EXHIBIT 2.1
PLAN OF ARRANGEMENT
UNDER SECTION 182
OF THE BUSINESS CORPORATIONS ACT (ONTARIO)
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In this Plan of Arrangement, unless there is something in the
subject matter or context inconsistent therewith, the following terms shall have
the following meanings, respectively:
"AFFILIATE" of any person means any other person directly or indirectly
controlled by, or under control of, that person. For the purposes of
this definition, "control" (including, with correlative meanings, the
terms "controlled by" and "under common control of"), as applied to any
person, means the possession by another person of the power to direct
or cause the direction of the management and policies of that first
mentioned person through the direct or indirect ownership of over 50%
of the voting securities;
"ARRANGEMENT" means the arrangement under section 182 of the OBCA on
the terms and subject to the conditions set out in this Plan of
Arrangement, subject to any amendments or variations hereto made in
accordance with section 6.1 of the Arrangement Agreement or Article 6
hereof or made at the direction of the Court in the Final Order;
"ARRANGEMENT AGREEMENT" means the agreement made June 9, 2004 among
WSI, Capital Holdings and CERI, as amended, supplemented or restated in
accordance therewith prior to the Effective Date, providing for, among
other things, the Arrangement;
"ARRANGEMENT RESOLUTION" means the special resolution of the CERI
Shareholders, to be substantially in the form and content of Schedule B
annexed to the Arrangement Agreement;
"ARTICLES OF ARRANGEMENT" means the articles of arrangement of CERI in
respect of the Arrangement that are required by the OBCA to be sent to
the Director after the Final Order is made;
"BOARD OF DIRECTORS" means the board of directors of CERI;
"BUSINESS DAY" means any day on which commercial banks are generally
open for business in New York, New York and Toronto, Ontario, other
than a Saturday, a Sunday or a day observed as a statutory holiday in
New York, New York under the laws of the State of New York or the
federal laws of the United States of America or in Toronto, Ontario
under the laws of the Province of Ontario or the federal laws of
Canada;
"CANADIAN DOLLAR EQUIVALENT" has the meaning ascribed thereto in the
Exchangeable Share Provisions;
"CANADIAN RESIDENT" means a resident of Canada for purposes of the ITA
and includes a partnership any member of which is a resident of Canada
for purposes of the ITA;
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"CAPITAL HOLDINGS" means Capital Environmental Holdings Company, an
unlimited liability company existing under the laws of the Province of
Nova Scotia and a subsidiary of WSI;
"CERI" means Capital Environmental Resource Inc., a corporation
existing under the laws of the Province of Ontario;
"CERI COMMON SHARES" means the issued and outstanding voting common
shares in the capital of CERI;
"CERI CURRENT MARKET PRICE" means, in respect of a CERI Common Share,
for the purposes of Section 4.5, the Canadian Dollar Equivalent of the
average of the closing bid and ask prices of one CERI Common Share on
NASDAQ during a period of 20 consecutive trading days ending three
trading days before the Effective Date; provided, however, that if in
the opinion of the Board of Directors, acting reasonably and in good
faith, the public distribution or trading activity of CERI Common
Shares during such period (whether or not traded on a stock exchange or
automated quotation system) does not create a market which reflects the
fair market value of a CERI Common Share, then the CERI Current Market
Price shall be determined by the Board of Directors, in good faith and
in its sole discretion, and provided further that any such opinion or
determination by the Board of Directors shall be conclusive and
binding;
"CERI MEETING" means the special meeting of CERI Shareholders,
including any adjournment thereof, to be called and held in accordance
with the Interim Order to consider the Arrangement Resolution;
"CERI OPTIONS" means the options to purchase CERI Common Shares granted
under the CERI Stock Option Plan and options to purchase CERI Common
Shares granted to non-employees, being outstanding and unexercised on
the Effective Date;
"CERI SHAREHOLDERS" means the holders of CERI Common Shares;
"CERI STOCK OPTION PLAN" means, collectively, the 1997 Stock Option
Plan and the 1999 Stock Option Plan approved by the Board of Directors,
each as amended;
"CERI WARRANTS" means the warrants exercisable for CERI Common Shares
outstanding and unexercised on the Effective Date;
"CERTIFICATE" means the certificate of arrangement giving effect to the
Arrangement, issued pursuant to subsection 183(2) of the OBCA after the
Articles of Arrangement have been filed;
"COURT" means the Ontario Superior Court of Justice;
"CURRENT MARKET PRICE" has the meaning ascribed thereto in the
Exchangeable Share Provisions;
"DEPOSITARY" means American Stock Transfer & Trust Company at its
offices set out in the Letter of Transmittal and Election Form;
"DIRECTOR" means the Director appointed pursuant to section 278 of the
OBCA;
"DISSENT RIGHTS" has the meaning set out in Section 3.1 hereof;
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"DISSENTING SHAREHOLDER" means a holder of CERI Common Shares who
dissents in respect of the Arrangement Resolution in strict compliance
with the Dissent Rights;
"DIVIDEND AMOUNT" has the meaning ascribed thereto in Section 5.1(a)
hereof;
"DROP DEAD DATE" means August 31, 2004, or such later date as may be
mutually agreed to by the parties to the Arrangement Agreement;
"EFFECTIVE DATE" means the date shown on the Certificate, provided that
such date occurs on or prior to the Drop Dead Date;
"EFFECTIVE TIME" means 12:01 a.m. on the Effective Date;
"ELECTED SHARES" means the CERI Common Shares held by persons that are
not U.S. Persons who elect, in a duly completed Letter of Transmittal
and Election Form deposited with the Depositary no later than the
Election Deadline, to receive Exchangeable Shares in connection with
the Arrangement;
"ELECTION DEADLINE" means 5:00 p.m. (New York time) on the date which
is two Business Days prior to the Effective Date;
"EXCHANGEABLE SHARE PROVISIONS" means the rights, privileges,
restrictions and conditions attaching to the Exchangeable Shares, which
rights, privileges, restrictions and conditions shall be substantially
as set out in Appendix 1 hereto;
"EXCHANGEABLE SHARES" means the exchangeable shares in the capital of
CERI, having substantially the rights, privileges, restrictions and
conditions set out in the Exchangeable Share Provisions;
"FINAL ORDER" means the final order of the Court approving the
Arrangement as such order may be amended by the Court at any time prior
to the Effective Date or, if appealed, then, unless such appeal is
withdrawn or denied, as affirmed;
"GOVERNMENTAL ENTITY" means any (a) multinational, federal, provincial,
territorial, state, regional, municipal, local or other government,
governmental or public department, central bank, court, tribunal,
arbitral body, commission, board, bureau or agency, domestic or
foreign, (b) any subdivision, agent, commission, board or authority of
any of the foregoing, (c) any regulatory agency or self-regulatory
authority (including the Ontario Securities Commission, the Quebec
Securities Commission, the NASDAQ and the United States Securities and
Exchange Commission), or (d) any quasi-governmental or private body
exercising any regulatory, expropriation or taxing authority under or
for the account of any of the foregoing;
"INTERIM ORDER" means the interim order of the Court, as the same may
be amended, in respect of the Arrangement;
"ITA" means the Income Tax Act (Canada), as amended;
"LETTER OF TRANSMITTAL AND ELECTION FORM" means the letter of
transmittal and election form for use by holders of CERI Common Shares,
in the form accompanying the Proxy Statement;
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"LIQUIDATION AMOUNT" has the meaning ascribed thereto in section 5.1 of
the Exchangeable Share Provisions;
"LIQUIDATION CALL PURCHASE PRICE" has the meaning ascribed thereto in
Section 5.1(a) hereof;
"LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in Section
5.1(a) hereof;
"LIQUIDATION DATE" has the meaning ascribed thereto in section 5.1 of
the Exchangeable Share Provisions;
"MEETING DATE" means the date of the CERI Meeting;
"NASDAQ" means the NASDAQ National Market;
"OBCA" means the Business Corporations Act (Ontario) as now in effect
and as may be amended from time to time prior to the Effective Date;
"PERSON" includes any individual, firm, partnership, joint venture,
venture capital fund, limited liability company, unlimited liability
company, association, trust, trustee, executor, administrator, legal
personal representative, estate, group, body corporate, corporation,
unincorporated association or organization, Governmental Entity,
syndicate or other entity, whether or not having legal status;
"PROXY STATEMENT" means the notice of the CERI Meeting and accompanying
proxy statement, including all schedules and exhibits thereto, to be
sent to CERI Shareholders in connection with the CERI Meeting;
"REDEMPTION CALL PURCHASE PRICE" has the meaning ascribed thereto in
Section 5.2(a) hereof;
"REDEMPTION CALL RIGHT" has the meaning ascribed thereto in Section
5.2(a) hereof;
"REDEMPTION DATE" has the meaning ascribed thereto in section 1.1 of
the Exchangeable Share Provisions;
"REDEMPTION PRICE" has the meaning ascribed thereto in section 7.1 of
the Exchangeable Share Provisions;
"RETRACTION CALL RIGHT" has the meaning ascribed thereto in section 6.1
of the Exchangeable Share Provisions;
"U.S. PERSON" means any person or entity that is (i) an individual
citizen or resident of the United States, (ii) a corporation (or other
entity taxable as a corporation for U.S. federal income tax purposes)
created or organized under the laws of the United States or any state
thereof or the District of Columbia, (iii) an estate the income of
which is subject to U.S. federal income taxation regardless of its
source or (iv) a trust that (x) is subject to the primary supervision
of a court within the United States and one or more U.S. persons have
the authority to control all substantial decisions of the trust or (y)
has a valid election in effect under applicable U.S. Treasury
Regulation (as such term is defined in the Arrangement Agreement) to be
treated as a U.S. person;
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"TRANSFER AGENT" has the meaning ascribed thereto in Section 5.1(b)
hereof;
"TRUSTEE" means the trustee to be chosen by WSI and CERI, acting
reasonably, to act as trustee under the Voting and Exchange Trust
Agreement, being a corporation existing under the laws of Canada or a
province therein and authorized to carry on the business of a trust
company in Canada, and any successor trustee appointed under the Voting
and Exchange Trust Agreement;
"VOTING AND EXCHANGE TRUST AGREEMENT" means an agreement to be made
among WSI, CERI and the Trustee in connection with the Plan of
Arrangement substantially in the form and content of Schedule E annexed
to the Arrangement Agreement, with such changes thereto as the parties
to the Arrangement Agreement, acting reasonably, may agree;
"WSI" means Waste Services, Inc., a corporation existing under the laws
of the State of Delaware;
"WSI COMMON SHARES" means the shares of common stock in the capital of
WSI;
"WSI CONTROL TRANSACTION" has the meaning ascribed thereto in section
1.1 of the Exchangeable Share Provisions; and
"WSI SPECIAL VOTING SHARE" means the share in the special voting stock
of WSI to be issued in its own series, which entitles the holder of
record to a number of votes at meetings of holders of the WSI Common
Shares equal to the number of Exchangeable Shares outstanding from time
to time (other than Exchangeable Shares held by WSI and its
affiliates), which share is to be issued to, deposited with and voted
by, the Trustee as described in the Voting and Exchange Trust
Agreement.
1.2 SECTIONS AND HEADINGS
The division of this Plan of Arrangement into Articles, Sections
and other portions and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Plan of Arrangement. Unless otherwise indicated, any reference in this Plan of
Arrangement to an "Article" or "Section" followed by a number or a letter refer
to the specified Article or Section of this Plan of Arrangement. The terms "this
Plan of Arrangement", "hereof", "herein" and "hereunder" and similar expressions
refer to this Plan of Arrangement and not to any particular Article, Section or
other portion hereof and include any agreement or instrument supplementary or
ancillary hereto.
1.3 NUMBER, GENDER, ETC.
In this Plan of Arrangement, unless the context otherwise
requires, words importing the singular number include the plural and vice versa
and words importing any gender include all genders.
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ARTICLE 2
ARRANGEMENT
2.1 BINDING EFFECT
This Plan of Arrangement will become effective at, and be
binding at and after, the Effective Time on (i) CERI, (ii) WSI, (iii) Capital
Holdings, (iv) all holders and all beneficial owners of CERI Common Shares, (v)
all holders and all beneficial owners of CERI Warrants and CERI Options, and
(vi) all holders and all beneficial owners of Exchangeable Shares from time to
time.
2.2 ARRANGEMENT
Commencing at the Effective Time, subject to the terms and
conditions of the Arrangement Agreement, the following shall occur and shall be
deemed to occur in the following order (except that (c), (d), (e) and (f) shall
be deemed to have occurred simultaneously) without any further act or formality:
(a) the articles of CERI will be amended to (i) create, as a class
of shares in the capital of CERI, an unlimited number of
Exchangeable Shares and (ii) change the name of CERI to "Waste
Services (CA) Inc.";
(b) Capital Holdings will purchase at fair market value from WSI the
WSI Common Shares required to effect the exchanges in paragraph
(c), and in consideration therefor will assume any debt owing by
WSI to CERI and will issue and deliver to WSI one common share
in the capital of Capital Holdings for each such WSI Common
Share so purchased and WSI will be recorded as the holder of
such common shares of Capital Holdings and be deemed the legal
and beneficial owner thereof;
(c) each CERI Common Share (other than Elected Shares and CERI
Common Shares held by (i) Dissenting Shareholders who are
ultimately entitled to be paid the fair value of the CERI Common
Shares held by them, and (ii) WSI) will be transferred, without
any further act or formality, by the holder thereof to Capital
Holdings in exchange for one fully paid and non-assessable WSI
Common Share, free and clear of all liens, claims and
encumbrances, and the name of each such holder will be removed
from the register of holders of CERI Common Shares and subject
to complying with the procedure for obtaining WSI Common Shares,
added to the register of holders of WSI Common Shares, and
Capital Holdings will be recorded as the registered holder of
such CERI Common Shares so transferred and will be deemed to be
the legal and beneficial owner thereof;
(d) each CERI Common Share that is an Elected Share will be
converted into one fully paid and non-assessable Exchangeable
Share, and the name of each such holder will be removed from the
register of holders of CERI Common Shares and added to the
register of holders of Exchangeable Shares;
(e) WSI, CERI and the Trustee will enter into the Voting and
Exchange Trust Agreement and WSI will issue to and deposit with
the Trustee the WSI Special Voting Share, in consideration of
the payment to WSI by CERI on behalf of the holders of the
Elected Shares of US$1.00, to be thereafter held of record by
the Trustee as trustee for and on behalf of, and for the use and
benefit of, the holders of the Exchangeable Shares in accordance
with the Voting and Exchange Trust Agreement;
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(f) each WSI Common Share held by CERI will be redeemed at a price
of US$1.00 per share;
(g) each CERI Option outstanding at the Effective Time will continue
to be an obligation of CERI; however, pursuant to the terms of
the CERI Option, it shall permit the holder to purchase a number
of WSI Common Shares equal to the number of CERI Common Shares
that may be purchased if such CERI Option were exercisable and
exercised immediately prior to the Effective Time. Each CERI
Option shall continue to provide for an exercise price per WSI
Common Share equal to the exercise price per CERI Common Share
of such CERI Option immediately prior to the Effective Time. The
term to expiry, conditions to and manner of exercising, vesting
schedule and all other terms and conditions of such CERI Option
will otherwise be unchanged, and any document or agreement
previously evidencing a CERI Option shall thereafter continue to
evidence and be deemed to evidence such CERI Option; and
(h) each CERI Warrant outstanding at the Effective Time will
continue to be an obligation of CERI; however, pursuant to the
terms of the CERI Warrant, it shall permit the holder to
purchase a number of WSI Common Shares equal to the number of
CERI Common Shares that may be purchased if such CERI Warrant
were exercisable and exercised immediately prior to the
Effective Time. Each CERI Warrant shall continue to provide for
an exercise price per WSI Common Share equal to the exercise
price per CERI Common Share of such CERI Warrant immediately
prior to the Effective Time. The term to expiry, conditions to
and manner of exercising, vesting schedule and all other terms
and conditions of such CERI Warrant will otherwise be unchanged,
and any document or agreement previously evidencing a CERI
Warrant shall thereafter continue to evidence and be deemed to
evidence such CERI Warrant.
2.3 ELECTIONS
Each Person who, at or prior to the Election Deadline, is a
holder of record of CERI Common Shares and who either (i) is not a U.S. Person
that holds such shares on its own behalf or (ii) holds such shares on behalf of
a Person who is not a U.S. Person, will be entitled, with respect to all or a
portion of such shares, to make or deliver an election at or prior to the
Election Deadline to receive Exchangeable Shares on the basis set forth herein
and in the Letter of Transmittal and Election Form.
2.4 ADJUSTMENTS TO EXCHANGE
The number of WSI Common Shares issued in connection with the
Arrangement shall be adjusted to reflect fully the effect of any stock split,
reverse split, stock dividend (including any dividend or distribution of
securities convertible into WSI Common Shares or CERI Common Shares other than
stock dividends paid in lieu of ordinary course dividends), reorganization,
recapitalization or other like changes with respect to WSI Common Shares or CERI
Common Shares occurring after the date of the Arrangement Agreement and prior to
the Effective Time.
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ARTICLE 3
RIGHTS OF DISSENT
3.1 RIGHTS OF DISSENT
Registered holders of CERI Common Shares may exercise rights of
dissent with respect to such shares pursuant to and, except as expressly
indicated to the contrary in this Section 3.1, in the manner set forth in
section 185 of the OBCA and this Section 3.1 (the "DISSENT RIGHTS") in
connection with the Arrangement Resolution; provided that, notwithstanding
subsection 185(6) of the OBCA, the written objection to the Arrangement
Resolution referred to in subsection 185(6) of the OBCA must be received by CERI
not later than 5:00 p.m. (Toronto time) on the Business Day preceding the CERI
Meeting; and provided further that, notwithstanding the provisions of section
185 of the OBCA, holders of CERI Common Shares who duly exercise such rights of
dissent and who:
(a) are ultimately determined to be entitled to be paid fair value
for their CERI Common Shares, which fair value, notwithstanding
anything to the contrary contained in section 185 of the OBCA,
shall be determined as of the Effective Time, shall be deemed to
have transferred such CERI Common Shares as of the Effective
Time at the fair value of such shares determined as of the
Effective Time, without any further act or formality and free
and clear of all liens and claims, to CERI and such shares so
transferred to CERI shall be cancelled as of the Effective Date;
or
(b) are ultimately determined not to be entitled, for any reason, to
be paid fair value for their CERI Common Shares shall be deemed
to have participated in the Arrangement on the same basis as a
non-dissenting holder of equity in CERI and shall be deemed to
have elected to receive, and shall receive, the securities
provided for in Section 2.2(c),
but in no case shall WSI, Capital Holdings, CERI, the Transfer Agent or any
other Person be required to recognize such holders as holders of CERI Common
Shares after the Effective Time, and the names of such holders of CERI Common
Shares shall be deleted from the registers of holders of equity in CERI at the
Effective Time.
ARTICLE 4
CERTIFICATES AND FRACTIONAL SHARES
4.1 ISSUANCE OF CERTIFICATES REPRESENTING EXCHANGEABLE SHARES
At or promptly after the Effective Time, CERI shall deposit with
the Depositary, for the benefit of the holders of Elected Shares, certificates
representing that number of whole Exchangeable Shares to be delivered pursuant
to the Arrangement. Upon surrender (on or prior to the Election Deadline) to the
Depositary for cancellation of a certificate which immediately prior to the
Effective Time represented one or more CERI Common Shares that were reclassified
for one or more Exchangeable Shares under the Arrangement, together with a duly
completed Letter of Transmittal and Election Form and such other documents,
instruments and payments as the Depositary may reasonably require, the holder of
such surrendered certificate shall be entitled to receive, and after the
Effective Time the Depositary shall deliver to such holder, certificate(s)
registered in the name of such holder representing that number (rounded down to
the nearest whole number) of Exchangeable Shares which such holder has the right
to receive (together with any dividends or distributions with respect thereto
pursuant to Section 4.4 and any cash in lieu of fractional Exchangeable Shares
pursuant to Section 4.5, less any amounts withheld pursuant to Section 4.8), and
any certificate so surrendered shall forthwith be cancelled. In the
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event of a transfer of ownership of CERI Common Shares which was not registered
in the transfer records of CERI, certificate(s) representing the number of
Exchangeable Shares to be delivered upon the reclassification of the CERI Common
Shares as Exchangeable Shares may be registered in the name of and issued to the
transferee if the certificate representing such CERI Common Shares is presented
to the Depositary, on or prior to the Election Deadline, accompanied by a duly
completed Letter of Transmittal and Election Form, all documents required to
evidence and effect such transfer and such other documents, instruments and
payments as the Depositary may reasonably require.
4.2 EXCHANGE OF CERTIFICATES FOR WSI COMMON SHARES
At or promptly after the Effective Time, Capital Holdings shall
deposit or caused to be deposited with the Depositary, for the benefit of the
holders of CERI Common Shares (other than Elected Shares), certificates
representing that whole number of WSI Common Shares delivered pursuant to the
Arrangement pursuant to Section 2.2(c). Upon surrender to the Depositary for
cancellation of a certificate which immediately prior to the Effective Time
represented outstanding CERI Common Shares which were transferred to Capital
Holdings in exchange for WSI Common Shares under the Arrangement, together with
a duly completed Letter of Transmittal and Election Form and such other
documents, instruments and payments as the Depositary may reasonably require,
the holder of such surrendered certificate shall be entitled to receive, and
after the Effective Time the Depositary shall deliver to such holder, a
certificate representing that number (rounded down to the nearest whole number)
of WSI Common Shares which such holder is entitled to receive (together with any
dividends or distributions with respect thereto pursuant to Section 4.4 and any
cash in lieu of fractional WSI Common Shares pursuant to Section 4.5, less any
amounts withheld pursuant to Section 4.8), and any certificate so surrendered
shall forthwith be cancelled. In the event of a transfer of ownership of such
CERI Common Shares which was not registered in the transfer records of CERI, the
certificates representing the number of WSI Common Shares issuable in exchange
for such CERI Common Shares may be registered in the name of and issued to the
transferee if the certificate representing the CERI Common Shares is presented
to the Depositary, accompanied by a duly completed Letter of Transmittal and
Election Form, all documents required to evidence and effect such transfer and
such other documents, instruments and payments as the Depositary may reasonably
require. Without limiting, and subject to, the provisions of Section 4.7, until
surrendered as contemplated by this Section 4.2, each certificate, which
immediately prior to the Effective Time represented one or more outstanding CERI
Common Shares which were exchanged for WSI Common Shares pursuant to Section
2.2(c), shall be deemed as of and after the Effective Time to represent only the
right to receive upon such surrender (i) the certificate representing WSI Common
Shares as contemplated by this Section 4.2, (ii) a cash payment in lieu of any
fractional WSI Common Shares as contemplated by Section 4.5 and (iii) any
dividends or distributions with a record date after the Effective Time
theretofore paid or payable with respect to WSI Common Shares as contemplated by
Section 4.4, in each case less any amounts withheld pursuant to Section 4.8.
4.3 INTENTIONALLY LEFT BLANK
4.4 DISTRIBUTIONS WITH RESPECT TO UNSURRENDERED CERTIFICATES
No dividends or other distributions declared or made after the
Effective Time with respect to Exchangeable Shares or WSI Common Shares with a
record date after the Effective Time shall be paid to the holder of any
unsurrendered certificate which immediately prior to the Effective Time
represented outstanding CERI Common Shares that were exchanged pursuant to
Section 2.2, and no cash payment in lieu of fractional shares shall be paid to
any such holder pursuant to Section 4.5 and no interest shall be earned or
payable on these proceeds, unless and until the holder of record of such
certificate shall surrender such certificate in accordance with Section 4.1 or
4.2. Subject to applicable
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law, at the time of such surrender of any such certificate (or, in the case of
clause (iii) below, at the appropriate payment date), there shall be paid to the
record holder of the certificates representing whole CERI Common Shares, without
interest, (i) the amount of any cash payable in lieu of a fractional
Exchangeable Share or WSI Common Share to which such holder is entitled pursuant
to Section 4.5, (ii) the amount of dividends or other distributions with a
record date after the Effective Time theretofore paid with respect to such whole
Exchangeable Share or WSI Common Share, as the case may be, and (iii) on the
appropriate payment date, the amount of dividends or other distributions with a
record date after the Effective Time but prior to surrender and a payment date
subsequent to surrender payable with respect to such whole Exchangeable Share or
WSI Common Share, as the case may be.
4.5 NO FRACTIONAL SHARES
No certificates representing fractional Exchangeable Shares or
fractional WSI Common Shares shall be issued upon the surrender for exchange of
certificates pursuant to Section 4.1 or 4.2 and no dividend, stock split or
other change in the capital structure of CERI shall relate to any such
fractional security and such fractional interests shall not entitle the owner
thereof to exercise any rights as a security holder of CERI. In lieu of any such
fractional securities:
(a) each Person otherwise entitled to a fractional interest in an
Exchangeable Share will receive from CERI a cash payment equal
to such Person's fractional interest multiplied by the CERI
Current Market Price; and
(b) each Person otherwise entitled to a fractional interest in a WSI
Common Share will receive a cash payment equal to such Person's
pro rata portion of the net proceeds after expenses received by
the Depositary upon the sale of whole shares representing an
accumulation of all fractional interests in WSI Common Shares to
which all such Persons would otherwise be entitled.
4.6 LOST CERTIFICATES
In the event any certificate which immediately prior to the
Effective Time represented one or more outstanding CERI Common Shares shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the Person claiming such certificate to be lost, stolen or destroyed, the
Depositary will issue in exchange for such lost, stolen or destroyed
certificate, cash and/or one or more certificates representing one or more
Exchangeable Shares or WSI Common Shares, as the case may be, (and any dividends
or distributions with respect thereto and any cash payment pursuant to Section
4.5) deliverable in accordance with such holder's Letter of Transmittal and
Election Form. When authorizing such payment in exchange for any lost, stolen or
destroyed certificate, the Person to whom certificates representing Exchangeable
Shares or WSI Common Shares are to be issued shall, as a condition precedent to
the issuance thereof, give a bond satisfactory to CERI, WSI and their respective
transfer agents in such sum as CERI or WSI may direct or otherwise indemnify
CERI and WSI in a manner satisfactory to CERI and WSI against any claim that may
be made against CERI or WSI with respect to the certificate alleged to have been
lost, stolen or destroyed.
4.7 EXTINCTION OF RIGHTS
Any certificate which immediately prior to the Effective Time
represented outstanding CERI Common Shares that were exchanged pursuant to
Section 2.2 that is not deposited with all other instruments required by Section
4.1 or 4.2 on or prior to the fifth anniversary of the Effective Date shall
cease to represent a claim or interest of any kind or nature as a shareholder of
CERI or WSI. On such
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date, the Exchangeable Shares and WSI Common Shares (or cash in lieu of
fractional interests therein, as provided in Section 4.5) to which the former
registered holder of the certificate referred to in the preceding sentence was
ultimately entitled shall be deemed to have been surrendered for no further
consideration to CERI or Capital Holdings, as the case may be, together with all
entitlements to dividends, distributions and interest in respect thereof held
for such former registered holder. None of WSI, Capital Holdings, CERI or the
Depositary shall be liable to any person in respect of any Exchangeable Shares
or WSI Common Shares (or dividends, distributions and interest in respect
thereof) delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
4.8 WITHHOLDING RIGHTS
CERI, Capital Holdings, WSI and the Depositary shall be entitled
to deduct and withhold from any dividend or consideration otherwise payable to
any holder of CERI Common Shares, WSI Common Shares or Exchangeable Shares such
amounts as CERI, Capital Holdings, WSI or the Depositary is required or
permitted to deduct and withhold with respect to such payment under the ITA, the
United States Internal Revenue Code of 1986 or any provision of federal,
provincial, territorial, state, local or foreign tax law, in each case, as
amended. To the extent that amounts are so withheld, such withheld amounts shall
be treated for all purposes hereof as having been paid to the holder of the
shares in respect of which such deduction and withholding was made, provided
that such withheld amounts are actually remitted to the appropriate taxing
authority. To the extent that the amount so required or permitted to be deducted
or withheld from any payment to a holder exceeds the cash portion of the
consideration otherwise payable to the holder, CERI, Capital Holdings, WSI and
the Depositary are hereby authorized to sell or otherwise dispose of such
portion of the consideration as is necessary to provide sufficient funds to
CERI, Capital Holdings, WSI or the Depositary, as the case may be, to enable it
to comply with such deduction or withholding requirement and CERI, Capital
Holdings, WSI or the Depositary shall notify the holder thereof and remit any
unapplied balance of the net proceeds of such sale.
ARTICLE 5
CERTAIN RIGHTS OF CAPITAL HOLDINGS TO ACQUIRE EXCHANGEABLE SHARES
5.1 CAPITAL HOLDINGS LIQUIDATION CALL RIGHT
In addition to Capital Holdings' rights contained in the
Exchangeable Share Provisions, including, without limitation, the Retraction
Call Right, Capital Holdings shall have the following rights in respect of the
Exchangeable Shares:
(a) Capital Holdings shall have the overriding right (the
"LIQUIDATION CALL RIGHT"), in the event of and notwithstanding
the proposed liquidation, dissolution or winding-up of CERI or
any other distribution of assets of CERI among its shareholders
for the purpose of winding up its affairs, pursuant to Article 5
of the Exchangeable Share Provisions, to purchase from all but
not less than all of the holders of Exchangeable Shares (other
than WSI and its affiliates) on the Liquidation Date all but not
less than all of the Exchangeable Shares held by each such
holder upon payment by Capital Holdings to each such holder of
an amount per Exchangeable Share (the "LIQUIDATION CALL PURCHASE
PRICE") equal to the sum of (i) the Current Market Price of a
WSI Common Share on the last Business Day prior to the
Liquidation Date, which shall be satisfied in full by Capital
Holdings causing to be delivered to such holder one WSI Common
Share, plus (ii) to the extent not paid by CERI, an additional
amount equivalent to the full amount of all declared and unpaid
dividends on each such Exchangeable Share held by such holder on
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any dividend record date which occurred prior to the date of
purchase by Capital Holdings (the "DIVIDEND AMOUNT"). In the
event of the exercise of the Liquidation Call Right by Capital
Holdings, each holder shall be obligated to sell all the
Exchangeable Shares held by the holder to Capital Holdings upon
the Liquidation Date on payment by Capital Holdings to the
holder of the Liquidation Call Purchase Price for each such
share, and CERI shall have no obligation to pay any Liquidation
Amount to any holder of such Exchangeable Shares so purchased by
Capital Holdings.
(b) To exercise the Liquidation Call Right, Capital Holdings must
notify CERI's transfer agent (the "TRANSFER AGENT"), as agent
for the holders of Exchangeable Shares, and CERI of Capital
Holdings' intention to exercise such right at least 30 days
before the Liquidation Date in the case of a voluntary
liquidation, dissolution or winding-up of CERI or any other
voluntary distribution of assets of CERI among its shareholders
for the purpose of winding up its affairs, and at least five
Business Days before the Liquidation Date in the case of an
involuntary liquidation, dissolution or winding-up of CERI or
any other involuntary distribution of assets of CERI among its
shareholders for the purpose of winding up its affairs. The
Transfer Agent will notify the holders of Exchangeable Shares as
to whether or not Capital Holdings has exercised the Liquidation
Call Right forthwith after the earlier of (i) receipt of notice
by the Transfer Agent from Capital Holdings of its intention to
exercise such right and (ii) the expiry of the period during
which the same may be exercised by Capital Holdings. If Capital
Holdings exercises the Liquidation Call Right, then on the
Liquidation Date Capital Holdings will purchase and such holders
will sell all of the Exchangeable Shares then outstanding for a
price per Exchangeable Share equal to the Liquidation Call
Purchase Price.
(c) For the purposes of completing the purchase of the Exchangeable
Shares pursuant to the Liquidation Call Right, Capital Holdings
shall deposit with the Transfer Agent, on or before the
Liquidation Date, certificates representing the aggregate number
of WSI Common Shares deliverable by Capital Holdings upon the
exercise of such right and a cheque or cheques of Capital
Holdings payable at par at any branch of the bankers of Capital
Holdings representing the aggregate Dividend Amount, if any, in
payment of the total Liquidation Call Purchase Price, less any
amounts withheld pursuant to Section 4.8. Provided that Capital
Holdings has complied with the immediately preceding sentence,
on and after the Liquidation Date the rights of each holder of
Exchangeable Shares will be limited to receiving, without
interest, such holder's proportionate part of the total
Liquidation Call Purchase Price payable by Capital Holdings upon
presentation and surrender by the holder of certificates
representing the Exchangeable Shares held by such holder and the
holder shall on and after the Liquidation Date be considered and
deemed for all purposes to be the holder of the WSI Common
Shares to which it is entitled. Upon surrender to the Transfer
Agent of a certificate or certificates representing Exchangeable
Shares, together with such other documents and instruments as
may be required to effect a transfer of Exchangeable Shares
under the OBCA and the articles and by-laws of CERI and such
additional documents, instruments and payments as the Transfer
Agent may reasonably require, the holder of such surrendered
certificate or certificates shall be entitled to receive in
exchange therefor, and the Transfer Agent on behalf of Capital
Holdings shall deliver to such holder, certificates representing
the WSI Common Shares (which securities shall be fully paid and
non-assessable and shall be free and clear of any lien, claim or
encumbrance) to which the holder is entitled and a cheque or
cheques of Capital Holdings payable at par at any branch of the
bankers of Capital Holdings in payment of the remaining portion,
if any, of the total Liquidation Call Purchase Price,
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less any amounts withheld pursuant to Section 4.8. If Capital
Holdings does not exercise the Liquidation Call Right in the
manner described above, on the Liquidation Date the holders of
the Exchangeable Shares will be entitled to receive in exchange
therefor the Liquidation Amount otherwise payable by CERI in
connection with the liquidation, dissolution or winding-up of
CERI or any other distribution of assets of CERI among its
shareholders for the purpose of winding up its affairs pursuant
to Article 5 of the Exchangeable Share Provisions.
5.2 CAPITAL HOLDINGS REDEMPTION CALL RIGHT
In addition to Capital Holdings' rights contained in the
Exchangeable Share Provisions, including, without limitation, the Retraction
Call Right, Capital Holdings shall have the following rights in respect of the
Exchangeable Shares:
(a) Capital Holdings shall have the overriding right (the
"REDEMPTION CALL RIGHT"), notwithstanding the proposed
redemption of the Exchangeable Shares by CERI pursuant to
Article 7 of the Exchangeable Share Provisions, to purchase from
all but not less than all of the holders of Exchangeable Shares
(other than WSI and its affiliates) on the Redemption Date all
but not less than all of the Exchangeable Shares held by each
such holder on payment by Capital Holdings to each holder of an
amount per Exchangeable Share (the "REDEMPTION CALL PURCHASE
PRICE") equal to the sum of (i) the Current Market Price of a
WSI Common Share on the last Business Day prior to the
Redemption Date, which shall be satisfied in full by Capital
Holdings delivering or causing to be delivered to such holder
one WSI Common Share, plus (ii) to the extent not paid by CERI,
the Dividend Amount. In the event of the exercise of the
Redemption Call Right by Capital Holdings, each holder shall be
obligated to sell all the Exchangeable Shares held by the holder
to Capital Holdings on the Redemption Date on payment by Capital
Holdings to the holder of the Redemption Call Purchase Price for
each such Exchangeable Share, and CERI shall have no obligation
to redeem, or to pay any Dividend Amount to any holder in
respect of, such Exchangeable Shares so purchased by Capital
Holdings.
(b) To exercise the Redemption Call Right, Capital Holdings must
notify the Transfer Agent, as agent for the holders of
Exchangeable Shares, and CERI of Capital Holdings' intention to
exercise such right at least 30 days before the Redemption Date,
except in the case of a redemption occurring as a result of a
WSI Control Transaction or an Exchangeable Share Voting Event
(each as defined in the Exchangeable Share Provisions), in which
case Capital Holdings shall so notify the Transfer Agent and
CERI on or before the Redemption Date. The Transfer Agent will
notify the holders of the Exchangeable Shares as to whether or
not Capital Holdings has exercised the Redemption Call Right
forthwith after the earlier of (i) receipt of notice by the
Transfer Agent from Capital Holdings of its intention to
exercise such right and (ii) the expiry of the period during
which the same may be exercised by Capital Holdings. If Capital
Holdings exercises the Redemption Call Right, then on the
Redemption Date Capital Holdings will purchase and such holders
will sell all of the Exchangeable Shares then outstanding for a
price per Exchangeable Share equal to the Redemption Call
Purchase Price.
(c) For the purposes of completing the purchase of the Exchangeable
Shares pursuant to the Redemption Call Right, Capital Holdings
shall deposit with the Transfer Agent, on or before the
Redemption Date, certificates representing the aggregate number
of WSI
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Common Shares deliverable by Capital Holdings upon the exercise
of such right and a cheque or cheques of Capital Holdings
payable at par at any branch of the bankers of Capital Holdings
representing the aggregate Dividend Amount, if any, in payment
of the total Redemption Call Purchase Price, less any amounts
withheld pursuant to Section 4.8 hereof. Provided that Capital
Holdings has complied with the immediately preceding sentence,
on and after the Redemption Date the rights of each holder of
Exchangeable Shares will be limited to receiving, without
interest, such holder's proportionate part of the total
Redemption Call Purchase Price payable by Capital Holdings upon
presentation and surrender by the holder of certificates
representing the Exchangeable Shares held by such holder and the
holder shall on and after the Redemption Date be considered and
deemed for all purposes to be the holder of the WSI Common
Shares to which it is entitled. Upon surrender to the Transfer
Agent of a certificate or certificates representing Exchangeable
Shares, together with such other documents and instruments as
may be required to effect a transfer of Exchangeable Shares
under the OBCA and the articles and by-laws of CERI and such
additional documents, instruments and payments as the Transfer
Agent may reasonably require, the holder of such surrendered
certificate or certificates shall be entitled to receive in
exchange therefor, and the Transfer Agent on behalf of Capital
Holdings shall deliver to such holder, certificates representing
the WSI Common Shares (which securities shall be fully paid and
non-assessable and shall be free and clear of any lien, claim or
encumbrance) to which the holder is entitled and a cheque or
cheques of Capital Holdings payable at par at any branch of the
bankers of Capital Holdings in payment of the remaining portion,
if any, of the total Redemption Call Purchase Price, less any
amounts withheld pursuant to Section 4.8. If Capital Holdings
does not exercise the Redemption Call Right in the manner
described above, on the Redemption Date the holders of the
Exchangeable Shares will be entitled to receive in exchange
therefor the Redemption Price plus accrued and unpaid dividends
payable by CERI in connection with the redemption of the
Exchangeable Shares pursuant to Article 7 of the Exchangeable
Share Provisions.
ARTICLE 6
AMENDMENTS
6.1 AMENDMENTS TO PLAN OF ARRANGEMENT
CERI reserves the right to amend, modify and/or supplement this
Plan of Arrangement at any time and from time to time prior to the Effective
Date, provided that each such amendment, modification and/or supplement must be
(i) set out in writing, (ii) approved by WSI, (iii) filed with the Court and, if
made following the CERI Meeting, approved by the Court and (iv) communicated to
CERI Shareholders if and as required by the Court.
Any amendment, modification or supplement to this Plan of
Arrangement may be proposed by CERI at any time prior to the CERI Meeting
(provided that WSI shall have consented thereto) with or without any other prior
notice or communication, and if so proposed and accepted by the Persons voting
at the CERI Meeting (other than as may be required under the Interim Order),
shall become part of this Plan of Arrangement for all purposes.
Any amendment, modification or supplement to this Plan of
Arrangement that is approved by the Court following the CERI Meeting shall be
effective only if (i) it is consented to by each of CERI and WSI and (ii) if
required by the Court, it is consented to by the CERI Shareholders voting in the
manner directed by the Court.
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Any amendment, modification or supplement to this Plan of
Arrangement may be made following the Effective Date unilaterally by WSI,
provided that it concerns a matter which, in the reasonable opinion of WSI, is
of an administrative nature required to better give effect to the implementation
of this Plan of Arrangement and is not adverse to the financial or economic
interests of any holder of CERI Common Shares.
ARTICLE 7
FURTHER ASSURANCES
7.1 Notwithstanding that the transactions and events set out
herein shall occur and be deemed to occur in the order set out in this Plan of
Arrangement without any further act or formality, each of the parties to the
Arrangement Agreement shall make, do and execute, or cause to be made, done and
executed, all such further acts, deeds, agreements, transfers, assurances,
instruments or documents as may reasonably be required by any of them in order
further to document or evidence any of the transactions or events set out
herein.
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APPENDIX 1
EXCHANGEABLE SHARE PROVISIONS
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