As filed with the Securities and Exchange Commission on May 10, 2019
Registration
No. 333-230692
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment
No. 1
To
Form
F-10
REGISTRATION STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
AURORA CANNABIS INC.
(Exact name of Registrant as specified in its charter)
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British Columbia, Canada
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2833
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Not Applicable
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(Province or other Jurisdiction of
Incorporation or Organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number, if any)
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Suite 500 – 10355 Jasper Avenue
Edmonton, Alberta T5J 1Y6
Canada
(604)
362-5207
(Address and telephone number of Registrant’s principal executive offices)
CORPORATION SERVICE COMPANY
251 Little Falls Drive
County of New Castle
Wilmington, Delaware 19808
1 (800)
927-9800
(Name, address (including zip code) and telephone number (including area code) of agent for service in the United States)
Copies to:
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Cory Kent
McMillan LLP
Royal
Centre, Suite 1500
1055 West Georgia Street, PO Box 11117
Vancouver, British Columbia V6E 4N7
Canada
(604)
691-7446
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Glen Ibbott
Chief Financial Officer
Aurora Cannabis Inc.
Suite 500 – 10355 Jasper Avenue
Edmonton, Alberta T5J 1Y6
Canada
(604)
362-5207
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Martin Glass
Jenner & Block LLP
919 Third Avenue
New
York, NY 10022
USA
(212)
891-1672
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Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.
Province of Alberta, Canada
(Principal jurisdiction regulating this offering)
It is proposed that this filing
shall become effective (check appropriate box below):
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A.
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☐
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upon filing with the Commission, pursuant to Rule 467(a) (if in connection with an offering being made contemporaneously in the United States and Canada).
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B.
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☒
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at some future date (check appropriate box below)
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1.
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☐
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pursuant to Rule 467(b) on ( ) at ( ) (designate a time not sooner than seven calendar days after filing).
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2.
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☐
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pursuant to Rule 467(b) on ( ) at ( ) (designate a time seven calendar days or sooner after filing) because the securities regulatory authority in the review jurisdiction has issued a receipt or notification of clearance on (
).
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3.
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pursuant to Rule 467(b) as soon as practicable after notification of the Commission by the Registrant or the Canadian securities regulatory authority of the review jurisdiction that a receipt or notification of clearance has been
issued with respect hereto.
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4.
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after the filing of the next amendment to this Form (if preliminary material is being filed).
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If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to the
home jurisdiction’s shelf prospectus offering procedures, check the following box. ☒
The Registrant
hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registration statement shall become effective as provided in Rule 467 under the Securities Act of 1933 or on such date as the
Commission, acting pursuant to Section 8(a) of the Act, may determine.
PART I
INFORMATION REQUIRED TO BE DELIVERED TO OFFEREES OR PURCHASERS
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SHORT FORM BASE SHELF PROSPECTUS
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New Issue
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May 10, 2019
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AURORA CANNABIS INC.
US$750,000,000
Common
Shares
Warrants
Options
Subscription
Receipts
Debt Securities
Units
This short form base shelf
prospectus (the “
Prospectus
”) relates to the offering for sale of common shares (the “
Common Shares
”), warrants (the “
Warrants
”), options (the “
Options
”), subscription receipts (the
“
Subscription Receipts
”), debt securities (the “
Debt Securities
”), or any combination of such securities (the “
Units
”) (all of the foregoing, collectively, the “
Securities
”) by
Aurora Cannabis Inc. (the “
Company
” or “
Aurora
”) from time to time, during the
25-month
period that the Prospectus, including any amendments hereto, remains effective, in one
or more series or issuances, with a total offering price of the Securities in the aggregate, of up to US$750,000,000. The Securities may be offered in amounts and at prices to be determined based on market conditions at the time of the sale and set
forth in an accompanying prospectus supplement (a “
Prospectus Supplement
”). In addition, Securities may be offered and issued in consideration for the acquisition of other businesses, assets or securities by the Company or a
subsidiary of the Company. The consideration for any such acquisition may consist of any of the Securities separately, a combination of Securities or any combination of, among other things, Securities, cash and assumption of liabilities. One or more
securityholders of the Company may also offer and sell Securities under this Prospectus. See “The Selling Securityholders”.
This offering is
made by a Canadian issuer that is permitted, under a multijurisdictional disclosure system adopted by the United States and Canada, to prepare this Prospectus in accordance with Canadian
disclosure requirements. Prospective investors should be aware that such requirements are different from those of the United States. Financial statements included or incorporated by reference
herein have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and may not be comparable to financial statements of United
States companies. Our financial statements are audited in accordance with Canadian generally accepted auditing standards.
The enforcement by
investors of civil liabilities under the United States federal securities laws may be affected adversely by the fact that the Company is incorporated under the laws of British Columbia, Canada, that the majority of its officers and directors are
residents of Canada, that all of the experts named in the registration statement are not residents of the United States, and that a substantial portion of the assets of the Company and said persons are located outside the United States.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SEC PASSED UPON THE ACCURACY OR
THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.
Investing in Securities of the Company involves a high
degree of risk. You should carefully review the risks outlined in this Prospectus (together with any Prospectus Supplement) and in the documents incorporated by reference in this Prospectus and any Prospectus Supplement and consider such risks in
connection with an investment in such Securities. See “
Risk Factors
”.
Prospective investors should be
aware that the acquisition of the Securities described herein may have tax consequences both in the United States and in Canada. Such consequences for investors who are resident in, or citizens of, the United States may not be described fully
herein. Prospective investors should read the tax discussion contained in the applicable Prospectus Supplement with respect to a particular offering of Securities.
The specific terms of the Securities with respect to a particular offering will be set out in one or more Prospectus Supplements and may include, where
applicable: (i) in the case of Common Shares, the number of Common Shares offered, the offering price and any other specific terms; (ii) in the case of Warrants or Options, the number of Warrants or Options offered, the offering price, the
designation, number and terms of the Common Shares issuable upon exercise of the Warrants or Options, any procedures that will result in the adjustment of these numbers, the exercise price, dates and periods of exercise, the currency in which the
Warrants or Options are issued and any other specific terms; (iii) in the case of Subscription Receipts, the number of Subscription Receipts offered, the offering price, the procedures for the exchange of the Subscription Receipts for Common
Shares or Warrants, as the case may be, and any other specific terms; (iv) in the case of Debt Securities, the specific designation, aggregate principal amount, the currency or the currency unit for which the Debt Securities may be purchased,
the maturity, interest provisions, authorized denominations, offering price, covenants, events of default, any terms for redemption, any exchange or conversion terms, whether the debt is senior, senior subordinated or subordinated, whether the debt
is secured or unsecured and any other terms specific to the Debt Securities being offered; and (v) in the case of Units, the designation, number and terms of the Common Shares, Warrants, Subscription Receipts or Debt Securities comprising the
Units. Where required by statute, regulation or policy, and where Securities are offered in currencies other than Canadian dollars, appropriate disclosure of foreign exchange rates applicable to the Securities will be included in the Prospectus
Supplement describing the Securities.
In addition, the Debt Securities that may be offered may be guaranteed by certain direct and indirect subsidiaries
of Aurora with respect to the payment of the principal, premium, if any, and interest on the Debt Securities. The Company expects that any guarantee provided in respect of senior Debt Securities would constitute a senior and unsecured obligation of
the applicable guarantor. For a more detailed description of the Debt Securities that may be offered, see “Description of Securities – Debt Securities - Guarantees”, below.
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All information permitted under applicable securities legislation to be omitted from the Prospectus will be
contained in one or more Prospectus Supplements that will be delivered to purchasers together with the Prospectus, except in cases where an exemption from such delivery requirements has been obtained. Each Prospectus Supplement will be incorporated
by reference into the Prospectus for the purposes of applicable securities legislation as of the date of the Prospectus Supplement and only for the purposes of the distribution of the Securities to which the Prospectus Supplement pertains. Investors
should read the Prospectus and any applicable Prospectus Supplement carefully before investing in the Securities.
This Prospectus constitutes a public
offering of the Securities only in those jurisdictions where they may be lawfully offered for sale and only by persons permitted to sell the Securities in such jurisdictions. We may offer and sell Securities to, or through, underwriters, dealers or
selling securityholders, directly to one or more other purchasers, or through agents pursuant to exemptions from registration or qualification under applicable securities laws. A Prospectus Supplement relating to each issue of Securities will set
forth the names of any underwriters, dealers, agents or selling securityholders involved in the offering and sale of the Securities and will set forth the terms of the offering of the Securities, the method of distribution of the Securities,
including, to the extent applicable, the proceeds to us and any fees, discounts, concessions or other compensation payable to the underwriters, dealers or agents, and any other material terms of the plan of distribution. In connection with any
offering of the Securities, other than an
“at-the-market
distribution” (as defined under applicable Canadian securities legislation) unless otherwise specified
in a Prospectus Supplement, the underwriters or agents may over-allot or effect transactions which stabilize or maintain the market price of the Securities offered at a higher level than that which might exist in the open market. Such transaction,
if commenced, may be interrupted or discontinued at any time. See “Plan of Distribution”.
No underwriter or dealer involved in an
“at-the-market
distribution” under this Prospectus, no affiliate of such an underwriter or dealer and no person or company acting jointly or in concert with such an
underwriter or dealer will over-allot securities in connection with such distribution or effect any other transactions that are intended to stabilize or maintain the market price of the Securities.
No underwriter has been involved in the preparation of the Prospectus or performed any review of the contents of the Prospectus.
The Company’s outstanding Common Shares are listed for trading on the Toronto Stock Exchange (the “
TSX
”) and on the New York Stock
Exchange (“
NYSE
”) under the trading symbol “ACB”. The closing price of the Company’s Common Shares on the TSX and NYSE on May 9, 2019 was $11.25 per Common Share and US$8.35 per Common Share, respectively.
Unless otherwise disclosed in any applicable Prospectus Supplement, the Debt Securities, the Warrants, the Subscription Receipts and the Units will not be listed on any securities exchange. Unless the Securities are disclosed to be listed, there
will be no market through which these Securities may be sold and purchasers may not be able to resell these Securities purchased under this Prospectus. This may affect the pricing of such Securities in the secondary market, the transparency and
availability of trading prices, the liquidity of such Securities, and the extent of issuer regulation.
The corporate head office of the Company
is located at 500 – 10355 Jasper Avenue, Edmonton, Alberta, T5J 1Y6. The registered office of the Company is located at Suite 1500, 1055 West Georgia Street, Vancouver, British Columbia, V6E 4N7.
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GENERAL MATTERS
In this Prospectus, “Aurora”, “we”, “us” and “our” refers, collectively, to Aurora Cannabis Inc. and our wholly owned
subsidiaries.
ABOUT THIS PROSPECTUS
We are a British Columbia company that is a “reporting issuer” under Canadian securities laws in each of the provinces of Canada. In addition, our
common shares are registered under Section 12(b) of the United States Securities Exchange Act of 1934, as amended (the “
Exchange Act
”). Our common shares are traded in Canada on the TSX and in the United States on the NYSE
under the symbol “ACB”.
This Prospectus is a base shelf prospectus that:
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we have filed with the securities commissions in each of the provinces of Canada, except Quebec (the
“
Canadian Qualifying Jurisdictions
”) in order to qualify the offering of the Securities described in this Prospectus in accordance with Canadian National Instrument
44-102—
Shelf
Distributions
(“NI 44-102”);
and
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forms part of a registration statement on Form
F-10
(the
“
Registration Statement
”) that we filed with the Securities and Exchange Commission (“
SEC
”) under the
Securities Act of 1933
, as amended (the “
U.S. Securities Act
”) under the
multijurisdictional disclosure system adopted by Canada and the United States (the “
MJDS
”).
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Under this Prospectus, we
may sell any combination of the Securities described in this Prospectus in one or more offerings up to a total aggregate initial offering price of US$750,000,000. This Prospectus provides you with a general description of the Securities that we may
offer. Each time we sell Securities under this Prospectus we will provide a Prospectus Supplement that will contain specific information about the terms of that specific offering. The specific terms of the Securities in respect of which this
Prospectus is being delivered will be set forth in the Prospectus Supplement.
You should rely only on the information contained in or incorporated
by reference into this Prospectus and in any applicable Prospectus Supplement. The Company has not authorized anyone to provide you with different information. The Company is not making any offer of these Securities in any jurisdiction where the
offer is not permitted.
DOCUMENTS INCORPORATED BY REFERENCE
We incorporate by reference into this Prospectus documents that we have filed with securities commissions or similar authorities in Canada, which have also
been filed with, or furnished to, the SEC.
You may obtain copies of the documents incorporated herein by reference without charge from Aurora Cannabis Inc., 500 – 10355 Jasper Avenue, Edmonton, Alberta, T5J 1Y6 (Telephone:
604-362-5207)
Attn: Corporate Secretary. These documents are also available electronically from the website of Canadian Securities Administrators at
www.sedar.com
(“
SEDAR
”) and from the EDGAR filing website of the United States Securities Exchange Commission at www.sec.gov (“
EDGAR
”). The Company’s filings through SEDAR and EDGAR are not incorporated by reference in the
Prospectus except as specifically set out herein.
The following documents (“
documents incorporated by reference
” or “
documents
incorporated herein by reference
”) have been filed by us with various securities commissions or similar authorities in the provinces of Canada in which we are a reporting issuer, are specifically incorporated herein by reference and form an
integral part of this Prospectus:
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the annual information form of the Company for the year ended June 30, 2018, dated September 24, 2018,
filed
September 25, 2018
(our “
2018 AIF
”);
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the audited consolidated financial statements of the Company, and the notes thereto for the years ended
June 30, 2018 and 2017, together with the independent auditors’ report thereon, filed
September 25, 2018
;
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the management’s discussion and analysis of financial condition and results of operations for the year ended
June 30, 2018, filed
September 25, 2018
(our “
2018 Annual MD&A
”);
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unaudited condensed interim consolidated financial statements of the Company and the notes thereto for the three
and six months ended December 31, 2018 and 2017, filed
February 11, 2019
;
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the management’s discussion and analysis of financial condition and results of operations for the three and
six months ended December 31, 2018, filed
February 11, 2019
;
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the material change report dated August 3, 2018 regarding the completion of the acquisition of MedReleaf
Corp., filed
August 3, 2018
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the material change report dated August 16, 2018 regarding the completion of the acquisition of Anandia
Laboratories Inc., filed
August 16, 2018
;
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the material change report dated September 10, 2018 regarding the entering into of a $200 million
credit facility with Bank of Montreal, filed
September 10, 2018
;
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the material change report dated September 18, 2018 regarding the entering into of an arrangement agreement
for the acquisition of ICC, filed
September 18, 2018
;
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the material change report dated November 28, 2018 regarding the completion of the acquisition of ICC, filed
November 28, 2018
;
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the material change report dated December 7, 2018 regarding the appointment of a Chief Science Officer,
filed
December 7, 2018
;
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the material change report dated January 25, 2019 regarding the completion of our US$345 million
offering of 5.5% Convertible Notes, filed
January 25, 2019
;
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the business acquisition report dated April
30, 2018 relating to the acquisition of CanniMed, filed
May 2, 2018
;
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the business acquisition report dated September
5, 2018 relating to the acquisition of MedReleaf, filed
September 17, 2018
, excluding the following documents incorporated in the business
acquisition report by reference:
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(a)
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the material change report of MedReleaf dated May 24, 2018, and
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(b)
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the management information circular of MedReleaf dated August 21, 2017;
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the management information circular of the Company dated October 2, 2017, distributed in connection with the
Company’s annual and special meeting of shareholders held on November 13, 2017, filed
October 6, 2017
;
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the management information circular of the Company dated October 16, 2018, distributed in connection with
the Company’s annual and special meeting of shareholders held on November 30, 2018, filed
October 24, 2018
;
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the management information circular dated December 8, 2017, in respect of shareholder approval for the
common shares issued by the Company pursuant to the take-over bid for CanniMed, filed
December 12, 2017
, excluding the following documents that are
incorporated therein by reference:
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(a)
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CanniMed’s interim condensed consolidated financial statements and related management discussion and
analysis as at (Q1) January 31, 2017, (Q2) April 30, 2017 and (Q3) July 31, 2017 filed on SEDAR on March 16, 2017, June 12, 2017 and September 11, 2017, respectively;
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(b)
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CanniMed’s audited consolidated financial statements for the year ended October 31, 2016, together
with the notes thereto and the independent auditor’s report thereon, and related management discussion and analysis, as SEDAR filed on February 24, 2017, and
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(c)
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the unaudited pro forma consolidated financial statements attached as Appendix “C”;
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the management information circular dated June 18, 2018, in respect of shareholder approval for the common
shares issued by the Company pursuant to the acquisition of MedReleaf, filed
June 20, 2018
, excluding the fairness opinion of BMO Capital Markets
dated May 13, 2018 and the following documents incorporated in the management information circular by reference:
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(a)
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the material change report of MedReleaf dated May 24, 2018, and
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(b)
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the management information circular of MedReleaf dated August 21, 2017;
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the annual information form of MedReleaf dated June 18, 2018, for the year ended March
31, 2018, filed
June 19, 2018
under MedReleaf’s SEDAR Profile;
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the audited consolidated financial statements of MedReleaf for the year ended March 31, 2018, together with
the notes thereto and the independent auditor’s report thereon, filed on
June 19, 2018
under MedReleaf’s SEDAR Profile; and
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the management’s discussion and analysis of financial condition and results of operations of MedReleaf for
the year ended March 31, 2018, filed on
June 19, 2018
under MedReleaf’s SEDAR Profile.
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Any document of the type referred to in section 11.1 of Form
44-101F1
of National Instrument
44-101
–
Short Form Prospectus Distributions
filed by the Company with the securities commissions or similar regulatory authorities in Canada after the date of this Prospectus and all Prospectus
Supplements disclosing additional or updated information filed pursuant to the requirements of applicable securities legislation in Canada and during the period that this Prospectus is effective shall be deemed to be incorporated by reference in
this Prospectus.
To the extent that any document or information incorporated by reference into the Prospectus is included in any report on Form
6-K,
Form
40-F,
Form
20-F,
Form
10-K,
Form
10-Q
or Form
8-K
(or any respective successor form) that is filed with or furnished to the SEC after the date of the Prospectus, such document or information shall be deemed to be incorporated by reference as an exhibit to
the Registration Statement of which the Prospectus forms a part. In addition, we may incorporate by reference into the Prospectus, or the Registration Statement of which it forms a part, other information from documents that we file with or furnish
to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act, if and to the extent expressly provided therein.
Any statement contained in
this Prospectus or in a document incorporated or deemed to be incorporated by reference herein will be deemed to be modified or superseded to the extent that a statement contained herein, in any Prospectus Supplement or in any other subsequently
filed document that is also incorporated or is deemed to be incorporated by reference herein modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include
any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement will not be deemed an admission for any purpose that the modified or superseded statement, when made, constituted a
misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement
so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of the Prospectus.
Upon a new annual
information form and related annual financial statements being filed by us with, and where required, accepted by, the applicable securities regulatory authority during the currency of this Prospectus, the previous annual information form, the
previous annual financial statements and all interim financial statements, material change reports and information circulars and all Prospectus Supplements filed prior to the commencement of our financial year in which a new annual information form
is filed shall be deemed no longer
3
to be incorporated into this Prospectus for purposes of future offers and sales of Securities hereunder. Upon condensed consolidated interim financial statements and the accompanying
management’s discussion and analysis of financial condition and results of operations being filed by us with the applicable Canadian securities commissions or similar regulatory authorities during the period that this Prospectus is effective,
all condensed consolidated interim financial statements and the accompanying management’s discussion and analysis of financial condition and results of operations filed prior to such new condensed consolidated interim financial statements and
management’s discussion and analysis of financial condition and results of operations shall be deemed to no longer be incorporated into this Prospectus for purposes of future offers and sales of Securities under this Prospectus. In addition,
upon a new management information circular for an annual meeting of shareholders being filed by us with the applicable Canadian securities commissions or similar regulatory authorities during the period that this Prospectus is effective, the
previous management information circular filed in respect of the prior annual meeting of shareholders shall no longer be deemed to be incorporated into this Prospectus for purposes of future offers and sales of Securities under this Prospectus.
Any template version of any “marketing materials” (as such term is defined in NI
44-101)
filed
after the date of a Prospectus Supplement and before the termination of the distribution of the Securities offered pursuant to such Prospectus Supplement (together with this Prospectus) is deemed to be incorporated by reference in such Prospectus
Supplement.
4
FORWARD LOOKING STATEMENTS
The Prospectus, including the documents incorporated by reference, contain forward-looking statements and forward-looking information (collectively referred
to as “
forward-looking statements
”) which may not be based on historical fact, including without limitation statements regarding our expectations in respect of future financial position, business strategy, future production,
expansion strategy and other activities, events or developments that we expect to take place in the future, projected costs and plans and objectives. Often, but not always, forward-looking statements can be identified by the use of the words
“believes”, “may”, “plan”, “will”, “estimate”, “scheduled”, “continue”, “anticipates”, “intends”, “expects”, and similar expressions.
Such statements reflect our management’s current views with respect to future events and are subject to risks and uncertainties and are necessarily based
upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and known or unknown risks and contingencies. Many
factors could cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including, among others:
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the good standing of our licenses;
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changes in the laws, regulations and guidelines and related regulatory approvals in the jurisdictions in which we
operate or propose to operate;
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the completion of construction of production facilities, associated costs, and receipt of licenses from Health
Canada to produce and sell cannabis and cannabis-related products from these facilities;
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potential acquisitions, including the potential acquisition of Farmacias;
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the successful integration of CanniMed, MedReleaf and our other acquisitions into our operations;
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strategic investments and capital expenditures, and related benefits;
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future growth, expansion plans and the availability of additional financing on favorable terms;
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expectations regarding production capacity, costs and yields, including statements regarding increasing our
production capacity and production;
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the expansion of the market for cannabis products, in Canada and internationally and related competition for
market share;
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product sales expectations and corresponding forecasted increase in revenue; and
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other risks detailed from
time-to-time
in our annual information forms, annual financial statements, MD&A, interim financial statements and material change reports filed with and furnished to
securities regulators, and those risks which are discussed under the heading “
Risk Factors
”.
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Such information is
included, among other places, in this Prospectus under the headings “The Company”, “Use of Proceeds”, “Risk Factors”, in our 2018 AIF under the headings “Description of the Business” and “Risk
Factors” and in our 2018 Annual MD&A, each of which documents are incorporated by reference into this Prospectus.
These factors should be
considered carefully, and readers are cautioned not to place undue reliance on the forward-looking statements. Readers are cautioned that the foregoing list of risk factors is not exhaustive, and it is recommended that prospective investors consult
the more complete discussion of risks and uncertainties facing the Company included in the Prospectus. See “
Risk Factors
” for a more detailed discussion of these risks.
5
Although we believe that the expectations conveyed by the forward-looking statements are reasonable based on
the information available to us on the date such statements were made, no assurances can be given as to future results, approvals or achievements. The forward-looking statements contained in the Prospectus and the documents incorporated by reference
herein are expressly qualified by this cautionary statement. We disclaim any duty to update any of the forward-looking statements after the date of the Prospectus to conform such statements to actual results or to changes in our expectations except
as otherwise required by applicable law.
6
GLOSSARY OF TERMS
The following is a glossary of certain terms used in this Prospectus:
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ABCA
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the Alberta Business Corporations Act;
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ACMPR
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Access to Cannabis for Medical Purposes Regulations;
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|
|
|
|
Anandia
|
|
Anandia Laboratories Inc.;
|
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|
|
Aurora
or the Company
|
|
Aurora Cannabis Inc., the parent company and its subsidiaries;
|
|
|
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|
Aurora
Deutschland
|
|
Aurora Deutschland GmbH, formerly known as Pedanios GmbH, a wholly owned subsidiary of the Company;
|
|
|
|
|
|
|
|
Aurora
Eau
|
|
the Company’s 48,000 square foot production facility located in Lachute, Quebec;
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|
|
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|
|
|
|
Aurora
Mountain
|
|
the Company’s 55,200 square foot production facility in Mountain View County near Cremona, Alberta;
|
|
|
|
|
|
|
|
Aurora
Nordic
|
|
Aurora Nordic Cannabis A/S, a company incorporated under the laws of Denmark in which we own a 51% interest, and which in turn owns Aurora
Nordic 1 and Aurora Nordic 2;
|
|
|
|
|
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|
Aurora
Nordic 1
|
|
Aurora Nordic’s 100,000 square foot production facility;
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|
Aurora
Nordic 2
|
|
Aurora Nordic’s 1,000,000 square foot production facility currently under construction;
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|
|
|
Aurora
Sky
|
|
the Company’s 800,000 square foot production facility located at Edmonton International Airport;
|
|
|
|
|
|
|
|
Aurora
Sun
|
|
the Company’s 1,620,000 square foot production facility located in Medicine Hat, Alberta that is currently under construction;
|
|
|
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|
|
|
|
Aurora
Vie
|
|
the 40,000 square feet cannabis production facility in Pointe-Claire, Quebec;
|
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|
BCBCA
|
|
the British Columbia Business Corporations Act;
|
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|
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|
Cannabis Act
|
|
An Act respecting cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts, S.C. 2018 c. 16,
which came into effect on October 17, 2018 legalizing the recreational use of cannabis nationwide in Canada;
|
|
|
|
|
|
|
|
CanniMed
|
|
CanniMed Therapeutics Inc., a wholly-owned subsidiary of the Company;
|
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|
Farmacias
|
|
Farmacias Magistrales SA
|
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|
Health
Canada
|
|
the Canadian federal department responsible for health;
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IHR
|
|
Industrial Hemp Regulations;
|
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ICC
|
|
ICC Labs Inc.;
|
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|
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|
MedReleaf
|
|
MedReleaf Corp., a wholly-owned subsidiary of the Company;
|
|
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|
7
|
|
|
|
|
|
|
|
MedReleaf Bradford
|
|
the Company’s 210,000 square foot production facility located in Bradford, Ontario;
|
|
|
|
|
|
|
|
MedReleaf Exeter
|
|
the Company’s 1,000,000 square foot facility located in Exeter, Ontario;
|
|
|
|
|
|
|
|
MedReleaf Markham
|
|
the Company’s 55,000 square foot production facility in Markham, Ontario;
|
|
|
|
|
|
|
|
Pemberton Facility
|
|
the Company’s 147,000 square foot production facility currently under construction, located in Pemberton, British Columbia;
|
|
|
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|
|
|
|
PIPEDA
|
|
the
Personal Information Protection and Electronics Documents Act
(Canada); and
|
|
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|
|
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|
|
Whistler Facility
|
|
the Company’s 12,500 square foot production facility located in Whistler, British Columbia.
|
|
|
|
NOTE TO UNITED STATES READERS REGARDING DIFFERENCES BETWEEN UNITED STATES
AND CANADIAN FINANCIAL REPORTING PRACTICES
We prepare our financial statements in accordance with International Financial Reporting Standards
(“
IFRS
”), as issued by the International Accounting Standards Board (the “
IASB
”), which differs from U.S. generally accepted accounting principles (“
U.S. GAAP
”). Accordingly, our financial
statements incorporated by reference in the Prospectus, and in the documents incorporated by reference in this Prospectus, may not be comparable to financial statements of United States companies prepared in accordance with U.S. GAAP.
8
CURRENCY PRESENTATION AND EXCHANGE RATE INFORMATION
Unless stated otherwise or as the context otherwise requires, all references to dollar amounts in this Prospectus and any Prospectus Supplement are
references to Canadian dollars. References to “$” or “C$” are to Canadian dollars and references to “U.S. dollars” or “US$” are to United States dollars.
Except as otherwise noted in our 2018 AIF and the Company’s financial statements and related management’s discussion and analysis of financial
condition and results of operations of the Company that are incorporated by reference into this Prospectus, the financial information contained in such documents is expressed in Canadian dollars.
The high, low, average and closing noon rates for the United States dollar in terms of Canadian dollars for each of the financial periods of the Company ended
December 31, 2018, June 30, 2018 and June 30, 2017, as quoted by the Bank of Canada, were as follows:
|
|
|
|
|
|
|
|
|
|
|
Six months ended
December 31, 2018
|
|
Year ended
June 30, 2018
|
|
Year ended
June 30, 2017
|
|
|
|
(expressed in Canadian dollars)
|
|
|
|
|
|
|
High
|
|
1.36
|
|
1.33
|
|
1.37
|
|
|
|
|
|
|
Low
|
|
1.28
|
|
1.21
|
|
1.22
|
|
|
|
|
|
|
Average
|
|
1.31
|
|
1.27
|
|
1.33
|
|
|
|
|
|
|
Closing
|
|
1.36
|
|
1.32
|
|
1.32
|
On May 9, 2019, the exchange rate for the United States dollar in terms of Canadian dollars, as quoted by the Bank of
Canada, was US$1.00 = $1.3483.
9
THE COMPANY
Aurora Cannabis Inc. was incorporated under the BCBCA on December 21, 2006.
Our corporate head office is located at 500 – 10355 Jasper Avenue, Edmonton, Alberta, T5J 1Y6. Our registered office is located at Suite 1500, 1055 West
Georgia Street, Vancouver, British Columbia, V6E 4N7.
We currently operate our business through our 57 wholly-owned subsidiaries. Our material
subsidiaries include:
|
|
•
|
|
Aurora Marijuana Inc., a holding company, which was incorporated under ABCA on September 5, 2013.
|
|
|
•
|
|
Aurora Cannabis Enterprises Inc.
, a holder of license(s) under the
Cannabis Act
, which was
incorporated under the ABCA on June 17, 2013.
|
|
|
•
|
|
1769474 Alberta Ltd., a holding company and the entity that leases the lands for some of our production
facilities, which was incorporated under the ABCA on August 20, 2013.
|
|
|
•
|
|
2105657 Alberta Inc., a holding company and the entity that is holding land for the construction for the Aurora
Sun production facility, which was incorporated under the ABCA on March 15, 2018.
|
|
|
•
|
|
Agropro UAB, a company incorporated under the laws of Lithuania and a producer, processor and supplier of
certified organic hemp and hemp products, which we acquired on September 10, 2018.
|
|
|
•
|
|
Borela UAB, a company incorporated under the laws of Lithuania and a producer, processor and supplier of organic
hulled hemp seeds, hemp seed protein, hemp flour and hemp seed oil, which we acquired on September 10, 2018.
|
|
|
•
|
|
Aurora Deutschland, a limited liability company under German law, which is a registered wholesale importer,
exporter and distributor of medical cannabis in Germany and which we acquired on May 30, 2017.
|
|
|
•
|
|
Aurora Larssen Projects Inc., which was incorporated on December 4, 2017 under the ABCA and which acquired
Larssen Ltd., a consulting company for advanced greenhouse cultivation facilities.
|
|
|
•
|
|
CanniMed a producer of various cannabis products, which was incorporated under the
Canada Business
Corporations Act
on October 31, 2016 and which we acquired on May 1, 2018.
|
|
|
•
|
|
MedReleaf, a producer of various cannabis products, which was incorporated under the
Business Corporations
Act
(Ontario) (the “
OBCA
”) on February 28, 2013 and which we acquired on July 25, 2018.
|
|
|
•
|
|
Anandia, a cannabis-focused science company, specializing in genomics, metabolite profiling, plant breeding,
disease characterization and cultivar certification, as well as providing testing services to patients and patient cultivars, which was incorporated under the BCBCA and which we acquired on August 8, 2018.
|
|
|
•
|
|
ICC, a company incorporated under the BCBCA which we acquired on November 22, 2018, and which, through its
subsidiaries, is a producer of cannabis in Uruguay.
|
|
|
•
|
|
Whistler Medical Marijuana Corp. (“
Whistler
”), a company incorporated under the BCBCA which
holds the Whistler Facility and the Pemberton Facility, and which we acquired on March 1, 2019.
|
10
The following chart sets out the material intercorporate relationships of Aurora:
Note:
This chart details the inter-corporate relationships with our material subsidiaries and is not a complete
chart. In addition, certain subsidiaries have additional subsidiaries which are not material and are not reflected above.
11
OUR BUSINESS
Overview
Our principal business is the production,
distribution and sale of cannabis products in Canada and internationally. Aurora currently conducts the following key business activities in the countries listed below:
|
|
•
|
|
Production, distribution and sale of medical and consumer market cannabis products in Canada pursuant to the
Cannabis Act;
|
|
|
•
|
|
Distribution of wholesale medical cannabis in the European Union (
“EU”
) pursuant to the
German
Medicinal
Products Act and German Narcotic Drugs Act;
|
|
|
•
|
|
Production of medical cannabis in Denmark pursuant to the
Danish Medicines Act; and
|
|
|
•
|
|
Production and distribution of cannabis in Uruguay pursuant to Law N° 19,172
Cannabis and its derivatives:
state control and regulation of the importation, production, acquisition, storage, marketing and distribution.
|
Through our recent
acquisitions, we have expanded our business to include research and development, the production and sale of indoor cultivation systems, and the production and sale of hemp related products. In addition, with a growing number of countries beginning
to adopt and develop medical cannabis legislation, we have embarked on an international expansion strategy, which includes business prospects and investments in Germany, Denmark, Italy, Poland, Australia, Cayman Islands, Malta, Lithuania, and South
America.
We believe the global cannabis market is a rapidly developing business opportunity that comes along only once in a generation. We intend to be a
leader in the Canadian domestic and international consumer cannabis market as well as the domestic and international medical cannabis space, both in terms of scale and profitability. We are active in five continents and 24 countries with a leading
market share in the Canadian, European, Australian and Latin American markets. We have been executing on an aggressive growth strategy that is focused on developing a vertically integrated and horizontally diversified company with a diversified
portfolio offering. We are well-positioned for an evolving market, including, based on the Cannabis Industry report dated October 31, 2018 prepared by BMO Capital Markets Corp. and the Recreational Marijuana report from 2016 prepared by
Deloitte LLP, an estimated current $3 billion annual medical and $9 billion annual
adult-use
market in Canada and, if cannabis products continue to become accepted and legalized in many countries,
estimated future global market, assuming legalization, of over $70 billion annual medical and $115 billion annual
adult-use
consumption. Our strategy includes controlling and driving down the
operating costs across the entire value chain; producing high-quality cannabis at a world-leading scale; a keen commitment to science and technology; a pledge to place Canadian and global medical patients as our first priority; a prudent but
aggressive deployment of capital and talent to identify, develop and win new markets; and finally, being the employer and partner of choice in the global cannabis industry. Our strategy is described in greater detail in our management discussion and
analysis for the three and six months ended December 31, 2018 and 2017.
12
Production Facilities and Licenses
Our cannabis products are cultivated and manufactured in our nine licensed production facilities, with an additional seven facilities under construction,
described in the following table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOCATION
|
|
SIZE
|
|
CAPACITY
|
|
STATUS
|
|
LICENSE
|
|
|
|
|
|
|
|
|
|
|
|
Cultivation
|
|
Sale
|
|
Aurora Mountain
|
|
Mountain View,
Alberta, Canada
|
|
55,200 ft
2
|
|
4,800
kg/year
|
|
Operating since 2015
|
|
●
|
|
●
|
|
Aurora Vie
|
|
Pointe Claire,
Quebec, Canada
|
|
40,000 ft
2
|
|
4,000
kg/year
|
|
Operating since June 2018
|
|
●
|
|
●
|
|
Aurora Eau
|
|
Lachute,
Quebec, Canada
|
|
48,000 ft
2
|
|
4,500
kg/year
|
|
Facility in full operation
|
|
●
|
|
|
|
Aurora Sky
|
|
Edmonton,
Alberta, Canada
|
|
800,000 ft
2
|
|
>100,000
kg/year
|
|
Facility in full operation
|
|
●
|
|
●
|
|
Aurora Sun
|
|
Medicine Hat,
Alberta, Canada
|
|
1,620,000 ft
2
|
|
>150,000
kg/year
|
|
Initial production beginning late calendar 2019 and full construction complete by mid calendar 2020
|
|
|
|
|
|
Aurora
Nordic 1
|
|
Odense,
Denmark
|
|
100,000 ft
2
|
|
>8,000
kg/year
|
|
Facility construction complete
|
|
●
|
|
|
|
Aurora
Nordic 2
|
|
Odense,
Denmark
|
|
1,000,000 ft
2
|
|
>120,000
kg/year
|
|
Full construction to be complete by mid calendar 2020
|
|
|
|
|
|
CanniMed
|
|
Saskatoon,
Saskatchewan,
Canada
|
|
97,000 ft
2
|
|
19,000
kg/year
|
|
Operating since 2004.
Facility upgrades underway
|
|
●
|
|
●
|
|
MedReleaf Markham
|
|
Markham,
Ontario, Canada
|
|
55,000 ft
2
|
|
7,000
kg/year
|
|
Operating since 2014
|
|
●
|
|
●
|
|
MedReleaf Bradford
|
|
Bradford, Ontario, Canada
|
|
210,000 ft
2
|
|
28,000
kg/year
|
|
Facility in full operation
|
|
●
|
|
●
|
|
MedReleaf Exeter
|
|
Exeter, Ontario,
Canada
|
|
1,000,000 ft
2
|
|
105,000
kg/year
|
|
Land and building purchased
|
|
|
|
|
|
Whistler Facility
|
|
Alpha Lake, British Columbia
|
|
12,500 ft
2
|
|
500
kg/year
|
|
Operating since 2014
|
|
●
|
|
●
|
|
Pemberton Facility
|
|
Pemberton, British Columbia
|
|
147,000 ft
2
|
|
12,000
kg/year
|
|
Phase 1 in operation and Phase 2 expected to be completed in September 2019
|
|
●
|
|
|
|
ICC Labs
|
|
Canelones, Uruguay
|
|
21,000 ft
2
|
|
>2,000
kg/year
|
|
Facility in full production
|
|
●
|
|
●
|
Estimated annual production capacity is based on the Company’s experience in growing cannabis and data available
concerning the wide variety strains under growing conditions maintained at its facilities. The material assumptions on which the actual or expected annual kilograms harvested is determined include, but are not limited to:
|
|
•
|
|
the number of cultivation rooms in the facility;
|
|
|
•
|
|
the planned (or actual) number of plants each room is built to contain;
|
13
|
|
•
|
|
the average per gram yield per plant based on Aurora’s historical averages for the strain and growing
conditions; and
|
|
|
•
|
|
the number of harvests (turns) planned (or realized) per year.
|
Distribution Methods
In addition to distributing to our
registered patients and internationally, as described in the 2018 AIF, since the adoption of the Cannabis Act, we distribute
non-medical
cannabis products in accordance with the various regulatory frameworks
in the respective provinces and territories governing adult use in Canada. We also distribute medical cannabis products internationally in accordance with applicable international laws and regulations. We have robust distribution networks
spanning 98% of the Canadian population and other locations worldwide.
International Opportunities
In addition to Canadian domestic operations, we continue to pursue international opportunities, including (subject to applicable laws and regulations): (a)
opportunities to export our medical cannabis products to other countries; and (b) opportunities to create international alliances with local partners to apply for cultivation licenses in other countries. We are currently pursuing these
opportunities in several countries.
We will only pursue international opportunities in accordance and compliance with all applicable laws. We are
currently pursuing international opportunities in several countries where a legal framework for the medical and/or
non-medical
use of cannabis exists or is expected to be implemented. The timing of our
activities in any international market is dependent on the pace of regulatory developments and, as such, it is not feasible for us to provide a timeline with respect to those activities.
Canadian Cannabis Regulatory Overview
On
October 17, 2018, the Cannabis Act came into force as law with the effect of legalizing the
non-medical
use of cannabis by adults across Canada. The Cannabis Act, among other things, replaced the ACMPR
and the IHR, both of which came into force under the CDSA, which previously permitted access to cannabis for medical purposes for only those Canadians who had been authorized to use cannabis by their health care practitioner. The ACMPR replaced the
Marihuana for Medical Purposes Regulations (the “
MMPR
”), which was enacted in June 2013. The MMPR replaced the Marihuana Medical Access Regulations (the “
MMAR
”), which was enacted in 2001. The MMPR and MMAR were
initial steps in the Government of Canada’s legislative path towards the eventual legalization and regulating
non-medical
and medical cannabis.
The Cannabis Act permits the
non-medical
use of cannabis by adults and regulates, among other things, the production,
distribution and sale of cannabis and related oil extracts in Canada, for both
non-medical
and medical purposes. Under the Cannabis Act, Canadians who are authorized by their health care practitioner to use
medical cannabis have the option of purchasing cannabis from one of the producers licensed by Health Canada, registering with Health Canada to produce a limited amount of cannabis for their own medical purposes or designating an individual who is
registered with Health Canada to produce cannabis on their behalf for personal medical purposes.
Pursuant to the Cannabis Act, subject to provincial and
territorial regulations and medical allowances, individuals over the age of 18 are able to purchase fresh cannabis, dried cannabis, cannabis oil, and cannabis plants or seeds and are able to legally possess up to 30 grams of dried cannabis (or the
prescribed equivalent amount) in public. The Cannabis Act also permits households to grow a maximum of four cannabis plants, which has been restricted by certain provinces. This limit applies regardless of the number of adults that reside in the
household. In addition, the Cannabis Act provides provincial and territorial governments the authority to prescribe regulations regarding retail sales and distribution, as well as the ability to regulate certain matters, such as increasing the
minimum age for purchase and consumption. All of the provinces and territories other than Alberta and Quebec have set the age of consumption at 19.
14
Provincial and territorial governments in Canada have varied regulatory regimes for the distribution and
sale of
non-medical
cannabis. For example, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Yukon and the Northwest Territories have chosen the government-regulated model for distribution and sale,
whereas Saskatchewan has opted for a private sector approach. Alberta, Ontario, Manitoba, Nunavut, British Columbia and Newfoundland & Labrador have announced plans to pursue a hybrid approach of public and private sale and/or distribution.
In connection with the new framework for regulating cannabis in Canada, the Federal Government of Canada has introduced new penalties under the Criminal
Code (Canada), including penalties for the illegal sale of cannabis, possession of cannabis over the prescribed limit, production of cannabis beyond personal cultivation limits, taking cannabis across the Canadian border, giving or selling cannabis
to a youth and involving a youth to commit a cannabis-related offence.
In addition to the Cannabis Act, the Federal Government of Canada published
regulations, including the Cannabis Regulations (the “
Cannabis Regulations
”) and the new IHR (together with the Cannabis Regulations, collectively, the “
Regulations
”), along with amendments to the Narcotic Control
Regulations and certain regulations under the Food and Drugs Act (Canada). The Regulations, among other things, outline additional rules for the cultivation, processing, research, analytical testing, distribution, sale, importation and exportation
of cannabis and hemp in Canada, including the various classes of licenses that can be granted. The Regulations set standards for these cannabis and hemp products and include strict specifications for the plain packaging and labelling and analytical
testing of all cannabis products as well as stringent physical and personnel security requirements for federally licensed sites. The Regulations also maintain a distinct system for access to cannabis.
On December 20, 2018, the Federal Government of Canada also released its proposed amendments to the Cannabis Regulations that contemplate the production
of cannabis edibles, extracts and topicals, among a variety of other changes in 2019. There was a
60-day
public consultation on the draft regulations. Final regulations have not yet been published.
Recent Developments
Legalization of
Non-Medical
Adult Cannabis Use in Canada
On October 17, 2018, the Cannabis Act came into force and replaced
the ACMPR and IHR, effectively legalizing the use of
non-medical
cannabis by adults across Canada. Because we were licensed pursuant to the ACMPR, our licenses were deemed to be issued under the Cannabis Act
and we continue to cultivate, process, and sell medical cannabis as well as cultivate, process and sell cannabis for
non-medical
purposes in Canada.
Changes to Board of Directors
On February 20,
2019, the Company appointed Michael Singer, previously Chairman of the Company, as Executive Chairman of the board of directors. The Company also named independent director Ronald Funk as lead independent director and appointed Shan Atkins as a new
independent director and chair of the Audit Committee. Diane Jang voluntarily resigned as a director of the Company.
Changes to Executive Officers
On December 7, 2018, we appointed of Dr. Jonathan Page, Phd. as the Company’s Chief Science Officer. Dr. Page was the founder
of Anandia. On February 21, we promoted Darren Karasiuk, our former Executive Vice President Adult Usage, Global, to Chief Commercial Officer, and promoted Jill Swainson, previously Senior Vice-President and General Counsel, to Chief Legal
Counsel and Corporate Secretary. On April 4, 2019, we appointed Carey Squires as Executive Vice President of Corporate Development and Strategy. Mr. Squires was formerly the Managing Director and Co-Head of Equity-Linked Capital Markets for BMO
Capital Markets.
15
Acquisition of Whistler Medical Marijuana Corp.
On March 1, 2019, we completed the acquisition of all of the issued and outstanding shares of Whistler Medical Marijuana Corp. in consideration of the
issuance of 13,667,933 common shares with a deemed issuance price of $9.77. The transaction was completed by way of a three-cornered amalgamation among the Company, Whistler and a wholly-owned subsidiary of the Company. We are also obligated to make
milestone payments to the former Whistler shareholders in the amounts of $10,000,000 (the “
First Milestone Payment
”) and $30,000,000 (the “
Second Milestone Payment
”) in Common Shares at the volume weighted average
trading price of the Common Shares on the TSX for the five trading days immediately prior to the date of issuance. The First Milestone Payment will be issued on the earlier of March 1, 2020 and the date on which Whistler achieves full
production. The Second Milestone Payment will be issuable upon satisfactory licensing of Whistler’s Pemberton facility.
Senior Advisory
Services Agreement
On March 12, 2019 we entered into a senior advisory services agreement (the “
Services Agreement
”) with 280
Park ACI Holdings, LLC, of New York, New York (“
ACI Holdings
”), of which Mr. Nelson Peltz is the principal, and appointed Mr. Nelson Peltz as a strategic advisor to the Company. Pursuant to the Services Agreement,
Mr. Peltz, acting through ACI Holdings and its partners, members, officers and employees, provides direct guidance and advice on business strategy, marketing, operations and business development to our executive management, board of directors
and financial advisors. The services include direct responsibility for formulating strategic advice regarding potential US corporate initiatives and periodic reporting to our Board and executive management. As consideration for the services, we
granted to Mr. Peltz options to purchase 19,961,754 Common Shares exercisable at a price of $10.34 per Common Share for a period of seven years. The options vest rateably on a quarterly basis over a four-year period. The vesting criteria
includes acceleration of vesting of the options upon the occurrence of certain specified events, which include the consummation of certain defined transactions, the closing price of Common Shares being at least $31.02 for a specified period, and the
closing price of Common Shares being at least $41.36 for a specified period. We have entered into a Registration Rights agreement with ACI Holdings to register these options as well as the Common Shares underlying such options so that they may be
freely transferred.
Acquisition of Chemi Pharmaceutical Inc.
On April 24, 2019, we completed the acquisition of Chemi Pharmaceutical Inc. (“
Chemi
”) a privately-held, Ontario-based laboratory specialized
in providing analytic services to pharmaceutical and cannabis industries. We acquired all of the issued and outstanding shares of Chemi in exchange for 83,299 Common Shares issued at closing and 41,649 Common Shares payable upon achievement of
certain milestones.
Chemi has a Health Canada Drug Establishment Licence enabling it to perform certified GMP compliant quality control analytical
testing. In addition, Chemi has received US FDA accreditation for its facility. Acquiring Chemi with its Drug Establishment Licence satisfies a prerequisite for applying for a Cannabis Drug Licence, which is required for the development of cannabis
therapeutics within the global medical cannabis market.
Investment in EnWave Corporation
On April 26, 2019, we completed a $10 million equity investment in EnWave Corporation (“
EnWave
”), a publicly-traded, Vancouver-based
technology company. Pursuant to the terms of a share purchase agreement dated April 25, 2019, we purchased 5,302,227 common shares in the capital of EnWave (the “
EnWave Shares
”) at a deemed price of $1.886 per share, based on the
volume weighted average trading price (“
VWAP
”) for EnWave’s Shares on the TSX Venture Exchange (the “
TSXV
”) for the five consecutive trading days up to and including April 22, 2019. As consideration for the
EnWave Shares, we issued to EnWave 840,576 Common Shares at a deemed price of $11.8966 per share. The EnWave Shares represent approximately 4.91% of the issued and outstanding common shares of EnWave on a non-diluted basis.
Letter Agreement with Hempco Food and Fiber Inc.
On
April 16, 2019, we entered into a binding letter agreement (the “
Letter Agreement
”) setting out the principal terms and conditions upon which we will acquire all of the issued and outstanding common shares of Hempco Food and
Fiber Inc. (“
Hempco
”) not already owned by Aurora for $1.04 per Hempco share, payable in Common Shares at a deemed price of $12.01 per Common Share, reflecting a valuation of approximately C$63.4 million on a fully diluted
basis. We currently own approximately 52% of the outstanding Hempco shares.
Assuming completion of the acquisition, Hempco will become a wholly owned
subsidiary of Aurora. Hempco’s shares will be de-listed from the TSX Venture Exchange and it is expected that Aurora will apply to cause Hempco to cease being a reporting issuer under applicable Canadian securities laws. The acquisition is
subject to the execution of a definitive agreement, the receipt of an independent valuation of Hempco, receipt of all regulatory, court, and shareholder approvals, and other customary closing conditions.
In anticipation of the acquisition, on January 15, 2019, we invested $5.0 million in a secured convertible debenture in Hempco. The debenture bears
interest at 8% per annum and is convertible at $1.18 per Hempco share at Aurora’s election until January 15, 2021.
16
THE SELLING SECURITYHOLDERS
Securities may be sold under this Prospectus by way of secondary offering by or for the account of certain of our securityholders. The Prospectus Supplement
that we will file in connection with any offering of Securities by selling securityholders will include the following information:
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the names of the selling securityholders;
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•
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the number or amount of Securities owned, controlled or directed of the class being distributed by each selling
securityholder;
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•
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the number or amount of Securities of the class being distributed for the account of each selling securityholder;
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•
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the number or amount of Securities of any class to be owned, controlled or directed by the selling
securityholders after the distribution and the percentage that number, or amount represents of the total number of our outstanding Securities;
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•
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whether the Securities are owned by the selling securityholders both of record and beneficially, of record only,
or beneficially only; and
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•
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all other information that is required to be included in the applicable Prospectus Supplement.
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17
USE OF PROCEEDS
Information regarding the use of the net proceeds from each offering of the Securities will be set forth in the Prospectus Supplement relating to the offering
of the Securities. This information will include the net proceeds to the Company from the sale of the Securities, the use of those proceeds and the specific business objectives that the Company expects to accomplish with such proceeds.
All expenses relating to an offering of Securities and any compensation paid to underwriters, dealers or agents, as the case may be, will be paid out of our
general funds, unless otherwise stated in the applicable Prospectus Supplement.
EARNINGS COVERAGE
RATIO
Earnings coverage ratios will be provided as required in the applicable Prospectus Supplement(s) with respect to the issuance of Debt
Securities pursuant to this Prospectus.
CONSOLIDATED CAPITALIZATION
Except as described below, there have been no material changes in our share and debt capital, on a consolidated basis, since December 31, 2018, being the
date of the Company’s most recently filed unaudited interim condensed consolidated financial statements incorporated by reference in this Prospectus, other than the issuance of:
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US$345.0 million in aggregate principal amount of Convertible Senior Notes due 2024 (“
Senior
Notes
”);
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3,088,967 common shares on the exercise of 3,088,967 stock options for gross proceeds of $13.3 million;
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942,029 common shares on the exercise of 942,029 warrants for gross proceeds of $4.8 million;
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75,525 common shares on vesting and exercise of 75,525 RSUs;
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•
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2,833 common shares on the exercise of 2,833 compensation options;
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•
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25,809 common shares issued at a deemed price of $9.69 in connection with earn out payments for a previous
acquisition;
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•
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13,667,933 common shares issued at a deemed price of $9.77 in connection with the acquisition of Whistler;
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•
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124,948 common shares issued at a deemed price of $12.00 in connection with the acquisition of Chemi;
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840,576 common shares issued at a deemed price of $11.90 in connection with an investment in EnWave; and
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the grants of stock options and issuance of share purchase warrants.
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18
TRADING PRICE AND VOLUME
Our common shares are listed on the TSX and NYSE under the trading symbol “ACB”. The following tables set forth information relating to the trading
of the common shares on the TSX and NYSE for the months indicated.
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Month
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TSX Price Range
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Total Volume
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High
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Low
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January 2018
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15.20
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8.90
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604,723,498
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February 2018
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12.55
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7.11
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365,286,690
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March 2018
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11.98
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8.81
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217,623,205
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April 2018
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9.34
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6.75
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226,335,287
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May 2018
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8.77
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7.17
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149,828,955
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June 2018
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10.72
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8.02
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243,443,443
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July 2018
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9.52
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6.53
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189,587,987
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August 2018
|
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9.38
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5.29
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428,603,704
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September 2018
|
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13.48
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7.65
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740,328,157
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October 2018
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16.24
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7.25
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872,736,309
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November 2018
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10.65
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7.07
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372,391,491
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December 2018
|
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8.31
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|
6.21
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253,376,955
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January 2019
|
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9.97
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6.59
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406,049,392
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February 2019
|
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10.94
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8.83
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325,088,920
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March 2019
|
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13.67
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9.35
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441,776,351
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April 2019
|
|
12.62
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|
11.30
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155,536,967
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May 1 – 9, 2019
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12.24
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11.00
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37,460,472
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Month
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NYSE Price Range (in US$)
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Total Volume
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High
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Low
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October 23 – October 31, 2018
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8.63
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5.39
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170,861,074
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November 2018
|
|
8.12
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5.31
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306,636,109
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December 2018
|
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6.23
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4.58
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263,352,848
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January 2019
|
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7.52
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4.83
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505,506,097
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February 2019
|
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8.34
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6.66
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522,841,015
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March 2019
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10.32
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7.01
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973,988,613
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April 2019
|
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9.37
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8.45
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392,856,411
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May 1 – 9, 2019
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9.14
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8.15
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104,608,973
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19
PLAN OF DISTRIBUTION
We may offer and sell Securities directly to one or more purchasers, through agents, or through underwriters or dealers designated by us from time to time. We
may distribute the Securities from time to time in one or more transactions at fixed prices (which may be changed from time to time), at market prices prevailing at the times of sale, at varying prices determined at the time of sale, at prices
related to prevailing market prices or at negotiated prices including sales in transactions that are deemed to be
“at-the-market
distributions” as defined in
National Instrument
44-102—
Shelf Distributions
, including sales made directly on the TSX, NYSE or other existing trading markets for the Securities. A description of such pricing will be disclosed
in the applicable Prospectus Supplement. We may offer different classes of Securities in the same offering, or we may offer different classes of Securities in separate offerings.
This Prospectus may also, from time to time, relate to the offering of our Securities by certain selling securityholders. The selling securityholders may sell
all or a portion of our Securities beneficially owned by them and offered thereby from time to time directly or through one or more underwriters, broker-dealers or agents. Our Securities may be sold by the selling securityholders in one or more
transactions at fixed prices (which may be changed from time to time), at market prices prevailing at the time of the sale, at varying prices determined at the time of sale, at prices related to prevailing market prices or at negotiated prices.
A Prospectus Supplement will describe the terms of each specific offering of Securities, including: (i) the terms of the Securities to which the
Prospectus Supplement relates, including the type of Security being offered; (ii) the name or names of any agents, underwriters or dealers involved in such offering of Securities; (iii) the name or names of any selling securityholders;
(iv) the purchase price of the Securities offered thereby and the proceeds to, and the portion of expenses borne by, the Company from the sale of such Securities; (v) any agents’ commission, underwriting discounts and other items
constituting compensation payable to agents, underwriters or dealers; and (vi) any discounts or concessions allowed or
re-allowed
or paid to agents, underwriters or dealers.
If Securities sold pursuant to a Prospectus Supplement are acquired by underwriters for their own account, they may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The obligations of the underwriters to purchase Securities will be subject to the conditions precedent agreed upon
by the parties and the underwriters will be obligated to purchase all Securities under that offering if any are purchased. Any public offering price and any discounts or concessions allowed or
re-allowed
or
paid to agents, underwriters or dealers may be changed from time to time.
Underwriters, dealers and agents who participate in the distribution of
the Securities may be entitled under agreements to be entered into with the Company to indemnification by the Company against certain liabilities, including liabilities under the U.S. Securities Act and Canadian securities legislation, or to
contribution with respect to payments which such underwriters, dealers or agents may be required to make in respect thereof. Such underwriters, dealers and agents may be customers of, engage in transactions with, or perform services for, the Company
in the ordinary course of business.
In connection with any offering of Securities, other than an
“at-the-market
distribution”, the underwriters may over-allot or effect transactions which stabilize or maintain the market price of the Securities offered at a level above that which might
otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time.
The Securities may also be sold:
(i) directly by the Company or the selling securityholders at such prices and upon such terms as agreed to; or (ii) through agents designated by the Company or the selling securityholders from time to time. Any agent involved in the
offering and sale of the Securities in respect of which this Prospectus is delivered will be named, and any commissions payable by the Company and/or selling securityholder to such agent will be set forth, in the Prospectus Supplement. Unless
otherwise indicated in the Prospectus Supplement, any agent is acting on a “best efforts” basis for the period of its appointment.
20
We and/or the selling securityholders may agree to pay the underwriters or agents a commission for various
services relating to the issue and sale of any Securities offered under any Prospectus Supplement. In addition, underwriters or agents may sell the securities to or through dealers, and those dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters or agents and/or commissions from the purchasers for which they may act as agent. Agents, underwriters or dealers who participate in the distribution of the Securities may be entitled under
agreements to be entered into with the Company and/or the selling securityholders to indemnification by the Company and/or the selling securityholders against certain liabilities, including liabilities under securities legislation, or to
contribution with respect to payments which such underwriters, dealers or agents may be required to make in respect thereof.
Each class or series of
Warrants, Options, Subscription Receipts, Debt Securities and Units will be a new issue of Securities with no established trading market. Unless otherwise specified in the applicable Prospectus Supplement, Warrants, Options, Subscription Receipts,
Debt Securities or Units will not be listed on any securities or stock exchange. Unless otherwise specified in the applicable Prospectus Supplement, there is no market through which the Warrants, Options, Subscription Receipts, Debt Securities or
Units may be sold and purchasers may not be able to resell Warrants, Options, Subscription Receipts, Debt Securities or Units purchased under this Prospectus or any Prospectus Supplement. This may affect the pricing of the Warrants, Options,
Subscription Receipts, Debt Securities or Units in the secondary market, the transparency and availability of trading prices, the liquidity of the Securities, and the extent of issuer regulation. Subject to applicable laws, certain dealers may make
a market in the Warrants, Options, Subscription Receipts, Debt Securities or Units, as applicable, but will not be obligated to do so and may discontinue any market making at any time without notice. No assurance can be given that any dealer will
make a market in the Warrants, Options, Subscription Receipts or Units or as to the liquidity of the trading market, if any, for the Warrants, Options, Subscription Receipts, Debt Securities or Units.
In connection with any offering of Securities, unless otherwise specified in a Prospectus Supplement, underwriters or agents may over-allot or effect
transactions which stabilize, maintain or otherwise affect the market price of Securities offered at levels other than those which might otherwise prevail on the open market. Such transactions may be commenced, interrupted or discontinued at any
time.
21
DESCRIPTION OF SECURITIES
The Securities may be offered under this Prospectus in amounts and at prices to be determined based on market conditions at the time of the sale and such
amounts and prices will be set forth in the accompanying Prospectus Supplement. The Securities may be issued alone or in combination and for such consideration determined by our board of directors.
Common Shares
The holders of Common Shares are entitled
to receive notice of any meeting of the shareholders of the Company and to attend and vote thereat, except those meetings at which only the holders shares of another class or of a particular series are entitled to vote. Each Common Share entitles
its holder to one vote. The holders of Common Shares are entitled to receive on a
pro-rata
basis such dividends as the board of directors may declare out of funds legally available therefor. In the event of
the dissolution, liquidation,
winding-up
or other distribution of our assets, such holders are entitled to receive on a
pro-rata
basis all of assets of the Company
remaining after payment of all of liabilities. The Common Shares carry no
pre-emptive
or conversion rights.
Warrants
This section describes the general terms that
will apply to any Warrants for the purchase of Common Shares. To the extent required under applicable law, we will not offer Warrants for sale separately to any member of the public in Canada unless the offering of such Warrants is in connection
with and forms a part of the consideration for an acquisition or merger transaction, or unless the applicable Prospectus Supplement containing the specific terms of the Warrants to be offered separately is first approved, in accordance with
applicable laws, for filing by the securities commissions or similar regulatory authorities in each of the jurisdictions where the Warrants will be offered for sale.
Subject to the foregoing, we may issue Warrants independently or together with other securities, and Warrants sold with other securities may be attached to or
separate from the other securities. Warrants may be issued directly by us to the purchasers thereof or under one or more warrant indentures or warrant agency agreements to be entered into by us and one or more banks or trust companies acting as
warrant agent. Warrants, like other Securities that may be sold, may be listed on a securities exchange subject to exchange listing requirements and applicable legal requirements.
The following description, together with the additional information the Company may include in any Prospectus Supplements, summarizes the material terms and
provisions of the Warrants that the Company may offer under the Prospectus, which may consist of Warrants to purchase Common Shares or other Securities and may be issued in one or more series. While the terms summarized below will apply generally to
any Warrants that the Company may offer under the Prospectus, the Company will describe the particular terms of any series of Warrants that it may offer in more detail in the applicable Prospectus Supplement. The terms of any Warrants offered under
a Prospectus Supplement may differ from the terms described below. A copy of any warrant indenture governing the terms of Warrants will be filed on SEDAR in connection with any offering of Warrants under this Prospectus.
The particular terms of each issue of Warrants will be described in the applicable Prospectus Supplement. This description will include, where applicable:
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the designation and aggregate number of Warrants;
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the price at which the Warrants will be offered;
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•
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the currency or currencies in which the Warrants will be offered;
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22
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•
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the date on which the right to exercise the Warrants will commence and the date on which the right will expire;
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•
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if applicable, the identity of the Warrant agent;
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•
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whether the Warrants will be listed on any securities exchange;
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•
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any minimum or maximum subscription amount;
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•
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the number of Common Shares that may be purchased upon exercise of each Warrant and the price at which and
currency or currencies in which the Common Shares may be purchased upon exercise of each Warrant;
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•
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the designation and terms of any securities with which the Warrants will be offered, if any, and the number of
the Warrants that will be offered with each security;
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•
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the date or dates, if any, on or after which the Warrants and the related securities will be transferable
separately;
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•
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whether the Warrants will be subject to redemption and, if so, the terms of such redemption provisions;
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whether the Warrants are to be issued in registered form, “book-entry only” form,
non-certificated
inventory system form, bearer form or in the form of temporary or permanent global securities and the basis of exchange, transfer and ownership thereof;
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any material risk factors relating to such Warrants and the Common Shares to be issued upon exercise of the
Warrants;
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•
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any other rights, privileges, restrictions and conditions attaching to the Warrants and the Common Shares to be
issued upon exercise of the Warrants;
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•
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material Canadian and United States federal income tax consequences of owning and exercising the Warrants; and
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•
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any other material terms or conditions of the Warrants and the Securities to be issued upon exercise of the
Warrants.
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The terms and provisions of any Warrants offered under a Prospectus Supplement may differ from the terms described above and
may not be subject to or contain any or all of the terms described above.
Prior to the exercise of any Warrants, holders of Warrants will not have any of
the rights of holders of the Common Shares purchasable upon such exercise or the right to vote such underlying securities.
Options
We may issue or grant Options in connection with acquisitions, merger transactions, or to directors, officers, employees or consultants, as applicable.
The particular terms and conditions applicable to each Option issue will be comprehensively described in the applicable Option Agreement and related
Prospectus Supplement. This description will include, where applicable:
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the designation and aggregate number of Options;
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23
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the price at which the Options will be offered;
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•
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the currency or currencies in which the Options will be offered;
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•
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the date on which the right to exercise the Options will commence and the date on which the right will expire;
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•
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the number of Common Shares that may be issued upon exercise of each Option and the price and currency or
currencies in which the Common Shares may be purchased upon exercise of each Option;
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•
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the date or dates, if any, on or after which the Options and the related securities will be transferable
separately;
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•
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any resale restrictions and vesting criteria related to the Options;
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•
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any applicable accelerated vesting provisions applicable to the Options;
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•
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any early termination provisions relating to the Options;
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•
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any material risk factors relating to such Options and the Common Shares to be issued upon exercise of the
Options;
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•
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any other rights, privileges, restrictions and conditions attaching to the Options and the Common Shares to be
issued upon exercise of the Options;
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•
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material Canadian and United States federal income tax consequences of owning and exercising the Options; and
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•
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any other material terms and conditions of the Options and the Securities to be issued upon exercise of the
Options.
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Prior to the exercise of any Options, holders of Options will not have any of the voting or other rights applicable to holders
of Common Shares.
Subscription Receipts
This
section describes the general terms that will apply to any Subscription Receipts that may be offered by us pursuant to the Prospectus. Subscription Receipts may be offered separately or together with Common Shares or Warrants, as the case may be.
The Subscription Receipts will be issued under a Subscription Receipt agreement.
In the event we issue Subscription Receipts, we will provide the
original purchasers of Subscription Receipts a contractual right of rescission exercisable following the issuance of common shares to such purchasers.
The applicable Prospectus Supplement will include details of the Subscription Receipt agreement covering the Subscription Receipts being offered. A copy of
the Subscription Receipt agreement relating to an offering of Subscription Receipts will be filed by us with the applicable securities regulatory authorities after it has been entered into by us. The specific terms of the Subscription Receipts, and
the extent to which the general terms described in this section apply to those Subscription Receipts, will be set forth in the applicable Prospectus Supplement. This description will include, where applicable:
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the number of Subscription Receipts;
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•
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the price at which the Subscription Receipts will be offered;
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24
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the currency at which the Subscription Receipts will be offered and whether the price is payable in installments;
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•
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the procedures for the exchange of the Subscription Receipts into Common Shares, Warrants or Units;
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•
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the number of Common Shares, Warrants or Units that may be issued upon exercise or deemed conversion of each
Subscription Receipt;
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•
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the designation and terms of any other Securities with which the Subscription Receipts will be offered, if any,
and the number of Subscription Receipts that will be offered with each Security;
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•
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conditions to the conversion or exchange of Subscription Receipts into other Securities and the consequences of
such conditions not being satisfied;
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•
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terms applicable to the gross or net proceeds from the sale of the Subscription Receipts plus any interest earned
thereon;
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•
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the dates or periods during which the Subscription Receipts may be converted or exchanged;
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•
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the circumstances, if any, which will cause the Subscription Receipts to be deemed to be automatically converted
or exchanged;
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•
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provisions applicable to any escrow of the gross or net proceeds from the sale of the Subscription Receipts plus
any interest or income earned thereon, and for the release of such proceeds from such escrow;
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•
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if applicable, the identity of the Subscription Receipt agent;
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•
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whether the Subscription Receipts will be listed on any securities exchange;
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•
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whether the Subscription Receipts will be issued with any other Securities and, if so, the amount and terms of
these Securities;
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•
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any minimum or maximum subscription amount;
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•
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whether the Subscription Receipts are to be issued in registered form, “book-entry only” form,
non-certificated
inventory system form, bearer form or in the form of temporary or permanent global securities and the basis of exchange, transfer and ownership thereof;
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•
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any material risk factors relating to such Subscription Receipts and the Securities to be issued upon conversion
or exchange of the Subscription Receipts;
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•
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any other rights, privileges, restrictions and conditions attaching to the Subscription Receipts and the
Securities to be issued upon exchange of the Subscription Receipts;
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•
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material Canadian and United States income tax consequences of owning or converting or exchanging the
Subscription Receipts; and
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•
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any other material terms and conditions of the Subscription Receipts and the Securities to be issued upon the
exchange of the Subscription Receipts.
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The terms and provisions of any Subscription Receipts offered under a Prospectus Supplement may
differ from the terms described above and may not be subject to or contain any or all of the terms described above.
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Prior to the exchange of any Subscription Receipts, holders of such Subscription Receipts will not have any
of the rights of holders of the Securities for which the Subscription Receipts may be exchanged, including the right to receive payments of dividends or the right to vote such underlying securities.
Description of Debt Securities
We may issue Debt
Securities in one or more series under an indenture (the “
Indenture
”), to be entered into among the Company and a trustee. The Indenture will be subject to and governed by the United States Trust Indenture Act of 1939, as amended
(the “
Trust Indenture Act
”). A copy of the form of the Indenture will be filed with the SEC as an exhibit to the Registration Statement of which this Prospectus forms a part. The following description sets forth certain general
material terms and provisions of the Debt Securities. If Debt Securities are issued, we will describe in the applicable Prospectus Supplement the particular material terms and provisions of any series of the Debt Securities and a description of how
the general material terms and provisions described below may apply to that series of the Debt Securities. Prospective investors should read both the Prospectus and the Prospectus Supplement for a complete summary of all material terms relating to a
particular series of Debt Securities. Prospective investors should be aware that information in the applicable Prospectus Supplement may update and supersede the following information. Prospective investors also should refer to the Indenture for a
complete description of all terms relating to the Debt Securities. We will file as exhibits to the Registration Statement, of which this Prospectus is a part, or will incorporate by reference from a report on
Form 6-K
that the Company furnishes to the SEC, any supplemental indenture describing the terms and conditions of Debt Securities that we are offering before the issuance of such Debt Securities. We will
also file the final Indenture for any offering of Debt Securities on SEDAR.
We may issue Debt Securities and incur additional indebtedness other
than through the offering of Debt Securities pursuant to this Prospectus.
General
The Indenture will not limit the aggregate principal amount of Debt Securities that we may issue under the Indenture and will not limit the amount of other
indebtedness that we may incur. The Indenture will provide that we may issue Debt Securities from time to time in one or more series and may be denominated and payable in U.S. dollars, Canadian dollars or any foreign currency. Unless otherwise
indicated in the applicable Prospectus Supplement, the Debt Securities will be unsecured obligations of the Company. The Indenture will also permit us to increase the principal amount of any series of the Debt Securities previously issued and to
issue that increased principal amount.
The applicable Prospectus Supplement for any series of Debt Securities that we offer will describe the specific
terms of the Debt Securities and may include, but is not limited to, any of the following:
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the title of the Debt Securities;
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any limit on the aggregate principal amount of the Debt Securities and, if no limit is specified, the Company
will have the right to
re-open
such series for the issuance of additional Debt Securities from time to time;
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whether the payment of principal, interest and premium, if any, on the Debt Securities will be our senior, senior
subordinated or subordinated obligations;
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whether payment of principal, interest and premium, if any, on the Debt Securities will be secured by certain
assets of the Company and any applicable guarantors;
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whether payment of the Debt Securities will be guaranteed by any other person;
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the date or dates, or the method by which such date or dates will be determined or extended, on which the
principal (and premium, if any) of the Debt Securities of the series is payable;
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the rate or rates at which the Securities of the series shall bear interest, if any, or the method by which such
rate or rates shall be determined, whether such interest shall be payable in cash or additional Securities of the same series or shall accrue and increase the aggregate principal amount outstanding of such series, the date or dates from which such
interest shall accrue, or the method by which such date or dates shall be determined;
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the place or places we will pay principal, premium and interest, if any, and the place or places where Debt
Securities can be presented for registration of transfer, exchange or conversion;
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whether and under what circumstances we will be required to pay any additional amounts for withholding or
deduction for taxes with respect to the Debt Securities, and whether and on what terms we will have the option to redeem the Debt Securities rather than pay the additional amounts;
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whether we will be obligated to redeem, repay or repurchase the Debt Securities pursuant to any sinking or other
provision, or at the option of a holder and the terms and conditions of such redemption, repayment or repurchase;
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whether we may redeem the Debt Securities, in whole or in part, prior to maturity and the terms and conditions of
any such redemption;
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the denominations in which we will issue any registered Debt Securities, if other than denominations of $2,000
and any multiple of $1,000 and, if other than denominations of $5,000, the denominations in which any unregistered Debt Security shall be issuable;
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whether we will make payments on the Debt Securities in a currency other than U.S. dollars;
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whether payments on the Debt Securities will be payable with reference to any index, formula or other method;
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whether we will issue the Debt Securities as global securities and, if so, the identity of the depositary for the
global securities;
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whether we will issue the Debt Securities as unregistered securities, registered securities or both;
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any changes or additions to, or deletions of, events of default or covenants whether or not such events of
default or covenants are consistent with the events of default or covenants in the Indenture;
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the applicability of, and any changes or additions to, the provisions for defeasance described under
“Defeasance” below;
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whether the holders of any series of Debt Securities have special rights if specified events occur;
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the terms, if any, for any conversion or exchange of the Debt Securities for any other securities;
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provisions as to modification, amendment or variation of any rights or terms attaching to the Debt Securities;
and
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any other terms, conditions, rights and preferences (or limitations on such rights and preferences).
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Unless stated otherwise in the applicable Prospectus Supplement, no holder of Debt Securities will have the
right to require us to repurchase the Debt Securities and there will be no increase in the interest rate if we become involved in a highly leveraged transaction or if we have a change of control.
We may issue Debt Securities bearing no interest or interest at a rate below the prevailing market rate at the time of issuance, and may offer and sell the
Debt Securities at a discount below their stated principal amount. We may also sell any of the Debt Securities for a foreign currency or currency unit, and payments on the Debt Securities may be payable in a foreign currency or currency unit. In any
of these cases, we will describe certain Canadian federal and U.S. federal income tax consequences and other special considerations in the applicable Prospectus Supplement.
We may issue Debt Securities with terms different from those of Debt Securities previously issued and, without the consent of the holders thereof, we may
reopen a previous issue of a series of Debt Securities and issue additional Debt Securities of such series (unless the reopening was restricted when such series was created).
Guarantees
Our payment obligations under any
series of Debt Securities may be guaranteed by certain of our direct or indirect subsidiaries. In order to comply with certain registration statement form requirements under U.S. law, these guarantees may in turn be guaranteed by the Company. The
terms of such guarantees will be set forth in the applicable Prospectus Supplement.
Ranking and Other Indebtedness
Unless otherwise indicated in an applicable Prospectus Supplement, and except to the extent prescribed by law, each series of Debt Securities shall be senior,
unsubordinated and unsecured obligations of the Company and shall rank pari passu and ratably without preference among themselves and pari passu with all other senior, unsubordinated and unsecured obligations of the Company.
Our Board of Directors may establish the extent and manner, if any, to which payment on or in respect of a series of Debt Securities will be senior, senior
subordinated or will be subordinated to the prior payment of the Company’s other liabilities and obligations, and whether the payment of principal, premium, if any, and interest, if any, will be guaranteed by any other person and the nature and
priority of any security.
Debt Securities in Global Form
The Depositary and Book-Entry
Unless otherwise
specified in the applicable Prospectus Supplement, a series of the Debt Securities may be issued in whole or in part in global form as a “global security” and will be registered in the name of or issued in bearer form and be deposited with
a depositary, or its nominee, each of which will be identified in the applicable Prospectus Supplement relating to that series. Unless and until exchanged, in whole or in part, for the Debt Securities in definitive registered form, a global security
may not be transferred except as a whole by the depositary for such global security to a nominee of the depositary, by a nominee of the depositary to the depositary or another nominee of the depositary or by the depositary or any such nominee to a
successor of the depositary or a nominee of the successor.
The specific terms of the depositary arrangement with respect to any portion of a particular
series of the Debt Securities to be represented by a global security will be described in the applicable Prospectus Supplement relating to such series. The Company anticipates that the provisions described in this section will apply to all
depositary arrangements.
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Upon the issuance of a global security, the depositary therefor or its nominee will credit, on its book
entry and registration system, the respective principal amounts of the Debt Securities represented by the global security to the accounts of such persons, designated as “participants”, having accounts with such depositary or its nominee.
Such accounts shall be designated by the underwriters, dealers or agents participating in the distribution of the Debt Securities or by the Company if such Debt Securities are offered and sold directly by the Company. Ownership of beneficial
interests in a global security will be limited to participants or persons that may hold beneficial interests through participants. Ownership of beneficial interests in a global security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the depositary therefor or its nominee (with respect to interests of participants) or by participants or persons that hold through participants (with respect to interests of persons other than
participants). The laws of some states in the United States may require that certain purchasers of securities take physical delivery of such securities in definitive form.
So long as the depositary for a global security or its nominee is the registered owner of the global security or holder of a global security in bearer form,
such depositary or such nominee, as the case may be, will be considered the sole owner or holder of the Debt Securities represented by the global security for all purposes under the Indenture. Except as provided below, owners of beneficial interests
in a global security will not be entitled to have a series of the Debt Securities represented by the global security registered in their names, will not receive or be entitled to receive physical delivery of such series of the Debt Securities in
definitive form and will not be considered the owners or holders thereof under the Indenture.
Any payments of principal, premium, if any, and interest,
if any, on global securities registered in the name of a depositary or securities registrar will be made to the depositary or its nominee, as the case may be, as the registered owner of the global security representing such Debt Securities. None of
the Company, any trustee or any paying agent for the Debt Securities represented by the global securities will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership
interests of the global security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
The Company
expects that the depositary for a global security or its nominee, upon receipt of any payment of principal, premium, if any, or interest, if any, will credit participants’ accounts with payments in amounts proportionate to their respective
beneficial interests in the principal amount of the global security as shown on the records of such depositary or its nominee. The Company also expects that payments by participants to owners of beneficial interests in a global security held through
such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in “street name”, and will be the responsibility of such participants.
Discontinuance of Depositary’s Services
If a
depositary for a global security representing a particular series of the Debt Securities is at any time unwilling or unable to continue as depositary or, if at any time the depositary for such series shall no longer be registered or in good standing
under the Exchange Act, and a successor depositary is not appointed by us within 90 days, the Company will issue such series of the Debt Securities in definitive form in exchange for a global security representing such series of the Debt Securities.
If an event of default under the Indenture has occurred and is continuing, Debt Securities in definitive form will be printed and delivered upon written request by the holder to the appropriate trustee. In addition, the Company may at any time and
in the Company’s sole discretion determine not to have a series of the Debt Securities represented by a global security and, in such event, will issue a series of the Debt Securities in definitive form in exchange for all of the global
securities representing that series of Debt Securities.
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Debt Securities in Definitive Form
A series of the Debt Securities may be issued in definitive form, solely as registered securities, solely as unregistered securities or as both registered
securities and unregistered securities. Registered securities will be issuable in denominations of $2,000 and integral multiples of $1,000 and unregistered securities will be issuable in denominations of $5,000 and integral multiples of $5,000 or,
in each case, in such other denominations as may be set out in the terms of the Debt Securities of any particular series. Unless otherwise indicated in the applicable Prospectus Supplement, unregistered securities will have interest coupons
attached.
Unless otherwise indicated in the applicable Prospectus Supplement, payment of principal, premium, if any, and interest, if any, on the Debt
Securities in definitive form will be made at the office or agency designated by the Company, or at the Company’s option the Company can pay principal, interest, if any, and premium, if any, by check mailed to the address of the person entitled
at the address appearing in the security register of the trustee or electronic funds wire transfer to an account of persons who meet certain thresholds set out in the Indenture who are entitled to receive payments by wire transfer. Unless otherwise
indicated in the applicable Prospectus Supplement, payment of interest, if any, will be made to the persons in whose name the Debt Securities are registered at the close of business on the day or days specified by the Company.
At the option of the holder of Debt Securities, registered securities of any series will be exchangeable for other registered securities of the same series,
of any authorized denomination and of a like aggregate principal amount. If, but only if, provided in an applicable Prospectus Supplement, unregistered securities (with all unmatured coupons, except as provided below, and all matured coupons in
default) of any series may be exchanged for registered securities of the same series, of any authorized denominations and of a like aggregate principal amount and tenor. In such event, unregistered securities surrendered in a permitted exchange for
registered securities between a regular record date or a special record date and the relevant date for payment of interest shall be surrendered without the coupon relating to such date for payment of interest, and interest will not be payable on
such date for payment of interest in respect of the registered security issued in exchange for such unregistered security, but will be payable only to the holder of such coupon when due in accordance with the terms of the Indenture. Unless otherwise
specified in an applicable Prospectus Supplement, unregistered securities will not be issued in exchange for registered securities.
The applicable
Prospectus Supplement may indicate the places to register a transfer of the Debt Securities in definitive form. Service charges may be payable by the holder for any registration of transfer or exchange of the Debt Securities in definitive form, and
the Company may, in certain instances, require a sum sufficient to cover any tax or other governmental charges payable in connection with these transactions.
We shall not be required to:
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issue, register the transfer of or exchange any series of the Debt Securities in definitive form during a period
beginning at the opening of 15 days before any selection of securities of that series of the Debt Securities to be redeemed and ending on the relevant date of notice of such redemption, as provided in the Indenture;
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register the transfer of or exchange any registered security in definitive form, or portion thereof, called for
redemption, except the unredeemed portion of any registered security being redeemed in part;
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exchange any unregistered security called for redemption except to the extent that such unregistered security may
be exchanged for a registered security of that series and like tenor; provided that such registered security will be simultaneously surrendered for redemption; or
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issue, register the transfer of or exchange any of the Debt Securities in definitive form which have been
surrendered for repayment at the option of the holder, except the portion, if any, of such Debt Securities not to be so repaid.
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Provision of Financial Information
The Company will file with the Trustee within 15 days after the Company files the same with the SEC, (i) copies of the annual reports containing audited
financial statements and copies of quarterly reports containing unaudited financial statements and (ii) copies of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) which the Company may be required to file with or furnish to the SEC pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934.
In the event that the Company is not required to remain subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, or otherwise
report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, it will continue to file with the SEC and provide the Trustee:
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within 140 days after the end of each fiscal year, annual reports on
Form 20-F,
40-F
or
Form 10-K,
as applicable (or any successor form), containing audited financial statements and the
other financial information required to be contained therein (or required in such successor form); and
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within 60 days after the end of each of the first three fiscal quarters of each fiscal year, reports on
Form 6-K
or
Form 10-Q
(or any successor form), containing unaudited financial statements and the other financial information which, regardless of applicable
requirements shall, at a minimum, contain such information required to be provided in quarterly reports under the laws of Canada or any province thereof to security holders of a corporation with securities listed on the Toronto Stock Exchange,
whether or not the Company has any of its securities so listed.
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Events of Default
Unless otherwise specified in the applicable Prospectus Supplement relating to a particular series of Debt Securities, the following is a summary of events
which will, with respect to any series of the Debt Securities, constitute an event of default under the Indenture with respect to the Debt Securities of that series:
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the Company fails to pay principal of, or any premium on any Debt Security of that series when it is due and
payable;
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the Company fails to pay interest payable on any Debt Security of that series when it becomes due and payable,
and such default continues for 30 days;
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the Company fails to make any required sinking fund or analogous payment when due for that series of Debt
Securities;
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the Company fails to observe or perform any of its covenants or agreements in the Indenture that affect or are
applicable to the Debt Securities of that series for 90 days after written notice to the Company by the trustees or to the Company and the trustees by holders of at least 25% in aggregate principal amount of the outstanding Debt Securities of that
series;
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certain events involving the Company’s bankruptcy, insolvency or reorganization; and
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any other event of default provided for in that series of Debt Securities.
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A default under one series of Debt Securities will not necessarily be a default under another series. A trustee may withhold notice to the holders of the Debt
Securities of any default, except in the payment of principal or premium, if any, or interest, if any, if in good faith it considers it in the interests of the holders to do so and so advises the Company in writing.
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If an event of default for any series of Debt Securities occurs and continues, a trustee or the holders of
at least 25% in aggregate principal amount of the Debt Securities of that series may require the Company to repay immediately:
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the entire principal and interest of the Debt Securities of the series; or
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if the Debt Securities are discounted securities, that portion of the principal as is described in the applicable
Prospectus Supplement.
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If an event of default relates to events involving the Company’s bankruptcy, insolvency or reorganization,
the principal of all Debt Securities will become immediately due and payable without any action by the trustee or any holder.
Subject to certain
conditions, the holders of a majority of the aggregate principal amount of the Debt Securities of the affected series can rescind and annul an accelerated payment requirement. If Debt Securities are discounted securities, the applicable Prospectus
Supplement will contain provisions relating to the acceleration of maturity of a portion of the principal amount of the discounted securities upon the occurrence or continuance of an event of default.
Other than its duties in case of a default, a trustee is not obligated to exercise any of the rights or powers that it will have under the Indenture at the
request or direction of any holders, unless the holders offer the trustee reasonable security or indemnity. If they provide this reasonable security or indemnity, the holders of a majority in aggregate principal amount of any series of Debt
Securities may, subject to certain limitations, direct the time, method and place of conducting any proceeding for any remedy available to a trustee, or exercising any trust or power conferred upon a trustee, for any series of Debt Securities.
The Company will be required to furnish to the trustees a statement annually as to its compliance with all conditions and covenants under the Indenture and,
if the Company is not in compliance, the Company must specify any defaults. The Company will also be required to notify the trustees as soon as practicable upon becoming aware of any event of default.
No holder of a Debt Security of any series will have any right to institute any proceeding with respect to the Indenture, or for the appointment of a receiver
or a trustee, or for any other remedy, unless:
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the holder has previously given to the trustees written notice of a continuing event of default with respect to
the Debt Securities of the affected series;
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the holders of at least 25% in principal amount of the outstanding Debt Securities of the series affected by an
event of default have made a written request, and the holders have offered reasonable indemnity, to the trustees to institute a proceeding as trustees; and
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the trustees have failed to institute a proceeding, and have not received from the holders of a majority in
aggregate principal amount of the outstanding Debt Securities of the series affected (or in the case of bankruptcy, insolvency or reorganization, all series outstanding) by an event of default a direction inconsistent with the request, within 60
days after receipt of the holders’ notice, request and offer of indemnity.
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However, such above-mentioned limitations do not apply
to a suit instituted by the holder of a Debt Security for the enforcement of payment of the principal of or any premium, if any, or interest on such Debt Security on or after the applicable due date specified in such Debt Security.
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Defeasance
When the Company uses the term “defeasance”, it means discharge from its obligations with respect to any Debt Securities of or within a series under
the Indenture. Unless otherwise specified in the applicable Prospectus Supplement, if the Company deposits with a trustee cash, government securities or a combination thereof sufficient to pay the principal, interest, if any, premium, if any, and
any other sums due to the stated maturity date or a redemption date of the Debt Securities of a series, then at the Company’s option:
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the Company will be discharged from the obligations with respect to the Debt Securities of that series; or
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the Company will no longer be under any obligation to comply with certain restrictive covenants under the
Indenture and certain events of default will no longer apply to the Company.
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If this happens, the holders of the Debt Securities of the
affected series will not be entitled to the benefits of the Indenture except for registration of transfer and exchange of Debt Securities and the replacement of lost, stolen, destroyed or mutilated Debt Securities. These holders may look only to the
deposited fund for payment on their Debt Securities.
To exercise the defeasance option, the Company must deliver to the trustees:
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an opinion of counsel in the United States to the effect that the holders of the outstanding Debt Securities of
the affected series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of a defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have
been the case if the defeasance had not occurred;
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an opinion of counsel in Canada or a ruling from the Canada Revenue Agency to the effect that the holders of the
outstanding Debt Securities of the affected series will not recognize income, gain or loss for Canadian federal, provincial or territorial income or other tax purposes as a result of a defeasance and will be subject to Canadian federal, provincial
or territorial income tax and other tax on the same amounts, in the same manner and at the same times as would have been the case had the defeasance not occurred; and
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a certificate of one of the Company’s officers and an opinion of counsel, each stating that all conditions
precedent provided for relating to defeasance have been complied with.
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If the Company is to be discharged from its obligations with
respect to the Debt Securities, and not just from the Company’s covenants, the U.S. opinion must be based upon a ruling from or published by the United States Internal Revenue Service or a change in law to that effect.
In addition to the delivery of the opinions described above, the following conditions must be met before the Company may exercise its defeasance option:
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no event of default or event that, with the passing of time or the giving of notice, or both, shall constitute an
event of default shall have occurred and be continuing for the Debt Securities of the affected series;
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the Company is not an “insolvent person” within the meaning of applicable bankruptcy and insolvency
legislation; and
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other customary conditions precedent are satisfied.
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Modification and Waiver
Modifications and amendments of the Indenture may be made by the Company and the trustees pursuant to one or more Supplemental Indentures (a
“Supplemental Indenture”) with the consent of the holders of at least a majority in aggregate principal amount of the outstanding Debt Securities of each series affected by the modification. However, without the consent of each holder
affected, no such modification may:
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change the stated maturity of the principal of, premium, if any, or any instalment of interest, if any, on any
Debt Security;
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reduce the principal, premium, if any, or rate of interest, if any, or change any obligation of the Company to
pay any additional amounts;
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reduce the amount of principal of a debt security payable upon acceleration of its maturity or the amount
provable in bankruptcy;
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change the place or currency of any payment;
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affect the holder’s right to require the Company to repurchase the Debt Securities at the holder’s
option;
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impair the right of the holders to institute a suit to enforce their rights to payment;
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adversely affect any conversion or exchange right related to a series of Debt Securities;
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reduce the percentage of Debt Securities required to modify the Indenture or to waive compliance with certain
provisions of the Indenture; or
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reduce the percentage in principal amount of outstanding Debt Securities necessary to take certain actions.
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The holders of at least a majority in principal amount of outstanding Debt Securities of any series may on behalf of the holders of all
Debt Securities of that series waive, insofar as only that series is concerned, past defaults under the Indenture and compliance by the Company with certain restrictive provisions of the Indenture. However, these holders may not waive a default in
any payment of principal, premium, if any, or interest on any Debt Security or compliance with a provision that cannot be modified without the consent of each holder affected.
The Company may modify the Indenture pursuant to a Supplemental Indenture without the consent of any holders to:
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evidence its successor under the Indenture;
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add covenants of the Company or surrender any right or power of the Company for the benefit of holders;
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provide for unregistered securities to become registered securities under the Indenture and make other such
changes to unregistered securities that in each case do not materially and adversely affect the interests of holders of outstanding Debt Securities;
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establish the forms of the Debt Securities;
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appoint a successor trustee under the Indenture;
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add provisions to permit or facilitate the defeasance and discharge of the Debt Securities as long as there is no
material adverse effect on the holders;
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cure any ambiguity, correct or supplement any defective or inconsistent provision or make any other provisions in
each case that would not materially and adversely affect the interests of holders of outstanding Debt Securities, if any; or
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change or eliminate any provisions of the Indenture where such change takes effect when there are no Debt
Securities outstanding which are
entitled to the benefit of those provisions under the Indenture.
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Governing Law
The Indenture and the Debt Securities will be governed by and construed in accordance with the laws of the State of New York.
The Trustee
The Trustee under the Indenture or
its affiliates may provide banking and other services to the Corporation in the ordinary course of their business.
The Indenture will contain
certain limitations on the rights of the Trustee, as long as it or any of its affiliates remains the Corporation’s creditor, to obtain payment of claims in certain cases or to realize on certain property received on any claim as security or
otherwise. The Trustee and its affiliates will be permitted to engage in other transactions with the Corporation. If the Trustee or any affiliate acquires any conflicting interest and a default occurs with respect to the Debt Securities, the Trustee
must eliminate the conflict or resign.
Resignation and Removal of Trustee
A trustee may resign or be removed with respect to one or more series of the Debt Securities and a successor trustee may be appointed to act with respect to
such series.
Consent to Jurisdiction and Service
Under the Indenture, the Corporation will irrevocably appoint an authorized agent upon which process may be served in any suit, action or proceeding arising
out of or relating to the Offered Debt Securities or the Indenture that may be instituted in any United States federal or New York state court located in The City of New York, and will submit to such
non-exclusive
jurisdiction.
Units
We may issue Units comprised of one or more of the other Securities described in the Prospectus in any combination. Each Unit will be issued so that the
holder of the Unit is also the holder of each of the Securities included in the Unit. Thus, the holder of a Unit will have the rights and obligations of a holder of each included Security. The unit agreement, if any, under which a Unit is issued may
provide that the Securities included in the Unit may not be held or transferred separately, at any time or at any time before a specified date.
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The particular terms and provisions of Units offered by any Prospectus Supplement, and the extent to which
the general terms and provisions described below may apply thereto, will be described in the Prospectus Supplement filed in respect of such Units. This description will include, where applicable:
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whether the Units will be issued with any other Securities and, if so, the amount and terms of these Securities;
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whether the Units and the Securities comprising the Units are to be issued in registered form,
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non-certificated
inventory system form, bearer form or in the form of temporary or permanent global securities and the basis of exchange,
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under what circumstances the Securities comprising the Units may be held or transferred separately.
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Units offered under a Prospectus Supplement may differ from the terms described above and may not be subject to or contain any or all of the terms described above.
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RISK FACTORS
Before making an investment decision to purchase any Securities, investors should carefully consider the information described in this Prospectus and the
documents incorporated or deemed incorporated by reference herein, including the applicable Prospectus Supplement. There are certain risks inherent in an investment in the Securities, including the factors described in the 2018 AIF, in the 2018
MD&A and any other risk factors described herein or in a document incorporated or deemed incorporated by reference herein, which investors should carefully consider before investing. Additional risk factors relating to a specific offering of
Securities will be described in the applicable Prospectus Supplement. Some of the factors described herein, in the documents incorporated or deemed incorporated by reference herein, and/or the applicable Prospectus Supplement are interrelated and,
consequently, investors should treat such risk factors as a whole. If any of the adverse effects set out in the risk factors described herein, in the 2018 AIF, in the 2018 MD&A, in another document incorporated or deemed incorporated by
reference herein or in the applicable Prospectus Supplement occur, it could have a material adverse effect on the business, financial condition and results of operations of the Company. Additional risks and uncertainties of which the Company
currently is unaware or that are unknown or that it currently deems to be immaterial could have a material adverse effect on the Company’s business, financial condition and results of operations. The Company cannot assure you that it will
successfully address any or all of these risks. There is no assurance that any risk management steps taken will avoid future loss due to the occurrence of the adverse effects set out in the risk factors herein, in the 2018 AIF, in the 2018 MD&A,
in the other documents incorporated or deemed incorporated by reference herein or in the applicable Prospectus Supplement or other unforeseen risks.
Risks relating to our Business
Our business is
reliant on the good standing of our licenses.
Our ability to continue our business of growth, storage and distribution of cannabis is dependent
on the good standing of all of our licenses, authorizations and permits and adherence to all regulatory requirements related to such activities. Any failure to comply with the terms of the licenses, or to migrate or renew the licenses after their
expiry dates, would have a material adverse impact on our financial condition and operations of the business. Although we believe that we will meet the requirements of the Cannabis Act for migration and future extensions or renewals of the licenses,
there can be no assurance that Health Canada will migrate, extend or renew the licenses, or if extended or renewed, that they will be extended or renewed on the same or similar terms. Should Health Canada or the Canada Revenue Agency not extend or
renew the licenses or should they renew the licenses on different terms, our business, financial condition and operating results would be materially adversely affected.
We compete for market share with a number of competitors and expect even more competitors to enter our market, and many of our current and future
competitors may have longer operating histories, more financial resources and lower costs than us.
We expect significant competition from other
companies in light of the recent coming into force of the Cannabis Act. A large number of companies appear to be applying for cultivation, processing and sale licenses, some of which may have significantly greater financial, technical, marketing and
other resources than us, may be able to devote greater resources to the development, promotion, sale and support of their products and services, and may have more extensive customer bases and broader customer relationships. Our future success
depends upon our ability to achieve competitive per unit costs through increased production and on our ability to recognize higher margins through the sale of higher margin products. To the extent that we are not able to produce our products at
competitive prices or consumers prioritize established low margin products over innovative, higher margin products, our business, financial conditions and operations could be materially and adversely affected.
Should the size of the cannabis market increase as projected the overall demand for products and number of competitors will increase as well, and in order for
us to be competitive we will need to invest significantly in
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research and development, market development, marketing, production expansion, new client identification, distribution channels and client support. If we are not successful in obtaining
sufficient resources to invest in these areas, our ability to compete in the market may be adversely affected, which could materially and adversely affect our business, financial conditions and operations.
Change in the laws, regulations and guidelines that impact our business may cause adverse effects on our operations.
Our business is subject to a variety of laws, regulations and guidelines relating to the marketing, acquisition, manufacture, management, transportation,
storage, sale, labeling and disposal of cannabis as well as laws and regulations relating to health and safety, the conduct of operations and the protection of the environment. Changes to such laws, regulations and guidelines may cause adverse
effects on our operations.
The Cannabis Act and its regulations came into force in Canada on October 17, 2018. The legislative framework pertaining
to the Canadian
non-medical
cannabis market is subject to significant provincial and territorial regulation. The legal framework varies across provinces and territories and results in an asymmetric regulatory
and market environment, different competitive pressures and significant additional compliance and other costs and/or limitations on our ability to participate in such market.
We operate in a highly regulated business and any failure or significant delay in obtaining regulatory approvals could adversely affect our ability to
conduct our business.
Achievement of our business objectives are contingent, in part, upon compliance with the regulatory requirements, including
those imposed by Health Canada, enacted by applicable government authorities and obtaining all regulatory approvals, where necessary, for the sale of our products. We cannot predict the time required to secure all appropriate regulatory approvals
for our products, or the extent of testing and documentation that may be required by government authorities. Any delays in obtaining, or failure to obtain regulatory approvals would significantly delay the development of markets and products and
could have a material adverse effect on our business, results of operation and financial condition.
We have a limited operating history and there
is no assurance we will be able to achieve or maintain profitability.
Aurora Marijuana Inc., prior to the completion of the reverse takeover of
Prescient Mining Corp. on December 9, 2014, was the entity in which our business was organized, was incorporated in 2013, and our business began operations in 2015, and started generating revenues from the sale of medical cannabis in January
2016. We are subject to all of the business risks and uncertainties associated with any early-stage enterprise, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources, and lack of
revenues.
We have incurred operating losses in recent periods. We may not be able to achieve or maintain profitability and may continue to incur
significant losses in the future. In addition, we expect to continue to increase operating expenses as we implement initiatives to grow our business. If our revenues do not increase to offset these expected increases in costs and operating expenses,
we will not be profitable. There is no assurance that we will be successful in achieving a return on shareholders’ investments and the likelihood of success must be considered in light of the early stage of our operations.
The cannabis business may be subject to unfavorable publicity or consumer perception.
The success of the cannabis industry may be significantly influenced by the public’s perception of cannabis. Cannabis is a controversial topic, and there
is no guarantee that future scientific research, publicity, regulations, medical opinion and public opinion relating to cannabis will be favorable. Consumer perception of our products
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can be significantly influenced by scientific research or findings, regulatory investigations, litigation, media attention and other publicity regarding the consumption of cannabis products.
There can be no assurance that future scientific research, findings, regulatory proceedings, litigation, media attention or other research findings or publicity will be favorable to the cannabis market or any particular product, or consistent with
earlier publicity. Future scientific research, findings, regulatory proceedings, litigation, media attention or other research findings or publicity that are perceived as less favorable than, or that question, earlier research reports, findings or
publicity could have a material adverse effect on the demand for our products and our business, financial condition, results of operations and prospects. Our dependence upon consumer perceptions means that adverse scientific research, findings,
regulatory proceedings, litigation, media attention or other research findings or publicity, whether or not accurate or with merit, could have a material adverse effect on us, the demand for products, and our business, financial condition, results
of operations and prospects. Further, adverse publicity reports or other media attention regarding the safety, efficacy and quality of cannabis in general, or our products specifically, or associating the consumption of cannabis with illness or
other negative effects or events, could have such a material adverse effect on us. Such adverse publicity reports or other media attention could arise even if the adverse effects associated with such products resulted from consumers’ failure to
consume such products legally, appropriately or as directed.
We may not be able to realize our growth targets.
Our ability to continue the production of cannabis products at the same pace as we are currently producing or at all, and our ability to continue to increase
both our production capacity and our production, may be affected by a number of factors, including plant design errors,
non-performance
by third party contractors, increases in materials or labor costs,
construction performance falling below expected levels of output or efficiency, environmental pollution, contractor or operator errors, breakdowns, aging or failure of equipment or processes, labor disputes, as well as factors specifically related
to indoor agricultural and processing practices, such as reliance on provision of energy and utilities to the facility, and potential impacts of major incidents or catastrophic events on the facility, such as fires, explosions, earthquakes or
storms.
Our continued growth may require additional financing, which may not be available on acceptable terms or at all.
Our continued development may require additional financing. The failure to raise such capital could result in the delay or indefinite postponement of our
current business strategy or our ceasing to carry on business. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be available on
favorable terms. If additional funds are raised through issuances of equity or convertible debt securities, existing shareholders could suffer significant dilution. In addition, from time to time, we may enter into transactions to acquire assets or
the shares of other companies. These transactions may be financed wholly or partially with debt, which may increase our debt levels above industry standards or our ability to service such debt. Any debt financing obtained in the future could involve
restrictive covenants relating to capital raising activities and other financial and operational matters, which could make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.
Debt financings may contain provisions, which, if breached, entitle lenders to accelerate repayment of debt and there is no assurance that we would be able to repay such debt in such an event or prevent the enforcement of security, if any, granted
pursuant to such debt financing.
We may be subject to uninsured or uninsurable risks.
We may be subject to liability for risks against which we cannot insure or against which we may elect not to insure due to the high cost of insurance premiums
or other factors. The payment of any such liabilities would reduce the funds available for our normal business activities. Payment of liabilities for which we do not carry insurance may have a material adverse effect on our financial position and
operations.
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Our success will depend on attracting and retaining key personnel.
Our success will depend on our directors’ and officers’ ability to develop and execute on our business strategies and manage our ongoing operations,
and on our ability to attract and retain key personnel. As the Cannabis Act requires us to retain certain prescribed personnel that can obtain security clearance, the loss of any such key personnel, their failure to maintain security clearance or
our inability to find and retain new key persons could have a material adverse effect on our business. Competition for qualified technical, sales and marketing staff, as well as officers and directors can be intense, and no assurance can be provided
that the Company will be able to attract or retain key personnel in the future, which may adversely impact the Company’s operations.
We have
expanded and intend to further expand our business and operations into jurisdictions outside of Canada, and there are risks associated with doing so.
We intend to continue to expand our operations and business into jurisdictions outside of Canada. There can be no assurance that any market for our products
will develop in any such foreign jurisdiction. We may face new or unexpected risks or significantly increase our exposure to one or more existing risk factors, including economic instability, changes in laws and regulations and the effects of
additional competition. These factors may limit our capability to successfully expand our operations and may have a material adverse effect on our business, financial condition and results of operations.
Failure to comply with the Corruption of Foreign Public Officials Act (Canada) (“CFPOA”) and the United States Foreign Corrupt Practices
(“FCPA”), as well as the other anti-bribery laws of the other nations in which we conduct business, could subject us to penalties and other adverse consequences.
We are subject to the CFPOA and the FCPA, which generally prohibit companies and company employees from engaging in bribery or other prohibited payments to
foreign officials for the purpose of obtaining or retaining business. The CFPOA and the FCPA also require companies to maintain accurate books and records and internal controls, including at foreign controlled subsidiaries. In addition, we are
subject to other anti-bribery laws of the nations in which we conduct business that apply similar prohibitions as the CFPOA and FCPA (e.g. the Organization for Economic
Co-operation
and Development
Anti-Bribery Convention). Our employees or other agents may, without our knowledge and despite our efforts, engage in prohibited conduct under our policies and procedures and the CFPOA, the FCPA or other anti-bribery laws to which we may be subject
for which we may be held responsible. If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition
and results of operations.
Third parties with whom we do business may perceive themselves as being exposed to reputational risk by virtue of their
relationship with us and may ultimately elect not to do business with us.
The parties with which we do business may perceive that they are
exposed to reputational risk as a result of our cannabis business activities. Failure to establish or maintain business relationships could have a material adverse effect on us.
We may enter into strategic alliances or expand the scope of currently existing relationships with third parties that we believe compliment or augment
our business, financial condition and results of operation and there are risks associated with such activities.
We have entered into, and may in
the future enter into, strategic alliances with third parties that we believe will complement or augment our existing business. Our ability to complete strategic alliances is dependent upon, and may be limited by, the availability of suitable
candidates and capital. In addition, strategic alliances could present unforeseen regulatory issues, integration obstacles or costs, may not enhance our business, and may involve risks
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that could adversely affect us, including significant amounts of management time that may be diverted from operations in order to pursue and complete such transactions or maintain such strategic
alliances. Future strategic alliances could result in the incurrence of additional debt, costs and contingent liabilities, and there can be no assurance that future strategic alliances will achieve, or that our existing strategic alliances will
continue to achieve, the expected benefits to our business or that we will be able to consummate future strategic alliances on satisfactory terms, or at all. Any of the foregoing could have a material adverse effect on our business, financial
condition and results of operations.
We may be subject to product liability claims
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As a manufacturer and distributor of products designed to be inhaled and ingested by humans, we face an inherent risk of exposure to product liability claims,
regulatory action and litigation if our products are alleged to have caused significant loss or injury. In addition, the manufacture and sale of cannabis products involves the risk of injury to consumers due to tampering by unauthorized third
parties or product contamination. Previously unknown adverse reactions resulting from human consumption of cannabis products alone or in combination with other medications or substances could occur. We may be subject to various product liability
claims, including, among others, that the products produced by us caused or contributed to injury or illness, include inadequate instructions for use or include inadequate warnings concerning possible side effects or interactions with other
substances. A product liability claim or regulatory action against us could result in increased costs, could adversely affect our reputation and goodwill with our customers and consumers generally, and could have a material adverse effect on our
business, financial condition and results of operations. There can be no assurances that we will be able to obtain or maintain product liability insurance on acceptable terms or with adequate coverage against potential liabilities. Such insurance is
expensive and may not be available in the future on acceptable terms, or at all. The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could prevent or inhibit
the commercialization of products.
Our cannabis products may be subject to recalls for a variety of reasons.
Manufacturers and distributors of products are sometimes subject to the recall or return of their products for a variety of reasons, including product
defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety and inadequate or inaccurate labeling disclosure. If any of the products produced by us are recalled due to an alleged product
defect or for any other reason, we could be required to incur the unexpected expense of the recall and any legal proceedings that might arise in connection with the recall. We may lose a significant amount of sales and may not be able to replace
those sales at an acceptable margin or at all. In addition, a product recall may require significant management attention. Although we have detailed procedures in place for testing finished products, there can be no assurance that any quality,
potency or contamination problems will be detected in time to avoid unforeseen product recalls, regulatory action or lawsuits, whether frivolous or otherwise. Additionally, if any of the products produced by us were subject to recall, the reputation
and goodwill of that product and/or us could be harmed. A recall for any of the foregoing reasons could lead to decreased demand for our products and could have a material adverse effect on our business, financial condition and results of
operations. Additionally, product recalls may lead to increased scrutiny of our operations by Health Canada or other regulatory agencies, requiring further management attention, increased compliance costs and potential legal fees, fines, penalties
and other expenses. Furthermore, any product recall affecting the cannabis industry more broadly could lead consumers to lose confidence in the safety and security of the products sold by holders of licenses under the Cannabis Act generally, which
could have a material adverse effect on our business, financial condition and results of operations.
We may not be able to successfully develop new
products or find a market for their sale.
The medical and
non-medical
cannabis industries are in their
early stages of development and it is likely that we, and our competitors, will seek to introduce new products in the future. In attempting to keep pace with any new
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market developments, we may need to expend significant amounts of capital in order to successfully develop and generate revenues from new products introduced by us. As well, we may be required to
obtain additional regulatory approvals from Health Canada and any other applicable regulatory authorities, which may take significant amounts of time and entail significant costs. We may not be successful in developing effective and safe new
products, bringing such products to market in time to be effectively commercialized, or obtaining any required regulatory approvals, which, together with any capital expenditures made in the course of such product development and regulatory approval
processes, may have a material adverse effect on our business, financial condition and results of operations.
Certain of our directors and officers
may have conflicts of interests due to other business relationships.
Certain of our directors and officers are also directors and officers of
other companies. Situations may arise in connection with potential acquisitions or opportunities where the other interests of these directors and officers conflict with or diverge from our interests. In accordance with the BCBCA, directors who have
a material interest in any person who is a party to a material contract or a proposed material contract are required, subject to certain exceptions, to disclose that interest and generally abstain from voting on any resolution to approve the
contract.
We may become party to litigation, mediation and/or arbitration from time to time.
We may become party to regulatory proceedings, litigation, mediation and/or arbitration from time to time in the ordinary course of business which could
adversely affect our business. Monitoring and defending against legal actions, whether or not meritorious, can be time-consuming, divert management’s attention and resources and cause us to incur significant expenses. In addition, legal fees
and costs incurred in connection with such activities may be significant and we could, in the future, be subject to judgments or enter into settlements of claims for significant monetary damages. While we have insurance that may cover the costs and
awards of certain types of litigation, the amount of insurance may not be sufficient to cover any costs or awards. Substantial litigation costs or an adverse result in any litigation may adversely impact our business, operating results or financial
condition.
Our business is subject to the risks inherent in agricultural operations.
Since our business revolves mainly around the growth and processing of cannabis, an agricultural product, the risks inherent with agricultural businesses
apply to our business. Such risks may include disease and insect pests, among others. Although we currently grow and expect to grow the significant majority of our product in climate controlled, monitored, indoor locations, there is no guarantee
that changes in outside weather and climate will not adversely affect production. Further, any rise in energy costs may have a material adverse effect on our ability to produce cannabis.
The price of production of cannabis will vary based on a number of factors outside of our control.
Our revenues are in a large part derived from the production, sale and distribution of cannabis. The price of production, sale and distribution of cannabis is
dependent on a number of key inputs and their related costs, including raw materials and supplies related to our growing operations, as well as electricity, water and other utilities. Our cannabis growing operations consume considerable energy,
making us vulnerable to rising energy costs. Any significant interruption or negative change in the availability or economics of the supply chain for key inputs could materially impact our financial condition and operating results. Any inability to
secure required supplies and services or to do so on appropriate terms could have a materially adverse impact on our business, financial condition, results of operations and prospects. This includes any change in the price of adult use products set
by the applicable province or territory.
Any prolonged disruption in courier service used to distribute our product could impact our business and
ability to operate profitably.
We depend on fast, cost-effective and efficient courier services to distribute our product to both
wholesale and retail customers. Any prolonged disruption of this courier service could have an adverse effect on our financial
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condition and results of operations. Rising costs associated with the courier service we use to ship our products may also adversely impact our business and our ability to operate profitably.
Our operations are subject to various environmental and employee health and safety regulations.
Our operations are subject to environmental and safety laws and regulations concerning, among other things, emissions and discharges to water, air and land,
the handling and disposal of hazardous and
non-hazardous
materials and wastes, and employee health and safety. We incur ongoing costs and obligations related to compliance with environmental and employee
health and safety matters. Failure to obtain an environmental compliance approval under applicable regulations or otherwise comply with environmental and safety laws and regulations may result in additional costs for corrective measures, penalties
or in restrictions on our manufacturing operations. In addition, changes in environmental, employee health and safety or other laws, more vigorous enforcement thereof or other unanticipated events could require extensive changes to our operations or
give rise to material liabilities, which could have a material adverse effect on our business, results of operations and financial condition.
We
may not be able to protect our intellectual property.
Our success depends in part on our ability to protect our ideas and technology. Even if we
move to protect our technology with trademarks, patents, copyrights or by other means, we are not assured that competitors will not develop similar technology, business methods or that we will be able to exercise our legal rights. Other countries
may not protect intellectual property rights to the same standards as does Canada. Actions taken to protect or preserve intellectual property rights may require significant financial and other resources such that said actions have a meaningfully
impact our ability to successfully grow our business.
Our business may be affected by political and economic instability.
We may be affected by possible political or economic instability. The risks include, but are not limited to, terrorism, military repression, extreme
fluctuations in currency exchange rates and high rates of inflation. Changes in medicine and agricultural development or investment policies or shifts in political attitude in certain countries may adversely affect our business. Operations may be
affected in varying degrees by government regulations with respect to restrictions on production, distribution, price controls, export controls, income taxes, expropriation of property, maintenance of assets, environmental legislation, land use,
land claims of local people and water use. The effect of these factors cannot be accurately predicted.
Our expansion efforts may not be successful.
There is no guarantee that our intentions to acquire and/or construct additional cannabis production and manufacturing facilities in Canada and
in other jurisdictions with legal cannabis markets, and to expand our marketing and sales initiatives will be successful. Any such activities will require, among other things, various regulatory approvals, licenses and permits (such as additional
licenses from Health Canada under the Cannabis Act, as applicable) and there is no guarantee that all required approvals, licenses and permits will be obtained in a timely fashion or at all. There is also no guarantee that we will be able to
complete any of the foregoing activities as anticipated or at all. Our failure to successfully execute our expansion strategy (including receiving required regulatory approvals and permits) could adversely affect our business, financial condition
and results of operations and may result in our failing to meet anticipated or future demand for our cannabis-based pharmaceutical products, when and if it arises.
In addition, the construction of Aurora Sky, Aurora Sun and Aurora Nordic II are subject to various potential problems and uncertainties, and may be delayed
or adversely affected by a number of factors beyond our control, including the failure to obtain regulatory approvals, permits, delays in the delivery or installation of equipment by our suppliers, difficulties in integrating new equipment with its
existing facilities, shortages in materials or
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labor, defects in design or construction, diversion of management resources, or insufficient funding or other resource constraints. Moreover, actual costs for construction may exceed our budgets.
As a result of construction delays, cost overruns, changes in market circumstances or other factors, we may not be able to achieve the intended economic benefits from the construction of the new facilities, which in turn may materially and adversely
affect our business, prospects, financial condition and results of operations.
We may not be able to successfully identify and execute future
acquisitions or dispositions, or to successfully manage the impacts of such transactions on our operations.
Over the past 24 months, we have
completed a number of significant acquisitions, including our acquisitions of MedReleaf and CanniMed. Material acquisitions, dispositions and other strategic transactions involve a number of risks, including: (i) potential disruption of our
ongoing business; (ii) distraction of management; (iii) we may become more financially leveraged; (iv) the anticipated benefits and cost savings of those transactions may not be realized fully or at all or may take longer to realize
than expected; (v) increasing the scope and complexity of our operations, and (vi) loss or reduction of control over certain of the our assets.
The presence of one or more material liabilities of an acquired company that are unknown to us at the time of acquisition could have a material adverse effect
on our results of operations, business prospects and financial condition. A strategic transaction may result in a significant change in the nature of our business, operations and strategy. In addition, we may encounter unforeseen obstacles or costs
in implementing a strategic transaction or integrating any acquired business into our operations.
We may experience breaches of security at our
facilities or in respect of electronic documents and data storage and may face risks related to breaches of applicable privacy laws.
Given the
nature of our product and its lack of legal availability outside of channels approved by the Government of Canada, as well as the concentration of inventory in our facilities, despite meeting or exceeding Health Canada’s security requirements,
there remains a risk of shrinkage as well as theft. A security breach at one of our facilities could expose us to additional liability and to potentially costly litigation, increase expenses relating to the resolution and future prevention of these
breaches and may deter potential customers from choosing our products.
In addition, we collect and store personal information about our customers and are
responsible for protecting that information from privacy breaches. A privacy breach may occur through procedural or process failure, information technology malfunction, or deliberate unauthorized intrusions. Theft of data for competitive purposes,
particularly patient lists and preferences, is an ongoing risk whether perpetrated via employee collusion or negligence or through deliberate cyber-attack. Any such theft or privacy breach would have a material adverse effect on our business,
financial condition and results of operations.
Furthermore, there are a number of federal and provincial laws protecting the confidentiality of certain
patient health information, including patient records, and restricting the use and disclosure of that protected information. In particular, the privacy rules under PIPEDA, protect medical records and other personal health information by limiting
their use and disclosure of health information to the minimum level reasonably necessary to accomplish the intended purpose. If we were found to be in violation of the privacy or security rules under PIPEDA or other laws protecting the
confidentiality of patient health information, we could be subject to sanctions and civil or criminal penalties, which could increase our liabilities, harm our reputation and have a material adverse effect on our business, results of operations and
financial condition.
We may be subject to risks related to our information technology systems, including cyber-attacks.
We have entered into agreements with third parties for hardware, software, telecommunications and other IT services in connection with its operations. Our
operations depend, in part, on how well we and our suppliers
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protect networks, equipment, IT systems and software against damage from a number of threats, including, but not limited to, cable cuts, damage to physical plants, natural disasters, intentional
damage and destruction, fire, power loss, hacking, computer viruses, vandalism and theft. Our operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as
pre-emptive
expenses to mitigate the risks of failures. Any of these and other events could result in information system failures, delays and/or increase in capital expenses. The failure of information systems or a
component of information systems could, depending on the nature of any such failure, adversely impact our reputation and results of operations.
We have
not experienced any material losses to date relating to cyber-attacks or other information security breaches, but there can be no assurance that we will not incur such losses in the future. Our risk and exposure to these matters cannot be fully
mitigated because of, among other things, the evolving nature of these threats. As a result, cyber security and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and
networks from attack, damage or unauthorized access is a priority. As cyber threats continue to evolve, we may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any
security vulnerabilities.
As a holding company, Aurora Cannabis Inc. is dependent on its operating subsidiaries to pay dividends and other
obligations.
Aurora Cannabis Inc. is a holding company and essentially all of its operating assets are the capital stock of its subsidiaries and
its business is conducted through subsidiaries which are separate legal entities. Consequently, our cash flows and ability to complete current or desirable future enhancement opportunities are dependent on the earnings of our subsidiaries and the
distribution of those earnings to us. The ability of these entities to pay dividends and other distributions will depend on their operating results and will be subject to applicable laws and regulations which require that solvency and capital
standards be maintained by such companies and contractual restrictions contained in the instruments governing their debt. In the event of a bankruptcy, liquidation or reorganization of any of our subsidiaries, holders of indebtedness and trade
creditors will generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are made available for distribution to us.
The integration of MedReleaf may not occur as planned and synergy targets may not be achieved.
It is expected that the acquisition of MedReleaf will result in enhanced production capacity, increased earnings and cost savings by taking advantage of
operating and other synergies to be realized from our consolidation with MedReleaf and enhanced growth opportunities for the combined company. These anticipated benefits will depend in part on whether MedReleaf and our operations can be integrated
in an efficient and effective manner. The integration of the two companies will present challenges to management, including the integration of systems and personnel of the two companies, and special risks, including possible unanticipated
liabilities, unanticipated costs, and the loss of key employees. The performance of operations acquired from us from the acquisition of MedReleaf could be adversely affected if the combined company cannot retain key employees to assist in the
integration and operation of us and MedReleaf. As a result of these factors, it is possible that the cost reductions and synergies expected from our combination with MedReleaf will not be realized.
Risks Related to our Common Shares
The price of
our common shares historically has been volatile. This volatility may affect the price at which you could sell our common shares and the sale of substantial amounts of our common shares could adversely affect the price of our common shares and the
value of your notes.
The market price for our common shares on the TSX has varied between a high of $16.24 on October 16, 2018 and a low
of $5.29 on August 14, 2018 in the twelve-month period ending on May 9, 2019, and on the NYSE
45
has varied between a high of US$10.32 on March 19, 2019 and a low of US$4.58 on December 24, 2018, during the period since the commencement of trading on the NYSE on October 23,
2018. This volatility may affect the price at which you could sell our common shares, and the sale of substantial amounts of our common shares could adversely affect the price of our common shares. Our share price is likely to continue to be
volatile and subject to significant price and volume fluctuations in response to market and other factors, including the other factors discussed in “Risks Related to our Business;” variations in our quarterly operating results from our
expectations or those of securities analysts or investors; downward revisions in securities analysts’ estimates; and announcement by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital
commitments.
We may not pay dividends in the future.
We have not paid dividends in the past and do not anticipate paying dividends in the near future. We expect to retain our earnings to finance further growth
and, when appropriate, retire debt. Any decision to pay dividends on our common shares in the future will be at the discretion of our board of directors (the “
Board
”) and will depend on, among other things, our results of
operations, current and anticipated cash requirements and surplus, financial condition, any future contractual restrictions and financing agreement covenants, solvency tests imposed by corporate law and other factors that the Board may deem
relevant. As a result, investors may not receive any return on an investment in our common shares unless they are able to sell their shares for a price greater than that which such investors paid for them.
Future sales or issuances of equity securities could decrease the value of our common shares, dilute investors’ voting power and reduce our
earnings per share.
We may sell additional equity securities in subsequent offerings (including through the sale of securities convertible into
equity securities and may issue equity securities in acquisitions, such as our proposed acquisitions of Farmacias). We cannot predict the size of future issuances of equity securities or the size and terms of future issuances of debt instruments or
other securities convertible into equity securities or the effect, if any, that future issuances and sales of our securities will have on the market price of our common shares.
Additional issuances of our securities may involve the issuance of a significant number of common shares at prices less than the current market price for the
common shares. Issuances of substantial numbers of common shares, or the perception that such issuances could occur, may adversely affect prevailing market prices of our common shares. Any transaction involving the issuance of previously authorized
but unissued common shares, or securities convertible into common shares, would result in dilution, possibly substantial, to security holders.
Sales of
substantial amounts of our securities by us or our existing shareholders, or the availability of such securities for sale, could adversely affect the prevailing market prices for our securities and dilute investors’ earnings per share.
Exercises of presently outstanding share options or warrants may also result in dilution to security holders. A decline in the market prices of our securities could impair our ability to raise additional capital through the sale of securities should
we desire to do so.
As of May 9, 2019, we had outstanding approximately 1,016,851,364 common shares and securities exercisable for and convertible
into approximately 159,280,191 common shares (of which approximately 103,905,020 were exercisable as of that date). The sale or the availability for sale of a large number of our common shares in the public market could cause the price of our common
shares to decline.
The regulated nature of our business may impede or discourage a takeover, which could reduce the market price of our common
shares and the value of your notes.
We require and hold various government licenses to operate our business, which would not necessarily continue
to apply to an acquiror of our business following a change of control. These licensing requirements could impede
46
a merger, amalgamation, takeover or other business combination involving us or discourage a potential acquirer from making a tender offer for our common shares, which, under certain
circumstances, could reduce the market price of our common shares.
There is no assurance we will continue to meet the listing standards of the NYSE
and the TSX.
We must meet continuing listing standards to maintain the listing of our common shares on the NYSE and the TSX. If we fail to comply
with listing standards and the NYSE and/or the TSX delists our common shares, we and our shareholders could face significant material adverse consequences, including:
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a limited availability of market quotations for our common shares;
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reduced liquidity for our common shares;
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a determination that our common shares are “penny stock,” which would require brokers trading in our
common shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our common shares;
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a limited amount of news about us and analyst coverage of us; and
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a decreased ability for us to issue additional equity securities or obtain additional equity or debt financing in
the future.
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Risks Related to Future Offerings
There is no existing trading market for the Warrants, Subscription Receipts, Debt Securities or Units.
There is no existing trading market for the Warrants, Subscription Receipts, Debt Securities or Units. As a result, there can be no assurance that a liquid
market will develop or be maintained for those Securities, or that a purchaser will be able to sell any of those Securities at a particular time (if at all). We may not list the Warrants, Subscription Receipts, Debt Securities or Units on any
Canadian or U.S. securities exchange.
Future Sales May Affect the Market Price of the Company Shares.
In order to finance future operations, we may determine to raise funds through the issuance of additional Common Shares or the issuance of debt instruments or
other securities convertible into Common Shares. We cannot predict the size of future issuances of Common Shares or the issuance of debt instruments or other securities convertible into Common Shares or the dilutive effect, if any, that future
issuances and sales of our securities will have on the market price of our Common Shares. These sales may have an adverse impact on the market price of our Common Shares.
Our management will have substantial discretion concerning the use of proceeds.
Our management will have substantial discretion concerning the use of proceeds of an offering under any Prospectus Supplement as well as the timing of the
expenditure of the proceeds thereof. As a result, investors will be relying on the judgment of management as to the specific application of the proceeds of any offering of Securities under any Prospectus Supplement. Management may use the net
proceeds of any offering of Securities under any Prospectus Supplement in ways that an investor may not consider desirable. The results and effectiveness of the application of the net proceeds are uncertain.
The Company is a Canadian company and shareholder protections differ from shareholder protections in the United States and elsewhere.
We are organized and exist under the laws of British Columbia, Canada and, accordingly, are governed by the BCBCA. The BCBCA differs in certain material
respects from laws generally applicable to United States corporations and shareholders, including the provisions relating to interested directors, mergers and similar arrangements, takeovers, shareholders’ suits, indemnification of directors
and inspection of corporation records.
47
The Company is a foreign private issuer within the meaning of the rules under the Exchange Act, and as
such is exempt from certain provisions applicable to United States domestic public companies.
Because we are a “foreign private issuer”
under the U.S. Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:
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the rules under the U.S. Exchange Act requiring the filing of quarterly reports on Form
10-Q
or current reports on Form
8-K
with the SEC;
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the sections of the U.S. Exchange Act regulating the solicitation of proxies, consents or authorizations in
respect of a security registered under the U.S. Exchange Act;
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the sections of the U.S. Exchange Act requiring insiders to file public reports of their stock ownership and
trading activities and liability for insiders who profit from trades made in a short period of time; and
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the selective disclosure rules by issuers of material
non-public
information under Regulation FD.
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We are required to file an annual report on Form
40-F
with the
United States Securities and Exchange Commission within three months of the end of each fiscal year. We do not intend to voluntarily file annual reports on Form
10-K
and quarterly reports on Form
10-Q
in lieu of Form
40-F
requirements. For so long as we choose to only comply with foreign private issuer requirements, the information we are required to file with or
furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information which would be made available to you if
you were investing in a U.S. domestic issuer.
48
CERTAIN INCOME TAX CONSIDERATIONS
The applicable Prospectus Supplement will describe certain Canadian federal income tax consequences to investors described therein of acquiring Securities.
The applicable Prospectus Supplement will also describe certain United States federal income tax consequences of the acquisition, ownership and
disposition of Securities by an initial investor who is a “U.S. person” (within the meaning of the United States Internal Revenue Code), if applicable, including, to the extent applicable, any such consequences relating to Securities
payable in a currency other than the United States dollar, issued at an original issue discount for United States federal income tax purposes or other special terms.
LEGAL MATTERS
Certain legal matters relating to the Securities offered by this Prospectus will be passed upon for us by (i) McMillan LLP, Vancouver, B.C., with respect
to matters of Canadian law, and (ii) Jenner
& Block LLP with respect to matters of United States law.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Shares of the Company is Computershare Trust Company of Canada at its principal office in
Vancouver, British Columbia and Toronto, Ontario, and the United States co-transfer agent for the Common Shares is Computershare Trust Company, N.A., at its office in Canton, Massachusetts.
49
INTEREST OF EXPERTS
The following are the names of each person or company who has prepared or certified a report, valuation, statement or opinion in this Prospectus, either
directly or in a document incorporated by reference, and whose profession or business gives authority to the report, valuation, statement or opinion made by the person or company:
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McMillan LLP, as the Company’s counsel with respect to Canadian legal matters;
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MNP LLP, Chartered Professional Accountants, as the former external auditor of the Company who reported on the
Company’s audited financial statements for the years ended June 30, 2018 and 2017, as filed on SEDAR and incorporated into this Prospectus by reference;
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Deloitte LLP, Chartered Professional Accountants, Licensed Professional Accountants, as the external auditor of
CanniMed who reported on CanniMed’s audited financial statements for the years ended October 31, 2017 and 2016, included in our business acquisition report dated April 30, 2018 which is incorporated into this Prospectus by reference;
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KPMG LLP, Chartered Professional Accountants, as the external auditor of MedReleaf who reported on
MedReleaf’s audited financial statements for the years ended March 31, 2018 and 2017, incorporated by reference in our business acquisition report dated September 17, 2018 which is incorporated into this Prospectus by reference.
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Each of KPMG LLP are the auditors of the Company and were, prior to the acquisition of MedReleaf, the auditors of MedReleaf, and MNP
LLP was the former auditor of the Company. Each of KPMG and MNP have confirmed with respect to the Company, that they are independent within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies
in Canada and any applicable legislation or regulations. Deloitte LLP was the independent auditor of CanniMed for the year ended October 31, 2017, and as of January 29, 2018 and throughout the period covered by the consolidated financial
statements of CanniMed on which they reported, Deloitte LLP was independent with respect to CanniMed within the meaning of the rules of professional conduct of the Chartered Professional Accountants of Saskatchewan.
As of the date hereof, the partners and associates of McMillan LLP, as a group, beneficially own less than 1% of the outstanding Common Shares of the Company.
50
ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form
F-10
under the U.S. Securities Act relating to the
offering of the Securities. The Prospectus, which constitutes part of the Registration Statement, does not contain all of the information set forth in the Registration Statement or the accompanying exhibits and schedules, as certain items included
in the Registration Statement that are not included in the Prospectus are included in the Registration Statement in accordance with the rules and regulations of the SEC. For further information with respect to us and the Securities offered in the
Prospectus, we refer you to the Registration Statement and the accompanying exhibits and schedules. Statements contained in the Prospectus regarding the contents of any contract, agreement or any other document are summaries of the material terms of
these contracts, agreements or other documents. With respect to each of these contracts, agreements or other documents filed as an exhibit to the Registration Statement, reference is made to such exhibit for a more complete description of the matter
involved. Such contracts, agreements, or other documents are or will also be filed by the Company on SEDAR at www.sedar.com in accordance with applicable Canadian securities laws.
We are subject to the informational reporting requirements of the Exchange Act as the Common Shares are registered under Section 12(b) of the Exchange
Act. Accordingly, we are required to publicly file reports and other information with the SEC. Under the MJDS, the Company is permitted to prepare such reports and other information in accordance with Canadian disclosure requirements, which are
different from United States disclosure requirements.
As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the
furnishing and content of proxy statements in connection with meetings of its shareholders. In addition, the officers, directors and principal shareholders of the Company are exempt from the reporting and short-swing profit recovery rules contained
in Section 16 of the Exchange Act.
We file annual reports on Form
40-F
with the SEC under the MJDS, which
annual reports include:
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the annual information form;
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management’s annual discussion and analysis of financial condition and results of operations;
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consolidated audited financial statements, which are prepared in accordance with IFRS, as issued by the IASB; and
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other information specified by the Form
40-F.
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As a foreign private issuer, we are required to furnish the following types of information to the SEC under cover of Form
6-K:
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material information that the Company otherwise makes publicly available in reports that the Company files with
securities regulatory authorities in Canada;
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material information that the Company files with, and which is made public by, the TSX and NYSE; and
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material information that the Company distributes to its shareholders in Canada.
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Investors may read and copy, for a fee, any document that the Company has filed with or furnished to the SEC at the SEC’s public reference room in
Washington, D.C. at 100 F Street, N.E., Washington, D.C. 20549. Investors should call the SEC at
1-800-SEC-0330
or access its
website at www.sec.gov for further information about the public reference room. Investors may read and download the documents the Company has filed with the SEC’s Electronic Data Gathering and Retrieval system (“EDGAR”) at
www.sec.gov. Investors may read and download any public document that the Company has filed with the securities commissions or similar regulatory authorities in Canada at www.sedar.com.
51
DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT
The following documents have been or will be filed with the SEC as part of the Registration Statement of which this Prospectus forms
a part:
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(i)
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the documents set out under the heading “
Documents Incorporated by Reference
”;
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(ii)
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the consents of the Company’s auditor and legal counsel;
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(iii)
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the powers of attorney from the directors and certain officers of the Company; and
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(iv)
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the form of Indenture.
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A copy of the form of any warrant indenture or subscription receipt agreement, as applicable, will be filed by post-effective amendment or by incorporation by
reference to documents filed or furnished with or furnished to the SEC under the U.S. Exchange Act.
ENFORCEABILITY OF CIVIL LIABILITIES BY U.S. INVESTORS
The Company is a corporation existing under the
Business Corporations Act
(British Columbia). All of our directors and officers, and all of the experts
named in the Prospectus, are residents of Canada or otherwise reside outside the United States, and all or a substantial portion of their assets, and a majority of our assets, are located outside the United States. We have appointed an agent for
service of process in the United States, but it may be difficult for holders of the Securities who reside in the United States to effect service within the United States upon those directors, officers and experts who are not residents of the United
States. It may also be difficult for holders of the Securities who reside in the United States to realize upon judgments of courts of the United States predicated upon the Company’s civil liability and the civil liability of its directors,
officers and experts under the United States federal securities laws.
We have been advised by our Canadian legal counsel, McMillan LLP, that a judgment
of a United States court predicated solely upon civil liability under United States federal securities laws would probably be enforceable in Canada if the United States court in which the judgment was obtained has a basis for jurisdiction in the
matter that would be recognized by a Canadian court for the same purposes. We have also been advised by McMillan LLP, however, that there is substantial doubt whether an action could be brought in Canada in the first instance on the basis of
liability predicated solely upon United States federal securities laws.
We have filed with the SEC, concurrently with our Registration Statement on Form
F-10,
an appointment of agent for service of process on Form
F-X.
Under the Form
F-X,
we appointed Corporation Service Company as our
agent for service of process in the United States in connection with any investigation or administrative proceeding conducted by the SEC, and any civil suit or action brought against or involving the Company in a United States court arising out of,
related to, or concerning the offering of the Securities under the Prospectus.
52
PART II
INFORMATION NOT REQUIRED TO BE DELIVERED TO
OFFEREES OR PURCHASERS
Indemnification
of Directors and Officers.
Aurora Cannabis Inc. (“we”, “us” or “our company”) is subject to the provisions of Part 5,
Division 5 of the Business Corporations Act (British Columbia) (the “Act”).
Under Section 160 of the Act, we may, subject to
Section 163 of the Act:
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indemnify an individual who:
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is or was a director or officer of our company,
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(ii)
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is or was a director or officer of another corporation (A) at a time when such corporation is or was an
affiliate of our company; or (B) at our request, or
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(iii)
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at our request, is or was, or holds or held a position equivalent to that of, a director or officer of a
partnership, trust, joint venture or other unincorporated entity,
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including, subject to certain limited exceptions, the
heirs and personal or other legal representatives of that individual (collectively, an “eligible party”), against all eligible penalties, defined below, to which the eligible party is or may be liable; and
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(b)
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after final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by an
eligible party in respect of that proceeding, where:
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(i)
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“eligible penalty” means a judgment, penalty or fine awarded or imposed in, or an amount paid in
settlement of, an eligible proceeding,
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(ii)
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“eligible proceeding” means a proceeding in which an eligible party or any of the heirs and personal
or other legal representatives of the eligible party, by reason of the eligible party being or having been a director or officer of, or holding or having held a position equivalent to that of a director or officer of, our company or an associated
corporation (A) is or may be joined as a party, or (B) is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding,
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(iii)
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“expenses” includes costs, charges and expenses, including legal and other fees, but does not include
judgments, penalties, fines or amounts paid in settlement of a proceeding, and
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(iv)
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“proceeding” includes any legal proceeding or investigative action, whether current, threatened,
pending or completed.
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Under Section 161 of the Act, and subject to Section 163 of the Act, we must, after the final
disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by an eligible party in respect of that proceeding if the eligible party (a) has not been reimbursed for those expenses, and (b) is wholly successful,
on the merits or otherwise, in the outcome of the proceeding or is substantially successful on the merits in the outcome of the proceeding.
Under
Section 162 of the Act, and subject to Section 163 of the Act, we may pay, as they are incurred in advance of the final disposition of an eligible proceeding, the expenses actually and reasonably incurred by an eligible party in respect of
the proceeding, provided that we must not make such payments unless we first receive from the eligible party a written undertaking that, if it is ultimately determined that the payment of expenses is prohibited under Section 163 of the Act, the
eligible party will repay the amounts advanced.
Under Section 163 of the Act, we must not indemnify an eligible party against eligible penalties to
which the eligible party is or may be liable or pay the expenses of an eligible party in respect of that proceeding under Sections 160, 161 or 162 of the Act, as the case may be, if any of the following circumstances apply:
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if the indemnity or payment is made under an earlier agreement to indemnify or pay expenses and, at the time
that the agreement to indemnify or pay expenses was made, we were prohibited from giving the indemnity or paying the expenses by our memorandum or articles;
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if the indemnity or payment is made otherwise than under an earlier agreement to indemnify or pay expenses and,
at the time that the indemnity or payment is made, we are prohibited from giving the indemnity or paying the expenses by our memorandum or articles;
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if, in relation to the subject matter of the eligible proceeding, the eligible party did not act honestly and
in good faith with a view to the best interests of our company or the associated corporation, as the case may be; or
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in the case of an eligible proceeding other than a civil proceeding, if the eligible party did not have
reasonable grounds for believing that the eligible party’s conduct in respect of which the proceeding was brought was lawful.
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If
an eligible proceeding is brought against an eligible party by or on behalf of our company or by or on behalf of an associated corporation, we must not either indemnify the eligible party against eligible penalties to which the eligible party is or
may be liable, or pay the expenses of the eligible party under Sections 160, 161 or 162 of the Act, as the case may be, in respect of the proceeding.
Under Section 164 of the Act, and despite any other provision of Part 5, Division 5 of the Act and whether or not payment of expenses or indemnification
has been sought, authorized or declined under Part 5, Division 5 of the Act, on application of our company or an eligible party, the court may do one or more of the following:
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order us to indemnify an eligible party against any liability incurred by the eligible party in respect of an
eligible proceeding;
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(b)
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order us to pay some or all of the expenses incurred by an eligible party in respect of an eligible proceeding;
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(c)
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order the enforcement of, or any payment under, an agreement of indemnification entered into by us;
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(d)
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order us to pay some or all of the expenses actually and reasonably incurred by any person in obtaining an
order under Section 164 of the Act; or
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make any other order the court considers appropriate.
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Section 165 of the Act provides that we may purchase and maintain insurance for the benefit of an eligible party or the heirs and personal or other legal
representatives of the eligible party against any liability that may be incurred by reason of the eligible party being or having been a director or officer of, or holding or having held a position equivalent to that of a director or officer of, our
company or an associated corporation.
Under Part 21.2 of our articles, and subject to the Act, we must indemnify an eligible party and his or her heirs
and legal personal representatives against all eligible penalties to which such person is or may be liable, and we must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in
respect of that proceeding. Each eligible party is deemed to have contracted with our company on the terms of the indemnity contained in our articles.
Under Part 21.3 of our articles, and subject to the Act, we may agree to indemnify and may indemnify any person (including an eligible party) against eligible
penalties and pay expenses incurred in connection with the performance of services by that person for our company. We have entered into indemnity agreements with certain of our directors and officers.
Under Part 21.4 of our articles, we may advance expenses to an eligible party to the extent permitted by and in accordance with the Act.
Pursuant to Part 21.5 of our articles, the failure of an eligible party of our company to comply with the Act, our articles or, if applicable, any former
Companies Act or former articles does not, of itself, invalidate any indemnity to which he or she is entitled under our articles.
II-2
Under Part 21.6 of our articles, we may purchase and maintain insurance for the benefit of any eligible
party (or his or her heirs or legal personal representatives of any eligible party) against any liability incurred by any eligible party.
Insofar as
indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers or persons controlling our company pursuant to the foregoing provisions, we have been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable.
II-3
EXHIBITS
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Exhibit
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Description
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4.1
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Annual information form of the Company for the year ended June 30, 2018, dated September 25, 2018, filed September 25, 2018 (incorporated by
reference to Exhibit 99.205 to the Annual Report on Form 40-F of Aurora Cannabis Inc., filed on October 5, 2018) (File No. 001-38691).
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4.2
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Audited consolidated financial statements of the Company, and the notes thereto for the years ended June 30, 2018 and 2017, together with the
independent auditors’ report thereon, filed September 25, 2018 (incorporated by reference to Exhibit 99.203 to the Annual Report on Form 40-F of Aurora Cannabis Inc., filed on October 5, 2018) (File No. 001-38691).
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4.3
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Management’s discussion and analysis of financial condition and results of operations for the year ended June 30, 2018, filed September
25, 2018 (incorporated by reference to Exhibit 99.204 to the Annual Report on Form 40-F of Aurora Cannabis Inc., filed on October 5, 2018) (File No. 001-38691).
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4.4
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Unaudited condensed interim consolidated financial statements of the Company and the notes thereto for the three and six months ended December 31, 2018
and 2017, filed February 11, 2019 (incorporated by reference to Exhibit 99.1 to the Report on Form 6-K of Aurora Cannabis Inc. containing such document, filed on February 12, 2019) (File No. 001-38691).
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4.5
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Management’s discussion and analysis of financial condition and results of operations for the six months ended December 31, 2018, filed February
11, 2019 (incorporated by reference to Exhibit 99.2 to the Report on Form 6-K of Aurora Cannabis Inc. containing such document, filed on February 12, 2019) (File No. 001-38691).
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4.6
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Material change report dated August 3, 2018 regarding the completion of the acquisition of MedReleaf Corp., filed August 3, 2018 (incorporated
by reference to Exhibit 99.170 to the Annual Report on Form 40-F of Aurora Cannabis Inc., filed on October 5, 2018) (File No. 001-38691).
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4.7
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Material change report dated August 16, 2018 regarding the completion of the acquisition of Anandia Laboratories Inc., filed August 16, 2018
(incorporated by reference to Exhibit 99.180 to the Annual Report on Form 40-F of Aurora Cannabis Inc., filed on October 5, 2018) (File No. 001-38691).
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4.8
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Material change report dated September 10, 2018 regarding the entering into of a $200 million credit facility with Bank of Montreal, filed September
10, 2018 (incorporated by reference to Exhibit 99.190 to the Annual Report on Form 40-F of Aurora Cannabis Inc., filed on October 5, 2018) (File No. 001-38691).
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4.9
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Material change report dated September 18, 2018 regarding the entering into of an arrangement agreement for the acquisition of ICC; filed September
18, 2018 (incorporated by reference to Exhibit 99.199 to the Annual Report on Form 40-F of Aurora Cannabis Inc., filed on October 5, 2018) (File No. 001-38691).
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4.10*
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Material change report dated November 28, 2018 regarding the completion of the acquisition of ICC, filed November 28, 2018.
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4.11
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Material change report dated December 7, 2018 regarding the appointment of a Chief Science Officer, filed December 7, 2018 (incorporated by reference
to Exhibit 99.1 to the Report on Form 6-K of Aurora Cannabis Inc. containing such document, filed on December 10, 2018) (File No. 001-38691).
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4.12
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Material change report of MedReleaf dated May 24, 2018, filed May 24, 2018.
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4.13
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Management information circular of MedReleaf dated August 21, 2017, filed September 5, 2017.
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4.14
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Business acquisition report dated April 30, 2018 relating to the acquisition of CanniMed, filed May 2, 2018 (incorporated by reference to Exhibit
99.124 to the Annual Report on Form 40-F of Aurora Cannabis Inc., filed on October 5, 2018) (File No. 001-38691).
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II-4
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4.15
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Business acquisition report dated September 5, 2018 relating to the acquisition of MedReleaf, filed September 17, 2018, excluding the following
documents incorporated in the business acquisition report by reference: (a) the material change report of MedReleaf dated May 24, 2018, and (b) the management information circular of MedReleaf dated August 21, 2017 (incorporated by reference to
Exhibit 99.194 to the Annual Report on Form 40-F of Aurora Cannabis Inc., filed on October 5, 2018) (File No. 001-38691).
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4.16
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Management information circular of the Company dated October 2, 2017, distributed in connection with the Company’s annual and special meeting
of shareholders held on November 13, 2017, filed October 6, 2017 (incorporated by reference to Exhibit 99.23 to the Annual Report on Form 40-F of Aurora Cannabis Inc., filed on October 5, 2018) (File No. 001-38691).
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4.17
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Management information circular of the Company dated October 16, 2018, distributed in connection with the Company’s annual and special meeting of
shareholders to be held on November 30, 2018, filed October 24, 2018 (incorporated by reference to Exhibit 99.3 to the Report on Form 6-K of Aurora Cannabis Inc., containing such document, filed on December 4, 2018) (File No.
001-38691).
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4.18
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Management information circular dated December 8, 2017, in respect of shareholder approval for the common shares issued by the Company pursuant
to the take-over bid for CanniMed, filed December 12, 2017, excluding the following documents that are incorporated therein by reference: (a) CanniMed’s interim condensed consolidated financial statements and related management discussion and
analysis as at (Q1) January 31, 2017, (Q2) April 30, 2017, and (Q3) July 31, 2017 filed on SEDAR on March 16, 2017, June 12, 2017 and September 11, 2017, respectively; and CanniMed’s audited consolidated financial statements for the year ended
October 31, 2016, together with the notes thereto and the independent auditor’s report thereon, and related management discussion and analysis, as SEDAR filed on February 24, 2017, and (b) the unaudited pro forma consolidated financial
statements attached as Appendix “C” (incorporated by reference to Exhibit 99.69 to the Annual Report on Form 40-F of Aurora Cannabis Inc., filed on October 5, 2018) (File No. 001-38691).
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4.19
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Management information circular dated June 18, 2018, in respect of shareholder approval for the common shares issued by the Company pursuant
to the acquisition of MedReleaf, filed June 20, 2018, excluding the fairness opinion of BMO Capital Markets dated May 13, 2018 and the following documents incorporated in the management information circular by reference: (a) the material change
report of MedReleaf dated May 24, 2018, and (b) the management information circular of MedReleaf dated August 21, 2017 (incorporated by reference to Exhibit 99.148 to the Annual Report on Form 40-F of Aurora Cannabis Inc., filed on October 5, 2018)
(File No. 001-38691).
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4.20*
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Annual information form of MedReleaf dated June 18, 2018, for the year ended March 31, 2018, filed June 19, 2018 under MedReleaf’s SEDAR
Profile.
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4.21*
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Audited consolidated financial statements of MedReleaf for the year ended March 31, 2018, together with the notes thereto and the independent
auditor’s report thereon, filed on June 19, 2018 under MedReleaf’s SEDAR Profile.
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4.22*
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Management’s discussion and analysis of financial condition and results of operations of MedReleaf for the year ended March 31, 2018, filed
on June 19, 2018 under MedReleaf’s SEDAR Profile.
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5.1
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Consent of KPMG LLP.
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5.2
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Consent of MNP LLP
.
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5.3
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Consent of Deloitte LLP.
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5.4*
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Consent of McMillan LLP.
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5.5*
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Consent of Jenner & Block LLP.
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6.1
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Powers of Attorney (included on the signature page of this Registration Statement).
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7.1
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Indenture dated as of May 3, 2019, between Aurora Cannabis Inc., as issuer, and GLAS Trust Company LLC, as trustee.
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7.2
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Statement of Eligibility of the Trustee for the Indenture referenced in Exhibit 7.1, GLAS Trust Company LLC, on Form T-1.
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II-5
PART III
UNDERTAKING AND CONSENT TO SERVICE OF PROCESS
Item 1. Undertaking.
Aurora Cannabis Inc.
undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Securities and Exchange Commission (the “Commission”) staff, and to furnish promptly, when requested to do so by the Commission
staff, information relating to the securities registered pursuant to Form
F-10
or to transactions in said securities.
Item 2. Consent to Service of Process.
Concurrently
with the filing of this Registration Statement, Aurora Cannabis Inc. has filed with the Commission a written Appointment of Agent for Service of Process and Undertaking on Form
F-X.
Any change to the name or address of the agent for service of Aurora Cannabis Inc. shall be communicated promptly to the Commission by an amendment to Form
F-X
referencing the file number of this Registration Statement.
III-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Aurora Cannabis Inc. certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form
F-10
and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Edmonton, Alberta, Canada, on May 10,
2019.
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AURORA CANNABIS INC.
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By:
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/s/ Terry Booth
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Name: Terry Booth
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Title: Chief Executive Officer
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POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Terry Booth and Glen Ibbott, and each of them, either of whom may act without the joinder
of the other, as his true and lawful
attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any
and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Commission, granting unto
said
attorneys-in-fact
and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact
and agents or their substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the
following persons in the capacities indicated and on May 10, 2019:
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Signature
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Title
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/s/ Terry Booth
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Chief Executive Officer, Director
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Terry Booth
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/s/ Glen Ibbott
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Chief Financial Officer
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Glen Ibbott
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/s/ Michael Singer
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Director, Executive Chairman of the Board of Directors
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Michael Singer
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/s/ Steve Dobler
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Director, President
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Steve Dobler
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/s/ Adam Szweras
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Director
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Adam Szweras
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/s/ Jason Dyck
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Director
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Dr. Jason Dyck
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/s/ Shan Atkins
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Director
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Shan Atkins
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/s/ Norma Beauchamp
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Director
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Norma Beauchamp
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/s/ Ronald Funk
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Director
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Ronald Funk
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III-2
AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the undersigned has signed this Registration Statement, solely in its
capacity as the duly authorized representative of Aurora Cannabis Inc. in the United States, on May 10, 2019.
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PUGLISI & ASSOCIATES
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By:
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/s/ Donald J.Puglisi
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Name: Donald J.Puglisi
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Title: Managing Director
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III-3
Exhibit 4.12
Form 51-102F3
Material Change Report
Item 1 Name and Address of Company
MedReleaf Corp. (“
MedReleaf
”)
Markham Industrial Park
Markham,
Ontario
Canada L3R 6G3
Item 2 Date
of Material Change
May 14, 2018.
Item 3 News Release
A news release
with respect to the material change referred to in this report was issued in Canada through the facilities of Canada Newswire and filed on SEDAR on May 14, 2018.
Item 4 Summary of Material Change
On May 14, 2018, MedReleaf entered into a definitive arrangement agreement (the “
Original
Agreement”
and, as
amended by the Amending Agreement (as defined below), the “
Agreement
”) with Aurora Cannabis Inc. (“
Aurora
”) whereby Aurora intends to acquire all of MedReleaf’s issued and outstanding common shares.
Shareholders of MedReleaf will receive 3.575 common shares of Aurora and $0.000001 in cash for each common share held. Upon completion of the transaction, existing Aurora and MedReleaf shareholders would own approximately 61% and 39% of the pro
forma company, respectively, on a fully diluted basis.
The transaction will be effected by way of a plan of arrangement (the
“
Arrangement
”) completed under the
Business Corporations Act
(Ontario). The Arrangement will require approval by at least 66 2/3% of the votes cast by the shareholders of MedReleaf present in person or represented by proxy
and entitled to vote at a special meeting of MedReleaf shareholders, which is expected to take place in the middle of July, 2018.
Item 5 Full
Description of Material Change
5.1 – Full Description of Material Change
Agreement
On May 14, 2018,
MedReleaf and Aurora entered into the Original Agreement and on May 24, 2018 MedReleaf and Aurora entered into an amending agreement (the “
Amending
Agreement
”)
. The following description of the Agreement does not
purport to be complete and is qualified in its entirety by reference to the full text of the Original Agreement and the Amending Agreement, each of which has been filed separately by MedReleaf with the Canadian securities regulators and is available
on SEDAR at www.sedar.com. Unless indicated otherwise, references to “Sections” or “Articles” are to the applicable provisions in the Agreement and capitalized terms used but not otherwise defined shall have the meanings
specified in the Agreement.
Arrangement
The Agreement provides that Aurora will purchase all of MedReleaf’s issued and outstanding common shares. Under the terms of the
Agreement, holders of MedReleaf common shares will receive 3.575 common shares of Aurora (the “
Share
Consideration
”)
and $0.000001 in cash (the “
Cash
Consideration
”)
for each MedReleaf
common share held. The Share Consideration will be appropriately adjusted for any stock splits, consolidations, stock dividends, reclassifications, redenominations or the like between the date of the Agreement and the Effective Time (as defined in
the Agreement). The transaction implies a price of C$29.44 per MedReleaf common share and a premium of approximately 34%, based on the 20-day volume weighted average prices of Aurora and MedReleaf common shares on the Toronto Stock Exchange (the
“
TSX
”) as of May 11, 2018.
Taxable Canadian resident MedReleaf shareholders will be entitled to elect to receive
tax-deferred roll-over treatment in connection with the acquisition by Aurora of their MedReleaf common shares under the transaction. Taxable Canadian resident MedReleaf shareholders will also be entitled to elect to solely receive the Share
Consideration (and not receive the Cash Consideration).
The transaction will be effected by way of a plan of arrangement completed under
the
Business Corporations Act
(Ontario). The Arrangement will require approval by at least 66 2/3% of the votes cast by the shareholders of MedReleaf present in person or represented by proxy and entitled to vote at a special meeting of
MedReleaf shareholders. The issuance of Aurora common shares in connection with the Arrangement will require the approval of a simple majority of the shareholders of Aurora present in person or represented by proxy and entitled to vote at a special
meeting. Certain directors and officers of Aurora and MedReleaf have entered into support agreements pursuant to which they have agreed to vote their shares in favour of the transaction. In addition, holders of approximately 56% of MedReleaf’s
issued and outstanding common shares have entered into irrevocable hard lock-ups to vote their shares in favour of the Arrangement, which terminate under certain specified circumstances, including on the earlier of the Completion Deadline (as
defined in the Agreement) and six months from the date of the Original Agreement.
The board of directors of MedReleaf and the special
committee of the MedReleaf board of directors obtained a fairness opinion from each of Canaccord Genuity Corp. and GMP Securities L.P. that, as of the date of the opinions, and subject to the assumptions, limitations, and qualifications on which
such opinions are based, the consideration to be received by MedReleaf’s shareholders pursuant to the Arrangement is fair, from a financial point of view, to the MedReleaf shareholders. The board of directors of Aurora obtained an opinion from
BMO Capital Markets that, as of the date of the opinion, and subject to the assumptions, limitations, and qualifications on which such opinion is based, the consideration payable under the Agreement is fair from a financial point of view to Aurora.
- 2 -
The Agreement has been unanimously approved by the boards of directors of Aurora and MedReleaf,
and each board recommends that their respective shareholders vote in favour of the transaction.
Upon completion of the Arrangement, the
board of directors of Aurora will be increased to eight members, with Norma Beauchamp and Ronald Funk, currently independent directors of MedReleaf, to be appointed to the board of directors of Aurora.
Upon completion of the Arrangement and in accordance with the terms of the MedReleaf stock option plan, the outstanding options under
MedReleaf’s stock option plan will be exchanged for an option of Aurora to acquire such number of Aurora common shares as is equal to: (A) that number of MedReleaf common shares that were issuable upon exercise of such MedReleaf option,
multiplied by (B) the Exchange Ratio (as defined in the Agreement) and, on an aggregate basis, rounded down to the nearest whole number of Aurora common shares, at an exercise price per Aurora common share equal to the greater of (i) the
quotient determined by dividing: (X) the exercise price per MedReleaf common share at which such MedReleaf option was exercisable, by (Y) the Exchange Ratio, rounded up to the nearest whole cent, and (ii) such minimum amount that
meets the requirements of paragraph 7(1.4)(c) of the
Income Tax Act
(Canada).
Upon completion of the Arrangement and in accordance
with the terms of the indenture governing MedReleaf’s outstanding warrants, each holder of a warrant to purchase MedReleaf common shares will be entitled to receive upon the exercise of such warrant, for the same aggregate consideration payable
therefor, as reduced by an amount equal to the aggregate Cash Consideration such holder would have received if such holder exercised such warrant immediately prior to the Arrangement, the Share Consideration which the holder would have been entitled
to receive under the Arrangement if such holder held the number of MedReleaf common shares which such holder would have been entitled to receive if such holder had exercised such warrant immediately prior to completion of the Arrangement.
Representations and Warranties and Ordinary Course of Business Covenants
The Agreement contains customary representations and warranties made by each of MedReleaf and Aurora and also contains customary covenants,
including, among others, agreements by MedReleaf and Aurora to, until the earlier of the Effective Time and the time that the Agreement is terminated in accordance with its terms, use commercially reasonable efforts to maintain and preserve each of
its own and its subsidiaries’ business organization, properties, employees, goodwill and business relationships with customers, suppliers, partners and others with which it or any of its subsidiaries have material business relations, and to not
engage in certain kinds of transactions or take certain actions during this period unless consented to in writing by the other party (such consent not to be unreasonably withheld, delayed or conditioned). In addition, on the terms and subject to
conditions set forth in the Agreement, each party has agreed to use its commercially reasonable efforts to obtain all required regulatory approvals, as outlined in the Agreement.
- 3 -
Non-Solicitation Covenants
Each of MedReleaf and Aurora are also subject to reciprocal non-solicitation restrictions that, among other things, restrict their ability to
initiate, solicit, knowingly facilitate, encourage or promote any inquiries, proposals, expressions of interest or offers regarding, constituting or that may reasonably be expected to constitute or lead to an acquisition proposal from any third
party. However, each party and its representatives may, at any time prior to the receipt of required approvals of the Arrangement by MedReleaf shareholders and Aurora shareholders, engage in or participate in any discussions or negotiations with
third parties that submit an unsolicited
bona fide
acquisition proposal, and, subject to entering into a confidentiality and standstill agreement with such third party, may provide due diligence access and information, but only if
(a) its board of directors has first determined, in its good faith judgment, after consultation with its financial advisors and outside legal counsel, that such acquisition proposal constitutes or could reasonably be expected to constitute or
lead to a superior proposal; (b) such third party was not restricted from making such an acquisition proposal pursuant to an existing confidentiality, standstill, non-disclosure, use, business purpose or similar restriction with it or any of
its subsidiaries; and (c) it has been, and continues to be, in compliance with its non-solicitation obligations.
If prior to
receiving its shareholder’s approval for the transaction, either party’s board receives an unsolicited acquisition proposal that it determines is a “superior proposal”, then it may, subject to among other things, payment of an
$80 million termination payment and the five business-day matching right of the other, change its recommendation of the Arrangement, terminate the Agreement and enter into an agreement in respect of such superior proposal.
Conditions Precedent to the Consummation of the Arrangement
Mutual Conditions Precedent
The
respective obligations of MedReleaf and Aurora to complete the Arrangement are subject to the fulfillment of the following conditions at or before the Completion Deadline or such other time as is specified below:
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1.
|
Interim Order.
The Interim Order shall have been granted on terms consistent with the Agreement and in
form and substance satisfactory to MedReleaf and Aurora, each acting reasonably, and shall not have been set aside or modified in a manner unacceptable to MedReleaf or Aurora, each acting reasonably, on appeal or otherwise.
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2.
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Arrangement Resolutions.
The Aurora Shareholders’ Resolution shall have been passed by the Aurora
Shareholders in accordance with the requirements of the TSX. The MedReleaf Arrangement Resolution shall have been passed by the MedReleaf Shareholders in accordance with the Interim Order.
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3.
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Final Order. The
Final Order shall have been granted in form and substance satisfactory to MedReleaf and
Aurora, each acting reasonably, and shall not have been set aside or modified in a manner unacceptable to MedReleaf or Aurora, each acting reasonably, on appeal or otherwise.
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- 4 -
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4.
|
Illegality.
There shall not be in force any laws, ruling, order or decree, and there shall not have been
any action taken under any laws or by any Governmental Entity or other regulatory authority, that makes it illegal or otherwise directly or indirectly restrains, enjoins or prohibits the consummation of the Arrangement in accordance with the terms
under the Agreement.
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5.
|
TSX Approval.
The TSX shall have conditionally approved the listing thereon of the Aurora common shares
to be issued pursuant to the Arrangement (including any Aurora common shares issuable upon the exercise or vesting of Replacement Securities), subject in each case only to compliance with the usual requirements of the TSX, including customary
post-closing deliveries.
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6.
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Competition Act Approval.
The Competition Act Approval shall have been obtained.
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7.
|
Dissent Rights.
Dissent Rights have not been validly exercised with respect to greater than 5.0% of the
issued and outstanding MedReleaf common shares.
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The foregoing conditions are for the mutual benefit of Aurora and
MedReleaf and may be waived by mutual consent of Aurora and MedReleaf in writing at any time.
Additional Conditions Precedent to the Obligations of
Aurora
The obligation of Aurora to complete the Arrangement is subject to the fulfillment of the following additional conditions at or
before the Completion Deadline or such other time as is specified below:
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1.
|
Representations and Warranties.
(i) The representations and warranties made by MedReleaf in
Sections (a), (b), (e) and (i)(i) of Schedule C to the Agreement shall be true and correct in all material respects as of the Effective Date as if made on and as of the Effective Date (except for those representations and warranties made as of
a specific date, which shall be true and correct in all material respects on and as of such date), and (ii) all other representations and warranties made by MedReleaf in the Agreement shall be true and correct in all respects as of the
Effective Date as if made on and as of the Effective Date (except for those representations and warranties made as of a specific date, which shall be true and correct in all respects on and as of such date), except where any failure or failures of
any such other representations and warranties to be so true and correct in all respects would not, individually or in the aggregate, have a Material Adverse Effect with respect to MedReleaf (and, for this purpose, any reference to
“material”, “Material Adverse Effect” or any other concept of materiality in such representations and warranties shall be ignored); and (iii) MedReleaf shall have provided to Aurora a certificate of two officers thereof,
certifying the foregoing.
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- 5 -
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2.
|
Material Adverse Effect.
From the date of the Agreement, there shall not have occurred a Material
Adverse Effect with respect to MedReleaf.
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3.
|
Performance of Covenants.
MedReleaf shall have complied in all material respects with each of the
covenants of MedReleaf contained in the Agreement to be complied with by it on or prior to the Effective Date, and MedReleaf shall have provided to Aurora a certificate of two officers thereof, certifying the foregoing.
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The foregoing conditions are for the benefit of Aurora and may be waived, in whole or in part, by Aurora in writing at any time.
Additional Conditions Precedent to the Obligations of MedReleaf
The obligation of MedReleaf to complete the Arrangement is subject to the fulfillment of the following additional conditions at or before the
Completion Deadline or such other time as is specified below:
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1.
|
Representations and Warranties.
(i) The representations and warranties made by Aurora in Sections
(a), (b), (i) and (j)(i) of Schedule D to the Agreement shall be true and correct in all material respects as of the Effective Date as if made on and as of the Effective Date (except for those representations and warranties made as of a
specific date, which shall be true and correct in all material respects on and as of such date), and (ii) all other representations and warranties made by Aurora in the Agreement shall be true and correct in all respects as of the Effective
Date as if made on and as of the Effective Date (except for those representations and warranties made as of a specific date, which shall be true and correct in all respects on and as of such date), except where any failure or failures of any such
other representations and warranties to be so true and correct in all respects would not, individually or in the aggregate, have a Material Adverse Effect with respect to Aurora (and, for this purpose, any reference to “material”,
“Material Adverse Effect” or any other concept of materiality in such representations and warranties shall be ignored); and (iii) Aurora shall have provided to MedReleaf a certificate of two officers thereof, certifying the foregoing.
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2.
|
Material Adverse Effect.
From the date of the Agreement, there shall not have occurred a Material
Adverse Effect with respect to Aurora.
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3.
|
Performance of Covenants.
Aurora shall have complied in all material respects with each of the covenants
of Aurora contained in the Agreement to be complied with by it on or prior to the Effective Date, and Aurora shall have provided to MedReleaf a certificate of two officers thereof, certifying the foregoing.
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- 6 -
The foregoing conditions are for the benefit of MedReleaf and may be waived, in whole or in part,
by MedReleaf in writing at any time.
Termination
The Agreement may be terminated at any time prior to the Effective Date:
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(a)
|
by the mutual written agreement of MedReleaf and Aurora, duly authorized by the board of directors of each;
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(i)
|
prior to the approval by the MedReleaf shareholders of the MedReleaf Arrangement Resolution, (A) the
MedReleaf board of directors shall make a MedReleaf Change in Recommendation (as defined in the Agreement) or (B) MedReleaf enters into an agreement (other than a confidentiality agreement that complies with Section 6.1(e)(ii) of the
Agreement) with respect to any superior proposal made to MedReleaf; or
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(ii)
|
MedReleaf breaches its obligations under Section 6.1
[MedReleaf Non-Solicitation Covenant]
or
Section 6.2 of the Agreement
[Notice of MedReleaf Superior Proposal Determination]
in any material respect.
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(i)
|
prior to the approval by the Aurora shareholders of the Aurora Arrangement Resolution (as defined in the
Agreement), (A) the Aurora board of directors makes an Aurora Change in Recommendation (as defined in the Agreement) or (B) Aurora enters into an agreement (other than a confidentiality agreement that complies with Section 6.1(e)(ii)
of the Agreement) in respect of any superior proposal made to Aurora; or
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(ii)
|
Aurora breaches its obligations under Section 6.3
[Aurora Non-Solicitation Covenant]
or
Section 6.4 of the Agreement
[Notice of Aurora Superior Proposal Determination]
in any material respect.
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(i)
|
either Aurora or MedReleaf if the MedReleaf Meeting (as defined in the Agreement) shall have been held and
completed and the MedReleaf Arrangement Resolution shall not have been approved by the MedReleaf shareholders in accordance with the Interim Order, provided that MedReleaf shall not be entitled to terminate the Agreement pursuant to
Section 7.2(d)(i) of the Agreement
[Failure to obtain shareholder approval of MedReleaf Arrangement Resolution]
if the failure to obtain the approval of the MedReleaf shareholders to the MedReleaf Arrangement Resolution has been caused
by, or is the result of, a breach by MedReleaf of any of its representations or warranties or the failure of MedReleaf to perform any of its covenants or agreements under the Agreement; or
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- 7 -
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(ii)
|
either Aurora or MedReleaf if the Aurora Meeting (as defined in the Agreement) shall have been held and
completed and the Aurora Shareholders’ Resolution shall not have been approved by the Aurora shareholders in accordance with the requirements of the TSX, provided that Aurora shall not be entitled to terminate the Agreement pursuant to
Section 7.2(d)(ii) of the Agreement
[Failure to obtain shareholder approval of Aurora Shareholders’ Resolution]
if the failure to obtain the approval of the Aurora shareholders to the Aurora Shareholders’ Resolution has been
caused by, or is the result of, a breach by Aurora of any of its representations or warranties or the failure of Aurora to perform any of its covenants or agreements under the Agreement;
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(e)
|
by either Aurora or MedReleaf if the Effective Date shall not have occurred by the Completion Deadline,
provided however:
|
|
|
(i)
|
if the failure of the Effective Date to occur by such date has been caused by, or is the result of, a breach by
MedReleaf of any of its representations or warranties or the failure of MedReleaf to perform any of its covenants or agreements under the Agreement, then MedReleaf shall not be entitled to terminate the Agreement pursuant to Section 7.2(e) of
the Agreement
[Effective Date shall not have occurred by the Completion Deadline];
or
|
|
|
(ii)
|
if the failure of the Effective Date to occur by such date has been caused by, or is the result of, a breach by
Aurora of any of its representations or warranties or the failure of Aurora to perform any of its covenants or agreements under the Agreement, then Aurora shall not be entitled to terminate the Agreement pursuant to Section 7.2(e) of the
Agreement
[Effective Date shall not have occurred by the Completion Deadline];
|
|
|
(f)
|
by either party if after the date of the Agreement, any applicable law is enacted, made, enforced or amended,
as applicable, that makes the consummation of the Arrangement illegal or otherwise prohibits or enjoins MedReleaf or Aurora from consummating the Arrangement, and such applicable law has, if applicable, become final and non-appealable, provided that
the party seeking to terminate the Agreement pursuant to Section 7.2(f) of the Agreement
[Illegality]
has used its commercially reasonable efforts to, as applicable, appeal or overturn such law or otherwise have it lifted or rendered
non-applicable in respect of the Arrangement;
|
- 8 -
|
|
(g)
|
by MedReleaf if MedReleaf proposes to enter into any agreement, arrangement or understanding in respect of a
superior proposal in compliance with Section 6.1
[MedReleaf Non-Solicitation Covenant]
and Section 6.2 of the Agreement
[Notice of MedReleaf Superior Proposal Determination],
provided that MedReleaf pays the MedReleaf
Termination Payment (as defined in the Agreement) to Aurora contemporaneously with such termination;
|
|
|
(h)
|
by Aurora if Aurora proposes to enter into any agreement, arrangement or understanding in respect of a superior
proposal in compliance with Section 6.3
[Aurora Non-Solicitation Covenant]
and Section 6.4 the Agreement
[Notice of Aurora Superior Proposal Determination],
provided that Aurora pays the Aurora Termination Payment (as defined
in the Agreement) to MedReleaf contemporaneously with such termination;
|
|
|
(i)
|
by Aurora, if MedReleaf breaches any representation or warranty of MedReleaf set forth in the Agreement which
breach would cause the condition in Section 5.2(a) of the Agreement
[MedReleaf Representations and Warranties]
not to be satisfied or MedReleaf fails to comply with any of its covenants set forth in the Agreement (other than the covenants in
Section 6.1
[MedReleaf Non-Solicitation Covenant]
and Section 6.2 of the Agreement
[Notice of MedReleaf Superior Proposal
Determination]
) that would cause the condition in Section 5.2(c) the Agreement
[MedReleaf Performance of Covenants]
not to be satisfied, and such breach or failure is incapable of being cured or is not cured in accordance with the terms of Section 5.4 of the Agreement; provided that any wilful breach shall be
deemed incapable of being cured and Aurora is not then in breach of the Agreement so as to cause any condition in Section 5.3(a)
[Aurora Representations and Warranties]
or Section 5.3(c) the Agreement
[Aurora Performance of
Covenants]
not to be satisfied;
|
|
|
(j)
|
by MedReleaf, if Aurora breaches any representation or warranty of Aurora set forth in the Agreement which
breach would cause the condition in Section 5.3(a) of the Agreement
[Aurora Representations and Warranties]
not to be satisfied or Aurora fails to comply with any of its covenants set forth in the Agreement (other than the covenants in
with Section 6.3
[Aurora Non-Solicitation Covenant]
and Section 6.4 of the Agreement
[Notice of Aurora Superior Proposal
Determination]
) that would cause the condition in Section 5.3(c) of the Agreement
[Aurora
Performance of Covenants]
not to be satisfied, and such breach or failure is incapable of being cured or is not cured in accordance with the terms of Section 5.4 of the Agreement; provided that any wilful breach shall be deemed incapable of
being cured and MedReleaf is not then in breach of the Agreement so as to cause any condition in Section 5.2(a)
[MedReleaf Representations and Warranties]
or Section 5.2(c) of the Agreement
[MedReleaf Performance of
Covenants]
;
|
|
|
(k)
|
by Aurora, if there has occurred a Material Adverse Effect with respect to MedReleaf after the date of the
Agreement; or
|
|
|
(l)
|
by MedReleaf, if there has occurred a Material Adverse Effect with respect to Aurora after the date of the
Agreement;
|
- 9 -
provided that any termination by a party in accordance with paragraphs (b) to (l) above shall be made
by such party delivering written notice to the other party prior to the Effective Date and specifying in reasonable detail the matter or matters giving rise to such termination right.
Termination Fees and Expenses
MedReleaf Termination
Fees
The Agreement provides for termination fees of $80 million to be paid by MedReleaf to Aurora if:
|
|
(a)
|
the Agreement is terminated by Aurora pursuant to Section 7.2(b) of the Agreement
[MedReleaf Change in
Recommendation or entering into an agreement with respect to any MedReleaf Acquisition Proposal]
(but not including a termination by Aurora pursuant to Section 7.2(b)(i) of the Agreement in circumstances where the MedReleaf Change in
Recommendation resulted from the occurrence of a Material Adverse Effect with respect to Aurora and MedReleaf has complied with Section 6.1(g)(iii) of the Agreement);
|
|
|
(b)
|
the Agreement is terminated by either Aurora or MedReleaf pursuant to Section 7.2(d)(i) of the Agreement
[Failure to obtain approval of MedReleaf Arrangement
Resolution]
if at such time Aurora was permitted to terminate the Agreement pursuant to Section 7.2(b) of the Agreement
[MedReleaf Change in Recommendation or entering into an
agreement with respect to any MedReleaf Acquisition Proposal]
(but not including a termination by Aurora pursuant to Section 7.2(b)(i) of the Agreement in circumstances where the MedReleaf Change in Recommendation resulted from the
occurrence of a Material Adverse Effect with respect to Aurora and MedReleaf has complied with Section 6.1(g)(iii) of the Agreement);
|
|
|
(c)
|
the Agreement is terminated by MedReleaf pursuant to Section 7.2(g) of the Agreement
[MedReleaf
Superior Proposal]
; or
|
|
|
(d)
|
the Agreement is terminated by either Aurora or MedReleaf pursuant to Section 7.2(d)(i)
[Failure to obtain
shareholder approval of MedReleaf Arrangement Resolution]
or Section 7.2(e) of the Agreement
[Effective Date shall not have occurred by the Completion Deadline]
and:
|
|
|
(i)
|
following the date of the Agreement and prior to such termination, a MedReleaf Acquisition Proposal (as defined
in the Agreement) shall have been made to MedReleaf and made known to MedReleaf shareholders generally or shall have been made directly to MedReleaf shareholders generally or any person shall have publicly announced an intention to make a MedReleaf
Acquisition Proposal; and
|
|
|
(ii)
|
within 365 days following the date of such termination:
|
- 10 -
|
|
A.
|
a MedReleaf Acquisition Proposal is consummated or effected (whether or not such MedReleaf Acquisition Proposal
is the same as the Pending MedReleaf Acquisition Proposal (as defined in the Agreement)); or
|
|
|
B.
|
MedReleaf or one or more of its subsidiaries, directly or indirectly, in one or more transactions, enters into
a contract in respect to a MedReleaf Acquisition Proposal (whether or not such MedReleaf Acquisition Proposal is the same as the Pending MedReleaf Acquisition Proposal) and such MedReleaf Acquisition Proposal is later consummated or effected
(whether or not such MedReleaf Acquisition Proposal is later consummated or effected within 365 days of such termination).
|
For the purposes of section (d) above, all references to “20%” in the definition of “MedReleaf Acquisition Proposal”
in the Agreement shall be deemed to be references to “50%”.
Aurora Termination Fees
The Agreement provides for termination fees of $80 million to be paid by Aurora to MedReleaf in the following circumstances:
|
|
(a)
|
the Agreement is terminated by MedReleaf pursuant to Section 7.2(c) of the Agreement
[Aurora Change in
Recommendation or entering into an agreement with respect to any Aurora Acquisition Proposal]
(but not including a termination by MedReleaf pursuant to Section 7.2(b)(i) of the Agreement in circumstances where the Aurora Change in
Recommendation resulted from the occurrence of a Material Adverse Effect with respect to MedReleaf and Aurora has complied with Section 6.3(g)(iii) of the Agreement);
|
|
|
(b)
|
the Agreement is terminated by either Aurora or MedReleaf pursuant to Section 7.2(d)(ii) of the Agreement
[Failure to obtain shareholder approval of Aurora Shareholders’ Resolution]
if at such time MedReleaf was permitted to terminate the Agreement pursuant to Section 7.2(c) of the Agreement
[Aurora Change in Recommendation or
entering into an agreement with respect to any Aurora Acquisition Proposal]
(but not including a termination by MedReleaf pursuant to Section 7.2(c)(i) of the Agreement in circumstances where the Aurora Change in Recommendation resulted from the
occurrence of a Material Adverse Effect with respect to MedReleaf and Aurora has complied with Section 6.3(g)(iii) of the Agreement);
|
|
|
(c)
|
the Agreement is terminated by Aurora pursuant to Section 7.2(h) of the Agreement
[Aurora Superior
Proposal]
; or
|
|
|
(d)
|
the Agreement is terminated by either Aurora or MedReleaf pursuant to Section 7.2(d)(ii)
[Failure to obtain
shareholder approval of Aurora Shareholders’ Resolution]
or Section 7.2(e) of the Agreement
[Effective Date shall not have occurred by the Completion Deadline]
and:
|
- 11 -
|
|
(i)
|
following the date of the Agreement and prior to such termination, an Aurora Acquisition Proposal (as defined
in the Agreement) shall have been made to Aurora and made known to Aurora shareholders generally or shall have been made directly to Aurora shareholders generally or any person shall have publicly announced an intention to make an Aurora Acquisition
Proposal; and
|
|
|
(ii)
|
within 365 days following the date of such termination:
|
|
|
A.
|
an Aurora Acquisition Proposal is consummated or effected (whether or not such Aurora Acquisition Proposal is
the same as the Pending Aurora Acquisition Proposal (as defined in the Agreement)); or
|
|
|
B.
|
Aurora or one or more of its subsidiaries, directly or indirectly, in one or more transactions, enters into a
contract in respect to an Aurora Acquisition Proposal (whether or not such Aurora Acquisition Proposal is the same as the Pending Aurora Acquisition Proposal) and such Aurora Acquisition Proposal is later consummated or effected (whether or not such
Aurora Acquisition Proposal is later consummated or effected within 365 days of such termination).
|
For the purposes of
section (d) above, all references to “20%” in the definition of “Aurora Acquisition Proposal” in the Agreement shall be deemed to be references to “50%”.
Reimbursement of Expenses
|
|
(a)
|
Subject to section (b) below, in the event of termination of the Agreement by:
|
|
|
(i)
|
either MedReleaf or Aurora in accordance with Section 7.2(d)(ii) of the Agreement
[Failure to obtain
shareholder approval of Aurora Shareholders’ Resolution],
Aurora shall pay, within three business days of the termination of the Agreement, a payment of $15,000,000 to MedReleaf as reimbursement for the costs and expenses incurred by
MedReleaf with respect to the Arrangement; or
|
|
|
(ii)
|
either MedReleaf or Aurora in accordance with Section 7.2(d)(i) of the Agreement
[Failure to obtain
shareholder approval of MedReleaf Arrangement
Resolution],
MedReleaf shall pay, within three business days of the termination of the Agreement, a payment of $15,000,000 to Aurora as reimbursement for the costs and expenses incurred by
Aurora with respect to the Arrangement.
|
- 12 -
|
|
(b)
|
No amount shall be paid or payable by Aurora under section (a)(i) above if Aurora has paid the Aurora
Termination Payment payable pursuant to Section 6.6 of the Agreement and no amount shall be paid or payable by MedReleaf under section (a)(ii) above if MedReleaf has paid the MedReleaf Termination Payment payable pursuant to Section 6.5 of the
Agreement, as the case may be. No amount shall be paid or payable by Aurora under section (a)(i) above if the Agreement is terminated by either MedReleaf or Aurora in accordance with Section 7.2(d)(ii) of the Agreement
[Failure to obtain
shareholder approval of Aurora
Shareholders’ Resolution]
in circumstances where either MedReleaf or Aurora is permitted to terminate the Agreement in accordance with Section 7.2(d)(i) of the Agreement
[Failure to obtain
shareholder approval of MedReleaf
Arrangement
Resolution]
. No amount shall be paid or payable by MedReleaf under section (a)(ii) above if the Agreement is terminated by either MedReleaf or Aurora in accordance with
Section 7.2(d)(i) of the Agreement
[Failure to obtain shareholder approval of MedReleaf Arrangement Resolution]
in circumstances where either MedReleaf or Aurora is entitled to terminate the Agreement in accordance with
Section 7.2(d)(ii) of the Agreement
[Failure to obtain shareholder approval of Aurora Shareholders’ Resolution]
.
|
|
|
(c)
|
In the event Aurora makes any payment under section (a)(i) above and is then required to pay an Aurora
Termination Payment, the amount paid under section (a)(i) above will be credited towards payment of the Aurora Termination Payment. In the event MedReleaf makes any payment under section (a)(ii) above and is then required to pay a MedReleaf
Termination Payment, the amount paid under section (a)(ii) above will be credited towards payment of the MedReleaf Termination Payment.
|
5.2 – Disclosure for Restructuring Transactions
Not Applicable.
Item 6 Reliance on
subsection 7.1(2) of National Instrument 51-102
Not Applicable.
Item 7 Omitted Information
Not
Applicable.
Item 8 Executive Officer
Igor Gimelshtein, Chief Financial Officer of MedReleaf, is an executive officer of MedReleaf and is knowledgeable about the material change and
this report. Mr. Gimelshtein can be contacted at 289-317-1004 or at igimelshtein@medreleaf.com.
Item 9 Date of Report
May 24, 2018.
- 13 -
Caution Concerning Forward-Looking Statements
This material change report includes forward-looking statements and information (collectively, the “forward-looking statements”)
including, but not limited to: forward-looking statements pertaining to the purchase by Aurora of all the issued and outstanding common shares of MedReleaf; the anticipated timing for the meeting of MedReleaf shareholders and closing of the
Arrangement; the consideration to be received by shareholders of MedReleaf, which may fluctuate in value due to Aurora common shares forming the consideration; the satisfaction of closing conditions including, without limitation (i) required
Aurora and MedReleaf shareholder approvals; (ii) necessary court approval in connection with the plan of arrangement, (iii) receipt of any required approvals under the Competition Act; (iv) certain termination rights available to the
parties under the Agreement; (v) Aurora obtaining the necessary approvals from the TSX for the listing of its common shares in connection with the Arrangement; and (vi) other closing conditions, including, without limitation, compliance by
Aurora and MedReleaf with various covenants contained in the Agreement. In particular, there can be no assurance that the Arrangement will be completed.
Implicit in the forward-looking statements referred to above, are assumptions regarding, among other things, the expected time required to
prepare and mail shareholder meeting materials; the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary shareholder, required regulatory approvals, court, stock exchange and other third party approvals; the
ability of the parties to satisfy, in a timely manner, the conditions to the closing of the Arrangement; and other expectations and assumptions concerning the Arrangement. The anticipated timing provided herein in connection with the Arrangement may
change for a number of reasons, including unforeseen delays in preparing shareholder meeting materials; the inability to secure necessary shareholder, required regulatory approvals, court, stock exchange or other third party approvals in the time
assumed or the need for additional time to satisfy the other conditions necessary to complete the Arrangement.
As a consequence, actual
results in the future may differ materially from any expectation, conclusion, forecast or projection in such forward-looking statements. Therefore, forward-looking statements should be considered carefully and undue reliance should not be placed on
them. Examples of statements that constitute forward-looking information may be identified by words such as “believe”, “expect”, “project”, “should”, “anticipate”, “could”,
“target”, “forecast”, “intend”, “plan”, “outlook”, “see”, “set”, “pending”, and other similar terms. All forward-looking statements are made pursuant to the safe harbour
provisions of applicable Canadian securities legislation.
- 14 -
Forward-looking statements are subject to risks and uncertainties including, but not limited to:
the potential risk that the transaction will not be approved by shareholders; failure to, in a timely manner, or at all, obtain the required regulatory approvals, stock exchange and court approvals for the Arrangement or any transaction ancillary
thereto; failure of the parties to otherwise satisfy the conditions to complete the Arrangement; the possibility that the MedReleaf board of directors could receive an acquisition proposal and approve a superior proposal; the effect of the
announcement of the Arrangement on MedReleaf’s and Aurora’s respective strategic relationships, operating results and business generally; significant transaction costs or unknown liabilities; the risk of litigation or adverse actions or
awards that would prevent or hinder the completion of the Arrangement; failure to realize the expected benefits of the Arrangement; compliance with all applicable laws and other customary risks associated with transactions of this nature; and
general economic conditions. In addition, if the transaction is not completed, and MedReleaf continues as an independent entity, there are serious risks that the announcement of the Arrangement and the dedication of substantial resources of
MedReleaf to the completion of the Arrangement could have an adverse impact on MedReleaf’s business and strategic relationships (including with future and prospective employees, customers, retailers, vendors, suppliers and partners), operating
results and businesses generally. As a consequence, actual results in the future may differ materially from any forward-looking statement, forecast or projection, whether expressed or implied. Furthermore, the failure of MedReleaf to comply with the
terms of the Agreement may, in certain circumstances, result in MedReleaf being required to pay a termination fee to Aurora, the result of which could have a material adverse effect on MedReleaf’s financial position and results of operations
and its ability to fund growth prospects. Therefore, forward-looking statements should be considered carefully and undue reliance should not be placed on them.
The forward-looking statements contained in this material change report are made as of the date of this report. MedReleaf disclaims any
intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Additionally, MedReleaf undertakes no obligation to comment on
expectations of, or statements made by, third parties in respect of the transaction.
- 15 -
Exhibit 4.13
MEDRELEAF CORP.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS AND
MANAGEMENT INFORMATION CIRCULAR
Annual Meeting of Shareholders of MedReleaf Corp.
commencing at 10:00 a.m. (Toronto time) on September 25, 2017 at the offices of
Norton Rose Fulbright Canada LLP
Royal Bank Plaza, South Tower
Suite 3800 – 200 Bay Street
Toronto, Ontario M5J 2Z4
Canada
August 21, 2017
MEDRELEAF CORP.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN
that an annual meeting (the “
Meeting
”) of the shareholders of MedReleaf Corp. (“
MedReleaf
” or
the “
Corporation
”) will be held at Norton Rose Fulbright Canada LLP located at Suite 3800, Royal Bank Plaza, South Tower, 200 Bay Street, Toronto, Ontario M5J 2Z4 Canada, on Monday September 25, 2017 commencing at 10:00 a.m.
(Toronto time) for the following purposes:
|
1
|
to receive the audited annual consolidated financial statements of the Corporation for the fiscal year ended
March 31, 2017, together with the report of the auditor thereon;
|
|
2
|
to elect directors for the ensuing year;
|
|
3
|
to appoint KPMG LLP as auditors of the Corporation for the ensuing year and to authorize the board of directors
of the Corporation to fix their remuneration; and
|
|
4
|
to transact such other business as may properly be put before the Meeting.
|
Only registered shareholders of record of MedReleaf at the close of business on August 21, 2017, or the persons they appoint as their proxies, will be
entitled to receive notice of and vote at the Meeting. Registered shareholders of MedReleaf who are unable to attend the Meeting in person are requested to sign, date and return the enclosed form of proxy to TSX Trust Company at 301 – 100
Adelaide Street West, Toronto, Ontario M5H 4H1 or by fax to (416) 595-9593.
In order to be valid for use at the Meeting, proxies must be received by
TSX Trust Company by 10:00 a.m. (Toronto time) on September 21, 2017 or, if the Meeting is adjourned or postponed, 48 hours prior to the time to which the Meeting has been adjourned or postponed, excluding Saturdays, Sundays and holidays. The
chair of the Meeting may waive or extend the proxy cut-off without notice. Non-registered shareholders of MedReleaf who receive these materials through their broker or other intermediary should carefully follow the instructions provided by their
broker or intermediary.
DATED
at Toronto, Ontario this 21
st
day of August, 2017.
|
|
|
BY ORDER OF THE BOARD OF DIRECTORS
|
|
|
|
(signed) “Neil Closner”
|
|
Neil Closner
|
|
Director and Chief Executive Officer
|
MANAGEMENT INFORMATION CIRCULAR
VOTING INFORMATION
Persons Making
This Solicitation
This management information circular (the “
Circular
”) is furnished in connection with the solicitation of proxies
by the management of MedReleaf Corp. (“
MedReleaf
” or the “
Corporation
”) for use at the annual meeting of shareholders of MedReleaf (the “
Meeting
”) to be held at Norton Rose Fulbright Canada LLP
located at Suite 3800, Royal Bank Plaza, South Tower, 200 Bay Street, Toronto, Ontario M5J 2Z4 Canada on September 25, 2017 commencing at 10:00 a.m. (Toronto time) for the purposes set forth in the accompanying notice of meeting (the
“
Notice
of Meeting
”
)
. Only registered shareholders of MedReleaf (“
Shareholders
”) of record at the close of business on August 21, 2017 (the “
Record
Date
”)
,
or the
persons they appoint as their proxies, will be entitled to receive notice of and vote at the Meeting.
The Corporation will not be relying on the notice
and access delivery procedures outlined in National Instrument 54-101 –
Communication with Beneficial Owners of Securities of a Reporting Issuer
of the Canadian Securities Administrators (“
NI
54-101
”)
to
distribute copies of proxy-related materials in connection with the Meeting.
While it is expected that the solicitation will be made primarily by mail,
proxies may also be solicited personally, by facsimile or by telephone by employees of the Corporation.
The solicitation of proxies by this Circular is being made by or on behalf of the management of the Corporation and the total cost of the
solicitation will be borne by the Corporation.
Appointment of Proxies
The individuals named in the accompanying management form of proxy are directors or officers of the Corporation.
Shareholders have the right to appoint a
person or company to represent him, her or it at the Meeting other than those persons designated on the form of proxy. A Shareholder who wishes to appoint some other person at the Meeting may do so by clearly inserting such person’s name in the
blank space provided in the form of proxy. Such other person need not be a shareholder.
A proxy will not be valid unless the completed, dated and signed form of proxy is delivered to TSX Trust Company, located at 301 – 100 Adelaide Street
West, Toronto, Ontario M5H 4H1 or by fax to (416) 595-9593, by 10:00 a.m. (Toronto time) on September 21, 2017 or, if the Meeting is adjourned or postponed, not less than 48 hours (excluding Saturdays, Sundays and holidays) before the time
of the adjourned or postponed Meeting.
Revocation of Proxies
A Shareholder who has given a proxy may revoke it by an instrument in writing executed by the Shareholder or by his, her or its attorney authorized in writing
or, if the Shareholder is a corporation, by a duly authorized officer or attorney of the corporation, and delivered either to the registered office of the Corporation, at Suite 3800, Royal Bank Plaza, South Tower, 200 Bay Street, Toronto, Ontario,
M5J 2Z4, Canada or to TSX Trust Company, located at 301 – 100 Adelaide Street West, Toronto, Ontario M5H 4H1 or by fax at (416) 595-9593, at any time up to and including the last business day preceding the day of the Meeting, or any
adjournment or postponement of the Meeting. Only Shareholders have the right to revoke a proxy. Non-registered holders of common shares in the capital of the Corporation (“
Common
Shares
”)
who wish to change their
voting instructions must contact the intermediary through which their Common Shares are held and by following the instructions of the intermediary respecting the revocation of such voting instructions.
A revocation of a proxy does not affect any matter on which a vote has been taken prior to the revocation.
1
Exercise of Discretion
The Common Shares represented by the proxies solicited hereby will be voted or withheld from voting in accordance with the instructions of the Shareholder on
any ballot that may be called for, and if a Shareholder specifies a choice with respect to any matter to be acted upon, the Common Shares represented by such proxy will be voted or withheld from voting accordingly. Shareholders may indicate the
manner in which the proxyholder is to vote with respect to any specific item by checking the appropriate space. If a Shareholder wishes to confer discretionary authority with respect to any item of business, then the space opposite the item should
be left blank.
The enclosed form of proxy confers discretionary authority upon the named proxyholder(s) with respect to any amendments to or
variations in matters identified in the accompanying Notice of Meeting, including other matters which may properly come before the Meeting or any adjournment or postponement thereof, in each instance, to the extent permitted by law, whether or not
the amendment, variation or other matter that comes before the Meeting is routine and whether or not the amendment, variation or other matter that comes before the Meeting is contested.
As at the date of this Circular, management of the
Corporation is not aware of any amendments, variations, or other matters, other than as set out in the accompanying Notice of Meeting. If such should occur, the persons designated by management or such other proxyholder as properly designated by the
Shareholder will vote in accordance with their best judgment.
IF A CHOICE WITH RESPECT TO SUCH MATTERS IS NOT SPECIFIED, THE PERSONS DESIGNATED BY
MANAGEMENT OF THE CORPORATION IN THE ENCLOSED PROXY WILL VOTE THE COMMON SHARES REPRESENTED BY THE PROXY IN FAVOUR OF EACH MATTER IDENTIFIED IN THE PROXY.
Non-Registered Shareholders
Most shareholders of the
Corporation are “
Non-Registered Shareholders
” because the Common Shares they beneficially own are not registered in their names but are instead registered in the name of an intermediary such as a brokerage firm, bank, trust
corporation, securities dealers or brokers and trustees or administrators of self-administered RRSPs, RRIFs, RESPs and similar plans through which they purchased the Common Shares (an “
Intermediary
”). A Non-Registered Shareholder
typically holds their Common Shares either: (a) in the name of the Intermediary that the Non-Registered Shareholder deals with in respect of the Common Shares; or (b) in the name of a clearing agency (such as CDS Clearing and Depository
Services Inc. (“CDS”)), of which the Intermediary is a participant.
Non-Registered Shareholders who have not objected to their Intermediary
disclosing certain beneficial ownership information about themselves to the Corporation are referred to as “NOBOs”. Non-Registered Shareholders who have objected to their Intermediary disclosing the ownership information about themselves
to the Corporation are referred to as “OBOs”. NI 54-101 permits the Corporation to send the Notice of Meeting, this Circular and a form of proxy or voting instruction form, as applicable, (collectively, the “
Meeting
Materials
”)
directly to the NOBOs. In accordance with NI 54-101, the Corporation has elected to send the Meeting Materials directly to NOBOs and has distributed copies of the Meeting Materials to Intermediaries for distribution to
OBOs. The Corporation will pay for an Intermediary to deliver the Meeting Materials to Non-Registered Shareholders who are OBOs, including a voting instruction form (as described further below).
If you are a Non-Registered Shareholder and you have not declined to receive the Meeting Materials, then you will receive either a voting instruction form or,
less frequently, a partially completed form of proxy. The purpose of these forms is to permit you to direct the voting of the Common Shares that you beneficially own. If you are a Non-Registered Shareholder you should follow the procedures set out
below, depending on which type of form you receive.
2
|
|
(a)
|
Voting Instruction Form.
In most cases, you will receive, as part of the Meeting Materials, a voting
instruction form, which is not the same as a form of proxy. If you do not wish to attend and vote at the Meeting in person (or have another person attend and vote on your behalf), the voting instruction form must be completed, signed and returned in
accordance with the directions on the voting instruction form. If you wish to attend and vote at the Meeting in person (or have another person attend and vote on your behalf), then you must complete, sign and return the voting instruction form in
accordance with the directions provided and a form of proxy giving the right to attend and vote at the Meeting will be forwarded to you.
|
or
|
|
(b)
|
Form of Proxy.
Less frequently, you will receive, as part of the Meeting Materials, a form of proxy that
has already been executed by the Intermediary (typically by a facsimile, stamped signature) and which is restricted as to the number of Common Shares beneficially owned by you, but which is otherwise incomplete. If you do not wish to attend and vote
at the Meeting in person (or have another person attend and vote on your behalf), you must complete the form of proxy and deposit it with TSX Trust Company, located at 301 – 100 Adelaide Street West, Toronto, Ontario M5H 4H1 or by fax to
(416) 595-9593, as described above. If you wish to attend and vote at the Meeting in person (or have another person attend and vote on your behalf), you must insert your name (or such other person’s) name in the blank space provided.
|
In any case, the purpose of these procedures is to permit Non-Registered Shareholders to direct the voting of the Common Shares
which they beneficially own. Should a Non-Registered Shareholder who receives one of the above forms wish to vote at the Meeting in person, the Non-Registered Shareholder should insert the Non-Registered Shareholder’s name in the blank space
provided.
Non-Registered Shareholders should follow the instructions on the forms they receive, including those regarding when and where the forms are to be delivered, and contact their Intermediaries promptly if they need assistance.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No person who has been a director or executive officer of the Corporation since the beginning of the Corporation’s most recently completed financial
year, or any proposed nominee by management of the Corporation for election as a director of the Corporation, nor any associate or affiliate of the foregoing persons, has any material interest, direct or indirect, by way of beneficial ownership of
securities or otherwise, in matters to be acted upon at the Meeting, other than the election of directors or the appointment of auditors.
VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES
The Corporation’s authorized capital consists of an unlimited number of Common Shares and 3.997.34 class B shares of which, as of the date hereof,
90,385,744 Common Shares are issued and outstanding and all of the class B shares are issued and outstanding. The class B shares of the Corporation are non-voting.
The holders of Common Shares have the right to one vote per Common Share at all meetings of the shareholders of the Corporation, have the right to receive any
dividend declared by the board of directors of the Corporation (the “
Board
of Directors
”)
,
and have the right to receive the remaining property of the Corporation on its dissolution, liquidation, winding up or
other distribution of its assets or property among the shareholders for the purpose of winding up its affairs.
3
Any Shareholder as of the Record Date who either personally attends the Meeting or who has completed and
delivered a proxy in the manner specified, subject to the provisions described above, shall be entitled to vote or to have their Common Shares voted at the Meeting.
As of the date hereof, to the knowledge of the Corporation’s directors and executive officers, no person or company beneficially owns, directly or
indirectly, or exercises control or direction over, voting securities of the Corporation carrying more than 10% of the voting rights attached to any class of voting securities of the Corporation, except as set out below.
|
|
|
|
|
|
|
|
|
|
|
Principal Security Holder
|
|
Number of Common Shares
Owned or Controlled
|
|
|
Approximate Percentage of Issued
and Outstanding Common Shares
|
|
|
Zola Finance Inc.
|
|
|
15,100,552
|
(1)
|
|
|
16.7
|
%
|
|
Rayray Investments Inc.
|
|
|
12,167,157
|
(2)
|
|
|
13.5
|
%
|
|
Stephen Arbib
|
|
|
10,770,745
|
(3)
|
|
|
11.9
|
%
|
|
Tikun Olam Ltd.
|
|
|
10,383,265
|
(4)
|
|
|
11.5
|
%
|
|
(1)
|
To the knowledge of the Corporation, these Common Shares are controlled by Tarik Ouass.
|
|
(2)
|
To the knowledge of the Corporation, these Common Shares are beneficially owned and controlled by Raymond
Leach.
|
|
(3)
|
To the knowledge of the Corporation, 4,661,275 Common Shares are held by MENA Investment Network Inc. and
6,109,470 Common Shares are held by AJA Holdings 2013 Inc.
|
|
(4)
|
To the knowledge of the Corporation, these Common Shares are controlled by Tsachi Cohen.
|
PARTICULARS OF MATTERS TO BE ACTED UPON
Financial Statements
The audited annual consolidated
financial statements of the Corporation for the fiscal year ended March 31, 2017, together with the report of the auditor thereon, will be presented to Shareholders for review at the Meeting. No vote by the Shareholders is required with respect
to this matter.
Election of Directors
The term of
office of each of the directors of the Corporation expires at the close of the Meeting. The Board of Directors is currently composed of five directors consisting of Norma Beauchamp, Neil Closner, Ronald Funk, Deborah Rosati and Lloyd M. Segal
(collectively, the “
Nominees
”). At the Meeting, management of the Corporation proposes to nominate the Nominees for re-election as directors of the Corporation for the ensuing year. Management of the Corporation does not anticipate
that any of the Nominees will be unable to serve as a director, but, if such should be the case at the Meeting, the persons whose names are printed on the form of proxy, in the absence of a specification to the contrary, intend to vote for such
other nominees as their best judgment may deem advisable.
If elected, each Nominee will hold office until the close of the next annual meeting of
Shareholders or until a successor is elected or appointed, unless earlier resigned or otherwise removed from office.
4
Majority Voting Policy
The Board of Directors has adopted a policy (the “
Majority
Voting Policy
”)
that requires that Shareholders be able to vote for,
or withhold from voting, separately for each Nominee. If, in an “uncontested” election of directors of the Corporation, the number of votes withheld from voting by Shareholders in respect of any particular Nominee exceeds the number of
votes for the election of the Nominee by Shareholders, then, although the Nominee will have been successfully elected to the Board of Directors pursuant to applicable corporate law, such Nominee will then be required to promptly tender his or her
resignation from the Board of Directors. The Corporate Governance, Compensation and Nominating Committee will consider such resignation and make a recommendation to the Board of Directors whether to accept it or not. The Board of Directors will
promptly accept the resignation within 90 days of the Meeting absent extraordinary circumstances, and disclose by press release its decision and the reasons for such decision.
Advance Notice Provisions
The Corporation’s by-laws
provide that Shareholders seeking to nominate candidates for election as directors must provide timely notice in writing (the “
Advance
Notice Provisions
”)
. To be timely, a Shareholder’s notice must be received by
the Corporation: (i) in the case of an annual meeting of holders of Common Shares, not less than 30 days prior to the date of the annual meeting of holders of Common Shares; provided, however, that in the event that the annual meeting of
holders of Common Shares is to be held on a date that is less than 50 days after the date on which the first public announcement (the “
Notice
Date
”)
of the date of the annual meeting was made, notice by a holder of
Common Shares may not be given later than the close of business on the 10th day following the Notice Date; and (ii) in the case of a special meeting (which is not also an annual meeting) of holders of Common Shares called for the purpose of
electing directors (whether or not called for other purposes), not later than the close of business on the 15th day following the day on which the first public announcement of the date of the special meeting of holders of Common Shares was made.
The Corporation did not receive notice of a nomination in compliance with the Advance Notice Provisions and, as such, any nominations other than
nominations of the Nominees will be disregarded at the Meeting.
5
Nominee Information
The following table sets out the names, province and country of residence of each Nominee, the present offices of the Corporation now held by each of them, the
principal occupations of each Nominee, the period of time for which each has been a director of the Corporation and the number of Common Shares beneficially owned by each Nominee, directly or indirectly, or over which control or direction is
exercised.
|
|
|
|
|
|
|
|
|
|
|
Name, Province and
Country of Residence
(1)
|
|
Present
Position(s) with
the
Corporation
|
|
Principal Occupation(s) for
the Past Five Years
(1)
|
|
Director Since
|
|
Number of Common
Shares Beneficially
Owned or Controlled,
Directly
or
Indirectly
(1)
|
|
Norma Beauchamp
(2)(3)
Ontario, Canada
|
|
Director
|
|
President and Chief Executive Officer of Cystic Fibrosis Canada; formerly Head of MS Patient-Centered Care at Sanofi Canada
|
|
June 7, 2017
|
|
2,600
|
|
|
|
|
|
|
|
Neil Closner
(4)
Ontario
,
Canada
|
|
Director & Chief Executive Officer
|
|
Chief Executive Officer of the Corporation; formerly a consultant and Vice President of Business Development at Mount Sinai Hospital
|
|
February 28, 2013
|
|
2,812,577
|
|
|
|
|
|
|
|
Ronald Funk
(2)(4)
Ontario, Canada
|
|
Director
|
|
Consultant
|
|
June 7, 2017
|
|
5,250
|
|
|
|
|
|
|
|
Deborah Rosati
(2)(3)
Ontario, Canada
|
|
Director
|
|
Corporate Director and Consultant
|
|
June 7, 2017
|
|
1,800
|
|
|
|
|
|
|
|
Lloyd M. Segal
(3)(4)
Quebec, Canada
|
|
Director & Chairman of the Board of Directors
|
|
President and Chief Executive Officer of Repare Therapeutics Inc.; Entrepreneur-in-residence at Versant Ventures; managing partner of Persistence Capital Partners; Corporate Director
|
|
June 7, 2017
|
|
5,250
|
|
(1)
|
The information as to country and province of residence, principal occupation and number of Common Shares
beneficially owned, or controlled or directed, directly or indirectly, by each respective Nominee is not within the knowledge of management of the Corporation and has been furnished by the respective Nominees.
|
|
(2)
|
Member of the Audit Committee
|
|
(3)
|
Member of the Corporate Governance and Compensation Committee.
|
|
(4)
|
Member of the Quality, Safety, Health and Public Policy Committee.
|
6
Biographical Information
Norma Beauchamp
Norma Beauchamp is the President and
Chief Executive Officer of Cystic Fibrosis Canada, as well as director of Acerus Pharmaceuticals Corporation, where she is a member of both the audit and corporate governance and nominating committees. Ms. Beauchamp brings over three decades of
experience in the corporate and non-profit sectors to her role with the Corporation, having held senior leadership positions in Canada and Germany, including executive positions at Bayer, Sanofi, and the Canadian Foundation for Women’s Health.
Ms. Beauchamp has served on the boards of St. Joseph’s Health Centre Foundation, Providence Healthcare Foundation and the Breast Cancer Society of Canada. Throughout her career she has been a patient advocate, working with patient and
healthcare organizations to enhance access to care. Ms. Beauchamp has completed the University of Toronto’s Rotman School of Management Directors Education Program (ICD.D), and holds a Bachelor of Business Administration in Marketing from
Bishop’s University.
Neil Closner
Neil Closner
has been a key driver of the Corporation’s growth and vision. His responsibilities include oversight of all general management for the organization, strategic leadership on growth opportunities and fostering an entrepreneurial spirit throughout
the Corporation. Mr. Closner brings nearly two decades of start-up, technology and health care experience to the MedReleaf team. Previously, he was a member of the senior leadership team at Toronto’s Mount Sinai Hospital where he served as
Vice-President of Business Development. Mr. Closner began his career as a health-care focused investment banker with Salomon Smith Barney (now Citigroup) and has also served as the founder, CEO or on the board of directors for more than half a
dozen technology and health-care related start-up companies. Mr. Closner is Chairman of the board of the Cannabis Canada Association, representing the majority of Licensed Producers. He also sits on the executive committee and on the board of
directors of Technion Canada. Mr. Closner studied economics at the London School of Economics and Political Science in London, England, and holds a BA from McGill University and an MBA from The Wharton School at the University of Pennsylvania.
Ronald Funk
Ronald Funk brings over 30 years of
experience in business and consulting to his role with the Corporation. Since 2009, he has managed his own consulting practice, working with clients on acquisitions, restructurings, strategy development and government relations. Mr. Funk has
worked on projects in various locations around the world, with clients engaged in a range of industries, including heavily regulated consumer products such as tobacco, alcohol, and food products. Other industries in which he has consulted include
retail, advanced data analytics, gaming, and real estate development. Before opening his consulting practice, Mr. Funk was employed for approximately 30 years by Rothmans, Benson & Hedges Inc., serving in various roles and capacities,
including Vice President of Sales, Human Resources, Corporate Affairs and Competitive Improvement. In these senior roles, he developed and executed a number of strategies that resulted in material growth in both market share and profitability.
Mr. Funk currently serves as an independent director of Carey Management Inc., a privately held business that owns Canada’s largest independent wholesale distributor. Mr. Funk has also served as the Chairman of the Ontario Convenience
Stores Association and Treasurer of the Canadian Convenience Stores Association. Mr. Funk holds a Kellogg-Schulich MBA from the Kellogg School of Management and the Schulich School of Business.
7
Deborah Rosati
Deborah Rosati brings over 30 years of experience in technology, consumer, retail, private equity, and venture capital sectors to her as board member of the
Corporation. Ms. Rosati has extensive knowledge and experience as a corporate director, particularly in the areas of financial and enterprise risk management, corporate strategy, transformational changes, mergers and acquisitions, corporate
governance, and CEO and board succession planning. Currently, Ms. Rosati serves as a director and chair of the nominating and corporate governance committee for Sears Canada Inc. (TSX:SCC), and director and chair of the audit committee for NexJ
Systems Inc. (TSX: NXJ). She is also a co-founder and CEO of Women Get On Board, a leading member-based company that connects, promotes, and empowers women to corporate boards. She has been recognized as a Diversity 50 candidate in 2014, and as one
of WXN’s Top 100 Canada’s Most Powerful Women in the corporate director award category in 2012. Ms. Rosati’s community engagements include serving as a member of the Adrenalys Advisory Council and the Advisory Council at the
Goodman School of Business at Brock University, from which she holds an HBA in business administration. Ms. Rosati became a Certified Director in 2008 (ICD.D) and has been a Chartered Professional Accountant (CPA) for over 30 years. In 2009,
she was named as a Fellow Chartered Professional Accountant (FCPA).
Lloyd M. Segal
Lloyd M. Segal is the President & CEO of Repare Therapeutics Inc., a cancer-focussed biotechnology company, and is also an Entrepreneur-in-residence
at Versant Ventures, a leading global healthcare venture capital firm. Previously, Mr. Segal was a managing partner of Persistence Capital Partners. In 2013, Mr. Segal was honored by the Financial Times as Outstanding Director of the Year.
Mr. Segal also serves on the board of The GBC American Growth Fund Inc. He has previously served as a director of several public and private corporations in the U.S. and Canada. He was CEO of Thallion Pharmaceuticals, a biotechnology company
sold to Bellus Health in 2013 and founding CEO of Caprion Pharmaceuticals (now Caprion Proteomics), a leading healthcare CRO. Previously, he was CEO of Advanced Bioconcept, an early innovator in the development and sale of novel discovery tools for
life science research, which was sold to NEN Life Sciences Products (now PerkinElmer Inc.) in 1998, and was with McKinsey & Co. as an associate from 1992 to 1996. Mr. Segal holds a BA in politics from Brandeis University and an MBA
(Hons.) from Harvard Business School.
Corporate Cease Trade Orders or Bankruptcies
To the knowledge of management of the Corporation, except as disclosed below, no Nominee is, at the date of this Circular, or has been, within ten years before
the date of this Circular,
|
|
(a)
|
a director, chief executive officer or chief financial officer of any company (including the Corporation) that:
|
|
|
(i)
|
was subject to an order that was issued while the nominee was acting in the capacity as director, chief
executive officer or chief financial officer; or
|
|
|
(ii)
|
was subject to an order that was issued after the Nominee ceased to be a director, chief executive officer or
chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer,
|
|
|
(b)
|
a director or executive officer of any company (including the Corporation) that, which such Nominee was acting
in that capacity, or within one year of such nominee ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangements or
compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or
|
8
|
|
(c)
|
became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or became subject
to or instituted any proceedings, arrangements or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of such Nominee.
|
For the purposes of section (a) above, the term “order” means a cease trade order, an order similar to a cease trade order or an order that
denied the relevant Corporation access to any exemption under securities legislation that was in effect for a period of more than 30 consecutive days.
Deborah Rosati is a director of Sears Canada Inc. which applied for and, on June 22, 2017, obtained an initial order from the Ontario Superior Court of
Justice (Commercial List) under the
Companies’ Creditors Arrangement Act
(Canada) providing for, among other things, a stay of proceedings in favour of Sears Canada Inc. and certain of its subsidiaries, for an initial period of 30-days.
On July 13, 2017, the stay was extended to October 6, 2017.
Penalties or Sanctions
To the knowledge of management of the Corporation, no Nominee has:
|
|
(a)
|
been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a
securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or
|
|
|
(b)
|
been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be
considered important to a reasonable securityholder in deciding whether to vote for a director nominee.
|
The persons designated as
proxyholders by management of the Corporation in the form of proxy which accompanies this Circular intend to vote
FOR
the election of the Nominees as directors of the Corporation whose names are set forth above, unless the Shareholder has
specified in the form of proxy that the Common Shares represented by such form of proxy are to be withheld from voting in respect thereof.
Appointment of Auditor
The auditors of the
Corporation are KPMG LLP located at Vaughan Metropolitan Centre, 100 New Park Place, Suite 1400, Vaughan, Ontario L4K 0J3 Canada. KPMG LLP have been auditors of the Corporation since July, 2015. Management proposes to nominate KPMG LLP for
re-appointment as auditors of the Corporation to hold office until the next annual meeting of Shareholders and to authorize the Board of Directors to fix the auditor’s remuneration. An affirmative vote of a majority of the votes cast at the
Meeting is sufficient for the appointment of the auditor.
The persons designated as proxyholders by management of the Corporation in the form of proxy
which accompanies this Circular intend to vote
FOR
the re-appointment of KPMG LLP, as the auditor of the Corporation unless the Shareholder has specified in the form of proxy that the Common Shares represented by such form of proxy are to be
withheld from voting in respect thereof.
9
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table provides information regarding the number of Common Shares to be issued upon the exercise of outstanding options, and the weighted-average
exercise price of outstanding options, outstanding on March 31, 2017, as adjusted to take into account a pre-closing capital reorganization of the Corporation that was completed in connection with the closing of the Corporation’s initial
public offering and described in the Corporation’s annual information form for the year ended March 31, 2017 (the “AIF”) under the heading “Corporate
Structure”,
which is available under the Corporation’s
SEDAR profile at www.sedar.com.
|
|
|
|
|
|
|
|
|
Plan Category
|
|
Number of securities to be
issued upon exercise of
outstanding options
(a)
|
|
Weighted-average exercise
price of outstanding options
(b)
|
|
Number of securities
remaining available for future
issuance under equity
compensation plans
(excluding securities reflected
in column (a))
(c)
|
|
Equity compensation plans approved by securityholders
|
|
2,655,226
(1)
|
|
$0.90
|
|
Nil
|
|
Equity compensation plans not approved by securityholders
|
|
Nil
|
|
Nil
|
|
Nil
|
|
TOTAL
|
|
2,655,226
|
|
$0.90
|
|
Nil
|
|
(1)
|
Represents Common Shares issuable under option agreements entered into prior to the adoption of the Stock
Option Plan and the completion of the Corporation’s initial public offering (the “
Legacy
Option Agreements
”)
. The options to purchase Common Shares issuable under the Legacy Option Agreements vest periodically
until October 2021 and expire between 2019 and 2022.
|
Stock Option Plan
Historically, the Corporation granted options pursuant to the Legacy Option Agreements, which remained outstanding following the completion of the IPO and will
continue to vest and be exercisable in accordance with their terms. However, in connection with the completion of the IPO, the Corporation adopted an incentive option plan (the “Stock
Option Plan”)
under which options to purchase
Common Shares (“Options”) may be granted to any employee, executive officer or consultant of the Corporation or its subsidiaries. As of the date hereof, Options to purchase a total of 4,229,716 Common Shares are outstanding under the Stock
Option Plan (representing approximately 4.7% of the total number of Common Shares outstanding as of the date hereof) and 2,644,430 Common Shares are issuable upon the due exercise of options granted under Legacy Option Agreements (representing
approximately 2.9% of the total number of Common Shares outstanding as of the date hereof).
The purpose of the Stock Option Plan is to advance the
interests of the Corporation by providing additional incentive to eligible persons, encouraging stock ownership by such persons, increasing the proprietary interest of such persons in the success of the Corporation, encouraging such persons to
remain with the Corporation, and attracting new employees, executive officers or consultants of the Corporation or its subsidiaries. The maximum number of Common Shares that may be issued under the Stock Option Plan is 10% of the total number of
Common Shares issued and outstanding from time to time, less Common Shares issuable under any other security-based compensation arrangements at any given time (including the Legacy Option Agreements), subject to adjustment pursuant to the Stock
Option Plan. The Stock Option Plan is an “evergreen” plan, and any Common Shares subject to an Option which has been granted and which has been exercised, cancelled, repurchased, expired or terminated, will again be available under the
Stock Option Plan. The Stock Option Plan also provides that the total number of Common Shares that may be issued to insiders of the Corporation within a one-year period, or issuable to insiders at any given time under all security-based compensation
arrangements, shall not exceed 10% of the Corporation’s then issued and outstanding Common Shares.
10
The exercise price of the Options is fixed by the Board of Directors at the date of grant and may not be less
than the five-day volume-weighted average trading price as determined in accordance with the rules of the Toronto Stock Exchange (the “
TSX
”). Options vest at the discretion of the Board of Directors, but in the absence of such
determination, Options will vest evenly on an annual basis over a three year period starting on the first anniversary of the grant. Options granted under the Stock Option Plan may have a term of up to five years (subject to an extension of the
scheduled expiry date in the event the option would otherwise expire during a blackout period). Options granted under the Stock Option Plan are not transferable or assignable except, with the consent of the Corporation, to an RRSP, RRIF or personal
holding company of the participant (provided there occurs no change in beneficial ownership) and also pursuant to the laws of descent. The administration and operation of the Stock Option Plan may be delegated by the Board of Directors to a
committee thereof.
The Stock Option Plan also contains provisions providing for the adjustment of the exercise price or the substitution or adjustment of
the number and kind of shares or other securities to be received upon exercise of outstanding Options in the event of any share dividend or subdivision, recapitalization, consolidation, combination or exchange of shares, or other fundamental or
similar corporate change, in order to preserve proportionally the interests of participants under the Stock Option Plan.
Unless otherwise permitted by
the Board of Directors, upon the termination of a participant’s employment without cause or due to the resignation of such participant (other than a resignation for good reason in connection with, or during the 12 month period following, a
change of control), any unvested Options held by the participant as at the termination date immediately expire, and all vested Options held by the participant as at the termination date may be exercised until the earlier of the expiry date of the
Options or 30 days after the termination date, after which time all Options will expire.
Upon the death of a participant, any unvested Options held by
the participant as at the termination date shall vest and any vested Options held by the participant (including any Options that vest on the termination date) may be exercised until the earlier of the expiry date of the Options or 180 days after the
termination date, after which all Options will expire.
Upon the retirement of a participant’s employment with the Corporation, any unvested Options
held by the participant as at the termination date will continue to vest in accordance with its vesting schedule, and all vested Options held by the participant at the termination date may be exercised until the earlier of the expiry date of the
Options or three years following the termination date, provided that if the participant breaches any post-employment restrictive covenants in favour of the Corporation (including non-competition or non-solicitation covenants), then any options held
by such participant, whether vested or unvested, will immediately expire and the participant shall pay to the Corporation any “in-the-money” amounts realized upon exercise of Options following the termination date.
Upon termination of a participant’s employment for cause, all Options (whether vested or unvested) held by the participant as at the termination date
immediately expire.
In connection with a change of control of the Corporation, the Board of Directors will take such steps as are reasonably necessary or
desirable to cause the conversion or exchange or replacement of outstanding Options into or for, rights or other securities of substantially equivalent (or greater) value in the continuing entity, provided that the Board of Directors may accelerate
the vesting of Options if: (i) the required steps to cause the conversion or exchange or replacement of Options are impossible or impracticable to take or are not being taken by the parties required to take such steps (other than the
Corporation); or (ii) the Corporation has entered into an agreement which, if completed, would result in a change of control and the counterparty or counterparties to such agreement require that all outstanding Options be exercised immediately
before the effective time of such transaction or terminated on or after the effective time of such transaction. If a participant is terminated without cause or resigns for good reason during the 12 month period following a change of control, or
after the Corporation has signed a written agreement to effect a change of control but before the change of control is completed, then any unvested Options will immediately vest and may be exercised within 30 days of such date.
11
Subject to any required regulatory approvals, the Board of Directors may, in its sole and absolute discretion,
and without the approval of holders of Common Shares, terminate the Stock Option Plan at any time, and amend or revise the terms thereof, including any Options granted thereunder, which may include:
|
|
•
|
|
amendments of a “housekeeping” or clerical nature, including those meant to clarify the meaning of an
existing provision of the Stock Option Plan, correct or supplement any provision of the Stock Option Plan that is inconsistent with any other provision of the Stock Option Plan, correct any grammatical or typographical errors or amend the provisions
of the Stock Option Plan regarding its administration;
|
|
|
•
|
|
the addition of, or a change to, the vesting provisions of an Option or the Stock Option Plan;
|
|
|
•
|
|
amendments to reflect any requirements of applicable law or the requirements of any regulatory authorities to
which the Corporation is subject;
|
|
|
•
|
|
a change to the termination provisions of an Option or the Stock Option Plan which does not entail an extension
beyond the original expiry date of an Option;
|
|
|
•
|
|
the addition of a form of financial assistance and any amendment to a financial assistance provision which is
adopted;
|
|
|
•
|
|
the addition of a cashless exercise feature, payable in cash or securities, and any amendment to a cashless
exercise feature which is adopted; and
|
|
|
•
|
|
the addition of any clawback provision and any amendment to a clawback provision which is adopted,
|
provided that no such amendment or revision may, without the consent of the participant, materially adversely affect such
participant’s rights under any Option previously granted under the Stock Option Plan.
Notwithstanding the foregoing, approval of the holders of
Common Shares (including disinterested approval, where required) is required, in addition to any required regulatory approvals, for the following amendments to the Stock Option Plan (and any Option granted thereunder):
|
|
•
|
|
any increase in the maximum number of Common Shares that may be issuable pursuant to Options granted under the
Stock Option Plan;
|
|
|
•
|
|
any change to the definition relating to the persons eligible to participate in the Stock Option Plan;
|
|
|
•
|
|
a reduction in the exercise price of an Option, or a cancellation and reissuance of Options or extension of the
expiry date of an Option or any amendment to the insider participation limits;
|
|
|
•
|
|
any amendment to the provision restricting transfers or assignability of Options or to the definition of
permitted assign; and
|
|
|
•
|
|
any grant of additional powers to the Board of Directors to amend the Stock Option Plan or any Options granted
thereunder without approval of holders of Common Shares, including any amendment to the amendment provisions of the Stock Option Plan.
|
If the Stock Option Plan is terminated, any Options outstanding on the date of such termination will be unaffected and continue to be outstanding, on the same
terms and conditions, and the provisions of the Stock Option Plan applicable to such Options will remain in force until all such Options are exercised, have expired, or are terminated in accordance with their terms, and the Board of Directors will
remain able to make such amendments in respect of such Options or the Stock Option Plan as it would have been entitled to make if the Stock Option Plan were still in effect.
12
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
No current or former director, executive officer or employee of the Corporation, or any associate of any such person, is, or has been at any time since the
incorporation of the Corporation, indebted to the Corporation or any of its subsidiaries nor is, or at any time since the incorporation of the Corporation has, any indebtedness of any such person to another entity been the subject of a guarantee,
support agreement, letter of credit or other similar arrangement or understanding provided by the Corporation or any of its subsidiaries.
REPORT ON CORPORATE GOVERNANCE
The securities regulatory authorities in Canada adopted National Instrument 58-101 – Disclosure of Corporate Governance Practices (“
NI
58-101
”)
and National Policy 58-201 – Corporate Governance Guidelines (“
NP
58-201
”)
. NP 58-201 contains a series of guidelines for effective corporate governance. The guidelines deal with such
matters as the constitution and independence of corporate boards, their functions, the effectiveness and education of board members and other items dealing with sound corporate governance.
For the purposes of this disclosure, the applicable meaning of “independent” is that which is provided in NI 58-101, which states that a director is
considered “independent” if he or she has no direct or indirect “material relationship” with the Corporation, which is one that could, in the view of the Board of Directors, be reasonably expected to interfere with the exercise
of a member’s independent judgment; provided that, with respect to the members of the audit committee of the Board of Directors (the “
Audit
Committee”),
the meaning of “independent” shall be that defined under,
and required by, NI 52-110.
Four of the five members of the Board of Directors are “independent”, as that term is defined in NI 58-101, being Lloyd M. Segal, Deborah Rosati,
Norma Beauchamp and Ronald Funk. Neil Closner is not considered “independent” because he also functions as the Chief Executive Officer of the Corporation. Accordingly, a majority of the members of the Board of Directors are
“independent”, including the Chair of the Board of Directors, Lloyd M. Segal.
Certain members of the Board of Directors are also members of the
board of directors of other reporting issuers, as noted below:
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|
|
|
|
Name of Director
|
|
Name(s) of Reporting Issuer(s) and Exchange
|
|
|
|
|
Lloyd M. Segal
|
|
The GBC American Growth Fund Inc.
|
|
|
|
|
Deborah Rosati
|
|
NexJ Systems Inc. (TSX)
|
|
|
|
|
|
|
Sears Canada Inc. (TSX)
|
|
|
|
|
Norma Beauchamp
|
|
Acerus Pharmaceuticals Corporation (TSX)
|
Director Tenure
The
Board of Directors has not adopted a term limit for directors. The imposition of director term limits may discount the value of experience and continuity amongst board members and runs the risk of excluding experienced and potential valuable board
members. The Board of Directors will rely on an annual director assessment procedure, as more fully described below, in evaluating board members, and believes that it can best strike the right balance between continuity and fresh perspectives
without mandated term limits.
13
Board and Senior Management Diversity
MedReleaf recognizes and embraces the benefits of having diversity on the Board of Directors and in its senior management. Presently the Corporation has no
female executive officers (0%) and the Corporation currently has two female directors on the Board of Directors (40%). The Corporation has adopted a diversity policy, which recognizes that it is important to ensure that members of the Board of
Directors and senior management provide the necessary range of perspectives, experience and expertise required to achieve our objectives and deliver for the Corporation’s stakeholders.
The Corporation also recognizes that the Board of Directors and its senior management appointments must be based on performance, ability, merit and potential.
Therefore, the Corporation ensures a merit-based competitive process for appointments. The Corporation’s commitment to diversity includes ensuring that diversity is given due consideration by the Corporate Governance and Compensation Committee.
With respect to the composition of the Board of Directors, on an annual basis, the Corporate Governance and Compensation Committee will: (i) assess
the effectiveness of the board appointment/nomination process at achieving the Corporation’s diversity objectives; (ii) measure the annual and cumulative progress in achieving its gender diversity targets, if targets have been adopted; and
(iii) monitor implementation of the policy. Currently, the Board of Directors does not believe that targets or strict rules set out in a formal policy necessarily result in the identification or selection of the best candidates. At any given
time the Board of Directors may seek to adjust one or more objectives concerning its diversity and measure progress accordingly.
With respect to senior
management appointments, on an annual basis, the Corporate Governance and Compensation Committee will: (i) assess the effectiveness of the senior management appointment process at achieving the Corporation’s diversity objectives;
(ii) consider and, if determined advisable, recommend to the Board of Directors for adoption, measurable objectives for achieving diversity in senior management; and (iii) monitor implementation of the policy. At any given time the Board
of Directors may seek to adjust one or more objectives concerning senior management diversity and measure progress accordingly.
Board Mandate
The mandate of the Board of Directors is to provide oversight for the Corporation and to act honestly and in good faith with a view to its best interests. The
Board of Directors acts in accordance with the
Business Corporations Act
(Ontario) and the Corporation’s articles of incorporation and by-laws, as well as with other applicable laws and Corporation policies. The Board of Directors
discharges its responsibilities both directly and through the work performed by its standing committees, as well as any other committees appointed from time to time on an
ad hoc
basis. The Board of Directors reviews and approves any
transactions and decisions that fall within its approval mandate in advance and reviews the results of these decisions on a regular basis.
The mandate of
the Board of Directors requires that the Board of Directors meet as many times as it considers necessary to carry out its responsibilities effectively, and in any event on a quarterly basis, at minimum, and that all Board of Directors’ meetings
include meetings of independent directors without any members of management present to allow for open discussions between such independent directors. A copy of the mandate of the Board of Directors is attached as Appendix “A” to this
Circular.
14
Position Descriptions
Chair of the Board and Committee Chairs
Lloyd M. Segal is
the Chair of the Board of Directors. A written position description for the Chair is included as part of the mandate of the Board of Directors, which sets out the position’s key responsibilities, including duties related to working with senior
management, Board of Directors’ meetings, shareholders’ meetings, director development and communication with shareholders and regulators. The charters for the standing committees of the Board of Directors include each committee
chair’s responsibilities, including chairing committee meetings and working with the respective committee and management to ensure, to the greatest extent possible, the effective functioning of the committee. These charters and position
descriptions are considered by the Board of Directors for approval annually.
CEO
Neil Closner is the Corporation’s Chief Executive Officer. The primary functions of the Chief Executive Officer are to lead the management of the
Corporation’s business and affairs and to lead the implementation of the resolutions and the policies of the Board of Directors. The Board of Directors developed a written position description for the Chief Executive Officer which sets out the
Chief Executive Officer’s key responsibilities, including duties relating to strategic planning, operational direction and interaction with the Board of Directors and communication with shareholders. The Chief Executive Officer position
description is considered by the Board of Directors for approval annually.
Orientation and Continuing Education
The Board of Directors consists of directors who are familiar with the industry or who bring particular expertise to the Board of Directors from their
professional experience. New directors will be expected to participate in an initial information session regarding the Corporation in the presence of its senior executive officers to learn about, among other things, the business of MedReleaf, its
financial situation and its strategic planning. All new directors will receive a record of public information about the Corporation, as well as other relevant corporate and business information including corporate governance practices of the
Corporation, the structure of the Board of Directors and its standing committees, its corporate organization, the charters of the Board of Directors and its standing committees, the Corporation’s articles, the Code of Conduct and other relevant
corporate policies. Members of senior management make regular presentations to the Board of Directors on the main areas of the business and the directors have the opportunity to ask questions and tour MedReleaf’s facilities.
Code of Business Conduct and Ethics
The Corporation has
a code of business conduct and ethics (the “
Code
of Conduct
”)
for directors, officers, employees and consultants.
Directors and executive officers are required by applicable law and the Corporation’s corporate governance practices and policies to promptly disclose
any potential conflict of interest that may arise. If a director or executive officer has a material interest in an agreement or transaction, applicable law and principles of sound corporate governance require them to declare the interest in writing
and, where required by applicable law, to abstain from voting with respect to such agreement or transaction.
Employees and consultants of MedReleaf are
required to immediately report any such conflicts of interest to their direct supervisor, a member of the human resources team or a senior executive officer. The Code of Conduct also sets out: (i) standards for the Corporation’s and its
employees’ relationships with customers and others; (ii) standards for the accuracy of the Corporation’s books and records and the provision of information to external auditors; and (iii) rules regarding the ownership, protection
and proper use of the Corporation’s assets.
15
Any waiver of the Code of Conduct’s provisions in respect of a director or officer must be approved by the
Board of Directors, and the Chief Executive Officer may approve waivers in respect of employees and consultants, and must report such waivers to the Board of Directors.
A copy of the Code of Conduct is available on the Corporation’s SEDAR profile at www.sedar.com.
Audit Committee
The Audit Committee is comprised of
Deborah Rosati (chair), Norma Beauchamp and Ronald Funk. Each of the members of the Audit Committee are “independent” and “financially literate”, each within the meaning of NI 52-110. Additional information concerning the Audit
Committee can be found in the AIF under the heading “Audit
Committee Information”,
which is available on the Corporation’s SEDAR profile at www.sedar.com. The full text of the Audit Committee charter can be found at Schedule
“A” to the AIF.
Corporate Governance and Compensation Committee
The Board of Directors has established a standing committee named the Corporate Governance and Compensation Committee, which is comprised of three directors,
each of whom are “independent”, as that term is defined in NI 58-101. The members of the Corporate Governance and Compensation Committee are Norma Beauchamp (chair), Lloyd M. Segal and Deborah Rosati.
The Corporate Governance and Compensation Committee fulfills its responsibilities by performing the following primary functions: (i) monitoring the
composition and performance of the Board of Directors and its standing committees; (ii) overseeing the development and regular assessment of the Corporation’s approach to corporate governance issues, and ensuring that such approach
supports the effective functioning of the Corporation with a view to the best interests of the Corporation; (iii) overseeing the development and regular assessment of the Corporation’s compensation structure for directors and members of
senior management; and (iv) the development and regular assessment of the performance of senior management.
The Corporate Governance and
Compensation Committee is also tasked with annually reviewing and assessing the performance goals and objectives relevant to the Chief Executive Officer, the Chief Financial Officer and other members of senior management, and recommending any
changes to such goals and objectives to the Board of Directors for consideration. The Corporate Governance and Compensation Committee is also responsible for reviewing and assessing the Corporation’s succession plan for the Chief Executive
Officer, Chief Financial Officer and other members of senior management.
Quality, Safety, Health and Public Policy Committee
The Board of Directors has established a Quality, Safety, Health and Public Policy Committee comprised of three directors, a majority of whom are
“independent”, as that term is defined in NI 58-101. The members of the Quality, Safety, Health and Public Policy Committee are Ronald Funk (chair), Neil Closner and Lloyd M. Segal.
The Quality, Safety, Health and Public Policy Committee is responsible for reviewing the Corporation’s policies and procedures related to product quality
assurance and to ensure that its production facilities have appropriate standards and implementation programs, including employee education and instruction in respect of such standards. In carrying out its mandate, the Quality, Safety, Health and
Public Policy Committee is responsible for: (i) reviewing the Corporation’s policies, programs, and practices in respect of product handling, packaging, and transportation; (ii) monitoring the adequacy of compliance systems in respect
of applicable legislation and regulations, and (iii) reporting and making recommendations to the Board of Directors on such areas of regulatory compliance as are considered appropriate.
16
Compensation Oversight
With respect to compensation, the Corporate Governance and Compensation Committee is responsible for: (i) annually reviewing the compensation structure
and policies in respect of senior management and recommending any changes to such structure and policies to the Board of Directors for consideration; (ii) seeking and considering the CEO’s recommendations for compensation of the other
members of senior management and recommending any changes to such compensation to the Board of Directors for consideration; and (iii) reviewing the Corporation’s incentive compensation and other equity-based plans and recommending changes
to such plans to the Board of Directors when necessary, and exercising all authority of the Board of Directors with respect to the administration of such plans; and (iv) annually reviewing directors’ compensation and recommending any
changes to the Board of Directors for consideration.
The Corporate Governance and Compensation Committee is responsible for developing the
Corporation’s compensation policies for directors and senior management to ensure that they: (i) properly reflect their respective duties and responsibilities; (ii) are competitive in attracting, retaining and motivating qualified
candidates for such roles; (iii) align the interests of the directors and senior management with that of shareholders and the Corporation as a whole; and (iv) are based on established corporate and individual performance goals and
objectives.
Board Nominations
The Corporate
Governance and Compensation Committee is responsible for seeking out and evaluating suitable candidates to serve on the Board of Directors. In so doing, the Corporate Governance and Compensation Committee will: (i) consider what competencies
and skills the Board of Directors, as a whole, should possess; (ii) assess what competencies and skills each existing director possesses; (iii) recommend to the Board of Directors the necessary and desirable competencies of directors,
taking into account the Corporation’s strategic direction and changing circumstances and needs; (iv) identify individuals qualified to become new members of the Board of Directors and recommending to the Board of Directors the new director
nominees for the next annual meeting of shareholders; and (v) annually conduct, review and report to the Board of Directors the results of an assessment of the performance and effectiveness of the Board of Directors.
The Corporate Governance and Compensation Committee is responsible for overseeing and assessing the functioning of the Board of Directors and the committees
thereof. The Corporate Governance and Compensation Committee is tasked with annually reviewing and making recommendations to the Board of Directors with regard to the size, composition and role of the Board of Directors and its standing committees
(including any additional committees to be established) and the methods and processes by which the Board of Directors, committees and individual directors fulfill their duties and responsibilities, including the methods and processes for evaluating
board, committee and individual director effectiveness.
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
Except as otherwise described herein or in the AIF, none of the persons who were directors or executive officers of the Corporation or a subsidiary of the
Corporation at any time during the Corporation’s last financial year, the Nominees, any person or corporation who beneficially owns, directly or indirectly, or who exercises control or direction over (or a combination of both) more than 10% of
the issued and outstanding Common Shares, nor any associate or affiliate of those persons, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any transaction or proposed transaction which has
materially affected or would materially affect the Corporation.
17
ADDITIONAL INFORMATION
Additional information relating to MedReleaf is available on SEDAR at
www.sedar.com.
Financial information is provided in the Corporation’s
audited consolidated financial statements and Management’s Discussion and Analysis (
“
MD&A
”) for its most recently completed financial year which are filed on SEDAR. In addition, copies of the Corporation’s
annual financial statements and MD&A and this Circular may be obtained upon request to the Corporation at P.O. Box 3040, Markham Industrial Park, Markham, Ontario L3R 6G4, Attention: Chief Financial Officer.
18
CERTIFICATION AND BOARD APPROVAL
The undersigned hereby certifies that the contents and the sending of this Circular to MedReleaf’s Shareholders have been approved by the Board of
Directors. A copy of this Circular has been sent to each director, each Shareholder entitled to notice of the Meeting and the auditors of the Corporation.
DATED
at Toronto, Ontario, on the 21st day of August, 2017.
ON BEHALF OF THE BOARD OF DIRECTORS OF MEDRELEAF CORP.
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|
|
(signed) “Neil Closner”
|
|
Neil Closner
|
|
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|
Director and Chief Executive
|
|
|
|
Officer
|
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|
19
APPENDIX “A” – MANDATE OF THE BOARD OF DIRECTORS
The members of the board of directors (the “Board”) of MedReleaf Corp. (the “Corporation”) are ultimately responsible for the stewardship
of the Corporation’s business and affairs. In exercising their powers and discharging their duties, the directors shall act honestly and in good faith with a view to the best interests of the Corporation and shall exercise the care, diligence
and skill that a reasonably prudent person would exercise in comparable circumstances.
Although directors may be appointed or elected by the shareholders
to bring special expertise or point of view to Board deliberations, they are not chosen to represent a particular constituency, and the best interests of the Corporation as a whole shall be paramount at all times.
Subject to the limitations set forth under applicable laws, the Board may discharge its responsibilities, including those listed below, through one or more
Board committees. The Board shall have three standing committees: (i) the Audit Committee, (ii) the Corporate Governance and Compensation Committee and (iii) the Quality, Safety, Health and Public Policy Committee (together, the
“Standing Committees”). In addition to the Standing Committees, the Board may appoint ad hoc committees periodically to address certain issues of a more short-term nature.
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2
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COMPOSITION, TERM AND INDEPENDENCE
|
Subject to the Corporation’s constating documents and applicable laws, the Board shall be comprised of a minimum of three and a maximum of 10 directors.
The Board shall periodically review its size in light of its duties and responsibilities from time to time.
Subject to the Corporation’s constating documents and applicable laws, directors shall be elected by the shareholders at each annual meeting of
shareholders (“
AGM
”) at which an election of directors is required, and shall hold office until the next AGM.
|
(a)
|
The Board shall be comprised of a majority of independent directors. A director shall be considered independent
if he or she would be considered independent for the purposes of National Instrument 58-101 –
Disclosure of Corporate Governance Practices.
|
|
(b)
|
The Board shall appoint an independent lead director (the “
Lead Director
”)
from among
the directors, who shall serve for such term as the Board may determine. If the Corporation has a non-executive Chair, then the role of the Lead Director will be filled by the non-executive Chair. The Lead Director or non-executive Chair shall chair
any meetings of the independent directors and assume such other responsibilities as the independent directors may designate in accordance with any applicable position descriptions or other applicable guidelines that may be adopted by the Board from
time to time.
|
A-1
|
3
|
MANDATE AND RESPONSIBILITIES
|
To fulfill its mandate, the Board assumes responsibility for the following matters:
|
3.1
|
Appointment of senior management
|
|
(a)
|
The Board has the responsibility for (i) appointing the Chief Executive Officer (“
CEO
”)
and all other senior executives and delegating to the CEO and other senior executives the authority over the day-to-day management of the business and affairs of the Corporation, and (ii) assessing the performance of the CEO, following a review
of the recommendations of the Corporate Governance and Compensation Committee. To the extent feasible, the Board shall satisfy itself as to the integrity of the CEO and other executive officers and that the executive officers create a culture of
integrity throughout the Corporation.
|
|
(b)
|
The Board has the responsibility for determining the compensation to be paid to the CEO, and approving the
compensation to be paid to all other executive officers following a review of the recommendations of the Corporate Governance and Compensation Committee and of the CEO (with respect to the other executive officers’ compensation).
|
|
(c)
|
The Board may, from time to time, delegate to executive officers the authority to enter into certain types of
transactions, including financial transactions, subject to specified limits. Investments and other expenditures above the specified limits and material transactions outside the ordinary course of business shall be reviewed by, and subject to the
prior approval of, the Board.
|
|
(d)
|
The Board oversees that appropriate succession planning programs are in place, including programs to appoint,
train, develop and monitor senior management.
|
|
(a)
|
The Board has the responsibility for adopting a strategic planning process and approving and reviewing, on at
least an annual basis, the strategic direction of the Corporation and its business, operational, and financial plans. Such strategic planning shall take into account, among other things, the opportunities and risks of the Corporation’s business
and affairs.
|
|
(b)
|
The Board has the responsibility for:
|
|
|
(i)
|
adopting processes for monitoring the Corporation’s progress toward its strategic and operational goals,
and providing input and guidance to management in light of changing circumstances affecting the Corporation; and
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|
(ii)
|
taking action when the Corporation’s performance falls short of its goals or when other special
circumstances warrant.
|
|
3.3
|
Monitoring of financial performance and financial reporting
|
The Board has the responsibility for:
|
(a)
|
approving the audited financial statements, interim financial statements and the notes and management’s
discussion and analysis accompanying such financial statements.
|
|
(b)
|
reviewing and approving material transactions outside the ordinary course of business and those matters which
the Board is required to approve under the Corporation’s constating documents or applicable laws, including the payment of dividends, the issuance, purchase and redemption of securities, the acquisitions and dispositions of material capital
assets and material capital expenditures.
|
A-2
|
(c)
|
overseeing the accurate reporting of the financial performance of the Corporation to shareholders, other
stakeholders and regulators (as applicable) on a timely basis; and
|
|
(d)
|
overseeing that the financial results are reported fairly and in accordance with generally accepted accounting
standards and disclosure requirements under applicable laws.
|
The Board has the responsibility for:
|
(a)
|
identifying, in conjunction with management, the principal risks of the Corporation’s business and
ensuring the implementation of appropriate systems to effectively monitor and manage such risks, with a view to balancing such risks against the potential shareholder returns and the long-term viability of the Corporation; and
|
|
(b)
|
implementing a system of internal control measures, including management of all information systems, and
ensuring that any remedial actions or adoption of new control measures are implemented effectively.
|
|
(a)
|
The Board has the responsibility for developing the Corporation’s approach to corporate governance,
including developing a set of corporate governance guidelines for the Corporation.
|
|
(b)
|
Following a review of the recommendations of the Corporate Governance and Compensation Committee, the Board has
the responsibility for approving and monitoring compliance with all of the Corporation’s policies and procedures related to corporate governance.
|
|
3.6
|
Communications and stakeholder engagement
|
The Board has the responsibility for adopting a communications policy which addresses, among other things:
|
(a)
|
the timely disclosure of any material changes, material facts and other developments that have a significant
and material impact on the Corporation;
|
|
(b)
|
how the Corporation interacts with analysts, investors, other key stakeholders and the public;
|
|
(c)
|
determining who is authorized to communicate on behalf of the Corporation;
|
|
(d)
|
measures for the Corporation to comply with its continuous and timely disclosure obligations and to avoid
selective disclosure;
|
|
(e)
|
understanding and enforcing the prohibition on tipping and restrictions on the purchase and sale of securities
of the Corporation, including by insiders and other persons with a special relationship with the Corporation;
|
|
(f)
|
the management and use of electronic communications channels, including the Corporation’s website;
|
|
(g)
|
reporting periodically, at least annually, to shareholders on its stewardship for the preceding year; and
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(h)
|
the Corporation’s development of stakeholder engagement programs and the implementation of systems which
accommodate feedback from stakeholders.
|
A-3
|
3.7
|
Orientation and continuing education
|
The Board has the responsibility for:
|
(a)
|
developing a description of the expectations and responsibilities of directors, including basic duties and
responsibilities with respect to attendance at Board meetings and advance review of meeting materials;
|
|
(b)
|
ensuring that all new directors receive a comprehensive orientation, that they fully understand the role and
duties of the Board, as well as the contribution individual directors are expected to make (including the commitment of time and resources that the Corporation expects from its directors) and that they understand the nature, operation and strategic
direction of the Corporation’s business; and
|
|
(c)
|
providing continuing education opportunities for all directors, so that individuals may maintain or enhance
their skills and abilities as directors, as well as ensuring that their knowledge and understanding of the Corporation’s business, including opportunities and risks, remains current.
|
|
3.8
|
Nomination of directors
|
In connection with the nomination or appointment of directors, the Board has the responsibility for reviewing periodically, at least annually, what
competencies and skills the Board, as a whole, should possess, and assessing what competencies and skills each existing director possesses, identifying any gaps while taking into account the Corporation’s strategic direction and changing needs.
In the course of this process, the members of the Board shall identify the strengths in a director that would benefit the Board and then seek out individuals who may possess such strengths.
The Board has the responsibility for assessing periodically, at least annually, the Board, the Standing Committees and any other committee, and each individual
director regarding his, her or its effectiveness and contribution. Such assessment will consider, in the case of the Board or any Standing Committee or any other committee, its performance against its mandate or charter and, in the case of an
individual director, his or her attendance and against the competencies and skills each individual director is expected to bring to the Board.
The Chair
of the Board, together with the independent lead director, if any, shall be responsible for assessing the effectiveness of the Board as a whole as well as individual Board members.
|
3.10
|
Role and responsibilities of the Chair of the Board
|
In addition to the duties and responsibilities of the Board generally, the Chair of the Board has the duties and responsibilities set out below.
|
|
(a)
|
Working with Management
|
The Chair has the responsibility to:
|
|
(i)
|
act as the principal sounding board, counselor and confidant for the CEO, including helping to review
strategies, define issues, maintain accountability, and build relationships;
|
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|
(ii)
|
in co-operation with the CEO, assist in representing the Corporation both internally and externally, including
as a designated spokesman;
|
A-4
|
|
(iii)
|
regularly communicate and ensure the CEO is aware of concerns of the Board, shareholders, other stakeholders
and the public; and
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|
|
(iv)
|
assess, in conjunction with the Corporate Governance and Compensation Committee and the Board, the performance
of the CEO and other executive officers, and provide input with respect to compensation and succession.
|
The Chair has the responsibility to:
|
|
(ii)
|
ensure the Board is aware of its obligations to the Corporation, shareholders, management, other stakeholders
and lead the Board in carrying out such obligations pursuant to applicable law;
|
|
|
(iii)
|
establish, in conjunction with the Corporate Governance and Compensation Committee, the frequency of Board
meetings and review such frequency from time to time, as considered appropriate or as requested by the Board;
|
|
|
(iv)
|
recommend the committees of the Board and their composition, review the need for, and the performance and
suitability of such committees and make such adjustments as are deemed necessary from time to time;
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|
|
(v)
|
ensure the co-ordination of the agenda, information packages and related events for Board meetings;
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|
|
(vi)
|
ensure the Board receives adequate and regular updates from the CEO and executive officers on all material
issues relating to the Corporation;
|
|
|
(vii)
|
act as a liaison and regularly communicate with all directors and committee chairs to coordinate input from
directors, and optimize the effectiveness of the Board and its committees; and
|
|
|
(viii)
|
in conjunction with the Corporate Governance and Compensation Committee, review and assess director attendance,
performance and compensation as well as the size and composition of the Board.
|
The Board shall adopt and periodically review policies and procedures designed to ensure that the Corporation and its directors, officers and employees comply
with all applicable laws, rules and regulations and conduct the Corporation’s business ethically and with honesty and integrity.
Directors are expected to attend, in person or via tele- or video-conference, all meetings of the Board and the committees upon which they serve, to come to
such meetings fully prepared, and to remain in attendance for the duration of the meeting. Where a director’s absence from a meeting is unavoidable, the director should, as soon as practicable after the meeting, contact the Chair, the CEO, or
the Secretary for a briefing on the substantive elements of the meeting.
A-5
Subject to the Corporation’s constating documents and applicable laws, the time at which and the place where
the meetings of the Board shall be held, the calling of meetings and the procedure at such meetings shall be determined by the Chair. The Board shall meet as many times as it considers necessary to carry out its responsibilities effectively and
shall, in any event, meet at least once per quarter. Meetings of the Board will also include in-camera meetings of the independent members of the Board without management present.
The Board Committee may invite such officers, directors or employees of the Corporation, financial, technical or legal advisors, or other persons as it sees
fit, from time to time, to attend at meetings of the Board and to assist in the discussion of matters being considered by the Board.
|
4.3
|
Authority to engage advisors
|
The Board shall have the authority to engage, at the expense of the Corporation, such outside advisors as it determines necessary or advisable to carry out its
duties, including legal, financial, technical and accounting advisors, and establish the compensation of such advisors.
The Board shall review and assess the adequacy of this Mandate, taking into account the strategic direction of the Corporation, its changing needs, and propose
recommended changes for approval.
This Mandate is not intended to give rise to civil liability on the part of the Corporation or its directors or
officers to shareholders, other security holders, customers, suppliers, competitors, employees or other persons or to any other liability whatsoever on their part.
Effective Date: June 7, 2017
A-6
Exhibit 5.1
Consent of Independent Auditors
The
Board of Directors
Aurora Cannabis Inc.
We consent to the use in this Registration Statement on Form
F-10
of Aurora Cannabis Inc. of our report dated
June 18, 2018, on the consolidated financial statements of MedReleaf Corp., which comprise the consolidated statements of financial position as at March 31, 2018 and 2017, the consolidated statements of comprehensive (loss) income,
shareholders’ equity and cash flows for the years then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information (collectively the “consolidated financial statements”) included
herein and to the reference to our firm under the heading “Experts” in such registration statement.
/s/ KPMG LLP
Chartered Professional Accountants, Licensed Public Accountants
May 10, 2019
Toronto, Canada
Exhibit 5.2
May 10, 2019
United States Securities and
Exchange Commission
Dear Sirs and Mesdames:
We consent to the use in this Registration Statement on Form F-10 of Aurora Cannabis Inc. (the “Company”) of our report dated September 24, 2018, on
the consolidated financial statements of the Company., which comprise the consolidated statements of financial position as at June 30, 2018 and 2017, the consolidated statements of comprehensive income (loss), consolidated statements of changes in
equity and consolidated cash flows for the years then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information included herein and to the reference to our firm under the heading
“Experts” in such registration statement.
Yours truly,
/s/ MNP LLP
Chartered Professional Accountants
Exhibit 5.3
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Deloitte LLP
122 1st Ave. S.
Suite 400
Saskatoon SK S7K 7E5
Canada
Tel: +13063434400
Fax: +13063434480
www.deloitte.ca
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CONSENT OF INDEPENDENT AUDITOR
We consent to the incorporation by reference in this Amendment No. 1 to the Registration Statement on Form F-10 of our report dated January 29, 2018
relating to the consolidated financial statements of CanniMed Therapeutics Inc. appearing in the Registration Statement on Form 40-F of Aurora Cannabis Inc.
/s/ Deloitte LLP
Chartered Professional Accountants
Licensed Professional Accountants
Saskatoon, Canada
May 10, 2019
Exhibit 7.1
Aurora Cannabis Inc.
as
Issuer
GLAS TRUST COMPANY LLC
as Trustee
Indenture
Dated as of May 3, 2019
Aurora Cannabis Inc.
Reconciliation and tie between
Trust Indenture Act
of 1939
and Indenture, dated as of May 3, 2019
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Trust Indenture
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Act Section
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Indenture Section
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§
310(a)(1)
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6.7
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(a)(2)
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6.7
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(b)
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6.8
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§
312(b)
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7.1
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(c)
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7.1
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§
313(a)
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7.2
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(b)(1)
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7.2
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(b)(2)
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7.2
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(c)
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7.2
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(d)
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7.2
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§
314(a)
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7.3
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(a)(4)
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9.4
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(c)(1)
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1.2
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(c)(2)
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1.2
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(e)
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1.2
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§
315(b)
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6.4
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§
316(a)(last sentence)
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1.1 (“Outstanding”)
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(a)(1)(A)
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5.2, 5.2
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(a)(1)(B)
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5.13
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(b)
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5.8
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(c)
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1.4(e)
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§
317(a)(1)
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5.3
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(a)(2)
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5.4
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(b)
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9.3
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§
318(a)
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1.11
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TABLE OF CONTENTS
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Article 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
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8
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Section 1.1 Definitions
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8
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Section 1.2 Compliance Certificates and Opinions.
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18
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Section 1.3 Form of Documents Delivered to Trustee.
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19
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Section 1.4 Acts of Holders.
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20
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Section 1.5 Notices, etc. to Trustee and Company.
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22
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Section 1.6 Notice to Holders; Waiver.
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22
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Section 1.7 Effect of Headings and Table of Contents.
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23
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Section 1.8 Successors and Assigns.
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23
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Section 1.9 Separability Clause.
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23
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Section 1.10 Benefits of Indenture.
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23
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Section 1.11 Governing Law.
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24
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Section 1.12 Legal Holidays.
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24
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Section 1.13 Agent for Service; Submission to Jurisdiction;
Waiver of Immunities.
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24
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Section 1.14 Conversion of Currency.
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25
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Section 1.15 Currency Equivalent.
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26
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Section 1.16 No Recourse Against Others.
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26
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Section 1.17 Multiple Originals.
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27
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Section 1.18 Conflict with
Trust Indenture Act
.
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27
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Article 2 SECURITY FORMS
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27
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Section 2.1 Forms Generally.
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27
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Section 2.2 Form of Trustee’s Certificate of
Authentication.
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27
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Section 2.3 Securities Issuable in Global Form.
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28
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Article 3 THE SECURITIES
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29
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Section 3.1 Amount Unlimited; Issuable in Series.
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29
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Section 3.2 Denominations.
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32
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Section 3.3 Execution, Authentication, Delivery and
Dating.
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33
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Section 3.4 Temporary Securities.
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35
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Section 3.5 Registration, Registration of Transfer and
Exchange.
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37
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Section 3.6 Mutilated, Destroyed, Lost and Stolen
Securities.
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41
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Section 3.7 Payment of Principal and Interest; Interest Rights
Preserved; Optional Interest Reset.
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42
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Section 3.8 Optional Extension of Stated Maturity.
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45
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Section 3.9 Persons Deemed Owners.
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46
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Section 3.10 Cancellation.
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47
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Section 3.11 Computation of Interest.
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47
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Article 4 SATISFACTION AND DISCHARGE
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48
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Section 4.1 Satisfaction and Discharge of Indenture.
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48
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Section 4.2 Application of Trust Money.
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49
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Article 5 REMEDIES
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49
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Section 5.1 Events of Default.
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49
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Section 5.2 Acceleration of Maturity; Rescission and
Annulment.
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51
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Section 5.3 Collection of Indebtedness and Suits for
Enforcement by Trustee.
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51
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Section 5.4 Trustee May File Proofs of Claim.
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52
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Section 5.5 Trustee May Enforce Claims Without Possession of
Securities.
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53
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Section 5.6 Application of Money Collected.
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53
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Section 5.7 Limitation on Suits.
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54
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Section 5.8 Unconditional Right of Holders to Receive
Principal, Premium and Interest.
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54
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Section 5.9 Restoration of Rights and Remedies.
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55
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Section 5.10 Rights and Remedies Cumulative.
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55
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Section 5.11 Delay or Omission Not Waiver.
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55
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Section 5.12 Control by Holders.
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55
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Section 5.13 Waiver of Past Defaults.
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56
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Section 5.14 Waiver of Stay or Extension Laws.
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56
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Section 5.15 Undertaking for Costs.
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57
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Article 6 THE TRUSTEE
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57
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Section 6.1 Notice of Defaults.
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57
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Section 6.2 Certain Rights of Trustee.
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57
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Section 6.3 Trustee Not Responsible for Recitals or Issuance of
Securities.
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60
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Section 6.4 May Hold Securities.
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60
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Section 6.5 Money Held in Trust.
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60
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Section 6.6 Compensation and Reimbursement.
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60
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Section 6.7 Corporate Trustee Required; Eligibility;
Conflicting Interests.
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61
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Section 6.8 Resignation and Removal; Appointment of
Successor.
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61
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Section 6.9 Acceptance of Appointment by Successor.
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63
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Section 6.10 Merger, Conversion, Consolidation or Succession to
Business.
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64
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Section 6.11 Appointment of Authenticating Agent.
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65
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Article 7 HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND THE COMPANY
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67
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Section 7.1 Disclosure of Names and Addresses of
Holders.
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67
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Section 7.2 Reports by Trustee.
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67
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Section 7.3 Reports by the Company.
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67
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Section 7.4 The Company to Furnish Trustee Names and Addresses
of Holders.
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68
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Article 8 SUPPLEMENTAL INDENTURES
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69
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Section 8.1 Supplemental Indentures Without Consent of
Holders.
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69
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Section 8.2 Supplemental Indentures with Consent of
Holders.
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70
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Section 8.3 Execution of Supplemental Indentures.
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71
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Section 8.4 Effect of Supplemental Indentures.
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72
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Section 8.5 Conformity with
Trust Indenture
Act
.
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72
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Section 8.6 Reference in Securities to Supplemental
Indentures.
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72
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Section 8.7 Notice of Supplemental Indentures.
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72
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Article 9 COVENANTS
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72
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Section 9.1 Payment of Principal, Premium, if any, and
Interest.
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72
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Section 9.2 Maintenance of Office or Agency.
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73
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Section 9.3 Money for Securities Payments to Be Held in
Trust.
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74
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Section 9.4 Statement as to Compliance.
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76
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Section 9.5 Payment of Taxes and Other Claims.
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76
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Section 9.6 Maintenance of Properties.
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76
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Section 9.7 Corporate Existence.
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76
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Section 9.8 Waiver of Certain Covenants.
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77
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Article 10 REDEMPTION OF SECURITIES
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77
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Section 10.1 Applicability of Article.
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77
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Section 10.2 Election to Redeem; Notice to Trustee.
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77
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Section 10.3 Selection by Trustee of Securities to Be
Redeemed.
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77
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Section 10.4 Notice of Redemption.
|
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78
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Section 10.5 Deposit of Redemption Price.
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79
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Section 10.6 Securities Payable on Redemption Date.
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80
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Section 10.7 Securities Redeemed in Part.
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80
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Article 11 SINKING FUNDS
|
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|
81
|
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Section 11.1 Applicability of Article.
|
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81
|
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Section 11.2 Satisfaction of Sinking Fund Payments with
Securities.
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81
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Section 11.3 Redemption of Securities for Sinking
Fund.
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82
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Article 12 REPAYMENT AT OPTION OF HOLDERS
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83
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Section 12.1 Applicability of Article.
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83
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Section 12.2 Repayment of Securities.
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83
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Section 12.3 Exercise of Option.
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83
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Section 12.4 When Securities Presented for Repayment Become Due
and Payable.
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84
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Section 12.5 Securities Repaid in Part.
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85
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Article 13 DEFEASANCE AND COVENANT DEFEASANCE
|
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85
|
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Section 13.1 Option to Effect Defeasance or Covenant
Defeasance.
|
|
|
85
|
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Section 13.2 Defeasance and Discharge.
|
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85
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Section 13.3 Covenant Defeasance.
|
|
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86
|
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Section 13.4 Conditions to Defeasance or Covenant
Defeasance.
|
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86
|
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Section 13.5 Deposited Money and Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions.
|
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|
88
|
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Section 13.6 Reinstatement.
|
|
|
89
|
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|
Article 14 MEETINGS OF HOLDERS OF SECURITIES
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90
|
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Section 14.1 Purposes for Which Meetings May Be
Called.
|
|
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90
|
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Section 14.2 Call, Notice and Place of Meetings.
|
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90
|
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Section 14.3 Persons Entitled to Vote at Meetings.
|
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90
|
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Section 14.4 Quorum; Action.
|
|
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91
|
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|
Section 14.5 Determination of Voting Rights; Conduct and
Adjournment of Meetings.
|
|
|
92
|
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Section 14.6 Counting Votes and Recording Action of
Meetings.
|
|
|
93
|
|
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|
Section 14.7 Waiver of Jury Trial.
|
|
|
93
|
|
INDENTURE, dated as of May 3, 2019, between Aurora Cannabis inc., a corporation duly organized and
existing under the laws the Province of British Columbia (herein called the “
Company
”), having its principal office at 500 – 10355 Jasper Avenue, Edmonton, Alberta, Canada, T5J 1Y6 and GLAS Trust Company LLC, a limited
liability company organized and existing under the laws of the State of New Hampshire, having its office at 3 Second Street, Suite 206, Jersey City, New Jersey 07302 as trustee (herein called the “
Trustee
”).
RECITALS
The Company has duly authorized
the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes, bonds or other evidences of indebtedness (herein called the “
Securities
”), which may be convertible into
or exchangeable for any securities of any Person (including the Company) to be issued in one or more series as in this Indenture provided.
This Indenture
is subject to the provisions of the
Trust Indenture Act of 1939
, as amended, that are required to be part of this Indenture and shall, to the extent applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the Company in accordance with 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 or of series thereof, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section
1.1
Definitions
. For all purposes of this Indenture, except as otherwise expressly provided or
unless the context otherwise requires:
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(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;
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(2)
|
all other terms used herein which are defined in the
Trust Indenture Act
, either directly or by
reference therein, have the meanings assigned to them therein, and the terms “cash transaction” and “self-liquidating paper”, as used in TIA Section 311, shall have the meanings assigned to them in the rules of the
Commission adopted under the
Trust Indenture Act
;
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(3)
|
all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with
Canadian GAAP; and
|
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(4)
|
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.
|
Certain terms, used
principally in Article Three, are defined in that Article.
“
Act
” when used with respect to any Holder, has the meaning
specified in Section 1.4.
“
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 appointed by the Trustee to act on behalf of the Trustee pursuant to
Section 6.11 to authenticate Securities.
“
Authorized Newspaper
” means a newspaper, in the English language or in an
official language of the country of publication, customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays, and of general circulation in each place in connection with which the term is used or in the
financial community of each 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 Business Day.
“
Bankruptcy Law
” means the Federal Bankruptcy Code,
Bankruptcy and
Insolvency Act
(Canada), the
Companies’ Creditors Arrangement Act
(Canada),
Winding-Up
& Restructuring Act
(Canada), or any other Canadian federal or provincial
law or the law of any other jurisdiction relating to bankruptcy, insolvency,
winding-up,
liquidation, dissolution, reorganization or relief of debtors or any similar law now or hereafter in effect for the
relief from, or otherwise affecting, creditors.
“
Bankruptcy Order
” means any court order made in a proceeding pursuant
to or within the meaning of any Bankruptcy Law, containing an adjudication of bankruptcy or insolvency, or providing for liquidation,
winding-up,
dissolution or reorganization, or appointing a Custodian of a
debtor or of all or any substantial part of a debtor’s property, or providing for the staying, arrangement, adjustment or compromise of indebtedness or other relief of a debtor.
“
Bearer Security
” means any Security except a Registered Security.
“
Board of Directors
” means the board of directors of the Company or any duly authorized committee of such board.
-9-
“
Board Resolution
” means a copy of a resolution certified by any authorized
signatory 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, and delivered to the Trustee.
“
Business Day
”, when used with respect to any Place of Payment or any other particular location referred to in this Indenture
or in the Securities, means, unless otherwise specified with respect to any Securities pursuant to Section 3.1, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment or
other location are authorized or obligated by law or executive order to close.
“
calculation period
” has the meaning
specified in Section 3.11.
“
Canadian GAAP
” means generally accepted accounting principles, and, except as otherwise
herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles used in the Company’s annual financial statements
contained in the Company’s annual report delivered to its shareholders in respect of the fiscal year immediately prior to the date of such computation, including International Financial Reporting Standards as issued by the International
Accounting Standards Board.
“
Clearstream
” means Clearstream Banking, société anonyme, or its successor.
“
Commission
” means the U.S. Securities and Exchange Commission, as from time to time constituted, created under the
Securities Exchange Act of 1934
, or, if at any time after the execution of this Indenture such Commission is not existing and performing the duties now assigned to it under the
Trust Indenture Act
, then the body performing such duties
at such time.
“
Common Depositary
” has the meaning specified in Section 3.4.
“
Company
” means the Person named as the “Company” in the first paragraph of this Indenture until a successor Person
shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.
“
Company Request
” or “
Company Order
” means a written request or order signed in the name of the Company by
any two authorized signatories of the Company and delivered to the Trustee.
“
Conversion Event
” means the cessation of
use of (i) a Foreign Currency (other than the Euro or other currency unit) both by the government of the country which issued such Currency and by a central bank or other public institution of or within the international banking community for
the settlement of transactions, (ii) the Euro or (iii) any currency unit (or composite currency) other than the Euro for the purposes for which it was established.
-10-
“
Corporate Trust Office
” means the principal corporate trust office of the
Trustee at which at any particular time its corporate trust business may be administered, which office on the date of execution of this Indenture is located at 3 Second Street, Suite 206, Jersey City, New Jersey 07302.
“
corporation
” includes corporations, associations, companies and business trusts.
“
covenant defeasance
” has the meaning specified in Section 13.3.
“
coupon
” means any interest coupon appertaining to a Bearer Security.
“
Currency
” means any currency or currencies, composite currency or currency unit or currency units, including, without
limitation, the Euro, issued by the government of one or more countries or by any recognized confederation or association of such governments.
“
Custodian
” means any receiver, interim receiver, receiver and manager, trustee, assignee, liquidator, sequestrator, monitor,
custodian or similar official or agent or any other Person with like powers.
“
Default
” means any event which is, or
after notice or passage of time or both would be, an Event of Default.
“
Defaulted Interest
” has the meaning specified in
Section 3.7.
“
defeasance
” has the meaning specified in Section 13.2.
“
Depositary
” means, with respect to the Securities of any series, The Depository Trust Company, or any successor thereto, or
any other Person designated pursuant to Section 3.1 with respect to the Securities of such series.
“Depository Trust
Company”
means Depository Trust Clearing Corporation, and any successor thereto.
“
Dollar
” or
“
$
” means a dollar or other equivalent unit in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts.
“
Euro
” means the single currency of the participating member states from time to time of the European Union described in
legislation of the European Counsel for the operation of a single unified European currency (whether known as the Euro or otherwise).
“
Euroclear
” means Euroclear Bank, S.A./N.V., and any successor thereto.
“
Event of Default
” has the meaning specified in Section 5.1.
“
Exchange Date
” has the meaning specified in Section 3.4.
-11-
“
Exchange Rate Agent
” means, with respect to Securities of or within any
series, unless otherwise specified with respect to any Securities pursuant to Section 3.1, a New York clearing house bank, designated in accordance with this Indenture.
“
Exchange Rate Officer’s Certificate
” means a tested telex or a certificate setting forth (i) the applicable Market
Exchange Rate and (ii) the Dollar or Foreign Currency amounts of principal (and premium, if any) and interest, if any (on an aggregate basis and on the basis of a Security having the lowest denomination principal amount determined in accordance
with Section 3.2 in the relevant Currency), payable with respect to a Security of any series on the basis of such Market Exchange Rate, sent (in the case of a telex) or signed (in the case of a certificate) by any authorized signatory of the
Company.
“
Extension Notice
” has the meaning specified in Section 3.8.
“
Extension Period
” has the meaning specified in Section 3.8.
“
Federal Bankruptcy Code
” means the
Bankruptcy Act
of Title 11 of the United States Code, as amended from time to
time.
“
Final Maturity
” has the meaning specified in Section 3.8.
“
First Currency
” has the meaning specified in Section 1.15.
“Fiscal Year”
means the year ending June 30
th
.
“
Foreign Currency
” means any Currency other than Currency of the United States.
“
Governmental Authority
” means any nation or government, any state, province, territory or other political subdivision
thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.
“
Government Obligations
” means, unless otherwise specified with respect to any series of Securities pursuant to
Section 301, securities which are (a) direct obligations of the government which issued the Currency in which the Securities of a particular series are payable or (b) obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the government which issued the Currency in which the Securities of such series are payable, the payment of which is unconditionally guaranteed by such government, which, in either case, are full faith and credit
obligations of such government payable in such Currency and are not callable or redeemable at the option of the issuer thereof and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of any such Government Obligation held by such custodian for the account of a holder of a depositary receipt, provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Obligation or the specific payment of interest or principal of the Government
Obligation evidenced by such depository receipt.
-12-
“
Holder
” means, in the case of a Registered Security, the Person in whose
name a Security is registered in the Security Register and, in the case of a Bearer Security, the bearer thereof and, when used with respect to any coupon, shall mean the bearer thereof.
“
Indebtedness
” means obligations for money borrowed whether or not evidenced by notes, bonds, debentures or other similar
evidences of indebtedness.
“
Indenture
” means this instrument as originally executed and 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, and shall include the terms of particular series of Securities established as contemplated by Section 3.1;
provided, however, that, if at any time more than one Person is acting as Trustee under this instrument, “Indenture” shall mean, with respect to any one or more series of Securities for which such Person is Trustee, 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 and shall include the terms of particular series of Securities for
which such Person is Trustee established as contemplated by Section 3.1, exclusive, however, of any provisions or terms which relate solely to other series of Securities for which such Person is not Trustee, regardless of when such terms or
provisions were adopted, and exclusive of any provisions or terms adopted by means of one or more indentures supplemental hereto executed and delivered after such Person had become such Trustee but to which such Person, as such Trustee, was not a
party.
“
Indexed Security
” means a Security the terms of which provide that the principal amount thereof payable at
Stated Maturity may be more or less than the principal face amount thereof at original issuance.
“
interest
”, when used
with respect to an Original Issue Discount Security, which by its terms bears interest only after Maturity, means interest payable after Maturity at the rate prescribed in such Original Issue Discount Security.
“
Interest Payment Date
”, when used with respect to any Security, means the Stated Maturity of an installment of interest on
such Security.
“
Judgment Currency
” has the meaning specified in Section 1.14.
“
Lien
” means any mortgage, lien, pledge, charge, security interest or encumbrance of any kind created, incurred or assumed in
order to secure payment of Indebtedness.
“
mandatory sinking fund payment
” has the meaning specified in
Section 11.1.
-13-
“
Market Exchange Rate
” means, unless otherwise specified with respect to
any Securities pursuant to Section 3.1, (i) for any conversion involving a currency unit on the one hand and Dollars or any Foreign Currency on the other, the exchange rate between the relevant currency unit and Dollars or such Foreign Currency
calculated by the method specified pursuant to Section 3.1 for the Securities of the relevant series, (ii) for any conversion of Dollars into any Foreign Currency, the noon (New York City time) buying rate for such Foreign Currency for
cable transfers quoted in New York City as certified for customs purposes by the Federal Reserve Bank of New York and (iii) for any conversion of one Foreign Currency into Dollars or another Foreign Currency, the spot rate at noon local time in
the relevant market at which, in accordance with normal banking procedures, the Dollars or Foreign Currency into which conversion is being made could be purchased with the Foreign Currency from which conversion is being made from major banks located
in either New York City, London or any other principal market for Dollars or such purchased Foreign Currency, in each case determined by the Exchange Rate Agent. Unless otherwise specified with respect to any Securities pursuant to Section 3.1,
in the event of the unavailability of any of the exchange rates provided for in the foregoing clauses (i), (ii) and (iii), the Exchange Rate Agent shall use, in its sole discretion and without liability on its part, such quotation of the Federal
Reserve Bank of New York as of the most recent available date, or quotations from one or more major banks in New York City, London, England or another principal market for the Currency in question, or such other quotations as the Exchange Rate Agent
shall deem appropriate. Unless otherwise specified by the Exchange Rate Agent, if there is more than one market for dealing in any Currency by reason of foreign exchange regulations or otherwise, the market to be used in respect of such Currency
shall be that upon which a
non-resident
issuer of securities designated in such Currency would purchase such Currency in order to make payments in respect of such Securities.
“
Maturity
”, when used with respect to any Security, means the date on which the principal of such Security or an installment
of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, notice of redemption, notice of option to elect repayment or otherwise.
“
Officers’ Certificate
” means a certificate signed by any two authorized signatories of the Company and delivered to the
Trustee.
“
Opinion of Counsel
” means a written opinion of counsel, who may be counsel for the Company, including an
employee of the Company, and who shall be acceptable to the Trustee.
“
Optional Reset Date
” has the meaning specified in
Section 3.7.
“
optional sinking fund payment
” has the meaning specified in Section 11.1.
“
Original Issue Discount Security
” means any Security which provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2.
-14-
“
Original Stated Maturity
” has the meaning specified in Section 3.8.
“
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)
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Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;
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(ii)
|
Securities, or portions thereof, for whose payment or redemption or repayment at the option of the Holder money
in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust 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 and any coupons appertaining thereto; 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;
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(iii)
|
Securities, except to the extent provided in Section 13.2 and 13.3, with respect to which the Company has
effected defeasance and/or covenant defeasance as provided in Article 13; and
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(iv)
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Securities which have been paid pursuant to Section 3.6 or in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide
purchaser in whose hands such Securities are valid obligations of the Company;
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provided, however
, that in
determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder or are present at a meeting of Holders for quorum purposes,
and for the purpose of making the calculations required by TIA Section 313, (i) the principal amount of an Original Issue Discount Security that may be counted in making such determination or calculation and that shall be deemed to be
Outstanding for such purpose shall be equal to the amount of principal thereof that would be (or shall have been declared to be) due and payable, at the time of such determination, upon a declaration of acceleration of the maturity thereof pursuant
to Section 5.2, (ii) the principal amount of any Security denominated in a Foreign Currency that may be counted in making such determination or calculation and that shall be deemed Outstanding for such purpose shall be equal to the Dollar
equivalent, determined as of the date such Security is originally issued by the Company as set forth in an Exchange Rate Officer’s Certificate delivered to the Trustee, of the principal amount (or, in the case of an Original Issue Discount
Security, the Dollar equivalent as of such date of original issuance of the amount determined as provided in clause (i) above) of such Security, (iii) the principal amount of any Indexed Security that may be counted in making such
determination or calculation and that shall be deemed outstanding for such purpose shall be equal to the principal face amount of such Indexed Security at original issuance, unless otherwise provided with respect to such Security pursuant to
Section 3.1, and (iv) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in making such calculation or in relying 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 certifies in writing to 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.
-15-
“
Paying Agent
” means any Person (including the Company acting as Paying
Agent) authorized by the Company to pay the principal of (or premium, if any) or interest, if any, on any Securities on behalf of the Company.
“
Person
” means an individual, partnership, limited liability company, joint stock company, corporation, business trust,
trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.
“
Place of
Payment
” means, when used with respect to the Securities of or within any series, the place or places where the principal of (and premium, if any) and interest, if any, on such Securities are payable as specified as contemplated by
Section 3.1 and 9.2.
“
Predecessor Security
” of any particular Security means every previous Security evidencing all
or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.6 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Security or a Security to which a mutilated, destroyed, lost or stolen coupon appertains shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security or the Security to which the mutilated, destroyed, lost or
stolen coupon appertains, as the case may be.
“
rate(s) of exchange
” has the meaning specified in Section 1.14.
“
Redemption Date
”, when used with respect to any Security to be redeemed, in whole or in part, means the date fixed for such
redemption by or pursuant to this Indenture.
“
Redemption Price
”, when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
“
Registered Security
” means any Security
registered in the Security Register.
-16-
“
Regular Record Date
” for the interest payable on any Interest Payment Date
on the Registered Securities of or within any series means the date specified for that purpose as contemplated by Section 3.1.
“
Repayment Date
” means, when used with respect to any Security to be repaid at the option of the Holder, the date fixed for
such repayment pursuant to this Indenture.
“
Repayment Price
” means, when used with respect to any Security to be repaid
at the option of the Holder, the price at which it is to be repaid pursuant to this Indenture.
“
Required Currency
” has
the meaning specified in Section 1.14.
“
Reset Notice
” has the meaning specified in Section 3.7.
“
Responsible Officer
”, when used with respect to the Trustee, means any vice president, assistant vice president, any trust
officer or assistant trust officer, or any 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 of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Indenture.
“
Securities
” has the meaning stated in the first recital of this Indenture and more particularly means any Securities
authenticated and delivered under this Indenture; provided, however, that if at any time there is more than one Person acting as Trustee under this Indenture, “Securities” with respect to the Indenture as to which such Person is Trustee
shall have the meaning stated in the first recital of this Indenture and shall more particularly mean Securities authenticated and delivered under this Indenture, exclusive, however, of Securities of any series as to which such Person is not
Trustee.
“
Security Register
” and “
Security Registrar
” have the respective meanings specified in
Section 3.5.
“
Special Record Date
” for the payment of any Defaulted Interest on the Registered Securities of or
within any series means a date fixed by the Trustee pursuant to Section 3.7.
“
Stated Maturity
”, when used with
respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security or a coupon representing such installment of interest as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable, as such date may be extended pursuant to the provisions of Section 3.8 (if applicable).
“
Subsequent Interest Period
” has the meaning specified in Section 3.7.
-17-
“
Subsidiary
” of any person means, at the date of determination, any
corporation or other person of which Voting Shares or other interests carrying more than 50% of the voting rights attached to all outstanding Voting Shares or other interests are owned, directly or indirectly, by or for such person or one or more
Subsidiaries thereof.
“
Trust Indenture Act
” or “
TIA
” means the
Trust Indenture Act of
1939
, as amended and as in force at the date as of which this Indenture was executed except as provided in Section 8.5.
“
Trustee
” means the Person named as the “Trustee” in the first paragraph of this Indenture until a successor
Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder; provided, however, that if at any time there is more than
one such Person, “Trustee” as used with respect to the Securities of any series shall mean only the Trustee with respect to Securities of that series.
“
United States
” means, unless otherwise specified with respect to any Securities pursuant to Section 3.1, the United
States of America (including the states and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction.
“
United States person
” means, unless otherwise specified with respect to any Securities pursuant to Section 3.1, an
individual who is a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States or an estate or trust the income of which is subject to United States federal
income taxation regardless of its source.
“
Voting Shares
” means shares of any class of a corporation having under all
circumstances the right to vote for the election of the directors of such corporation, provided that, for the purpose of the definition, shares which only carry the right to vote conditionally on the happening of an event shall not be considered
Voting Shares whether or not such event shall have happened.
“
Yield to Maturity
” means the yield to maturity, computed
at the time of issuance of a Security (or, if applicable, at the most recent redetermination of interest on such Security) and as set forth in such Security in accordance with generally accepted United States bond yield computation principles.
Section 1.2 Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers’ Certificate stating that all conditions precedent, if any, provided for in this Indenture (including any covenant compliance with which constitutes a condition precedent) relating to the proposed action have been complied
with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.
-18-
Every certificate or opinion with respect to compliance with a covenant or condition provided for in this
Indenture (other than pursuant to Section 9.4) shall include:
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(1)
|
a statement that each individual signing such certificate or opinion has read such covenant or condition and
the definitions herein relating thereto;
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(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;
|
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(3)
|
a statement that, in the opinion of each 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
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(4)
|
a statement as to whether, in the opinion of each such individual, such covenant or condition has been complied
with.
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Section 1.3 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or
opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters upon which his 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.
Any certificate or opinion of an officer of the
Company or of counsel may be based, insofar as it relates to accounting matters, upon a certificate or opinion of, or representations by, an accountant or firm of accountants in the employ of the Company, unless such officer or counsel, as the case
may be, knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the accounting matters upon which such certificate or opinion may be based are erroneous. Any certificate or opinion
of any independent firm of public accountants filed with the Trustee shall contain a statement that such firm is independent.
-19-
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.
Section 1.4 Acts of Holders.
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(a)
|
Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this
Indenture to be given or taken by Holders of the Outstanding Securities of all series or one or more series, as the case may be, may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in
person or by agents duly appointed in writing. If Securities of a series are issuable as Bearer Securities, any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by
Holders of such series may, alternatively, be embodied in and evidenced by the record of Holders of Securities of such series voting in favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders of Securities
of such series duly called and held in accordance with the provisions of Article 14, or a combination of such instruments and any such record. Except as herein otherwise expressly provided, such action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments and any such record (and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the “Act” of the Holders signing such instrument or instruments or so voting at any such meeting. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. The record of any meeting of Holders of Securities shall be proved in the manner
provided in Section 14.6.
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(b)
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The fact and date of the execution by any Person of any such instrument or writing may be proved in any
reasonable manner which the Trustee deems sufficient.
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(c)
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The principal amount and serial numbers of Registered Securities held by any Person, and the date of holding
the same, shall be proved by the Security Register.
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(d)
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The principal amount and serial numbers of Bearer Securities held by any Person, and the date of holding the
same, may be proved by the production of such Bearer Securities or by a certificate executed, as depositary, by any trust company, bank, banker or other depositary, wherever situated, if such certificate shall be deemed by the Trustee to be
satisfactory, showing that at the date therein mentioned such Person had on deposit with such depositary, or exhibited to it, the Bearer Securities therein described; or such facts may be proved by the certificate or affidavit of the Person holding
such Bearer Securities, if such certificate or affidavit is deemed by the Trustee to be satisfactory. The Trustee and the Company may assume that such ownership of any Bearer Security continues until (1) another certificate or affidavit bearing
a later date issued in respect of the same Bearer Security is produced, or (2) such Bearer Security is produced to the Trustee by some other Person, or (3) such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The principal amount and serial numbers of Bearer Securities held by any Person, and the date of holding the same, may also be proved in any other manner that the Trustee deems sufficient.
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(e)
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If the Company shall solicit from the Holders of Registered Securities any request, demand, authorization,
direction, notice, consent, waiver or other Act, the Company may, at its option, by or pursuant to a Board Resolution, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other Act, but the Company, shall have no obligation to do so. Notwithstanding TIA Section 316(c), such record date shall be the record date specified in or pursuant to such Board Resolution, which shall be a date not
earlier than the date 30 days prior to the first solicitation of Holders generally in connection therewith and not later than the date such solicitation is completed. If such a record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of Outstanding Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Securities shall be computed as of
such record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than eleven months after
the record date.
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(f)
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Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any
Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange 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.
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Section 1.5 Notices, etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other documents provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
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(1)
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the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing or sent by facsimile to the Trustee at its Corporate Trust Office, GLAS TRUST COMPANY LLC, 3 Second Street, Suite 206, Jersey City, NJ 07311, Fax:
212-202-6246,
Attention Corporate Trust Administration, or
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(2)
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the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage prepaid, or sent by overnight courier to the Company, addressed to it at 500 – 10355 Jasper Avenue, Edmonton, Alberta, Canada, T5J 1Y6, Attention: Corporate Secretary, or
at any other address previously furnished in writing to the Trustee by the Company.
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Section 1.6 Notice
to Holders; Waiver.
Where this Indenture provides for notice of any event to Holders of Registered Securities by the Company or the Trustee, such
notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed at the expense of the Company, first-class postage prepaid, to each such Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders of Registered Securities 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 of Registered Securities or the sufficiency of any notice to Holders of Bearer Securities given as
provided. Any notice mailed to a Holder in the manner herein prescribed shall be conclusively deemed to have been received by such Holder, whether or not such Holder actually receives such notice.
In case, by reason of the suspension of or irregularities in regular mail service or by reason of any other cause, it shall be impractical to mail notice of
any event to Holders of Registered Securities when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be directed by the Company shall be deemed to be sufficient giving of
such notice for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise specified with respect to any Securities pursuant to
Section 3.1, where this Indenture provides for notice to Holders of Bearer Securities of any event, such notice shall be sufficiently given at the expense of the Company to Holders of Bearer Securities if published in an Authorized Newspaper in
The City of New York and in such other city or cities as may be specified in such Securities on a Business Day at least twice, the first such publication to be not earlier than the earliest date, and not later than the latest date, prescribed for
the giving of such notice. Any such notice shall be deemed to have been given on the date of the first such publication.
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In case, by reason of the suspension of publication of any Authorized Newspaper or Authorized Newspapers or
by reason of any other cause, it shall be impracticable to publish any notice to Holders of Bearer Securities as provided above, then such notification to Holders of Bearer Securities as shall be given as directed by the Company shall constitute
sufficient notice to such Holders for every purpose hereunder. Neither the failure to give notice by publication to Holders of Bearer Securities as provided above, nor any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent 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.
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 shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
Section 1.7 Effect of
Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the
construction hereof.
Section 1.8 Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.
Section 1.9 Separability Clause.
In case any provision in this Indenture or in any Security or coupon shall be invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 1.10 Benefits of Indenture.
Nothing in this Indenture or in the Securities or coupons, express or implied, shall give to any Person, other than the parties hereto, any
Authenticating Agent, any Paying Agent, any Securities Registrar and their successors hereunder and the Holders of Securities or coupons, any benefit or any legal or equitable right, remedy or claim under this Indenture.
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Section 1.11 Governing Law.
This Indenture and the Securities and coupons shall be governed by and construed in accordance with the law of the State of New York. This Indenture is
subject to the provisions of the
Trust Indenture Act
that are required to be part of this Indenture and shall, to the extent applicable, be governed by such provisions.
Section 1.12 Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, sinking fund payment date or Stated Maturity or Maturity of any Security shall not be a Business
Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of any Security or coupon other than a provision in the Securities of any series which specifically states that such provision shall apply in lieu of this
Section), payment of principal (or premium, if any) or interest, if any, need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made
on the Interest Payment Date, Repayment Date or Redemption Date or sinking fund payment date, or at the Stated Maturity or Maturity; provided that no interest shall accrue for the period from and after such Interest Payment Date, Repayment
Date, Redemption Date, sinking fund payment date, Stated Maturity or Maturity, as the case may be.
Section 1.13 Agent for
Service; Submission to Jurisdiction; Waiver of Immunities.
By the execution and delivery of this Indenture, the Company (i) irrevocably
designates and appoints, and acknowledges that it has irrevocably designated and appointed, as its authorized agent upon which process may be served in any suit, action or proceeding arising out of or relating to the Securities or this Indenture
that may be instituted in any United States federal or New York state court in The City of New York or brought under federal or state securities laws or brought by the Trustee (whether in its individual capacity or in its capacity as Trustee
hereunder) or, subject to Section 5.7, any Holder of Securities in any United States federal or New York state court in The City of New York, (ii) submits to the
non-exclusive
jurisdiction of any
such court in any such suit, action or proceeding, and (iii) agrees that service of process upon Corporation Service Company, 251 Little Falls Drive, Wilmington, Delaware 19808 and written notice of said service to the Company (mailed or
delivered to its Corporate Secretary at its principal office specified in the first paragraph of this Indenture and in the manner specified in Section 1.5 hereof), shall be deemed in every respect effective service of process upon the Company
in any such suit, action or proceeding. The Company further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of
Corporation Service Company in full force and effect so long as any of the Securities shall be Outstanding or any amounts shall be payable in respect of any Securities or coupons.
The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of
venue of any such action, suit or proceeding in any such court or any appellate court with respect thereto and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any such action,
suit or proceeding in any such court.
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To the extent that the Company has or hereafter may acquire any immunity from jurisdiction of any court or
from any legal process (whether through service of notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, it hereby irrevocably waives such immunity in respect of its
obligations under this Indenture and the Securities, to the extent permitted by law.
Section 1.14 Conversion of Currency.
The Company covenants and agrees that the following provisions shall apply to conversion of Currency in the case of the Securities and this Indenture
to the fullest extent permitted by applicable law:
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(a) (i)
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If for the purposes of obtaining judgment in, or enforcing the judgment of, any court in any country, it
becomes necessary to convert into a Currency (the “
Judgment Currency
”) an amount due or contingently due under the Securities of any series or this Indenture in any other currency (the “
Required Currency
”), then the
conversion shall be made at the rate of exchange prevailing on the Business Day before the day on which the judgment is given or the order of enforcement is made, as the case may be (unless a court shall otherwise determine).
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(ii)
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If there is a change in the rate of exchange prevailing between the Business Day before the day on which the
judgment is given or an order of enforcement is made, as the case may be (or such other date as a court shall determine), and the date of receipt of the amount due, the Company shall pay such additional (or, as the case may be, such lesser) amount,
if any, as may be necessary so that the amount paid in the Judgment Currency when converted at the rate of exchange prevailing on the date of receipt will produce the amount in the Required Currency originally due.
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(b)
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In the event of the
winding-up
of the Company at any time while any
amount or damages owing under the Securities and this Indenture, or any judgment or order rendered in respect thereof, shall remain unpaid or outstanding, the Company shall indemnify and hold the Holders and the Trustee and any agents harmless
against any deficiency arising or resulting from any variation in rates of exchange between (1) the date as of which the equivalent of the amount in the Required Currency (other than under this Subsection (b)) is calculated for the purposes of
such
winding-up
and (2) the final date for the filing of proofs of claim in such
winding-up.
For the purpose of this Subsection (b) the final date for the
filing of proofs of claim in the
winding-up
of the Company shall be the date fixed by the liquidator or otherwise in accordance with the relevant provisions of applicable law as being the latest practicable
date as at which liabilities of the Company may be ascertained for such
winding-up
prior to payment by the liquidator or otherwise in respect thereto.
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(c)
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The obligations contained in Subsections (a)(ii) and (b) of this Section shall constitute separate and
independent obligations of the Company from its other obligations under the Securities and this Indenture, shall give rise to separate and independent causes of action against the Company, shall apply irrespective of any waiver or extension granted
by any Holder or Trustee from time to time and shall continue in full force and effect notwithstanding any judgment or order or the filing of any proof of claim in the
winding-up
of the Company for a
liquidated sum in respect of amounts due hereunder (other than under Subsection (b) above) or under any such judgment or order. Any such deficiency as aforesaid shall be deemed to constitute a loss suffered by the Holders or the Trustee, as the
case may be, and no proof or evidence of any actual loss shall be required by the Company or the applicable liquidator. In the case of Subsection (b) above, the amount of such deficiency shall not be deemed to be reduced by any variation in
rates of exchange occurring between the said final date and the date of any liquidating distribution.
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(d)
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The term “rate(s) of exchange” shall mean the Bank of Canada indicative rate for purchases on the
relevant date of the Required Currency with the Judgment Currency, as reported on the “Exchange Rates” page of the website of Bank of Canada (or such other means of reporting the Bank of Canada indicative rate as may be agreed upon by each
of the parties to this Indenture) and includes any premiums and costs of exchange payable.
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Section 1.15 Currency Equivalent.
Except as otherwise provided in this Indenture, for purposes of the construction of the terms of this Indenture or of the Securities, in the event that any
amount is stated herein in the Currency of one nation (the “
First Currency
”), as of any date such amount shall also be deemed to represent the amount in the Currency of any other relevant nation which is required to purchase such
amount in the First Currency at the Bank of Canada indicative rate as reported on the “Exchange Rates” page of the website of Bank of Canada as determined by the Issuer (or such other means of reporting the Bank of Canada indicative rate
as may be agreed upon by each of the parties to this Indenture) on the date of determination.
Section 1.16 No Recourse
Against Others.
A director, officer, employee or shareholder, as such, of the Company shall not have any liability for any obligations of the Company
under the Securities or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such liability. Such waiver and release shall be
part of the consideration for the issue of the Securities.
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Section 1.17 Multiple Originals.
The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
Section 1.18 Conflict with
Trust Indenture Act
.
If and to the extent that any provision hereof limits, qualifies or conflicts with another provision that is required or deemed to be included in this
Indenture by any of the provisions of the
Trust Indenture Act
, such required or deemed provision shall control.
ARTICLE 2
SECURITY FORMS
Section 2.1 Forms Generally.
The Registered Securities, if any, of each series and the Bearer Securities, if any, of each series and related coupons shall be in substantially the forms
as shall be established by or pursuant to a Board Resolution of the Company or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith,
be determined by the Company. If the forms of Securities or coupons of any series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 3.3 for the authentication and delivery of such Securities or coupons. Any portion of the text of any Security may be
set forth on the reverse thereof, with an appropriate reference thereto on the face of the Security.
The Trustee’s certificate of authentication on
all Securities shall be in substantially the form set forth in this Article.
The definitive Securities and coupons, if any, may be produced in any
manner, all as determined by the officers of the Company executing such Securities, as evidenced by their execution of such Securities or coupons. A Security may be in substantially the form attached as Exhibit A hereto, or a Security may be in any
form established by or pursuant to authority granted by one or more Board Resolutions and set forth in an Officers’ Certificate or supplemental indenture pursuant to Section 3.1.
Section 2.2 Form of Trustee’s Certificate of Authentication.
Subject to Section 6.11, the Trustee’s certificate of authentication shall be in substantially the following form:
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TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
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GLAS Trust Company LLC, as Trustee
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By:
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Authorized Signatory
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Section 2.3 Securities Issuable in Global Form.
If Securities of or within a series are issuable in global form, as contemplated by Section 3.1, then, notwithstanding clause (8) of
Section 3.1, any such Security shall represent such of the Outstanding Securities of such series as shall be specified therein and may provide that it shall represent the aggregate amount of Outstanding Securities of such series from time
to time endorsed thereon and that the aggregate amount of Outstanding Securities of such series represented thereby may from time to time be increased or decreased to reflect exchanges. Any endorsement of a Security in global form to reflect the
amount, or any increase or decrease in the amount, of Outstanding Securities represented thereby shall be made by the Trustee in such manner and upon instructions given by such Person or Persons as shall be specified therein or in the Company Order
to be delivered to the Trustee pursuant to Section 3.3 or Section 3.4. Subject to the provisions of Section 3.3 and, if applicable, Section 3.4, the Trustee shall deliver and redeliver any Security in permanent global form in the
manner and upon instructions given by the Person or Persons specified therein or in the Company Order. If a Company Order pursuant to Section 3.3 or Section 3.4 has been, or simultaneously is, delivered, any instructions by the Company
with respect to endorsement or delivery or redelivery of a Security in global form shall be in writing but need not comply with Section 1.12 and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 3.3 shall apply to any Security represented by a Security in global form if such Security was never issued
and sold by the Company and the Company delivers to the Trustee the Security in global form together with written instructions (which need not comply with Section 1.2 and need not be accompanied by an Opinion of Counsel) with regard to the
reduction in the principal amount of Securities represented thereby, together with the written statement contemplated by the last sentence of Section 3.3.
Notwithstanding the provisions of Section 3.7, unless otherwise specified as contemplated by Section 3.1, payment of principal of (and premium, if
any) and interest, if any, on any Security in permanent global form shall be made to the Person or Persons specified therein.
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Notwithstanding the provisions of Section 3.9 and except as provided in the preceding paragraph, the
Company, the Trustee and any agent of the Company or the Trustee shall treat as the Holder of such principal amount of Outstanding Securities represented by a permanent global Security (i) in the case of a permanent global Security in
registered form, the Holder of such permanent global Security in registered form, or (ii) in the case of a permanent global Security in bearer form, Euroclear or Clearstream.
ARTICLE 3
THE
SECURITIES
Section 3.1 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. Except as otherwise provided herein, and except to the extent prescribed by law, each series of Securities
shall be direct, unconditional and unsecured obligations of the Company and shall rank: pari passu and ratably without preference among themselves and pari passu with all other unsecured and unsubordinated obligations of the Company. There shall be
established in one or more Board Resolutions of the Company or pursuant to authority granted by one or more Board Resolutions of the Company and, subject to Section 3.3, set forth in, or determined in the manner provided in, an Officers’
Certificate of the Company, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series, any or all of the following, as applicable (each of which (except for the matters set forth in
clauses (1), (2) and (14) below), if so provided, may be determined from time to time by the Company with respect to unissued Securities of the series and set forth in such Securities of the series when issued from time to time):
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(1)
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the title of the Securities of the series (which shall distinguish the Securities of such series from all other
series of Securities, except to the extent that Additional Securities of an existing series are being issued);
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(2)
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any limit upon the aggregate principal amount of the Securities of the series that may be authenticated and
delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Sections 3.4, 3.5, 3.6, 8.6, 10.7 or 12.5) and, in the
event that no limit upon the aggregate principal amount of the Securities of that series is specified, the Company shall have the right, subject to any terms, conditions or other provisions specified pursuant to this Section 3.1 with respect to
the Securities of such series, to
re-open
such series for the issuance of additional Securities of such series from time to time;
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(3)
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the date or dates, or the method by which such date or dates will be determined or extended, on which the
principal (and premium, if any) of the Securities of the series is payable;
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(4)
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the rate or rates at which the Securities of the series shall bear interest, if any, or the method by which
such rate or rates shall be determined, whether such interest shall be payable in cash or additional Securities of the same series or shall accrue and increase the aggregate principal amount outstanding of such series, the date or dates from which
such interest shall accrue, or the method by which such date or dates shall be determined, the Interest Payment Dates on which such interest shall be payable and the Regular Record Date, if any, for the interest payable on any Registered Security on
any Interest Payment Date, or the method by which such date or dates shall be determined, and the basis upon which interest shall be calculated if other than on the basis of a
360-day
year of twelve
30-day
months;
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(5)
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the place or places, if any, other than the Corporate Trust Office, where the principal of (and premium, if
any) and interest, if any, on Securities of the series shall be payable, where any Registered Securities of the series may be surrendered for registration of transfer, where Securities of the series may be surrendered for exchange, where Securities
of the series that are convertible or exchangeable may be surrendered for conversion or exchange, as applicable, and, if different than the location specified in Section 1.5, the place or places where notices or demands to or upon the Company
in respect of the Securities of the series and this Indenture may be served; and the extent to which, or the manner in which, any interest payment due on a global Security of that series on an Interest Payment Date will be paid (if different than
for other Securities of such series);
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(6)
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the period or periods within which, the price or prices at which, the Currency (if other than Dollars) in
which, and other terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company, if the Company is to have that option;
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(7)
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the obligation, if any, of the Company to redeem, repay or purchase Securities of the series pursuant to any
sinking fund or analogous provision or at the option of a Holder thereof, and the period or periods within which, the price or prices at which, the Currency (if other than Dollars) in which, and other terms and conditions upon which Securities of
the series shall be redeemed, repaid or purchased, in whole or in part, pursuant to such obligation;
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(8)
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if other than denominations of $2,000 and integral multiples of $1,000, the denomination or denominations in
which any Registered Securities of the series shall be issuable and, if other than denominations of $5,000, the denomination or denominations in which any Bearer Securities of the series shall be issuable;
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(9)
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if other than the Trustee, the identity of each Security Registrar and/or Paying Agent;
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(10)
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if other than the principal amount thereof, the portion of the principal amount of Securities of the series
that shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 5.2 or the method by which such portion shall be determined;
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(11)
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whether the amount of payments of principal of (or premium, if any) or interest, if any, on the Securities of
the series may be determined with reference to an index, formula or other method (which index, formula or method may be based, without limitation, on one or more Currencies, commodities, equity indices or other indices), and the manner in which such
amounts shall be determined;
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(12)
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the designation of the initial Exchange Rate Agent, if any;
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(13)
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the applicability, if any, of Section 3.2 and/or 13.3 to the Securities of the series and any provisions
in modification of, in addition to or in lieu of any of the provisions of Article 13 that shall be applicable to the Securities of the series;
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(14)
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provisions, if any, granting special rights to the Holders of Securities of the series upon the occurrence of
such events as may be specified;
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(15)
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any deletions from, modifications of or additions to the Events of Default or covenants (including any
deletions from, modifications of or additions to Section 9.8) of the Company with respect to Securities of the series, whether or not such Events of Default or covenants are consistent with the Events of Default or covenants set forth herein;
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(16)
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whether Securities of the series are to be issuable as Registered Securities, Bearer Securities (with or
without coupons) or both, any restrictions applicable to the offer, sale or delivery of Bearer Securities, whether any Securities of the series are to be issuable initially in temporary global form and whether any Securities of the series are to be
issuable in permanent global form with or without coupons and, if so, whether beneficial owners of interests in any such permanent global Security may exchange such interests for Securities of such series and of like tenor of any authorized form and
denomination and the circumstances under which any such exchanges may occur, if other than in the manner provided in Section 3.5, whether Registered Securities of the series may be exchanged for Bearer Securities of the series (if permitted by
applicable laws and regulations), whether Bearer Securities of the series may be exchanged for Registered Securities of such series, and the circumstances under which and the place or places where any such exchanges may be made and if Securities of
the series are to be issuable in global form, the identity of any initial depository therefor if other than The Depository Trust Company;
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(17)
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the date as of which any Bearer Securities of the series and any temporary global Security representing
Outstanding Securities of the series shall be dated if other than the date of original issuance of the first Security of the series to be issued;
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(18)
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the Person to whom any interest on any Registered Security of the series shall be payable, if other than 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, the manner in which, or the Person to whom, any interest on any Bearer Security of the
series shall be payable, if otherwise than upon presentation and surrender of the coupons appertaining thereto as they severally mature, and the extent to which, or the manner in which, any interest payable on a temporary global Security on an
Interest Payment Date will be paid if other than in the manner provided in Section 3.4;
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(19)
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if Securities of the series are to be issuable in definitive form (whether upon original issue or upon exchange
of a temporary Security of such series) only upon receipt of certain certificates or other documents or satisfaction of other conditions, the form and/or terms of such certificates, documents or conditions;
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(20)
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if the Securities of the series are to be issued upon the exercise of warrants, the time, manner and place for
such Securities to be authenticated and delivered;
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(21)
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if the Securities of the series are to be convertible into or exchangeable for any securities of any Person
(including the Company), the terms and conditions upon which such Securities will be so convertible or exchangeable;
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(22)
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if payment of the Securities of the series will be guaranteed by any other Person;
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(23)
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the extent and manner, if any, in which payment on or in respect of the Securities of the series will be
senior, senior subordinated or subordinated obligations of the Company; and
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(24)
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any other terms, conditions, rights and preferences (or limitations on such rights and preferences) relating to
the series (which terms shall not be inconsistent with the requirements of the
Trust Indenture Act
but which need not be consistent with the provisions of this Indenture).
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All Securities of any one series and the coupons appertaining to any Bearer Securities of such series shall be substantially identical except, in the case of
Registered Securities, as to denomination and except as may otherwise be provided in or pursuant to such Board Resolution (subject to Section 3.3) and set forth in such Officers’ Certificate or in any such indenture supplemental hereto.
Not all Securities of any one series need be issued at the same time, and, unless otherwise provided, a series may be reopened for issuances of additional Securities of such series.
If any of the terms of the series are established by action taken pursuant to one or more Board Resolutions, such Board Resolutions shall be delivered to the
Trustee at or prior to the delivery of the Officers’ Certificate setting forth the terms of the series.
Section 3.2 Denominations.
The Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 3.1. With respect to Securities of
any series denominated in Dollars, in the absence of any such provisions, the Registered Securities of such series, other than Registered Securities issued in global form (which may be of any denomination), shall be issuable in denominations of
$1,000 and any integral multiple thereof and the Bearer Securities of such series, other than the Bearer Securities issued in global form (which may be of any denomination), shall be issuable in a denomination of $5,000.
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Section 3.3 Execution, Authentication, Delivery and Dating.
The Securities and any coupons appertaining thereto shall be executed on behalf of the Company by any two of its authorized signatories. The signature of any
of these officers on the Securities or coupons may be the manual or facsimile signatures of the present or any future such authorized signatory and may be imprinted or otherwise reproduced on the Securities.
Securities or coupons bearing the manual or facsimile signatures 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 or coupons.
At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series together with any
coupons appertaining thereto, executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with such Company Order shall authenticate
and deliver such Securities; provided, however, that, in connection with its original issuance, no Bearer Security shall be mailed or otherwise delivered to any location in the United States or Canada; and provided further that, unless otherwise
specified with respect to any series of Securities pursuant to Section 3.1, a Bearer Security may be delivered in connection with its original issuance only if the Person entitled to receive such Bearer Security shall have furnished a
certificate in the form set forth in Exhibit
B-1
to this Indenture, dated no earlier than 15 days prior to the earlier of the date on which such Bearer Security is delivered and the date on which any temporary
Security first becomes exchangeable for such Bearer Security in accordance with the terms of such temporary Security and this Indenture. If any Security shall be represented by a permanent global Bearer Security, then, for purposes of this Section
and Section 3.4, the notation of a beneficial owner’s interest therein upon original issuance of such Security or upon exchange of a portion of a temporary global Security shall be deemed to be delivery in connection with its original
issuance of such beneficial owner’s interest in such permanent global Security. Except as permitted by Section 3.6, the Trustee shall not authenticate and deliver any Bearer Security unless all appurtenant coupons for interest then matured
have been detached and cancelled. If not all the Securities of any series are to be issued at one time and if the Board Resolution or supplemental indenture establishing such series shall so permit, such Company Order may set forth procedures
acceptable to the Trustee for the issuance of such Securities and determining terms of particular Securities of such series such as interest rate, stated maturity, date of issuance and date from which interest shall accrue.
In authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to TIA Sections 315(a) through 315(d)) shall be fully protected in conclusively relying upon, an Opinion or Opinions of Counsel of the Company stating:
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(a)
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that the form or forms of such Securities and any coupons have been established in conformity with the
provisions of this Indenture;
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(b)
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that the terms of such Securities and any coupons have been established in conformity with the provisions of
this Indenture;
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(c)
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that such Securities, together with any coupons appertaining thereto, when completed by appropriate insertions
and executed and delivered by the Company to the Trustee for authentication in accordance with this Indenture, authenticated and delivered by the Trustee in accordance with this Indenture and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute the legal, valid and binding obligations of the Company, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization and other similar laws
of general applicability relating to or affecting the enforcement of creditors’ rights, to general equitable principles and to such other qualifications as such counsel shall conclude do not materially affect the rights of Holders of such
Securities and any coupons;
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(d)
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that all laws and requirements in respect of the execution and delivery by the Company of such Securities, any
coupons, and of the supplemental indentures, if any, have been complied with and that authentication and delivery of such Securities and any coupons and the execution and delivery of the supplemental indenture, if any, by the Trustee will not
violate the terms of the Indenture;
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(e)
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that the Company has the corporate power to issue such Securities and any coupons and has duly taken all
necessary corporate action with respect to such issuance; and
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(f)
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that the issuance of such Securities and any coupons will not contravene the articles of incorporation or
amalgamation or
by-laws
of the Company, or result in any violation of any of the terms or provisions of any law or regulation.
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Notwithstanding the provisions of Section 3.1and of the preceding two paragraphs, if not all the Securities of any series are to be issued at one time,
it shall not be necessary to deliver the Officers’ Certificate otherwise required pursuant to Section 3.1 or the Company Order and Opinion of Counsel otherwise required pursuant to the preceding two paragraphs prior to or at the time of
issuance of each Security, but such documents shall be delivered prior to or at the time of issuance of the first Security of such series.
The Trustee
shall not be required to authenticate and deliver any such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in
a manner which is not reasonably acceptable to the Trustee.
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Each Registered Security shall be dated the date of its authentication and each Bearer Security shall be
dated as of the date specified as contemplated by Section 3.1.
No Security or coupon endorsed thereon shall entitle the Holder to any benefit under
this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein duly executed by the Trustee by manual signature of an authorized signatory,
and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture. Notwithstanding the foregoing, if
any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 3.1 together with a written
statement (which need not comply with Section 1.2 and need not be accompanied by an Opinion of Counsel) stating that such Security has never been issued and sold by the Company, for all purposes of this Indenture such Security shall be deemed
never to have been authenticated and delivered hereunder and shall never entitle the Holder to the benefits of this Indenture.
Section 3.4 Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company may execute, and upon receipt of a Company Order, the Trustee shall authenticate
and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued, in
registered form or, if authorized, in bearer form with one or more coupons or without coupons and in all cases with such appropriate insertions, omissions, substitutions and other variations as the officers of the Company, executing such Securities
may determine, as conclusively evidenced by their execution of such Securities. Such temporary Securities may be in global form.
Except in the case of
temporary Securities in global form (which shall be exchanged in accordance with the provisions of the following paragraphs), if temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be
prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of
such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series (accompanied by any unmatured coupons
appertaining thereto), the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of the same series of authorized denominations and of like tenor and evidencing the
same Indebtedness; provided, however, that no definitive Bearer Security shall be delivered in exchange for a temporary Registered Security; and provided further that a definitive Bearer Security shall be delivered in exchange for a temporary Bearer
Security only in compliance with the conditions set forth in Section 3.3. Until so exchanged the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such
series.
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If temporary Securities of any series are issued in global form, any such temporary global Security shall,
unless otherwise provided therein, be delivered to the London, England office of a depositary or common depositary (the “
Common Depositary
”), for the benefit of Euroclear and Clearstream, for credit to the respective accounts of the
beneficial owners of such Securities (or to such other accounts as they may direct).
Without unnecessary delay, but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global Security (the “
Exchange Date
”), the Company shall deliver to the Trustee definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary global Security and evidencing the same Indebtedness, executed by the Company. On or after the Exchange Date, such temporary global Security shall be surrendered by the Common Depositary to the Trustee, as the Company’s
agent for such purpose, to be exchanged, in whole or from time to time in part, for definitive Securities without charge, and the Trustee shall authenticate and deliver, in exchange for each portion of such temporary global Security, an equal
aggregate principal amount of definitive Securities of the same series of authorized denominations and of like tenor and evidencing the same Indebtedness as the portion of such temporary global Security to be exchanged. The definitive Securities to
be delivered in exchange for any such temporary global Security shall be in bearer form, registered form, permanent global bearer form or permanent global registered form, or any combination thereof, as specified as contemplated by Section 3.1,
and, if any combination thereof is so specified, as requested by the beneficial owner thereof; provided, however, that, unless otherwise specified in such temporary global Security, upon such presentation by the Common Depositary, such temporary
global Security is accompanied by a certificate dated the Exchange Date or a subsequent date and signed by Euroclear as to the portion of such temporary global Security held for its account then to be exchanged and a certificate dated the Exchange
Date or a subsequent date and signed by Clearstream as to the portion of such temporary global Security held for its account then to be exchanged, each in the form set forth in Exhibit
B-2
to this Indenture
(or in such other form as may be established pursuant to Section 3.1); and provided further that definitive Bearer Securities shall be delivered in exchange for a portion of a temporary global Security only in compliance with the requirements
of Section 3.3.
Unless otherwise specified in such temporary global Security, the interest of a beneficial owner of Securities of a series in a
temporary global Security shall be exchanged for definitive Securities of the same series and of like tenor and evidencing the same Indebtedness following the Exchange Date when the account holder instructs Euroclear or Clearstream, as the case may
be, to request such exchange on his behalf and delivers to Euroclear or Clearstream, as the case may be, a certificate in the form set forth in Exhibit
B-1
to this Indenture (or in such other form as may be
established pursuant to Section 3.1), dated no earlier than 15 days prior to the Exchange Date, copies of which certificate shall be available from the offices of Euroclear and Clearstream, the Trustee, any Authenticating Agent appointed for
such series of Securities and each Paying Agent. Unless otherwise specified in such temporary global Security, any such exchange shall be made free of charge to the beneficial owners of such temporary global Security, except that a Person receiving
definitive Securities must bear the cost of insurance, postage, transportation and the like in the event that such Person does not take delivery of such definitive Securities in person at the offices of Euroclear or Clearstream. Definitive
Securities in bearer form to be delivered in exchange for any portion of a temporary global Security shall be delivered only outside the United States and Canada.
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Until exchanged in full as hereinabove provided, the temporary Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as definitive Securities of the same series and of like tenor and evidencing the same Indebtedness authenticated and delivered hereunder, except that, unless otherwise specified as
contemplated by Section 3.1, interest payable on a temporary global Security on an Interest Payment Date for Securities of such series occurring prior to the applicable Exchange Date shall be payable to Euroclear and Clearstream on such
Interest Payment Date upon delivery by Euroclear and Clearstream to the Trustee of a certificate or certificates in the form set forth in Exhibit
B-2
to this Indenture (or in such other form as may be
established pursuant to Section 3.1), for credit without further interest thereon on or after such Interest Payment Date to the respective accounts of the Persons who are the beneficial owners of such temporary global Security on such Interest
Payment Date and who have each delivered to Euroclear or Clearstream, as the case may be, a certificate dated no earlier than 15 days prior to the Interest Payment Date occurring prior to such Exchange Date in the form set forth in Exhibit
B-1
to this Indenture (or in such other form as may be established pursuant to Section 3.1). Notwithstanding anything to the contrary herein contained, the certifications made pursuant to this paragraph shall
satisfy the certification requirements of the preceding two paragraphs of this Section and of the third paragraph of Section 3.3 of this Indenture and the interests of the Persons who are the beneficial owners of the temporary global Security
with respect to which such certification was made will be exchanged for definitive Securities of the same series and of like tenor and evidencing the same Indebtedness on the Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as otherwise provided in this paragraph, no payments of principal (or premium, if any) or interest, if any, owing with respect to a beneficial interest in a temporary
global Security will be made unless and until such interest in such temporary global Security shall have been exchanged for an interest in a definitive Security. Any interest so received by Euroclear and Clearstream and not paid as herein provided
shall be returned to the Trustee no later than one month prior to the expiration of two years after such Interest Payment Date in order to be repaid to the Company in accordance with Section 10.3.
Section 3.5 Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the Trustee or other Security Registrar office if specified pursuant to section 3.1 (9) a
register for each series of Securities issued by the Company (the registers maintained in the Corporate Trust Office of the Trustee or other Security Registrar office if specified pursuant to section 3.1 (9) and in any other office or agency of the
Company in a Place of Payment being herein sometimes collectively referred to as the “
Security Register
”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of
Registered Securities and of transfers of Registered Securities. The Security Register shall be in written form or any other form capable of being converted into written form within a reasonable time. At all reasonable times, the Security Register
shall be open to inspection by the Trustee. The Trustee is hereby initially appointed as security registrar (the “
Security Registrar
”) unless another Security Registrar is selected for a particular series for the purpose of
registering Registered Securities and transfers of Registered Securities as herein provided. The Company shall have the right to remove and replace from time to time the Security Registrar for any series of Securities; provided, however, that no
such removal or replacement shall be effective until a successor Security Registrar with respect to such series of Registered Securities shall have been appointed by the Company and shall have accepted such appointment by the Company. In the event
that the Trustee shall not be or shall cease to be the Security Registrar with respect to a series of Securities, it shall have the right to examine the Security Register for such series at all reasonable times. There shall be only one Security
Register for each series of Securities.
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Upon surrender for registration of transfer of any Registered Security of any series at the office or agency
in a Place of Payment for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee, one or more replacement Registered Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor and evidencing the same Indebtedness.
At the option of the Holder, Registered Securities
of any series may be exchanged for other replacement Registered Securities of the same series, of any authorized denomination and of a like aggregate principal amount and tenor and evidencing the same Indebtedness, upon surrender of the Registered
Securities to be exchanged at such office or agency. Whenever any Registered Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Registered Securities, which the Holder making
the exchange is entitled to receive. Unless otherwise specified with respect to any series of Securities as contemplated by Section 3.1, Bearer Securities may not be issued in exchange for Registered Securities.
If (but only if) expressly permitted in or pursuant to the applicable Board Resolution and (subject to Section 3.3) set forth in the applicable
Officers’ Certificate, or in any indenture supplemental hereto, delivered as contemplated by Section 3.1, at the option of the Holder, Bearer Securities of any series may be exchanged for Registered Securities of the same series of any
authorized denomination and of a like aggregate principal amount and tenor, upon surrender of the Bearer Securities to be exchanged at any such office or agency, with all unmatured coupons and all matured coupons in default thereto appertaining. If
the Holder of a Bearer Security is unable to produce any such unmatured coupon or coupons or matured coupon or coupons in default, any such permitted exchange may be effected if the Bearer Securities are accompanied by payment in funds acceptable to
the Company in an amount equal to the face amount of such missing coupon or coupons, or the surrender of such missing coupon or coupons may be waived by the Company and the Trustee if there is furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Security shall surrender to any Paying Agent any such missing coupon in respect of which such a payment shall have been made, such Holder shall be entitled
to receive the amount of such payment; provided, however, that, except as otherwise provided in Section 9.2, interest represented by coupons shall be payable only upon presentation and surrender of those coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case a Bearer Security of any series is surrendered at any such office or agency in a permitted exchange for a Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the opening of business at such office or agency on the relevant Interest Payment Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest, such Bearer Security shall be surrendered without the coupon relating to such Interest Payment Date or proposed date for payment, as the case may be, and interest or
Defaulted Interest, as the case may be, will not be payable on such Interest Payment Date or proposed date for payment, as the case may be, in respect of the Registered Security issued in exchange for such Bearer Security, but will be payable only
to the Holder of such coupon when due in accordance with the provisions of this Indenture.
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Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver the Securities which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise
specified as contemplated by Section 3.1, any permanent global Security shall be exchangeable only as provided in this paragraph and the two following paragraphs. If any beneficial owner of an interest in a permanent global Security is entitled
to exchange such interest for Securities of such series and of like tenor and principal amount of another authorized form and denomination, as specified as contemplated by Section 3.1 and provided that any applicable notice provided in the
permanent global Security shall have been given, then without unnecessary delay but in any event not later than the earliest date on which such interest may be so exchanged, the Company shall deliver to the Trustee definitive Securities in aggregate
principal amount equal to the principal amount of such beneficial owner’s interest in such permanent global Security, executed by the Company. On or after the earliest date on which such interests may be so exchanged, such permanent global
Security shall be surrendered by the Depositary for such permanent global Security to the Trustee, as the Company’s agent for such purpose, to be exchanged, in whole or from time to time in part, for definitive Securities without charge, and
the Trustee shall authenticate and deliver, in exchange for each portion of such permanent global Security, an equal aggregate principal amount of definitive Securities of the same series of authorized denominations and of like tenor and evidencing
the same Indebtedness as the portion of such permanent global Security to be exchanged which, unless the Securities of the series are not issuable both as Bearer Securities and as Registered Securities, as specified as contemplated by
Section 3.1, shall be in the form of Bearer Securities or Registered Securities, or any combination thereof, as shall be specified by the beneficial owner thereof; provided, however, that no Bearer Security delivered in exchange for a portion
of a permanent global Security shall be mailed or otherwise delivered to any location in the United States or Canada. If a Registered Security is issued in exchange for any portion of a permanent global Security after the close of business at the
office or agency where such exchange occurs on (i) any Regular Record Date and before the opening of business at such office or agency on the relevant Interest Payment Date, or (ii) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment of Defaulted Interest, then (in the case of clause (i)) interest or (in the case of clause (ii)) Defaulted Interest, as the case may be, will not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of such Registered Security, but will be payable on such Interest Payment Date or proposed date for payment, as the case may be, only to the Person who was the Holder of such
permanent global Security at the close of business on the relevant Regular Record Date or Special Record Date, as the case may be.
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If at any time the Depositary for Securities of a series notifies the Company that it is unwilling or unable
to continue as Depositary for Securities of such series or if at any time the Depositary for global Securities for such series shall no longer be a clearing agency registered as such under the Securities Exchange Act of 1934, as amended, the Company
shall appoint a successor depositary with respect to the Securities for such series. If a successor to the Depositary for Securities is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such
condition, as the case may be, the Company’s election pursuant to Section 3.1 shall no longer be effective with respect to the Securities for such series and the Company will execute, and the Trustee, upon receipt of a Company Order for
the authentication and delivery of definitive Securities of such series, will authenticate and deliver replacement Securities of such series in definitive registered form, in authorized denominations and in an aggregate principal amount equal to the
principal amount of the global Security or Securities representing such series and evidencing the same Indebtedness in exchange for such global Security or Securities. The provisions of the last sentence of the immediately preceding paragraph shall
be applicable to any exchange pursuant to this paragraph.
The Company may at any time and in its sole discretion determine that the Securities of any
series issued in the form of one or more global Securities shall no longer be represented by such global Security or Securities. In such event, the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and
delivery of definitive Securities of such series, will authenticate and deliver replacement Securities of such series in definitive registered form, in authorized denominations and in an aggregate principal amount equal to the principal amount of
the global Security or Securities representing such series and evidencing the same Indebtedness in exchange for such global Security or Securities. The provisions of the last sentence of the second preceding paragraph shall be applicable to any
exchange pursuant to this paragraph.
Upon the exchange of a global Security for Securities in definitive registered form, such global Security shall be
cancelled by the Trustee. Securities issued in exchange for a global Security pursuant to this Section shall be registered in such names and in such authorized denominations as the Depositary for such global Security, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee in writing. The Trustee shall deliver such Securities to the Persons in whose names such Securities are so registered.
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
entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.
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Every Registered 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.
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 3.4, 8.6, 10.7 or 12.5 not involving any
transfer.
The Company shall not be required (i) to issue, register the transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the selection for redemption of Securities of that series under Section 10.3 or 11.3 and ending at the close of business on (A) if Securities of the series are issuable only as Registered
Securities, the day of the mailing of the relevant notice of redemption and (B) if Securities of the series are issuable as Bearer Securities, the day of the first publication of the relevant notice of redemption or, if Securities of the series
are also issuable as Registered Securities and there is no publication, the mailing of the relevant notice of redemption; (ii) to register the transfer of or exchange any Registered Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part; (iii) to exchange any Bearer Security so selected for redemption except that such a Bearer Security may be exchanged for a Registered Security of that series and like tenor;
provided that such Registered Security shall be simultaneously surrendered for redemption; or (iv) to issue, register the transfer of or exchange any Security which has been surrendered for repayment at the option of the Holder, except the
portion, if any, of such Security not to be so repaid.
Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated coupon appertaining to it is surrendered to the Trustee, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a replacement Security of the same series and of like tenor and principal amount and evidencing the same Indebtedness, with coupons corresponding to the coupons, if any, appertaining to the
surrendered Security; provided, however, that any Bearer Security or any coupon shall be delivered only outside the United States and Canada; and provided, further, that all Bearer Securities shall be delivered and received in person.
If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security or coupon
and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security or coupon has been acquired by a bona
fide purchaser, the Company shall execute and upon Company Order the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security or in exchange for the Security for which a destroyed, lost or stolen coupon
appertains (with all appurtenant coupons not destroyed, lost or stolen), a replacement Security of the same series and of like tenor and principal amount and evidencing the same Indebtedness and, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to which such destroyed, lost or stolen coupon appertains; provided, however, that any Bearer Security or any coupon shall be delivered only outside the United States and
Canada; and provided, further, that all Bearer Securities shall be delivered and received in person.
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Notwithstanding the provisions of the previous two paragraphs, in case any such mutilated, destroyed, lost
or stolen Security or coupon has become or is about to become due and payable, the Company in its discretion may, instead of issuing a replacement Security, with coupons corresponding to the coupons, if any, appertaining to such mutilated,
destroyed, lost or stolen Security or to the Security to which such mutilated, destroyed, lost or stolen coupon appertains, pay such Security or coupon; provided, however, that payment of principal of (and premium, if any) and interest, if any, on
Bearer Securities shall, except as otherwise provided in Section 9.2, be payable only at an office or agency located outside the United States and Canada and, unless otherwise specified as contemplated by Section 3.1, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the coupons appertaining thereto.
Upon the issuance of any replacement
Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee)
connected therewith.
Every replacement Security of any series with its coupons, if any, issued pursuant to this Section in lieu of any mutilated,
destroyed, lost or stolen Security or in exchange for a Security to which a mutilated, destroyed, lost or stolen coupon appertains, shall constitute a contractual obligation of the Company, whether or not the mutilated, destroyed, lost or stolen
Security and its coupons, if any, or the mutilated, destroyed, lost or stolen coupon shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other
Securities of that series and their coupons, if any, duly issued hereunder.
The provisions of this Section, as amended or supplemented pursuant to
Section 3.1 of this Indenture with respect to particular securities or generally, 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 or coupons.
Section 3.7 Payment of Principal and Interest; Interest Rights Preserved; Optional Interest
Reset.
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(a)
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Unless otherwise provided as contemplated by Section 3.1 with respect to any series of Securities,
interest, if any, on any Registered 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 such Security (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest at the office or agency of the Company maintained for such purpose pursuant to Section 9.2; provided, however, that each installment of interest, if any, on any Registered
Security may at the Company’s option be paid by (i) mailing a check for such interest, payable to or upon the written order of the Person entitled thereto pursuant to Section 3.9, to the address of such Person as it appears on the
Security Register or (ii) wire transfer to an account located in the United States maintained by the Person entitled to such payment as specified in the Security Register. Principal paid in relation to any Security at Maturity shall be paid to
the Holder of such Security only upon presentation and surrender of such Security to any office or agency referred to in this Section 3.7(a).
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Unless otherwise provided as contemplated by Section 3.1 with respect to the Securities of any series,
payment of interest, if any, may be made, in the case of a Bearer Security, by transfer to an account located outside the United States and Canada maintained by the payee, upon presentation and surrender of the coupons appertaining thereto.
If so provided pursuant to Section 3.1 with respect to the Securities of any series, every permanent global Security of such series will provide
that interest, if any, payable on any Interest Payment Date will be paid to each of Euroclear, Clearstream and/or Depository Trust Company, as applicable, with respect to that portion of such permanent global Security held for its account by the
Common Depositary, for the purpose of permitting each of Euroclear and Clearstream to credit the interest, if any, received by it in respect of such permanent global Security to the accounts of the beneficial owners thereof.
Any interest on any Registered Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date 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 and, if applicable, interest on such defaulted interest (to the extent lawful) at the rate specified in
the Securities of such series (such defaulted interest and, if applicable, interest thereon herein collectively called “
Defaulted Interest
”) shall be paid by the Company, at its election in each case, as provided in clause (1)
or (2) below:
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(1)
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The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Registered
Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Registered Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money
in the Currency in which the Securities of such series are payable (except as otherwise specified pursuant to Section 3.1 for the Securities of such series) 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 on or 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. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, 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 given in the manner provided in Section 1.6, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so given, such Defaulted Interest shall be paid to the Persons in whose name the Registered Securities of such series (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).
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(2)
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The Company may make payment of any Defaulted Interest on the Registered Securities of any series in any other
lawful manner not inconsistent with the requirements of any securities exchange on which such 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.
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(b)
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The provisions of this Section 3.7(2)(b) may be made applicable to any series of Securities pursuant to
Section 3.1 (with such modifications, additions or substitutions as may be specified pursuant to such Section 3.1). The interest rate (or the spread or spread multiplier used to calculate such interest rate, if applicable) on any Security
of such series may be reset by the Company on the date or dates specified on the face of such Security (each an “
Optional Reset Date
”). The Company may exercise such option with respect to such Security by notifying the Trustee of
such exercise at least 50 but not more than 60 days prior to an Optional Reset Date for such Security, which notice shall specify the information to be included in the Reset Notice (as defined). Not later than 40 days prior to each Optional Reset
Date, the Trustee shall transmit, in the manner provided for in Section 1.6, to the Holder of any such Security a notice (the “
Reset Notice
”) indicating whether the Company has elected to reset the interest rate (or the spread
or spread multiplier used to calculate such interest rate, if applicable), and if so (i) such new interest rate (or such new spread or spread multiplier, if applicable) and (ii) the provisions, if any, for redemption during the period from
such Optional Reset Date to the next Optional Reset Date or if there is no such next Optional Reset Date, to the Stated Maturity of such Security (each such period a “
Subsequent Interest Period
”), including the date or dates on
which or the period or periods during which and the price or prices at which such redemption may occur during the Subsequent Interest Period.
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Notwithstanding the foregoing, not later than 20 days prior to the Optional Reset Date, the Company may, at its option, revoke the interest rate (or the
spread or spread multiplier used to calculate such interest rate, if applicable) provided for in the Reset Notice and establish an interest rate (or a spread or spread multiplier used to calculate such interest rate, if applicable) that is higher
than the interest rate (or the spread or spread multiplier, if applicable) provided for in the Reset Notice, for the Subsequent Interest Period by causing the Trustee to transmit, in the manner provided for in Section 1.6, notice of such higher
interest rate (or such higher spread or spread multiplier, if applicable) to the Holder of such Security. Such notice shall be irrevocable. All Securities with respect to which the interest rate (or the spread or spread multiplier used to
calculate such interest rate, if applicable) is reset on an Optional Reset Date, and with respect to which the Holders of such Securities have not tendered such Securities for repayment (or have validly revoked any such tender) pursuant to the next
succeeding paragraph, will bear such higher interest rate (or such higher spread or spread multiplier, if applicable).
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The Holder of any such Security will have the option to elect repayment by the Company of the principal of
such Security on each Optional Reset Date at a price equal to the principal amount thereof plus interest accrued to such Optional Reset Date. In order to obtain repayment on an Optional Reset Date, the Holder must follow the procedures set forth in
Article 12 for repayment at the option of Holders except that the period for delivery or notification to the Trustee shall be at least 25 but not more than 35 days prior to such Optional Reset Date and except that, if the Holder has tendered
any Security for repayment pursuant to the Reset Notice, the Holder may, by written notice to the Trustee, revoke such tender or repayment until the close of business on the tenth day before such Optional Reset Date.
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(c)
|
Subject to the foregoing provisions of this Section and Section 3.5, each Security delivered under this
Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.
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Section 3.8 Optional Extension of Stated Maturity.
The provisions of this Section 3.8 may be made applicable to any series of Securities pursuant to Section 3.1 (with such modifications, additions or
substitutions as may be specified pursuant to such Section 3.1). The Stated Maturity of any Security of such series may be extended at the option of the Company for the period or periods specified on the face of such Security (each an
“
Extension Period
”) up to but not beyond the date (the “
Final Maturity
”) set forth on the face of such Security. The Company may exercise such option with respect to any Security by notifying the Trustee and the
Paying Agent in writing of such exercise at least 50 but not more than 60 calendar days prior to the Stated Maturity of such Security in effect prior to the exercise of such option (the “
Original Stated Maturity
”). If the
Company exercises such option, the Trustee or the Paying Agent (if the Paying Agent is different than the Trustee) shall transmit at the expense of the Issuer, in the manner provided for in Section 1.6, to the Holder of such Security not later
than 40 calendar days prior to the Original Stated Maturity a notice (the “
Extension Notice
”) indicating (i) the election of the Company to extend the Stated Maturity, (ii) the new Stated Maturity, (iii) the interest
rate, if any, applicable to the Extension Period and (iv) the provisions, if any, for redemption during such Extension Period. Upon the Trustee’s or Paying Agent’s transmittal of the Extension Notice, the Stated Maturity of such
Security shall be extended automatically and, except as modified by the Extension Notice and as described in the next paragraph, such Security will have the same terms as prior to the transmittal of such Extension Notice.
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Notwithstanding the foregoing, not later than 20 calendar days before the Original Stated Maturity of such
Security, the Company may, at its option, revoke the interest rate provided for in the Extension Notice and establish a higher interest rate for the Extension Period by causing the Trustee or Paying Agent to transmit at the expense of the Issuer, in
the manner provided for in Section 1.6, notice of such higher interest rate to the Holder of such Security. Such notice shall be irrevocable. All Securities with respect to which the Stated Maturity is extended will bear such higher interest
rate.
If the Company extends the Maturity of any Security, the Holder will have the option to elect repayment of such Security by the Company on the
Original Stated Maturity at a price equal to the principal amount thereof, plus interest accrued to such date. In order to obtain repayment on the Original Stated Maturity once the Company has extended the Maturity thereof, the Holder must follow
the procedures set forth in Article 12 for repayment at the option of Holders, except that the period for delivery or notification to the Trustee and Paying Agent shall be at least 25 but not more than 35 calendar days prior to the Original
Stated Maturity and except that, if the Holder has tendered any Security for repayment pursuant to an Extension Notice, the Holder may by written notice to the Trustee and Paying Agent revoke such tender for repayment until the close of business on
the tenth calendar day before the Original Stated Maturity.
Section 3.9 Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of transfer, the Company, the Trustee and any agent of any of the foregoing may treat the
Person in whose name such Registered Security is registered as the owner of such Registered Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 3.5 and 3.7) interest, if any, on such
Security and for all other purposes whatsoever, whether or not such Security be overdue, and none of the Company, the Trustee or any agent of any of the foregoing shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto shall pass by delivery. The Company, the Trustee and any agent of any of the foregoing may
treat the bearer of any Bearer Security and the bearer of any coupon as the absolute owner of such Security or coupon for the purpose of receiving payment thereof or on account thereof and for all other purposes whatsoever, whether or not such
Security or coupons be overdue, and the Company, the Trustee or any agent of any of the foregoing shall be affected by notice to the contrary.
The
Depositary for Securities may be treated by the Company, the Trustee, and any agent of the Company or the Trustee as the owner of such global Security for all purposes whatsoever. None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Security in global form or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
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Notwithstanding the foregoing, with respect to any global Security, nothing herein shall prevent the
Company, the Trustee, or any agent of any of the foregoing from giving effect to any written certification, proxy or other authorization furnished by any depositary, as a Holder, with respect to such global Security or impair, as between such
depositary and owners of beneficial interests in such global Security, the operation of customary practices governing the exercise of the rights of such depositary (or its nominee) as Holder of such global Security.
Section 3.10 Cancellation.
All Securities and coupons surrendered for payment, redemption, repayment at the option of the Holder, registration of transfer or exchange or for credit
against any current or future sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee. All Securities and coupons so delivered to the Trustee shall be promptly cancelled by it. The Company may at
any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the
Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled by the Trustee. If the Company shall so acquire any of the Securities,
however, such acquisition shall not operate as a redemption or satisfaction of the Indebtedness represented by such Securities unless and until the same are surrendered to the Trustee for cancellation. No Securities shall be authenticated in lieu of
or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of by the Trustee in accordance with its customary procedures
and certification of their disposal delivered to the Company unless by Company Order the Company shall direct that cancelled Securities be returned to it.
Section 3.11 Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 with respect to any Securities, interest, if any, on the Securities of each series shall be
computed on the basis of a
360-day
year of twelve
30-day
months and, for a partial month, on the basis of the number of days actually elapsed in a
30-day
month. For the purposes of disclosure under the Interest Act (Canada), the yearly rate of interest to which interest calculated under a Security for any period in any calendar year (the “
calculation
period
”) is equivalent, is the rate payable under a Security in respect of the calculation period multiplied by a fraction the numerator of which is the actual number of days in such calendar year and the denominator of which is the actual
number of days in the calculation period.
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ARTICLE 4
SATISFACTION AND DISCHARGE
Section 4.1 Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect with respect to any series of Securities issued by the Company specified in such
Company Request (except as to any surviving rights of the Trustee and surviving rights of registration of transfer or exchange of Securities of such series expressly provided for herein or pursuant hereto, and the rights of Holders of such series of
Securities and any related coupons to receive, solely from the trust fund described in subclause (b) of clause (1) of this Section, payments in respect of the principal of (and premium, if any) and interest, if any, on such Securities
and any related coupons when such payments are due and except as provided in the last paragraph of this Section 4.1) and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge
of this Indenture as to such series when
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(a)
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all Securities of such series theretofore authenticated and delivered and all coupons, if any, appertaining
thereto (other than (i) coupons appertaining to Bearer Securities surrendered for exchange for Registered Securities and maturing after such exchange, whose surrender is not required or has been waived as provided in Section 3.5, (ii)
Securities and coupons of such series which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.6, (iii) coupons appertaining to Securities called for redemption and maturing after the relevant
Redemption Date, whose surrender has been waived as provided in Section 10.6, and (iv) Securities and coupons of such series for whose payment money has theretofore been deposited in trust with the Trustee or any Paying Agent or segregated
and held in trust by the Company and thereafter repaid to the Company, as provided in Section 9.3) have been delivered to the Trustee for cancellation; or
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(b)
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all Securities of such series and, in the case of (i) or (ii) below, any coupons appertaining thereto not
theretofore delivered to the Trustee for cancellation
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(i)
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have become due and payable, or
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(ii)
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will become due and payable at their Stated Maturity within one year, or
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(iii)
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if redeemable at the option of the Company, 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 (i), (ii) or (iii) above, has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust for such purpose an amount in the Currency in which the Securities of such series are payable, sufficient to pay and discharge the entire Indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal (and premium, if any) and interest, if any, 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;
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(2)
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the Company has paid or caused to be paid all other sums payable hereunder by the Company, and
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(3)
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the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating
that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture as to such series have been complied with.
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Notwithstanding the satisfaction and discharge of this Indenture, the provisions of Section 9.5, the obligations of the Company to the Trustee under
Section 6.6, the obligations of the Trustee to any Authenticating Agent under Section 6.11 and, if money shall have been deposited with the Trustee pursuant to subclause (b) of clause (1) of this Section, the provisions of
Sections 1.13, 1.14, 3.4, 3.5, 3.6, 9.2 and 9.3 (and any applicable provisions of Article 10) and the obligations of the Trustee under Section 4.2 shall survive such satisfaction and discharge and remain in full force and effect.
Section 4.2 Application of Trust Money.
Subject to the provisions of the last paragraph of Section 9.3, all money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the coupons and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine,
to the Persons entitled thereto, of the principal (and premium, if any) and interest, if any, for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by
law.
ARTICLE 5
REMEDIES
Section 5.1 Events of Default.
“
Event of Default
”, wherever used herein with respect to Securities of any series, 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),
unless such event is specifically deleted or modified in or pursuant to a supplemental indenture, Board Resolution or Officers’ Certificate establishing the terms of such series pursuant to Section 3.1 of this Indenture:
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(1)
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default in the payment of the principal of (or premium, if any, on) any Security of that series at its
Maturity; or
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(2)
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default in the payment of any interest on any Security of that series, or any related coupon, when such
interest or coupon becomes due and payable, and continuance of such default for a period of 30 days; or
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(3)
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default in the deposit of any sinking fund payment, when the same becomes due by the terms of the Securities of
that series; or
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(4)
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default in the performance, or breach, of any covenant or agreement of the Company in this Indenture in respect
of the Securities of that series (other than a default in the performance or breach of a covenant or agreement which is specifically dealt with elsewhere in this Section), and continuance of such default or breach for a period of 90 days after there
has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of all Outstanding Securities affected thereby, a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or
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(5)
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the Company pursuant to or under or within the meaning of any Bankruptcy Law:
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(i)
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commences a proceeding or makes an application seeking a Bankruptcy Order;
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(ii)
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consents to the making of a Bankruptcy Order or the commencement of any proceeding or application seeking the
making of a Bankruptcy Order against it;
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(iii)
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consents to the appointment of a Custodian of it or for any substantial part of its property;
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(iv)
|
makes a general assignment for the benefit of its creditors or files a proposal or notice of intention to make
a proposal or other scheme of arrangement involving the rescheduling, reorganizing or compromise of its Indebtedness;
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(v)
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files an assignment in bankruptcy; or
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(vi)
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consents to the filing of an assignment in bankruptcy or the appointment of or taking possession by a
Custodian;
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(6)
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a court of competent jurisdiction in any involuntary case or proceeding makes a Bankruptcy Order against the
Company, and such Bankruptcy Order remains unstayed and in effect for 90 consecutive days; or
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(7)
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any other Event of Default provided with respect to Securities of that series.
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Section 5.2 Acceleration of Maturity; Rescission and Annulment.
If an Event of Default described in Section 5.1, other than an Event of Default specified in Section 5.1(6) or 5.1(7), with respect to Securities of
any series at the time Outstanding 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 of that series may, subject to any subordination provisions
thereof, declare the principal amount (or, if the Securities of that series are Original Issue Discount Securities or Indexed Securities, such portion of the principal amount as may be specified in the terms of such series) of all of the Outstanding
Securities of that series and any accrued but unpaid interest thereon to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or
specified portion thereof) and any accrued but unpaid interest thereon shall become immediately due and payable. If an Event of Default specified in Section 5.1(6) or 5.1(7) with respect to Securities of any series at the time Outstanding
occurs and is continuing, then the principal amount of all the Securities shall immediately become and be immediately due and payable without any declaration or other act on the part of the Trustees or any Holder. The Trustee shall have no
obligation to accelerate the Notes if, in the reasonable judgment of the Trustee, acceleration is not in the best interest of the Holders.
At any time
after a declaration of acceleration with respect to Securities of any series (or of all series, as the case may be) has been made, and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter provided
in this Article, the Holders of a majority in principal amount of the Outstanding Securities of such series (or of all series, as the case may be), by written notice to the Company and the Trustee, may rescind and annul such declaration and its
consequences, so long as such rescission and annulment would not conflict with any judgment of a court of competent jurisdiction, if:
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(1)
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the Company has paid or deposited with the Trustee a sum sufficient to pay in the Currency in which the
Securities of such series are payable, all overdue interest, if any, on all Outstanding Securities of that series (or of all series, as the case may be) and any related coupons, (i) all unpaid principal of (and premium, if any, on) all
Outstanding Securities of that series (or of all series, as the case may be) which has become due otherwise than by such declaration of acceleration, and interest on such unpaid principal at the rate or rates prescribed therefor in such Securities,
(ii) to the extent lawful, interest on overdue interest, if any, at the rate or rates prescribed therefor in such Securities, and (iii) 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
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(2)
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all Events of Default with respect to Securities of that series (or of all series, as the case may be), other
than the
non-payment
of amounts of principal of (or premium, if any, on) or interest on Securities of that series (or of all series, as the case may be) which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 5.13.
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No such rescission shall affect any subsequent default or
impair any right consequent thereon.
Section 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if:
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(1)
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default is made in the payment of any installment of interest on any Security or any related coupon when such
interest becomes due and payable and such default continues for a period of 30 days, or
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(2)
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default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity
thereof, then the Company will, upon demand of the Trustee, pay to the Trustee for the benefit of the Holders of such Securities and coupons, the whole amount then due and payable on such Securities and coupons for principal (and premium, if any)
and interest, if any, and interest on any overdue principal (and premium, if any) and to the extent lawful on any overdue interest, at the rate or rates prescribed therefor in such Securities, 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.
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If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name as trustee of an express trust, may, but shall not be
obligated to, institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon such Securities and
collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any series (or of all series, as the case may be) 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 of such series (or of all series, as the case may be) by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.
Section 5.4 Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of 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, premium, if any, or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise, (i) to file a proof of claim for the whole amount of principal (and premium, if any), or such portion of the principal amount of any series of Original Issue Discount Securities or Indexed
Securities as may be specified in the terms of such series, and interest, if any, 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 allowed in such judicial proceeding, and (ii) to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the same;
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.6.
Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 5.5 Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture, the Securities or coupons may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or coupons 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 and coupons in respect of which such judgment has been
recovered.
Section 5.6 Application of Money Collected.
Any money collected by the Trustee pursuant to this Article 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 premium, if any) or interest, if any, upon presentation of the Securities or coupons, or both, as the case may be, and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
First
: To the payment of all amounts due the Trustee under Section 6.6;
Second
: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest, if any, on the
Securities and coupons in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities and coupons for principal (and
premium, if any) and interest, if any, respectively; and
Third
: The balance, if any, to the Person or Persons entitled thereto.
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Section 5.7 Limitation on Suits.
No Holder of any Security of any series or any related coupons shall have any right to institute any proceeding, judicial or otherwise, with respect to this
Indenture or the Securities, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless
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(1)
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such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to
the Securities of that series;
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(2)
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the Holders of not less than 25% in principal amount of the Outstanding Securities of all series affected by
such Event of Default (determined as provided in Section 5.2 and, if more than one series of Securities, as one class), shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
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(3)
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such Holder or Holders have offered to the Trustee reasonable indemnity and/or security against the costs,
expenses and liabilities to be incurred in compliance with such request (which includes the costs of the trustee’s legal counsel);
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(4)
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the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to
institute any such proceeding; and
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(5)
|
no direction inconsistent with such written request has been given to the Trustee during such
60-day
period by the Holders of a majority or more in principal amount of the Outstanding Securities of all series affected by such Event of Default (determined as provided in Section 5.2 and, if more than one
series of Securities, as one class);
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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 Holders of Outstanding Securities of such affected series, or to obtain or to 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 Holders of Outstanding Securities of such affected series. For purposes of
clarity, it is hereby understood and agreed that an Event of Default described in clause (1), (2) or (3) of Section 5.1 with respect to the Securities of any series shall, for purposes of this Section 5.7, be deemed to affect
only such series of Securities.
Section 5.8 Unconditional Right of Holders to Receive Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to
receive payment, as provided herein (including, if applicable, Article 13) and in such Security of the principal of (and premium, if any) and (subject to Section 3.7) interest, if any, on, such Security or payment of such coupon on the
respective Stated Maturities expressed in such Security or coupon (or, in the case of redemption, on the Redemption Date or, in the case of repayment at the option of the Holder as contemplated by Article 12 hereof,
on the Repayment Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.
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Section 5.9 Restoration of Rights and Remedies.
If the Trustee or any Holder 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 and coupons shall be
restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.
Section 5.10 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities or coupons in the last paragraph of
Section 3.6, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders of Securities or coupons 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, to the extent
permitted by law, prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 5.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security or coupon 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 an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may
be deemed expedient, by the Trustee or by the Holders, as the case may be.
Section 5.12 Control by Holders.
The Holders of not less than a majority in principal amount of the Outstanding Securities of all series affected by an Event of Default (determined as
provided in Section 5.2 and, if more than one series of Securities, as one class) 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, with respect to the Outstanding Securities of such affected series, provided in each case
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(1)
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such direction shall not be in conflict with any rule of law or with this Indenture,
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(2)
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the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such
direction, and
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(3)
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the Trustee need not take any action which might in the opinion of the Trustee expose the Trustee to personal
liability or be unduly prejudicial to the Holders of Outstanding Securities of such affected series not joining therein.
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For
purposes of clarity, it is hereby understood and agreed that an Event of Default described in clause (1), (2) or (3) of Section 5.1 with respect to the Securities of any series shall, for purposes of this Section 5.12, be deemed
to affect only such series of Securities.
Section 5.13 Waiver of Past Defaults.
Subject to Section 5.2, the Holders of not less than a majority in principal amount of the Outstanding Securities of all series with respect to which a
Default shall have occurred and be continuing (as one class if more than one series) may on behalf of the Holders of all the Outstanding Securities of such affected series waive any such past Default, and its consequences, except a Default
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(1)
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in respect of the payment of the principal of (or premium, if any) or interest, if any, on any Security or any
related coupon, or
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(2)
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in respect of a covenant or provision which under Article 9 cannot be modified or amended without the consent
of the Holder of each Outstanding Security of such affected series.
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Upon any such waiver, any 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 Event of Default or impair any right consequent thereon. For
purposes of clarity, it is hereby understood and agreed that an Event of Default described in clause (1), (2) or (3) of Section 5.1 with respect to the Securities of any series shall, for purposes of this Section 5.13, be deemed
to affect only such series of Securities.
Section 5.14 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such
law had been enacted.
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Section 5.15 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by its 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 or omitted by it as Trustee, the filing by any party litigant in such suit of any 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 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 for the enforcement of the payment of the principal of (or premium, if any) or interest on any Security on or after the respective Stated Maturities expressed in such Security (or,
in the case of redemption, on or after the Redemption Date or, in the case of repayment at the option of Holders as contemplated by Article 12 hereof, on or after the applicable Repayment Date).
ARTICLE 6
THE
TRUSTEE
Section 6.1 Notice of Defaults.
Within 90 days after the occurrence and continuance of any Default hereunder with respect to the Securities of any series, the Trustee shall transmit in the
manner and to the extent provided in TIA Section 313(c), notice of such default hereunder known to the Trustee, unless such Default shall have been cured or waived; provided, however, that, except in the case of a Default in the payment of the
principal of (or premium, if any) or interest, if any, on any Security of such series or in the payment of any sinking fund installment with respect to Securities of such series, the Trustee shall be protected in withholding such notice if and so
long as it in good faith determines that the withholding of such notice is in the interest of the Holders of Securities of such series and any related coupons; and provided further that in the case of any Default of the character specified in
Section 5.1(4) with respect to Securities of such series, no such notice to Holders shall be given until at least 30 days after the occurrence thereof.
Section 6.2 Certain Rights of Trustee.
Subject to the provisions of TIA Sections 315(a) through 315(d):
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(1)
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the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of Indebtedness or other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
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(2)
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before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of
Counsel, or both. The Trustee will not be liable for any action it takes or omits to take in good faith reliance on such Officer’s Certificate or Opinion of Counsel;
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(3)
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any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request
or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution;
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(4)
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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 gross negligence or willful misconduct on its part, conclusively rely upon an
Officers’ Certificate or Opinion of Counsel;
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(5)
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the Trustee may consult with counsel of its own selection and the 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;
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(6)
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the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture
at the written request or direction of any of the Holders of Securities of any series or any related coupons pursuant to this Indenture, unless such Holders shall have offered to the Trustee security and/or indemnity reasonably satisfactory to
the Trustee against any costs, expenses, losses and liabilities (which includes the costs of the Trustee’s legal counsel) which might be incurred by it in compliance with such request or direction;
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(7)
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the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of Indebtedness or other paper or document, or inquiry as to the performance by the Company of any of its
covenants in this Indenture, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the expense of the Company and shall incur no liability of any kind by reason of such inquiry or investigation;
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(8)
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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;
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(9)
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the Trustee shall not be liable for any action taken, suffered or omitted by it in good faith and believed by
it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;
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(10)
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the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer
of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this
Indenture;
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(11)
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the rights, privileges, protections, immunities and benefits given to the Trustee, including, without
limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder on behalf of the Trustee;
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(12)
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the Trustee may request that the Company deliver an Officers’ Certificate setting forth the names of
individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by any person authorized to sign an Officers’ Certificate, including any person
specified as so authorized in any such certificate previously delivered and not superseded;
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(13)
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In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or
damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action;
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(14)
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The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and
duties hereunder;
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(15)
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In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its
obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its reasonable control, including, without limitation, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God,
and interruptions, loss or malfunction of utilities, third-party communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices to resume
performance as soon as practicable under the circumstances;
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(16)
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The permissive right of the Trustee to take actions permitted by this Indenture shall not be construed as an
obligation or duty to do so; and
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(17)
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The Trustee shall have no duty to monitor, inquire as to or ascertain compliance with the Issuer’s
covenants set forth herein, other than with respect to payments described in Section 9.1.
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The Trustee shall not be required 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 and/or security against such risk or liability is not reasonably assured to it.
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Section 6.3 Trustee Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except for the Trustee’s certificates of authentication, and in any coupons shall be taken
as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities or
coupons, except that the Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate the Securities and perform its obligations hereunder and that the statements made by it in any Statement of Eligibility on
Form
T-1
supplied to the Company are true and accurate, subject to the qualifications set forth therein. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
Section 6.4 May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company or of the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities and coupons and, subject to TIA Sections 310(b) and 311, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
Section 6.5 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 with the Company.
Section 6.6 Compensation and Reimbursement.
The Company agrees:
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(1)
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to pay to the Trustee from time to time such reasonable compensation as the Company and the Trustee shall from
time to time agree in writing, for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);
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(2)
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except as otherwise expressly provided herein, to reimburse the Trustee upon its written request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as shall be determined to have been caused by its own gross negligence or willful misconduct; and
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(3)
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to indemnify the Trustee and its officers, directs, employees and agents for, and to hold it harmless against,
any and all loss, liability, claim, damage or expense, including taxes (other than taxes based on the income of the Trustee) incurred without gross negligence or willful misconduct on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder, including the reasonable
costs and expenses of enforcing this Indenture against the Company (including this Section 6.6).
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The obligations of the Company
under this Section 6.6 to compensate the Trustee, to pay or reimburse the Trustee for expenses, disbursements and advances and to indemnify and hold harmless the Trustee shall constitute additional Indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture and resignation or removal of the Trustee. As security for the performance of such obligations of the Company, the Trustee shall have a claim prior to the Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the payment of principal of (or premium, if any) or interest, if any, on particular Securities or any coupons.
Without prejudice to 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 5.1(5), (6) or (7), the expenses (including reasonable charges and expense of its counsel) of and the compensation for such services are intended to constitute expenses of administration under any
applicable Bankruptcy Law.
The provisions of this Section shall survive the termination of this Indenture and resignation or removal of the Trustee (or
any agent, as applicable).
Section 6.7 Corporate Trustee Required; Eligibility; Conflicting Interests.
The Trustee shall comply with the terms of Section 310(b) of the TIA. There shall be at all times a Trustee hereunder which shall be eligible to act as
Trustee under TIA Section 310(a)(1). If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of Federal, State, territorial or District of Columbia 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.
Section 6.8 Resignation and Removal; Appointment of Successor.
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(a)
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No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article
shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.9.
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(b)
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The Trustee may resign at any time with respect to the Securities of one or more series by giving written
notice thereof to the Company. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor trustee by written instrument, a copy of which shall be delivered to the resigning Trustee and a copy to the successor Trustee.
If the instrument of acceptance by a successor Trustee required by Section 6.9 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
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(c)
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The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of
not less than a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company 30 days prior to the removal’s effectiveness. If the instrument of acceptance by a successor Trustee required
by Section 6.9 shall not have been delivered to the Trustee within 30 days after the giving of such notice of removal, the Trustee being removed may petition, at the expense of the Company, any court of competent jurisdiction for the
appointment of a successor Trustee.
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(1)
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the Trustee shall fail to comply with the provisions of TIA Section 310(b) after written request therefor
by either the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or
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(2)
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the Trustee shall cease to be eligible under Section 6.7 and shall fail to resign after written request
therefor by either the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or
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(3)
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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,
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then, in any such case, (i) either the Company, by a Board Resolution, may remove the Trustee with respect to all Securities or the
Securities of such series, or (ii) subject to TIA Section 315(e), any Holder 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 with respect to all Securities of such series and the appointment of a successor Trustee or Trustees.
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(e)
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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, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being
understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series). If, within
one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee with respect to the Securities of such
series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the
manner hereinafter provided, any Holder who has been a bona fide Holder of a Security of such series 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 with respect to the Securities of such series.
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(f)
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The Company shall give notice of each resignation and each removal of the Trustee with respect to the
Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to the Holders of Securities of such series in the manner provided for in Section 1.6. Each notice shall include the name of the
successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.
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Section 6.9 Acceptance of Appointment by Successor.
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(a)
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In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such
successor Trustee so appointed shall execute, acknowledge and deliver 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.
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(b)
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In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but
not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable
to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees
co-trustees
of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each 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 with respect to the Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such successor Trustee relates. Whenever there is a successor Trustee with respect to one or more (but less than all) series of securities issued pursuant to this Indenture, the terms
“Indenture” and “Securities” shall have the meanings specified in the provisos to the respective definitions of those terms in Section 1.1 which contemplate such situation.
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(c)
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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 rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be.
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(d)
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No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article.
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(e)
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No resigning Trustee shall be responsible or liable for any action or inaction of a successor Trustee.
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Section 6.10 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 the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities. In case any of the Securities shall not have been authenticated by such predecessor Trustee, any successor Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the
successor Trustee. In all such cases such certificates shall have the full force and effect which this Indenture provides for the certificate of authentication of the Trustee; provided, however, that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate Securities in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation.
Section 6.11 Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding, the Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of
Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series and the Trustee shall give written notice of such appointment to all Holders of Securities of the series with respect to which such
Authenticating Agent will serve, in the manner provided for in Section 1.6. Securities so authenticated 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. Any such appointment shall be evidenced by an instrument in writing signed by a Responsible Officer of the Trustee, and a copy of such instrument shall be promptly furnished to the Company. Wherever reference is made in this Indenture to
the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the
United States of America, any state thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent and subject to supervision or examination by federal or state authority. 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 an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and
with the effect specified in this Section.
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Any corporation into which an Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating
Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, 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, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give written notice of such appointment to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve, in the manner provided for in Section 1.6. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers
and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon,
in addition to the Trustee’s certificate of authentication, an alternate certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
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as Trustee
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By:
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as Authenticating Agent
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By:
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Authorized Signatory
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ARTICLE 7
HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND THE COMPANY
Section 7.1 Disclosure of Names and Addresses of Holders.
Every Holder of Securities or coupons, by receiving and holding the same, agrees with the Company and the Trustee that none of the Company or the Trustee or
any agent of any of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with TIA Section 312, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under TIA Section 312(b).
Section 7.2 Reports by Trustee.
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(a)
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Within 60 days after May 15 of each year commencing with the first May 15 after the first issuance of
Securities pursuant to this Indenture, the Trustee shall transmit a brief report by mail to the Holders of Securities, in accordance with and to the extent required by Section 313 of the TIA.
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(b)
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A copy of each such report at the time of its mailing to Holders shall be filed with the Commission and each
stock exchange on which Debt Securities of any series are listed.
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Section 7.3 Reports by the Company.
The Company shall:
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(1)
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file with the Trustee, within 15 days after the Company files the same with the Commission, (i) copies of
the annual reports containing audited financial statements and copies of quarterly reports containing unaudited financial statements and (ii) copies of the information, documents and other reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with or furnish to the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934;
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(2)
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in the event that the Company is not required to remain subject to the reporting requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the Commission, continue
to file with the Commission and provide the Trustee:
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(a)
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within 140 days after the end of each Fiscal Year, annual reports on Form
20-F,
40-F
or Form
10-K,
as applicable (or any successor form), containing audited financial statements and the other financial
information required to be contained therein (or required in such successor form); and
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(b)
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within 60 days after the end of each of the first three fiscal quarters of each Fiscal Year, reports on Form
6-K
or
Form 10-Q
(or any successor form), containing unaudited financial statements and the other financial information which, regardless of applicable requirements
shall, at a minimum, contain such information required to be provided in quarterly reports under the laws of Canada or any province thereof to security holders of a corporation with securities listed on the Toronto Stock Exchange, whether or not the
Company has any of its securities so listed.
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provided, however
, that if the Company is no longer subject to the periodic
reporting requirements of the
Exchange Act
, the Company will not be required to comply with Section 302 or Section 404 of the Sarbanes- Oxley Act of 2002, or related Items 307 and 308 of Regulation
S-K
promulgated by the SEC, or Item 10(e) of Regulation
S-K
(with respect to any
non-
GAAP financial measures contained therein).
Each of such reports will be prepared in accordance with Canadian or United States disclosure requirements, as required by the appropriate form or
report, and Canadian GAAP and/or accounting principles generally accepted in the United States, provided, however, that the Company shall not be so obligated to file such reports with or furnish such reports to the Commission if the Commission does
not permit such reports to be so filed or furnished; and
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(3)
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(transmit to all Holders, in the manner and to the extent provided in and required by TIA Section 313(c),
within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
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Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).
Section 7.4 The Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
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(1)
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semi-annually, not later than 15 days after the Regular Record Date for interest for each series of Securities
if the Trustee is not the Security Registrar for such series, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Registered Securities of such series as of such Regular Record Date, or if there
is no Regular Record Date for interest for such series of Securities, semi-annually, upon such dates as are set forth in the Board Resolution, Officers’ Certificate or indenture supplemental hereto authorizing such series, and
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(2)
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at such other times as the Trustee may 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, provided, however, that so long as the Trustee is the Security Registrar, no such list shall be required to be
furnished.
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ARTICLE 8
SUPPLEMENTAL INDENTURES
Section 8.1 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by or pursuant to a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:
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(1)
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to evidence the succession of another Person to the Company, or successive successions, and the assumption by
such successor of the covenants and obligations of the Company contained in the Securities of one or more series and in this Indenture or any supplemental indenture;
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(2)
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to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities and
any related coupons (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are being included solely for the benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
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(3)
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to add any additional Events of Default (and if such Events of Default are to be for the benefit of less than
all series of Securities, stating that such Events of Default are being included solely for the benefit of such series); or
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(4)
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to add to or change any of the provisions of this Indenture to provide that Bearer Securities may be
registrable as to principal, to change or eliminate any restrictions on the payment of principal of or any premium or interest on Bearer Securities, to permit Bearer Securities to be issued in exchange for Registered Securities, to permit
Bearer Securities to be issued in exchange for Bearer Securities of other authorized denominations or to permit or facilitate the issuance of Securities in uncertificated form, in each case to the extent then permitted under the U.S. Internal
Revenue Code of 1986, as amended, and the U.S. Treasury Regulations thereunder; provided that any such action shall not adversely affect the interests of the Holders of Securities of any series or any related coupons in any material respect; or
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(5)
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to change or eliminate any of the provisions of this Indenture; provided that any such change or elimination
shall become effective only when there is no Security Outstanding of any series created prior to the execution of such supplemental indenture which is entitled to the benefit of such provision; or
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(6)
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to secure the Securities; or
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(7)
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to establish the form or terms of Securities of any series as permitted by Sections 2.1 and 3.1; or
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(8)
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to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the
Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of
Section 6.9(b); or
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(9)
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to cure any ambiguity or to correct or supplement any provision herein which may be defective or inconsistent
with any other provision herein, provided that any such action under this clause (9) shall not adversely affect the interests of the Holders of Securities of any series and any related coupons in any material respect; or
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(10)
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to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or
facilitate the defeasance and discharge of any series of Securities pursuant to Sections 4.1, 13.2 or 13.3; provided that any such action shall not adversely affect the interests of the Holders of Securities of such series and any related coupons or
any other series of Securities in any material respect.
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Section 8.2 Supplemental Indentures with Consent
of Holders.
With the consent of the Holders of not less than a majority in principal amount of all Outstanding Securities of all series affected by
such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by or pursuant to 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 which affect such series of Securities or of modifying in any manner the rights of the Holders of Securities of such series under
this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security of such series,
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(1)
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change the Stated Maturity (except with regard to section 3.8 of this indenture) of the principal of (or
premium, if any) or any installment of interest on any Security of such series, or reduce the principal amount thereof (or premium, if any) or the rate of interest, if any, thereon, or the Redemption Price thereof or any amount payable upon
repayment thereof at the option of the Holder, reduce the amount of the principal of an Original Issue Discount Security of such series that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 5.2 or the amount thereof provable in bankruptcy pursuant to Section 5.4, or adversely affect any right of repayment at the option of any Holder of any Security of such series, or change any Place of Payment where, or the Currency
in which, any Security of such series or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption or repayment at
the option of the Holder, on or after the Redemption Date or Repayment Date, as the case may be), or adversely affect any right to convert or exchange any Security as may be provided pursuant to Section 3.1 herein, or
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(2)
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reduce the percentage in principal amount of the Outstanding Securities of such series required for any such
supplemental indenture, for any waiver of compliance with certain provisions of this Indenture which affect such series or certain defaults applicable to such series hereunder and their consequences provided for in Section 5.13 or
Section 9.8 of this Indenture, or reduce the requirements of Section 14.4 for quorum or voting with respect to Securities of such series, or
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(3)
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modify any of the provisions of this Section, Section 5.13 or Section 9.8, except to increase any
such percentage or to provide that certain other provisions of this Indenture which affect such series cannot be modified or waived without the consent of the Holder of each Outstanding Security of such series.
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Any such supplemental indenture adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture, or modifying in any
manner the rights of the Holders of Securities of such series, shall not affect the rights under this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders 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.
Upon the written request of the Issuer, accompanied by an Officer’s Certificate and
Opinion of Counsel stating that such amendment is authorized or permitted by the Indenture and is
“legally valid, binding and enforceable against the Issuer and the Guarantors
if any and a copy of the Board Resolution, and upon the
filing with the Trustee of evidence of the consent of the Holders as aforesaid, the Trustee shall join with the Issuer in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties
or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.
Section 8.3 Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and shall be fully protected in conclusively relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this
Indenture and is legally valid, binding and enforceable against the Company and the Guarantors. 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.
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Section 8.4 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture
shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.
Section 8.5 Conformity with
Trust Indenture Act
.
Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the
Trust Indenture Act
as then in effect.
Section 8.6 Reference in Securities to Supplemental Indentures.
Securities of any series 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 of any series so modified as to conform, in the opinion of the Trustee and
the Company, 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 of such series.
Section 8.7 Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of Section 8.2, the Company shall
give notice thereof to the Holders of each Outstanding Security affected, in the manner provided for in Section 1.6, setting forth in general terms the substance of such supplemental indenture.
ARTICLE 9
COVENANTS
Section 9.1 Payment of Principal, Premium, if any, and Interest.
The Company covenants and agrees for the benefit of the Holders of each series of Securities and any related coupons that it will duly and punctually pay the
principal of (and premium, if any) and interest, if any, on the Securities of that series in accordance with the terms of the Securities, any coupons appertaining thereto and this Indenture. Unless otherwise specified as contemplated by
Section 3.1 with respect to any series of Securities, any interest installments due on Bearer Securities on or before Maturity shall be payable only upon presentation and surrender of the several coupons for such interest installments as are
evidenced thereby as they severally mature.
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Section 9.2 Maintenance of Office or Agency.
If the Securities of a series are issuable only as Registered Securities, the Company will maintain in each Place of Payment for any series of Securities an
office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange, where Securities of that series that are convertible or
exchangeable may be surrendered for conversion or exchange, as applicable and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served.
If Securities of a series are issuable as Bearer Securities, the Company will maintain (A) in The City of New York, an office or agency where any
Registered Securities of that series may be presented or surrendered for payment, where any Registered Securities of that series may be surrendered for registration of transfer, where Securities of that series may be surrendered for exchange, where
Securities of that series that are convertible or exchangeable may be surrendered for conversion or exchange, as applicable, where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be
served and where Bearer Securities of that series and related coupons may be presented or surrendered for payment in the circumstances described in the second succeeding paragraph (and not otherwise), (B) subject to any laws or regulations
applicable thereto, in a Place of Payment for that series which is located outside the United States and Canada, an office or agency where Securities of that series and related coupons may be presented and surrendered for payment; provided, however,
that, if the Securities of that series are listed on any stock exchange located outside the United States and Canada and such stock exchange shall so require, the Company will maintain a Paying Agent for the Securities of that series in any required
city located outside the United States and Canada so long as the Securities of that series are listed on such exchange, and (C) subject to any laws or regulations applicable thereto, in a Place of Payment for that series located outside the
United States and Canada an office or agency where any Registered Securities of that series may be surrendered for registration of transfer, where Securities of that series may be surrendered for exchange, where Securities of that series that are
convertible and exchangeable may be surrendered for conversion or exchange, as applicable and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served.
The Company will give prompt written notice to the Trustee 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 any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee,
except that Bearer Securities of any series and the related coupons may be presented and surrendered for payment at the offices specified in the Security, and the Company hereby appoints the same as its agents to receive such respective
presentations, surrenders, notices and demands.
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Unless otherwise specified with respect to any Securities pursuant to Section 3.1, no payment of
principal, premium or interest on Bearer Securities shall be made at any office or agency of the Company in the United States or Canada or by check mailed to any address in the United States or Canada or by transfer to an account maintained with a
bank located in the United States or Canada; provided, however, that, if the Securities of a series are payable in Dollars, payment of principal of (and premium, if any) and interest, if any, on any Bearer Security shall be made at the office of the
Company’s Paying Agent in The City of New York, if (but only if) payment in Dollars of the full amount of such principal, premium or interest, as the case may be, at all offices or agencies outside the United States maintained for such purpose
by the Company in accordance with this Indenture is illegal or effectively precluded by exchange controls or other similar restrictions.
The Company may
also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind any such designation; provided, however,
that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in accordance with the requirements set forth above for Securities of any series for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. Unless otherwise specified with respect to any Securities as contemplated by Section 3.1 with
respect to a series of Securities, the Company hereby designates as a Place of Payment for each series of Securities the office or agency of the Trustee in, and initially appoints the Trustee at its Corporate Trust Office as Paying Agent and as its
agent to receive all such presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 3.1, if and so long as the Securities of any series (i) are denominated in a Currency other than Dollars or (ii) may be payable in a Currency other than Dollars, or so long as it is required under any other provision of the
Indenture, then the Company will maintain with respect to each such series of Securities, or as so required, at least one Exchange Rate Agent.
Section 9.3 Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect to any series of Securities and any related coupons, it will, on or before each due
date of the principal of (or premium, if any) or interest, if any, on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum in the Currency in which the Securities of such series
are payable (except as may otherwise be specified pursuant to Section 3.1 for the Securities of such series) sufficient to pay the principal of (or premium, if any) or interest, if any, on Securities of such series so becoming due until such
sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of Securities and any related coupons, it will, prior to or on each due date of the
principal of (or premium, if any) or interest, if any, on any Securities of that series, deposit with a Paying Agent a sum (in the Currency described in the preceding paragraph) sufficient to pay the principal (or premium, if any) or interest, if
any, so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so
to act.
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The Company will cause the bank through which payment of funds to the Paying Agent will be made to deliver
to the Paying Agent by 10:00 a.m. (New York Time) two Business Days prior to the due date of such payment an irrevocable confirmation (by tested telex or authenticated Swift MT 100 Message) of its intention to make such payment.
The Company will cause each Paying Agent (other than the Trustee) for any series of Securities 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)
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hold all sums held by it for the payment of the principal of (and premium, if any) and interest, if any, on
Securities of such series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;
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(2)
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give the Trustee notice of any default by the Company (or any other obligor upon the Securities of such series)
in the making of any payment of principal of (or premium, if any) or interest, if any, on the Securities of such series; and
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(3)
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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 in trust by such Paying Agent.
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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 sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such sums.
Except as provided in the Securities of any series, 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 premium, if any) or interest, if any, on any Security of any series, or any coupon appertaining thereto, and remaining unclaimed for two years (or such shorter period as may be specified under applicable law) after
such principal, premium or interest has become due and payable shall be paid to the Company, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security or coupon 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
Trustee or such Paying Agent, before being required to make any such repayment, shall at the written direction and at the expense of the Company cause to be published once, in an Authorized Newspaper, or cause to be mailed to such Holder or both,
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 or mailing, any unclaimed balance of such money then remaining will be repaid to the Company.
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Section 9.4 Statement as to Compliance.
The Company will deliver to the Trustee, within 120 days after the end of each fiscal year (which as of the date hereof ends on the 31st day of December), a
brief certificate from the principal executive officer, principal financial officer or principal accounting officer as to his or her knowledge of the Company’s compliance with all conditions and covenants under this Indenture and as to any
default in such performance. For purposes of this Section 9.4, such compliance shall be determined without regard to any period of grace or requirement of notice under this Indenture.
Section 9.5 Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (1) all material taxes, assessments and
governmental charges levied or imposed upon the Company or upon the income, profits or property of the Company and (2) all material lawful claims for labor, materials and supplies which, if unpaid, might by law become a Lien upon any property
of the Company; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by
appropriate proceedings.
Section 9.6 Maintenance of Properties.
The Company will cause all its properties 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 except to the extent that the failure to do so would not materially impair the operations of the Company and its Subsidiaries taken as a whole; provided, however, that nothing in this Section shall prevent or
restrict the sale, abandonment or other disposition of any of such properties if such action is, in the judgment of the Company desirable in the conduct of the business of the Company and not disadvantageous in any material respect to the Holders.
Section 9.7 Corporate Existence.
The Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence (corporate or other) and the rights
(charter and statutory) and franchises of the Company; provided, however, that the Company shall not be required to preserve any such right or franchise if the Company shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries as a whole, as the case may be.
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Section 9.8 Waiver of Certain Covenants.
The Company may, with respect to any series of Securities, omit in any particular instance to comply with any term, provision or condition which affects such
series set forth in Sections 9.5 to 9.7, inclusive, or, as specified pursuant to Section 3.1(16) for Securities of such series, in any covenants added to Article 9 pursuant to Section 3.1(16) in connection with Securities of such
series, if before the time for such compliance the Holders of at least a majority in principal amount of all Outstanding Securities of such series, by Act of such Holders, waive such compliance in such instance with such term, provision or
condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee to
Holders of Securities of such series in respect of any such term, provision or condition shall remain in full force and effect.
ARTICLE 10
REDEMPTION OF SECURITIES
Section 10.1 Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with the terms of such Securities and (except as
otherwise specified as contemplated by Section 3.1 for Securities of any series) in accordance with this Article.
Section 10.2 Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by or pursuant to a Board Resolution. In case of any redemption at the election of the
Company, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities of
such series to be redeemed and shall deliver to the Trustee such documentation and records as shall enable the Trustee to select the Securities to be redeemed pursuant to Section 10.3. In the case of any redemption of Securities prior to the
expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers’ Certificate evidencing compliance with such restriction.
Section 10.3 Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to
the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by lot or in such manner as the Trustee shall deem fair and appropriate, in accordance with the procedures of the Depositary,
and which may provide for the selection for redemption of portions of the principal of Securities of such series; provided, however, that no such partial redemption shall reduce the portion of the principal amount of a Security not redeemed to less
than the minimum authorized denomination for Securities of such series established pursuant to Section 3.1.
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The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in
the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of such Security which has been or is to be
redeemed.
Section 10.4 Notice of Redemption.
Except as otherwise specified as contemplated by Section 3.1, notice of redemption shall be given in the manner provided for in Section 1.6 not less
than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed.
All notices of redemption shall state:
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(1)
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The Cusip or ISIN numbers of the Securities,
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(3)
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the Redemption Price and the amount of accrued interest to the Redemption Date payable as provided in
Section 10.6, if any,
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(4)
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if less than all the Outstanding Securities of any series are to be redeemed, the identification (and, in the
case of partial redemption, the principal amounts) of the particular Securities to be redeemed,
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(5)
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in case any Security is to be redeemed in part only, the notice which relates to such Security shall state that
on and after the Redemption Date, upon surrender of such Security, the Holder will receive, without charge, a new Security or Securities of authorized denominations for the principal amount thereof remaining unredeemed,
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(6)
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that on the Redemption Date, the Redemption Price and accrued interest, if any, to the Redemption Date payable
as provided in Section 10.6 will become due and payable upon each such Security, or the portion thereof, to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date,
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(7)
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the Place or Places of Payment where such Securities, together in the case of Bearer Securities with all
coupons appertaining thereto, if any, maturing after the Redemption Date, are to be surrendered for payment of the Redemption Price and accrued interest, if any,
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(8)
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that the redemption is for a sinking fund, if such is the case,
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(9)
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that, unless otherwise specified in such notice, Bearer Securities of any series, if any, surrendered for
redemption must be accompanied by all coupons maturing subsequent to the Redemption Date or the amount of any such missing coupon or coupons will be deducted from the Redemption Price unless security or indemnity satisfactory to the Company,
the Trustee and any Paying Agent is furnished, and
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(10)
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if Bearer Securities of any series are to be redeemed and any Registered Securities of such series are not to
be redeemed, and if such Bearer Securities may be exchanged for Registered Securities not subject to redemption on such Redemption Date pursuant to Section 3.5 or otherwise, the last date, as determined by the Company, on which such exchanges
may be made.
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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 and at the expense of the Company
provided that the Issuer/Company makes such request at least 5 Business Days prior to the date by which such notice of redemption must be given to
holders (unless a shorter notice period shall be satisfactory to the Trustee).
Section 10.5 Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit or cause to be deposited with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in Section 9.3) an amount of money in the Currency in which the Securities of such series are payable (except, if applicable, as otherwise specified pursuant to
Section 3.1 for the Securities of such series) sufficient to pay the Redemption Price of, and accrued interest, if any, on, all the Securities which are to be redeemed on that date.
The Company will cause the bank through which payment of funds to the Trustee or the Paying Agent will be made to deliver to the Trustee or the Paying Agent,
as the case may be, by 10:00 a.m. (New York Time) two Business Days prior to the due date of such payment an irrevocable confirmation (by tested telex or authenticated Swift MT 100 Message) of its intention to make such payment.
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Section 10.6 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 in the Currency in which the Securities of such series are payable (except, if applicable, as otherwise specified pursuant to Section 3.1 for the Securities of such series) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest, if any) such Securities shall, if the same were interest-bearing, cease to bear interest and the coupons
for such interest appertaining to any Bearer Securities so to be redeemed, except to the extent provided below, shall be void. Upon surrender of any such Security for redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be paid by the Company at the Redemption Price, together with accrued interest, if any, to the Redemption Date; provided, however, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be payable only at an office or agency located outside the United States and Canada (except as otherwise provided in Section 9.2) and, unless otherwise specified as
contemplated by Section 3.1, only upon presentation and surrender of coupons for such interest; and provided further that installments of interest on Registered Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant record dates according to their terms and the provisions of Section 3.7.
If any Bearer Security surrendered for redemption shall not be accompanied by all appurtenant coupons maturing after the Redemption Date, such Security may be
paid after deducting from the Redemption Price an amount equal to the face amount of all such missing coupons, or the surrender of such missing coupon or coupons may be waived by the Company and the Trustee if there be furnished to them such
security or indemnity as they may require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Security shall surrender to the Trustee or any Paying Agent any such missing coupon in respect of which a deduction shall
have been made from the Redemption Price, such Holder shall be entitled to receive the amount so deducted; provided, however, that interest represented by coupons shall be payable only at an office or agency located outside the United States and
Canada (except as otherwise provided in Section 9.2) and, unless otherwise specified as contemplated by Section 3.1, only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear
interest from the Redemption Date at the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) set forth in such Security.
Section 10.7 Securities Redeemed in Part.
Any Security which is to be redeemed only in part (pursuant to the provisions of this Article or of Article 11) shall be surrendered at a Place of
Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series, of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.
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ARTICLE 11
SINKING FUNDS
Section 11.1 Applicability of Article.
Retirements of Securities of any series pursuant to any sinking fund shall be made in accordance with the terms of such Securities and (except as otherwise
specified as contemplated by Section 3.1 for Securities of any series) in accordance with this Article.
The minimum amount of any sinking fund
payment provided for by the terms of Securities of any series is herein referred to as a “mandatory sinking fund payment”, and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein
referred to as an “optional sinking fund payment”. If provided for by the terms of Securities of any series, the cash amount of any mandatory sinking fund payment may be subject to reduction as provided in Section 11.2. Each sinking
fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series.
Section 11.2 Satisfaction of Sinking Fund Payments with Securities.
Subject to Section 11.3, in lieu of making all or any part of any mandatory sinking fund payment with respect to any Securities of a series in cash, the
Company may at its option (1) deliver to the Trustee Outstanding Securities of such series (other than any previously called for redemption) theretofore purchased or otherwise acquired by the Company together in the case of any Bearer
Securities of such series with all unmatured coupons appertaining thereto, and/or (2) receive credit for the principal amount of Securities of such series which have been previously redeemed either at the election of the Company pursuant to the
terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any mandatory sinking fund payment with respect to the
Securities of the same series required to be made pursuant to the terms of such Securities as provided for by the terms of such series; provided, however, that such Securities have not been previously so credited. Such Securities shall be received
and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such mandatory sinking fund payment shall be reduced accordingly.
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Section 11.3 Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officers’
Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash in the Currency in which the Securities of
such series are payable (except, if applicable, as otherwise specified pursuant to Section 3.1 for the Securities of such series) and the portion thereof, if any, which is to be satisfied by delivering or crediting Securities of that series
pursuant to Section 11.2 (which Securities will, if not previously delivered, accompany such certificate) and whether the Company intends to exercise its right to make a permitted optional sinking fund payment with respect to such series. Such
certificate shall be irrevocable and upon its delivery the Company shall be obligated to make the cash payment or payments therein referred to, if any, on or before the next succeeding sinking fund payment date. In the case of the failure of the
Company to deliver such certificate, the sinking fund payment due on the next succeeding sinking fund payment date for that series shall be paid entirely in cash and shall be sufficient to redeem the principal amount of such Securities subject to a
mandatory sinking fund payment without the option to deliver or credit Securities as provided in Section 11.2 and without the right to make any optional sinking fund payment, if any, with respect to such series.
Not more than 60 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in
the manner specified in Section 10.3 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 10.4. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections 10.6 and 10.7.
Prior to any sinking fund payment date, the Company
shall pay to the Trustee or a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 9.3) in cash a sum equal to any interest that will accrue to the date fixed for redemption of
Securities or portions thereof to be redeemed on such sinking fund payment date pursuant to this Section 11.3.
The Company will cause the bank
through which payment of funds to the Trustee or the Paying Agent will be made to deliver to the Trustee or the Paying Agent, as the case may be, by 10:00 a.m. (New York Time) two Business Days prior to the due date of such payment an irrevocable
confirmation (by tested telex or authenticated Swift MT 100 Message) of its intention to make such payment.
Notwithstanding the foregoing, with respect
to a sinking fund for any series of Securities, if at any time the amount of cash to be paid into such sinking fund on the next succeeding sinking fund payment date, together with any unused balance of any preceding sinking fund payment or payments
for such series, does not exceed in the aggregate $100,000, the Trustee, unless requested by the Company, shall not give the next succeeding notice of the redemption of Securities of such series through the operation of the sinking fund. Any such
unused balance of moneys deposited in such sinking fund shall be added to the sinking fund payment for such series to be made in cash on the next succeeding sinking fund payment date or, at the request of the Company, shall be applied at any time or
from time to time to the purchase of Securities of such series, by public or private purchase, in the open market or otherwise, at a purchase price for such Securities (excluding accrued interest and brokerage commissions, for which the Trustee or
any Paying Agent will be reimbursed by the Company) not in excess of the principal amount thereof.
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ARTICLE 12
REPAYMENT AT OPTION OF HOLDERS
Section 12.1 Applicability of Article.
Repayment of Securities of any series before their Stated Maturity at the option of Holders thereof shall be made in accordance with the terms of such
Securities and (except as otherwise specified as contemplated by Section 3.1 for Securities of any series) in accordance with this Article.
Section 12.2 Repayment of Securities.
Securities of any series subject to repayment in whole or in part at the option of the Holders thereof will, unless otherwise provided in the terms of such
Securities, be repaid at a price equal to the principal amount thereof, together with interest, if any, thereon accrued to the Repayment Date specified in or pursuant to the terms of such Securities. The Company covenants that, with respect to
Securities issued by the Company, on or before the Repayment Date it will deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 9.3) an amount
of money in the Currency in which the Securities of such series are payable (except, if applicable, as otherwise specified pursuant to Section 3.1 for the Securities of such series) sufficient to pay the principal (or, if so provided by the
terms of the Securities of any series, a percentage of the principal) of and (except if the Repayment Date shall be an Interest Payment Date) accrued interest, if any, on, all the Securities or portions thereof, as the case may be, to be repaid on
such date.
Section 12.3 Exercise of Option.
Securities of any series subject to repayment at the option of the Holders thereof will contain an “Option to Elect Repayment” form on the reverse
of such Securities. To be repaid at the option of the Holder, any Security so providing for such repayment, with the “Option to Elect Repayment” form on the reverse of such Security duly completed by the Holder (or by the Holder’s
attorney duly authorized in writing), must be received by the Company at the Place of Payment therefor specified in the terms of such Security (or at such other place or places or which the Company shall from time to time notify the Holders of such
Securities) not earlier than 45 calendar days nor later than 30 calendar days prior to the Repayment Date. If less than the entire principal amount of such Security is to be repaid in accordance with the terms of such Security, the principal amount
of such Security to be repaid, in increments of the minimum denomination for Securities of such series, and the denomination or denominations of the Security or Securities to be issued to the Holder for the portion of the principal amount of such
Security surrendered that is not to be repaid, must be specified. The principal amount of any Security providing for repayment at the option of the Holder thereof may not be repaid in part if, following such repayment, the unpaid principal amount of
such Security would be less than the minimum authorized denomination of Securities of the series of which such Security to be repaid is a part. Except as otherwise may be provided by the terms of any Security providing for repayment at the option of
the Holder thereof, exercise of the repayment option by the Holder shall be irrevocable unless waived by the Company.
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Section 12.4 When Securities Presented for Repayment Become Due and Payable.
If Securities of any series providing for repayment at the option of the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or the portions thereof, as the case may be, to be repaid shall become due and payable and shall be paid by the Company on the Repayment Date therein specified, and on and
after such Repayment Date (unless the Company shall default in the payment of such Securities on such Repayment Date together with, if applicable, accrued interest, if any, thereon to the Repayment Date) such Securities shall, if the same were
interest-bearing, cease to bear interest and the coupons for such interest appertaining to any Bearer Securities so to be repaid, except to the extent provided below, shall be void. Upon surrender of any such Security for repayment in accordance
with such provisions, together with all coupons, if any, appertaining thereto maturing after the Repayment Date, the principal amount of such Security so to be repaid shall be paid by the Company, together with accrued interest, if any, to the
Repayment Date; provided, however, that coupons whose Stated Maturity is on or prior to the Repayment Date shall be payable only at an office or agency located outside the United States and Canada (except as otherwise provided in Section 9.2)
and, unless otherwise specified pursuant to Section 3.1, only upon presentation and surrender of such coupons; and provided further that, in the case of Registered Securities, installments of interest, if any, whose Stated Maturity is on or
prior to the Repayment Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of
Section 3.7.
If any Bearer Security surrendered for repayment shall not be accompanied by all appurtenant coupons maturing after the Repayment Date,
such Security may be paid after deducting from the amount payable therefor as provided in Section 12.2 an amount equal to the face amount of all such missing coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there be furnished to them such security or indemnity as they may require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Security shall surrender to the Trustee or any Paying Agent any
such missing coupon in respect of which a deduction shall have been made as provided in the preceding sentence, such Holder shall be entitled to receive the amount so deducted; provided, however, that interest represented by coupons shall be payable
only at an office or agency located outside the United States and Canada (except as otherwise provided in Section 9.2) and, unless otherwise specified as contemplated by Section 3.1, only upon presentation and surrender of those coupons.
If the principal amount of any Security surrendered for repayment shall not be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid, bear interest from the Repayment Date at the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) set forth in such Security.
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Section 12.5 Securities Repaid in Part.
Upon surrender of any Registered Security which is to be repaid in part only, the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge and at the expense of the Company, a new Registered Security or Securities of the same series each, of any authorized denomination specified by the Holder, in an aggregate principal amount equal to and
in exchange for the portion of the principal of such Security so surrendered which is not to be repaid.
ARTICLE 13
DEFEASANCE AND COVENANT DEFEASANCE
Section 13.1 Option to Effect Defeasance or Covenant Defeasance.
Except as otherwise specified as contemplated by Section 3.1 for Securities of any series, the provisions of this Article 13 shall apply to each
series of Securities, and the Company may, at its option, effect defeasance of the Securities of a series under Section 13.2, or covenant defeasance of a series under Section 13.3 in accordance with the terms of such Securities and in
accordance with this Article; provided, however, that, unless otherwise specified pursuant to Section 3.1 with respect to the Securities of any series, the Company may effect defeasance or covenant defeasance only with respect to all of the
Securities of such series.
Section 13.2 Defeasance and Discharge.
Upon the exercise by the Company of the above option applicable to this Section with respect to any Securities of a series, the Company shall be deemed to
have been discharged from its obligations with respect to such Outstanding Securities and any related coupons on the date the conditions set forth in Section 13.4 are satisfied (hereinafter, “
defeasance
”). For this purpose,
such defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by such Outstanding Securities and any related coupons, respectively, which shall thereafter be deemed to be
“Outstanding” only for the purposes of Section 13.5 and the other provisions of this Indenture referred to in (A), (B), (C) and (D) below, and to have satisfied all their other obligations under such Securities and any related
coupons, respectively, and this Indenture insofar as such Securities and any related coupons are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which
shall survive until otherwise terminated or discharged hereunder: (A) the rights of Holders of such Outstanding Securities and any related coupons to receive, solely from the trust fund described in Section 13.4 and as more fully set forth
in such Section, payments in respect of the principal of (and premium, if any) and interest, if any, on such Securities and any related coupons when such payments are due, (B) the Company’s and the Trustee’s obligations with respect
to such Securities under Sections 1.13, 1.14, 3.4, 3.5, 3.6, 9.2 and 9.3 (and any applicable provisions of Article 10), (C) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (D) this Article 13. Subject to
compliance with this Article 13, the Company may exercise its option under this Section 13.2 notwithstanding the prior exercise of the option under Section 13.3 with respect to such Securities and any related coupons.
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Section 13.3 Covenant Defeasance.
Upon the exercise by the Company of the above option applicable to this Section with respect to any Securities of a series, the Company shall be released from
its obligations under Sections 9.5 through 9.7, and, if specified pursuant to Section 3.1, their obligations under any other covenant, in each case with respect to such Outstanding Securities and any related coupons, respectively, on and
after the date the conditions set forth in Section 13.4 are satisfied (hereinafter, “
covenant defeasance
”), and such Securities and any related coupons shall thereafter be deemed not to be “Outstanding” for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “Outstanding” for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to such Outstanding Securities and any related coupons, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 5.1(3) or Section 5.1(6) or otherwise, as the case may be, but, except as specified above, the remainder of this Indenture and such Securities and any related coupons shall be
unaffected thereby.
Section 13.4 Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section 13.2 or Section 13.3 to any Outstanding Securities of or within a series and
any related coupons:
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(1)
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The Company has deposited or caused to be deposited with the Trustee (or another trustee satisfying the
requirements of Section 6.7 who shall agree to comply with the provisions of this Article 13 applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities and any related coupons, (A) an amount (in such Currency in which such Securities and any related coupons are then specified as payable at Stated Maturity), or (B) Government Obligations
applicable to such Securities (determined on the basis of the Currency in which such Securities are then specified as payable at Stated Maturity) which through the scheduled payment of principal and interest in respect thereof in accordance with
their terms will provide, not later than one day before the due date of any payment of principal of or premium, if any, or interest, if any, or any other sums due under such Securities and any related coupons, money in an amount, or (C) a
combination thereof, sufficient, in the opinion of a nationally recognized firm of independent certified public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by
the Trustee (or other qualifying trustee) to pay and discharge, (i) the principal of (and premium, if any) and interest, if any, and any other sums due under such Outstanding Securities and any related coupons on the Stated Maturity (or
Redemption Date, if applicable) of such principal (and premium, if any) or installment of interest, if any, or any other sums and (ii) any mandatory sinking fund payments or analogous payments applicable to such Outstanding Securities and any
related coupons on the day on which such payments are due and payable in accordance with the terms of this Indenture and of such Securities and any related coupons; provided that the Trustee shall have been irrevocably instructed to apply such money
or the proceeds of such Government Obligations to said payments with respect to such Securities and any related coupons. Before such a deposit, the Company may give to the Trustee, in accordance with Section 10.2 hereof, a notice of its
election to redeem all or any portion of such Outstanding Securities at a future date in accordance with the terms of the Securities of such series and Article 10 hereof, which notice shall be irrevocable. Such irrevocable redemption notice, if
given, shall be given effect in applying the foregoing.
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(2)
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In the case of an election under Section 13.2, the Company shall have delivered to the Trustee an Opinion
of Counsel in the United States stating that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (y) since the date of execution of this Indenture, there has been a change in the
applicable U.S. federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the Holders of such Outstanding Securities and any related coupons will not recognize income, gain or loss for U.S. federal
income tax purposes as a result of such defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred.
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(3)
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In the case of an election under Section 13.3, the Company shall have delivered to the Trustee an Opinion
of Counsel in the United States to the effect that the Holders of such Outstanding Securities and any related coupons will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such covenant defeasance and will be
subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred.
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(4)
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The Company has delivered to the Trustee an Opinion of Counsel in Canada or a ruling from Canada Customs and
Revenue Agency to the effect that the Holders of such Outstanding Securities and any related coupons will not recognize income, gain or loss for Canadian federal or provincial income tax or other tax purposes as a result of such defeasance or
covenant defeasance and will be subject to Canadian federal and provincial income tax and other tax on the same amounts, in the same manner and at the same times as would have been the case had such defeasance or covenant defeasance not occurred
(and for the purposes of such opinion, such Canadian counsel shall assume that Holders of such Outstanding Securities include Holders who are not resident in Canada).
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(5)
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The Company is not an “insolvent person” within the meaning of the Bankruptcy and Insolvency Act
(Canada) on the date of such deposit or at any time during the period ending on the 91st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period).
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(6)
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No Event of Default or event that, with the passing of time or the giving of notice, or both, shall constitute
an Event of Default with respect to such Securities or any related coupons shall have occurred and be continuing on the date of such deposit or, insofar as paragraphs (5), (6) and (7) of Section 5.1 are concerned, at any time during the
period ending on the 91st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period).
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(7)
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The Company has delivered to the Trustee an Opinion of Counsel to the effect that such deposit shall not cause
the Trustee or the trust so created to be subject to the Investment Company Act of 1940, as amended.
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(8)
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Such defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default
under, this Indenture or any other material agreement or instrument to which the Company is a party or by which it is bound.
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(9)
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Notwithstanding any other provisions of this Section, such defeasance or covenant defeasance shall be effected
in compliance with any additional or substitute terms, conditions or limitations in connection therewith pursuant to Section 3.1.
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(10)
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The Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for relating to either the defeasance under Section 13.2 or the covenant defeasance under Section 13.3 (as the case may be) have been complied with.
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Section 13.5 Deposited Money and Government Obligations to Be Held in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 9.3, all money and Government Obligations (or other property as may be provided pursuant
to Section 3.1) (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 13.5, the “
Trustee
”) pursuant to Section 13.4 in respect of
such Outstanding Securities and any related coupons shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and any related coupons and this Indenture, to the payment, either directly or through any
Paying Agent as the Trustee may determine (other than, with respect only to defeasance pursuant to Section 13.2, the Company or any of its Affiliates), to the Holders of such Securities and any related coupons of all sums due and to become due
thereon in respect of principal (and premium, if any) and interest, if any, but such money need not be segregated from other funds except to the extent required by law.
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Unless otherwise specified with respect to any Security pursuant to Section 3.1, if, after a deposit
referred to in Section 13.4(1) has been made, (a) the Holder of a Security in respect of which such deposit was made is entitled to, and does, elect pursuant to Section 312(b) or the terms of such Security to receive payment in a
Currency other than that in which the deposit pursuant to Section 13.4(1) has been made in respect of such Security, or (b) a Conversion Event occurs as contemplated by the terms of any Security in respect of which the deposit pursuant to
Section 13.4(1) has been made, the Indebtedness represented by such Security and any related coupons shall be deemed to have been, and will be, fully discharged and satisfied through the payment of the principal of (and premium, if any) and
interest, if any, on such Security as they become due out of the proceeds yielded by converting (from time to time as specified below in the case of any such election) the amount or other property deposited in respect of such Security into the
Currency in which such Security becomes payable as a result of such election or Conversion Event based on the applicable Market Exchange Rate for such Currency in effect on the third Business Day prior to each payment date, except, with respect to a
Conversion Event, for such Currency in effect (as nearly as feasible) at the time of the Conversion Event.
The Company shall pay and indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against the Government Obligations deposited pursuant to Section 13.4 or the principal and interest received in respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of such Outstanding Securities and any related coupons.
Anything in this Article 13 to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon request of the Company any money or Government Obligations (or other property and any proceeds therefrom) held by it as provided in Section 13.4 which, in
the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an
equivalent defeasance or covenant defeasance, as applicable, in accordance with this Article.
Section 13.6 Reinstatement.
If the Trustee or any Paying Agent is unable to apply any money in accordance with Section 13.5 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations of the Company under this Indenture and such Securities and any related coupons shall be revived and reinstated as though no deposit had
occurred pursuant to Section 13.2 or 13.3, as the case may be, until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 13.5; provided, however, that if the Company makes any
payment of principal of (or premium, if any) or interest, if any, on any such Security or any related coupon following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities and any
related coupons to receive such payment from the money held by the Trustee or Paying Agent.
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ARTICLE 14
MEETINGS OF HOLDERS OF SECURITIES
Section 14.1 Purposes for Which Meetings May Be Called.
If Securities of a series are issuable, in whole or in part, as Bearer Securities, a meeting of Holders of Securities of such series 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 of such
series.
Section 14.2 Call, Notice and Place of Meetings.
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(a)
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The Trustee may at any time call a meeting of Holders of Securities of any series for any purpose specified in
Section 14.1, to be held at such time and at such place in the City of New York or in London or in Vancouver, British Columbia, Canada as the Trustee shall determine. Notice of every meeting of Holders of Securities of any series, 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 for in Section 1.6, not less than 21 nor more than 180 days prior to the date fixed
for the meeting.
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(b)
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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 of any series shall have requested the Trustee to call a meeting of the Holders of Securities of such series for any purpose specified in Section 14.1, by written request (a) setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not have made the first publication of the notice of such meeting within 21 days after receipt of such request or shall not thereafter proceed to cause the meeting to be
held as provided herein, then the Company or the Holders of Securities of such series in the amount above specified, as the case may be, may determine the time and the place in the City of New York, London or in Vancouver, British Columbia, Canada
for such meeting and may call such meeting for such purposes by giving notice thereof as provided in paragraph (a) of this Section.
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Section 14.3 Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for a Holder or Holders of one or more Outstanding Securities of such series by such Holder of Holders. The only Persons who shall be entitled to be present or to speak
at any meeting of Holders of Securities of any series shall be the Person 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.
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Section 14.4 Quorum; Action.
The Persons entitled to vote a majority in principal amount of the Outstanding Securities of a series shall constitute a quorum for a meeting of Holders of
Securities of such series; provided, however, that, if any action is to be taken at such meeting with respect to a consent or waiver which this Indenture expressly provides may be given by the Holders of not less than a specified percentage in
principal amount of the Outstanding Securities of a series, the Persons entitled to vote such specified percentage in principal amount of the Outstanding Securities of such series 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 of such series, 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 of not less than 10 days as determined by the
chairman of the meeting prior to the adjournment of such adjourned meeting. Notice of the reconvening of any adjourned meeting shall be given as provided in Section 14.2(a), except that such notice need be given only once not less than five
days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of any adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the Outstanding Securities of such
series which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting adjourned for lack of a quorum the Persons entitled
to vote 25% in principal amount of the Outstanding Securities at the time shall constitute a quorum for the taking of any action set forth in the notice of the original meeting.
Except as limited by the proviso to Section 8.2, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted by the affirmative vote of the Holders of not less than a majority in principal amount of the Outstanding Securities of such series; provided, however, that, except as limited by the proviso to Section 8.2, any
resolution with respect to any request, demand, authorization, direction, notice, consent, waiver or other action which this Indenture expressly provides may be made, given or taken by the Holders of a specified percentage, which is less
than a majority, in principal amount of the Outstanding Securities of a series may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of not less than
such specified percentage in principal amount of the Outstanding Securities of such series.
Any resolution passed or decision taken at any meeting of
Holders of Securities of any series duly held in accordance with this Section shall be binding on all the Holders of Securities of such series and the related coupons, whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 14.4, if any action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent, waiver or other action that this Indenture expressly provides may be made, given or taken by the Holders of a specified percentage in principal amount of all Outstanding
Securities affected thereby, or of the Holders of such series and one or more additional series:
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(i)
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there shall be no minimum quorum requirement for such meeting; and
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(ii)
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the principal amount of the Outstanding Securities of such series that vote in favor of such request, demand,
authorization, direction, notice, consent, waiver or other action shall be taken into account in determining whether such request, demand, authorization, direction, notice, consent, waiver or other action has been made, given or taken under this
Indenture.
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Section 14.5 Determination of Voting Rights; Conduct and Adjournment of Meetings.
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(a)
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Notwithstanding any provisions of this Indenture, the Trustee may make such reasonable regulations as it may
deem advisable for any meeting of Holders of Securities of a series in regard to proof of the holding of Securities of such series 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 its 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 1.4 and the appointment of any proxy shall be proved in the manner specified in Section 1.4 or by having the signature of the person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 1.4 to certify to the holding of Bearer Securities. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and
genuine without the proof specified in Section 1.4 or other proof.
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(b)
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The Trustee shall, by an instrument in writing appoint a temporary chairman of the meeting, unless the meeting
shall have been called by the Company or by Holders of Securities as provided in Section 14.2(b), in which case the Company or the Holders of Securities of the series 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 of such series represented at the meeting.
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(c)
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At any meeting each Holder of a Security of such series or proxy shall be entitled to one vote for each $1,000
principal amount of Outstanding Securities of such series held or represented by him (determined as specified in the definition of “Outstanding” in Section 1.1); provided, however, that no vote shall be cast or counted at any meeting
in respect of any Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Security of such series or proxy.
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(d)
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Any meeting of Holders of Securities of any series duly called pursuant to Section 14.2 at which a quorum
is present may be adjourned from time to time by Persons entitled to vote a majority in principal amount of the Outstanding Securities of such series represented at the meeting; and the meeting may be held as so adjourned without further notice.
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-92-
Section 14.6 Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of Securities of any series shall be by written ballots on which shall be subscribed
the signatures of the Holders of Securities of such series or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities of such series 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 of any series 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 14.2
and, if applicable, Section 14.4. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company, and another to the Trustee to be preserved by
the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated.
Section 14.7 Waiver of Jury Trial.
Each of the Company and the Trustee hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Indenture, the Securities or the transactions contemplated hereby.
This Indenture 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 Indenture.
-93-
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as of the day and
year first above written.
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Aurora Cannabis Inc.
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By:
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/s/ Terry Booth
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Name: Terry Booth
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Title: CEO
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GLAS Trust Company LLC, as Trustee
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By:
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/s/ Adam Berman
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Name: ADAM BERMAN
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Title: VICE PRESIDENT
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[Signature Page to Indenture]
EXHIBIT A
FORM OF SECURITY
*[Unless this
Security is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Company (as defined below) or its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
*[This Security is a global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of DTC or a nominee of DTC.
This Security is exchangeable for Securities registered in the name of a Person other than DTC or its nominee only in the limited circumstances described in the Indenture, and no transfer of this Security (other than a transfer of this Security as a
whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any such nominee to a successor Depositary or nominee of such successor Depositary) may be registered except in limited circumstances.]
Aurora Cannabis Inc.
% [Debenture] [Note] [Due]
*Include if Securities are to be issued in global form. At the time of this writing, DTC will not accept global securities
with an aggregate principal amount in excess of $500,000,000. If the aggregate principal amount of the offering exceeds this amount, use more than one global security.
Aurora Cannabis Inc., a corporation incorporated under the laws of the Province of British Columbia, Canada (herein called the “Company”, which term
includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to [Cede & Co.]*, or registered assigns, the principal sum of $[●] ([●] DOLLARS) on [date and year], at the
office or agency of the Company referred to below, and to pay interest thereon on [date and year], and semi-annually thereafter on [date] and [date] in each year, from and including [date and year],** or from and including the most recent Interest
Payment Date to which interest has been paid or duly provided for, at the rate of [●]% per annum, until the principal hereof is paid or duly provided for, and (to the extent lawful) to pay on demand interest on any overdue principal, [premium,
if any,] or interest at the rate borne by this Security from and including the date on which such overdue principal, [premium, if any,] or interest becomes payable to but excluding the date payment of such principal, [premium, if any,] or interest
has been made or duly provided for. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this 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 [date] or [date] (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date, and such Defaulted Interest, and (to the extent lawful) interest on such Defaulted Interest at the rate borne by the
Securities of this series, may 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
Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. 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.
*Include if Securities are to be
issued in global form. At the time of this writing, DTC will not accept global securities with an aggregate principal amount in excess of $500,000,000. If the aggregate principal amount of the offering exceeds this amount, use more than one global
security.
**Insert date from which interest is to accrue or, if the Securities are to be sold “flat”, the
closing date of the offering.
Unless the certificate of authentication hereon has been duly executed by the Trustee by manual signature, 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
instrument to be duly executed.
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Dated: [●]
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Aurora Cannabis Inc.
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By:
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By:
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TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
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as Trustee
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Authorized Signatory
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[Form of Reverse]
This Security is one of a duly authorized issue of securities of the Company designated as its [●]% [Debentures] [Notes] [Due] [●] (herein called
the “
Securities
”), limited (except as otherwise provided in the Indenture referred to below [and except as provided in the second succeeding paragraph]) in aggregate principal amount to $[●], which may be issued under an
indenture (herein called the “
Indenture
”) dated as of [●], 2019, between Aurora Cannabis Inc. and [●], as trustee (herein called the “
Trustee
”, which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties, obligations 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. [This Security is a global Security representing $[●] aggregate principal amount [at maturity]** of the Securities of this
series.]***
Payment of the principal of (and premium, if any,) and interest on this Security will be made at the office or agency of the Company
maintained for that purpose in [●], in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the
option of the Company (i) by check mailed to the address of the Person entitled thereto as such address shall appear on the Security Register or (ii) by wire transfer to an account maintained in the United States by the Person entitled to
such payment as specified in the Security Register. [Notwithstanding the foregoing, payments of principal, premium, if any, and interest on a global Security registered in the name of a Depositary or its nominee will be made by wire transfer of
immediately available funds.] Principal paid in relation to any Security of this series at Maturity shall be paid to the Holder of such Security only upon presentation and surrender of such Security to such office or agency referred to above.
[As provided for in the Indenture, the Company may from time to time without notice to, or the consent of, the Holders of the Securities, create and issue
additional Securities of this series under the Indenture, equal in rank to the Outstanding Securities of this series in all respects (or in all respects except for the payment of interest accruing prior to the issue date of the new Securities of
this series or except for the first payment of interest following the issue date of the new Securities of this series) so that the new Securities of this series shall be consolidated and form a single series with the Outstanding Securities of this
series and have the same terms as to status, redemption or otherwise as the Outstanding Securities of this series.]****
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**
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Include if a discount security.
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***
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Include in a global Security.
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****
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Include if this series of Securities may be reopened pursuant to Section 301 of the Indenture.
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[The Securities of this series are subject to redemption upon not less than 30 nor more than 60 days’
notice, at any time after [date and year], as a whole or in part, at the election of the Company [, at a Redemption Price equal to the percentage of the principal amount set forth below if redeemed during the
12-month
period beginning [date], of the years indicated:
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Year
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Redemption Price
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Year
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Redemption Price
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%
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%
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%
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%
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and thereafter] at 100% of the principal amount, together in the case of any such redemption with accrued interest, if any, to
the Redemption Date, all as provided in the Indenture.]*
[The Securities of this series are also subject to redemption on [date] in each year commencing
in [year] through the operation of a sinking fund, at a Redemption Price equal to 100% of the principal amount, together with accrued interest to the Redemption Date, all as provided in the Indenture. The sinking fund provides for the [mandatory]
redemption on [date] in each year beginning with the year [year] of $ [●] aggregate principal amount of Securities of this series. [In addition, the Company may, at its option, elect to redeem up to an additional $[●] aggregate principal
amount of Securities of this series on any such date.] Securities of this series acquired or redeemed by the Company (other than through operation of the sinking fund) may be credited against subsequent [mandatory] sinking fund payments.]**
[The Securities of this series are subject to repayment at the option of the Holders thereof on [Repayment Date(s)] at a Repayment Price equal to [●]%
of the principal amount, together with accrued interest to the Repayment Date, all as provided in the Indenture. To be repaid at the option of the Holder, this Security, with the “Option to Elect Repayment” form duly completed by the
Holder hereof (or the Holder’s attorney duly authorized in writing), must be received by the Company at its office or agency maintained for that purpose in [●] not earlier than 45 days nor later than 30 days prior to the Repayment Date.
Exercise of such option by the Holder of this Security shall be irrevocable unless waived by the Company.]***
In the case of any redemption [repayment]
of Securities of this series, interest installments whose Stated Maturity is on or prior to the Redemption Date [Repayment Date] will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant record dates according to their terms and the provisions of Section 3.7 of the Indenture. Securities of this series (or portions thereof) for whose redemption [repayment] payment is made or duly provided for in
accordance with the Indenture shall cease to bear interest from and after the Redemption Date [Repayment Date].
In the event of redemption [repayment] of
this Security in part only, a new Security or Securities of this series for the unredeemed [unpaid] portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof.
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*
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Include if the Securities are subject to redemption or replace with any other redemption provisions applicable
to the Securities.
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**
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Include if the Securities are subject to a sinking fund.
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***
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Include if the Securities are subject to repayment at the option of the Holders.
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If an Event of Default shall occur and be continuing, the principal of [and accrued but unpaid interest on] all the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (a) the
entire Indebtedness of the Company on this Security and (b) certain restrictive covenants and the related Defaults and Events of Default applicable to the Securities of this series, upon compliance by the Company, with certain conditions set
forth therein, which provisions apply to this Security.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the rights of the Holders under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in aggregate principal amount of the Securities at
the time Outstanding of all series affected by such amendment or modification. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities of this series at the time
Outstanding, on behalf of the Holders of all the Securities of this series, to waive compliance by the Company with certain provisions of the Indenture and also contains provisions permitting the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of all series with respect to which a Default shall have occurred and shall be continuing, on behalf of the Holders of all Outstanding Securities of such affected series, to waive certain past defaults
under the Indenture and their consequences. Any such consent or waiver by or on behalf of 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 upon the
registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Security.
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 premium, if any, on) and interest on this
Security at the times, place, and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registerable on the Security Register of the Company, upon surrender of this Security for registration of transfer at the office or agency of the Company maintained for such purpose in
[ ] 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 hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
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The Securities of this series are issuable only in registered form without coupons in denominations of
$1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series of a
different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange of Securities of this series, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to the time of due presentment of this 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 this Security is registered as the owner hereof for all purposes, whether or not this Security is overdue, and neither the Company, the Trustee nor any agent shall be affected by notice to the contrary.
Interest on this Security shall be computed on the basis of a
360-day
year of twelve
30-day
months. For the purposes of disclosure under the Interest Act (Canada), the yearly rate of interest to which interest calculated under a Security of this series for any period in any calendar year (the
“
calculation period
”) is equivalent is the rate payable under a Security of this series in respect of the calculation period multiplied by a fraction the numerator of which is the actual number of days in such calendar year and the
denominator of which is the actual number of days in the calculation period.
[If at any time, (i) the Depositary for the Securities of this series
notifies the Company that it is unwilling or unable to continue as Depositary for the Securities of this series or if at any time the Depositary for the Securities of this series shall no longer be a clearing agency registered as such under the
Securities Exchange Act of 1934, as amended and a successor Depositary is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such condition, as the case may be, [or] (ii) the Company
determines that the Securities of this series shall no longer be represented by a global Security or Securities [or (iii) any Event of Default shall have occurred and be continuing with respect to the Securities of this series]*, then in such
event the Company will execute and the Trustee will authenticate and deliver Securities of this series in definitive registered form, in authorized denominations, and in an aggregate principal amount equal to the principal amount of this Security in
exchange for this Security. Such Securities of this series in definitive registered form shall be registered in such names and issued in such authorized denominations as the Depository, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities of this series to the Persons in whose names such Securities of this series are so registered.]**
The Indenture and this Security shall be governed by and construed in accordance with the laws of the State of New York.
-101-
All references herein to “dollars” or “$” means a dollar or other equivalent unit in
such coin or currency of the United States of America as at the time should be legal tender for the payment of public and private debts, and all terms used in this Security which are defined in the Indenture shall have the meanings assigned to them
in the Indenture.
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*
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Include, if applicable.
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**
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Include for global security.
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[OPTION TO ELECT REPAYMENT
The undersigned
hereby irrevocably requests and instructs the Company to repay the within Security [(or the portion thereof specified below)], pursuant to its terms, on the “Repayment Date” first occurring after the date of receipt of the within Security
as specified below, at a Repayment Price equal to [●]% of the principal amount thereof, together with accrued interest to the Repayment Date, to the undersigned at:
(Please Print or Type Name and Address of the Undersigned.)
For this Option to Elect Repayment to be effective, this Security with the Option to Elect Repayment duly completed must be received not earlier than 45 days
prior to the Repayment Date and not later than 30 days prior to the Repayment Date by the Company at its office or agency in New York, New York.
If
less than the entire principal amount of the within Security is to be repaid, specify the portion thereof (which shall be $1,000 or an integral multiple thereof) which is to be repaid: $[●].
If less than the entire principal amount of the within Security is to be repaid, specify the denomination(s) of the Security(ies) to be issued for the unpaid
amount ($1,000 or any integral multiple of $1,000): $[●].
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Dated:
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Note: The signature to this Option to Elect Repayment must correspond with the name as written upon the face of the within Security in every particular without alterations or enlargement or any change whatsoever.]
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ASSIGNMENT FORM*
To assign this Security, fill in the form below:
I or we assign
and transfer this Security to
-102-
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(INSERT ASSIGNEE’S SOC. SEC., SOC. INS. OR TAX ID NO.)
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(Print or type assignee’s name, address and zip or postal code)
and irrevocably appoint
agent
to transfer this Security on the books of the Company. The agent may substitute another to act for him.
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Dated:
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Your
Signature:
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(Sign exactly as name appears on the other side of this Security)
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Signature
Guarantee:
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(Signature must be guaranteed by a commercial bank or trust company, by a member or members’ organization of The New York Stock Exchange or by another eligible guarantor institution as defined in Rule
17Ad-15
under the Securities Exchange Act of 1934)
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*
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Omit if a global security
|
-103-
EXHIBIT B
FORMS OF CERTIFICATION
EXHIBIT
B-1
FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY
OR TO OBTAIN INTEREST PAYABLE PRIOR
TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description
of Securities to be delivered]
This is to
certify that as of the date hereof, and except as set forth below, the above-captioned Securities held by you for our account (i) are not owned by any person(s) that is a citizen or resident of the United States; a corporation or partnership
(including any entity treated as a corporation or partnership for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia unless, in the case of a partnership,
U.S. Treasury Regulations provide otherwise; any estate whose income is subject to U.S. federal income tax regardless of its source or; a trust if (A) a U.S. court can exercise primary supervision over the trust’s administration and one or
more United States persons are authorized to control all substantial decisions of the trust or (B) a trust in existence on August 20, 1996, and treated as a United States person before this date that timely elected to continue to be
treated as a United States person (“
United States persons(s)
”), (ii) are owned by United States person(s) that are (a) foreign branches of U.S. financial institutions (financial institutions, as defined in U.S. Treasury
Regulation
Section 1.165-12(c)(1)(iv)
are herein referred to as “
financial institutions
”) purchasing for their own account or for resale, or (b) United States person(s) who acquired
the Securities through foreign branches of U.S. financial institutions and who hold the Securities through such U.S. financial institutions on the date hereof (and in either case (a) or (b), each such U.S. financial institution hereby agrees,
on its own behalf or through its agent, that you may advise Aurora Cannabis Inc. or its agent that such financial institution will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the U.S. Internal Revenue Code of 1986,
as amended, and the regulations thereunder), or (iii) are owned by U.S. or foreign financial institution(s) for purposes of resale during the restricted period (as defined in U.S. Treasury Regulation
Section 1.163-5(c)(2)(i)(D)(7)),
and, in addition, if the owner is a U.S. or foreign financial institution described in clause (iii) above (whether or not also described in clause (i) or (ii)),
this is to further certify that such financial institution has not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions.
As used herein, “United States” means the United States of America (including the states and the District of Columbia); and its
“possessions” include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the date on which you intend to submit
your certification relating to the above-captioned Securities held by you for our account in accordance with your Operating Procedures if any applicable statement herein is not correct on such date, and in the absence of any such notification it may
be assumed that this certification applies as of such date.
This certificate excepts and does not relate to [U.S.$] [●] of such interest in the
above-captioned Securities in respect of which we are not able to certify and as to which we understand an exchange for an interest in a permanent global Security or an exchange for and delivery of definitive Securities (or, if relevant,
collection of any interest) cannot be made until we do so certify.
We understand that this certificate may be required in connection with certain tax
legislation in the United States. If administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate or a copy thereof to any
interested party in such proceedings.
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Dated:
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[To be dated no earlier than the 15th day prior to (i) the Exchange Date or (ii) the relevant Interest Payment Date occurring prior to the Exchange Date, as applicable]
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[Name of Person Making Certification]
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(Authorized Signatory)
Name:
Title:
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-105-
EXHIBIT
B-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CLEARSTREAM IN
CONNECTION
WITH THE EXCHANGE OF A PORTION OF A
TEMPORARY GLOBAL SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or
sufficient description
of Securities to be delivered]
This is to certify that based solely on written certifications that we have received in writing, by tested telex or by electronic transmission from each of
the persons appearing in our records as persons entitled to a portion of the principal amount set forth below (our “
Member Organizations
”) substantially in the form attached hereto, as of the date hereof, [U.S.$] [●] principal
amount of the above-captioned Securities (i) is not owned by any person(s) that is a citizen or resident of the United States; a corporation or partnership (including any entity treated as a corporation or partnership for U.S. federal income
tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia unless, in the case of a partnership, U.S. Treasury Regulations provide otherwise; any estate whose income is subject to U.S.
federal income tax regardless of its source or; a trust if (A) a U.S. court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the
trust or (B) a trust in existence on August 20, 1996, and treated as a United States person before this date that timely elected to continue to be treated as a United States person (“
United States person(s)
”), (ii) is
owned by United States person(s) that are (a) foreign branches of U.S. financial institutions (financial institutions, as defined in U.S. Treasury Regulation
Section 1.165-12(c)(1)(iv)
are herein
referred to as “
financial institutions
”) purchasing for their own account or for resale, or (b) United States person(s) who acquired the Securities through foreign branches of U.S. financial institutions and who hold the
Securities through such U.S. financial institutions on the date hereof (and in either case (a) or (b), each such financial institution has agreed, on its own behalf or through its agent, that we may advise Aurora Cannabis Inc. or its agent that
such financial institution will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) is owned by U.S. or foreign financial
institution(s) for purposes of resale during the restricted period (as defined in U.S. Treasury Regulation
Section 1.163-5(c)(2)(i)(D)(7))
and, to the further effect, that financial institutions described
in clause (iii) above (whether or not also described in clause (i) or (ii)) have certified that they have not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United
States or its possessions.
As used herein, “United States” means the United States of America (including the states and the District of
Columbia); and its “possessions” include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for exchange (or, if relevant,
collection of any interest) any portion of the temporary global Security representing the above-captioned Securities excepted in the above-referenced certificates of Member Organizations and (ii) as of the date hereof we have not received any
notification from any of our Member Organizations to the effect that the statements made by such Member Organizations with respect to any portion of the part submitted herewith for exchange (or, if relevant, collection of any interest) are no longer
true and cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with certain tax legislation in the
United States. If administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate or a copy thereof to any interested party
in such proceedings.
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Dated:
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[To be dated no earlier than the Exchange Date or the relevant Interest Payment Date occurring prior to the Exchange Date, as applicable]
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[MORGAN GUARANTY TRUST COMPANY OF NEW YORK, BRUSSELS OFFICE, as Operator of the Euroclear System]
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[CLEARSTREAM]
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By
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-107-
Exhibit 7.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
T-1
STATEMENT OF
ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
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☐
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CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b) (2)
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GLAS TRUST COMPANY LLC
(Exact name of trustee as specified in its charter)
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A New Hampshire Limited Liability Company
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81-4468886
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(Jurisdiction of incorporation or
organization if not a U.S. national bank)
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(I.R.S. Employer
Identification No.)
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3 Second Street, Suite 206 Jersey City, NJ
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07311
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(Address of principal executive offices)
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(Zip code)
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GLAS AMERICAS LLC
230 Park Avenue, 3rd floor West
New York, New York 10169
(212)
808-3050
(Name, address and telephone number of agent for service)
AURORA CANNABIS INC.
(Exact name of obligor as specified in its charter)
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British Columbia, Canada
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Not Applicable
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Suite 500 – 10355 Jasper Avenue Edmonton, Alberta
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T5J 1Y6
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(Address of principal executive offices)
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(Zip code)
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Shelf Indenture – Debt Securities
(Title of the indenture securities)
Item 1.
General Information.
Furnish the following information as to the trustee:
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(a)
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Name and address of each examining or supervising authority to which it is subject.
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Comptroller of the Currency
Treasury Department
Washington, D.C.
Federal
Deposit Insurance Corporation
Washington, D.C.
Federal Reserve Bank of San Francisco
San Francisco, California 94120
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(b)
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Whether it is authorized to exercise corporate trust powers.
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The trustee is authorized to exercise corporate trust powers.
Item 2.
Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such affiliation.
None with respect to the trustee.
No responses
are included for Items
3-14
of this Form
T-1
because the obligor is not in default as provided under Item 13.
Item 15.
Foreign Trustee.
Not applicable.
Item 16.
List of Exhibits.
List below all exhibits filed as a part of this Statement of Eligibility.
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Exhibit 1.
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A copy of the Limited Liability Company Agreement of the trustee now in effect.
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Exhibit 2.
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A copy of the State of New Hampshire – Office of the Bank Commissioner Certificate to Conduct Business for GLAS TRUST COMPANY LLC, dated February 23, 2017.
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Exhibit 3.
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A copy of the State of New Hampshire Certificate to Exercise Corporate Trust Powers for GLAS TRUST COMPANY LLC, dated February 12, 2016.
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Exhibit 4.
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Copy of
By-laws
of the trustee as now in effect.
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Exhibit 5.
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Not applicable.
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Exhibit 6.
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The consent of the trustee required by Section 321(b) of the Act.
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Exhibit 7.
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A copy of the latest State of New Hampshire Call Report with Attestation of the trustee published pursuant to law or the requirements of its supervising or examining authority.
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Exhibit 8.
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Not applicable.
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Exhibit 9.
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Not applicable.
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SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, GLAS Trust Company LLC , a New Hampshire Limited Liability Company
organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York on the
10 day of May 2019.
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GLAS TRUST COMPANY LLC
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/s/ Adam Berman
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Adam Berman
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Vice President
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Exhibit 1
Limited Liability Company Agreement
STATE OF NEW HAMPSHIRE
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Filing fee: $35.00
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Form
LLC-3
RSA
304-C:34
|
LIMITED LIABILITY COMPANY CERTIFICATE OF AMENDMENT
TO THE CERTIFICATE OF FORMATION
PURSUANT TO THE PROVISIONS OF CHAPTER
304-C,
SECTION 34 OF THE NEW HAMPSHIRE REVISED STATUTES ANNOTATED, THE
UNDERSIGNED SUBMITS THE FOLLOWING CERTIFICATE OF AMENDMENT:
FIRST
:
The name of the limited liability company is:
GLAS LLC
SECOND
: The text of each amendment is:
ARTICLE FIRST shall be deleted in its entirety and replaced with the following:
FIRST: The name of the limited liability company is:
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GLAS Trust Company LLC
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GLAS LLC
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Dated: November 14, 2016
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By:
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Daniel Fisher, Manager
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Be it known, that whereas the attached Certificate of Amendment to GLAS TRUST COMPANY LLC formerly GLAS LLC
has complied with the provisions of the statutes of this State in such case made and provided, as appears from the petition duly approved by the Bank Commissioner and recorded in this office.
Now, therefore, I, William M. Gardner, Secretary of State do hereby certify that said Certificate of Amendment of GLAS TRUST COMPANY LLC
formerly GLAS LLC has been filed with this office.
Business ID#: 739423
LIMITED LIABILITY COMPANY AGREEMENT
OF
GLAS LLC
This Limited Liability Company Agreement of GLAS LLC, dated as of February 8, 2016 (this “
Agreement
”), is entered into
by GLAS Holdings Limited, an English company with an address of 45 Ludgate Hill, London EC4M 7JU, as the sole member (the “
Member
”).
The Member hereby forms a limited liability company pursuant to and in accordance with the provisions of New Hampshire state law as currently
in effect of this date, and hereby agrees as follows:
1.
Name
. The name of the limited
liability company is GLAS LLC (the “
Company
”).
2.
Purpose
. The purpose of the
Company, and the nature of the business to be conducted and promoted by the Company, is to engage in any lawful act or activity permissible for a trust company under New Hampshire state law, and engaging in any and all activities necessary,
advisable or incidental to the foregoing.
3.
Powers of the Company
. Subject to any limitations
set forth in this Agreement, the Company shall have the power and authority to take any and all actions necessary, appropriate, proper, advisable, incidental or convenient to or for the furtherance of the purposes set forth in Section 2,
including without limitation the power to borrow money and issue evidences of indebtedness in furtherance of the purposes of the Company; provided, however that the Company shall not have the power to accept deposits. Notwithstanding any other
provision of this Agreement, the Member is authorized to execute and deliver any document on behalf of the Company without any vote or consent of any other person or entity.
4.
Registered Office; Registered Agent
. The name and address of the registered agent of the Company
for service of process on the Company in the State of New Hampshire is Registered Agent Solutions, Inc., 10 Ferry St., Suite 313, Concord, NH 03301.
5.
Fiscal Year
. The fiscal year of the Company shall end on December 31.
6.
Management: Authorized Persons
.
(a) The Member hereby exclusively vests the power to manage, operate and set policies for the Company in a
board of directors (the “
Board of Directors
”). The total
number of directors on the Board of Directors (the “
Directors
”) shall be not less than five (5), unless otherwise fixed at a different number by an amendment hereto or a
resolution signed by the Member. The Board of Directors shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by
members under the laws of the State of New Hampshire. The Board of Directors may execute, deliver and file any certificates (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in a jurisdiction in
which the Company may wish to conduct business, any documents required to obtain a U.S. taxpayer identification number and any documents otherwise required in order for the Company to conduct its affairs. A Director acting individually or in his or
her capacity shall have the power to act for or bind the Company to the extent authorized to do so by the Board of Directors.
(b)
The Member hereby appoints as the initial Directors of the Company: Brian Carne, Mia Drennan, Daniel Fisher, Barnaby Webb, Steven Hodgetts, and Stuart Draper. Brian Carne shall be the Chairman. Mia Drennan shall
be the President. Daniel Fisher shall be Secretary. Barnaby Webb shall be the Treasurer. A Director shall remain in office until (i) removed by a written instrument signed by the Member, (ii) such Director resigns in a written instrument
delivered to the Member, or (iii) such Director dies or is unable to serve, whichever occurs first. In the event of any such vacancy, the Member shall fill the vacancy. Each Director shall have one vote.
(c) Meetings of the Board of Directors shall be held at times and places agreed upon by a majority of the
Directors. Directors may participate in such meetings by conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute
presence in person at such meeting. The presence of at least 50% of the Directors shall constitute a quorum for the transaction of business. Decisions of the Board of Directors shall require the approval of majority of the Directors present at a
meeting;
provided
,
however,
that should the Board of Directors be unable to render a decision due to either a tie in the vote or more than one Director being recused with respect to the issue being voted upon, then the Member may make
the decision in lieu of the Board of Directors.
7.
Officers
. The day to day functions of the
Company may be managed and performed by a person or persons appointed by resolution of the Board of Directors as officers of the Company. At the outset, the Board of Directors shall appoint (i) a president of the Company that shall have all of
the powers and duties that are functionally equivalent to the powers and duties held by the president of a corporation under New Hampshire law, (ii) a Treasurer of the Company that shall have all the powers and duties that are functionally
equivalent to the powers and duties held by the treasurer of a corporation under New Hampshire law, and (iii) a Secretary of the Company that shall have all of the powers and duties that are functionally equivalent to the powers and duties
2
held by the secretary of a corporation under New Hampshire law. For the avoidance of doubt, (i) one person may be chosen to serve in multiple officer positions simultaneously and,
(ii) a Director may also serve as an officer of the Company.
8.
Dissolution
. The Company
shall dissolve, and its affairs shall be wound up, upon the first to occur of the following:
(a)
the written consent of the Member, (
b
) at any time there is no member of the Company, unless the Company is continued pursuant
to applicable law or (c) the entry of a decree of judicial dissolution of the Company under applicable law.
9.
Capital Contributions
. The Member shall contribute the following amounts, in cash, and no other
property, to the Company:
GLAS Holdings Limited
$ 1.00
No loan made to the Company by the Member shall constitute a capital contribution to the Company for any
purpose.
10.
Additional Contributions
. The Member is not required to make any additional
capital contribution to the Company. The Member may make additional capital contributions to the Company in the form of cash, property, services or otherwise, and upon such contribution the Member’s capital account balance shall be adjusted
accordingly.
11.
Distributions
. Distributions shall be made to the Member at the times and in
the aggregate amounts determined by the Member. Notwithstanding anything to the contrary contained herein, the Company shall not make a Distribution to the Member on account of the interest of the Member in the Company if such distribution would
violate applicable law.
12.
Membership
Interest
. The Company is authorized to issue a
Membership Interest to the Member, such Interest representing the Member’s right to Distributions of the Company. The Company is authorized to issue and deliver to the Member a certificate or certificates representing the Membership Interest,
and upon such issuance, the Membership Interest shall be validly issued.
13. L
iability of
Member
. Except as otherwise provided by applicable law, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and neither the
Member nor any officer or Director shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member, officer or Director of the Company.
3
14.
Exculpation and Indemnification
. Neither the
Member nor any officer or Director of the Company shall be liable to the Company or any other person or entity who or that is bound by this Agreement for any loss, damage or claim incurred by reason of any act or omission performed or omitted by the
Member or officer or Director in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on the Member, officer or Director by this Agreement, except that the Member, officer or
Director shall be liable for any such loss, damage or claim incurred by reason of the Member’s or such officer’s or Director’s gross negligence or willful misconduct. To the full extent permitted by applicable law, the Member or an
officer or Director shall be entitled to indemnification from the Company for any loss, damage or claim incurred by the Member or by such officer or Director by reason of any act or omission performed or omitted by the Member or by such officer or
Director in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on the Member or such officer or Director by this Agreement, except that neither the Member nor any officer or
Director shall be entitled to be indemnified in respect of any loss, damage or claim incurred by the Member or any such officer or Director by reason of gross negligence or willful misconduct with respect to such acts or omissions,
provided,
however, that any indemnity under this Section 13 shall be provided out of and to the extent of Company assets only, and neither the Member nor any officer or Director shall have personal liability on account thereof.
15.
Amendments
. This Agreement may not be modified, altered, supplemented or amended except
pursuant to a written agreement executed and delivered by the Member.
16.
Bankruptcy
. The
bankruptcy of the Member shall not cause the Member to cease to be a member of the Company and upon the occurrence of such an event, the Company shall continue without dissolution.
17.
Counterparts
. This Agreement may be executed in several counterparts, each of which shall be
deemed an original and all of which shall together constitute one and the same instrument.
18.
Governing Law
. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE INTERNAL LAWS OF THE STATE OF NEW HAMPSHIRE, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES THEREOF.
19.
Separability of Provisions
. Each provision of this Agreement shall be considered separable, and
if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions
of this Agreement that are valid, enforceable and legal.
4
20.
Sole Benefit of Member
. Except as expressly
provided in Section 13, the provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no
such creditor shall be a third-party beneficiary of this Agreement), and the Member shall not have any duty or obligation to any creditor of the Company to make any contributions or payments to the Company.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the date first above
written.
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MEMBER
:
|
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GLAS HOLDINGS LIMITED
|
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5
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Filing fee: $100.00
|
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Form LLC-1
|
|
Use black print or type.
|
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|
|
RSA
304-C:31
|
CERTIFICATE OF FORMATION
NEW HAMPSHIRE LIMITED LIABILITY COMPANY
THE UNDERSIGNED, under the
New Hampshire Limited Liability Company Laws submits the following certificate of formation:
FIRST:
The name of the limited liability company is
GLAS
LLC
.
Principal Business
Information:
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Principal Office Address:
|
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45 Ludgate Hill
|
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London EC4M 7JU
|
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(no. & street)
|
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|
(city/town)
|
|
(state)
|
|
(zip code)
|
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Principal Mailing Address (if different):
|
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(no. & street)
|
|
(city/town)
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(state)
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(zip code)
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Business
Phone:
Business Email:
directors@glas.agency
Please check if you would prefer to receive the Annual Report
Reminder Notice by email.
SECOND:
Describe the nature of the primary business or purposes (and if known, list the NAICS Code and Sub Code):
The purpose
of the company is to engage in any lawful act or activity permissible under
New Hampshire state law for a nondepository trust company and any act or activity necessary, proper,
or incidental thereto. The company shall not have the
power to accept deposits.
THIRD
:
The name of the limited liability company’s registered agent is:
|
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Registered Agent Solutions
.
|
The complete address of its registered office (agent’s business address) is:
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10 Ferry St., Suite 313
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Concord
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NH
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03301
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(no. & street)
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(city/town)
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(state)
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(zip code)
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FOURTH:
The management of the limited liability company
is
vested in a manager or managers.
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Page 1 of 2
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Form LLC-1 (9/2015)
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CERTIFICATE OF FORMATION OF A
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Form
LLC-1
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NEW HAMPSHIRE LIMITED LIABILITY COMPANY
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(Cont.)
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*Signature:
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Print or type name:
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Mia Drennan
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Title:
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Manager
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(Enter “manager” or “member”)
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Date signed:
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Note: The sale or offer for sale of membership interests of the limited liability company will comply with the requirements of the New
Hampshire Uniform Securities Act (RSA
421-B).
The membership interests of the limited liability company: 1) have been registered or when offered will be registered under RSA
421-B;
2) are exempted or when offered will be exempted under RSA
421-B;
3) are or will be offered in a transaction exempted from registration under RSA
421-B;
4) are not securities under RSA
421-B;
OR 5) are federal covered securities under RSA
421-B.
The statement above shall not by
itself constitute a registration or a notice of exemption from registration of securities within the meaning of sections 448 and 461 (i)(3) of the United States Internal Revenue Code and the regulation promulgated thereunder.
* Must be signed by a
manager; if no manager, must be signed by a member.
DISCLAIMER: All documents filed with the Corporation Division become public records and will be available for
public inspection in either tangible or electronic form.
Mailing Address - Corporation Division, NH Dept, of State, 107 N Main St, Rm 204,
Concord, NH 03301-4989
Physical Location - State House Annex, 3rd Floor, Rm 317, 25 Capitol St, Concord, NH
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Page 2 of 2
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Form LLC-1 (9/2015)
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CERTIFICATE
I, William M. Gardner, Secretary of State of the State of New Hampshire, do hereby certify that GLAS LLC is a New Hampshire limited liability company
filed on February 12, 2016. I further certify that it is in good standing as far as this office is concerned, having paid the fees required by law; and that a certificate of cancellation has not been filed.
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Date:
2/26/2016
Filed Documents
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(Annual Report History, View Images, etc.)
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For a blank Annual Registration Report, click here.
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Business Name History
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Name
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Name Type
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GLAS LLC
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Legal
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Limited Liability Company - Domestic - Information
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Business ID:
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739423
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Status:
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Good Standing
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Entity Creation Date:
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2/4/2016
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Principal Office Address:
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45 Ludgate Hill
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London EC4M 7 JU
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Principal Mailing Address:
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No Address
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Last Annual Report Filed Date:
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Last Annual Report Filed:
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0
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Registered Agent
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Agent Name:
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Registered Agent Solutions Inc
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Office Address:
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10 Ferry Street S313
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Concord NH 03301
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Mailing Address:
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NEW
!
File
Annual Report Online.
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Important Note: The
status reflected for each entity on this website only refers to the status of the entity’s filing requirements with this office. It does not necessarily reflect the disciplinary status of the entity with any state agency. Requests for
disciplinary information should be directed to agencies with licensing or other regulatory authority over the entity.
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1/2
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2/26/2016
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Business Entity
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2/2
Confidential Exhibit B
Please see the signed Limited Liability Company Agreement of GLAS LLC, the Certificate of Formation, the Certificate of Good Standing for GLAS
LLC, and confirmation of the Certificate of Good Standing’s filing with the New Hampshire Corporate Division attached.
LIMITED LIABILITY COMPANY AGREEMENT
OF
GLAS LLC
This Limited Liability Company Agreement of GLAS LLC, dated as of February 8, 2016 (this “
Agreement”
), is entered into
by GLAS Holdings Limited, an English company with an address of 45 Ludgate Hill, London EC4M 7JU, as the sole member (the “
Member
”).
The Member hereby forms a limited liability company pursuant to and in accordance with the provisions of New Hampshire state law as currently
in effect of this date, and hereby agrees as follows:
1.
Name
. The name of the limited
liability company is GLAS LLC (the “Company”).
2.
Purpose
. The purpose of the
Company, and the nature of the business to be conducted and promoted by the Company, is to engage in any lawful act or activity permissible for a trust company under New Hampshire state law, and engaging in any and all activities necessary,
advisable or incidental to the foregoing.
3.
Powers of the Company
. Subject to any limitations
set forth in this Agreement, the Company shall have the power and authority to take any and all actions necessary, appropriate, proper, advisable, incidental or convenient to or for the furtherance of the purposes set forth in Section 2,
including without limitation the power to borrow money and issue evidences of indebtedness in furtherance of the purposes of the Company; provided, however that the Company shall not have the power to accept deposits. Notwithstanding any other
provision of this Agreement, the Member is authorized to execute and deliver any document on behalf of the Company without any vote or consent of any other person or entity.
4.
Registered Office; Registered Agent
. The name and address of the registered agent of the Company
for service of process on the Company in the State of New Hampshire is Registered Agent Solutions, Inc., 10 Ferry St., Suite 313, Concord, NH 03301.
5.
Fiscal Year
. The fiscal year of the Company shall end on December 31.
6.
Management; Authorized Persons
.
(a) The Member hereby exclusively vests the power to manage, operate and set policies for the Company in a board of
directors (the “
Board of Directors
”). The total
number of directors on the Board of Directors (the “
Directors”)
shall be not less than five (5), unless otherwise fixed at a different number by an amendment hereto or a
resolution signed by the Member. The Board of Directors shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by
members under the laws of the State of New Hampshire. The Board of Directors may execute, deliver and file any certificates (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in a jurisdiction in
which the Company may wish to conduct business, any documents required to obtain a U.S. taxpayer identification number and any documents otherwise required in order for the Company to conduct its affairs. A Director acting individually or in his or
her capacity shall have the power to act for or bind the Company to the extent authorized to do so by the Board of Directors.
(b) The Member hereby appoints as the initial Directors of the Company: Brian Carne, Mia Drennan, Daniel Fisher,
Barnaby Webb, Steven Hodgetts, and Stuart Draper. Brian Carne shall be the Chairman. Mia Drennan shall be the President. Daniel Fisher shall be Secretary. Barnaby Webb shall be the Treasurer. A Director shall remain in office until (i) removed
by a written instrument signed by the Member, (ii) such Director resigns in a written instrument delivered to the Member, or (iii) such Director dies or is unable to serve, whichever occurs first. In the event of any such vacancy, the
Member shall fill the vacancy. Each Director shall have one vote.
(c) Meetings of the Board of Directors shall be
held at times and places agreed upon by a majority of the Directors. Directors may participate in such meetings by conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each
other, and such participation in a meeting shall constitute presence in person at such meeting. The presence of at least 50% of the Directors shall constitute a quorum for the transaction of business. Decisions of the Board of Directors shall
require the approval of majority of the Directors present at a meeting;
provided, however,
that should the Board of Directors be unable to render a decision due to either a tie in the vote or more than one Director being recused with respect
to the issue being voted upon, then the Member may make the decision in lieu of the Board of Directors.
7.
Officers.
The day to day functions of the Company may be managed and performed by a person or
persons appointed by resolution of the Board of Directors as officers of the Company. At the outset, the Board of Directors shall appoint (i) a president of the Company that shall have all of the powers and duties that are functionally
equivalent to the powers and duties held by the president of a corporation under New Hampshire law, (ii) a Treasurer of the Company that shall have all the powers and duties that are functionally equivalent to the powers and duties held by the
treasurer of a corporation under New Hampshire law, and (iii) a Secretary of the Company that shall have all of the powers and duties that are functionally equivalent to the powers and duties
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held by the secretary of a corporation under New Hampshire law. For the avoidance of doubt, (i) one person may be chosen to serve in multiple officer positions simultaneously and,
(ii) a Director may also serve as an officer of the Company.
8.
Dissolution
. The Company
shall dissolve, and its affairs shall be wound up, upon the first to occur of the following: (
a
) the written consent of the Member, (
b
) at any time there is no member of the Company, unless the Company is continued pursuant
to applicable law or (
c
) the entry of a decree of judicial dissolution of the Company under applicable law.
9.
Capital Contributions
. The Member shall contribute the following amounts, in cash, and no other
property, to the Company:
GLAS Holdings
Limited
$ 1.00
No loan made to the Company by the Member shall constitute a capital contribution to the Company for any purpose.
10.
Additional Contributions
. The Member is not required to make any additional capital contribution
to the Company. The Member may make additional capital contributions to the Company in the form of cash, property, services or otherwise, and upon such contribution the Member’s capital account balance shall be adjusted accordingly.
11.
Distributions
. Distributions shall be made to the Member at the times and in the aggregate
amounts determined by the Member. Notwithstanding anything to the contrary contained herein, the Company shall not make a Distribution to the Member on account of the interest of the Member in the Company if such distribution would violate
applicable law.
12.
Membership Interest
. The Company is authorized to issue a Membership
Interest to the Member, such Interest representing the Member’s right to Distributions of the Company. The Company is authorized to issue and deliver to the Member a certificate or certificates representing the Membership Interest, and upon
such issuance, the Membership Interest shall be validly issued.
13.
Liability of Member
. Except
as otherwise provided by applicable law, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and neither the Member nor any
officer or Director shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member, officer or Director of the Company.
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14.
Exculpation and Indemnification
. Neither the Member
nor any officer or Director of the Company shall be liable to the Company or any other person or entity who or that is bound by this Agreement for any loss, damage or claim incurred by reason of any act or omission performed or omitted by the Member
or officer or Director in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on the Member, officer or Director by this Agreement, except that the Member, officer or Director
shall be liable for any such loss, damage or claim incurred by reason of the Member’s or such officer’s or Director’s gross negligence or willful misconduct. To the full extent permitted by applicable law, the Member or an officer or
Director shall be entitled to indemnification from the Company for any loss, damage or claim incurred by the Member or by such officer or Director by reason of any act or omission performed or omitted by the Member or by such officer or Director in
good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on the Member or such officer or Director by this Agreement, except that neither the Member nor any officer or Director shall
be entitled to be indemnified in respect of any loss, damage or claim incurred by the Member or any such officer or Director by reason of gross negligence or willful misconduct with respect to such acts or omissions,
provided,
however, that
any indemnity under this Section 13 shall be provided out of and to the extent of Company assets only, and neither the Member nor any officer or Director shall have personal liability on account thereof.
15.
Amendments
. This Agreement may not be modified, altered, supplemented or amended except pursuant
to a written agreement executed and delivered by the Member.
16.
Bankruptcy
. The bankruptcy of
the Member shall not cause the Member to cease to be a member of the Company and upon the occurrence of such an event, the Company shall continue without dissolution.
17.
Counterparts
. This Agreement may be executed in several counterparts, each of which shall be
deemed an original and all of which shall together constitute one and the same instrument.
18.
Governing Law
. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING AS TO VALIDITY,
INTERPRETATION AND EFFECT, BY THE INTERNAL LAWS OF THE STATE OF NEW HAMPSHIRE, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES THEREOF.
19.
Separability of Provisions
. Each provision of this Agreement shall be considered separable, and
if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions
of this Agreement that are valid, enforceable and legal.
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20.
Sole Benefit of Member
. Except as expressly
provided in Section 13, the provisions of this Agreement are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no
such creditor shall be a third-party beneficiary of this Agreement), and the Member shall not have any duty or obligation to any creditor of the Company to make any contributions or payments to the Company.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the date first above
written.
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MEMBER
:
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GLAS HOLDINGS LIMITED
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5
CERTIFICATE OF INCUMBENCY
OF GLAS TRUST COMPANY LLC
I, Brian Carne
(the “Chair”), of GLAS TRUST COMPANY LLC (the “Trust Company”), having its principal offices at 45 Ludgate Hill, London, United Kingdom EC4M7JU, incorporated on 8th of February, 2016 in the State of New Hampshire, do hereby
certify that the following persons were designated and appointed to the offices below, and that said persons do continue to hold such offices at this time, and the signatures set forth opposite the names are the genuine signatures as of the date of
this Certificate of Incumbency, 20
th
of September, 2017.
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Name
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Title
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Signature
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Mia Drennan
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President
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Daniel Fisher
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EVP/Corporate Secretary
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Barnaby Webb
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Treasurer
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Stuart Draper
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Director
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Steve Hodgetts
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Director
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Michael Amato
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Vice President
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Adam Berman
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Vice President
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Martin Reed
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Vice President
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This Certificate of incumbency is hereby authorized pursuant to the Trust Company’s authority under Article 3 of the
Limited Liability Company Operating Agreement dated 8
th
of February 2016.
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Brian Carne, Chair
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IN WITNESS WHEREOF
, I have hereunto signed my names this 20th day of September 2017.
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Daniel R. Fisher, Corporate Secretary
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Exhibit 2
Office of the Bank Commissioner Certificate to Conduct Business
Exhibit 3
State of New Hampshire Certificate to Exercise Corporate Trust Powers
State of New Hampshire
Department of State
Be it known,
that whereas Mia Drennan have associated themselves with the intention of forming a trust company under the name of GLAS LLC, for the purpose of forming a non depository trust company and any act or activity necessary, proper, or incidental thereto.
The company shall not have the power to accept deposits, and has complied with the provisions of the statutes of this state as duly approved by the Bank Commissioner and recorded in this office.
Now, therefore, I William M. Gardner, secretary of state, do hereby certify that said Mia Drennan and their successors, are legally organized and established
as, and are hereby made, an existing trust company under the name of GLAS LLC, with the powers, rights and privileges, and subject to the limitations, duties, and restrictions, which by law appertain thereto.
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Witness my official signature hereunto subscribed, and the Seal of the State of New Hampshire, this Twelfth day of February in the year of 2016.
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William M. Gardner
Secretary of State
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Exhibit 4
Copy of
By-Laws
for the Trustee
BYLAWS
OF
GLAS TRUST
COMPANY LLC
ARTICLE I
SHAREHOLDERS
Section
1.
Annual Meeting
.
An annual meeting shall be held once each calendar year for the purpose of electing
directors and for the transaction of such other business as may properly come before the meeting. The annual meeting shall be held at the time and place designated by the Board of Directors from time to time.
Section
2
.
Special
Meetings
.
Special meetings of the shareholders may be
requested by the Chairman, President, the Board of Directors, or the holders of a majority of the outstanding voting shares.
Section 3.
Notice
.
Written notice of all shareholder meetings, whether regular or special meetings, shall be provided under this section or as otherwise required by law. The Notice shall state the place, date, and hour of meeting, and if for a
special meeting, the purpose of the meeting. Such notice shall be mailed to all shareholders of record at the address shown on the corporate books, at least 10 days prior to the meeting. Such notice shall be deemed effective when deposited in
ordinary U.S. mail, properly addressed, with postage prepaid.
Section 4.
Place of Meeting
.
Shareholders’ meetings shall be held at the
corporation’s principal place of business unless otherwise stated in the notice. Shareholders of any class or series may participate in any meeting of shareholders by means of remote communication to the extent the Board of Directors authorizes
such participation for such class or series. Participation by means of remote communication shall be subject to such guidelines and procedures as the Board of Directors adopts. Shareholders participating in a shareholders’ meeting by means of
remote communication shall be deemed present and may vote at such a meeting if the corporation has implemented reasonable measures: (1) to verify that each person participating remotely is a shareholder, and (2) to provide such
shareholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the shareholders, including an opportunity to communicate, and to read or hear the proceedings of the meeting, substantially concurrent with such
proceedings.
Section 5.
Quorum
.
A majority of the outstanding voting shares, whether represented in person or by proxy, shall
constitute a quorum at a shareholders’ meeting. In the absence of a quorum, a majority of the represented shares may adjourn the meeting to another time without further notice. If a quorum is represented at an adjourned meeting, any business
may be transacted that might have been transacted at the meeting as originally scheduled. The shareholders present at a meeting represented by a quorum may continue to transact business until adjournment, even if the withdrawal of some shareholders
results in representation of less than a quorum.
Section 6.
Informal Action
.
Any action required to be taken, or which may be taken, at
a shareholders meeting, may be taken without a meeting and without prior notice if a consent in writing, setting forth the action so taken, is signed by the shareholders who own all of the shares entitled to vote with respect to the subject matter
of the vote.
ARTICLE II
DIRECTORS
Section 1.
Number of
Directors
.
The corporation shall be managed by a Board of Directors consisting of 6 director(s).
Section 2.
Election and Term of
Office
.
The directors shall be elected at the annual shareholders’ meeting. Each director shall serve a term of 2 years year(s), or until a successor has been elected and qualified.
Section 3.
Quorum
.
A majority of directors shall constitute a quorum.
Section 4.
Adverse Interest
.
In the determination of a quorum of the directors, or in voting, the disclosed adverse interest
of a director shall not disqualify the director or invalidate his or her vote.
Section 5.
Regular Meeting
.
An annual meeting shall be
held, without notice, immediately following and at the same place as the annual meeting of the shareholders. The Board of Directors may provide, by resolution, for additional regular meetings without notice other than the notice provided by the
resolution.
Section
6.
Special Meeting
.
Special meetings may be requested by the Chairman, President, Vice-President,
Secretary, or any two directors by providing five days’ written notice by ordinary United States mail, effective when mailed. Minutes of the meeting shall be sent to the Board of Directors within two weeks after the meeting.
Section 7.
Procedures
.
The vote of a majority of the directors present at a properly called meeting at which a quorum is present shall be the act
of the Board of Directors, unless the vote of a greater number is required by law or by these by-laws for a particular resolution. A director of the corporation who is present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have
assented to the action taken unless their dissent shall be entered in the minutes of the meeting. The Board shall keep written minutes of its proceedings in its permanent records.
If authorized by the governing body, any requirement of a written ballot shall be satisfied by a ballot submitted by electronic transmission, provided that any
such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the member or proxy holder.
Section
8.
Informal Action
.
Any action required to be taken at a meeting of directors, or any action which may
be taken at a meeting of directors or of a committee of directors, may be taken without a meeting if a consent in writing setting forth the action so taken, is signed by all of the directors or all of the members of the committee of directors, as
the case may be.
Section 9.
Removal/Vacancies
.
A director shall be subject to removal, with or without cause, at a meeting of the
shareholders called for that purpose. Any vacancy that occurs on the Board of Directors, whether by death, resignation, removal or any other cause, may be filled by the remaining directors. A director elected to fill a vacancy shall serve the
remaining term of his or her predecessor, or until a successor has been elected and qualified.
Section 10.
Resignation
.
Any director
may resign effective upon giving written notice to the chairperson of the board, the president, the secretary or the Board of Directors of the corporation, unless the notice specifies a later time for the effectiveness of such resignation. If the
resignation is effective at a future time, a successor may be elected to take office when the resignation becomes effective.
Section
11.
Committees
.
To the extent permitted by law, the Board of Directors may appoint from its members a
committee or committees, temporary or permanent, and designate the duties, powers and authorities of such committees.
ARTICLE III
OFFICERS
Section 1.
Number of Officers
.
The officers of the corporation shall be a President, one or more Vice-Presidents (as determined by the Board of Directors), a Treasurer, and a Secretary.
President/Chairman.
The Chairman and the President shall be the chief executive officers and either shall preside at all meetings of
the Board of Directors and its Executive Committee, if such a committee is created by the Board.
Vice President.
The Vice
President shall perform the duties of the President in the absence of the President and shall assist that office in the discharge of its leadership duties.
Secretary.
The Secretary shall give notice of all meetings of the Board of Directors and Executive Committee, if any, shall keep an
accurate list of the directors, and shall have the authority to certify any records, or copies of records, as the official records of the corporation. The Secretary shall maintain the minutes of the Board of Directors’ meetings and all
committee meetings.
Treasurer/CFO.
The Treasurer shall be responsible for conducting the financial affairs of the corporation as
directed and authorized by the Board of Directors and Executive Committee, if any, and shall make reports of the corporation’s finances as required, but no less often than at each meeting of the Board of Directors and Executive Committee.
Section
2.
Election and Term of Office
.
The officers shall be elected annually by the Board of Directors at the
first meeting of the Board of Directors, immediately following the annual meeting of the shareholders. Each officer shall serve a one year term or until a successor has been elected and qualified.
Section 3.
Removal or Vacancy
.
The Board of Directors shall have the power to remove an officer or agent of the corporation. Any vacancy
that occurs for any reason may be filled by the Board of Directors.
ARTICLE IV
CORPORATE SEAL, EXECUTION OF INSTRUMENTS
The corporation shall not have a corporate seal. All instruments that are executed on behalf of the corporation which are acknowledged and which affect an
interest in real estate shall be executed by the Chairman, President or any Vice-President and the Secretary or Treasurer. All other instruments executed by the corporation, including a release of mortgage or lien, may be executed by the Chairman,
President or any Vice-President. Notwithstanding the preceding provisions of this section, any written instrument may be executed by any officer(s) or agent(s) that are specifically designated by resolution of the Board of Directors.
ARTICLE V
AMENDMENT TO
BYLAWS
The bylaws may be amended, altered, or repealed by the Board of Directors or the shareholders by a majority of a
quorum vote at any regular or special meeting; provided however, that the shareholders may from time to time specify particular provisions of the bylaws which shall not be amended or repealed by the Board of Directors.
ARTICLE VI
INDEMNIFICATION
Any director or officer who
is involved in litigation by reason of his or her position as a director or officer of this corporation shall be indemnified and held harmless by the corporation to the fullest extent authorized by law as it now exists or may subsequently be amended
(but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights).
ARTICLE VII
STOCK
CERTIFICATES
The corporation may issue shares of the corporation’s stock without certificates. Within a reasonable time after the issue or
transfer of shares without certificates, the corporation shall send the shareholder a written statement of the information that is required by law to be on the certificates. Upon written request to the corporate secretary by a holder of such shares,
the secretary shall provide a certificate in the form prescribed by the directors.
ARTICLE VIII
DISSOLUTION
The corporation may be
dissolved only with authorization of its Board of Directors given at a special meeting called for that purpose, and with the subsequent approval by no less than
two-thirds
(2/3) vote of the members.
Certification
Daniel R Fisher, Secretary
of GLAS Trust Company LLC hereby certifies that the foregoing is a true and correct copy of the bylaws of the above-named corporation, duly adopted by the incorporator(s) on September 20, 2017.
EXHIBIT 6
May 2, 2019
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended, the undersigned hereby consents that reports of examination of the
undersigned made by Federal, State, Territorial, or District authorities authorized to make such examination may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor.
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Very truly yours,
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GLAS TRUST COMPANY LLC
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/s/ Adam Berman
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Adam Berman
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Vice President
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Exhibit 7
State of New Hampshire Call Report with Attestation
Quarter
Ending:
Instructions:
This worksheet replaces the FFIEC 041 Report filing for
Non-Depository
Trust Companies
Please do not change the formatting, location of cells, or add calculations to the cells. The Department will be merging the information into a database and these
changes will inhibit our ability to import the file.
The worksheets found in the excel file are based on the FFIEC 041 report. When filling out the forms please
follow the instructions found at http://www.fdic.gov/regulations/resources/call/index.html. All New Hampshire
non-depository
trust companies must file quarterly. Disregard any instructions that state or imply
quarterly filing is not necessary. When completing the call report, all dollar amounts should be rounded to thousands.
The “Attestation” worksheet needs
to be printed off and signed as detailed on the worksheet. After the necessary signatures are gathered the form needs to be mailed to the department. This needs to be received no later than 32 days after the quarter end.
The Department is requesting additional information to be reported quarterly on Call Report Schedule
RC-T
for those institutions
or their subsidiaries offering fiduciary and related services. This change will begin with the September 30, 2008 filing period. Please be aware that this particular Call Report schedule will differ from the FFIEC forms & instructions
given the presence of two additional reporting items in the Memoranda section of Schedule
RC-T.
New reporting will include the following: 1) Accounts where the institution is named or serves as a fiduciary of
an account to be funded at a later date (‘‘dry trusts”), and 2) Accounts where the institution is named or serves as “Trust Protector”.
Information:
|
|
|
|
|
Name of Institution:
|
|
GLAS Trust Company LLC
|
|
Filing Period (Quarter ending):
|
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31-Dec-18
|
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Date Report was emailed:
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30-Jan
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Information on person to contact with question on this call report filing
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Primary Contact
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Secondary Contact
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Name:
|
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Brian Carne
|
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Dan Fisher
|
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Phone Number:
|
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+44 20 3764 9320
|
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(212) 808 3050
|
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E-Mail
Address:
|
|
brian.carne@glas.agency
|
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dan.fisher@glas.agency
|
USA PATRIOT ACT Section 314(a) Anti-Money Laundering Contact Information:
To facilitate the 314(a) process, you will need to provide the following information for two (2) individuals who will serve as the Point of Contact (POC) for your
institution. Any changes to the POCs will need to be reported in writing to the New Hampshire Banking Department.
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POC Name:
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Primary Contact
Brian Carne
|
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Secondary Contact
Dan Fisher
|
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POC Title:
|
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Chairman
|
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Secretary
|
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Mailing Address:
|
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Street
|
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45 Ludgate Hill
|
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3 Second Street, Suite 206
|
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PO B
OX
|
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City, State, Zip
|
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London, EC4M 7JU, UK
|
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Jersey City, NJ 07302
|
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Email Address:
|
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brian.carne@glas.agency
|
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dan.fisher@glas.agency
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Phone Number:
|
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+44 20 3764 9320
|
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(212) 808 3050
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Revised 3/18/14
Quarter
Ending:
Attestation
This report is required by RSA 383:13
|
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|
|
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Name of Institution:
|
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GLAS Trust Company LLC
|
Date report was sent electronically to the New Hampshire Banking Department:
30-
Jan-19
Information in the report is for Quarter Ending: 31
December 2018
NOTE: The report must be signed by an authorized officer and attested to by not less than two directors (trustees).
I,
Martin Reed, Senior Vice President/ Corporate
Secretary
Typed Name and Title of Officer Authorized to Sign
Report
of the named bank do hereby declare that the report sent electronically to the New Hampshire Banking Department has been prepared in conformance with the
instructions issued by the FFIEC and are true to the best of my knowledge and belief.
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30-Jan-19
|
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Signature of Office Authorized to Sign Report
|
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Date of Signature
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We, the undersigned directors (trustees), attest to the correctness
of the report sent electronically to the New Hampshire Banking Department and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instruction issued by the FFIEC and is true
and correct.
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Steven Hodgetts
|
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Signature of Director (Trustee)
|
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Printed Name of Director (Trustee)
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Daniel Fisher
|
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Signature of Director (Trustee)
|
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Printed Name of Director (Trustee)
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|
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Signature of Director (Trustee)
|
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Printed Name of Director
(Trustee)
|
The signed “Attestation” needs to be received by the department no later than 32 days after the quarter end.
Revised 9/16/13
Quarter
Ending:
Schedule Rl
-- Income Statement
All Report of Income schedules are to be entered on a calendar
year-to-date
basis in thousands of dollars.
|
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|
|
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1
|
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|
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Interest Income:
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|
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|
|
1. a.
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|
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Interest and fee income on loans:
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(1)
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Loans secured by real estate
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(2)
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Commercial and industrial loans
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(3)
|
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Loans to individuals for household, family, and other personal expenditures:
|
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|
|
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|
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(a) Credit cards
|
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|
|
|
|
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(b) Other (includes single payment, installment, all student loans, and revolving credit plans other than credit cards)
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|
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(4)
|
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Loans to foreign governments and official institutions
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(5)
|
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All other loans
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(6)
|
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Total interest and fee income on loans (sum of items 1.a.(1) through 1.a.(5))
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|
|
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1. b.
|
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|
|
Income from lease financing receivables
|
|
|
|
|
|
1. c.
|
|
|
|
Interest income on balances due from depository institutions
|
|
|
|
|
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1. d.
|
|
|
|
Interest and dividend income on securities
|
|
8
|
|
|
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|
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(1)
|
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U.S. Treasury securities and U.S. Government agency obligations (excluding mortgage-backed securities)
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|
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(2)
|
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Mortgage-backed securities
|
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|
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(3)
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|
|
|
|
|
|
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|
|
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All other securities (includes securities issued by states and political subdivisions in the U.S.)
|
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|
|
|
|
1. e.
|
|
|
|
Interest income from trading assets
|
|
|
|
|
|
1. f.
|
|
|
|
Interest income on federal funds sold and securities purchased under agreements to resell
|
|
|
|
|
|
1. g.
|
|
|
|
Other interest income
|
|
|
|
|
|
1. h.
|
|
|
|
Total interest income (sum of items 1.a.(6) through 1.g)
|
|
|
|
8
|
|
2.
|
|
|
|
Interest expense:
|
|
|
|
|
|
2. a.
|
|
|
|
Interest on deposits:
|
|
|
|
|
|
|
|
(1)
|
|
Transaction accounts (interest-bearing demand deposits, NOW accounts, ATS accounts, and telephone and preauthorized transfer accounts)
|
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|
|
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|
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(2)
|
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Nontransaction accounts:
|
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|
|
|
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|
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|
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(a) Savings deposits (includes MMDAs)
|
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|
|
|
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|
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(b) Time deposits of $100,000 or more
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|
|
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|
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(c) Time deposits of less than $100,000
|
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|
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2. b.
|
|
|
|
Expense of federal funds purchased and securities sold under agreements to repurchase
|
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|
|
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2. c.
|
|
|
|
Interest on trading liabilities and other borrowed money
|
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|
|
|
|
2. d.
|
|
|
|
Interest on subordinated notes and debentures
|
|
|
|
|
|
2. e.
|
|
|
|
Total interest expense (sum of items 2. a though 2. d)
|
|
|
|
|
|
3.
|
|
|
|
Net interest income (item 1.h minus 2.e)
|
|
|
|
8
|
|
4.
|
|
|
|
Provision for loan and lease losses
|
|
|
|
|
|
5.
|
|
|
|
Noninterest income:
|
|
|
|
|
|
5. a.
|
|
|
|
Income from fiduciary activities
|
|
1,398
|
|
|
|
5. b.
|
|
|
|
Service charges on deposit accounts
|
|
|
|
|
|
5. c.
|
|
|
|
Trading revenue
|
|
|
|
|
|
5. d.
|
|
(1)
|
|
Fees and commissions from securities brokerage
|
|
|
|
|
|
|
|
(2)
|
|
Investment banking, advisory, and underwriting fees and commissions
|
|
|
|
|
|
|
|
(3)
|
|
Fees and commissions from annuity sales
|
|
|
|
|
|
|
|
(4)
|
|
Underwriting income from insurance and reinsurance activities
|
|
|
|
|
|
|
|
(5)
|
|
Income from other insurance activities
|
|
|
|
|
|
5. e.
|
|
|
|
Venture capital revenue
|
|
|
|
|
|
5. f.
|
|
|
|
Net servicing fees
|
|
|
|
|
|
5. g.
|
|
|
|
Net securitization income
|
|
|
|
|
|
5. h.
|
|
|
|
Not applicable
|
|
|
|
|
|
5. i.
|
|
|
|
Net gains (losses) on sales of loans and leases
|
|
|
|
|
|
5. j.
|
|
|
|
Net gains (losses) on sales of other real estate owned
|
|
|
|
|
|
5. k.
|
|
|
|
Net gains (losses) on sales of other assets (excluding securities)
|
|
|
|
|
|
5. l.
|
|
|
|
Other noninterest income*
|
|
|
|
|
|
5. m.
|
|
|
|
Total noninterest income (sum of items 5.a though 5.1)
|
|
|
|
1,398
|
|
6. a.
|
|
|
|
Realized gains (losses) on
held-to-maturity
securities
|
|
|
|
|
|
6. b.
|
|
|
|
Realized gains (losses) on
available-for-sale
securities
|
|
|
|
|
|
7.
|
|
|
|
Noninterest expense:
|
|
|
|
|
|
7. a.
|
|
|
|
Salaries and employee benefits
|
|
|
|
|
|
7. b.
|
|
|
|
Expenses of premises and fixed assets (net of rental income) (excluding salaries and employee benefits and mortgage interest)
|
|
|
|
|
|
7. c.
|
|
|
|
(1) Goodwill impairment losses
|
|
|
|
|
|
|
|
|
|
(2) Amortization expense and impairment losses for other intangible assets
|
|
1
|
|
|
|
7. d.
|
|
|
|
Other noninterest expense*
|
|
1,313
|
|
|
|
7. e.
|
|
|
|
Total noninterest expense (sum of items 7, a though 7.d)
|
|
|
|
1,314
|
|
8.
|
|
|
|
Income (loss) before income taxes and extraordinary items and other adjustments (item 3 plus or minus items 4, 5.m, 6.a, 6.b and 7.e)
|
|
|
|
92
|
|
9.
|
|
|
|
Applicable income taxes (on item 8)
|
|
|
|
14
|
|
10.
|
|
|
|
Income (loss) before extraordinary items and other adjustments (item 8 minus item 9)
|
|
|
|
78
|
|
11.
|
|
|
|
Extraordinary items and other adjustments, net of income taxes*
|
|
|
|
|
|
12.
|
|
|
|
Net income (loss) attributable to bank and noncontrolling (minority) interests (sum of items 10 and 11)
|
|
|
|
78
|
|
13.
|
|
|
|
LESS: Net income (loss) attributable to noncontrolling (minority) interests (if net income, report as a positive value; if net loss, report as a negative value)
|
|
|
|
|
|
14.
|
|
|
|
Net income (loss) attributable to bank (item 12 minus item 13)
|
|
|
|
78
|
|
*
|
Describe on Schedule RI-E - Explanations
|
Revised 9/16/13
Quarter
Ending:
Schedule Rl
- Continued
All Report of Income schedules are to be entered on a calendar
year-to-date
basis in thousands of dollars.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Memoranda
|
|
|
|
|
|
|
|
|
|
|
|
14.
|
|
|
|
Other-than-temporary impairment losses on
held-to-maturity
and
available-for-sale
debt securities:
|
|
|
|
|
|
|
|
a.
|
|
Total other-than-temporary impairment losses
|
|
|
|
|
|
|
|
b.
|
|
Portion of losses recognized in other comprehensive income (before income taxes)
|
|
|
|
|
|
|
|
c.
|
|
Net impairment losses recognized in earnings (included in Schedule RI, items 6.a
|
|
|
|
|
|
|
|
|
|
and 6.b)(Memorandum item 14.a minus Memorandum item 14.b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Memoranda Items
1-13
Omitted
|
|
|
|
|
Revised 9/16/13
Quarter
Ending:
Schedule
RI-A -- Changes in Equity Capital
|
|
|
|
|
|
|
|
|
|
|
Indicate decreases and losses in parentheses.
Dollar Amounts in
Thousands
|
|
|
|
1.
|
|
Total equity capital most recently reported for the previous year end, Reports of Condition and Income (i.e., after adjustments from amended Reports of Income)
|
|
1,504
|
|
|
|
2.
|
|
Restatements due to corrections of material accounting errors and changes in accounting principles*
|
|
|
|
|
|
3.
|
|
Balance end of previous calendar year as restated (sum of items 1 and 2)
|
|
1,504
|
|
|
|
4.
|
|
Net income (loss) (must equal Schedule RI, item 14)
|
|
78
|
|
|
|
5.
|
|
Sale, conversion, acquisition, or retirement of capital stock, net (excluding treasury stock transactions)
|
|
|
|
|
|
6.
|
|
Treasury stock transactions, net
|
|
|
|
|
|
7.
|
|
Changes incident to business combinations, net
|
|
|
|
|
|
8.
|
|
LESS: Cash dividends declared on preferred stock
|
|
|
|
|
|
9.
|
|
LESS: Cash dividends declared on common stock
|
|
|
|
|
|
10.
|
|
Other comprehensive income
|
|
|
|
|
|
11.
|
|
Other transactions with parent holding company* (not included in items 5, 6, 8, or 9 above)
|
|
20
|
|
Capital Contribution
|
|
12.
|
|
Total equity capital end of current period (sum of items 3 through 11) (must equal Schedule RC, item 27 .a)
|
|
1,602
|
|
|
|
*
|
Describe on Schedule
Rl-E-Explanations
|
|
|
|
|
|
|
|
|
|
Schedule
Rl-E
-- Explanations
|
|
Quarter Ending:
|
Schedule
Rl-E
is to be completed each quarter
on a calendar
year-to-date
basis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollar Amounts in Thousands
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
|
|
|
Other noninterest income (from Schedule Rl, item 5.1)
|
|
|
|
|
|
|
|
|
|
Itemize and describe amounts greater than $25,000 that exceed 3% of Schedule Rl, item 5.1:
|
|
|
|
see below
|
|
1. a.
|
|
|
|
Income and fees from the printing and sale of checks
|
|
|
|
|
|
1. b.
|
|
|
|
Earnings on/increase in value of cash surrender value of life insurance
|
|
|
|
|
|
1. c.
|
|
|
|
Income and fees from automated teller machines (ATMs)
|
|
|
|
|
|
1. d.
|
|
|
|
Rent and other income from other real estate owned
|
|
|
|
|
|
1. e.
|
|
|
|
Safe deposit box rent
|
|
|
|
|
|
1. f.
|
|
|
|
Net change in the fair values of financial instruments accounted for under a fair value option
|
|
|
|
|
|
1. g.
|
|
|
|
Bank card and credit card interchange fees
|
|
|
|
|
|
1. h.
|
|
|
|
Gains on bargain purchases
|
|
|
|
|
|
1. i.
|
|
|
|
|
|
|
|
|
|
1. j.
|
|
|
|
|
|
|
|
|
|
1. k.
|
|
|
|
|
|
|
|
|
|
2.
|
|
|
|
Other noninterest expense (from Schedule Rl, item 7.d)
|
|
|
|
|
|
|
|
|
|
Itemize and describe amounts greater than $25,000 that exceed 3% of Schedule Rl, item 7.d:
|
|
|
|
see below
|
|
2. a.
|
|
|
|
Data processing expenses
|
|
|
|
|
|
2. b.
|
|
|
|
Advertising and marketing expenses
|
|
|
|
|
|
2. c.
|
|
|
|
Directors’ fees
|
|
|
|
|
|
2. d.
|
|
|
|
Printing, stationery, and supplies
|
|
|
|
|
|
2. e.
|
|
|
|
Postage
|
|
|
|
|
|
2. f.
|
|
|
|
Legal fees and expenses
|
|
|
|
|
|
2. g.
|
|
|
|
FDIC deposit insurance assessments
|
|
|
|
|
|
2. h.
|
|
|
|
Accounting and auditing expenses
|
|
89
|
|
|
|
2. i.
|
|
|
|
Consulting and advisory expenses
|
|
|
|
|
|
2. j.
|
|
|
|
|
|
|
|
|
|
2. k.
|
|
|
|
Telecommunications expenses
|
|
|
|
|
|
2. I.
|
|
|
|
|
|
|
|
|
|
2. m.
|
|
|
|
|
|
|
|
|
|
2. n.
|
|
|
|
|
|
|
|
|
|
3.
|
|
|
|
Extraordinary items and other adjustments and applicable income tax effect (from Schedule Rl, item 11) (itemize and describe all extraordinary items and other adjustments):
|
|
|
|
|
|
3. a.
|
|
(1)
|
|
|
|
|
|
|
|
|
|
(2)
|
|
Applicable income tax effect
|
|
|
|
|
|
3. b.
|
|
(1)
|
|
|
|
|
|
|
|
|
|
(2)
|
|
Applicable income tax effect
|
|
|
|
|
|
3. c.
|
|
(1)
|
|
|
|
|
|
|
|
|
|
(2)
|
|
Applicable income tax effect
|
|
|
|
|
|
4.
|
|
|
|
Cumulative effect of changes in accounting principles and corrections of material accounting errors (from Schedule RI-A, item 2) (itemize and describe all such effects):
|
|
|
|
|
|
4. a.
|
|
|
|
|
|
|
|
|
|
4. b.
|
|
|
|
|
|
|
|
|
|
5.
|
|
|
|
Other transactions with parent holding company (from Schedule RI-A, item 11) (itemize and describe all such transactions):
|
|
|
|
|
|
5. a.
|
|
|
|
Introduction of initial capital as membership interest.
|
|
|
|
|
|
5. b.
|
|
|
|
|
|
|
|
|
|
6.
|
|
|
|
Adjustments to allowance for loan and lease losses; (itemize and describe all adjustments)
|
|
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6. a.
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6. b.
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7.
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Other explanations (the space below is provided for the bank to briefly describe, at its option, any
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other significant items affecting the Report of Income):
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Comments? (Yes or No)
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Other explanations (please type or print clearly):
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Itemize and describe amounts greater than $25,000 that exceed 3% of Schedule Rl, item 7.d:
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$57k Insurance costs
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$639k expenses for services provided by GLAS Americas to Trust Co
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$68k Bank service charges
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$173k Commission for new deals
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$165k expense allocation for services by GLAS Ltd
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$89k Professional Services for Audit & Tax services
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Itemize and describe amounts greater than $25,000 that exceed 3% of Schedule Rl, item 5.1:
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$58k Murray Energy Agency Fees
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$74k 9W Billable Hours
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$55k GNC Collateral Fees
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$556k Murray Energy Transfer Fees
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$167k Advanz Transfer Fees
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Revised 9/16/13
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Schedule RC -- Balance Sheet
|
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Quarter Ending:
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|
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Dollar Amounts in Thousands
|
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|
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|
ASSETS
|
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1.
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Cash and balances due from depository institutions :
|
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|
|
|
|
|
|
|
|
1. a.
|
|
Noninterest-bearing balances and currency and coin
|
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|
202
|
|
|
|
|
|
|
1. b.
|
|
Interest-bearing balances
|
|
|
1,505
|
|
|
|
|
|
|
2.
|
|
Securities:
|
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|
|
|
|
|
|
|
|
2. a.
|
|
Held-to-maturity securities (from Schedule RC-B, column A)
|
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|
|
|
|
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|
|
2. b.
|
|
Available-for-sale securities (from Schedule RC-B, column D)
|
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|
|
|
|
|
|
|
|
3.
|
|
Federal funds sold and securities purchased under agreements to resell:
|
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|
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|
|
|
|
|
|
3. a.
|
|
Federal funds sold
|
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|
|
|
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|
|
3. b.
|
|
Securities purchased under agreements to resell
|
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|
|
|
|
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|
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4.
|
|
Loans and lease financing receivables:
|
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|
|
|
|
|
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|
|
4. a.
|
|
Loans and leases held for sale
|
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|
4. b.
|
|
Loans and leases, net of unearned income
|
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|
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4. c.
|
|
LESS: Allowance for loan and lease losses
|
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|
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4. d.
|
|
Loans and leases, net of unearned income and allowance (item 4.b minus 4.c)
|
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|
|
|
|
|
|
|
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5.
|
|
Trading assets
|
|
|
|
|
|
|
|
|
|
6.
|
|
Premises and fixed assets (including capitalized leases)
|
|
|
2
|
|
|
|
|
|
|
7.
|
|
Other real estate owned
|
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|
|
|
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|
|
|
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8.
|
|
Investments in unconsolidated subsidiaries and associated companies
|
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|
|
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|
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|
|
9.
|
|
Direct and indirect investments in real estate ventures
|
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|
|
|
|
|
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|
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10.
|
|
Intangible assets:
|
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|
|
|
|
|
|
|
|
10. a.
|
|
Goodwill
|
|
|
|
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|
|
10. b.
|
|
Other intangible assets
|
|
|
|
|
|
|
|
|
|
11.
|
|
Other assets (from Schedule RC-F)
|
|
|
294
|
|
|
|
|
|
|
12.
|
|
Total assets (sum of items 1 though 11)
|
|
|
|
|
|
|
2,003
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
13.
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
13. a.
|
|
In domestic offices:
|
|
|
|
|
|
|
|
|
|
|
|
(1) Noninterest-bearing
|
|
|
|
|
|
|
|
|
|
|
|
(2) Interest-bearing
|
|
|
|
|
|
|
|
|
|
13. b.
|
|
Not applicable
|
|
|
|
|
|
|
|
|
|
14.
|
|
Federal funds purchased and securities sold under agreements to repurchase:
|
|
|
|
|
|
|
|
|
|
14. a.
|
|
Federal funds purchased
|
|
|
|
|
|
|
|
|
|
14. b.
|
|
Securities sold under agreements to repurchase
|
|
|
|
|
|
|
|
|
|
15.
|
|
Trading liabilities
|
|
|
|
|
|
|
|
|
|
16.
|
|
Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases)
|
|
|
|
|
|
|
|
|
|
17.
|
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
|
18.
|
|
Not applicable
|
|
|
|
|
|
|
|
|
|
19.
|
|
Subordinated notes and debentures
|
|
|
|
|
|
|
|
|
|
20.
|
|
Other liabilities (from Schedule RC-G)
|
|
|
401
|
|
|
|
|
|
|
21.
|
|
Total liabilities (sum of items 13 through 20)
|
|
|
|
|
|
|
401
|
|
|
22.
|
|
Not applicable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY CAPITAL
|
|
|
|
|
|
|
|
|
|
23.
|
|
Perpetual preferred stock and related surplus
|
|
|
|
|
|
|
|
|
|
24.
|
|
Common Stock
|
|
|
1,565
|
|
|
|
|
|
|
25.
|
|
Surplus (exclude all surplus related to preferred stock)
|
|
|
|
|
|
|
|
|
|
26. a.
|
|
Retained earnings
|
|
|
37
|
|
|
|
|
|
|
26. b.
|
|
Accumulated other comprehensive income (includes net unrealized holding gains (losses) on available-for-sale securities, accumulated net gains (losses) on cash flow hedges, and minimum pension liability adjustments.)
|
|
|
|
|
|
|
|
|
|
26. c.
|
|
Other equity capital components
|
|
|
|
|
|
|
|
|
|
27. a.
|
|
Total bank equity capital (sum of items 23 through 26.c)
|
|
|
|
|
|
|
1,602
|
|
|
27. b.
|
|
Noncontrolling (minority) interests in consolidated subsidiaries
|
|
|
|
|
|
|
|
|
|
28.
|
|
Total equity capital (sum of items 27.a and 27.b)
|
|
|
|
|
|
|
1,602
|
|
|
29.
|
|
Total liabilities and equity capital (sum of items 21 and 28)
|
|
|
|
|
|
|
2,003
|
|
|
|
|
|
|
|
|
|
Memorandum
|
|
|
|
|
|
|
|
|
|
|
|
Indicate in the box at the right the year of the last completed audit, that conforms to the
|
|
|
|
|
|
|
|
|
|
|
|
standards listed in NH RSA 384:43, “Annual Audits”.
|
|
|
|
|
|
|
2017
|
|
Revised 9/13/13
|
|
|
|
|
Schedule RC-B -- Securities
|
|
Quarter Ending:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollar Amounts in Thousands
|
|
|
|
|
|
|
|
Held to maturity
|
|
Available for sale
|
|
|
|
|
|
|
|
(Column A)
Amortized Cost
|
|
(Column B)
Fair Value
|
|
(Column C)
Amortized Cost
|
|
(Column D)
Fair Value
|
|
1.
|
|
|
|
U.S. Treasury securities
|
|
|
|
|
|
|
|
|
|
2.
|
|
|
|
U.S. Government agency obligations (exclude mortgage-backed securities):
|
|
|
|
|
|
|
|
|
|
2. a.
|
|
|
|
Issued by U.S. Government agencies
|
|
|
|
|
|
|
|
|
|
2. b.
|
|
|
|
Issued by U.S. Government-sponsored agencies
|
|
|
|
|
|
|
|
|
|
3.
|
|
|
|
Securities issued by states and political subdivisions in the U.S.
|
|
|
|
|
|
|
|
|
|
4.
|
|
|
|
Mortgage-backed securities (MBS):
|
|
|
|
|
|
|
|
|
|
4. a.
|
|
|
|
Pass-through securities:
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Guaranteed by GNMA
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
Issued by FNMA and FHLMC
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
|
Other pass-through securities
|
|
|
|
|
|
|
|
|
|
4. b.
|
|
|
|
Other mortgage-backed securities (include CMOs, REMICs and stripped MBS):
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Issued or guaranteed by U.S. Government agencies or sponsored agencies
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
Collateralized by MBS issued or guaranteed by U.S. Government agencies or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
sponsored agencies
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
|
All other residential MBS
|
|
|
|
|
|
|
|
|
|
4. c.
|
|
|
|
Commercial MBS:
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Commercial mortgage pass-through securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Issued or guaranteed by FNMA, FHLMC, or GNMA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Other pass-through securities
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
Other commercial MBS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Issued or guaranteed by U.S. Government agencies or sponsored agencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) All other commercial MBS
|
|
|
|
|
|
|
|
|
|
5.
|
|
|
|
Asset-backed securities and structured financial products:
|
|
|
|
|
|
|
|
|
|
|
|
a.
|
|
Asset-backed securities (ABS)
|
|
|
|
|
|
|
|
|
|
|
|
b.
|
|
Structured financial products:
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Cash
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
Synthetic
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
|
Hybrid
|
|
|
|
|
|
|
|
|
|
6.
|
|
|
|
Other debt securities:
|
|
|
|
|
|
|
|
|
|
6. a.
|
|
|
|
Other domestic debt securities
|
|
|
|
|
|
|
|
|
|
6. b.
|
|
|
|
Foreign debt securities
|
|
|
|
|
|
|
|
|
|
7.
|
|
|
|
Investments in mutual funds and other equity securities with readily determinable fair values
|
|
|
|
|
|
|
|
|
|
8.
|
|
|
|
Total (sum of items 1 through 7) (total of column A must equal Schedule RC, item 2.a) (total of column D must equal Schedule RC, item 2.b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Memoranda
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollar Amounts in Thousands
|
|
1.
|
|
|
|
Pledged securities
1
|
|
|
|
|
|
|
|
|
1 Includes held-to-maturity securities at amortized cost and available-for-sale securities at fair value.
Revised 9/16/13
|
|
|
|
|
|
|
|
|
|
|
Schedule RC-F -- Other Assets
|
|
Quarter Ending:
|
|
|
|
|
|
Dollar Amounts in Thousands
|
|
1.
|
|
Accrued interest receivable
|
|
|
|
|
|
2.
|
|
Net deferred tax assets
|
|
|
|
|
|
3.
|
|
Interest-only strips receivable (not in the form of a security) on:
|
|
|
|
|
|
3. a.
|
|
Mortgage loans
|
|
|
|
|
|
3. b.
|
|
Other financial assets
|
|
|
|
|
|
4.
|
|
Equity securities that DO NOT have readily determinable fair values
|
|
|
|
|
|
5.
|
|
Life insurance assets:
|
|
|
|
|
|
a.
|
|
General account life insurance assets
|
|
|
|
|
|
b.
|
|
Separate account life insurance assets
|
|
|
|
|
|
c.
|
|
Hybrid account life insurance assets
|
|
|
|
|
|
6.
|
|
All other assets (itemize and describe amounts greater than $25,000 that exceed 25% of this item)
|
|
|
|
294
|
|
6. a.
|
|
Prepaid expenses
|
|
151
|
|
|
|
6. b.
|
|
Repossessed personal property (including vehicles)
|
|
|
|
|
|
6. c.
|
|
Derivatives with a positive fair value held for purposes other than trading
|
|
|
|
|
|
6. d.
|
|
Retained interests in accrued interest receivables related to securitized credit cards
|
|
|
|
|
|
6. e.
|
|
FDIC loss-sharing indemnification assets
|
|
|
|
|
|
6. f.
|
|
Prepaid deposit insurance assessments
|
|
|
|
|
|
6. g.
|
|
Account receivables
|
|
112
|
|
|
|
6. h.
|
|
|
|
|
|
|
|
6. i.
|
|
|
|
|
|
|
|
7.
|
|
Total (sum of items 1 through 6) (must equal Schedule RC, item 11)
|
|
|
|
294
|
|
|
|
|
|
|
|
|
6. Itemized amounts
$147k are prepayments to GLAS entities for future services to be provided
$74k are
hours billed and due for Nine West deal
|
|
|
|
|
Revised 9/16/13
|
|
|
|
|
|
|
|
|
Schedule RC-G -- Other Liabilities
|
|
Quarter Ending:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollar Amounts in Thousands
|
|
|
|
1. a.
|
|
Interest accrued and unpaid on deposits
|
|
|
|
|
|
|
|
1. b.
|
|
Other expenses accrued and unpaid (includes accrued income taxes payable)
|
|
|
|
46
|
|
|
|
2.
|
|
Net deferred tax liabilities
|
|
|
|
|
|
|
|
3.
|
|
Allowance for credit losses on off-balance sheet credit exposures
|
|
|
|
|
|
|
|
4.
|
|
All other liabilities (itemize and describe amounts greater than $25,000 that exceed 25% of this item)
|
|
|
|
355
|
|
Item: $349k Deferred Revenue
|
|
4. a.
|
|
Accounts payable
|
|
|
|
|
|
|
|
4. b.
|
|
Deferred compensation liabilities
|
|
|
|
|
|
|
|
4. c.
|
|
Dividends declared but not yet payable
|
|
|
|
|
|
|
|
4. d.
|
|
Derivatives with a negative fair value held for purposes other than trading
|
|
|
|
|
|
|
|
4. e.
|
|
|
|
|
|
|
|
|
|
4. f.
|
|
|
|
|
|
|
|
|
|
4. g.
|
|
|
|
|
|
|
|
|
|
5.
|
|
Total (sum of items 1 though 4) (must equal Schedule RC, item 20)
|
|
|
|
401
|
|
|
Revised 9/16/13
|
|
|
|
|
Schedule RC-T -- Fiduciary and Related Services
|
|
Quarter Ending:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIDUCIARY AND RELATED ASSETS
|
|
(Column A) Managed Assets
|
|
(Column B)
Non-Managed
Assets
|
|
(Column C) Number of Managed Accounts
|
|
|
(Column D)
Number of
Non-Managed
Accounts
|
|
|
4.
|
|
Personal trust and agency accounts
|
|
|
|
|
|
|
|
|
|
|
|
5.
|
|
Retirement related trust and agency accounts:
|
|
|
|
|
|
|
|
|
|
|
|
5. a.
|
|
Employee benefit -- defined contribution
|
|
|
|
|
|
|
|
|
|
|
|
5. b.
|
|
Employee benefit -- defined benefit
|
|
|
|
|
|
|
|
|
|
|
|
5. c.
|
|
Other employee benefit and retirement-related accounts
|
|
|
|
|
|
|
|
|
|
|
|
6.
|
|
Corporate trust and agency accounts USD
|
|
|
|
8,344,736
|
|
|
|
|
23
|
|
|
7.
|
|
Investment management and investment advisory agency accounts
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
|
Foundation and endowment trust and agency accounts
|
|
|
|
|
|
|
|
|
|
|
|
9.
|
|
Other fiduciary accounts
|
|
|
|
|
|
|
|
|
|
|
|
10.
|
|
Total fiduciary accounts (sum of items 4 through 9)
|
|
|
|
|
|
|
|
|
|
|
|
11.
|
|
Custody and safekeeping accounts
|
|
|
|
8,344,736
|
|
|
|
|
23
|
|
|
12.
|
|
Not applicable
|
|
|
|
|
|
|
|
|
|
|
|
13.
|
|
Individual Retirement Accounts, Health Savings Accounts, and other similar accounts (included in items 5.c. and 11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIDUCIARY AND RELATED SERVICES INCOME
|
|
|
|
|
|
|
|
|
|
|
|
14.
|
|
Personal trust and agency accounts
|
|
|
|
|
|
|
|
|
|
|
|
15.
|
|
Employee benefit and retirement related trust and agency accounts:
|
|
|
|
|
|
|
|
|
|
|
|
15. a.
|
|
Employee benefit -- defined contribution
|
|
|
|
|
|
|
|
|
|
|
|
15. b.
|
|
Employee benefit -- defined benefit
|
|
|
|
|
|
|
|
|
|
|
|
15. c.
|
|
Other employee benefit and retirement-related accounts
|
|
|
|
|
|
|
|
|
|
|
|
16.
|
|
Corporate trust and agency accounts
|
|
1,398
|
|
|
|
|
|
|
|
|
|
17.
|
|
Investment management and investment advisory agency accounts
|
|
|
|
|
|
|
|
|
|
|
|
18.
|
|
Foundation and endowment trust and agency accounts
|
|
|
|
|
|
|
|
|
|
|
|
19.
|
|
Other fiduciary accounts
|
|
|
|
|
|
|
|
|
|
|
|
20.
|
|
Custody and safekeeping accounts
|
|
|
|
|
|
|
|
|
|
|
|
21.
|
|
Other fiduciary and related services income
|
|
|
|
|
|
|
|
|
|
|
|
22.
|
|
Total gross fiduciary and related services income (sum of items 14 through 21) (must equal Schedule Rl, item 5.a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,398
|
|
|
|
|
|
|
|
|
|
23.
|
|
Less: Expenses
|
|
(1,314)
|
|
|
|
|
|
|
|
|
|
24.
|
|
Less: Net losses from fiduciary and related services
|
|
|
|
|
|
|
|
|
|
|
|
25.
|
|
Plus: Intracompany income credits for fiduciary and related services
|
|
|
|
|
|
|
|
|
|
|
|
26.
|
|
Net fiduciary and related services income
|
|
84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Memoranda
|
|
(Column A) Personal Trust and Agency and Investment Management Agency Accounts
|
|
(Column B) Employee Benefit and Retirement Related Trust and Agency Accounts
|
|
(Column C) All Other Accounts
|
|
|
|
|
|
1.
|
|
Managed assets held in fiduciary accounts:
|
|
|
|
|
|
|
|
|
|
|
|
1. a.
|
|
Noninterest-bearing deposits
|
|
|
|
|
|
|
|
|
|
|
|
1. b.
|
|
Interest-bearing deposits
|
|
|
|
|
|
|
|
|
|
|
|
1. c.
|
|
U.S. Treasury and U.S. Government agency obligations
|
|
|
|
|
|
|
|
|
|
|
|
1. d.
|
|
State, county and municipal obligations
|
|
|
|
|
|
|
|
|
|
|
|
1. e.
|
|
Money market mutual funds
|
|
|
|
|
|
|
|
|
|
|
|
1. f.
|
|
Equity mutual funds
|
|
|
|
|
|
|
|
|
|
|
|
1. g.
|
|
Other mutual funds
|
|
|
|
|
|
|
|
|
|
|
|
1. h.
|
|
Common trust funds and collective investment funds
|
|
|
|
|
|
|
|
|
|
|
|
1. i.
|
|
Other short-term obligations
|
|
|
|
|
|
|
|
|
|
|
|
1. j. 1. k.
|
|
Other notes and bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in unregistered funds and private equity investments
Other common and preferred stocks
|
|
|
|
|
|
|
|
|
|
|
|
1. I.
|
|
|
|
|
|
|
|
|
|
|
|
1. m.
|
|
Real estate mortgages
|
|
|
|
|
|
|
|
|
|
|
|
1. n.
|
|
Real estate
|
|
|
|
|
|
|
|
|
|
|
|
1. o.
|
|
Miscellaneous assets
|
|
|
|
|
|
|
|
|
|
|
|
1. p.
|
|
Total managed assets held in fiduciary accounts (for each column, sum of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Memorandum items 1.a through 1.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Column A) Managed Assets
|
|
(Column B) Number of Managed Accounts
|
|
|
|
|
|
|
|
1. q.
|
|
Investments of managed fiduciary accounts in advised or sponsored mutual funds
|
|
|
|
|
|
|
|
|
|
|
Revised 9/16/13
(Continued) -- Schedule
RC-T
-- Fiduciary and Related Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollar Amounts in Thousands
|
|
|
|
|
|
(Column A)
Number of
Issues
|
|
(Column B)
Principal
Amount
Outstanding
|
|
|
|
2.
|
|
Corporate trust and agency accounts:
|
|
|
|
|
|
|
|
|
|
Corporate trust and agency accounts:
|
|
|
|
|
|
|
|
2. a.
|
|
Corporate and municipal trusteeships USD
|
|
23
|
|
8,342,698
|
|
|
|
|
(1) Issues reported in Memorandum item 2.a. that are in default
|
|
3
|
|
457,752
|
|
|
|
2. b.
|
|
Transfer agent, registrar, paying agent, and other corporate agency
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Column A) Number of Funds
|
|
(Column B) Market Value of Fund Assets
|
|
|
|
3.
|
|
Collective investment funds and common trust funds:
|
|
|
|
|
|
|
|
3. a.
|
|
Domestic equity
|
|
|
|
|
|
|
|
3. b.
|
|
International/Global equity
|
|
|
|
|
|
|
|
3. c.
|
|
Stock/Bond blend
|
|
|
|
|
|
|
|
3. d.
|
|
Taxable bond
|
|
|
|
|
|
|
|
3. e.
|
|
Municipal bond
|
|
|
|
|
|
|
|
3. f.
|
|
Short term investments/Money market
|
|
|
|
|
|
|
|
3. g.
|
|
Specialty/Other
|
|
|
|
|
|
|
|
3. h.
|
|
Total collective investment funds (sum of Memorandum items 3.a through 3.g)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Column A)
Gross
Losses
Managed
Accounts
|
|
(Column B)
Gross
Losses Non-
Managed
Accounts
|
|
(Column C) Recoveries
|
|
4.
|
|
Fiduciary settlements, surcharges, and other losses:
|
|
|
|
|
|
|
|
4. a.
|
|
Personal trust and agency accounts
|
|
|
|
|
|
|
|
4. b.
|
|
Employee benefit and retirement-related trust and agency accounts
|
|
|
|
|
|
|
|
4. c.
|
|
Investment management and investment advisory agency accounts
|
|
|
|
|
|
|
|
4. d.
|
|
Other fiduciary accounts and related services
|
|
|
|
|
|
|
|
4. e.
|
|
Total fiduciary settlements, surcharges, and other losses (sum of Memorandum items 4.a through 4.d) (sum of columns A and B minus column C must equal Schedule
RC-T,
item 24)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Accounts
|
|
|
|
|
|
5.
|
|
Accounts where the institution is named or serves as a fiduciary of an account to be funded at a later date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Accounts
|
|
|
|
|
|
6.
|
|
Accounts where the institution is named or serves as “Trust Protector”
|
|
|
|
|
|
|
Revised 9/16/13
