EXHIBIT 2.2
PLAN OF ARRANGEMENT
UNDER SECTION 252
OF THE COMPANY ACT
(BRITISH COLUMBIA)
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ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In this Plan of Arrangement unless there is something in the subject
matter or context inconsistent therewith, the following terms shall have the
respective meanings set out below and grammatical variations of such terms shall
have corresponding meanings:
(a) "ACQUISITION AGREEMENT" means the agreement by and among Parent,
the Company, the Shareholders' Representative and Target, dated
as of August 5, 2000, as the same may be amended and restated, to
which this Plan of Arrangement is attached;
(b) "AFFILIATE" means, as applied to any Person, (a) any other Person
directly or indirectly controlling, controlled by or under common
control with, that Person, (b) any other Person that owns or
controls 10% or more of any class of equity securities of that
Person or any of its Affiliates (treating for purposes of this
clause (b) any equity securities issuable upon the exercise of
any option, warrant or convertible security owned or controlled
by such other Person as if such equity securities were issued and
outstanding), or (c) any director, partner or officer of such
Person. For the purposes of this definition, "control" (including
with correlative meanings, the terms "controlling", "controlled
by", and "under common control with") as applied to any Person,
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of
that Person, whether through ownership of voting securities or by
contract or otherwise;
(c) "AGGREGATE NUMBER OF CONSIDERATION SHARES" means the quotient
obtained by dividing (x) $28,980,000 by (y) the Average Closing
Price;
(d) "ARRANGEMENT" means the arrangement under section 252 of the BC
Company Act on the terms and subject to the conditions set out in
this Plan of Arrangement, subject to any amendments hereto made
in accordance with section 6.1 or made at the direction of the
Court in the Final Order;
(e) "AUTOMATIC REDEMPTION DATE" means that date which is the second
anniversary of the Closing, unless such date shall be accelerated
at any time to a specified earlier date by the Board of Directors
upon at least 75 days prior written
notice to the registered holders of Exchangeable Shares, in which
case the Automatic Redemption Date shall be such earlier date;
PROVIDED, HOWEVER, that the Board of Directors may so accelerate
the Automatic Redemption Date only at such time as there are
outstanding fewer than 250,000 Exchangeable Shares held by
holders other than Parent and its Affiliates;
(f) "AVERAGE CLOSING PRICE" means $47.66, subject to adjustment upon
the occurrence of a stock split, reverse split, stock dividend,
stock combination, reclassification or other similar change with
respect to Parent Common Stock;
(g) "BC COMPANY ACT" means the Company Act (British Columbia), as
amended from time to time;
(h) "BOARD OF DIRECTORS" means the board of directors of the Company;
(i) "BUSINESS DAY" means any day on which commercial banks are
generally open for business in Boston, Massachusetts and
Vancouver, British Columbia other than a Saturday, a Sunday or a
day observed as a holiday in Boston, Massachusetts or in
Vancouver, British Columbia under the laws of the Commonwealth of
Massachusetts, under the laws of the Province of British Columbia
or the federal laws of Canada or the United States of America
applicable therein;
(j) "CANADIAN DOLLAR EQUIVALENT" means in respect of an amount
expressed in a foreign currency (the "Foreign Currency Amount")
at any date the product obtained by multiplying (a) the Foreign
Currency Amount by (b) the noon spot exchange rate on such date
for such foreign currency expressed in Canadian dollars as
reported by the Bank of Canada or, in the event such spot
exchange rate is not available, such exchange rate on such date
for such foreign currency expressed in Canadian dollars as may be
deemed by the Board of Directors to be appropriate for such
purpose;
(k) "CAPITAL REORGANIZATION" has the meaning ascribed thereto in
section 5.6;
(l) "CALL NOTICE" has the meaning ascribed thereto in subsection
5.1(b);
(m) "CERTIFICATE LIMIT" has the meaning ascribed to that term in
Section 116 of the Tax Act.
(n) "CLEARANCE CERTIFICATE" means a certificate issued pursuant to
Section 116 of the Tax Act.
(o) "CLOSING" has the meaning ascribed thereto in the Acquisition
Agreement;
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(p) "COMPANY" means C&T Acquisition Corporation, a corporation
existing under the BC Company Act;
(q) "COURT" means the Supreme Court of British Columbia;
(r) "CURRENT MARKET PRICE" means, as of any date, the Canadian Dollar
Equivalent of the closing sale price of a share of Parent
Common Stock on such date (or, if no trades of Parent Common
Stock occurred on such date, on the last trading day prior
thereto on which such trades occurred) as traded on NASDAQ and
reported by the Wall Street Journal, or, if shares of Parent
Common Stock are not then quoted on NASDAQ, on such other
stock exchange or automated quotation system on which shares
of Parent Common Stock are listed or quoted, as the case may
be, as may be selected by the Board of Directors for such
purpose, PROVIDED, HOWEVER, in the event that the Parent
Common Stock is no longer listed on NASDAQ or any other
national exchange or automated quotation system then the
Current Market Price of a share of Parent Common Stock shall
be determined by the Board of Directors in good faith based
upon the advice of such qualified independent financial
advisors as the Board of Directors may deem to be appropriate,
and provided further that any such selection, opinion or
determination by the Board of Directors shall be conclusive
and binding;
(s) "CURRENT PARENT COMMON SHARE EQUIVALENT" means, on any date, the
equivalent as at such date of one share of Parent Common Stock as
at the Effective Date, expressed to four decimal places,
determined by applying on a cumulative basis the following
adjustments, to the extent applicable by reason of any
transactions occurring in respect of Parent Common Stock between
the Effective Date and such date, the Current Parent Common Share
Equivalent as at the Effective Date being 1.0000:
if Parent shall (A) subdivide or redivide its then
outstanding shares of Parent Common Stock into a greater
number of shares of Parent Common Stock, unless the Company
is permitted under applicable law without a vote of its
shareholders to make, and shall simultaneously make, the
same or an economically equivalent change to the rights of
the holders of Exchangeable Shares, (B) combine or
consolidate its then outstanding shares of Parent Common
Stock into a lesser number of shares of Parent Common Stock,
unless the Company is permitted under applicable law without
a vote of its shareholders to make, and shall simultaneously
make, the same or an economically equivalent change to the
rights of the holders of Exchangeable Shares, or (C) issue
shares of Parent Common Stock (or securities exchangeable or
convertible into Parent Common Stock) to the holders of all
or substantially all of its then outstanding shares of
Parent Common Stock by way of stock dividend or other
distribution (other than to holders of Parent Common Stock
who exercise an option to receive stock dividends in lieu of
receiving cash dividends), unless the Company
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is permitted under applicable law without a vote of its
shareholders to issue or distribute, and shall
simultaneously issue and distribute, equivalent numbers of
shares of Parent Common Stock or other securities (adjusted
if necessary in accordance with the Current Parent Common
Share Equivalent), or the economic equivalent on a per share
basis, to the holders of the Exchangeable Shares (any of
such events being herein called a "Parent Common Stock
Reorganization"), the Current Parent Common Share Equivalent
shall be adjusted effective immediately after the record
date at which the holders of Parent Common Stock are
determined for the purpose of the Parent Common Stock
Reorganization by multiplying the Current Parent Common
Share Equivalent in effect on such record date by the
quotient obtained when:
(i) the number of shares of Parent Common Stock
outstanding after the completion of such Parent
Common Stock Reorganization (but before giving
effect to the issue of any shares of Parent Common
Stock issued after such record date otherwise than
as part of such Parent Common Stock
Reorganization) including, in the case where
securities exchangeable or convertible into shares
of Parent Common Stock are distributed in
accordance with such Parent Common Stock
Reorganization, the number of shares of Parent
Common Stock that would have been outstanding had
such securities been exchanged for or converted
into shares of Parent Common Stock on such record
date, is divided by
(ii) the number of shares of Parent Common Stock
outstanding on such record date before giving
effect to the Parent Common Stock Reorganization;
(t) "EFFECTIVE DATE" means the date the certified copy of the Final
Order is accepted for filing by the Registrar to give effect to
the Arrangement;
(u) "EFFECTIVE TIME" means 12:01 a.m. on the Effective Date;
(v) "ESCROW AGENT" means State Street Bank and Trust Company at its
principal offices in Boston, Massachusetts;
(w) "ESCROW AGREEMENT" has the meaning ascribed thereto in the
Acquisition Agreement;
(x) "ESCROW FUND" has the meaning ascribed thereto in the Acquisition
Agreement.
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(y) "ESCROWED SHARES" has the meaning ascribed thereto in section
2.1(e) hereof;
(z) "EXCHANGE RATIO" means (A) when used with respect to, or in the
context of, any Target Preferred Share transferred in exchange
for Exchangeable Shares or shares of Parent Common Stock (or a
combination of both) pursuant to the Arrangement, the Target
Preferred Share Exchange Ratio, (B) when used with respect to, or
in the context of, any Target Preferred Share Convertible
Security that is assumed by Parent and is converted into a
Replacement Option, Replacement Warrant or Replacement
Convertible Debenture, as the case may be, pursuant to the
Arrangement, the Target Preferred Share Exchange Ratio, (C) when
used with respect to, or in the context of, any Target Common
Share transferred in exchange for Exchangeable Shares or shares
of Parent Common Stock (or a combination of both) pursuant to the
Arrangement, the Target Common Share Exchange Ratio, and (D) when
used with respect to, or in the context of, any Target Common
Share Convertible Security that is assumed by Parent and is
converted into a Replacement Option, Replacement Warrant or
Replacement Convertible Debenture, as the case may be, pursuant
to the Arrangement, the Target Common Share Exchange Ratio;
(aa) "EXCHANGEABLE SHARE PROVISIONS" means the special rights and
restrictions attaching to the Exchangeable Shares, which are set
forth in Appendix A hereto;
(bb) "EXCHANGEABLE SHARES" means the Exchangeable Shares of the
Company having the special rights and restrictions set forth in
the Exchangeable Share Provisions;
(cc) "FINAL ORDER" means the final order of the Court approving the
Arrangement as such order may be amended by the Court at any time
prior to the Effective Time;
(dd) "FILING FEES" has the meaning ascribed thereto in the Acquisition
Agreement;
(ee) "INCOME TAX ACT" means the INCOME TAX ACT of Canada and the
Regulations thereto, as amended from time to time.
(ff) "LETTER OF TRANSMITTAL" means collectively a Letter of
Transmittal and Election Form in the form accompanying the
materials to be sent to the shareholders of Target in connection
with the Meeting;
(gg) "LIEN" means any lien, pledge, adverse claim, security interest,
mortgage, claim, charge or encumbrance;
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(hh) "LIQUIDATION CALL PURCHASE PRICE" has the meaning ascribed
thereto in subsection 5.2(a);
(ii) "LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in
subsection 5.2(a);
(jj) "LIQUIDATION DATE" has the meaning ascribed thereto in section
4.1 of the Exchangeable Share Provisions;
(kk) "MEETING" means the Special Meeting of the shareholders of Target
to be held to consider the Arrangement;
(ll) "NASDAQ" means the distinct tier of the Nasdaq Stock Market
referred to as the National Market;
(mm) "NON-RESIDENT PERSON" means at the particular time that the
context of this Agreement requires, a Person who is not a
resident of Canada for purposes of the INCOME TAX ACT at that
particular time.
(nn) "NUMBER OF FULLY DILUTED TARGET COMMON SHARES" means the sum of
(i) the total number of Target Common Shares issued and
outstanding at the Effective Time, (ii) the total number of
Target Common Shares issuable at the Effective Time upon exercise
or conversion, as the case may be, of all Target Common Share
Convertible Securities outstanding at the Effective Time, (iii)
the total number of Target Common Shares issuable at the
Effective Time upon conversion of all Target Preferred Shares
issued and outstanding at the Effective Time and (iv) the total
number of Target Common Shares issuable upon conversion of all
Target Preferred Shares issuable at the Effective Time upon
exercise or conversion, as the case may be, of all Target
Preferred Share Convertible Securities outstanding at the
Effective Time.
(oo) "PARENT" means Cubist Pharmaceuticals, Inc., a corporation
existing under the laws of the State of Delaware, and any
successor corporation;
(pp) "PARENT COMMON STOCK REORGANIZATION" has the meaning ascribed
thereto in subsection 1.1(s);
(qq) "PARENT COMMON STOCK" means the common stock, par value US$0.001
per share, of Parent, and any other securities into which such
stock may be changed;
(rr) "PERSON" means any natural person, corporation, general
partnership, limited partnership, limited liability company or
partnership, proprietorship, other business organization, trust,
union, association or governmental or regulatory authority;
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(ss) "REDEMPTION CALL PURCHASE PRICE" has the meaning ascribed thereto
in subsection 5.3(a);
(tt) "REDEMPTION CALL RIGHT" has the meaning ascribed thereto in
subsection 5.3(a);
(uu) "REGISTRAR" means the Registrar appointed under the BC Company
Act;
(vv) "REPLACEMENT CONVERTIBLE DEBENTURE" has the meaning ascribed
thereto in subsection 2.1(g);
(ww) "REPLACEMENT OPTION" has the meaning ascribed thereto in
subsection 2.1(e);
(xx) "REPLACEMENT WARRANT" has the meaning ascribed thereto in
subsection 2.1(f);
(yy) "RETRACTED SHARES" has the meaning ascribed thereto in section
5.1 of the Exchangeable Share Provisions;
(zz) "RETRACTION CALL PURCHASE PRICE" has the meaning ascribed thereto
in subsection 5.1(a);
(aaa) "RETRACTION CALL RIGHT" has the meaning ascribed thereto in
subsection 5.1(a);
(bbb) "RETRACTION DATE" has the meaning ascribed thereto in section 5.2
of the Exchangeable Share Provisions;
(ccc) "RETRACTION REQUEST" has the meaning ascribed thereto in section
5.1 of the Exchangeable Share Provisions;
(ddd) "SECURITIES ACT" has the meaning ascribed thereto in section 5.8;
(eee) "SHAREHOLDERS' REPRESENTATIVE" has the meaning ascribed thereto
in the Acquisition Agreement;
(fff) "SHAREHOLDERS' AGREEMENT" has the meaning ascribed thereto in the
Acquisition Agreement;
(ggg) "TARGET" means TerraGen Discovery, Inc., a corporation existing
under the BC Company Act;
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(hhh) "TARGET COMMON SHARES" means the common shares in the capital of
Target, including all rights associated therewith;
(iii) "TARGET COMMON SHARE CONVERTIBLE SECURITY" means any Target
Option, Target Warrant or Target Convertible Debenture that is
exercisable for or convertible into, as the case may be, Target
Common Shares;
(jjj) "TARGET COMMON SHARE EXCHANGE RATIO" means the quotient
obtained by dividing (A) the Aggregate Number of Consideration
Shares, by (B) the Number of Fully Diluted Target Common
Shares;
(kkk) "TARGET CONVERTIBLE DEBENTURE" means any debenture convertible
into Target Shares;
(lll) "TARGET OPTION" means any option, whether vested or unvested,
granted by Target prior to the Effective Date to purchase Target
Shares;
(mmm) "TARGET PREFERRED SHARES" means the Series 1 Preferred Shares,
Series 2 Preferred Shares, Series 3 Preferred Shares and Series 4
Preferred Shares in the capital of Target, including all rights
associated therewith;
(nnn) "TARGET PREFERRED SHARE CONVERTIBLE SECURITY" means any Target
Option, Target Warrant or Target Convertible Debenture that is
exercisable for or convertible into, as the case may be, Target
Preferred Shares.
(ooo) "TARGET PREFERRED SHARE EXCHANGE RATIO" means the product
obtained by multiplying (A) the number of Target Common Shares
issuable at the Effective Time upon conversion of a single Target
Preferred Share (regardless of whether such single Target
Preferred Share is issued and outstanding at the Effective Time
or is issuable at the Effective Time upon exercise or conversion
of any Target Preferred Share Convertible Security outstanding at
the Effective Time), by (B) a fraction, the numerator of which is
the Aggregate Number of Consideration Shares, and the denominator
of which is the Number of Fully Diluted Target Common Shares.
(ppp) "TARGET SHARES" means all of the issued and outstanding Target
Common Shares and Target Preferred Shares;
(qqq) "TARGET WARRANT" means any warrant to acquire Target Shares;
(rrr) "TAX ACT" means the INCOME TAX ACT (Canada), as amended from time
to time;
(sss) "THIRD PARTY EXPENSES" has the meaning ascribed thereto in the
Acquisition Agreement;
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(ttt) "TRANSFER AGENT" means Xxxxx & Company or such other person as
may from time to time be the Registrar and Transfer Agent for the
Exchangeable Shares;
(uuu) "TRUSTEE" means State Street Bank and Trust Company, a
Massachusetts banking organization; and
(vvv) "VOTING AND EXCHANGE TRUST AGREEMENT" means the Voting and
Exchange Trust Agreement between the Company, Parent and the
Trustee, made as of the Effective Date.
1.2 SECTIONS AND HEADINGS
The division of this Plan of Arrangement into sections and the
insertion of headings are for reference purposes only and shall not affect the
interpretation of this Plan of Arrangement. Unless otherwise indicated, any
reference in this Plan of Arrangement to a section or an Appendix refers to the
specified section of or Appendix to this Plan of Arrangement.
1.3 NUMBER, GENDER AND PERSONS
In this Plan of Arrangement, unless the context otherwise requires,
words importing the singular number include the plural and vice versa, words
importing any gender include all genders and words importing persons include
individuals, corporations, partnerships, associations, trusts, unincorporated
organizations, governmental bodies and other legal or business entities of any
kind.
1.4 WITHHOLDING TAX
All amounts or shares required to be paid, deposited or delivered or
issued under this Plan of Arrangement shall be paid, deposited, delivered or
issued after deduction of any amount required by applicable law to be deducted
or withheld on account of tax and the deduction of such amounts and remittance
to the applicable tax authorities shall, to the extent thereof, satisfy such
requirement to pay, deposit or deliver hereunder.
ARTICLE 2
ARRANGEMENT
2.1 ARRANGEMENT
At the Effective Time on the Effective Date, the following shall occur
and shall be deemed to occur in the following order without any further act or
formality:
(a) The authorized share capital of the Company shall be amended to
authorize an unlimited number of Exchangeable Shares; as a result
of such amendment the
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Company shall have three classes of authorized share capital,
namely, 10,000,000 Common Shares, 200,000,000 preferred shares
and an unlimited number of Exchangeable Shares; the special
rights and restrictions attaching to the Exchangeable Shares
shall be as set out in APPENDIX A.
(b) All of the outstanding Target Shares, except Target Shares held
by holders who have exercised their rights of dissent in
accordance with section 3.1 hereof and who are ultimately
entitled to be paid fair value for such shares (hereinafter,
"Dissenters") shall, without any action on the part of such
holders be deemed to be transferred to the Company in exchange
for that number of Exchangeable Shares (to be delivered to the
affected holder pursuant to section 4.1 hereof), or shares of
Parent Common Stock (to be delivered to the affected holder of
Target Shares pursuant to section 4.2 hereof), or a combination
of the two, according to the election made pursuant to Section
2.2 hereof, equal to the product of such number of Target Shares
(other than shares held by Dissenters) being exchanged and the
Exchange Ratio. Each such former holder of Target Shares shall
receive the whole number of Exchangeable Shares or shares of
Parent Common Stock, or a combination of the two, according to
the election made pursuant to Section 2.2 hereof, resulting from
the exchange of such holder's Target Shares for the consideration
set out in the foregoing sentence; provided however, that a
number of Exchangeable Shares and shares of Parent Common Stock
shall not be issued to such holders but deposited in escrow
pursuant to Section 2.1(i) below. In lieu of fractional
Exchangeable Shares or shares of Parent Common Stock, or a
combination of the two, each holder of a Target Share who
otherwise would be entitled to receive a fraction of an
Exchangeable Share or of a share of Parent Common Stock, or a
combination of the two, on the exchange shall be paid an amount
determined as set forth in section 4.4 hereof.
(c) Upon the exchange referred to in subsection 2.1(b) above, each
holder of exchanged Target Shares shall cease to be such a
holder, shall have their name removed from the register of
holders of Target Shares and shall become a holder of the number
of fully paid Exchangeable Shares or shares of Parent Common
Stock, or a combination of the two, as the case may be, to which
they are entitled as a result of such exchange and such holder's
name shall be added to the register of holders of Exchangeable
Shares or shares of Parent Common Stock, or a combination of the
two, accordingly.
(d) The Company shall add to its stated capital account in respect of
Exchangeable Shares issued pursuant to subsection 2.1(b) an
amount equal to the aggregate fair market value of the Target
Shares exchanged for Exchangeable Shares pursuant to subsection
2.1(b) and immediately thereafter such paid-up capital shall be
reduced to an amount equal to the paid-up capital, for purposes
of the Income Tax Act (Canada), of such Target Shares so
exchanged all as determined by the Board of Directors of the
Company.
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(e) Except for Target Options granted to holders who have exercised
their rights of dissent in accordance with Section 3.1 hereof and
who are ultimately entitled to be paid fair value for the Target
Shares subject to such Target Options, each Target Option
outstanding at the Effective Time (and any related stock option
plan) shall be assumed by Parent and be converted into an option
(each, a "Replacement Option") to purchase a number of shares of
Parent Common Stock determined by multiplying the number of
Target Shares subject to such Target Option by the Exchange Ratio
(and rounding the result down to the nearest whole share), each
such Replacement Option (I) to have an exercise price per share
equal to quotient obtained by dividing (1) the exercise price per
share in effect at the Effective Time of the Target Option of
which such Replacement Option is a replacement, by (2) the
Exchange Ratio (and rounding the result up to the nearest whole
cent), and (II) to have the same vesting, expiration and other
terms as such Target Option, all in accordance with the terms of
the stock option plan and stock option agreement governing such
Target Option. In the event that a holder holds more than one
Target Option, all of such Target Options, as well as the total
number of Target Shares subject to all of such Target Options,
shall be aggregated for purposes of implementing the assumption
and conversion provisions of this Section 2.1(e).
(f) Except for Target Warrants granted to holders who have exercised
their rights of dissent in accordance with Section 3.1 hereof and
who are ultimately entitled to be paid fair value for the Target
Shares subject to such Target Warrants, each Target Warrant
outstanding at the Effective Time shall be assumed by Parent and
be converted into a warrant (each, a "Replacement Warrant") to
purchase a number of shares of Parent Common Stock determined by
multiplying the number of Target Shares subject to such Target
Warrant by the Exchange Ratio (and rounding the result down to
the nearest whole share), each such Replacement Warrant (I) to
have an exercise price per share equal to quotient obtained by
dividing (1) the exercise price per share in effect at the
Effective Time of the Target Warrant of which such Replacement
Warrant is a replacement, by (2) the Exchange Ratio (and rounding
the result up to the nearest whole cent), and (II) to have the
same expiration and other terms as such Target Warrant, all in
accordance with the terms of the warrant instrument or warrant
agreement governing such Target Warrant. In the event that a
holder holds more than one Target Warrant, all of such Target
Warrants, as well as the total number of Target Shares subject to
all of such Target Warrants, shall be aggregated for purposes of
implementing the assumption and conversion provisions of this
Section 2.1(f).
(g) Except for Target Convertible Debentures held by holders who have
exercised their rights of dissent in accordance with Section 3.1
hereof and who are ultimately entitled to be paid fair value for
the Target Shares into which such Target Convertible Debentures
are convertible, each Target Convertible Debenture outstanding at
the Effective Time shall be assumed by Parent and be converted
into a debenture (each, a "Replacement Convertible Debenture")
convertible into a number of shares of Parent Common Stock
determined by
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multiplying the number of Target Shares into which such Target
Convertible Debenture is convertible by the Exchange Ratio (and
rounding the result down to the nearest whole share), each such
Replacement Convertible Debenture (I) to have a conversion price
per share equal to quotient obtained by dividing (1) the
conversion price per share in effect at the Effective Time of the
Target Convertible Debenture of which such Replacement
Convertible Debenture is a replacement, by (2) the Exchange Ratio
(and rounding the result up to the nearest whole cent), and (II)
to have the same expiration and other terms as such Target
Convertible Debenture, all in accordance with the terms of the
instrument or agreement governing such Target Convertible
Debenture. In the event that a holder holds more than one Target
Convertible Debenture, all of such Target Convertible Debentures,
as well as the total number of Target Shares into which all of
such Target Convertible Debentures are convertible, shall be
aggregated for purposes of implementing the assumption and
conversion provisions of this Section 2.1(g).
(h) The maximum aggregate number of shares of Parent Common Stock and
Exchangeable Shares to be issued in exchange for all Target
Shares issued and outstanding immediately prior to the Effective
Time, upon exercise of any and all vested and unvested
Replacement Options and Replacement Warrants and upon conversion
of any and all Replacement Convertible Debentures shall be equal
to the Aggregate Number of Consideration Shares. No adjustment
shall be made in the aggregate number of shares of Parent Common
Stock and Exchangeable Shares issued or issuable pursuant to the
Arrangement as a result of any consideration (in any form
whatsoever) received by the Target from the date hereof to the
Effective Time as a result of any exercise, conversion or
exchange of Target Options, Target Warrants or Target Convertible
Debentures.
(i) Notwithstanding any other provision of this Plan of Arrangement
to the contrary, at the Closing, Parent, the Company, the
Shareholders' Representative and the Escrow Agent will execute
and deliver the Escrow Agreement, pursuant to which the Company
at the Effective Time shall deliver to the Escrow Agent, to be
held in escrow pursuant to the terms of the Escrow Agreement, a
stock certificate representing Exchangeable Shares and the Parent
at the Effective Time shall deliver to the Escrow Agent, to be
held in escrow pursuant to the terms of the Escrow Agreement, a
stock certificate representing shares of Parent Common Stock,
which certificates shall represent, in the aggregate, ten percent
(10%) of the aggregate number of Exchangeable Shares and shares
of Parent Common Stock issued at the Effective Time pursuant to
the Arrangement (the "Escrowed Shares"). The number of the
Escrowed Shares that will consist of Exchangeable Shares shall be
equal to the product obtained by multiplying (A) ten percent
(10%) of the aggregate number of Exchangeable Shares and shares
of Parent Common Stock issued at the Effective Time pursuant to
the Arrangement by (B) a fraction, the numerator of which shall
be the total number of Exchangeable Shares to be issued by Parent
to the holders of Target Shares at the Effective Time, and
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the denominator of which shall be equal to the total number of
Exchangeable Shares and shares of Parent Common Stock to be
issued by Parent to the holders of Target Shares at the Effective
Time. The remainder of the Escrowed Shares shall be shares of
Parent Common Stock. The provisions of the Escrow Agreement and
the indemnification provisions of the Shareholders' Agreement
shall apply to the Escrowed Shares.
(j) Notwithstanding any other provision of this Plan of Arrangement
to the contrary, the Company or Parent (as the case may be) shall
be entitled, at its option to:
(i) refuse to issue any Exchangeable Shares ("Withheld
Exchangeable Shares") or shares of Parent Common Stock ("Withheld
Parent Common Stock") to any Person who has not reasonably
satisfied the Company or the Parent that such Person is not a
Non-Resident Person, unless such Person has, prior to the time at
which such Exchangeable Shares or shares of Parent Common Stock
are to be issued, provided the Company or the Parent, as
applicable, with a Clearance Certificate having a Certificate
Limit not less than the fair market value of the Exchangeable
Shares or shares of Parent Common Stock, as the case may be, to
be issued;
(ii) exchange any Withheld Exchangeable Shares for shares
of Parent Common Stock, whereupon such shares of Parent Common
Stock will become Withheld Parent Common Stock; and
(iii) sell any Withheld Parent Common Stock and remit such
portion of the sale proceeds to the Receiver General for Canada
as may be required to fulfil any obligation pursuant to
subsection 116(5) of the Income Tax Act.
(k) For purposes of illustrating the calculation of the Target Common
Share Exchange Ratio and the Target Preferred Share Exchange
Ratio at the Effective Time, and without limiting the generality
of the provisions of this Plan of Arrangement (including, without
limitation, the definition of Target Common Share Exchange Ratio
and Target Preferred Share Exchange Ratio) or of any of the other
Acquisition Documents, if the Effective Time had occurred at
12:00 a.m. on the date of the Acquisition Agreement, the Target
Common Share Exchange Ratio would have been 0.021174 at such time
and the Target Preferred Share Exchange Ratio would have been
0.030173 at such time.
(l) At the Closing, Target shall deliver to Parent a certificate
executed by the Target's Director of Finance and by the
Shareholders' Representative (acting on behalf of the holders of
Target Shares, Target Options, Target Warrants and Target
Convertible Debentures) setting forth the calculation of the
Target Common Share Exchange Ratio and the Target Preferred Share
Exchange Ratio as of the Effective Time. Such calculation shall
be made in accordance with all of the provisions of this Plan of
Arrangement. Each of Parent and Company shall be entitled to rely
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on such calculation for purposes of (i) allocating to the holders
of Target Shares the shares of Parent Common Stock and
Exchangeable Shares issued by Parent and the Company,
respectively, at the Effective Time pursuant to the Arrangement
and (ii) converting Target Options, Target Warrants and Target
Convertible Debentures into Replacement Options, Replacement
Warrants and Replacement Convertible Debentures, respectively,
pursuant to the Arrangement. No Person that is a holder of
Company Shares, Company Options, Company Warrants or Company
Convertible Debentures shall have the right to challenge, or make
a claim or bring an action against, Parent, Company or Target
disputing the allocation among the holders of Target Shares of
the shares of Parent Common Stock and Exchangeable Shares issued
by Parent and Company, respectively, at the Effective Time
pursuant to the Arrangement or the determination of the number
shares of Parent Common Stock subject to each Replacement Option,
Replacement Warrant or Replacement Convertible Debenture, if and
to the extent that such allocation and such determination are
based on, and consistent with, the calculation of the Target
Common Share Exchange Ratio and the Target Preferred Share
Exchange Ratio set forth in the Certificate delivered to Parent
and Company pursuant to, and in accordance with, the provisions
of this Subsection 2.1(l).
2.2 ELECTIONS
Each Person who, at or prior to 5:00 p.m. (Vancouver Time) on the
Business Day immediately preceding the Meeting, is a holder of record of Target
Shares, will be entitled, with respect to all or a portion of such shares, to
make an election at or prior to 5:00 p.m. on the Business Day immediately
preceding the Meeting to receive Exchangeable Shares or shares of Parent Common
Stock, or a combination thereof, in exchange for such holder's Target Shares, on
the basis set forth herein and in accordance with such arrangements and
procedures as will be agreed upon in good faith by Parent, the Company and
Target, including the form of the Letter of Transmittal containing the elections
and the procedures governing transmittal. Any Target Shares for which an
effective election has not been made (other than Dissenters) will be deemed to
be transferred to the Company pursuant to Section 2.1(b) in exchange for
Exchangeable Shares.
2.3 SECTION 85 ELECTION
If so requested by any holder of Target Shares who exchanges any of his
Target Shares for Exchangeable Shares, the Company will jointly with that holder
elect, in prescribed form and in accordance with subsection 85(6) of the Tax
Act, pursuant to subsection 85(1) of the Tax Act at such amount as is stipulated
by that holder.
2.4 BINDING EFFECT
This Plan of Arrangement will become effective at and be binding at and
after, the Effective Time on (i) the Target; (ii) Company; (iii) all holders and
all beneficial holders of Target Shares, Target Options, Target Warrants or
Target Convertible Debentures; and (iv) all holders and all beneficial holders
of the Exchangeable Shares and Parent Common Stock issued
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pursuant to this Plan of Arrangement without limiting the generality of the
foregoing, approval of this Plan of Arrangement shall constitute the approval by
the beneficial holders of Target Shares of the Shareholders' Representative
provisions of Section 1.3(e) of the Acquisition Agreement, which provisions are
incorporated herein by reference.
2.5 ADJUSTMENTS TO EXCHANGE RATIOS
Each of the Target Common Share Exchange Ratio and the Target Preferred
Share Exchange Ratio shall be adjusted to reflect fully the effect of any stock
split, reverse split, stock dividend (including any dividend or distribution of
securities convertible into Parent Common Shares or Target Shares other than
stock dividends paid in lieu of ordinary course dividends), reorganization,
recapitalization or other like change with respect to Parent Common Stock or
Target Preferred Shares or Target Common Shares, as applicable, occurring after
the date of the Acquisition Agreement and prior to the Effective Time.
ARTICLE 3
RIGHTS OF DISSENT
3.1 RIGHTS OF DISSENT
Holders of Target Shares or of Target Options, Target Warrants or
Target Convertible Debentures may exercise rights of dissent with respect to
such Target Shares or the Target Shares subject to such Target Options, Target
Warrants or Target Convertible Debentures, as the case may be, ("Dissenters'
Shares"). In order to dissent with respect to Target Options, Target Warrants or
Target Convertible Debentures, as the case may be, such Target Options, Target
Warrants or Target Convertible Debentures, as the case may be, shall be deemed
to have been exercised or converted for the purpose of exercising such dissent
rights and the exercise price or conversion price, as the case may be, under
each such Target Option, Target Warrant or Target Convertible Debenture, as the
case may be, shall be deemed to be satisfied by set-off against the fair value
paid for the Dissenters' Shares subject thereto, provided that if the holder of
any such Target Option, Target Warrant or Target Convertible Debenture, as the
case may be, is ultimately not entitled to be paid fair value for the
Dissenters' Shares subject thereto, such Target Option, Target Warrant or Target
Convertible Debenture, as the case may be, shall be deemed not to have been
exercised and shall become a Replacement Option, Replacement Warrant or
Replacement Convertible Debenture, as the case may be, in accordance with
subsection 2.1(e), 2.1(f) or 2.1(g), as applicable. All such rights of dissent
shall be exercised pursuant to and in the manner set forth in section 207 of the
BC Company Act as modified by the Interim Order (as defined in the Acquisition
Agreement) and this section 3.1 (the "Dissent Procedures") provided the Notice
of Dissent is given to Target by no later than the close of business (Vancouver,
British Columbia time) on the date which is two Business Days prior to the
Meeting. Without limiting the generality of the foregoing, holders who duly
exercise such rights of dissent and who:
(a) are ultimately entitled to be paid fair value for their
Dissenters' Shares shall be deemed to have transferred such
Dissenters' Shares to Target for cancellation on the Effective
Date but shall not be entitled to any other payment or
consideration
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(including Exchangeable Shares and shares of Parent Common Stock)
that would be payable under this Arrangement had such holder not
exercised such right of dissent, or
(b) are ultimately not entitled, for any reason, to be paid fair
value for their Dissenters' Shares shall be deemed to have
participated in the Arrangement on the same basis as any
non-dissenting holder of Target Shares, Target Options, Target
Warrants or Target Convertible Debentures, as the case may be,
and shall receive Exchangeable Shares on the basis determined in
accordance with subsection 2.1(b), or Replacement Options,
Replacement Warrants or Replacement Convertible Debentures, as
the case may be, on the basis provided in subsection 2.1(e),
2.1(f) or 2.1(g), respectively.
In no case shall Target be required to recognize such holders as holders of
Target Shares, Target Options, Target Warrants or Target Convertible Debentures,
as the case may be, on and after the Effective Date, and the names of such
holders of Target Shares, Target Options, Target Warrants or Target Convertible
Debentures, as the case may be, shall be deleted from the register of holders of
Target Shares, Target Options, Target Warrants or Target Convertible Debentures,
as the case may be, maintained by the Target on the Effective Date.
ARTICLE 4
CERTIFICATES AND FRACTIONAL SHARES
4.1 ISSUANCE OF CERTIFICATES REPRESENTING EXCHANGEABLE SHARES
At or promptly after the Effective Time, the Company shall deposit with
the Transfer Agent, for the benefit of the holders of Target Shares who will
receive Exchangeable Shares in connection with the Arrangement, certificates
representing the Exchangeable Shares issued to such holders pursuant to
subsection 2.1(b) in exchange for outstanding Target Shares. Upon surrender to
the Transfer Agent for cancellation of a certificate which immediately prior to
the Effective Time represented outstanding Target Shares that were exchanged for
Exchangeable Shares under the Arrangement, together with such other documents
and instruments as would have been required to effect the transfer of the Target
Shares formerly represented by such certificate under the BC Company Act and the
articles of Target and such additional documents and instruments as the Transfer
Agent may reasonably require, the holder of such surrendered certificate shall
be entitled to receive in exchange therefor, and the Transfer Agent shall
deliver to such holder, a certificate representing that number (rounded down to
the nearest whole number) of Exchangeable Shares, which such holder has the
right to receive pursuant to subsection 2.1(b) hereof (together with any
dividends or distributions with respect thereto pursuant to section 4.3 and any
cash in lieu of fractional Exchangeable Shares, pursuant to section 4.4), and
the certificate so surrendered shall forthwith be cancelled. In the event of a
transfer of ownership of Target Shares which is not registered in the transfer
records of Target, a
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certificate representing the proper number of Exchangeable Shares may be issued
to a transferee if the certificate representing such Target Shares is presented
to the Transfer Agent, accompanied by all documents required to evidence and
effect such transfer. Until surrendered as contemplated by this section 4.1,
each certificate which immediately prior to the Effective Time represented one
or more outstanding Target Shares that were exchanged for one or more
Exchangeable Shares shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender (i) a certificate
representing Exchangeable Shares, as contemplated by this section 4.1, (ii) a
cash payment in lieu of any fractional Exchangeable Shares, as contemplated by
section 4.4, and (iii) any dividends or distributions with a record date after
the Effective Time theretofore paid or payable with respect to Exchangeable
Shares, as contemplated by section 4.3.
4.2 EXCHANGE OF CERTIFICATES FOR PARENT COMMON STOCK
At or promptly after the Effective Time, Parent shall deposit with the
Transfer Agent, for the benefit of the holders of Target Shares who will receive
shares of Parent Common Stock in connection with the Arrangement, certificates
representing the shares of Parent Common Stock issued to such holders pursuant
to subsection 2.1(b) in exchange for outstanding Target Shares. Upon surrender
to the Transfer Agent for cancellation of a certificate which immediately prior
to the Effective Time represented outstanding Target Shares that were exchanged
for shares of Parent Common Stock together with such other documents and
instruments as would have been required to effect the transfer of the Target
Shares formerly represented by such certificate under the BC Company Act and the
articles of Target and such additional documents and instruments as the Transfer
Agent may reasonably require, the holder of such surrendered certificate shall
be entitled to receive in exchange therefor, and the Transfer Agent shall
deliver to such holder, a certificate representing that number (rounded down to
the nearest whole number) of shares of Parent Common Stock, which such holder
has the right to receive pursuant to subsection 2.1(b) hereof (together with any
dividends or distributions with respect thereto pursuant to section 4.3 and any
cash in lieu of fractional shares of Parent Common Stock, pursuant to section
4.4), and the certificate so surrendered shall forthwith be cancelled. In the
event of a transfer of ownership of Target Shares which is not registered in the
transfer records of Target, a certificate representing the proper number of
shares of Parent Common Stock may be issued to a transferee if the certificate
representing such Target Shares is presented to the Transfer Agent, accompanied
by all documents required to evidence and effect such transfer. Until
surrendered as contemplated by this section 4.2, each certificate which
immediately prior to the Effective Time represented one or more outstanding
Target Shares that were exchanged for one or more shares of Parent Common Stock
shall be deemed at any time after the Effective Time to represent only the right
to receive upon such surrender (i) a certificate representing shares of Parent
Common Stock, as contemplated by this section 4.2, (ii) a cash payment in lieu
of any fractional share of Parent Common Stock, as contemplated by section 4.4,
and (iii) any dividends or distributions with a record date after the Effective
Time theretofore paid or payable with respect to shares of Parent Common Stock,
as contemplated by section 4.3.
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4.3 DISTRIBUTIONS WITH RESPECT TO UNSURRENDERED CERTIFICATES
No dividends or other distributions declared or made after the
Effective Time with respect to Exchangeable Shares or shares of Parent Common
Stock with a record date after the Effective Time shall be paid to the holder of
any unsurrendered certificate which, immediately prior to the Effective Time,
represented outstanding Target Shares that were exchanged pursuant to section
2.1(b), and no cash payment in lieu of fractional shares shall be paid to any
such holder pursuant to section 4.4, unless and until such certificate shall be
surrendered in accordance with section 4.1 or section 4.2. Subject to applicable
law and to section 4.6, at the time of such surrender of any such certificate
(or, in the case of clause (iii) below, at the appropriate payment date), there
shall be paid to the record holder of the certificate representing whole
Exchangeable Shares or shares of Parent Common Stock, as the case may be, into
which the shares represented by the surrendered certificate were exchanged,
without interest, (i) the amount of any cash payable in lieu of a fractional
Exchangeable Share or share of Parent Common Stock to which such holder is
entitled pursuant to section 4.4, (ii) the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to such whole Exchangeable Shares or shares of Parent Common Stock, as
the case may be, and (iii) the amount of dividends or other distributions with a
record date after the Effective Time but prior to surrender and a payment date
subsequent to surrender payable with respect to such whole Exchangeable Shares
or shares of Parent Common Stock, as the case may be.
4.4 NO FRACTIONAL SHARES
No certificates or scrip representing fractional Exchangeable Shares or
shares of Parent Common Stock shall be issued upon the surrender for exchange of
certificates pursuant to section 4.1 or section 4.2 and no dividend, stock split
or other change in the capital structure of the Parent or Company, as
applicable, shall relate to any such fractional security and such fractional
interests shall not entitle the owner thereof to vote or to exercise any rights
as a security holder of Parent or Company, as applicable. In lieu of any such
fractional securities, each person entitled to a fractional interest in an
Exchangeable Share or a share of Parent Common Stock will receive an amount of
cash (rounded to the nearest whole cent), without interest, equal to the
Canadian Dollar Equivalent as of the Effective Date of the product of (i) such
fraction, multiplied by (ii) the Average Closing Price.
4.5 LOST CERTIFICATES
If any certificate that immediately prior to the Effective Time
represented outstanding Target Shares that were exchanged pursuant to section
2.1(b) has been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the person claiming such certificate to be lost, stolen or
destroyed, the Transfer Agent will issue in exchange for such lost, stolen or
destroyed certificate, certificates representing Exchangeable Shares or shares
of Parent Common Stock (and any dividends or distributions with respect thereto
and any cash pursuant to section 4.4) deliverable in respect thereof as
determined in accordance with section 2.1(b). When authorizing such payment in
exchange for any lost, stolen or destroyed certificate, the person to whom
certificates representing Exchangeable Shares or shares of Parent Common Stock
are to be issued shall, as a condition precedent to the issuance thereof, give a
bond satisfactory to Parent or the Company, as the case may be, in such sum as
Parent or the Company may direct or otherwise
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indemnify Parent or the Company in a manner satisfactory to the Company and
Parent against any claim that may be made against Target or the Company with
respect to the certificate alleged to have been lost, stolen or destroyed.
4.6 EXTINGUISHMENT OF RIGHTS
Any certificate that immediately prior to the Effective Time
represented outstanding Target Shares that were exchanged pursuant to section
2.1(b) and not deposited, with all other instruments required by section 4.1 or
section 4.2, on or prior to the second anniversary of the Effective Date shall
cease to represent a claim or interest of any kind or nature as a shareholder of
Target. On such date, the Exchangeable Shares or Parent Common Stock to which
the former registered holder of the certificate referred to in the preceding
sentence was ultimately entitled shall be deemed to have been surrendered to the
Company together with all entitlements to dividends, distributions and interests
thereon held for such former registered holder for no consideration.
ARTICLE 5
CERTAIN RIGHTS OF PARENT TO ACQUIRE EXCHANGEABLE SHARES
5.1 PARENT RETRACTION CALL RIGHT
(a) Parent shall have the overriding right (the "Retraction Call
Right"), notwithstanding the proposed redemption of Retracted
Shares by the Company on a Retraction Date, to purchase from the
holder of the Retracted Shares on the Retraction Date the
Retracted Shares upon payment by Parent to the holder of an
amount per share equal to (a) the Current Market Price multiplied
by the Current Parent Common Share Equivalent, in each case
determined on the Retraction Date, which shall be satisfied in
full in respect of the Retracted Shares by causing to be
delivered to such holder such whole number of shares of Parent
Common Stock as is equal to the product obtained by multiplying
the number of Retracted Shares by the Current Parent Common Share
Equivalent (together with an amount in lieu of any fractional
share of Parent Common Stock resulting from such calculation
payable in accordance with section 5.5), plus (b) the aggregate
of all dividends declared and unpaid on such Retracted Share
(collectively the "Retraction Call Purchase Price"). In the event
of the exercise of the Retraction Call Right by Parent, (i) the
holder of the Retracted Shares shall be obligated to deliver to
Parent a completed and executed copy of the certificate attached
as SCHEDULE B to the Exchangeable Share Provisions and (ii)
subject to the provisions of Section 5.8 hereof, the holder of
the Retracted Shares shall be obligated to sell to Parent, and
Parent shall be obligated to purchase, the Retracted Shares on
the Retraction Date upon payment by Parent to such holder of the
Retraction Call Purchase Price for each Retracted Share.
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(b) In order to exercise the Retraction Call Right, Parent must
notify the Transfer Agent in writing of its determination to do
so (the "Call Notice") prior to the expiry of the third Business
Day after the receipt by the Transfer Agent of the Retraction
Request. If Parent does not so notify the Transfer Agent, the
Transfer Agent will notify the holder as soon as possible
thereafter that Parent will not exercise the Retraction Call
Right, in which case the holder may revoke his Retraction Request
in accordance with the Exchangeable Share Provisions. If Parent
delivers the Call Notice before the end of such three Business
Day period, the Retraction Request shall thereupon be considered
only to be an offer by the holder to sell the Retracted Shares to
Parent in accordance with the Retraction Call Right. In such
event, the Company shall not redeem the Retracted Shares and
Parent shall purchase from such holder and such holder shall sell
to Parent on the Retraction Date the Retracted Shares for the
Retraction Call Purchase Price for each Retracted Share.
(c) For the purposes of completing a purchase of the Retracted Shares
pursuant to the Retraction Call Right, Parent shall deposit with
the Transfer Agent, on or before the Retraction Date,
certificates representing the shares of Parent Common Stock to be
delivered to the holder of the Retracted Shares in payment of the
total Retraction Call Purchase Price for the Retracted Shares (or
the portion thereof payable in shares of Parent Common Stock, as
the case may be) and a cheque in the amount of the remaining
portion, if any, of the total Retraction Call Purchase Price (or,
if any part of the Retraction Call Purchase Price consists of
dividends payable in property, such property or property that is
the same as or economically equivalent to such property).
Provided that such total Retraction Call Purchase Price has been
so deposited with the Transfer Agent, the closing of the purchase
and sale of the Retracted Shares pursuant to the Retraction Call
Right shall be deemed to have occurred as of the close of
business on the Retraction Date and, for greater certainty, no
redemption by the Company of such Retracted Shares shall take
place on the Retraction Date. Parent shall cause the Transfer
Agent to deliver to the holder of the Retracted Shares, at the
address of such holder recorded in the securities register of the
Company for the Exchangeable Shares or at the address specified
in the holder's Retraction Request or by holding for pick-up by
the holder at the office of the Transfer Agent to which the
Retraction Request was delivered, in payment of such total
Retraction Call Purchase Price, certificates representing the
Parent Common Stock to be delivered in respect of such payment
(which shares shall be duly issued as fully paid and
non-assessable and shall be free and clear of any Liens)
registered in the name of the holder or in such other name as the
holder may request in payment of such and, if applicable, a
cheque of Parent payable at par and in Canadian dollars at any
branch of the bankers of Parent or the Company in Canada (or, if
any part of the Retraction Call Purchase Price consists of
dividends payable in property, such property or property that is
the same as or economically equivalent to such property), and
such delivery of such certificates and cheque (and property, if
any) to the holder on behalf of Parent by the Transfer Agent
shall be deemed to be payment of and
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shall satisfy and discharge all liability for the total
Retraction Call Purchase Price to the extent that the same is
represented by such share certificates and cheque (and property,
if any), unless such cheque is not paid on due presentation. On
and after the close of business on the Retraction Date, the
holder of the Retracted Shares shall cease to be a holder of such
Retracted Shares and shall not be entitled to exercise any of the
rights of a holder in respect thereof, other than the right to
receive the Retraction Call Purchase Price, unless upon
presentation and surrender of certificates in accordance with the
foregoing provisions, payment of the total Retraction Call
Purchase Price shall not be made, in which case the rights of
such holder shall remain unaffected until the total Retraction
Call Purchase Price has been paid in the manner hereinbefore
provided. On and after the close of business on the Retraction
Date, provided that presentation and surrender of certificates
and payment of the total Retraction Call Purchase Price has been
made in accordance with the foregoing provisions, the holder of
the Retracted Shares so purchased by Parent shall thereafter be
considered and deemed for all purposes to be a holder of the
shares of Parent Common Stock delivered to such holder.
5.2 PARENT LIQUIDATION CALL RIGHT
(a) Parent shall have the overriding right (the "Liquidation Call
Right"), in the event of and notwithstanding the proposed
liquidation, dissolution or winding-up of the Company, to
purchase from all but not less than all of the holders (other
than Parent and its Affiliates) of Exchangeable Shares on the
Liquidation Date all but not less than all of the Exchangeable
Shares held by each such holder on payment by Parent of an amount
per share equal to (a) the Current Market Price multiplied by the
Current Parent Common Share Equivalent, in each case determined
on the last business day prior to the Liquidation Date, which
shall be satisfied in full in respect of all of the Exchangeable
Shares held by such holder by Parent causing to be delivered to
such holder such whole number of Parent Common Stock as is equal
to the product obtained by multiplying the number of such
Exchangeable Shares by the Current Parent Common Share Equivalent
(together with an amount in lieu of any fractional share of
Parent Common Stock resulting from such calculation payable in
accordance with section 5.5), plus (b) the aggregate of all
dividends declared and unpaid on such Exchangeable Share up to
the Liquidation Date (collectively the "Liquidation Call Purchase
Price"). In the event of the exercise of the Liquidation Call
Right by Parent, (i) each holder shall be obligated to deliver to
Parent a completed and executed copy of the certificate attached
as SCHEDULE B to the Exchangeable Share Provisions and
(ii) subject to the provisions of Section 5.8 hereof, each holder
shall be obligated to sell all the Exchangeable Shares held by
the holder to Parent on the Liquidation Date on payment by Parent
to the holder of the Liquidation Call Purchase Price for each
such share.
(b) To exercise the Liquidation Call Right, Parent must notify the
Transfer Agent and the Company of Parent's intention to exercise
such right at least 30 days before the
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Liquidation Date in the case of a voluntary liquidation,
dissolution or winding up of the Company and at least five
Business Days before the Liquidation Date in the case of an
involuntary liquidation, dissolution or winding up of the
Company. The Transfer Agent will notify the holders of
Exchangeable Shares as to whether or not Parent has exercised the
Liquidation Call Right forthwith after the expiry of the date by
which the same may be exercised by Parent. If Parent exercises
the Liquidation Call Right, on the Liquidation Date, Parent will,
subject to the provisions of Section 5.8 hereof, purchase and the
holders will sell all of the Exchangeable Shares then outstanding
for a price per share equal to the Liquidation Call Purchase
Price.
(c) For the purposes of completing the purchase of the Exchangeable
Shares pursuant to the Liquidation Call Right, Parent shall
deposit with the Transfer Agent, on or before the Liquidation
Date, certificates representing the aggregate number of shares
Parent Common Stock deliverable by Parent (which shares shall be
duly issued as fully paid and non-assessable and shall be free
and clear of any Liens) in payment of the total Liquidation Call
Purchase Price (or the portion thereof payable in Parent Common
Stock, as the case may be) and a cheque or cheques in the amount
of the remaining portion, if any, of the total Liquidation Call
Purchase Price (or, if any part of the Liquidation Call Purchase
Price consists of dividends payable in property, such property or
property that is the same as or economically equivalent to such
property). Provided that such total Liquidation Call Purchase
Price has been so deposited with the Transfer Agent, on and after
the Liquidation Date the rights of each holder of Exchangeable
Shares will be limited to receiving such holder's proportionate
part of the total Liquidation Call Purchase Price payable by
Parent upon presentation and surrender by the holder of
certificates representing the Exchangeable Shares held by such
holder and the holder shall on and after the Liquidation Date be
considered and deemed for all purposes to be the holder of the
Parent Common Stock delivered to it. Upon surrender to the
Transfer Agent of a certificate or certificates representing
Exchangeable Shares, together with such other documents and
instruments as may be required to effect a transfer of
Exchangeable Shares under the BC Company Act and the articles of
the Company and such additional documents and instruments as the
Transfer Agent may reasonably require, the holder of such
surrendered certificate or certificates shall be entitled to
receive in exchange therefor, and the Transfer Agent on behalf of
Parent shall deliver to such holder, certificates representing
the Parent Common Stock to which the holder is entitled and a
cheque or cheques of Parent payable at par and in Canadian
dollars at any branch of the bankers of Parent or of the Company
in Canada in payment of the remaining portion, if any, of the
total Liquidation Call Purchase Price (or, if any part of the
Liquidation Call Purchase Price consists of dividends payable in
property, such property or property that is the same as or
economically equivalent to such property). If Parent does not
exercise the Liquidation Call Right in the manner described
above, on the Liquidation Date the holders of the Exchangeable
Shares will be entitled to receive in exchange therefor the
Liquidation Amount otherwise payable by the
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Company in connection with the liquidation, dissolution or
winding-up of the Company pursuant to sections 4.1 to 4.3 of the
Exchangeable Share Provisions.
5.3 PARENT REDEMPTION CALL RIGHT
(a) Parent shall have the overriding right (the "Redemption Call
Right"), notwithstanding the proposed redemption of the
Exchangeable Shares by the Company on the Automatic Redemption
Date, to purchase from all but not less than all of the holders
(other than Parent or its Affiliates) of Exchangeable Shares on
the Automatic Redemption Date all but not less than all of the
Exchangeable Shares held by each such holder on payment by Parent
to the holder of an amount per share equal to (a) the Current
Market Price multiplied by the Current Parent Common Share
Equivalent, in each case determined on the Automatic Redemption
Date, which shall be satisfied in full in respect of all of the
Exchangeable Shares held by such holder by causing to be
delivered to such holder such number of shares of Parent Common
Stock as is equal to the product obtained by multiplying the
number of such Exchangeable Shares by the Current Parent Common
Share Equivalent (together with an amount in lieu of any
fractional share of Parent Common Stock resulting from such
calculation payable in accordance with section 5.5), plus (b) the
aggregate of all dividends declared and unpaid on such
Exchangeable Shares (collectively the "Redemption Call Purchase
Price"). In the event of the exercise of the Redemption Call
Right by Parent, (i) each holder shall be obligated to deliver to
Parent a completed and executed copy of the certificate attached
as SCHEDULE B to the Exchangeable Share Provisions and
(ii) subject to Section 5.8 hereof, each holder shall be
obligated to sell to Parent, and Parent shall be obligated to
purchase upon receipt of such certificate, all the Exchangeable
Shares held by the holder on the Automatic Redemption Date on
payment by Parent to the holder of the Redemption Call Purchase
Price for each such share.
(b) To exercise the Redemption Call Right, Parent must notify the
Transfer Agent, as agent for the holders of the Exchangeable
Shares, and the Company of Parent's intention to exercise such
right at least 75 days before the Automatic Redemption Date. The
Transfer Agent will notify the holders of the Exchangeable Shares
as to whether or not Parent has exercised the Redemption Call
Right forthwith after the date by which the same may be exercised
by Parent. If Parent exercises the Redemption Call Right, on the
Automatic Redemption Date Parent will purchase and the holders
will sell all of the Exchangeable Shares then outstanding for a
price per share equal to the Redemption Call Purchase Price.
(c) For the purposes of completing the purchase of the Exchangeable
Shares pursuant to the Redemption Call Right, Parent shall
deposit with the Transfer Agent, on or before the Automatic
Redemption Date, certificates representing the aggregate number
of Parent Common Stock deliverable by Parent (which shares shall
be duly issued as fully paid and non-assessable and shall be free
and clear of any
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Liens) in payment of the total Redemption Call Purchase Price (or
the portion thereof payable in Parent Common Stock, as the case
may be) and a cheque or cheques in the amount of the remaining
portion, if any, of the total Redemption Call Purchase Price (or,
if any of the Redemption Call Purchase Price consists of
dividends payable in property, such property or property the same
as or economically equivalent to such property). Provided that
such total Redemption Call Purchase Price has been so deposited
with the Transfer Agent, on and after the Automatic Redemption
Date the rights of each holder of Exchangeable Shares will be
limited to receiving such holder's proportionate part of the
total Redemption Call Purchase Price payable by Parent upon
presentation and surrender by the holder of certificates
representing the Exchangeable Shares held by such holder and the
holder shall on and after the Automatic Redemption Date be
considered and deemed for all purposes to be the holder of the
Parent Common Stock delivered to such holder. Upon surrender to
the Transfer Agent of a certificate or certificates representing
Exchangeable Shares, together with such other documents and
instruments as may be required to effect a transfer of
Exchangeable Shares under the BC Company Act and the articles of
the Company and such additional documents and instruments as the
Transfer Agent may reasonably require, the holder of such
surrendered certificate or certificates shall be entitled to
receive in exchange therefor, and the Transfer Agent on behalf of
Parent shall deliver to such holder, certificates representing
the Parent Common Stock to which the holder is entitled and a
cheque or cheques of Parent payable at par and in Canadian
dollars at any branch of the bankers of Parent or of the Company
in Canada in payment of the remaining portion, if any, of the
total Redemption Call Purchase Price (or, if part of the
Redemption Call Purchase Price consists of dividends payable in
property, such property or property the same as or economically
equivalent to such property). If Parent does not exercise the
Redemption Call Right in the manner described above, on the
Automatic Redemption Date the holders of the Exchangeable Shares
will be entitled to receive in exchange therefor the redemption
price otherwise payable by the Company in connection with the
redemption of the Exchangeable Shares pursuant to Article 6 of
the Exchangeable Share Provisions.
5.4 FRACTIONAL SHARES OF PARENT COMMON STOCK
No certificates or scrip representing fractional shares of Parent
Common Stock shall be delivered to holders of Exchangeable Shares pursuant to
the provisions hereof. In lieu of any such fractional security, each person
entitled to a fractional interest in a share of Parent Common Stock will receive
an amount of cash (rounded to the nearest whole cent), without interest, equal
to the Canadian Dollar Equivalent as of the third Business Day prior to the
relevant date of delivery of certificates representing shares of Parent Common
Stock (the "Fractional Share Calculation Date") of the product of (i) such
fraction, multiplied by (ii) the closing sale price of Shares of Parent Common
Stock as traded on NASDAQ and reported by The Wall Street Journal on the
Fractional Share Calculation Date, or, if shares of Parent Common Stock are not
then quoted on NASDAQ, on such other stock exchange or automated quotation
system on which
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shares of Parent Common Stock are listed or quoted, as the case may be, as may
be selected by the Board of Directors for such purpose, provided, however, that
if in the opinion of the Board of Directors the public distribution or trading
activity of Shares of Parent Common Stock during such period does not create a
market that reflects the fair market value of a share of Parent Common Stock
then the Current Market Price of a share of Parent Common stock shall be
determined by the Board of Directors in good faith based upon the advice of such
qualified independent financial advisors as the Board of Directors may deem to
be appropriate, and provided further that any such selection, opinion or
determination by the Board of Directors shall be conclusive and binding.
5.5 ECONOMIC EQUIVALENCE
The Board of Directors shall determine, in good faith and in its sole
discretion (with the assistance of such reputable and qualified independent
financial advisors and/or other experts as the Board of Directors may require)
economic equivalence for the purposes of any provision herein that requires such
a determination and each such determination shall be conclusive and binding on
Parent and the holders of Exchangeable Shares, where applicable.
5.6 CAPITAL REORGANIZATION OF PARENT
If at any time there is a capital reorganization of Parent that is not
provided for in subsection 1.1(s) or a consolidation, merger, arrangement or
amalgamation (statutory or otherwise) of Parent with or into another entity (any
such event being called a "Capital Reorganization"), any holder of Exchangeable
Shares whose Exchangeable Shares have not been exchanged for Parent Common Stock
in accordance with the provisions hereof prior to the record date for such
Capital Reorganization shall be entitled to receive and shall accept, upon any
such exchange occurring pursuant to the provisions hereof at any time after the
record date for such Capital Reorganization, in lieu of the shares of Parent
Common Stock that he would otherwise have been entitled to receive pursuant to
the provisions hereof, the number of shares or other securities of Parent or of
the body corporate resulting, surviving or continuing from the Capital
Reorganization, or other property, that such holder would have been entitled to
receive as a result of such Capital Reorganization if, on the record date, he
had been the registered holder of the number of shares of Parent Common Stock to
which he was then entitled upon any exchange of his Exchangeable Shares into
shares of Parent Common Stock in accordance with the provisions hereof, subject
to adjustment thereafter in the same manner, as nearly as may be possible, as is
provided for in subsection 1.1(s); provided that no such Capital Reorganization
shall be carried into effect unless all necessary steps shall have been taken so
that each holder of Exchangeable Shares shall thereafter be entitled to receive,
upon any exchange of his Exchangeable Shares pursuant to the provisions hereof,
such number of shares or other securities of Parent or of the body corporate
resulting, surviving or continuing from the Capital Reorganization, or other
property.
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5.7 OTHER CHANGE IN PARENT COMMON STOCK
In the case of any reclassification of, or other change in, the
outstanding shares of Parent Common Stock other than a Parent Common Stock
Reorganization or a Capital Reorganization, such changes shall be made in the
rights attaching to the Exchangeable Shares, without any action on the part of
the Company or the holders of the Exchangeable Shares to the extent permitted by
applicable law, effective immediately following the record date for such
reclassification or other change, to the extent necessary to ensure that holders
of Exchangeable Shares shall be entitled to receive, upon the occurrence at any
time after such record date of any event whereby they would receive shares of
Parent Common Stock pursuant to the provisions hereof, such shares, securities
or rights as they would have received if their Exchangeable Shares had been
exchanged for shares Parent Common Stock pursuant to the provisions hereof
immediately prior to such record date, subject to adjustment thereafter in the
same manner, as nearly as may be possible, as is provided for in subsection
1.1(s).
5.8 SECURITIES LAW AND TAX LAW COMPLIANCE CONDITIONS
(a) Notwithstanding anything expressed or implied in this Plan of
Arrangement to the contrary, Parent shall not be obligated to purchase any
Exchangeable Shares upon exercise of the Parent Retraction Call Right,
Liquidation Call Right or Parent Redemption Call Right if such purchase would
violate applicable federal, state or provincial securities laws of the United
States or Canada. In the event that the Securities Act of 1933, as amended (the
"Securities Act"), would require, as a condition precedent to any such purchase
by Parent, that the shares of Parent Common Stock to be issued by Parent in
consideration for such purchase be registered under the Securities Act (and that
no exemption is then available from such registration requirement), then Parent
shall file a registration statement on Form S-3 with the United States
Securities and Exchange Commission covering such shares of Parent Common Stock
to be issued by Parent.
(b) Notwithstanding anything expressed or implied in this Plan of
Arrangement to the contrary, Parent shall not be obligated to purchase any
Exchangeable Shares upon exercise of the Parent Retraction Call Right,
Liquidation Call Right or Parent Redemption Call Right, if the holder of such
Exchangeable Shares has not reasonably satisfied Parent that such holder is not
a Non-Resident Person, unless such holder has, prior to such purchase, provided
Parent with a Clearance Certificate having a Certificate Limit not less than the
fair market value of the shares of Parent Common Stock to be issued in
connection with such purchase, which fair market value shall be calculated as of
the time of such purchase; but Parent may, at its election, (i) purchase any
such Exchangeable Shares (ii) withhold the shares of Parent Common Stock that
Parent would otherwise be required to deliver in connection such purchase (the
"Section 5.8 Withheld Parent Common Stock"), (iii) sell any Section 5.8 Withheld
Parent Common Stock and remit such portion of the sale proceeds to the Receiver
General for Canada as may be required to fulfil any obligation pursuant to
subsection 116(5) of the Income Tax Act, and (iv) deliver the remaining Section
5.8 Withheld Parent Common Stock to the applicable holder.
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ARTICLE 6
AMENDMENT
6.1 PLAN OF ARRANGEMENT AMENDMENT
(a) By instrument in writing the Company and Target may amend, modify
and/or supplement this Plan of Arrangement at any time and from
time to time provided that any such amendment, modification, or
supplement must be (i) agreed to by Parent, (ii) filed with the
Court and, if made following the Meeting, approved by the Court
and (iii) communicated to holders of Target Shares, Target
Options, Target Warrants or Target Convertible Debentures, as the
case may be, in the manner required by the Court (if so
required).
(b) Any amendment, modification or supplement to this Plan of
Arrangement that is approved by the Court following the Meeting
shall be effective only if (i) it is consented to by each of the
Company, Target and Parent and (ii) it is consented to by the
holders of the Target Shares, Target Options, Target Warrants or
Target Convertible Debentures, as the case may be, to the extent
so required by the Court.
ARTICLE 7
GUARANTY AND ASSIGNMENT
Parent shall unconditionally and irrevocably guarantee the full and
punctual performance of all of the obligations of the Company under this Plan of
Arrangement. Parent may assign all or a portion of its rights and obligations
(including, without limitation, Parent's obligations pursuant to section 4.2,
the Retraction Call Right, the Liquidation Call Right and the Redemption Call
Right) under this Plan of Arrangement to any Affiliate of Parent (collectively,
the "Permitted Assigns" and either individually a "Permitted Assign") without
the consent of the holders of Exchangeable Shares, provided that Parent shall
not thereby be released from such obligations.
ARTICLE 8
INDEMNIFICATION
By virtue of the adoption of the Acquisition Agreement and the approval
of the Arrangement by the holders of Target Shares, the holders of Target Shares
shall be required, if the Closing occurs and the Arrangement is consummated, to
indemnify Parent, the Company, the Target and each of their respective
directors, officers, employees, agents, representatives, and other Affiliates
with respect to certain matters as shall be set forth in the Shareholders'
Agreement. The terms and conditions of such indemnification obligation of the
holders of Target Shares shall be set forth in the Shareholders' Agreement and
the Escrow Agreement, and shall be treated as if such terms and conditions were
an integral part of the Arrangement such that they are binding on all of the
holders of Target Shares to the same extent as any other term or condition
applicable or pertaining to the Arrangement that is set forth in this Plan of
Arrangement. The terms and conditions of such indemnification obligation of the
holders of
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Target Shares under the Shareholders' Agreement and the Escrow Agreement shall
be binding on each holder of Target Shares, regardless of whether such holder of
Target Shares is a party to the Shareholders' Agreement or voted in favor of the
Arrangement. Notwithstanding the foregoing provisions of this Article 8 or any
provision of the Shareholders' Agreement to the contrary, (i) the provisions of
this Article 8 shall not apply to any holder of Target Shares that properly
perfects his statutory dissenter's rights pursuant to, and in accordance with,
the provisions of Article 3 hereof and (ii) in no event shall any holder of
Target Shares that is not a party to the Shareholders' Agreement have any
personal liability for any indemnification obligation that arises under the
Shareholders' Agreement (it being understood that the sole recourse against such
holder of Target Shares to satisfy any indemnification obligation of such holder
of Target Shares under the Shareholders' Agreement shall be to make a claim
against the Escrow Fund pursuant to, and in accordance with, the provisions of
the Shareholders' Agreement and the Escrow Agreement).
ARTICLE 9
FURTHER ASSURANCES
Notwithstanding that the transactions and events set out herein shall
occur and be deemed to occur in the order set out in this Plan of Arrangement
without any further act or formality, each of the parties to the Acquisition
Agreement shall make, do and execute, or cause to be made, done and executed,
all such further acts, deeds, agreements, transfers, assurances, instruments or
documents as may reasonably be required by any of them in order further to
document or evidence any of the transactions or events set out herein.
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APPENDIX A TO PLAN OF ARRANGEMENT
PROVISIONS ATTACHING TO THE EXCHANGEABLE SHARES
The Exchangeable Shares in the capital of the Company shall have the
following special rights and restrictions.
ARTICLE 1
INTERPRETATION
1.1 For the purposes of these share provisions:
(a) "AFFILIATE" means, as applied to any Person, (a) any other Person
directly or indirectly controlling, controlled by or under common
control with, that Person, (b) any other Person that owns or
controls 10% or more of any class of equity securities of that
Person or any of its Affiliates (treating for purposes of this
clause (b) any equity securities issuable upon the exercise of
any option, warrant or convertible security owned or controlled
by such other Person as if such equity securities were issued and
outstanding), or (c) any director, partner or officer of such
Person. For the purposes of this definition, "control" (including
with correlative meanings, the terms "controlling", "controlled
by", and "under common control with") as applied to any Person,
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of
that Person, whether through ownership of voting securities or by
contract or otherwise.
(b) "AUTOMATIC REDEMPTION DATE" means that date which is the second
anniversary of the Closing, unless such date shall be accelerated
at any time to a specified earlier date by the Board of Directors
upon at least 75 days prior written notice to the registered
holders of Exchangeable Shares, in which case the Automatic
Redemption Date shall be such earlier date; PROVIDED, HOWEVER,
that the Board of Directors may so accelerate the Automatic
Redemption Date only at such time as there are outstanding fewer
than 250,000 Exchangeable Shares held by holders other than
Parent and its Affiliates.
(c) "BC COMPANY ACT" means the Company Act (British Columbia) as
amended from time to time.
(d) "BOARD OF DIRECTORS" means the board of directors of the Company.
(e) "BUSINESS DAY" means any day on which commercial banks are
generally open for business in Boston, Massachusetts and
Vancouver, British Columbia other than a Saturday, a Sunday or a
day observed as a holiday in Boston, Massachusetts or in
Vancouver, British Columbia under the laws of the Commonwealth of
Massachusetts, under the laws of the Province of British Columbia
or the federal laws of Canada or the United States of America
applicable therein.
(f) "CANADIAN DOLLAR EQUIVALENT" means in respect of an amount
expressed in a foreign currency (the "Foreign Currency Amount")
at any date the product obtained by multiplying (a) the Foreign
Currency Amount by (b) the noon spot exchange rate on such date
for such foreign currency expressed in Canadian dollars as
reported by the Bank of Canada or, in the event such spot
exchange rate is not available, such exchange rate on such date
for such foreign currency expressed in Canadian dollars as may be
deemed by the Board of Directors to be appropriate for such
purpose.
(g) "CAPITAL REORGANIZATION" has the meaning ascribed thereto in
section 9.2 of these share provisions.
(h) "CALL NOTICE" has the meaning ascribed thereto in subsection
5.1(b) of the Plan of Arrangement.
(i) "CERTIFICATE LIMIT" has the meaning ascribed to that term in
Section 116 of the Tax Act.
(j) "CLEARANCE CERTIFICATE" means a certificate issued pursuant to
Section 116 of the Tax Act.
(k) "COMPANY" means C&T Acquisition Corporation, a corporation
incorporated under the BC Company Act.
(l) "CURRENT MARKET PRICE" means, in respect of Parent Common Stock
on any date, the Canadian Dollar Equivalent of the closing sale
price of a share of Parent Common Stock on such date (or, if no
trades of Parent Common Stock occurred on such date, on the last
trading day prior thereto on which such trades occurred) as
traded on NASDAQ and as reported by The Wall Street Journal, or,
if shares of the Parent Common Stock are not then quoted on
NASDAQ, on such other stock exchange or automated quotation
system on which shares of Parent Common Stock are listed or
quoted, as the case may be, as may be selected by the Board of
Directors for such purpose, PROVIDED, HOWEVER, that if in the
event that the Parent Common Stock is no longer listed on the
NASDAQ or any other national exchange or automated quotation
system, then the Current Market Price of a share of Parent Common
Stock shall be determined by the Board of Directors in good faith
based upon the advice of such qualified independent financial
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advisors as the Board of Directors may deem to be appropriate,
and provided further that any such selection, opinion or
determination by the Board of Directors shall be conclusive and
binding.
(m) "CURRENT PARENT COMMON SHARE EQUIVALENT" means, on any date, the
equivalent as at such date of one share of Parent Common Stock as
at the Effective Date, expressed to four decimal places,
determined by applying on a cumulative basis the following
adjustments, to the extent applicable by reason of any
transactions occurring in respect of Parent Common Stock between
the Effective Date and such date, the Current Parent Common Share
Equivalent as at the Effective Date being 1.0000:
if Parent shall (A) subdivide or redivide its then
outstanding shares of Parent Common Stock into a greater
number of shares of Parent Common Stock, unless the Company
is permitted under applicable law without a vote of its
shareholders to make, and shall simultaneously make, the
same or an economically equivalent change to the rights of
the holders of Exchangeable Shares, (B) combine or
consolidate its then outstanding shares of Parent Common
Stock into a lesser number of shares of Parent Common Stock,
unless the Company is permitted under applicable law without
a vote of its shareholders to make, and shall simultaneously
make, the same or an economically equivalent change to the
rights of the holders of Exchangeable Shares, or (C) issue
shares of Parent Common Stock (or securities exchangeable or
convertible into Parent Common Stock) to the holders of all
or substantially all of its then outstanding shares of
Parent Common Stock by way of stock dividend or other
distribution (other than to holders of Parent Common Stock
who exercise an option to receive stock dividends in lieu of
receiving cash dividends), unless the Company is permitted
under applicable law without a vote of its shareholders to
issue or distribute, and shall simultaneously issue and
distribute, equivalent numbers of shares of Parent Common
Stock or other securities (adjusted if necessary in
accordance with the Current Parent Common Share Equivalent),
or the economic equivalent on a per share basis, to the
holders of the Exchangeable Shares (any of such events being
herein called a "Parent Common Stock Reorganization"), the
Current Parent Common Share Equivalent shall be adjusted
effective immediately after the record date at which the
holders of Parent Common Stock are determined for the
purpose of the Parent Common Stock Reorganization by
multiplying the Current Parent Common Share Equivalent in
effect on such record date by the quotient obtained when:
(I) the number of shares of Parent Common Stock
outstanding after the completion of such Parent
Common Stock Reorganization (but before giving
effect to the issue of any shares of Parent Common
Stock issued after such record
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date otherwise than as part of such Parent Common
Stock Reorganization) including, in the case where
securities exchangeable or convertible into shares
of Parent Common Stock are distributed in
connection with such Parent Common Stock
Reorganization, the number of shares of Parent
Common Stock that would have been outstanding had
such securities been exchanged for or converted
into shares of Parent Common Stock on such record
date, is divided by
(II) the number of shares of Parent Common Stock
outstanding on such record date before giving
effect to the Parent Common Stock Reorganization;
(n) "EFFECTIVE DATE" has the meaning ascribed thereto in the Plan of
Arrangement.
(o) "EXCHANGEABLE SHARES" mean the Exchangeable Shares of the Company
having the special rights and restrictions set forth herein.
(p) "LIEN" has the meaning ascribed thereto in the Plan of
Arrangement.
(q) "LIQUIDATION AMOUNT" has the meaning ascribed thereto in section
4.1 of these share provisions.
(r) "LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in
subsection 5.2(a) of the Plan of Arrangement.
(s) "LIQUIDATION DATE" has the meaning ascribed thereto in section
4.1 of these share provisions.
(t) "NASDAQ" means the distinct tier of The Nasdaq Stock Market
referred to as the Nasdaq National Market.
(u) "NON-RESIDENT PERSON" means at the particular time that the
context of this Agreement requires, a Person who is not a
resident of Canada for purposes of the INCOME TAX ACT at that
particular time.
(v) "PARENT" means Cubist Pharmaceuticals, Inc., a corporation
organized and existing under the laws of the State of Delaware,
and any successor corporation.
(w) "PARENT COMMON STOCK REORGANIZATION" has the meaning ascribed
thereto in subsection 1.1(m) of these share provisions.
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(x) "PARENT COMMON STOCK" mean the common stock of Parent, with a par
value of U.S.$0.001 per share, and any other securities into
which such common stock may be changed.
(y) "PARENT DIVIDEND DECLARATION DATE" means the date on which the
Board of Directors of Parent declares any dividend on the Parent
Common Stock.
(z) "PARENT SUPPORT AGREEMENT" means the Parent Support Agreement
among Parent and the Company, made as of the Effective Date, a
copy of which is on file at the registered office of the Company
and available. at no cost, upon request.
(aa) "PERSON" means any natural person, corporation, general
partnership, limited partnership, limited liability company or
partnership, proprietorship, other business organization, trust,
union, association or Governmental or Regulatory Authority;
(bb) "PLAN OF ARRANGEMENT" means the plan of arrangement relating to
the arrangement of the Company under section 252 of the BC
Company Act, to which plan these share provisions are attached.
(cc) "REDEMPTION CALL RIGHT" has the meaning ascribed thereto in
subsection 5.3(a) of the Plan of Arrangement.
(dd) "REDEMPTION PRICE" has the meaning ascribed thereto in section
6.1 of these share provisions.
(ee) "RETRACTED SHARES" has the meaning ascribed thereto in section
5.1 of these share provisions.
(ff) "RETRACTION CALL RIGHT" has the meaning ascribed thereto in
subsection 5.1(a) of the Plan of Arrangement.
(gg) "RETRACTION DATE" has the meaning ascribed thereto in section 5.2
of these share provisions.
(hh) "RETRACTION PRICE" has the meaning ascribed thereto in section
5.1 of these share provisions.
(ii) "RETRACTION REQUEST" has the meaning ascribed thereto in section
5.1 of these share provisions.
(jj) "SECURITIES ACT" has the meaning ascribed thereto in section 4.5
of these share provisions.
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(kk) "TAX ACT" means the INCOME TAX ACT (Canada) as amended from time
to time.
(ll) "TRANSFER AGENT" means Xxxxx & Company or such other person as
may from time to time be the registrar and transfer agent for the
Exchangeable Shares.
(mm) "TRUSTEE" means State Street Bank and Trust Company, a
Massachusetts banking organization, and any successor trustee
appointed under the Voting and Exchange Trust Agreement.
(nn) "VOTING AND EXCHANGE TRUST AGREEMENT" means the Voting and
Exchange Trust Agreement between the Company, Parent and the
Trustee, made as of the Effective Date.
1.2 All amounts required to be paid, deposited or delivered hereunder shall
be paid, deposited or delivered after deduction of any amount required by
applicable law to be deducted or withheld on account of tax and the deduction of
such amounts and remittance to the applicable tax authorities shall, to the
extent thereof, satisfy such requirement to pay, deposit or deliver hereunder.
ARTICLE 2
RANKING OF EXCHANGEABLE SHARES
2.1 The Exchangeable Shares shall rank PARI PASSU to the Common Shares of
the Company and any other shares ranking PARI PASSU to the Common Shares of the
Company, with respect to the payment of dividends and the distribution of assets
in the event of the liquidation, dissolution or winding-up of the Company,
whether voluntary or involuntary, or any other distribution of the assets of the
Company among its shareholders for the purpose of winding up its affairs.
ARTICLE 3
DIVIDENDS
3.1 A holder of an Exchangeable Share shall be entitled to receive and the
Board of Directors shall, subject to applicable law, declare a dividend on each
Exchangeable Share (a) in the case of a cash dividend declared on the Parent
Common Stock, in an amount in cash for each Exchangeable Share equal to the
Canadian Dollar Equivalent on the Parent Dividend Declaration Date of the cash
dividend declared on each share of Parent Common Stock as is equal to the
Current Parent Common Share Equivalent on the Parent Dividend Declaration Date
or (b) in the case of a stock dividend declared on the Parent Common Stock to be
paid in shares of Parent Common Stock, in such whole number of Exchangeable
Shares for the Exchangeable Shares held by each holder as is equal to the number
of shares of Parent Common Stock to be paid as a dividend on each share of
Parent Common Stock (if such calculation results in a fraction of an
Exchangeable Share, the holder shall receive in lieu of such fraction an amount
in cash equal to the product obtained by multiplying the amount that would be
payable in respect of an equal
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fraction of a share of Parent Common Stock as at the Parent Dividend Declaration
Date, calculated in accordance with section 9.4, by the Current Parent Common
Share Equivalent as at such date) or (c) in the case of a dividend declared on
the Parent Common Stock to be paid in property other than cash or Parent Common
Stock (including without limitation other securities of Parent), in such type
and amount of property for each Exchangeable Share as is the same as or
economically equivalent (as determined by the Board of Directors in accordance
with section 9.1) to the type and amount of property to be paid as a dividend on
each share of Parent Common Stock as is equal to the Current Parent Common Share
Equivalent on the Parent Dividend Declaration Date. Such dividends shall be paid
out of money, assets or property of the Company properly applicable to the
payment of dividends, or out of authorized but unissued Exchangeable Shares.
3.2 Cheques of the Company payable at par at any branch of the bankers of
the Company shall be issued in respect of any cash dividends contemplated by
subsection 3.1(a) hereof or in respect of any cash amount payable in lieu of a
fractional Exchangeable Share in connection with any stock dividends
contemplated by subsection 3.1(b) hereof and the sending of such a cheque to
each holder of an Exchangeable Share shall satisfy the cash dividend represented
thereby unless the cheque is not paid on presentation. Certificates registered
in the name of the registered holder of Exchangeable Shares shall be issued or
transferred in respect of any stock dividends contemplated by subsection 3.1(b)
hereof and the sending of such a certificate to each holder of an Exchangeable
Share shall satisfy the stock dividend represented thereby. Such other type and
amount of property in respect of any dividends contemplated by subsection 3.1(c)
hereof shall be issued, distributed or transferred by the Company in such manner
as it shall determine and the issuance, distribution or transfer thereof by the
Company to each holder of an Exchangeable Share shall satisfy the dividend
represented thereby. No holder of an Exchangeable Share shall be entitled to
recover by action or other legal process against the Company any dividend that
is represented by a cheque that has not been duly presented to the Company's
bankers for payment or that otherwise remains unclaimed for a period of two
years from the date on which such dividend was payable.
3.3 The record date for the determination of the holders of Exchangeable
Shares entitled to receive payment of, and the payment date for, any dividend
declared on the Exchangeable Shares under section 3.1 hereof shall be the same
dates as the record date and payment date, respectively, for the corresponding
dividend declared on the Parent Common Stock.
3.4 If on any payment date for any dividends declared on the Exchangeable
Shares under section 3.1 hereof the dividends are not paid in full on all of the
Exchangeable Shares then outstanding, any such dividends that remain unpaid
shall be paid on a subsequent date or dates determined by the Board of Directors
on which the Company shall have sufficient moneys, assets or property properly
applicable to the payment of such dividends.
3.5 S So long as any of the Exchangeable Shares are outstanding, the Company
shall not at any time without, but may at any time with, the approval of the
holders of the Exchangeable Shares given as specified in section 8.2 of these
share provisions issue any Exchangeable Shares other than (i) by way of stock
dividends to the holders of such Exchangeable Shares, (ii) otherwise pro
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rata to holders of Exchangeable Shares, (iii) as contemplated by the Parent
Support Agreement or (iv) pursuant to any agreements or rights in existence at
the Effective Date.
ARTICLE 4
DISTRIBUTION ON LIQUIDATION
4.1 In the event of the liquidation, dissolution or winding-up of the
Company or any other distribution of the assets of the Company among its
shareholders for the purpose of winding up its affairs, a holder of Exchangeable
Shares shall be entitled, subject to applicable law, to receive from the assets
of the Company in respect of each Exchangeable Share held by such holder on the
effective date (the "Liquidation Date") of such liquidation, dissolution or
winding-up, PARI PASSU with any distribution of any part of the assets of the
Company among the holders of the Common Shares of the Company or any other
shares ranking PARI PASSU with the Exchangeable Shares, an amount per share
equal to (a) the Current Market Price multiplied by the Current Parent Common
Share Equivalent, in each case determined on the last Business Day prior to the
Liquidation Date, which shall be satisfied in full in respect of all of the
Exchangeable Shares held by such holder by the Company causing to be delivered
to such holder such whole number of shares of Parent Common Stock as is equal to
the product obtained by multiplying the number of such Exchangeable Shares by
the Current Parent Common Share Equivalent (together with an amount in lieu of
any fractional share of Parent Common Stock resulting from such calculation
payable in accordance with section 9.4), plus (b) the aggregate of all declared
and unpaid dividends on each such Exchangeable Share up to the Liquidation Date
(collectively the "Liquidation Amount").
4.2 In any case of any liquidation, dissolution or winding-up of the
Company pursuant to this Article 4, the Company shall, at least 15 days before
the Liquidation Date, send or cause to be sent to each holder of Exchangeable
Shares a notice in writing of such liquidation, dissolution or winding-up. Upon
receipt of such notice of liquidation, dissolution or winding-up from the
Company, each holder of Exchangeable Shares shall, within five (5) days after
receipt of such notice, execute and deliver to the Company and Parent a
certificate in the form attached hereto as SCHEDULE B.
4.3 On or promptly after the Liquidation Date, and subject to the exercise
by Parent of the Liquidation Call Right, the Company shall, subject to the
provisions of Sections 4.5 and 4.6 hereof, cause to be delivered to the holders
of the Exchangeable Shares the Liquidation Amount for each such Exchangeable
Share upon presentation and surrender of the certificates representing such
Exchangeable Shares, together with such other documents and instruments as may
be required to effect a transfer of Exchangeable Shares under the BC Company Act
and the articles of the Company and such additional documents and instruments as
the Transfer Agent may reasonably require, at the registered office of the
Company and at any office of the Transfer Agent as may be specified by the
Company by notice to the holders of the Exchangeable Shares. Payment of the
total Liquidation Amount for such Exchangeable Shares shall be made by delivery
to each holder, at the address of the holder recorded in the securities register
of the Company for the Exchangeable Shares or by holding for pick-up by the
holder at the registered
-8-
office of the Company or at any office of the Transfer Agent as may be specified
by the Company by notice to the holders of Exchangeable Shares, on behalf of the
Company of certificates representing the shares of Parent Common Stock to be
delivered in payment thereof (which shares shall be duly issued as fully paid
and non-assessable and shall be free and clear of any Liens) and a cheque of the
Company payable at par at any branch of the bankers of the Company in respect of
any fractional share of Parent Common Stock and all declared and unpaid
dividends comprising part of the total Liquidation Amount (or, if any of such
dividends were payable in property, such property or property that is the same
as or economically equivalent to such property).
On and after the Liquidation Date, the holders of the Exchangeable
Shares shall cease to be holders of such Exchangeable Shares and shall not be
entitled to exercise any of the rights of holders in respect thereof, other than
the right to receive the total Liquidation Amount in respect of their
Exchangeable Shares, unless payment of the total Liquidation Amount for such
Exchangeable Shares shall not be made upon presentation and surrender of share
certificates in accordance with the foregoing provisions, in which case the
rights of the holders shall remain unaffected until the total Liquidation Amount
has been paid in the manner hereinbefore provided.
The Company shall have the right at any time on or after the
Liquidation Date to deposit or cause to be deposited the total Liquidation
Amount in respect of the Exchangeable Shares represented by certificates that
have not at the Liquidation Date been surrendered by the holders thereof in a
custodial account with any chartered bank or trust company in Canada. Upon such
deposit being made, the rights of the holders of Exchangeable Shares after such
deposit shall be limited to receiving the total Liquidation Amount (without
interest) for such Exchangeable Shares so deposited, against presentation and
surrender of the said certificates held by them, respectively, in accordance
with the foregoing provisions. Upon such payment or deposit of the total
Liquidation Amount, the holders of the Exchangeable Shares shall thereafter be
considered and deemed for all purposes to be the holders of the shares of Parent
Common Stock delivered to them.
4.4 After the Company has satisfied its obligations to pay the holders of
the Exchangeable Shares the Liquidation Amount per Exchangeable Share pursuant
to section 4.1 of these share provisions, such holders shall not be entitled to
share in any further distribution of the assets of the Company.
4.5 Notwithstanding anything expressed or implied in this Article 4 to the
contrary, the Company shall not be obligated to make payment of the Liquidation
Amount on any Exchangeable Shares pursuant to this Article 4 if such payment
would violate, or cause Parent to violate, applicable federal, state or
provincial securities laws of the United States or Canada. In the event that the
Securities Act of 1933, as amended (the "Securities Act"), would require, as a
condition precedent to any such payment of the Liquidation Amount, that the
shares of Parent Common Stock to be issued in payment of such Liquidation Amount
be registered under the Securities Act (and that no exemption is then available
from such registration requirement), then Parent shall file a registration
statement on Form S-3 with the United States Securities and Exchange Commission
covering such shares of Parent Common Stock to be issued.
-9-
4.6 Notwithstanding anything expressed or implied in this Article 4 to the
contrary, the Company shall not be obligated to make payment of the Liquidation
Amount on any Exchangeable Shares pursuant to this Article 4 if the holder of
such Exchangeable Shares has not reasonably satisfied the Company that such
holder is not a Non-Resident Person, unless such holder has, prior to such
payment, provided the Company with a Clearance Certificate having a Certificate
Limit not less than the fair market value of the shares of Parent Common Stock
to be issued in connection with such purchase, which fair market value shall be
calculated as of the time of such purchase; but the Company may, at its option,
(i) make payment of such Liquidation Amount, (ii) withhold the shares of Parent
Common Stock that Parent would otherwise be required to deliver in connection
with such payment (the "Section 4.6 Withheld Parent Common Stock"), (iii) sell
any Section 4.6 Withheld Parent Common Stock and remit such portion of the sale
proceeds to the Receiver General for Canada as may be required to fulfil any
obligation pursuant to subsection 116(5) of the Income Tax Act and (iv) return
any remaining Section 4.6 Withheld Parent Common Stock to the applicable holder.
ARTICLE 5
RETRACTION OF EXCHANGEABLE SHARES BY XXXXXX
5.1 A holder of Exchangeable Shares shall be entitled at any time, subject
to the exercise by Parent of the Retraction Call Right and otherwise upon
compliance with the provisions of this Article 5, to require the Company to
redeem any or all of the Exchangeable Shares registered in the name of such
holder (the "Retracted Shares") for an amount for each Retracted Share equal to
(a) the Current Market Price multiplied by the Current Parent Common Share
Equivalent, in each case determined on the last Business Day prior to the
Retraction Date, which shall be satisfied in full in respect of the Retracted
Shares by the Company causing to be delivered to such holder such whole number
of shares of Parent Common Stock as is equal to the product obtained by
multiplying the number of Retracted Shares by the Current Parent Common Share
Equivalent (together with an amount in lieu of any fractional share of Parent
Common Stock resulting from such calculation payable in accordance with section
9.4), plus (b) the aggregate of all dividends declared and unpaid on each
Retracted Share up to the Retraction Date (collectively the "Retraction Price",
provided that if the record date for any such declared and unpaid dividend
occurs on or after the Retraction Date the Retraction Price shall not include
such declared and unpaid dividends). To effect such redemption, the holder shall
present and surrender at any office of the Transfer Agent listed on SCHEDULE A
hereto the certificate or certificates representing the Exchangeable Shares
which the holder desires to have the Company redeem, together with such other
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the BC Company Act and the articles of the Company and
such additional documents and instruments as the Transfer Agent may reasonably
require, and together with a duly executed statement (the "Retraction Request")
in the form of SCHEDULE A hereto or in such other form as may be acceptable to
the Transfer Agent:
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(a) specifying that the holder desires to have the Retracted Shares
represented by such certificate or certificates redeemed by the
Company; and
(b) acknowledging the Retraction Call Right of Parent to purchase all
but not less than all the Retracted Shares directly from the
holder and that the Retraction Request shall be deemed to be a
revocable offer by the holder to sell the Retracted Shares to
Parent in accordance with the Retraction Call Right.
5.2 Subject to the exercise by Parent of the Retraction Call Right, upon
receipt by the Transfer Agent in the manner specified in section 5.1 hereof of a
certificate or certificates representing the number of Exchangeable Shares which
the holder desires to have the Company redeem, together with such other
documents and instruments as may be required pursuant to section 5.1 and a
Retraction Request, and provided that the Retraction Request is not revoked by
the holders in the manner specified in Section 5.7, the Company shall, subject
to the provisions of Sections 5.8 and 5.9 hereof, redeem the Retracted Shares
effective at the close of business on the sixth Business Day after the
Retraction Request is received (the "Retraction Date") and shall cause to be
delivered to such holder the total Retraction Price with respect to such shares.
If only a part of the Exchangeable Shares represented by any certificate are
redeemed (or purchased by Parent pursuant to the Retraction Call Right), a new
certificate for the balance of such Exchangeable Shares shall be issued to the
holder at the expense of the Company.
5.3 Upon receipt by the Transfer Agent of a Retraction Request, the
Transfer Agent shall forthwith notify Parent thereof. In order to exercise the
Retraction Call Right, Parent must deliver a Call Notice to the Transfer Agent
prior to the expiry of the third Business Day after the receipt by the Transfer
Agent of the Retraction Request. If Parent does not so notify the Transfer
Agent, the Transfer Agent will notify the holder as soon as possible thereafter
that Parent will not exercise the Retraction Call Right. If Parent delivers the
Call Notice before the end of such three Business Day period, and provided that
the Retraction Request is not revoked by the holder in the manner specified in
section 5.7, the Retraction Request shall thereupon be considered only to be an
offer by the holder to sell the Retracted Shares to Parent in accordance with
the Retraction Call Right. In such event, the Company shall not redeem the
Retracted Shares and Parent shall purchase from such holder and such holder
shall sell to Parent on the Retraction Date the Retracted Shares pursuant to the
Retraction Call Right.
5.4 If a Retraction Request is received by the Transfer Agent pursuant to
section 5.1 and Parent has not exercised the Retraction Call Right, and provided
the Retraction Request is not revoked by the holder in the manner specified in
section 5.7, the Company shall cause the Transfer Agent to deliver to the holder
of the Retracted Shares, at the address of the holder recorded in the securities
register of the Company for the Exchangeable Shares or at the address specified
in the holder's Retraction Request or by holding for pick-up by the holder at
the office of the Transfer Agent to which the Retraction Request was delivered,
certificates representing the shares of Parent Common Stock to be delivered to
the holder in payment of the total Retraction Price for the Retracted Shares (or
the portion thereof payable in shares of Parent Common Stock, as the case may
be) (which shares shall be duly issued as fully paid and non-assessable and
shall be free and clear of any Liens) registered in the name of the holder or in
such other name as the
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holder may request and a cheque of the Company payable at par at any branch of
the bankers of the Company in payment of the remaining portion, if any, of the
total Retraction Price (or, if any part of the Retraction Price consists of
dividends payable in property, such property or property that is the same as or
economically equivalent to such property), and such delivery of such
certificates and cheque (and property, if any) on behalf of the Company, by the
Transfer Agent shall be deemed to be payment of and shall satisfy and discharge
all liability for the total Retraction Price, to the extent that the same is
represented by such share certificates and cheque (and property, if any), unless
such cheque is not paid on due presentation.
5.5 On and after the close of business on the Retraction Date, the holder
of the Retracted Shares shall cease to be a holder of such Retracted Shares and
shall not be entitled to exercise any of the rights of a holder in respect
thereof, other than the right to receive his proportionate part of the total
Retraction Price, unless upon presentation and surrender of certificates in
accordance with the foregoing provisions, payment of the total Retraction Price
shall not be made, in which case the rights of such holder shall remain
unaffected until the total Retraction Price has been paid in the manner
hereinbefore provided. On and after the close of business on the Retraction
Date, provided that presentation and surrender of certificates and payment of
the total Retraction Price has been made in accordance with the foregoing
provisions, the holder of the Retracted Shares so redeemed by the Company shall
thereafter be considered and deemed for all purposes to be a holder of the
shares of Parent Common Stock delivered to it.
5.6 Notwithstanding any other provision of this Article 5, the Company
shall not be obligated to redeem Retracted Shares specified by a holder in a
Retraction Request to the extent that such redemption of Retracted Shares would
be contrary to solvency requirements or other provisions of applicable law. If
the Company believes that on any Retraction Date it would not be permitted by
any of such provisions to redeem the Retracted Shares tendered for redemption on
such date, and provided that Parent shall not have exercised the Retraction Call
Right with respect to the Retracted Shares, the Company shall be obligated to
redeem Retracted Shares specified by a holder in a Retraction Request only to
the extent of the maximum number that may be so redeemed (rounded down to a
whole number of shares) as would not be contrary to such provisions on a pro
rata basis and shall notify the holder at least two Business Days prior to the
Retraction Date as to the number of Retracted Shares which will not be redeemed
by the Company and the Company shall issue to each holder of Retracted Shares a
new certificate, at the expense of the Company, representing the Retracted
Shares not redeemed by the Company pursuant to section 5.2 hereof. The holder of
any such Retracted Shares not redeemed by the Company pursuant to section 5.2 of
these share provisions as a result of solvency requirements of applicable law
shall be deemed by giving the Retraction Request to require Parent to purchase
such Retracted Shares from such holder pursuant to the Exchange Right (as
defined in the Voting and Exchange Trust Agreement).
5.7 A holder of Retracted Shares may, by notice in writing given by the
holder to the Company and to the Transfer Agent before the close of business on
the Business Day immediately preceding the Retraction Date, withdraw its
Retraction Request, in which event such Retraction Request shall be null and
void and, for greater certainty, the revocable offer
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constituted by the Retraction Request to sell the Retracted Shares to Parent
shall be deemed to have been revoked.
5.8 Notwithstanding anything expressed or implied in this Article 5 to the
contrary, the Company shall not be obligated to redeem any Retracted Shares if
such redemption would violate, or cause Parent to violate, applicable federal,
state or provincial securities laws of the United States or Canada. In the event
that the Securities Act would require, as a condition precedent to any such
redemption by the Company, that the shares of Parent Common Stock to be issued
in connection with such redemption be registered under the Securities Act (and
that no exemption is then available from such registration requirement), then
Parent shall file a registration statement on Form S-3 with the United States
Securities and Exchange Commission covering such shares of Parent Common Stock
to be issued.
5.9 Notwithstanding anything expressed or implied in this Article 5 to the
contrary, the Company shall not be obligated to redeem any Retracted Shares if
the holder of such Retracted Shares has not reasonably satisfied the Company
that such holder is not a Non-Resident Person, unless such holder has, prior to
such redemption, provided the Company with a Clearance Certificate having a
Certificate Limit not less than the fair market value of the shares of Parent
Common Stock to be issued in connection with such redemption, which fair market
value shall be calculated as of the time of such redemption; but the Company
may, at its election, (i) redeem such Retracted Shares, (ii) withhold the shares
of Parent Common Stock that the Company would otherwise be required to deliver
in connection with such redemption, the "Section 5.9 Withheld Parent Common
Stock"), (iii) sell any Section 5.9 Withheld Parent Common Stock and remit such
portion of the sale proceeds to the Receiver General for Canada as may be
required to fulfil any obligation pursuant to subsection 116(5) of the Income
Tax Act, and (iv) deliver the remaining Section 5.9 Withheld Parent Common Stock
to the applicable holder.
ARTICLE 6
REDEMPTION OF EXCHANGEABLE SHARES
6.1 Subject to applicable law, and if Parent does not exercise the
Redemption Call Right, the Company shall, subject to the provisions of Sections
6.4 and 6.5 hereof, on the Automatic Redemption Date redeem the whole of the
then outstanding Exchangeable Shares for an amount per share equal to (a) the
Current Market Price multiplied by the Current Parent Common Share Equivalent,
in each case determined on the last business day prior to the Automatic
Redemption Date, which shall be satisfied in full in respect of all of the
Exchangeable Shares held by each holder of Exchangeable Shares by the Company
causing to be delivered to such holder such whole number of shares of Parent
Common Stock as is equal to the product obtained by multiplying the number of
such Exchangeable Shares by the Current Parent Common Share Equivalent (together
with an amount in lieu of any fractional share of Parent Common Stock resulting
from such calculation payable in accordance with section 9.4), plus (b) the
aggregate of all declared and unpaid dividends thereon up to the Automatic
Redemption Date (collectively the "Redemption Price").
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6.2 In any case of a redemption of Exchangeable Shares under this
Article 6, the Company shall, at least 75 days before the Automatic Redemption
Date, send or cause to be sent to each holder of Exchangeable Shares a notice in
writing of the redemption by the Company or the purchase by Parent under the
Redemption Call Right, as the case may be, of the Exchangeable Shares held by
such holder. Such notice shall set out the formula for determining the
Redemption Price or the Redemption Call Purchase Price, as the case may be, the
Automatic Redemption Date and, if applicable, particulars of the Redemption Call
Right. Upon receipt of such notice of redemption from the Company, each holder
of Exchangeable Shares shall, within fifteen (15) days after receipt of such
notice, execute and deliver to the Company a certificate in the form attached
hereto as SCHEDULE B.
6.3 On or after the Automatic Redemption Date and subject to the exercise
by Parent of the Redemption Call Right, the Company shall cause to be delivered
to the holders of the Exchangeable Shares the Redemption Price for each such
Exchangeable Share upon presentation and surrender at any office of the Transfer
Agent of the certificates representing such Exchangeable Shares, together with
such other documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the BC Company Act and the articles of the Company and
such additional documents and instruments as the Transfer Agent may reasonably
require. Payment of the total Redemption Price for such Exchangeable Shares
shall be made by delivery to each holder, at the address of the holder recorded
in the securities register of the Company or by holding for pick up by the
holder at the registered office of the Company or at any office of the Transfer
Agent as may be specified by the Company in such notice, on behalf of the
Company of certificates representing the shares of Parent Common Stock to be
delivered to the holder in payment of the Redemption Price (or the portion
thereof payable in shares of Parent Common Stock, as the case may be) (which
shares shall be duly issued as fully paid and non-assessable and shall be free
and clear of any Liens) and a cheque of the Company payable at par at any branch
of the bankers of the Company in respect of any fractional share of Parent
Common Stock and all declared and unpaid dividends comprising part of the total
Redemption Price (or, if any of such dividends are payable in property, such
property or property of the economic equivalent thereof). On and after the
Automatic Redemption Date, the holders of the Exchangeable Shares called for
redemption shall cease to be holders of such Exchangeable Shares and shall not
be entitled to exercise any of the rights of holders in respect thereof, other
than the right to receive the total Redemption Price for their Exchangeable
Shares, unless payment of the total Redemption Price for such Exchangeable
Shares shall not be made upon presentation and surrender of certificates in
accordance with the foregoing provisions, in which case the rights of the
holders shall remain unaffected until the total Redemption Price has been paid
in the manner hereinbefore provided. The Company shall have the right at any
time to deposit or cause to be deposited the total Redemption Price of the
Exchangeable Shares so called for redemption, or of such of the said
Exchangeable Shares represented by certificates that have not at the date of
such deposit been surrendered by the holders thereof in connection with such
redemption, in a custodial account with any chartered bank or trust company in
Canada named in such notice. Upon the later of such deposit being made and the
Automatic Redemption Date, the Exchangeable Shares in respect whereof such
deposit shall have been made shall be redeemed and the rights of the holders
thereof after such deposit or Automatic Redemption Date, as the case may be,
shall be limited to receiving the total Redemption Price for such Exchangeable
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Shares so deposited, against presentation and surrender of the said certificates
held by them, respectively, in accordance with the foregoing provisions. Upon
such payment or deposit of the total Redemption Price, the holders of the
Exchangeable Shares shall thereafter be considered and deemed for all purposes
to be holders of the shares of Parent Common Stock delivered to them.
6.4 Notwithstanding anything expressed or implied in this Article 6 to the
contrary, the Company shall not be obligated to redeem any Exchangeable Shares
pursuant to this Article 6 if such redemption would violate, or cause the Parent
to violate, applicable federal, state or provincial securities laws of the
United States or Canada. In the event that the Securities Act would require, as
a condition precedent to any such redemption by the Company, that the shares of
Parent Common Stock to be issued in connection with such redemption be
registered under the Securities Act (and that no exemption is then available
from such registration requirement), then Parent shall file a registration
statement on Form S-3 with the United States Securities and Exchange Commission
covering such shares of Parent Common Stock to be issued.
6.5 Notwithstanding anything expressed or implied in this Article 6 to the
contrary, the Company shall not be obligated to redeem any Exchangeable Shares
if the holder of such Exchangeable Shares has not reasonably satisfied the
Company that such holder is not a Non-Resident Person, unless such holder has,
prior to such redemption, provided the Company with a Clearance Certificate
having a Certificate Limit not less than the fair market value of the shares of
Parent Common Stock to be issued in connection with such redemption, which fair
market value shall be calculated as of the time of such purchase; but the
Company may, at its election, (i) redeem such Retracted Shares, (ii) withhold
the shares of Parent Common Stock that the Company would otherwise be required
to deliver in connection with such redemption (the "Section 6.5 Withheld Parent
Common Stock"), (iii) sell any Section 6.5 Withheld Parent Common Stock and
remit such portion of the sale proceeds to the Receiver General for Canada as
may be required to fulfil any obligation pursuant to subsection 116(5) of the
Income Tax Act and (iv) deliver the remaining Section 6.5 withheld Parent Common
Stock to the applicable holder.
ARTICLE 7
VOTING RIGHTS
7.1 Except as required by applicable law and the provisions of sections 8.1
and 10.2, the holders of the Exchangeable Shares shall not be entitled as such
to receive notice of or to attend any meeting of the members of the Company or
to vote at any such meeting.
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ARTICLE 8
AMENDMENT AND APPROVAL
8.1 The special rights and restrictions attaching to the Exchangeable
Shares may be added to, changed or removed but only with the approval of the
holders of the Exchangeable Shares given as hereinafter specified.
8.2 Any approval given by the holders of the Exchangeable Shares to add to,
change or remove any right, privilege, restriction or condition attaching to the
Exchangeable Shares or any other matter requiring the approval or consent of the
holders of the Exchangeable Shares shall be deemed to have been sufficiently
given if it shall have been given in accordance with applicable law subject to a
minimum requirement that such approval be evidenced by resolution passed by not
less than two-thirds of the votes cast on such resolution at a meeting of
holders of Exchangeable Shares duly called and held at which the holders of at
least 50% of the outstanding Exchangeable Shares at that time are present or
represented by proxy. If at any such meeting the holders of at least 50% of the
outstanding Exchangeable Shares at that time are not present or represented by
proxy within one-half hour after the time appointed for such meeting then the
meeting shall be adjourned to such date not less than 10 days thereafter and to
such time and place as may be designated by the Chairman of such meeting. At
such adjourned meeting the holders of Exchangeable Shares present or represented
by proxy thereat may transact the business for which the meeting was originally
called and a resolution passed thereat by the affirmative vote of not less than
two-thirds of the votes cast on such resolution at such meeting shall constitute
the approval or consent of the holders of the Exchangeable Shares.
ARTICLE 9
ECONOMIC EQUIVALENCE, CHANGES RELATING TO PARENT
9.1 The Board of Directors shall determine, in good faith and in its sole
discretion (with the assistance of such reputable and qualified independent
financial advisors and/or other experts as the Board of Directors may require)
economic equivalence for the purposes of any provision herein that requires such
a determination and each such determination shall be conclusive and binding on
Parent, where applicable.
9.2 If at any time there is a capital reorganization of Parent that is not
provided for in subsection 1.1(m) or a consolidation, merger, arrangement or
amalgamation (statutory or otherwise) of Parent with or into another entity (any
such event being called a "Capital Reorganization"), any holder of Exchangeable
Shares whose Exchangeable Shares have not been exchanged for Parent Common Stock
in accordance with the provisions hereof prior to the record date for such
Capital Reorganization shall be entitled to receive and shall accept, upon any
such exchange occurring pursuant to the provisions hereof at any time after the
record date for such Capital Reorganization, in lieu of the Parent Common Stock
that he would otherwise have been entitled to receive pursuant to the provisions
hereof, the number of shares or other securities of Parent or of the body
corporate resulting, surviving or continuing from the Capital Reorganization, or
other property, that such holder would have been entitled to receive as a result
of such Capital Reorganization if, on the record date, he had been the
registered holder of the number of shares of Parent Common Stock to which he was
then entitled upon any exchange of his Exchangeable Shares into shares of Parent
Common Stock in accordance with the provisions
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hereof, subject to adjustment thereafter in the same manner, as nearly as may be
possible, as is provided for in subsection 1.1(m); provided that no such Capital
Reorganization shall be carried into effect unless all necessary steps shall
have been taken so that each holder of Exchangeable Shares shall thereafter be
entitled to receive, upon any exchange of his Exchangeable Shares pursuant to
the provisions hereof, such number of shares or other securities of Parent or of
the body corporate resulting, surviving or continuing from the Capital
Reorganization, or other property.
9.3 In the case of any reclassification of, or other change in, the
outstanding Parent Common Stock other than a Parent Common Stock Reorganization
or a Capital Reorganization, such changes shall be made in the rights attaching
to the Exchangeable Shares, without any action on the part of the Company or the
holders of the Exchangeable Shares to the extent permitted by applicable law,
effective immediately following the record date for such reclassification or
other change, to the extent necessary to ensure that holders of Exchangeable
Shares shall be entitled to receive, upon the occurrence at any time after such
record date of any event whereby they would receive shares of Parent Common
Stock pursuant to the provisions hereof, such shares, securities or rights as
they would have received if their Exchangeable Shares had been exchanged for
shares of Parent Common Stock pursuant to the provisions hereof immediately
prior to such record date, subject to adjustment thereafter in the same manner,
as nearly as may be possible, as is provided for in subsection 1.1(m).
9.4 If and whenever at any time up to and including the Liquidation Date:
(a) shares or securities of Parent of any class other than shares of
Parent Common Stock (other than shares convertible into or
exchangeable for or carrying rights to acquire shares of Parent
Common Stock);
(b) rights, options or warrants, other than those referred to in
subsection 1.1(m);
(c) evidences of indebtedness of Parent; or
(d) assets of Parent;
are issued or distributed to the holders of all or substantially all of the then
outstanding shares of Parent Common Stock, the economic equivalent on a per
share basis of such rights, options, securities, shares, evidences of
indebtedness or other assets shall be issued or distributed simultaneously to
holders of the Exchangeable Shares whose Exchangeable Shares have not been
exchanged for shares of Parent Common Stock in accordance with the provisions
hereof prior to the record date for such issuance or distribution.
9.5 No certificates or scrip representing fractional shares of Parent
Common Stock shall be delivered to holders of Exchangeable Shares pursuant to
the provisions hereof. In lieu of any such fractional security, each person
entitled to a fractional interest in a share of Parent Common Stock will receive
an amount of cash (rounded to the nearest whole cent), without interest, equal
to the Canadian Dollar Equivalent as of the fourth Business Day prior to the
relevant date of
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delivery of certificates representing shares of Parent Common Stock (the
"Fractional Share Calculation Date") of the product of (i) such fraction,
multiplied by (ii) the closing sale price of a share of Parent Common Stock as
reported on NASDAQ on the Fractional Share Calculation Date, or, if shares of
Parent Common Stock are not then quoted on NASDAQ, on such other stock exchange
or automated quotation system on which shares of Parent Common Stock are listed
or quoted, as the case may be, as may be selected by the Board of Directors for
such purpose, provided, however, that if in the opinion of the Board of
Directors the public distribution or trading activity of shares of Parent Common
Stock during such period does not create a market that reflects the fair market
value of a share of Parent Common Stock then the Current Market Price of a share
of Parent Common Stock shall be determined by the Board of Directors in good
faith based upon the advice of such qualified independent financial advisors as
the Board of Directors may deem to be appropriate, and provided further that any
such selection, opinion or determination by the Board of Directors shall be
conclusive and binding.
ARTICLE 10
ACTIONS BY THE COMPANY UNDER PARENT SUPPORT AGREEMENT
10.1 The Company will take all such actions and do all such things as shall
be necessary or advisable to perform and comply with and to ensure performance
and compliance by Parent with all provisions of the Parent Support Agreement and
the Voting and Exchange Trust Agreement applicable to the Company and Parent,
respectively, in accordance with the terms thereof including, without
limitation, taking all such actions and doing all such things as shall be
necessary or advisable to enforce to the fullest extent possible for the direct
benefit of the Company and the holders of Exchangeable Shares all rights and
benefits in favour of the Company under or pursuant to such agreements.
10.2 The Company shall not propose, agree to or otherwise give effect to any
amendment to, or waiver or forgiveness of its rights or obligations under, the
Parent Support Agreement and the Voting and Exchange Trust Agreement without the
approval of the holders of the Exchangeable Shares given in accordance with
section 8.2 of these share provisions other than such amendments, waivers and/or
forgiveness as may be necessary or advisable for the purposes of:
(a) adding to the covenants of the other party or parties to such
agreement for the protection of the Company or the holders of
Exchangeable Shares; or
(b) making such provisions or modifications not inconsistent with
such agreements as may be necessary or desirable with respect to
matters or questions arising thereunder which, in the opinion of
the Board of Directors, it may be expedient to make, provided
that the Board of Directors shall be of the opinion, after
consultation with counsel, that such provisions and modifications
will not be prejudicial to the interests of the holders of the
Exchangeable Shares; or
(c) making such changes in or corrections to such agreements which,
on the advice of counsel to the Company, are required for the
purpose of curing or correcting any
-18-
ambiguity or defect or inconsistent provision or clerical
omission or mistake or manifest error contained therein, provided
that the Board of Directors shall be of the opinion, after
consultation with counsel, that such changes or corrections will
not be prejudicial to the interests of the holders of the
Exchangeable Shares.
ARTICLE 11
LEGEND
The certificates evidencing the Exchangeable Shares shall contain or
have affixed thereto a legend, in form and on terms approved by the Board of
Directors, with respect to the Parent Support Agreement, the provisions of the
Plan of Arrangement relating to the Retraction Call Right, the Liquidation Call
Right and the Redemption Call Right, and the Voting and Exchange Trust Agreement
(including the provisions with respect to the voting rights, exchange right and
automatic exchange thereunder).
ARTICLE 12
NOTICES
12.1 Any notice, request or other communication to be given to the Company
by a holder of Exchangeable Shares shall be in writing and shall be valid and
effective if given by mail (postage prepaid) or by telecopy or by delivery to
the registered office of the Company and addressed to the attention of the
President. Any such notice, request or other communication, if given by mail,
telecopy or delivery, shall only be deemed to have been given and received upon
actual receipt thereof by the Company.
12.2 Any presentation and surrender by a holder of Exchangeable Shares to
the Company or the Transfer Agent of certificates representing Exchangeable
Shares in connection with the liquidation, dissolution or winding up of the
Company or the retraction or redemption of Exchangeable Shares shall be made by
registered mail (postage prepaid) or by delivery to the registered office of the
Company or to such office of the Transfer Agent as may be specified by the
Company, in each case addressed to the attention of the President of the
Company. Any such presentation and surrender of certificates shall only be
deemed to have been made and to be effective upon actual receipt thereof by the
Company or the Transfer Agent, as the case may be. Any such presentation and
surrender of certificates made by registered mail shall be at the sole risk of
the holder mailing the same.
12.3 Any notice, request or other communication to be given to a holder of
Exchangeable Shares by or on behalf of the Company shall be in writing and shall
be valid and effective if given by mail (postage prepaid) or by delivery to the
address of the holder recorded in the securities register of the Company or, in
the event of the address of any such holder not being so recorded, then at the
last known address of such holder. Any such notice, request or other
communication, if given by mail, shall be deemed to have been given and received
on the fifth Business Day following the date of mailing and, if given by
delivery, shall be deemed to have
-19-
been given and received on the date of delivery. Accidental failure or omission
to give any notice, request or other communication to one or more holders of
Exchangeable Shares shall not invalidate or otherwise alter or affect any action
or proceeding to be taken by the Company pursuant thereto.
ARTICLE 13
TAX MATTERS
13.1 While any Exchangeable Share is outstanding, the Company will at no
time be a specified financial institution (as that term is defined in subsection
248(1) of the Tax Act) or a specified person (as that term is defined in
paragraph 112(2.2)(g) of the Tax Act) in relation to any such institution.
ARTICLE 14
RESTRICTIONS ON TRANSFER
The Exchangeable Shares shall not be sold, assigned, transferred,
pledged, hypothecated, mortgaged, encumbered or disposed of in any case
(including, without limitation, any transfer by gift or operation of law)
without the prior written consent of the Parent. Without limiting the generality
of the foregoing, in the event of any sale, assignment, transfer, pledge,
hypothecation, mortgage, encumbrance or disposition (each, a "Transfer") of any
Exchangeable Shares in violation of the provisions of the foregoing sentence,
such Exchangeable Shares shall be deemed, and treated as, having been redeemed
by the transferor thereof pursuant to Article 5 hereof prior to any such
Transfer such that the interest conveyed by such transferor to the purported
transferee of such Exchangeable Shares is an interest not in such Exchangeable
Shares themselves but an interest in the shares of Parent Common Stock to which
the transferor was entitled as a result of the deemed redemption of such
Exchangeable Shares pursuant to this Article 14.
-20-
SCHEDULE A
NOTICE OF RETRACTION
To: C&T Acquisition Corporation (the "Company") and Cubist Pharmaceuticals,
Inc. ("Parent")
This notice is given pursuant to Article 5 of the provisions (the
"Share Provisions") attaching to the share(s) represented by this certificate
and all capitalized words and expressions used in this notice that are defined
in the Share Provisions have the meanings ascribed to such words and expressions
in such Share Provisions.
The undersigned hereby represents and warrants to the Company and the
Parent (and the Permitted Assigns) that (THE UNDERSIGNED MUST CHECK ONE OF THE
FOLLOWING):
[ ] the undersigned is an "accredited investor" as such term
is defined in Rule 501 of Regulation D promulgated under the Securities
Act of 1993, as amended (the "Securities Act"); the undersigned has
such knowledge and experience in financial and business matters that
the undersigned is capable of evaluating the merits and risks of the
investment in Parent Common Stock that the undersigned is making by
reason of the Retraction Request made hereby;. the undersigned's
financial condition is such that the undersigned is able to bear all
economic risks of investment in Parent Common Stock, including a
complete loss of the undersigned's investment; Parent has provided the
undersigned with adequate access to financial and other information
concerning Parent (including, without limitation, Parent's public
filings with the Securities and Exchange Commission) and the
undersigned has had the opportunity obtain from Parent information
regarding an investment in Parent; and the undersigned will acquire
shares of Parent Common Stock pursuant to this Retraction Request
solely for investment purposes, with no present intention of
distributing or reselling any of such shares or any interest therein.
the undersigned is aware that, except as set forth in such
Shareholders' Agreement, such shares of Parent Common Stock will not be
registered under the Securities Act, and that neither such shares nor
any interest therein may be sold, pledged, or otherwise transferred
unless the resale of such shares is registered under the Securities Act
or such shares qualify for an exemption from such registration, and the
certificate(s) representing such shares will bear appropriate
restrictive legends referring to such restrictions on transfer.
[ ] the undersigned is not a "U.S. Person" as such term is
defined in Rule 902(k) of Regulation S promulgated under the Securities
Act of 1933, as amended (the "Securities Act"); the undersigned is not
acquiring the shares of Parent Common Stock for the account or benefit
of any such U.S. person; the undersigned has such knowledge and
experience in financial and business matters that the undersigned is
capable of evaluating the merits and risks of the investment in Parent
Common Stock that the undersigned is making by reason of the Retraction
Request made hereby;. the
undersigned's financial condition is such that the undersigned is able
to bear all economic risks of investment in Parent Common Stock,
including a complete loss of the undersigned's investment; Parent has
provided the undersigned with adequate access to financial and other
information concerning Parent (including, without limitation, Parent's
public filings with the Securities and Exchange Commission) and the
undersigned has had the opportunity obtain from Parent information
regarding an investment in Parent; and the undersigned will acquire
shares of Parent Common Stock pursuant to this Retraction Request
solely for investment purposes, with no present intention of
distributing or reselling any of such shares or any interest therein.
the undersigned is aware that, except as set forth in such
Shareholders' Agreement, such shares of Parent Common Stock will not be
registered under the Securities Act, and that neither such shares nor
any interest therein may be sold, pledged, or otherwise transferred
unless in accordance with the provisions of Regulation S under the
Securities Act or unless the resale of such shares is registered under
the Securities Act or such shares qualify for an exemption from such
registration, and the certificate(s) representing such shares will bear
appropriate restrictive legends referring to such restrictions on
transfer.
The undersigned hereby notifies the Company that, subject to the
Retraction Call Right referred to below, the undersigned desires to have the
Company redeem in accordance with Article 5 of the Share Provisions:
[ ] all share(s) represented by this certificate; or
[ ] _____________________________ share(s) only.
The undersigned acknowledges the Retraction Call Right of Parent (or a
Permitted Assign) to purchase all but not less than all the Retracted Shares
from the undersigned and that this notice shall be deemed to be a revocable
offer (subject as hereinafter provided) by the undersigned to sell the Retracted
Shares to Parent (or a Permitted Assign) in accordance with the Retraction Call
Right on the Retraction Date for the Retraction Call Purchase Price and on the
other terms and conditions set out in section 5.1 of the Plan of Arrangement. If
Parent (or a Permitted Assign) determines not to exercise the Retraction Call
Right, the Transfer Agent will notify the undersigned of such fact as soon as
possible. This notice of retraction, and the offer to sell the Retracted Shares
to Parent (or a Permitted Assign), may be withdrawn and revoked by the
undersigned only by notice in writing given to Parent (or a Permitted Assign),
the Company and to the Transfer Agent at any time before the close of business
on the business day immediately preceding the Retraction Date.
The undersigned acknowledges that if, as a result of solvency
provisions of applicable law or otherwise, the Company fails to redeem all
Retracted Shares, the undersigned will be deemed to have exercised the Exchange
Right (as defined in the Voting and Exchange Trust Agreement) so as to require
Parent to purchase the unredeemed Retracted Shares.
-2-
Upon request of Parent, the undersigned will duly complete and deliver
to Parent a purchaser questionnaire in such form as reasonably required by
Parent.
The undersigned hereby further represents and warrants to the Company
and Parent (and the Permitted Assigns):
(i) that the undersigned has good title to, and owns, the share(s)
represented by this certificate to be acquired by the Company or
Parent (or a Permitted Assign), as the case may be, free and
clear of all Liens; AND
(ii) either
[ ] the undersigned is a resident of Canada for purposes of the
Income Tax Act (Canada); OR
[ ] the undersigned is not a resident of Canada for purposes of
the Income Tax Act (Canada).
The undersigned hereby acknowledges that, if the undersigned is not a resident
of Canada, and has not submitted with this notice a certificate issued by
Revenue Canada under section 116 of the Income Tax Act (Canada) in respect of
the Retracted Shares, the amount of any securities or cash resulting from the
retraction or the purchase of the Retracted Shares will be reduced by the amount
of withholdings required under the Income Tax Act (Canada).
--------------- ------------------------------- -----------------------
(Date) (Signature of Shareholder) (Guarantee of Signature)
[ ] Please check box if the securities and any cheque(s) resulting
from the retraction or purchase of the Retracted Shares are to be
held for pick-up by the shareholder at the principal transfer
office of ___________________________________ failing which the
securities and any cheque(s) will be mailed to the last address
of the shareholder as it appears on the register.
NOTE: This panel must be completed and this certificate, together with
such additional documents as the Transfer Agent may require, must
be deposited with the Transfer Agent at its principal transfer
office in _______________. The securities and any cheque(s)
resulting from the retraction or purchase of the Retracted Shares
will be issued and registered in, and made payable to,
respectively, the name of the shareholder as it appears on the
register of the Company and the securities and cheque(s)
resulting from such retraction or purchase will be
-3-
delivered to such shareholder as indicated above, unless the form
appearing immediately below is duly completed.
--------------------------------- ----------------------------------
Name of Person in Whose Name Date
Securities or Cheque(s) Are To
Be Registered, Issued or
Delivered (please print)
--------------------------------- ----------------------------------
Street Address or P.O. Box Signature of Shareholder
--------------------------------- ----------------------------------
City-Province Signature of Shareholder
NOTE: If the notice of retraction is for less than all of the share(s)
represented by this certificate, a certificate representing the
remaining shares of the Company will be issued and registered in
the name of the shareholder as it appears on the register of the
Company, unless the Share Transfer Power on the share certificate
is duly completed in respect of such shares.
-4-
SCHEDULE B
CERTIFICATE
To: C&T Acquisition Corporation (the "Company") and Cubist Pharmaceuticals,
Inc.("Parent")
This notice is given pursuant to the Plan of Arrangement and the
provisions (the "Share Provisions") attaching to the share(s) represented by
this certificate and all capitalized words and expressions used in this notice
that are defined in the Share Provisions have the meanings ascribed to such
words and expressions in such Share Provisions.
The undersigned hereby represents and warrants to the Company and the
Parent (and the Permitted Assigns) that (THE UNDERSIGNED MUST CHECK ONE OF THE
FOLLOWING)):
[ ] the undersigned is an "accredited investor" as such term
is defined in Rule 501 of Regulation D promulgated under the Securities
Act of 1993, as amended (the "Securities Act"); the undersigned has
such knowledge and experience in financial and business matters that
the undersigned is capable of evaluating the merits and risks of the
investment in Parent Common Stock that the undersigned is making by
reason of the Retraction Request made hereby;. the undersigned's
financial condition is such that the undersigned is able to bear all
economic risks of investment in Parent Common Stock, including a
complete loss of the undersigned's investment; Parent has provided the
undersigned with adequate access to financial and other information
concerning Parent (including, without limitation, Parent's public
filings with the Securities and Exchange Commission) and the
undersigned has had the opportunity obtain from Parent information
regarding an investment in Parent; and The undersigned will acquire
shares of Parent Common Stock pursuant to this Retraction Request
solely for investment purposes, with no present intention of
distributing or reselling any of such shares or any interest therein.
The undersigned is aware that, except as set forth in such
Shareholders' Agreement, such shares of Parent Common Stock will not be
registered under the Securities Act, and that neither such shares nor
any interest therein may be sold, pledged, or otherwise transferred
unless the resale of such shares is registered under the Securities Act
or such shares qualify for an exemption from such registration, and the
certificate(s) representing such shares will bear appropriate
restrictive legends referring to such restrictions on transfer.
[ ] the undersigned is not a "U.S. Person" as such term is
defined in Rule 902(k) of Regulation S promulgated under the Securities
Act of 1933, as amended (the "Securities Act"); the undersigned is not
acquiring the shares of Parent Common Stock for the account or benefit
of any such U.S. person; the undersigned has such knowledge and
experience in financial and business matters that the undersigned is
capable of evaluating the merits and risks of the investment in Parent
Common Stock that the undersigned is making by reason of the Retraction
Request made hereby;. the undersigned's financial condition is such
that the undersigned is able to bear all economic
risks of investment in Parent Common Stock, including a complete loss
of the undersigned's investment; Parent has provided the undersigned
with adequate access to financial and other information concerning
Parent (including, without limitation, Parent's public filings with the
Securities and Exchange Commission) and the undersigned has had the
opportunity obtain from Parent information regarding an investment in
Parent; and The undersigned will acquire shares of Parent Common Stock
pursuant to this Retraction Request solely for investment purposes,
with no present intention of distributing or reselling any of such
shares or any interest therein. The undersigned is aware that, except
as set forth in such Shareholders' Agreement, such shares of Parent
Common Stock will not be registered under the Securities Act, and that
neither such shares nor any interest therein may be sold, pledged, or
otherwise transferred unless in accordance with the provisions of
Regulation S under the Securities Act or unless the resale of such
shares is registered under the Securities Act or such shares qualify
for an exemption from such registration, and the certificate(s)
representing such shares will bear appropriate restrictive legends
referring to such restrictions on transfer.
Upon request of Parent, the undersigned will duly complete and deliver
to Parent a purchaser questionnaire in such form as reasonably required by
Parent.
The undersigned hereby further represents and warrants to the Company
and Parent (and the Permitted Assigns):
(i) that the undersigned has good title to, and owns, the share(s)
represented by this certificate to be acquired by the Company or
Parent (or a Permitted Assign), as the case may be, free and
clear of all Liens; AND
(ii) either (THE UNDERSIGNED MUST CHECK ONE OF THE FOLLOWING)
[ ] the undersigned is a resident of Canada for purposes of the
Income Tax Act (Canada); OR
[ ] the undersigned is not a resident of Canada for purposes of
the Income Tax Act (Canada).
The undersigned hereby acknowledges that, if the undersigned is not a resident
of Canada, and has not submitted with this notice a certificate issued by
Revenue Canada under section 116 of the Income Tax Act (Canada) in respect of
the Retracted Shares, the amount of any securities or cash resulting from the
retraction or the purchase of the Retracted Shares will be reduced by the amount
of withholdings required under the Income Tax Act (Canada).
-------------------- -------------------------- ------------------------
(Date) (Signature of Shareholder) (Guarantee of Signature)
-2-
NOTE: This panel must be completed and this certificate, together with
such additional documents as the Transfer Agent may require, must
be deposited with the Transfer Agent at its principal transfer
office in _______________. The securities and any cheque(s) will
be issued and registered in, and made payable to, respectively,
the name of the shareholder as it appears on the register of the
Company and the securities and cheque(s) resulting from such
retraction or purchase will be delivered to such shareholder as
indicated above, unless the form appearing immediately below is
duly completed.
--------------------------------- ---------------------------------
Name of Person in Whose Name Date
Securities or Cheque(s) Are To
Be Registered, Issued or
Delivered (please print)
--------------------------------- ---------------------------------
Street Address or P.O. Box Signature of Shareholder
--------------------------------- ---------------------------------
City-Province Signature of Shareholder
NOTE: If the notice of retraction is for less than all of the share(s)
represented by this certificate, a certificate representing the
remaining shares of the Company will be issued and registered in
the name of the shareholder as it appears on the register of the
Company, unless the Share Transfer Power on the share certificate
is duly completed in respect of such shares.
-3-
