0000947871-05-000333.txt : 20120725 0000947871-05-000333.hdr.sgml : 20120725 20050208171030 ACCESSION NUMBER: 0000947871-05-000333 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20050208 DATE AS OF CHANGE: 20050208 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FOAMEX INTERNATIONAL INC CENTRAL INDEX KEY: 0000912908 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS FOAM PRODUCTS [3086] IRS NUMBER: 050473908 STATE OF INCORPORATION: DE FISCAL YEAR END: 1229 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-48793 FILM NUMBER: 05584812 BUSINESS ADDRESS: STREET 1: 1000 COLUMBIA AVENUE CITY: LINWOOD STATE: PA ZIP: 19061 BUSINESS PHONE: 6108593000 MAIL ADDRESS: STREET 1: 1000 COLUMBIA AVE CITY: LINWOOD STATE: PA ZIP: 19061 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BANK OF NOVA SCOTIA / CENTRAL INDEX KEY: 0000009631 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 134941099 FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 44 KING STREET WEST STREET 2: SCOTIA PLAZA 8TH FL. CITY: TORONTO STATE: A6 ZIP: M5H 1H1 BUSINESS PHONE: (416)866-3397 MAIL ADDRESS: STREET 1: 44 KING STREET WEST STREET 2: SCOTIA PLAZA 8TH FL. CITY: TORONTO STATE: A6 ZIP: M5H 1H1 SC 13D/A 1 sc13da_020405.txt SCHEDULE 13D/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D/A Under the Securities Exchange Act of 1934 (Amendment No. 1) Foamex International Inc. -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $0.01 Par Value Per Share -------------------------------------------------------------------------------- (Title of Class of Securities) 344123997 -------------------------------------------------------------------------------- (CUSIP Number) Mr. Robert L. Brooks Senior Executive Vice-President, Treasury and Operations The Bank of Nova Scotia 44 King Street West Scotia Plaza, 64th floor Toronto, Ontario, Canada M5H 1H1 (416) 866-6163 -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) January 31, 2005 -------------------------------------------------------------------------------- (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g) check the following box [ ]. SCHEDULE 13D ---------------------------------------------- CUSIP No. 344123997 ---------------------------------------------- ------- ------------------------------------------------------------------------ 1 NAME OF REPORTING PERSONS The Bank of Nova Scotia I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) ------- ------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [ ] ------- ------------------------------------------------------------------------ 3 SEC USE ONLY ------- ------------------------------------------------------------------------ SOURCE OF FUNDS (See Instructions) 4 Not Applicable ------- ------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] ------- ------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Canada ------------------------- ---------- ------------------------------------------- 7 SOLE VOTING POWER NUMBER 5,496,426 OF ---------- -------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 0 EACH ---------- ------------------------------------------- REPORTING SOLE DISPOSITIVE POWER PERSON 9 WITH 5,496,426 ---------- ------------------------------------------- SHARED DISPOSITIVE POWER 10 0 ------- ------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,496,426 ------- ------------------------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [X] ------- ------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 22.49% (calculated on the basis of 24,444,617 shares of voting common stock outstanding, as reported on the Issuer's Form 10-Q for the quarter ended September 26, 2004). ------- ------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON (See Instructions) BK ------- ------------------------------------------------------------------------ (Continued on following pages) Page 2 of 17 Pages ------------------------------------------ CUSIP No. 344123997 ------------------------------------------ -------- ----------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS Calder & Co. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) -------- ----------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [ ] -------- ----------------------------------------------------------------------- 3 SEC USE ONLY -------- ----------------------------------------------------------------------- SOURCE OF FUNDS (See Instructions) 4 Not Applicable -------- ----------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] -------- ----------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York, United States ------------------------- ---------- ------------------------------------------- 7 SOLE VOTING POWER NUMBER 0 OF ---------- -------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 5,443,426 EACH ---------- ------------------------------------------- REPORTING SOLE DISPOSITIVE POWER PERSON 9 WITH 0 ---------- ------------------------------------------- SHARED DISPOSITIVE POWER 10 5,443,426 ------------------------- ---------- ------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,443,426 -------- ----------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [X] -------- ----------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 22.27% (calculated on the basis of 24,444,617 shares of voting common stock outstanding, as reported on the Issuer's Form 10-Q for the quarter ended September 26, 2004). -------- ----------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) PN -------- ----------------------------------------------------------------------- (Continued on following pages) Page 3 of 17 Pages Explanatory Note This Amendment No. 1 ("Amendment No. 1") amends and restates the Statement on Schedule 13D (the "Schedule 13D") filed with the Securities and Exchange Commission on November 8, 2000 by The Bank of Nova Scotia (the "Bank"). Unless otherwise defined herein, all capitalized terms shall have the meanings ascribed to them in the Schedule 13D. Item 1. Security and Issuer. This Amendment No. 1 to the Schedule 13D relates to shares of Common Stock, par value $ .01 per share (the "Company Common Stock"), of Foamex International Inc. (the "Company"). The principal executive offices of the Company are located at 1000 Columbia Avenue, Linwood, PA 19061. Item 2. Identity and Background. This Amendment No. 1 is being filed by The Bank of Nova Scotia, whose place of organization is Canada and whose business address is 44 King Street West, Scotia Plaza, 8th floor, Toronto, Ontario, Canada, M5H 1H1, and by Calder & Co., a partnership established to hold securities in the partnership name for the account and subject to the order of the Bank (the "Nominee"), whose business address is One Liberty Plaza, New York, New York 10006. Set forth on Appendix A attached hereto and incorporated herein by reference are the names, business addresses, principal occupations and citizenship of the directors and executive officers of the Bank. Set forth on Appendix B attached hereto and incorporated herein by reference are the names, business addresses, principal occupations and citizenship of the partners of the Nominee. During the last five years, neither the Bank, nor to its knowledge, any of its directors or executive officers, nor the Nominee, nor to its knowledge, any of its partners, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violations with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration See the information set forth under "Item 4. Purpose of Transaction," which is incorporated by reference in response to this Item 3. Item 4. Purpose of Transaction. In the ordinary course of its business, from 1995 through 1999, the Bank made loans and advances, and extended credit and other financial accommodations to or for the benefit of Trace Page 4 of 17 Pages International and/or Trace Foam Sub (collectively "Trace") pursuant to, or in connection with, certain loan agreements, credit agreements, pledge agreements, security agreements, demand notes, guarantees and other agreements, instruments and documents, including without limitation the following (collectively, the "Loan Documents"): Margin Loan Credit Agreement, dated as of August 15, 1997, between Trace International and the Bank, as amended, amended and restated, supplemented or otherwise modified from time to time; Second Amended and Restated Credit Agreement, dated as of December 24, 1997, between Trace International and the Bank, as amended, amended and restated, supplemented or otherwise modified from time to time; Guaranty, dated July 28, 1995, by Trace International in favor of the Bank, as amended, amended and restated, supplemented or otherwise modified from time to time; Demand Note, dated May 7, 1999, between Trace International and the Bank, as amended, amended and restated, supplemented or otherwise modified from time to time; Amended and Restated Pledge Agreement, dated as of June 30, 1998, by Trace International in favor of the Bank, as amended, amended and restated, supplemented or otherwise modified from time to time; Pledge Agreement, dated as of August 15, 1997, by Trace International in favor of the Bank, as amended, amended and restated, supplemented or otherwise modified from time to time; Trace Foam Sub Guaranty, dated as of December 30, 1998, by Trace Foam Sub in favor of the Bank, as amended, amended and restated, supplemented or otherwise modified from time to time; Demand Note, dated December 1, 1998, between Trace Foam Sub and the Bank, as amended, amended and restated, supplemented or otherwise modified from time to time; Note Pledge Agreement, dated as of March 29, 1999, by Trace Foam Sub in favor of the Bank, as amended, amended and restated, supplemented or otherwise modified from time to time; and Borrower Pledge Agreement, dated as of May 7, 1999, made by Trace Foam Sub in favor of the Bank, as amended. On July 21, 1999, Trace filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. The Bank's claims of in excess of US $167,000,000 at the time Trace filed its petitions in addition to the assigned claims of certain other Trace creditors were secured by liens and security interests on certain Trace assets, including as to the assigned claims, 7,000,247 shares of Company Common Stock. Pursuant to the Stipulation of Settlement (the "Settlement") between the Bank and John S. Pereira, in his capacity as the Chapter 7 Trustee of Trace (the "Trustee"), entered as an Order by the U.S. Bankruptcy Court for the Southern District of New York on October 18, 2000, and which became final and non-appealable on or about October 31, 2000, the Bank became the owner of 1,500,000 shares of Company Common Stock. Pursuant to the Share Exchange Agreement, dated as of July 31, 2000, as amended October 25, 2000, by and between the Bank and the Company (the "Share Exchange Agreement"), on November 2, 2000 the Bank transferred 1,500,000 shares of Company Common Stock to the Company in exchange for 15,000 shares of Company Series B Preferred Stock (the "Company Preferred Stock") to be held the Nominee. At any time, the holders of the Company Preferred Stock may convert each share of Company Preferred Stock, for no further consideration, into 100 shares of Company Common Stock, subject to adjustment; provided that, until (A) the termination of (1) the Credit Agreement, dated as of June 12, 1997, as amended and restated as of February 27, 1998, as further amended and restated as of June 29, 1999, among Page 5 of 17 Pages Foamex L.P., FMXI, Inc., the lenders and issuing banks named therein, and Citicorp USA, Inc. and The Bank of Nova Scotia, as administrative agents, (2) the Credit Agreement, dated as of February 27, 1998, as amended or as may be amended, among Foamex Carpet Cushion, Inc., the lenders and issuing banks named therein, and Citicorp USA, Inc. and The Bank of Nova Scotia, as administrative agents, (3) the Indenture, dated as of June 12, 1997, as supplemented from time to time, by and among Foamex L.P., Foamex Capital Corporation, General Felt Industries, Inc., Foamex Fibers, Inc. and the Bank of New York, as trustee, and (4) the Indenture, dated as of December 23, 1997, as supplemented from time to time, by and among Foamex L.P., Foamex Capital Corporation, General Felt Industries, Inc., Foamex Fibers, Inc., Foamex LLC, Crain Holdings Corp. and the Bank of New York, as trustee, or (B) the elimination of the change of control provisions in such Credit Agreements and Indentures, such conversion would not result in any holder becoming the owner of 25% or more of the voting stock of the Company. After effectuating the transfer of 1,500,000 shares of Company Common Stock to the Company in exchange for 15,000 shares of Company Preferred Stock to be held by the Nominee, the Trustee released the remaining shares of Company Common Stock and the Bank, through its Nominee, became the owner of 5,697,426 shares of Company Common Stock pursuant to the Settlement. As a result of these transactions and its prior holdings of 53,000 shares of Company Common Stock, the Bank had become the owner of 5,750,426 shares of Company Common Stock and 15,000 shares of Company Preferred Stock, of which 5,697,426 of such shares of Company Common Stock and all of the 15,000 shares of Company Preferred Stock were held through its Nominee. The foregoing descriptions of the Settlement and the Share Exchange Agreement do not purport to be complete and are qualified in their entirety by reference to the Settlement, the Share Exchange Agreement, as amended, the Series B Preferred Stock Certificate of Designations, and the Calder & Co. Partnership Agreement, respectively, each of which was previously filed as Exhibits 99.1, 99.2, 99.3, 99.4 and 99.5 to the Schedule 13D, and is incorporated herein by reference. The Bank intends to review its investment in the Company on a continuing basis and, depending upon price and availability of Company securities, subsequent developments affecting the Company, the business and prospects of the Company, general stock market and economic conditions, tax considerations and other factors deemed relevant, to consider decreasing the size of the Bank's investment in the Company. On December 15, 2004, the Bank entered into a written sales plan (the "Sales Plan") with Morgan Stanley & Co. Incorporated, acting as agent for the Bank ("Morgan Stanley"), for the purpose of establishing a trading plan that complies with the requirements of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended. Pursuant to, but subject to the terms and conditions of, the Sales Plan and the requirements of Rule 144 of the Securities Act of 1933, as amended, Morgan Stanley may sell in the open market, on behalf of the Bank, up to the maximum number of shares of Company Common Stock permitted under the volume limitations of Rule 144(e), in any given time period. The maximum number of shares that potentially could Page 6 of 17 Pages be sold under the Sales Plan is 5,697,426. If not earlier terminated in accordance therewith, the Sales Plan will terminate on the earlier to occur of (i) the date on which all the shares covered by the Sales Plan are sold or (ii) December 15, 2006. During the period from December 15, 2004 to January 31, 2005, 254,000 shares of Company Common Stock were sold by the Bank pursuant to the Sales Plan. Effective February 7, 2005, the Company suspended selling of additional shares under the Sales Plan until further notice. Item 5. Interest in Securities of the Issuer. (a) As of January 31, 2005, the Bank beneficially owns 5,496,426 shares of Company Common Stock, 5,443,426 of which are held in the name of its Nominee. The total number of shares beneficially owned by the Bank represent in the aggregate approximately 22.49% of the outstanding shares of Company Common Stock. The calculation of the foregoing percentage is based on 24,444,617 shares of Company Common Stock disclosed as outstanding as of November 1, 2004 by the Company in its quarterly report on Form 10-Q for the quarterly period ended September 26, 2004. (b) The Bank holds sole power to vote and to dispose of the 5,496,426 shares of Company Common Stock described in (a) above. (c) Except as described in Item 4, the Bank has not effected any transaction in the Company Common Stock during the past 60 days from January 31, 2005. (d) No other person is known to the Bank to have the right to receive or power to direct dividends from, or proceeds from the sale of, the shares of Company Common Stock held by the Bank. (e) Not applicable. As of the date hereof, the Bank beneficially owns 15,000 shares of Company Preferred Stock, which are held on behalf of the Bank in the name of its Nominee. Such 15,000 shares of Company Preferred Stock are convertible into an aggregate of 1,500,000 shares of Company Common Stock upon the occurrence of the events described in Item 4. The Bank disclaims beneficial ownership over such 1,500,000 shares of Company Common Stock on the basis that the Company Preferred Stock is not convertible within the next 60 days into such shares of Company Common Stock. If the Bank were to be deemed to beneficially own such shares, it would hold an aggregate of 28.62% of the Company Common Stock. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. See the information set forth under "Item 4. Purpose of Transaction" which is incorporated by reference in response to this Item 6. Page 7 of 17 Pages Item 7. Materials to be Filed as Exhibits. The following document is attached as an exhibit hereto: Exhibit 99.7 - Sales Plan between The Bank of Nova Scotia and Morgan Stanley & Co. Incorporated, dated December 15, 2004. Page 8 of 17 Pages SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: February 8, 2005 THE BANK OF NOVA SCOTIA By: /s/ Russell Morgan ------------------------------ Name: Russell Morgan Title: Senior Vice President, Investments Page 9 of 17 Pages SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: February 8, 2005 CALDER & CO. By: /s/ W.R. Ebbels -------------------------------- Name: W.R. Ebbels Title: Partner Page 10 of 17 Pages APPENDIX A Information Concerning Executive Officers and Directors of The Bank of Nova Scotia

NAME OF CORPORATE OFFICERS PRESENT POSITION WITH THE BANK CITIZENSHIP Richard E. Waugh President and Canada Chief Executive Officer Robert W. Chisholm Vice-Chairman Canada W. David Wilson Vice-Chairman Canada Robert L. Brooks Senior Executive Vice-President, Canada, Treasury & Operations Ireland Sarabjit S. Marwah Senior Executive Vice-President and Canada Chief Financial Officer Deborah M. Alexander Executive Vice-President, General Canada Counsel and Secretary Peter C. Cardinal Executive Vice-President, Latin America Canada Alberta G. Cefis Executive Vice-President, Canada Retail Lending Services Sylvia D. Chrominska Executive Vice-President, Canada Human Resources and Public, Corporate and Government Affairs Wendy G. Hannam Executive Vice-President, Domestic Canada Branch Banking Timothy P. Hayward Executive Vice-President and Chief Canada Administrative Officer, International Banking Christopher J. Hodgson Executive Vice-President, Canada Wealth Management Dieter W. Jentsch Executive Vice-President, Canada Commercial Banking Stephen D. McDonald Executive Vice-President, Canada Deputy Chairman, Scotia Capital and U.S. Country Head Barbara F. Mason Executive Vice-President, Marketing Canada and Sales and Service Robert H. Pitfield Executive Vice-President, Canada International Banking

Page 11 of 17 Pages Luc A. Vanneste Executive Vice-President and Chief Auditor Canada Albert E. Wahbe Executive Vice-President, Canada Electronic Banking Warren K. Walker Head, Global Risk Management Canada The business address for Executive Officers of the Bank is: 44 King St. West, Toronto, Ontario, Canada M5H 1H1 Page 12 of 17 Pages

NAME OF (Non-Officer) PRINCIPAL OCCUPATION AND ADDRESS CITIZENSHIP CORPORATE DIRECTORS Arthur R.A. Scace Chairman of the Board Canada The Bank of Nova Scotia Chairman of the Board 44 King St. West Toronto, Ontario, Canada M5H 1H1 Ronald A. Brenneman President and CEO Canada Petro-Canada P O Box 2844, Station "M" 150-6th Avenue S.W. Calgary, Alberta, Canada T2P 3E3 Choong Joong Chen Counsel Singapore Rajah & Tann Advocates & Solicitors (Attorneys) 4 Battery Road #26-01 Bank of China Building Singapore 049908 N. Ashleigh Everett President Canada Royal Canadian Securities Limited 800 - 240 Graham Avenue Winnipeg, Manitoba, Canada R3M 0J7 M. Keith Goodrich Corporate Director, Canada, Retired Chairman USA Moore Corporation Limited 574 North Burton Drive Lake Forest, Illinois 60045 USA John C. Kerr Chairman Canada Lignum Investments Ltd. 1720 - 1111 West Georgia Street Vancouver, British Columbia, Canada V6E 4M3 Senator Member of the Senate of Canada Canada Michael J.L. Kirby The Senate of Canada Parliament Buildings Room 471-S, Centre Block Ottawa, Ontario, Canada K1A 0A4

Page 13 of 17 Pages

NAME OF (Non-Officer) PRINCIPAL OCCUPATION AND ADDRESS CITIZENSHIP CORPORATE DIRECTORS Laurent Lemaire Executive Vice-Chairman of the Board Canada Cascades Inc. P.O. Box 30 404, rue Marie-Victorin Kingsey Falls, Quebec, Canada J0A 1B0 John T. Mayberry Corporate Director Canada 1982 Fieldgate Drive Burlington, Ontario, Canada L7P 3H6 The Honourable Advisor, Aird & Berlis LLP Canada Barbara J. McDougall BCE Place 181 Bay Street, Suite 1800 P.O. Box 754 Toronto, Ontario, Canada M5J 2T9 Elizabeth Parr-Johnston President Canada Parr Johnston Economic and Policy Consultants 217 Borgel's Drive P.O. Box 219 Chester Basin, Nova Scotia, Canada B0J 1K0 Gerald W. Schwartz Chairman & CEO Canada Onex Corporation 161 Bay Street, 49th Floor P.O. Box 700 Toronto, Ontario, Canada M5J 2S1 Allan C. Shaw Chairman & CEO Canada The Shaw Group Limited P.O. Box 996 Halifax, Nova Scotia, Canada B3J 2X1 Paul D. Sobey President & CEO Canada Empire Company Limited 115 King Street Stellarton, Nova Scotia, Canada B0K 1S0

Page 14 of 17 Pages

NAME OF (Non-Officer) PRINCIPAL OCCUPATION AND ADDRESS CITIZENSHIP CORPORATE DIRECTORS Barbara S. Thomas Corporate Director USA 6 Belleview Boulevard Unit 207 Belleair, Florida U.S.A. 33756

Page 15 of 17 Pages APPENDIX B Information Concerning The Partners of Calder & Co. NAME OF PARTNER PRINCIPAL OCCUPATION AND CITIZENSHIP ADDRESS Vilma Pindling Banker The Bank of Nova Scotia U.S.A. One Liberty Plaza New York, NY 10006 William R. Ebbels Banker The Bank of Nova Scotia Canada One Liberty Plaza New York, NY 10006 Warren Goshine Banker The Bank of Nova Scotia U.S.A. One Liberty Plaza New York, NY 10006 Eric Sitcheran Banker The Bank of Nova Scotia U.S.A. One Liberty Plaza New York, NY 10006 Ross Coomber Banker The Bank of Nova Scotia Canada/U.K. One Liberty Plaza New York, NY 10006 Yasmin Prendergast Banker The Bank of Nova Scotia U.S.A. One Liberty Plaza New York, NY 10006 Dorothy Jennings Banker The Bank of Nova Scotia Canada/U.S.A./Jamaica One Liberty Plaza New York, NY 10006 Page 16 of 17 Pages EXHIBIT INDEX Exhibit 99.7 - Sales Plan between The Bank of Nova Scotia and Morgan Stanley & Co. Incorporated, dated December 15, 2004. Page 17 of 17 Pages EX-99 2 ex99_020405.txt Customer: Bank of Nova Scotia Account No. _____________ [Graphic] Morgan Stanley Private Wealth Management Preset Diversification ProgramSM (PDP) Sales Plan Sales Plan dated the date specified in Annex A hereto (this "Sales Plan") between Seller specified in Annex A ("Seller") and Morgan Stanley & Co. Incorporated ("Morgan Stanley"), acting as agent for Seller. Capitalized terms used but not defined herein shall have the meaning given such terms in Annex A and Annex B hereto. A. Recitals 1. This Sales Plan is entered into between Seller and Morgan Stanley for the purpose of establishing a trading plan that complies with the requirements of Rule 10b5-1(c)(1) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). 2. Seller is establishing this Sales Plan in order to permit the orderly disposition of a portion of Seller's holdings of the Stock of the Issuer, including (only if the Sales Plan covers Stock that Seller has the right to acquire under outstanding stock options as specified in Annex B hereto) Stock that Seller has the right to acquire under outstanding stock options listed on Annex C (the "Options") issued by the Issuer. B. Representations, Warranties and Covenants 1. As of the date hereof, Seller is not aware of any material nonpublic information concerning the Issuer or its securities. Seller is entering into this Sales Plan in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws. 2. The securities to be sold under this Sales Plan are owned free and clear by Seller (subject, in the case of shares underlying Options (if Annex C is applicable), only to the compliance by Seller with the exercise provisions of such Options) and are not subject to any agreement granting any pledge, lien, mortgage, hypothecation, security interest, charge, option or encumbrance or any other limitation on disposition, other than those which may have been entered into between Seller and Morgan Stanley or imposed by Rules 144 or 145 under the Securities Act of 1933, as amended (the "Securities Act"). 3. While this Sales Plan is in effect, Seller agrees not to enter into or alter any corresponding or hedging transaction or position with respect to the securities covered by this Sales Plan (including, without limitation, with respect to any securities convertible or exchangeable into the Stock) and, unless this Sales Plan is modified or terminated in accordance with the terms hereof, agrees not to alter or deviate from the terms of this Sales Plan. 4. Seller agrees that Seller shall not, directly or indirectly, communicate any information relating to the Stock or the Issuer to any employee of Morgan Stanley or its affiliates who is involved, directly or indirectly, in executing this Sales Plan at any time while this Sales Plan is in effect. Morgan Stanley represents that it has in place reasonable policies and procedures to ensure that any representative of Morgan Stanley effecting sales pursuant to this Sales Plan does not sell shares of Stock on this basis of material non-public information. Any notice given to Morgan Stanley pursuant to this Sales Plan shall be given in accordance with paragraph F.4 below. 5. (a) Seller agrees to provide Morgan Stanley with a certificate dated as of the date hereof and signed by the Issuer substantially in the form of Exhibit A hereto prior to commencement of the Plan Sales Period (as defined below). (b) Seller agrees to notify Morgan Stanley by telephone at the number set forth in paragraph F.4 below as soon as practicable if Seller becomes aware of (i) a legal, contractual or regulatory restriction that is applicable to Seller or Seller's affiliates or a stock offering requiring an affiliate lock-up, which would prohibit any sale pursuant to the Sales Plan (other than any such restriction relating to Seller's possession or alleged possession of material nonpublic information about the Issuer or its securities), (ii) a change in the Issuer's insider trading policies, so that the sales to be made by Morgan Stanley for the account of the Seller pursuant to the Sales Plan would violate these policies, or (iii) where the Sales Plan covers Stock that Seller has the right to acquire under outstanding stock options, a change in the Issuer's policies with regard to the timing or method of exercising such options which could interfere with the manner or timing of the sales to be made pursuant to this Sales Plan. In the case of a notice relating to clause (i) above, such notice shall indicate the anticipated duration of the restriction, but shall not include any other information about the nature of the restriction or its applicability to Seller and shall not in any way communicate any material nonpublic information about the Issuer or its securities to Morgan Stanley. Such notice shall be in addition ________________ Preset Diversification Program is a registered service mark of Morgan Stanley & Co. Incorporated, protected in the United States and other countries. 1 to the notice required to be given to Morgan Stanley by the Issuer pursuant to the certificate set forth as Exhibit A hereto. 6. Seller agrees to complete, execute and deliver to Morgan Stanley a seller representation letter dated as of the date hereof substantially in the form of Exhibit B hereto prior to the commencement of the Plan Sales Period. 7. The execution and delivery of this Sales Plan by Seller and the transactions contemplated by this Sales Plan will not contravene any provision of applicable law or any agreement or other instrument binding on Seller or any of Seller's affiliates or any judgment, order or decree of any governmental body, agency or court having jurisdiction over Seller or Seller's affiliates. 8. Seller has consulted with Seller's own advisors as to the legal, tax, business, financial and related aspects of this Sales Plan. Seller acknowledges that Morgan Stanley is not acting as its fiduciary but is acting in a brokerage capacity in connection with the adoption and implementation of this Sales Plan. 9. Seller agrees that until this Sales Plan has been terminated Seller shall not, without providing prior written notice to Morgan Stanley, (i) enter into a binding contract with respect to the purchase or sale of Stock with another broker, dealer or financial institution (each, a "Financial Institution"), (ii) instruct another Financial Institution to purchase or sell Stock or (iii) adopt a plan for trading with respect to Stock other than this Sales Plan. 10. (a) Seller agrees to make (or cause to be made) all filings, if any, required under Sections 13(d), 13(g) and 16 of the Exchange Act in a timely manner, to the extent any such filings are applicable to Seller. (b) Seller agrees that Seller shall at all times during the Plan Sales Period (as defined below), in connection with the performance of this Sales Plan, comply with all applicable laws, including without limitation, Section 16 of the Exchange Act and the rules and regulations promulgated thereunder, if applicable. (c) To the extent Section 16 filings are applicable to the Seller, Seller agrees to complete, execute and deliver to Morgan Stanley a Section 16 Authorization Letter in the form attached hereto as Exhibit C. 11. Seller acknowledges and agrees that Seller does not have, and shall not attempt to exercise, any influence over how, when or whether to effect sales of Stock pursuant to this Sales Plan. Seller and Morgan Stanley acknowledge and agree that Morgan Stanley shall not sell Stock pursuant to this Sales Plan at any time when any person at Morgan Stanley executing such sales is aware of material nonpublic information concerning the Issuer or its securities. 12. (a) Seller represents that Seller is not entering into the Sales Plan on behalf of, or with the assets of, an individual retirement account or individual retirement annuity, or any employee retirement or employee benefit plan (such as, for example, a Keogh or "HR-10" plan). (b) If Seller is not an individual, Seller represents that Seller is not an "employee benefit plan" within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, or a "plan" as defined under Section 4975(e) of the Internal Revenue Code of 1986, as amended, or an entity whose underlying assets include the assets of any such plan by reason of such a plan's investment in such entity. 13. If the Stock is to be sold pursuant to Rule 144 or 145 of the Securities Act (as indicated by Seller in Annex A hereto), Seller makes the following additional representations, warranties and agreements: (a) Seller represents and warrants that the Stock to be sold pursuant to this Sales Plan is currently eligible for sale under Rule 144 or 145. (b) Seller agrees not to take, and agrees to cause any person or entity with which Seller would be required to aggregate sales of Stock pursuant to paragraph (a)(2) or (e) of Rule 144 not to take, any action that would cause the sales hereunder not to meet all applicable requirements of Rule 144. (c) Seller agrees to complete, execute and deliver to Morgan Stanley Forms 144 for the sales to be effected under this Sales Plan at such times and in such numbers as Morgan Stanley shall request, and Morgan Stanley agrees to file such Forms 144 on behalf of Seller as required by applicable law. The "Remarks" section of each Form 144 shall bear a notification which states that the Stock covered by such Form 144 is being sold pursuant to this Sales Plan and that the representation regarding Seller's knowledge of material nonpublic information speaks as of the date that Seller adopted this Sales Plan. If Annex A indicates that the Stock is to be sold pursuant to Rule 144 or 145 of the Securities Act, Seller agrees that Morgan Stanley shall continue making Form 144 filings as contemplated by this paragraph B.13(c) in connection with sales under this Sales Plan until Morgan Stanley receives a written notification stating that Seller is no longer an "affiliate" of the Issuer as that term is defined under Rule 144. (d) Seller hereby grants Morgan Stanley a power of attorney to complete and/or file on behalf of Seller any required Forms 144. Notwithstanding such power of attorney, Seller acknowledges that Morgan Stanley shall have no obligation to complete or file Forms 144 on behalf of Seller except as set forth in subparagraph (c). 14. As of the date hereof, Seller has not received notice of the imposition of, and Seller is not otherwise aware of the actual or approximate beginning or ending dates of, any existing or impending "blackout period" pertaining to the Issuer's securities in individual account plans maintained by the Issuer, as defined by Rule 100(b) of Regulation Blackout Trading Restriction ("Regulation BTR") issued by the 2 Securities and Exchange Commission (the "SEC"), and any amendments thereto. 15. Seller has read and understands the terms and conditions of the Client Agreement (which Client Agreement governs the Plan Account), including the terms of Section 8 titled "Failure of Delivery" of the Client Agreement. 16. Morgan Stanley agrees to conduct all sales pursuant to this Sales Plan in accordance with the manner of sale and current public information requirements of Rule 144 and in no event shall Morgan Stanley effect any sale if such sale would exceed the then-applicable amount limitation under Rule 144, assuming Morgan Stanley's sales pursuant to this Sales Plan are the only sales subject to that limitation. C. Implementation of the Plan 1. Seller hereby appoints Morgan Stanley to sell shares of Stock pursuant to the terms and conditions set forth below. Subject to such terms and conditions, Morgan Stanley hereby accepts such appointment. 2. Morgan Stanley is authorized to begin selling Stock pursuant to this Sales Plan on the Selling Start Date and shall cease selling Stock on the earliest to occur of (i) the date on which Morgan Stanley is required to suspend or terminate sales under this Sales Plan pursuant to paragraph D.3 below, (ii) the date on which the Issuer or any other person publicly announces a tender or exchange offer with respect to the Stock or a merger, acquisition, reorganization, recapitalization or comparable transaction affecting the securities of the Issuer as a result of which the Stock is to be exchanged or converted into shares of another company, (iii) the date on which Morgan Stanley receives notice of the commencement or impending commencement of any proceedings in respect of or triggered by Seller's bankruptcy or insolvency, (iv) the date on which Morgan Stanley receives a valid Customer Securities Account Transfer notice with respect to the account of Seller, and (v) the Selling End Date (the "Plan Sales Period"). 3. (a) Morgan Stanley shall sell the Interim Sale Amount specified in Annex B for the account of Seller during each Interim Sales Period specified in Annex B in Morgan Stanley's sole discretion as to execution and timing; provided, however, that Morgan Stanley shall not sell any shares of Stock pursuant to this Sales Plan at a price of less than the Minimum Sale Price specified in Annex B. A "Trading Day" is any day during the Plan Sales Period that the primary market on which the Stock regularly trades is open for business and the Stock trades regular way on such market. If any Interim Sales Period is more than one month and no further instruction as to the timing of sales within the Interim Sales Period is given in this Sales Plan, Morgan Stanley will implement this selling instruction by selling a prorated portion of the Interim Sale Amount each week during the Interim Sales Period. (b) The Interim Sale Amount, the Total Sale Amount, if applicable, and the Minimum Sale Price, if applicable, and any other share amounts and per share prices set forth in this Sales Plan shall be adjusted automatically on a proportionate basis to take into account any stock split, reverse stock split or stock dividend with respect to the Stock or any change in capitalization with respect to the Issuer that occurs during the Plan Sales Period. 4. Morgan Stanley shall not sell Stock hereunder at any time when: (i) Morgan Stanley, in its sole discretion, has determined that a market disruption, material disruption in securities settlement, payment or clearance services, banking moratorium, outbreak or escalation of hostilities or other crisis or calamity that could, in Morgan Stanley's judgment, impact offer, sales or delivery of the Stock has occurred (provided, however, that Morgan Stanley shall resume effecting trades in accordance with this Sales Plan as soon as Morgan Stanley determines that it is reasonably practical to do so); or (ii) Morgan Stanley, in its sole discretion, has determined that it is prohibited from doing so by a legal, contractual or regulatory restriction applicable to it or its affiliates or to Seller or Seller's affiliates (other than any such restriction relating to Seller's possession or alleged possession of material nonpublic information about the Issuer or the Stock); or (iii) Morgan Stanley has received notice from the Issuer or Seller of the occurrence of any event contemplated by paragraph 3 of the certificate set forth as Exhibit A hereto; or (iv) Morgan Stanley has received notice from Seller to terminate the Sales Plan in accordance with paragraph D.1 below. 5. (a) Seller agrees to deliver the Stock to be sold pursuant to this Sales Plan (with the amount to be estimated by Seller in good faith, if the Interim Sale Amount is designated as an aggregate dollar amount) (the "Plan Shares"), to the extent such Plan Shares are currently owned by Seller, into an account at Morgan Stanley in the name of and for the benefit of Seller (the "Plan Account") prior to the commencement of sales under this Sales Plan. Morgan Stanley agrees to notify Seller promptly if at any time during the Plan Sales Period the number of shares of Stock so delivered to the Plan Account is less than the number of Plan Shares remaining to be sold pursuant to this Sales Plan (not including shares of Stock underlying the Options described in subparagraph (b) below). Upon such notification, Seller agrees to deliver promptly to the Plan Account the number of shares of Stock necessary to eliminate this shortfall. (b) If the Sales Plan covers Options and Annex C is applicable, Seller agrees to make appropriate arrangements with the Issuer and its transfer agent and stock 3 plan administrator to permit Morgan Stanley to furnish notice to the Issuer of the exercise of the Options and to have underlying shares delivered to Morgan Stanley as necessary to effect sales under this Sales Plan. Seller hereby authorizes Morgan Stanley to serve as Seller's agent and attorney-in-fact and, in accordance with the terms of this Sales Plan, to exercise the Options. Seller agrees to complete, execute and deliver to Morgan Stanley Stock Option Cashless Exercise Forms, in the form attached hereto as Exhibit D, for the exercise of Options pursuant to this Sales Plan at such times and in such numbers as Morgan Stanley shall request. Stock received upon exercise of Options shall be delivered to the Plan Account. (c) Morgan Stanley shall withdraw Stock from the Plan Account in order to effect sales of Stock under this Sales Plan. If the Sales Plan covers Options and Annex C is applicable, and on any day that sales are to be made under this Sales Plan the number of shares of Stock in the Plan Account is less than the number of shares to be sold on such day, Morgan Stanley shall exercise a sufficient number of Options to effect such sales in the manner specified in Annex C under "Manner of Exercising Options". Morgan Stanley shall in no event exercise any Option if at the time of exercise the exercise price of the Option is equal to or higher than the market price of the Stock. Morgan Stanley shall, in connection with the exercise of Options, remit to the Issuer the exercise price thereof along with such amounts as may be necessary to satisfy withholding obligations. These amounts shall be deducted from the proceeds of sale of the Stock, together with interest thereon computed in accordance with Morgan Stanley's customary practices. (d) To the extent that any Stock remains in the Plan Account after the end of the Plan Sales Period or upon termination of this Sales Plan, Morgan Stanley agrees to return such Stock promptly to the Issuer's transfer agent for relegending to the extent that such Stock would then be subject to transfer restrictions in the hands of the Seller. 6. Morgan Stanley shall in no event effect any sale under this Sales Plan if the Stock to be sold is not in the Plan Account or underlying an Option that is exercised in accordance with the terms of this Sales Plan on the day of such sale. 7. Morgan Stanley may sell Stock on any national securities exchange, in the over-the-counter market, on an automated trading system or otherwise. Seller agrees that if Morgan Stanley is a market maker in the Stock at the time that any sale is to be made under this Sales Plan, Morgan Stanley may, at its sole discretion, purchase the Stock from Seller in its capacity as market maker. 8. All references in this Sales Plan to per share stock prices shall be before deducting any commission, commission equivalent, mark-up or differential and other expenses of sale. 9. Seller may instruct Morgan Stanley to sell or purchase shares of Stock other than pursuant to this Sales Plan. The parties hereto agree that any such sale or purchase transaction (i) will not be deemed to modify this Sales Plan unless Seller so requests in writing in accordance with paragraph D.3 below and (ii) will be given by Seller to Morgan Stanley only if such transaction does not contravene any of the representations, warranties or covenants set forth in Section B of this Sales Plan. D. Amendment; Termination 1. This Sales Plan may be amended by Seller only upon the written consent of Morgan Stanley and receipt by Morgan Stanley of the following documents, each dated as of the date of such amendment: (i) a representation signed by the Issuer substantially in the form of Exhibit A hereto, (ii) a certificate signed by Seller certifying that the representations and warranties of Seller contained in this Sales Plan are true at and as of the date of such certificate as if made at and as of such date, and (iii) a seller representation letter completed and executed by Seller substantially in the form of Exhibit B hereto. 2. In no event may Seller modify or otherwise alter this Sales Plan if Seller has received notice of the imposition of, or Seller is otherwise aware of the actual or approximate beginning or ending dates of, any existing or impending "blackout period" pertaining to the Issuer's securities in individual account plans maintained by the Issuer, as defined by Rule 100(b) of Regulation BTR issued by the SEC, and any amendments thereto. 3. (a) This Sales Plan may be suspended or terminated by Seller at any time upon two days prior written notice sent to Morgan Stanley's compliance office by overnight mail and by facsimile at the address and fax number set forth in paragraph F.4 below. Seller agrees that Seller shall not suspend or terminate this Sales Plan except upon consultation with Seller's own legal advisors. (b) This Sales Plan shall be suspended or, at Morgan Stanley's option, terminated, if Morgan Stanley receives notice from the Issuer of the occurrence of any event contemplated by paragraph 3 of the certificate set forth as Exhibit A hereto. 4. Seller agrees that Morgan Stanley will execute this Sales Plan in accordance with its terms and will not be required to suspend or terminate any sales of the Stock unless Morgan Stanley has received notice from Seller or the Issuer in accordance with paragraph D.3 above at least one day prior to the date on which this Sales Plan is to be suspended or terminated. 4 E. Indemnification; Limitation of Liability 1. (a) Seller agrees to indemnify and hold harmless Morgan Stanley and its directors, officers, employees and affiliates from and against all claims, losses, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) (collectively, "Losses") arising out of or attributable to this Sales Plan, including, without limitation, any breach by Seller of this Sales Plan (including Seller's representations and warranties hereunder) or any violation by Seller of applicable laws or regulations; provided, however, that the indemnification provisions of this paragraph E.1.(a) shall not apply in the case of any claims, losses, damages or liabilities resulting from Morgan Stanley's gross negligence or willful misconduct. Seller will reimburse Morgan Stanley for any and all fees, costs and expenses of any kind incurred by Morgan Stanley as a result of such Losses. This indemnification shall survive termination of this Sales Plan. (b) Notwithstanding any other provision hereof, neither party shall be liable to the other for: (i) any special, indirect, punitive, exemplary or consequential damages, or incidental losses or damages of any kind, even if advised of the possibility of such losses or damages or if such losses or damages could have been reasonably foreseen, or (ii) any failure to perform or to cease performance or any delay in performance that results from a cause or circumstance that is beyond its reasonable control, including but not limited to failure of electronic or mechanical equipment, strikes, failure of common carrier or utility systems, outbreak or escalation of hostilities or other crisis or calamity, severe weather, market disruptions, material disruptions in securities settlement, payment or clearance services or other causes commonly known as "acts of God". F. General 1. Proceeds from each sale of Stock effected under the Sales Plan will be delivered to the account of Seller less any commission, commission equivalent, mark-up or differential and other expenses of sale to be paid to Morgan Stanley, provided that any commission hereunder shall be as specified in Annex B. 2. Seller and Morgan Stanley acknowledge and agree that this Sales Plan is a "securities contract," as such term is defined in Section 741(7) of Title 11 of the United States Code (the "Bankruptcy Code"), entitled to all of the protections given such contracts under the Bankruptcy Code. 3. This Sales Plan constitutes the entire agreement between the parties with respect to this Sales Plan and supercedes any prior agreements or understandings with regard to the Sales Plan. 4. All notices to Morgan Stanley under this Sales Plan shall be given to Morgan Stanley's PDP Trading Desk in the manner specified by this Sales Plan by telephone at 212-761-4233, by facsimile at 212-507-3942 or by certified mail to the address below: Morgan Stanley & Co. Incorporated 1585 Broadway 11th Floor New York, NY 10036 Attn: Brian Gager/ PDP Desk 5. Seller's rights and obligations under this Sales Plan may not be assigned or delegated without the written permission of Morgan Stanley. 6. This Sales Plan may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 7. If any provision of this Sales Plan is or becomes inconsistent with any applicable present or future law, rule or regulation, that provision will be deemed modified or, if necessary, rescinded in order to comply with the relevant law, rule or regulation. All other provisions of this Sales Plan will continue and remain in full force and effect. 8. This Sales Plan shall be governed by and construed in accordance with the internal laws of the State of New York and may be modified or amended only by a writing signed by the parties hereto. 5 IN WITNESS WHEREOF, the undersigned have signed this Sales Plan on the date specified below[footnote]. SELLER: THE BANK OF NOVA SCOTIA By: /s/ R.L. Brooks ------------------------------ Name: R.L. Brooks Title[footnote]: Senior Executive Vice President, Treasury and Operations Date: December 15, 2004 MORGAN STANLEY & CO. INCORPORATED By: /s/ Michael David ------------------------------ Name: Michael David Title: Executive Director Date: 12/16/04 ____________________ 1. Seller is advised that Morgan Stanley's oligations under this Sales Plan will not take effect unless and until this Sales Plan is approved and executed by Morgan Stanley. 2. Only needed if Seller is an entity. 6