Exhibit 10.33
SHARE EXCHANGE AGREEMENT
BY AND AMONG
WORLDWIDE FIBER INC.
AND
CANADIAN NATIONAL RAILWAY COMPANY
DATED AS OF
MARCH 6, 2000
TABLE OF CONTENTS
Page
SECTION 1 - EXCHANGE FOR CLASS A NON-VOTING SHARES................................................................1
1.1 The Exchange....................................................................................1
1.2 The Closing.....................................................................................2
1.3 Deliveries at the Closing.......................................................................2
1.4 Adjustments.....................................................................................3
SECTION 2 -REPRESENTATIONS AND WARRANTIES OF THE CORPORATION......................................................7
SECTION 3 -REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS OF CN..................................................9
SECTION 4 -OTHER COVENANTS.......................................................................................12
4.1 Cooperation by Parties; Satisfaction of Closing Conditions.....................................12
4.2 Shareholders Agreement and Registration Rights Agreement.......................................13
4.3 Amendments to Side Letters.....................................................................13
4.4 Restrictions on Conversion into Voting Shares..................................................13
4.5 Access to Records..............................................................................14
4.6 Financial Statements...........................................................................14
4.7 Consent to Amendment to Articles of the Corporation............................................14
SECTION 5 -CONDITIONS TO THE EXCHANGE............................................................................15
5.1 Conditions to Obligations of Each Party........................................................15
5.2 Conditions to Obligations of CN................................................................15
5.3 Conditions to the Obligations of the Corporation...............................................16
SECTION 6 -DELETED...............................................................................................17
SECTION 7 -SURVIVAL OF REPRESENTATIONS, WARRANTIES, AGREEMENTS AND COVENANTS, ETC................................17
SECTION 8 -EXPENSES..............................................................................................17
SECTION 9 -CALL OPTION...........................................................................................17
9.1 Call Option....................................................................................17
9.2 Closing of Call Option.........................................................................17
SECTION 10 -CONFIDENTIALITY......................................................................................19
SECTION 11 -UNDERWRITTEN OFFERING -LOCK -UP OF SHARES............................................................20
SECTION 12 -REMEDIES.............................................................................................22
SECTION 13 -FURTHER ASSURANCES...................................................................................22
SECTION 14 -SUCCESSORS AND ASSIGNS...............................................................................22
SECTION 15 -ENTIRE AGREEMENT.....................................................................................22
SECTION 16 -NOTICES..............................................................................................22
SECTION 17 -AMENDMENTS...........................................................................................23
SECTION 18 -COUNTERPARTS.........................................................................................23
SECTION 19 -HEADINGS.............................................................................................24
SECTION 20 -NOUNS AND PRONOUNS...................................................................................24
SECTION 21 -GOVERNING LAW........................................................................................24
SECTION 22 -CURRENCY.............................................................................................24
SECTION 23 -NO PARTNERSHIP.......................................................................................24
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INDEX OF DEFINED TERMS
1933 Act.............................................................................................Section 3(b)
Actual Michel's Roll-up Number.......................................................................Section 1.4(a)
Actual Number of Issue Event Shares..................................................................Section 1.4(a)
Additional Shares....................................................................................Section 1.4(a)
Affiliate............................................................................................Section 1.4(a)
Agreement..................................................................................................recitals
Articles...................................................................................................recitals
Assumed Michel's Roll-up Number......................................................................Section 1.4(a)
Assumed Number of Issue Event Shares.................................................................Section 1.4(a)
Below Market Employee Shares.........................................................................Section 1.4(a)
Business Day............................................................................................Section 1.2
Call Option.............................................................................................Section 9.1
Call Price..............................................................................................Section 9.1
Canadian Securities Laws...............................................................................Section 3(h)
Class A Non-Voting Shares..................................................................................recitals
Closing Date............................................................................................Section 1.2
Closing.................................................................................................Section 1.2
CN.........................................................................................................recitals
CN Shares...............................................................................................Section 1.1
CN WFI-CN Shares ..........................................................................................recitals
Common Share Equivalents.............................................................................Section 1.4(a)
Common Shares..........................................................................................Section 2(d)
Corporation................................................................................................recitals
Encumbrance............................................................................................Section 3(n)
Exchange................................................................................................Section 1.1
Governmental Authority.................................................................................Section 2(g)
HSR Act..............................................................................................Section 4.4(b)
IPO Price............................................................................................Section 1.4(d)
IPO Shares...........................................................................................Section 1.4(d)
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IPO..................................................................................................Section 1.4(d)
Joinder Agreement ......................................................................................Section 4.2
Lapsed Option........................................................................................Section 1.4(a)
Litigation...............................................................................................Section 21
Xxxxxx Purchase ......................................................................................Schedule 2(d)
Xxxxxxx Roll-Up Transaction............................................................................Schedule 1.4
Permitted Assigns Section 14
Permitted Option ....................................................................................Section 1.4(a)
Permitted Reissue Option................................................................................Section 1.4
Person.................................................................................................Section 2(g)
Preferred Share Purchase Agreement.....................................................................Schedule 1.4
Preferred Shares.......................................................................................Section 2(d)
Registration Rights Agreement...........................................................................Section 4.2
Sale.....................................................................................................Section 11
Share Reorganization.................................................................................Section 1.4(e)
Shareholders Agreement..................................................................................Section 4.2
Shares.................................................................................................Section 2(d)
Stock Compensation Plan..............................................................................Section 1.4(a)
Time of Closing......................................................................................Section 9.3(a)
Transaction Documents..................................................................................Section 2(b)
WFI-CN.....................................................................................................recitals
WFI-CN Shareholder Agreement...........................................................................Section 3(n)
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SCHEDULES
Schedule B Articles of the Corporation
Schedule 1.4 Estimated Number of Shares to be Issued in Respect of
the Xxxxxxx Roll-up Transaction
Schedule 2(d) Outstanding Common Shares, Preferred Shares and Common
Shares Equivalents
Schedule 3 U.S. Representations & Warranties
Schedule 4.2(a) Joinder Agreement
Schedule 4.2(b) Registration Rights Agreement
Schedule 4.3(a) Surviving IC Side Letter Terms
Schedule 4.3(b) Surviving CN Side Letter Terms
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WORLDWIDE FIBER INC.
and
CANADIAN NATIONAL RAILWAY COMPANY
SHARE EXCHANGE AGREEMENT
THIS AGREEMENT, dated as of March 6, 2000 (as amended from time to
time, this "AGREEMENT") is entered into, by and among WORLDWIDE FIBER INC., a
Canadian corporation (the "CORPORATION"), and CANADIAN NATIONAL RAILWAY COMPANY,
a corporation continued under the laws of Canada ("CN").
WITNESSETH:
WHEREAS:
A. CN is the holder of 25 Class A common shares (the "CN WFI-CN SHARES")
in the capital stock of WFI-CN Fibre Inc., a Canadian corporation ("WFI-CN");
B. CN has agreed to exchange the CN WFI-CN Shares and $20 million for a
total of 7,460,433 fully paid and non-assessable Class A Non-Voting Shares (the
"CLASS A NON-VOTING SHARES") in the capital stock of the Corporation, having the
terms set forth in the Articles (the "ARTICLES") of the Corporation in effect on
the date hereof, a copy of which is attached hereto as Schedule B.
ACCORDINGLY, the parties hereto hereby agree as follows: SECTION 1-
EXCHANGE FOR CLASS A NON-VOTING SHARES
1.1 THE EXCHANGE.
Subject to the terms and conditions set forth in this agreement, at the
Closing, CN shall transfer to the Corporation the CN WFI-CN Shares (which the
parties agree and declare have a value of $40 million) and pay to the
Corporation $20 million, and the Corporation shall issue to CN, in exchange
therefor, 7,460,433 Class A Non-Voting Shares (the "EXCHANGE"), subject to
adjustment as set forth in Section 1.4 (such Class A Non-Voting Shares or other
shares into which such Class A Non-Voting Shares have been converted, exchanged,
reclassified or recapitalized, together with all Class A Non-Voting Shares
issued or to be issued to CN and less any shares surrendered or to be
surrendered by CN to the Corporation pursuant to an adjustment made or to be
made pursuant to Section 1.4, all as the same may be subdivided, redivided,
consolidated, combined or reduced from time to time, and including any shares
issued thereon by way of a stock dividend or other distribution, are herein
called the "CN SHARES"). For greater clarity, the aggregate issue price of the
CN Shares shall be $60 million.
1.2 THE CLOSING.
Subject to the terms and conditions set forth in this agreement, the
closing of the Exchange (the "CLOSING") shall take place at the offices of
Xxxxxxx & Xxxxxx, 21st Floor, 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx on March 6, 2000 or such other Business Day as may be agreed to in
writing by each of the parties hereto (the "CLOSING DATE"). For purposes of this
agreement, "BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
when commercial banks in Vancouver, British Columbia are required to be closed.
1.3 DELIVERIES AT THE CLOSING (a) At the Closing, and each time Class A
Non-Voting Shares are issued to CN pursuant to Section 1.4, the Corporation
shall deliver to CN a certificate or certificates representing the Class A
Non-Voting Shares to be issued to CN in the Exchange or pursuant to Section 1.4,
as the case may be, registered in the name of CN, against, in the case of the
Class A Non-Voting Shares issued at the Closing, delivery at the Closing by CN
of payment of $20 million and certificates for the CN WFI-CN Shares, accompanied
by such documents and instruments of transfer necessary or required to transfer
the CN WFI-CN Shares, on the books of WFI-CN, into the name of the Corporation.
Each certificate representing CN Shares shall bear a legend containing
the following words:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN QUALIFIED
FOR PUBLIC DISTRIBUTION IN CANADA AND HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH APPLICABLE CANADIAN
SECURITIES LAWS AND THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED.
IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO THE RESTRICTIONS ON TRANSFER SET FORTH IN THE SHAREHOLDERS
AGREEMENT, DATED AS OF SEPTEMBER 9, 1999, AS AMENDED, BY THE
CORPORATION AND THE PARTIES THERETO, A COPY OF WHICH IS ON FILE IN THE
OFFICE OF THE CORPORATION.
The requirement that the above securities legend be placed upon certificates
evidencing any such securities shall cease and terminate upon the earliest of
the following events: (a) when such securities are transferred in an initial
public offering; (b) when such securities are transferred pursuant to Rule 144
under the 1933 Act; or (c) when such securities are transferred in any other
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transaction if the seller delivers to the Corporation an opinion of its counsel,
which counsel and opinion shall be reasonably satisfactory to the Corporation to
the effect that such legend is no longer necessary in order to protect the
Corporation against a violation by it of applicable securities laws upon any
sale or other disposition of such securities without registration thereunder.
The requirement that the above legend regarding the Shareholders Agreement be
placed upon certificates evidencing any such securities shall cease and
terminate upon the termination of the Shareholders Agreement. Upon the
occurrence of any event requiring the removal of a legend hereunder, the
Corporation, upon the surrender of certificates containing such legend, shall,
at its own expense, deliver to the holder of any such securities as to which the
requirement for such legend shall have terminated, one or more new certificates
evidencing such securities not bearing such legend.
(b) At the Closing, the Corporation will deliver to CN, and CN will
deliver to the Corporation, the various certificates, instruments and documents
referred to in Section 5.
1.4 ADJUSTMENTS
(a) If at any time after the Closing and prior to the closing of the
issue of IPO Shares pursuant to the IPO, the Actual Number of Issue Event Shares
on an Adjustment Date:
(i) is greater than 110% of the Assumed Number of Issue Event
Shares, or
(ii) is less than 90% of the Assumed Number of Issue Event Shares,
then the Corporation shall promptly thereafter advise CN by notice in writing of
the occurrence of such event and:
(iii) if the Actual Number of Issue Event Shares is greater than
110% of the Assumed Number of Issue Event Shares, then the
Corporation will issue to CN for no additional payment by CN to the
Corporation and as an adjustment to the number of Class A
Non-Voting Shares to be issued to CN in the Exchange, (A) that
number of Class A Non-Voting Shares equal to (2.040816% of that
number which is the Actual Number of Issue Event Shares less the
Assumed Number of Issue Event Shares) (B) less the aggregate number
of Class A Non-Voting Shares issued pursuant to this subsection
1.4(a)(iii) prior to such time, (C) plus the aggregate number of
Class A Non-Voting Shares surrendered pursuant to subsection
1.4(a)(iv) prior to such time; and
(iv) if the Actual Number of Issue Event Shares is less than 90% of
the Assumed Number of Issue Event Shares, then CN will surrender to
the Corporation for cancellation and without further consideration,
as an adjustment to the number of Class A Non-Voting Shares to be
issued in the Exchange, (A) that number of Class A Non-Voting
Shares equal to (2.040816% of that number which is the Assumed
Number of Issue Event Shares less the Actual Number of Issue Event
Shares) (B) less the aggregate number of Class A Non-Voting Shares
surrendered pursuant to this subsection 1.4(a)(iv) prior to such
time, (C) plus the
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aggregate number of Class A Non-Voting Shares issued pursuant to
subsection 1.4(a)(iii).
If the Adjustment Date is on the occurrence of the IPO, then such issuance or
surrender shall be effected immediately prior to the IPO as soon as practicable
thereafter. If CN sells all of the CN Shares in a sale permitted under this
Agreement and the Other Transaction Documents, the obligations of the
Corporation and CN under this Section 1.4(a) shall terminate. If CN sells part
of the CN Shares prior to an Adjustment Date in a sale permitted under this
Agreement and the Other Transaction Documents, then the number of Shares to be
issued by the Corporation under subsection 1.4(a)(iii) or surrendered by CN
under subsection 1.4(a)(iv) shall be multiplied by a fraction, the numerator of
which is the number of CN Shares held by CN on the Adjustment Date, and the
denominator of which is the original number of CN Shares, as previously adjusted
under this subsection 1.4(a) and under subsection 1.4(e).
On the date of the IPO, or immediately prior to the IPO, the Corporation shall
give notice in writing to CN specifying the Actual Number of Issue Event Shares.
For purposes of this agreement:
"ACTUAL NUMBER OF ISSUE EVENT SHARES" means, at an Adjustment Date, the Assumed
Number of Issue Event Shares:
(i) plus the number of any Common Shares or Common Share
Equivalents issued by the Corporation after December 16, 1999 as
Below Market Employee Shares, subject to adjustment as set forth in
subsection 1.4(e); and
(ii) in respect of the Xxxxxxx Roll-up Transaction, if the actual
number of Common Shares or Common Share Equivalents issued in
respect of the Xxxxxxx Roll-up Transaction, including Preferred
Shares issued pursuant to the Preferred Share Purchase Agreement as
a result of the Xxxxxxx Roll-up Transaction (subject to adjustment
as set forth in subsection 1.4(e), collectively the "ACTUAL XXXXXXX
ROLL-UP NUMBER") exceeds the sum of the totals of the Common Shares
and Preferred Shares shown on Schedule 1.4 as having been assumed,
for the purposes of this Agreement, to be issued in respect of the
Xxxxxxx Roll-up Transaction, including pursuant to the Preferred
Share Purchase Agreement as a result of the Xxxxxxx Roll-up
Transaction (subject to adjustment as set forth in subsection
1.4(e), collectively the "ASSUMED XXXXXXX ROLL-UP NUMBER"), then
plus the amount by which the Actual Xxxxxxx Roll-up Number exceeds
the Assumed Xxxxxxx Roll-up Number or, if the Actual Xxxxxxx
Roll-up Number is less than the Assumed Xxxxxxx Roll-up Number,
then less the amount by which the Actual Xxxxxxx Roll-up Number is
less than the Assumed Xxxxxxx Roll-up Number.
"ADJUSTMENT DATE" means the date of the closing of the IPO and, if the IPO has
not then occurred, June 30, 2000, September 30, 2000, December 31, 2000, and
March 31, June 30, September 30 and December 31 of each year thereafter until
the earlier of the occurrence of the IPO or December 31, 2002.
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"AFFILIATE" of any Person means any partnership, corporation, trust, or other
organization which is controlled by or under common control of such Person.
"ASSUMED NUMBER OF ISSUE EVENT SHARES" means, subject to adjustment as set forth
in subsection 1.4(e), 64,682,963 Common Shares, being the aggregate of (a) the
number of Common Share Equivalents issued and outstanding as at December 16,
1999 in respect of employee, executive and incentive plans, as described in
Schedule 2(d); (b) the number of Shares issued pursuant to the Xxxxxx Purchase
as described in Schedule 2(d); (c) the number of Shares issued in respect of the
Xxxxxx Purchase pursuant to the Preferred Share Purchase Agreement, as described
in Schedule 2(d); (d) the number of Shares assumed, for the purposes of this
Agreement, to be issued under the Xxxxxxx Roll-up Transaction, as described in
Schedule 1.4; and (e) the number of Shares assumed, for the purposes of this
Agreement, to be issued in respect of the Xxxxxxx Roll-up Transaction under the
Preferred Share Purchase Agreement, as described in Schedule 1.4.
"BELOW MARKET EMPLOYEE SHARES" means any Common Shares or Common Share
Equivalents issued to directors, officers, employees or consultants of the
Corporation or its subsidiaries, other than as, or pursuant to, Permitted
Options or Permitted Reissue Options.
"COMMON SHARE EQUIVALENT" means all outstanding warrants, options, agreements,
convertible securities or other commitments or outstanding securities
convertible into, or exchangeable or exercisable for Common Shares.
"LAPSED OPTION" means any stock option issued by the Corporation pursuant to a
Stock Compensation Plan, which after the date hereof, lapses or terminates
without being converted or exercised.
"PERMITTED OPTION" means any Common Share Equivalent issued under the terms of
any stock compensation plan of the Corporation approved by the board of
directors of the Corporation (a "STOCK COMPENSATION PLAN") provided that the
issue price of any Common Share to be issued pursuant to any Common Share
Equivalent issued or agreed to be issued by the Corporation after the date
hereof pursuant to any Stock Compensation Plan is not less than the fair market
value of such Common Share as determined by the board of directors of the
Corporation as at the time of the issue by the Corporation of, of the agreement
by the Corporation to issue, such Common Share Equivalent.
"PERMITTED REISSUE OPTION" means any Common Share Equivalent issued in
accordance with a Stock Compensation Plan then in effect to replace any Lapsed
Option with a conversion or exercise price equal to or greater than the
conversion or exercise price of the Lapsed Option (as adjusted to reflect any
stock split, stock dividend, combination, reorganization, reclassification or
other similar event involving Common Shares) and a term no longer than the
original term of the Lapsed Option.
(b) Any Class A Non-Voting Shares and Common Shares issued to CN or
surrendered by CN pursuant to this Section 1.4 shall be treated as if they were
issued or surrendered, as the case may be, on December 16, 1999 and shall
reflect any dividends or other
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distributions which would have accrued or have been payable with respect to and
the application of any anti-dilution, ratable treatment or similar provisions as
set forth in the Articles, applicable law or otherwise which would have been
applicable to such Class A Non-Voting Shares and Common Shares had they been
issued or surrendered, as the case may be, on December 16, 1999.
(c) Any Class A Non-Voting Shares or Common Shares issued to CN
pursuant to this Section 1.4 shall, when issued, be validly issued and fully
paid and nonassessable with no personal liability attaching to the ownership
thereto.
(d) Notwithstanding the provisions of subsection 1.4(a), if, at the
time of the initial sale of any shares ("IPO SHARES") in the capital stock of
the Corporation by the Corporation pursuant to a BONA FIDE underwritten public
offering made pursuant to (i) a final prospectus (for which a receipt or
receipts have been obtained) under Canadian Securities Laws and/or (ii) an
effective registration statement filed under the 1933 Act, as amended
(collectively an "IPO"), the value of the CN Shares is less than US$ 100 million
or more than US$ 160 million (such value being determined by multiplying the
number of CN Shares by the price to the public (the "IPO PRICE") per IPO Share
issued in the IPO), then, (y) if the value of the CN Shares on the basis of the
IPO Price is less than US$ 100 million, then the Corporation will issue to CN,
for no additional payment by CN to the Corporation and as an adjustment to the
number of Class A Non-Voting Shares to be issued in the Exchange, that number of
Class A Non-Voting Shares as is required so that, immediately after giving
effect to such issue, the value of the CN Shares, determined as aforesaid on the
basis of the IPO Price, is US$ 100 million; and (z) if the value of the CN
Shares on the basis of the IPO Price is more than US$ 160 million, then CN will
surrender to the Corporation for cancellation and without further consideration,
as an adjustment to the number of Class A Non-Voting Shares to be issued in the
Exchange, that number of Class A Non-Voting Shares as is required so that,
immediately after giving effect to such surrender and cancellation, the value of
the CN Shares, determined as aforesaid on the basis of the IPO Price, is US$160
million.
(e) If and whenever at any time prior to the IPO the Corporation shall
(a) subdivide or redivide any outstanding Class A Non-Voting Shares into a
greater number of Class A Non-Voting Shares, (b) consolidate, combine or reduce
any outstanding Class A Non-Voting Shares into a lesser number of Class A
Non-Voting Shares, or (c) issue any shares of Class A Non-Voting Shares to all
or substantially all of the holders of Class A Non-Voting Shares by way of a
stock dividend or other distribution (any of such events being called a "Share
Reorganization"), then, in each such event:
(i) the Assumed Number of Issue Event Shares, as previously
adjusted under this subsection 1.4(e);
(ii) the number of Common Shares or Common Share Equivalents issued
by the Corporation (to the extent that such Common Share
Equivalents do not automatically adjust on the occurrence of such
Share Reorganization) as Below Market Employee Shares after
December 16, 1999 and prior to the occurrence of such Share
Reorganization, as previously adjusted under this subsection
1.4(e);
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(iii) the Actual Xxxxxxx Roll-up Number, if Common Shares or Common
Share Equivalents are issued as a result of the Xxxxxxx Roll-up
Transaction prior to the occurrence of such Share Reorganization,
as previously adjusted under this subsection 1.4(e);
(iv) the Assumed Xxxxxxx Roll-up Number, as previously adjusted
under this subsection 1.4(e); and
(v) the original number of CN Shares, as described in subsection
1.4(a), as previously adjusted under this subsection 1.4(e),
shall each be adjusted by a fraction, of which the numerator shall be the total
number of Class A Non-Voting Shares outstanding on such date after giving effect
to such Share Reorganization, and of which the denominator shall be the total
number of Class A Non-Voting Shares outstanding on such date before giving
effect to such Share Reorganization. Each such adjustment will be made
successively whenever any such Share Reorganization shall occur.
SECTION 2 - REPRESENTATIONS AND WARRANTIES OF THE CORPORATION.
The Corporation hereby represents and warrants to CN as of the
date hereof and, unless otherwise provided, as of the Closing Date as follows:
(a) The Corporation is a corporation, duly organized, validly existing
and in good standing under the CANADA BUSINESS CORPORATIONS ACT, and has all
requisite corporate power and authority to enter into and carry out the
transactions contemplated by this agreement.
(b) The execution and delivery by the Corporation of this agreement,
the Joinder Agreement and the Registration Rights Agreement (collectively, the
"TRANSACTION DOCUMENTS") and the performance by the Corporation of its
obligations hereunder and thereunder has been duly authorized by all requisite
corporate action on the part of the Corporation. Each Transaction Document
constitutes a legal, valid and binding agreement of the Corporation, enforceable
against the Corporation in accordance with its terms except to the extent that
enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally and by equitable principles generally,
whether enforced in a court of law or at equity.
(c) The execution, delivery and performance by the Corporation of the
Transaction Documents and the consummation by the Corporation of the
transactions contemplated thereby will not (a) violate any provision of law,
statute, rule or regulation, or any ruling, writ, injunction, order, judgment or
decree of any court, administrative agency or other governmental body applicable
to it, or any of its properties or assets; (b) conflict with or result in any
breach of any of the terms, conditions or provisions of, or constitute (with due
notice or lapse of time, or both) a default (or give rise to any right of
termination, cancellation or acceleration) under any contract to which the
Corporation is a party that would materially adversely affect the Corporation's
ability to consummate the transactions contemplated by any Transaction Document
or perform its obligations under any Transaction Document; or (c) violate its
organizational documents.
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(d) The authorized and issued share capital ("SHARES") of the
Corporation, as of March 6, 2000 (for clarity, prior to the issuance of the CN
Shares and prior to the issuance of Shares under the Preferred Share Purchase
Agreement in respect thereof), consists of:
Class or Series Number Number
OF SHARES AUTHORIZED ISSUED
PREFERRED SHARES Unlimited
Series A Non-Voting Preferred Shares 100,000,000,000 75,475,656
Series B Subordinate Voting Preferred Shares 100,000,000,000 Nil
Series C Redeemable Preferred Shares 45,000,000,000 Nil
(collectively, the "PREFERRED SHARES")
COMMON SHARES
Class A Non-Voting Shares Unlimited 176,713,200
Class B Subordinate Voting Shares Unlimited 41,314,800
Class C Multiple Voting Shares Unlimited 40,920,000
(collectively, together with any common shares of the Corporation of any other
class or series, hereinafter authorized (the "COMMON SHARES")
Schedule 2(d) sets forth the number of Common Shares and Common Share
Equivalents issued and outstanding as of the dates specified therein. On the
date hereof, the issued Preferred Shares are convertible into 75,475,656 Common
Shares and, as of January 28, 2000, all of the Common Share Equivalents (other
than the Preferred Shares) issued and outstanding are convertible into
23,181,347 Common Shares.
(e) The authorization, issuance, sale and delivery of the Class A
Non-Voting Shares to CN pursuant to this agreement have been duly authorized by
all requisite corporate action on the part of the Corporation, and when issued,
sold and delivered in accordance with this agreement, will be validly issued and
outstanding, fully paid and nonassessable with no personal liability attaching
to the ownership thereof and not subject to preemptive or similar rights of the
shareholders of the Corporation or others, except as set out in the Shareholders
Agreement and the Transaction Documents. The terms, designations, powers,
preferences and relative, participating, optional and other special rights, and
the qualifications, limitations and restrictions, of any series of Common
Shares, or any series of Preferred Shares of the Corporation, are as stated in
the Articles.
(f) Assuming the accuracy of the representations and warranties
contained in Section 3 hereof, the offer, sale and/or the issuance and delivery
of the CN Shares as contemplated herein is exempt from the prospectus and
registration requirements under applicable securities laws.
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(g) No permit, authorization, consent or approval of or by, or any
notification of or filing with, any government, regulatory authority,
governmental department, agency, commission, board, tribunal, crown corporation,
or court or other law, rule or regulating-making entity having or purporting to
have jurisdiction on behalf of any nation, or province or state or other
subdivision thereof or any municipality, district or other subdivision thereof;
(a "GOVERNMENTAL AUTHORITY") or any individual, sole proprietorship, general,
limited or any other partnership, limited liability company, unincorporated
association, unincorporated syndicate, unincorporated organization, trust, body
corporate, or other entity, and a natural person in such person's capacity as
trustee, executor, administrator or other legal representative (collectively,
with Governmental Authority, a "PERSON") is required in connection with the
execution, delivery and performance by the Corporation of any Transaction
Document, the consummation by the Corporation of the transactions contemplated
hereby or thereby, or the issuance, sale or delivery of the CN Shares (other
than such notifications or filings required under applicable provincial
securities laws, if any, which shall be made by the Corporation on a timely
basis and other than provided for in any Transaction Document).
(h) The CN Shares constitute 2% of the aggregate of (i) the total
issued and outstanding Common Shares and Preferred Shares as of December 16,
1999, (ii) the Common Share Equivalents issued and outstanding as at December
16, 1999 in respect of employee, executive and inactive plans, (iii) 6,000,000
Class A Non-Voting Shares (being the number of shares that the parties have
assumed, for the purpose of this representation, have been issued on the Xxxxxxx
Roll-up Transaction); (iv) 1,605,131 Preferred Shares (being the number of
Shares to be issued in respect of (iii) under the Preferred Share Purchase
Agreement based on the above assumption); (v) 31,000,000 Class A Non-Voting
Shares (being the number of such Shares issued on the Xxxxxx Purchase); (vi)
4,541,192 Preferred Shares (being the number of such Shares issued in respect of
(v) under the Preferred Share Purchase Agreement); (vii) 7,460,433 Class A
Non-Voting Shares (being the CN Shares) and (viii) 1,995,823 Preferred Shares
(being the number of Preferred Shares to be issued in respect of (vii) under the
Preferred Share Purchase Agreement. The Class A Non-Voting Shares are the class
of shares of the Corporation that are intended to be registered upon completion
of an IPO.
(i) The Corporation acknowledges and agrees that the foregoing
representations, warranties and covenants set out herein are made by the
Corporation with the intent that they be relied upon by CN in determining its
willingness to effect the Exchange. The Corporation further agrees that by
accepting the CN WFI-CN Shares and CN's payment of $20 million, the Corporation
shall be representing and warranting that the foregoing representations and
warranties are true as at the Closing Date with the same force and effect as if
they had been made by the Corporation at the Closing Date. The Corporation
undertakes to notify CN in writing of any change in any representation, warranty
or other information relating to the Corporation set forth herein which takes
place prior to the Closing Date.
SECTION 3 - REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS OF CN.
CN represents, warrants and acknowledges to the Corporation as of the
date hereof as follows:
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(a) CN is acquiring Class A Non-Voting Shares as principal with an
aggregate acquisition cost to CN of not less than C$150,000 and is purchasing
the Class A Non-Voting Shares for investment only and not with a view to resale
or distribution in violation of applicable Securities Laws.
(b) CN, if a "U.S. Person" (as defined in Regulation S under the United
States Securities Act of 1993, as amended (the "1933 ACT"), is an "Accredited
Investor" (as defined in Rule 501(a)(1), (2), (3) (7) or (8) under the 1933
Act), and CN makes the additional representations and warranties contained in
SCHEDULE 3.
(c) CN acknowledges that no offering memorandum, prospectus or
registration statement has been prepared or filed by the Corporation with any
securities commission or similar authority in any jurisdiction in connection
with the Exchange and the issue and sale of Class A Non-Voting Shares to CN is
subject to such sale being exempt from the requirements of applicable securities
laws as to the filing of an offering memorandum, prospectus or registration
statement.
(d) CN has not received or been provided with a prospectus, offering
memorandum or other similar document, nor has it requested, nor does it have any
need to receive, a prospectus, offering memorandum or any other similar document
describing the business and affairs of the Corporation.
(e) To CN's knowledge, the Class A Non-Voting Shares were not
advertised in printed media of general and regular paid circulation, radio or
television and CN has not purchased the Class A Non-Voting Shares as a result of
any form of general solicitation or general advertising, including
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar media or broadcast over radio, or television, or
any seminar or meeting whose attendees have been invited by general solicitation
or general advertising.
(f) CN has such knowledge and experience in financial and business
affairs as to be capable of evaluating the merits and risks of the investment
hereunder and is able to bear the economic risk of loss of such investment.
(g) CN understands that the Class A Non-Voting Shares have not been and
will not be registered under the 1933 Act, as amended, or the securities laws of
any state of the United States and that the sale contemplated hereby is being
made in reliance on an exemption from such registration requirements and CN
understands and agrees that the Class A Non-Voting Shares may not be traded in
the United States or by or on behalf of a U.S. Person or a person in the United
States unless permitted by the terms of the Shareholders Agreement and either
registered under the 1933 Act and any applicable state securities laws or an
exemption from such registration requirements is available and that certificates
representing the Class A Non-Voting Shares will bear a legend to such effect.
(h) CN understands that no prospectus has been or will be filed in
accordance with the securities laws, and the regulations thereunder, of, and the
applicable published rules, policy
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statements, blanket orders and notices of the securities regulatory authorities
in the provinces and territories of Canada (the "CANADIAN SECURITIES Laws")
qualifying the distribution of the Class A Non-Voting Shares in any province or
territory of Canada and that the Class A Non-Voting Shares may not be offered or
sold by CN in any province or territory of Canada except pursuant to an
applicable exemption from the prospectus requirements of the applicable Canadian
Securities Laws and from a dealer appropriately registered under the applicable
Canadian Securities Laws or, other than in Ontario, in accordance with an
exemption from the registration requirements of such laws.
(i) CN has not employed any broker or finder in connection with the
transactions contemplated by this agreement. The Corporation acknowledges that
CN has retained Xxxxxxx Xxxxx as an advisor to CN, and CN represents, warrants
and acknowledges to the Corporation that Xxxxxxx Xxxxx is not employed as a
broker or finder in connection with the transactions contemplated by this
agreement and that CN will be responsible for all fees payable to Xxxxxxx Xxxxx.
(j) The execution, delivery and performance by CN of this agreement and
each of the other Transaction Documents and the consummation by CN of the
transactions contemplated hereby and thereby will not (a) violate any provision
of law, statute, rule or regulation, or any ruling, writ, injunction, order,
judgment or decree of any court, administrative agency or other governmental
body applicable to it, or any of its properties or assets; (b) conflict with or
result in any breach of any of the terms, conditions or provisions of, or
constitute (with due notice or lapse of time, or both) a default (or give rise
to any right of termination, cancellation or acceleration) under any contract to
which CN is a party that would materially adversely affect CN's ability to
consummate the transactions contemplated by this agreement or perform its
obligations under any Transaction Documents; or (c) violate its constating
documents.
(k) CN is duly organized and validly existing under the laws of the
jurisdiction of its organization and has all partnership, corporate or company
power, as applicable, and authority to enter into and carry out the transactions
contemplated by each of the Transaction Documents and the performance by CN of
its obligations hereunder and thereunder. Each of the Transaction Documents has
been duly authorized by all necessary action on the part of CN. Each of the
Transaction Documents constitutes a valid and binding agreement of CN
enforceable against CN in accordance with its terms except to the extent that
enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally and by equitable principles generally
whether enforced in a court of law or at equity.
(l) No permit, authorization, consent or approval of or by, or any
notification of or filing with, any Person is required in connection with the
execution, delivery and performance by CN of any Transaction Document, the
consummation by CN of the transactions contemplated hereby or thereby, or the
issuance, purchase or delivery of the CN Shares (other than such notifications
or filings required under applicable provincial securities laws, if any, which
shall be made on a timely basis and other than provided for in any Transaction
Document).
(m) WFI-CN was duly incorporated and organized under the laws of its
jurisdiction of incorporation.
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(n) In respect of the CN WFI-CN Shares (a) no Person, other than the
Corporation or Worldwide Fiber Networks Ltd., has any written or oral agreement
or option or any right or privilege (whether by law, pre-emptive or contractual)
capable of becoming an agreement or option for the purchase or acquisition from
CN of any of the CN WFI-CN Shares, (b) no Person other than the Corporation or
Worldwide Fiber Networks Ltd. has any agreement or option or any right or
privilege (whether by law, pre-emptive or contractual) capable of becoming an
agreement, including convertible securities, warrants or convertible obligations
of any nature, for the purchase, subscription, allotment or issuance of any
unissued shares or other securities of WFI-CN, (c) CN is the registered and
beneficial owner of the CN WFI-CN Shares, with good and marketable title
thereto, free and clear of any mortgage, lien, security interest, pledge,
escrow, charge, or other encumbrance of any kind or character whatsoever (an
ENCUMBRANCE") and, without limiting the generality of the foregoing, none of the
CN WFI-CN Shares are subject to any voting trust, shareholder agreement or
voting agreement other than the Unanimous Shareholder Agreement dated May 28,
1999 between the Worldwide Fiber Networks Ltd., CN and WFI-CN (the "WFI-CN
SHAREHOLDER AGREEMENT") and (d) upon completion of the transaction contemplated
by this agreement, all of the CN WFI-CN Shares will be owned by the Corporation
as the registered and beneficial owner, with a good and marketable title thereto
free and clear of any Encumbrance except for such Encumbrances as may have been
granted by the Corporation.
(o) CN acknowledges and agrees that the foregoing representations,
warranties and covenants set out herein are made by CN with the intent that they
be relied upon in determining its suitability as a purchaser of Class A
Non-Voting Shares. CN further agrees that by accepting the Class A Non-Voting
Shares, CN shall be representing and warranting that the foregoing
representations and warranties are true as at the Closing Date with the same
force and effect as if they had been made by CN at the Closing Date and shall
continue in full force and effect notwithstanding any subsequent disposition by
it of the Class A Non-Voting Shares. CN undertakes to notify the Corporation in
writing of any change in any representation, warranty or other information
relating to CN set forth herein which takes place prior to the Closing Date.
SECTION 4 - OTHER COVENANTS.
4.1 COOPERATION BY PARTIES; SATISFACTION OF CLOSING CONDITIONS.
From the date hereof and prior to the Closing, each party shall use its
commercially reasonable efforts, and will cooperate with each other, to secure
as promptly as practicable all necessary consents, approvals, authorizations,
exemptions and waivers from third parties as shall be required to enable the
parties hereto to effect the transactions contemplated hereby, and the
Corporation shall use its commercially reasonable efforts to cause (but not
waive) any closing condition in Section 5.3 to be satisfied.
4.2 SHAREHOLDERS AGREEMENT AND REGISTRATION RIGHTS AGREEMENT
On the Closing Date the Corporation and CN shall execute and deliver
(a) an agreement (the "JOINDER AGREEMENT") in the form attached as SCHEDULE
4.2(A) to become a party to, and be bound by, and to be entitled to the
benefits, rights and features, subject to the
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obligations, of the Shareholders Agreement (the "SHAREHOLDERS AGREEMENT"), dated
as of September 9, 1999, by and among Worldwide Fiber Inc., DWF SRL, GS Capital
Partners III, L.P., GSCP3 WWF (Barbados) SRL, a, WWF (Barbados) SRL, Providence
Equity Fiber, L.P., Tyco Group S.a.r.l., Worldwide Fiber Holdings Ltd., Ledcor
Inc., and each other Person who has become a party thereto and (b) the
Registration Rights Agreement (the "REGISTRATION RIGHTS AGREEMENT"), in the form
attached as SCHEDULE 4.2(B).
4.3 AMENDMENTS TO SIDE LETTERS
From and after the Closing Date:
(a) the letter agreement dated May 28, 1999 addressed from Illinois
Central Railroad Company to the Corporation shall be amended by deleting all of
the provisions thereof and substituting the terms specified in Schedule 4.3(a),
and CN shall cause Illinois Central Railroad Company to execute such further
documents and assurances as WFI may reasonably request from time to time to give
effect to the intent of this provision; and
(b) the letter agreement dated May 28, 1999 addressed from CN to the
Corporation shall be amended by deleting all of the provisions thereof and
substituting the terms specified in Schedule 4.3(b).
4.4 RESTRICTIONS ON CONVERSION INTO VOTING SHARES
(a) CN agrees that it may convert any Class A Non-Voting Shares into
Class B Subordinate Voting Shares only concurrently with or after (a) any
underwritten public offering of shares with voting rights providing gross
aggregate proceeds to the Corporation or any selling shareholders of at least
$150,000,000 before deducting underwriting discounts and commissions and
offering expenses or (b) the Corporation has issued, paid any dividend of, or
made any distribution of, any shares with voting rights other than the Class B
Subordinate Voting Shares issued and outstanding as of the date hereof. The
Corporation will provide to CN timely information regarding the transactions
referred to in clause (a) or (b) of the preceding sentence in order to permit CN
time to convert Shares in accordance with this subsection 4.4(a) and the terms
of such Shares. Notwithstanding the foregoing, following the elimination of the
restrictions on the ownership of voting shares and on the control in fact of the
Corporation by non-Canadians under the TELECOMMUNICATIONS ACT (Canada) and the
rules and regulations promulgated thereunder, there shall either be (i) no
restrictions on the conversion by CN of any Class A Non-Voting Shares into Class
B Subordinate Voting Shares; or (ii) the Class A Non-Voting Shares will
automatically obtain the voting rights presently attached to the Class B
Subordinate Voting Shares.
(b) To the extent required by the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder (the "HSR ACT"), if CN elects to convert its non-voting Shares into
voting Shares, CN and (upon written request by CN) the Corporation agree to (a)
file or cause to be filed, as promptly as practicable after such request, with
the United States Federal Trade Commission and the Antitrust Division of the
United States Department of Justice, all reports and documents required to be
filed by CN and the Corporation
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under the HSR Act concerning the conversion transaction and (b)
promptly comply with or cause to be complied with any requests by the United
States Federal Trade Commission or the Antitrust Division of the United States
Department of Justice for additional information concerning such transactions,
in order to obtain antitrust regulatory clearance as soon as possible. The
Corporation agrees to request, and to cooperate with CN in requesting, early
termination of any applicable waiting period under the HSR Act.
4.5 ACCESS TO RECORDS
From and after that day which is six months after the Closing and until
the occurrence of the earliest of any of the following events:
(a) CN no longer holds any CN Shares; or
(b) the closing of an IPO,
the Corporation shall, and shall cause each of its subsidiaries to, afford CN
and their respective employees, counsel and other authorized representatives
access, during normal business hours, upon reasonable advance notice, with due
regard to its ongoing operations, to all of its books, records and properties,
and to all of its officers and employers for any reasonable purpose related to
monitoring CN's investment in the CN Shares.
4.6 FINANCIAL STATEMENTS
Until the occurrence of an IPO, the Corporation shall furnish to CN the
financial statements and documents that the Corporation is required to furnish
to Investors under Section 12.6 of the Shareholders Agreement.
4.7 CONSENT TO AMENDMENT TO ARTICLES OF THE CORPORATION
CN shall execute such consent shareholders resolutions and incidental
documents as the Corporation may request to amend the Articles of the
Corporation, to alter the share capital of the Corporation, and to alter the
rights, privileges, restrictions and conditions attached to each class of shares
in the share capital of the Corporation, as described in the Registration
Statement of the Corporation filed on Form F-1 and dated January 28, 2000, or as
may otherwise be requested by the Company provided any alterations so requested
have substantially the same effect as those so described in such Registration
Statement.
SECTION 5 - CONDITIONS TO THE EXCHANGE.
5.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY
The respective obligations of each party hereto to consummate the
transactions contemplated hereby shall be subject to the satisfaction at or
prior to the Closing Date of the following conditions, any or all of which may
be waived in writing, in whole or in part, by the Corporation or CN, to the
extent permitted by applicable law:
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(a) No Governmental Authority shall have enacted, issued, promulgated
or enforced any statute, rule, regulation, executive order, decree, judgment,
preliminary or permanent injunction or other order which is in effect and which
prohibits, enjoins or otherwise restrains the consummation of the transactions
contemplated hereby; provided, that the parties shall use commercially
reasonable efforts to cause any such decree, judgment, injunction or order to be
vacated or lifted.
(b) Each consent or approval from, or filing with any Person, required
to be obtained or made and any waiting period required to have expired in order
to consummate the transactions contemplated by this agreement at the Closing
shall have been obtained, or made, as the case may be, and any such waiting
period shall have expired.
(c) The sale of 25 units of Worldwide Fiber IC LLC from IC Fiber
Holding Inc. ("ICFHI") to Worldwide Fiber IC Holdings, Inc. ("WFICHI") pursuant
to that certain Purchase Agreement dated March 6, 2000 and made between ICFHI,
WFICHI and Illinois Central Railroad Company shall have been completed.
5.2 CONDITIONS TO OBLIGATIONS OF CN.
The obligations of CN to consummate the Exchange shall be subject to
the satisfaction or waiver, on or prior to the Closing Date, of the following
conditions:
(a) Each representation and warranty made by the Corporation herein
shall be true and correct, in all material respects on and as of the Closing
Date, with the same force and effect as though such representation and warranty
had been made on and as of the Closing Date, except for changes permitted or
contemplated by this agreement and except for each representation and warranty
that is made as of a specific date or time, which shall be true and correct in
all material respects, only as of such specific date or time.
(b) The Corporation shall have complied in all material respects with
all its agreements and covenants contained herein required to be performed at or
prior to the Closing to the extent such agreements and covenants relate to the
Closing.
(c) The Corporation shall have delivered to CN a certificate executed
by a senior executive officer of the Corporation, which shall be satisfactory in
form and substance to CN, certifying that the conditions set forth in paragraphs
(a) and (b) have been met.
(d) The Corporation shall have delivered to CN a certificate of the
corporate secretary of the Corporation, in form and substance satisfactory to
CN, certifying (i) a copy of the Articles of the Corporation and all amendments
thereto, (iii) a Certificate of Status for the Corporation issued by the
Director under the Canada Business Corporations Act, (iv) resolutions of the
board of directors of the Corporation authorizing the execution, delivery and
performance by the Corporation of this agreement, any other agreement entered
into or instrument delivered by the Corporation in connection herewith, and the
transactions contemplated thereby, (v) copies of each governmental or third
party consent, approval or filing required to be obtained or made in
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order to consummate the transactions contemplated by this agreement at the
Closing, and (vi) incumbency matters.
(e) The Joinder Agreement shall be executed and delivered by the
Corporation and each other party thereto.
(f) The Registration Rights Agreement shall have been executed and
delivered by the Corporation.
5.3 CONDITIONS TO THE OBLIGATIONS OF THE CORPORATION
The obligations of the Corporation to consummate the Purchase shall be
subject to the satisfaction or waiver, on or before the Closing Date, of the
following conditions:
(a) Each representation and warranty made by CN herein shall be true
and correct in all material respects, with the same force and effect as though
such representation and warranty had been made on and as of the Closing Date,
except for changes permitted or contemplated by this agreement and except for
each representation and warranty that is made as of a specific date or time,
which shall be true and correct, in all material respects, only as of such
specific date or time.
(b) CN shall have complied in all material respects with all of its
agreements and covenants contained herein required to be performed at or prior
to the Closing to the extent such agreements and covenants relate to the
Closing.
(c) CN shall have delivered to the Corporation a certificate executed
by a senior executive officer of CN, which shall be satisfactory in form and
substance to the Corporation, certifying that the conditions set forth in
paragraphs (a) and (b) have been met.
(d) CN shall have delivered to the Corporation a certificate of its
corporate secretary, in form and substance satisfactory to the Corporation,
certifying (i) a copy of the constating documents of CN and all amendments
thereto, (ii) the By-Laws of CN, (iii) a Certificate of Status for CN issued by
an appropriate governmental official, (iv) resolutions of the board of directors
of CN authorizing the execution, delivery and performance by CN, respectively,
of this agreement, any other agreement entered into or instrument delivered by
CN in connection herewith, and the transactions contemplated thereby, (v) copies
of each governmental or third party consent, approval or filing required to be
obtained or made in order to consummate the transactions contemplated by this
agreement at the Closing, and (vi) incumbency matters.
(e) The Joinder Agreement shall have been executed and delivered by CN
and each other party thereto.
(f) The Registration Rights Agreement shall have been executed and
delivered by CN.
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SECTION 6 - DELETED
SECTION 7 - SURVIVAL OF REPRESENTATIONS, WARRANTIES, AGREEMENTS AND
COVENANTS, ETC.
All representations and warranties in the this agreement shall survive
the Closing indefinitely and shall in no way be affected by any investigation of
the subject matter thereof made by or on behalf of the Corporation or CN. All
statements contained in any certificate or other instrument delivered by the
Corporation pursuant to this agreement shall constitute representations and
warranties by the Corporation under this agreement. All statements contained in
any certificate or other instrument delivered by CN pursuant to this agreement
shall constitute representations and warranties by CN under this agreement.
SECTION 8 - EXPENSES
Each of the Corporation and CN shall pay all the costs and expenses
incurred by it or on its behalf in connection with this agreement and the
consummation of the transactions contemplated hereby.
SECTION 9 - CALL OPTION 9.1 CALL OPTION
On the terms and subject to the conditions set forth herein, CN hereby
grants to the Corporation an irrevocable option (the "CALL OPTION") exercisable
at any time after December 31, 2002 and before the earlier of: (i) the closing
of the IPO, (ii) April 1, 2003, and, upon exercise of the Call Option in
accordance herewith, CN irrevocably agrees to sell to Corporation all, but not
less than all, of the CN Shares for the aggregate purchase price for all of the
CN Shares of US$ 80 million (the "CALL PRICE"). If the Corporation desires to
exercise the Call Option, the Corporation shall give CN written notice of
exercise of the Call Option. A notice of exercise of the Call Option may be
given during, but not after the end of, the period in which the Call Option is
exercisable and shall, subject to the terms and conditions set out herein,
irrevocably commit the Corporation to the purchase of the CN Shares from CN.
9.2 CLOSING OF CALL OPTION
(a) The closing of any purchase and sale of CN Shares to be effected as
a result of the exercise of the Call Option shall take place at the offices of
the Corporation at a date and time that is mutually acceptable to the
Corporation and CN, or, if no date and time for closing are so agreed upon, the
time for closing shall be 11 a.m. (Vancouver, BC time) (the "TIME OF CLOSING")
on the 15th Business Day following the exercise of the Call Option.
(b) At the Time of Closing of any purchase and sale of the CN Shares
pursuant to or as a result of the exercise of the Call Option, the Corporation
shall deliver to CN, subject to subsection 9.3(d), the Call Price.
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(c) At the Time of Closing: (a) CN shall deliver or cause to be
delivered to the Corporation (i) the certificates representing the CN Shares,
duly endorsed by CN for transfer or accompanied by appropriate transfers duly
executed by CN, (ii) a representation and warranty executed by CN in favour of
the Corporation that the CN Shares being sold by CN are owned of record and
beneficially by CN with a good and marketable title thereto, free and clear of
any mortgage, lien, charge, pledge, hypothecation, security interest,
encumbrance, restriction, covenant, right, demand or adverse claim of any kind,
and (iii) a release of the Corporation from all provisions of this agreement,
the Shareholders Agreement and the Registration Rights Agreement; and (b) the
Corporation shall, subject to subsection 9.3(d), deliver to CN a certified
cheque or bank draft payable to or to order of CN in payment of the Call Price.
(d) If CN is not present at the place of closing at the Time of
Closing, or is present but fails for any reason whatsoever to comply with
subsection 9.3(c)(a) or any other relevant requirements hereof, in addition to
and without limitation to any other rights it may have at law, the Corporation
may make payment of the amount payable pursuant to subsection 9.3(c)(b) to CN by
depositing such amount into a special interest-bearing account at a branch of
the Corporation's bankers in the name of CN. Such deposit shall constitute valid
and effective payment of such amount to CN, even though CN has voluntarily
encumbered or disposed of any the CN Shares and notwithstanding the fact that a
certificate or certificates representing any such CN Shares may have been
delivered to any pledgee, transferee or other person.
(e) If the required amount is deposited pursuant to subsection 9.3(d)
into a special account at a branch of the Corporation's bankers in the name of
CN, then from and after the date of such deposit and even though the CN Shares
to be sold by CN have not been delivered to the Corporation, the purchase and
sale of the CN Shares to be sold by CN shall be deemed to have been fully
completed and all right, title, benefit and interest, both at law and in equity,
in and to the CN Shares to be sold by CN shall conclusively be deemed to have
been transferred and assigned to and become vested in the Corporation and all
right, title, benefit and interest, both at law and in equity, of CN or of any
transferee, assignee or other person having any interest, legal or equitable,
therein or thereto, whether as shareholder or creditor of any company or
otherwise, shall cease and determine; provided, however, that CN shall be
entitled to receive the amount so deposited with interest thereon upon the
delivery of all documents, releases or indemnities to be delivered by CN as
contemplated by subsection 9.3(c)(a).
(f) CN irrevocably constitutes and appoints the Corporation as its true
and lawful attorney in fact as agent for, in the name and on behalf of CN, to
execute and deliver in the name of CN, if CN is not present at the place of
closing at the Time of Closing or is present but fails for any reason whatsoever
to comply with subsection 9.3(c)(a) or any other relevant requirement hereof,
all such assignments, transfers, deeds and instruments as may be necessary
effectively to transfer and assign to the Corporation or its nominee or nominees
on the books of the Corporation the CN Shares to be sold by CN pursuant to the
Call Option. Such appointment and power of attorney, being coupled with an
interest, shall not be revoked by the insolvency, bankruptcy or incapacity of
CN, and CN hereby ratifies and confirms and agrees to ratify and confirm all
that the Corporation may lawfully do or cause to be done by virtue of the
provisions of this subsection 9.2.
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(g) CN shall be entitled to receive the amount deposited with the
bankers of the Corporation pursuant to subsection 9.2(d) on delivery to the
Corporation of the documents required to be delivered by CN pursuant to
subsection 9.2(c)(a) and compliance with any other relevant requirements of this
agreement.
(h) In addition to and without limiting any remedy that may be
available at law or in equity to CN, in the event that the Corporation is
obligated to purchase CN Shares as a result of the exercise of the Call Option
and defaults in the performance of its obligation to complete such purchase, CN
may, at its option, by notice in writing to the Corporation, terminate all its
obligations relating to such purchase and, upon the giving of such notice in
accordance with the provisions of this subsection 9.3(h), such obligations shall
be terminated without prejudice to the continued effectiveness of this
agreement.
SECTION 10 - CONFIDENTIALITY
(a) The parties hereto hereby covenant and agree with each other that,
subject to subsection 10(c), they will not disclose, or allow their respective
directors, officers, employees agents, representatives or consultants, if any,
to disclose, to any Person, any of the terms, conditions or other facts of or
concerning this agreement or the existence of this agreement without the prior
written consent of the other parties hereto. The parties hereto hereby further
covenant and agree with each other that they will at all times keep, and all
reasonable and normal steps to cause their respective directors, officers,
employees, agents, representatives and consultants, if any, to at all times
keep, all information of every nature and kind whatsoever regarding the
Corporation and CN including, without limitation, information on and/or copies
of material agreements, corporate, proceedings and other data, whether
transferred in writing, orally, visually, electronically or by any other means,
and all analyses, studies, compilations, data, supplies or other documents
prepared by any party or the Corporation or CN containing, or based in whole or
in part on, any such information or reflecting any such information, strictly
confidential, and shall at no time convey or disclose, or knowingly allow their
respective directors, officers, employees, agents, representatives or
consultants, if any, to convey or disclose, in any manner whatsoever, to any
person, firm or corporation any of the aforesaid information. The parties hereto
hereby further covenant and agree with each other not to use, and to take all
normal and reasonable steps to ensure that their respective directors, officers,
employees, agents, representatives or consultants, if any, do not use, any of
the aforesaid information except for the purposes of exercising their respective
rights and performing their respective obligations under this agreement.
(b) Each party hereto hereby covenants and agrees with each other party
hereto to indemnify and hold harmless each other party hereto from any losses,
damages, charges, fees or expenses (including reasonable solicitors' fees)
arising out of or resulting from any breach of subsection 10(a). The parties
hereto hereby further covenant and agree with each other not to do any act, or
knowingly allow their respective directors, officers, employees, agents,
representatives or consultants, if any, to do any act, to infringe upon any
copyright, patent, industrial design or other proprietary rights of the
Corporation.
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(c) The parties hereto hereby further covenant and agree with each
other that, in the event they, or their respective directors, officers,
employees, agents, representatives or consultants, if any, become legally
compelled to disclose any of the aforesaid information, or are advised by their
respective legal counsel that such disclosure is required to comply with
applicable law, to immediately provide the other parties with written notice so
that the other parties may seek a protective order or other appropriate remedy,
and to cooperate, and to cause their respective directors, officers, employees,
agents, representatives and consultants, if any, to cooperate, with the other
parties in any effort undertaken to obtain a protective order or other remedy.
Each party hereto hereby further covenants and agrees with each other party to,
in the event that such protective order or remedy is not obtained, furnish, and
to cause his directors, officers, employees, agents, representatives and
consultants, if any, to furnish, only that portion of the aforesaid information
which he is legally required to furnish, and to use his best efforts, and to
cause his directors, officers, employees, agents, representatives, and
consultants, if any, to use their best efforts, to obtain an assurance from the
recipient of any of the aforesaid information that confidential treatment will
be accorded to such information, to the extent that such assurance is available.
Notwithstanding the foregoing, each of the parties acknowledges that the parties
may be required to disclose the terms of this agreement, and provide a copy of
this agreement, in filings made by such party under applicable securities law,
and may have to disclose the aforesaid information in an open court in legal
proceedings between the parties, or between a party and others, and each of the
parties hereby consents to such disclosure and to the filing of a copy of this
agreement for public viewing under filings required to be made by a party under
applicable securities law.
(d) Each party hereto hereby acknowledges to and covenants and
agrees with each other party hereto that a breach by him of any of his covenants
contained in this Section 10 may result in damages to each of the other parties
and that a monetary award would not adequately compensate for such damages, and,
accordingly, that in the event of any such breach, in addition to all other
remedies available in law or in equity, the other parties, or any of them, shall
be entitled as a matter of right to apply to a court of competent equitable
jurisdiction for such relief by way of restraining order, injunction, decree or
otherwise as may be appropriate to ensure compliance by him with Section 10.
(e) Each of the parties hereto hereby acknowledges to and covenants and
agrees with each of the other parties hereto that, notwithstanding any provision
of this agreement, its covenants contained in Section 10 survive any termination
of this agreement, whether or not it continues to hold shares in the capital of
the Corporation.
SECTION 11 - UNDERWRITTEN OFFERING - LOCK -UP OF SHARES
CN agrees, if requested in writing by the managing underwriter(s) of an
IPO, not to effect any sale (or in any other way, directly or indirectly, effect
any transfer, assignment, distribution, pledge, encumbrance or other disposition
of, either voluntarily or involuntarily, including the assignment or transfer of
voting rights, if any) (collectively, with "sale", a "SALE") of any Shares or of
any equity securities (or securities convertible into or exchangeable for equity
securities) of the Corporation, including, without limitation, any Sale pursuant
to Canadian Securities Laws or Rule 144 under the U.S. Securities Act, (other
than as part of such
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underwritten public offering) during the time period requested by the managing
underwriter(s) not to exceed the lesser of: (a) one year from the effective date
of the IPO, and (b) the period of time for which Worldwide Fiber Holdings Ltd.
agrees with the managing underwriters not to effect any such Sale of Shares or
of any equity securities (or securities convertible into or exchangeable for
equity securities) of the Corporation (for clarity, excluding any sale under the
IPO). The Corporation hereby represents and warrants to CN that all shareholders
of the Corporation with shareholdings the size of CN's shareholdings or larger
(other than (i) Worldwide Fiber Holdings Ltd., Ledcor Limited Partnership, Xxxxx
Xxxxx and Xxxxxxx Xxxx, to the extent of certain private sales agreed to before
the closing of the IPO, (ii) Ledcor Limited Partnership, the "selling
shareholder" identified in the registration statement filed with the U.S.
Securities and Exchange Commission on Form F-1 dated January 28, 2000, and (iii)
Ledcor Limited Partnership to the extent of transfers of shares pursuant to its
Designated Share Program) are also locked up for a period of not less than one
year from the effective date of the IPO. The Corporation shall exercise its
reasonable best efforts such that no waivers of such lockups be given by such
underwriter(s) or the Corporation prior to the end of such one-year period,
unless CN is granted a waiver for not less than a prorata portion of the number
of shares in respect of which the waiver is being granted. For the purpose of
this section "prorata" means that:
(a) if a single such shareholder has its lockup waived so that it is
permitted to sell a percentage of its shares (the "Specified Percentage"), then
CN shall be entitled to a similar waiver of the Specified Percentage of CN's
holdings; and
(b) if there are more than one such shareholder, then CN shall be
entitled to a similar waiver for the highest such Specified Percentage for all
such shareholders
(calculated in each case to include the holdings of such shareholder
and of its affiliates). For purposes hereof, "affiliate" means any natural
person, partnership, corporation or other legal entity ("Person") that directly
or indirectly controls, or is under common control with, or is controlled by
another Person, where "control" means the possession, directly or indirectly, of
more than fifty percent (50%) of the combined voting power of all outstanding
securities, or the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by contract
or otherwise).
SECTION 12 - REMEDIES.
In case any one or more of the covenants and/or agreements set forth in
this agreement shall have been breached by any party hereto, each other party
may proceed to protect and enforce its rights either by suit in equity and/or by
action at law, including, but not limited to, an action for damages as a result
of any such breach and/or an action for specific performance of any such
covenant or agreement contained in this agreement, and to exercise all other
rights existing in their favor. The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach of the provisions of
this agreement and that each party may in its sole discretion apply to any court
of law or equity of competent jurisdiction for specific
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performance and/or injunctive relief (without posting a bond or other security)
in order to enforce or prevent any violation of the provisions of this
agreement.
SECTION 13 - FURTHER ASSURANCES.
At any time or from time to time after the Closing, the Corporation, on
the one hand, and CN, on the other hand, agree to cooperate with each other, and
at the request of the other party, to execute and deliver any further
instruments or documents and to take all such further action as the other party
may reasonably request in order to evidence or effectuate the consummation of
the transactions contemplated hereby and to otherwise carry out the intent of
the parties hereunder.
SECTION 14 - SUCCESSORS AND ASSIGNS
This agreement shall bind and inure to the benefit of the Corporation
and CN and the respective successors, Permitted Assigns, heirs and personal
representatives of the Corporation and CN. The parties acknowledge that, subject
to compliance with applicable securities laws, CN may transfer and assign all or
a part of its rights and obligations under this agreement to one or more other
partnerships, corporations, trusts or other organizations which have been
created by, or are controlled by, control, or are under common control with, CN,
without the consent of the Corporation (collectively, "PERMITTED ASSIGNS"). This
agreement shall not be assignable by the Corporation, without the consent of CN,
or by CN except to Permitted Assigns without the consent of the Corporation.
SECTION 15 - ENTIRE AGREEMENT.
This agreement and the other writings referred to herein or delivered
pursuant hereto which form a part hereof contain the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior and
contemporaneous arrangements or understandings with respect thereto.
SECTION 16 - NOTICES.
All notices, requests, consents and other communications hereunder to
any party shall be deemed to be sufficient if contained in a written instrument
delivered in person or sent by fax, nationally recognized overnight courier or
first class registered or certified mail, return receipt requested, postage
prepaid, addressed to such party at the address set forth below or such other
address as may hereafter be designated in writing by such party to the other
parties:
(i) if to the Corporation, to:
Worldwide Fiber Inc.
#0000-0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Fax: (000) 000-0000
Attention: Xxxxxxx Xxxx
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with a copy to:
Farris, Vaughan, Xxxxx & Xxxxxx
0000-000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
(ii) if to CN, to:
Canadian National Railway Company
000, xx xx Xxxxxxxxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Attention: Chief Legal Officer and Corporate Secretary (1 copy)
Fax (000) 000-0000
Senior Vice-President and Chief Financial Officer
(1 copy)
Fax (000) 000-0000
All such notices, requests, consents and other communications shall be deemed to
have been given when received.
SECTION 17 - AMENDMENTS.
The terms and provisions of this agreement may be modified or amended,
or any of the provisions hereof waived, temporarily or permanently, pursuant to
the written consent of the Corporation and CN.
SECTION 18 - COUNTERPARTS.
This Agreement may be executed in any number of counterparts, and each
such counterpart hereof shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one agreement.
SECTION 19 - HEADINGS.
The headings of the sections of this agreement have been inserted for
convenience of reference only and shall not be deemed to be a part of this
agreement.
SECTION 20 - NOUNS AND PRONOUNS.
Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of names and pronouns shall include the plural and vice versa.
-23-
SECTION 21 - GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the Province of British Columbia without giving effect to the
principles of conflicts of law. Each of the parties hereto hereby irrevocably
and unconditionally consents to submit to the non-exclusive jurisdiction of the
courts of the Province of British Columbia located in the City of Vancouver, for
any action, proceeding or investigation in any court or before any governmental
authority ("LITIGATION") arising out of or relating to this agreement and the
transactions contemplated hereby, and further agrees that service of any
process, summons, notice or document by registered mail to its respective
address set forth in this agreement shall be effective service of process for
any Litigation brought against it in any such court. Each of the parties hereto
hereby irrevocably and unconditionally waives any objection to the laying of
venue of any Litigation arising out of this agreement or the transactions
contemplated hereby in the courts of the Province of British Columbia located in
the City of Vancouver, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such Litigation
brought in any such court has been brought in an inconvenient forum.
SECTION 22 - CURRENCY.
Unless otherwise indicated, references to "dollars", "$" or "US$" are
to U.S. dollars and references to "C$" are to Canadian dollars.
SECTION 23 - NO PARTNERSHIP.
The obligations of each of the parties to this agreement are several
and not joint. Nothing in this agreement shall imply or be deemed to imply a
partnership, joint venture or other relationship between the parties.
[THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
agreement as of the date first above written.
WORLDWIDE FIBER INC.
By: /s/ Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
------------------------------
Title: Chairman
-----------------------------
CANADIAN NATIONAL RAILWAY COMPANY
By: /s/ Xxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxx
------------------------------
Title: Senior Vice President and
Chief Financial Officer
-----------------------------
SCHEDULE B
COPY OF ARTICLES OF THE CORPORATION
SCHEDULE 1.4
ESTIMATED NUMBER OF SHARES TO BE ISSUED IN RESPECT OF
THE XXXXXXX ROLL-UP TRANSACTION
For the purposes of this Agreement, assumed to be issued 6,000,000
pursuant to the Shareholders Agreement dated December 31,
1998 between the Corporation, Worldwide Fiber Networks
Ltd., Ledcor Industries Inc., Worldwide Fiber (USA) Inc.,
Mi-Tech Communications, LLC, Ledcor and Xxxxxxx Pipeline
Construction (or any transactions or series of related
transactions with similar effect) (the "XXXXXXX ROLL-UP
TRANSACTION")
For the purposes of this Agreement, assumed to be issued
in respect of the Xxxxxxx Roll-up Transaction pursuant to 1,605,131
the agreement dated September 7, 1999 by and among the
Corporation, DWF SRL, GSCP3 WWF (Barbados) SRL, Providence
Equity Fiber L.P. and Tyco Group S.A.R.L. (the "PREFERRED
SHARE PURCHASE AGREEMENT") ---------
TOTAL 7,605,131
---------
---------
SCHEDULE 2(d)
OUTSTANDING COMMON SHARES, PREFERRED SHARES AND COMMON SHARE EQUIVALENTS
Issued and Outstanding Common Shares and Preferred Shares 298,882,464
as at December 16, 1999
Common Share Equivalents issued and outstanding as at 21,536,640
December 16, 1999 in respect of employee, executive and
incentive plans
Common Shares issued pursuant to Stock Purchase Agreement 31,000,000
entered into with Xxxxxxx Xxxxxx (CEO) (the "XXXXXX
PURCHASE")
Preferred Shares issued in respect of the Xxxxxx Purchase 4,541,192
pursuant to the Preferred Share Purchase Agreement
---------------------------------------------------------
TOTAL 355,960,296
=========================================================
SCHEDULE 3
U.S. REPRESENTATIONS & WARRANTIES
If CN falls under one of the categories listed in Section 3(b)
of the Agreement, by executing the Agreement, CN, on its own behalf and, if
applicable on behalf of others for whom it is contracting, represents, warrants
and acknowledges to the Corporation the following:
(a) CN is acquiring the Class A Non-Voting Shares for its own account,
for investment purposes only and not with a view to any resale, distribution or
other disposition of the Class A Non-Voting Shares in violation of the United
States securities laws.
(b) If CN decides to offer, sell or otherwise transfer any of the Class
A Non-Voting Shares, it will not offer, sell or otherwise transfer any of such
Class A Non-Voting Shares directly or indirectly, unless such sale is made in
compliance with, or in reliance of an exemption from, the 1933 Act and
applicable state securities laws.
(c) CN understands and agrees that there may be material tax
consequences to CN of an acquisition or disposition of the Class A Non-Voting
Shares and that, except as expressly set forth in this Agreement, the
Corporation gives no opinion and makes no representation with respect to the tax
consequences to CN under United States, state, local or foreign tax law of CN's
acquisition or disposition of such securities.
SCHEDULE 4.2(a)
JOINDER TO SHAREHOLDERS AGREEMENT
THIS AGREEMENT (the "Agreement") dated as of March 6, 2000 by
and among Worldwide Fiber Inc., a corporation continued under the laws of Canada
(the "Corporation"), Canadian National Railway Company, a Canadian corporation
(the "New Investor"), DWF SRL, a Barbados company ("DLJ"), GS Capital Partners
III L.P, a Delaware limited partnership, GSCP3 WWF (Barbados) SRL, a Barbados
company, WWF (Barbados) SRL (collectively "GSCP"), Providence Equity Fiber, LP,
a Delaware limited partnership, ("Providence") and Tyco Group S.a.r.l., a
Luxembourg corporation ("Tyco"), (collectively with DLJ, GSCP and Providence,
the "Investors"), Xxxxxxx X. Xxxxxx ("Xxxxxx'), Worldwide Fiber Holdings Ltd.,
an Alberta Corporation, ("WFH"), Ledcor Inc., an Alberta corporation ("Ledcor"),
Xxxxxxxx Xxxx, Xxxxx Xxxxx, Xxx Xxxxxxxxx, Xxx Xxxxxxx, Madison Square Inc.,
Xxxxx Xxxx, Xxxxxxx Xxxxxx, Xxxxxxx Xxxx, Ledcor Industries Limited as General
Partner for Ledcor Limited Partnership and Ledcor Industries Limited.
WHEREAS, by an Agreement dated as of September 9, 1999, as
amended (the "Shareholders Agreement"), the parties thereto (being all of the
parties hereto other than CN) entered into an agreement with respect to certain
rights and obligations associated with ownership of Shares (as defined in the
Shareholders Agreement).
WHEREAS, the Corporation and the New Investor have entered
into a Share Exchange Agreement made as of the 6th day of March, 2000 (the
"Share Exchange Agreement") pursuant to which the New Investor is to be issued
Class A Non-Voting Shares of the Corporation and is to be entitled to certain
benefits, rights and features contained in the Shareholders Agreement.
WHEREAS, WFH and the New Investor have entered into a Put
Option Agreement made as of March 6, 2000 (the "Put Option Agreement") pursuant
to which the New Investor is entitled to put to WFH the shares of the
Corporation that the New Investor has received under the Share Exchange
Agreement, at the price and on the terms specified in the Put Option Agreement.
WHEREAS, the Shareholders Agreement provides that any person
who acquires more than one percent of the issued shares of the Corporation is to
execute and agree to be bound by the terms of the Shareholders Agreement.
WHEREAS, the Investors and the Corporation, for receipt of
good and valuable consideration, have agreed to provide such rights, benefits
and features:
NOW, THEREFORE, in consideration of the premises and mutual
covenants and obligations hereinafter set forth, the parties hereto hereby agree
as follows:
-6-
1. Terms having a meaning defined in the Shareholders Agreement and not
otherwise defined in this Agreement shall have the same meaning as
provided in the Shareholders Agreement, unless the context otherwise
requires.
2. The New Investor agrees to join in and be bound by the Shareholders
Agreement and each of the Investors in the Corporation hereby agrees
that, for all purposes of the Shareholders Agreement, the New Investor
shall constitute, and shall be entitled to all the benefits, rights and
features associated with being, a "Shareholder" and is deemed a
Shareholder for all purposes of the Shareholders Agreement.
3. It is acknowledged that no provision of the Shareholders Agreement
shall in any manner whatsoever affect CN's rights under the
Registration Rights Agreement (as defined in the Share Exchange
Agreement) or Section 1 of the Put Option Agreement and, in particular,
and without limiting the generality of the foregoing:
(a) Sections 3, 4 and 5 of the Shareholders Agreement shall not apply
to the Call Option in Section 9.1 of the Share Exchange Agreement,
the Put Option in Section 1.1 of the Put Option Agreement, or any
transfer of Shares made pursuant to either of them.
(b) For the purposes of Section 9 of the Shareholders Agreement
including, without limitation, Section 9(b)(v), each of the
parties hereby confirms that they consent to the transactions
described in the Share Exchange Agreement, except for the exercise
by the Corporation of the Call Option in Section 9.1 of the Share
Exchange Agreement, and the Investors agree that they shall not
(except in connection with the exercise by the Corporation of the
Call Option in Section 9.1 of the Share Exchange Agreement) give
notice to the Corporation of their election to disapprove or veto
any Major Transaction resulting therefrom.
4. Section 8.6 of the Shareholders Agreement shall apply to the New
Investor and to the Affiliates of the New Investor, as if the New
Investor were an Investor and the Affiliates of the New Investor were
Investor Affiliates for all of the purposes of that Section.
5. The parties agree that the Shareholders Agreement is in full force and
effect, and has neither been amended nor modified save and except for
the matters contemplated by this Agreement.
-7-
6. This Agreement can be executed in any number of counterparts, each of
which when executed and delivered is an original but all of which when
taken together constitute one and the same instrument, and any party
may execute this Agreement by signing any counterpart of it.
IN WITNESS WHEREOF this Agreement has been executed by the parties on the day
and year first above written.
WORLDWIDE FIBER INC. CANADIAN NATIONAL RAILWAY
COMPANY
Per: Per;
------------------------------------ -----------------------------
Authorized Signatory Authorized Signatory
GSCP3 WWF (BARBADOS) SRL DWF SRL
Per: Per:
------------------------------------ -----------------------------
Authorized Signatory Authorized Signatory
GS CAPITAL PARTNERS III L.P. PROVIDENCE EQUITY FIBER, LP
Per: Per:
------------------------------------ -----------------------------
Authorized Signatory Authorized Signatory
WWF (BARBADOS) SRL WORLDWIDE FIBER HOLDINGS LTD.
Per: Per:
------------------------------------ -----------------------------
Authorized Signatory Authorized Signatory
TYCO GROUP S.A.R.L. LEDCOR INC.
Per: Per:
------------------------------------ -----------------------------
Authorized Signatory Authorized Signatory
---------------------------------------- ---------------------------------
XXXXXXX X. XXXXXX XXXXXXXX XXXX
---------------------------------------- ---------------------------------
XXXXX XXXXX XXX XXXXXXXXX
-8-
MADISON SQUARE INC.
Per:
---------------------------------------- -----------------------------
XXX XXXXXXX Authorized Signatory
---------------------------------------- ---------------------------------
XXXXX XXXX XXXXXXX XXXXXX
LEDCOR INDUSTRIES LIMITED as
General Partner for Ledcor Limited
Partnership
Per:
---------------------------------------- -----------------------------
XXXXXXX XXXX Authorized Signatory
LEDCOR INDUSTRIES LIMITED
Per:
------------------------------------
Authorized Signatory
-9-
SCHEDULE 4.2(b)
FORM OF REGISTRATION RIGHTS AGREEMENT
-10-
SCHEDULE 4.3(a)
SURVIVING IC SIDE LETTER TERMS
The terms in the Schedule relate to the Amended and Restated License Agreements
(each a "License Agreement" and collectively the "License Agreements") dated as
of March 6, 2000 among Worldwide Fiber Inc. ("WFI"), Illinois Central Railroad
Company ("IC"), and, respectively, IC Fiber Illinois LLC, IC Fiber Kentucky LLC,
IC Fiber Tennessee LLC, IC Fiber Mississippi LLC, IC Fiber Louisiana LLC, IC
Fiber Alabama LLC and IC Fiber Iowa LLC (each such limited liability company a
"Newco" and collectively the "Newcos").
1. Any terms used in this Schedule as defined terms and not defined herein
shall have the meanings assigned to them or in the License Agreements
as the context requires.
2. WFI and IC have entered into the License Agreements, each of which
covers the IC ROW in one of the States of Illinois, Kentucky,
Tennessee, Mississippi, Louisiana, Alabama and Iowa. Both WFI and IC
believe the use of a separate License Agreement for the IC ROW located
in each of such States is beneficial and furthers the purposes of the
License Agreements. However, WFI has advised IC that WFI may in the
future include the interest of the Newcos under the License Agreements
in a public offering of securities ("Offering"), to be issued by WFI or
an affiliate, and IC has agreed that, in the event it is reasonably
determined by the lead underwriter for such Offering that the use of a
separate License Agreement for each State (as opposed to one agreement
covering the entire IC ROW in all of the States referred to above) will
result in the Offering having a lower initial valuation than would be
the case if one agreement were employed, IC will, within 14 days
following written notice thereof from WFI, modify the License Agreement
structure (other than a modification which would eliminate any of the
Newcos) or enter into another arrangement in order to develop an
alternative which provides WFI with an initial valuation at least equal
to the initial valuation that would be achieved if one agreement were
utilized for the entire IC ROW. In addition, IC has agreed that it will
bear any incremental direct administrative costs (as reasonably
determined by the management of WFI LLC) resulting from the current
License Agreement structure.
3. Should IC be required by judgement or other order of a court or other
tribunal (notwithstanding that IC may appeal or otherwise contest such
judgement or order) other than a judgement or order with respect to the
existing agreements by and between CN and fONOROLA Telecommunications,
Limited Partnership, or should IC reasonably determine that it has a
legal obligation, to grant to a party other than the Newcos a license
or other rights with respect to the IC ROW for the purpose of
installing and maintaining a fiber optic communications system, IC
hereby irrevocably appoints each Newco to negotiate the consideration
(subject to any limitations imposed by an applicable law) for the
license or other rights granted to such party on a per-mile basis, and
IC will pay over to the appropriate Newco the net amount of such
consideration when and as received by IC.
4. As soon as and to the extent practicable, the following grants of Fiber
Optic Cable capacity shall be made to IC:
(a) to IC, upon request by IC, the rights, for railroad purposes, to
Fiber Optic Cable capacity at all times equivalent to (i) two (2)
Fiber Optic Cable strands along the entire length of the Initial
Facility, including spur lines to major traffic centers, and (ii)
two (2) Fiber Optic Cable strands along the entire length of each
Additional Facility, including spur lines to major traffic
centres.
5. Pursuant to Section 4 and the License Agreements IC, from time to time,
has the right to acquire Fiber Optic Cable capacity from the Newcos
along the IC ROW. IC agrees that to the extent any of the Newcos or WFI
LLC incur tax liability as a result of the acquisition of Fiber Optic
Cable strands by IC, IC shall reimburse the Newcos or WFI LLC, as the
case may be, for the amount of any tax which becomes payable (including
all related costs, penalties and interest) by such Newco or WFI LLC, as
the case may be.
-12-
SCHEDULE 4.3(b)
SURVIVING CN SIDE LETTER TERMS
1. In respect of the contractual relationship between CN and fONOROLA
Telecommunications, Limited Partnership ("fONOROLA"), which includes a
telecommunications agreement dated October 1, 1997 ("Telecommunications
Agreement") and a License Agreement dated April 26, 1995, as amended on
October 1, 1997 ("fONOROLA License Agreement") (the above-mentioned
agreements being collectively referred to as the "fONOROLA
Agreements"), CN has advised WFI as follows:
(a) Pursuant to the fONOROLA License Agreement, fONOROLA has a license
to construct and install fiber optic telecommunications systems
("FOTS") along the CN right of way ("CN ROW"), solely for the
purpose of carrying on the business of owning, upgrading,
maintaining, installing and marketing Bulk Telecommunications
Services (Bulk Telecommunications Services being defined as
unchannelized dedicated and switched transmission capacity). CN
undertakes not to extend or expand this right of fONOROLA by
contractual amendment, waiver, renunciation or in any other matter
whatsoever, without the prior written consent of WFI, over any
portion of the CN ROW available to WFI or its subsidiary WFI-CN
pursuant to the Amended and Restated License Agreement made as of
March 6, 0000 xxxxxxx XXX, XXX-XX and CN ("CN License Agreement").
(b) In the event that fONOROLA decides to proceed with the
construction of a FOTS pursuant to the fONOROLA Agreements, CN
shall exercise its right as set forth in section 2.4 of the
Telecommunications Agreement to act as subcontractor for the
construction of such FOTS and shall engage WFI (or such other
company as WFI may request), at a fair market rate, subject to the
payment by WFI to CN of an appropriate referral fee.
(c) CN confirms that the only Existing FOTS Party with an ongoing
right to build on the CN ROW is fONOROLA.
(d) In the event that WFI does not agree with CN's view as to
fONOROLA's right to access the IC ROW under the terms of the
fONOROLA License Agreement, CN, if so requested by WFI, will
diligently and in good faith contest any such claim by fONOROLA
that its license pursuant to the fONOROLA License Agreement
extends to subsidiaries acquired by CN after April 26, 1995, such
as IC, provided that all costs and expenses of any court or
arbitration proceeding taken by or against CN or IC to contest any
such claim (including reasonable legal fees) related to such
contestation are paid by WFI and provided that WFI shall indemnify
CN or IC from any costs or damages which are awarded against CN or
IC in any such court or arbitration proceedings.
(e) Should fONOROLA's license be found to apply to the right of way of
Illinois Central Railroad Company ("IC") or part thereof ("IC
ROW"), then CN shall cause IC to perform the obligations set forth
in paragraphs 1(a) and (b) of this letter, MUTATIS MUTANDIS.
2. In connection with the CN License Agreement, CN and WFI each understand
that WFI-CN may suffer or incur a tax liability as a result of the
transfer of fibre optic strands to CN and to WFI pursuant to Section
2.1 of the CN License Agreement. CN agrees to indemnify and save
harmless WFI-CN from and against any such tax liability suffered or
incurred by WFI-CN from the disposition of fibre optic strands to CN
pursuant to Section 2.1 of the CN License Agreement, and all related
costs, penalties and interest.
3. CN acknowledges that the licensing transactions between and among CN,
IC and WFI are intended to include rights of way belonging to railways
operated by the Grand Trunk Corporation ("GTC"), namely the Grand Trunk
Western Railroad and the Duluth Winnipeg & Pacific Railroad. Should WFI
elect to construct any Facility over all or a portion of the rights of
way belonging to these railways, transaction documents paralleling the
seven Amended and Restated License Agreements dated as March 6, 2000
between WFI and IC ("IC License Agreements") on the one hand and each
of IC Fiber Illinois LLC, IC Fiber Kentucky LLC, IC Fiber Tennessee
LLC, IC Fiber Mississippi LLC, IC Fiber Louisiana LLC, IC Fiber Alabama
LLC and IC Fiber Iowa LLC.
4. CN, GTC and IC hold exclusive rights to grant licenses for the
installation of fiber optic cable along certain rights of way not owned
by CN, GTC or IC. The rights of way over which such right to grant
licenses applies will be identified by CN and, if not previously
provided by CN to WFI, the details with respect to such rights of way
will be provided by CN to WFI within thirty days of the execution of
this Agreement. Subject to the provisions of the agreements between CN,
GTC and IC and the owners of such rights of way, WFI shall have the
right to add all or a portion of such rights of way to the Reserved CN,
IC or GTC ROW List, as the case may be.
5. Should CN be required by judgement or other order of a court or other
tribunal (notwithstanding that CN may appeal or otherwise contest such
judgement or order) other than a judgement or order with respect to the
existing agreements by and between CN and fONOROLA, or should CN
reasonably determine that it has a legal obligation, to grant to a
party other than WFI-CN a license or other rights with respect to the
CN ROW for the purpose of installing and maintaining a fiber optic
communications system, CN hereby irrevocably appoints WFI-CN to
negotiate the consideration for the license or other rights granted to
such party on a per-mile basis and will pay over to WFI-CN the net
amount of such consideration when and as received by CN.
-14-
