EXHIBIT 4.2
ASPREVA PHARMACEUTICALS CORPORATION
SHAREHOLDER RIGHTS PLAN AGREEMENT
dated as of February 4, 2005
Between
Aspreva Pharmaceuticals Corporation
And
Computershare Investor Services Inc.
As Rights Agent
ASPREVA SHAREHOLDER RIGHTS PLAN
TABLE OF CONTENTS
Page
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ARTICLE 1 - INTERPRETATION............................................................................... 2
1.1 Definitions.................................................................................... 2
1.2 Currency....................................................................................... 16
1.3 Grandfather Provision.......................................................................... 17
1.4 Holder......................................................................................... 17
1.5 Acting in Good Faith........................................................................... 17
1.6 Acting Jointly or in Concert................................................................... 18
1.7 Headings and References........................................................................ 18
1.8 Singular, Plural etc........................................................................... 18
1.9 Schedule....................................................................................... 18
ARTICLE 2 - THE RIGHTS................................................................................... 18
2.1 Legend on Certificates......................................................................... 18
2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights............................... 19
2.3 Adjustments to Exercise Price; Number of Rights................................................ 22
2.4 Date on which Exercise is Effective............................................................ 27
2.5 Execution, Authentication, Delivery and Dating of Rights Certificates.......................... 28
2.6 Registration, Registration of Transfer and Exchange............................................ 28
2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates...................................... 29
2.8 Persons Deemed Owners.......................................................................... 30
2.9 Delivery and Cancellation of Certificates...................................................... 30
2.10 Agreement of Rights Holders.................................................................... 30
2.11 Rights Held by the Corporation and Subsidiaries................................................ 31
ARTICLE 3 - ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS............................... 31
3.1 Flip-in Event.................................................................................. 31
ARTICLE 4 - THE RIGHTS AGENT............................................................................. 33
4.1 General........................................................................................ 33
4.2 Merger, Amalgamation or Consolidation or Change of Name of Rights Agent........................ 34
4.3 Duties of Rights Agent......................................................................... 35
4.4 Change of Rights Agent......................................................................... 37
ARTICLE 5 - MISCELLANEOUS................................................................................ 37
5.1 Redemption and Waiver.......................................................................... 37
5.2 Expiration..................................................................................... 38
5.3 Issuance of New Rights Certificates............................................................ 39
5.4 Supplements and Amendments..................................................................... 39
5.5 Fractional Rights and Fractional Shares........................................................ 39
5.6 Rights of Action............................................................................... 39
5.7 Holder of Rights Not Deemed a Shareholder...................................................... 40
5.8 Notice of Proposed Actions..................................................................... 40
5.9 Notices........................................................................................ 40
5.10 Costs of Enforcement........................................................................... 41
5.11 Successors..................................................................................... 42
5.12 Benefits of this Agreement..................................................................... 42
5.13 Governing Law.................................................................................. 42
5.14 Counterparts................................................................................... 42
5.15 Severability................................................................................... 42
5.16 Effective Date................................................................................. 42
5.17 Reconfirmation After Five Years................................................................ 42
5.18 Determinations and Actions by the Board of Directors........................................... 43
5.19 Declaration as to Non-Canadian Holders......................................................... 44
5.20 Successor Corporations......................................................................... 44
5.21 Time of Essence................................................................................ 45
Exhibit A - Form of Rights Certificate
Exhibit 1 - Form of Election to Exercise
Exhibit 2 - Form of Assignment
ASPREVA SHAREHOLDER RIGHTS PLAN AGREEMENT
THIS SHAREHOLDER RIGHTS PLAN AGREEMENT was made as of the 4th day of
February, 2005.
BETWEEN:
ASPREVA PHARMACEUTICALS CORPORATION, a corporation continued
under the laws of the Province of British Columbia.
(the "CORPORATION")
OF THE FIRST PART
AND:
COMPUTERSHARE INVESTOR SERVICES INC., a trust company existing under
the laws of Canada.
(the "RIGHTS AGENT")
OF THE SECOND PART
WHEREAS the Board of Directors has determined that it is advisable
to adopt a shareholder rights plan (the "RIGHTS PLAN"), inter alia, in order to:
(a) facilitate the maximization of shareholder values if a
substantial portion of the Voting Shares of the Corporation
are to be acquired by any Person;
(b) protect the Corporation and its shareholders from abusive
acquisition tactics or acquisitions which may not be in the
best interests of the Corporation and its shareholders; and
(c) provide a framework in which appropriate take-over bids for
the Corporation can be put before its shareholders in a fair
and proper manner so that its shareholders can make a fully
informed decision with respect to such take-over bids;
AND WHEREAS the Board of Directors has been advised that, based upon
the experiences of other corporations and taking into account the circumstances
itself, the adoption of the Rights Plan will assist the Corporation to achieve
the intended results;
AND WHEREAS it is not the intention of the Board of Directors to
adopt the Rights Plan as a means of preventing or deterring any Person from
seeking to acquire the Voting Shares or the assets of the Corporation, provided
they do so in a manner that is fair to all
shareholders, or of foreclosing the ability of the Board of Directors to take
any action that it, at its discretion, considers reasonable in the circumstances
of any such transaction having regard for the best interests of the Company and
its shareholders;
AND WHEREAS in order to implement the Rights Plan, the Board of
Directors has:
(a) authorized and declared effective 5:00 P.M. (Vancouver time)
on the effective date of the Registration Statement (as
hereinafter defined) a distribution of one right (a "RIGHT")
in respect of each Common Share outstanding at the Close of
Business on the effective date of the Registration Statement
(the "RECORD TIME"); and
(b) authorized the issuance of one Right in respect of each Common
Share issued after the Record Time and prior to the earlier of
the Separation Time (as hereinafter defined) and the
Expiration Time (as hereinafter defined);
AND WHEREAS each Right entitles the holder thereof, after the
Separation Time but before the Expiration Time, to purchase securities of the
Corporation (or, in certain cases, of certain other entities) pursuant to the
terms and subject to the conditions set forth herein;
AND WHEREAS the Corporation desires to appoint the Rights Agent to
act on behalf of the Corporation and the holders of Rights, and the Rights Agent
is willing to so act, in connection with the issuance, transfer, exchange and
replacement of Rights Certificates (as hereafter defined), the exercise of
Rights and other matters referred to herein;
NOW, THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereto hereby agree as follows:
ARTICLE 1- INTERPRETATION
1.1 DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "ACQUIRING PERSON" shall mean any Person who is the Beneficial Owner
of 20% or more of the outstanding Voting Shares of the Corporation
provided, however, that the term "ACQUIRING PERSON" shall not
include:
(i) the Corporation or any Subsidiary or Affiliate, any employee,
executive or director stock ownership or other benefit plan,
any trust for the benefit of employees of the Corporation or
any Subsidiary or Affiliate, or any Person organized,
appointed or established by the Corporation for or pursuant to
the terms of any such plan or trust;
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(ii) any Person who becomes the Beneficial Owner of 20% or more of
the outstanding Voting Shares of the Corporation after the
Record Time and such Person's Beneficial Ownership does not
exceed the number of Voting Shares Beneficially Owned by such
Person immediately prior to the Record Time other than as a
result of any one or a combination of:
(A) acquisitions or redemptions by the Corporation of Voting
Shares of the Corporation which, by reducing the number
of Voting Shares outstanding, increases the
proportionate number of Voting Shares Beneficially Owned
by such Person to 20% or more of the Voting Shares of
the Corporation then outstanding ("VOTING SHARE
REDUCTIONS");
(B) share acquisitions made pursuant to a Permitted Bid or a
Competing Permitted Bid ("PERMITTED BID ACQUISITIONS");
(C) share acquisitions (1) in respect of which the Board of
Directors of the Corporation has waived the application
of Section 3.1 pursuant to the provisions of subsections
5.1(b) and 5.1(c) or (2) which were made prior to the
date of this Agreement; or (3) pursuant to an
amalgamation, merger or other statutory procedure
requiring shareholder approval ("EXEMPT ACQUISITION");
(D) the acquisition of Voting Shares upon the exercise of
Convertible Securities received by such Person pursuant
to a Permitted Bid Acquisition, Exempt Acquisition or a
Pro Rata Acquisition (as defined below) ("CONVERTIBLE
SECURITY ACQUISITIONS"); or
(E) a Pro-rata Acquisition;
provided, however, that if a Person shall become the
Beneficial Owner of 20% or more of the Voting Shares of the
Corporation then outstanding by reason of any one or a
combination of (i) Permitted Bid Acquisitions, (ii) Voting
Share Reductions, (iii) Exempt Acquisitions, or (iv)
Convertible Security Acquisitions, or (v) Pro-rata
Acquisitions and, after such Permitted Bid Acquisitions,
Voting Share Reductions, Exempt Acquisitions, Convertible
Security Acquisitions or Pro-rata Acquisitions, and such
Person is, at the time such Person becomes the Beneficial
Owner of 20% or more of the outstanding Voting Shares, or
becomes, at any time thereafter while such Person is the
Beneficial Owner of 20% or more of the Voting Shares of the
Corporation then outstanding, the Beneficial Owner of any
additional Voting Shares constituting more than 1% of the
Voting Shares then outstanding of the Corporation (other than
pursuant to any one or combination of Permitted Bid
Acquisitions, Voting Share Reductions, Exempt Acquisitions,
Convertible Security Acquisitions or Pro-rata Acquisitions)
then as of the date such Person becomes the Beneficial Owner
of 20% or more of the outstanding Voting Shares while
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holding such additional Voting Shares, or becomes the
beneficial holder of such additional Voting Shares, while
the Beneficial Owner of 20% or more of the Voting Shares, as
the case may be, such Person shall be deemed to be an
"ACQUIRING PERSON";
(iii) for the period of 10 days after the Disqualification Date (as
hereinafter defined), any Person who becomes the Beneficial
Owner of 20% or more of the outstanding Voting Shares of the
Corporation as a result of such Person becoming disqualified
from relying on paragraph 1.1(g)(v) hereof solely because such
Person has made or proposes to make a tender or exchange offer
or Take-over Bid in respect of securities of the Corporation
alone or by acting jointly or in concert with any other
Person; the first date of public announcement (which, for
purposes of this definition, shall include, without
limitation, a report filed pursuant to Sections 101 and 102 of
the Securities Act (Ontario), Section 111 of the Securities
Act (British Columbia) or Section 13(d) under the 1934
Exchange Act) by such Person or the Corporation of the intent
to commence such a tender or exchange offer or Take-over Bid
(or pursuant to any comparable or successor laws, rules or
regulations) being herein referred to as the "DISQUALIFICATION
DATE"; or
(iv) an underwriter or member of a banking or selling group that
becomes the Beneficial Owner of 20% or more of the Voting
Shares in connection with a distribution of securities by way
of prospectus or private placement.
(b) "ADJUSTED EXERCISE PRICE" means the price at which a holder may
purchase the securities issuable upon exercise of Rights pursuant to
the terms of paragraph 3.1(a)(ii) which, until adjustment thereof in
accordance with the terms hereof, shall be equal to the Exercise
Price multiplied by a fraction in which:
(i) the numerator is the number of Shares per Right that may be
purchased pursuant to paragraph 3.1(a)(ii); and
(ii) the denominator is the number of Shares per Right that could
have been purchased pursuant to paragraph 3.1(a)(i) in the
event that there had been sufficient authorized but unissued
Common Shares to permit each holder of a Right (other than an
Acquiring Person or a transferee of the kind described in
paragraph 3.1(b)(ii)) to purchase the number of Common Shares
to which they would have been entitled under paragraph
3.1(a)(i);
(c) "ADJUSTMENT FACTOR" shall mean a fraction in which:
(i) the numerator is equal to Corporation's authorized but
unissued Voting Shares; and
(ii) the denominator is equal to Corporation's issued and
outstanding Voting Shares minus those Voting Shares that the
Acquiring Person Beneficially owns;
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(d) "AFFILIATE" shall mean, when used to indicate a relationship with a
specified body corporate, a Person that directly or indirectly
through one or more intermediaries controls, or is a body corporate
controlled by, or under common control with, such specified body
corporate;
(e) "AGREEMENT" means this Rights Agreement as amended, modified or
supplemented from time to time;
(f) "ASSOCIATE" shall mean, when used to indicate a relationship with a
specified Person, (i) a spouse of that Person, (ii) any Person of
the same or opposite sex with whom that Person is living in a
conjugal relationship outside marriage, (iii) any relative of that
Person if that relative has the same residence as that Person or
(iv) any relative of such spouse or other Person referred to in the
immediately preceding clauses (i), (ii) or (iii) above, if that
relative has the same residence as the specified Person;
(g) Subject to Section 1.3, a Person shall be deemed the "BENEFICIAL
OWNER", and to have "BENEFICIAL OWNERSHIP", of, and to "BENEFICIALLY
OWN":
(i) any securities of which such Person or any such Person's
Affiliates or Associates is an owner at law or in equity,
(ii) any securities as to which such Person or any of such Person's
Affiliates or Associates has
(A) the right to acquire upon the exercise of Convertible
Securities; or
(B) the right to acquire (whether such right is exercisable
immediately or the lapse or after the passage of time or
upon the occurrence of a contingency or otherwise)
pursuant to any agreement, arrangement, pledge or
understanding,
in either case where such right is exercisable within 60 days and
whether or not on condition or the happening of any contingency
(other than customary agreements with and between underwriters and
banking group or selling group members with respect to a
distribution of securities and other than pledges of securities in
the ordinary course of business), or
(iii) any securities which are Beneficially Owned, directly or
indirectly, within the meaning of paragraphs 1.1(g)(i) or (ii)
by any other Person with which such Person or any of such
Person's Affiliates or Associates in acting jointly or in
concert;
provided, however, that a Person shall not be deemed the "BENEFICIAL
OWNER", or to have "BENEFICIAL OWNERSHIP" of, or to "BENEFICIALLY
OWN", any security:
(iv) because such security has been agreed to be deposited or
tendered pursuant to a Permitted Lock-up Agreement, or is
otherwise deposited or
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tendered, to any Take-over Bid made by such Person, made by
any of such Person's Affiliates or Associates or made by any
other Person acting jointly or in concert with such Person
until such deposited or tendered security has been taken up or
paid for, whichever shall first occur;
(v) because such Person, or any of such Persons' Affiliates or
Associates or any other Person referred to in paragraph
1.1(g)(iii), holds such security provided that:
(A) the ordinary business of any such Person (the
"INVESTMENT MANAGER") includes the management of
investment funds for others (which, without limitation,
may include or be limited to one or more employee
benefit plans or pension plans) and such security is
held by the Investment Manager in the ordinary course of
such business in the performance of such Investment
Manager's duties for the account of any other Person,
including the acquisition or holding of securities for
non-discretionary accounts on behalf of a client by a
broker or dealer registered under applicable securities
laws (a "CLIENT");
(B) such Person (the "TRUST COMPANY") is licensed to carry
on the business of a trust company under applicable laws
and, as such, acts as trustee or administrator or in a
similar capacity in relation to the estates of deceased
or incompetent Persons (each an "ESTATE ACCOUNT") or in
relation to other accounts (each an "OTHER ACCOUNT") and
holds such security in the ordinary course of such
duties for such Estate Accounts or Other Accounts;
(C) the ordinary business of such person includes, acting as
an agent of the Crown in the management of public assets
(the "CROWN AGENT");
(D) the Person is an independent person (the "INDEPENDENT
PERSON") established by statute for, among other things,
and the ordinary business or activity of such Person
includes, the administration of investment funds for
employee benefit plans, pension plans, insurance plans
or various public bodies; or
(E) such Person (the "ADMINISTRATOR") is the administrator
or trustee of one or more pension funds, plans or
related trusts (a "PLAN") registered or qualified under
the laws of Canada or any Province thereof or the laws
of the United States of America or any State thereof or
is a Plan;
provided that the Investment Manager, the Trust Company, the
Crown Agent, the Independent Person, the Administrator and the
Plan, as the case may be, is not then making, or has not
announced a current intention to
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make, a Take-over Bid alone or by acting jointly or in concert
with any other Person, other than an Offer to Acquire Voting
Shares or other securities pursuant to a distribution by the
Corporation or by means of ordinary market transactions
(including pre-arranged trades entered into in the ordinary
course of business of such Person) executed through the
facilities of a stock exchange, securities quotation system or
organized over-the-counter market, alone, through its
Affiliates or Associates or by acting jointly or in concert
with any other Person;
(vi) because such Person is (1) a Client of the same Investment
Manager as another Person on whose account the Investment
Manager holds such security, (2) because such Person is an
Estate Account or an Other Account of the same Trust Company
as another Person on whose account the Trust Company holds
such security or (3) a Plan with the same Administrator as
another Plan on whose account the Administrator holds such
security;
(vii) where such Person is:
(A) a Client of an Investment Manager and such security is
owned at law or in equity by the Investment Manager;
(B) an Estate Account or an Other Account of a Trust Company
and such security is owned at law or in equity by the
Trust Company; or
(C) a Plan and such security is owned at law or in equity by
the Administrator of the Plan;
(viii) where such Person is a registered holder of such security as
a result of carrying on the business of, or acting as a
nominee of, a securities depository;
For the purposes of this Agreement in determining the percentage of
the outstanding Voting Shares with respect to which a Person is or
is deemed to be the Beneficial Owner, all Voting Shares as to which
such Person is deemed the Beneficial Owner shall be deemed
outstanding;
(h) "BOARD OF DIRECTORS" shall mean the board of directors of the
Corporation or, if duly constituted and whenever duly empowered, the
executive committee of the board of directors of the Corporation;
(i) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a
day that is treated as a holiday at the Corporation's or the Rights
Agent's principal executive offices in Canada;
7
(j) "BUSINESS CORPORATIONS ACT (BRITISH COLUMBIA)" shall mean the
Business Corporations Act, S.C.B. 2002, c.57 as amended and the
regulations thereunder, and any comparable or successor laws or
regulations thereto;
(k) "CANADIAN DOLLAR EQUIVALENT" of any amount which is expressed in
United States dollars shall mean on any day the Canadian dollar
equivalent of such amount determined by reference to the
Canadian-U.S. Exchange Rate on such date;
(l) "CANADIAN-U.S. EXCHANGE RATE" shall mean on any date the inverse of
the U.S.-Canadian Exchange Rate;
(m) "CLOSE OF BUSINESS" on any given date shall mean the time on such
date (or, if such date is not a Business Day, the time on the next
succeeding Business Day) at which the office of the transfer agent
for the Common Shares in the City of Vancouver (or, after the
Separation Time, the offices of the Rights Agent in the City of
Vancouver) becomes closed to the public;
(n) "COMMON SHARES" shall mean Common Shares of the Company and, when
used with reference to any Person other than the Corporation, shall
mean the class or classes of shares (or similar equity interest)
with the greatest per share voting power entitled to vote generally
in the election of all directors of such other Person or the equity
securities or other equity interest of an entity having power
(whether or not exercised) to control or direct the management of
such other Person; if such other Person is a Subsidiary of another
person, "such other Person" as used herein shall mean the Person or
Persons which ultimately control such first-mentioned Person;
(o) "COMPETING PERMITTED BID" means a Take-over Bid that:
(i) is made for the Voting Shares after a Permitted Bid for Voting
Shares has been made but prior to the expiry of such Permitted
Bid;
(ii) satisfies all of the conditions of the definition of Permitted
Bid subject to paragraph 1.1(o)(iii) below; and
(iii) contains, and the take-up and payment for securities tendered
or deposited is subject to, an irrevocable and unqualified
condition that no Voting Shares will be taken up and paid for
pursuant to the Take-over Bid prior to the close of business
on a date which is not earlier than the later of 35 days after
the date of the Take-over Bid or the 60th day following the
date of the earliest Permitted Bid;
(p) "CONVERTIBLE SECURITIES" means, at any time, any securities issued
by the Corporation from time to time (other than the Rights)
carrying any exercise, conversion or exchange right pursuant to
which the holder thereof may acquire Voting Shares or other
securities which are convertible into, exercisable into or
exchangeable for Voting Shares;
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(q) "CONVERTIBLE SECURITY ACQUISITIONS" has the meaning set forth in the
definition of "Acquiring Person" herein;
(r) "CORPORATION" means Aspreva Pharmaceuticals Corporation;
(s) "EXEMPT ACQUISITION" shall have the meaning ascribed thereto in the
definition of Acquiring Person;
(t) "EXERCISE PRICE" shall mean, as of any date, the price at which a
holder may purchase the securities issuable upon exercise of one
whole Right and until adjustment or amendment thereof in accordance
with the terms hereof, the Exercise Price shall equal $100;
(u) "EXPIRATION TIME" shall mean the earlier of:
(i) the Termination Time; or
(ii) the Close of Business on that date which is the earlier of:
(A) the date of termination of the next annual general
meeting of the shareholders of the Corporation after the
date of this Agreement if this Agreement is not approved
at such meeting as required by Section 5.16 herein;
(B) the date of termination of the meeting of the
shareholders of the Corporation called to consider the
reconfirmation of this Agreement as provided for in
Section 5.17 herein if this Agreement is not reconfirmed
at such meeting as required by Section 5.17 herein; and
(C) the tenth anniversary of the date of this Agreement, if
this Agreement is approved and reconfirmed as required
by Sections 5.16 and 5.17, respectively;
(v) "FLIP-IN EVENT" shall mean a transaction in which any Person shall
become an Acquiring Person;
(w) "INDEPENDENT SHAREHOLDERS" shall mean holders of outstanding Voting
Shares of the Corporation excluding (i) any Acquiring Person; or
(ii) any Person (other than a Person who is deemed not to
Beneficially Own such Voting Shares by reason of paragraph
1.1(g)(v)) that is making or has announced a current intention to
make a Take-over Bid for Voting Shares of the Corporation (including
a Permitted Bid or a Competing Permitted Bid) but excluding any such
Person if the Take-over Bid so announced or made by such Person has
been withdrawn, terminated or, expired; or (iii) any Affiliate or
Associate of such Acquiring Person or a Person referred to in
paragraph (ii); or (iv) any Person acting jointly or in concert with
such Acquiring Person or a Person referred to in paragraph (ii); or
(v) a Person who is a trustee of any employee benefit plan, share
purchase plan, deferred profit
9
sharing plan or any similar plan or trust for the benefit of
employees of the Corporation or a Subsidiary of the Corporation,
unless the beneficiaries of the plan or trust direct the manner in
which the Voting Shares are to be voted or direct whether the Voting
Shares are to be tendered to a Take-over Bid;
(x) "MARKET PRICE" per share of any securities on any date of
determination shall mean the average of the daily Closing Price Per
Share of such securities (determined as described below) on each of
the 20 consecutive Trading Days through and including the Trading
Day immediately preceding such date; provided, however, that if an
event of a type analogous to any of the events described in Section
2.3 hereof shall have caused the closing prices used to determine
the Market Price on any Trading Days not to be fully comparable with
the closing price on such date of determination or, if the date of
determination is not a Trading Day, on the immediately preceding
Trading Day, each such closing price so used shall be appropriately
adjusted in a manner analogous to the applicable adjustment provided
for in Section 2.3 hereof in order to make it fully comparable with
the closing price on such date of determination or, if the date of
determination is not a Trading Day, on the immediately preceding
Trading Day. The "CLOSING PRICE PER SHARE" of any securities on any
date shall be:
(i) the closing board lot sale price, or, if such price is not
available, the average of the closing bid and asked prices,
for each share as reported by the principal stock exchange in
Canada on which such securities are listed and posted for
trading (provided that if at the date of determination such
securities are listed or admitted to trading on more than one
stock exchange or national securities quotation system, such
price or prices shall be determined based on the stock
exchange or national securities quotation system on which such
securities are then listed or admitted to trading on which the
largest number of such securities were traded during the most
recently completed calendar year);
(ii) if the securities are not listed or posted for trading on any
stock exchange in Canada, the last sale price, regular way,
or, in case no such sale takes place on such date, the average
of the closing bid and asked prices, regular way, for each
share of such securities as reported in the principal
consolidated transaction reporting system with respect to
securities listed or posted for trading on the principal
national securities exchange in the United States on which
such securities are listed or posted for trading;
(iii) if for any reason none of such prices is available on such
date or the securities are not listed or admitted to trading
on a stock exchange in Canada or a national securities
exchange in the United States, the last quoted price, or if
not so quoted, the average of the high bid and low asked
prices for each share of such securities in the
over-the-counter market; or
(iv) if on any such date the securities are not quoted by any such
organization, the average of the closing bid and asked prices
as furnished by a
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professional market maker making a market in the securities
selected in good faith by the Board of Directors of the
Corporation;
provided, however, that if on any such date the securities are not
traded in the over-the-counter market, the closing price per share
of such securities on such date shall mean the fair value per share
of such securities on such date as determined in good faith by the
Board of Directors of the Corporation, after consultation with a
nationally and internationally recognized investment banking firm
with respect to the fair value per share of such securities. The
Market Price shall be expressed in United States dollars and if
initially determined in respect of any day forming part of the 20
consecutive Trading Day period in question in Canadian dollars, such
amount shall be translated into United States dollars at the U.S.
Dollar Equivalent thereof;
(y) "1933 SECURITIES ACT" shall mean the Securities Act of 1933 of the
United States, as amended, and the rules and regulations thereunder,
and any comparable or successor laws or regulations thereto;
(z) "1934 EXCHANGE ACT" shall mean the Securities Exchange Act of 1934
of the United States, as amended, and the rules and regulations
thereunder, and any comparable or successor laws or regulations
thereto;
(aa) "OFFER TO ACQUIRE" shall include:
(i) an offer to purchase, or a solicitation of an offer to sell,
Voting Shares; and
(ii) an acceptance of an offer to sell Voting Shares, whether or
not such offer to sell has been solicited;
or any combination thereof, and the Person accepting an offer to
sell shall be deemed to be making an Offer to Acquire to the Person
that made the offer to sell;
(bb) "OFFEROR" shall mean a Person who has announced a current intention
to make or who is making a Take-over Bid;
(cc) "OFFEROR'S SECURITIES" means Voting Shares Beneficially Owned on the
date of an Offer to Acquire by any Person who makes a Take-over Bid
or by any Person acting jointly or in concert with such Person;
(dd) "PERMITTED BID" means a Take-over Bid made by means of a Take-over
Bid Circular and which also complies with the following additional
provisions:
(i) the Take-over Bid is made to all holders of record of Voting
Shares wherever resident as registered on the books of the
Corporation, on identical terms;
(ii) the Take-over Bid contains irrevocable and unqualified
provisions that all Voting Shares may be deposited pursuant to
the Take-over Bid at any time
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prior to the Close of Business on the date referred to in
paragraph 1.1(dd)(iii) and that all Voting Shares deposited
pursuant to the Take-over Bid may be withdrawn at any time
prior to the Close of Business on such date;
(iii) the Take-over Bid contains, and the take up and payment for
securities tendered or deposited is subject to, an irrevocable
and unqualified provision that no Voting Shares will be taken
up or paid for pursuant to the Take-over Bid prior to the
Close of Business on a date which is not less than 60 days
following the date of the Take-over Bid and that Voting Shares
shall not be taken up and paid for by the Offeror unless
Independent Shareholders have deposited or tendered shares
representing more than 50% of the Voting Shares then
outstanding pursuant to the Take-over Bid and have not
withdrawn such shares; and
(iv) the Take-over Bid contains an irrevocable and unqualified
provision that, should the condition referred to in paragraph
1.1(dd)(iii) be met, the Offeror will make a public
announcement of that fact, the Take-over Bid will be extended
on the same terms for a period of not less than 10 days from
the date referred to in paragraph 1.1(dd)(iii) and where a
greater number of such Voting Shares is deposited pursuant
thereto than the Offeror is bound or willing to acquire under
the Take-over Bid, the Voting Shares shall be taken up and
paid for on a pro rata basis;
(ee) "PERMITTED BID ACQUISITIONS" shall have the meaning ascribed thereto
in the definition of Acquiring Person;
(ff) "PERMITTED LOCK-UP AGREEMENT" means an agreement between an Offeror,
any of its Affiliates or Associates or any other Person acting
jointly or in concert with the Offeror and a Person (the "LOCKED-UP
PERSON") (the terms of which are publicly disclosed and a copy of
which is made available to the public (including the Corporation)
not later than the date of the Lock-up Bid (as defined below), or if
the Lock-up Bid has been made prior to the date of the Lock-up
Agreement not later than the first Business Day following the date
of the Lock-up Agreement) who is not an Affiliate or Associate of
the Offeror or a Person acting jointly or in concert with the
Offeror whereby the Locked-up Person agrees to deposit or tender the
Voting Shares held by the Locked-up Person to the Offeror's
Take-over Bid or to any Take-over Bid made by any of the Offeror's
Affiliates or Associates or made by any other Person acting jointly
or in concert with the Offeror (the "LOCK-UP BID"), where the
agreement:
(i) (A) permits the Locked-up Person to withdraw the Voting
Shares in order to tender or deposit the Voting Shares
to another Take-over Bid or to support another
transaction that contains an offering price for each
Voting Share that exceeds, or provides a value for each
Voting Share that is greater than, the offering price
contained or proposed to be contained in the Lock-up
Bid;
12
(B) permits the Locked-up Person to withdraw the Voting
Shares in order to tender or deposit the Voting Shares
to another Take-over Bid or to support another
transaction that contains an offering price for each
Voting Share that exceeds, or provides a value for each
Voting Share that is greater than, the offering price
contained in or proposed to be contained in, the Lock-up
Bid by as much or more than a specified amount (the
"SPECIFIED AMOUNT") and the Specified Amount is not
greater than 7% of the offering price that is contained
or proposed to be contained in the Lock-up Bid; or
(C) permits the Locked-up Person to withdraw the Voting
Shares in order to tender or deposit the Voting Shares
to another Take-over Bid for a number of Voting Shares
at least 7% greater than the number of Voting Shares
that were the subject of the Lock-up Bid at a price that
is not less than the price or value per Voting Share
offered under the Lock-up Bid; and
(ii) does not provide for any "break-up fees", "top-up fees",
penalties, expenses or other amounts that exceed in the
aggregate the cash equivalent of 2.5% of the price or value
payable to the Locked-up Person under the Take-over Bid or
one-half of the increased price or value that is paid pursuant
to another Take-over Bid or transaction, whichever is the
greater, in the event that the Locked-up Person fails to
tender Voting Shares pursuant thereto in order to accept the
other Take-over Bid or support another transaction;
and for greater clarity, the agreement may contain a right of first
refusal or require a period of delay to give the Person who made the
Lock-up Bid an opportunity to match a higher price in another
Take-over Bid or other similar limitation on a Locked-up Person's
right to withdraw Voting Shares from the agreement, so long as the
limitation does not preclude the exercise by the Locked-up Person of
the right to withdraw Voting Shares during the period of the other
Take-over Bid or transaction;
(gg) "PERSON" shall include any individual, firm, partnership,
association, trust, trustee, personal representative, group, body
corporate, corporation, unincorporated organization, syndicate,
governmental entity, or other entity;
(hh) "PRO-RATA ACQUISITIONS" means acquisitions by a Person of Voting
Shares pursuant to (i) any dividend reinvestment plan, such purchase
plan or other plan of the Corporation made available to all holders
of Voting Shares (other than holders resident in any jurisdiction
where participation in such plan is restricted or impractical as a
result of applicable law); (ii) a stock dividend, a stock split or
other event pursuant to which such Person becomes the Beneficial
Owner of Voting Shares on the same pro rata basis as all other
holders of Voting Shares of the same class or series; (iii) the
acquisition or exercise of rights to purchase Voting Shares
distributed to all holders of Voting Shares (other than holders
13
resident in any jurisdiction where such distribution or exercise is
restricted or impractical as a result of applicable law) by the
Corporation pursuant to a rights offering (but only if such rights
are acquired directly from the Corporation); or (iv) a distribution
of Voting Shares or Convertible Securities in respect thereof
offered pursuant to a prospectus or by way of a private placement by
the Corporation or a conversion or exchange of any such Convertible
Security, provided that, in the cases of (iii) and (iv) above, such
Person does not thereby acquire a greater percentage of Voting
Shares or Convertible Securities so offered than the Person's
percentage of Voting Shares Beneficially Owned immediately prior to
such acquisition;
(ii) "REGISTRATION STATEMENT" means the Corporation's registration
statement filed with the United States Securities and Exchange
Commission dated January 24, 2005;
(jj) "REGULAR PERIODIC CASH DIVIDEND" shall mean cash dividends paid at
regular intervals in any fiscal year of the Corporation to the
extent that such cash dividends do not exceed, in the aggregate, the
greatest of:
(i) 200% of the aggregate amount of cash dividends declared
payable by the Corporation on its Common Shares in its
immediately preceding fiscal year;
(ii) 300% of the arithmetic mean of the aggregate amounts of cash
dividends declared payable by the Corporation on its Common
Shares in its three immediately preceding fiscal years; and
(iii) 100% of the aggregate consolidated net income of the
Corporation, before extraordinary items, for its immediately
preceding fiscal year;
(kk) "RIGHTS" means the rights authorized to be issued by the Board of
Directors and governed by this Agreement;
(ll) "RIGHTS AGENT" means Computershare Investor Services Inc.;
(mm) "RIGHTS CERTIFICATE" shall mean the certificates representing the
rights after the Separation Time, which shall be in the form
attached hereto as Exhibit A;
(nn) "SECURITIES ACT (BRITISH COLUMBIA)" shall mean the Securities Act,
R.S.B.C. 1996, c.418 as amended, and the regulations thereunder, and
any comparable or successor laws or regulations thereto;
(oo) "SECURITIES ACT (ONTARIO)" shall mean the Securities Act, R.S.O.
1990, c.55 as amended, and the regulations thereunder, and any
comparable or successor laws or regulations thereto;
(pp) "SEPARATION TIME" shall mean the Close of Business on the earlier
of:
14
(i) the tenth Business Day after the Stock Acquisition Date; and
(ii) the tenth Business Day after the date of the commencement of,
or first public announcement of the intent of any Person
(other than the Corporation or any Subsidiary of the
Corporation) to commence a Take-over Bid (other than a
Permitted Bid or Competing Permitted Bid so long as such
Take-over Bid continues to satisfy the requirements of a
Permitted Bid or Competing Permitted Bid);
or such later date as may be determined by the Board of Directors
provided that, if the Board of Directors determines pursuant to
Section 5.1 to waive the application of Section 3.1 to a Flip-in
Event, or if any Take-over Bid referred to in paragraph 1.1(pp)(ii)
expires, is cancelled, terminated or otherwise withdrawn prior to
the Separation Time, such offer shall be deemed, for purposes of
this subsection 1.1(pp), never to have been made;
(qq) "SHARES" shall mean shares in the capital of the Corporation;
(rr) "STOCK ACQUISITION DATE" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Sections 101 and 102
of the Securities Act (Ontario), Section 111 of the Securities Act
(British Columbia) or Section 13(d) under the 1934 Exchange Act) by
the Corporation or an Acquiring Person that a Person has become an
Acquiring Person;
(ss) "SUBSIDIARY" of any specified Person shall have the meaning ascribed
thereto in the Business Corporations Act (British Columbia);
(tt) "TAKE-OVER BID" means an Offer to Acquire Voting Shares or
securities convertible into Voting Shares, where the Voting Shares
subject to the Offer to Acquire, together with the Voting Shares
into which the securities subject to the Offer to Acquire are
convertible, and the Offeror's Securities, constitute in the
aggregate 20% or more of the outstanding Voting Shares at the date
of the Offer to Acquire;
(uu) "TERMINATION TIME" shall mean the time at which the right to
exercise Rights shall terminate pursuant to Sections 5.1, 5.16 or
5.17 hereof;
(vv) "TRADING DAY" when used with respect to any securities, shall mean a
day on which the principal securities exchange on which such
securities are listed or posted for trading is open for the
transaction of business or, if the securities are not listed or
posted for trading on any securities exchange, a Business Day;
(ww) "U.S.-CANADIAN EXCHANGE RATE" shall mean on any date:
(i) if on such date the Bank of Canada sets an average noon spot
rate of exchange for the conversion of one United States
dollar into Canadian dollars, such rate; and
15
(ii) in any other case, the rate for such date for the conversion
of one United States dollar into Canadian dollars which is
calculated in the manner which shall be determined by the
Board of Directors of the Corporation from time to time acting
in good faith;
(xx) "U.S. DOLLAR EQUIVALENT" of any amount which is expressed in
Canadian dollars shall mean on any day the United States dollar
equivalent of such amount determined by reference to the U.S. -
Canadian Exchange Rate on such date;
(yy) "VOTING SHARES" shall, when used with reference to the Corporation,
mean collectively the Common Shares of the Corporation, and any
other shares of capital stock of the Corporation to which is
attached a right to vote generally for the election of directors
and, when used with reference to any other Person other than the
Corporation, means a Common Share of such Person and any other share
of capital stock or voting interests of such person entitled to vote
generally for the election of directors. The percentage of Voting
Shares Beneficially Owned by any Person, shall, for the purposes of
this Agreement be and be deemed to be the product determined by the
formula:
100 x A
-
B
where
A = the number of votes for the election of all directors
generally attaching to the Voting Shares Beneficially Owned by
such Person; and
B = the number of votes for the election of all directors
generally attaching to all outstanding Voting Shares;
and where any Person is deemed to Beneficially Own unissued Voting
Shares which may be acquired pursuant to Convertible Securities,
such Voting Shares shall be deemed to be outstanding for the purpose
of calculating the percentage of Voting Shares Beneficially Owned by
such Person, but no other unissued Voting Shares which may be
acquired pursuant to any other outstanding Convertible Securities
shall, for the purposes of the calculation, be deemed to be
outstanding;
(zz) "VOTING SHARE REDUCTION" shall have the meaning attributed thereto
in the definition of Acquiring Person.
1.2 Currency
All sums of money which are referred to in this Agreement are
expressed in lawful money of United States, unless otherwise specified.
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1.3 GRANDFATHER PROVISION
For the purposes of determining whether a Person is an Acquiring
Person and interpreting the definition of Acquiring Person, a Person shall not
be and shall not be deemed to be an Acquiring Person if such Person:
(a) was the Beneficial Owner of 20% or more of the outstanding Voting
Shares of the Corporation determined as at the Record Time;
(b) becomes the Beneficial Owner of 20% or more of the outstanding
Voting Shares of the Corporation after the Record Time and such
Person's Beneficial Ownership of Voting Shares of the Corporation
does not exceed the number of Voting Shares of the Corporation
Beneficially Owned by such Person immediately prior to the Record
Time by more than 2% of the then issued and outstanding Voting
Shares of the Corporation; or
(c) is a person or entity affiliated with Sprout Capital IX, L.P. or
Sprout Entrepreneurs Funds, L.P. or any group of such persons, and
such person, entity or group is the Beneficial Owner of not more
than 25% of the then issued and outstanding Voting Shares of the
Corporation;
provided, however, that this exception shall not be, and shall cease to be,
applicable to a Person in the event that such Person shall, after the Record
Time, become the Beneficial Owner of additional Voting Shares of the Corporation
constituting more than 2% of the Voting Shares of the Corporation then
outstanding other than pursuant to Permitted Bid Acquisitions, through Exempt
Acquisitions, Voting Share Reductions or Pro-rata Acquisitions; and provided
further that, in the event that this exception shall cease to be applicable to a
Person as aforesaid, such a person shall be and shall be deemed to be an
Acquiring Person as at and from the time that this exception shall cease to be
applicable.
1.4 HOLDER
As used in this Agreement, unless the context otherwise requires the
term "HOLDER" when used with reference to Rights, means the registered holder of
such rights or prior to the Separation Time, the Shares with which such Rights
are associated.
1.5 ACTING IN GOOD FAITH
For purposes of this Agreement, when any determination or decision
is made by the Board of Directors pursuant to this Agreement, the Board of
Directors shall exercise its powers and discharge its duties honestly and in
good faith with a view to the best interests of the Corporation and each
director shall exercise the care, diligence and skill that a reasonably prudent
person would exercise in comparable circumstances all in accordance with the
requirements of the Business Corporations Act (British Columbia).
17
1.6 ACTING JOINTLY OR IN CONCERT
For the purposes of this Agreement, a Person is acting jointly or in
concert with every Person who is a party to any agreement, commitment or
understanding, whether formal or informal, with the first Person or any
Associate or Affiliate thereof to acquire or offer to acquire Voting Shares
(other than customary agreements with and between underwriters and/or banking
group members and/or selling group members with respect to a public offering or
private placement of securities or pledges of securities in the ordinary course
of business).
1.7 HEADINGS AND REFERENCES
The headings of the articles, sections and subsections of this
Agreement and the table of contents are inserted for convenience of reference
only and shall not affect the construction or interpretation of this Agreement.
All references to articles, sections, subsections and paragraphs are to
articles, sections, subsections and paragraphs of this Agreement. The words
"HERETO", "HEREIN", "HEREOF", "HEREUNDER", "THIS AGREEMENT", "THE RIGHTS
AGREEMENT" and similar expressions refer to this Agreement including the
schedule attached hereto as a whole, as the same may be amended, modified or
supplemented at any time or from time to time.
1.8 SINGULAR, PLURAL ETC.
In this Agreement, where the context so requires, words importing
the singular number include the plural and vice versa and words importing gender
include the masculine, feminine and neuter genders.
1.9 SCHEDULE
Any schedule attached hereto forms part of this Agreement.
ARTICLE 2 - THE RIGHTS
2.1 LEGEND ON CERTIFICATES
Certificates for the Common Shares, including without limitation,
Common Shares issued upon the conversion of Convertible Securities, issued after
the Record Time but prior to the earlier of the Separation Time and the
Expiration Time shall evidence one Right for each Common Share represented
thereby and shall have impressed on, printed on, typewritten on or otherwise
affixed to them the following legend:
"Until the Separation Time (as defined in the Rights Agreement
referred to below), this certificate also evidences and entitles the
holder hereof to certain Rights as set forth in the Shareholder
Rights Plan Agreement, dated as of the 4th day of February , 2005 as
such may be from time to time amended, restated, varied or replaced,
between Aspreva Pharmaceuticals Corporation (the "CORPORATION") and
Computershare Investor Services Inc., as Rights Agent (the "RIGHTS
AGREEMENT"), the terms of which are
18
hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of the Corporation. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights may be amended or redeemed, may expire, may become void (if,
in certain cases, they are "BENEFICIALLY OWNED" by an "ACQUIRING
PERSON", as such terms are defined in the Rights Agreement) whether
currently held or on behalf or such Person or any subsequent holder
or may be evidenced by separate certificates and may no longer be
evidenced by this certificate. The Corporation will mail or arrange
for the mailing of a copy of the Rights Agreement to the holder of
this certificate without charge within five days after the receipt
of a written request therefor."
Certificates representing Common Shares that are issued and
outstanding at the Record Time shall evidence one Right for each Common Share
evidenced thereby notwithstanding the absence of the foregoing legend until the
earlier of the Separation Time and the Expiration Time.
2.2 INITIAL EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF RIGHTS
(a) Subject to adjustment as herein set forth, each Right will entitle
the holder thereof, from and after the Separation Time and prior to
the Expiration Time, to purchase, for the Exercise Price or its
Canadian Dollar Equivalent as at the Business Day immediately
preceding the day of exercise of the Right, one Common Share.
(b) Until the Separation Time:
(i) no Right may be exercised; and
(ii) each Right will be evidenced by the certificate for the
associated Share (which certificates shall also be deemed to
be Rights Certificates) and will be transferable only together
with, and will be transferred by a transfer of, such
associated Share.
(c) From and after the Separation Time and prior to the Expiration Time,
the Rights:
(i) may be exercised; and
(ii) will be registrable and transferable independent of Shares.
Promptly following the Separation Time the Rights Agent will mail to
each holder of record of Common Shares as of the Separation Time
and, in respect of each Convertible Security converted into Common
Shares after the Separation Time and prior to the Expiration Time
promptly after such conversion to the holder so converting (other
than an Acquiring Person and other than, in respect of any Rights
Beneficially Owned by such Acquiring Person which are not held of
record by such Acquiring Person, the holder of Record of such Rights
(a
19
"NOMINEE")), at such holder's address as shown by the records of the
Corporation (and the Corporation hereby agrees to furnish copies of
such records to the Rights Agent for this purpose),
(A) a Rights Certificate in substantially the form of
Exhibit A hereto appropriately completed, representing
the number of Rights held by such holder at the
Separation Time and having such marks of identification
or designation and such legends, summaries or
endorsements printed thereon as the Corporation may deem
appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any
stock exchange or quotation system on which the Rights
may from time to time be listed or traded, or to conform
to usage, and
(B) a disclosure statement describing the Rights;
provided that a Nominee shall be sent the materials provided for in
(A) and (B) only in respect of all Common Shares held of record by
it which are not Beneficially Owned by an Acquiring Person.
(d) Rights may be exercised in whole or in part on any Business Day
after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent the Rights Certificate evidencing
such Rights with an Election to Exercise (an "ELECTION TO EXERCISE")
substantially in the form attached to the Rights Certificate duly
completed and executed by the holder or its executors or other
personal representatives or its legal attorney duly appointed by an
instrument in writing in form and manner satisfactory to the Rights
Agent, accompanied by payment in cash, or by certified cheque,
banker's draft or money order payable to the order of the
Corporation, of a sum equal to the Exercise Price multiplied by the
number of Rights being exercised and a sum sufficient to cover any
transfer tax or charge which may be payable in respect of any
transfer involved in the transfer or delivery of Rights Certificates
or the issuance or delivery of certificates for the relevant Shares
in a name other than that of the holder of the Rights being
exercised.
(e) Upon receipt of a Rights Certificate, with a duly completed and
executed Election to Exercise accompanied by payment as set forth in
subsection 2.2(d) above, the Rights Agent will (unless otherwise
instructed by the Corporation) forthwith:
(i) requisition from a transfer agent for the relevant Shares,
certificates representing the number of Shares to be purchased
(the Corporation hereby irrevocably authorizing its transfer
agents to comply with all such requisitions);
20
(ii) when appropriate, requisition from the Corporation the amount
of cash to be paid in lieu of issuing fractional Shares;
(iii) after receipt of such certificates, deliver the same to or
upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be
designated by such holder; and
(iv) when appropriate, after receipt, deliver such cash to or to
the order of the registered holder of the Rights Certificate.
(f) In case the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be
issued by the Rights Agent to such holder or to such holder's duly
authorized assigns.
(g) The Corporation covenants and agrees that it will:
(i) take all such action as may be necessary and within its power
to ensure that all Shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such
Shares (subject to payment of the Exercise Price), be duly and
validly authorized, executed, issued and delivered as fully
paid and non-assessable;
(ii) subject to Section 5.19, take all such action as may be
necessary and within its power to comply with any applicable
requirements of the Securities Act (British Columbia) or
comparable legislation of each of the provinces of Canada, the
1933 Securities Act and the 1934 Exchange Act or the rules and
regulations thereunder or any other applicable law, rule or
regulation, in connection with the issuance and delivery of
the Rights Certificates and the issuance of any Shares upon
exercise of Rights;
(iii) use commercially reasonable efforts to cause all Shares issued
upon exercise of Rights to be listed on the principal
exchanges on which the Shares of such class or series were
traded prior to the Stock Acquisition Date; and
(iv) pay when due and payable any and all Canadian and United
States federal, provincial and state transfer taxes (for
greater certainty not including any income taxes on capital
gains of the holder or exercising holder or any liability of
the Corporation to withhold tax) and charges which may be
payable in respect of the original issuance or delivery of the
Rights Certificates or certificates for Shares, provided that
the Corporation shall not be required to pay any transfer tax
or charge which may be payable in respect of any transfer
involved in the transfer or delivery of Rights Certificates or
the issuance or delivery of certificates for Shares in a name
other than that of the holder of the Rights being transferred
or exercised.
21
2.3 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS
The Exercise Price, the number and kind of Shares subject to
purchase upon exercise of each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 2.3.
(a) In the event the Corporation shall at any time after the Record Time
and prior to the Expiration Time:
(i) declare or pay a dividend on the Common Shares payable in
Common Shares (or other securities exchangeable for or
convertible into or giving a right to acquire Common Shares)
other than pursuant to any optional stock dividend program,
dividend reinvestment plan or a dividend payable in Common
Shares in lieu of a Regular Periodic Cash Dividend;
(ii) subdivide or change the then outstanding Common Shares into a
greater number of Common Shares;
(iii) consolidate or change the then outstanding Common Shares into
a smaller number of Common Shares; or
(iv) issue any Common Shares (or other capital stock or securities
exchangeable for or convertible into or giving a right to
acquire Common Shares or other capital stock) in respect of,
in lieu of, or in exchange for existing Common Shares, except
as otherwise provided in this Section 2.3;
the Exercise Price and the number of Rights outstanding, or, if the
payment or effective date therefor shall occur after the Separation
Time, the Shares purchasable upon exercise of Rights shall be
adjusted in the manner set forth below. If the Exercise Price and
number of Rights outstanding are to be adjusted,
(A) the Exercise Price in effect after such adjustment will
be equal to the Exercise Price in effect immediately
prior to such adjustment divided by the number of Common
Shares (or other capital stock) (the "EXPANSION FACTOR")
that a holder of one Common Share immediately prior to
such dividend, subdivision, change, combination or
issuance would hold thereafter as a result thereof, and
(B) each Right held prior to such adjustment will become
that number of Rights equal to the Expansion Factor, and
the adjusted number of Rights will be deemed to be
allocated among the Shares with respect to which the
original Rights were associated (if they remain
outstanding) and the Shares issued in respect of such
dividend, subdivision, change, combination or issuance,
so that each such Share (or other capital stock) will
have exactly one Right associated with it.
22
If the Shares purchasable upon exercise of Rights are to
be adjusted, the Shares purchasable upon exercise of
each Right after such adjustment will be the Shares that
a holder of the Shares purchasable upon exercise of one
Right immediately prior to such dividend, subdivision,
change, combination or issuance would hold thereafter as
a result thereof. If after the Record Time and prior to
the Expiration Time the Corporation shall issue any
shares of capital stock other than Common Shares in a
transaction of a type described in paragraphs 2.3(a)(i)
to (iv), shares of such capital stock shall be treated
herein as nearly equivalent to Common Shares as may be
practicable and appropriate under the circumstances and
the Corporation and the Rights Agent agree to amend this
Agreement in order to effect such treatment, and will
not consolidate with, amalgamate with or into or enter
into a statutory arrangement with, any other Person
unless such Person agrees to be bound by the terms of an
amendment effecting such treatment.
In the event the Corporation shall at any time after the
Record Time and prior to the Separation Time issue any
Common Shares otherwise than in a transaction referred
to in the preceding paragraph, each such Common Share so
issued shall automatically have one new Right associated
with it, which Right shall be evidenced by the
Certificate representing such Share.
(b) In the event the Corporation shall at any time after the
Record Time and prior to the Separation Time fix a
record date for the making of a distribution to all
holders of Common Shares of rights, options, or warrants
entitling them (for a period expiring within 45 calendar
days after such record date) to subscribe for or
purchase Common Shares (or securities convertible into
or exchangeable for or carrying a right to purchase or
subscribe for Common Shares) at a price per Common Share
(or, if a security convertible into or exchangeable for
or carrying a right to purchase or subscribe for Common
Shares, having a conversion, exchange or exercise price
(including the price required to be paid to purchase
such convertible or exchangeable security or right per
share)) less than the Market Price per Common Share on
such record date, the Exercise Price shall be adjusted.
The Exercise Price in effect after such record date will
equal the Exercise Price in effect immediately prior to
such record date multiplied by a fraction, of which the
numerator shall be the number of Common Shares
outstanding on such record date plus the number of
Common Shares which the aggregate offering price of the
total number of Common Shares so to be offered (and/or
the aggregate initial conversion, exchange or exercise
price of the convertible or exchangeable securities or
rights so to be offered (including the price required to
be paid to purchase such convertible or exchangeable
securities or rights)) would purchase at such Market
Price and of which the denominator shall be the number
of Common Shares outstanding on such record date plus
the number of additional Common Shares to be offered for
subscription or purchase (or into which the convertible
or exchangeable securities or rights so to be offered
are initially convertible, exchangeable or exercisable).
In case such subscription price may be paid in a
consideration part or all of which shall be in a form
other than cash, the value of such consideration shall
be as determined in good faith by the Board of Directors
of the Corporation, whose determination shall be
described
23
in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the
Rights. For purposes of this Agreement, the granting of
the right to purchase Common Shares (whether from
treasury shares or otherwise) pursuant to any dividend
or interest reinvestment plan and/or any Common Share
purchase plan providing for the reinvestment of
dividends or interest payable on securities of the
Corporation and/or the investment of periodic optional
payments and/or employee benefit or similar plans (so
long as such right to purchase is in no case evidenced
by the delivery of rights or warrants) shall not be
deemed to constitute an issue of rights, options or
warrants by the Corporation; provided, however, that, in
the case of any dividend or interest reinvestment plan,
the right to purchase Common Shares is at a price per
share of not less than 90 percent of the current market
price per Common Share (determined as provided in such
plans) of the Common Shares. Such adjustment shall be
made successively whenever such a record date is fixed
and, in the event that such rights, options or warrants
are not so issued, the Exercise Price in respect of the
Rights shall be adjusted to be the Exercise Price which
would then be in effect if such record date had not been
fixed.
(c) In the event the Corporation shall at any time after the
Record Time and prior to the Separation Time fix a
record date for the making of a distribution to all
holders of Common Shares (including without limitation
any distribution made in connection with a merger in
which the Corporation is the continuing corporation) of
evidences of indebtedness or assets (other than a
Regular Periodic Cash Dividend or a dividend paid in
Common Shares) or rights, options or warrants entitling
them to subscribe for or purchase Common Shares (or
Convertible Securities in respect of Common Shares) at a
price per Common Share (or, in the case of a Convertible
Security in respect of Common Shares having a conversion
or exercise price per share (including the price
required to be paid to purchase such Convertible
Security) less than 90% of the Market Price per Common
Share on such record date (excluding those referred to
in subsection 2.3(b)), the Exercise Price shall be
adjusted. The Exercise Price in effect after such record
date will equal the Exercise Price in effect immediately
prior to such record date less the fair market value as
shall be determined in good faith by the Board of
Directors of the Corporation, whose determination shall
be described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and the holders
of the Rights, of the portion of the assets, evidences
of indebtedness, rights or warrants so to be distributed
applicable to the securities purchaseable upon exercise
of one Right. Such adjustments shall be made
successively whenever such a record date is fixed and,
in the event that such distribution is not so made, the
Exercise Price in respect of the Rights shall be
adjusted to be the Exercise Price in respect of the
Rights which would have been in effect if such record
date had not been fixed.
24
(d) Each adjustment made pursuant to this Section 2.3 shall
be made as of:
(i) the payment or effective date for the applicable
dividend, subdivision, consolidation, change,
combination or issuance, in the case of an
adjustment made pursuant to subsection 2.3(a)
herein; and
(ii) the record date for the applicable dividend or
distribution, in the case of an adjustment made
pursuant to subsections 2.3(b) or (c) herein.
Any adjustment pursuant to subsections 2.3(a), (b), (c)
and (e) hereof shall be made successively whenever an
event referred to herein shall occur, subject to the
other subsections of this Section 2.3.
(e) In the event the Corporation shall at any time after the
Record Time and prior to the Separation Time issue any
Shares (other than Common Shares), or rights, options or
warrants to subscribe for or purchase any such shares,
or securities convertible into or exchangeable for any
such shares, in a transaction referred to in paragraphs
2.3(a)(i) or (iv) above, if the Board of Directors of
the Corporation acting in good faith determines that the
adjustments contemplated by subsections 2.3(a), (b), and
(c) above in connection with such transaction will not
appropriately protect the interests of the holders of
Rights, the Board of Directors of the Corporation may
determine what other adjustments to the Exercise Price,
number of Rights and/or securities purchaseable upon
exercise of Rights would be appropriate and,
notwithstanding subsections 2.3(a), (b), and (c) above,
such adjustments, rather than the adjustments
contemplated by subsections 2.3(a), (b), and (c) above,
shall be made with the prior approval of the holders of
shares in accordance with Section 5.4. The Corporation
and the Rights Agent shall amend this Agreement as
appropriate to provide for such adjustments.
(f) Notwithstanding anything herein to the contrary, no
adjustment in an Exercise Price shall be required unless
such adjustment would require an increase or decrease of
at least one percent in such Exercise Price; provided,
however, that any adjustments which by reason of this
subsection 2.3(f) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment. Each adjustment to the Exercise Price made
pursuant to this Section 2.3 shall be calculated to the
nearest cent or the nearest ten-thousandth of a Common
Share or other Share as the case may be. Whenever an
adjustment to the Exercise Price is made pursuant to
this Section 2.3, the Corporation shall:
(i) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts
accounting for such adjustment; and
(ii) promptly file with the Rights Agent and with each
transfer agent for the Common Shares a copy of
such certificate and a brief summary thereof to
each holder of Rights.
(g) Irrespective of any adjustment or change in an Exercise
Price or the number of securities purchaseable upon
exercise of the Rights, the Rights Certificates
25
theretofore and thereafter issued may continue to
express the relevant Exercise Price per Share and the
number of securities so purchaseable which were
expressed in the initial Rights Certificates issued
hereunder.
(h) If as a result of an adjustment made pursuant to Section
3.1 herein, the holder of any Right thereafter exercised
shall become entitled to receive any Shares other than
Common Shares, thereafter the number of such other
Shares so receivable upon exercise of any Right and the
applicable Exercise Price thereof shall be subject to
adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with
respect to the Common Shares contained in this Section
2.3, and the provisions of this Agreement with respect
to the Common Shares shall apply on like terms to any
such other Shares.
(i) Unless the Corporation shall have exercised its election
as provided in subsection 2.3(j), upon each adjustment
of an Exercise Price as a result of the calculations
made in subsections 2.3(b) and (c), each Right
outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of
Common Shares (calculated to the nearest one
ten-thousandth), obtained by:
(i) multiplying (x) the number of such Shares covered
by a Right immediately prior to this adjustment by
(y) the relevant Exercise Price in effect
immediately prior to such adjustment of the
relevant Exercise Price; and
(ii) dividing the product so obtained by the relevant
Exercise Price in effect immediately after such
adjustment of the relevant Exercise Price.
(j) The Corporation may elect on or after the date of any
adjustment of an Exercise Price to adjust the number of
Rights, in lieu of any adjustment in the number of
Shares purchaseable upon the exercise of a Right. Each
of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number and
kind of Shares for which such Right was exercisable
immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the
nearest one ten-thousandth) obtained by dividing the
relevant Exercise Price in effect immediately prior to
adjustment of the relevant Exercise Price by the
relevant Exercise Price in effect immediately after
adjustment of the relevant Exercise Price. The
Corporation shall make a public announcement of its
election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This
record date may be the date on which the relevant
Exercise Price is adjusted or any day thereafter but, if
the Rights Certificates have been issued, shall be at
least 10 days later than the date of the public
announcement. If Rights Certificates have been issued,
upon each adjustment of the number of Rights pursuant to
this subsection 2.3(j), the Corporation shall, as
promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record
date, Rights Certificates evidencing,
26
subject to Section 5.5, the additional Rights to which such holders
shall be entitled as a result of such adjustment or, at the option
of the Corporation, shall cause to be distributed to such holders of
record in substitution and replacement for the Rights Certificates
held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Corporation, new Rights
Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the
manner provided for herein and may bear, at the option of the
Corporation, the relevant adjusted Exercise Price and shall be
registered in the names of holders of record of Rights Certificates
on the record date specified in the public announcement.
(k) In any case in which this Section 2.3 shall require that an
adjustment in an Exercise Price be made effective as of a record
date for a specified event, the Corporation may elect to defer until
the occurrence of such event the issuance to the holder of any Right
exercised after such record date of the number of Shares and other
securities of the Corporation, if any, issuable upon such existence
over and above the number of Shares and other securities of the
Corporation, if any, issuable upon such exercise on the basis of the
relevant Exercise Price in effect prior to such adjustment;
provided, however, that the Corporation shall deliver to such holder
a due bill or other appropriate instrument evidencing such holder's
right to receive such additional Shares (fractional or otherwise) or
other securities upon the occurrence of the event requiring such
adjustment.
(l) Notwithstanding anything in this Section 2.3 to the
contrary, the Corporation shall be entitled to make such reductions
in each Exercise Price, in addition to those adjustments expressly
required by this Section 2.3, as and to the extent that in their
good faith judgment the Board of Directors of the Corporation shall
determine to be advisable in order that any (i) consolidation or
subdivision of Shares, (ii) issuance wholly for cash of any Shares
at less than the applicable Market Price, (iii) issuance wholly for
cash of any Common Shares or securities that by their terms are
convertible into or exchangeable for Shares, (iv) stock dividends or
(v) issuance of rights, options or warrants referred to in this
Section 2.3, hereafter made by the Corporation to holders of its
Shares, shall not be taxable to such shareholders.
2.4 DATE ON WHICH EXERCISE IS EFFECTIVE
Each person in whose name any certificate for Shares is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Shares represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered (together with a duly completed Election to
Exercise) and payment of the Exercise Price for such Rights (and any applicable
transfer taxes and other governmental charges payable by the exercising holder
hereunder) was made; provided, however, that if the date of such surrender and
payment is a date upon which the relevant Share transfer books of the
Corporation are closed, such person shall be deemed to have become the record
holder of such Shares on, and such certificate shall be dated, the next
27
succeeding Business Day on which the relevant Share transfer books of the
Corporation are open.
2.5 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS
CERTIFICATES
(a) The Rights Certificates shall be executed on behalf of the
Corporation by any one of its directors or officers, under its
corporate seal reproduced thereon attested by its Secretary or one
of its Assistant Secretaries. The signature of any of these officers
on the Rights Certificates may be manual or facsimile.
(b) Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper directors or officers of
the Corporation shall bind the Corporation, notwithstanding that
such individuals or any of them have ceased to hold such offices
prior to the countersignature and delivery of such Rights
Certificates.
(c) Promptly after the Corporation learns of the Separation Time, the
Corporation will notify the Rights Agent of such Separation Time and
will deliver Rights Certificates executed by the Corporation to the
Rights Agent for countersignature, and the Rights Agent shall
countersign (manually or by facsimile signature in a manner
satisfactory to the Corporation) and deliver such Rights
Certificates to the holders of the Rights pursuant to subsection
2.2(c) hereof. No Rights Certificate shall be valid for any purpose
until countersigned by the Rights Agent as aforesaid.
(d) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.6 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE
(a) The Corporation will cause to be kept a register (the "RIGHTS
REGISTER") in which, subject to such reasonable regulations as it
may prescribe, the Corporation will provide for the registration and
transfer of Rights. The Rights Agent is hereby appointed "RIGHTS
REGISTRAR" for the purpose of maintaining the Rights Register for
the Corporation and registering Rights and transfers of Rights as
herein provided. In the event that the Rights Agent shall cease to
be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of subsection 2.6(c)
below, the Corporation will execute, and the Rights Agent will
countersign and deliver, in the name of the holder or the designated
transferee or transferees, as required pursuant to the holder's
instructions, one or more new Rights Certificates evidencing the
same aggregate number of Rights as did the Rights Certificates so
surrendered.
(b) All Rights issued upon any registration of transfer or exchange of
Rights Certificates shall be valid obligations of the Corporation,
and such Rights shall be
28
entitled to the same benefits under this Agreement as the Rights
surrendered upon such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Corporation or
the Rights Agent, as the case may be, duly executed by the holder
thereof or such holder's attorney duly authorized in writing. As a
condition to the issuance of any new Rights Certificate under this
Section 2.6, the Corporation may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the
fees and expenses of the Rights Agent) in connection therewith.
(d) The Corporation shall not be required to register the transfer or
exchange of any Rights after the Rights have been terminated under
Section 5.1 hereof.
2.7 MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES
(a) If any mutilated Rights Certificate is surrendered to the Rights
Agent prior to the Expiration Time, the Corporation shall execute
and the Rights Agent shall countersign and deliver in exchange
therefor a new Rights Certificate evidencing the same number of
Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Corporation and the Rights Agent
prior to the Expiration Time:
(i) evidence to their satisfaction of the destruction, loss or
theft of any Rights Certificate; and
(ii) such security or indemnity as may be required by them to save
each of them and any of the agents harmless,
then, in the absence of notice to the Corporation or the Rights
Agent that such Rights Certificate has been acquired by a bona fide
purchaser, the Corporation shall execute and upon its request the
Rights Agent shall countersign and deliver, in lieu of any such
destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights
Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.7, the Corporation may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the
fees and expenses of the Rights Agent) in connection therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.7 in
lieu of any destroyed, lost or stolen Rights Certificate shall
evidence an original additional contractual obligation of the
Corporation, whether or not the destroyed, lost or
29
stolen Rights Certificate shall be at any time enforceable by anyone
and shall be entitled to all the benefits of this Agreement equally
and proportionately with any and all other Rights duly issued
hereunder.
2.8 PERSONS DEEMED OWNERS
Prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Share certificate) for registration of transfer,
the Corporation, the Rights Agent and any agent of the Corporation or the Rights
Agent may deem and treat the person in whose name such Rights Certificate (or,
prior to the Separation Time, such relevant Share certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby for all purposes
whatsoever. As used in this Agreement, unless the context otherwise requires,
the term "HOLDER" of any Rights shall mean the registered holder of such Rights
(or, prior to the Separation Time, the associated Shares).
2.9 DELIVERY AND CANCELLATION OF CERTIFICATES
All Rights Certificates surrendered upon exercise or for redemption,
registration of transfer or exchange shall, if surrendered to any person other
than the Rights Agent, be delivered to the Rights Agent and, in any case, shall
be promptly cancelled by the Rights Agent. The Corporation may at any time
deliver to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Corporation may have acquired in
any manner whatsoever, and all Rights Certificates so delivered shall be
promptly cancelled by the Rights Agent. No Rights Certificate shall be
countersigned in lieu of or in exchange for any Rights Certificates cancelled as
provided in this Section 2.9, except as expressly permitted by this Agreement.
The Rights Agent shall destroy all cancelled Rights Certificates and deliver a
certificate of destruction to the Corporation.
2.10 AGREEMENT OF RIGHTS HOLDERS
Every holder of Rights by accepting a Right consents and agrees with
the Corporation and the Rights Agent and with every other holder of Rights that:
(a) it will be bound by and subject to the provisions of this Agreement,
as amended from time to time in accordance with the terms hereof, in
respect of all Rights held;
(b) prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the
associated Share;
(c) after the Separation Time, the Rights Certificates shall be
transferable only upon the registration of the transfer on the
Rights Register as provided herein;
(d) prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Share certificate) for registration
of transfer, the Corporation, the Rights Agent and any agent of the
Corporation or the Rights Agent may deem and treat the person in
whose name the Rights Certificate (or, prior to the Separation Time,
the associated Share certificate) is registered as the absolute
owner thereof
30
and of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on such Rights Certificate or the associated
Share certificate made by anyone other than the Corporation or the
Rights Agent) for all purposes whatsoever, and neither the
Corporation nor the Rights Agent shall be affected by any notice to
the contrary;
(e) without the approval of any holder of Rights and upon the sole
authority of the Board of Directors of the Corporation acting in
good faith this Agreement may be supplemented or amended from time
to time as provided herein;
(f) such holder of Rights has waived its right to receive any fractional
Rights or any fractional shares upon exercise of a Right (except as
provided herein); and
(g) that notwithstanding anything in this Agreement to the contrary,
neither the Corporation nor the Rights Agent shall have any
liability to any holder of a Right or to any other Person as a
result of its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a government, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation.
2.11 RIGHTS HELD BY THE CORPORATION AND SUBSIDIARIES
Notwithstanding any other provision of this Agreement, any Rights
held by the Corporation or any of its Subsidiaries shall not be exercisable for
so long as they are held by the Corporation or its Subsidiaries.
ARTICLE 3 - ADJUSTMENTS TO THE RIGHTS IN THE
EVENT OF CERTAIN TRANSACTIONS
3.1 FLIP-IN EVENT
(a) Subject to subsection 3.1(b), subsections 5.1(b) and 5.1(c) hereof,
in the event that prior to the Expiration Time a Flip-in Event shall
occur, the Corporation shall take such action as shall be necessary
to ensure and provide, within 10 Business Days of such occurrence or
such longer period as may be required to satisfy the requirements of
the securities acts or comparable legislation of each of the
Provinces and Territories of Canada then, except as provided below:
(i) each Right shall thereafter constitute the right to purchase
from the Corporation upon exercise thereof in accordance with
the terms hereof, that number of Common Shares of the
Corporation having an aggregate Market Price on the date of
consummation or occurrence of such Flip-in Event equal to
twice the Exercise Price for an amount in cash equal to the
Exercise Price (such right to be appropriately adjusted in a
manner analogous to the applicable adjustment provided for in
Section 2.3 in the event that after such date of consummation
or occurrence an event of a
31
type analogous to any of the events described in Section 2.3
shall have occurred);
(ii) in the event that there are insufficient authorized but
unissued Shares to permit each holder of a Right (other than
an Acquiring Person or a transferee of the kind described in
paragraph 3.1(b)(ii) to purchase from the Corporation that
number of Common Shares per Right provided for in paragraph
3.1(a)(i), then until such time as holders of Common Shares
approve an increase in the Corporation's authorized capital
such that there are sufficient authorized but unissued Common
Shares to permit each holder of a Right (other than an
Acquiring Person or a transferee of the kind described in
paragraph 3.1(b)(ii) to purchase from the Corporation that
number of Common Shares per Right provided for in paragraph
3.1(a)(i), each whole Right shall constitute, effective at the
Close of Business on the eighth Trading Day after the Stock
Acquisition Date, the right to purchase from the Corporation,
upon exercise thereof in accordance with the terms hereof,
that number of Common Shares that is equal to one Common Share
multiplied by the Adjustment Factor for an amount in cash
equal to the Adjusted Exercise Price (such right to be
appropriately adjusted in a manner analogous to the applicable
adjustment provided for in Section 2.3 in the event that after
the consummation or occurrence or event, an event of a type
analogous to any of the events described in Section 2.3 shall
have occurred).
(b) Notwithstanding the foregoing, upon the occurrence of any Flip-in
Event, any Rights that are or were Beneficially Owned on or after
the earlier of the Separation Time or the Stock Acquisition Date by:
(i) an Acquiring Person (or any Affiliate or Associate of an
Acquiring Person or any Person acting jointly or in concert
with an Acquiring Person of any Associate or Affiliate of an
Acquiring Person); or
(ii) a transferee or other successor in title directly or
indirectly (a "TRANSFEREE") of Rights held by any Acquiring
Person (or any Affiliate or Associate of an Acquiring Person
or any Person acting jointly or in concert with an Acquiring
Person or any Affiliate or Associate of an Acquiring Person)
where such transferee becomes a transferee concurrently with
or subsequent to the Acquiring Person becoming an Acquiring
Person becoming such in a transfer that the Board of Directors
has determined is part of a plan, arrangement or scheme of an
Acquiring Person (or any Affiliate or Associate of an
Acquiring Person or any Person acting jointly or in concert
with an Acquiring Person or any Associate or Affiliate of an
Acquiring Person), that has the purpose or effect of avoiding
paragraph 3.1(b)(i);
shall become void and any holder of such Rights (including
Transferees) shall thereafter have no right to exercise such Rights
under any provision of this
32
Agreement and shall not have thereafter any other rights whatsoever
with respect to such Rights, whether under any provision of this
Agreement or otherwise.
(c) Any Rights Certificate that represents Rights Beneficially Owned by
a Person described in either paragraphs (i) or (ii) of subsection
3.1(b) or transferred to any nominee of any such Person, and any
Rights Certificate issued upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this
sentence, shall contain the following legend:
"The Rights represented by this Rights Certificate were issued
to a Person who was an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person or a Transferee (as such
terms are defined in the Rights Agreement) or acting jointly
or in concert with any of them. This Rights Certificate and
the Rights represented hereby are void or shall become void in
the circumstances specified in subsection 3.1(b) of the Rights
Agreement."
provided that the Rights Agent shall not be under any responsibility
to ascertain the existence of facts that would require the
imposition of such legend by shall be required to impose such legend
only if instructed to do so by the Corporation or if a holder fails
to certify upon transfer or exchange in the space provided on the
Rights Certificate that such holder is not an Acquiring Person or an
Affiliate or Associate thereof or acting jointly or in concert with
any of them.
ARTICLE 4 - THE RIGHTS AGENT
4.1 GENERAL
(a) The Corporation hereby appoints the Rights Agent to act as agent for
the Corporation and the holders of Rights in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Corporation may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable. In the event
the Corporation appoints one or more co-Rights Agents, the
respective duties of the Rights Agent and co-Rights Agents shall be
as the Corporation may determine. The Corporation agrees to pay to
the Rights Agent reasonable compensation for all services rendered
by it hereunder and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder.
The Corporation also agrees to indemnify the Rights Agent, its
affiliates, their current and former directors, officers, employees
and agents for, and to hold them harmless against, any and all
claims, demands, losses, penalties, costs, expenses, fees and
liabilities, including without limitation, legal fees and expenses,
directly or indirectly arising out of, or in connection with, or in
respect of, this Agreement,
33
except where same results from gross negligence, wilful misconduct
or bad faith on the part of the Rights Agent, which right to
indemnification shall survive the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance
upon any certificate for Shares, Rights Certificates, certificate
for other securities of the Corporation, instrument of assignment of
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to be signed, executed
and, where necessary, verified or acknowledged, by the proper Person
or Persons.
4.2 MERGER, AMALGAMATION OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or amalgamated or with which it may be
consolidated, or any corporation resulting from any merger,
amalgamation or consolidation to which the Rights Agent or any
successor Rights Agent is a party, or any corporation succeeding to
the shareholder or stockholder services business of the Rights Agent
or any successor Rights Agent, will be the successor to the Rights
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as
a successor Rights Agent under the provisions of Section 4.4 hereof.
In case at the time such successor Rights Agent succeeds to the
agency created by this Agreement any of the Rights Certificates have
been countersigned but not delivered, any such successor Rights
Agent may adopt the counter signature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such
Rights Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates will have the full force provided in
the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior
name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
34
4.3 DUTIES OF RIGHTS AGENT
The Rights Agent undertakes the duties and obligations imposed by
this Agreement upon the following terms and conditions, by all of which the
Corporation, and the holders of Rights Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may retain and consult with legal counsel (who may
be legal counsel for the Corporation), and the opinion of such
counsel will be full and complete authorization and protection to
the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion and the Rights Agent may
also consult with such other experts as the Rights Agent shall
consider necessary or appropriate to properly carry out the duties
and obligations imposed under this Agreement (at the Corporation's
expense) and the Rights Agent shall be entitled to act and rely in
good faith on the advice of any such expert.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent deems it necessary or desirable that any fact or matter
be proved or established by the Corporation prior to taking or
suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate
signed by a person believed by the Rights Agent to be the Chairman
of the Board, the President or any Vice President and by the
Treasurer or any Assistant Treasurer or the Secretary or any
Assistant Secretary of the Corporation and delivered to the Rights
Agent; and such certificate will be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall not be liable for any action taken or not
taken by the Rights Agent under or in connection with this
Agreement, except for losses arising directly and principally from
its gross negligence, wilful misconduct or bad faith.
Notwithstanding any other provision of this Agreement, and whether
such losses or damages are foreseeable or unforeseeable, the Rights
Agent shall not be liable under any circumstances whatsoever for any
(a) breach by any other party of securities law or other rule of any
securities regulatory authority, (b) lost profits or (c) special,
indirect, incidental, consequential, exemplary, aggravated or
punitive losses or damages.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for Shares or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but all
such statements and recitals are and will be deemed to have been
made by the Corporation only.
(e) The Rights Agent will not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any
Share certificate or Rights Certificate (except its
35
countersignature thereof); nor will it be responsible for any breach
by the Corporation of any covenant or condition contained in this
Agreement or in any Rights Certificate; nor will it be responsible
for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to subsection 3.1(b) hereof) or any
adjustment required under the provisions of Section 2.3 hereof or
responsible for the manner, method or amount of any such adjustment
or the ascertainment of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights
after receipt of the certificate contemplated by Section 2.3
describing any such adjustment); nor will it by any act hereunder be
deemed to make any representation or warranty as to the
authorization of any Share to be issued pursuant to this Agreement
or any Rights or as to whether any Shares will, when issued, be duly
and validly authorized, executed, issued and delivered as fully paid
and nonassessable.
(f) The Corporation agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the
carrying out or performance by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
from any person believed by the Rights Agent to be the Chairman of
the Board, the President, any Vice President, the Secretary or any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the
Corporation, and to apply to such persons for advice or instructions
in connection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance with
instructions of any such person.
(h) The Rights Agent and any shareholder or stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
Shares, Rights or other securities of the Corporation or become
pecuniarily interested in any transaction in which the Corporation
may be interested, or contract with or lend money to the Corporation
or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Corporation or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights
Agent will not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any
loss to the Corporation resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised by the
Rights Agent in the selection and continued employment thereof.
36
4.4 CHANGE OF RIGHTS AGENT
The Rights Agent may resign and be discharged from its duties under
this Agreement upon 90 days' notice (or such lesser notice as is acceptable to
the Corporation) in writing mailed to the Corporation and to each transfer agent
of Shares by registered or certified mail in accordance with Section 5.9. The
Corporation may remove the Rights Agent upon 30 days' notice in writing, mailed
to the Rights Agent and to each transfer agent of the Shares by registered or
certified mail, and to the holders of the Rights in accordance with Section 5.9.
If the Rights Agent should resign or be removed or otherwise become incapable of
acting, the Corporation will appoint a successor to the Rights Agent. If the
Corporation fails to make such appointment within a period of 30 days after such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of
any Rights (which holder shall, with such notice, submit such holder's Rights
Certificate for inspection by the Corporation), then the holder of any Rights
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Corporation
or by such a court, shall be a corporation incorporated under the laws of Canada
or a province thereof authorized to carry on the business of a trust company in
the Province of British Columbia. After appointment, the successor Rights Agent
will be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Corporation will file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Shares, and mail a notice thereof in writing to the holders of the
Rights in accordance with Section 5.9. Failure to give any notice provided for
in this Section 4.4, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the
appointment of any successor Rights Agent, as the case may be.
ARTICLE 5 - MISCELLANEOUS
5.1 REDEMPTION AND WAIVER
(a) The Board of Directors acting in good faith may, at its option, at
any time prior to the Separation Time elect to redeem all but not
less than all of the then outstanding Rights at a redemption price
of $0.001 per Right appropriately adjusted in a manner analogous to
the applicable adjustment provided for in Section 2.3 herein if an
event of the type analogous to any of the events described in
Section 2.3 herein shall have occurred (such redemption price being
herein referred to as the "Redemption Price"). The redemption of the
Rights by the Board of Directors may be made effective at such time,
on such basis and with such conditions as the Board of Directors in
its sole discretion may establish.
(b) The Board of Directors may, until the expiration of 10 Business Days
following the occurrence of a Flip-in Event, upon written notice
delivered to the Rights Agent, waive the application of Section 3.1
to any particular Flip-in Event.
37
(c) Notwithstanding the provisions of subsection 5.1(b) herein, the
Board of Directors may waive the application of Section 3.1 herein
to any particular Flip-in Event, provided that both of the following
conditions are satisfied:
(i) the Board of Directors has determined that the Acquiring
Person became an Acquiring Person by inadvertence and without
any intent or knowledge that he would become an Acquiring
Person; and
(ii) such Acquiring Person has reduced its Beneficial Ownership of
Voting Shares such that at the time of waiver pursuant to this
subsection 5.1(c) herein it is no longer an Acquiring Person;
and, in the event of any such waiver, for the purposes of this
Agreement, such Flip-in Event shall be deemed not to have occurred
as a result of such Person having inadvertently become an acquiring
Person.
(d) The Board of Directors shall, without further formality, be deemed
to have elected to redeem the Rights at the Redemption Price on the
date of expiry of a Permitted Bid or a Competing Permitted Bid,
provided that the Offeror takes up and pays for the Voting Shares
pursuant to the terms and conditions of the Permitted Bid or
Competing Permitted Bid.
(e) If the Board of Directors elects or is deemed to have elected to
redeem the Rights, the right to exercise the Rights will thereupon,
without further action and without notice, terminate and the only
right thereafter of the holders of Rights, as such, shall be to
receive the Redemption Price.
(f) Within 10 days after the Board of Directors has elected or been
deemed to have elected to redeem the Rights, the Corporation shall
give notice of redemption to the holders of the then outstanding
Rights by mailing such notice to each such holder at his last
address as it appears upon the registry books of the Rights Agent
or, prior to the Separation Time, on the registry books of the
Transfer Agent for the Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price will
be made. The Corporation may not redeem, acquire or purchase for
value any Rights at any time in any manner other than that
specifically set forth in this Section 5.1, and other than in
connection with the purchase of Shares prior to the Separation Time.
5.2 EXPIRATION
No Person shall have any rights pursuant to this Agreement or in
respect of any Right after the Expiration Time, except the Rights Agent as
specified in subsection 4.1(a) herein.
38
5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Corporation may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by the Board of
Directors to reflect any adjustment or change in the number or kind or class of
Shares purchasable upon exercise of Rights made in accordance with the
provisions of this Agreement.
5.4 SUPPLEMENTS AND AMENDMENTS
Subject in each case to the Corporation having obtained the prior
written consent of The Toronto Stock Exchange, the Corporation may from time to
time supplement or amend this Agreement as follows:
(a) to make any changes or amendments required hereunder or otherwise
which the Board of Directors acting in good faith may deem necessary
or desirable, including without limitation amend the Exercise Price,
provided that no such supplement or amendment made on or after the
Stock Acquisition Date shall materially adversely affect the
interest of the holders of Rights generally and provided further
that no such supplement or amendment shall be made to the provisions
of Article 4 except with the written concurrence of the Rights Agent
to such supplement or amendment; or
(b) in order to cure any ambiguity or to correct or supplement any
provision contained herein which may be inconsistent with any other
provision herein or be otherwise defective, provided the no such
amendment or supplement shall be made to the provisions of Article 4
except with the written concurrence of the Rights Agent to such
amendment or supplement.
5.5 FRACTIONAL RIGHTS AND FRACTIONAL SHARES
(a) The Corporation shall not be required to issue fractions of Rights
or to distribute Rights Certificates which evidence fractional
Rights. After the Separation Time there shall be paid to the
registered holders of the Rights Certificates with regard to which
fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the Market Price of a whole Right in
lieu of such Fractional Rights.
(b) The Corporation shall not be required to issue fractional Shares
upon exercise of the Rights or to distribute certificates which
evidence fractional Shares. In lieu of issuing fractional Shares,
the Corporation shall pay to the registered holder of Rights
Certificates at the time such Rights are exercised as herein
provided, an amount in cash equal to the same fraction of the Market
Price of one whole Share.
5.6 RIGHTS OF ACTION
Subject to the terms of this Agreement, all rights of action in
respect to this Agreement, other than rights of action vested solely in the
Rights Agent, are vested in the
39
respective holders of the Rights and any holder of any Rights, without the
consent of the Rights Agent or of the holder of any other Rights, may, on such
holder's own behalf and for such holder's own benefit and the benefit of other
holders of Rights, as the case may be, enforce, and may institute and maintain
any suit, action or proceeding against the Corporation to enforce, or otherwise
act in respect of such holder's right to exercise such holder's Rights, or
Rights to which it is entitled, in the manner provided in this Agreement, and in
such holder's Rights Certificate. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for any breach of
this Agreement and will be entitled to specific performance of and injunctive
relief against actual or threatened violations of, the obligations of any Person
subject to this Agreement.
5.7 HOLDER OF RIGHTS NOT DEEMED A SHAREHOLDER
No holder, as such, of any Right or Rights Certificate, shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of
Shares or any other securities which may at any time be issuable on the exercise
of Rights, nor shall anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Right or Rights Certificate, as such,
any of the rights of a shareholder of the Corporation or any right to vote at
any meeting of shareholders of the Corporation whether for the election of
directors or otherwise or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
expressly provided herein), or to receive dividends or subscription rights or
otherwise, until such Rights, or Rights to which such holder is entitled, shall
have been exercised in accordance with the provisions hereof.
5.8 NOTICE OF PROPOSED ACTIONS
In case the Corporation shall propose after the Separation Time and
prior to the Expiration Time:
(a) to effect or permit (in cases where the Corporation's permission is
required) any Flip-in Event; or
(b) to effect the liquidation, dissolution or winding up of the
Corporation or the sale of all or substantially all of the
Corporation's assets;
then, in each such case, the Corporation shall give to each holder of a Right,
in accordance with Section 5.9 herein, a notice of such proposed action, which
shall specify the date on which such Flip-in Event, liquidation, dissolution, or
winding up is to take place, and such notice shall be so given at least 20
Business Days prior to the date of the taking of such proposed action by the
Corporation.
5.9 NOTICES
Any Notice or other communication authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Corporation
40
shall be delivered, telecopied or sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
Aspreva Pharmaceuticals Corporation
1203, 4464 Markham Street
Victoria, British Columbia
V8Z 7X8
Attention: Corporate Secretary
Telecopier: 250 744-2498
Any notice or other communication authorized or required by this Agreement to be
given or made by the Corporation or by the holder of any Rights to or on the
Rights Agent shall be delivered, telecopied or sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the
Corporation) as follows:
Computershare Investor Services Inc.
510 Burrard Street
Vancouver, British Columbia
V6C 3B9
Attention: Manager, Client Services
Telecopier: (604) 604 661 9549
Any Notices or other communication authorized or required by this Agreement to
be given or made by the Corporation or the Rights Agent to or on the holder of
any Rights, shall be delivered or sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as it appears upon the
registry books of the Rights Agent or, prior to the Separation Time, on the
registry books of the Corporation for the Common Shares.
Any notice which is delivered or telecopied herewith shall be deemed to have
been given and received on the business day next following the date of delivery
or telecopying, as the case may be. Any notice mailed as aforesaid shall be
deemed to have been given and received on the third business day following the
date it is posted, provided that if between the time of mailing and actual
receipt of the notice there shall be mail strike, slow-down or other labour
dispute which might affect delivery of the notice by mail, then the notice shall
be effective only when actually delivered.
5.10 COSTS OF ENFORCEMENT
The Corporation agrees that if the Corporation or any other Person
the securities of which are purchasable upon exercise of Rights fails to fulfil
any of its obligations pursuant to this Agreement, then the Corporation or such
Person will reimburse the holder of any Rights for the costs and expenses
(including legal fees) incurred by such holder in actions to enforce its rights
pursuant to any Rights or this Agreement.
41
5.11 SUCCESSORS
All the covenants and provisions of this Agreement by or for the
benefit of the Corporation or the Rights Agent shall bind and enure to the
benefit of their respective successors and assigns hereunder.
5.12 BENEFITS OF THIS AGREEMENT
Nothing in this Agreement shall be construed to give to any Person
other than the Corporation, the Rights Agent and the holders of the Rights any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Corporation, the
Rights Agent and the holders of the Rights.
5.13 GOVERNING LAW
This Agreement and each Right issued hereunder shall be deemed to be
a contract made under the laws of the Province of British Columbia and for all
purposes shall be governed by and construed in accordance with the laws of
British Columbia applicable to contracts to be made and performed entirely
within British Columbia.
5.14 COUNTERPARTS
This Agreement may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute one and the same instrument.
5.15 SEVERABILITY
If any term or provision hereof or the application thereof to any
circumstances shall, in any jurisdiction and to any extent, be invalid or
unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.
5.16 EFFECTIVE DATE
This Agreement is effective in accordance with its terms from the
date hereof. If this Agreement is not confirmed by resolution passed by a
majority of greater than 50% of the votes cast by Independent Shareholders who
vote in respect of confirmation of this Agreement at the special meeting of
Shareholders to be held on February 4, 2005 of the Corporation after the date of
this Agreement then this Agreement and any then outstanding Rights shall be of
no further force and effect from the Close of Business on the date of
termination of such meeting.
5.17 RECONFIRMATION AFTER FIVE YEARS
Notwithstanding the confirmation of this Agreement pursuant to
Section 5.16 herein, if this Agreement is not reconfirmed by a resolution passed
by a majority of greater than
42
50% of the votes cast by Independent Shareholders who vote in respect of such
reconfirmation of this Agreement at a meeting of shareholders to be held not
earlier then January 1, 2010 and not later than the date on which the 2010
annual general meeting of shareholders of the Corporation terminates, this
Agreement and all outstanding Rights shall terminate and be void and of no
further force and effect on and from the Close of Business on that date which is
the earlier of the date of termination of the meeting called to consider the
reconfirmation of this Agreement and the date of termination of the 2010 annual
general meeting of shareholders of the Corporation; provided, however, that no
Flip-in Event has occurred prior to the date upon which this Agreement would
otherwise terminate pursuant to this Section 5.17, which has not been waived
pursuant to Section 5.1 hereof.
5.18 DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS
(a) The Board of Directors shall have the exclusive power and authority
to administer and amend this Agreement and to exercise all rights
and powers specifically granted to the Board of Directors or as may
be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to:
(i) interpret the provisions of this Agreement; and
(ii) make all actions, calculations, interpretations and
determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to
redeem or not to redeem the Rights or to amend the Agreement
in accordance with the terms hereof).
All such actions, calculations, interpretations and determinations
(including, for purposes of item (iv) below, all omissions with
respect to the foregoing) which are done or made by the Board of
Directors, in good faith shall:
(iii) be final, conclusive and binding on the Corporation, the
Rights Agent, the holders of the Rights and all other parties;
and
(iv) not subject the Board of Directors to any liability to the
holders of the Rights.
(b) Nothing contained in this Agreement shall be deemed to be in
derogation of the obligation of the Board of Directors to exercise
its fiduciary duties. Without limiting the generality of the
foregoing, nothing contained herein shall be construed to suggest or
imply that the Board of Directors shall not be entitled to recommend
that the holders of the Voting Shares reject any Permitted Bid or
any Competing Permitted Bid or any Take-Over Bid, or to take any
other action (including, without limiting the generality of the
foregoing, the commencement, prosecution, defence or settlement of
any litigation and the submission of additional or alternative
Permitted Bids or Competing Permitted Bids or Take-Over Bids) with
respect to any Permitted Bid or any Competing Permitted Bid or any
Take-Over Bid or otherwise that the Board of Directors believes is
necessary or appropriate in the exercise of its fiduciary duties.
43
5.19 DECLARATION AS TO NON-CANADIAN HOLDERS
If in the opinion of the Board of Directors (who may rely upon the
advice of counsel) any action or event contemplated by this Agreement would
require compliance with the securities laws or comparable legislation of a
jurisdiction outside Canada, the Board of Directors acting in good faith may
take such actions as it may deem appropriate to ensure that such compliance is
not required, including without limitation establishing procedures for the
issuance to a Canadian resident trust company registered under the trust company
legislation of Canada or any province thereof or a portfolio manager registered
under the securities legislation of one or more provinces of Canada (herein
called a "Fiduciary") of Rights or securities issuable on exercise of Rights,
the holding thereof in trust for the Persons entitled thereto (but reserving to
the Fiduciary or to the Fiduciary and the Corporation, as the Corporation may
determine, absolute instrument discretion with respect thereto) and the sale
thereof and remittance of the proceeds of such sale, if any, to the Persons
entitled thereto. In no event shall the Corporation or the Rights Agent be
required to issue or deliver Rights or securities issuable on exercise of Rights
to Persons who are citizens, residents or nationals of any jurisdiction other
than Canada and any province or territory thereof in which such issue or
delivery would be unlawful without registration of the relevant Persons or
securities for such purposes.
5.20 SUCCESSOR CORPORATIONS
The Corporation shall not consummate or permit or suffer to occur
any consolidation, amalgamation, merger or transfer of the undertaking or assets
of the Corporation as an entirety or substantially as an entirety to another
Corporation (the "Successor Corporation") unless the Successor Corporation
resulting from such consolidation, amalgamation, merger or transfer (if not the
Corporation) shall expressly assume, by supplemental agreement in form
satisfactory to the Rights Agent and executed and delivered to the Rights Agent,
the due and punctual performance and observance of each and every covenant and
condition of this Agreement to be performed and observed by the Corporation.
44
5.21 TIME OF ESSENCE
Time shall be of the essence of this Agreement.
WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
ASPREVA PHARMACEUTICALS CORPORATION COMPUTERSHARE INVESTOR SERVICES INC.
Per: /s/ RICHARD GLICKMAN Per: /s/ JUNE GLOVER
__________________________________ ________________________________
Authorized Signatory Authorized Signatory
Per: /s/ BRUCE COUSINS Per: /s/ CHAD EMNACE
__________________________________ ________________________________
Authorized Signatory Authorized Signatory
45
EXHIBIT A
(FORM OF RIGHTS CERTIFICATE)
Certificate No.
__________________________ ______________________________Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION, ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED
IN SUBSECTION 3.1(b) OF THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR TRANSFEREES OF AN ACQUIRING PERSON OR ITS AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY PERSON
ACTING JOINTLY OR IN CONCERT WITH ANY OF THEM MAY BECOME VOID WITHOUT ANY
FURTHER ACTION.
Rights Certificate
This certifies that ___________________________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Shareholder Rights Plan Agreement dated as of February 4,
2005, as such may from time to time be amended, restated, varied or replaced
(the "RIGHTS AGREEMENT") between Aspreva Pharmaceuticals Corporation, a
corporation continued under the British Columbia Business Corporations Act (the
"CORPORATION") and Computershare Investor Services Inc., a trust company
incorporated under the laws of Canada, as Rights Agent (the "RIGHTS AGENT")
which term shall include any successor Rights Agent under the Rights Agreement,
to purchase from the Corporation at any time after the Separation Time (as such
term is defined in the Rights Agreement) and prior to the Expiration Time (as
such term is defined in the Rights Agreement), one fully paid common share of
the Corporation (a "COMMON SHARE") at the Exercise Price referred to below, upon
presentation and surrender of this Rights Certificate with the Form of Election
to Exercise duly executed and submitted to the Rights Agent at its principal
office in any of the cities of Vancouver and Toronto. The Exercise Price shall
initially be US$100 per Right and shall be subject to adjustment in certain
events as provided in the Rights Agreement. The number of Common Shares which
may be purchased for the Exercise Price is subject to adjustment as set forth in
the Rights Agreement.
This Rights Certificate is subject to all the terms, provisions and
conditions of the Rights Agreement which terms and provisions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Rights Agent, the Corporation and the holders of the Rights Certificates. Copies
of the Rights Agreement are on file at the registered office of the Corporation
and are available upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at any of the offices of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate or Rights Certificate
of like tenor and date evidencing an aggregate
number of Rights equal to the aggregate number of Rights evidenced by the Rights
Certificate or Rights Certificates surrendered. If this Rights Certificate is
exercised in part, the registered holder shall be entitled to receive, upon
surrender hereof, another Rights Certificate or Rights Certificate to the number
of whole Rights not exercised. Any exercise of the Rights is subject to
completion of the Form of Election to Exercise attached as Exhibit 1 hereto. Any
assignment of Rights is subject to completion of the Form of Assignment attached
as Exhibit 2 hereto.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Corporation at a redemption
price of $0.001 per Right, subject to adjustment in certain events, under
certain circumstances at its option.
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby nor will Rights Certificates be issued for less
than one whole Right. After the Separation Time, in lieu of issuing fractional
Rights a cash payment will be made as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Common
Shares or of any other securities which may at any time be issuable upon the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the Rights of a
shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Rights evidenced by this Rights Certificate shall have been exercised
as provided in the Rights Agreement.
This Rights Certificate is not valid or obligatory for any purpose
until it has been countersigned by the Rights Agent.
IN WITNESS the facsimile signature of the proper officers of the
Corporation and its seal.
Date: _____________________________________
ATTEST:
__________________________________________ By:______________________________
Secretary
Countersigned: (By Rights Agent)
By ________________________________________
Authorized Signature
EXHIBIT 1
FORM OF ELECTION TO EXERCISE
(TO BE ATTACHED TO EACH RIGHTS CERTIFICATE)
To:
The undersigned hereby irrevocably elects to exercise______________ whole Rights
represented by the attached Rights Certificate to purchase the Common Shares
issuable upon the exercise of such Rights and requests that certificates for
such shares be issued in the name of:
Name: __________________________________________________________________________
Street: ________________________________________________________________________
City, Province & Postal Code: __________________________________________________
Social Insurance Number or
other taxpayer identification number: __________________________________________
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, the undersigned requests that a new Rights Certificate for the
balance of such Rights be issued in the name of and delivered to:
Name: __________________________________________________________________________
Street: ________________________________________________________________________
City, Province & Postal Code: __________________________________________________
Social Insurance Number or
other taxpayer identification number: __________________________________________
Dated:______________________________ ______________________________________
Signature
Signature Guaranteed: (The signature on this form must
correspond with the name as recorded on
the certificate(s) in every particular,
without alteration or enlargement or any
change whatsoever)
Signature must be guaranteed by a Canadian chartered bank, a Canadian trust
company, a member firm of a recognized stock exchange in Canada, a member of a
registered national securities exchange in the United States, or a member of the
Securities Transfer Association Medallion (STAMP) Program.
________________________________________________________________________________
(To be completed if true)
The undersigned represents, for the benefit of all holders of Rights and Common
Shares, that the Rights evidenced by this Rights Certificate are not, and, to
the best of the knowledge of the undersigned, never have been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof or a person
"acting jointly or in concert" with an Acquiring Person or an Affiliate or
Associate thereof. Capitalized terms and "acting jointly or in concert" have the
meanings set out in the Rights Agreement.
___________________________
Signature
NOTICE
If the certification set forth above is not completed, the Corporation shall
deem the Beneficial Owner of the Rights evidenced by this Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof. The Corporation
shall not issue Rights Certificates in exchange for a Rights Certificate owned
or deemed to have been owned by an Acquiring Person or an Affiliate or Associate
thereof or by a Person acting jointly or in concert with an Acquiring Person or
an Affiliate or Associate thereof.
EXHIBIT 2
FORM OF ASSIGNMENT
(TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH HOLDER DESIRES TO TRANSFER THE
RIGHTS CERTIFICATE)
FOR VALUE RECEIVED _____________________________________________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________________
(Please print name and address of transferee)
the Rights represented by this Rights Certificate, together with all right,
title and interest therein, and hereby irrevocably constitutes and appoints
_______________, as attorney, to transfer the within Rights on the books of the
within-named Corporation, with full power of substitution.
Dated: ________________ __________________________________
Signature
Signature Guaranteed: (The signature on this form must correspond with the
name as recorded on the certificate(s) in every
particular, without alteration or enlargement or any
change whatsoever)
Signature must be guaranteed by a Canadian chartered bank, a Canadian trust
company, a member firm of a recognized stock exchange in Canada, a member of a
registered national securities exchange in the United States, or a member of the
Securities Transfer Association Medallion (STAMP) Program.
________________________________________________________________________________
(To be completed if true)
The undersigned represents, for the benefit of all holders of Rights and Common
Shares, that the Rights evidenced by this Rights Certificate are not, and, to
the best of the knowledge of the undersigned, never have been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof or a person
"acting jointly or in concert" with an Acquiring Person or an Affiliate or
Associate thereof. Capitalized terms and "acting jointly or in concert" have the
meanings set out in the Rights Agreement.
__________________
Signature
NOTICE
If the certification set forth above is not completed, the Corporation shall
deem the Beneficial Owner of the Rights evidenced by this Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof. The Corporation
shall not issue Rights Certificates in exchange for a Rights Certificate owned
or deemed to have been owned by an Acquiring Person or an Affiliate or Associate
thereof or by a Person acting jointly or in concert with an Acquiring Person or
an Affiliate or Associate thereof.