Exhibit 10.45
UNANIMOUS SHAREHOLDERS AGREEMENT
THIS AGREEMENT Dated For Reference the _____ day of April, 2000
BETWEEN:
360NETWORKS INC.
("360")
AND:
360 URBANLINK LTD.
("360-Holdco")
AND:
WORLDWIDE FIBER HOLDINGS LTD.
("WFHL")
AND:
URBANLINK HOLDINGS LTD.
(the "Corporation")
AND:
WFI URBANLINK LTD.
("Urbanlink")
WHEREAS:
A. The Corporation owns all of the issued and outstanding shares of
Urbanlink.
B. Urbanlink carries on business in Canada as a telecommunications common
carrier.
C. 360-Holdco and WFHL are the registered and beneficial holders of the
numbers of issued and outstanding shares in the capital of the Corporation set
out in Schedule C, which shares represent the only issued and outstanding shares
of the Corporation.
D. 360-Holdco is a wholly-owned indirect subsidiary of 360.
E. 360-Holdco, WFHL and 360 wish to establish their respective rights and
obligations in respect of their shares in the Corporation and record their
agreement in respect of the other matters set out in this Agreement.
SECTION 1
TERMS OF AGREEMENT
In consideration of the premises and the mutual covenants contained in this
Agreement, the parties to this Agreement covenant and agree each with the others
as follows:
1.1 INTERPRETATION
DEFINITIONS. For the purposes of this Agreement (including the recitals), the
terms in Schedule A shall have the meanings given to them in that Schedule.
MEANING OF CONTROL. For the purposes of this Agreement, "control" where used in
connection with a corporation means:
(a) the right to exercise a majority of the votes which may be voted
at a general meeting of such corporation; or
(b) the right to elect or appoint directly or indirectly a majority
of the directors of such corporation or other persons who have
the right to manage or supervise the management of the affairs
and business of the corporation.
ACCOUNTING TERMINOLOGY. All accounting terms not expressly defined in this
Agreement shall have the respective meanings usually ascribed to them in
accordance with generally accepted accounting principles in Canada.
MEANING OF PRO RATA. Unless the context otherwise requires, all rights,
obligations or other matters which are, under the terms of this Agreement, to be
determined on a proportionate or pro rata basis shall be determined on a basis
which is pro rata or proportionate to the total number of shares of the
Corporation issued and outstanding as of the date of such determination.
HEADINGS. The headings used in the Agreement are for convenience and reference
only and shall not affect the construction or interpretation of this Agreement.
SCHEDULES. The Schedules to this Agreement which are incorporated and form part
of this Agreement are as follows:
A--Definitions
B--Matters Requiring Unanimous Consent of Directors
C--Capital Contributions
UNANIMOUS SHAREHOLDERS AGREEMENT. The Shareholders agree that this is a
Unanimous Shareholders Agreement for the purposes of the BUSINESS CORPORATIONS
ACT and will conduct
-2-
themselves and will cause the affairs of the Corporation to be conducted in
accordance with the terms of this Agreement.
SECTION 2
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS OF 360-HOLDCO.
360-Holdco represents and warrants to each of the other parties that:
(a) 360-Holdco is a corporation duly incorporated under the laws of
the Province of Alberta, and is validly existing, subsisting and
in good standing with respect to the filing of annual reports.
(b) 360-Holdco has the corporate power to enter into this Agreement
and to perform and observe its obligations and agreements set
out in this Agreement.
(c) This Agreement has been duly executed and delivered by
360-Holdco and is a valid and binding obligation of 360-Holdco
enforceable in accordance with its terms.
2.2 REPRESENTATIONS OF WFHL.
WFHL represents and warrants to each of the other parties that:
(a) WFHL is a corporation duly incorporated under the laws of the
Province of Alberta, and is validly existing, subsisting and in
good standing with respect to the filing of annual reports.
(b) WFHL has the corporate power to enter into this Agreement and to
perform and observe its obligations and agreements set out in
this Agreement.
(c) This Agreement has been duly executed and delivered by WFHL and
is a valid and binding obligation of WFHL enforceable in
accordance with its terms.
2.3 REPRESENTATIONS OF 360.
360 represents and warrants to each of the other parties that:
(a) 360 is a corporation duly continued under the laws of the
Province of Nova Scotia, and is valid, subsisting and in good
standing with respect to the filing of annual reports.
(b) 360 has the corporate power to enter into this Agreement and to
perform and observe its obligations and agreements set out in
this Agreement;
(c) This Agreement has been duly executed and delivered by 360 and
is a valid and binding obligation of 360 enforceable in
accordance with its terms.
-3-
SECTION 3
AGREEMENT ON CORPORATE MATTERS
3.1 CORPORATE MATTERS.
The Shareholders and the Corporation agree that, notwithstanding any provisions
to the contrary contained in the Articles of the Corporation or the Bylaws of
the Corporation, the corporate matters referred to in this Section 3 shall be
governed by the applicable provisions of this Section 3, and that in the case of
any inconsistency or conflict between the Articles of Corporation or the Bylaws
of the Corporation and the provisions of this Section 3, the provisions of this
Section 3 shall govern.
3.2 DIRECTORS.
Unless otherwise agreed in writing from time to time by 360-Holdco, the
Shareholders shall vote their Shares so that the Board of the Corporation, the
Board of Urbanlink and the Board of any other Subsidiary of the Corporation each
comprise a maximum of five directors, and that each such Board shall include one
nominee of 360-Holdco. Subject to the foregoing, if the position on any such
Board held by the nominee of 360 becomes vacant, 360 shall be entitled to
nominate a new director to fill the vacancy.
3.3 PRESIDENT
The President and Chief Executive Officer of the Corporation shall be an
individual selected by the Board. The President and Chief Executive Officer of
the Corporation shall also be the President and Chief Executive Officer of
Urbanlink and, unless otherwise approved by 360-Holdco, acting reasonably and in
good faith, the President and Chief Executive Officer of every other Subsidiary
of the Corporation. The President and Chief Executive Officer shall be a
Canadian, shall be a full-time employee, and shall not be a director, officer or
employee of 360 or any Subsidiary of 360.
3.4 FAILURE TO VOTE.
In the event that a director shall fail to vote and act as a director to carry
out the provisions of this Agreement, the Shareholders shall exercise their
rights as shareholders of the Corporation to remove such director from the Board
and, subject to Subsection 3.2, to elect in his or her place an individual who
will use his or her best efforts to carry out the provisions of this Agreement.
3.5 MATTERS REQUIRING UNANIMOUS APPROVAL OF DIRECTORS.
The matters set out in Schedule B shall only be undertaken with (in addition to
the consents or approvals, if any, required under the BUSINESS CORPORATIONS ACT,
the Articles of the Corporation or the Bylaws of the Corporation) the consent in
writing of the 360-Holdco nominee to the Board of the Corporation.
3.6 EXISTING SHAREHOLDER CAPITAL.
As at the date hereof, the Shares of each of the Shareholders are as set out in
Schedule C.
-4-
SECTION 4
THE BUSINESS OF THE CORPORATION
4.1 THE BUSINESS
The parties acknowledge that the businesses that they intend the Corporation and
Urbanlink to carry on are the following:
(a) Unless otherwise agreed between 360 and WFHL, the Corporation
shall hold of the issued and outstanding shares of Urbanlink.
(b) Urbanlink shall carry on business in Canada (and not elsewhere)
as a telecommunications common carrier as defined in the
TELECOMMUNICATIONS ACT.
Unless 360 and WFHL otherwise agree in writing, the Corporation and Urbanlink
shall not, either directly or indirectly, carry on any business other than a
business described above or a business that is incidental to or develops out of
the conduct of any business that the Corporation or Urbanlink may carry on in
accordance with this Section 4.1.
4.2 TELECOMMUNICATIONS ACT
The Corporation and Urbanlink and any other Subsidiaries of the Corporation
shall at all times comply with all of the requirements of the TELECOMMUNICATIONS
ACT including, without limiting the generality of the foregoing, those
provisions relating to the ownership and control of telecommunications common
carriers, as defined in the TELECOMMUNICATIONS ACT. Without limiting the
generality of the foregoing, 360, 360-Holdco and WFHL shall promptly take such
action as may from time to time be required in order to cause the Corporation,
Urbanlink and any other Subsidiaries of the Corporation to comply with all of
the requirements of the TELECOMMUNICATIONS ACT including, without limiting the
generality of the foregoing, those provisions relating to the ownership and
control of telecommunications common carriers as defined in the
TELECOMMUNICATIONS ACT.
4.3 HIGH YIELD DEBT INDENTURES
The Corporation, Urbanlink and WFHL covenant and agree with 360 and 360-Holdco
that, without the prior written consent of 360, the Corporation, Urbanlink, any
other Subsidiary of the Corporation and WFHL shall not take any action, or fail
to take any action or fail, if such action, or failure to act:
(a) would be, or with the passage of time, would be or result in, an
Event of Default as defined in any of the High Yield Debt
Indentures; or
(b) would be permitted under one or more of the High Yield Debt
Indentures only in reliance on one of the "basket" clauses in
the High Yield Debt Indentures, being one of those clauses where
specifically described events are permitted to a specified
limit, whether such limit is an amount fixed in the High Yield
Indentures or is an amount determined by reference to a formula
or other determination process or conditions.
-5-
SECTION 5
RESTRICTIONS ON TRANSFER
5.1 RESTRICTION ON TRANSFER.
No Shareholder shall Transfer all or any part of its Interest to any person,
whether a Shareholder or not, except as otherwise expressly provided in this
Agreement.
5.2 RIGHT OF FIRST REFUSAL.
(a) A Shareholder (the "Offeror") desiring to transfer any or all of
its Shares shall give written notice to the Corporation (the
"Transfer Notice") specifying the number of its Shares that it
desires to transfer (the "Offered Shares"), the price, in lawful
money of Canada, for the Offered Shares, and the terms of
payment upon which the Offeror is prepared to transfer the
Offered Shares. The Transfer Notice shall constitute the
Corporation as the agent of the Offeror for the sale of the
Offered Shares to any other Shareholder or Shareholders at the
price and upon the terms of payment specified in the Transfer
Notice. The Transfer Notice shall also state whether the Offeror
has received an offer to purchase (the "Third Party Offer") the
Offered Shares, or any of them, from, or proposes to sell the
Offered Shares, or any of them, to, any particular person or
persons who are not Shareholders and, if so, the names and
addresses of those persons and the price and terms in the Third
Party Offer shall be specified in the Transfer Notice. The
Transfer Notice shall constitute an offer by the Offeror to the
other Shareholders to sell the Offered Shares to the other
Shareholders and shall not be revocable.
(b) The Corporation shall forthwith upon receipt of the Transfer
Notice transmit a copy of it to each Shareholder other than the
Offeror and shall request that each such Shareholder state in
writing, within 30 days from the date of the Transfer Notice,
whether it is willing to purchase any of the Offered Shares and,
if so, the maximum number it is willing to purchase.
(c) Upon the expiration of the 30-day notice period provided for in
paragraph (b) above, if the Corporation has received from the
Shareholders entitled to receive the Transfer Notice sufficient
acceptances to purchase all the Offered Shares the Corporation
shall thereupon apportion the Offered Shares among the
Shareholders so accepting pro rata in proportion to the number
of Shares held by each of them respectively up to the number of
Offered Shares accepted by each of them respectively. If the
Corporation did not receive sufficient acceptances to purchase
all of the Offered Shares, the Corporation may, but only with
the consent of the Offeror, who shall not be obliged to sell in
the aggregate less than all the Offered Shares, apportion the
Offered Shares among the Shareholders accepting pro rata in
proportion to the number of Shares held by each of them
respectively up to the number of the Offered Shares accepted by
each of them respectively.
(d) Upon the Corporation's receipt of an acceptance to purchase all
or any part of the Offered Shares and after an apportionment has
been made pursuant to
-6-
paragraph (c) above, if necessary, a binding contract of
purchase and sale between the Offeror and the Shareholder who
transmitted such acceptance shall be deemed to come into
existence on the terms set out in this Agreement and the
Transfer Notice, which contract will be completed in the manner
provided in Section 8.
(e) After an apportionment has been made pursuant to paragraph (c)
above and upon payment of the price for the Offered Shares
apportioned, the Offeror shall be bound to transfer those shares
in accordance with that apportionment and if the Offeror fails
to do so the Corporation shall cause the names of the purchasing
Shareholders to be entered in the register of members of the
Corporation as the holders of those shares and shall cancel the
share certificates previously issued to the Offeror representing
those shares whether they have been produced to the Corporation
or not. Payment to the Corporation, as agent for the Offeror, of
the Purchase Price shall be sufficient payment by the purchasing
Shareholders and entry of the transfers in the register of
members of the Corporation shall be conclusive evidence of the
validity of the transfers. Upon completion of the transfers, and
delivery of the share certificates duly endorsed in blank for
transfer, the Corporation shall pay the Purchase Price to the
Offeror.
(f) The Offeror may, for a period of 60 days after the expiration of
the 30-day period provided for in paragraph (b) above, transfer
to any person the Offered Shares not purchased by other
Shareholders pursuant to paragraphs (b), (c), (d) and (e) above,
provided that:
(i) if the other Shareholders did not purchase any of the
Offered Shares, the Offeror may not sell less than all
the Offered Shares;
(ii) the Offeror shall sell the Offered Shares for cash at
Closing, free and clear of encumbrances, and on terms
that are otherwise identical to those specified in the
Transfer Notice;
(iii) the Offeror shall not sell any of the Offered Shares to
any person, unless at the time of the sale that person
complies with Subsection 5.5; and
(iv) if the Offeror has not transferred the Offered Shares or
any of them within the 60-day period, then the
provisions of this Subsection 5.2 shall again become
applicable to all of the Offered Shares not disposed of
within the 60-day period.
(g) The provisions as to transfers of Shares contained in paragraphs
(a), (b), (c), (d), (e) and (f) of this Subsection 5.2 shall not
apply:
(i) if, before the proposed transfer of Shares is made, the
other Shareholders waive their rights to receive the
Transfer Notice; or
(ii) to any transfer of Shares pursuant to the provisions of
Section 6 or 7 of this Agreement.
-7-
(h) The Offeror may include all or any part of its Shareholder's
Loan (if any) in the Transfer Notice, in which case the
Shareholder's Loan (or part thereof) shall be included in the
price of the Offered Shares, and all references to Offered
Shares in Subsection 5.2 shall include the portion of the
Shareholder's Loan included therein. If the Offeror does not
include its Shareholder's Loan in the Transfer Notice, the
Offeror shall retain its Shareholder's Loan, which shall be
repaid as the Corporation's finances permit, as determined by
the directors.
5.3 TRANSFER TO AFFILIATES.
Notwithstanding Subsections 5.1 and 5.2, any Shareholder may sell, transfer or
otherwise dispose of all, but not less than all, of its Interest to an Affiliate
controlled by such Shareholder provided that, prior to any such transfer, the
Shareholder and the Affiliate enter into an agreement with the other parties to
this Agreement, in form and content acceptable to such parties, which provides
that:
(a) one hundred percent (100%) of the Shareholder's Interest will be
transferred to the Affiliate;
(b) the Affiliate will remain an Affiliate controlled by the
Shareholder for so long as the Affiliate holds the Interest;
(c) prior to the Affiliate ceasing to be an Affiliate controlled by
the Shareholder, the Affiliate will transfer its Interest to the
Shareholder or to another Affiliate controlled by the
Shareholder, and that such other Affiliate will enter into an
agreement similar to this Agreement with the other Shareholders
and the Corporation;
(d) the Affiliate will otherwise be bound by and have the benefit of
the provisions of this Agreement; and
(e) the obligations of the original Shareholder hereunder shall not
in any way be released and shall continue in full force and
effect.
5.4 NO TRANSFER BY DEFAULTING SHAREHOLDER.
Notwithstanding any other provision of this Agreement, except as required by the
terms of this Agreement, no Shareholder shall be entitled to sell, transfer,
assign or otherwise dispose of its Interest, or any part thereof, without the
prior written consent of the other Shareholders, if it is at that time a
Defaulting Shareholder, unless prior to or concurrently with that sale, transfer
or other disposition it ceases to be a Defaulting Shareholder.
5.5 FURTHER RESTRICTION OF TRANSFER.
No Shareholder shall transfer all or any part of its Interest to any person,
whether a Shareholder or not, who is not a party to or has not agreed to be
bound by this Agreement until such person subscribes to or agrees to be bound by
this Agreement. The Shareholders and the Corporation will not recognize or treat
as a shareholder of the Corporation any person who acquires any
-8-
interest or control over any Shares or afford any such person the rights
afforded by this Agreement or any of the incidents connected with being a
shareholder of the Corporation until such person subscribes to or agrees to be
bound by this Agreement, and the Shareholders need only deal with as a member of
the Corporation persons who have subscribed to or agreed to be bound by this
Agreement.
SECTION 6
DEFAULT
6.1 EVENTS OF DEFAULT.
An event of default (a "Default") arises if a Shareholder (a "Defaulting
Shareholder"):
(a) fails to observe, perform or carry out any of its obligations
under this Agreement and such failure continues for 30 days
after any Shareholder not in default (the "Non-defaulting
Shareholder" individually and the "Non-defaulting Shareholders"
collectively) gives a written notice of such default to the
Defaulting Shareholder and the Corporation, which notice shall
set out particulars of the Default and demand that the Default
be cured;
(b) fails to take reasonable actions to prevent or defend
assiduously any action, proceeding, seizure, execution, or
attachment which claims possession, sale, foreclosure, the
appointment of a receiver or receiver manager of the
Shareholder's assets, or forfeiture or termination of or
against, any of the Interest of the Defaulting Shareholder, and
such failure continues for 30 days after a Non-defaulting
Shareholder has in writing demanded that such actions be taken
or the Defaulting Shareholder fails to defend successfully any
such action, proceeding, seizure, execution or attachment; or
(c) commits or is the subject of an Insolvency Event.
6.2 REMEDIES.
If a Default occurs under Subsection 6.1, any one or more of the Non-defaulting
Shareholders may:
(a) pursue any remedy available in law or in equity, each
Shareholder acknowledging that specific performance, injunctive
relief (mandatory or otherwise) or other equitable relief may be
the only adequate remedy for a Default;
(b) take all actions in their own name or in the name of the
Defaulting Shareholder, the Shareholders or the Corporation as
may reasonably be required to cure the Default, and all
payments, costs and expenses incurred by the Non-defaulting
Shareholder(s) shall be payable by the Defaulting Shareholder to
the Non-defaulting Shareholder(s) on demand with interest at the
Prime Rate plus 2% per annum;
-9-
(c) implement the buy-sell procedure set out in Subsection 6.3 by
notifying the Corporation of the Default, the name of the
Defaulting Shareholder and the Non-defaulting Shareholder's
election to implement such procedure (the "Notice of Default");
and
(d) waive the Default, provided that any waiver of a particular
Default shall only be effective if it is in writing, signed by
the Non-defaulting Shareholder, shall not operate as a waiver of
any subsequent or continuing Default, and shall not be binding
upon, or limit the remedies available to, any Non-defaulting
Shareholder who has not signed such waiver.
6.3 BUY-SELL PROCEDURE ON DEFAULT.
In the event the buy-sell procedure in this Subsection 6.3 is implemented
pursuant to paragraph 6.2(c), the Defaulting Shareholder shall be deemed to
offer to sell (the "Offer") to the Corporation and the Non-Defaulting
Shareholder(s) all, but not less than all, of its Interest on the following
terms and conditions:
(a) the Purchase Price payable shall be equal to 85% of the fair
market value of the Defaulting Shareholder's Interest determined
as of the date of the Notice of Default in accordance with
Subsection 9.2;
(b) upon receipt of the Notice of Default, the President of the
Corporation shall forthwith:
(i) transmit the Notice of Default to each director of the
Corporation;
(ii) transmit the Notice of Default to each of the
Non-defaulting Shareholder(s); and
(iii) call a meeting of the Board to consider the Offer;
(c) the Corporation shall have the first right to accept the Offer,
in whole or in part, and to the extent that it is accepted, the
Non-defaulting Shareholder(s) agree to refuse any pro rata offer
by the Corporation to purchase the Interest which is required to
be made by the Corporation under the BUSINESS CORPORATIONS ACT,
the Articles of the Corporation, the Bylaws of the Corporation
or this Agreement;
(d) if the Offer is not wholly accepted by the Corporation within 30
days after the date of the Notice of Default:
(i) the Secretary of the Corporation shall advise the
Non-defaulting Shareholder(s) of the extent to which the
Offer is still open, forthwith upon the expiration of
the aforesaid 30-day period;
(ii) that portion of the Offer not accepted by the
Corporation shall be open for acceptance within the next
30 days by the Non-defaulting Shareholder(s)
-10-
pro rata in accordance with their respective
shareholdings in the Corporation;
(iii) acceptance by the Non-defaulting Shareholder(s) of the
Offer shall be by notice to the Secretary of the
Corporation and by such acceptance a Non-defaulting
Shareholder may specify any additional portion of the
Interest offered for sale that such Non-defaulting
Shareholder is prepared to purchase in the event that
any of the other Non-defaulting Shareholder(s) fails to
accept such Offer, and if any of the other
Non-defaulting Shareholder(s) fails to accept such
Offer, such Non-defaulting Shareholder (pro rata if more
than one) shall be entitled to purchase such additional
portion of the Interest as shall be so available;
(iv) the Secretary of the Corporation shall advise each of
the directors of the Corporation of the extent to which
the Offer is still open forthwith upon the expiration of
the aforesaid 30-day period;
(e) after compliance with paragraph 6.3(d), to the extent the Offer
has not been accepted, the Corporation shall be deemed to accept
the Offer with respect to such portion of the Interest as shall
then be available; and
(f) upon the acceptance of the Offer, a binding contract of purchase
and sale for the Interest of the Defaulting Shareholder shall be
deemed to be formed between the Defaulting Shareholder and the
Corporation and/or the Non-defaulting Shareholder(s), as the
case may be, on the terms and conditions set out in the Offer
and this Agreement, which contract shall be completed in the
manner provided in Section 8.
6.4 MONIES HELD.
If and so long as a Shareholder is a Defaulting Shareholder, all monies payable
to that Defaulting Shareholder by the Corporation by way of dividends, repayment
of loans or other distributions shall be held by the Corporation until such time
as the Shareholder is no longer a Defaulting Shareholder.
SECTION 7
BUY SELL ON CHANGE OF TELECOMMUNICATIONS
ACT OWNERSHIP REQUIREMENTS
7.1 COMPULSORY BUY SELL
On the determination of 360, acting reasonably and in good faith, that the
TELECOMMUNICATIONS ACT has been amended to eliminate the requirement for the
Canadian ownership and control of telecommunications common carriers, as defined
in the TELECOMMUNICATIONS ACT, or has otherwise been amended sufficiently to
permit the transactions contemplated by this Section, then 360 shall send a
notice in writing to WFHL of such determination (the "Section 7 Notice") and, on
the occurrence of such event, WFHL shall be deemed to offer to sell to
360-Holdco all of its Interest on the following terms and conditions:
-11-
(a) the purchase price payable shall be the fair market value of
WFHL's Interest determined as of the date of the Section 7
Notice in accordance with Subsection 9.2;
(b) upon the giving of the Section 7 Notice, a binding contract of
purchase and sale for the purchase by 360-Holdco and the sale by
WFHL of the Interests of WFHL shall be deemed to be formed
between 360-Holdco and WFHL on the terms and conditions set out
in this Agreement, which contract shall be completed in the
manner provided in Section 8.
SECTION 8
COMPLETION OF TRANSFERS
8.1 TIME AND PLACE OF CLOSING.
Except as otherwise expressly provided in this Agreement, or unless the
Purchaser and the Vendor otherwise agree in writing, each contract of purchase
and sale arising out of Sections 5, 6 or 7 shall be completed at a Closing to be
held at 11:00 a.m., Vancouver time, at the office of the Corporation in
Vancouver or at such other place as the parties to such contract may agree, on
the day (the "Closing Date") which is the later of:
(a) 60 days following the date on which such contract is formed; and
(b) 30 days following the final determination of the Purchase Price
thereunder;
or, if such day is not a Business Day, on the next Business Day.
8.2 PARTIES TO THE CONTRACT.
In this Section 8, a contract referred to in Subsection 8.1 is called a
"Contract", and the Shares or Interest to be sold and purchased pursuant to a
Contract are called the "Transfer Interest".
8.3 PAYMENT FOR TRANSFER INTEREST.
Except as otherwise expressly provided in this Agreement, or unless the
Purchaser and the Vendor otherwise agree in writing, the Purchase Price for the
Transfer Interest shall be paid in full on the Closing Date.
8.4 CLOSING DOCUMENTS AND ESCROW BY CORPORATION.
(a) In addition to any other documents required by this Agreement or
the terms of the Contract, the Vendor shall deliver to the
Corporation at the Closing, duly executed where appropriate:
(i) an instrument of transfer, share certificates
representing the shares being transferred, duly endorsed
for transfer, and such other documents as may be
necessary to assign and transfer the Transfer Interest
to the Purchaser;
-12-
(ii) the resignation of the Vendor and any persons nominated
by the Vendor as directors or officers of the
Corporation from all offices and directorships in the
Corporation and its Subsidiaries, effective on the
Closing Date;
(iii) if the Vendor is indebted to the Corporation, a
certified cheque of the Vendor payable to the
Corporation for the amount of such indebtedness; and
(iv) all such other documents and assurances as may be
required to comply with and to fulfil the intent of this
Agreement and the terms of the Contract.
(b) In addition to any other documents and things required by this
Agreement or the terms of the Contract, the Purchaser shall
deliver to the Vendor at the Closing, duly executed where
appropriate, against delivery by the Vendor to the Purchaser of
the documents referred to in paragraph 8.4(a):
(i) the Purchase Price for the Transfer Interest payable at
the Closing in cash or by certified cheque drawn on a
Canadian chartered bank; and
(ii) all such other documents and assurances as may be
required to comply with and to fulfil the intent of this
Agreement and the terms of the Contract.
(c) All documents delivered by the Vendor to the Corporation at or
before the Closing shall be held by the Corporation until the
Purchaser has delivered all documents and paid all money
required to be delivered or paid to the Vendor by the Purchaser
at the Closing, at which time the Corporation shall deliver to
the Purchaser the documents delivered by the Vendor pursuant to
paragraph 8.4(a) and the transfer of the Transfer Interest to
the Purchaser shall be completed by the Corporation and new
certificates issued for the Shares included in the Transfer
Interest.
8.5 TIME TO BE OF THE ESSENCE.
Time shall be of the essence of each Contract and each Contract shall be binding
upon the parties thereto and upon their respective heirs, executors,
administrators, successors, legal representatives and assigns.
8.6 FAILURE TO COMPLETE.
(a) If the Vendor fails to attend the Closing or is present but
fails for any reason whatsoever to complete the sale of the
Transfer Interest when the Purchaser is ready, willing and able
to do so, the Purchaser may deposit the Purchase Price for the
Transfer Interest into a special account at any branch in
Vancouver, British Columbia of any Canadian chartered bank in
trust for the Vendor and such deposit shall constitute valid and
effective payment to the Vendor at the Closing even though the
Vendor may have voluntarily encumbered or disposed of any of
-13-
the Transfer Interest and notwithstanding the fact that a
certificate or certificates representing any of the Transfer
Interest may have been delivered to any pledgee, transferee or
other person.
(b) If the Purchaser deposits the Purchase Price for the Transfer
Interest into a special account pursuant to paragraph 8.6(a),
then from and after the date of such deposit (even if any
certificate representing any of the Transfer Interest has not
been delivered to the Purchaser or the Corporation) the sale and
purchase of the Transfer Interest shall be deemed to have been
completed and all right, title, benefit and interest, both at
law and in equity, in and to the Transfer Interest shall be
conclusively deemed to have been transferred and assigned to and
become vested in the Purchaser and all right, title, benefit and
interest, both at law and in equity, of the Vendor, and of any
other assignee, transferee or other person having any interest,
legal or equitable, in or to the Transfer Interest, whether as a
shareholder or creditor of the Corporation or the Vendor, or
otherwise, shall cease and determine, but the Vendor shall be
entitled to receive the Purchase Price for the Transfer
Interest, without interest, upon completion of all acts and
deeds as were required of the Vendor to complete the sale of the
Transfer Interest.
(c) For the purposes of this Subsection 8.6, each Shareholder hereby
irrevocably constitutes and appoints each other Shareholder as
its true and lawful attorney in fact and agent for, in the name
of and on behalf of such first Shareholder to execute and
deliver, and to receive delivery of, all such assignments,
transfers, deeds, assurances and instruments as may be necessary
to effectively complete the sale of any Interest pursuant to
Sections 5, 6 or 7 on the records of the Corporation, and such
appointment and power of attorney shall not be revoked by the
bankruptcy, insolvency, winding-up, liquidation, dissolution,
incapacity or death of such first Shareholder and such first
Shareholder hereby ratifies and confirms and agrees to ratify
and confirm all that any other Shareholder, as attorney in fact
and agent for, in the name of and on behalf of such first
Shareholder, may lawfully do or cause to be done by virtue of
this paragraph 8.6(c).
(d) If the Purchaser defaults at the Closing in paying the Purchase
Price for the Transfer Interest, then the Vendor may, by
delivering written notice to the Purchaser and the Corporation
that the Vendor is terminating the Contract, terminate the
Contract and retake possession of the Transfer Interest as the
absolute owner thereof, in which event the rights of the
Purchaser in respect of the Transfer Interest shall revert to
the Vendor and the Vendor shall be entitled, upon delivering to
the Corporation and each Shareholder its duly executed
subscription to this Agreement to the return from the
Corporation of the documents delivered by the Vendor to the
Corporation in escrow in connection with the Contract.
(e) If either the Vendor or the Purchaser fails to complete the
Contract as required herein, the Contract is specifically
enforceable and nothing in this Agreement shall be construed to
mitigate the availability of the remedy of specific performance
in respect of the Contract in a court of law.
-14-
8.7 WAIVER AND CONSENTS.
Each of the Shareholders hereby expressly consents to the transfer of any Shares
or Interests transferred in accordance with this Agreement, agrees to execute
promptly on demand specific waivers and consents if requested by another party,
covenants and agrees to waive any restriction on transfer contained in the
Articles of the Corporation or the Bylaws of the Corporation in order to give
effect to such transfers and agrees to vote in favour of or consent in writing
to resolutions of the members (if applicable) of the Corporation approving the
transfer of any Shares or Interests which is not prohibited by this Agreement.
In the case of any transfer of Shares in accordance with this Agreement where
the Corporation is the Purchaser of such Shares, the Shareholders other than the
Vendor in respect of such Contract hereby waive their rights to require the
Corporation to purchase their Shares, except as expressly set forth in this
Agreement and covenant to reject any pro rata offer to purchase Shares which the
Corporation may be obliged to make pursuant to the provisions of the BUSINESS
CORPORATIONS ACT.
SECTION 9
GENERAL PROVISIONS ON TRANSFER
9.1 TRANSFER OF SHARES.
The transfer of the Shares or Interest of any Shareholder pursuant to any of the
terms of this Agreement shall be subject to the general provisions set out in
this Section 9. In the event of any inconsistency between any of the provisions
of Sections 5, 6 or 7 and any of the provisions of this Section 9, the
provisions of this Section 9 shall govern.
9.2 DETERMINATION OF FAIR MARKET VALUE.
(a) Where pursuant to the provisions of Sections 6 or 7 of this
Agreement a determination of the fair market value of an
Interest is required to be made (in this Subsection 9.2 referred
to as the "Subject Interest"), a Shareholder may give written
notice to the other Shareholders requesting that the
Shareholders forthwith meet and attempt in good faith to agree
upon the fair market value of the Subject Interest. In the event
that all of the Shareholders are able to reach agreement on the
fair market value of the Subject Interest, such agreed value
shall be deemed to be the fair market value of the Subject
Interest for the purposes of this Agreement.
(b) In the event that the Shareholders are for any reason unable to
reach agreement on the fair market value of the Subject Interest
within 14 days of the delivery of the notice referred to in
paragraph 9.2(a), then the Shareholders shall forthwith meet for
the purposes of identifying and retaining a valuator (the "First
Valuator") for the purpose of determining the fair market value
of the Subject Interest. Unless otherwise unanimously agreed by
the Shareholders, the First Valuator shall be an accountant
practising with the Auditors who has at least five years'
experience in valuating businesses and is accredited as a
chartered business valuator. In the event that the Shareholders
do not agree upon a First Valuator within 30 days of the
delivery of the notice referred to in paragraph 9.2(a), then any
Shareholder
-15-
may refer the determination of the First Valuator to arbitration
pursuant to Section 11.
(c) The First Valuator shall prepare and deliver to each of the
Shareholders a written report (the "First Valuation Report")
setting out its Valuation of the Subject Interest as soon as
possible, and in any event within 45 days after being retained.
(d) Any Shareholder may within 30 days of its receipt of the First
Valuation Report provide written notice to the other
Shareholders advising that it wishes to have a second Valuation
of the Subject Interest undertaken. If no such notice is given,
the First Valuation Report shall be final and binding on the
parties. If such notice is given the Shareholders shall
forthwith meet for the purposes of identifying and retaining a
second valuator (the "Second Valuator") for the purpose of
preparing a second Valuation of the Subject Interest. The Second
Valuator shall be an accountant practising with a national
accounting firm other than the Auditors and who has the
experience and credentials referred to in paragraph 9.2(b). In
the event that the Shareholders do not agree upon a Second
Valuator within 14 days of the delivery of the notice referred
to in this paragraph, then any Shareholder may refer the
determination of the Second Valuator to arbitration pursuant to
Section 11.
(e) The Second Valuator shall prepare and deliver to each of the
Shareholders a written report (the "Second Valuation Report")
setting out its Valuation of the Subject Interest as soon as
possible, and in any event within 45 days after being retained.
Where a Second Valuation Report has been prepared, the fair
market value of the Subject Interest for the purposes of
Sections 6 and 7 of this Agreement shall be equal to the average
of the fair market values of the Subject Interest as set out in
the First Valuation Report and the Second Valuation Report.
(f) The Corporation and each of the Shareholders shall make
available to the First Valuator and the Second Valuator all
books, records and other data and information in their
possession or control as the First Valuator or Second Valuator
may reasonably require for the purposes of its valuation.
(g) In determining the fair market value of the Subject Interest
under this Subsection 9.2, the First Valuator and the Second
Valuator may apply such principles of valuation as each
considers appropriate in the circumstances provided that:
(i) there shall be no premium for a control position or
discount for a minority position;
(ii) the fair market value of any Shareholder Loans shall not
be discounted by reason only of the fact that such Loans
are not demand loans and may not bear interest; and
(iii) the Corporation shall be valued on a going concern
basis.
-16-
(h) The Corporation shall pay all fees and expenses charged by the
First Valuator for preparing the First Valuation Report. The
Shareholder(s) who request the Second Valuation shall pay all
fees and expenses charged by the Second Valuator for preparing
the Second Valuation Report.
(i) The First Valuator and the Second Valuator shall be entitled to
retain such qualified independent appraisers as each may deem
appropriate to assist with its valuation.
9.3 PAYMENT OF LIENS ON SHARES.
Notwithstanding anything in this Agreement to the contrary, if by reason of any
lien, charge or encumbrance on the Interest of the Vendor, the Vendor is unable
to make delivery of the Vendor's Interest free and clear of all charges, liens
or encumbrances to the Purchaser within the time limited therefor, the Purchaser
shall be at liberty to make payment to the holder of the lien or charge or the
governmental authority imposing the duty, tax, levy or lien, which payment shall
be deemed to be payment to the Vendor and shall be applied in reduction of the
unpaid balance of the Purchase Price and interest accrued thereon.
SECTION 10
TERMINATION OF AGREEMENT
10.1 METHOD OF TERMINATION.
This Agreement shall cease and determine on the execution of an agreement of
termination of this Agreement in writing by all of the Shareholders.
SECTION 11
ARBITRATION
11.1 ARBITRATION.
Except for any determination of the value of an Interest made in accordance with
Subsection 9.2, which determination shall be final and binding on the parties,
all disputes arising out of or in connection with this contract, or in respect
of any defined legal relationship associated therewith or derived therefrom,
shall be referred to and finally resolved by arbitration under the Rules of the
British Columbia International Commercial Arbitration Centre. The appointing
authorities shall be the British Columbia International Commercial Arbitration
Centre. The case shall be administered by the British Columbia International
Commercial Arbitration Centre in accordance with its "Procedures for Cases Under
the BCICAC Rules". There shall be a single arbitrator (the "Arbitrator"). The
place of arbitration shall be Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx.
11.2 FINAL AND BINDING.
The decision of the Arbitrator on all issues or matters submitted to the
Arbitrator for resolution shall be conclusive, final and binding on all of the
parties.
-17-
11.3 COSTS.
The Arbitrator shall determine who shall bear the costs of arbitration pursuant
to this Section 11.
SECTION 12
GENERAL
12.1 LEGEND ON SHARE CERTIFICATES.
All share certificates issued by the Corporation (including existing
certificates) shall have typed or otherwise written thereon the following
legend:
"The shares represented by this certificate are subject to the
provisions of a Unanimous Shareholders Agreement dated as of April ___,
2000 among 360networks inc., 360 Urbanlink Ltd., Worldwide Fiber
Holdings Ltd., the Corporation and WFI Urbanlink Ltd., which agreement
contains restrictions on the right of the holder hereof to sell,
exchange, transfer, assign, gift, pledge, encumber, hypothecate or
otherwise alienate the shares represented hereby and notice of those
restrictions is hereby given."
12.2 GOVERNING LAW AND ATTORNMENT
This Agreement will be governed by and construed in accordance with the
substantive laws of Alberta and the federal laws of Canada applicable in
Alberta, without regard to the conflict of law rules of Alberta. The parties
irrevocably submit to and accept generally and unconditionally the exclusive
jurisdiction of the courts and appellate courts of Alberta with respect to any
legal action or proceeding which may be brought at any time relating in any way
to this Agreement. Each of the parties irrevocably waives any objection it may
now or in the future have to the venue of any such action or proceeding, and any
claim it may now or in the future have that any such action or proceeding has
been brought in an inconvenient forum.
12.3 TIME OF THE ESSENCE OF THE AGREEMENT
Unless otherwise specifically provided in this Agreement, time will be of the
essence of this Agreement and of the transactions contemplated by this
Agreement.
12.4 REMEDIES NOT EXCLUSIVE
The remedies provided to the parties under this Agreement are cumulative and not
exclusive to each other, and any such remedy will not be deemed or construed to
affect any right which any of the parties is entitled to seek at law, in equity
or by statute.
12.5 NOTICES
Any notice, direction, request or other communication required or contemplated
by any provision of this Agreement will be given in writing and will be given by
delivering or faxing or emailing the same to the parties as follows:
-18-
(a) To 360 or 360-Holdco at:
Xxxxx 0000, 0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Attention: Xxxxxxxxx XxXxxxxxx
Fax No.: (000) 000-0000
Email: xxxxxxxxx.xxxxxxxxx@xxxxxxx.xxx
(b) To WFHL, the Corporation or Urbanlink at:
Xxxxx 0000, 0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Attention: Xxxx Xxxxxx
Fax No.: (000) 000-0000
Email: xxxx.xxxxxx@xxxxxxx.xxx
Any such notice, direction, request or other communication will be deemed to
have been given or made on the date on which it was delivered or, in the case of
fax or email, on the next business day after receipt of transmission. Any party
may change its fax number or address for service or email address from time to
time by written notice in accordance with this Section.
12.6 COUNTERPARTS
This Agreement may be executed in any number of counterparts with the same
effect as if all parties had signed the same document. All of these counterparts
will for all purposes constitute one agreement, binding on the parties,
notwithstanding that all parties are not signatories to the same counterpart. A
fax transcribed copy or photocopy of this Agreement executed by a party in
counterpart or otherwise will constitute a properly executed, delivered and
binding agreement or counterpart of the executing party.
12.7 WAIVER
No failure or delay on the part of any party in exercising any power or right
under this Agreement will operate as a waiver of such power or right. No single
or partial exercise of any right or power under this Agreement will preclude any
further or other exercise of such right or power. No modification or waiver of
any provision of this Agreement and no consent to any departure by any party
from any provision of this Agreement will be effective until the same is in
writing. Any such waiver or consent will be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or
demand on any party in any circumstances will entitle such party to any other or
further notice or demand in similar or other circumstances.
12.8 SHAREHOLDERS TO TAKE FURTHER STEPS
Each Shareholder shall take all necessary actions (including amending the
articles of the Corporation) and shall exercise that Shareholder's rights as a
Shareholder of the Corporation to
-19-
cause the Corporation to pass all necessary resolutions and effect all necessary
corporate acts to comply with the intent and provisions of this Agreement,
including the convening and attending at meetings, voting approval of necessary
resolutions, or otherwise as may be necessary for the purpose of this Agreement.
12.9 CORPORATION TO BE BOUND
The Corporation, so far as its powers apply, shall be bound by the terms of this
Agreement and shall do and perform all such acts and things and execute all such
documents and assurances as it has power to do and as is necessary to fully and
effectually carry out the terms of this Agreement.
12.10 ENTIRE AGREEMENT
This Agreement and any documents and agreements to be delivered pursuant to this
Agreement supersede all previous invitations, proposals, letters,
correspondence, negotiations, promises, agreements, covenants, conditions,
representations and warranties with respect to the subject matter of this
Agreement. There is no representation, warranty, collateral term or condition or
collateral agreement affecting this Agreement, other than as expressed in
writing in this Agreement. No trade terms or trade usages are to be incorporated
by reference implicitly or otherwise into this Agreement, unless expressly
referred to in this Agreement.
12.11 AMENDMENTS
No change or modification of this Agreement will be valid unless it is in
writing and signed by each party to
this Agreement.
12.12 INVALIDITY OF PARTICULAR PROVISION
If any provision of this Agreement or any part of any provision (in this Section
called the "Offending Provision") is declared or becomes unenforceable, invalid
or illegal for any reason whatsoever including, without limiting the generality
of the foregoing, a decision by any competent courts, legislation, statutes,
bylaws or regulations or any other requirements having the force of law, then
the remainder of this Agreement will remain in full force and effect as if this
Agreement had been executed without the Offending Provision.
12.13 CURRENCY
Unless otherwise specified all sums of money expressed in this Agreement are in
the lawful money of Canada.
12.14 NUMBER AND GENDER
Unless the context of this Agreement otherwise requires, to the extent necessary
so that each clause will be given the most reasonable interpretation, the
singular number will include the plural and vice versa, the verb will be
construed as agreeing with the word so substituted, words importing the
masculine gender will include the feminine and neuter genders, words importing
-20-
persons will include firms and corporations and words importing firms and
corporations will include individuals.
12.15 ACKNOWLEDGEMENT OF RECEIPT
Each of the parties acknowledges receiving an executed copy of this Agreement.
12.16 ENUREMENT
Subject to the restrictions on transfer contained in this Agreement, this
Agreement will enure to the benefit of and be binding on the parties and their
respective heirs, executors, administrators, successors and assigns.
[THE NEXT PAGE IS THE EXECUTION PAGE.]
-21-
IN WITNESS WHEREOF the parties have executed this Agreement as of the date
stated on the first page.
360NETWORKS INC. 360 URBANLINK LTD.
Per: Per:
----------------------------------- -----------------------------------
Signature Signature
Name Name
------------------------------- -------------------------------
Title Title
------------------------------ ------------------------------
WORLDWIDE FIBER HOLDINGS WFI URBANLINK LTD.
LTD.
Per: Per:
----------------------------------- -----------------------------------
Signature Signature
Name Name
------------------------------- -------------------------------
Title Title
------------------------------ ------------------------------
URBANLINK HOLDINGS LTD.
Per:
-----------------------------------
Signature
Name
-------------------------------
Title
------------------------------
-22-
SCHEDULE A
DEFINITIONS
The following words shall whenever used in this Agreement have the following
meanings:
"AFFILIATE" has the meaning given to that term in the BUSINESS CORPORATIONS ACT
in effect on the date hereof;
"ARBITRATOR" has the meaning given to that term in Subsection 11.1;
"AUDITORS" means:
(a) if the Corporation has appointed an auditor, the auditor of the
Corporation most recently appointed; or
(b) if the Corporation has not so appointed an auditor, the firm of
chartered accountants most recently engaged by the Corporation
to advise upon, or assist in the preparation of, review, or
report on, its financial statements.
"BANK" means The Toronto-Dominion Bank or such other bank or financial
institution as the Board may from time to time determine;
"BOARD" means, with respect to any corporation, the board of directors of such
Corporation;
"BUSINESS CORPORATIONS ACT" means the BUSINESS CORPORATIONS ACT (Alberta), as
amended;
"BUSINESS DAY" means any day except Saturdays, Sundays or statutory holidays in
British Columbia;
"CLOSING" means any closing of the purchase and sale of an Interest of a
Shareholder as provided in this Agreement;
"CLOSING DATE" has the meaning given to that term in Subsection 8.1;
"CONTRACT" has the meaning given to that term in Subsection 8.2;
"DEFAULT" has the meaning given to that term in Subsection 6.1;
"DEFAULTING SHAREHOLDER" has the meaning given to that term in Subsection 6.1;
"FIRST VALUATION REPORT" has the meaning given to that term in paragraph 9.2(c);
"FIRST VALUATOR" has the meaning given to that term in paragraph 9.2(b);
"HIGH YIELD DEBT INDENTURES" means (i) the Indenture dated as of December 23,
1998 between 360 (then called Worldwide Fiber Inc.) and HSBC Bank USA (then
called Marine Midland Bank), as amended from time to time, (ii) the Indenture
dated as of July 28, 1999 between 360 (then called Worldwide Fiber Inc.) and
HSBC Bank USA, as amended from time to time, (iii)
-23-
any similar Indentures that may be entered into by 360 from time to time, as
amended from time to time, and (iv) any other credit arrangements entered into
by 360, as amended from time to time.
"INSOLVENCY EVENT" means the winding-up or liquidation of a corporation, the
institution of proceedings to be adjudicated a bankrupt or insolvent under the
BANKRUPTCY AND INSOLVENCY ACT (Canada) or any analogous laws, the consenting to
the institution of such proceedings, the consenting to the filing of any
petition under the BANKRUPTCY AND INSOLVENCY ACT (Canada) or to the appointment
of a receiver or receiver manager, the making of a general assignment for the
benefit of creditors, the filing of a proposal to settle payment of creditors'
liabilities under the COMPANIES' CREDITORS ARRANGEMENT ACT, the admission in
writing of insolvency, the taking of any action in furtherance of any of the
above, the passing of a resolution by a corporation for its winding-up or
dissolution pursuant to the BUSINESS CORPORATIONS ACT;
"INTEREST" means, in respect of each Shareholder, all of that Shareholder's
Shares and Shareholder's Loans and any other right or claim that the Shareholder
may have against the Corporation and the other Shareholders in that
Shareholder's capacity as a member of the Corporation;
"NON-DEFAULTING SHAREHOLDER" has the meaning given to that term in paragraph
6.1(a);
"NOTICE OF DEFAULT" has the meaning given to that term in paragraph 6.2(c);
"OFFER" has the meaning given to that term in Subsection 6.3;
"OFFERED SHARES" has the meaning given to that term in paragraph 5.2(a);
"OFFEROR" has the meaning given to that term in paragraph 5.2(a);
"PRIME RATE" means the annual rate of interest designated from time to time by
the Bank as its prime rate for Canadian dollar loans made in Canada;
"PURCHASE PRICE" means, with respect to any sale and purchase of an Interest of
a Shareholder, the amount payable to purchase such Interest as determined in
accordance with the provisions of this Agreement applicable to that sale and
purchase;
"PURCHASER" means a Shareholder who is the purchaser of Shares or of an Interest
pursuant to any of the provisions of this Agreement;
"RESELLER AGREEMENT" means the Reseller Agreement dated as of the date of this
Agreement and made between 360, Worldwide Fiber Network Services Ltd. and
Urbanlink, as amended from time to time;
"SECOND VALUATION REPORT" has the meaning given to that term in paragraph
9.2(e);
"SECOND VALUATOR" has the meaning given to that term in paragraph 9.2(d);
"SECTION 7 NOTICE" has the meaning given to that term in Subsection 7.1;
-24-
"SHAREHOLDER" means at any time a person that is (x) a party to this Agreement
that is bound by this Agreement at the time and holds one or more Shares at the
time or (y) a person that becomes bound by this Agreement at any time and is
bound by this Agreement at the time and holds one or more Shares at the time,
and "SHAREHOLDERS" means all of them;
"SHAREHOLDER'S OR SHAREHOLDERS' LOANS" means, in respect of each Shareholder,
the aggregate amount of money advanced from time to time as a loan by that
Shareholder to the Corporation and not repaid, together with accrued and unpaid
interest, if any;
"SHARES" means, in respect of each Shareholder, all of the shares in the capital
of the Corporation directly or indirectly owned by that Shareholder or in
respect of which that Shareholder has any right to purchase (except under this
Agreement);
"SUBSIDIARY" has the meaning given to that term in the BUSINESS CORPORATIONS ACT
in effect on the date hereof;
"TELECOMMUNICATIONS ACT " means the TELECOMMUNICATIONS ACT (Canada) and the
Regulations issued pursuant to such Act (including, without limiting the
generality of the foregoing, the Regulations Respecting the Ownership and
Control of Canadian Telecommunications Common Carriers) as amended from time to
time;
"THIRD PARTY OFFER" has the meaning given to that term in paragraph 5.2(a);
"TRANSFER" of an Interest includes any sale, exchange, transfer, assignment,
gift, pledge, encumbrance, hypothecation, alienation or other transaction,
whether voluntary, involuntary or by operation of law, whether in whole or in
part, by which the legal or beneficial ownership of, or any security interest or
other interest in an Interest, passes from one person to another, or to the same
person in a different capacity, whether or not for value, and "to transfer",
"transferred" and similar expressions have corresponding meanings;
"TRANSFER INTEREST" has the meaning given to that term in Subsection 8.2;
"TRANSFER NOTICE" has the meaning given to that term in paragraph 5.2(a);
"VALUATION" means a valuation prepared pursuant to Subsection 9.2 and which
expresses the value per Share and per dollar amount of any Shareholder's Loan;
and
"VENDOR" means a Shareholder who is the seller of an Interest or Interests
pursuant to any of the provisions of this Agreement.
-25-
SCHEDULE B
MATTERS REQUIRING UNANIMOUS CONSENT OF DIRECTORS
Pursuant to Subsection 3.5 of the Agreement, the following matters shall require
the written consent of the 360 nominee to the Board of the Corporation:
(a) except for any expenditures contemplated by an approved capital
expenditure or operating budget, any single expenditure of the
Corporation and its Subsidiaries, in excess of $20 million per
year, or any series of related expenditures which exceed, in the
aggregate, the sum of $20 million per year, other than
expenditures that the Corporation and its Subsidiaries can
recover under the Reseller Agreement;
(b) the entering into, execution, acknowledgement, amendment,
supplement, cancellation or termination of any Material Contract
on behalf of the Corporation or any Subsidiary of the
Corporation and, for this purpose, "Material Contract" means any
of the following:
(i) any contract, agreement or other instrument to be
entered into by the Corporation or any Subsidiary of the
Corporation with any Shareholder or an Affiliate of a
Shareholder; and
(ii) any contract, agreement or other instrument to be
entered into by the Corporation or any Subsidiary of the
Corporation which may in the aggregate over the term of
the contract, agreement or instrument involve an
obligation of the Corporation or any Subsidiary of the
Corporation, to pay in excess of $20 million other than
expenditures that the Corporation and its Subsidiaries
can recover under the Reseller Agreement.
(c) the guarantee by the Corporation or any Subsidiary of the
Corporation of the debts of any person other than the
Corporation, or a wholly-owned Subsidiary of the Corporation;
(d) any loans by the Corporation or any Subsidiary of the
Corporation to any person other than the Corporation or a
wholly-owned Subsidiary of the Corporation;
(e) the sale of any shares of any Subsidiary of the Corporation;
(f) the sale, lease, transfer, mortgage, pledge or other disposition
of all or substantially all of the undertaking of the
Corporation or any Subsidiary of the Corporation;
(g) any amendment to the Articles or other constating documents of
the Corporation or any Subsidiary of the Corporation;
(h) the consolidation, merger or amalgamation of the Corporation or
any Subsidiary of the Corporation with any other corporation,
association, partnership or other legal entity;
(i) the creation, allotment or issuance of, or agreement to create,
allot or issue, any shares or other securities of the
Corporation or any Subsidiary of the Corporation, or the
granting
-26-
of any option or right capable of becoming an option to purchase
any shares or other securities of the Corporation or any
Subsidiary of the Corporation;
(j) the winding-up or liquidation of the Corporation or any
Subsidiary of the Corporation, the institution of proceedings to
be adjudicated a bankrupt or insolvent under the BANKRUPTCY AND
INSOLVENCY ACT (Canada), the consenting to the institution of
such proceedings against the Corporation or any Subsidiary of
the Corporation, the consenting to the institution of bankruptcy
or insolvency proceedings against the Corporation or any
Subsidiary of the Corporation under the BANKRUPTCY AND
INSOLVENCY ACT (Canada) or any other analogous laws, the
consenting to the filing of any such petition or to the
appointment of a receiver or receiver manager of the property of
the Corporation or any Subsidiary of the Corporation, the making
of a general assignment for the benefit of creditors, the filing
of a proposal to settle payments of creditors' liabilities under
the COMPANIES' CREDITORS ARRANGEMENT ACT, the admission in
writing of the insolvency of the Corporation or any Subsidiary
of the Corporation, or the taking of any corporate action in
furtherance of any of the aforesaid purposes;
(k) the redemption, repurchase or retirement for value of any shares
or other securities of the Corporation, except under the
provisions of this Agreement.
-27-
SCHEDULE C
CAPITAL CONTRIBUTIONS
The registered and beneficial holders of all the issued and outstanding shares
in the capital of the Corporation are as follows:
--------------------------------------------------------------
SHAREHOLDER NUMBER AND CLASS OF SHARES
--------------------------------------------------------------
360-Holdco 333 Class "A" Common Voting
Non-Participating Shares
510,000 Class "B" Common
Non-Voting Participating Shares
--------------------------------------------------------------
WFHL 667 Class "A" Common Voting
Non-Participating Shares
490,000 Class "C" Common
Non-Voting Participating Shares
--------------------------------------------------------------
-28-
