Exemption Orders (Discretionary)
ORCHESTREAM HOLDINGS plc
2001 BCSECCOM 312
IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418
AND
IN THE MATTER OF ORCHESTREAM HOLDINGS plc
Exemption Order Under Section 88
[para 1]
WHEREAS Orchestream Holdings plc (“Orchestream”), has applied to the Executive Director for an order under section 88 of the Securities Act, R.S.B.C. 1996, c. 418 that Orchestream be deemed to have ceased to be a reporting issuer under the Act;
[para 2]
AND WHEREAS Orchestream has represented to the Executive Director that:
1. Orchestream is a limited company incorporated in England and Wales; Orchestream's authorized capital consists of 200,000,000 ordinary shares of a nominal value of 10 pence each (the "Orchestream Shares"), of which 122,077,199 Orchestream Shares were issued and outstanding as at March 5, 2001;
2. the Orchestream Shares are listed on the London Stock Exchange (the “LSE”); the Orchestream Shares are not listed on any exchange in Canada;
3. CrossKeys Systems Corporation (“CrossKeys”) is a company incorporated under the Canada Business Corporations Act (the “CBCA”) and is a reporting issuer in all the Provinces of Canada except Québec;
4. CrossKey's authorized capital consists of an unlimited number of common shares (the "CrossKeys Common Shares") and an unlimited number of preference shares, of which 19,160,980 CrossKeys Common Shares and no preference shares were issued and outstanding as at March 5, 2001; as at March 5, 2001 CrossKeys had options (the "CrossKeys Options") outstanding entitling holders to acquire up to 4,111,180 CrossKeys Common Shares;
5. the CrossKeys Common Shares are listed on The Toronto Stock Exchange (the “TSE”) and are quoted on the NASDAQ National Market;
6. the acquisition of CrossKeys by Orchestream is proposed to be effected by way of a plan of arrangement (the “Arrangement”) under section 192 of the CBCA, involving CrossKeys, its shareholders and optionholders and a company to be incorporated as a wholly-owned subsidiary of Orchestream (“Orchestream Canada”) pursuant to which Orchestream will become the owner of all of the issued and outstanding shares of the successor company to CrossKeys (“Amalco”);
7. subject to the terms of an interim order (the "Interim Order") to be sought from the Superior Court of Justice (Ontario), it is anticipated that CrossKeys will be required to obtain the approval of its shareholders and optionholders of the Arrangement by not less than 66 2/3 percent of the votes cast at a special meeting (the "Meeting") called to consider the Arrangement, at which each holder of a CrossKeys Common Share and each holder of a CrossKeys Option will be entitled to one vote for each CrossKeys Common Share and CrossKeys Option held by them;
8. in connection with the Meeting, CrossKeys will send to each holder of CrossKeys Common Shares and CrossKeys Options a management information circular containing prospectus-level disclosure of the business and affairs of each of Orchestream and CrossKeys and the terms of the Arrangement in compliance with the CBCA, the Interim Order and all applicable securities laws;
9. at the effective time of the Arrangement (the “Effective Time”), CrossKeys and Orchestream Canada will amalgamate under the CBCA to form Amalco (the “Amalgamation”);
10. upon the Amalgamation, each CrossKeys Common Share that is not owned by a dissenting shareholder outstanding immediately prior to the Effective Time will be exchanged for a number of fully paid and non-assessable Orchestream Shares equal to the exchange ratio of 0.453;
11. at the Effective Time, each outstanding CrossKeys Option:
(a) with an exercise price greater than or equal to $2.71 will be terminated and Amalco will cease to have any liability in respect thereof; and
(b) with an exercise price less than $2.71 will entitle, and be deemed to have entitled, the holder to receive from Amalco, immediately before the Effective Time, an amount equal to the difference between $2.71 and the exercise price of such CrossKeys Option, multiplied by the number of such CrossKeys Options and all such CrossKeys Options will be deemed to be exercised and thereafter terminated and Amalco will cease to have any liability in respect thereof upon payment of the amount provided herein;
13. at the Effective Time, approximately 8.7 million Orchestream Shares will be issued to the former CrossKeys shareholders, representing approximately 7.1 percent of the current issued share capital of Orchestream; as at January 30, 2001, to the knowledge of CrossKeys, there were two CrossKeys shareholders resident in British Columbia holding an aggregate of 2,189 CrossKeys Common Shares;
14. as at January 30, 2001, to the knowledge of Orchestream, there was one Orchestream shareholder in Canada holding an aggregate of 38,592 Orchestream Shares, representing approximately 0.03 percent of the current issued and outstanding Orchestream Shares;
15. upon completion of the Arrangement, it is expected that there will be two registered shareholders of Orchestream resident in British Columbia, holding less than 1 percent of the then issued and outstanding Orchestream Shares;
16. Orchestream will make an application to the UK Listing Authority in order that the Orchestream Shares issued pursuant to the Arrangement be admitted to the Official List of the UK Listing Authority and be admitted to trading on the LSE;
17. Orchestream intends to have Amalco delisted from the TSE and from the NASDAQ National Market and intends to file an application with the applicable Canadian securities regulators to have Amalco deemed to cease to be a reporting issuer upon the consummation of the Arrangement or shortly thereafter;
18. following the completion of the Arrangement, Orchestream will send, concurrently, to the Canadian shareholders of Orchestream, the same disclosure materials that it sends to holders of Orchestream Shares in the United Kingdom and in the United States;
19. there is no market in Canada for the Orchestream Shares, nor is one expected to develop and any resale of the Orchestream Shares will be effected through the facilities of a stock exchange or market located outside Canada; and
20. under subsection 1(1) of the Act, upon the exchange of CrossKeys Common Shares for Orchestream Shares under the terms of the Arrangement, Orchestream will be deemed to be a reporting issuer under the Act;
[para 3]
AND WHEREAS the Executive Director considers that to do so would not be prejudicial to the public interest;
[para 4]
IT IS ORDERED THAT Orchestream shall be deemed to have ceased to be a reporting issuer under the Act effective immediately after the exchange of CrossKeys Common Shares for Orchestream Shares.
[para 5]
DATED March 12, 2001.
Brenda Leong
Director