Exhibit 10.32
AGREEMENT
THIS AGREEMENT is made as of this 20th day of March, 2000, by
and among 360NETWORKS INC., a company continued under the laws of Canada
(formerly known as Worldwide Fiber Inc.) ("360"), WORLDWIDE FIBER NETWORKS LTD.,
a Canadian company incorporated in the Province of Alberta (`WFN"), LEDCOR
COMMUNICATIONS LTD., a Canadian company incorporated in the province of Alberta,
LEDCOR INDUSTRIES, INC., a Washington corporation, WORLDWIDE FIBER (USA), INC.,
a Nevada corporation (formerly known as Pacific Fiber Link, Inc.) (the
"Company"), MI-TECH COMMUNICATIONS, LLC, a Wisconsin limited liability company
("Mi-Tech"), LEDCOR INC., a Canadian company incorporated in the Province of
Alberta and XXXXXXX PIPELINE CONSTRUCTION, INC., a Wisconsin corporation
("Xxxxxxx").
WITNESSETH :
WHEREAS, the parties entered into a Shareholders' Agreement,
dated December 31, 1998, a copy of which is attached hereto as EXHIBIT A (the
"Shareholders' Agreement");
WHEREAS, Mi-Tech is the holder of 50 shares of Class A Voting
Preferred Stock and 50 shares of Non-Voting Common Stock of the Company
(collectively referred to herein as the "Company Shares");
WHEREAS, among other things, the Shareholders' Agreement
provides Mi-Tech with an option to convert its Company Shares into shares of 360
in the event 360 effects an underwritten initial public offering of its stock
(the "IPO");
WHEREAS, Articles IV, V and VI of the Shareholders' Agreement
set forth the manner in which the Company Shares are to be converted into shares
of 360 of the same class and series to be offered to the public;
WHEREAS, 360 and Mi-Tech wish to forego the procedures set
forth in Articles IV, V and VI of the Shareholders' Agreement and instead set
forth herein the agreement of 360 and Mi-Tech with respect to the amount of 360
shares Mi-Tech will receive in exchange for the Company Shares;
WHEREAS, Mi-Tech has agreed to exchange the Company Shares for
fully paid and non-assessable Class A Subordinate Voting Shares (the "Class A
Subordinate Voting Shares") of 360 pursuant to this Agreement; and
WHEREAS, 360, Mi-Tech and the other parties to this Agreement
also wish to set forth herein other agreements which relate to 360, Mi-Tech, the
Company, the other parties to this Agreement and the Shareholders' Agreement.
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereby agree as follows:
Section 1. CONVERSION OF COMPANY SHARES INTO 360 SHARES.
Subject to the terms and conditions set forth in this Agreement, at the Closing
(as hereinafter defined), all Company Shares held by Mi-Tech shall be
transferred to 360 and 360 shall, in the manner provided below, issue in
exchange therefor, the number of shares of Class A Subordinate Voting Shares
equal to the quotient obtained by dividing Three Hundred and Twelve Million
Dollars (US$312,000,000) by the initial public offering price to the public per
share of the Class A Subordinate Voting Shares as reflected in the final
prospectus distributed in connection with the IPO (the "IPO Price"). Such
transaction is hereinafter referred to as the "Exchange". Mi-Tech hereby assigns
to Xxxxxxx Xxxxx & Company ("Xxxxx") 2% of the subscription rights held by
Mi-Tech in connection with the Exchange, so that Xxxxx shall receive 2% of the
Class A Subordinate Voting Shares to be issued in the Exchange.
Section 2. CLOSING; EXCHANGE OF SHARES; VALIDITY OF WORLDWIDE
SHARES.
(a) CLOSING. Subject to the terms and conditions set forth in
this Agreement, the closing of the Exchange (the "Closing") shall take place at
such location as 360 shall specify by notice in writing to Mi-Tech, on the day
of and immediately prior to the IPO, or on such other Business Day as may be
agreed to in writing by Mi-Tech and 360 (the "Closing Date"). For purposes of
this Agreement, "Business Day" means any day other than a Saturday, a Sunday or
a day when commercial banks in Vancouver, British Columbia are required to be
closed.
(b) EXCHANGE. At the Closing, Mi-Tech shall cause to be
delivered to Worldwide certificates representing Mi-Tech's Company Shares
together with such documents and instruments of transfer necessary or required
to transfer the Company Shares on the books of the Company into the name of 360,
and, within three (3) Business Days after the Closing, 360 shall deliver (i) to
Mi-Tech a certificate or certificates representing ninety-eight percent (98%) of
the Class A Subordinate Voting Shares to be issued in the Exchange; and (ii) to
Xxxxx a certificate or certificates representing two percent (2%) of the Class A
Subordinate Voting Shares issuable in the Exchange. Each certificate
representing 360 Shares issued to Mi-Tech and to Xxxxx shall have a legend
containing the following:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN QUALIFIED
FOR PUBLIC DISTRIBUTION IN CANADA AND HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH APPLICABLE CANADIAN
SECURITIES LAWS AND THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED.
IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO THE RESTRICTIONS ON TRANSFER SET FORTH IN THE WORLDWIDE FIBER, INC.
SHAREHOLDERS AGREEMENT, DATED
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AS OF SEPTEMBER 9, 1999, AS AMENDED, BY THE CORPORATION AND THE PARTIES
THERETO, A COPY OF WHICH IS ON FILE IN THE OFFICE OF THE CORPORATION.
The requirement that the above securities legend be placed upon certificates
evidencing any such securities shall cease and terminate upon the earliest of
the following events: (a) when such securities are transferred in a registered
offering subsequent to the IPO; (b) when such securities are transferred
pursuant to Rule 144 under the 1933 Act; or (c) when such securities are
transferred in any other transaction if the seller delivers to 360 an opinion of
its counsel, which counsel and opinion shall be reasonably satisfactory to 360,
to the effect that such legend is no longer necessary in order to protect 360
against a violation by it of applicable securities laws upon any sale or other
disposition of such securities without registration thereunder. The requirement
that the above legend regarding the Shareholders Agreement of 360, dated
September 9, 1999, as amended (the "360 Shareholders Agreement") be placed upon
certificates evidencing any such securities shall cease and terminate upon the
termination of the 360 Shareholders Agreement. Upon the occurrence of any event
requiring the removal of a legend hereunder, 360, upon the surrender of
certificates containing such legend, shall, at its own expense, deliver
immediately to the holder of any such securities as to which the requirement for
such legend shall have terminated, one or more new certificates evidencing such
securities not bearing such legend.
(c) CLOSING ESCROW AGREEMENT. As soon as practicable after the
execution of this Agreement 360, Mi-Tech and Xxxxxxx shall execute and deliver a
Closing Escrow Agreement (the "Closing Escrow Agreement") in the form attached
as EXHIBIT B, and each of 360, Mi-Tech and Xxxxxxx shall deliver to the escrow
agent named in the Closing Escrow Agreement (the "Closing Escrow Agent") the
closing documents described in the Closing Escrow Agreement as being delivered
by such party.
(d) VALIDITY OF SHARES. The Class A Subordinate Voting Shares
to be issued in the Exchange shall be duly authorized by all necessary corporate
action by 360 and, upon issuance in accordance with the provisions of Sections 1
and 2 of this Agreement, such Class A Subordinate Voting Shares to be issued in
the Exchange shall be validly issued, fully paid and nonassessable.
(e) NO FRACTIONAL SHARES. Notwithstanding any other provision
in this Agreement, no certificates or scrip for fractional shares of Class A
Non-Voting stock shall be issued in the Exchange. In lieu of any such fractional
shares, Mi-Tech or Xxxxx, as the case may be, shall be entitled to receive a
cash payment equal to such fraction multiplied by the IPO Price.
Section 3. REGISTRATION RIGHTS. The parties acknowledge that
the Registration Rights Agreement attached hereto as EXHIBIT C (the
"Registration Rights Agreement") shall be executed and delivered by 360 and
Mi-Tech pursuant to the Closing Escrow Agreement and that such Registration
Rights Agreement shall be effective concurrent with the Closing.
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Section 4. CONTINUANCE OF INDEMNIFICATION OBLIGATIONS. The
agreements and obligations of the Company set forth in the 3rd and 4th sentences
of Section 1.2 of the Shareholders' Agreement shall survive the termination of
the Agreement.
Section 5. [DELETED]
Section 6. GOVERNING AGREEMENT. Section 3.2(b) of the
Governing Agreement by and among Worldwide Fiber Ltd., Mi-Tech, Ledcor Inc.,
Xxxxxxx, Ledcor Industries Inc. and the Company, dated August 31, 1998 shall
survive the termination of the Shareholders' Agreement. For convenience of
reference, Section 3.2(b) provides as follows:
"Ledcor or its affiliates shall use their best reasonable commercial
efforts to obtain releases of all guarantees given by Mi-Tech or
Xxxxxxx and, to the extent that such guarantees are not released,
Ledcor will defend, indemnify and save harmless Mi-Tech and Xxxxxxx
(the "Indemnified Persons") or either of them from and against all
actions, proceedings, demands, claims, liabilities, losses, damages,
judgments, costs and expenses including, without limiting the
generality of the foregoing, reasonable legal fees and disbursements
which the Indemnified Persons or either of them may be liable to pay or
may incur by reason of such guarantees."
Section 7. TERMINATION OF AGREEMENT; SURVIVAL. Upon the
Closing, the Shareholders' Agreement shall terminate except to the extent
specifically set forth herein and except for Sections 1.4, 1.5, 1.6, 3.4 and
14.10 of the Shareholders' Agreement, all of which shall survive termination of
the Shareholders' Agreement, and all of which shall be amended by deleting the
same and replacing the same with the following.
1.4 SCOPE OF BUSINESS
The parties hereto acknowledge and agree that the Company's
scope of business ("Scope of Business") shall be to continue the
development of the fiber optic builds within the continental United
States and to undertake within the continental United States and any
festoons between cities in the continental United States (the
"Territory") any and all projects as developer related to the
development of telecommunications infrastructures, including conduits,
design, management of construction, marketing, management of
maintenance, operation, ownership and/or management, of all conduit and
rights-of-way associated with related copper cable, fiber optic cable
and coaxial cable telecommunications and transmission systems,
ownership and operation of, and the selling and reselling of, capacity,
or any similar such functions or services that can reasonably be
included in the definition of telecommunications development within the
Territory.
1.5 COMMITMENTS OF XXXXXXX
(a) Xxxxxxx commits to support and assist the Company in its
strategy of developing fiber optic systems in the Territory. Xxxxxxx
shall provide the Company with general advice and assistance in
complying with labor or other union issues and such
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requirements pertinent to all projects of the Company. In addition,
Xxxxxxx shall provide the Company upon request the following services
to support the direct staff of the Company:
(i) general advice and assistance concerning the
design, marketing and construction of projects of the Company;
(ii) general referrals to all contacts and resources
in the construction industry, especially but not limited to
potential clients on the Company's development projects; and
(iii) construction services and ancillary equipment
of the type provided generally to its customers for
installation of fiber optic systems.
All services provided to the Company pursuant to Section 1.5(a)(iii)
shall be provided at a cost to the Company equal to Cost (as
hereinafter defined) plus twenty-five percent (25%). For purposes
hereof, "Cost" shall mean the actual allocated cost of Xxxxxxx, as
determined by its accountants, including the costs of materials,
supplies, equipment, labor and overhead and including allocation of a
reasonable amount of administrative services. All services other than
those specified in this Section 1.5(a)(iii) shall be provided at no
cost to the Company.
(b) Notwithstanding the good faith commitment of Xxxxxxx to
support and assist the Company, Xxxxxxx shall not be required to
provide any services until the Company has used its best efforts to
exhaust any and all other alternatives, Xxxxxxx shall not have any
obligation to suspend or otherwise delay any work on any other project
for any customer in order to provide such services, whether incurring a
penalty or not, and Michel's obligations to provide any such services
shall be subject to the availability of necessary personnel (both
management and crew), equipment and supplies. The Company shall provide
as much notice as is practicable in advance of requesting services
hereunder. The sufficiency of the services and the control and
management of any and all aspects of any services shall be determined
and controlled by Xxxxxxx.
(c) The obligations of Xxxxxxx under this Section 1.5 shall
expire on December 31, 2002.
1.6 EXCLUSIVITY; NONCOMPETITION.
(a) Neither Mi-Tech, Xxxxxxx nor any of their respective
Affiliates (collectively, the "Michel's Group") shall undertake any
project within the Company's Scope of Business, except through the
Company and no member of the Michel's Group shall acquire an ownership
interest in, or render advice or assistance to, or engage in any
business, incorporated or otherwise, which undertakes such projects,
except that, beginning on the earlier of April 15, 2000 or the date
that is 12 months after the closing of the IPO any member of the
Michel's Group may engage in telecommunications construction projects,
including, without limitation, the construction of
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telecommunication facilities for which one or more members of the
Michel's Group receives consideration, directly or indirectly, in the
form of, in whole or in part, the securities (including, but not
limited to common equity, partnership interests, warrants, debt and
convertible instruments) or personal or real property of any of the
owners or developers of such projects or facilities or securities or
real or personal property of one or more Affiliates of such owners or
developers; PROVIDED THAT:
(i) no member or members of the Michel's Group,
individually or together, shall be permitted to
receive consideration in the form of such securities
if the receipt of such securities would result in a
member or members of the Michel's Group, individually
or together, beneficially owning securities, directly
or indirectly representing Control of the issuer of
such securities; and
(ii) if a member of the Michel's Group receives, or has
entered into a legally binding contract to receive,
title to such property in the form of
telecommunications assets (whether conduits, ducts,
fiber cable, coaxial cable, bandwidth or otherwise)
in the Territory, WFI shall have a right of first
refusal to purchase such assets (the "Right of First
Refusal"), which Right of First Refusal shall be on
the following terms:
X. Xxxxxxx and Mi-Tech shall not, and shall
cause the other members of the Michel's
Groups not to, sell, transfer or otherwise
dispose of, or offer to sell, transfer or
otherwise dispose of, all or any part of
such assets, except in compliance with the
terms of this Right of First Refusal.
B. Mi-Tech and Xxxxxxx shall provide notice in
writing (a "Clause B "Offer") to WFI of the
receipt by any member of the Michel's Group
of any such assets, such notice to be
provided within 30 days of such receipt. The
Clause B Offer shall provide reasonable
particulars of the nature of such assets,
and shall state the price (expressed only in
lawful money of the United States) and other
terms (such other terms shall be reasonable
in the circumstances) on which such member
of the Michel's Group is prepared to sell
all or any part of such assets to WFI.
Xxxxxxx and Mi-Tech shall forthwith provide
such additional information on such assets
as WFI may reasonably request. The Clause B
Offer shall be open for acceptance by WFI
for a period of 30 days after its receipt by
WFI. WFI may accept the Clause B Offer as to
all or any contiguous part of such assets.
If and to the extent the Clause B Offer is
not accepted, the applicable member of the
Michel's Group may sell, transfer, or
otherwise dispose of such assets, as
described in the Clause B Offer, to any
other person, firm or corporation, but only
for consideration and on terms not more
favorable to such person, firm or
corporation than those set out in the Clause
B Offer, and
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only within a period of six months after the
expiration of the period for acceptance by
WFI and, if such member of the Michel's
Group does not do so, the provisions of this
Clause (B) will again become applicable to
the sale, transfer or other disposition of
such assets, and so on from time to time.
C. If, during the six month period referred to
in Clause (B), the applicable member of the
Michel's Group wishes to transfer such
assets to a third party (the "Third Party")
at a price or on terms more favorable than
the price and terms specified in the last
Offer by such member of the Michel's Group
to WFI under Clause (B), then such member of
the Michel's Group shall deliver to WFI a
notice in writing (the "Clause C Offer")
together with a copy of the agreement that
such member of the Michel's Group proposes
to enter into with such third party (the
"Third Party Agreement"). The Clause C Offer
shall be an offer to sell to WFI all or part
of such assets that are the subject matter
of the Third Party Agreement on the terms
and conditions referred to in the Third
Party Agreement. Michel's and Mi-Tech shall
forthwith provide to WFI such additional
information on such assets as WFI may
reasonably request. The Offer shall be open
for acceptance by WFI for a period of 10
Business Days (as defined in Clause (D))
after its receipt by WFI. WFI may accept the
offer as to all or any contiguous part of
such assets. If and to the extent that the
Clause C Offer is not accepted, the
applicable member of the Michel's Group may
transfer such assets, as described in the
Clause C Offer, to the Third Party at the
price and terms specified in the Third Party
Agreement and, if the applicable member of
the Michel's Group does not do so, the
provisions of Clause (B) and this Clause (C)
will again become applicable to the sale,
transfer or other disposition of such
assets, and so on from time to time.
D. The closing of any purchase and sale of
assets to be effected as a result of the
acceptance of a Clause B Offer or a Clause C
Offer by WFI shall take place at the offices
of WFI at a date and time that is mutually
acceptable to the applicable member of the
Michel's Group, or, if no date and time for
closing are so agreed upon, the time for
closing shall be 11:00 a.m. (Vancouver, B.C.
time) on the 20th Business Day following the
acceptance of the Offer by WFI. For the
purposes of this Clause (C) and Clause (D),
"Business Day" means any day other than a
Saturday and Sunday or a day when commercial
banks in Vancouver, British Columbia, are
required to be closed. At the time of
closing, the applicable member of the
Xxxxxxx Group shall deliver or cause to be
delivered to WFI or its nominee such
transfer documents as WFI may reasonably
request to transfer good and marketable
title in such
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assets to WFI or its nominee, free and clear
of any mortgage, lien, charge, pledge,
hypothecation, security interest,
encumbrance, restriction, covenant, right,
demand or adverse claim of any kind, and the
members of the Xxxxxxx Group shall execute
and deliver any further instruments or
documents and take all such further actions
as WFI may reasonably request in order to
evidence or effect such transfer, against
delivery by WFI or its nominee of payment of
the purchase price for such assets.
E. Except with respect to any Clause B Offer or
Clause C Offers that have been made prior to
December 31, 2002 (or that were required to
have been made in accordance with the terms
of this Agreement prior to such date), the
obligations of Mi-Tech and Xxxxxxx under
this Section 1.6 shall expire on December
31, 2002.
(b) Notwithstanding the foregoing, the Parties acknowledge and
agree that Worldwide and Xxxxxxx are leading construction contractors
with special expertise in telecommunications construction (the "Core
Business"). The Parties expressly agree that no provision of this
Agreement or any other agreement between them shall be interpreted as
to restrain or in any manner impede Xxxxxxx or any member of the
Michel's Group, Ledcor or Worldwide from performing such Core Business,
for consideration consisting of cash or cash equivalents, except that
until December 31, 2002, Xxxxxxx and Mi-Tech shall, and shall cause the
other members of the Xxxxxxx Group to, use their good faith reasonable
efforts not to perform telecommunications construction on the same
right of way as a competing contractor on contracts in excess of 50
miles within 50 miles of any point along a contiguous 50-mile segment
of an Active Company Project. For purposes of this Section 1.6(b), an
"Active Company Project" shall mean any project being undertaken by the
Company with respect to which the Company has secured the legal right
to commence construction on a contiguous 50 or more miles segment of
the route (including attempting to own or license the applicable right
of way and to obtain all building and construction permits and
franchises for such segment), has commenced construction with respect
to such contiguous 50 or more miles segment, and has executed at least
one contract with a purchaser of strands."
3.4 ADDITIONAL FIBER OPTIONS.
(a) Mi-Tech provided, and the original execution of this
Agreement constituted, an option to the Company to purchase from Mi-Tech and its
Affiliates 24 strands of the existing Montreal to Albany fiber optic build owned
by Mi-Tech and its Affiliates, at a price and on terms no less favorable than
the price paid by any third party for the purchase of an equivalent number of
strands of the Montreal to Albany build. Such option was to be exercisable
commencing on the date such strands were available and was to terminate one year
thereafter; provided, that if no third party had purchased an equivalent number
of strands of the Montreal to Albany build prior to exercise of the option, the
exercise price and terms upon which the option was to be exercisable was to be
as mutually agreed by Mi-Tech and the Company.
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(b) Mi-Tech and the Company acknowledge and agree that the
Company has exercised such option and that Mi-Tech and the Company have reached
agreement on the principal terms applicable to the purchase of such strands.
Mi-Tech and the Company shall negotiate reasonably and in good faith to conclude
a definitive agreement for such purchase.
14.10 DEFINITIONS
The following terms shall have the following meanings:
"Affiliate" means any Person that directly or indirectly
controls, or is under common control with, or is controlled by another
Person, where "control" means the possession, directly or indirectly,
of more than fifty percent (50%) of the combined voting power of all
outstanding securities, or the direction of management or policies
(whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise) and shall be deemed to
include senior executive officers of Mi-Tech or Xxxxxxx.
"Company", for the purposes of Sections 1.4, 1.5 and 1.6,
shall include the Company and its Affiliates.
"Control" shall mean, for the purpose of Section 1.6(a)(i),
the ownership, possession or control, directly or indirectly, of:
(i) 5% of the issued and outstanding securities of
Xxxxxxxx Communications Group, Inc., Broadcasting
Communications Services Inc., Global Crossing Ltd.,
Colt Telecom Group plc, Xxxxx 0 Xxxxxxxxxxxxxx, Xxx.,
Xxxxx Communications Corporation, GST
Telecommunications Inc., Metromedia Fiber Network,
Inc. or their publicly traded Affiliates; or;
(ii) securities representing 50% or more of the combined
voting power of all outstanding securities of the
issuer, or the direction of management policies
(whether through ownership of securities or
partnership or other ownership interests, by contract
or otherwise); or
(iii) securities representing 50% or more of the combined
equity of all outstanding securities of the issuer.
"Person" means any natural person, partnership, corporation or
other legal entity.
Capitalized terms used above and not defined shall have the
meaning set forth in the Shareholders' Agreement.
Section 8. IPO DATE. In the event the IPO is terminated or
does not close on or before June 1, 2000 thereby preventing the conversion of
the Company Shares into Class A Subordinate Voting Shares pursuant to this
Agreement by or before June 1, 2000, this Agreement shall be null and void and
the Shareholders' Agreement shall remain in full force and effect as if
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the IPO Notice (as defined in the Shareholders' Agreement) provided by 360 on
November 19, 1999 had never been provided.
Section 9. REPRESENTATIONS AND WARRANTIES OF 360. 360 hereby
represents and warrants to Mi-Tech and Xxxxxxx as of the date hereof and, unless
otherwise provided, as of the Closing Date as follows:
(a) 360 is a corporation, duly organized, validly existing and
in good standing under the CANADA BUSINESS CORPORATIONS ACT, and has
all requisite corporate power and authority to enter into and carry out
the transactions contemplated by this agreement.
(b) The execution and delivery by 360 of this Agreement, the
Registration Rights Agreement and the Closing Escrow Agreement
(collectively, "360 Transaction Documents") and the performance by 360
of its obligations hereunder and thereunder has been duly authorized by
all requisite corporate action on the part of 360. Each 360 Transaction
Document constitutes a legal, valid and binding agreement of 360,
enforceable against 360 in accordance with its terms except to the
extent that enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights generally and by
equitable principles generally, whether enforced in a court of law or
at equity.
(c) The execution, delivery and performance by 360 of the 360
Transaction Documents and the consummation by 360 of the transactions
contemplated thereby will not (i) violate any provision of law,
statute, rule or regulation, or any ruling, writ, injunction, order,
judgment or decree of any court, administrative agency or other
governmental body applicable to it, or any of its properties or assets;
(ii) conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute (with due notice or lapse of
time, or both) a default (or give rise to any right of termination,
cancellation or acceleration) under any contract to which 360 is a
party that would materially adversely affect 360's ability to
consummate the transactions contemplated by any 360 Transaction
Document or perform its obligations under any Transaction Document; or
(iii) violate its constating documents.
(d) The authorization, issuance, sale and delivery of the
Class A Subordinate Voting Shares to Mi-Tech and Xxxxx pursuant to this
Agreement have been duly authorized by all requisite corporate action
on the part of 360, and when issued, sold and delivered in accordance
with this Agreement, will be validly issued and outstanding, fully paid
and nonassessable with no personal liability attaching to the ownership
thereof and not subject to preemptive or similar rights of the
shareholders of 360 or others, except as set out in the Shareholders
Agreement and the 360 Transaction Documents.
(e) Assuming the accuracy of the representations and
warranties contained in Section 10 hereof in the case of Mi-Tech and
the representations and warranties made by Xxxxx in the separate
agreement referenced in Section 11 hereof, in the case of Xxxxx, the
offer, sale and/or the issuance and delivery of the Class A Subordinate
Voting Shares to
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Mi-Tech and to Xxxxx as contemplated herein is exempt from the
prospectus and registration requirements under applicable securities
laws.
(f) No permit, authorization, consent or approval of or by, or
any notification of or filing with, any government, regulatory
authority, governmental department, agency, commission, board,
tribunal, crown corporation, or court or other law, rule or
regulating-making entity having or purporting to have jurisdiction on
behalf of any nation, or province or state or other subdivision thereof
or any municipality, district or other subdivision thereof; (a
"Governmental Authority") or any individual, sole proprietorship,
general, limited or any other partnership, limited liability company,
unincorporated association, unincorporated syndicate, unincorporated
organization, trust, body corporate, or other entity, and a natural
person in such person's capacity as trustee, executor, administrator or
other legal representative (collectively, with Governmental Authority,
a "Person") is required in connection with the execution, delivery and
performance by 360 of any 360 Transaction Document, the consummation by
360 of the transactions contemplated hereby or thereby, or the
issuance, sale or delivery of the Class A Subordinate Voting Shares to
Mi-Tech and Xxxxx (other than such notifications or filings required
under applicable securities laws, if any, which shall be made by 360 on
a timely basis and other than provided for in any 360 Transaction
Document).
(g) 360 acknowledges and agrees that the foregoing
representations, warranties and covenants set out herein are made by
360 with the intent that they be relied upon by Mi-Tech in determining
its willingness to effect the Exchange. 360 further agrees that by
accepting the Company Shares, 360 shall be representing and warranting
that the foregoing representations and warranties are true as at the
Closing Date with the same force and effect as if they had been made by
360 at the Closing Date. 360 undertakes to notify Mi-Tech in writing of
any change in any representation, warranty or other information
relating to 360 set forth herein that takes place prior to the Closing
Date.
Section 10. REPRESENTATIONS AND WARRANTIES OF XXXXXXX AND
MI-TECH. Xxxxxxx and Mi-Tech represent, warrant and acknowledge to 360 as of the
date hereof and, unless otherwise provided, as of the Closing Date, as follows:
(a) Mi-Tech is acquiring Class A Subordinate Voting Shares as
principal with an aggregate acquisition cost to Mi-Tech of not less
than C$150,000 and is purchasing the Class A Subordinate Voting Shares
for investment only and not with a view to resale or distribution in
violation of applicable securities laws.
(b) Mi-Tech, if a "U.S. Person" (as defined in Regulation S
under the United States Securities Act of 1993, as amended (the "1933
Act"), is an "Accredited Investor" (as defined in Rule 501 under the
1933 Act). Mi-Tech is acquiring the Class A Subordinate Voting Shares
for its own account, for investment purposes only and not with a view
to any resale, distribution or other disposition of the Class A
Subordinate Voting Shares in violation of the United States securities
laws. If Mi-Tech decides to offer, sell or otherwise transfer any of
the Class A Subordinate Voting Shares, it will not
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offer, sell or otherwise transfer any of such Class A Subordinate
Voting Shares directly or indirectly, unless such sale is made in
compliance with, or in reliance of an exemption from, the 1933 Act and
applicable state securities laws. Mi-Tech understands and agrees that
there may be material tax consequences to Mi-Tech of an acquisition or
disposition of the Class A Subordinate Voting Shares and that, except
as expressly set forth in this Agreement, 360 gives no opinion and
makes no representation with respect to the tax consequences to
Mi-Tech under United States, state, local or foreign tax law of
Mi-Tech's acquisition or disposition of such securities.
(c) Mi-Tech acknowledges that no offering memorandum,
prospectus or registration statement has been prepared or filed by 360
with any securities commission or similar authority in any jurisdiction
in connection with the Exchange and the issue and sale of Class A
Subordinate Voting Shares to Mi-Tech is subject to such sale being
exempt from the requirements of applicable securities laws as to the
filing of an offering memorandum, prospectus or registration statement.
(d) Mi-Tech has received and reviewed 360's Registration
Statement on Form F-1 as filed with the Securities and Exchange
Commission of the United States on January 28, 2000 and has had the
opportunity to discuss the disclosure therein, as well as developments,
concerning 360 and the industry in which it competes, with
representatives of 360 and has received complete answers to all of its
questions. Mi-Tech is not relying on any written or oral
representations made by 360, except to the extent expressly provided in
this Agreement.
(e) To Mi-Tech's knowledge, the Class A Subordinate Voting
Shares were not advertised in printed media of general and regular paid
circulation, radio or television and Mi-Tech has not purchased the
Class A Subordinate Voting Shares as a result of any form of general
solicitation or general advertising, including advertisements,
articles, notices or other communications published in any newspaper,
magazine or similar media or broadcast over radio, or television, or
any seminar or meeting whose attendees have been invited by general
solicitation or general advertising.
(f) Mi-Tech has such knowledge and experience in financial and
business affairs as to be capable of evaluating the merits and risks of
the investment hereunder and is able to bear the economic risk of loss
of such investment.
(g) Mi-Tech understands that the Class A Subordinate Voting
Shares have not been and will not be registered under the 1933 Act, as
amended, or the securities laws of any state of the United States and
that the sale contemplated hereby is being made in reliance on an
exemption from such registration requirements and Mi-Tech understands
and agrees that the Class A Subordinate Voting Shares may not be traded
in the United States or by or on behalf of a U.S. Person or a person in
the United States unless permitted by the terms of the 360 Shareholders
Agreement and either registered under the 1933 Act and any applicable
state securities laws or an exemption from such registration
requirements is available and that certificates representing the Class
A Subordinate Voting Shares will bear a legend to such effect.
-12-
(h) Mi-Tech understands that no prospectus has been or will be
filed in accordance with the securities laws, and the regulations
thereunder, of, and the applicable published rules, policy statements,
blanket orders and notices of the securities regulatory authorities in
the provinces and territories of Canada (the "Canadian Securities
Laws") qualifying the distribution of the Class A Subordinate Voting
Shares in any province or territory of Canada and that the Class A
Subordinate Voting Shares may not be offered or sold by Mi-Tech in any
province or territory of Canada except pursuant to an applicable
exemption from the prospectus requirements of the applicable Canadian
Securities Laws and from a dealer appropriately registered under the
applicable Canadian Securities Laws or, other than in Ontario, in
accordance with an exemption from the registration requirements of such
laws.
(i) Neither Mi-Tech nor Xxxxxxx has employed any broker or
finder in connection with the transactions contemplated by this
agreement.
(j) The execution, delivery and performance by Mi-Tech and
Xxxxxxx of this Agreement, and the execution, delivery and performance
by Mi-Tech of the 360 Transaction Documents and the Agreement to be
Bound by the 360 Shareholders Agreement (collectively the "Mi-Tech
Transaction Documents") and the consummation by Mi-Tech and Xxxxxxx of
the transactions contemplated hereby and thereby will not (i) violate
any provision of law, statute, rule or regulation, or any ruling, writ,
injunction, order, judgment or decree of any court, administrative
agency or other governmental body applicable to it, or any of its
properties or assets; (ii) conflict with or result in any breach of any
of the terms, conditions or provisions of, or constitute (with due
notice or lapse of time, or both) a default (or give rise to any right
of termination, cancellation or acceleration) under any contract to
which Mi-Tech or Xxxxxxx is a party that would materially adversely
affect their ability to consummate the transactions contemplated by
this agreement or perform their obligations under any Mi-Tech
Transaction Documents; or (iii) violate its constating documents.
(k) Mi-Tech is duly organized and validly existing under the
laws of the jurisdiction of its organization, and Xxxxxxx is duly
incorporated and validly existing under the laws of its jurisdiction of
incorporation, and each has all partnership, corporate or company
power, as applicable, and authority to enter into and carry out the
transactions contemplated by each of the Mi-Tech Transaction Documents
and the performance by them of their obligations hereunder and
thereunder. Each of the Mi-Tech Transaction Documents has been duly
authorized by all necessary action on the part of Mi-Tech and Xxxxxxx.
Each of the Mi-Tech Transaction Documents constitutes a valid and
binding agreement of Mi-Tech, and this Agreement constitutes a valid
and binding agreement of Xxxxxxx, enforceable against Mi-Tech and
Xxxxxxx, as the case may be, in accordance with its terms except to the
extent that enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights generally and by
equitable principles generally whether enforced in a court of law or at
equity.
(l) No permit, authorization, consent or approval of or by, or
any notification of or filing with, any Person is required in
connection with the execution, delivery and
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performance by Mi-Tech or Xxxxxxx of any Mi-Tech Transaction Document,
the consummation by Mi-Tech or Xxxxxxx of the transactions
contemplated hereby or thereby, or the issuance, purchase or delivery
of the Mi-Tech Shares (other than such notifications or filings
required under applicable securities laws, if any, which shall be made
on a timely basis and other than provided for in any Mi-Tech
Transaction Document).
(m) In respect of the Company Shares (i) no Person, other than
360 or WFN, has any written or oral agreement or option or any right or
privilege (whether by law, pre-emptive or contractual) capable of
becoming an agreement or option for the purchase or acquisition from
Mi-Tech of any of the Company Shares, (ii) no Person other than 360 or
WFN has any agreement or option or any right or privilege (whether by
law, pre-emptive or contractual) capable of becoming an agreement,
including convertible securities, warrants or convertible obligations
of any nature, for the purchase, subscription, allotment or issuance of
any unissued shares or other securities of the Company, (iii) Mi-Tech
is the registered and beneficial owner of the Company Shares, with good
and marketable title thereto, free and clear of any mortgage, lien,
security interest, pledge, escrow, charge, or other encumbrance of any
kind or character whatsoever (an "Encumbrance") and, without limiting
the generality of the foregoing, none of the Company Shares are subject
to any voting trust, shareholder agreement or voting agreement other
than the Shareholders Agreement, and (d) upon completion of the
transaction contemplated by this agreement, all of the Company Shares
will be owned by 360 as the registered and beneficial owner, with a
good and marketable title thereto free and clear of any Encumbrance
except for such Encumbrances as may have been granted by 360.
(n) Mi-Tech and Xxxxxxx acknowledge and agree that the
foregoing representations, warranties and covenants set out herein are
made by Mi-Tech and Xxxxxxx with the intent that they be relied upon in
determining the suitability of Mi-Tech as a purchaser of Class A
Subordinate Voting Shares. Mi-Tech and Xxxxxxx further agree that by
Mi-Tech accepting the Class A Subordinate Voting Shares, Mi-Tech and
Xxxxxxx shall be representing and warranting that the foregoing
representations and warranties are true as at the Closing Date with the
same force and effect as if they had been made by Mi-Tech and Xxxxxxx
at the Closing Date and shall continue in full force and effect
notwithstanding any subsequent disposition by Mi-Tech of the Class A
Subordinate Voting Shares. Mi-Tech and Xxxxxxx undertake to notify 360
in writing of any change in any representation, warranty or other
information relating to Mi-Tech or Xxxxxxx set forth herein that takes
place prior to the Closing Date.
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Section 11. XXXXX'X REPRESENTATIONS AND ACKNOWLEDGMENT. On or
prior to the Closing, Mi-Tech shall cause Xxxxx to execute a Representation and
Acknowledgment in the form attached as EXHIBIT E.
Section 12. OTHER COVENANTS.
(a) COOPERATION BY PARTIES; SATISFACTION OF CLOSING
CONDITIONS. From the date hereof and prior to the Closing, each party shall use
its commercially reasonable efforts, and will cooperate with each other, to
secure as promptly as practicable all necessary consents, approvals,
authorizations, exemptions and waivers from third parties as shall be required
to enable the parties hereto to effect the transactions contemplated hereby,
provided however that 360 shall not by this section be obliged to proceed with
an IPO unless 360 decides to proceed, in its sole and absolute discretion.
(b) 360 SHAREHOLDERS AGREEMENT AND REGISTRATION RIGHTS
AGREEMENT. As soon as practicable after the execution of this Agreement, 360 and
Mi-Tech shall execute and deliver to the Closing Escrow Agent pursuant to the
Closing Escrow Agreement (a) an agreement by which Mi-Tech agrees to be bound by
the 360 Shareholders Agreement, (b) the Registration Rights Agreement, and (c)
such other documents and instruments as required pursuant to the Closing Escrow
Agreement.
Section 13. ACKNOWLEDGEMENT OF INTENDED AMENDMENT TO ARTICLES
OF 360. Mi-Tech acknowledges that it has been advised that it is the intention
of 360 to request its shareholders to amend the Articles of 360, to alter the
share capital of 360, and to alter the rights, privileges, restrictions and
conditions attached to each class of shares in the share capital of 360, as
described in the draft Articles of Amendment (to be attached as EXHIBIT D as
soon as practicable after the execution of this Agreement), prior to, or
concurrently with, the IPO.
Section 14. CONDITIONS TO THE EXCHANGE.
(a) CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
obligations of each party hereto to consummate the transactions contemplated
hereby shall be subject to the satisfaction at or prior to the Closing Date of
the following conditions, any or all of which may be waived in writing, in whole
or in part, by 360 or Mi-Tech, to the extent permitted by applicable law:
(b) No Governmental Authority shall have enacted, issued,
promulgated or enforced any statute, rule, regulation, executive order, decree,
judgment, preliminary or permanent injunction or other order which is in effect
and which prohibits, enjoins or otherwise restrains the consummation of the
transactions contemplated hereby; provided, that the parties shall use
commercially reasonable efforts to cause any such decree, judgment, injunction
or order to be vacated or lifted.
(c) Each consent or approval from, or filing with any Person,
required to be obtained or made and any waiting period required to have expired
in order to consummate the
-15-
transactions contemplated by this agreement at the Closing shall have been
obtained, or made, as the case may be, and any such waiting period shall have
expired.
(d) The events described in Section 8 shall not then have
occurred.
Section 15. CONDITIONS TO OBLIGATIONS OF MI-TECH. The
obligations of Mi-Tech to consummate the Exchange shall be subject to the
satisfaction or waiver, on or prior to the Closing Date, of the following
conditions:
(a) Each representation and warranty made by 360 herein shall
be true and correct, in all material respects on and as of the Closing
Date, with the same force and effect as though such representation and
warranty had been made on and as of the Closing Date, except for
changes permitted or contemplated by this agreement and except for each
representation and warranty that is made as of a specific date or time,
which shall be true and correct in all material respects, only as of
such specific date or time.
(b) 360 shall have complied in all material respects with all
its agreements and covenants contained herein required to be performed
at or prior to the Closing to the extent such agreements and covenants
relate to the Closing.
(c) 360 shall have delivered to Mi-Tech a certificate executed
by a senior executive officer of 360, which shall be satisfactory in
form and substance to Mi-Tech, certifying that the conditions set forth
in paragraphs (a) and (b) have been met.
Section 16. CONDITIONS TO THE OBLIGATIONS OF 360. The
obligations of 360 to consummate the Exchange shall be subject to the
satisfaction or waiver, on or before the Closing Date, of the following
conditions:
(a) Each representation and warranty made by Mi-Tech and
Xxxxxxx herein shall be true and correct in all material respects, with
the same force and effect as though such representation and warranty
had been made on and as of the Closing Date, except for changes
permitted or contemplated by this agreement and except for each
representation and warranty that is made as of a specific date or time,
which shall be true and correct, in all material respects, only as of
such specific date or time.
(b) Mi-Tech and Xxxxxxx shall have complied in all material
respects with all of its agreements and covenants contained herein
required to be performed at or prior to the Closing to the extent such
agreements and covenants relate to the Closing.
(c) Each of Mi-Tech and Xxxxxxx shall have delivered to 360 a
certificate executed by a senior executive officer, which shall be
satisfactory in form and substance to 360, certifying that the
conditions set forth in paragraphs (a) and (b) have been met.
Section 17. SURVIVAL OF REPRESENTATIONS, WARRANTIES,
AGREEMENTS AND COVENANTS. All representations and warranties in this Agreement
shall survive the Closing indefinitely and shall in no way be affected by any
investigation of the subject matter thereof made by or on behalf of 360 or
Mi-Tech. All statements contained in any certificate or other
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instrument delivered by 360 pursuant to this Agreement shall constitute
representations and warranties by 360 under this agreement. All statements
contained in any certificate or other instrument delivered by Mi-Tech or Xxxxxxx
pursuant to this agreement shall constitute representations and warranties by
the Mi-Tech or Xxxxxxx, as the case may be, under this agreement.
Section 18. EXPENSES. Each of the parties shall pay all the
costs and expenses incurred by it or on its behalf in connection with this
agreement and the consummation of the transactions contemplated hereby.
Section 19. CONFIDENTIALITY.
(a) The parties hereto hereby covenant and agree with each
other that, subject to subsection 19(c), they will not disclose, or allow their
respective directors, officers, employees agents, representatives or
consultants, if any, to disclose, to any Person, any of the terms, conditions or
other facts of or concerning this Agreement or the existence of this agreement
without the prior written consent of the other parties hereto. The parties
hereto hereby further covenant and agree with each other that they will at all
times keep, and all reasonable and normal steps to cause their respective
directors, officers, employees, agents, representatives and consultants, if any,
to at all times keep, all information of every nature and kind whatsoever
regarding 360, Mi-Tech and their affiliates including, without limitation,
information on and/or copies of material agreements, corporate, proceedings and
other data, whether transferred in writing, orally, visually, electronically or
by any other means, and all analyses, studies, compilations, data, supplies or
other documents prepared by any party or 360 or Mi-Tech or their affiliates
containing, or based in whole or in part on, any such information or reflecting
any such information, strictly confidential, and shall at no time convey or
disclose, or knowingly allow their respective directors, officers, employees,
agents, representatives or consultants, if any, to convey or disclose, in any
manner whatsoever, to any person, firm or corporation any of the aforesaid
information. The parties hereto hereby further covenant and agree with each
other not to use, and to take all normal and reasonable steps to ensure that
their respective directors, officers, employees, agents, representatives or
consultants, if any, do not use, any of the aforesaid information except for the
purposes of exercising their respective rights and performing their respective
obligations under this agreement. The obligations in this Section 19(a) shall
not apply to: (i) information that, at the time of its disclosure, is publicly
available; (ii) information that, after the time of its disclosure, becomes
publicly available other than through a breach of the confidentiality
obligations of this Agreement; (iii) information that was, is, or becomes
available to a party on a non-confidential basis, which a party obtains from a
third person who is not known by such party as being under confidentiality
obligations respecting such information; or (iv) information that, at the time
of such disclosure, the receiving party already had in its own possession as
evidenced by such party's written records.
(b) Each party hereto hereby covenants and agrees with each
other party hereto to indemnify and hold harmless each other party hereto from
any losses, damages, charges, fees or expenses (including reasonable lawyers'
fees) arising out of or resulting from any breach of subsection 19(a). The
parties hereto hereby further covenant and agree with each other not to do any
act, or knowingly allow their respective directors, officers, employees, agents,
-17-
representatives or consultants, if any, to do any act, to infringe upon any
copyright, patent, industrial design or other proprietary rights of 360 or its
affiliates.
(c) The parties hereto hereby further covenant and agree with
each other that, in the event they, or their respective directors, officers,
employees, agents, representatives or consultants, if any, become legally
compelled to disclose any of the aforesaid information, or are advised by their
respective legal counsel that such disclosure is required to comply with
applicable law, to immediately provide the other parties with written notice so
that the other parties may seek a protective order or other appropriate remedy,
and to cooperate, and to cause their respective directors, officers, employees,
agents, representatives and consultants, if any, to cooperate, with the other
parties in any effort undertaken to obtain a protective order or other remedy.
Each party hereto hereby further covenants and agrees with each other party to,
in the event that such protective order or remedy is not obtained, furnish, and
to cause his directors, officers, employees, agents, representatives and
consultants, if any, to furnish, only that portion of the aforesaid information
which he is legally required to furnish, and to use his best efforts, and to
cause his directors, officers, employees, agents, representatives, and
consultants, if any, to use their best efforts, to obtain an assurance from the
recipient of any of the aforesaid information that confidential treatment will
be accorded to such information, to the extent that such assurance is available.
Notwithstanding the foregoing, each of the parties acknowledges that the parties
may be required to disclose the terms of this Agreement, and provide a copy of
this Agreement, in filings made by such party under applicable securities law,
and may have to disclose the aforesaid information in an open court in legal
proceedings between the parties, or between a party and others, and each of the
parties hereby consents to such disclosure and to the filing of a copy of this
Agreement for public viewing under filings required to be made by a party under
applicable securities law.
(d) Each party hereto hereby acknowledges to and covenants and
agrees with each other party hereto that a breach by it of any of its covenants
contained in this Section 19 may result in damages to each of the other parties
and that a monetary award would not adequately compensate for such damages, and,
accordingly, that in the event of any such breach, in addition to all other
remedies available in law or in equity, the other parties, or any of them, shall
be entitled as a matter of right to apply to a court of competent equitable
jurisdiction for such relief by way of restraining order, injunction, decree or
otherwise as may be appropriate to ensure compliance by it with Section 19.
(e) Each of the parties hereto hereby acknowledges to and
covenants and agrees with each of the other parties hereto that, notwithstanding
any provision of this Agreement, its covenants contained in Section 19 survive
any termination of this Agreement, whether or not it continues to hold shares in
the capital of 360.
Section 20. UNDERWRITTEN OFFERING - LOCK-UP OF SHARES. Mi-Tech
agrees, if requested in writing by the managing underwriter(s) of an IPO, not to
effect any sale (or in any other way, directly or indirectly, effect any
transfer, assignment, distribution, pledge, encumbrance or other disposition of,
either voluntarily or involuntarily, including the assignment or transfer of
voting rights, if any) (collectively, with "sale", a "Sale") of any shares or of
any equity securities (or securities convertible into or exchangeable for equity
securities) of 360,
-18-
including, without limitation, any Sale pursuant to Canadian Securities Laws or
Rule 144 under the U.S. Securities Act, (other than as part of such underwritten
public offering) during the time period requested by the managing underwriter(s)
not to exceed one year.
Section 21. RESTRICTIONS ON CONVERSION INTO VOTING SHARES. To
the extent required by the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder (the "HSR
Act"), if Mi-Tech elects to convert its non-voting Shares into voting Shares,
Mi-Tech and (upon written request by Mi-Tech) 360 agree to file or cause to be
filed, as promptly as practicable after such request, with the United States
Federal Trade Commission and the Antitrust Division of the United States
Department of Justice, all reports and documents required to be filed by Mi-Tech
and 360 under the HSR Act concerning the conversion transaction and (b) promptly
comply with or cause to be complied with any requests by the United States
Federal Trade Commission or the Antitrust Division of the United States
Department of Justice for additional information concerning such transactions,
in order to obtain antitrust regulatory clearance as soon as possible. 360
agrees to request, and to cooperate with Mi-Tech in requesting, early
termination of any applicable waiting period under the HSR Act. All fees
required to be paid in connection with such filings shall be borne by 360.
Section 22. MODIFICATION OR AMENDMENT. The parties hereto may
modify or amend this Agreement only by written agreement duly executed and
delivered on behalf of the respective parties.
Section 23. WAIVER OF CONDITIONS.
(a) IN WRITING. Any provision of this Agreement may be waived
if, and only if, such waiver is in writing and signed by the party against whom
the waiver is to be effective.
(b) FAILURE OR DELAY. No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
Except as otherwise herein provided, the rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 24. COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts shall together constitute the same
agreement.
Section 25. GOVERNING LAW. This Agreement shall be deemed to
be made in and in all respects shall be interpreted, construed and governed by
and in accordance with the laws of the State of New York without regard to the
conflict of law principles thereof.
Section 26. NOTICES. Notices, requests, instructions or other
documents to be given under this Agreement shall be in writing and shall be
deemed given, (i) when sent if sent by facsimile, provided that the fax is
promptly confirmed by telephone confirmation thereof, (ii) when delivered, if
delivered personally to the intended recipient, and (iii) one business day
-19-
later, if sent by overnight delivery via a national courier service, and in each
case, addressed to a party at the address for such party set forth below or to
such other persons or addresses as may be designated in writing by the party to
receive such notice:
(a) If to 000, XXX, Xxxxxx Communications Ltd. or the
Company, to:
c/o 360networks inc.
#0000-0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Fax: (000) 000-0000
Attn: General Counsel
with a copy to:
Xxxxxxx & Xxxxxx
0000-0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Fax: (000) 000-0000
Attn: Xxxxx Xxxxxxx
(b) If to Ledcor Inc. or Ledcor Industries, Inc., to:
Ledcor Industries Limited
Suite 1000, 0000 Xxxx Xxxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Fax: (000) 000-0000
Attn: Xxxxx Xxxx
(c) If to Michels or Mi-Tech
Mi-Tech Communications, LLC
X.X. Xxx 000
Xxxxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxxxx, Manager
with a copy to:
Michels Pipeline Construction, Inc.
X.X. Xxx 000
Xxxxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attn: A. Xxxxx Xxxxxxxx
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and
Xxxxx & Lardner
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxx X. Xxxxxxx
Section 27. ENTIRE AGREEMENT. This Agreement, the 360
Shareholders' Agreement, the documents delivered pursuant to the Closing Escrow
Agreement, the Shareholders' Agreement to the extent it survives, the Transfer
Agreement, dated as of December 31, 1998, and any other written agreement
between the parties not expressly terminated hereunder, constitute the entire
agreement among the parties hereto, and supersede all other prior agreements,
understandings, representations and warranties both written and oral, among the
parties, with respect to the subject matter hereof.
Section 28. SEVERABILITY. The provisions of this Agreement
shall be deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability or the other
provisions hereof.
Section 29. CAPTIONS. The captions herein are for convenience
of reference only, do not constitute part of this Agreement and shall not be
deemed to limit or otherwise affect any of the provisions hereof.
Section 30. ASSIGNMENT. This Agreement shall not be assignable
by operation of law or otherwise.
Section 31. DISPUTE RESOLUTION.
(a) RESOLUTION BY DISCUSSION BETWEEN PARTIES. The parties
hereto shall attempt to resolve any disputes arising out of the terms and
conditions of this Agreement by discussions between representatives of the
respective parties which representatives shall have the authority to take all
actions necessary for the resolution of such dispute. Such individuals shall
cooperate with each other for the purpose of resolving such disputes and shall
exchange such information as the other shall request for purposes thereof. If a
party desires to commence such discussions, it shall notify the other and upon
such notice the parties shall use their good faith efforts to resolve the
dispute within 30 days of such notice. Any dispute which cannot be resolved to
the satisfaction of such parties during such 30 day period may, upon written
notice by any such party, be submitted to arbitration in accordance with Section
31(b) below.
(b) ARBITRATION. All disputes, controversies and claims which
cannot be settled by mutual discussions as provided in Section 31(a) above may,
upon written notice by any party be submitted to arbitration with the American
Arbitration Association (the "AAA") in accordance with the rules of the AAA. The
arbitration shall be conducted by three arbitrators. One arbitrator shall be
appointed by 360 on behalf of itself and its affiliates and one arbitrator shall
be appointed by Mi-Tech on behalf of itself and its affiliates, and the two
appointed
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arbitrators shall select a third arbitrator. If a party shall fail to appoint an
arbitrator, such party's arbitrator shall be selected in accordance with the
rules and procedures of the AAA. The arbitration shall take place in New York,
New York. Each of the parties agrees to provide such information as the
arbitrators shall request for purposes of resolving the dispute. Any award
issued by the arbitrators shall be final and binding on the parties. Judgment
upon such award may be entered in any court having jurisdiction. Each of the
parties shall bear its own costs in connection with the arbitration, unless the
arbitrators shall otherwise determine. Nothing in this Section 31 shall prevent
a party from seeking injunctive relief or other equitable or extraordinary
remedies from a court of competent jurisdiction at any time prior to, or during,
an arbitration initiated under the terms of this Agreement.
Section 32. ENFORCEMENT. The parties hereto agree that money
damages or other remedy at law would not be a sufficient or adequate remedy for
any breach or violation of, or a default under, this Agreement by them and that
in addition to all other monetary and other remedies available to them, each of
them shall be entitled to the fullest extent permitted by law to an injunction
restraining such breach, violation or default or threatened breach, violation or
default and to any other equitable relief, including, without limitation,
specific performance, without bond or other security being required.
Section 33. CURRENCY. Unless otherwise indicated, references
to "dollars", "$" or "US$" are to U.S. dollars and references to "C$" are to
Canadian dollars.
Section 34. NO PARTNERSHIP. The obligations of each of the
parties to this agreement are several and not joint. Nothing in this agreement
shall imply or be deemed to imply a partnership, joint venture or other
relationship between the parties.
Section 35. FURTHER ASSURANCES. At any time or from time to
time after the Closing, 360, on the one hand, and Mi-Tech and Xxxxxxx, on the
other hand, agree to cooperate with each other, and at the request of the other
party, to execute and deliver any further instruments or documents and to take
all such further action as the other may reasonably request in order to evidence
or effectuate the consummation of the transactions contemplated hereby and to
otherwise carry out the intent of the parties hereunder.
[THE REST OF THE PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto as of the date
first written above.
360NETWORKS INC.
By: /s/ Xxxxx Xxxx
-----------------------
(Title)
WORLDWIDE FIBER NETWORKS LTD.
By: /s/ Xxxxx Xxxx
-----------------------
(Title)
LEDCOR COMMUNICATIONS LTD.
By: /s/ Xxxxx Xxxx
-----------------------
(Title)
LEDCOR INDUSTRIES, INC.
By: /s/ Xxxxx Xxxx
-----------------------
(Title)
WORLDWIDE FIBER (USA) INC.
By: /s/ Xxxxx Xxxx
-----------------------
(Title)
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MI-TECH COMMUNICATIONS, LLC
By: /s/ Brain X. Xxxxxxx
-----------------------
Xxxxx X. Xxxxxxx, Manager
LEDCOR INC.
By: /s/ Xxxxx Xxxx
-----------------------
(Title)
XXXXXXX PIPELINE CONSTRUCTION, INC.
By: /s/ Brain X. Xxxxxxx
-----------------------
Xxxxx X. Xxxxxxx, Executive
Vice President
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EXHIBIT B
CLOSING ESCROW AGREEMENT
THIS AGREEMENT is dated for reference the _ day of March, 2000.
AMONG:
360NETWORKS INC.
----------------
(the "Corporation")
AND:
MI-TECH COMMUNICATIONS, LLC
---------------------------
("Mi-Tech")
AND:
XXXXXXX PIPELINE CONSTRUCTION, INC.
-----------------------------------
("Michels")
AND:
XXXXXXX & XXXXXX
----------------
("Xxxxxxx")
WHEREAS:
A. By a Share Exchange Agreement dated as of March 20, 2000 by and among
the Corporation, Worldwide Fiber Networks Ltd., Ledcor Communications Ltd.,
Ledcor Industries, Inc., Worldwide Fiber (USA), Inc., Mi-Tech, Ledcor Inc. and
Xxxxxxx (the "Share Exchange Agreement"), Mi-Tech agreed to exchange its 50
shares of Class A Voting Preferred Stock and 50 shares of Non-Voting Common
Stock in the capital stock of Worldwide Fiber (USA), Inc. for Class A
Subordinate Voting Shares in the capital stock of the Corporation, the number of
such shares to be determined in the manner specified in the Share Exchange
Agreement.
B. This Closing Escrow Agreement is entered into pursuant to the terms of
the Share Exchange Agreement.
IN CONSIDERATION of the mutual agreements in this Agreement, pursuant to the
obligations of the Corporation, Mi-Tech and Xxxxxxx in the Share Exchange
Agreement, and subject to the terms and conditions specified in this Agreement,
the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS
In this Agreement, including the recitals and the schedules, words
having a meaning defined in the Share Exchange Agreement will have the same
meaning when used in this Agreement and the following words and expressions have
the following meanings unless the context otherwise requires:
"Closing Agenda" means the Closing Agenda attached as Schedule A.
"Conditions Notice" has the meaning specified in Section 2.3.
"Conditions Precedent" has the meaning specified in Section 2.2.
"Escrow Documents" means the closing documents listed as document
numbers -, - [LIST] in the Closing Agenda.
"Escrow Release Notice" has the meaning specified in Section 2.3.
"IPO Notice" has the meaning specified in Section 2.3.
"Notice Deadline" has the meaning specified in Section 2.3.
"Share Exchange Agreement" has the meaning specified in the Recitals.
"Transaction Parties" means the Corporation, Mi-Tech and Xxxxxxx.
ARTICLE 2
CLOSING ESCROW
2.1 DELIVERY OF ESCROW DOCUMENTS
All of the Escrow Documents shall be signed by the applicable
Transaction Party or Transaction Parties, and the other parties thereto, as
applicable, with the number of copies specified in the Closing Agenda, left
undated, and delivered in escrow to Xxxxxxx on or before March -, 2000 (or such
other time as may be agreed upon between the Transaction Parties), to be held in
escrow pursuant to the terms of this Agreement. The Escrow Documents shall not
be considered to have been delivered unless and until Xxxxxxx has sent the
Escrow Release Notice in accordance with Section 2.3. With the consent of
Mi-Tech and Xxxxxxx (such consent not to be unreasonably withheld or delayed),
the Corporation may from time to time replace an Escrow Document delivered by it
and, with the consent of the Corporation not to be unreasonably withheld,
Mi-Tech and Xxxxxxx may from time to time replace an Escrow Document delivered
by either of them (by way of an example only, such a replacement might be
necessary if a representation in the Share Exchange Agreement was no longer
accurate, and an amendment to a bring down certificate was required as a
result).
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2.2 CONDITIONS PRECEDENT TO THE EXCHANGE
Notwithstanding that the Escrow Documents have been placed in escrow,
the obligations of the Corporation, Xxxxxxx and Mi-Tech to complete the Share
Exchange Agreement shall continue to be subject to the condition precedents (the
"Conditions Precedent") set forth in Sections 14, 15 and 16 of the Share
Exchange Agreement, but, for greater clarity, there shall be no other conditions
precedent to the closing of the Share Exchange Agreement.
2.3 RELEASE FROM ESCROW FOR CLOSING
If, on or before June 1, 2000 (the "Notice Deadline"), Xxxxxxx receives from the
Corporation a written notice (the "IPO Notice") that the IPO is about to close,
on the date of the IPO Notice, and that there are no conditions to the
completion of the closing of the IPO other than the closing of the Share
Exchange Agreement, such notice to also specify the IPO Price, then, provided
that, before sending the Escrow Release Notice in accordance with Section
2.3(b), Xxxxxxx has not received notice in writing from Mi-Tech referring to
either Section 14 or Section 15 of the Share Exchange Agreement and advising
that it is the position of Mi-Tech, as the case may be, that one of the events
described in Sections 14 or 15 has failed to occur and that Mi-Tech does not
waive such condition (a "Conditions Notice"), Xxxxxxx shall forthwith proceed
to:
(a) insert the date of the closing of the IPO in those documents
that are described as documents -, -, -, and - in the Closing
Agenda;
(b) send by fax to the Transaction Parties (at the fax numbers
specified in the Share Exchange Agreement) a notice in writing
advising that the Escrow Documents are by such notice released
from escrow (the "Escrow Release Notice"), and send by fax to
Mi-Tech and Xxxxxxx photocopies of the IPO Notice;
(c) deliver to the Transaction Parties and their legal counsel the
Escrow Documents in accordance with the provisions for
delivery in the Closing Agenda.
2.4 DELIVERY OF SHARE CERTIFICATE
Within three Business Days after the delivery by Xxxxxxx of the Escrow
Release Notice, the Corporation shall deliver to Mi-Tech and to Xxxxx the share
certificates described in, and in accordance with the terms of, Section 2(b) of
the Share Exchange Agreement.
2.5 EFFECT OF ESCROW RELEASE NOTICE
Upon Xxxxxxx sending the Escrow Release Notice as specified in Section
2.3, the Share Exchange Agreement will be deemed to have been completed
effective such date, the Conditions Precedent will be deemed to be satisfied or
waived on such date and, upon Xxxxxxx making the deliveries described in
Sections 2.3(c), Xxxxxxx shall have fulfilled its obligations as escrow agent
and this Agreement shall terminate.
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2.6 RELEASE FROM ESCROW IF NO CLOSING
If Xxxxxxx does not receive the IPO Notice by the Notice Deadline or if
Xxxxxxx receives a Conditions Notice before sending the Escrow Release Notice,
then, unless the Corporation, Xxxxxxx and Mi-Tech otherwise agree in writing:
(a) the Escrow Documents shall be released from escrow and, at the
election of Xxxxxxx, destroyed (except that the share
certificates listed as item - on the Closing Agenda shall not
be destroyed and shall be returned to Mi-Tech or its legal
counsel) or returned unused to the parties who delivered them
into escrow, on the basis that the Escrow Documents are not
delivered and have no effect;
(b) the parties to the Share Exchange Agreement shall have no
further obligations to each other under this Agreement,
and upon Xxxxxxx returning or destroying the Escrow Documents in accordance with
the foregoing, Xxxxxxx shall have fulfilled its obligations as escrow agent and
this Agreement shall terminate.
ARTICLE 3
ESCROW AGENT TERMS
3.1 IRREVOCABLE AUTHORIZATION TO XXXXXXX
The Transaction Parties hereby irrevocably authorize and direct
Xxxxxxx to hold the Escrow Documents in escrow and to carry out the terms of the
escrow, in accordance with the terms of this Agreement.
3.2 XXXXXXX LEGAL COUNSEL TO THE CORPORATION
Mi-Tech and Xxxxxxx acknowledge that Xxxxxxx is legal counsel to the
Corporation, and each of Mi-Tech and Xxxxxxx expressly consents to Xxxxxxx also
acting as escrow agent pursuant to this Agreement, notwithstanding its
representation of the Corporation.
3.3 DUTIES LIMITED
Xxxxxxx shall act at all times and for all purposes under this
Agreement as an escrow agent. However, the duties and powers of Xxxxxxx shall
only be as expressly stated in this Agreement and no further duties shall be
implied.
3.4 INDEMNITY AND LIMITATION OF LIABILITIES
The Transaction Parties agree that:
(a) The Transaction Parties shall jointly and severally indemnify
and save Xxxxxxx harmless from and against any losses, claims
and damages arising out of this Agreement or Xxxxxxx'x
possession or disposition of the Escrow Documents,
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except where the losses, claims or damages are caused by
Xxxxxxx'x deliberate and wilful breach of this Agreement.
(b) Xxxxxxx shall not incur any liability for anything done by
Xxxxxxx in pursuance of the duties of Xxxxxxx hereunder,
unless caused by Xxxxxxx'x deliberate and wilful breach of
this Agreement, and the Transaction Parties each release
Xxxxxxx of and from any and all liability from any and all
claims and demands both at law and in equity that the
Transaction Parties, or any of them, may now or hereafter have
against Xxxxxxx relating to anything done by Xxxxxxx in
pursuance of its duties hereunder, unless arising out of or
from Xxxxxxx'x deliberate and wilful breach of this Agreement.
(c) Xxxxxxx shall not be responsible or liable in any manner
whatsoever for the sufficiency, correctness, genuineness or
validity of any of the Escrow Documents deposited with
Xxxxxxx.
(d) Xxxxxxx shall be protected in acting upon any written notice,
request, waiver, consent, receipt, statutory declaration or
other paper or document furnished to Xxxxxxx, and signed by or
purporting to be signed by any of the Transaction Parties, or
any of the directors and officers thereof, not only as to its
due execution and the validity and effectiveness of its
provisions, but also as to the truth and acceptability of any
information contained therein, which Xxxxxxx in good faith
believes to be genuine.
(e) If Xxxxxxx considers such action necessary or desirable,
Xxxxxxx may at any time apply to any court of competent
jurisdiction to interplead the Escrow Documents or any of
them.
(f) Xxxxxxx shall have no liability for lost, misplaced or
destroyed documents, unless such documents are lost, misplaced
or destroyed by Xxxxxxx'x deliberate and wilful breach of this
Agreement.
3.5 COURT ORDERS
Any and all requirements of Xxxxxxx to do any acts pursuant to the
terms of this Agreement will always be subject to an order of a court of
competent jurisdiction.
3.6 FEES
The fees and expenses of Xxxxxxx for acting hereunder shall be paid by
the Corporation.
ARTICLE 4
GENERAL
4.1 GOVERNING LAW AND ATTORNMENT
This Agreement will be governed by and construed in accordance with the
substantive laws of British Columbia and the federal laws of Canada applicable
in British Columbia, without
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regard to the conflict of law rules of British Columbia. The parties irrevocably
submit to and accept generally and unconditionally the exclusive jurisdiction of
the courts and appellate courts of British Columbia 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.
4.2 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.
4.3 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 the same to the parties as follows:
(a) To the Corporation at:
c/o 360networks inc.
#0000-0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Fax: (000) 000-0000
Attention: General Counsel
Fax No.: (000) 000-0000
(b) To Mi-Tech or Michels at:
Mi-Tech Communications, LLC
X.X. Xxx 000
Xxxxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxxx, Manager
Fax No.: (000) 000-0000
with a copy to:
Xxxxx & Xxxxxxx
Firstar Center
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xx. Xxxx Xxxxxxx
Fax No.: (000) 000-0000
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(c) To Xxxxxxx at:
Xxxxxxx & Xxxxxx
X.X. Xxx 00000
2100 - 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Attention: Xxxxx Xxxxxxx
Fax No.: (000) 000-0000
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, 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.
4.4 ASSIGNMENT
This Agreement is not assignable by any party in whole or in part,
without the prior written consent of the other parties.
4.5 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.
4.6 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.
4.7 FURTHER ASSURANCES
Each of the parties will promptly execute and deliver to the other
party such further documents and assurances and take such further actions as any
of the others may from time to time request in order to more effectively carry
out the intent and purpose of this Agreement and
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to establish and protect the rights, interests and remedies intended to be
created in favour of the others.
4.8 ENTIRE AGREEMENT
This Agreement, the Share Exchange Agreement and any documents and
agreements to be delivered pursuant to this Agreement or the Share Exchange
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.
4.9 AMENDMENTS
No change or modification of this Agreement will be valid unless
it is in writing and signed by each party to this Agreement.
4.10 HEADINGS AND CAPTIONS
The headings and captions of sections and paragraphs contained in
this Agreement are all inserted for convenience of reference only and are not to
be considered when interpreting this Agreement.
4.11 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 successors and assigns.
[THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.]
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IN WITNESS WHEREOF the parties have executed this Agreement on the dates stated
below.
360NETWORKS INC.
Per:
___________________________________
Authorized Signatory
MI-TECH COMMUNICATIONS, LLC
Per:
___________________________________
Authorized Signatory
XXXXXXX PIPELINE CONSTRUCTION, INC.
Per:
___________________________________
Authorized Signatory
XXXXXXX & XXXXXX
Per:
___________________________________
Partner
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SCHEDULE A
CLOSING AGENDA
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of ____________, 2000,
by and among MI-TECH COMMUNICATIONS, LLC, a Wisconsin limited liability company
("Mi-Tech") and 360NETWORKS INC., a Canadian company incorporated in the
Province of Alberta (formerly called Worldwide Fiber Inc.) (the "Company").
W I T N E S S E T H :
WHEREAS, pursuant to an agreement by and among Mi-Tech, the
Company, Worldwide Fiber Networks, Ltd., Ledcor Communications Ltd., Ledcor
Industries, Inc., Worldwide Fiber (USA), Inc. (formerly known as Pacific Fiber
Link, Inc.) ("Worldwide (USA)"), Ledcor, Inc. and Xxxxxxx Pipeline Construction,
Inc., dated March 20, 2000, Mi-Tech is, as of the date hereof, exchanging its
shares of Class A Voting Preferred Stock and Non-Voting Common Stock of
Worldwide (USA) for Class A Subordinate Voting Shares of the Company
(hereinafter the "Exchange"); and
WHEREAS, the Company desires to allow Mi-Tech and its
Affiliates, as well as Xxxxxxx Xxxxx & Company ("Xxxxx") to publicly sell such
Class A Subordinate Voting Shares of the Company pursuant to certain
registration statements which may be filed by the Company under the Securities
Act of 1933, as amended (the "Act") pursuant to the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
promises herein made and mutual benefits to be derived from this Agreement, it
is hereby agreed as follows:
1. DEFINITIONS. All capitalized terms used in this Agreement
shall have, unless otherwise defined below in this Section 1 or otherwise in
this Agreement, the meaning ascribed such terms in that certain Shareholders
Agreement dated December 31, 1998, among the Company, Worldwide Fiber Networks
Ltd., Ledcor Industries Inc., Mi-Tech, Ledcor, Inc., Ledcor Communications Ltd.,
Worldwide (USA) and Xxxxxxx Pipeline Construction, Inc. (the "Shareholders
Agreement").
"AFFILIATE" means any Person which directly or indirectly
controls, or is under common control with, or is controlled by another Person,
where "control" means the possession, directly or indirectly, of more than fifty
percent (50%) of the combined voting power of all outstanding securities, or the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise) and shall be
deemed to include senior employees of Mi-Tech or Xxxxxxx designated by Mi-Tech
or Xxxxxxx by notice to the Company from time to time.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the Class A Subordinate Voting Shares of
the Company.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"HOLDER" means Mi-Tech and any of its Affiliates and Xxxxx
holding Registrable Stock
"OTHER REGISTRATION RIGHTS AGREEMENTS" means the Private
Equity Registration Rights Agreement, the Registration Rights Agreement between
the Company and Canadian National Railway, and the agreements to provide
registration rights to Xxxxxxx X. Xxxxxx, Xxxxxx Xxxxxx Investment Partners LLC,
Madison Square Inc. and Xxxxx X. Xxxxx.
"PERSON" means any natural person, partnership, corporation or
other legal entity.
"PRIVATE EQUITY REGISTRATION RIGHTS AGREEMENT" means the
Registration Rights Agreement dated as of September 9, 1999 between the Company,
DWF SRL, GSCP3 WWF (Barbados) SRL, Providence Equity Fiber, L.P. and Tyco Group
S.a.r.l.
"REGISTRABLE STOCK" means the Common Stock issued or issuable
to Mi-Tech and its Affiliates and Xxxxx upon conversion of the Worldwide (USA)
Stock and any other shares of Common Stock issued in respect of such shares by
way of a stock dividend, or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation, share exchange or
reorganization; PROVIDED, HOWEVER, that Registrable Stock shall not include
shares of Common Stock which the holder thereof is entitled to sell into the
public market, together with all other Registrable Stock of the Company
beneficially owned by such holder (and all Registrable Stock as to which such
holder shares beneficial ownership) that is at the time of registration,
transferable by the holder thereof in a single brokerage transaction under the
provisions and within the volume limitations or Rule 144(e)(1) promulgated under
the Securities Act or any successor to such Rule.
"REGISTRATION STATEMENT" means a registration statement filed
by the Company with the Commission for a public offering and sale of securities
of the Company (other than a registration statement on Form X-0, Xxxx X-0, or
successor form).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"WORLDWIDE (USA) STOCK" means all shares of stock of Worldwide
(USA) owned by Mi-Tech or its Affiliates.
2. REQUIRED REGISTRATION.
(a) [Deleted]
(b) At any time following one (1) year after the effective
date of the first registration statement filed by the Company under the
Securities Act covering an underwritten offering of its securities to the
general public, the Holder or Holders holding, in the aggregate, at
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least fifty percent (50%) of the then outstanding Registrable Stock, may by
notice in writing to the Company request that the Company file a Registration
Statement with respect to all or any portion of shares of Registrable Stock the
aggregate proceeds of which (after deduction for underwriter's discounts and
expenses related to the issuance) are reasonably expected to exceed $5,000,000.
Notwithstanding anything to the contrary contained herein, if the Company shall
furnish to Holder a certificate signed by the President of the Company stating
that in good faith judgment of the Board it would be seriously detrimental to
the Company or its shareholders for a registration statement to be filed in the
near future due to pending Company events, or that it would require disclosure
of material non-public information relating to the Company which, in the
reasonable opinion of the Board, should not be disclosed, then the Company's
obligation to use all reasonable efforts to register, qualify or comply under
this Section 2 shall be deferred for a period not to exceed one hundred eighty
(180) days from the date of receipt of written request from such Holders;
PROVIDED, HOWEVER, that the Company may not utilize this right more than once in
any twelve (12) month period.
(c) Following receipt of any notice given under this Section 2
by Holders of Registrable Stock, the Company shall immediately notify all
Holders from whom notice has not been received that such registration is to be
effected and shall use its best efforts to register under the Securities Act the
number of shares of Registrable Stock specified in such notice (and in all
notices received by the Company from other holders within twenty (20) days after
the giving of such notice by the Company to such other Holders). The Holders of
a majority of the shares of Registrable Stock to be sold in such offering may
designate the managing underwriter of such offering (subject to the consent of
the Company, which consent will not be unreasonably withheld). The Company shall
be obligated to register Registrable Stock pursuant to Section 2(b) on two (2)
occasions only, PROVIDED, HOWEVER, that such obligation shall be deemed
satisfied only when a Registration Statement covering all shares of Registrable
Stock specified in notices received as aforesaid and which have not been
withdrawn by the Holders thereof shall have become effective. A registration
which does not become effective after the Company has filed a Registration
Statement with respect thereto solely by reason of the refusal of the requesting
Holders to proceed shall be deemed to have been effected by the Company at the
request of such requesting Holders unless such requesting Holders shall have
elected to pay all the Company's reasonable expenses in connection with such
registration.
(d) The Holders requesting registration under this Section 2
must distribute the Registrable Stock covered by their request by means of a
public offering underwritten by a reputable national or regional underwriter.
The rights of any Holder to include its Registrable Stock in such registration
under this Section 2 shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Stock in the
underwriting to the extent provided herein. All Holders proposing to distribute
their Registrable Stock through such underwriting shall (together with the
Company as provided in Section 4(b)) enter into an underwriting agreement in
customary form with the managing underwriter designated for such underwriting.
(e) If in the good faith judgment of the managing underwriter
of such public offering the inclusion of all of the Registrable Stock requested
for inclusion pursuant to this Section 2 would interfere with the successful
marketing of a smaller number of shares to be
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offered, then the number of shares of Registrable Stock to be included in the
offering shall be reduced to the required level. The Company shall be entitled
to include in any Registration Statement referred to in this Section 2 shares of
Common Stock to be sold by the Company for its own account, and pursuant to the
exercise of piggyback registration rights granted by the Company pursuant to the
Other Registration Rights Agreements, except as and to the extent that, in the
opinion of the managing underwriter, such inclusion would adversely affect the
marketing of the Registrable Stock of the Holders to be sold.
(f) Notwithstanding anything to the contrary contained herein,
the Company shall not be obligated to effect, or to take any action to effect,
any registration pursuant to Section 2(b) during the period starting with the
date sixty (60) days prior to the Company's good faith estimate of the date of
filing of, and ending on a date one hundred eighty (180) days after the
effective date of, a Company-initiated registration; PROVIDED, that the Company
is actively employing in good faith all reasonable efforts to cause such
registration statement to become effective.
3. INCIDENTAL REGISTRATION. Each time the Company shall
determine to file a Registration Statement (other than in connection with the
initial public offering of the Company) in connection with the proposed offer
and sale for money of any of its securities by it or any of its security
holders, the Company will give written notice of its determination to all
Holders. Upon the written request of a Holder given within ten (10) days after
the giving of any such notice by the Company, the Company will use its best
efforts to cause all such shares of Registrable Stock, the Holders of which have
so requested registration thereof, to be included in such Registration
Statement, all to the extent requisite to permit the sale or other disposition
by the prospective seller or sellers of the Registrable Stock to be so
registered. If the Registration Statement is to cover an underwritten
distribution, the Company shall use its best efforts to cause the Registrable
Stock requested for inclusion pursuant to this Section 3 to be included in the
underwriting on the same terms and conditions as the securities otherwise being
sold through the underwriters. If, in the good faith judgment of the managing
underwriter of such public offering, the inclusion of all of the Registrable
Stock requested for inclusion pursuant to this Section 3 and other securities
would interfere with the successful marketing of a smaller number of shares to
be offered, then the number of shares of Registrable Stock and other securities
to be included in the offering (except for shares: (a) to be issued by the
Company in an offering initiated by the Company; (b) shares to be registered
pursuant to the Private Equity Registration Rights Agreement; or (c) shares to
be registered pursuant to the exercise of a demand registration right held by
one of the Company's security holders) shall be reduced to the required level
with the participation in such offering to be PRO RATA among the holders thereof
requesting such registration, based upon the number of shares of Registrable
Stock and other securities owned by such holders.
4. REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions of Section 2 or 3 hereof to effect the registration
of shares of Registrable Stock under the Securities Act, the Company will, at
its expense, as expeditiously as possible:
(a) In accordance with the Securities Act and the rules and
regulations of the Commission, prepare and file with the Commission a
Registration Statement with respect to such securities and use its best
efforts to cause such Registration Statement to become
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and remain effective for a period of one hundred twenty (120) days or
until the securities covered by such Registration Statement have been
sold, whichever first occurs, and prepare and file with the Commission
such amendments to such Registration Statement (and use its best
efforts to cause post-effective amendments to become and remain
effective) and supplements to the prospectus contained therein as may
be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
Registration Statement;
(b) If the offering is to be underwritten in whole or in part,
enter into a written underwriting agreement in customary form with the
managing underwriter of the public offering;
(c) Furnish to the participating Holders and to the
underwriters such reasonable number of copies of the Registration
Statement (including all exhibits thereto), preliminary prospectus,
final prospectus and such other documents as such underwriters and
participating Holders may reasonably request in order to facilitate the
public offering of such securities;
(d) Use its best efforts to register or qualify the securities
covered by such Registration Statement under such state securities or
blue sky laws of such jurisdictions (i) as shall be reasonably
appropriate for the distribution of the securities covered by such
Registration Statement or (ii) as such participating Holders and
underwriters may reasonably request within twenty (20) days following
the original filing of such Registration Statement, except that the
Company shall not for any purpose be required to execute a general
consent to service of process, to subject itself to taxation, or to
qualify to do business as a foreign corporation in any jurisdiction
where it is not so qualified;
(e) Notify the Holders participating in such registration,
promptly after it shall receive notice thereof, of the date and time
when such Registration Statement and each post-effective amendment
thereto has become effective or a supplement to any prospectus forming
a part of such Registration Statement has been filed;
(f) Notify the Holders participating in such registration
promptly of any request by the Commission or any state securities
commission or agency for the amending or supplementing of such
Registration Statement or prospectus or for additional information;
(g) Prepare and file with the Commission, promptly upon the
request of any such participating Holders, any amendments or
supplements to such Registration Statement or prospectus which is
required under the Securities Act or the rules and regulations
thereunder in connection with the distribution of the Registrable Stock
by such participating Holders;
(h) Prepare and promptly file (in any event within twenty (20)
days) with the Commission, and immediately notify such participating
Holders of the need to file and of the filing of, such amendments or
supplements to such Registration Statement or
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prospectus as may be necessary to correct any statements or omissions
if, at the time when a prospectus relating to such securities is
required to be delivered under the Securities Act, any event has
occurred as the result of which any such prospectus or any other
prospectus as then in effect would include an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
(i) In case any of such participating Holders or any
underwriter for any such Holders is required to deliver a prospectus at
a time when the prospectus then in circulation is not in compliance
with the Securities Act or the rules and regulations of the Commission,
prepare promptly upon request such amendments or supplement to such
Registration Statement and such prospectus as may be necessary in order
for such prospectus to comply with the requirements of the Securities
Act and such rules and regulations;
(j) Advise such participating Holders, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any stop
order by the Commission or any state securities commission or agency
suspending the effectiveness of such Registration Statement or the
initiation or threatening of any proceeding for that purpose and
promptly use its best efforts to prevent the issuance of any stop order
or to obtain its withdrawal if such stop order should be issued;
(k) At the request of any participating Holder (i) furnish on
the date that such Registrable Stock is delivered to the underwriters
for sale in connection with such registration, an opinion, dated such
date, of the counsel representing the Company for the purposes of such
registration, addressed to the underwriters, in form and substance as
it customarily provided by issuer's counsel to underwriters in an
underwritten public offering and (ii) use its best efforts to furnish
letters dated each such effective date and such closing date, from the
independent certified public accountants of the Company, addressed to
the underwriters, in form and substance as is customarily provided by
independent certified public accountants to underwriters in an
underwritten public offering; and
(l) Cooperate with the Holders to facilitate the timely
preparation and delivery (under normal way settlement procedures) of
certificates representing securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in such
denominations and registered in such names as Holders may request prior
to sales of securities pursuant to such Registration Statement.
5. EXPENSES. With respect to each registration effected
pursuant to Section 2 and 3 hereof, all fees, costs and expenses of and
incidental to such registration and the public offering in connection therewith
shall be borne by the Company; PROVIDED, HOWEVER, that security Holders
participating in any such registration shall bear (a) their PRO RATA share of
the underwriting discounts and selling commissions; (b) the fees and expenses of
more than one counsel for the selling Holders selected by Holders of a majority
of the Registrable Stock to be registered, which additional counsel, if any,
shall be paid by the Holder or Holders that engaged
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such counsel; and (c) expenses in excess of $15,000 of any special audit
required in connection with a demand registration, which shall be paid by the
selling Holders in proportion to the aggregate value of the securities offered
for sale by each of them. The fees, costs and expenses of registration to be
borne by the Company as provided in this Section 5 above, shall include, without
limitation, all registration, filing fees, printing expenses, fees and
disbursements of counsel and accountants for the Company, fees and disbursements
of counsel for the underwriter or underwriters of such securities (if the
Company and/or selling security holders are otherwise required to bear such fees
and disbursements), all legal fees and disbursements and other expenses of
complying with state securities or blue sky laws of any jurisdictions in which
the securities to be offered are to be registered or qualified, reasonable fees
and disbursement of one counsel for the Holders and the premiums and other costs
of policies of insurance insuring the Company against liability arising out of
such public offering. Notwithstanding the foregoing, the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to Section 2 above if the registration request is subsequently withdrawn (other
than a withdrawal due to (i) a material adverse change in the Company's business
or financial condition or (ii) a reduction in the closing sale price of the
Company's Common Stock (as reported in THE WALL STREET JOURNAL) since the
registration was initiated by the Holders) at the request of the Holders of a
majority of the Registrable Stock to be registered (which Holders shall bear
such expenses), unless the Holders of a majority of the Registrable Stock agree
to forfeit the right to one demand registration pursuant to Section 2.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless each Holder
of shares of Registrable Stock which are included in a Registration Statement
pursuant to the provisions of this Agreement, the directors, officers, employees
and agents of such Holder, any underwriter (as defined in the Securities Act) of
the securities covered by the Registration Statement, the directors, officers,
employees and agents of such underwriter, and any Person who controls such
Holder or such underwriter within the meaning of the Securities Act or the
Exchange Act, and each of their successors, from and against any and all claims,
actions, demands, losses, damages or liabilities (including legal and other
expenses reasonably incurred in connection with defending same), joint or
several (collectively, "Damages"), to which they or any of them may become
subject under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such Damages
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in such Registration Statement (including all
documents incorporated therein by reference) as originally filed or in any
amendment thereto, any preliminary or final prospectus contained therein or any
amendment or supplement thereto, or arise out of or are based upon the ommission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading or arise out
of or are based on any violation or alleged violation of any federal, state or
common law rule or regulation applicable to the Company and relating to action
required of or inaction by the Company in connection with any such registration
and agrees to reimburse each such Holder, as incurred, for any legal or other
expenses reasonably incurred by it in connection with the investigation or
defending any such Damages; PROVIDED, HOWEVER, that the Company will not be
liable in any such case to the extent that any such Damages arise out of or are
based upon an untrue statement or alleged untrue statement or
-7-
omission or alleged omission so made in reliance upon and in strict conformity
with information furnished by such Holder, such underwriter or such controlling
Person in writing specifically for use in the preparation thereof. This
indemnity shall be in addition to any liability which the Company may otherwise
have and shall be in addition to any subsequently executed indemnity agreements.
(b) Each Holder of shares of the Registrable Stock which are
included in a registration pursuant to the provisions of this Agreement will,
severally, indemnify and hold harmless the Company, the directors, officers,
employees and agents of the Company, any underwriter (as defined in the
Securities Act) of the securities covered by the Registration Statement, the
directors, officers, employees and agents of such underwriter, and any Person
who controls the Company or such underwriter within the meaning of the
Securities Act or the Exchange Act, and each of their successors, from and
against any and all Damages, joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
Damages arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in such Registration Statement
(including all documents incorporated therein by reference) as originally filed
or in any amendment thereto, any preliminary or final prospectus contained
therein or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was so made in reliance
upon and in strict conformity with written information furnished by such Holder
for use in the preparation thereof. This indemnity shall be in addition to any
liability which such Holder may otherwise have and shall be in addition to any
subsequently executed indemnity agreements.
(c) Promptly after receipt by a party to be indemnified
pursuant to the provision of paragraph (a) or (b) of this Section 6 (an
"indemnified party") of notice of the commencement of any action involving the
subject matter of the foregoing indemnity provisions, such indemnified party
will, if a claim thereof is to be made against the indemnifying party pursuant
to the provisions of paragraph (a) or (b), notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 6 and shall not relieve the indemnifying party
from liability under this Section 6 unless such indemnifying party is prejudice
by such omission. The indemnifying party shall be entitled to appoint counsel of
the indemnifying party's choice at the indemnifying party's expense to represent
the indemnified party in any action for which indemnification is sought (in
which case the indemnifying party shall not thereafter be responsible for the
fees and expenses of any separate counsel retained by the indemnified party or
parties except as set forth below); PROVIDED, HOWEVER, that such counsel shall
be reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel (and local
counsel) if (i) the use of counsel chosen by the indemnifying party to represent
the indemnified party would present such counsel with a conflict
-8-
of interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action; or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which either (i) any
Holder exercising rights under this Agreement, or any controlling Person of any
such Holder, makes a claim for indemnification pursuant to this Section 6 but it
is judicially determined (by the entry of a final judgment or decree by a court
of competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 6 provides for indemnification
is such case, or (ii) contribution under the Securities Act may be required on
the part of any such selling Holder or any such controlling Person in
circumstances for which indemnification is provided under this Section 6; then,
and in each such case, the Company and such Holder will contribute to the
aggregate Damages in such proportion as is appropriate to reflect the relative
fault of the indemnifying party, on the one hand, and the indemnified party, on
the other. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
indemnifying party, on the one hand, or by the indemnified party, on the other
hand. The parties agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 6,
each Person who controls a Holder within the meaning of either the Securities
Act or the Exchange Act and each director, officer, employee and agent of such
Holder shall have the same rights to contribution as such Holder, and each
Person who controls the Company within the meaning of either the Securities Act
or the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (d); PROVIDED, HOWEVER, that, in any such
case, no Person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any Person or entity who was not guilty of such fraudulent
misrepresentation.
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(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The provisions of this Section 6 will remain in full force
and effect, regardless of any investigation made by or on behalf of any Holder
or the Company or any of the officers, directors, employees or agents or
controlling Persons referred to in Section 6 hereof, and will survive the sale
by a Holder of securities covered by a Registration Statement.
7. REPORTING REQUIREMENTS UNDER EXCHANGE ACT. When it is first
legally required to do so, the Company shall register its Common Stock under
Section 12 of the Exchange Act and shall keep effective such registration and
shall timely file such information, documents and reports as the Commission may
require or prescribe under Section 13 of the Exchange Act. From and after the
effective date of the first Registration Statement filed by the Company, the
Company shall (whether or not it shall then be required to do so) timely file
such information, documents and reports as the Commission may require or
prescribe under Section 13 or 15(d) (whichever is applicable) of the Exchange
Act. The Company acknowledges and agrees that the purposes of the requirements
contained in this Section 7 are (a) to enable any such Holder to comply with the
current public information requirement contained in Paragraph (c) of Rule 144
under the Securities Act should such Holder ever wish to dispose of any of the
securities of the Company acquired by it without registration under the
Securities Act in reliance upon Rule 144 (or any other similar or successor
exemptive provision), and (b) to qualify the Company for the use of Registration
Statements on Form S-3 or Form F-3 (or any successor form or forms). In
addition, the Company shall take such other measures and file such other
information, documents and reports, as shall hereafter be required by the
Commission as a condition to the availability of Rule 144 under the Securities
Act (or any similar or successor exemptive provision hereafter in effect) and
the use of Form S-3 or Form F-3 (or any successor form or forms). From and after
the effective date of the first Registration Statement filed by the Company, the
Company agrees to use its best efforts to facilitate and expedite transfers of
Registrable Stock pursuant to Rule 144 under the Securities Act (or any similar
or successor exemptive provision hereafter in effect), which efforts shall
include timely notice to its transfer agent to expedite such transfers of
Registrable Stock.
8. DELAY OF REGISTRATION. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Agreement.
9. WAIVERS. The terms provided for in this Agreement may be
amended, waived, discharged or terminated (either generally or in a particular
instance and either retroactively or prospectively) only by a writing executed
by the Company and the Holders of a majority of the Registrable Stock, and any
such amendment, waiver, discharge or termination shall be binding on all the
Holders, but in no event shall the obligation of any Holder be materially
increased, except upon the written consent of such Holder.
-10-
10. ASSIGNMENT. The rights to cause the Company to register
securities granted to Holders by the Company pursuant hereto may not be
transferred or assigned for 180 days after the date of grant except to any
Affiliate of a Holder; PROVIDED that the Company is, within a reasonable period
of time after such transfer, furnished with written notice of the name and
address of such transferee or assignee and the securities with respect to which
such registration rights are being assigned; and PROVIDED, FURTHER, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act.
11. TERMINATION. The registration rights provided for in this
Agreement shall terminate as to all Holders on the fifth anniversary of the
closing of the Company's first public offering (the "Fifth Anniversary")
PROVIDED, HOWEVER, such termination shall be postponed until the later of (i)
that number of days following such Fifth Anniversary equal to the number of
days, if any, between the date of such first public offering and the Fifth
Anniversary that the Common Stock of the Company is not traded on a national
stock exchange or the Nasdaq National Market System (or any successor
organization) and (ii) if as of the Fifth Anniversary, the Company is not so
traded, then, one year following such date as the Company first resumes trading
on a national stock exchange or the Nasdaq National Market System (or any
successor organization).
12. THIRD PARTY BENEFICIARIES. Xxxxx and any Affiliate of
Mi-Tech who is a Holder shall be express third party beneficiaries of this
Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth above.
MI-TECH COMMUNICATIONS LLC
By: ______________________________
Xxxxx X. Xxxxxxx, Manager
360NETWORKS INC.
By: ______________________________
______________________________
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EXHIBIT D
ARTICLES OF AMENDMENT OF 360
To be provided by 360 to Mi-Tech as soon as
possible after the execution of this Agreement.
EXHIBIT E
XXXXX REPRESENTATION AND ACKNOWLEDGEMENT
TO: 360networks inc.
WHEREAS:
A. By an Agreement made as of the 20th day of March 2000 (the
"Share Exchange Agreement") by and among 360networks inc. ("360"), Worldwide
Fiber (USA), Inc. (the "Company"), Mi-Tech Communications, LLC ("Mi-Tech"),
Xxxxxxx Pipeline Construction, Inc. and the other parties named therein, Mi-Tech
agreed to exchange its shares of the Company for Class A Subordinate Voting
Shares of 360, and assigned 2% of its subscription rights in respect thereof to
Xxxxxxx Xxxxx & Company ("Xxxxx").
B. Under the Share Exchange Agreement Mi-Tech has agreed that,
prior to the issuance of shares (the "Xxxxx Shares") by 360 to Xxxxx, it shall
cause Xxxxx to execute and deliver this instrument to 360.
THEREFORE, in consideration of the issuance of the Xxxxx Shares to Xxxxx, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Xxxxx covenants to and for the benefit of 360 as
follows:
Section 1. DEFINED TERMS. Terms having a meaning defined in
the Share Exchange Agreement shall have the same meaning when used in this
instrument, unless the context otherwise requires.
Section 2. REPRESENTATIONS AND WARRANTIES OF XXXXX. Xxxxx
represents, warrants and acknowledges to 360 as of the date hereof and, unless
otherwise provided, as of the Closing Date, as follows:
(a) Xxxxx is acquiring Class A Subordinate Voting Shares as
principal with an aggregate acquisition cost to Xxxxx of not less than
C$150,000 and is purchasing the Class A Subordinate Voting Shares for
investment only and not with a view to resale or distribution in
violation of applicable securities laws.
(b) Xxxxx, if a "U.S. Person" (as defined in Regulation S
under the United States Securities Act of 1993, as amended (the "1933
Act"), is an "Accredited Investor" (as defined in Rule 501 under the
1933 Act). Xxxxx is acquiring the Class A Subordinate Voting Shares for
its own account, for investment purposes only and not with a view to
any resale, distribution or other disposition of the Class A
Subordinate Voting Shares in violation of the United States securities
laws. If Xxxxx decides to offer, sell or otherwise transfer any of the
Class A Subordinate Voting Shares, it will not offer, sell or otherwise
transfer any of such Class A Subordinate Voting Shares directly or
indirectly, unless such sale is made in compliance with, or in reliance
of an exemption from, the 1933 Act and
applicable state securities laws. Xxxxx understands and agrees that
there may be material tax consequences to Xxxxx of an acquisition or
disposition of the Class A Subordinate Voting Shares and that, except
as expressly set forth in this Agreement, 360 gives no opinion and
makes no representation with respect to the tax consequences to Xxxxx
under United States, state, local or foreign tax law of Xxxxx'x
acquisition or disposition of such securities.
(c) Xxxxx acknowledges that no offering memorandum, prospectus
or registration statement has been prepared or filed by 360 with any
securities commission or similar authority in any jurisdiction in
connection with the Exchange and the issue and sale of Class A
Subordinate Voting Shares to Xxxxx is subject to such sale being exempt
from the requirements of applicable securities laws as to the filing of
an offering memorandum, prospectus or registration statement.
(d) Xxxxx has received and reviewed 360's Registration
Statement on Form F-1 as filed with the Securities and Exchange
Commission of the United States on January 28, 2000 and has had the
opportunity to discuss the disclosure therein, as well as developments,
concerning 360 and the industry in which it competes, with
representatives of 360 and has received complete answers to all of its
questions. Xxxxx is not relying on any written or oral representations
made by 360, except to the extent expressly provided in this Agreement.
(e) To Xxxxx'x knowledge, the Class A Subordinate Voting
Shares were not advertised in printed media of general and regular paid
circulation, radio or television and Xxxxx has not purchased the Class
A Subordinate Voting Shares as a result of any form of general
solicitation or general advertising, including advertisements,
articles, notices or other communications published in any newspaper,
magazine or similar media or broadcast over radio, or television, or
any seminar or meeting whose attendees have been invited by general
solicitation or general advertising.
(f) Xxxxx has such knowledge and experience in financial and
business affairs as to be capable of evaluating the merits and risks of
the investment hereunder and is able to bear the economic risk of loss
of such investment.
(g) Xxxxx understands that the Class A Subordinate Voting
Shares have not been and will not be registered under the 1933 Act, as
amended, or the securities laws of any state of the United States and
that the sale contemplated hereby is being made in reliance on an
exemption from such registration requirements and Xxxxx understands and
agrees that the Class A Subordinate Voting Shares may not be traded in
the United States or by or on behalf of a U.S. Person or a person in
the United States unless permitted by the terms of the 360 Shareholders
Agreement and either registered under the 1933 Act and any applicable
state securities laws or an exemption from such registration
requirements is available and that certificates representing the Class
A Subordinate Voting Shares will bear a legend to such effect.
(h) Xxxxx understands that no prospectus has been or will be
filed in accordance with the securities laws, and the regulations
thereunder, of, and the applicable
-2-
published rules, policy statements, blanket orders and notices of the
securities regulatory authorities in the provinces and territories of
Canada (the "Canadian Securities Laws") qualifying the distribution of
the Class A Subordinate Voting Shares in any province or territory of
Canada and that the Class A Subordinate Voting Shares may not be
offered or sold by Xxxxx in any province or territory of Canada except
pursuant to an applicable exemption from the prospectus requirements
of the applicable Canadian Securities Laws and from a dealer
appropriately registered under the applicable Canadian Securities Laws
or, other than in Ontario, in accordance with an exemption from the
registration requirements of such laws.
(i) Xxxxx has not employed any broker or finder in connection
with the transactions contemplated by the Share Exchange Agreement.
(j) Xxxxx acknowledges and agrees that the foregoing
representations, warranties and covenants set out herein are made by
Xxxxx and Xxxxxxx with the intent that they be relied upon in
determining the suitability of Xxxxx as a purchaser of Class A
Subordinate Voting Shares. Xxxxx further agrees that by Xxxxx accepting
the Xxxxx Shares, Xxxxx shall be representing and warranting that the
foregoing representations and warranties are true as at the Closing
Date with the same force and effect as if they had been made by Xxxxx
at the Closing Date and shall continue in full force and effect
notwithstanding any subsequent disposition by Xxxxx of the Class A
Subordinate Voting Shares. Xxxxx undertakes to notify 360 in writing of
any change in any representation, warranty or other information
relating to Xxxxx set forth herein that takes place prior to the
Closing Date.
Section 3. UNDERWRITTEN OFFERING - LOCK-UP OF SHARES. Xxxxx
agrees, if requested in writing by the managing underwriter(s) of an IPO, not to
effect any sale (or in any other way, directly or indirectly, effect any
transfer, assignment, distribution, pledge, encumbrance or other disposition of,
either voluntarily or involuntarily, including the assignment or transfer of
voting rights, if any) (collectively, with "sale", a "Sale") of any shares or of
any equity securities (or securities convertible into or exchangeable for equity
securities) of 360, including, without limitation, any Sale pursuant to Canadian
Securities Laws or Rule 144 under the U.S. Securities Act, (other than as part
of such underwritten public offering) during the time period requested by the
managing underwriter(s) not to exceed one year.
Section 4. GOVERNING LAW. This Agreement shall be deemed to be
made in and in all respects shall be interpreted, construed and governed by and
in accordance with the laws of the State of New York without regard to the
conflict of law principles thereof.
-3-
Section 5. ENUREMENT. This instrument shall be binding upon
Xxxxx and its successors and shall enure to the benefit of 360 and its
successors and assigns.
EXECUTED this ________ day of March, 2000.
XXXXXXX XXXXX & COMPANY
Per:
_________________________________
Signature
_________________________________
Name
_________________________________
Title
-4-
