EXECUTION COPY
XXXXXX COMMUNICATIONS INC.
- and -
JVII PARTNERSHIP
- and -
XXXXXX CANTEL MOBILE COMMUNICATIONS INC.
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SHAREHOLDERS' AGREEMENT
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August 16, 1999
ARTICLE 1. INTERPRETATION......................................................2
1.1. DEFINITIONS...........................................................2
1.2. SCHEDULES............................................................12
1.3. HEADINGS AND TABLE OF CONTENTS.......................................12
1.4. GENDER AND NUMBER....................................................13
1.5. CURRENCY.............................................................13
1.6. INVALIDITY OF PROVISIONS.............................................13
1.7. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.............................13
1.8. ENTIRE AGREEMENT.....................................................13
1.9. WAIVER, AMENDMENT....................................................13
1.10. GOVERNING LAW..................................................14
1.11. DEALING AT ARM'S LENGTH........................................14
ARTICLE 2. REPRESENTATIONS AND WARRANTIES.....................................14
2.1. REPRESENTATIONS AND WARRANTIES.......................................14
ARTICLE 3. GOVERNANCE RIGHTS..................................................15
3.1. GOVERNANCE RIGHTS....................................................15
3.2. CONSULTATION RIGHTS..................................................24
3.3. EXERCISE OF JV SHAREHOLDER VOTING RIGHTS.............................25
3.4. COOPERATION WITH RESPECT TO TAX EFFECTS..............................25
3.5. VETO BY JV SHAREHOLDER...............................................25
3.6. SURVIVAL.............................................................26
ARTICLE 4. ADDITIONAL COVENANTS...............................................26
4.1. ADDITIONAL COVENANTS OF RCI..........................................26
4.2. ADDITIONAL COVENANTS OF RCMCI........................................27
4.3. ADDITIONAL COVENANTS OF JV SHAREHOLDER...............................27
4.4 TRANSFER OF INTERESTS IN JV SHAREHOLDER..............................28
4.5 SURVIVAL.............................................................29
ARTICLE 5. GENERAL PROHIBITION ON TRANSFER OF SECURITIES......................29
5.1. GENERAL PROHIBITION ON TRANSFER OF SECURITIES........................29
ARTICLE 6. RIGHT OF FIRST NEGOTIATION.........................................29
6.1. GRANT OF RIGHT OF FIRST NEGOTIATION..................................29
ARTICLE 7. SALE OF SHARES BY JV Shareholder...................................44
7.1. SALE OF CLASS A SHARES BY JV SHAREHOLDER.............................44
7.2. EXCEPTION............................................................47
7.3. SURVIVAL.............................................................48
ARTICLE 8. CHANGE OF CONTROL OF RCI...........................................48
8.1. APPLICATION OF ARTICLE 8.............................................48
8.2 DEFINITIONS..........................................................49
8.3 SIGNIFICANT INFLUENCE................................................52
8.4 CHANGES TO SCHEDULE "B"..............................................53
8.5 ACQUISITION OF CONTROL OF RCI BY A DESIGNATED
MATERIAL COMPETITOR OF AT&T..........................................55
8.6 SHOTGUN RIGHTS AT FMV PLUS 5%........................................56
8.7 SHOTGUN RIGHTS AT ANY SPECIFIED PURCHASE PRICE
PER SECURITY.........................................................57
8.8 ACQUISITION OF CONTROL OF RCI BY A NON-DESIGNATED
MATERIAL COMPETITOR OF AT&T..........................................59
8.9 CHANGE OF STATUS OF NON-DESIGNATED MATERIAL
COMPETITOR OF AT&T...................................................59
8.10 FAIR MARKET VALUE PER SECURITY OF RCMCI........................60
8.11 GENERAL........................................................63
ARTICLE 9. PRE-EMPTIVE RIGHT..................................................65
9.1 PRE-EMPTIVE RIGHT OF JV SHAREHOLDER..................................65
9.2 NON-APPLICABILITY OF PRE-EMPTIVE RIGHT...............................66
9.3 PRE-EMPTIVE RIGHT OF RCI.............................................66
ARTICLE 10. CLOSING PROCEDURES................................................66
10.1. CLOSING PROCEDURES.............................................66
ARTICLE 11. ARBITRATION.......................................................68
11.1. MEDIATION AND ARBITRATION......................................68
11.2. INJUNCTIVE RELIEF..............................................69
ARTICLE 12. GENERAL PROVISIONS................................................69
12.1. TERM...........................................................69
12.2. TERMINATION NOT TO AFFECT RIGHTS OR OBLIGATIONS................71
12.3. NOTICES........................................................71
12.4. TIME LIMITS....................................................75
12.5. FURTHER ASSURANCES.............................................75
12.6. COUNTERPARTS...................................................75
12.7. ENUREMENT......................................................75
SCHEDULES
SCHEDULE "A"
OWNERSHIP OF SECURITIES
SCHEDULE "B"
LISTED MATERIAL COMPETITORS
SCHEDULE "C"
PLEDGES OUTSTANDING
Schedule"D"
CONFIDENTIALITY AGREEMENT
SHAREHOLDERS' AGREEMENT
THIS AGREEMENT is made as of the 16th day of August, 0000,
X X X X X X X:
XXXXXX COMMUNICATIONS INC., a corporation incorporated under the laws of
British Columbia
(hereinafter called "RCI")
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JVII PARTNERSHIP, a general partnership formed under the laws of Delaware
(hereinafter called "JV Shareholder")
- and -
XXXXXX CANTEL MOBILE COMMUNICATIONS INC., a corporation incorporated under
the laws of Canada
(hereinafter called "RCMCI")
RECITALS:
WHEREAS 90,468,259 Class A multiple voting shares (the "Class
A Shares") and 31,310,160 Class B restricted voting shares (the "Class B
Shares") of RCMCI are issued and outstanding;
AND WHEREAS the Shareholders are the legal and beneficial
owners of all of the outstanding Class A Shares and certain of the Shareholders
hold a portion of the outstanding Class B Shares;
AND WHEREAS the Shareholders and RCMCI wish to enter into this
Agreement to govern certain aspects of their relationship as shareholders of
RCMCI;
NOW THEREFORE in consideration of the mutual covenants and
agreements contained in this Agreement and other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged by each of the
parties), the parties hereto agree as follows:
ARTICLE 1.
INTERPRETATION
1.1. Definitions
In this Agreement,
"ACE" means AT&T Canada Enterprises Company, a company amalgamated
under the laws of Nova Scotia;
"Affiliate" means a Person which, directly or indirectly, Controls, is
Controlled by or is under common Control with another Person. For the
purposes of this definition, (i) "Control" (including, with correlative
meanings, the terms "Controlled by" and "under common Control with")
means the possession of the power, in law or in fact, to direct or
cause the direction of the management and policies of a corporation or
other Person, whether through legal and beneficial ownership of a
majority of Voting Shares of such Person or voting interests in such
Person if not a corporation, by agreement or otherwise; and (ii) each
of BT and its Affiliates and AT&T U.S. and its Affiliates shall be
deemed to be an Affiliate of JV Shareholder (and vice versa); provided
that BT and its Affiliates or AT&T U.S. and its Affiliates shall cease
to be deemed to be an Affiliate of JV Shareholder (and vice versa),
respectively, if they hold, directly or indirectly through the JV
Shareholder, less than 5% of the Equity Shares of RCMCI and JV
Shareholder shall provide written notice to the other Parties promptly
after it has knowledge that either BT and its Affiliates or AT&T U.S.
and its Affiliates have ceased to be deemed to be Affiliates of JV
Shareholder;
"Agreement" means this agreement and all schedules, if any, attached to
this agreement, in each case as they may be supplemented or amended
from time to time, and the expressions "hereof", "herein", "hereto",
"hereunder", "hereby" and similar expressions refer to this Agreement,
and unless otherwise indicated, references to Articles and sections are
to the specified Articles and sections in this Agreement;
"AT&T U.S." means AT&T Corp., a corporation incorporated under the laws
of the State of New York;
"AWS" means AT&T Wireless Services Inc., a wholly-owned subsidiary of
AT&T U.S. incorporated under the laws of the State of Delaware;
"Board of Directors" means the board of directors of RCMCI;
"Brand Licence Agreement" means the revised brand licence agreement
dated August 16, 1999 between ACE and Cantel, as the same may be
renewed or amended from time to time;
"Broadcasting Act" means the Broadcasting Act (Canada) as the same
may be amended from time to time and any successor legislation;
"BT" means British Telecommunications plc, a corporation incorporated
under the laws of the United Kingdom;
"Business Day" means any day, other than Saturday, Sunday or any
statutory holiday in the Province of Ontario;
"Cantel" means Xxxxxx Cantel Inc., a corporation incorporated under the
laws of Canada;
"Class A Shares" means any Class A Multiple Voting Shares of RCMCI
which are issued and outstanding from time to time and includes any
shares or securities which may be converted or changed into Class A
Multiple Voting Shares or which result from a consolidation,
subdivision or reclassification or which are received by holders of
Class A Multiple Voting Shares upon or as a result of any merger,
amalgamation, arrangement, consolidation, reorganization or similar
transaction of or involving RCMCI;
"Class B Shares" means the Class B Restricted Voting Shares of RCMCI
which are issued and outstanding from time to time and includes any
shares or securities which may be converted or changed into Class B
Restricted Voting Shares or which result from a consolidation,
subdivision or reclassification or which are received by holders of
Class B Restricted Voting Shares upon or as a result of any merger,
amalgamation, arrangement, consolidation, reorganization or similar
transaction of or involving RCMCI;
"Concurrent Offer" means (i) an offer made in accordance with section 2
of the Trust Agreement by JV Shareholder or a Third Party to the
holders of Class B Shares to purchase Class B Shares on the same terms
and conditions as a purchase by JV Shareholder or such Third Party
under section 6.1; or (ii) an offer made in accordance with section 2
of the JV Trust Agreement by RCI, an Affiliate of RCI or by a Third
Party to the holders of the Class B Shares to purchase Class B Shares
on the same terms and conditions as a purchase by RCI, such Affiliate
of RCI or such Third Party under section 7.1;
"Control" or "Controlled" other than for the purposes of the definition
of Affiliate means, with respect to a Person, such Person holding
securities to which are attached more than 50% of the total votes
which, if exercised, are sufficient to elect a majority of the
directors or similar positions of such Person;
"Convertible Security" means any security which may be, directly or
indirectly, converted into or exchanged for an Equity Share or which
constitutes or carries a right to purchase an Equity Share or any other
right to purchase an Equity Share;
"Designated Material Competitor of AT&T" has the meaning set forth in
section 8.2;
"EBITDA" means an amount equal to the total net income of RCMCI, on a
consolidated basis, prepared in accordance with generally accepted
accounting principles, and excluding all extraordinary and other
non-recurring and unusual items plus, to the extent deducted in
calculating such net income, interest expense and other financing costs
and expenses, depreciation, amortization and all taxes, whether or not
deferred, applicable to the relevant period;
"Equity Share" means any security or other interest in a Person which,
directly or indirectly, confers upon the holder thereof the right to
participate in the distribution of assets upon the voluntary or
involuntary liquidation, dissolution or winding-up of the relevant
Person beyond a fixed sum or a fixed sum plus accrued dividends and any
Voting Share, and, in the case of RCMCI, includes the Preference
Shares, the Class A Shares and the Class B Shares;
"Excluded Services" means the following services: television services
(whether cable, broadcast, direct broadcast satellite or broadband
wireless) and broadcast radio services,
"Fair Market Value" for the purposes of sections 6.1(k) and (o) and
section 12.1(a) means (i) where the subject securities are listed on a
stock exchange, the weighted average trading price of such securities
during the 20 trading days immediately preceding the applicable
calculation date on the stock exchange or stock association on which
the highest volume of trading of such securities occurred during such
20 trading day period; and (ii) where the subject securities are not
listed on a stock exchange or stock association, the fair market value
as at the applicable calculation date determined in accordance with
section 8.10;
"Fixed Wireless Services" has the meaning set forth in the Brand
Licence Agreement;
"Independent Directors" means a director of RCMCI other than a director
who (apart from being a director of RCMCI or any of its subsidiaries)
is an employee, insider, associate (as the terms insider and associate
are defined in the Securities Act) or Affiliate of RCI or one of its
Affiliates;
"Internet Access" has the meaning set forth in the Brand Licence
Agreement;
"Internet Services" has the meaning set forth in the Brand Licence
Agreement;
"JV" means JV Shareholder and its Affiliates;
"JV Securities" means all of the Securities of RCMCI beneficially
owned, directly or indirectly, by JV Shareholder at the particular
time;
"JV Threshold Amount" means that number of Equity Shares of RCMCI which
constitutes 20% of the outstanding Equity Shares of RCMCI;
"JV Trust Agreement" means the trust agreement dated August 16, 1999
among JV Shareholder, RCMCI and CIBC Mellon Trust Company, as trustee;
"Licensee Controlling Interest" means the ownership of or control over
fifty percent (50%) or more of the voting rights attached to the Voting
Shares of Cantel or any of its subsidiaries which are permitted
Sublicensees or such other percentage of the voting rights attached to
Voting Shares of Cantel or any of its subsidiaries which are permitted
Sublicensees that are sufficient, if exercised, to elect a majority of
the board of directors of Cantel or any of its subsidiaries which are
permitted Sublicensees;
"material subsidiary" means a subsidiary of RCMCI where the
unconsolidated EBITDA of such subsidiary, based on 12 month trailing
EBITDA, constitutes more than 5% of the EBITDA of the RCMCI Group,
based on 12 month trailing EBITDA, calculated on a consolidated basis.
"Member of the Rogers Family" means (a) Xxxxxx X. Xxxxxx O.C.; (b) any
of the following Persons: (i) the spouse, for the time being and from
time to time, of Xxxxxx X. Xxxxxx O.C.; (ii) after the death of Xxxxxx
X. Xxxxxx O.C., the widow, if any, of Xxxxxx X. Xxxxxx O.C.; (iii) the
issue of Xxxxxx X. Xxxxxx O.C. ; (iv) any half-sister of Xxxxxx X.
Xxxxxx O.C. and the issue of any such half-sister; (v) individuals
adopted by Xxxxxx X. Xxxxxx O.C. or by any of the issue of Xxxxxx X.
Xxxxxx O.C., provided that such individuals have not attained the age
of majority at the date of such adoption, together with the issue of
any such adopted individuals; provided that if any Person is born out
of wedlock he or she shall be deemed not to be the issue of another
Person for the purposes hereof unless and until he or she is proven or
acknowledged to be the issue of such Person; (c) a Qualifying Trust;
and (d) any Person designated by any of the foregoing to exercise
voting rights provided that such Person is either one of the foregoing
or has no beneficial interest in the securities for which such Person
has been granted voting rights and has a fiduciary duty to exercise
such voting rights in the best interests of one or more of the
foregoing;
"Mobile Communication Services" means communication services, where
either the terminal from which the communication originated or a
terminal on which the communication was alternately received, or both
such terminals, are mobile radiocommunications devices (including, in
each case, mobile communications devices that are being used in a fixed
mode) and include, but are not limited to, cellular telephone equipment
sales and related services, paging and mobile voice/data equipment
sales and related services, local area personal communications network
and all activities reasonably necessary or incidental thereto;
"Mobile Wireless Services" means telecommunications services
(including, voice, video or data) provided by means of radio
frequencies that are or may be licensed, permitted or authorized now or
in the future by United States or Canadian regulatory authorities, and
in respect of which services the user equipment is capable of and
intended for usage during routine movement, including halts at
unspecified points, at more than one location throughout a wide area
public or private wireless network. Mobile Wireless Services shall
exclude Excluded Services;
"Non Competition Agreement" means the non-competition agreement dated
August 16, 1999 entered into between AT&T Canada Corp. and Cantel, as
the same may be amended from time to time;
"Party" means any of RCI, RCMCI, JV Shareholder and any Person who may
become bound by the terms hereof; and "Parties" means all of them;
"Permitted Transferee" means AT&T U.S. or BT or any Person in which
AT&T U.S. or BT, or a combination thereof, owns directly or indirectly,
at least a majority of the voting rights attached to all outstanding
Voting Shares sufficient, if exercised, to elect a majority of the
board of directors or similar governing body of such Person;
"Person" means any individual, partnership, limited partnership,
limited liability company, unlimited liability company, joint venture,
syndicate, sole proprietorship, company or corporation with or without
share capital, unincorporated entity or association, trust, trustee,
executor, administrator or other legal personal representative,
regulatory body or agency, government or governmental agency, authority
or entity however designated or constituted;
"Pledge" means any mortgage, hypothecation, lien, charge, pledge,
encumbrance, grant of security interest or similar arrangement with
respect to assets or shares;
"Preference Shares" means the convertible preference shares in the
capital of RCMCI purchased by JV Shareholder from RCMCI under the
Subscription Agreement;
"Programming Undertaking" means "distribution undertaking" as set forth
in the Broadcasting Act;
"Qualifying Trust" means a trust (whether testamentary or inter vivos
and whether now or hereinafter constituted) the primary beneficiaries
of which are one or more of the Persons referred to in paragraph (a) or
(b) of the definition of "Member of the Rogers Family" or the spouse,
widow or widower, for the time being and from time to time, of any
Person described in paragraph (b)(iii), (iv) or (v) of the definition
of "Member of the Rogers Family" (provided that such spouse, widow or
widower is living at the date hereof or is born after the date hereof)
or a charity and none of the non-primary beneficiaries of which, who
are Persons who are not individuals, carries on a business which is
competitive with the business carried on by AT&T U.S. and its
Affiliates;
"RCMCI Group" means RCMCI together with its subsidiaries;
"RCMCI Wholly-Owned Group" means RCMCI together with its wholly-owned
subsidiaries;
"Registration Rights Agreement" means the registration rights agreement
dated August 16, 1999 entered into between JV Shareholder and RCMCI, as
the same may be amended from time to time;
"Related Agreements" means the Brand Licence Agreement, the Wireless
Marketing, Technology and Services Agreement, the Non-Competition
Agreement, the Supply and Marketing Agreement, the Share Purchase
Agreement, the Subscription Agreement, the Registration Rights
Agreement and the Warrant Amendment Agreement;
"Right of First Negotiation" means the rights granted to JV Shareholder
under section 6.1 or the rights granted to RCI under section 7.1, as
the case may be;
"Xxxxxx Cable Territories" means the territories in which RCI or any of
its Affiliates carries on from time to time a Programming Undertaking;
"Rogers Family Holding Company" means a corporation which is Controlled
by one or more Persons each of whom is a Member of the Rogers Family;
"Rogers Group" means RCI and its Affiliates, the Members of the Rogers
Family, the Rogers Family Holding Companies and the Affiliates of the
Rogers Family Holding Companies;
"Rogers Shareholders" means, collectively, the holders of Class A
Shares which are members of the Rogers Group;
"Securities" means any Equity Shares of RCMCI or Convertible Securities
of RCMCI;
"Securities Act" means the Securities Act (Ontario) and the rules and
regulations thereunder, as the same may be amended from time to time
and any successor legislation;
"Shareholder" means the Persons specified in Schedule "A" who are
registered holders of Securities;
"Share Purchase Agreement" means the agreement dated August 5, 1999
under which Rogers Cablesystems Limited and Rogers Holdings Inc. agreed
to sell an aggregate of 12,313,435 Class A Shares to JV Shareholder;
"Sublicensees" means permitted sublicensees under the Brand Licence
Agreement;
"Subscription Agreement" means the subscription agreement dated August
5, 1999 between RCMCI, RCI and JV Shareholder under which JV
Shareholder subscribed for the Preference Shares;
"subsidiary" has the meaning set forth in the Securities Act;
"Supply and Marketing Agreement" means the supply and marketing
agreement dated August 16, 1999, as amended, entered into between AT&T
Canada Corp. and Cantel as the same may be amended from time to time;
"Third Party" means any Person or group or combination of Persons that
is at arm's length to the Rogers Group and JV;
"Transfer" includes any sale, exchange, assignment, transfer,
distribution, gift, bequest, disposition, Pledge or other arrangement
by which legal title or beneficial ownership passes from one Person to
another, or to the same Person in a different capacity, whether or not
voluntary and whether or not for value, and any agreement to effect any
of the foregoing; provided, however, that a Transfer shall not include
(i) any Pledge granted by or on behalf of RCI or its Affiliates which
is outstanding on the date hereof as described in Schedule "C" hereto
or which is an amendment, renewal, extension, substitution,
refinancing, restructuring, supplement or other modification of such
Pledge, provided that no such amendment, renewal, extension,
substitution, refinancing, supplement or other modification shall be on
terms that have a material adverse effect on the rights of JV
Shareholder hereunder or result in an additional number of Securities
becoming subject to the Pledge other than in accordance with the
existing terms of the Pledge unless, with respect to any such
additional Securities, the Pledge satisfies the criteria set out in
(ii) below; or (ii) any Pledge given in favour of a recognized
financial institution as security for a bona fide loan or obligation
and such financial institution agrees in writing to be bound by this
Agreement, including, without limitation, the Right of First
Negotiation, to the same extent as RCI, provided that such a Pledge
shall not release RCI from any of its obligations under this Agreement;
further provided that if AT&T and its Affiliates and/or BT and its
Affiliates propose to Transfer Equity Shares in JV Shareholder (the "JV
Shares"), and if after giving effect to such Transfer, AT&T and/or its
Affiliates and/or BT and/or its Affiliates and/or their Permitted
Transferees would own, directly or indirectly, less than a majority of
the outstanding Equity Shares in JV Shareholder (calculated on a fully
diluted basis) then the Transfer of the JV Shares shall be deemed to be
a Transfer to which Article 7 shall apply, mutatis mutandis; and the
word "Transferred", "Transferring", "Transferee" and similar words have
corresponding meanings;
"Trust Agreement" means the trust agreement dated July 25, 1991 among
RCI (as successor to Rogers Canada Inc.), RCMCI and the CIBC Mellon
Trust Company (as successor to National Trust Company), as trustee;
"Voting Share" means any security carrying a voting right either under
all circumstances or under circumstances that have occurred and are
continuing;
"Warrant Amendment Agreement" means the agreement dated August 16, 1999
to amend the Warrant Certificate;
"Warrant Certificate" means the warrant certificate dated November 13,
1996 issued by RCMCI to AT&T Canada Enterprises Company and "Warrants"
means the share purchase warrants evidenced by the Warrant Certificate;
"Wireless Marketing, Technology and Services Agreement" means the
wireless marketing, technology and services agreement dated August 16,
1999, as amended, entered into between AWS and Cantel;
1.2. Schedules
The following are the schedules attached to this Agreement:
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Schedule "A" Ownership of Securities
-Section 2.1(a)
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Schedule "B" Listed Material Competitors
-Section 8.2
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Schedule "C" Pledges Outstanding
-Section 1.1
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Schedule "D" Form of Confidentiality Agreement
-Section 6.1(b)
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1.3. Headings and Table of Contents
The inclusion of headings and a table of contents in this Agreement are
for convenience of reference only and shall not affect the construction or
interpretation hereof.
1.4. Gender and Number
In this Agreement, unless the context otherwise requires, words
importing the singular include the plural and vice versa and words importing
gender include all genders.
1.5. Currency
Except as otherwise expressly provided in this Agreement, all amounts
in this Agreement are stated and shall be paid in Canadian currency.
1.6. Invalidity of Provisions
Each of the provisions contained in this Agreement is distinct and
severable and a declaration of invalidity or unenforceability of any such
provision by a court of competent jurisdiction shall not affect the validity or
enforceability of any other provision hereof.
1.7. Generally Accepted Accounting Principles
In this Agreement, except to the extent otherwise expressly provided,
references to "generally accepted accounting principles" mean, for those
principles stated in the Handbook of the Canadian Institute of Chartered
Accountants, such principles so stated.
1.8. Entire Agreement
This Agreement together with the Related Agreements constitute the
entire agreement between the parties hereto pertaining to the subject matter
hereof. There are no other agreements between the parties in connection with the
subject matter hereof except as specifically set forth or referred to herein or
therein.
1.9. Waiver, Amendment
Except as expressly provided in this Agreement, no amendment or waiver
of this Agreement shall be binding unless executed in writing by the party to be
bound thereby. No waiver of any provision of this Agreement shall constitute a
waiver of any other provision nor shall any such waiver constitute a continuing
waiver unless otherwise expressly provided.
1.10. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein
and, subject to Article 11, each of the parties hereby submits to the exclusive
jurisdiction of the courts of Ontario.
1.11. Dealing at Arm's Length
For the purposes of this Agreement, whether or not any Person is at, or
deals at, arm's length with another Person shall be determined in accordance
with the Income Tax Act (Canada).
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES
2.1. Representations and Warranties
Each Shareholder hereby represents and warrants:
(a) that such Shareholder is the legal and beneficial owner of the
number of Securities which are set out opposite such
Shareholder's name in Schedule "A" hereto;
(b) in the case of a Shareholder that is a corporation, that it is
duly incorporated and validly existing under the laws of its
jurisdiction of incorporation, that it has the corporate power
and capacity to enter into and perform its obligations under
this Agreement and that the execution and delivery of this
Agreement have been duly authorized by it;
(c) in the case of a Shareholder that is a partnership, that it is
duly constituted and validly existing as a partnership under
the laws of its jurisdiction of formation, that it has the
power and capacity to perform its obligations under this
Agreement and that the execution and delivery of this
Agreement have been duly authorized by it; and
(d) that this Agreement constitutes a valid and binding obligation
enforceable against the Shareholder in accordance with its
terms, subject to the usual exceptions as to bankruptcy and
the availability of equitable remedies.
ARTICLE 3.
GOVERNANCE RIGHTS
3.1. Governance Rights
(a) So long as the Xxxxxx Group Controls RCMCI, RCI agrees as
shareholder of RCMCI to cause JV Shareholder to have the
governance rights set forth in this section 3.1 to the fullest
extent permitted by applicable law.
(b) JV Shareholder shall have the right to nominate four
individuals for election and appointment as directors to the
Board of Directors and to the board of directors of Cantel out
of a total number of 16 directors and RCI shall cause such
individuals to be so elected or appointed. Such nominees shall
include the chief executive officer of AWS, as long as no
other Person that is not an Affiliate of AT&T U.S. has a
larger equity interest in JV Shareholder than AT&T U.S. and
its subsidiaries, and such other senior officers of JV as may
be mutually agreed upon by JV Shareholder and RCI. The Parties
acknowledge that a majority of the members of the Board of
Directors and at least 80% of the board of directors of Cantel
shall be resident Canadians. JV Shareholder's right to
nominate directors is subject to any requirement for the
appointment of "Canadian" directors. RCMCI shall reserve seats
for non-Canadian members of the Board of Directors and the
board of directors of Cantel for JV Shareholder, subject in
the case of Cantel, to the maximum number of non-Canadian
members permitted under applicable law. If there are any
increases in the size of the Board of Directors or the board
of directors of Xxxxxx, XX Shareholder's rights to nominate
directors shall be adjusted proportionately. At such time as
the number of directors on the Board of Directors or the board
of directors of Cantel is increased, JV Shareholder shall have
the right to nominate such greater number of directors, if
any, to make such nomination rights proportionate to its
ownership of Equity Shares of RCMCI. At such time as RCMCI has
any material subsidiaries (other than Cantel), RCMCI shall
provide similar proportionate nomination rights for JV
Shareholder on the board of directors of such material
subsidiary.
(c) JV Shareholder shall have the right to select two of JV
Shareholder's nominees to the Board of Directors who will be
appointed to each of the audit committee and executive
committee of the Board of Directors and one of JV
Shareholder's nominees to the Board of Directors who will be
appointed to each of the compensation committee and pension
committee of the Board of Directors. JV Shareholder shall have
the right to select two of JV Shareholder's nominees who will
be appointed to each other standing committee of the Board of
Directors established from time to time. JV Shareholder shall
have similar proportionate representation rights on committees
of the board of directors of Cantel and any other material
subsidiary. The Parties agree that JV Shareholder shall not
nominate a majority of the members of any standing committee
of the Board of Directors and the members of such standing
committees shall be resident Canadians as required by
applicable law.
(d) JV Shareholder will have the right to nominate any new
individual who is proposed as the Chief Technology Officer of
RCMCI and Cantel or as the officer to perform a similar
function subject to such nominee being approved by the Board
of Directors. If such nominee is not approved by the Board of
Directors, JV Shareholder's right to nominate shall again be
exercised, and so on until the Board of Directors approves an
JV Shareholder nominee. JV Shareholder acknowledges that it
supports the individual currently holding the office of Chief
Technology Officer of RCMCI.
(e) JV Shareholder's prior written approval will be required for:
(i) a Transfer of all or substantially all of the assets
of the RCMCI Group to a Person or Persons that are
not members of the RCMCI Wholly-Owned Group;
(ii) any decision by the RCMCI Group that the RCMCI Group
sell the Licensee Controlling Interest, provided that
such restriction shall not require the prior written
approval of JV Shareholder for any sale of Control of
a subsidiary of RCMCI where the unconsolidated EBITDA
of such subsidiary, based on 12 month trailing
EBITDA, does not constitute more than 5% of the
EBITDA of the RCMCI Group, based on 12 month trailing
EBITDA, calculated on a consolidated basis provided
that, in such event, such subsidiary will not be
entitled to continue to have the benefit of the Brand
Licence Agreement;
(iii) any amendment to the articles of incorporation or
other constating document of any member of the RCMCI
Group including the continuance of any member of the
RCMCI Group under the laws of any other jurisdiction,
or the making, amending or repealing of any by-laws
of any member of the RCMCI Group, which would have an
adverse effect on the rights attaching to any shares
in the capital of a member of the RCMCI Group held by
JV Shareholder or which would adversely affect the
governance rights granted to JV Shareholder under
this Agreement;
(iv) (A) any decision by the RCMCI Group to carry on a
business other than Mobile Communication Services,
Internet Services, Mobile Wireless Services, Internet
Access provided by Mobile Wireless Services, and
Fixed Wireless Services, except decisions to carry on
any of the businesses as permitted to be carried on
by Cantel by express exceptions to the restrictions
contained in the Non-Competition Agreement and except
for capital expenditures or investments in, or
acquisitions of, businesses or assets outside of the
foregoing businesses which do not exceed in the first
five year period ending December 31, 2004 an
aggregate of $225 million and which do not exceed
more than an aggregate of $100 million in year one of
such first five year period, an aggregate of $200
million in year one and year two of such first five
year period and an aggregate of $225 million in year
one, year two and year three of such first five year
period and after year three of such first five year
period do not exceed an aggregate of $225 million in
any rolling five year period;
(B) any decision by RCI and its subsidiaries
(including the RCMCI Group) to carry on Mobile
Communication Services, Internet Services, Mobile
Wireless Services, Internet Access provided by Mobile
Wireless Services or Fixed Wireless Services
businesses in North America other than through a
member of the RCMCI Group in or from Canada and other
than the business of reselling the Mobile
Communication Services, Mobile Wireless Services and
Fixed Wireless Services of the RCMCI Group by RCI and
its subsidiaries other than the RCMCI Group in or
from Canada; provided that notwithstanding the
foregoing, RCI and its subsidiaries (excluding the
RCMCI Group) shall not be restricted from carrying on
Fixed Wireless Services in the Xxxxxx Cable
Territories or outside Canada or Internet Services in
or outside Canada;
(C) any decision by RCI and its subsidiaries
(including the RCMCI Group) to carry on a Mobile
Communication Services, Internet Services, Mobile
Wireless Services, Internet Access provided by Mobile
Wireless Services or Fixed Wireless Services business
outside North America; provided that if RCI offers to
carry on any such business within the RCMCI Group and
JV Shareholder does not consent to any such business
being carried on within the RCMCI Group, RCI and its
subsidiaries may carry on such business outside of
the RCMCI Group provided that RCI and its
subsidiaries will not have the benefits of the Brand
Licence Agreement with respect to such business and
provided further that notwithstanding the foregoing,
RCI and its subsidiaries (excluding the RCMCI Group)
shall not be restricted from carrying on Fixed
Wireless Services or Internet Services outside North
America;
(D) for greater certainty, nothing in this Agreement
restricts RCI and its subsidiaries (excluding the
RCMCI Group) from carrying on Internet Services
businesses in or outside Canada;
(v) the taking of any steps to wind-up, dissolve,
reorganize or terminate the corporate existence of
any member of the RCMCI Group (other than the
wind-up, dissolution, reorganization or termination
of a subsidiary of RCMCI with or into the RCMCI
Wholly-Owned Group) or the taking by any member of
the RCMCI Group of any steps in respect of
bankruptcy, insolvency, liquidation or similar
proceedings other than in connection with a
transaction under clause (xi) that does not require
JV Shareholder's prior written approval;
(vi) any decision by RCMCI to issue, or enter into any
agreement to issue, any shares of any class of Equity
Shares or Convertible Securities except (A) the
issuance of Class A Shares pursuant to rights granted
to all holders of Class A Shares to subscribe for
Class A Shares; (B) the issuance of Class B Shares
whereby no one Person, following completion of the
distribution, acquires more than 5% of the Equity
Shares outstanding, other than Persons who are
equipment, software or service providers to the RCMCI
Group and who have an on-going business relationship
with the RCMCI Group which Persons may acquire up to
10% of the Equity Shares outstanding, provided that
in the case of (A) and (B), the number of Class A
Shares and Class B Shares issued in any 12 month
period does not exceed, in the aggregate, 15% of the
then outstanding number of Equity Shares; (C) in
connection with the issuance of Class B Shares
pursuant to the exercise of stock options granted
under RCMCI's stock option plan, stock purchase plan
or stock benefit plan provided that the Equity Shares
issuable pursuant to such plans do not exceed 10% of
the then outstanding number of Equity Shares; and (D)
pursuant to any conversion or exchange right
outstanding or existing on the date hereof (including
pursuant to any securities issued under the
Subscription Agreement) or pursuant to any conversion
or exchange right attaching to a Convertible Security
the issuance of which does not require JV
Shareholder's prior written approval hereunder. In
all cases described in (A), (B), (C) and (D) above,
during the term of this Agreement and thereafter so
long as the Brand Licence Agreement is in effect,
neither RCMCI nor any of its subsidiaries shall
knowingly issue or sell any Equity Shares,
Convertible Securities or other securities or rights
to acquire any such securities to any Designated
Material Competitor of AT&T (other than a Designated
Material Competitor of AT&T who, after the date
hereof, acquires Control of RCMCI in accordance with
the terms of this Agreement) and in any public
distribution of securities of RCMCI or any of its
subsidiaries, RCMCI or its subsidiary, as the case
may be, as the issuer or seller will cause each of
the underwriters or selling agents to covenant that
it will not knowingly take any action which will
result in a breach of this covenant;
(vii) any decision by any subsidiary of RCMCI to issue, or
enter into any agreement to issue to any Person other
than a member of the RCMCI Wholly-Owned Group, any
shares of any class of Securities other than, subject
to section 3.1(e)(vi), an issuance or grant of option
or right to make an investment of 10% or less of the
capital stock of any subsidiary of Cantel provided
that such subsidiary has not acquired and will not
thereafter acquire any assets having a value in
excess of $100 million or any material rights from a
member of the RCMCI Group;
(viii) after giving effect to the use of proceeds as
permitted under section 7.1 of the Subscription
Agreement, any decision by any member of the RCMCI
Group to create, assume, become liable for or
guarantee any borrowing or to issue any debt
securities which would result in the RCMCI Group
having total indebtedness for borrowed money
outstanding in excess of five times EBITDA based on
the 12 month trailing EBITDA all calculated on a
consolidated basis;
(ix) any decision by any member of the RCMCI Group to
enter into any contract, agreement or commitment with
RCI or any Affiliate of RCI (other than a member of
the RCMCI Group) or with any Person who does not deal
at arm's length with RCI or any Affiliate of RCI
(other than a member of the RCMCI Group), other than
(A) contracts, agreements or commitments which do not
represent expenditures or costs in excess of $5
million in the aggregate in any fiscal year; (B)
contracts, agreements or commitments relating to the
provision of management services, the acquisition of
products and services, the payment of interest on
indebtedness for borrowed money constituting
intercompany borrowings, the sharing or leasing of
premises, facilities or assets or other cost and
expense, related party and sharing arrangements and
transactions of similar type that have been entered
into prior to the date hereof and which are referred
to in Appendix V to Part A of Schedule B to the Share
Purchase Agreement or which constitute an amendment,
expansion, replacement, extension, supplement or
modification of any such contract, agreement or
commitment provided such amendment, expansion,
replacement, extension, supplement or modification
does not change in any material respect the basis or
principle for calculating or determining the amounts
payable thereunder; or (C) contracts, agreements or
commitments entered into on terms no less favourable
to the members of the RCMCI Group than those which
may be obtained at the time from a Person who deals
at arm's length with the RCMCI Group provided that:
1. for such contracts, agreements or commitments
that do not represent costs or expenditures in
excess of $20 million in any year, such
contract is approved by a majority of the
Independent Directors on the audit committee
provided that if no JV Shareholder nominee on
the audit committee of RCMCI approves such
contract, agreement or commitment, RCMCI shall
obtain at its cost an opinion of an
independent, internationally recognized
qualified valuator selected by JV Shareholder
with the consent of RCMCI not to be
unreasonably withheld, as to the fair market
value of the financial terms of such contract,
agreement or commitment; it being understood
that such opinion will not prevent or impair
the ability of RCMCI to enter into such a
contract, agreement or commitment that is
approved by a majority of the Independent
Directors on the audit committee provided that
the financial terms are revised retroactively,
if necessary, to make sure that such financial
terms are at fair market value in accordance
with the opinion of such valuator; and
2. for such contracts, agreements or commitments
that represent costs or expenditures in excess
of $20 million in any year, such contract,
agreement or commitment is approved by a
majority of the Independent Directors on the
audit committee which majority shall include
at least one JV Shareholder nominee;
(x) any decision by any member of the RCMCI Group to
enter into any material contract, agreement or
commitment with any Person other than JV Shareholder
in respect of which any action or inaction on the
part of JV Shareholder would result (with or without
notice or lapse of time or both) in a material breach
or default, acceleration or termination of such
contract, agreement or commitment;
(xi) any amalgamation, merger, arrangement, acquisition,
disposition or other business combination transaction
involving:
(A) the sale, lease, exchange, transfer or other
disposition of any assets or securities of
the RCMCI Group to any Person other than a
member of the RCMCI Wholly-Owned Group,
including the granting of an option for any
such transaction, where the total enterprise
value of such assets or securities is in
excess of the greater of $500 million and
15% of the book value of the total
consolidated assets of RCMCI as at the date
of its most recent consolidated balance
sheet in any one transaction or related
transactions;
(B) the taking of any steps to amalgamate, merge
or otherwise combine any member of the RCMCI
Group with another Person (which Person has
an enterprise value in excess of the greater
of $500 million and 15% of the book value of
the total consolidated assets of RCMCI as at
the date of its most recent consolidated
balance sheet) other than any such
amalgamation or merger solely among the
RCMCI Wholly-Owned Group; or
(C) the acquisition or taking of any steps by
any member of the RCMCI Group to acquire any
assets or securities of any other Person
other than a member of the RCMCI
Wholly-Owned Group where the total
enterprise value of such other Person is in
excess of the greater of $500 million and
15% of the book value of the total
consolidated assets of RCMCI as at the date
of its most recent consolidated balance
sheet in any one transaction or related
transactions,
provided that, whether or not subject to JV
Shareholder's written approval, any additional shares
of any class of Equity Shares or Convertible
Securities issued by RCMCI in connection with any
such transaction (excluding any such shares issued on
a pro rata basis to the shareholders of RCMCI
immediately prior to such transaction in connection
with such transaction) shall be counted for the
purposes of determining whether RCMCI is entitled to
issue Equity Shares under section 3.1(e)(vi);
(xii) the entering into by any member of the RCMCI Group of
any material contract with a Designated Material
Competitor of AT&T which is outside the normal course
of the business of the RCMCI Group; or
(xiii) the granting to any Person other than JV Shareholder
of any voting rights, Board of Directors rights,
Board of Directors committee rights or other
governance rights other than (A) those attaching to
the shares generally of RCMCI; or (B) voting rights,
Board of Directors rights, Board of Directors
committee rights or other governance rights which are
not superior to those granted to JV Shareholder under
this Agreement and the Related Agreements and any
amendments thereto and which do not diminish or
adversely affect the rights of JV Shareholder
(including by reducing the proportion of JV
Shareholder nominees on the Board of Directors or on
the boards of directors of Cantel and any other
material subsidiary of RCMCI).
3.2. Consultation Rights
RCMCI agrees to provide to AT&T U.S., AWS and BT, as long as each of
them is an Affiliate of JV Shareholder, a reasonable right of consultation in
the preparation of the annual and long term consolidated budgets and business
plans of RCMCI prior to submission of such budgets and plans to the Board of
Directors for its approval. If any such Person with such right of consultation
has any specific initiatives to propose, it may provide a detailed business case
to RCMCI to support the recommended initiative. Any such Person with such right
of consultation and RCMCI will share their business plans and budgets relating
to RCMCI, as approved by their respective boards of directors, with each other.
3.3. Exercise of JV Shareholder Voting Rights
JV Shareholder shall not exercise the voting rights attached to any
Class B Shares held by it, from time to time, with respect to the election of
directors to the Board of Directors pursuant to the right of holders of Class B
Shares, voting separately as a class, to elect three directors to the Board of
Directors unless this Agreement shall have terminated or JV Shareholder shall
not be entitled to exercise its Board of Directors nomination rights under
Section 3.1(b) in which event, JV Shareholder shall be entitled to exercise the
voting rights attached to the Class B Shares held by it to elect up to that
number of directors of RCMCI for which the Class B Shares may be voted for
election which is proportionate to JV Shareholder holding of Class B Shares,
rounded up to the nearest whole number.
3.4. Cooperation with respect to Tax Effects
The Parties hereto agree that (i) if any member of the RCMCI Group
proposes to take any act or upon the occurrence of any event which such member
of the RCMCI Group has been advised in writing by JV Shareholder, or which such
member knows, would have, or would be reasonably likely to have, a significant
adverse tax effect on JV and, if any member of the RCMCI Group has taken or
omitted to take any action which has resulted, or is reasonably likely to result
in, such a significant adverse tax effect on JV and JV Shareholder advises such
Person in writing, the RCMCI Group shall take such commercially reasonable steps
as JV Shareholder may request to minimize such result; (ii) if JV proposes to
take any act or upon the occurrence of any event which JV Shareholder has been
advised in writing by a member of the Xxxxxx Group, or which JV Shareholder
knows, would have, or would be reasonably likely to have, a significant adverse
tax effect on the RCMCI Group and, if JV has taken or omitted to take any action
which has resulted, or is reasonably likely to result in, such a significant
adverse tax effect and the RCMCI Group advises JV Shareholder in writing, JV
shall take such commercially reasonable steps as the RCMCI Group may request to
minimize such result.
3.5. Veto by JV Shareholder
In the event that JV Shareholder does not approve a particular
amalgamation, merger, arrangement, acquisition, disposition or other business
combination with or involving a Third Party or Third Parties in Canada under
section 3.1(e)(xi) and provided JV Shareholder is not able to veto such
particular transaction pursuant to any other provision hereunder, JV and RCI and
its subsidiaries shall be prohibited from engaging in that particular
amalgamation, merger, arrangement, acquisition, disposition or other business
combination transaction with or involving such Third Party or Third Parties from
the date JV Shareholder has exercised its right to veto the transaction.
3.6. Survival
Notwithstanding any other provision of this Agreement, the provisions
of this Article 3 other than the last sentence of section 3.1(e)(vi), section
3.3 and section 3.5 shall not survive the termination of this Agreement.
ARTICLE 4.
ADDITIONAL COVENANTS
4.1. Additional Covenants of RCI
(a) RCI agrees that it will not, and will cause its Affiliates
not to, themselves nominate or vote for, and will to the
extent permitted by law persuade its nominees on the Board of
Directors not to nominate or vote for, as directors of RCMCI
or its subsidiaries, individuals who are employees or
representatives of any Designated Material Competitor of AT&T
or who are employees or representatives of Persons who are, or
whose Affiliates are, in partnership or formal joint ventures
with the Designated Material Competitor of AT&T where such
partnership or formal joint venture provides wireless, long
distance or other telecommunications services, but excluding
the sale of equipment, the provision of telecommunications
software and the sale, by means of telecommunications, of
non-telecommunications goods and services.
(b) The covenants set forth in sections 3.1(e)(xii) and 4.1(a)
shall not apply to a Designated Material Competitor of AT&T
which has acquired Control of RCI and/or RCMCI.
(c) RCI agrees unconditionally and irrevocably to authorize the
RCMCI Group to carry on outside the Xxxxxx Cable Territories
the businesses of offering wireline long distance services,
wireline local services and Fixed Wireless Services, subject
to the RCMCI Group's compliance with its contractual and other
legal obligations to JV Shareholder.
4.2. Additional Covenants of RCMCI
(a) Pursuant to Article II of Schedule III to the articles of
incorporation of RCMCI, without the consent of the holder of a
majority of the Class A Shares, RCMCI may not carry on any
businesses except:
(i) any business carried on by RCMCI or its subsidiaries
on June 17, 1991; and
(ii) Mobile Communication Services.
(b) RCMCI and each of its subsidiaries shall take all reasonable
actions not prohibited by law to deny representatives of a
Designated Material Competitor of AT&T access to confidential
or proprietary marketing and strategic plans and other
confidential corporate material relating to the use and
planned use of the licensed marks and materials disclosed by
AT&T U.S. or its subsidiaries to the RCMCI Group.
4.3. Additional Covenants of JV Shareholder
(a) JV Shareholder agrees that it will not oppose and will support
any "going private" or similar transaction relating to RCMCI
that may be initiated by RCI (or any of its Affiliates) as
purchaser provided JV Shareholder retains the same equity and
voting interests and the same corporate governance rights in
RCMCI after completion of any such transaction, provided that
in the case of a "going private" or similar transaction
initiated by RCMCI, the prior written consent of JV
Shareholder was obtained and provided that in each case RCMCI
agrees to continue to provide JV Shareholder with the timely
and continuous disclosure that it would otherwise be required
to disclose to the public as a reporting issuer prior to
effecting the "going private" transaction. Following any
"going private" transaction, RCI and/or RCMCI shall provide JV
Shareholder with liquidity for its Equity Shares satisfactory
to JV Shareholder, acting reasonably, for its investment in
RCMCI.
(b) Subject to clause (c), so long as RCI Controls RCMCI, JV shall
not purchase any outstanding Class B Shares except from the
Xxxxxx Group or as otherwise permitted hereunder.
(c) In the event of any merger, amalgamation, arrangement,
consolidation, reorganization or similar transaction of or
involving RCMCI, JV Shareholder may purchase outstanding Class
B Shares notwithstanding section 4.3(b) provided that after
giving effect to such purchase JV Shareholder would hold no
more than the lesser of (i) 33 1/3% of the outstanding Equity
Shares of RCMCI; and (ii) the percentage of outstanding Equity
Shares held by JV Shareholder immediately prior to such
transaction.
4.4 Transfer of Interests in JV Shareholder
In the event that any Person other than (x) AT&T U.S., (y) BT, or (z) a
Permitted Transferee, or any combination of AT&T U.S., BT and Permitted
Transferees, becomes the beneficial owner of, directly or indirectly, more than
a majority of the Equity Shares in, or has the power, in law or in fact, to
direct or cause the direction of the management and policies of JV Shareholder,
JV Shareholder shall notify RCMCI in writing of such fact forthwith and, whether
or not JV Shareholder so notifies RCMCI, upon the occurrence of the foregoing,
JV Shareholder shall be required immediately to exercise all rights to convert,
directly or indirectly, all Securities (including the Preference Shares, Series
A and all Class A Shares) held by it and its Permitted Transferees into Class B
Shares.
4.5 Survival
Notwithstanding any other provision hereof, the provisions of Article 4
shall survive the termination of this Agreement; provided that sections 4.1(a)
and 4.2 shall apply only so long as the Brand Licence Agreement is in effect
unless the Brand Licence Agreement has been terminated as a result of default by
Cantel.
ARTICLE 5.
GENERAL PROHIBITION ON TRANSFER OF SECURITIES
5.1. General Prohibition on Transfer of Securities
During the term of this Agreement, none of the Parties shall Transfer
any Securities of RCMCI or any interest therein now or hereafter owned by such
Person except in accordance with and as permitted by this Agreement and any
purported Transfer of any such Securities in violation of this Agreement shall
constitute a breach of this Agreement.
ARTICLE 6.
RIGHT OF FIRST NEGOTIATION
6.1. Grant of Right of First Negotiation
(a) Grant of Right of First Negotiation. On and subject to the
terms and conditions of this section 6.1, RCI grants to JV
Shareholder, the exclusive first right to negotiate the
acquisition of any Securities owned by RCI if RCI wishes to
Transfer any number of such Securities.
(b) Notice to JV Shareholder. (i) RCI shall use commercially
reasonable efforts to give prompt written notice to JV
Shareholder at such time as it has entered into discussions
with one or more Third Parties which RCI reasonably believes
may result in the delivery to JV Shareholder of a Sale Notice
referred to below and, in connection with any such
discussions, shall cause a confidentiality agreement
containing customary provisions, substantially in the form
attached as Schedule D, to be entered into by such Third Party
or Third Parties in favour of RCMCI; (ii) RCI will give prompt
written notice to JV Shareholder (a "Sale Notice") of any
decision by RCI to Transfer any Securities, including the
number of Securities of RCMCI then beneficially owned,
directly or indirectly, by RCI and the number and class or
series of such Securities proposed to be Transferred (the
"Offered Securities"); and (iii) from the date such Sale
Notice has been given until RCI is entitled to offer the
Offered Securities to a Third Party or Third Parties other
than JV Shareholder under clauses (d), (i), (m), (o), (r) or
(v), RCI will not solicit, initiate or encourage inquiries,
submissions, proposals, bids or offers from or negotiate with
any Third Party or Third Parties relating to, or furnish to
any Third Party or Third Parties any information with respect
to, or enter into any agreement with any Third Party or Third
Parties with respect to, the Transfer of the Offered
Securities or make any public announcement relating to any of
the foregoing except as required by law or any regulatory
requirement.
Sale of Control
(c) Sale of Control; Other Sales. In the event that RCI gives a
Sale Notice to JV Shareholder that RCI wishes to Transfer (i)
Offered Securities which are or include Class A Shares or any
other Securities which have voting rights, absolute or
contingent (other than the voting rights which may be cast by
holders of the Class B Shares), and if, after giving effect to
such Transfer, RCI would own Securities to which are attached
less than a majority of the voting rights sufficient to elect
a majority of directors of RCMCI in which case RCI shall be
deemed for all purposes of this section 6.1 to have given a
Sale Notice to Transfer all of the Securities beneficially
owned, directly or indirectly, by RCI and the Offered
Securities shall constitute all of the Securities beneficially
owned, directly or indirectly, by RCI; or (ii) Offered
Securities and if in such Sale Notice RCI specifies that the
provisions of clauses (d) to (j) inclusive shall apply to the
Transfer of such Securities; then in each such case, the
provisions of clauses (d) to (j) inclusive shall apply to such
Transfer.
(d) Good Faith Negotiations. During the period of 25 Business
Days following receipt by JV Shareholder of a Sale Notice to
which this clause applies (the "First Negotiation Period"),
RCI and JV Shareholder shall negotiate diligently and in good
faith to attempt to agree upon the price and other terms and
conditions for the Transfer of the Offered Securities to JV
Shareholder. At any time during the First Negotiation Period,
JV Shareholder may deliver to RCI a written offer (the "JV
Initial Offer") to purchase the Offered Securities from RCI at
a price and on terms and conditions upon which JV Shareholder
is prepared to purchase the Offered Securities. If on the
expiry of the First Negotiation Period JV Shareholder has not
delivered a JV Initial Offer, JV Shareholder shall within 4
Business Days following the expiry of the First Negotiation
Period deliver to RCI a JV Initial Offer. If JV Shareholder
does not deliver a JV Initial Offer to RCI as contemplated by
this clause (d) or notifies RCI in writing of its intention
not to deliver a JV Initial Offer, RCI shall be entitled
during the period of 120 days following (i) the expiration of
such 4 Business Day period, or (ii) if JV Shareholder gives
notice that it will not deliver a JV Initial Offer, the date
such notice is received by RCI, to complete the Transfer of
all, but not less than all, of the Offered Securities to any
bona fide Third Party or Third Parties on such terms and
conditions as RCI shall determine (without prejudice to JV
Shareholder's rights hereunder in the event that no such sale
is completed during such period). The JV Initial Offer shall
remain open for acceptance by RCI for a period of 8 Business
Days following receipt by RCI of the JV Initial Offer or until
RCI rejects in writing the JV Initial Offer (the "JV Initial
Offer Period").
(e) Due Diligence. RCMCI agrees that JV Shareholder shall be
permitted to conduct reasonable due diligence with respect to
RCMCI during the First Negotiation Period.
(f) RCI Response to JV Initial Offer. During the JV Initial Offer
Period, unless or until RCI accepts or rejects in writing the
JV Initial Offer or until the expiry of the JV Initial Offer
Period, RCI and JV Shareholder shall negotiate diligently and
in good faith to attempt to agree upon the price and other
terms and conditions for the Transfer of the Offered
Securities to JV Shareholder. At any time prior to the expiry
of the JV Initial Offer Period, RCI may in writing accept the
JV Initial Offer or RCI may in writing reject the JV Initial
Offer. If at the expiry of the JV Initial Offer Period RCI has
not in writing accepted the JV Initial Offer, RCI shall be
deemed to have rejected the JV Initial Offer.
(g) RS Counter Offer. If on the expiry of the JV Initial Offer
Period an agreement for the Transfer of the Offered Securities
to JV Shareholder has not been reached, RCI shall within 4
Business Days following the expiry of the JV Initial Offer
Period deliver a written offer to JV Shareholder (the "RS
Counter Offer") to Transfer the Offered Securities to JV
Shareholder at a price and on terms and conditions which RCI
is prepared to accept, which offer shall be at a price per
share no less than 2% greater than the purchase price per
share set out in the JV Initial Offer or, if a subsequent
offer was made by JV Shareholder, in the highest offer made in
writing by JV Shareholder to RCI during the JV Initial Offer
Period. The RS Counter Offer shall remain open for acceptance
for a period of 4 Business Days following receipt by JV
Shareholder of the RS Counter Offer or until JV Shareholder
rejects in writing the RS Counter Offer (the "RS Counter Offer
Period"). If RCI does not deliver an RS Counter Offer within 4
Business Days following the expiry of the JV Initial Offer
Period, RCI shall cease to have any right to Transfer any of
the Offered Securities under this section 6.1, and RCI shall
have no right to give a subsequent Sale Notice to JV
Shareholder under clause (b) for a period of 120 days
following the expiry of the JV Initial Offer Period without
prejudice to RCI's right to give an Offer Notice under clause
(o).
(h) JV Shareholder Response to RS Counter Offer. At any time prior
to the expiry of the RS Counter Offer Period, JV Shareholder
may in writing:
(i) accept the RS Counter Offer;
(ii) reject the RS Counter Offer; or
(iii) reject the RS Counter Offer and deliver a written
offer to RCI (the "JV Final Offer") to purchase the
Offered Securities at a price and on terms and
conditions which JV Shareholder is willing to accept,
which offer shall be at a price per share no less
than 2% greater than the purchase price per share set
out in the JV Initial Offer or in the highest offer
made in writing by JV Shareholder subsequent to the
JV Initial Offer and prior to the expiry of the RS
Counter Offer Period.
The JV Final Offer shall remain open for acceptance for a
period of 5 Business Days following receipt by RCI of the JV
Final Offer. If on expiry of the RS Counter Offer Period, JV
Shareholder has not in writing taken one of the actions
referred to in subclause (i), (ii) or (iii) of this clause
(h), JV Shareholder shall be deemed to have rejected the RS
Counter Offer. If JV Shareholder has rejected or is deemed to
have rejected the RS Counter Offer and if no JV Final Offer
has been made, or if an JV Final Offer has been made but RCI
has not in writing accepted the JV Final Offer within the
period of 5 Business Days following receipt by RCI of the JV
Final Offer, then RCI shall be entitled to Transfer the
Offered Securities to a Third Party or Third Parties in
accordance with clause (i).
(i) Sale at Adjusted Price. During the period of 120 days
following the later of (i) the expiry of the RS Counter Offer
Period, and (ii) the expiry or rejection in writing by RCI of
the JV Final Offer, if any, (such period is hereinafter
referred to as the "Third Party Offer Period"), RCI may
Transfer all, but not less than all, of the Offered Securities
to any bona fide Third Party or Third Parties for
consideration per share no less than the Adjusted Price, as
such term is defined in clause (j). In the event that no sale
to a bona fide Third Party or Third Parties has been completed
prior to the expiry of the Third Party Offer Period, RCI shall
be entitled and required to comply again with the Right of
First Negotiation in accordance with its terms in the event
that RCI proposes any subsequent Transfer of Securities
provided that RCI shall have no right to give a subsequent
Sale Notice to JV Shareholder under clause (b) for a period of
60 days following the expiry of the Third Party Offer Period
without prejudice to RCI's right to give an Offer Notice under
clause (o).
(j) "Adjusted Price" means for the purposes of clause (i), the
aggregate of (x) the price per share offered by JV Shareholder
pursuant to the highest offer made in writing by JV
Shareholder to RCI up to and including the JV Final Offer,
plus (y) 75% of the excess of (i) the price per share offered
by RCI pursuant to the RS Counter Offer or pursuant to the
lowest offer made in writing by RCI to JV Shareholder during
the RS Counter Offer Period; over (ii) the price per share
referred to in item (x) of this clause (j).
(k) Piggy-Back/Carry-Along Rights. If RCI proposes to Transfer
the Offered Securities or Offer Securities (as defined in
clause (o)) to a Third Party who is a Designated Material
Competitor of AT&T and if, after giving effect to such
Transfer, RCI would own Securities to which are attached less
than a majority of the voting rights sufficient to elect a
majority of directors of RCMCI, then RCI shall obtain from the
Third Party or Third Parties a bona fide offer addressed to JV
Shareholder (a "Piggy-Back Offer") to purchase all of the
Securities owned by JV Shareholder at the same price and on
the same terms and conditions as are contained in the offer
(the "Third Party Offer") by the Third Party or Third Parties
to purchase the Offered Securities or the Offer Securities, as
the case may be, provided that JV Shareholder shall be
required to provide only customary representations, warranties
and covenants and shall not be bound by any non-competition or
other obligations of the seller and RCI shall deliver the
Piggy-Back Offer to JV Shareholder no later than 5 Business
Days after RCI enters into a binding agreement to sell the
Offered Securities or the Offer Securities, as the case may
be, to the Third Party or Third Parties. To the extent that
the consideration payable to RCI under the Third Party Offer
consists wholly or partly of securities, the Piggy-Back Offer
shall include an offer consisting of the same proportion of
securities and an all cash offer which includes the equivalent
in cash of the Fair Market Value of such securities. JV
Shareholder shall be entitled to elect the form of
consideration to be paid to it pursuant to the Piggy-Back
Offer provided that if it fails to advise the Third Party or
Third Parties of its election within 20 Business Days of
receipt of the Piggy-Back Offer it shall be deemed to have
elected to be paid entirely in cash. For greater certainty,
the Piggy-Back Offer shall be for the same price per Class A
Share and Class B Share held by JV Shareholder. The Piggy-Back
Offer shall be irrevocable and shall be open for acceptance by
JV Shareholder by written notice to the Third Party or Third
Parties given within the period of 10 Business Days following
receipt of the Piggy-Back Offer by JV Shareholder. RCI may
deliver to JV Shareholder together with the Piggy-Back Offer,
written notice to JV Shareholder (a "Carry-Along Notice")
requiring that all, but not less than all, of the Securities
owned by JV Shareholder shall be sold to the Third Party or
Third Parties at the same price and on the same terms and
conditions as are contained in the Piggy-Back Offer provided
that in the event such Piggy Back Offer includes an all cash
offer and an offer consisting wholly or partly of securities,
JV Shareholder shall be entitled to elect the form of
consideration to be paid to it pursuant to the Carry-Along
Notice provided that if it fails to advise the Third Party or
Third Parties of its election within 20 Business Days of
receipt of the Carry-Along Notice it shall be deemed to have
elected to be paid entirely in cash. JV Shareholder shall be
deemed to have accepted the Piggy-Back Offer upon the receipt
by JV Shareholder of the Carry-Along Notice. If JV Shareholder
accepts or is deemed to accept the Piggy-Back Offer, closing
of such sale shall occur contemporaneously with the sale of
the Offered Securities or the Offer Securities by RCI to the
Third Party or Third Parties. It is understood and agreed that
the Third Party Offer may provide for the making by the Third
Party or Third Parties of a Concurrent Offer to the holders of
the Class B Shares to purchase their Class B Shares. In that
event, the closing of the sale of the Offered Securities or
the Offer Securities and of the sale pursuant to the
Piggy-Back Offer shall occur contemporaneously with the
take-up and payment for shares under the Concurrent Offer and
the Concurrent Offer shall be commenced within 20 Business
Days following acceptance or deemed acceptance of the
Piggy-Back Offer and take-up and payment for the Class B
Shares tendered to such offer shall occur no later than 45
days after the making of the Concurrent Offer.
Sale of Securities Without Sale of Control
(l) Sale of a Portion of Holdings in RCMCI. In the event that RCI
gives notice to JV Shareholder under clause (b) that RCI
desires to Transfer less than all of the Securities it holds
in RCMCI and if after giving effect to such Transfer RCI would
continue to own Securities to which are attached at least a
majority of the voting rights sufficient to elect a majority
of directors of RCMCI and RCI has not elected under subclause
(c)(ii) to proceed under clauses (d) to (j) inclusive, then
the provisions of clauses (m) and (n) shall apply to such
sale.
(m) JV Shareholder Rights. In the event that RCI gives a Sale
Notice to JV Shareholder with respect to Offered Securities
other than those governed by clause (c)(i), and if RCI has not
elected as permitted under clause (c)(ii), then RCI shall
negotiate diligently and in good faith with JV Shareholder for
a period of 21 days from the date of the Sale Notice (in this
clause (m), the "Negotiation Period") to attempt to agree upon
the terms and conditions for the sale of the Offered
Securities to JV Shareholder which are satisfactory to RCI and
JV Shareholder. If on the expiry of the Negotiation Period, an
agreement cannot be reached, RCI may during the 60 day period
following the expiry of the Negotiation Period, Transfer the
Offered Securities pursuant to a sale whereby no one Person
upon completion of such Transfer acquires in such sale from
RCI more than 5% of the Equity Shares outstanding, other than
Persons who are equipment, software or service providers to
the RCMCI Group who have an on-going business relationship
with the RCMCI Group which Persons may acquire up to 10% of
the Equity Shares outstanding, provided that if such Offered
Securities are Class A Shares, the Class A Shares are
converted to Class B Shares prior to the completion of the
sale and provided that RCI shall not knowingly sell any of
such Offered Securities to a Designated Material Competitor of
AT&T. On any such Transfer, the price per share shall be
greater than the price per share offered by JV Shareholder
pursuant to the highest offer made in writing by JV
Shareholder to RCI prior to the expiry of the Negotiation
Period or, if no such offer was made, shall be on such terms
and conditions as RCI shall determine. In the event that no
Transfer to a bona fide Third Party or Third Parties has been
completed prior to the expiry of the 60 day period referred to
in this clause (m), RCI shall comply again with the Right of
First Negotiation in accordance with its terms in the event
that RCI proposes any subsequent sale of Securities.
(n) Conversion of JV Shareholder's Class A Shares. If Class A
Shares are converted into Class B Shares in connection with a
Transfer described in clause (m) and such conversion of Class
A Shares into Class B Shares would result in JV Shareholder
owning more than the maximum percentage of outstanding Class A
Shares which may be owned at that time by a non-Canadian under
applicable federal legislation limiting foreign ownership or
any other regulatory requirement, JV Shareholder agrees that
it will in connection with the conversion of Class A Shares
and the Transfer of Class B Shares pursuant to clause (m) upon
written notice from RCI, convert, within 15 Business Days
following receipt of such notice, sufficient Class A Shares
into Class B Shares, or Transfer sufficient Class A Shares to
Third Parties (including to a trustee as permitted under
clause (t) below) so that JV Shareholder's ownership of Class
A Shares will not exceed such foreign ownership threshold.
General
(o) Third Party Offer. If at any time when a Sale Notice has not
been given, a Third Party or Third Parties make a bona fide,
unsolicited, written offer (the "Third Party Offer") to
purchase Securities (the "Offer Securities"), which offer RCI
wishes to accept, RCI shall give written notice (the "Offer
Notice") to JV Shareholder irrevocably offering the Offer
Securities for sale to JV Shareholder, which notice shall
include a copy of the Third Party Offer, and JV Shareholder
shall have the right by written notice given to RCI (the
"Acceptance Notice") within the period of 30 Business Days
following receipt by JV Shareholder of the Offer Notice to
purchase the Offer Securities from RCI at the price and on the
terms and conditions set forth in the Third Party Offer. In
the event that the Third Party Offer offers consideration
which is payable wholly or partly in securities, JV
Shareholder may in the Acceptance Notice offer all cash or may
offer securities of JV Shareholder and/or its Affiliates to
the same extent as provided in the Third Party Offer, which
cash and/or securities shall (1) have a Fair Market Value no
less than the Fair Market Value of the securities offered
under the Third Party Offer; and (2) provide no less liquidity
than the securities offered under the Third Party Offer. The
purchase by JV Shareholder under this clause (o) shall be
completed on the date specified by JV Shareholder in the
Acceptance Notice which date shall be no more than 15 days
following receipt by RCI of the Acceptance Notice. In the
event that JV Shareholder fails to deliver the Acceptance
Notice as contemplated by this clause (o) within the 30
Business Day period, RCI shall be entitled, subject to clause
(k) hereof, to Transfer the Offer Securities to such Third
Party or Third Parties at no less than the price, and
substantially on the other terms and conditions, specified in
the Third Party Offer, such Transfer to be completed on the
date no more than 15 days following the expiry of the 30
Business Day Period or the date that JV Shareholder fails to
complete the purchase of the Offer Securities, as the case may
be. In the event that JV Shareholder fails to complete the
purchase of the Offer Securities by reason of a default of JV
Shareholder, RCI shall be entitled, subject to clause (k)
hereof, to Transfer the Offer Securities to any bona fide
Third Party or Third Parties upon such terms and conditions as
RCI shall determine provided such Transfer is completed during
the 120 day period following such failure (and such sale shall
be without prejudice to any rights and remedies RCI may
otherwise have by reason of such default). If any Transfer by
RCI to a bona fide Third Party or Third Parties is not
completed as contemplated by this clause (o), RCI shall be
required to comply with the Right of First Negotiation in
accordance with its terms in the event that RCI proposes any
subsequent sale of Securities.
(p) Binding on the Third Parties. This Agreement, including the
Right of First Negotiation constituted by this section 6.1 and
the Change of Control provisions contained in Article 8, shall
be binding upon any Transferee of Securities from RCI referred
to in clause (d), (i), (o), (r) or (v) unless either RCI or JV
Shareholder has exercised and completed the
piggy-back/carry-along rights provided for in clause (k) and
references to RCI shall be deemed to refer to such Transferee
except that a Transferee of Securities from RCI referred to in
clauses (o), (r) or (v) where such Transfer is not governed by
clause (c)(i) shall not be bound by this Agreement.
(q) Sale Prohibited under Trust Agreement. In the event that a
sale by RCI to JV Shareholder hereunder would be prohibited
under the terms of the Trust Agreement, JV Shareholder shall
advise RCI in any notice given hereunder offering to purchase
Securities or accepting an offer to Transfer Securities by RCI
whether or not it proposes to make, or cause to be made, a
Concurrent Offer. If JV Shareholder advises RCI that it
proposes to make, or cause to be made, a Concurrent Offer,
then notwithstanding any other provisions of this section 6.1,
the sale by RCI to JV Shareholder shall be completed
contemporaneously with the take-up and payment for shares
under the Concurrent Offer and the provisions of clause (r)
shall apply.
(r) JV Shareholder Concurrent Offer. If JV Shareholder advises
RCI that it proposes to make, or cause to be made, a
Concurrent Offer, JV Shareholder shall commence such offer, or
cause such offer to be commenced, within 20 Business Days
following any agreement reached by JV Shareholder and RCI for
the purchase by JV Shareholder of Securities (the "Purchase
Securities") and shall take-up and pay for shares under the
Concurrent Offer no later than 45 days after the making of the
Concurrent Offer. In the event that JV Shareholder advises RCI
that it will make but fails to make, or cause to be made, a
Concurrent Offer, or fails to take-up and pay for shares under
the Concurrent Offer, within the time periods set forth in
this clause (r) by reason that such purchase is prohibited
under applicable law or pursuant to the terms of the Trust
Agreement or by reason of JV Shareholder's default in its
obligations, JV Shareholder shall thereupon cease to have any
right to purchase the Purchase Securities and RCI may, subject
to clause (k) hereof, sell the Purchase Securities to a bona
fide Third Party or Third Parties provided such sale is
completed during the 120 day period following such failure
upon such terms and conditions as RCI shall determine. If such
Transfer is not so completed, RCI shall be required to comply
again with the Right of First Negotiation in accordance with
its terms in the event that RCI proposes any subsequent sale
of Securities.
(s) Concurrent Offer by Third Party or Third Parties. Any
requirement under this section 6.1 that a Transfer of
Securities to a Third Party or Third Parties be completed
within a specified period shall mean, in the event that the
Transfer by RCI to the Third Party or Third Parties would be
prohibited under the terms of the Trust Agreement unless the
Third Party or Third Parties make a Concurrent Offer to the
holders of the Class B Shares, that such Third Party or Third
Parties shall have agreed in writing to purchase the
Securities from RCI and to make the Concurrent Offer to the
holders of the Class B Shares and that the Third Party or
Third Parties shall have commenced the Concurrent Offer,
provided that the Third Party or Third Parties take-up and pay
for the Securities to be purchased from RCI concurrently with
the take-up and payment for Class B Shares under the
Concurrent Offer and provided further that the Third Party or
Third Parties take-up and pay for Class B Shares under the
Concurrent Offer within 45 days after the making of such
offer, failing which the Right of First Negotiation shall
apply again to the Transfer of such Securities.
(t) Designation of Third Party or Third Parties. JV Shareholder
shall have the right to designate any Person as the purchaser
of Securities pursuant to this section 6.1, including a Third
Party who, in JV Shareholder 's discretion, may be a trustee
who will hold the Securities in trust pending receipt of any
regulatory or other approval necessary for the transfer of
such Securities to JV Shareholder provided that such Person
agrees to be bound by this Agreement with respect to such
Securities.
(u) Deferral for Certain Regulatory Approvals. Notwithstanding
any other provision of this section 6.1, JV Shareholder shall
be entitled to defer the completion of any purchase by JV
Shareholder, or by any Person or a Third Party or Third
Parties designated under clause (t), and any Third Party or
Third Parties purchasing Securities pursuant to clauses (d),
(i), (k), (m), (o), (r) or (v) shall be entitled to defer the
completion of any purchase by such Third Party or Third
Parties, for a period not exceeding 90 days from the making of
a Concurrent Offer or, if no Concurrent Offer is required to
be made, 115 days from the date of the relevant agreement of
purchase and sale, for the sole purpose of permitting the
purchaser to obtain any Investment Canada Act, Competition
Act, Telecommunications Act or other regulatory approval
necessary to the completion of such purchase.
(v) Failure of JV Shareholder to Purchase. In the event that JV
Shareholder agrees with RCI to purchase Offered Securities or
Offer Securities under this section 6.1 and JV Shareholder
ultimately fails to complete such purchase as contemplated by
such agreement by reason that such purchase is prohibited
under applicable law or pursuant to the terms of the Trust
Agreement or by reason of JV Shareholder's default in its
obligations, RCI shall be entitled, subject to clause (k)
hereof, during the period of 120 days following the failure by
JV Shareholder to complete the purchase of the Offered
Securities or the Offer Securities, as the case may be, as
contemplated by this section 6.1 to Transfer the Offered
Securities or the Offer Securities to any Third Party or Third
Parties on such terms and conditions as RCI shall determine
(without prejudice to any rights and remedies RCI may
otherwise have by reason of such default).
(w) Brand Licence Agreement. In the event of the Transfer of
Offered Securities or Offer Securities by RCI to a Third Party
who is a Designated Material Competitor of AT&T (other than a
Designated Material Competitor of AT&T who acquires such
Offered Securities or Offer Securities in the public markets
without the prior knowledge of RCI), then ACE and Cantel shall
each be entitled to terminate the Brand Licence Agreement,
without any liability under the Brand Licence Agreement based
solely on such termination, by written notice given by the
terminating party to the other party within 60 days following
the completion of the sale of such Securities.
(x) Exceptions. The Right of First Negotiation in this section 6.1
shall not apply:
(i) to any conversion by RCI of Class A Shares into Class
B Shares provided that, for greater certainty, the
Right of First Negotiation in this section 6.1 shall
apply to any subsequent Transfer of such Class B
Shares;
(ii) to any Transfer by RCI to any member of the Xxxxxx
Group provided that such Person agrees in writing
with JV Shareholder to be bound by this Agreement
including, without limitation, the Right of First
Negotiation in this section 6.1, to the same extent
as RCI and provided that such Transfer shall not
release RCI from its obligations under this
Agreement;
(iii) to any Pledge of Securities by or on behalf of RCI to
a recognized financial institution as security for a
bona fide loan or obligation provided that the
pledgee agrees in writing with JV Shareholder to be
bound by this Agreement including, without
limitation, this Article 6 and provided that such
Pledge shall not release RCI from its obligations
under this Agreement;
(iv) to a Pledge of Securities by or on behalf of RCI or
its Affiliates excluded from the definition of
"Transfer" in section 1.1; and
(v) to any Transfer of Securities resulting from any amalgamation,
merger, arrangement, acquisition, disposition or other
business combination involving solely Persons who are
wholly-owned by members of the Xxxxxx Group or permitted
pursuant to clause 3.1(e)(xi).
(y) Co-operation. The Parties shall agree to co-operate fully in
the filing of all applications for all necessary regulatory
approvals and to use their respective reasonable commercial
efforts to obtain all such necessary regulatory approvals
within the relevant time periods referred to in Article 6. In
the event that a necessary regulatory approval is not obtained
on terms satisfactory to the purchaser, acting reasonably,
within such period, the agreement of purchase and sale shall
cease to be binding and enforceable with respect to the
purchase and sale of the Securities of RCMCI subject thereto,
without prejudice to any right of the Parties to seek damages
for any breach of the terms and conditions of such agreement
or of this Agreement.
ARTICLE 7.
SALE OF SHARES BY JV SHAREHOLDER
7.1. Sale of Class A Shares by JV Shareholder
(a) Grant of Right of First Negotiation. On and subject to the
terms and conditions of this section 7.1, JV Shareholder
grants to RCI for so long as RCI holds at least 20% of the
Equity Shares of RCMCI the exclusive first right to negotiate
the acquisition of any Securities owned by JV Shareholder if
JV Shareholder wishes to Transfer any number of such
Securities.
(b) Notice to RCI. JV Shareholder agrees that it will give prompt
written notice to RCI of any decision by JV Shareholder to
Transfer any Securities, including the number of Securities
then beneficially owned, directly or indirectly, by JV
Shareholder in the aggregate and the number and class or
series of such Securities proposed to be Transferred (the "JV
Offered Securities").
(c) Acceptance/Rejection. If JV Shareholder gives a notice to
RCI under clause (b), JV Shareholder shall negotiate
diligently and in good faith with RCI for a period of 21 days
following receipt by RCI of the notice from JV Shareholder
referred to in clause (b) (in this clause 7.1(c) the
"Negotiation Period") to attempt to agree upon the terms and
conditions to the Transfer of the JV Offered Securities to RCI
which are satisfactory to JV Shareholder and RCI. If on the
expiry of the Negotiation Period, an agreement cannot be
reached, JV Shareholder may, during the 60 day period
following the expiry of the Negotiation Period, Transfer the
JV Offered Securities to any bona fide Third Party or Third
Parties provided that if the JV Offered Securities include
Securities other than Class B Shares, such JV Offered
Securities, if convertible or exchangeable, directly or
indirectly, into Class B Shares, are converted or exchanged
into Class B Shares prior to the completion of such Transfer
and provided that no one Person following completion of such
Transfer acquires more than 5% of the Equity Shares of RCMCI
except for Persons who are equipment, software or service
providers to the RCMCI Group who have an on-going business
relationship with the RCMCI Group which Persons may acquire up
to 10% of the Equity Shares outstanding. On any such Transfer,
the price per Security shall be greater than the price per
Security offered by RCI pursuant to the highest offer made in
writing by RCI to JV Shareholder prior to the expiry of the
Negotiation Period or, if no such offer was made, shall be on
such terms and conditions as JV Shareholder shall determine.
In the event that no Transfer to a bona fide Third Party or
Third Parties has been completed prior to the expiry of the 60
day period referred to in this clause (c), JV Shareholder
shall comply again with the Right of First Negotiation in
accordance with its terms in the event that JV Shareholder
proposes any subsequent sale of Securities.
(d) Binding on Permitted Transferees. The Right of First
Negotiation in this section 7.1 shall be binding upon any
Permitted Transferees from JV Shareholder of JV Offered
Securities pursuant to clause (c) and references to JV
Shareholder shall be deemed to refer to such Permitted
Transferees.
(e) Sale Prohibited under Trust Agreement. In the event that a
Transfer by JV Shareholder to RCI hereunder would be
prohibited under the terms of the Trust Agreement RCI shall
advise JV Shareholder in any notice given hereunder offering
to purchase JV Offered Securities whether or not it agrees to
make, or cause to be made, a Concurrent Offer. If RCI advises
JV Shareholder that it proposes to make, or cause to be made,
a Concurrent Offer, then notwithstanding any other provision
of this section 7.1, the sale by JV Shareholder to RCI shall
be completed contemporaneously with the take-up and payment
for Securities under the Concurrent Offer and the provisions
of clause (f) shall apply.
(f) Making a Concurrent Offer. If RCI advises JV Shareholder that
it proposes to make, or cause to be made, a Concurrent Offer,
RCI shall commence such offer, or cause such offer to be
commenced, within 20 Business Days following an agreement
being reached for the purchase by RCI of the JV Offered
Securities and RCI shall take-up and pay for shares under the
Concurrent Offer concurrently with the purchase of the JV
Offered Securities from JV Shareholder (which take-up and
payment shall occur no later than 45 days after the making of
the Concurrent Offer). In the event that RCI advises JV
Shareholder it will make but fails to make, or cause to be
made, the Concurrent Offer, or fails to take-up and pay for
Securities under the Concurrent Offer within the time periods
set forth in this clause (f) by reason that such purchase is
prohibited under applicable law or pursuant to the terms of
the Trust Agreement or by reason of RCI's default in its
obligations, RCI shall thereupon cease to have any rights to
purchase the JV Offered Securities and JV Shareholder may sell
the JV Offered Securities to a bona fide Third Party or Third
Parties upon such terms and conditions as JV Shareholder shall
determine provided such sale is completed during the 60 day
period following such default.
(g) Designation of Third Party or Third Parties. RCI shall have
the right to designate any Person as a purchaser of Securities
pursuant to this section 7.1, including a Third Party or Third
Parties who, in RCI's discretion, may be a trustee who will
hold the Securities in trust pending receipt of any regulatory
or other approval necessary for the transfer of such
Securities to RCI provided such Person agrees to be bound by
this Agreement with respect to such Securities.
(h) Deferral for Certain Regulatory Approvals. Notwithstanding
any other provision of this section 7.1, RCI shall be entitled
to defer the completion of any purchase by RCI, or by any
Person or a Third Party or Third Parties designated under
clause (g), and any Third Party or Third Parties purchasing
Securities pursuant to clause (c) shall be entitled to defer
the completion of any purchase by such Third Party or Third
Parties, for a period not exceeding 90 days from the making of
a Concurrent Offer or, if no Concurrent Offer is required to
be made, 115 days from the date of the relevant agreement of
purchase and sale, for the sole purpose of permitting the
purchaser to obtain any Investment Canada Act, Competition
Act, Telecommunications Act or other regulatory approval
necessary to the completion of such purchase.
(i) Failure of RCI to Purchase. In the event that RCI agrees with
JV Shareholder to purchase JV Offered Securities under this
section 7.1 and RCI ultimately fails to complete such purchase
as contemplated by such agreement by reason of RCI's default
in its obligations, JV Shareholder shall be entitled during
the period of 60 days following the failure by RCI to complete
the purchase of the JV Offered Securities as contemplated by
this section 7.1 to Transfer the JV Offered Securities to any
Third Party or Third Parties on such terms and conditions as
JV Shareholder shall determine (without prejudice to any
rights and remedies JV Shareholder may otherwise have by
reason of such default).
(j) Co-operation. The Parties shall agree to co-operate fully in
the filing of all applications for all necessary regulatory
approvals and to use their respective reasonable commercial
efforts to obtain all such necessary regulatory approvals
within the relevant time periods referred to in Article 7. In
the event that a necessary regulatory approval is not obtained
on terms satisfactory to the purchaser, acting reasonably,
within such period, the agreement of purchase and sale shall
cease to be binding and enforceable with respect to the
purchase and sale of the Securities of RCMCI subject thereto,
without prejudice to any right of the Parties to seek damages
for any breach of the terms and conditions of such agreement
or of this Agreement.
7.2. Exception
(a) The Right of First Negotiation in section 7.1 shall not apply,
(i) to the conversion by JV Shareholder of Preference
Shares into Class A Shares or Class B Shares or to
the conversion of Class A Shares into Class B Shares
provided that, for greater certainty, the Right of
First Negotiation in section 7.1 shall apply to any
subsequent Transfer of such Class A Shares or Class B
Shares;
(ii) to any Transfer by JV Shareholder to any Permitted
Transferee provided that any such Permitted
Transferee agrees in writing with RCI to be bound by
this Agreement including, without limitation, the
Right of First Negotiation in this Article 7 to the
same extent as JV Shareholder and provided that such
Transfer shall not release the transferor of its
obligations under this Agreement; and
(iii) to any Pledge of Securities by JV Shareholder or any
Permitted Transferee to a recognized financial
institution as security for a bona fide loan or
obligation provided that the pledgee agrees in
writing with RCI to be bound by this Agreement
including, without limitation, this Article 7 and
provided that such Pledge shall not release the
pledgor of its obligations under this Agreement.
7.3. Survival
Notwithstanding any other provision of this Agreement, the provisions
of this Article 7 shall survive the termination of this Agreement with respect
to any Securities owned by JV Shareholder.
ARTICLE 8.
CHANGE OF CONTROL OF RCI
8.1. Application of Article 8
The provisions of Article 8 apply only so long as:
(a) the Xxxxxx Group Controls RCMCI or Control of RCMCI has been
acquired by a Person upon whom this Agreement is binding under
section 6.1(p) or by a Person pursuant to sections 6.1(x)
(ii), (iii) and (iv) of this Agreement (a "Relevant
Transferee");
(b) JV Shareholder and/or a Permitted Transferee holds in the
aggregate at least the JV Threshold Amount; and
(c) the Brand Licence Agreement is in effect or, if the Brand
Licence Agreement is not in effect, the Brand Licence
Agreement has been terminated by ACE in accordance with its
terms due to a breach thereof by Cantel.
8.2 Definitions
In this Article 8,
"Acquisition of Control" has the meaning set out in section 8.5.
"AT&T Line of Business" means each of (i) U.S. domestic long distance
voice and data; (ii) international long distance voice and data; (iii)
local telecommunications; (iv) wireless telecommunications; and (v)
Internet communications transmission and access services (as long as
AT&T U.S. or an Affiliate shall continue to carry on any such business
in a material way) and such other lines of business as are from time to
time publicly reported by AT&T U.S. pursuant to the rules and
regulations of the Securities and Exchange Commission (or its
successor) as segmented group financial results of business operations;
provided that, so long as RCI Controls Rogers Cablesystems Limited and
Rogers Cablesystems Limited remains a significant provider of cable
services in Canada, AT&T Line of Business shall not include Broadcast
Distribution Undertakings including traditional analog cable services
and digital cable services; and provided further that AT&T Line of
Business shall also not include businesses publicly reported by AT&T
U.S. as segmented group financial results of business operations under
the heading "Other".
"Broadcast Distribution Undertakings" means "distribution undertaking"
as set out in the Broadcasting Act (Canada).
"Designated Material Competitor of AT&T" means:
(a) a Listed Material Competitor;
(b) any Affiliate of a Listed Material Competitor;
(c) any Person or group of Persons which is Significantly
Influenced by a Listed Material Competitor and/or by
an Affiliate of a Listed Material Competitor; and
(d) any Person who acquires all or substantially all of
the assets used in carrying on the business of a
Listed Material Competitor or who completes any
amalgamation, merger, arrangement or other business
combination with a Listed Material Competitor
provided that such Person becomes a Listed Material
Competitor pursuant to Section 8.4(B)(c) ;
provided that a Person and its Affiliates shall be deemed not to be a
Designated Material Competitor of AT&T if AT&T U.S. has entered into a
joint venture with such Person involving significant equity or asset
contributions by both parties to the joint venture, having a term of 15
years or more, providing for the sale by the joint venture to customers
of both parties and requiring the entering into of mutual, material,
non-competition covenants with respect to Canada and the United States
of America.
"Eligible Material Competitor" means a Person (including its
Affiliates):
(a) which carries on a business at the Relevant Date that
constitutes significant competition in or with AT&T
U.S. and its Affiliates in an AT&T Line of Business
as at the Relevant Date; and
(b) which
(i) either:
(A) derives not less than 25% of its
audited, consolidated gross revenues
for its most recently completed
financial year ended on or prior to
the Relevant Date from its business
which competes with AT&T U.S. and
its Affiliates in or with the AT&T
Line of Business; or
(B) has a market share in the same
market as the AT&T Line of Business
of not less than 15%, provided that
AT&T U.S. (including its Affiliates)
has a market share in such AT&T Line
of Business in such market of not
less than 7.5% and
(ii) in the case of a Person which operates
primarily outside of Canada, has a market
capitalization in excess of the greater of
U.S. $7 billion and 3% of the market
capitalization of AT&T U.S. at the Relevant
Date, or in the case of a Person which
operates primarily in Canada, has a market
capitalization in excess of 125% of the
market capitalization of RCMCI as at the end
of its most recently completed financial
year ended on or prior to the Relevant Date.
"group of Persons" means Persons who are acting jointly or in concert.
"Initiating Party" has the meaning set out in sections 8.6(b) or
8.7(b), as the case may be.
"Listed Material Competitor" means a Person listed on Schedule "B"
hereto as the same may be revised from time to time pursuant to section
8.4 hereof.
"Non-Designated Material Competitor of AT&T" means a Person who is not
a Designated Material Competitor of AT&T.
"Relevant Date" has the meaning set out in section 8.4 B.(b).
"Relevant Transferee" has the meaning set out in section 8.1(a).
"Responding Party" has the meaning set out in sections 8.6(a) and
8.7(a), as the case may be.
"Section 8.6 Shotgun Notice" has the meaning set out in section 8.6(a).
"Section 8.7 Shotgun Notice" has the meaning set out in section 8.7(a).
"Section 8.6 Specified Purchase Price per Security" has the meaning set
out in section 8.6(a).
"Section 8.7 Specified Purchase Price per Security" has the meaning set
out in section 8.7(a).
8.3 Significant Influence
In this Article 8, a Person or group of Persons ("Person B") will be
deemed to be Significantly Influenced by another Person ("Person A") if:
(a) Person A owns 30% or more of the Voting Shares of Person B
(on a fully diluted basis);
(b) Person A owns 20% or more but less than 30% of the Voting
Shares of Person B (on a fully diluted basis) provided that no
other Person owns more than 50% of the Voting Shares of Person
B (on a fully diluted basis); or
(c) If five or more of the following elements exist:
(i) Person A has the right to nominate management of
Person B such as, without limitation, the Chief
Executive Officer, the Chief Operating Officer, the
Chief Financial Officer, the senior marketing officer
or the senior technology officer;
(ii) Person A is the largest single shareholder of Person
B or holds a sufficient interest in the equity of
Person B to equity account for such investment;
(iii) Person A has the right to nominate 25% or more of the
directors of Person B on the board or similar
governing body of Person B;
(iv) Person A has granted to Person B a licence to use any
of its trade marks or trade names;
(v) Person A has entered into a consulting services
agreement, management services agreement or similar
agreement with Person B;
(vi) Person A has an agreement with Person B for the
purpose of providing seamless services;
(vii) Person A is a member of the same international
telecommunications alliance of which Person B is also
a member; or
(viii) Person A has the right to veto either the capital or
operating budgets of Person B.
8.4 Changes to Schedule "B"
A. Changes Made by JV Shareholder
JV Shareholder shall be entitled by written notice given to
RCI and RCMCI not more than once in each 12 month period following the date of
this Agreement to:
(a) replace up to four Listed Material Competitors with an
equivalent number of Eligible Material Competitors who shall
thereupon become Listed Material Competitors; and
(b) fill any vacancies created on Schedule "B" pursuant to
sections 8.4 B.(a) or (b) with an equivalent number of
Eligible Material Competitors who shall thereupon become
Listed Material Competitors; provided that any vacancies
created on Schedule "B" pursuant to section 8.4 B.(a) may only
be filled to the extent that such vacancies resulted in the
number of Listed Material Competitors being fewer than 20.
B. Other Changes
(a) In the event of the acquisition of all or substantially all of
the assets used in carrying on the business of a Listed
Material Competitor by another Listed Material Competitor, an
amalgamation, merger, arrangement or other business
combination of two or more Listed Material Competitors, then
the acquiring or continuing Person shall be deemed to continue
as a Listed Material Competitor and a vacancy or vacancies
shall be deemed to be created on Schedule "B" with respect to
the Listed Material Competitor or Listed Material Competitors
whose assets were acquired or who was or were amalgamated,
merged or combined with the continuing Person;
(b) A Listed Material Competitor shall be deemed to be deleted
from Schedule "B" and an equivalent vacancy shall be deemed to
be created in Schedule "B" if such Listed Material Competitor
does not qualify to be an Eligible Material Competitor as at
the date of its annual, audited consolidated financial
statements for its financial year which ends next after the
sixth anniversary of the date of this Agreement in the case of
the original Listed Material Competitors or next after the
fifth anniversary of the date of its addition to Schedule "B"
(in the case of a Designated Material Competitor of AT&T which
is added to Schedule "B") (the respective date referred to
being the "Relevant Date");
(c) In the event of the acquisition of all or substantially all
of the assets used in carrying on the business of a Listed
Material Competitor or an amalgamation, merger, arrangement or
other business combination with a Listed Material Competitor,
as contemplated by clause (d) of the definition of Designated
Material Competitor of AT&T in Section 8.2, the Person
acquiring such assets or completing such amalgamation, merger,
arrangement or other business combination may be placed on the
list on Schedule "B" in substitution for the Listed Material
Competitor whose assets such Person acquired or with whom such
Person completed the amalgamation, merger, arrangement or
other business combination (the "Predecessor Listed Material
Competitor"), provided that such Person shall be deemed to
have become a Listed Material Competitor as of the date the
Predecessor Listed Material Competitor became a Listed
Material Competitor.
8.5 Acquisition of Control of RCI by a Designated Material Competitor of
AT&T
In the event that there is an acquisition of Control of RCI by a
Designated Material Competitor of AT&T (an "Acquisition of Control"):
(a) if, in connection with the Acquisition of Control,
(i) JV Shareholder had been given written notice of the
proposed sale of Control of RCI at the earlier of (A)
the earlier of: (i) three Business Days prior to
entering into a written confidentiality,
non-disclosure or similar agreement or commitment
with a Third Party in connection with negotiations
with such Third Party relating to a possible sale of
Control of RCI to such Third Party; or (ii) the date
on which any material confidential information
relating to RCMCI or its subsidiaries is disclosed to
such Third Party; and (B) 30 Business Days prior to
the date that a binding agreement was entered into
with respect to the Acquisition of Control, and
(ii) JV Shareholder was offered the opportunity to
participate as a potential buyer in the process
leading to the sale of Control of RCI on a basis
equivalent to Third Parties who have entered into
negotiations to acquire Control of RCI,
then the provisions of section 8.6 shall apply; or
(b) if, in connection with the Acquisition of Control, JV
Shareholder had not been given the notice in the time referred
to in clause (a)(i) above, or had been given such notice but
had not been offered the opportunity to participate in the
sale process as referred to in clause (a)(ii) above, then the
provisions of section 8.7 shall apply.
For greater certainty, RCI and RCMCI shall not have any obligation to
JV Shareholder to give the notice or to offer the participation in the sale
process referred to in clause (a) above. The only consequence of JV Shareholder
not receiving such notice, or receiving such notice but not the offer to
participate, is that section 8.7 shall be applicable in the event of an
Acquisition of Control.
8.6 Shotgun Rights at FMV plus 5%
(a) Either RCI or JV Shareholder shall have the right but not the
obligation within a period of 90 days following the closing of
an Acquisition of Control to which this section 8.6 applies to
deliver to the other party a notice in writing (the "Section
8.6 Shotgun Notice") offering to purchase all but not less
than all of the Securities of RCMCI owned by the other party
at the purchase price per Security specified in such notice,
payable in cash (the "Section 8.6 Specified Purchase Price per
Security"); provided that the Section 8.6 Specified Purchase
Price per Security may not exceed 105% of the Fair Market
Value per Security of RCMCI. Upon the giving of a Section 8.6
Shotgun Notice, the party receiving such notice (the
"Responding Party") shall thereupon cease to have the right to
give a Section 8.6 Shotgun Notice under this section 8.6
unless the purchase and sale pursuant to the Section 8.6
Shotgun Notice so given is not completed as contemplated by
this section 8.6, other than by reason of the default of the
Responding Party, in which case, the Responding Party shall
thereupon be entitled to give a Section 8.6 Shotgun Notice
under this section 8.6 during the period of 30 days following
the failure of the purchaser to complete any such purchase and
sale.
(b) The Responding Party shall have a period of 30 days from the
date of receipt by the Responding Party of the Section 8.6
Shotgun Notice during which the Responding Party may deliver a
written notice to the party giving the Section 8.6 Shotgun
Notice (the "Initiating Party") either:
(i) accepting the offer to purchase contained in the
Section 8.6 Shotgun Notice and thereby agreeing to
sell all but not less than all the Securities of
RCMCI owned by the Responding Party to the Initiating
Party at the Section 8.6 Specified Purchase Price per
Security; or
(ii) rejecting the offer to purchase set out in the
Section 8.6 Shotgun Notice.
(c) In the event that the Responding Party fails to deliver a
written notice either accepting or rejecting the offer to
purchase on the terms and conditions set out in the Section
8.6 Shotgun Notice, the Responding Party shall be deemed to
have accepted the offer to purchase and to have agreed to sell
all but not less than all the Securities of RCMCI owned by the
Responding Party to the Initiating Party for the Section 8.6
Specified Purchase Price per Security payable in cash.
(d) In the event that the Responding Party delivers a written
notice rejecting the offer to purchase set out in the Section
8.6 Shotgun Notice, the Initiating Party shall thereupon be
deemed to have agreed to sell and the Responding Party shall
thereupon be deemed to have agreed to purchase all and not
less than all of the Securities of RCMCI owned by the
Initiating Party at the Section 8.6 Specified Purchase Price
per Security, payable in cash.
8.7 Shotgun Rights at any Specified Purchase Price per Security
(a) Either RCI or JV Shareholder shall have the right but not the
obligation within a period of 90 days following the closing of
an Acquisition of Control to which this section 8.7 applies to
deliver to the other party a notice in writing (the "Section
8.7 Shotgun Notice") offering to purchase all but not less
than all of the Securities of RCMCI owned by the other party
at the purchase price per Security specified in such notice,
payable in cash (the "Section 8.7 Specified Purchase Price per
Security"). Upon the giving of a Section 8.7 Shotgun Notice,
the party receiving such notice (the "Responding Party") shall
thereupon cease to have the right to give a Section 8.7
Shotgun Notice under this section 8.7 unless the purchase and
sale pursuant to the Section 8.7 Shotgun Notice so given is
not completed as contemplated by this section 8.7, other than
by reason of the default of the Responding Party, in which
case, the Responding Party shall thereupon be entitled to give
a Section 8.7 Shotgun Notice under this section 8.7 during the
period of 30 days following the failure of the purchaser to
complete any such purchase and sale.
(b) The Responding Party shall have a period of 30 days from the
date of receipt by the Responding Party of the Section 8.7
Shotgun Notice during which the Responding Party may deliver a
written notice to the party giving the Section 8.7 Shotgun
Notice (the "Initiating Party") either:
(i) accepting the offer to purchase contained in the
Section 8.7 Shotgun Notice and thereby agreeing to
sell all but not less than all the Securities of
RCMCI owned by the Responding Party to the Initiating
Party at the Section 8.7 Specified Purchase Price per
Security; or
(ii) rejecting the offer to purchase set out in the
Section 8.7 Shotgun Notice.
(c) In the event that the Responding Party fails to deliver a
written notice either accepting or rejecting the offer to
purchase on the terms and conditions set out in the Section
8.7 Shotgun Notice, the Responding Party shall be deemed to
have accepted the offer to purchase and to have agreed to sell
all but not less than all the Securities of RCMCI owned by the
Responding Party to the Initiating Party for the Section 8.7
Specified Purchase Price per Security payable in cash.
(d) In the event that the Responding Party delivers a written
notice rejecting the offer to purchase set out in the Section
8.7 Shotgun Notice, the Initiating Party shall thereupon be
deemed to have agreed to sell and the Responding Party shall
thereupon be deemed to have agreed to purchase all but not
less than all of the Securities of RCMCI owned by the
Initiating Party at the Section 8.7 Specified Purchase Price
per Security, payable in cash.
8.8 Acquisition of Control of RCI by a Non-Designated Material Competitor
of AT&T
In the event that there is an acquisition of Control of RCI by a
Non-Designated Material Competitor of AT&T, the provisions of this Agreement
shall continue in full force and effect, unamended, and the Brand Licence
Agreement shall not be affected by such acquisition of Control of RCI by the
Non-Designated Material Competitor of AT&T.
8.9 Change of Status of Non-Designated Material Competitor of AT&T
In the event that a Non-Designated Material Competitor of AT&T acquires
Control of RCI and at any time after such acquisition such Non-Designated
Material Competitor of AT&T:
(a) becomes Controlled or Significantly Influenced by a Person who
is a Designated Material Competitor of AT&T at the time such
Non-Designated Material Competitor of AT&T becomes so
Controlled or Significantly Influenced;
(b) acquires Control of a Person that is a Designated Material
Competitor of AT&T at the time such Non-Designated Material
Competitor of AT&T acquires Control of such Person; or
(c) becomes an Eligible Material Competitor and is added to
Schedule B pursuant to section 8.4;
then, when either RCI or JV Shareholder becomes aware of the occurrence of one
or more of the events referred to in (a), (b) or (c) of this section 8.9, such
Party shall give written notice to the other Parties and within 90 days of such
notice, either RCI or JV Shareholder may deliver the Section 8.6 Shotgun Notice,
and section 8.6 shall then apply, mutatis mutandis and either Cantel or ACE may
terminate the Brand Licence Agreement in accordance with section 8.11(f),
mutatis mutandis. Notwithstanding the foregoing provisions of this section 8.9,
in the event that, following the occurrence of an event referred to in either
section 8.9(b) or section 8.9(c), the Non-Designated Material Competitor of AT&T
that either acquired Control of a Designated Material Competitor of AT&T under
section 8.9(b) or became an Eligible Material Competitor and is added to
Schedule B under section 8.9(c) provides a written notice to JV Shareholder
within 30 days of the occurrence of either such event ("Divestiture Notice")
that such Non-Designated Material Competitor of AT&T intends to divest or
otherwise transfer to a Person or Persons with whom its deals at arm's length
that is not its Affiliate within a period of not more than 12 months from the
date of the occurrence of the respective event so that, after giving effect to
such divestitures and transfers, such Non-Designated Material Competitor of AT&T
neither Controls a Designated Material Competitor nor is an Eligible Material
Competitor, then neither RCI nor the JV Shareholder shall be entitled to deliver
the section 8.6 Shotgun Notice unless (i) such Non-Designated Material
Competitor of AT&T has not commenced its divestitures and transfers within 90
days of the date of receipt of the Divestiture Notice; or (ii) the necessary
divestitures and transfers are not completed within 12 months from the date of
the occurrence of the respective event under section 8.9(b) or section 8.9(c),
as the case may be.
8.10 Fair Market Value per Security of RCMCI
(a) For the purposes of section 8.6, the Fair Market Value per
Security of RCMCI shall be determined as of the date of the
Acquisition of Control and for the purpose of section 8.9 the
Fair Market Value per Security of RCMCI shall be determined as
of the date upon which the notice of exercise of the Section
8.6 Shotgun Notice is given and, in each case, in accordance
with this section 8.10.
(b) Either RCI or JV Shareholder may at any time appoint an
internationally recognized valuator under this section 8.10 by
written notice (the "appointment notice") to the other
identifying the valuator so appointed. The other may then
appoint a second valuator by written notice to the party which
gave the appointment notice, such written notice appointing a
second valuator to be given within 15 days following receipt
by the other party of an appointment notice. Failing the
appointment of a second valuator by such notice, the valuator
identified in the appointment notice shall be the sole
valuator for all purposes of this section 8.10.
(c) Any valuator appointed under this section 8.10 shall determine
the Fair Market Value per Security of RCMCI pursuant to a
formal valuation prepared in accordance with Ontario
Securities Commission Policy 9.1 (or its successor from time
to time), including independence of the valuator, applying the
valuation rules and practices as have been outlined by the
Canadian Institute of Chartered Business Valuators. Fair
Market Value shall be the maximum monetary consideration that,
in an open and unrestricted market, a prudent and informed
buyer would pay to a prudent and informed seller, each acting
at arm's length with the other and under no compulsion to act.
The valuation shall not include a downward adjustment to
reflect the liquidity of the Securities, the effect of the
transaction on the Securities or the fact that the Securities
may not form part of a Controlling interest.
(d) Each party appointing a valuator under clause (b) shall be
liable for the fees of such valuator.
(e) Immediately upon appointment, the valuator or valuators shall
proceed to determine the Fair Market Value per Security of
RCMCI. Such determination shall be made as expeditiously as
possible and in any event within a period of 60 days following
the appointment of such valuator or valuators. Each valuator
shall specify in its valuation the dollar amount (and not a
range of dollar amounts) which it considers to be the Fair
Market Value per Security of RCMCI.
(f) Upon a determination by a valuator of the Fair Market Value
per Security of RCMCI, the valuator shall give notice in
writing to each of RCI and JV Shareholder that it has
completed its valuation, but without disclosing the amount of
such valuation, and when both valuations (the "initial
valuations") have been completed, the initial valuations shall
be simultaneously delivered to each of RCI and JV Shareholder,
together with reasonable particulars of the basis upon which
such value was determined.
(g) Subject to clause (b) and (h), the Fair Market Value per
Security of RCMCI shall be the average of the Fair Market
Values per Security of RCMCI of the relevant Securities
determined in the initial valuations.
(h) If the Fair Market Value per Security of RCMCI determined by
one valuator in an initial valuation is more than 10% greater
than the Fair Market Value per Security of RCMCI determined by
the second valuator in the other initial valuation, then RCI
and JV Shareholder shall agree as to the appointment of a
third valuator. Failing such agreement, the auditors of RCMCI
(who shall be one of the five largest international firms of
chartered accountants) shall, at the request of either RCI or
JV Shareholder made within seven days following delivery of
the initial valuations to each of RCI and JV Shareholder,
appoint a third valuator who shall be an internationally
recognized valuator. The third valuator shall determine the
Fair Market Value per Security of RCMCI in accordance with
this section 8.10 within 60 days after the date of its
appointment and shall deliver its valuation and reasonable
particulars of the basis upon which such value was determined
to each of RCI and JV Shareholder upon completion. For greater
certainty, the third valuator shall not receive copies of the
initial valuations or be advised of the dollar amounts arrived
at in the initial valuations prior to delivery of the
valuation of the third valuator. The Fair Market Value per
Security of RCMCI for purposes of this section 8.10 shall be
the Fair Market Value determined in the initial valuation
which is closest to the Fair Market Value per Security of
RCMCI as determined by the valuator appointed under this
clause (h). The reasonable fees of the third valuator shall be
borne equally by RCI and JV Shareholder.
(i) The determination of Fair Market Value per Security of RCMCI
pursuant to this section 8.10 shall be final and binding on
RCI and JV Shareholder and shall not be subject to appeal.
(j) Each of RCI and JV Shareholder agrees to co-operate in good
faith with each other and the valuator or valuators to permit
the determination of the Fair Market Value per Security of
RCMCI.
8.11 General
(a) A Section 8.6 Shotgun Notice or a Section 8.7 Shotgun Notice
may not contain any terms and conditions to the offer to
purchase the Securities of RCMCI other than:
(i) the receipt of all necessary regulatory approvals
applicable to the transfer of ownership of the
applicable Securities of RCMCI to the purchaser, on
terms and conditions satisfactory to the purchaser,
acting reasonably, within a period not exceeding 90
days from the making of a Concurrent Offer or, if no
Concurrent Offer is required to be made, 115 days
from the date the relevant agreement of purchase and
sale is entered into or is deemed to be entered into
between the parties; and
(ii) the delivery of the required closing documents by the
parties to transfer to the purchaser legal title to
the Securities of RCMCI to be purchased and sold.
(b) The parties shall agree to co-operate fully in the filing of
all applications for all necessary regulatory approvals and to
use their respective reasonable commercial efforts to obtain
all such necessary regulatory approvals within the relevant
time period referred to in clause (a)(i). In the event that a
necessary regulatory approval is not obtained on terms
satisfactory to the purchaser, acting reasonably, within such
period, the agreement of purchase and sale resulting from
delivery of a Shotgun at FMV Notice or a Shotgun Notice shall
cease to be binding and enforceable with respect to the
purchase and sale of the Securities of RCMCI subject thereto,
without prejudice to any right of the parties to seek damages
for any breach of the terms and conditions of such agreement
or of this Agreement.
(c) Subject to clause (b), the agreement of purchase and sale that
results from the delivery of a Shotgun at FMV Notice or a
Shotgun Notice shall be closed on the fifth Business Day
following receipt of all necessary regulatory approvals.
(d) Any sale of Securities of RCMCI pursuant to the agreement of
purchase and sale that results from the delivery of a Section
8.6 Shotgun Notice or a Section 8.7 Shotgun Notice must not be
prohibited under the Trust Agreement or the JV Trust
Agreement, if applicable. If such sale is prohibited or if the
purchaser having agreed to make a Concurrent Offer fails to
purchase or cause to be purchased the Securities of RCMCI
deposited under such Concurrent Offer, the seller shall be
relieved of all obligations under the agreement of purchase
and sale that results from the delivery of a Section 8.6
Shotgun Notice or a Section 8.7 Shotgun Notice without
liability to the purchaser. The foregoing shall not relieve
the purchaser of any liability arising from any breach of the
terms and conditions of the agreement of purchase and sale or
of this Agreement.
(e) Either RCI or JV Shareholder shall have the right to designate
an Affiliate or a Third Party or Third Parties as the
purchaser of the Securities of RCMCI who in that party's
discretion may be a trustee who will hold the Securities in
trust in order to comply with or pending the receipt of all
necessary regulatory approvals for the transfer of such
Securities to the purchasing party.
(f) In the event that there is an Acquisition of Control, Cantel
and ACE shall each be entitled to cancel in each case without
any liability therefor, the Brand Licence Agreement by written
notice given by the terminating party to the other party
within 60 days following the Acquisition of Control.
ARTICLE 9.
PRE-EMPTIVE RIGHT
9.1 Pre-Emptive Right of JV Shareholder
RCMCI agrees that if RCMCI or any of its subsidiaries issues any Equity
Shares or Convertible Securities (the "Additional Securities") (other than to
another member of the RCMCI Wholly-Owned Group), RCMCI shall, or shall cause its
subsidiary to, contemporaneously with such issuance or promptly thereafter offer
to JV Shareholder the right to subscribe for and purchase a number of such
Additional Securities so that JV Shareholder can maintain the voting and equity
interest in the RCMCI Group (determined on a diluted basis) which JV Shareholder
held immediately prior to the issue of the Additional Securities at the same
cash subscription price (or if the subscription price was paid in property, the
amount added to stated capital of the class of shares of RCMCI being issued in
respect of such property) in respect of such Additional Securities. Such offer
shall be made in writing by RCMCI to JV Shareholder and shall contain a
description of the terms and conditions of the Additional Securities, the price
at which the Additional Securities are to be or have been issued and the number
of Additional Securities which JV Shareholder is entitled to purchase under this
section and the offer shall state that if JV Shareholder wishes to purchase
Additional Securities under this section, it may do so only by giving written
notice of exercise of such right to RCMCI within 30 days following the date of
the offer to JV Shareholder. The offer shall also state that if JV Shareholder
wishes to subscribe for a number of Additional Securities less than the number
to which it is entitled under this section, JV Shareholder may do so and shall,
in the notice of exercise of the offer, specify the number of Additional
Securities that JV Shareholder wishes to purchase. RCMCI shall not be required
to offer to JV Shareholder any securities issuable upon the conversion of, or
otherwise issuable pursuant to, a Convertible Security so long as JV Shareholder
was offered the right to acquire such Convertible Security in accordance with
this section 9.1.
9.2 Non-Applicability of Pre-Emptive Right
The provisions of section 9.1 shall not apply to any issue of Equity
Shares or Convertible Securities:
(a) pursuant to the conversion of Class A Shares into Class B
Shares or pursuant to the exercise of any conversion or
exchange right attached to any currently outstanding
Convertible Security of RCMCI;
(b) to a director, officer or employee of RCMCI pursuant to an
employee stock option plan, employee stock purchase plan or
other employee stock incentive plan of RCMCI provided that the
Equity Shares issuable pursuant to such plans do not exceed
10% of the then outstanding number of Equity Shares.
9.3 Pre-Emptive Right of RCI
RCMCI agrees that RCI shall have a pre-emptive right on the same terms
and conditions as the pre-emptive right granted to JV Shareholder under section
9.1 and the provisions of sections 9.1 and 9.2 shall apply, mutatis mutandis, to
the pre-emptive right granted by RCMCI to RCI under this section 9.3.
ARTICLE 10.
CLOSING PROCEDURES
10.1. Closing Procedures
Except as otherwise expressly provided in this Agreement, if a purchase
and sale of Securities is made pursuant to this Agreement, the following shall
apply:
(a) Payment of Purchase Price and Delivery of Certificates. The
purchase price shall be paid on closing. If the purchase price
is payable in cash, it shall be paid by wire transfer in
immediately available funds or in such other manner as the
Purchaser and Vendor may agree upon. The purchase price shall
be paid against receipt of the share certificate or
certificates representing the Securities or Convertible
Securities being purchased, duly endorsed for transfer in
blank with signatures guaranteed by a Canadian chartered bank
or trust company.
(b) Date and Time of Closing. If the date for completion of any
transaction of purchase and sale falls on a day which is not a
Business Day, the transaction shall be completed on the first
Business Day following such date. Closing shall take place at
11:00 a.m. on the date for completion at the registered office
of RCMCI.
(c) Title. The acceptance by the vendor of payment for the Equity
Shares or Convertible Securities being purchased and sold
shall constitute a representation and warranty by the vendor
that the vendor has good and marketable title to such
Securities or Convertible Securities free and clear of any
Pledge or adverse claim (collectively, the "Liens"), except
the terms of this Agreement and the Related Agreements.
Notwithstanding the foregoing, the vendor shall deliver to the
purchaser all such documents, instruments and releases and
shall do all such acts and things as the purchaser may
reasonably request, whether before or after completion of the
transaction, to vest such title in the purchaser free and
clear of all Liens except the terms of this Agreement and the
Related Agreements.
(d) Failure to Complete Sale. If, at the time of closing, the
vendor shall not complete the sale for any reason, the
purchaser shall have the right to deposit the purchase price
for the Securities or Convertible Securities, if any, to be
purchased and sold for the account of the vendor in an account
with the bankers of RCMCI and such deposit shall constitute
valid and effective payment of the purchase price to the
vendor. Thereafter the purchaser shall have the right to
execute and deliver any deeds, stock transfers, assignments,
resignations, releases and other documents as may, in the
reasonable opinion of the purchaser, be necessary or desirable
in order to complete the transaction. If payment of the
purchase price is so deposited, then from and after the date
of deposit, notwithstanding that certificates or instruments
evidencing the Securities or Convertible Securities may not
have been delivered to the purchaser, the purchase of the
Securities or Convertible Securities shall be deemed to have
been fully completed and the records of RCMCI shall be amended
accordingly and all right, title, benefit and interest, both
at law and in equity, in and to the Securities or Convertible
Securities shall be conclusively deemed to have been
transferred and assigned to and become vested in the purchaser
and all right, title and interest of the vendor and of any
other Person (other than the purchaser) having any interest
therein, legal or equitable, in any capacity whatsoever shall
cease.
ARTICLE 11.
ARBITRATION
11.1. Mediation and Arbitration
Any dispute arising out of or in relation to this Agreement, including
any dispute in relation to its breach, existence, validity or termination, or
whether an issue is arbitrable ("Disputes") which cannot be settled within a
reasonable period of time (not exceeding 30 days from the date of written notice
from any party to another describing the nature of the dispute) through
negotiation, shall be submitted to a sole mediator selected by the Parties or,
at any time at the option of a Party, to mediation by a mediator appointed by
the Arbitration and Mediation Institute of Ontario Inc., (the "AMI"), which
mediation shall be governed by the then-current mediation rules of the AMI. If
not thus resolved, the Dispute shall be referred to a panel of three (3)
arbitrators (none of whom may have any conflict with the issues forming the
subject matter of the arbitration or with the Parties to the arbitration and all
of whom have the required expertise for the issues forming the subject of the
arbitration) selected by the Parties, with one arbitrator to be appointed by
each Party and the third arbitrator to be agreed upon by both RCMCI and JV
within thirty (30) days of the termination of mediation or, in the absence of
such selection, to a panel of three arbitrators appointed by the AMI upon
application of either Party, which arbitration shall be governed by the
Arbitration Act, 1991 (Ontario) and the then-current arbitration rules of the
AMI and judgement on the award may be entered in any court having jurisdiction.
Any mediator or arbitrator selected shall be qualified by education and
experience to decide the matter in dispute and shall deal at arm's length to the
Parties. The arbitrators shall determine issues of arbitrability but may not
award punitive damages or limit, expand or otherwise modify the terms of this
Agreement. The arbitrators shall send a copy of their decision to the Parties as
soon as practicable after conclusion of the final hearing, but in any event no
later than sixty (60) days after the final hearing, unless that time period is
extended for a fixed period by the arbitrators on written notice to each Party
because of illness or other cause beyond the arbitrators' control. The decision
of the arbitrators shall be final and binding on the Parties and shall not be
subject to any appeal or review if the arbitrators have followed the rules of
the AMI and have proceeded in accordance with the principles of natural justice.
The Parties, their representatives, other participants and the mediator and/or
the arbitrators shall hold the existence, content and result of the mediation
and/or arbitration in confidence to the greatest extent permitted by applicable
law.
11.2. Injunctive Relief
Notwithstanding arbitration pursuant to section 11.1 above, the Parties
acknowledge that money damages are not an adequate remedy for violations of this
Agreement and that any Party may, in its sole discretion, apply prior to or
during arbitration pursuant to section 11.1, to a court of competent
jurisdiction for specific performance or injunctive relief on an interim or
interlocutory basis as such court may deem just and proper in order to enforce
this Agreement or prevent any violation hereof at an interim or interlocutory
stage and, to the extent permitted by applicable law, each Party waives any
objection to the imposition of such relief.
ARTICLE 12.
GENERAL PROVISIONS
12.1. Term
This Agreement shall come into force and effect as of the date set out
on the first page of this Agreement and, except as otherwise expressly provided
in this Agreement, shall continue in force until the earliest of:
(a) the 180th day following the date on which JV Shareholder and
any Permitted Transferees first cease to own in the aggregate
at least the JV Threshold Amount provided that JV Shareholder
and any Permitted Transferees cease to own in the aggregate at
least the JV Threshold Amount throughout such 180 day period;
Notwithstanding section 12.1(a), if JV Shareholder shall have
given written notice (the "Purchase Notice") to RCMCI, not
later than 90 days prior to the expiry of such 180 day period,
advising RCMCI of the fact that JV Shareholder and any
Permitted Transferees ceased to own in the aggregate at least
the JV Threshold Amount, setting out details of the then
ownership of Securities by JV Shareholder and its Permitted
Transferees and subscribing to RCMCI at Fair Market Value for
such number of authorized and unissued Class B Shares as is
necessary for JV Shareholder and any Permitted Transferees to
own in the aggregate at least the JV Threshold Amount after
giving effect to such subscription and either (A) RCMCI has
failed to issue such Class B Shares to JV Shareholder or its
Permitted Transferees at such price or (B) such shares have
been issued to JV Shareholder or its Permitted Transferees,
such that JV Shareholder and its Permitted Transferees own at
least the JV Threshold Amount, then this Agreement shall
continue in full force and effect. JV Shareholder shall not be
entitled to give the Purchase Notice if both of AT&T U.S. and
its Affiliates on the one hand, and BT and its Affiliates, on
the other hand, have Transferred Class B Shares (whether
directly or indirectly through JV Shareholder) otherwise than
to the Xxxxxx Group or to Permitted Transferees. Any
Additional Class B Shares issued pursuant to this section
12.1(a) shall not be counted for purposes of determining
whether RCMCI is entitled to exercise its rights to issue
Equity Shares under section 3.1(e)(vi);
(b) having ceased to own in the aggregate at least the JV
Threshold Amount and having thereafter acquired sufficient
Securities to again own in the aggregate at least the JV
Threshold Amount as contemplated in clause (a) above, JV
Shareholder and any Permitted Transferees thereafter cease to
own the JV Threshold Amount;
(c) at any time that JV Shareholder and any Permitted Transferees
cease to own in the aggregate at least 5% of the outstanding
Securities;
(d) in the event JV Shareholder is required to convert its
Securities into Class B Shares in compliance with section 4.4;
and
(e) the date on which this Agreement is terminated by written
agreement of all of the Parties.
12.2. Termination Not to Affect Rights or Obligations
The termination of this Agreement shall not affect or prejudice any
rights or obligations which have accrued or arisen under this Agreement prior to
the time of termination and such rights and obligations shall survive the
termination of this Agreement.
12.3. Notices
Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be given by prepaid first-class mail, by
facsimile or other means of electronic communication or by hand-delivery as
hereinafter provided. If any notice or other communication shall be given by a
method other than facsimile or other means of electronic communication, a copy
of such notice or other communication will be delivered by facsimile as outlined
below but failure to do so will not constitute failure to provide proper notice.
Any such notice or other communication, if mailed by prepaid first-class mail at
any time other than during a general discontinuance of postal service due to
strike, lockout or otherwise, shall be deemed to have been received on the third
Business Day after the post-marked date thereof, or if sent by facsimile or
other means of electronic communication, shall be deemed to have been received
on the day received if received prior to 5:00 p.m. (local time) on a Business
Day, otherwise on the following day that is a Business Day, or if delivered by
hand shall be deemed to have been received at the time it is delivered to the
applicable address noted below either to the individual designated below or to
an individual at such address having apparent authority to accept deliveries on
behalf of the addressee. Notice of change of address shall also be governed by
this section. In the event of a general discontinuance of postal service due to
strike, lock-out or otherwise, notices or other communications shall be
delivered by hand or sent by facsimile or other means of electronic
communication and shall be deemed to have been received in accordance with this
section. Notices and other communications shall be addressed as follows:
(a) if to RCMCI:
Xxxxxx Cantel Mobile Communications Inc.
000 Xxxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Chief Executive Officer
Telecopier: (000) 000-0000
with a copy to:
Xxxxxx Cantel Mobile Communications Inc.
000 Xxxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Chairman of the Board of Directors
Telecopier: (000) 000-0000
and with a copy to:
Tory Xxxx XxxXxxxxxxx & Xxxxxxxxxx
Suite 3000
Xxxxx Xxxxx
X.X. Xxx 000
Xxxxxxx-Xxxxxxxx Xxxxxx
00 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx X.X. Xxxxxx
Telecopier: (000) 000-0000
(b) if to RCI:
Xxxxxx Communications Inc.
000 Xxxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Chief Executive Officer
Telecopier: (000) 000-0000
with a copy to:
Xxxxxx Communications Inc.
000 Xxxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
and with a copy to:
Tory Xxxx XxxXxxxxxxx & Binnington
Suite 3000
Xxxxx Xxxxx
X.X. Xxx 000
Xxxxxxx-Xxxxxxxx Xxxxxx
00 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx X.X. Xxxxxx
Telecopier: (000) 000-0000
(c) if to JV Shareholder:
XX XX
c/o AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx
00000
Attention: Secretary, Xxxxxxx Xxxxxx
Telecopier: (000) 000-0000
and:
c/o British Telecommunications plc
00 Xxxxxxx Xxxxxx
Xxxxxx, XX
XX0X 0XX
Attention: The Solicitor (Ref. CYB)
Telecopier: 44-1-71-356-6151
with a copy to:
Fasken Xxxxxxxx Xxxxxxx
TD Xxxx Xxxxx
X.X. Xxx 00
Xxxxxxx-Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx X. Xxxxxx, Xx.
Telecopier: (000) 000-0000
and to:
Xxxxxxx Xxxxxxxx & Xxxxxxxx
Suite 2400
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxx X. Xxxxxxxx
Telecopier: (000) 000-0000
12.4. Time Limits
The Parties to the Agreement have set the time limits in this Agreement
after due consideration of the amount of time necessary to complete each step
and it is their express desire that no extension of any time limit shall be
granted except in extraordinary circumstances, the onus for the proof of the
existence of which lies on the Party seeking an extension.
12.5. Further Assurances
Each of the Shareholders shall vote and act at all times as a
shareholder of RCMCI and in all other respects to take all such steps, execute
all such documents and do all such acts and things as may be necessary and
within the power of such Shareholder to implement to the full extent the
provisions of this Agreement.
12.6. Counterparts
This Agreement may be signed in counterparts and each of such
counterparts shall constitute an original document and such counterparts, taken
together, shall constitute one and the same instrument.
12.7. Enurement
This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and legal personal
representatives and permitted assigns. Except as otherwise expressly provided in
this Agreement, the rights and benefits under this Agreement may not be
transferred, assigned or delegated to any Person except with the prior written
consent of the Party granting such rights and benefits.
12.8 Transferees bound by this Agreement
In the event of an acquisition of control of RCMCI by a Person who has
assumed the obligations of RCI under this Agreement, references herein to RCI
shall be deemed thereafter to refer to such Person and in the event of a
Transfer to a Permitted Transferee of all of the Securities of RCMCI held,
directly or indirectly, by JV Shareholder, references herein to JV Shareholder
shall be deemed thereafter to refer to such Permitted Transferee.
IN WITNESS WHEREOF the parties have executed this Agreement.
XXXXXX COMMUNICATIONS INC.
/s/ Xxxxxx XxXxxxx
------------------------------
By: Xxxxxx XxXxxxx
Title:
/s/ Xxxxx Xxxxxx
------------------------------
By: Xxxxx Xxxxxx
Title:
JVII PARTNERSHIP
/s/ Xxxxxx Xxxxxxxxx
------------------------------
By: Xxxxxx Xxxxxxxxx
Title:
/s/ Xxxxxxx X. Xxxxx
------------------------------
By: Xxxxxxx X. Xxxxx
Title:
XXXXXX CANTEL MOBILE COMMUNICATIONS INC.
/s/ Xxxxxx XxXxxxx
------------------------------
By: Xxxxxx XxXxxxx
Title:
/s/ Xxxxx Xxxxxx
------------------------------
By: Xxxxx Xxxxxx
Title:
SCHEDULE "A"
OWNERSHIP OF SECURITIES
XXXXXX CANTEL MOBILE COMMUNICATIONS INC.
Class A Shares % Class B Shares %
Xxxxxx Communications Inc. 62,820,371 69.4% --- 0.0%
Public --- 0.0% 19,448,395 59.1%
JVII Partnership 27,647,888 30.6% 13,486,495 40.9%
---------- ------ ---------- ------
90,468,259 100.0% 32,934,890 100.0%
SCHEDULE "B"
LISTED MATERIAL COMPETITORS
1. BCE
2. Telus
3. Call-Net
4. GTE
5. MCI Worldcom
6. Sprint (US)
7. Ameritech
8. BellSouth
9. Clearnet
10. Telesystem
11. Nextel
12. Qwest
13. Global Crossing
14. AOL
15. Cable and Wireless
16. Alltel
17. Vodafone
18. EDS
19. Deutsch Telekom
20. France Telecom
21. XxXxxx USA
22. Orange
23. Telmex
SCHEDULE "C"
PLEDGES OUTSTANDING
The following Pledges are currently outstanding:
(A) the Pledge of RCMCI Class B Restricted Voting Shares (in the
form of RCMCI Class A Multiple Voting Shares) in connection
with the obligations of Rogers Cablesystems Limited
("Cablesystems") under an amended and restated loan agreement
made as of April 2, 1990 and amended and restated on November
26, 1996 and as further amended on April 21, 1997, May 1, 1997
and December 23, 1997; and
(B) security granted by Cantel under the its Amended and Restated
Deed of Trust dated March 15, 1997 between Cantel and National
Trust Company to secure obligations of Cantel under the
following agreements: (1) a Letter Loan Agreement dated
October 31, 0000 xxxxxxx Xxxxxx xxx Xxx Xxxx xx Xxxx Xxxxxx as
amended on March 30, 1992 re a Cdn.$10,000,000 overdraft
(operating) credit facility; (2) Amended and Restated Credit
Agreement dated as of March 15, 1997 between Cantel and The
Bank of Nova Scotia, as administrative agent, and others re a
Cdn.$800,000,000 revolving credit facility; (3) Indenture
dated as of May 30, 1996 among Cantel, Chemical Bank and The
R-M Trust Company re Cdn.$160,000,000 10 1/2% Senior Secured
Notes due 2006; (4) Indenture dated as of May 30, 1996 among
Cantel, Chemical Bank and The R-M Trust Company re
US$510,000,000 9-3/8% Senior Secured Debenture due 2008; (5)
Indenture dated as of May 30, 1996 among Cantel, Chemical Bank
and The R-M Trust Company re US$175,000,000 9 3/4% Senior
Secured Debentures due 2016; (6) Indenture dated as of
September 30, 1997 among Cantel, The Chase Manhattan Bank and
CIBC Mellon Trust Company re US$275,000,000 8.30% Senior
Secured Notes due 2007; and (7) Indenture dated as of
September 30, 1997 among Cantel, The Chase Manhattan Bank and
CIBC Mellon Trust Company re US$215,000,000 8.8% Senior
Subordinated Notes due 2007.
SCHEDULE "D"
[LETTERHEAD OF RCMCI]
CONFIDENTIALITY AGREEMENT
[Date]
Xxxxxx Communications Inc.
000 Xxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Chief Executive Officer
[Purchaser]
Dear Sirs:
We understand that Xxxxxx Communications Inc. or its affiliates ("RCI") are
considering the possibility of a sale of |X| Class A Multiple Voting Shares
[and/or other securities] of RCMCI to |X| ("Purchaser"). In connection with such
potential sale, RCMCI agreed in the shareholders agreement dated August 16, 1999
(the "Shareholders' Agreement") among such parties and RCMCI that if it
furnished to the Purchaser information which is either non-public, confidential
or proprietary in nature in order to permit the Purchaser to carry out
reasonable due diligence with respect to RCMCI it would obtain a confidentiality
agreement in the form of this letter. The purpose of this letter agreement is to
set out the agreement of RCMCI, RCI and the Purchaser with respect to the
disclosure, provision and use of such information.
For the purposes of this agreement, "Confidential Information" means any
and all information supplied or communicated (either orally or in writing) by
RCMCI to the Purchaser including information designated as confidential, or
which ought to be considered as confidential from its nature or from the
circumstances surrounding its disclosure or which is acquired by inspection.
Confidential Information includes, without limiting the generality of the
foregoing, information:
1. relating to RCMCI's software or hardware products and services, or
to its research and development projects or plans; and
2. relating to RCMCI's business policies, strategies, operations,
finances, plans or opportunities including the identity of, or
particulars about, RCMCI's customers, clients or suppliers.
SECTION 1 - RCMCI CONFIDENTIAL INFORMATION
All of RCMCI's Confidential Information provided or communicated to the
Purchaser, its directors, officers, employees, agents, or representatives,
including, without limitation, its lawyers, accountants, consultants or
financial advisors (all of such persons other than the Purchaser are
collectively referred to as "representatives") shall remain the exclusive and
confidential property of RCMCI. The Purchaser shall not disclose, or allow to be
disclosed, RCMCI's Confidential Information to any person other than the
Purchaser's representatives as permitted under this Agreement. The Purchaser
agrees to take all reasonable steps (including those steps the Purchaser takes
to protect its own information, data or tangible or intangible property which it
regards as confidential) to ensure the confidentiality of RCMCI's Confidential
Information including, without limitation, requiring its representatives to
agree to be bound by the provisions of this Agreement prior to the disclosure of
any such Confidential Information to any such representative. The Purchaser
shall allow access to RCMCI's Confidential Information to representatives only
on a need-to-know basis. The Purchaser agrees that Confidential Information
which consists of competitively sensitive information may be made available by
RCMCI to the Purchaser subject to such additional restrictions and pursuant to
such other arrangements as RCMCI may determine. Except as otherwise required by
law, the Purchaser agrees to keep confidential the fact that Confidential
Information is being provided to it under this Agreement, that this Agreement
has been entered into or that the Purchaser is considering the possible purchase
by it from RCI of securities of RCMCI.
SECTION 2 - USE OF CONFIDENTIAL INFORMATION
The Purchaser agrees that it will not use, nor will it permit
any person to whom disclosure is permitted under this Agreement to use, any
Confidential Information other than for the purpose of evaluating a purchase of
securities of RCMCI from RCI.
SECTION 3 - PERMITTED DISCLOSURE AND USE
The provisions of Section 1 and 2 shall not apply to and Confidential
Information shall not include:
(i) information that is in the public domain other than
as a consequence of a breach of the obligations
contained in this Agreement to maintain the
confidentiality of Confidential Information;
(ii) information that is known by the Purchaser prior to
the disclosure to the Purchaser without any other
obligation of confidentiality to RCMCI or is
independently developed by the Purchaser without use
of the Confidential Information or breach of the
obligations contained in this Agreement; and
(iii) information that has been received by the Purchaser
from a third party who is not subject to obligations
similar to the obligations contained in this
Agreement.
SECTION 4 - PROVISION AND RETURN OF CONFIDENTIAL INFORMATION
Unless otherwise agreed to in writing by RCMCI, the Purchaser shall:
(i) return or cause to be returned to RCMCI all copies of
the Confidential Information in its possession or in
the possession of its representatives (which are not
destroyed pursuant to clause (ii) of this section 4);
and
(ii) destroy all copies of any analyses, compilations,
studies or other documents prepared by the Purchaser
or for the Purchaser's use containing, incorporating
or reflecting any Confidential Information;
before the close of business 24 hours following the date of any written
request by RCMCI to the Purchaser to return or destroy the Confidential
Information. The Purchaser shall certify to RCMCI in writing of its compliance
with this section forthwith after having so complied. For purposes of this
section, "document" means any embodiment of Confidential Information in any
physical or ephemeral form, including any and all papers, reproductions,
slides and microfilms and any electronic media such as disks, tapes, other
magnetic media, computer software and computer storage systems containing any
Confidential Information and, where this Agreement calls for any document to
be destroyed, in the case of electronic media that can be erased, such
obligation means that such document shall be permanently erased.
SECTION 5 - COURT ORDERS
In the event that the Purchaser or anyone else to whom Confidential
Information is provided as permitted by this Agreement receives notice
indicating that it may or will be legally compelled to disclose any of the
Confidential Information to any person other than as permitted by this
Agreement, the Purchaser shall provide RCMCI with prompt notice so that RCMCI
may seek a protective order or other appropriate remedy and/or waive compliance
with the provisions of this Agreement. In the event that such protective order
or other remedy is not obtained for whatever reason, or that RCMCI waives
compliance with the provisions of this Agreement, such compelled person will
furnish only that portion of the information in respect of which it is advised
by written opinion of counsel that it is legally required to disclose and will
exercise its best efforts to obtain reliable assurances that confidential
treatment will be accorded such Confidential Information. Such compelled
disclosure of Confidential Information by the Purchaser will not constitute a
breach of this Agreement.
SECTION 6 - SPECIFIC PERFORMANCE
RCI and the Purchaser understand and agree that this Agreement is separate
and independent of any agreement which has been or is entered into by RCI and
the Purchaser. The existence of any claim or cause of action by RCI or the
Purchaser against the other, whether predicated on such other agreements or
otherwise, shall not constitute a defence to the enforcement by RCMCI of any of
the covenants and agreements contained in this Agreement. The parties hereto
agree that failure to comply with the provisions of this Agreement may cause
irreparable harm to RCMCI and accordingly agree that any court having
jurisdiction may enter a preliminary and/or permanent restraining order,
injunction or order for specific performance in the event of actual or
threatened breach of any of the provisions of this Agreement in addition to
imposing any other remedies available.
SECTION 7 - NO REPRESENTATION OR WARRANTIES REGARDING CONFIDENTIAL INFORMATION
The Purchaser acknowledges that any Confidential Information provided to it
under this Agreement is given without any liability whatsoever on the part of
RCMCI or RCI or their respective directors, officers or employees and that no
representation or warranty is made with respect to such Confidential Information
by RCMCI, RCI or their respective directors, officers or employees and the
Purchaser acknowledges that RCMCI shall have no obligation whatsoever to update
or supplement the Confidential Information. Except as hereinafter provided, each
of RCI and the Purchaser agrees not to assert or allege the existence of any
representation, warranty or agreement by RCMCI or its directors, officers or
employees as a result of the provision of Confidential Information. RCMCI shall
have liability only in respect of those representations, warranties and
agreements which are made in writing by RCMCI and duly executed by it.
SECTION 8 - LIABILITY FOR BREACH OF AGREEMENT BY REPRESENTATIVES
The Purchaser agrees to be responsible for any breach of this Agreement by
any of its representatives.
SECTION 9 - PROVISIONS DISTINCT AND SEVERABLE
Each of the provisions contained in the Agreement is distinct and severable
and a declaration of invalidity or unenforceability of any such provision or
part thereof by a court of competent jurisdiction shall not affect the validity
or enforceability of any other provision hereof.
SECTION 10 - GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein.
Yours very truly,
XXXXXX CANTEL MOBILE COMMUNICATIONS INC.
by:
Accepted and agreed to as of the date set forth above.
XXXXXX COMMUNICATIONS INC.
by:
[Purchaser]
by:
