EXHIBIT 99.3
FORM OF SUPPORT AGREEMENT
AMONG
ADVANCED COMMUNICATIONS GROUP, INC.
AND
ACG HOLDING COMPANY
AND
ACG EXCHANGE COMPANY
AND
CERTAIN HOLDERS OF YPTEL CORPORATION
SHARES AS LISTED IN SCHEDULE A
AND
THE J. L. R. FAMILY TRUST AND THE PAISLEY FAMILY TRUST
-, 2000
INDEX
ARTICLE I DEFINITIONS AND INTERPRETATION..............................................................2
1.1 DEFINED TERMS.................................................................................2
1.2 INTERPRETATION NOT AFFECTED BY HEADINGS.......................................................2
1.3 NUMBER, GENDER................................................................................2
1.4 DATE FOR ANY ACTION...........................................................................2
ARTICLE II COVENANTS OF PARENT, NEWCO I AND NEWCO II..................................................2
2.1 COVENANTS OF PARENT, NEWCO I AND NEWCO II REGARDING EXCHANGEABLE SHARES.......................2
2.2 SEGREGATION OF FUNDS..........................................................................4
2.3 RESERVATION OF SHARES OF PARENT COMMON STOCK..................................................4
2.4 NOTIFICATION OF CERTAIN EVENTS................................................................5
2.5 DELIVERY OF SHARES OF PARENT COMMON STOCK.....................................................5
2.6 QUALIFICATION OF SHARES OF PARENT COMMON STOCK................................................6
2.7 ECONOMIC EQUIVALENCE..........................................................................6
2.8 SALE OF PARENT...............................................................................10
2.9 OWNERSHIP OF OUTSTANDING SHARES OF NEWCO I AND NEWCO II......................................12
2.10 PARENT AND SUBSIDIARIES NOT TO VOTE EXCHANGEABLE SHARES.....................................13
2.11 RULE 10B-18 PURCHASES........................................................................13
ARTICLE III CERTAIN RESTRICTIONS.....................................................................13
3.1 NEWCO I RESTRICTIONS..........................................................................13
3.2 NEWCO II RESTRICTIONS.........................................................................14
3.3 PARENT SUCCESSOR OR PURCHASER.................................................................15
ARTICLE IV GENERAL...................................................................................15
4.1 TERM.........................................................................................15
4.2 SEVERABILITY.................................................................................15
4.3 AMENDMENTS, MODIFICATIONS, ETC...............................................................15
4.4 MINISTERIAL AMENDMENTS.......................................................................16
4.5 MEETING TO CONSIDER AMENDMENTS...............................................................16
4.6 ENUREMENT....................................................................................16
4.7 NOTICE.......................................................................................17
4.8 COUNTERPARTS.................................................................................19
4.9 JURISDICTION.................................................................................19
4.10 ATTORNMENT..................................................................................19
4.11 CONSTRUCTION.................................................................................19
4.12 EXCHANGEABLE SHARE PROVISIONS................................................................19
4.13 EFFECTIVENESS OF AGREEMENT...................................................................19
SUPPORT AGREEMENT
THIS SUPPORT AGREEMENT is entered into as of __, 1999, by and among
Advanced Communications Group, Inc., a corporation existing under the laws of
Delaware ("PARENT"), ACG Holding Company, a Nova Scotia unlimited liability
company and wholly owned subsidiary of Parent ("NEWCO I"), ACG Exchange Inc., a
Nova Scotia limited liability company and a subsidiary of Newco I ("NEWCO II"),
certain holders of YPtel Corporation shares as set out in Schedule A hereto, The
J. L. R. Family Trust and The Paisley Family Trust.
WHEREAS, pursuant to an Agreement made as of June 3, 1999, as amended
and restated October ____, 1999 (as the same may be further amended from time to
time, the "YPTEL AGREEMENT"), by and among Parent, YPtel Corporation, a
corporation incorporated under the laws of Canada (the "COMPANY"), the
shareholders of the Company listed on Exhibit "A" attached thereto, Cold Trust,
Global Investment Trust, Freezer Trust, Storage Trust, Directory Trust,
Publisher Trust (collectively the "BARBADIAN TRUSTS"), The J.L.R. Family Trust,
The Paisley Family Trust, Xxxxxx Xxxxxx, and Xxxxxxx X. XxXxxxxx (collectively
the "ICL PRINCIPALS") and Imperial Capital Limited, a corporation incorporated
under the laws of Ontario, the parties agreed that on the Closing Date (as
defined in the YPtel Agreement) the parties hereto would execute and deliver the
within Support Agreement;
WHEREAS, pursuant to the YPtel Agreement, the shareholders of the
Company who are parties hereto will exchange certain of the issued and
outstanding common shares of the Company owned by them for all the initially
issued and outstanding Class A Special Shares of Newco II (the "CLASS A SPECIAL
SHARES");
WHEREAS, Appendix A to the Articles of Association of Newco II, as
amended, sets forth the rights, privileges, restrictions and conditions
attaching to the Class A Special Shares (as the same may be amended from time to
time, the "EXCHANGEABLE SHARE PROVISIONS");
WHEREAS, the parties hereto desire to make appropriate provision and
to establish a procedure whereby Parent, Newco I and Newco II will take
certain actions and make certain payments and deliveries necessary to ensure
that Newco I, Newco II or Parent will be able to make certain payments and to
deliver or cause to be delivered shares of common stock of Parent, par value
US$0.0001 per share ("PARENT COMMON STOCK") in satisfaction of the
obligations of Newco II with respect to the payment and satisfaction of
dividends, Liquidation Consideration, Retraction Prices, Exchangeable Share
Consideration and Redemption Prices, all in accordance with the Exchangeable
Share Provisions and the provisions of the Exchange and Voting Trust
Agreement between Newco I, Newco II, Parent, the holders of Exchangeable
Shares and the trustee named therein, dated as of ___, 1999 (as the same may
be amended from time to time, the "EXCHANGE AND VOTING TRUST AGREEMENT");
-2-
NOW, THEREFORE, in consideration of the respective covenants and
agreements provided in this Agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 DEFINED TERMS. Each term denoted herein by initial capital letters
and not otherwise defined herein shall have the meaning attributed thereto in
the Exchangeable Share Provisions or the Exchange and Voting Trust Agreement, as
applicable, unless the context otherwise requires.
1.2 INTERPRETATION NOT AFFECTED BY HEADINGS. The division of this
Agreement into Articles, Sections and paragraphs and the insertion of headings
are for convenience of reference only and shall not affect the construction or
interpretation of this Agreement. Unless otherwise indicated, all references to
an "ARTICLE" OR "SECTION" followed by a number and/or a letter refer to the
specified Article or Section of this Agreement. The terms "THIS AGREEMENT",
"HEREOF ", "HEREIN" and "HEREUNDER" and similar expressions refer to this
Agreement and not to any particular Article, Section or other portion hereof and
include any agreement or instrument supplementary or ancillary hereto.
1.3 NUMBER AND GENDER. Words importing the singular number only shall
include the plural and vice versa. Words importing the use of any gender shall
include all genders.
1.4 DATE FOR ANY ACTION. If any date on which any action is required to
be taken under this Agreement is not a Business Day, such action shall be
required to be taken on the next succeeding Business Day. For the purposes of
this Agreement, a "BUSINESS DAY" means any day on which commercial banks are
open for business in St. Louis, Missouri and Xxxxxxx, Xxxxxxx, other than a
Saturday, a Sunday or a day observed as a holiday in Toronto, Ontario under the
laws of the Province of Ontario or the federal laws of Canada or in St. Louis,
Missouri under the laws of the State of Missouri or the federal laws of the
United States of America.
ARTICLE II
COVENANTS OF PARENT, NEWCO I AND NEWCO II
2.1 COVENANTS OF PARENT, NEWCO I AND NEWCO II REGARDING EXCHANGEABLE
SHARES. So long as any Exchangeable Shares held by a Holder are outstanding:
(a) Parent will not declare or pay any dividend on Parent Common Stock
unless (i) Newco II will have sufficient assets, funds and other
property available (including but not limited to authorized but
unissued securities available) to enable the due declaration and the
due and punctual payment in accordance with applicable law of a
-3-
dividend on the Exchangeable Shares in accordance with Article 3 of the
Exchangeable Share Provisions and (ii) Subsection 2.1(b) shall be
complied with in connection with such dividend;
(b) Parent, Newco I and Newco II will cause Newco II to declare
simultaneously with the declaration of any dividend on Parent Common
Stock a dividend on the Exchangeable Shares and, when such dividend is
paid on Parent Common Stock, cause Newco II to pay simultaneously
therewith such dividend on the Exchangeable Shares, in each case in
accordance with Article 3 of the Exchangeable Share Provisions;
(c) Parent will advise Newco I and Newco II sufficiently in advance of the
declaration by Parent of any dividend on Parent Common Stock and take
all such other actions as are necessary, in cooperation with Newco II,
to ensure that the respective record date and payment date for a
dividend on the Exchangeable Shares shall be the same as the record
date and payment date for the corresponding dividend on Parent Common
Stock and that such dividend on the Exchangeable Shares will correspond
with any requirement of the principal stock exchange on which Parent
Common Stock or the Exchangeable Shares are listed;
(d) Parent will ensure that the record date for any dividend declared on
Parent Common Stock is not less than ten Business Days after the
declaration date for such dividend;
(e) Subject to the exercise by Newco I of the Liquidation Call Right,
Redemption Call Right or Retraction Call Right pursuant to the Exchange
and Voting Trust Agreement, Parent, Newco I and Newco II will take all
such actions and do all such things as are necessary or desirable to
enable and permit Newco II to pay and otherwise perform its obligations
with respect to the satisfaction of the Liquidation Consideration or
the Retraction Price in respect of each issued and outstanding
Exchangeable Share upon the liquidation, dissolution or winding-up of
Newco II or the delivery of a Retraction Request by a holder of
Exchangeable Shares, as the case may be, including, without limitation,
all such actions and all such things as are necessary or desirable to
enable and permit Newco II to cause to be delivered Exchangeable Share
Consideration to the holders of Exchangeable Shares in accordance with
the provisions of Article 5, 6 or 7, as the case may be, of the
Exchangeable Share Provisions; and
(f) Parent, Newco I and Newco II will take all such actions and do all such
things as are necessary or desirable to enable and permit Parent, Newco
I or Newco II, as the case may be, in accordance with applicable law,
to perform their obligations, as the case may be, pursuant to the
Exchangeable Share Provisions and the
-4-
Exchange and Voting Trust Agreement, including but not limited to,
arising upon or from (i) the exercise by Newco I of its Retraction
Call Right, Liquidation Call Right or Redemption Call Right pursuant
to the Exchange and Voting Trust Agreement; (ii) the exercise by a
Holder of Exchangeable Shares of such Holder's Exchange Put Right or
Exchange Right pursuant to the Exchangeable Share Provisions or the
Exchange and Voting Trust Agreement; (iii) the automatic exchange of
a Holder's Exchangeable Shares in accordance with the rights set forth
in Section 5.13 of the Exchange and Voting Trust Agreement (the
"AUTOMATIC EXCHANGE RIGHTS"); or (iv) the provisions of the
Exchangeable Share Provisions, including, without limitation, all
such actions and all such things as are necessary or desirable to
enable and permit Parent, Newco I or Newco II to cause Exchangeable
Share Consideration to be delivered to the holders of Exchangeable
Shares in accordance with the Exchangeable Share Provisions and the
Exchange and Voting Trust Agreement.
2.2 SEGREGATION OF FUNDS. Parent will cause Newco II to deposit a
sufficient amount of funds in a separate account, in trust, and segregate a
sufficient amount of such assets and other property, in trust, as is necessary
to enable Newco II to pay or otherwise satisfy the applicable dividends, and if
Parent has notice of a Liquidation Event or a Retraction Request and if Newco I
has not exercised or will not exercise its Liquidation Call Right or Retraction
Call Right with respect thereto, the Liquidation Consideration or Retraction
Price, as applicable, in each case for the benefit of Holders from time to time
of the Exchangeable Shares, and Newco II will use such funds, assets and other
property so segregated exclusively for the payment of dividends and the payment
or other satisfaction of the Liquidation Consideration or the Retraction Price,
as applicable, net of any corresponding withholding tax obligations and for the
remittance of such withholding tax obligations.
2.3 RESERVATION OF SHARES OF PARENT COMMON STOCK. Parent hereby
represents, warrants and covenants that it has irrevocably reserved for issuance
and will at all times keep available, free from pre-emptive and other rights,
out of its authorized and unissued capital stock such number of shares of Parent
Common Stock (or other shares or securities into which Parent Common Stock may
be reclassified or changed as contemplated by Section 2.7 hereof) (a) as is
equal to the number of shares of Parent Common Stock for which the Exchangeable
Shares issued and outstanding from time to time and held by the Holders are
exchangeable, and (b) as are now and may hereafter be required to enable and
permit Parent to meet its obligations hereunder with respect to the Exchangeable
Share Provisions and the Exchange and Voting Trust Agreement and under any other
security or commitment pursuant to which Parent may now or hereafter be required
to issue Parent Common Stock, to enable and permit Newco II to meet its
respective obligations or exercise its rights hereunder, under the Exchange and
Voting Trust Agreement and the Exchangeable Share Provisions.
-5-
2.4 NOTIFICATION OF CERTAIN EVENTS. In order to assist Parent to comply
with its obligations hereunder and under the Exchange and Voting Trust
Agreement, Newco II will give or cause the Transfer Agent so acting to give
Parent notice of each of the following events at the time set forth below:
(i) immediately, in the event of any determination by the Board of
Directors of Newco II to take any action which would require a
vote or consent of the Holders of Exchangeable Shares for
approval; and
(ii) immediately, upon the earlier of (A) receipt by Newco II
(directly or from Newco I) of notice of, and (B) Newco II
otherwise becoming aware of, any threatened or instituted
claim, suit, petition or other proceedings with respect to the
involuntary liquidation, dissolution or winding-up of Newco II
or to effect any other distribution of the assets of Newco II
among its shareholders for the purpose of winding-up its
affairs.
At least 30 days prior to any Automatic Redemption Date as determined by the
Board of Directors of Parent pursuant to the definition of Automatic Redemption
Date in the Exchange and Voting Trust Agreement, Parent shall notify Newco II of
an Automatic Redemption Date or possible Automatic Redemption Date, as
applicable. At least sixty (60) days prior to a Redemption Date set by Newco II
or Parent in accordance with the definition of Redemption Date in the
Exchangeable Share Provisions, the entity setting the Redemption Date shall
notify the other, whether Newco II or Parent, of the applicable Redemption Date.
2.5 DELIVERY OF SHARES OF PARENT COMMON STOCK. In furtherance of its
obligations hereunder, upon notice from Newco II of any event which requires
Newco II to cause to be delivered shares of Parent Common Stock to any Holder of
Exchangeable Shares, Parent shall forthwith contribute to the capital of Newco I
and cause Newco I to contribute to the capital of Newco II or Parent shall
otherwise deliver or cause to be delivered to Newco II (directly or from Newco
I) the requisite shares of Parent Common Stock to be received by, and issued to
the order of, the former Holder of the surrendered Exchangeable Shares, as Newco
II shall direct. All such shares of Parent Common Stock shall be duly issued as
fully paid and non-assessable. Unless Parent shall otherwise direct, in
consideration of the issuance and delivery of each such share of Parent Common
Stock, Newco II shall issue to Newco I, Common Shares of Newco II, and Newco I
shall issue to Parent common shares of Newco I having substantially equivalent
value to the Parent Common Stock so contributed (such equivalence to be
determined by Parent and Newco II from time to time). Upon notice from Newco I
of any event which requires Newco I to cause to be delivered shares of Parent
Common Stock to any Holder of Exchangeable Shares, Parent shall similarly
contribute to Newco I or otherwise deliver to Newco I the requisite shares of
Parent Common Stock to be received by, and issued to the order of, the former
Holder of the surrendered Exchangeable Shares, as Newco I shall direct. The
shares of Parent Common Stock for the former Holders may be delivered directly
to the Transfer Agent (unless Newco II or Newco I, as
-6-
applicable otherwise directs) for delivery to such Holders. Notwithstanding
the foregoing provisions of this Section 2.5, in any case where a former
Holder of surrendered Exchangeable Shares is entitled to shares of Parent
Common Stock under the Exchangeable Share Provisions, the Exchange and Voting
Trust Agreement or this Agreement, Parent shall ensure that such shares of
Parent Common Stock are delivered to such Holder or as such Holder shall have
directed.
2.6 QUALIFICATION OF SHARES OF PARENT COMMON STOCK. If any shares of
Parent Common Stock (or other shares or securities into which Parent Common
Stock may be reclassified or changed as contemplated by Section 2.7 hereof) to
be issued or delivered hereunder require registration or qualification with or
approval of or the filing of any document including any prospectus or similar
document, the taking of any proceeding with or the obtaining of any order,
ruling or consent from any governmental or regulatory authority under any
Canadian or United States federal, provincial or state law or regulation or
pursuant to the rules and regulations of any regulatory authority, or the
fulfilment of any other legal requirement (collectively the "APPLICABLE LAWS")
before such shares (or such other shares or securities) may be issued by Parent
or delivered by Parent, Newco I or Newco II to the Holder of surrendered
Exchangeable Shares or in order that such shares (or such other shares or
securities) may be freely traded thereafter, Parent will in good faith
expeditiously take all such actions and do all such things as are necessary to
cause such shares of Parent Common Stock (or such other shares or securities) to
be and remain duly registered, qualified or approved. Parent will in good faith
take all actions and do all things as are reasonably necessary or desirable
under Applicable Laws as they exist at the relevant time to cause the shares of
Parent Common Stock (and such other shares or securities) to be issued or
delivered hereunder to be freely tradeable thereafter. Parent will in good faith
expeditiously take all such actions and do all such things as are necessary to
cause all shares of Parent Common Stock (or such other shares or securities) to
be delivered hereunder to be listed, quoted or posted for trading on all stock
exchanges and quotation systems on which outstanding shares of Parent Common
Stock (or such other shares or securities) are listed, quoted or posted for
trading at such time.
2.7 ECONOMIC EQUIVALENCE.
(a) Parent will not, without the prior approval of the Holders of the
Exchangeable Shares given in accordance with Article 10 of the Exchangeable
Share Provisions:
(i) issue or distribute shares of Parent Common Stock (or
securities exchangeable for or convertible into or carrying
rights to acquire shares of Parent Common Stock) to the
holders of all or substantially all of the then outstanding
shares of Parent Common Stock by way of stock dividend or
other distribution; or
(ii) issue or distribute rights, options or warrants to the holders
of all or substantially all of the then outstanding shares of
Parent Common
-7-
Stock entitling them to subscribe for or to purchase shares
of Parent Common Stock (or securities exchangeable for or
convertible into or carrying rights to acquire shares of
Parent Common Stock); or
(iii) issue or distribute to the holders of all or substantially all
of the then outstanding shares of Parent Common Stock (A)
shares or securities of Parent of any class other than Parent
Common Stock (other than shares convertible into or
exchangeable for or carrying rights to acquire shares of
Parent Common Stock), (B) rights, options or warrants other
than those referred to in Subsection 2.7(a)(ii) above, (C)
evidences of indebtedness of Parent or (D) assets of Parent;
unless one or both of Newco II and Parent is permitted under applicable law to
issue and distribute the economic equivalent on a per share basis of such
rights, options, warrants, securities, shares, evidences of indebtedness or
assets to Holders of the Exchangeable Shares and the economic equivalent
(determined on the basis of the number of Parent Common Stock for which the
Exchangeable Shares then issued and outstanding and held by Holders are
exchangeable) of the items referred to in Subsections 2.7(a)(i), (ii) and (iii)
above, as applicable, is simultaneously issued or distributed to the Holders of
the Exchangeable Shares.
This Subsection 2.7(a) shall not apply to or restrict the issuance or
distribution of any of the foregoing items that are not part of an issuance or
distribution to be made available to all or substantially all of the holders of
outstanding Parent Common Stock in their capacity as such shareholders. By way
of example, but not limitation, the following are not restricted hereunder, (a)
the issuance or granting by Parent of stock options, restricted stock, "SARS" or
other securities to employees or directors of Parent or any of its subsidiaries
under a current or future employee incentive plan or other plan not made
available to all or substantially all of the holders of outstanding Parent
Common Stock, and (b) the issuance of convertible securities (including, without
limitation, notes and warrants) unless issued or offered to all or substantially
all of the holders of Parent Common Stock. This Subsection 2.7(a) shall not
apply to or restrict the issuance or distribution of shares of Parent Common
Stock or other securities to the holders of rights, options, warrants,
convertible securities or evidences of indebtedness now outstanding or which are
hereafter issued without violation of this Subsection 2.7(a).
(b) Parent will not, without the prior approval of the Holders of the
Exchangeable Shares given in accordance with Article 10 of the Exchangeable
Share Provisions:
(i) subdivide, redivide or change the then outstanding shares of
Parent Common Stock into a greater number of shares of Parent
Common Stock; or
-8-
(ii) reduce, combine or consolidate or change the then outstanding
shares of Parent Common Stock into a lesser number of shares
of Parent Common Stock, or
(iii) reclassify or otherwise change the shares of Parent Common
Stock or effect an amalgamation, merger, reorganization or
other transaction affecting the shares of Parent Common Stock;
unless Newco II is permitted under applicable law to make the same or an
economically equivalent change to, or in the rights of holders of, the
Exchangeable Shares on a tax deferred basis if the change to the Parent Common
Stock is not a taxable event generally to the holders of Parent Common Stock
generally and the same or an economically equivalent change is simultaneously
made to, or in the rights of, the Holders of the Exchangeable Shares.
(c) Parent will ensure that the record date for both Parent and Newco
II for any event referred to in Subsection 2.7 (a) or 2.7 (b) above, or (if no
record date is applicable for such event) the effective date for any such event,
is not less than 10 Business Days after the date on which such event is declared
or announced by Parent (with simultaneous notice thereof to be given by Parent
to Newco II).
(d) Newco II agrees that, to the extent required, upon due notice from
Parent, Newco II will take or cause to be taken such steps as may be necessary
for the purposes of ensuring that appropriate dividends are paid or other
distributions are made by Newco II, or subdivisions, redivisions or changes are
made to the Exchangeable Shares, in order to implement the required economic
equivalence with respect to the Parent Common Stock and Exchangeable Shares as
provided for in this Section 2.7.
(e) The board of directors of Parent ("PARENT BOARD OF DIRECTORS")
shall determine, in good faith and in its sole discretion, economic equivalence
for the purposes of any event referred to in Section 2.7(a) or 2.7(b) above.
With respect to situations in which the item distributed is nontaxable generally
to holders of Parent Common Stock but is taxable to Holders of Exchangeable
Shares, the lack of tax deferral shall be valued by the Parent Board of
Directors as provided in Section 2.8(j) below. In making its determinations of
economic equivalence, the following factors shall, without excluding other
factors determined by the Parent Board of Directors to be relevant, be
considered by the Parent Board of Directors:
(i) in the case of any stock dividend or other distribution
payable in Parent Common Stock, the number of such shares
issued in proportion to the number of shares of Parent Common
Stock previously outstanding;
(ii) in the case of the issuance or distribution of any rights,
options or warrants to subscribe for or purchase Parent Common
Stock (or
-9-
securities exchangeable for or convertible into or
carrying rights to acquire Parent Common Stock), the
relationship between the exercise price of each such right,
option or warrant and the current market value (as determined
by the boards of directors of Newco II and Parent in the
manner contemplated below) of a share of Parent Common Stock;
(iii) in the case of the issuance or distribution of any other form
of property (including without limitation any shares or
securities of Parent of any class other than Parent Common
Stock, any rights, options or warrants other than those
referred to in Subsection 2.7 (e)(ii) above, any evidences of
indebtedness of Parent or any assets of Parent), the
relationship between the fair market value (as determined by
the Parent Board of Directors in the manner contemplated
below) of such property to be issued or distributed with
respect to each outstanding share of Parent Common Stock and
the current market value (as determined by the Parent Board of
Directors in the manner contemplated below) of a share of
Parent Common Stock;
(iv) in the case of any subdivision, redivision or change of the
then outstanding shares of Parent Common Stock into a greater
number of shares of Parent Common Stock or the reduction,
combination, consolidation or change of the then outstanding
shares of Parent Common Stock into a lesser number of shares
of Parent Common Stock or any amalgamation, merger,
reorganization or other transaction affecting Parent Common
Stock, the effect thereof upon the then outstanding shares of
Parent Common Stock;
(v) in all such cases, the general taxation consequences of the
relevant event to Holders of Exchangeable Shares to the extent
that such consequences may differ from the taxation
consequences to holders of Parent Common Stock as a result of
differences between taxation laws of Canada and the United
States (except for any differing consequences arising as a
result of differing marginal taxation rates and without regard
to the individual circumstances of holders of Exchangeable
Shares); and
(vi) in all such cases, the five (5) year deferral of tax available
to the Holders of Exchangeable Shares measured from the date
of their first issue.
For purposes of the foregoing determinations, the current market value of any
security listed and traded or quoted on a securities exchange shall be the
weighted average of the daily closing prices of such security during a period of
not less than 20 consecutive trading days ending not more than three trading
days before the date of determination on the principal securities exchange on
which such securities are listed and traded or quoted.
-10-
(f) In the event of a Liquidation Event, Section 5.13 of the Exchange
and Voting Trust Agreement shall be applicable and this Section 2.7 shall not be
applicable except to confirm the right of the holders of Parent Common Stock
received upon such exchange of Exchangeable Shares to participate in the
applicable Liquidation Event in the same manner as other holders of Parent
Common Stock.
(g) In the event the item to be distributed pursuant to this Section
2.7 is not readily marketable, reference shall be made to Section 2.8(i) to the
extent applicable.
2.8 SALE OF PARENT.
(a) In the event of a proposed transaction involving the sale of Parent
(whether by shareholder sale of stock, sale of all or substantially all of its
assets or by other means) which the Parent Board of Directors desires to pursue
or recommend (the "Proposed Sale"), the following provisions shall apply.
(b) If the Proposed Sale involves the receipt by shareholders of Parent
of all cash, Parent shall ensure that the Holders of Exchangeable Shares will be
able to receive the same per share cash consideration as the holders of Parent
Common Stock and at the same time as the holders of Parent Common Stock.
(c) If the consideration receivable by holders of Parent Common Stock
is property other than cash or partly cash and partly property other than cash,
then to the EXTENT that such non-cash consideration will be non-taxable to such
holders GENERALLY, Parent will use its best efforts to take all such actions and
do all such things as are necessary or desirable to enable and permit Holders of
Exchangeable Shares to participate in such Proposed Sale to the same extent and
on an equivalent basis (such equivalence based on the number of shares of Parent
Common Stock for which the Exchangeable Shares are exchangeable) as the holders
of shares of Parent Common Stock, without discrimination, and Parent shall use
its best efforts in good faith so that Holders of Exchangeable Shares may
participate in the Proposed Sale without being required to exchange Exchangeable
Shares except to the extent of the cash component of the Proposed Sale.
(d) To the extent that the consideration receivable by holders of the
Parent Common Stock is represented in whole or in part by property other than
cash and such other property is non-taxable to such holders GENERALLY in whole
or in part, and the Parent Board of Directors, after using its best efforts to
attempt to ensure that Holders of Exchangeable Shares do not have to exchange
their shares, determines in good faith that it is not practicable in the
circumstances of the Proposed Sale to provide for the deferral of the taxable
event that will arise from such Proposed Sale in so far as it affects the
Holders of Exchangeable Shares GENERALLY (by continuation of the tax deferral
provided by the Newco II Exchangeable Shares structure or otherwise), Parent may
nevertheless enter into the Proposed Sale, ensuring firstly that the
consideration to be received by the Holders of the Exchangeable Shares is
equivalent on a per share pre-tax
-11-
basis to the consideration to be received by holders of Parent Common Stock
and shall FURTHER use its best efforts to maintain the economic equivalency
of the Proposed Sale to such Holders of Exchangeable Shares GENERALLY,
compared to the situation of the holders of Parent Common Stock GENERALLY,
taking into account such Holders' loss of tax deferral for Canadian income
tax purposes, by:
(i) adjustment upward of the economic consideration to be received
by the Holders of the Exchangeable Shares relative to such
consideration received by holders of Parent Common Stock; or
(ii) compensating such Holders by other means.
Any issues of economic equivalency shall be determined by the Parent Board of
Directors in good faith and in its sole discretion.
(e) Parent will take all necessary steps to ensure that any exchange of
Exchangeable Shares required in connection with such Proposed Sale shall be
effective only upon, and shall be conditional upon, the closing of the Proposed
Sale.
(f) To the extent that implementation of the Proposed Sale necessarily
involves the exchange by the Holders of Exchangeable Shares of such shares, the
Parent Board of Directors shall ensure that the consideration receivable by the
Holders of Exchangeable Shares is not subject to any escrow or transfer
restrictions which would prevent immediate liquidation of such consideration to
pay tax, except as a Holder may otherwise agree.
(g) To the extent that any cash or non-cash consideration received by
holders of Parent Common Stock is taxable on the completion of the Proposed
Sale, the Parent Board of Directors need not consider the economic equivalency
to Holders of Exchangeable Shares beyond ensuring that they are able to receive
the same consideration per share and that such non-cash consideration is to the
extent taxable not subject to any escrow or other restriction and can be
liquidated immediately to pay tax, except as a Holder may otherwise agree.
(h) Subject to the foregoing provisions of this Section 2.8, if the
Proposed Sale is approved at a meeting of stockholders of Parent and the Holders
of Exchangeable Shares were entitled to vote on such Proposed Sale through the
voting trust arrangement as provided in Article 4 of the Exchange and Voting
Trust Agreement, the Proposed Sale may occur without the further approval of the
Holders of Exchangeable Shares under Article 10 of the Exchangeable Share
Provisions.
(i) If the consideration receivable by holders of the Parent Common
Stock is non-taxable to such holders generally but such consideration to be
received by Holders of Exchangeable Shares is taxable generally to Holders of
Exchangeable Shares, and if such consideration or additional compensation to be
received by Holders of Exchangeable Shares is not readily marketable, (the "NON
MARKETABLE CONSIDERATION") then Parent Board of Directors shall use its best
efforts to issue Parent Common Stock in exchange for a portion of the Non
-12-
Marketable Consideration, acquire or arrange for the acquisition of a portion of
the Non Marketable Consideration for cash or other readily marketable
consideration, or in some other manner provide a means for the Holders of
Exchangeable Shares to similarly liquidate a portion of such Non Marketable
Consideration, such portion to be in an amount sufficient only to permit the
Holders of Exchangeable Shares to satisfy the tax liability incurred by such
Holders in connection with the Non Marketable Consideration so received.
(j) Economic equivalency for purposes of the Holders' loss of tax
deferral for Canadian income tax purposes shall be valued in Section 3.8(d)(i)
above as the amount of income tax payable upon the loss of such tax deferral
multiplied by an interest factor equal to the "PRIME RATE" per annum, which
product shall be multiplied by the period stated in years (and any fraction
thereof) from the date of the closing of the Proposed Sale to the fifth
anniversary of the date of initial issuance of the Class A Special Shares. The
"Prime Rate" shall be the average U.S. Prime Rate as last reported in the Wall
Street Journal on the Business Day closest to 60 days prior to the Proposed Sale
Date. The income tax payable shall be estimated in good faith by the Parent
Board of Directors based on the estimated fair market value of the consideration
to be received. The amount of income tax shall be calculated on an aggregate
hypothetical basis for all Holders of Exchangeable Shares (assuming there is a
capital gain and income taxes are paid based on an assumed tax rate of 50
percent) but without additional gross up for taxes based on the additional
consideration. The determinations under this subsection shall be made by the
Parent Board of Directors in good faith.
(k) In the event of any dispute concerning the application of the
provisions of this Section 2.8 in connection with a Proposed Sale, the Board of
Directors shall determine in good faith what is fair in the circumstances to
settle the matter.
(l) This Section 2.8 shall be applicable notwithstanding any provisions
in this Agreement, the Exchange and Voting Trust Agreement, or the Exchangeable
Share Provisions to the contrary and is intended to provide the Parent Board of
Directors with the authority to take the actions reasonably necessary to
implement a Proposed Sale without the prior approval of the Holders of the
Exchangeable Shares as may be otherwise required under the Support Agreement,
the Exchange and Voting Trust Agreement, or the Exchangeable Share Provisions,
but subject nevertheless to any required vote of shareholders.
2.9 OWNERSHIP OF OUTSTANDING SHARES OF NEWCO I AND NEWCO II. Without
the prior approval of Newco I and Newco II and the prior approval of the Holders
of the Exchangeable Shares given in accordance with Article 10 of the
Exchangeable Share Provisions, Parent covenants and agrees in favor of Newco I,
Newco II and the Holders that, as long as any outstanding Exchangeable Shares
are owned by a Holder, Parent will be and remain the direct or indirect
beneficial owner of all issued and
-13-
outstanding shares in the capital of Newco I and Newco I shall remain the
direct or indirect beneficial owner of all issued and outstanding Common
Shares in the capital of Newco II; provided this shall not restrict the
pledging by Parent of any such shares to a commercial lender or financial
institution in connection with a loan or other financial accommodation to
Parent or any of its subsidiaries, but upon a foreclosure of any such shares,
the purchaser of such shares shall be bound by the covenants of Parent, Newco
I and Newco II, as applicable, hereunder.
2.10 PARENT AND SUBSIDIARIES NOT TO VOTE EXCHANGEABLE SHARES. Parent
covenants and agrees that it will appoint and cause to be appointed proxy
holders with respect to all Exchangeable Shares held by Parent and its
Subsidiaries for the sole purpose of attending each meeting of holders of
Exchangeable Shares in order to be counted as part of the quorum for each such
meeting to the extent but only to the extent that such presence is required
under the provisions of the applicable corporate statute or the Exchangeable
Share Provisions in order to obtain a quorum to conduct a meeting of holders of
Exchangeable Shares (the "REQUIRED PRESENCE"). Parent further covenants and
agrees that it will not, and will cause its Subsidiaries not to, exercise any
voting rights which may be exercisable by holders of Exchangeable Shares from
time to time pursuant to the Exchangeable Share Provisions or pursuant to the
provisions of the applicable corporate statute (or any successor or other
corporate statute by which Newco I or Newco II may in the future be governed)
with respect to any Exchangeable Shares held by it or by its Subsidiaries in
respect of any matter considered at any meeting of holders of Exchangeable
Shares; provided that to the extent, if any, of the Required Presence, Parent or
its Subsidiaries may exercise the voting rights, if any, with respect to such
Required Presence to vote such Exchangeable Shares on the same side as the
Holders of Exchangeable Shares who have cast the majority of votes (excluding
those cast by a holder not a Holder) for or against the applicable resolution to
be voted upon.
2.11 RULE 10b-18 PURCHASES. Anything to the contrary in this Agreement
notwithstanding, Parent shall not be obligated to take any action hereunder
which would prevent Parent from effecting repurchases of Parent Common Stock
pursuant to the "safe harbor" provisions of Rule 10b-18 promulgated under the
U.S. Securities Exchange Act of 1934 as amended or any successor provision
thereof.
ARTICLE III
CERTAIN RESTRICTIONS
3.1 NEWCO I RESTRICTIONS. Subject to what is hereinafter provided, so
long as any of the Exchangeable Shares are outstanding and held by Holders,
Newco I shall not at any time without, but may at any time with, the approval of
the Holders of the Exchangeable Shares given as specified in Article 10 of the
Exchangeable Share Provisions:
(a) incur indebtedness or other liabilities except as may be desirable for
or reasonably required or incidental to performance of the terms and
conditions of this Agreement, the Exchange and Voting Trust
-14-
Agreement or the Exchangeable Share Provisions or the rights and
obligations of Newco I, Parent or Newco II relating thereto or
relating to the Class B Preferred Shares, or guarantee the obligations
of any other party except as set forth in the preceding exception or
insofar as recourse of the obligee on the guarantee is limited to the
preferred shares of YPtel Inc. held by YPtel Corporation on or after
the Closing Date and the dividends and other distributions and proceeds
with respect to such preferred shares, and any dividends issued or
other distributions made with respect to the common stock of YPtel
Corporation or Newco II or the proceeds thereof (collectively, the
"COLLATERAL");
(b) voluntarily liquidate, dissolve or wind-up or otherwise distribute its
assets or cause Newco II to do so;
(c) issue any shares other than to Parent; or
(d) transfer any of the Common Shares of Newco II other than to Parent or
Newco II, except in connection with a pledge thereof as set forth
below; or
(e) enter into or operate any business other than that of a holding company
owning the shares of Newco II and any business incidental thereto or
other than any business reasonably required or appropriate for Newco I
to carry out its rights, duties or obligations pursuant to the
provisions of the Exchangeable Share Provisions, the Support Agreement
or this Agreement or in connection with the investment and distribution
of any dividends of or distributions by Newco II or YPtel Corporation.
Nothing contained herein or in Section 3.2 below shall restrict the pledging by
Newco I of the Common Shares of Newco II (or indirectly the common stock of
YPtel Corporation) or the pledging by Newco II of the common stock of YPtel
Corporation, in either case to secure a loan or other financial accommodation to
Parent or any of its subsidiaries by a commercial lender or financial
institution ("LENDER") to the extent such security is required by such Lender in
order to preserve or better protect its lien on or rights in the Collateral or
to the extent that the Lender agrees that upon a foreclosure or sale by Lender
of such shares, the purchaser of such shares shall be bound by the covenants of
Parent, Newco I and Newco II, as applicable hereunder, each of which shall
remain liable under its respective covenants.
3.2 NEWCO II RESTRICTIONS. Subject to what is otherwise provided in
Section 3.1 above, so long as any of the Exchangeable Shares are outstanding and
held by a Holder, Newco II shall not at any time without, but may at any time
with, the approval of the Holders of the Exchangeable Shares given as specified
in Article 10 of the Exchangeable Share Provisions:
-15-
(a) incur indebtedness or other liabilities except as may be desirable for
or reasonably required or incidental to performance of the terms and
conditions of this Agreement, the Exchange and Voting Trust Agreement
or the Exchangeable Share Provisions or the rights and obligations of
Newco I, Parent or Newco II relating thereto or relating to the Class B
Preferred Shares, or guarantee the obligations of any other party
insofar as recourse of the obligee on the guarantee is limited to the
Collateral;
(b) transfer any of the common stock of YPtel Corporation, other then to
Newco I, except in connection with a pledge thereof as set forth in
Section 3.1 hereof;
(c) issue any Common Shares other than to Newco I; or
(d) amend its Articles of Association after the effective date hereof,
except for minor amendments consistent with the purposes set forth in
Section 4.4 hereof.
3.3 PARENT SUCCESSOR OR PURCHASER. Subject to Section 2.8 hereof, in
the event there is a Parent Successor pursuant to Section 12.1 of the Exchange
and Voting Trust Agreement or other purchaser of substantially all the
outstanding shares of Parent Common Stock, the covenants of and restrictions
applicable to Newco I and Newco II shall continue in full force and effect
(substituting the Parent Successor or such purchaser for Parent, as applicable),
Subject to the terms of any applicable supplemental agreement referred to in
said Section 12.1, and Parent shall not thereby be released from any obligations
or liabilities then accrued hereunder except to the extent that such obligations
or liabilities are assumed by the Parent Successor or such purchaser.
ARTICLE IV
GENERAL
4.1 TERM. This Agreement shall come into force and be effective as of
the date hereof, subject to Section 4.13 below, and shall terminate and be of no
further force and effect at such time as the Exchange and Voting Trust Agreement
shall terminate (or shall no longer continue) as provided in Section 14.2 of the
Exchange and Voting Trust Agreement.
4.2 SEVERABILITY. If any provision of this Agreement is held to be
invalid, illegal or unenforceable, the validity, legality or enforceability of
the remainder of this Agreement shall not in any way be affected or impaired
thereby and this Agreement shall be carried out as nearly as possible in
accordance with its original terms and conditions.
4.3 AMENDMENTS, MODIFICATIONS, ETC. Subject to amendments of the nature
contemplated by Section 13.4 of the Exchange and Voting Trust Agreement, this
Agreement may not be amended, modified or waived except by an agreement in
writing executed by Newco I, Newco II and Parent and approved
-16-
by the Holders of the Exchangeable Shares in accordance with Article 10 of
the Exchangeable Share Provisions.
4.4 MINISTERIAL AMENDMENTS. Notwithstanding the provisions of Section
4.3, Newco I, Newco II and Parent may in writing, at any time and from time to
time, upon reasonable notice to (including sufficient details of the proposed
changes) but without the approval of the Holders of the Exchangeable Shares,
amend or modify this Agreement for the purposes of:
(a) adding to the covenants of any or all parties hereto for
the protection of the Holders of the Exchangeable Shares;
(b) making such amendments or modifications not inconsistent
with this Agreement as may be necessary or desirable with
respect to matters or questions which, in the good faith
opinion of the board of directors of each of Parent,
Newco I and Newco II, having in mind the best interests
of the Holders as a whole, it may be expedient to make,
provided that each such board of directors shall be of the
good faith opinion that such amendments or modifications
will not be prejudicial to the interests of the Holders as
a whole; or
(c) making such changes or corrections which, on the advice of
counsel to Parent, Newco I and Newco II, are required for
the purpose of curing or correcting any ambiguity or defect
or inconsistent provision or clerical omission or mistake or
manifest error, provided that the boards of directors of
each of Parent, Newco I and Newco II shall be of the opinion
that such changes or corrections will not be prejudicial to
the interests of the Holders as a whole.
4.5 MEETING TO CONSIDER AMENDMENTS. Newco II, at the request of Parent,
Newco I or any ten Holders, shall call a meeting or meetings of the Holders of
the Exchangeable Shares for the purpose of considering any proposed amendment or
modification requiring approval pursuant hereto. Any such meeting or meetings
shall be called and held in accordance with the Exchangeable Share Provisions
and, to the extent applicable, the Articles of Association of Newco II and all
applicable laws and shall be held in the City of Toronto. An approval of Holders
may be obtained by written consents in lieu of a meeting, as provided in Article
10 of the Exchangeable Share Provisions.
4.6 ENUREMENT. This Agreement shall be binding upon and enure to the
benefit of the parties hereto, the Holders, from time to time, of Exchangeable
Shares and each of their respective heirs, successors and assigns. Certain of
the Company shareholders party to this Agreement are contemplated to become
Holders hereunder when the Class A Special Shares are issued on the Closing Date
while the other such shareholders may transfer their Company shares to
corporations or limited partnerships who will become Holders hereunder on the
Closing Date. Upon any such party or transferee becoming a Holder hereunder,
such party or transferee will be party to this Agreement in its capacity as a
-17-
Holder. Any such transferee becoming a Holder or any other transferee hereafter
becoming a Holder shall be substituted for its transferor under this Agreement
upon the date of such transfer, and the transferor shall be released from any
obligations or liability thereafter arising under this Agreement.
4.7 NOTICE. All notices and other communications hereunder shall be in
writing and shall be deemed given to a party if delivered, sent by facsimile
transmission with confirmation of transmission, or mailed by registered or
certified mail (postage prepaid and return receipt requested) to the parties at
the following addresses and facsimile numbers (or at such other address or
facsimile number for the parties as the parties shall specify by like notice),
and such notice shall be deemed given: (i) if delivered to the party, on the
date of such delivery; (ii) if telecopied, on the date of confirmation of
receipt or transmission, unless such day is not a Business Day, in which case it
shall be deemed to have been given and received upon the immediately following
Business Day; or (iii) if mailed, five (5) Business Days after mailing:
TO PARENT, NEWCO I OR NEWCO II:
c/o 000 Xxxxx Xxxxx Xxxx Xxxx
Xxxxx 000
Xx. Xxxxx, Xxxxxxxx
X.X.X. 63017
Attention: the President
FACSIMILE NO.: (000) 000-0000
WITH COPIES TO:
Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx, LLP
000 Xxxxx Xxxxxx
Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx
X.X.X. 00000-0000
Attention: Xxxxx Xxxxx
FACSIMILE NO.: (000) 000-0000
AND
Xxxxxxx Mercure
CIBC Tower
31st floor
0000 Xxxx Xxxxxxxx Xxxx. Xxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxx Silcoff
FACSIMILE NO.: (000) 000-0000
AND
-18-
c/o Imperial Capital Limited
1 First Canadian Place
P.O. Box 438
Suite 5102
Xxxxxxx XX X0X 0X0
Attention: Managing Partner
FACSIMILE NO.: (000) 000-0000
AND
Xxxxxxx, Xxxxx & Xxxxxxxxx
Scotia Plaza, Suite 2100
00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
XXXXXX
Attention: Xxxxxxx Xxxxxxx
FACSIMILE NO.: (000) 000-0000
TO THE HOLDERS:
At their respective addresses
appearing on the records of
the Transfer Agent
WITH COPIES TO:
Imperial Capital Limited
1 First Canadian Place
P.O. Box 438
Suite 5102
Xxxxxxx XX X0X 0X0
Attention: Managing Partner
FACSIMILE NO.: (000) 000-0000
AND:
Xxxxxxx, Xxxxx & Xxxxxxxxx
Scotia Plaza, Suite 2100
00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
XXXXXX
Attention: Xxxxxxx Xxxxxxx
FACSIMILE NO.: (000) 000-0000
Any notice period providing for notice to be given twenty (20) or more days
before a specified date or event may be calculated as if the date of mailing
were the date of giving notice. Notwithstanding any requirement for written
notice in this Agreement, any notices provided herein to be given as between
Newco I, Newco II, Parent and Transfer Agent may be given by telephone, by fax
or otherwise in an informal manner as such entities may agree among themselves
-19-
from time to time and such notices may be subject to standing orders as to
particular notices.
4.8 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, and all of which taken together shall
constitute one and the same instrument. One or more of the parties may sign this
Agreement and deliver this Agreement by facsimile transmission. The parties
agree that a facsimile of a signature shall be deemed an original signature.
4.9 JURISDICTION. Except to the extent that the Delaware and Nova
Scotia corporate laws under which Parent, Newco I and Newco II are,
respectively, organized govern the determination of particular corporate issues
under this Agreement, this Agreement shall be construed and enforced in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.
4.10 ATTORNMENT. Each of the parties hereto, on behalf of such party
and such party's heirs, personal representatives, successors and permitted
assigns, agrees that any action or proceeding arising out of or relating to this
Agreement may be instituted in the courts of Ontario, waives any objection which
it may have now or hereafter to the venue of any such action or proceeding,
irrevocably submits to the jurisdiction of such courts in any such action or
proceeding, agrees to be bound by any judgment of such courts and not to seek,
and hereby waives, any review of the merits of any such judgment by the courts
of any other jurisdiction.
4.11 CONSTRUCTION. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
4.12 EXCHANGEABLE SHARE PROVISIONS. The parties hereto agree to take
such actions, execute such documents, and vote such securities as are necessary
to give full effect to the Exchangeable Share Provisions, as if they comprised a
contract among such parties.
4.13 EFFECTIVENESS OF AGREEMENT. This Agreement is being entered into
in anticipation of the "Closing" under the YPtel Agreement and the related
issuance of Class A Special Shares to certain of the Company shareholders in
exchange for some of their Company shares. This Agreement shall not become
effective until the Class A Special Shares are so issued, and if not so issued
within sixty (60) days after the date of this Agreement, but on or before March
1, 2000 in any event, this Agreement shall be null and void.
IN WITNESS WHEREOF, the parties have caused this Support Agreement to
be signed by their respective officers duly authorized, all as of the date first
written above.
-20-
ADVANCED COMMUNICATIONS GROUP, INC.
By:_________________________________________
ACG HOLDING COMPANY
By:_________________________________________
ACG EXCHANGE COMPANY
By:_________________________________________
CERTAIN YPTEL CORPORATION
STOCKHOLDERS (See Schedule A), by
their attorney, Imperial Capital
Limited
By:__________________________________________
THE J.L.R. FAMILY TRUST
Per:
_____________________________________________
Xxxxxxx X. Xxxxxxxxx - as trustee with no
personal liability and liability being
limited to trust assets
Per:
_____________________________________________
Xxxxxxx Xxxxxxx - as trustee with no
personal liability and liability
being limited to trust assets
THE PAISLEY FAMILY TRUST
Per:
_____________________________________________
Xxxxxxx X. Xxxxxx - as trustee with no
personal liability and liability being
limited to trust assets
Per:
_____________________________________________
Xxxxxxx Xxxxxxx - as trustee with no
personal liability and liability
being limited to trust assets
SCHEDULE A
CERTAIN HOLDERS OF SHARES OF YPTEL CORPORATION
