AMENDED AND RESTATED SHARE PURCHASE AGREEMENT
This Share Purchase Agreement entered into on the 7th day of September,
1999
BETWEEN:
LEDCOR INDUSTRIES LIMITED, a corporation continued under the laws of
the Province of Alberta, having an office at 1000 - 1066 West Hastings
Street, Vancouver, British Columbia, and LEDCOR INDUSTRIES INC., a
company incorporated pursuant to the laws of the State of Washington,
United States of America, having an office at 000 Xxxxxx Xxxxx, Xxxxxx
Xxxxxxxxxx, X.X.X. 00000
(hereinafter collectively referred to as the "Sellers")
OF THE FIRST PART
AND:
WORLDWIDE FIBER INC., a corporation continued under the laws of Canada,
having an office at 1520 - 0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx
(the "Purchaser")
OF THE SECOND PART
WHEREAS:
A. The Sellers own fiber optic strands, conduits and related rights and
obligations attaching thereto and the Purchaser wishes to acquire such
assets;
B. The parties entered into an agreement effective the 28th day of May, 1999
whereby the Sellers agreed to transfer the fiber assets and related rights
and obligations to a wholly-owned subsidiary of the Sellers and the
Purchaser agreed to acquire from the Sellers all of the shares of such
subsidiary (the "Original Share Purchase Agreement");
C. The parties entered into an Amended and Restated Share Purchase Agreement
on June 28, 1999, to amend certain provisions of the Original Share
Purchase Agree-
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ment and to restate the provisions thereof (the "First Amended and Restated
Share Purchase Agreement"); and
D. The parties wish to amend certain provisions of the Amended and Restated
Share Purchase Agreement and have agreed to restate the provisions thereof
as provided herein;
IN CONSIDERATION of the sum of $10.00 (U.S.) and other good and valuable
consideration passing between the parties hereto, the receipt and adequacy of
which is acknowledged by both parties, the parties covenant and agree as
follows:
1. Recitals and Definition.
1.1 Effect of Recitals. The parties hereto represent and warrant that the
above recitals are true and agree that the terms of this Amended and Restated
Share Purchase Agreement shall supersede and replace the terms of the Original
Share Purchase Agreement and the first Amended and Restated Share Purchase
Agreement and shall have effect as of and from the Effective Date (as defined
herein);
1.2 Definitions. Schedules A and B and the Exhibits attached to such
schedules are incorporated in this Share Purchase Agreement by this reference.
Any capitalized term used in this Share Purchase Agreement shall have the
meaning ascribed to such term in the Terms of Purchase attached as Schedule A.
In addition, the following capitalized terms shall have the meaning set out
below:
(a) "Closing Date" means the date on which the Roll-In Transaction is
completed pursuant to the provisions of the Terms of Purchase;
(b) "Effective Date" means the 28th day of May, 1999;
(c) "Encumbrances" means any and all mortgages, liens, charges, security
interests, encumbrances or other claims;
(d) "Newco Shares" means all of the issued and outstanding shares of
Newco;
(e) "Roll-In Transaction" means the transaction of purchase and sale
between the Sellers as vendor, and Newco as purchaser, whereby the
Fiber Assets (as defined in Schedule A) are transferred to Newco in
accordance with the terms and provisions of Schedule A attached;
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(f) "Share Closing" means completion of the share purchase transaction
contemplated herein which shall occur immediately following completion
of the Roll-In Transaction on the Closing Date; and
(g) "Terms of Purchase" means the terms and conditions of Schedule A
attached;
(h) "WFI Shares" means the Class C Multiple Voting Shares in the capital
of the Purchaser, having the rights and restrictions attaching thereto
as set out in Schedule B attached and any amendment to such rights or
restrictions which are consented to by both parties on or prior to the
Share Closing.
2. Roll-In Structure.
2.1 Sellers' Obligations. The Sellers shall complete the Roll-In
Transaction in accordance with the Terms of Purchase on the Closing Date
specified therein.
3. Purchase and Sale of Shares.
3.1 Sale and Purchase Price. The Purchaser on the Share Closing shall
acquire from the Sellers and the Sellers shall sell to the Purchaser, all of the
Newco Shares for a purchase price of $45,000,000 (U.S.). Such Purchase Price
shall be satisfied by the Purchaser issuing to the Sellers 4,500,000 WFI Shares,
free and clear of all Encumbrances.
4. Representations and Warranties.
4.1 Representations and Warranties of the Sellers. The Sellers represent
and warrant to the Purchaser and acknowledge and confirm that the Purchaser is
relying on such representations and warranties in connection with the purchase
by the Purchaser of the Newco Shares:
(a) Organization and Qualification. On the Share Closing, Newco will:
(i) be a company duly incorporated and organized and validly
subsisting in good standing under the laws of Alberta;
(ii) have the corporate power to own its assets and carry on the
business of owning fiber optic communication cables and related
facilities;
(iii) be duly qualified as a company to do business; and
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(iv) be extra-provincially registered in the Province of British
Columbia to carry on business and no impediment shall exist for
Newco to carry on business in those jurisdictions in which it
carries on business or in which the location of its assets makes
such qualification necessary.
(b) Due Authorization Etc. The Roll-In Transaction contemplated hereunder
will on the Share Closing be duly authorized by all necessary
corporate action on the part of Newco.
(c) No Conflicts or Violations. The entering into of the Purchase
Agreement by Newco, as the case may be, will not result in violation
of any of the terms and provisions of the articles or by-laws of Newco
or of any indenture or other agreement, written or oral, to which any
of Newco or the Sellers may be a party or by which they are bound or
will be bound on the Share Closing.
(d) Authorized Capital. The authorized capital of Newco consists of an
unlimited number of common voting shares of which (i) immediately
prior to the Roll-In Transaction only one common share shall have been
duly issued to the Sellers jointly as fully paid and non-assessable;
and (ii) immediately prior to the Share Closing only 1,000 common
shares shall have been issued and those will have been issued in
favour of the Sellers and will be outstanding as fully paid and
non-assessable;
(e) Options Etc. No person has any option, warrant, right, call,
commitment, conversion right, right of exchange or other agreement or
any right or privilege (whether by law, pre-emptive or contractual)
capable of becoming an option, warrant, right, call, commitment,
conversion right, right of exchange or other agreement:
(i) for the purchase from either of the Sellers of any of the issued
and outstanding shares of Newco; or
(ii) for the purchase, subscription, allotment or issuance of any of
the unissued shares of the capital of Newco or of any securities
of Newco.
(f) Status of Newco Shares. Subsequent to the Roll-In Transaction and
immediately prior to the Share Closing the Newco Shares shall be
issued in the name of the Sellers, jointly, as the registered and
beneficial owners thereof with good and marketable title thereto, free
and clear of all mortgages, liens,
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charges, pledges, security interests, encumbrances or other claims
whatsoever, other than rights in favour of the Purchaser pursuant to
this Share Purchase Agreement; each of the Sellers has the right,
power and authority to enter into this Agreement and to sell all the
Newco Shares on the Share Closing as contemplated herein, and the
delivery of such Newco Shares to the Purchaser pursuant to the
provisions hereof will transfer to the Purchaser valid title thereto,
free and clear of all Encumbrances.
(g) Title to Assets. Newco, on the Share Closing, shall beneficially own,
possess and have good and marketable title to the Fiber Assets, free
and clear of any Encumbrances save for the Permitted Encumbrances.
(h) Outstanding Debt or Guarantees. Newco, on the Share Closing, shall
have no outstanding liability for borrowed money or other indebtedness
and Newco shall not be a guarantor or otherwise contingently liable
for the obligations of any other person including for the Sellers or
either of them, except for the obligations to be assumed by Newco
pursuant to the Terms of Purchase.
(i) Employees. On the Share Closing, Newco shall have no employees.
4.2 Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Sellers and acknowledges and confirms that the
Sellers are relying on such representations and warranties in connection with
the issue by the Purchaser of the WFI Shares to the Sellers:
(a) Organization and Qualification. The Purchaser is a corporation duly
continued, validly subsisting and in good standing under the laws of
Canada and is extra-provincially registered to carry on business in
the Province of British Columbia.
(b) Due Authorization Etc. The Purchaser has the exclusive right and has
all necessary corporate power and authority to enter into this Share
Purchase Agreement and to carry out its obligations hereunder, and the
execution and delivery of this Share Purchase Agreement and the
consummation of the transactions contemplated hereunder have been duly
authorized by all necessary corporate action on the part of the
Purchaser.
(c) No Conflicts or Violations. The entering into of this Agreement and
the transactions contemplated hereby will not result in the violation
of any of the terms and provisions of the constating documents or
bylaws of the Purchaser
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or of any indenture or other agreement, written or oral, to which the
Purchaser is a party or by which it is bound.
(d) Authorized Capital. Immediately prior to the Share Closing the
authorized capital of the Purchaser shall consist of:
(i) an unlimited number of Class A Non-Voting Shares;
(ii) an unlimited number of Class B Subordinate Voting Shares;
(iii) an unlimited number of Class C Multiple Voting Shares;
(iv) an unlimited number of Preferred Shares, of which the first
series shall consist of 100,000,000,000 Series A Non-Voting
Shares, the second series shall consist of 100,000,000,000 Series
B Subordinate Voting Preferred Shares and the third series shall
consist of 45,000,000 Series C Preferred Shares,
of which no more than 24,000,000 Class B Subordinate Voting Shares
shall be issued and outstanding, which amount may be increased by any
additional shares issued pursuant to the options and agreements
described in Section 4.2(f) below.
(e) No Liens, Etc. On the Share Closing there shall be no Encumbrances
affecting any of the WFI Shares to be issued to the Sellers on
Closing.
(f) Options, Etc. On the Share Closing, except for options granted
pursuant to the Purchaser's director and employee stock option plan,
certain options issued to an employment agency or consultant engaged
by the Purchaser and agreements to issue certain shares to certain
investors and to certain minority shareholders of subsidiaries (all of
which have been accurately and fully disclosed by the Purchaser to the
Sellers), no person has any option, warrant, right, call commitment,
conversion right or other agreement capable of becoming an option,
warrant, right, call, commitment or conversion right for the purchase,
subscription, allotment or issuance of any of the unissued shares in
the capital of the Purchaser.
4.3 Survival of Representations and Warranties. The representations and
warranties of each of the Sellers and of the Purchaser contained in this
Agreement and contained in certificates or documents submitted pursuant to or in
connection with the transactions herein provided for shall survive the Share
Closing and, notwithstanding such
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closing, shall continue in full force and effect for the benefit of the Sellers
or the Purchasers, as the case may be, for a period of three years from the
Share Closing.
5. Purchaser's Rights of Assignment.
5.1 Reasonable Requests. The Sellers agree to accommodate all reasonable
requests of the Purchaser to transfer the Fiber Assets, as the case may be, to
Newco and/or additional wholly-owned subsidiaries of the Sellers as may be
expedient from the Purchaser's perspective for accounting or taxation purposes
and the parties agree to execute such amending agreements and additional
documents as may be reasonably required to reflect that "Newco" may be one or
more corporate entities, each owning a portion of the Fiber Assets subject to
the Roll-In Transaction.
6. Joint and Several Obligations.
6.1 The obligations of the Sellers herein shall be joint and several
obligations of Ledcor Industries Limited and Ledcor Industries Inc.
7. Covenants.
7.1 Covenants of the Sellers.
(a) Deliveries. On the Share Closing, the Sellers shall deliver or cause
to be delivered to the Purchaser the following in form and substance
satisfactory to the Purchaser:
(i) Share certificates representing the Newco Shares, duly endorsed
for transfer, or accompanied by duly executed irrevocable
security powers of attorney, together with evidence satisfactory
to the Purchaser that the Purchaser or its nominees have been
duly entered upon the books of Newco as the holder of the Newco
Shares;
(ii) A certificate of senior officers of both Sellers certifying the
names and signatures of its officers and directors authorized to
sign the documents to be delivered by the Sellers under this
Agreement;
(iii) Certificates duly executed by each of the Sellers to the effect
that each of the representations and warranties of such Sellers
set forth in section 4.1 of this Agreement are true and correct
as at the Share Closing with the same force and effect as if it
were made at and as of such time;
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(iv) Certificates duly executed by an officer of Newco to the effect
that each of the representations and warranties applicable to
Newco set forth in section 4.1 are true and correct at the Share
Closing with the same force and effect as if it were made at and
as of such time;
(v) Duly executed resignations of all persons who are directors or
officers of Newco immediately prior to the Share Closing;
(vi) All necessary deeds, conveyances, bills of sale, assurances,
transfers, assignments and consents, and any other documents
necessary or reasonably required effectively to transfer the
Newco Shares to the Purchaser with a good and marketable title
thereto, free and clear of all Encumbrances; and
(vii) Such other documents including opinions of legal counsel for
Newco as may be required by the Purchaser, acting reasonably.
(b) Restrictions against dealing with Fiber Assets. From and after the
Effective Date, the Sellers shall not transfer, encumber, lease,
exchange or otherwise deal with or alienate the Fiber Assets without
the prior written consent of the Purchaser. In addition, the Sellers
shall not amend or otherwise alter any obligations to be assumed by
Newco pursuant to the terms of the Terms of Purchase without the prior
written consent of the Purchaser being obtained. The Purchaser may
enter into agreements respecting the Fiber Assets conditional upon the
Purchaser acquiring control of the Fiber Assets as contemplated in
this Agreement and the Terms of Purchase.
(c) Rights of Purchaser. The Sellers acknowledge and agree that Newco or
the Purchaser may install on the Purchased Strands DWDM optical
equipment and ancillary support equipment required to utilize the
Purchased Strands for the transmission of telecommunication services
(such equipment being referred to herein as the "Equipment"). The
Sellers shall allow the Purchasers reasonable access to their shelters
and to the Purchased Strands to allow installation of the Equipment.
In the event that completion of the share purchase transaction
contemplated herein fails to complete on or prior to the Share Closing
Date, the Purchaser shall, at its option, exercisable by written
notice (the "Equipment Notice") delivered by the Purchaser to the
Sellers, either:
(i) remove the Equipment and restore the Purchased Strands to the
condition existing immediately prior to installation of the
Equipment; or
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(ii) require the Sellers to acquire the Equipment at a price equal to
the lesser of (A) fair market value of the Equipment at the time
of transfer and (B) the Purchaser's book value of the Equipment
determined in accordance with generally accepted accounting
principles at the time of transfer.
The Equipment Notice shall specify whether the Purchasers are
exercising option (i) or (ii) above and the date upon which either the
removal or transfer, as the case may be, will take place, which date
shall not be more than 180 days following delivery of the Equipment
Notice.
7.2 Covenants of the Purchaser.
(a) Deliveries. On or before the Share Closing, the Purchaser shall
deliver or cause to be delivered to the Sellers the following in form
and substance satisfactory to the Sellers.
(i) Share certificates representing the WFI Shares to be delivered to
the Sellers in satisfaction of the purchase price;
(ii) An opinion of counsel to WFI opining as to the due incorporation
of WFI that all necessary corporate action has been taken by WFI
with respect to issuance of the WFI Shares; any restrictions on
transfer effecting the WFI Shares; the issued and outstanding
shares of WFI at the time of issuance and any other matters
reasonably requested by the solicitors for the Sellers;
(iii) A certificate of a senior officer of the Purchaser certifying
the names and signatures of its officers and directors authorized
to sign the documents to be delivered by the Purchaser under this
Agreement;
(iv) A certificate duly executed by the Purchaser to the effect that
each of the representations and warranties of the Purchaser set
forth in section 4.2 are true and correct at the time of the
Share Closing with the same force and effect as if it were made
at and as of such time;
(v) All necessary deeds, conveyances, bills of sale, assurances,
transfers, assignments and consents, and any other documents
necessary or reasonably required to effectively issue, as fully
paid and nonassessable, the WFI Shares to the Sellers with a good
and marketable title thereto, free and clear of all Encumbrances;
and
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(vi) Such other documents as may be required by the Sellers, acting
reasonably.
7.3 Tax Election. The parties agree that Newco and the Purchaser will
jointly elect pursuant to Subsection 85(1) of the Income Tax Act (Canada) (the
"Act") that the proceeds of disposition for the Newco Shares shall be equal to
the Sellers' tax cost of such shares. The parties agree that such joint
elections shall be filed within the prescribed time and in the prescribed form
set forth in the Act.
8. General.
8.1 Notices. Any notice or other communications required or permitted to be
given pursuant to this Agreement shall be in writing and shall be hand delivered
(including delivery by courier service), or sent by certified mail return
receipt requested, postage prepaid or by facsimile transmission, as follows:
If to the Sellers:
c/o Ledcor Industries Limited
#1000 - 0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X., Xxxxxx X0X 0X0
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
If to the Purchaser:
Worldwide Fiber Inc.
1520 - 0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X., Xxxxxx X0X 0X0
Facsimile: (000) 000-0000
Attention: Xx. Xxxxxxx Xxxx, Executive Vice President
Any notice or communication shall be deemed given or made (i) when delivered by
hand (or courier service) (ii) when mailed three business days after being
deposited in the mail postage prepaid sent by certified mail, return receipt
requested and (iii) when sent by facsimile transmission, when confirmation of
transmission is received.
8.2 Entire Agreement. This Share Purchase Agreement, together with the
Schedules attached hereto, including the Exhibits thereto, constitutes the
entire agreement between the parties and there are no other verbal statements,
representations, warranties, undertakings or agreements between the parties with
respect to the subject matter hereof or the transaction of purchase and sale
arising hereunder. This Share Purchase Agreement
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may not be amended or modified in any respect except by written instrument
signed by both parties and any agreements contemplated hereunder are to be
evidenced in writing.
8.3 Time of the Essence. Time shall be of the essence in this Share
Purchase Agreement.
8.4 Severability and Waiver. If any provision of this Share Purchase
Agreement is declared invalid or unenforceable by a court of competent
jurisdiction this Share Purchase Agreement shall endure except for that part
declared invalid or unenforceable by such order. A waiver of any breach or
provision of this Share Purchase Agreement shall not be construed as a
continuing waiver of other breaches of the same or other provisions of this
Share Purchase Agreement nor a waiver of a subsequent breach or default of any
term, provision or condition set out herein.
8.5 Governing Law. This Purchase Agreement has been made and shall be
governed by and construed in accordance with the laws of the Province of British
Columbia and the laws of Canada applicable therein.
8.6 Enurement. Save as specifically provided herein with respect to Newco
designating affiliates who may acquire all or some of the Fiber Assets, neither
party may assign their rights or obligations pursuant to this Share Purchase
Agreement without the prior written consent of the other, not to be unreasonably
withheld or delayed. This Share Purchase Agreement shall enure to the benefit of
and be binding upon the parties hereto and their respective administrators,
successors and permitted assigns.
8.7 Further Assurances. From time to time both prior to and subsequent to
the Share Closing the parties shall execute and deliver such additional
conveyances, transfers and other assurances as may be reasonably required to
carry out the intent and effect of this Share Purchase Agreement and to complete
the Roll-In Transaction.
8.8 Schedules. The Schedules listed below and attached to this Agreement
shall form part of this Share Purchase Agreement.
Schedule A Terms and Conditions of Roll-In Transaction
Schedule B Rights and Restrictions Attaching to WFI Shares
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IN WITNESS WHEREOF the parties have executed this Agreement to have effect
as of and from the Effective Date.
WORLDWIDE FIBER INC. LEDCOR INDUSTRIES LIMITED
per: per:
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signature signature
------------------------------- -------------------------------
Name and Office Name and Office
LEDCOR INDUSTRIES INC.
per:
-------------------------------
signature
-------------------------------
Name and Office
SCHEDULE A
TO SHARE PURCHASE AGREEMENT BETWEEN
LEDCOR INDUSTRIES INC., LEDCOR INDUSTRIES LIMITED
AND WORLDWIDE FIBER INC.
TERMS AND CONDITIONS OF
ROLL-IN TRANSACTION
1. Definitions.
(a) "Assignment and Assumption Agreement(s)" means an agreement or
agreements between Ledcor as assignor and Newco as assignee:
(i) wherein Ledcor assigns its rights pursuant to the Assumed
Contracts to Newco as of and from the Closing Date;
(ii) Newco agrees to perform all of the obligations of Ledcor pursuant
to the Assumed Contracts as of and from the Closing Date; and
(iii) Ledcor indemnifies and holds harmless Newco from any damage,
loss, claim or costs suffered by Newco arising from breach or
default by Ledcor attributable to the period prior to the Closing
Date and Newco indemnifies and holds harmless Ledcor for any
damage, loss, claim or costs suffered by Ledcor arising from
breach or default by Newco attributable to the period on or
following the Closing Date;
(b) "Assumed Contracts" means those agreements currently binding Ledcor
relating to the Fiber Assets which are specified in Exhibit 2 to this
Schedule A together with the Build Agreements and any additional
agreements entered into by Ledcor in the normal course of its
telecommunications business prior to the Closing;
(c) "Build Agreements" means the agreements described in Exhibit 3
attached hereto;
(d) "Closing" means completion of the transactions contemplated hereby
which shall take place at the offices of Ledcor in Vancouver at 10:00
a.m. Vancouver time on the Closing Date or such other time as agreed
to by the parties;
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(e) "Closing Date" means September 30, 1999, unless otherwise extended or
amended in accordance with paragraph 3 of this Schedule A;
(f) "Dollars or $" means dollars in the currency of the United States of
America;
(g) "Fiber Assets" means:
(i) all rights of Ledcor pursuant to the Assumed Contracts, as
assigned to Newco under the Assignment and Assumption Agreements;
(ii) the segments of fiber optic strands identified in Exhibit 1
attached hereto, which strands, together with other strands, form
part of a cable which has been encased in conduit and placed in
ground or undersea or is otherwise located along the routes
identified in Exhibit 1, but which strands have not yet been
activated by electronics or optronics, together with certain
in-ground conduit also specified in Exhibit 1 (collectively the
"Purchased Strands");
(iii) a nonexclusive right to use and enjoy, in common with all others
having rights with respect to other strands forming part of the
fiber optic cable containing portions of the Purchased Strands,
each easement, license, right-of-way or similar right owned or
acquired or hereafter acquired by Ledcor, on and subject to the
terms and conditions set out in the agreements governing such
rights and all ancillary agreements thereto, with respect to
lands or buildings through which such fiber optic cable passes;
and
(iv) the rights of Ledcor relating to any Support Structures;
(h) "Ledcor" means Ledcor Industries Inc. and Ledcor Industries Limited
being the parties described as the Seller in the Purchase Agreement;
(i) "Newco" means a company to be incorporated by Ledcor under the Alberta
Business Corporations Act which shall have no assets or liabilities
exceeding a value of $10 (U.S.) immediately preceding the Closing
contemplated herein;
(j) "Newco Common Shares" means common voting shares in the capital of
Newco having the rights and restrictions described in Exhibit 4
attached hereto;
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(k) "Permitted Encumbrances" means those encumbrances, liens, agreements,
mortgages, charges, security interests or similar claims set out in
Exhibit 5 attached hereto;
(l) "Purchase Agreement" means the agreement of purchase and sale
containing the terms set out in this Schedule A between Ledcor as
Seller and the Purchaser, to be executed and delivered on Closing;
(m) "Share Purchase Agreement" means the Amended and Restated Purchase
Agreement between Ledcor and Newco to have effect from the 28th day of
May, 1999 and of which this Schedule A forms a part;
(n) "Support Structures" means the infrastructure necessary to support the
Purchased Strands, including, without limitation, communications
shelters, cable sheathing and all associated conduit, troughing,
pedestals and related equipment, but excluding electronics and
optronics necessary to activate the Purchased Strands; and
(o) "Underlying Rights" has the meaning set forth in section 6(f) below.
2. Purchase and Sale. On Closing Ledcor shall transfer to Newco the Fiber
Assets free and clear of all liens, charges and encumbrances save for the
Permitted Encumbrances and Newco shall purchase same for the purchase price of
$45,000,000 (U.S.) (the "Purchase Price") in accordance with the terms and
conditions set out in this Purchase Agreement.
3. Closing Date. In the event that Worldwide Fiber Inc. has not, on or
before September 30, 1999, completed an initial public offering of shares in its
common stock on a recognized exchange, either party may, by written notice to
the other - and with the consent of Worldwide Fiber Inc., extend the Closing
Date to a date no later than March 31, 2000. Notwithstanding any extension or
amendment of the Closing Date herein, Newco with the consent of Worldwide Fiber
Inc. may, at any time prior to the Closing Date, on ten days prior written
notice to Ledcor, accelerate the Closing Date to such date as may be set out in
the notice. The parties acknowledge that the Closing Date has been set at
September 27, 1999.
4. Satisfaction of Purchase Price. Newco shall satisfy the Purchase Price
by issuing to Ledcor 000 Xxxxx Xxxxxx Shares.
5. Adjustments. Following Closing, the parties shall make adjustments
between themselves as provided below:
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(a) Ledcor and Newco confirm and declare that the purchase price has been
calculated based on (x) the price paid by MetroNet to Ledcor and
fONOROLA for the transfer of certain fiber assets, and (y) deducting
therefrom the anticipated cost of performing certain obligations to be
assumed by Newco hereunder. It is the intention of Ledcor and Newco
that the transfer of the Fiber Assets be effected on economic terms
equivalent to the terms, responsibilities and arrangements between
Ledcor, fONOROLA and MetroNet relating to the transfer by Ledcor and
fONOROLA to MetroNet of such fiber assets.
(b) Accordingly, following Closing the parties shall adjust between
themselves, from time to time at and after the Closing, with respect
to the following matters:
(i) Ledcor and Newco shall each pay to the other such amounts as may
be necessary, acting reasonably, to effect the intent described
in subsection 5(a).
(ii) Without limiting the generality of the foregoing, all costs,
expenses and payments which relate to the cost of the builds
including, without limitation, right-of-way and similar charges
(for clarity, including without limitation those relating to WFI
or any other purchaser of fiber assets and, in respect of all
rights-of-way and similar charges, for the term expiring on March
1, 2018), construction costs, holdbacks, warranty claims and all
costs of performing any assumed obligations where Newco has not
received the associated revenue, shall be paid by Ledcor. For
greater certainty, this obligation shall continue indefinitely,
but Ledcor shall remain responsible for all right-of-way payments
relating to or necessary for the sale of fiber stands to MetroNet
or to Newco in respect of the initial term expiring March 1,
2018.
(iii) Without limiting the generality of the foregoing, with respect
to the obligation of fONOROLA to make ongoing right-of-way
payments to CPR, and the obligation of Ledcor to reimburse
fONOROLA for 50% of such payments, all such amounts shall be paid
by Ledcor, and Ledcor shall be entitled to any surplus which may
arise under (and Ledcor shall pay any deficiency in relation to)
the amounts held in trust by Stikeman, Xxxxxxx to secure the
obligation to CPR.
(iv) Except as expressly provided above, the parties shall adjust any
prepaid or accrued amounts owing pursuant to the Assumed
Contracts,
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and all costs and revenue associated with the Assumed
Contracts, with Ledcor to be responsible for all costs and
expenses and to receive all benefits attributable to the period
prior to the Closing Date and Newco to be responsible for all
costs and expenses and to receive all benefits attributable to
the period as of and from the Closing Date. For greater
certainty, Ledcor acknowledges it has prepaid amounts relating to
obligations which Newco will covenant to perform under the terms
of the Assignment and Assumption Agreements. In finalizing
adjustments between the parties, these amounts shall be pro rated
to the Closing Date and shall be credited to Newco.
(v) Except as expressly provided above, as of the Closing Date, there
shall also be adjusted between Ledcor and Newco, utility rates
and charges, other income from the Fiber Assets, taxes,
insurance, other amounts received from purchasers, licensees and
tenants, deposits and interest thereon, fuel, prepaid expenses
and all other items normally adjusted between a vendor and
purchaser in the sale of similar assets so that Ledcor shall pay
all expenses and receive all income relative to the Fiber Assets
prior to the Closing Date and Newco shall bear and pay all
expenses and receive all income relative to the Fiber Assets from
and including the Closing Date.
(vi) Newco shall be responsible for payment of all taxes, rates,
duties, assessments and charges levied, rated, charged or
assessed in respect of the Fiber Assets that are payable in
respect of all periods of time from and after the Closing Date,
and Ledcor shall be responsible for payment of all taxes, rates,
duties, assessments and charges levied, rated, charged or
assessed in respect of the Fiber Assets that are payable in
respect of all periods of time before the Closing Date.
(vii) The parties agree that assumption of the commitment in the Build
Agreements to supply 12 fiber strands between Portland and Los
Angeles to fONOROLA has been reflected in the calculation of the
Purchase Price and there will be no adjustment between the
parties with respect to such assumed obligation.
6. Representations and Warranties of Ledcor. Ledcor represents and warrants
to, and covenants with, Newco that:
(a) Status. Ledcor Industries Limited is a corporation duly continued,
validly existing and in good corporate standing under the laws of the
Province of
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Alberta with respect to all filings required under applicable
legislation and Ledcor Industries Inc. is duly incorporated and in
good standing under the laws of the State of Washington, U.S.A.;
(b) Authority. Ledcor has all necessary corporate capacity and authority
to carry on its business, including the construction and ownership of
fiber optic cables and has full power and capacity to enter into this
Purchase Agreement and carry out the terms of this Purchase Agreement;
(c) Residency. Ledcor Industries Ltd. is not a non-resident of Canada
within the meaning of Section 116 of the Canadian Income Tax Act;
(d) Title to Purchased Assets. Ledcor has good title to the Fiber Assets
free and clear of all liens, charges and encumbrances, with full right
to deal with such assets without the consent of any other person other
than the third party consents contemplated under Section 11, subject
however, in each case, to the Permitted Encumbrances;
(e) Licenses, Permits. Ledcor possesses all material licenses, permits,
tax registration certificates and operating authorities required to
carry on its business and Ledcor is not aware of any material default
by it under the terms of any such licenses, permits, tax registration
certificates and operating authorities;
(f) Underlying Rights. To the best of Ledcor's knowledge, pursuant to the
Build Agreements (described in Exhibit 3 attached hereto), one or more
of fONOROLA Telecommunications, Limited Partnership, fONOROLA Fiber
Development Inc. and Ledcor have secured or are proceeding to secure
from the owners of all lands and properties through which the
Purchased Strands pass sufficient easements, licenses, rights of way
or similar permission (collectively "Underlying Rights") to assure
peaceable occupation, quiet possession and use, subject to the terms
of and compliance with the Assumed Contracts and all related primary
licensing documents and laws, of the Purchased Strands and the
proportionate undivided interest in the Support Structures to which
the owner of the Purchased Strands is entitled, free of any material
adverse claims of such owners or those claiming through them;
(g) Litigation Etc. There are no material actions, suits, judgments,
proceedings or other adverse claims against or affecting Ledcor or the
Fiber Assets or the right to acquire or use them at law or at equity
before any federal, provincial, state, municipal or governmental
department, commission, court or
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agency with respect to construction, ownership or use of the Purchased
Strands or in connection with any of the Assumed Contracts, except
possibly the application commenced by Ledcor against the City of
Vancouver under Part VII of the Telecommunications Act (Canada)
relating to charges which the City of Vancouver attempted to impose;
(h) Status of Build Agreements. On Closing there shall be no restrictions
binding Ledcor which would prevent or impede the transfer of the Fiber
Assets to Newco as contemplated herein or place any restriction on
Newco's ability to deal with the Fiber Assets as it sees fits, other
than as set out in the Assumed Contracts or Permitted Encumbrances;
(i) Compliance with Constating Documents, Agreements and Laws. Execution
of this Purchase Agreement and completion of the transactions
contemplated hereby does not and will not:
(i) conflict with, breach, or violate any of the terms, conditions or
provisions of the constating documents of Ledcor;
(ii) conflict with, breach, or violate any of the terms, conditions or
provisions of any law, judgment, order or ruling of any court or
governmental authority, domestic or foreign, to which Ledcor is
subject or trigger default under any agreement or commitment to
which Ledcor is a party or by which its assets are bound which
would have a material adverse effect upon Ledcor, financial or
otherwise, or its ability to perform its obligations hereunder;
(iii) subject to Section 11 hereof, give to any person any remedy,
cause of action or right of termination with respect to any of
the Assumed Contracts or any other material agreement or
commitment to which Ledcor is a party; or
(iv) give to any governmental authority any right of termination or
constitute a default under any material permit, license, control
or authority issued to Ledcor in connection with the Fiber
Assets.
(j) GST Registrant. Ledcor Industries Ltd. is a "GST Registrant" in good
standing and its GST Registration Number is 103025847.
7. Representations and Warranties of Newco. Newco represents and warrants
to, and covenants with, Ledcor that, effective as of the Share Closing:
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(a) Corporate Status. Newco is a corporation duly incorporated, validly
existing and in good corporate standing under the laws of Alberta with
respect to all filings required under any applicable legislation;
(b) Authority. Newco has all necessary corporate capacity and authority to
carry on its business, including ownership of the Fiber Assets and has
full power and capacity to enter into and complete the transaction of
purchase and sale contemplated by this Purchase Agreement;
(c) Licenses, Permits. Newco possesses all material licenses, permits, tax
registration certificates and operating authorities required to carry
on its business and Newco is not aware of any material default by it
under the terms of any such licenses, permits, tax registration
certificates and operating authorities;
(d) Compliance with Constating Documents, Agreements and Laws. Completion
of the transactions contemplated hereby does not and will not:
(i) conflict with, breach, or violate any of the terms, conditions or
provisions of the constating documents of Newco;
(ii) conflict with, breach, or violate any of the terms, conditions or
provisions of any law, judgment, order or ruling of any court or
governmental authority, domestic or foreign to which Newco is
subject or trigger a default under any agreement or commitment to
which Newco is a party or by which its assets are bound which
would have a material adverse effect upon Newco, financial or
otherwise, or its ability to perform its obligations hereunder;
(iii) give to any person any remedy, cause of action or right of
termination with respect to any material agreement or commitment
to which Newco is a party; or
(iv) give to any governmental authority, including any department,
commission, board or administrative agency, any right of
termination or constitute a default under any material permit,
license, control or authority issued to Newco in connection with
the Fiber Assets;
(e) GST Registrant. Newco is a "GST Registrant" in good standing;
(f) Authorized Capital. The authorized capital of Newco consists, or will
consist on Closing of an unlimited number of Newco Common Shares of
which
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no more than one Newco Common Share issued to Ledcor shall be issued
and outstanding as fully paid and non-assessable shares as of the
Closing;
(g) No Liens, etc. On Closing, there shall be no liens, charges or
encumbrances charging any of the shares to be issued to Ledcor, as the
case may be, on Closing; and
(h) Options, Etc. Except as provided or referred to herein, no person has
any option, warrant, right, call commitment, conversion right or other
agreement capable of becoming an option, warrant, right, call
commitment or conversion right for the purchase, subscription,
allotment or issuance of any of the unissued shares in the capital of
Newco as at the Closing Date.
8. United States Real Property Interests. To the extent any of the assets
sold hereunder to Newco are, or are deemed to be, United States real property
interests (as defined in the United States Internal Revenue Code) sold by a
non-resident of the United States (within the meaning of the United States
Internal Revenue Code), Ledcor hereby agrees to indemnify and hold Newco
harmless with respect to all tax obligations and liabilities, penalties, costs
and interest in connection therewith.
9. Insurance. Ledcor shall cause the tangible Fiber Assets to be adequately
insured up to Closing and Newco shall be responsible for insuring such assets
following Closing.
10. Closing Deliveries. On closing the parties shall execute, deliver and
exchange such certificates, agreements, assignments, bills of sale and other
items required to complete the transactions contemplated herein, in form and
substance satisfactory to both parties, acting reasonably, including, without
limitation the following:
(a) documents duly executed and delivered by Ledcor:
(i) Xxxx(s) of Sale respecting the Purchased Strands;
(ii) Certified copy of a resolution of the board of directors of
Ledcor approving the sale of the Fiber Assets on the terms set
out herein and confirming that sale of the Fiber Assets does not
constitute a sale of all or substantially all of the assets of
Ledcor;
(iii) a certificate duly executed by Ledcor to the effect that each of
the representations and warranties of Ledcor set forth in
paragraph 6 are true and correct at Closing with the same force
and effect as if it were made at Closing;
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(iv) subject to Section 11 hereof, consents of any third parties
required to complete the sale transactions contemplated herein,
including the release of any lien, charge or encumbrance holders
who are not holders of Permitted Encumbrances; and
(v) the Assignment and Assumption Agreement(s);
(b) documents duly executed and delivered by Newco:
(i) certified copies of the (A) the certificate of incorporation,
articles and by-laws of Newco, (B) the resolutions of the
directors approving completion of the transactions contemplated
hereunder including the issuance of the Newco Common Shares, as
contemplated herein, and (C) all other documents evidencing
necessary corporate action of Newco;
(ii) a certificate duly executed by Newco to the effect that each of
the representations and warranties of Newco set forth in
paragraph 7 are true and correct as of Closing with the same
force and effect as if it were made at and as of Closing;
(iii) share certificates representing the Newco Shares to be issued to
Ledcor in satisfaction of the Purchase Price; and
(iv) the Assignment and Assumption Agreement(s) duly executed by
Newco.
11. Third Party Consents. To the extent the assignment of any contract,
agreement, commitment, license, permission or permit to be assigned to Newco
pursuant to this Agreement shall require the consent of any other party, this
Agreement shall not constitute a contract to assign same if an attempted
assignment would constitute a breach thereof. Ledcor shall use its reasonable
best efforts to procure consent to such assignments. If any such consent is not
obtained, Newco shall cooperate with Ledcor in any reasonable arrangement
designed to provide Newco the benefit of any such contract, agreement,
commitment, license, permission or permit. Nothing contained herein shall be
construed to negate or diminish as between Newco and Ledcor, Ledcor's covenants
and obligations to transfer and deliver to Newco the Fiber Assets as provided in
this Agreement.
12. Tax Election. The parties hereto agree that the transfer of the Fiber
Assets to Newco shall be accomplished, to the extent possible, on a tax-free
rollover basis. Ledcor and Newco agree that they will jointly elect, pursuant to
Subsection 85(1) of the
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Income Tax Act (Canada) (the "Act") in the prescribed form and within the time
limited thereby, specifying the elected proceeds of disposition for tax purposes
for that portion of the Fiber Assets in Canada to be equal to Ledcor Industries
Limited's adjusted cost base and, for U.S. tax purposes, that the elected amount
for that portion of the Fiber Assets located in the United States shall be equal
to the fair market value of such United States assets.
13. Miscellaneous.
(a) Notice. The provisions respecting notice set forth in paragraph 8.1 of
the Share Purchase Agreement apply with respect to any notice to be
given pursuant to the provisions of this Purchase Agreement.
(b) Representations, Warranties. The representations, warranties and
covenants of the parties set forth herein shall not merge on Closing
but shall survive for a period of 3 years following Closing.
(c) Entire Agreement. The Share Purchase Agreement, together with the
terms and conditions set forth in this Schedule A, including the
Exhibits hereto, constitute the entire agreement between the parties
and there are no other verbal statements, representations, warranties,
undertakings or agreements between the parties with respect to the
subject matter of the Share Purchase Agreement or the transaction of
purchase and sale arising thereunder. This Purchase Agreement may not
be amended or modified in any respect except by written instrument
signed by both parties and any agreements contemplated hereunder are
to be evidenced in writing.
(d) Time of the Essence. Time shall be of the essence of this Purchase
Agreement.
(e) Severability and Waiver. If any provision of this Purchase Agreement
is declared invalid or unenforceable by a court of competent
jurisdiction this Purchase Agreement shall endure except for that part
declared invalid or unenforceable by such order. A waiver of any
breach or provision of this Purchase Agreement shall not be construed
as a continuing waiver of other breaches of the same or other
provisions of this Purchase Agreement nor a waiver of a subsequent
breach or default of any term, provision or condition set out herein.
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(f) Governing Law. This Purchase Agreement has been made and shall be
governed by and construed in accordance with the laws of the Province
of British Columbia and the laws of Canada applicable therein.
(g) Enurement. Save as specifically provided herein with respect to Newco
designating affiliates who may acquire all or some of the Fiber
Assets, neither party may assign their rights or obligations pursuant
to this Purchase Agreement without the prior written consent of the
other, not to be unreasonably withheld or delayed. This Purchase
Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective administrators, successors and
permitted assigns.
(h) Further Assurances. From time to time both prior to and subsequent to
the Closing Date the parties shall execute and deliver shall
additional conveyances, transfers and other assurances as may be
reasonably required to carry out the intent and effect of this
Purchase Agreement and to transfer the Fiber Assets to Newco.
(i) Exhibits. The Exhibits listed below attached to this Schedule A shall
form part of this Purchase Agreement.
Exhibit 1 - Description of Purchased Strands
Exhibit 2 - List of Assumed Contracts
Exhibit 3 - Description of Build Agreements
Exhibit 4 - Rights and Restrictions Attaching to
Newco Common Shares
Exhibit 5 - Description of Permitted Encumbrances
Exhibit 1
Installed Installed
Ledcor Additional Additional No. of Contiguous 6 Remaining Total
Original Strands Conduit Route Km's Fiber Km's Fiber Km's Conduit Km's
"B" Strands
