Exhibit 1
6796508 CANADA INC.
as Purchaser
and
BCE INC.
as Company
--------------------------------------------------------------------------------
DEFINITIVE AGREEMENT
JUNE 29, 2007
--------------------------------------------------------------------------------
TABLE OF CONTENTS
ARTICLE 1 INTERPRETATION..........................................................................................1
Section 1.1 Definitions.....................................................................................1
Section 1.2 Interpretation Not Affected by Headings........................................................15
Section 1.3 Interpretation.................................................................................15
Section 1.4 Date for Any Action............................................................................15
Section 1.5 Entire Agreement...............................................................................16
Section 1.6 Statutory References, References to Persons and References to Contracts........................16
Section 1.7 Currency.......................................................................................16
Section 1.8 Accounting Principles..........................................................................16
Section 1.9 Schedules......................................................................................16
ARTICLE 2 THE ARRANGEMENT........................................................................................17
Section 2.1 Arrangement....................................................................................17
Section 2.2 Interim Order..................................................................................17
Section 2.3 The Company Meeting............................................................................17
Section 2.4 The Company Circular...........................................................................18
Section 2.5 Final Order....................................................................................20
Section 2.6 Court Proceedings..............................................................................20
Section 2.7 Stock Compensation Plans.......................................................................20
Section 2.8 Articles of Arrangement and Effective Date.....................................................21
Section 2.9 Payment of Consideration.......................................................................21
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................................22
Section 3.1 Representations and Warranties of the Company..................................................22
Section 3.2 Survival of Representations and Warranties of the Company......................................22
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER........................................................22
Section 4.1 Representations and Warranties of the Purchaser................................................22
Section 4.2 Survival of Representations and Warranties of the Purchaser....................................22
ARTICLE 5 COVENANTS OF THE COMPANY...............................................................................22
Section 5.1 Conduct of Business............................................................................22
Section 5.2 Non-Solicitation...............................................................................27
Section 5.3 Assistance with Purchaser Financing............................................................29
Section 5.4 Completion of the Telesat Transaction..........................................................31
Section 5.5 Cooperation Regarding Reorganization...........................................................32
Section 5.6 Conduct of the Company.........................................................................33
Section 5.7 Dividend Reinvestment Plan; Employee Savings Plans.............................................33
Section 5.8 Cooperation with Solvency Opinion..............................................................33
ARTICLE 6 COVENANTS OF THE PURCHASER PARTIES.....................................................................34
Section 6.1 Conduct of the Purchaser.......................................................................34
Section 6.2 Director and Officer Liability.................................................................34
Section 6.3 Interim Period Consents........................................................................36
Section 6.4 Purchaser Financing............................................................................36
Section 6.5 Investment Canada Act..........................................................................38
(i)
Section 6.6 Syndication of Equity..........................................................................39
ARTICLE 7 MUTUAL COVENANTS.......................................................................................40
Section 7.1 Regarding the Arrangement......................................................................40
Section 7.2 Industry Canada Matters........................................................................43
Section 7.3 FCC Matters....................................................................................44
Section 7.4 CRTC Matters...................................................................................45
Section 7.5 Public Communications..........................................................................46
Section 7.6 Notice and Cure Provisions.....................................................................47
Section 7.7 Access to Information; Confidentiality.........................................................47
Section 7.8 Employee Matters...............................................................................48
ARTICLE 8 CONDITIONS.............................................................................................48
Section 8.1 Mutual Conditions Precedent....................................................................48
Section 8.2 Additional Conditions Precedent to the Obligations of the Purchaser............................49
Section 8.3 Additional Conditions Precedent to the Obligations of the Company..............................50
Section 8.4 Satisfaction of Conditions.....................................................................50
ARTICLE 9 TERMINATION............................................................................................51
Section 9.1 Termination....................................................................................51
Section 9.2 Effect of Termination..........................................................................52
ARTICLE 10 GENERAL PROVISIONS....................................................................................52
Section 10.1 Standard......................................................................................52
Section 10.2 Amendments....................................................................................53
Section 10.3 Waiver........................................................................................53
Section 10.4 Notices.......................................................................................53
Section 10.5 Governing Law.................................................................................55
Section 10.6 Expenses and Termination Fees.................................................................55
Section 10.7 Injunctive Relief.............................................................................57
Section 10.8 Time of Essence...............................................................................57
Section 10.9 Binding Effect................................................................................57
Section 10.10 Severability.................................................................................57
Section 10.11 No Third Party Beneficiaries.................................................................57
Section 10.12 Rules of Construction........................................................................58
Section 10.13 No Liability.................................................................................58
Section 10.14 Language.....................................................................................58
Section 10.15 Counterparts, Execution......................................................................58
(ii)
SCHEDULES
Schedule A PLAN OF ARRANGEMENT
Schedule B SPECIAL RESOLUTION
Schedule C KEY REGULATORY APPROVALS
Schedule D ADDITIONAL REGULATORY APPROVALS
Schedule E REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Schedule F REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Schedule G PRE-APPROVED EQUITY PARTNERS
(iii)
DEFINITIVE AGREEMENT
THIS AGREEMENT is made as of June 29, ▇▇▇▇,
▇ ▇ ▇ ▇ ▇ ▇ ▇:
6796508 CANADA INC., a corporation incorporated under the laws
of Canada (the "PURCHASER")
- and -
BCE INC., a corporation existing under the laws of Canada
("BCE" or the "COMPANY").
NOW THEREFORE, in consideration of the covenants and agreements herein
contained, the Parties agree as follows:
ARTICLE 1
INTERPRETATION
SECTION 1.1 DEFINITIONS
In this Agreement, unless something in the subject matter or the
context is inconsistent therewith:
"1933 ACT" means the United States Securities Act of 1933;
"1934 ACT" means the United States Securities Exchange Act of 1934;
"ACQUISITION PROPOSAL" means, other than the transactions contemplated
by this Agreement (including, for greater certainty, the Telesat
Transaction) and other than any transaction involving only the Company
and/or one or more of its wholly-owned Subsidiaries, any offer,
proposal or inquiry from any Person or group of Persons (other than any
Purchaser Party) after the date hereof relating to (i) any acquisition
or purchase, direct or indirect, of assets representing 20% or more of
the consolidated assets or contributing 20% or more of the consolidated
revenue of the Company and its Subsidiaries or 20% or more of the
voting or equity securities of the Company or any of its Subsidiaries
(or rights or interests therein or thereto) whose assets or revenues,
individually or in the aggregate, constitute 20% or more of the
consolidated assets or consolidated revenue, as applicable, of the
Company, (ii) any take-over bid or exchange offer that, if consummated,
would result in such Person or group of Persons beneficially owning 20%
or more of any class of voting or equity securities of the Company or
any of its Subsidiaries whose assets or revenues, individually or in
the aggregate, constitute 20% or more of the consolidated assets or
consolidated revenue, as applicable, of the Company or (iii) a plan of
arrangement, merger, amalgamation, consolidation, share exchange,
business combination, reorganization, recapitalization, liquidation,
dissolution or other similar transaction involving the Company or any
of its Subsidiaries whose assets or revenues, individually or in the
aggregate, constitute 20% or more of the consolidated assets or
revenue, as applicable, of the Company, but excluding for greater
certainty the ordinary course conversion from time to time of issued
and outstanding Preferred Shares of one or more series into Preferred
Shares of a different series in accordance with their terms and the
ordinary course refinancing of existing indebtedness of the Company or
its Subsidiaries as permitted by the terms hereof;
"ADDITIONAL REGULATORY APPROVALS" means the approvals listed on
Schedule D hereto;
"AFFECTED SHAREHOLDERS" means the Common Shareholders and the Preferred
Shareholders;
"AFFILIATE" has the meaning ascribed thereto in Section 1.2 of National
Instrument 45-106 - Prospectus and Registration Exemptions as in effect
on the date hereof, but with respect to the Company does not include
Telesat (so long as the Telesat Purchase Agreement has not been
terminated) or the ▇▇▇▇ Aliant Entities;
"AGREEMENT" means this definitive agreement as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
the terms hereof;
"AMF" means the Autorite des marches financiers, and includes any
successor thereto;
"APPLICABLE LAW" means, with respect to any Person, any domestic or
foreign federal, national, state, provincial or local law (statutory,
common or otherwise), constitution, treaty, convention, ordinance,
code, rule, regulation, order, injunction, judgment, decree, ruling or
other similar requirement enacted, adopted, promulgated or applied by a
Governmental Authority that is binding upon or applicable to such
Person, as amended unless expressly specified otherwise;
"ARRANGEMENT" means an arrangement under Section 192 of the CBCA on the
terms and subject to the conditions set out in the Plan of Arrangement,
subject to any amendments or variations thereto made in accordance with
Section 10.2 hereof or the Plan of Arrangement or made at the direction
of the Court in the Final Order with the consent of the Company and the
Purchaser, each acting reasonably;
"ARRANGEMENT RESOLUTION" means the special resolution approving the
Plan of Arrangement to be considered at the Company Meeting, to be
substantially in the form and content of Schedule B hereto;
"ARTICLES OF ARRANGEMENT" means the articles of arrangement of the
Company in respect of the Arrangement, required by the CBCA to be sent
to the Director after the Final Order is made, which shall be in a form
and content satisfactory to the Company and the Purchaser, each acting
reasonably;
"BCE CURRENT PUBLIC DISCLOSURE RECORD" means (i) the annual information
form of the Company dated March 7, 2007 for the year ended December 31,
2006, (ii) the audited consolidated financial statements of the Company
as at and for the years ended December 31, 2006 and 2005, including the
notes thereto and the management's discussion and analysis thereof,
(iii) the unaudited interim consolidated financial statements of the
Company as at and for the three months ended March 31, 2007, including
2
the notes thereto and the management's discussion and analysis thereof,
and (iv) the management proxy circular of the Company dated April 13,
2007;
"▇▇▇▇ ALIANT ENTITIES" means ▇▇▇▇ Aliant Regional Communications Income
Fund, ▇▇▇▇ Aliant Holdings Trust, ▇▇▇▇ Aliant Regional Communications
Holdings Inc., ▇▇▇▇ Aliant Regional Communications Holdings, Limited
Partnership, ▇▇▇▇ Nordiq Trust, ▇▇▇▇ Aliant Regional Communications
Inc., ▇▇▇▇ Aliant Regional Communications, Limited Partnership, ▇▇▇▇
Nordiq Group Inc., Telebec, Limited Partnership, Northern Tel, Limited
Partnership and any of their respective direct or indirect
Subsidiaries;
"BOARD" means the board of directors of the Company as the same is
constituted from time to time;
"BREAK-UP FEE" has the meaning ascribed thereto in Section 10.6(6);
"BROADCASTING ACT" means the Broadcasting Act (Canada);
"BUSINESS DAY" means a day, other than a Saturday, Sunday or other day
on which commercial banks in ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ or New
York, New York are closed;
"CANADIAN EQUITY SPONSORS" has the meaning ascribed thereto in Section
6.6;
"CBCA" means the Canada Business Corporations Act;
"CERTIFICATE OF ARRANGEMENT" means the certificate of arrangement to be
issued by the Director pursuant to subsection 192(7) of the CBCA in
respect of the Articles of Arrangement;
"CHANGE IN RECOMMENDATION" has the meaning ascribed thereto in Section
9.1(1)(c)(i);
"CODE" means the United States Internal Revenue Code of 1986;
"COLLECTIVE AGREEMENTS" has the meaning ascribed thereto in paragraph
(o) of Schedule E;
"COMMITMENT LETTER" has the meaning ascribed thereto in paragraph (f)
of Schedule F;
"COMMON SHAREHOLDERS" means the registered or beneficial holders of
Common Shares, as the context requires;
"COMMON SHARES" means the common shares in the capital of the Company,
as currently constituted;
"COMPANY BALANCE SHEET" means the consolidated balance sheet of the
Company as of March 31, 2007 and the footnotes thereto;
"COMPANY CIRCULAR" means the notice of the Company Meeting and
accompanying management information circular, including all schedules,
appendices and exhibits thereto, to be sent to the Affected
3
Shareholders in connection with the Company Meeting, as amended,
supplemented or otherwise modified from time to time;
"COMPANY DISCLOSURE LETTER" means the disclosure letter dated the date
hereof regarding this Agreement that has been provided by the Company
to the Purchaser;
"COMPANY EMPLOYEES" means the employees of the Company and its
Subsidiaries;
"COMPANY FILINGS" means all documents publicly filed under the profile
of the Company on the System for Electronic Document Analysis Retrieval
(SEDAR) since December 31, 2005;
"COMPANY MEETING" means the special meeting of Affected Shareholders,
including any adjournment or postponement thereof, to be called and
held in accordance with the Interim Order to consider the Arrangement
Resolution;
"COMPANY SHARES" means, collectively, the Common Shares and the
Preferred Shares;
"COMPETITION ACT" means the Competition Act (Canada);
"COMPETITION ACT COMPLIANCE" means that the applicable waiting period
under Part IX of the Competition Act shall have expired or been waived
or terminated and there shall be no order in place issued by the
Competition Tribunal established under the Competition Tribunal Act
(Canada) which would preclude completion of the transactions
contemplated by this Agreement;
"COMPETITION LAWS" means the Competition Act, the HSR Act and any other
applicable foreign antitrust or competition laws;
"CONFIDENTIALITY AGREEMENTS" means: (i) the confidentiality agreements
(or related undertaking) dated as of June 5, 2007 between each of the
Equity Sponsors and the Company pursuant to which the Equity Sponsors
and the Purchaser have been provided with access to confidential
information of the Company, as amended from time to time in accordance
with their terms, and (ii) any other letter agreements entered into
between the Company and any of the Equity Sponsors regarding
confidential information of the Company;
"CONSIDERATION" means an amount in cash per Company Share as set out in
Exhibit I to the Plan of Arrangement;
"CONTRACT" means any legally binding contract, agreement, license,
franchise, lease, arrangement or commitment (written or oral) to which
the Company or any of its Subsidiaries is a party;
"COURT" means the Quebec Superior Court;
"CRTC" means the Canadian Radio-television and Telecommunications
Commission, and includes any successor thereto;
4
"CRTC APPLICATIONS" means applications to the CRTC pursuant to the
Broadcasting Act and related regulations for approval of a change in
control of the CRTC Licensees and to approve new licensees of
Express-Vu if requested by the Purchaser (provided that such licensees
are Subsidiaries of the Company);
"CRTC APPROVAL" means that all required approvals by the CRTC of the
CRTC Applications shall have been received;
"CRTC LICENSEES" means the Company and those affiliates of the Company
that hold CRTC Licenses, treating for this purpose the ▇▇▇▇ Aliant
Entities as affiliates of the Company;
"CRTC LICENSES" means those licenses issued by the CRTC to the Company
and affiliates of the Company under the Broadcasting Act and related
regulations, treating for this purpose the ▇▇▇▇ Aliant Entities as
affiliates of the Company;
"DATA ROOM" means the material contained in the virtual data room
established by the Company as at 3:15 p.m. on June 29, 2007, the index
of documents of which is appended to the Company Disclosure Letter;
"DEPOSITARY" means Computershare Investor Services Inc.;
"DIVIDEND REINVESTMENT PLAN" means the Shareholder Dividend
Reinvestment and Stock Purchase Plan of the Company, as the same may be
amended from time to time in compliance with this Agreement;
"DIRECTION" means the Direction to the CRTC (Ineligibility of
Non-Canadians);
"DIRECTOR" means the Director appointed pursuant to Section 260 of the
CBCA;
"DISSENT RIGHTS" means the rights of dissent in respect of the
Arrangement described in the Plan of Arrangement;
"D&O INSURANCE" has the meaning ascribed thereto in Section 6.2(2);
"DSUS" means deferred share units issued under the Company's 1997 Share
Unit Plan for Non-Employee Directors or the Company's 1997 Share Unit
Plan for Senior Executives and Other Key Employees, in each case as
amended from time to time;
"EFFECTIVE DATE" means the date shown on the Certificate of Arrangement
giving effect to the Arrangement;
"EFFECTIVE TIME" has the meaning ascribed thereto in the Plan of
Arrangement;
"EMPLOYEE PLANS" has the meaning ascribed thereto in paragraph (n) of
Schedule E hereto;
5
"EMPLOYEE SAVINGS PLANS" means the 1970 Employees' Savings Plan and the
2000 Employees' Savings Plan (US) of the Company, in each case as
amended from time to time;
"ENVIRONMENTAL LAWS" means any Applicable Law relating to the
environment or pollutants, contaminants, wastes or chemicals or any
toxic, radioactive, ignitable, corrosive, reactive or hazardous
substances, wastes or materials;
"EQUITY COMMITMENT LETTERS" has the meaning ascribed thereto in
paragraph (f) of Schedule F;
"EQUITY SPONSORS" has the meaning ascribed thereto in paragraph (f) of
Schedule F;
"EXCHANGE" or "EXCHANGES" means the Toronto Stock Exchange and/or the
New York Stock Exchange, as applicable;
"EXECUTIVE OFFICER" has the meaning ascribed thereto in National
Instrument 51-102 - Continuous Disclosure Obligations;
"FCC" means the United States Federal Communications Commission, and
includes any successor thereto;
"FCC APPLICATIONS" means the applications and declaratory rulings to
the FCC in relation to the FCC Licenses for approval of the change in
control of the Company or its applicable Subsidiaries (treating for
this purpose the ▇▇▇▇ Aliant Entities and Telesat, in Telesat's case
for so long as the Telesat Transaction has not been completed, as
Subsidiaries of the Company) on the completion of the transactions
contemplated herein;
"FCC APPROVAL" means that all required approvals of the FCC
Applications shall have been received from the FCC or relevant FCC
staff pursuant to delegated authority;
"FCC LICENSES" means the authorizations, licenses and declaratory
rulings issued by the FCC to the Company or a Subsidiary thereof
(treating for this purpose the ▇▇▇▇ Aliant Entities and Telesat, in
Telesat's case for so long as the Telesat Transaction has not been
completed, as Subsidiaries of the Company) for the provision of service
in the United States or between the United States and any foreign
points as disclosed in the Company Disclosure Letter;
"FINAL ORDER" means the final order of the Court in a form acceptable
to the Company and the Purchaser, acting reasonably, approving the
Arrangement as such order may be amended by the Court (with the consent
of both the Company and the Purchaser, each acting reasonably) at any
time prior to the Effective Date or, if appealed, then, unless such
appeal is withdrawn or denied, as affirmed or as amended (provided that
any such amendment is acceptable to both the Company and the Purchaser,
each acting reasonably) on appeal;
"FINANCIAL ADVISORS" means, collectively, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., CIBC
World Markets Inc., BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc., RBC Dominion Securities
Inc. and ▇▇▇▇▇▇▇▇▇ & Co. Canada Ltd.;
6
"GAAP" means accounting principles generally accepted in Canada
including those set out in the Handbook of the Canadian Institute of
Chartered Accountants, at the relevant time applied on a consistent
basis;
"GOVERNMENTAL AUTHORITY" means any (a) multinational, federal,
national, provincial, state, regional, municipal, local or other
government, governmental or public department, central bank, court,
tribunal, arbitral body, commission, board, bureau, ministry or agency,
domestic or foreign, (b) any subdivision, agent, commission, board, or
authority of any of the foregoing, (c) any quasi-governmental or
private body exercising any regulatory, self-regulatory, expropriation
or taxing authority under or for the account of any of the foregoing,
or (d) any stock exchange;
"HERITAGE MINISTER" has the meaning ascribed thereto in Section 6.5(1);
"HSR ACT" means the United States ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976;
"HSR APPROVAL" means the expiration or early termination of any waiting
period, and any extension thereof, applicable to the completion of the
transactions contemplated hereby under the HSR Act;
"INDEMNIFIED PERSON" has the meaning ascribed thereto in Section
6.2(1);
"INDUSTRY CANADA" means the Minister of Industry acting in accordance
with the powers and discretion accorded to the Minister under the
Radiocommunication Act;
"INDUSTRY CANADA APPLICATIONS" means applications to Industry Canada in
respect of Industry Canada Licenses under the Radiocommunication Act
and related regulations for approval of the change in control of the
Industry Canada Licensees on the completion of the transactions set out
herein;
"INDUSTRY CANADA APPROVAL" means that all required approvals by
Industry Canada of the Industry Canada Applications shall have been
received;
"INDUSTRY CANADA LICENSEES" means those affiliates of the Company who
hold Industry Canada Licenses, treating for this purpose the ▇▇▇▇
Aliant Entities and Telesat, in Telesat's case for so long as the
Telesat Transaction has not been completed, as affiliates of the
Company;
"INDUSTRY CANADA LICENSES" means only those radio or spectrum licenses
issued by Industry Canada pursuant to the Radiocommunication Act to
affiliates of the Company (treating for this purpose the ▇▇▇▇ Aliant
Entities and Telesat, in Telesat's case for so long as the Telesat
Transaction has not been completed, as affiliates of the Company) which
contain, as a condition of license, the requirement to seek the prior
approval of Industry Canada for a material change in ownership or
control of the licensee, a complete list of which is set out in the
Company Disclosure Letter;
"INTELLECTUAL PROPERTY RIGHTS" has the meaning ascribed thereto in
paragraph (u) of Schedule E;
7
"INTERNAL CONTROLS" has the meaning ascribed thereto in Rule 13a-15 of
the 1934 Act;
"INTERIM ORDER" means the interim order of the Court in a form
acceptable to the Company and the Purchaser, acting reasonably,
providing for, among other things, the calling and holding of the
Company Meeting, as the same may be amended by the Court with the
consent of the Company and the Purchaser, each acting reasonably;
"INVESTMENT CANADA ACT" means the Investment Canada Act;
"INVESTMENT CANADA ACT APPROVAL" means, if required, that the Minister
designated for the purposes of the Investment Canada Act shall have
confirmed to the Purchaser that he or she has determined, or shall have
been deemed to have determined, that the transactions contemplated by
this Agreement are of "net benefit" to Canada;
"KEY REGULATORY APPROVALS" means the approvals listed on Schedule C
hereto;
"KNOWLEDGE" means the actual knowledge of any of the individuals
expressly identified for these purposes in the Company Disclosure
Letter;
"LEASED REAL PROPERTY" has the meaning ascribed thereto in paragraph
(q) of Schedule E;
"LEASED NETWORK FACILITIES" means all of the Company's and its
Subsidiaries' Network Facilities that are not owned by the Company or
its Subsidiaries but are provided under lease, license or other
agreement between the Company or the Subsidiary and one or more other
Persons;
"LENDERS" has the meaning ascribed thereto in paragraph (f) of Schedule
F;
"LIEN" means, with respect to any property or asset, any mortgage,
lien, hypothec, pledge, charge, security interest, encumbrance, defect
of title, restriction or other rights of third parties, or other
adverse claim of any kind in respect of such property or asset;
"MARKETING PERIOD" shall mean, unless otherwise agreed to by the
Parties, the first period of 20 consecutive calendar days after the
Required Information Schedule is delivered, during which (A) the
Purchaser shall have the Required Information that the Company is
required to provide to the Purchaser pursuant to Section 5.3 and (B)
all conditions set forth in Section 8.1 and Section 8.2 (other than
those that by their nature will not be satisfied until the Effective
Time or conditions set forth in Section 8.1 with respect to which any
Purchaser Party shall have failed to comply with its obligations
hereunder) have been satisfied and no event has occurred and no
conditions exist that would cause any of the conditions set forth in
Section 8.1 (other than conditions set forth in Section 8.1 that are
not satisfied as a result of any Purchaser Party having failed to
comply with its obligations hereunder) or Section 8.2 to fail to be
satisfied assuming the Effective Time were to be scheduled for any time
during such 20 consecutive calendar day period; provided, however, that
the Marketing Period shall end on any earlier date that is the date on
which the debt financing contemplated by the Commitment Letter is
otherwise obtained; provided further that if the Marketing Period would
not end on or prior to December 19, 2007, the Marketing Period shall
8
commence no earlier than January 7, 2008, and if the Marketing Period
would not end on or prior to August 15, 2008, the Marketing Period
shall commence no earlier than September 8, 2008; provided further that
the Marketing Period shall not be deemed to have commenced if, (i)
after the date hereof and prior to the completion of the Marketing
Period, Deloitte and Touche LLP shall have withdrawn its audit opinion
with respect to any of the financial statements contained in the
Company Filings or refuses to issue a customary comfort letter (in
accordance with its normal practices) or (ii) the financial statements
included in the Required Information that is available to the Purchaser
on the first day of any such 20 consecutive calendar day period would
not be sufficiently current on any day during such 20 consecutive
calendar day period to permit a registration statement using such
financial statements to be declared effective by the SEC on the last
day of the 20 consecutive calendar day period;
"MATERIAL ADVERSE EFFECT" means an effect that, individually or in the
aggregate with other such effects, is or would reasonably be expected
to be material and adverse to the financial condition, business or the
results of operations of the Company and its Subsidiaries, taken as a
whole, (treating for purposes of this definition the ▇▇▇▇ Aliant
Entities and, for so long as the Telesat Transaction has not been
completed, Telesat, as Subsidiaries of the Company), except any such
effect resulting from or arising in connection with: (a) any change in
GAAP; (b) any adoption, proposal, implementation or change in
Applicable Law or any interpretation thereof by any Governmental
Authority; (c) any change in global, national or regional political
conditions (including the outbreak of war or acts of terrorism) or in
general economic, business, regulatory, political or market conditions
or in national or global financial or capital markets; (d) any change
affecting any of the industries in which the Company or any of its
Subsidiaries operate; (e) any natural disaster; (f) the execution,
announcement or performance of the Agreement or consummation of the
transactions contemplated hereby, including any loss or threatened loss
of, or adverse change or threatened adverse change in, the relationship
of the Company or any of its Subsidiaries with any of their employees,
financing sources, bondholders or shareholders; (g) any change in the
market price or trading volume of any securities of the Company (it
being understood that the causes underlying such change in market price
may be taken into account in determining whether a Material Adverse
Effect has occurred), or any suspension of trading in securities
generally on any securities exchange on which any securities of the
Company trade; (h) the Company ceasing to be a "qualified corporation"
for purposes of the Telecommunications Regulations, or ceasing to be a
"Canadian" for purposes of the Radiocommunication Regulations, or
ceasing to be a "Canadian" for purposes of the Direction or ceasing to
be in compliance with the Direction; (i) the failure of the Company in
and of itself to meet any internal or public projections, forecasts or
estimates of revenues or earnings (it being understood that the causes
underlying such failure may be taken into account in determining
whether a Material Adverse Effect has occurred); (j) the failure of the
Telesat Transaction to be completed for any reason; (k) any actions
taken (or omitted to be taken) upon the request of the Purchaser; or
(l) any action taken by the Company or any of its Subsidiaries which is
required pursuant to the Agreement; provided, however, that with
respect to clauses (c), (d) and (e), such matter does not have a
materially disproportionate effect on the Company and its Subsidiaries,
taken as a whole, relative to other comparable companies and entities
operating in the industries in which the Company and/or its
9
Subsidiaries operate, and unless expressly provided in any particular
section of this Agreement, references in certain sections of this
Agreement to dollar amounts are not intended to be, and shall not be
deemed to be, illustrative or interpretive for purposes of determining
whether a "MATERIAL ADVERSE EFFECT" has occurred;
"MATERIAL CONTRACT" means: (a) any Contract which, if terminated or
modified or if it ceased to be in effect, would reasonably be expected
to have a Material Adverse Effect; (b) any partnership agreement,
limited liability company agreement, joint venture agreement or similar
agreement or arrangement relating to the formation, creation or
operation of any partnership, limited liability company or joint
venture, the properties and assets of which exceed $400 million (book
value or fair market value), in which the Company or any of its
Subsidiaries is a partner, member or joint venturer (or other
participant) and in which the interest of the Company and its
Subsidiaries has a fair market value which exceeds $200 million, but
excluding any such partnership, limited liability company or joint
venture which is a wholly-owned Subsidiary of the Company; (c) any
Contract under which indebtedness in excess of $250 million is or may
become outstanding, other than any such Contract between two or more
wholly-owned Subsidiaries of the Company or between the Company and one
or more or its wholly-owned Subsidiaries; (d) any Contract providing
for the sale or exchange of, or option to sell or exchange, any
property or asset where the sale price or agreed value or fair market
value of such property or asset is in excess of $200 million, or the
purchase or exchange of, or option to purchase or exchange, any
property or asset where the purchase price or agreed value or fair
market value of such property or asset is in excess of $200 million, in
either case entered into in the past 12 months or entered into more
than 12 months prior to the date hereof in respect of which the
applicable transaction has not yet been substantially consummated,
other than any such Contract between two or more wholly-owned
Subsidiaries of the Company or between the Company and one or more or
its wholly-owned Subsidiaries; or (e) any Contract restricting the
incurrence of indebtedness by the Company or any of its Subsidiaries or
(including by requiring the granting of an equal and rateable Lien) the
incurrence of any Liens on any properties or assets of the Company or
any of its Subsidiaries which are material to the Company and its
Subsidiaries, taken as a whole, or restricting the payment of dividends
by the Company, other than any such Contract between two or more
wholly-owned Subsidiaries of the Company or between the Company and one
or more or its wholly-owned Subsidiaries which may be amended, and the
terms of which may be waived without the consent of any other Party
(the "LIEN RESTRICTIONS"); (f) any Contract under which the Company or
its wholly-owned Subsidiaries are obligated to make or expect to
receive payments on an annual basis in excess of $100 million or $300
million over the remaining term of the Contract; and (g) any Contract
that limits or otherwise restricts, in a manner material to the Company
and its Subsidiaries, taken as a whole, (i) the ability of the Company
or any of its wholly-owned Subsidiaries to compete in any material
geographic area or material line of business or (ii) the scope of
Persons to whom the Company or any of its Subsidiaries may sell
products or deliver services;
"MATERIAL FACT" has the meaning ascribed thereto in the Securities Act;
"MATERIAL SUBSIDIARIES" means those subsidiaries of Company which are
identified as such in the Company Disclosure Letter;
10
"MISREPRESENTATION" has the meaning ascribed thereto in the Securities
Act;
"NETWORK FACILITIES" means all of the Company's and its Subsidiaries'
material network facilities (including cable, wires, conduits, switches
and other equipment and facilities) and related material operating
support equipment systems, network operations centres, and land and
buildings, whether owned or leased;
"NETWORK FACILITY AGREEMENTS" means agreements under which third
Persons provide Network Facilities to the Company and/or its
Subsidiaries;
"OPTION" means an option to purchase Common Shares granted under any of
the Stock Option Plans;
"OWNED NETWORK FACILITIES" means Network Facilities that are owned by
the Company or one of its Subsidiaries;
"OWNED REAL PROPERTY" has the meaning ascribed thereto in paragraph (q)
of Schedule E;
"OUTSIDE DATE" means June 30, 2008, or such later date as the Purchaser
and the Company may agree in writing, provided that if the Effective
Date has not occurred by the Outside Date as a result of the failure to
obtain all of the Key Regulatory Approvals, then either the Purchaser
or the Company may from time to time elect in writing, provided that
the Party so electing is then in compliance in all material respects
with its obligations under the Agreement, to extend the Outside Date by
a specified period of not less than five Business Days, provided that
in aggregate such extensions shall not exceed three months, and
provided further that the Outside Date may only be extended if the
Party so extending the Outside Date reasonably believes that all of the
Key Regulatory Approvals are capable of being obtained prior to the
Outside Date, as it may be so extended; and provided that, after the
Key Regulatory Approvals have been obtained, the Outside Date shall not
occur prior to the end of the Marketing Period;
"PARTIES" means, collectively, the Purchaser and the Company, and
"PARTY" means any of them;
"PERMITTED DIVIDEND" means, in respect of the Common Shares, a dividend
not in excess of $0.365 per Common Share per quarter (adjusted for any
stock split, stock dividend, reorganization or similar event after the
date hereof), and in respect of any Preferred Share, a dividend in an
amount and with a payment frequency as provided for or contemplated by
the terms of such Preferred Share, including as such dividend rate may
be reset by the Company from time to time, in each case with customary
record and payment dates;
"PERMITTED LIENS" means: (i) the reservations, limitations, provisos
and conditions expressed in the original grant from the Crown and any
statutory exceptions to title; (ii) inchoate or statutory liens of
contractors, subcontractors, mechanics, workers, suppliers,
materialmen, carriers and others in respect of the construction,
maintenance, repair or operation of real or personal property; (iii)
easements, servitudes, restrictions, restrictive covenants, party wall
11
agreements, rights of way, licenses, permits and other similar rights
in real property (including, without limiting the generality of the
foregoing, easements, rights of way and agreements for sewers, drains,
gas and water mains or electric light and power or telephone,
telecommunications or cable conduits, poles, wires and cables); (iv)
liens for Taxes in respect of real property not yet due and payable;
(v) zoning and building by-laws and ordinances, regulations made by
public authorities and other restrictions affecting or controlling the
use, marketability or development of real property; (vi) agreements
with any municipal, provincial or federal governments or authorities
and any public utilities or private suppliers of services, including
(without limitation) subdivision agreements, development agreements,
site control agreements, engineering, grading or landscaping agreements
and similar agreements; and (vii) such other imperfections or
irregularities of title or Liens as do not materially affect the use of
the properties or assets subject thereto or affected thereby or
otherwise materially impair business operations at such properties;
which in the case of (iii), (v) and (vi), do not materially impair the
use of the applicable real property subject thereto as such property is
being used at the date hereof;
"PERSON" includes any individual, firm, partnership, limited
partnership, limited liability partnership, joint venture, venture
capital fund, limited liability company, unlimited liability company,
association, trust, trustee, executor, administrator, legal personal
representative, estate, body corporate, corporation, company,
unincorporated association or organization, Governmental Authority,
syndicate or other entity, whether or not having legal status;
"PLAN OF ARRANGEMENT" means the plan of arrangement, substantially in
the form of Schedule A hereto, and any amendments or variations thereto
made in accordance with Section 10.2 hereof or the Plan of Arrangement
or made at the direction of the Court in the Final Order with the
consent of the Company and the Purchaser, each acting reasonably;
"PRE-ACQUISITION REORGANIZATION" has the meaning ascribed thereto in
Section 5.5;
"PREFERRED SHAREHOLDERS" means the registered or beneficial holders of
Preferred Shares, as the context requires;
"PREFERRED SHARES" means the first preferred shares in the capital of
the Company, as constituted on the date hereof, and includes all series
thereof (and, for greater certainty, includes, as the context requires,
the series of preferred shares into which one or more outstanding
series may be converted in accordance with their terms);
"PROCEEDINGS" means any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or
investigative;
"PURCHASER PARTIES" means the Purchaser and each of the Equity
Sponsors;
"RADIOCOMMUNICATION ACT" means the Radiocommunication Act (Canada);
12
"RADIOCOMMUNICATION REGULATIONS" means the Radiocommunication
Regulations made under the Radiocommunication Act;
"REGULATORY APPROVALS" means the Key Regulatory Approvals and the
Additional Regulatory Approvals;
"REPRESENTATIVES" has the meaning ascribed thereto in Section 5.2(1);
"REQUIRED INFORMATION" has the meaning ascribed thereto in Section 5.3;
"REQUIRED INFORMATION SCHEDULE" has the meaning ascribed thereto in
Section 5.3;
"RETURNS" means all reports, forms, elections, designations, schedules,
statements, estimates, declarations of estimated tax, information
statements and returns required to be filed with a Governmental
Authority with respect to Taxes;
"RIGHT-OF-WAY AGREEMENT" has the meaning ascribed thereto in paragraph
(r) of Schedule E;
"RSUS" means restricted share units issued under the Company's 2004
Restricted Share Unit Plan for Executives and Other Key Employees, as
amended from time to time;
"SECURITIES ACT" means the Securities Act (Quebec);
"SECURITIES AUTHORITIES" means the United States Securities and
Exchange Commission, the AMF and the applicable securities commissions
and other securities regulatory authorities in each of the other
provinces and territories of Canada;
"SECURITIES LAWS" means the Securities Act and all other applicable
Canadian provincial and territorial, United States federal and state
securities laws, rules and regulations and published policies
thereunder;
"SOLVENT" when used with respect to the Company, means that, as of any
date of determination (a) the amount of the "fair saleable value" of
the assets of the Company will, as of such date, exceed (i) the value
of all "liabilities of the Company, including contingent and other
liabilities," as of such date, as such quoted terms are generally
determined in accordance with Applicable Laws governing determinations
of the insolvency of debtors, and (ii) the amount that will be required
to pay the probable liabilities of the Company on its existing debts
(including contingent and other liabilities) as such debts become
absolute and mature, (b) the Company will not have, as of such date, an
unreasonably small amount of capital for the operation of the
businesses and transactions in which it intends to engage or proposes
to be engaged following the Effective Date, (c) the Company will be
able to meet its obligations as they generally become due and to pay
its liabilities, including contingent and other liabilities, as they
mature, and (d) the aggregate of the property of the Company is, at a
fair valuation, sufficient, or, if disposed of at a fairly conducted
sale under legal process, would be sufficient, to enable payment of all
its obligations, due and accruing due. For purposes of this definition,
"not have an unreasonably small amount of capital for the operation of
the businesses in which it is engaged or proposed to be engaged" and
"able to pay its liabilities, including contingent and other
13
liabilities, as they mature" means that the Company will be able to
generate enough cash from operations, asset dispositions or
refinancing, or a combination thereof, to meet its obligations as they
become due;
"STOCK OPTION PLANS" means, collectively, the BCE Inc. Long Term
Incentive (Stock Option) Program (1999), the BCE Inc. Replacement Stock
Option Plan (Plan of Arrangement 2000) and any other existing stock
option plan of the Company, in each case as amended from time to time;
"SUBSIDIARY" has the meaning ascribed thereto in Section 1.1 of
National Instrument 45-106 - Prospectus and Registration Exemptions as
in effect on the date hereof, but with respect to the Company does not
include Telesat (so long as the Telesat Purchase Agreement has not been
terminated) or the ▇▇▇▇ Aliant Entities;
"SUPERIOR PROPOSAL" shall mean any written Acquisition Proposal: (i) to
acquire not less than 50.1% of the outstanding Common Shares or assets
of the Company on a consolidated basis, (ii) that is reasonably capable
of being completed, taking into account to the extent considered
appropriate by the Board, all financial, legal, regulatory and other
aspects of such proposal and the Person making such proposal, (iii) in
respect of which, where applicable, financing commitment letters
reasonably satisfactory to the Company shall have been furnished to the
Company, (iv) that is not subject to a due diligence condition, and (v)
that the Board determines, in its good faith judgment, after receiving
the advice of its outside legal and financial advisors and after taking
into account all the terms and conditions of the Acquisition Proposal,
is on terms and conditions that are more favourable from a financial
point of view to the Affected Shareholders than those contemplated by
this Agreement (after taking into account for greater certainty any
modifications to this Agreement proposed by the Purchaser as
contemplated by Section 5.2);
"TAX ACT" means the Income Tax Act (Canada);
"TAXES" means any and all domestic and foreign federal, state,
provincial, municipal and local taxes, assessments and other
governmental charges, duties, impositions and liabilities imposed by
any Governmental Authority, including Canada Pension Plan and
provincial pension plan contributions, tax instalment payments,
unemployment insurance contributions and employment insurance
contributions, worker's compensation and deductions at source,
including taxes based on or measured by gross receipts, income,
profits, sales, capital, use, and occupation, and including goods and
services, value added, ad valorem, sales, capital, transfer, franchise,
non-resident withholding, customs, payroll, recapture, employment,
excise and property duties and taxes, together with all interest,
penalties, fines and additions imposed with respect to such amounts;
"TECHNOLOGY" has the meaning ascribed thereto in paragraph (u) of
Schedule E;
"TELECOMMUNICATIONS ACT" means the Telecommunications Act (Canada);
"TELECOM LAWS" means the Telecommunications Act, the Broadcasting Act
and the Radiocommunication Act, and the respective regulations, rules,
policies and directions made thereunder, as well as any applicable
14
foreign telecommunications or communications laws, regulations, rules,
policies and directions including those administered by the FCC;
"TELECOMMUNICATIONS REGULATIONS" means the Canadian Telecommunications
Common Carrier Ownership and Control Regulations made under the
Telecommunications Act;
"TELESAT" means Telesat Canada, a corporation continued under the laws
of Canada;
"TELESAT PURCHASE AGREEMENT" means the share purchase agreement dated
as of December 16, 2006 among the Company, Telesat and 4363213 Canada
Inc. as the same has been or may be amended from time to time in
accordance with its terms and this Agreement;
"TELESAT TRANSACTION" means the purchase and sale transaction, and
related transactions, contemplated by Telesat Purchase Agreement;
"TERMINATION FEE" has the meaning ascribed thereto in Section 10.6(2);
and
"TERMINATION FEE EVENT" has the meaning ascribed thereto in Section
10.6(2).
SECTION 1.2 INTERPRETATION NOT AFFECTED BY HEADINGS
The division of this Agreement into Articles and Sections and the
insertion of a table of contents and headings are for convenience of reference
only and do not affect the construction or interpretation of this Agreement. The
terms "hereof", "hereunder" and similar expressions refer to this Agreement and
not to any particular Article, Section or other portion hereof. Unless something
in the subject matter or context is inconsistent therewith, references herein to
Articles, Sections and Schedules are to Articles and Sections of and Schedules
to this Agreement.
SECTION 1.3 INTERPRETATION
In this Agreement words importing the singular number include the
plural and vice versa, and words importing any gender include all genders.
Whenever the words "include", "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation", whether or not they are in fact followed by those words or words of
like import. The term "made available" means that (i) copies of the subject
materials were included in the Data Room on or prior to 3:15 p.m. on June 29,
2007, (ii) copies of the subject materials were provided to the Purchaser or any
of the Purchaser Parties, or (iii) the subject material was listed in the
Company Disclosure Letter or referred to in the Data Room on or prior to 3:15
p.m. on June 29, 2007 and copies were provided to the Purchaser or any of the
Purchaser Parties by the Company if requested. Any capitalized terms used in any
Schedule or in the Company Disclosure Letter but not otherwise defined therein,
shall have the meaning as defined in this Agreement.
SECTION 1.4 DATE FOR ANY ACTION
If the date on which any action is required to be taken hereunder by a
Party is not a Business Day, such action shall be required to be taken on the
next succeeding day which is a Business Day. In this Agreement, references from
15
or through any date mean, unless otherwise specified, from and including that
date and/or through and including that date, respectively.
SECTION 1.5 ENTIRE AGREEMENT
This Agreement, the agreements and other documents herein referred to,
and the Confidentiality Agreements, constitute the entire agreement between the
Parties pertaining hereto and supersede all other prior agreements,
understandings, negotiations and discussions, whether oral or written, between
the Parties hereto. Except as expressly represented and warranted herein or in
any other binding agreement relating hereto executed by the Parties after the
date hereof, no Party shall be considered to have given any other express or
implied representations or warranties, including without limitation as a result
of oral or written statements or management or other presentations or memoranda.
The Parties acknowledge that in order to induce the Company to enter into this
Agreement, the Equity Sponsors have, contemporaneously with the execution and
delivery of this Agreement, executed and delivered to the Company a guarantee of
certain of the obligations of the Purchaser hereunder.
SECTION 1.6 STATUTORY REFERENCES, REFERENCES TO PERSONS AND REFERENCES TO
CONTRACTS
In this Agreement, unless something in the subject matter or context is
inconsistent therewith or unless otherwise herein provided, a reference to any
statute, regulation, direction or instrument is to that statute, regulation,
direction or instrument as now enacted or as the same may from time to time be
amended, re-enacted or replaced, and in the case of a reference to a statute,
includes any regulations, rules, policies or directions made thereunder. Any
reference in this Agreement to a Person includes its heirs, administrators,
executors, legal personal representatives, predecessors, successors and
permitted assigns. References to any contract are to that agreement or contract
as amended, modified or supplemented from time to time in accordance with its
terms.
SECTION 1.7 CURRENCY
Unless otherwise stated, all references in this Agreement to sums of
money are expressed in lawful money of Canada and "$" refers to Canadian
dollars.
SECTION 1.8 ACCOUNTING PRINCIPLES
Unless otherwise stated, all accounting terms used in this Agreement
shall have the meanings attributable thereto under GAAP, and all determinations
of an accounting nature required to be made shall be made in a manner consistent
with GAAP.
SECTION 1.9 SCHEDULES
The following Schedules are annexed to this Agreement and are
incorporated by reference into this Agreement and form a part hereof:
Schedule A - Plan of Arrangement
Schedule B - Special Resolution
Schedule C - Key Regulatory Approvals
Schedule D - Additional Regulatory Approvals
16
Schedule E - Representations and Warranties of the Company
Schedule F - Representations and Warranties of the Purchaser
Schedule G - Pre-Approved Equity Partners
ARTICLE 2
THE ARRANGEMENT
SECTION 2.1 ARRANGEMENT
The Company and the Purchaser agree that the Arrangement will be
implemented in accordance with and subject to the terms and conditions contained
in this Agreement and the Plan of Arrangement.
SECTION 2.2 INTERIM ORDER
The Company agrees that as soon as reasonably practicable after the
date hereof, but in any event in sufficient time to permit the Company Meeting
to be convened in accordance with Section 2.3(1), the Company shall apply in a
manner reasonably acceptable to the Purchaser pursuant to Section 192 of the
CBCA and, in cooperation with the Purchaser, prepare, file and diligently pursue
an application for the Interim Order, which shall provide, among other things:
(a) for the class of persons to whom notice is to be provided in
respect of the Arrangement and the Company Meeting and for the
manner in which such notice is to be provided;
(b) that the requisite approval for the Arrangement Resolution
shall be two-thirds of the votes cast on the Arrangement
Resolution by Affected Shareholders present in person or
represented by proxy at the Company Meeting;
(c) that, in all other respects, the terms, restrictions and
conditions of the Company's articles of amalgamation and
by-laws, including quorum requirements and all other matters,
shall apply in respect of the Company Meeting;
(d) for the grant of the Dissent Rights;
(e) for the notice requirements with respect to the presentation
of the application to the Court for the Final Order; and
(f) that the Company Meeting may be adjourned or postponed from
time to time by the Company without the need for additional
approval of the Court.
SECTION 2.3 THE COMPANY MEETING
(1) Subject to the terms of this Agreement, the Company agrees to convene
and conduct the Company Meeting in accordance with the Interim Order,
the Company's articles of amalgamation and by-laws and Applicable Laws
on or before October 29, 2007, and not to propose to adjourn or
postpone the Company Meeting:
(a) except as required for quorum purposes or by Applicable Law;
17
(b) except as required under Section 7.6(2) of this Agreement; or
(c) except for an adjournment for the purpose of attempting to
obtain the requisite approval of the Arrangement Resolution.
(2) Subject to the terms of this Agreement and compliance by the directors
and officers of the Company with their fiduciary duties, the Company
will use its commercially reasonable efforts to solicit proxies in
favour of the approval of the Arrangement Resolution, including, if so
requested by the Purchaser, acting reasonably, using dealer and proxy
solicitation services and cooperating with any Persons engaged by the
Purchaser to solicit proxies in favour of the approval of the
Arrangement Resolution.
(3) The Company will give notice to the Purchaser of the Company Meeting
and allow the Purchaser's representatives and legal counsel to attend
the Company Meeting.
(4) The Company will advise the Purchaser as the Purchaser may reasonably
request, and at least on a daily basis on each of the last five
Business Days prior to the date of the Company Meeting, as to the
aggregate tally of the proxies received by the Company in respect of
the Arrangement Resolution.
(5) The Company will promptly advise the Purchaser of any written notice of
dissent or purported exercise by any Affected Shareholder of Dissent
Rights received by the Company in relation to the Arrangement
Resolution and any withdrawal of Dissent Rights received by the Company
and, subject to Applicable Laws, any written communications sent by or
on behalf of the Company to any Affected Shareholder exercising or
purporting to exercise Dissent Rights in relation to the Arrangement
Resolution. The Company shall not settle any claims with respect to
Dissent Rights without first consulting with the Purchaser.
SECTION 2.4 THE COMPANY CIRCULAR
(1) Promptly after the execution of this Agreement, the Company shall
prepare and complete, in consultation with the Purchaser, the Company
Circular together with any other documents required by the CBCA,
Securities Laws and other Applicable Laws in connection with the
Company Meeting and the Arrangement, and the Company shall, promptly
after obtaining the Interim Order, cause the Company Circular and other
documentation required in connection with the Company Meeting to be
filed and to be sent to each Affected Shareholder and other Persons as
required by the Interim Order and Applicable Laws, in each case so as
to permit the Company Meeting to be held within the time required by
Section 2.3(1).
(2) The Company shall ensure that the Company Circular complies in all
material respects with all Applicable Laws, and, without limiting the
generality of the foregoing, that the Company Circular (including with
respect to any information incorporated therein by reference) will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements contained therein not misleading in light of the
circumstances in which they are made (other than in each case with
respect to any information furnished by the Purchaser Parties) and
18
shall provide Affected Shareholders with information in sufficient
detail to permit them to form a reasoned judgement concerning the
matters to be placed before them at the Company Meeting. Subject to
Section 5.2(6), the Company Circular will include the recommendation of
the Board that Affected Shareholders vote in favour of the Arrangement
Resolution.
(3) The Purchaser and its legal counsel shall be given a reasonable
opportunity to review and comment on drafts of the Company Circular and
other documents related thereto, and reasonable consideration shall be
given to any comments made by the Purchaser and its counsel, provided
that all information relating solely to the Purchaser Parties included
in the Company Circular shall be in form and content satisfactory to
the Purchaser, acting reasonably.
(4) The Purchaser will furnish to the Company all such information
concerning the Purchaser Parties as may be reasonably required by the
Company in the preparation of the Company Circular and other documents
related thereto, and the Purchaser shall ensure that no such
information will contain any untrue statement of a material fact or
omit to state a material fact required to be stated in the Company
Circular in order to make any information so furnished or any
information concerning the Purchaser Parties not misleading in light of
the circumstances in which it is disclosed.
(5) The Purchaser will indemnify and save harmless the Company, its
Subsidiaries and their respective directors, officers, employees,
agents, advisors and representatives from and against any and all
liabilities, claims, demands, losses, costs, damages and expenses to
which the Company, any Subsidiary or any of their respective directors,
officers, employees, agents, advisors or representatives may be subject
or may suffer, in any way caused by, or arising, directly or
indirectly, from or in consequence of:
(a) any misrepresentation or alleged misrepresentation in any
information included in the Company Circular that is provided
by the Purchaser Parties for the purpose of inclusion in the
Company Circular; and
(b) any order made, or any inquiry, investigation or proceeding by
any Securities Authority or other Governmental Authority,
based on any misrepresentation or any alleged
misrepresentation in any information related solely to the
Purchaser Parties and provided by the Purchaser Parties for
the purpose of inclusion in the Company Circular.
(6) The Company and the Purchaser shall each promptly notify each other if
at any time before the Effective Date it becomes aware (in the case of
the Company only with respect to the Company and in the case of the
Purchaser only with respect to it or a Purchaser Party) that the
Company Circular contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary to make the statements contained therein not misleading in
light of the circumstances in which they are made, or that otherwise
requires an amendment or supplement to the Company Circular, and the
Parties shall co-operate in the preparation of any amendment or
supplement to the Circular, as required or appropriate, and the Company
shall promptly mail or otherwise publicly disseminate any amendment or
supplement to the Company Circular to Affected Shareholders and, if
19
required by the Court or Applicable Laws, file the same with the
Securities Authorities and as otherwise required.
SECTION 2.5 FINAL ORDER
If the Interim Order is obtained, the Arrangement Resolution is passed
at the Company Meeting as provided for in the Interim Order and as required by
Applicable Law and the condition in Section 8.1(d) has been satisfied or waived
by each of the Parties, and subject to the terms of this Agreement, the Company
shall as soon as reasonably practicable thereafter take all steps necessary or
desirable to submit the Arrangement to the Court and diligently pursue an
application for the Final Order pursuant to Section 192 of the CBCA.
SECTION 2.6 COURT PROCEEDINGS
The Purchaser and the Company will cooperate in seeking the Interim
Order and the Final Order, including by the Purchaser providing to the Company
on a timely basis any information required to be supplied by any Purchaser Party
in connection therewith. The Company will provide legal counsel to the Purchaser
with reasonable opportunity to review and comment upon drafts of all material to
be filed with the Court in connection with the Arrangement, and will give
reasonable consideration to all such comments. The Company will also provide
legal counsel to the Purchaser on a timely basis with copies of any notice of
appearance and evidence served on the Company or its legal counsel in respect of
the application for the Final Order or any appeal therefrom. Subject to
Applicable Laws, the Company will not file any material with the Court in
connection with the Arrangement or serve any such material, and will not agree
to modify or amend materials so filed or served, except as contemplated hereby
or with the Purchaser's prior written consent, such consent not to be
unreasonably withheld, conditioned or delayed; provided that nothing herein
shall require the Purchaser to agree or consent to any increase in Consideration
or other modification or amendment to such filed or served materials that
expands or increases the Purchaser's obligations set forth in any such filed or
served materials or under this Agreement.
SECTION 2.7 STOCK COMPENSATION PLANS
(1) Subject to the terms and conditions of this Agreement, pursuant to the
Arrangement, each holder of Options, whether vested or unvested, will
be entitled to receive from the Company in respect of each Option an
amount equal to the Consideration per Common Share less the applicable
exercise price in respect of such Option, as well as any applicable
related special compensation payments, and the Company shall take all
such reasonable steps as may be necessary or desirable to give effect
to the foregoing.
(2) Subject to the terms and conditions of this Agreement, pursuant to the
Arrangement, all DSUs and all RSUs (other than any interests in RSUs
held by individuals eligible to participate in the Company's retention
plan, which will be paid out on the earlier of 12 months from the date
hereof and six months from the Effective Date for an amount provided
under such retention plan, a description of which was provided to the
Purchaser on June 22, 2007), will be acquired or cancelled by the
Company for cash equal to the Consideration per Common Share per DSU or
20
RSU, as the case may be, and the Company shall take all such reasonable
steps as may be necessary or desirable to give effect to the foregoing.
SECTION 2.8 ARTICLES OF ARRANGEMENT AND EFFECTIVE DATE
The Articles of Arrangement shall implement the Plan of Arrangement.
The Articles of Arrangement shall include the form of the Plan of Arrangement
attached to this Agreement as Schedule A, as it may be amended at the reasonable
request of the Purchaser to include such terms and conditions as may be
determined by the Purchaser, acting reasonably, to be necessary or desirable
provided that no such term or condition (i) shall be prejudicial to the Affected
Shareholders or other Persons to be bound by the Plan of Arrangement or be
inconsistent with the provisions of this Agreement or (ii) creates a reasonable
risk of delaying, impairing or impeding in any material respect the receipt of
any Key Regulatory Approval or the satisfaction of any condition set forth in
Article 8 hereof. Subject to the Interim Order, the Final Order and any
Applicable Law, the Company agrees to amend the Plan of Arrangement at any time
prior to the Effective Time in accordance with Section 10.2 of this Agreement to
add, remove or amend any steps or terms determined to be necessary or desirable
by the Purchaser, acting reasonably, provided that the Plan of Arrangement shall
not be amended in any manner which is (i) prejudicial to the Affected
Shareholders or other Persons to be bound by the Plan of Arrangement or is
inconsistent with the provisions of this Agreement or (ii) creates a reasonable
risk of delaying, impairing or impeding in any material respect the receipt of
any Key Regulatory Approval or the satisfaction of any condition set forth in
Article 8 hereof. On the later of (i) the second Business Day following the last
day of the Marketing Period and (ii) the fifth Business Day after the
satisfaction or, where not prohibited, the waiver by the applicable Party or
Parties in whose favour the condition is, of the conditions (excluding
conditions that, by their terms, cannot be satisfied until the Effective Date,
but subject to the satisfaction or, where not prohibited, the waiver by the
applicable Party or Parties in whose favour the condition is, of those
conditions as of the Effective Date) set forth in Article 8, unless another time
or date is agreed to in writing by the Parties, the Articles of Arrangement
shall be filed by the Company with the Director. From and after the Effective
Time, the Plan of Arrangement will have all of the effects provided by
Applicable Law, including the CBCA. The closing of the transactions contemplated
hereby will take place at the offices of Stikeman Elliott LLP, 1155
▇▇▇▇-▇▇▇▇▇▇▇▇ Blvd. West, 40th Floor, Montreal, Quebec, or at such other
location as may be agreed upon by the Parties.
SECTION 2.9 PAYMENT OF CONSIDERATION
The Purchaser will, following receipt of the Final Order and prior to
the filing by the Company of the Articles of Arrangement with the Director,
provide the Depositary with sufficient funds in escrow (the terms and conditions
of such escrow to be satisfactory to the Company, acting reasonably) to complete
all of the transactions contemplated by the Plan of Arrangement, as provided in
the Plan of Arrangement.
21
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in (i) the Company Filings filed before the date of
this Agreement or (ii) the Company Disclosure Letter, the Company represents and
warrants to the Purchaser as set forth in Schedule E. For greater certainty, for
purposes of Schedule E Telesat shall be deemed not to be a Subsidiary or
affiliate of the Company, regardless of whether the Telesat Purchase Agreement
has been terminated.
SECTION 3.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The representations and warranties of Company contained in this
Agreement shall not survive the completion of the Arrangement and shall expire
and be terminated on the earlier of the Effective Time and the date on which
this Agreement is terminated in accordance with its terms.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company as set forth in
Schedule F.
SECTION 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The representations and warranties of the Purchaser contained in this
Agreement shall not survive the completion of the Arrangement and shall expire
and be terminated on the earlier of the Effective Time and the date on which
this Agreement is terminated in accordance with its terms.
ARTICLE 5
COVENANTS OF THE COMPANY
SECTION 5.1 CONDUCT OF BUSINESS
The Company covenants and agrees that, during the period from the date
of this Agreement until the earlier of the Effective Time and the time that this
Agreement is terminated in accordance with its terms, except as set out in the
Company Disclosure Letter, as required or permitted by the Agreement, as
required by Applicable Law or Governmental Authority, as required by the terms
of any existing Contract, or as contemplated by (i) the Company's 2007 business
plans specifically identified in the Company Disclosure Letter and made
available to the Purchaser and as updated in the written management presentation
provided on June 7, 2007 or (ii) the Company's 2008 business plans which are
approved by the Board, acting in good faith and following reasonable
consultation with the Purchaser that are consistent in all material respects
with the 2008 forecasts provided to the Purchaser Parties at the management
presentation held on June 7, 2007 and the related documents provided in the Data
Room, the Company shall, and shall cause each of its Subsidiaries to, conduct
its business in the ordinary course consistent with past practice, and shall use
22
its commercially reasonable efforts to preserve intact the present business
organization of the Company and its Subsidiaries and to preserve the current
relationships of the Company and its Subsidiaries with customers, suppliers,
distributors, licensors, employees and other Persons with which the Company or
any of its Subsidiaries has significant business relations. Without limiting the
generality of the foregoing, from the date of this Agreement until the earlier
of the Effective Time and the time that this Agreement is terminated in
accordance with its terms, except as set forth in the Company Disclosure Letter,
as required or permitted by this Agreement, as required by Applicable Law,
Governmental Authority or as required by the terms of any existing Contract, or
as contemplated by (i) the Company's 2007 business plans specifically identified
in the Company Disclosure Letter and made available to the Purchaser and as
updated in the written management presentation provided on June 7, 2007 or (ii)
the Company's 2008 business plans which are approved by the Board, acting in
good faith and following reasonable consultation with the Purchaser that are
consistent in all material respects with the 2008 forecasts provided to the
Purchaser Parties at the management presentation held on June 7, 2007 and the
related documents provided in the Data Room, the Company shall not, nor shall it
permit any of its Subsidiaries to, except with the prior consent of Purchaser
(which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend its articles of incorporation, articles of amalgamation,
by-laws or, in the case of any Subsidiary which is not a
corporation, its similar organizational documents;
(b) split, combine or reclassify any shares of the Company or
declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination
thereof), other than: (i) Permitted Dividends; (ii) dividends
or distributions from a Subsidiary of the Company to the
Company or another wholly-owned Subsidiary of the Company; or
(iii) as required by the terms thereof and in accordance with
such terms, including without limitation in order to effect
the conversion from time to time of issued and outstanding
Preferred Shares of one or more series into Preferred Shares
of a different series and/or to reset the dividend rate from
time to time on such Preferred Shares;
(c) redeem, repurchase, or otherwise acquire or offer to redeem,
repurchase or otherwise acquire any shares of capital stock of
the Company or any of its Subsidiaries, except: (i) for the
acquisition of shares of capital stock of any wholly-owned
Subsidiary of the Company by the Company or by any other
wholly-owned Subsidiary of the Company; (ii) as required by
the terms thereof and in accordance with such terms, including
without limitation in order to effect the conversion from time
to time of issued and outstanding Preferred Shares of one or
more series into Preferred Shares of a different series; or
(iii) for the acquisition of Common Shares pursuant to the
Company's normal course issuer bid at prices per share that
are less than the applicable Consideration;
(d) issue, deliver or sell, or authorize the issuance, delivery or
sale of any shares of capital stock, any options, warrants or
similar rights exercisable or exchangeable for or convertible
into such capital stock, of the Company or any of its
Subsidiaries, or any RSUs, other than: (i) the issuance of
Common Shares on the exercise or termination of Options
23
outstanding on the date hereof or as granted hereafter in
compliance with this Section 5.1(d), (ii) the issuance of up
to a maximum of 1,000,000 Options in the ordinary course
operation of existing share issuance plans of the Company
(iii) the issuance of additional Preferred Shares on the
conversion from time to time of issued and outstanding
Preferred Shares of one or more series into Preferred Shares
of a different series in accordance with the terms thereof, or
(iv) the issuance of any shares of capital stock of any
Subsidiary of the Company to the Company or any other
wholly-owned Subsidiary of the Company;
(e) acquire (by merger, consolidation, acquisition of stock or
assets or otherwise), directly or indirectly, in one
transaction or in a series of related transactions, assets,
securities, properties, interests or businesses having a cost,
on a per transaction or series of related transactions basis,
in excess of $100 million and subject to a maximum of $300
million for all such transactions, other than for greater
certainty ordinary course procurement contracts or the
acquisition of inventory or other assets for resale or use by
the Company and/or any of its Subsidiaries or their respective
customers in connection with the ordinary course operation of
their businesses;
(f) sell, lease or otherwise transfer, in one transaction or in a
series of related transactions, any assets, securities,
properties, interests or businesses, having a cost or
proceeds, as applicable, on a per transaction or series of
related transactions basis, in excess of $200 million and
subject to a maximum of $500 million for all such
transactions, other than: (i) for greater certainty, the sale,
lease or other use or transfer of inventories and products in
the ordinary course of business consistent with past practice;
(ii) in connection with the Telesat Transaction; or (iii) in
respect of obsolete, damaged or destroyed assets;
(g) make, in one transaction or in a series of related
transactions, any loans, advances or capital contributions to,
or investments in, in an amount on a per transaction or series
of related transactions basis in excess of $100 million
individually and $300 million in the aggregate, in any other
Person, other than the Company or any wholly-owned Subsidiary
of the Company and other than pursuant to the exercise of
existing pre-emptive or similar rights or existing capital
call obligations;
(h) prepay any long-term indebtedness before its scheduled
maturity or create, incur, assume or otherwise become liable,
in one transaction or in a series of related transactions,
with respect to any indebtedness for borrowed money or
guarantees thereof in an amount, on a per transaction or
series of related transactions basis, in excess of $200
million provided that the amount contemplated by subsection
(j)(ii) of Schedule E shall not be increased by more than $800
million as a result of the net effect of all such
transactions, other than (i) indebtedness owing by one
Subsidiary of the Company to the Company or another Subsidiary
of the Company or of the Company to another Subsidiary of the
Company; (ii) in connection with the refinancing of
indebtedness outstanding on the date hereof; (iii) in
connection with advances under the Company's or any
Subsidiary's existing credit facilities; or (iv) indebtedness
entered into in the ordinary course consistent with past
24
practice, including for greater certainty lease financing
transactions (including real property leasing financing
transactions) and the issuance of commercial paper from time
to time; provided that any indebtedness created, incurred,
refinanced, assumed or for which the Company or any Subsidiary
becomes liable in accordance with (ii) - (iv) shall be
prepayable at the Effective Time without premium, penalty or
other incremental costs (including breakage costs) in excess
of $5 million, in the aggregate;
(i) except as required by Applicable Law or by the terms of the
Employee Plans or Contracts in effect on the date hereof: (i)
increase any severance, change of control or termination pay
to (or amend any existing arrangement with) any Company
Employee, director or executive officer of the Company or any
of its Subsidiaries; (ii) increase the benefits payable under
any existing severance or termination pay policies with any
Company Employee, director or executive officer of the Company
or any of its Subsidiaries; (iii) increase the benefits
payable under any employment agreements with any Company
Employee, director or executive officer of the Company or any
of its Subsidiaries (other than, in the case of a Company
Employee other than a director or executive officer of the
Company or ▇▇▇▇ Canada, in a manner consistent with past
practice); (iv) enter into any employment, deferred
compensation or other similar agreement (or amend any such
existing agreement) with any director or executive officer of
the Company or ▇▇▇▇ Canada; or (v) increase compensation,
bonus levels or other benefits payable to any director or
executive officer of the Company or ▇▇▇▇ Canada or to any
Company Employee (other than, in the case of a Company
Employee other than a director or executive officer of the
Company or ▇▇▇▇ Canada, in a manner consistent with past
practice); provided that the foregoing shall not prohibit the
Company from paying, establishing or increasing the
compensation of the members of the Strategic Oversight
Committee;
(j) make any material change in the Company's methods of
accounting, except as required by concurrent changes in GAAP,
or pursuant to written instructions, comments or orders from
the SEC, the AMF or any applicable Securities Authority;
(k) waive, release, assign, settle or compromise any claim in a
manner that could require a payment by, or release another
Person of an obligation to, the Company or any of its
Subsidiaries of $100 million individually, or $200 million in
aggregate, or could reasonably be expected to have a Material
Adverse Effect or to adversely affect in any material respect
the ability of the Company to complete the transactions
contemplated by this Agreement;
(l) amend or modify any Contract referred to in clause (aa) of
Schedule E to increase the amounts payable to any of the
Financial Advisors or amend or modify in any material respect
or terminate or waive any material right under any Material
Contract or enter into any contract or agreement that would be
a Material Contract if in effect on the date hereof except for
(i) any Contract or agreement for the sale or procurement of
goods or services entered into on arm's length terms with a
customer or supplier of the Company or any Subsidiary, (ii)
any Contract that does not provide for the possible payment or
25
receipt by the Company and/or its Subsidiaries over the
remaining life of such Contract of an amount in excess of $400
million, (iii) any other revenue-generating Contract entered
into in the ordinary course of business that provides for
payment or revenues of less than $200 million per annum and
$500 million over the remaining life of such Contract, or (iv)
any renewal or extension of any existing Contract (other than
the agreements listed in Section 5.1(l) of the Company
Disclosure Letter) on substantially similar terms; provided
that the exceptions set out in clauses (i), (ii) and (iii)
above shall not apply in respect of any Contract that is a
Material Contract by virtue of clause (g) of the definition of
Material Contract set out in Section 1.1;
(m) enter into, amend or modify any union recognition agreement,
collective agreement or similar agreement with any trade union
or representative body other than in the ordinary course of
business consistent with past practice and upon reasonable
consultation with the Purchaser;
(n) for greater certainty, except as contemplated in Section 6.2,
amend, modify or terminate any material insurance policy of
the Company or any Subsidiary in effect on the date of this
Agreement, except for scheduled renewals of any insurance
policy of the Company or any Subsidiary in effect on the date
hereof in the ordinary course of business consistent with past
practice;
(o) grant or commit to grant an exclusive licence or otherwise
transfer any Intellectual Property or exclusive rights in or
in respect thereto that is material to the Company and its
Subsidiaries taken as a whole, other than in the ordinary
course of business or to wholly-owned Subsidiaries;
(p) make, change or revoke any material Tax election or settle or
compromise any material Tax liability;
(q) materially change the business or regulatory strategy of the
Company or its Subsidiaries;
(r) to the extent that Telesat or any ▇▇▇▇ Aliant Entity is
required to obtain the consent of the Company or its
Subsidiaries under any Contract, provide any consent under
such Contract that would permit Telesat or such ▇▇▇▇ Aliant
Entity to take any action that would be restricted by this
Section 5.1 if Telesat or such ▇▇▇▇ Aliant Entity was a
Subsidiary of the Company; or
(s) agree, resolve or commit to do any of the foregoing.
Notwithstanding the provisions of (e), (f), (g) and (h) above, the Company and
its Subsidiaries shall not be restricted from efficiently managing excess cash
balances (including the proceeds from the Telesat Transaction) in a tax
efficient manner consistent with past practice including (i) investing in or
disposing of money market instruments and (ii) repaying short-term indebtedness
or maturing other indebtedness. The Company shall not, however, redeem any long
term indebtedness maturing after December 31, 2010.
26
SECTION 5.2 NON-SOLICITATION
(1) Except as expressly provided in this Section 5.2, the Company shall
not, directly or indirectly, through any officer, director, employee,
representative (including any financial or other advisor) or agent of
the Company or any of its Subsidiaries (collectively,
"REPRESENTATIVES"): (i) solicit, initiate or knowingly encourage
(including by furnishing information or entering into any Contract) any
inquiries or proposals regarding an Acquisition Proposal; (ii)
participate in any substantive discussions or negotiations with any
Person (other than the Purchaser Parties) regarding an Acquisition
Proposal; (iii) make a Change in Recommendation; (iv) accept, approve,
endorse or recommend, or propose publicly to accept, approve, endorse
or recommend, any Acquisition Proposal (it being understood that
publicly taking no position or a neutral position with respect to an
Acquisition Proposal for a period of no more than ten Business Days
following the formal announcement of such Acquisition Proposal shall
not be considered to be in violation of this Section 5.2(1) unless such
position has not been withdrawn by or before the end of such ten
Business Day period); or (v) accept, approve, endorse or recommend or
enter into, or publicly propose to accept, approve, endorse or
recommend or enter into, any Contract in respect of an Acquisition
Proposal.
(2) Except as otherwise provided in this Section 5.2, the Company shall,
and shall cause its Subsidiaries and Representatives to, immediately
cease and cause to be terminated any solicitation, encouragement,
discussion or negotiation with any Persons conducted heretofore by the
Company, its Subsidiaries or any Representatives with respect to any
Acquisition Proposal, and, in connection therewith, the Company will
discontinue access to the Data Room (and not establish or allow access
to any other data rooms, virtual or otherwise or otherwise furnish
information) and shall as soon as possible request, to the extent that
it is entitled to do so (and exercise all rights it has to require) the
return or destruction of all confidential information regarding the
Company and its Subsidiaries previously provided to any such Person or
any other Person and will request (and exercise all rights it has to
require) the destruction of all material including or incorporating or
otherwise reflecting any material confidential information regarding
the Company and its Subsidiaries. The Company agrees that neither it,
nor any of its Subsidiaries, shall terminate, waive, amend or modify
any provision of any existing confidentiality agreement relating to an
Acquisition Proposal or any standstill agreement to which it or any of
its Subsidiaries is a party (except that the Purchaser acknowledges
that the automatic termination of the standstill provisions and
clubbing restrictions of such agreements as a result of the entering
into and announcement of this Agreement shall not be a violation of
this Section 5.2(2)).
(3) Notwithstanding Section 5.2(1) and any other provision of this
Agreement or of any other agreement between the Parties or between the
Company and any other Person, including without limitation the
provisions of any confidentiality or standstill agreement, if at any
time following the date of this Agreement and prior to obtaining the
approval of the Arrangement Resolution by Affected Shareholders at the
Company Meeting, the Company receives any written Acquisition Proposal,
other than any Acquisition Proposal that resulted from a wilful and
intentional breach of this Section 5.2 by the Company or any director
or officer of the Company or any Representative acting at the direction
of or on behalf of the Company or any director or officer of the
Company, that the Board determines in good faith, after consultation
27
with its financial advisors and outside counsel, constitutes or could
reasonably be expected to lead to a Superior Proposal, then the Company
may:
(a) furnish information with respect to the Company and its
Subsidiaries to the Person making such Acquisition Proposal;
and/or
(b) enter into, participate, facilitate and maintain discussions
or negotiations with, and otherwise cooperate with or assist,
the Person making such Acquisition Proposal,
provided that the Company shall not, and shall not allow its
Representatives to, disclose any non-public information to such Person
without having entered into a confidentiality agreement with such
Person that contains provisions that are no less favourable in the
aggregate to the Company and that are not individually or in the
aggregate materially more favourable to such Person than those
contained in the Confidentiality Agreements, except that such agreement
may contain a less restrictive or no standstill restriction and may
specifically release such party from any existing standstill
restriction (a correct and complete copy of which confidentiality
agreement shall be provided to the Purchaser before any such non-public
information is provided) and provided that such confidentiality
agreement may not include any provision calling for an exclusive right
to negotiate with the Company and may not restrict the Company or its
Subsidiaries from complying with this Section 5.2, and will promptly
provide to the Purchaser any material non-public information concerning
the Company or its Subsidiaries provided to such other Person which was
not previously provided to the Purchaser. Notwithstanding the
foregoing, the Company shall not provide any commercially sensitive
non-public information to any competitor that has made an Acquisition
Proposal, except in a manner consistent with the Company's past
practice in dealing with the disclosure of such information in the
context of considering Acquisition Proposals prior to the date of this
Agreement.
(4) The Company shall promptly (and in any event within 24 hours) notify
the Purchaser (orally and in writing) in the event it receives a
written Acquisition Proposal, including the identity of the Person
making such Acquisition Proposal and the material terms and conditions
thereof, and shall, at the Purchaser's reasonable request, inform the
Purchaser as to the status of developments and negotiations with
respect to such Acquisition Proposal, including any changes to the
material terms or conditions of such Acquisition Proposal.
(5) The Company shall not accept, approve, recommend or enter into any
agreement relating to an Acquisition Proposal (other than a
confidentiality agreement complying with Section 5.2(3)) unless (i) the
Acquisition Proposal did not result from the wilful and intentional
breach of this Section 5.2 by the Company or any director or officer of
the Company or any Representative acting at the direction of or on
behalf of the Company or any director or officer of the Company, (ii)
the Board determines in good faith, after consultation with its
financial advisors and outside counsel, that such Acquisition Proposal
constitutes a Superior Proposal, (iii) the Company has provided the
Purchaser with a copy of such Acquisition Proposal, (iv) a period (the
"MATCHING PERIOD") of five Business Days has lapsed from the date (the
"NOTICE DATE") that is the later of (a) the date the Purchaser received
28
written notice of the Company's proposed determination to take such
action, and (b) the date the Purchaser received a copy of the
Acquisition Proposal, (v) during the Matching Period, the Purchaser
shall have the opportunity (but not an obligation) to offer to amend
the terms and conditions of this Agreement such that the Acquisition
Proposal would cease to be a Superior Proposal, (vi) after the Matching
Period, the Board (a) determines in good faith, after consultation with
its financial advisors and outside counsel, that such Acquisition
Proposal continues to constitute a Superior Proposal and (b) determines
in good faith, after consultation with outside legal counsel, that
failure to take such action would reasonably be expected to be
inconsistent with its fiduciary duties under Applicable Law, (vii)
prior to or simultaneously with taking such action, the Company (a)
terminates this Agreement pursuant to Section 9.1(1)(d)(i) and (b) pays
the Termination Fee pursuant to Section 10.6(2), and (viii) promptly
following such termination, the Company enters into a definitive
agreement with the Person making such Superior Proposal. Each
successive material modification (including any increase in the
proposed price) of any Acquisition Proposal shall constitute a new
Acquisition Proposal for purposes of Section 5.2(5), provided that the
Matching Period in respect of such new Acquisition Period shall extend
only until the later of the end of the initial five Business Day
Matching Period and 36 hours after the Notice Date in respect of the
new Acquisition Proposal.
(6) Nothing contained in this Agreement, including Section 5.2(1), shall
prohibit the Board from making a Change in Recommendation or from
making any disclosure to any securityholders of the Company prior to
the Effective Time, including for greater certainty disclosure of a
Change in Recommendation, if, in the good faith judgment of the Board,
after consultation with outside legal counsel, failure to take such
action or make such disclosure would reasonably be expected to be
inconsistent with the Board's exercise of its fiduciary duties or such
action or disclosure is otherwise required under Applicable Law
(including without limitation by responding to an Acquisition Proposal
under a directors' circular or otherwise as required under Securities
Laws), provided that for greater certainty in the event of a Change of
Recommendation and a termination by the Purchaser of this Agreement
pursuant to Section 9.1(1)(c)(i), the Company shall pay the Termination
Fee as required by Section 10.6(2). The Board may not make a Change in
Recommendation pursuant to the preceding sentence unless the Company
gives the Purchaser at least two Business Days prior written notice of
its intention to make such Change in Recommendation, provided that, for
greater certainty, the foregoing limitation shall not apply in respect
of any actions taken under Section 5.2(5). In addition, nothing
contained in this Agreement shall prevent the Company or the Board from
calling and holding a meeting of Shareholders, or any of them,
requisitioned by Shareholders, or any of them, in accordance with the
CBCA or ordered to be held by a court in accordance with Applicable
Laws.
SECTION 5.3 ASSISTANCE WITH PURCHASER FINANCING
The Company will, and will cause its Subsidiaries to, and each shall
use commercially reasonable efforts to cause its Representatives to, provide
such co-operation to the Purchaser as the Purchaser may reasonably request in
connection with the arrangements by the Purchaser to obtain the advance of the
debt financing referred to in Section 6.4 as contemplated in the Commitment
Letter and/or any alternative financing proposed by the Purchaser pursuant to
29
Section 6.4, (provided that such request is made on reasonable notice and
reasonably in advance of the proposed commencement of the Marketing Period
and/or the Effective Time, as applicable, and provided such co-operation does
not unreasonably interfere with the ongoing operations of the Company and its
Subsidiaries or interfere with or hinder or delay the performance by the Company
or its Subsidiaries of their other obligations), including (and subject to the
foregoing) as so requested: (a) participating in a reasonable number of
meetings, drafting sessions, presentations, road shows, due diligence sessions
and sessions with rating agencies, (b) assisting the Purchaser and the Lenders
in the preparation of offering documents for any debt raised to complete the
Arrangement and materials for rating agency, Lender or investor presentations,
(c) cooperating with the Purchaser in connection with applications to obtain
such consents, approvals or authorizations which may be reasonably necessary or
desirable in connection with such debt financing, (d) using commercially
reasonable efforts to seek to take advantage of the Company's existing lending
relationships, including encouraging the Company's existing lenders to
participate in the syndicate organized by the Lenders, (e) reasonably
cooperating with the marketing efforts of the Purchaser and the Lenders for any
debt raised by the Purchaser to complete the Arrangement, including
participating in presentations to the Lenders and by facilitating direct contact
between the Company's senior management and the Lenders, (f) having officers
execute, without personal liability, any reasonably necessary officer's
certificates or management representation letters to the Company's accountants
to issue reports with respect to the financial statements to be included in any
offering documents to the extent customary for similar offerings and solvency
certificates or other certificates customarily requested by lenders in
transactions of this type, (g) provided that all Key Regulatory Approvals have
been obtained, subject to the terms of the Company's and its Subsidiaries'
existing indebtedness, giving timely redemption or prepayment notices, as
applicable, in connection with the refinancing of the Company's or its
Subsidiaries' existing indebtedness outstanding on or after the Effective Time
as may be reasonably required by the Purchaser, (h) providing advance estimates
of payout amounts in respect of indebtedness being repaid on the Effective Date
and arranging for releases and discharge of Liens securing indebtedness being
repaid on the Effective Date, (i) the execution and delivery of a customary
purchase agreement and related documentation on terms reasonably satisfactory to
the Company in connection with any offering of debt securities, (j) subject to
Applicable Laws and the obtaining of any necessary consents in connection
therewith (which the Company shall use reasonable commercial efforts to obtain),
executing and delivering any pledge and security documents, currency or interest
hedging arrangements or other definitive financing documents or other
certificates and documents as may be reasonably requested by the Purchaser or
otherwise facilitating the pledging of collateral as may be reasonably requested
by the Purchaser; provided that any obligations contained in such documents
shall be effective no earlier than as of the Effective Time, (k) furnishing the
Purchaser and its financing sources as promptly as practicable (and in any event
no later than 30 days prior to the Outside Date) with financial and other
pertinent information regarding the Company and its Subsidiaries as may be
reasonably requested by the Purchaser, including Canadian GAAP financial
statements together with a reconciliation to US GAAP prepared substantially in
accordance with Item 17 of Form 20-F, of the type and form customarily included
in offering documents used in private placements by foreign private issuers
under Rule 144A of the 1933 Act, to consummate the offerings of debt securities
contemplated by the Commitment Letters at the time during the Company's fiscal
year such offerings will be made including but not limited to annual audited
financial statements (with accompanying audit reports), interim financial
30
statements (consistent with the Company's regular quarterly reporting) and
corresponding LTM data and pro forma financial statements (information required
to be delivered pursuant to this clause (k) being referred to as the "Required
Information"), provided that the Purchaser shall provide the Company with a list
of the form and types of financial and other information requested pursuant to
this clause (k) by no later than August 1, 2007 (the "REQUIRED INFORMATION
SCHEDULE"), (l) obtaining customary accountants' comfort letters, accountants'
consents, and legal opinions as reasonably requested by the Purchaser (provided
that the Purchaser shall arrange to provide any opinion required by the terms of
any of the Company's or any of its Subsidiaries' existing trust indentures in
connection with any such financing or related actions) and (m) taking all
actions reasonably necessary to permit the Lenders to evaluate the Company's and
its Subsidiaries' current assets, cash management and accounting systems,
policies and procedures relating thereto for the purpose of establishing
collateral arrangements. Notwithstanding the foregoing, none of the Company nor
any Subsidiary of the Company will be required to (a) pay any commitment,
consent or other fee or incur any other liability in connection with any such
financing prior to the Effective Time, (b) take any action or do anything that
would contravene any Applicable Law, contravene any Contract of the Company or
any Subsidiary that relates to borrowed money or be capable of impairing or
preventing the satisfaction of any condition set forth in Article 8 hereof, (c)
commit to take any action that is not contingent on the consummation of the
transactions at the Effective Time, or (d) disclose any information that in the
reasonable judgment of the Company would result in the disclosure of any trade
secrets or similar information or violate any obligations of the Company or any
other Person with respect to confidentiality. The Purchaser agrees to indemnify
the Company, its affiliates and their respective officers, directors and
employees from and against any and all liabilities, losses, damages, claims,
costs, expenses, interest, awards, judgments and penalties suffered or incurred
by any of them in connection with any financing or potential financing by the
Purchaser or any actions or omissions by any of them in connection with any
request by the Purchaser made hereunder and for any alleged misstatement or
omission in any information provided hereunder at the request of the Purchaser
(other than historical factual information to the extent prepared by the Company
and relating to the Company and its Subsidiaries). The Purchaser will promptly
upon request by the Company and from time to time (other than in circumstances
where this Agreement is terminated by the Purchaser pursuant to Section
9.1(1)(c)(ii) due to willful and intentional breach or fraud) reimburse the
Company for all reasonable out-of-pocket costs (including legal fees) incurred
by the Company or its Subsidiaries and their respective advisers, agents and
representatives in connection with any of the foregoing. The Company hereby
consents to the use of its and its Subsidiaries' logos in connection with the
financing; provided that such logos are used solely in a manner that is not
intended to or reasonably likely to harm or disparage the Company or any of its
Subsidiaries or the reputation or goodwill of the Company or any of its
Subsidiaries.
SECTION 5.4 COMPLETION OF THE TELESAT TRANSACTION
The Company will use all commercially reasonable efforts to complete as
promptly as practicable the Telesat Transaction on substantially the terms and
conditions outlined in the Telesat Purchase Agreement. The Company shall
promptly update the Purchaser as to any material developments relating to the
Telesat Transaction and in no event shall the Company make any material
amendments or waivers to the Telesat Purchase Agreement without the prior
written consent of the Purchaser (such consent not to be unreasonably withheld,
conditioned or delayed). In the event that the Telesat Purchase Agreement is
terminated in accordance with its terms, then Telesat shall, from the date of
31
such termination, be deemed to be a Subsidiary of the Company for purposes of
Section 5.1.
SECTION 5.5 COOPERATION REGARDING REORGANIZATION
(1) Upon the reasonable request or requests of the Purchaser (not less than
30 Business Days prior to the Effective Time), the Company shall, and
shall cause its Subsidiaries to, use all commercially reasonable
efforts to (i) effect, in the period immediately prior to the Effective
Time, such reorganizations of their business, operations and assets as
the Purchaser may request, acting reasonably (each a "PRE-ACQUISITION
Reorganization"); (ii) cooperate fully with the Purchaser and its
advisors to determine the nature of the Pre-Acquisition Reorganizations
that might be undertaken and the manner in which they would most
effectively be undertaken; and (iii) cooperate fully with the Purchaser
in the preparation and filing of a request for an advance income tax
ruling to be requested by the Purchaser from the Canada Revenue Agency
(and provincial taxing authorities as applicable) respecting such
income tax matters as the Purchaser may determine including, in
particular, rulings relating to paragraphs 88(1)(c) and (d) of the Tax
Act, and to cooperate as requested during the process of obtaining such
tax ruling. The obligations of the Company pursuant to this Section 5.5
shall be conditional on the understanding that: (i) any Pre-Acquisition
Reorganization shall not delay, impair or impede the completion of the
Arrangement or the ability of the Purchaser to obtain any financing
required by it in connection with the transactions contemplated by this
Agreement; (ii) any Pre-Acquisition Reorganization shall not
unreasonably interfere in the ongoing operations of the Company or any
of its Subsidiaries; (iii) any Pre-Acquisition Reorganization shall not
require the Company or any Subsidiary to contravene any Applicable
Laws, their respective organizational documents or any Contract; (iv)
any Pre-Acquisition Reorganization shall not become effective unless
the Purchaser shall have waived or confirmed in writing the
satisfaction of all conditions in its favour under Section 8.1 and
Section 8.2 and shall have confirmed in writing that it is prepared to
promptly and without condition (other than satisfaction of the
condition contemplated by Section 8.2(a)) proceed to effect the
Arrangement; (v) the Company and its Subsidiaries shall not be
obligated to take any action that would reasonably be expected to
result in any Taxes being imposed on, or any adverse Tax or other
consequences to, any securityholder of the Company incrementally
greater than the Taxes or other consequences to such party in
connection with the consummation of the Arrangement in the absence of
any Pre-Acquisition Reorganization; and (vi) the Company, its
Subsidiaries and their respective officers, directors, employees,
agents, advisors and representatives shall have received an indemnity,
in form and substance satisfactory to the Company, acting reasonably,
from the Purchaser Parties from and against any and all liabilities,
losses, damages, claims, costs, expenses, interest, awards, judgements
and penalties suffered or incurred by any of them in connection with or
as a result of any Pre-Acquisition Reorganization. The Purchaser
acknowledges and agrees that the Pre-Acquisition Reorganizations shall
not be considered in determining whether a representation, warranty or
covenant of the Company hereunder has been breached, it being
acknowledged by the Purchaser that these actions could require the
consent of third parties under applicable Contracts. The Purchaser and
the Company shall, at the expense of the Purchaser, work cooperatively
and use commercially reasonable efforts to prepare prior to the
32
Effective Time all documentation necessary and do such other acts and
things as are necessary to give effect to such Pre-Acquisition
Reorganizations.
(2) The Company shall use its reasonable best efforts to, and shall use its
reasonable best efforts to cause its Subsidiaries to, maintain in good
standing the tax loss monetization (the "MONETIZATION") among ▇▇▇▇
Canada, ▇▇▇▇ Mobility Inc. and others, in a manner consistent with the
advance income tax ruling issued on March 27, 2007. The Company and its
Subsidiaries shall not unwind, terminate or amend the Monetization, in
whole or in part, without the consent of the Purchaser, acting
reasonably.
SECTION 5.6 CONDUCT OF THE COMPANY
For the period commencing on the date hereof and ending on the
Effective Time, and except as required by Applicable Law, the Company shall not,
and shall not permit its Subsidiaries to enter into any merger, acquisition,
joint venture, disposition, lease, contract or debt or equity financing, or
agree to do any of the foregoing, that would reasonably be likely to delay,
impair or impede in any material respect the receipt of any Regulatory Approval
or the satisfaction of any condition set forth in Article 8 hereof.
SECTION 5.7 DIVIDEND REINVESTMENT PLAN; EMPLOYEE SAVINGS PLANS
(a) From and after the date of this Agreement until the Effective
Time, all Common Shares delivered to participants under the
Dividend Reinvestment Plan shall be acquired only by open
market or third party arm's length purchases, and not for
greater certainty from treasury.
(b) Upon the execution of this Agreement, the Company shall not
issue or otherwise authorize the issuance of any Common Shares
from treasury in respect of the Employee Savings Plans and all
Common Shares delivered to participants under the Employee
Savings Plans for the period commencing on the date of this
Agreement and ending at the Effective Time shall be acquired
by open market or third party arm's length purchases. The
Company shall take all steps necessary to cause the Employee
Savings Plans to be terminated at the Effective Time.
SECTION 5.8 COOPERATION WITH SOLVENCY OPINION
Each of the Purchaser and the Company shall use their respective
reasonable best efforts to (a) make available their respective officers, agents
or other representatives on a customary basis and on reasonable notice and (b)
provide or make available such information and documents concerning the
business, properties, Contracts, assets and liabilities of the Company and, in
the case of the Purchaser, the financing contemplated by the Commitment Letter
and Equity Commitment Letters, as may reasonably be requested by the firm
preparing the opinion contemplated by Section 8.1(f).
33
ARTICLE 6
COVENANTS OF THE PURCHASER PARTIES
SECTION 6.1 CONDUCT OF THE PURCHASER
For the period commencing on the date hereof and ending on the
Effective Time, and except as required by Applicable Law, no Purchaser Party
shall enter into any merger, acquisition, joint venture, disposition, lease,
contract or debt or equity financing, or agree to do any of the foregoing, that
would reasonably be likely to (a) result in any of the representations and
warranties referred to in Section 4.1 becoming false or inaccurate in any
material respect, or (b) delay, impair or impede in any material respect the
receipt of any Regulatory Approval or the satisfaction of any condition set
forth in Article 8 hereof.
SECTION 6.2 DIRECTOR AND OFFICER LIABILITY
(1) From and after the Effective Time, the Purchaser shall, and shall cause
the Company to, indemnify and hold harmless, to the fullest extent
permitted under Applicable Law (and to also advance expenses as
incurred to the fullest extent permitted under Applicable Law), each
present and former director, officer, trustee and employee of the
Company and its Subsidiaries (each, an "INDEMNIFIED PERSON") against
any costs or expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages or liabilities incurred in
connection with any claim, inquiry, action, suit, proceeding or
investigation, whether civil, criminal, administrative or
investigative, arising out of or related to such Indemnified Person's
service as a director, officer, trustee or employee of the Company
and/or any of its Subsidiaries or services performed by such Persons at
the request of the Company and/or any of its Subsidiaries at or prior
to or following the Effective Time, whether asserted or claimed prior
to, at or after the Effective Time, including the approval or
completion of this Agreement, the Arrangement or any of the other
transactions contemplated by this Agreement or arising out of or
related to this Agreement and the transactions contemplated hereby.
Neither the Purchaser nor the Company shall settle, compromise or
consent to the entry of any judgment in any claim, action, suit,
proceeding or investigation or threatened claim, action, suit,
proceeding or investigation involving or naming an Indemnified Person
or arising out of or related to an Indemnified Person's service as a
director, officer, trustee or employee of the Company and/or any of its
Subsidiaries or services performed by such Persons at the request of
the Company and/or any of its Subsidiaries at or prior to or following
the Effective Time without the prior written consent of that
Indemnified Person.
(2) Prior to the Effective Time, the Company shall and, if the Company is
unable to, the Purchaser shall cause the Company as of the Effective
Time, to obtain and fully pay the premium for the extension of the
directors', officers', trustees' and employees' liability coverage of
the Company's and its Subsidiaries' existing directors', officers',
trustees' and employees' insurance policies for a claims reporting or
run-off and extended reporting period and claims reporting period of at
least six years from and after the Effective Time with respect to any
claim related to any period or time at or prior to the Effective Time
from an insurance carrier with the same or better credit rating as the
Company's current insurance carriers with respect to directors',
officers', trustees' and employees' liability insurance ("D&O
INSURANCE"), and with terms, conditions, retentions and limits of
34
liability that are no less advantageous to the Indemnified Persons than
the coverage provided under the Company's and its Subsidiaries'
existing policies with respect to any actual or alleged error,
misstatement, misleading statement, act, omission, neglect, breach of
duty or any matter claimed against a director, officer, trustee or
employee of the Company or any of its Subsidiaries by reason of him or
her serving in such capacity that existed or occurred at or prior to
the Effective Time (including in connection with the approval or
completion of this Agreement, the Arrangement or the other transactions
contemplated by this Agreement or arising out of or related to this
Agreement and the transactions contemplated hereby). If the Company for
any reason fails to obtain such "run off" insurance policies as of the
Effective Time, the Company shall continue to maintain in effect for a
period of at least six years from and after the Effective Time the D&O
Insurance in place as of the date hereof with terms, conditions,
retentions and limits of liability that are no less advantageous in the
aggregate than the coverage provided under the Company's and its
Subsidiaries' existing policies as of the date hereof, or the Company
shall purchase comparable D&O Insurance for such six-year period with
terms, conditions, retentions and limits of liability that are at least
as favourable to the Indemnified Persons as provided in the Company's
existing policies as of the date hereof.
(3) If the Company or the Purchaser or any of their successors or assigns
shall:
(a) amalgamate, consolidate with or merge or wind-up into any
other Person and, if applicable, shall not be the continuing
or surviving corporation or entity; or
(b) transfer all or substantially all of its properties and assets
to any Person or Persons,
then, and in each such case, proper provisions shall be made so that
the successors, assigns and transferees of the Company or the
Purchaser, as the case may be, shall assume all of the obligations set
forth in this Section 6.2.
(4) If any Indemnified Person makes any claim for indemnification or
advancement of expenses under this Section 6.2 that is denied by the
Company or the Purchaser, and a court of competent jurisdiction
determines that the Indemnified Person is entitled to such
indemnification, then the Company and the Purchaser shall pay such
Indemnified Person's costs and expenses, including reasonable legal
fees and expenses, incurred in connection with pursuing such claim
against the Company or the Purchaser.
(5) The rights of the Indemnified Persons under this Section 6.2 shall be
in addition to any rights such Indemnified Persons may have under the
constating documents of the Company or any of its Subsidiaries, or
under any Applicable Law or under any Contract of any Indemnified
Person with the Company or any of its Subsidiaries. All rights to
indemnification and exculpation from liabilities for acts or omissions
occurring at or prior to the Effective Time and rights to advancement
of expenses relating thereto in favour of any Indemnified Person as
provided in the constating documents of the Company or any Subsidiary
of the Company or any Contract, the form of which is in the Data Room
as at the date hereof, between such Indemnified Person and the Company
or any of its Subsidiaries shall survive the Effective Time and shall
35
not be amended, repealed or otherwise modified in any manner that would
adversely affect any right thereunder of any such Indemnified Person.
(6) For purposes of this Section 6.2, the ▇▇▇▇ Aliant Entities and Telesat
shall be deemed to be Subsidiaries of the Company.
(7) This Section 6.2 shall survive the consummation of the Arrangement and
is intended to be for the benefit of, and shall be enforceable by, the
Indemnified Persons and their respective heirs, executors,
administrators and personal representatives and shall be binding on the
Company and its successors and assigns, and, for such purpose, the
Company hereby confirms that it is acting as agent on behalf of the
Indemnified Persons.
SECTION 6.3 INTERIM PERIOD CONSENTS
The Purchaser will, promptly following the date hereof, designate two
individuals from either of whom the Company may seek approval to undertake any
actions not permitted to be taken under Section 5.1, and will ensure that such
persons will respond, on behalf of the Purchaser, to the Company's requests in
an expeditious manner.
SECTION 6.4 PURCHASER FINANCING
(1) Without limiting the generality of Section 7.1, the Purchaser will use
its and cause the Purchaser Parties to use their reasonable best
efforts to consummate the financing contemplated by the Commitment
Letter and Equity Commitment Letters no later than the Effective Date,
but in each case shall ensure that any financing arranged by the
Purchaser, when taken together with all other transactions contemplated
hereby, shall comply in all material respects with the requirements of
all outstanding Material Contracts of the Company or its Subsidiaries
relating to borrowed money that have been made available and under all
Applicable Laws.
(2) The Purchaser will use reasonable best efforts to satisfy, on a timely
basis, all covenants, terms, representations and warranties within its
control applicable to the Purchaser in the Commitment Letter and Equity
Commitment Letters and accommodate the financing provided for under the
Commitment Letter and Equity Commitment Letters.
(3) The Purchaser will use reasonable best efforts to negotiate and enter
into definitive credit or loan or other agreements and all other
documentation with respect to the financings contemplated in this
Section 6.4 as may be necessary for the Purchaser to obtain such funds,
on the basis described in this Section 6.4 and otherwise on terms and
conditions no less favourable to the Company than those contained in
the Commitment Letter and the Equity Commitment Letters, and otherwise:
(a) subject only to such other conditions precedent as are acceptable
to the Company in its reasonable discretion; or (b) on terms and
conditions which do not impair the ability of the Purchaser to perform
its obligations hereunder or to effect the Arrangement, as soon as
reasonably practicable but in any event prior to the Outside Date. The
Purchaser will deliver to the Company correct and complete copies of
such executed definitive agreements and documentation promptly when
available and drafts thereof from time to time upon request by the
Company.
36
(4) The Purchaser will keep the Company informed with respect to all
material activity concerning the status of the financings referred to
in this Section 6.4 and will give the Company prompt notice of any
material change with respect to any such financings. Without limiting
the generality of the foregoing, the Purchaser agrees to notify the
Company promptly, and in any event within 24 hours, if at any time
prior to the Effective Time: (a) the Commitment Letter or any Equity
Commitment Letter referred to in this Section 6.4 will expire or be
terminated for any reason, (b) any event occurs that, with or without
notice, lapse of time or both, would individually or in the aggregate,
constitute a default or breach on the part of the Purchaser under any
material term or condition of the Commitment Letter or any Equity
Commitment Letter or definitive agreement or documentation referred to
in this Section 6.4 or if the Purchaser has any reason to believe that
it will be unable to satisfy, on a timely basis, any term or condition
of any funding referred to in this Section 6.4 to be satisfied by it,
that in each case would reasonably be expected to impair the ability of
the Purchaser to consummate the financing; or (c) any financing source
that is a party to the Commitment Letter or any Equity Commitment
Letter advises the Purchaser or any Purchaser Party, whether orally or
in writing, that such source either no longer intends to provide or
underwrite any financing referred to in this Section 6.4 on the terms
set forth in the Commitment Letter or any Equity Commitment Letter, as
applicable, or requests amendments or waivers thereto that are or could
reasonably be expected to be materially adverse to the timely
completion by the Purchaser of the transactions contemplated by this
Agreement.
(5) Other than in connection with and as contemplated in this Agreement,
neither the Purchaser nor any Purchaser Party will, without the prior
written consent of the Company, take any action or enter into any
transaction, including any merger, acquisition, joint venture,
disposition, lease, contract or debt or equity financing, that would
reasonably be expected to materially impair, delay or prevent the
Purchaser obtaining any of the financings contemplated by this Section
6.4.
(6) The Purchaser will not amend or alter, or agree to amend or alter, the
Commitment Letter or the Equity Commitment Letters or any definitive
agreement or documentation referred to in this Section 6.4 in any
manner that would reasonably be expected to materially impair, delay or
prevent the consummation of the transactions contemplated by this
Agreement, in each case without the prior written consent of the
Company.
(7) If the Commitment Letter or any Equity Commitment Letter is terminated
or modified in a manner materially adverse to the Purchaser's ability
to complete the transactions contemplated by this Agreement for any
reason, the Purchaser will use reasonable best efforts to: (a) obtain,
as promptly as practicable, and, once obtained, provide the Company
with a copy of, a new financing commitment that provides for at least
the same amount of financing as contemplated by the Commitment Letter
and/or the Equity Commitment Letters, as the case may be, on a basis
that is not subject to any condition precedent materially less
favourable from the perspective of the Company than the conditions
precedent contained in the Commitment Letter, or the Equity Commitment
Letters, as the case may be, and otherwise on terms and conditions not
materially less favourable from the perspective of the Company, (b)
negotiate and enter into definitive credit, loan or other agreements
and all required documentation with such third parties as may be
necessary for the Purchaser to obtain such funds (to the extent
reasonably practicable, on terms and conditions not materially less
37
favourable than the Commitment Letter or the Equity Commitment Letter,
as the case may be, being replaced) and on the basis described in this
Section 6.4 and on terms and conditions consistent with such new
financing commitment, as soon as reasonably practicable but in any
event prior to the Outside Date, and deliver to the Company correct and
complete copies of such executed definitive agreements and
documentation promptly upon request by the Company, (c) satisfy, on a
timely basis, all covenants, terms, representations and warranties
applicable to the Purchaser in respect of such new financing
commitments and all other required agreements and documentation
referred to in this Section 6.4(7) and enforce its rights under such
new financing commitments and agreements and documentation, and (d)
obtain funds under such commitments to the extent necessary to
consummate the transactions contemplated by this Agreement.
(8) For greater certainty, all non-public or otherwise confidential
information regarding the Company obtained by the Purchaser or its
representatives (including without limitation the Lenders and any of
their representatives or advisors or any Purchaser Party) pursuant to
Section 5.3 is information which is subject to the Confidentiality
Agreements and will be treated in accordance with the Confidentiality
Agreements; provided the Purchaser shall be entitled to provide such
information to its Lenders and investors in its debt financing and
their respective representatives and rating agencies, subject to the
confidentiality conditions set forth in the Confidentiality Agreements.
(9) The Purchaser acknowledges and agrees that its obtaining financing is
not a condition to any of its obligations hereunder, regardless of the
reasons why financing is not obtained or whether such reasons are
within or beyond the control of the Purchaser. For the avoidance of
doubt, if any financing referred to in this Section 6.4 is not
obtained, the Purchaser will continue to be obligated to consummate the
Arrangement, subject to and on the terms contemplated by this
Agreement.
SECTION 6.5 INVESTMENT CANADA ACT
(1) If the Minister of Canadian Heritage or official of The Department of
Canadian Heritage (together, the "HERITAGE MINISTER"), or the Minister
of Industry in his capacity as the Minister responsible for the
administration of the Investment Canada Act, in order to determine
whether the Purchaser is a Canadian and not controlled in fact by one
or more non-Canadians (all within the meaning of the Investment Canada
Act), requests information or evidence for that purpose, the Purchaser
Parties will promptly comply with each such request.
(2) The Purchaser Parties will (subject to the Company's prior written
consent if required pursuant to the terms of this Agreement), use their
reasonable best efforts to promptly satisfy the Heritage Minister or
the Minister of Industry that the Purchaser is Canadian and not
controlled in fact by one or more non-Canadians (all within the meaning
of the Investment Canada Act), including for greater certainty making
any non-material adjustments or amendments to the arrangements
governing the ownership of the Purchaser, provided that nothing in this
Section 6.5(2) shall require the Purchaser Parties to accede to any
request of the Heritage Minister or the Minister of Industry to modify
38
the amount of equity invested or the percentage of equity ownership in
the Purchaser on the part of any of the Equity Sponsors.
(3) For greater certainty, in the event that the Purchaser Parties are not,
despite compliance with their obligations under this Section 6.5(1) and
Section 6.5(2), able to satisfy the Heritage Minister or the Minister
of Industry that the Purchaser is Canadian and not controlled in fact
by one or more non-Canadians (all within the meaning of the Investment
Canada Act), then Investment Canada Act Approval shall be deemed to be
a Key Regulatory Approval.
SECTION 6.6 SYNDICATION OF EQUITY
(1) Except as provided by this Section 6.6, notwithstanding anything to the
contrary contained in the Confidentiality Agreements, the Purchaser
Parties shall not without the prior written consent of the Company
allow the equity syndication of any of their direct or indirect equity
or proposed equity ownership in the Company.
(2) Subject to the limitations set forth in this Section 6.6, the Company
will permit each Purchaser Party to syndicate equity:
(a) to all Persons identified on Schedule G (and will permit those
Persons to syndicate equity); and
(b) to limited partners and co-investors of such Purchaser Party
who are not identified on the Pre-Approved List;
provided that the Ontario Teachers' Pension Plan Board (the "CANADIAN
EQUITY SPONSOR") and any Persons to whom the Canadian Equity Sponsor
syndicates equity shall be permitted to syndicate equity only to
Persons who meet the same Canadian status tests for purposes of
applicable Telecom Laws and the Investment Canada Act as the Canadian
Equity Sponsor.
(3) From the date of this Agreement until the Company Meeting, the
Purchaser Parties and their representatives and Persons to whom the
Purchaser Parties may have syndicated all or part of their interests as
permitted by Section 6.6(2) (the "SYNDICATED PARTIES") and their
representatives shall be permitted to hold equity syndication
discussions and negotiations with Persons identified in Part 3 of
Schedule G and any other Persons who are not identified in Part 1 or
Part 2 of Schedule G.
(4) After the Company Meeting, the Purchaser Parties and the Syndicated
Parties and their representatives shall be permitted to commence any
form of equity syndication or equity syndication discussions and
negotiations with any Person, including Persons who are identified in
Part 1 and Part 2 of Schedule G.
(5) For the purposes of this Section 6.6, "equity syndication" by any
Purchaser Party or Syndicated Party and similar terms includes any
discussion or inquiry by that Purchaser Party or Syndicated Party,
whether or not solicited or initiated by that Purchaser Party or
Syndicated Party, or any of its representatives, relating to any other
Person acquiring, directly or indirectly, any equity interest in the
Company or the Purchaser Party or Syndicated Party (or in any other
Person that beneficially owns a material equity interest in the
Purchaser Party or Syndicated Party), whether or not such equity
39
interest is already outstanding or issued, and including any right to
acquire any such equity interest or any direct or indirect interest in
any such equity interest.
(6) Notwithstanding anything to the contrary in this Section 6.6, no
syndication by the Purchaser Parties or Syndicated Parties shall be
permitted that would reasonably be expected to impair, impede or
materially delay the receipt of any Key Regulatory Approval.
(7) The written consent of the Purchaser Party shall be required for the
syndication of equity by any Person to whom equity has been syndicated
by that Purchaser Party pursuant to this Section 6.6.
(8) The amount of equity that may be syndicated by the Purchaser Parties
shall be subject to the following limitations:
(a) there shall be no limit on the amount of equity that the
Purchaser Parties may syndicate to Persons identified in Part
3 of Schedule G or other Persons not identified in Part 1 or 2
of Schedule G; and
(b) the collective syndication of equity by the Purchaser Parties
to Persons identified in Parts 1 and 2 of Schedule G shall be
subject to one of the following limitations, at the election
of the Purchaser made by notice in writing to the Company
prior to any equity syndication to such Persons:
(i) a maximum of $2 billion in the aggregate to one or
more of the Persons identified in Part 1 of Schedule
G, plus a maximum of $750 million in the aggregate to
one or more of the Persons identified in Part 2 of
Schedule G; or
(ii) a maximum of $2 billion of equity in the aggregate to
one or more of the Persons identified in Part 2 of
Schedule G, plus a maximum of $750 million to one or
more of the Persons identified in Part 1 of Schedule
G.
(9) Notwithstanding anything in the foregoing to the contrary, the Company
may change, modify, eliminate or amend in any respect any of this
Section 6.6 if, in the good faith judgment of the Board, such changes,
modifications, elimination or amendments are in the best interests of
the Company and the Affected Shareholders; provided, however, that no
such changes, modifications, eliminations or amendments shall be
adverse to the Purchaser Parties.
ARTICLE 7
MUTUAL COVENANTS
SECTION 7.1 REGARDING THE ARRANGEMENT
(1) Subject to the terms and conditions of this Agreement, the Purchaser
Parties and the Company shall use their reasonable best efforts to
take, or cause to be taken, all actions and to do, or cause to be done,
40
all things necessary, proper or advisable under Applicable Law to
consummate the transactions contemplated by this Agreement as soon as
practicable, including:
(a) preparing and filing as promptly as practicable, and in any
event by no later than thirty days from the date of the
Agreement, a pre-merger notification filing under the
Competition Act and a request for an advance ruling
certificate pursuant to Section 102 of the Competition Act, an
appropriate filing of a Notification and Report Form pursuant
to the HSR Act, the CRTC Applications, the FCC Applications
and the Industry Canada Applications, and preparing and filing
as promptly as practicable, and in any event by no later than
the earlier of (i) sixty days from the date of the Agreement,
or (ii) within such time as requested by the applicable
Governmental Authority, all other necessary documents,
registrations, statements, petitions, filings and applications
for the Key Regulatory Approvals;
(b) preparing and filing as promptly as practicable all necessary
documents, registrations, statements, petitions, filings and
applications for the Additional Regulatory Approvals;
(c) using their reasonable best efforts to obtain and maintain all
approvals, clearances, consents, registrations, permits,
authorizations and other confirmations required to be obtained
from any Governmental Authority or other third party that are
necessary, proper or advisable to consummate the transactions
contemplated by this Agreement, including the Key Regulatory
Approvals;
(d) using reasonable best efforts to oppose, lift or rescind any
injunction or restraining or other order seeking to stop, or
otherwise adversely affecting its ability to consummate, the
Arrangement and to defend, or cause to be defended, any
Proceedings to which it is a party or brought against it or
its directors or officers challenging this Agreement or the
consummation of the transactions contemplated hereby; and
(e) carrying out the terms of the Interim Order and Final Order
applicable to it and using reasonable best efforts to comply
promptly with all requirements which Applicable Laws may
impose on it or its Subsidiaries or affiliates with respect to
the transactions contemplated hereby.
(2) Subject to the express provisions of Section 7.2, Section 7.3 and
Section 7.4 hereof, the Parties shall co-operate in the preparation of
any application for the Regulatory Approvals and any other orders,
clearances, consents, rulings, exemptions, no-action letters and
approvals reasonably deemed by either the Purchaser or the Company to
be necessary to discharge their respective obligations under this
Agreement or otherwise advisable under Applicable Laws in connection
with the Arrangement and this Agreement. In connection with the
foregoing, each Party shall furnish, on a timely basis, and in any
event within 15 days of a request for same by the other Party or by any
Governmental Authority, all information as may be reasonably required
to effectuate the foregoing actions, and each covenants that, to its
knowledge, no information so furnished by it in writing will contain a
misrepresentation.
41
(3) Subject to Applicable Laws and to the express provisions of Section
7.2, Section 7.3 and Section 7.4 hereof, the Purchaser and the Company
shall cooperate with and keep each other fully informed as to the
status of and the processes and proceedings relating to obtaining the
Regulatory Approvals, and shall promptly notify each other of any
communication from any Governmental Authority in respect of the
Arrangement or this Agreement, and shall not make any submissions or
filings, participate in any meetings or any material conversations with
any Governmental Authority in respect of any filings, investigations or
other inquiries related to the Arrangement or this Agreement unless it
consults with the other Party in advance and, to the extent not
precluded by such Governmental Authority, gives the other Party the
opportunity to review drafts of any submissions or filings, or attend
and participate in any communications or meetings. Notwithstanding the
foregoing, submissions, filings or other written communications with
any Governmental Authority may be redacted as necessary before sharing
with the other Party to address reasonable attorney-client or other
privilege or confidentiality concerns, provided that external legal
counsel to the Purchaser and the Company shall receive non-redacted
versions of drafts or final submissions, filings or other written
communications to any Governmental Authority on the basis that the
redacted information will not be shared with their respective clients.
(4) Each of the Purchaser and the Company will promptly notify the other if
at any time before the Effective Time it becomes aware that:
(a) any application for a Regulatory Approval or other filing
under Applicable Laws made in connection with this Agreement,
the Arrangement or the transactions contemplated herein
contains a misrepresentation; or
(b) any Regulatory Approval or other order, clearance, consent,
ruling, exemption, no-action letter or other approval applied
for as contemplated herein which has been obtained contains or
reflects or was obtained following submission of any
application, filing, document or submission as contemplated
herein that contained a misrepresentation,
such that an amendment or supplement to such application, filing,
document or submission or order, clearance, consent, ruling, exemption,
no-action letter or approval may be necessary or advisable. In such
case, the Parties will cooperate in the preparation of such amendment
or supplement as required.
(5) Notwithstanding anything in this Agreement to the contrary, if any
objections are asserted with respect to the transactions contemplated
hereby under any applicable Competition Law or Telecom Law, or if any
Proceeding is instituted or threatened by any Governmental Authority
challenging or which could lead to a challenge of any of the
transactions contemplated hereby as violative of or not in compliance
with the requirements of any applicable Competition Law or Telecom Law,
the Company and the Purchaser shall use their reasonable best efforts
to resolve such Proceeding so as to allow the Effective Time to occur
prior to the Outside Date.
(6) Without limiting the generality of the foregoing, in addition to using
their reasonable best efforts to obtain the Competition Act Compliance,
the Purchaser Parties shall, and shall cause their Subsidiaries and
affiliates to, take any and all steps necessary to obtain the
42
Competition Act Compliance, including, without limitation, agreeing in
respect of any of the businesses, properties, assets, rights or
interests of the Purchaser Parties and their Subsidiaries and
affiliates (including any businesses, properties, assets, rights or
interests acquired or to be acquired by the Purchaser contemplated
hereby): (a) to any and all divestitures, licensing, hold separate or
similar arrangements with respect to assets or conduct of business
arrangements; (b) to terminate any and all existing relationships and
contractual rights and obligations; (c) to commit to, enter into,
register or effect any and all undertakings or consent agreements; and
(d) to satisfy, assent to and/or comply with the terms and conditions
of any licence or permit transfer or approval, in each such case
without any reduction of the Consideration provided that the taking of
any and all steps necessary to obtain the Competition Act Compliance
shall not require the Purchaser Parties to accede to any request to
modify the amount of equity invested or the percentage of equity
ownership in the Purchaser on the part of any of the Equity Sponsors.
(7) For greater certainty, for the purposes of obtaining the FCC Approval,
reasonable best efforts shall include without limitation agreeing to
comply with any request of an United States Governmental Authority to
enter into a network security agreement or letter of assurance
concerning law enforcement and security matters that is in form and
substance similar to such agreements or letters on file at the FCC
involving similar businesses in similar circumstances.
(8) The Purchaser shall pay all filings fees, if any, required in
connection with obtaining the HSR Approval and the Competition Act
Compliance.
SECTION 7.2 INDUSTRY CANADA MATTERS
(1) The Purchaser and the Company each will use their reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause
to be done, and to assist and cooperate with each other in doing, all
things necessary, proper or advisable under Applicable Law to obtain
Industry Canada Approvals. Subject to the provisions of this Section
7.2, the Company shall cause the Industry Canada Licensees to, as soon
as reasonably practicable following the date hereof, and in any event
by not later than forty-five days from the date of the Agreement,
prepare and file the Industry Canada Applications, and in any event by
not later than thirty days from the date of the Agreement, notify
Industry Canada of the transactions contemplated herein pursuant to any
licences from Industry Canada held by the Company and its affiliates
requiring such notification. To the extent that Industry Canada takes
the position that its prior approval is required pursuant to any
licence so requiring notification of the transactions contemplated
herein, the definition of "INDUSTRY CANADA LICENCES" shall be amended
to include such licence. The Purchaser and the Company shall at all
times reasonably cooperate with each other with respect to the
preparation of the Industry Canada Applications, provided that the
Company and the Industry Canada Licensees shall prepare and have
control over such applications and the process related thereto.
(2) The Company and the Industry Canada Licensees shall diligently pursue
the Industry Canada Applications on the terms set forth in such
applications which shall be consistent with the terms of this
43
Agreement. The Company shall cause the Industry Canada Licensees to
request that the Industry Canada Applications be processed by Industry
Canada on an expedited basis.
(3) The Purchaser shall, after consultation with the Industry Canada
Licensees and the Company, and in any event by not later than sixty
days from the date of the Agreement, diligently file with Industry
Canada any information, documentation, corporate by-laws, unanimous
shareholders agreements or any other such information which Industry
Canada requires to be filed in connection with the Industry Canada
Applications including as to whether the Purchaser complies with
Canadian foreign ownership and control requirements under applicable
Telecom Laws, and shall consider in good faith any suggestions made by
the Company in connection therewith. In particular, the Purchaser shall
immediately provide the Company with copies of any written
correspondence received by the Purchaser or its counsel from Industry
Canada in connection with the transactions contemplated hereby, and a
complete copy of any response to Industry Canada as soon as practicable
after it is sent.
(4) Subject to Applicable Laws, representatives of the Purchaser designated
by the Purchaser from time to time shall have the right to attend all
material meetings and to participate in all material conference
telephone calls that are attended by or participated in by
representatives of the Company or the Industry Canada Licensees, on the
one hand, and of Industry Canada, on the other hand, in connection with
the Industry Canada Applications.
(5) The Purchaser shall pay all filing fees, if any, required in connection
with the making of the Industry Canada Applications.
(6) None of the Parties shall take any action that will have the effect of
delaying, impairing or impeding the approval of the Industry Canada
Applications.
SECTION 7.3 FCC MATTERS
(1) The Purchaser and the Company will each use their reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause
to be done, and to assist and cooperate with each other in doing, all
things necessary, proper or advisable under Applicable Law to obtain
the FCC Approval. In furtherance and not in limitation of the
foregoing, each Party agrees to make or cause to be made any
appropriate filing or filings that are required by or advisable under
the United States Communications Act (including the rules, regulations
and policies promulgated there under by the FCC) as promptly as
practicable, and in any event by no later than forty-five days from the
date of the Agreement, and to supply as promptly as practicable, and in
any event within 15 days of such request, any additional information
and documentary material that may be requested pursuant to the United
States Communications Act or by any Governmental Authority of the
United States participating in a review of such filing or filings
pursuant to the United States Communications Act.
(2) The Purchaser and the Company, in connection with the foregoing, shall
each use their reasonable best efforts to:
44
(a) cooperate to prosecute the FCC Applications with reasonable
diligence and otherwise use reasonable best efforts to obtain
the FCC Approval as expeditiously as practicable, including
the exercise of reasonable diligence to comply with any
request from the FCC or any other Governmental Authority of
the United States for additional documents, information or
materials;
(b) cooperate in all respects with each other in connection with
any filing or submission in connection with the FCC
Applications;
(c) notify each other promptly following any communication
received by, or given to, the FCC or any other Governmental
Authority of the United States in connection with the FCC
Applications and of any communication received or given in
connection with any Proceeding by a private party relating
thereto and, in each case, provide each other with a copy of
any such written communication promptly after the receipt
thereof; and
(d) oppose any petitions to deny or other objections filed with
respect to the FCC Applications, including any administrative
or judicial review and any request for reconsideration or
review of any FCC Approval.
(3) The Parties shall request that the FCC Applications be processed by the
FCC on an expedited basis.
(4) Each of the Purchaser and the Company shall take or cause to be taken
all actions necessary, appropriate or desirable to permit the FCC to
approve in a timely fashion the FCC Applications including using its
reasonable best efforts to resolve such objections, if any, as may be
asserted by any Governmental Authority of the United States
participating in a review of such FCC Applications under the United
States Communications Act.
(5) Representatives of each of the Parties shall have the right, subject to
Applicable Law, to attend all material meetings and to participate in
all material conference calls that are attended by or participated in
by representatives of the other Party, on the one hand, and of the FCC
or any Governmental Authority of the United States participating in a
review of such FCC Applications under the United States Communications
Act, on the other hand.
(6) None of the Parties shall take any action that will have the effect of
delaying, impairing or impeding the approval of the FCC Applications.
(7) The Purchaser shall pay all filing fees, if any, required in connection
with the making of the FCC Applications.
SECTION 7.4 CRTC MATTERS
(1) The Purchaser and the Company will each use their reasonable best
efforts to take, or cause to be taken, all actions and to do, or choose
to be done, and to assist and cooperate with each other in doing, all
things necessary, proper or advisable under Applicable Law to obtain
CRTC Approval. Subject to the provisions of this Section 7.4, the
Company shall cause the CRTC Licensees to, as soon as reasonably
45
practicable following the date hereof, and in any event by not later
than forty-five days from the date of the Agreement, prepare and file
the CRTC Applications. The Purchaser and the Company shall at all times
reasonably cooperate with each other with respect to preparing the CRTC
Applications, provided that the CRTC Licensees shall prepare and have
control over such applications, including the presentation of any
application at any public hearing held to consider it, if applicable,
subject to the participation of and consultation with the Purchaser.
(2) The Company and the CRTC Licensees shall diligently pursue the CRTC
Applications on the terms set forth in such applications which shall be
consistent with the terms of this Agreement. The Company shall, and
shall cause the CRTC Licensees to, request that the CRTC Applications
be processed by the CRTC on an expedited basis.
(3) The Company shall inform the Purchaser or its counsel on a regular
basis as to the status of the processing of the CRTC Applications by
the CRTC and shall immediately provide the Purchaser or its counsel
with copies of any written correspondence from or to the CRTC in
connection with the CRTC Applications.
(4) The Purchaser shall, after consultation with the CRTC Licensees and the
Company, and in any event by not later than the earlier of sixty days
from the date of the Agreement or within any applicable time limits
established by the CRTC, diligently file with the CRTC any information,
documentation, corporate by-laws, unanimous shareholders agreements or
any other such information which the CRTC requires to be filed in
connection with the CRTC Applications including as to whether the
Purchaser complies with Canadian foreign ownership and control
requirements under applicable Telecom Laws, and shall consider in good
faith any suggestions made by the Company in connection therewith. In
particular, the Purchaser shall immediately provide the Company with
copies of any correspondence from the CRTC in connection with the
transactions contemplated hereby, and a complete copy of any response
to the CRTC as soon as practicable after it is sent.
(5) Subject to Applicable Laws, representatives of the Purchaser designated
by the Purchaser from time to time shall have the right to attend all
material meetings and to participate in all material conference
telephone calls that are attended by or participated in by
representatives of the Company or the CRTC Licensees, on the one hand,
and of the CRTC, on the other hand, in connection with the CRTC
Applications.
(6) None of the Parties shall take any action that will have the effect of
delaying, impairing or impeding the approval of the CRTC Applications.
SECTION 7.5 PUBLIC COMMUNICATIONS
The Parties agree to co-operate in the preparation of presentations, if
any, to Shareholders regarding the Arrangement. None of the Company or the
Purchaser Parties shall issue any press release relating to this Agreement or
the Arrangement without the consent of the Parties hereto (which consent shall
not be unreasonably withheld, conditioned or delayed) and the Company shall not
make any filing with any Governmental Authority with respect thereto (other than
under Competition Laws or as required under Securities Laws) without the consent
of the Purchaser (which shall not be unreasonably withheld, conditioned or
46
delayed) and the Purchaser shall not make any filing with any Governmental
Authority in connection with the Arrangement without the consent of the Company
(which shall not be unreasonably withheld, conditioned or delayed); provided,
however, that the foregoing shall be subject to the Company's overriding
obligation to make any disclosure or filing required under Applicable Laws, and
in such circumstances the Company shall use its reasonable best efforts to give
prior oral or written notice to the Purchaser and reasonable opportunity for the
Purchaser to review or comment on the disclosure or filing (other than with
respect to confidential information contained in such disclosure or filing), and
if such prior notice is not possible, to give such notice immediately following
the making of any such disclosure or filing; provided, however, that the Company
shall have no obligation to consult with the Purchaser or any Purchaser Party
prior to making any disclosure related to an Acquisition Proposal or a Change in
Recommendation.
SECTION 7.6 NOTICE AND CURE PROVISIONS
(1) Each Party will give prompt notice to the other of the occurrence, or
failure to occur, at any time from the date hereof until the earlier to
occur of the termination of this Agreement and the Effective Time of
any event or state of facts which occurrence or failure would, or would
be likely to:
(a) cause any of the representations or warranties of such Party
contained herein to be untrue or inaccurate in any material
respect on the date hereof or at the Effective Time; or
(b) result in the failure to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by
such Party hereunder prior to the Effective Time.
(2) The Purchaser may not exercise its right to terminate this Agreement
pursuant to Section 9.1(1)(c)(ii) and the Company may not exercise its
right to terminate this Agreement pursuant to Section 9.1(1)(d)(ii)
unless the Party seeking to terminate the Agreement shall have
delivered a written notice to the other Party specifying in reasonable
detail all breaches of covenants, representations and warranties or
other matters which the Party delivering such notice is asserting as
the basis for the termination right. If any such notice is delivered,
provided that a Party is proceeding diligently to cure such matter and
such matter is capable of being cured, no Party may exercise such
termination right until the earlier of (i) the Outside Date, and (ii)
the date that is 30 Business Days following receipt of such notice by
the Party to whom the notice was delivered, if such matter has not been
cured by such date. If such notice has been delivered prior to the date
of the Company Meeting, such meeting shall, unless the Parties agree
otherwise, be postponed or adjourned until the expiry of such period
(without causing any breach of any other provision contained herein).
SECTION 7.7 ACCESS TO INFORMATION; CONFIDENTIALITY
(1) From the date hereof until the earlier of the Effective Time and the
termination of this Agreement, subject to compliance with Applicable
Law and the terms of any existing Contracts, the Company shall:
47
(a) give to the Purchaser and its representatives (including
financing sources) reasonable access to the offices,
properties, books and records of the Company and its
Subsidiaries; and
(b) furnish to the Purchaser and its representatives such
financial and operating data and other information as such
Persons may reasonably request.
(2) Any investigation pursuant to this Section 7.7 shall be conducted
during normal business hours and in such manner as not to interfere
unreasonably with the conduct of the business of the Company and its
Subsidiaries. Neither the Purchaser nor any of its representatives will
contact officers or employees of the Company or any of its Subsidiaries
except after prior consultation with ▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
(3) Notwithstanding Section 7.7(1) or any other provision of this
Agreement, the Company shall not be obligated to provide access to, or
to disclose, any information to the Purchaser if the Company reasonably
determines that such access or disclosure would jeopardize any
privilege claim by the Company or any of its Subsidiaries.
(4) For greater certainty, the Purchaser Parties shall treat, and shall
cause their respective representatives to treat, all information
furnished to the Purchaser Parties or any of such representatives in
connection with the transactions contemplated by this Agreement or
pursuant to the terms of this Agreement in accordance with the terms of
the Confidentiality Agreements. Without limiting the generality of the
foregoing, the Purchaser Parties acknowledge and agree that the Company
Disclosure Letter and all information contained in it is confidential
and shall be treated in accordance with the terms of the
Confidentiality Agreements.
SECTION 7.8 EMPLOYEE MATTERS
From and after the Effective Time, the Purchaser shall honour and
perform, or cause the Company to honour and perform, all of the obligations of
the Company and any of its Subsidiaries under employment and other agreements
with current or former employees, and for a period of 12 months following the
Effective Time shall provide Company Employees with benefits that are
substantially equivalent to those provided by the Company under the Employee
Plans; provided that no provision of this Section 7.8 shall give any employees
of the Company or any of its Subsidiaries any right to continued employment or
impair in any way the right of the Company or any of its Subsidiaries to
terminate the employment of any employees.
ARTICLE 8
CONDITIONS
SECTION 8.1 MUTUAL CONDITIONS PRECEDENT
The obligations of the Parties to complete the transactions
contemplated by this Agreement are subject to the fulfillment, on or before the
Effective Time, of each of the following conditions precedent, each of which may
only be waived with the mutual consent of the Parties:
48
(a) the Arrangement Resolution shall have been approved and
adopted by the Affected Shareholders at the Company Meeting in
accordance with the Interim Order;
(b) the Interim Order and the Final Order shall each have been
obtained on terms consistent with the Agreement, and shall not
have been set aside or modified in a manner unacceptable to
the Company and the Purchaser, acting reasonably, on appeal or
otherwise;
(c) no Applicable Law (with the exception of any Applicable Law
relating to any outstanding Additional Regulatory Approvals)
shall be in effect that makes the consummation of the
Arrangement illegal or otherwise prohibited or enjoins the
Company or the Purchaser from consummating the Arrangement;
(d) the Key Regulatory Approvals shall have been obtained;
(e) this Agreement shall not have been terminated in accordance
with its terms; and
(f) the Purchaser and the Company shall have received an opinion
at the Effective Time from a nationally recognized valuation
firm engaged by the Purchaser and agreed to by the Company,
acting reasonably to the effect that the Company will, subject
to certain qualifications, be Solvent as of the Effective Time
and immediately after the consummation of the transactions
contemplated by the Plan of Arrangement.
SECTION 8.2 ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE
PURCHASER
The obligations of the Purchaser to complete the transactions
contemplated by this Agreement shall also be subject to the fulfillment of each
of the following conditions precedent (each of which is for the exclusive
benefit of the Purchaser and may be waived by the Purchaser):
(a) all covenants of the Company under this Agreement to be
performed on or before the Effective Time shall have been duly
performed by the Company in all material respects, and the
Purchaser shall have received a certificate of the Company
addressed to the Purchaser and dated the Effective Time,
signed on behalf of the Company by two senior executive
officers of the Company (on the Company's behalf and without
personal liability), confirming the same as at the Effective
Date; and
(b) the representations and warranties of the Company set forth in
this Agreement shall be true and correct in all respects,
without regard to any materiality or Material Adverse Effect
qualifications contained in them as of the Effective Time, as
though made on and as of the Effective Time (except for
representations and warranties made as of a specified date,
the accuracy of which shall be determined as of that specified
date), except where the failure or failures of all such
representations and warranties to be so true and correct in
all respects would not reasonably be expected to have a
Material Adverse Effect, provided that the representations and
49
warranties of the Company set out in paragraphs (b), (e) and
(j)(ii) and (aa) of Schedule E shall be true and correct in
all material respects, other than where such variations result
from actions expressly permitted by Section 5.1; and the
Purchaser shall have received a certificate of the Company
addressed to the Purchaser and dated the Effective Time,
signed on behalf of the Company by two senior executive
officers of the Company (on the Company's behalf and without
personal liability), confirming the same as at the Effective
Date.
SECTION 8.3 ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE
COMPANY
The obligations of the Company to complete the transactions
contemplated by this Agreement shall also be subject to the following conditions
precedent (each of which is for the exclusive benefit of the Company and may be
waived by the Company):
(a) all covenants of the Purchaser Parties under this Agreement to
be performed on or before the Effective Time shall have been
duly performed by the Purchaser Parties in all material
respects, and the Company shall have received a certificate of
the Purchaser, addressed to the Company and dated the
Effective Time, signed on behalf of the Purchaser by two of
its senior executive officers (on the Purchaser's behalf and
without personal liability), confirming the same as of the
Effective Date;
(b) the representations and warranties of the Purchaser set forth
in this Agreement shall be true and correct in all material
respects as of the Effective Time as though made on and as of
the Effective Time (except for representations and warranties
made as of a specified date, the accuracy of which shall be
determined as of that specified date, and except in each case,
for those representations and warranties that are subject to a
materiality qualification, which must be true and correct in
all respects), and the Company shall have received a
certificate of the Purchaser, addressed to the Company and
dated the Effective Time, signed on behalf of the Purchaser by
two senior executive officers of the Purchaser (on the
Purchaser's behalf and without personal liability), confirming
the same as at the Effective Date; and
(c) the Purchaser shall have deposited or caused to be deposited
with the Depositary in escrow (the terms and conditions of
such escrow to be satisfactory to the Company, acting
reasonably) in accordance with Section 2.9 the funds required
to effect payment in full of the aggregate Consideration to be
paid pursuant to the Arrangement and the Depositary shall have
confirmed to the Company receipt of these funds.
SECTION 8.4 SATISFACTION OF CONDITIONS
The conditions precedent set out in Section 8.1, Section 8.2 and
Section 8.3 shall be conclusively deemed to have been satisfied, waived or
released when the Certificate of Arrangement is issued by the Director. For
greater certainty, and notwithstanding the terms of any escrow arrangement
entered into between the Purchaser and the Depositary, all funds held in escrow
50
by the Depositary pursuant to Section 2.9 hereof shall be deemed to be released
from escrow when the Certificate of Arrangement is issued by the Director.
ARTICLE 9
TERMINATION
SECTION 9.1 TERMINATION
(1) This Agreement may be terminated and the Arrangement may be abandoned
at any time prior to the Effective Time (notwithstanding any approval
of this Agreement or the Arrangement Resolution or the Arrangement by
the Affected Shareholders and/or the Court):
(a) by mutual written agreement of the Company and the Purchaser;
or
(b) by either the Company or the Purchaser, if:
(i) the Effective Time shall not have occurred on or
before the Outside Date, except that the right to
terminate this Agreement under this Section
9.1(1)(b)(i) shall not be available to any Party
whose failure (or, in the case of Purchaser, the
failure of any Purchaser Party) to fulfill any of its
obligations has been the cause of, or resulted in,
the failure of the Effective Time to occur by such
date;
(ii) after the date hereof, there shall be enacted or made
any Applicable Law (or any such Applicable Law shall
have been amended) that makes consummation of the
Arrangement illegal or otherwise prohibited or
enjoins the Company or the Purchaser from
consummating the Arrangement and such Applicable Law
(if applicable) or enjoinment shall have become final
and non-appealable; or
(iii) the Arrangement Resolution shall have failed to
receive the requisite vote of the Affected
Shareholders for approval at the Company Meeting
(including any adjournment or postponement thereof)
in accordance with the Interim Order;
(c) by the Purchaser, if:
(i) prior to obtaining the approval of the Arrangement
Resolution by Affected Shareholders, (A) the Board
withdraws, amends, modifies or qualifies, in a manner
adverse to the Purchaser, the approval or
recommendation of the Board of the Arrangement (a
"CHANGE IN RECOMMENDATION") (it being understood that
publicly taking no position or a neutral position
with respect to an Acquisition Proposal for a period
of no more than ten Business Days following the
formal announcement thereof shall not be considered a
Change in Recommendation); or (B) the Company
wilfully and intentionally breaches Section 5.2(1) in
a material respect; or
51
(ii) a breach of any representation or warranty or failure
to perform any covenant or agreement on the part of
the Company set forth in this Agreement shall have
occurred that would cause the conditions set forth in
Section 8.1 or Section 8.2 not to be satisfied, and
such conditions are incapable of being satisfied by
the Outside Date; provided that the Purchaser is not
then in breach of this Agreement so as to cause any
of the conditions set forth in Section 8.1 or Section
8.3 not to be satisfied; or
(d) by the Company, if:
(i) the Board authorizes the Company, subject to
complying with the terms of Section 5.2(5) and
Section 10.6, to enter into a written agreement
concerning a Superior Proposal;
(ii) a breach of any representation or warranty or failure
to perform any covenant or agreement on the part of
any of the Purchaser Parties set forth in this
Agreement shall have occurred that would cause the
conditions set forth in Section 8.1 or 8.3 not to be
satisfied, and such condition is incapable of being
satisfied by the Outside Date; provided that the
Company is not then in breach of this Agreement so as
to cause any of the conditions set forth in Section
8.1 or Section 8.2 not to be satisfied; or
(iii) the Purchaser does not provide or cause to be
provided the Depositary with sufficient funds to
complete the transactions contemplated by the
Agreement as required pursuant to Section 2.9.
(2) The Party desiring to terminate this Agreement pursuant to this Section
9.1 (other than pursuant to Section 9.1(1)(a)) shall give notice of
such termination to the other Party.
SECTION 9.2 EFFECT OF TERMINATION
If this Agreement is terminated pursuant to Section 9.1, this Agreement
shall become void and of no effect without liability of any Party (or any
shareholder, director, officer, employee, agent, consultant or representative of
such Party) to any other Party hereto, except that the provisions of this
Section 9.2, Section 2.4(5), the second penultimate and penultimate sentences of
Section 5.3, Section 6.4(8), Section 7.7(4), Section 10.5, Section 10.6 and
Section 10.13 shall survive any termination hereof pursuant to Section 9.1(1).
ARTICLE 10
GENERAL PROVISIONS
SECTION 10.1 STANDARD
No representation or warranty of the Company contained in this
Agreement shall be deemed untrue or incorrect for any purpose under this
Agreement, and the Company shall not be deemed to have breached a representation
or warranty for any purpose under this Agreement, in any case as a consequence
of the existence or absence of any fact, circumstance or event unless such fact,
circumstance or event, individually or when taken together with all other facts,
circumstances or events inconsistent with any representations or warranties
contained in this Agreement, has had or would be reasonably expected to have a
52
Material Adverse Effect with respect to the Company (disregarding for purposes
of this Section 10.1 any materiality or Material Adverse Effect qualification
contained in any such representations or warranties).
SECTION 10.2 AMENDMENTS
This Agreement and the Plan of Arrangement may, at any time and from
time to time before or after the holding of the Company Meeting but not later
than the Effective Time, be amended by mutual written agreement of the Parties,
and any such amendment may, subject to the Interim Order and Final Order and
Applicable Laws, without limitation:
(a) change the time for performance of any of the obligations or
acts of the Parties;
(b) modify any representation or warranty contained herein or in
any document delivered pursuant hereto;
(c) modify any of the covenants herein contained and waive or
modify performance of any of the obligations of the Parties;
and/or
(d) modify any mutual conditions precedent herein contained.
SECTION 10.3 WAIVER
No waiver of any of the provisions of this Agreement shall be deemed to
constitute a waiver of any other provision (whether or not similar) or a future
waiver of the same provisions, nor shall such waiver be binding unless executed
in writing by the Party to be bound by the waiver. No failure or delay by any
Party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by Applicable Law.
SECTION 10.4 NOTICES
All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been duly given or made as of
the date delivered or sent if delivered personally or sent by electronic mail,
or as of the following Business Day if sent by prepaid overnight courier, to the
Parties at the following addresses (or at such other addresses as shall be
specified by either Party by notice to the other given in accordance with these
provisions):
(a) if to the Purchaser:
Ontario Teachers' Pension Plan Board
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Email: ▇▇▇▇_▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
53
and to:
Providence Equity Partners Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Email: ▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
and to:
Madison Dearborn Partners, LLC
Three First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Email: ▇▇▇▇▇▇@▇▇▇▇.▇▇▇
with a copy (which shall not constitute notice) to:
Goodmans LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Email: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇
and to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Dufell
Email: ▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
(b) if to Company:
1000, rue de La Gauchetiere Ouest,
Bureau 3700
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Chief Executive Officer
E-Mail: ▇▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇.▇▇
54
with a copy (which shall not constitute notice) to:
1000, rue de La Gauchetiere Ouest,
Bureau 3700
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Chief Legal Officer
E-Mail: ▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇
SECTION 10.5 GOVERNING LAW
This Agreement shall be governed, including as to validity,
interpretation and effect, by the laws of the Province of Quebec and the laws of
Canada applicable therein, and shall be construed and treated in all respects as
a Quebec contract. Each of the Parties hereby irrevocably attorns to the
exclusive jurisdiction of the Courts of the Province of Quebec in respect of all
matters arising under and in relation to this Agreement and the Arrangement.
SECTION 10.6 EXPENSES AND TERMINATION FEES
(1) Except as otherwise provided herein, all costs and expenses incurred in
connection with this Agreement shall be paid by the Party incurring
such cost or expense.
(2) If a Termination Fee Event occurs, the Company shall pay as directed by
the Equity Sponsors jointly in writing (by wire transfer of immediately
available funds) the Termination Fee in accordance with Section
10.6(3). For the purposes of this Agreement, "TERMINATION FEE" means
$800 million, less the amount of any non-resident withholding required
by Applicable Laws relating to Taxes which is concurrently remitted by
the Company to the relevant Governmental Authority, and "TERMINATION
FEE EVENT" means the termination of this Agreement pursuant to:
(a) Section 9.1(1)(c)(i) or Section 9.1(1)(d)(i); or
(b) Section 9.1(1)(b)(iii) or Section 9.1(1)(c)(ii) (due to
willful and intentional breach or fraud), but only if, in the
case of this paragraph (b): (i) prior to the Company Meeting,
a bona fide Acquisition Proposal shall have been made or
publicly announced by any Person other than any Purchaser
Party; and (ii) within twelve months following the date of
such termination, such Person or any of its affiliates: (A)
directly or indirectly, in one or more transactions, acquires
the Company by arrangement or otherwise; (B) directly or
indirectly, in one or more transactions, acquires more than
50% of the total assets of the Company and its Subsidiaries,
taken as a whole; or (C) directly or indirectly, in one or
more transactions, acquires more than 50% of the outstanding
Common Shares; or (D) enters into a Contract (other than a
confidentiality agreement) with respect to the foregoing or
any other Acquisition Proposal. For purposes of the foregoing,
the term "Acquisition Proposal" shall have the meaning
assigned to such term in Section 1.1, except that references
to "20% or more" shall be deemed to be references to 50% or
more.
55
(3) If a Termination Fee Event occurs due to a termination of this
Agreement by the Company pursuant to Section 9.1(1)(d)(i), the
Termination Fee shall be paid simultaneously with the occurrence of
such Termination Fee Event. If a Termination Fee Event occurs due to a
termination of this Agreement by the Purchaser pursuant to Section
9.1(1)(c)(i), the Termination Fee shall be paid within two Business
Days following such Termination Fee Event. If a Termination Fee Event
occurs in the circumstances set out in Section 10.6(2)(b), the
Termination Fee shall be paid upon the earlier of the closing of the
applicable acquisition referred to therein or upon the entering into of
the applicable Contract referred to therein.
(4) Notwithstanding any other provision relating to the payment of
expenses, costs or fees, the Company shall pay, or cause to be paid, to
the Purchaser Parties in such proportions as directed by the Purchaser
Parties jointly in writing, all reasonable documented expenses, costs
and fees of the Purchaser Parties and their affiliates incurred in
connection with the transactions contemplated hereby and related
financings not to exceed $25 million if this Agreement shall have been
terminated by the Purchaser or the Company pursuant to Section
9.1(1)(b)(iii) and not to exceed $50 million if this Agreement shall
have been terminated by the Purchaser pursuant to Section
9.1(1)(c)(ii), such payment to be made within two Business Days of any
such termination.
(5) In no event shall the Company be required to pay under Section 10.6(2)
or Section 10.6(3), on the one hand, and Section 10.6(4), on the other
hand, in the aggregate, an amount in excess of the Termination Fee.
(6) In the event that, prior to a Termination Fee Event, this Agreement is:
(a) terminated by the Company pursuant to Section 9.1(1)(d)(ii) or
Section 9.1(1)(d)(iii); or
(b) terminated by either the Company or the Purchaser pursuant to
Section 9.1(1)(b)(i) and all of the conditions referred to in
Section 8.1 and Section 8.2 (other than conditions that are
satisfied by their nature at the Effective Time or conditions
set forth in Section 8.1 that are not satisfied as a result of
any Purchaser Party having failed to comply with its
obligations hereunder) have been waived or satisfied;
then, in any such case, the Purchaser will pay or will cause to be paid
to the Company by wire transfer in immediately available funds to an
account designated by the Company an amount equal to $1 billion (the
"BREAK-UP FEE"). Such payment will be due within two Business Days of
such termination.
(7) Each of the Parties acknowledges that the agreements contained in this
Section 10.6 are an integral part of the transactions contemplated in
this Agreement and that, without those agreements, the Parties would
not enter into this Agreement. Each Party acknowledges that all of the
payment amounts set out in this Section 10.6 are payments of liquidated
damages which are a genuine pre-estimate of the damages which the Party
entitled to such damages will suffer or incur as a result of the event
giving rise to such payment and the resultant termination of this
Agreement and are not penalties. Each Party irrevocably waives any
56
right that it may have to raise as a defence that any such liquidated
damages are excessive or punitive. Subject to Section 10.7, the Parties
agree that the payment of an amount pursuant to Section 10.6 is the
sole remedy of the Party receiving such payment, and where such payment
has been paid in full the Party receiving such payment shall be
precluded from any other remedy against the Party making such payment,
at law or in equity or otherwise.
SECTION 10.7 INJUNCTIVE RELIEF
The Parties agree that irreparable harm would occur for which money
damages would not be an adequate remedy at law in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
Parties shall be entitled to an injunction or injunctions and other equitable
relief to prevent breaches of this Agreement, any requirement for the securing
or posting of any bond in connection with the obtaining of any such injunctive
or other equitable relief hereby being waived.
SECTION 10.8 TIME OF ESSENCE
Time is of the essence of this Agreement. The mere lapse of time in the
performance of the terms of this Agreement by any Party shall have the effect of
putting such Party in default in accordance with Articles 1594 to 1600 of the
Civil Code of Quebec.
SECTION 10.9 BINDING EFFECT
This Agreement shall be binding on and shall enure to the benefit of
the Parties and their respective successors and permitted assigns, provided that
this Agreement may not be assigned or novated by any Party without the prior
written consent of the other.
SECTION 10.10 SEVERABILITY
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any Applicable Law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
SECTION 10.11 NO THIRD PARTY BENEFICIARIES
Except as provided in Section 6.2, which, without limiting their terms,
are intended as stipulations for the benefit of the third Persons mentioned
therein, and except for the rights of the Affected Shareholders to receive the
Consideration following the Effective Time pursuant to the Arrangement (for
which purpose the Company hereby confirms that it is acting as agent on behalf
of the Affected Shareholders), this Agreement is not intended to confer any
rights or remedies upon any Person other than the Parties to this Agreement. To
the fullest extent permitted by Applicable Law, each of the Purchaser and the
Company agrees that the stipulations for the benefit of third Persons set out in
57
Section 6.2 shall not be revoked, and that acceptance by such third Persons of
such stipulations shall be deemed to have occurred, without prejudice to their
right to accept in any other manner, through the fulfilment of their respective
duties and functions with the Company or its Subsidiaries until the end of the
Business Day following the execution of this Agreement, it being an essential
condition of this Agreement that the Persons intended to be beneficiaries of
such stipulations shall be entitled to all the rights and remedies available to
them thereunder and under Applicable Law.
SECTION 10.12 RULES OF CONSTRUCTION
The Parties to this Agreement waive the application of any Applicable
Law or rule of construction providing that ambiguities in any agreement or other
document shall be construed against the party drafting such agreement or other
document.
SECTION 10.13 NO LIABILITY
No director or officer of the Purchaser shall have any personal
liability whatsoever to the Company under this Agreement or any other document
delivered in connection with the transactions contemplated hereby on behalf of
the Purchaser. No director or officer of the Company or any of its Subsidiaries
shall have any personal liability whatsoever to the Purchaser under this
Agreement or any other document delivered in connection with the transactions
contemplated hereby on behalf of the Company or any of its Subsidiaries.
SECTION 10.14 LANGUAGE
The Parties expressly acknowledge that they have requested that this
Agreement and all ancillary and related documents thereto be drafted in the
English language only. Les parties aux presentes reconnaissent avoir exige que
la presente entente et tous les documents qui y sont accessoires soient rediges
en anglais seulement.
SECTION 10.15 COUNTERPARTS, EXECUTION
This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original but all of which together shall
constitute one and the same instrument. The Parties shall be entitled to rely
upon delivery of an executed facsimile or similar executed electronic copy of
this Agreement, and such facsimile or similar executed electronic copy shall be
legally effective to create a valid and binding agreement between the Parties.
IN WITNESS WHEREOF the Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
BCE INC.
Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Authorized Signing Officer
58
6796508 CANADA INC.,
Per: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Authorized Signing Officer
59
SCHEDULE A
PLAN OF ARRANGEMENT
PLAN OF ARRANGEMENT UNDER SECTION 192
OF THE CANADA BUSINESS CORPORATIONS ACT
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
Unless indicated otherwise, where used in this Plan of Arrangement, capitalized
terms used but not defined shall have the meanings ascribed thereto in the
Definitive Agreement and the following terms shall have the following meanings
(and grammatical variations of such terms shall have corresponding meanings):
"APPLICABLE LAW" means, with respect to any Person, any domestic or foreign
federal, national, state, provincial or local law (statutory, common or
otherwise), constitution, treaty, convention, ordinance, code, rule, regulation,
order, injunction, judgment, decree, ruling or other similar requirement
enacted, adopted, promulgated or applied by a Governmental Authority that is
binding upon or applicable to such Person, as amended unless expressly specified
otherwise;
"ARRANGEMENT" means the arrangement under Section 192 of the CBCA on the terms
and subject to the conditions set out in this Plan of Arrangement, subject to
any amendments or variations thereto made in accordance with Section 10.2 of the
Definitive Agreement or this Plan of Arrangement or made at the direction of the
Court in the Final Order with the consent of the Company and the Purchaser, each
acting reasonably;
"ARRANGEMENT RESOLUTION" means the special resolution approving the Plan of
Arrangement presented to the Affected Shareholders at the Company Meeting;
"ARTICLES OF ARRANGEMENT" means the articles of arrangement of the Company in
respect of the Arrangement that are required by the CBCA to be sent to the
Director after the Final Order is made in order for the Arrangement to become
effective;
"BCE AMALCO" means the corporation continuing upon the amalgamation of Subco
and the Company pursuant to step g) of Exhibit II;
"BUSINESS DAY" means a day, other than a Saturday, Sunday or other day on which
commercial banks in ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ or New York, New York are
closed;
"CASH AMOUNT" means an amount in cash per Company Share as set out in Exhibit I;
"CBCA" means the Canada Business Corporations Act as now in effect and as it may
be amended from time to time prior to the Effective Date;
"COMMON SHARES" means the Common Shares in the capital of the Company;
"COMPANY" means BCE Inc., a corporation existing under the laws of Canada;
"COMPANY CIRCULAR" means the notice of the Company Meeting and accompanying
management information circular, including all schedules, appendices and
exhibits thereto, sent to, among others, holders of Company Shares in connection
with the Company Meeting, as amended, supplemented or otherwise modified from
time to time;
"COMPANY MEETING" means the special meeting of holders of Company Shares
(including any adjournment or postponement thereof) called and held in
accordance with the Interim Order to consider the Arrangement Resolution;
"COMPANY SHARES" means, collectively, the Common Shares and the Preferred
Shares;
"COURT" means the Quebec Superior Court;
"DEFINITIVE AGREEMENT" means the definitive agreement made as of June 29, 2007
between the Purchaser and the Company (including the Schedules thereto) as it
may be amended, modified or supplemented from time to time in accordance with
its terms;
"DEPOSITARY" means Computershare Investor Services Inc., as depositary;
"DIRECTOR" means the Director appointed pursuant to Section 260 of the CBCA;
"DISSENT RIGHTS" has the meaning ascribed thereto in Section 3.1 hereof;
"DISSENTING SHAREHOLDER" means a holder of Company Shares who has duly exercised
its Dissent Rights and has not withdrawn or been deemed to have withdrawn such
exercise of Dissent Rights, but only in respect of the Company Shares in respect
of which Dissent Rights are validly exercised by such holder;
"ECP INTERESTS" means units (but, for greater certainty, not Options or any
interests in RSUs held by individuals eligible to participate in the Company's
retention plan) granted or issued under the Equity Compensation Plans;
"EFFECTIVE DATE" means the date shown on the Certificate of Arrangement giving
effect to the Arrangement;
"EFFECTIVE TIME" means 12:01 a.m. (Toronto time), or such other time as may be
specified in writing by the Company with the consent of the Purchaser, on the
Effective Date;
"EQUITY COMPENSATION PLANS" means, collectively, the BCE Inc. Long Term
Incentive (Stock Option) Program (1999), the BCE Inc. Replacement Stock Option
Plan (Plan of Arrangement 2000), the BCE Inc. Restricted Share Unit Plan for
Executives and Other Key Employees (2004), the BCE Inc. Share Unit Plan for
Senior Executives and Other Key Employees (1997), the BCE Inc. Share Unit Plan
for Non-Employee Directors (1997) and any other existing equity compensation
plan of the Company, in each case as amended from time to time;
"FINAL ORDER" means the final order of the Court in a form acceptable to the
Company and the Purchaser, acting reasonably, as contemplated by Section 2.5 of
the Definitive Agreement approving the Arrangement, as such order may be amended
by the Court (with the consent of both the Company and the Purchaser, each
acting reasonably) at any time prior to the Effective Date or, if appealed,
2
then, unless such appeal is withdrawn or denied, as affirmed or as amended
(provided that any such amendment is acceptable to both the Company and the
Purchaser, each acting reasonably) on appeal;
"GOVERNMENTAL AUTHORITY" means any (a) multinational, federal, national,
provincial, state, regional, municipal, local or other government, governmental
or public department, central bank, court, tribunal, arbitral body, commission,
board, bureau, ministry or agency, domestic or foreign, (b) any subdivision,
agent, commission, board, or authority of any of the foregoing, (c) any
quasi-governmental or private body exercising any regulatory, self regulatory,
expropriation or taxing authority under or for the account of any of the
foregoing, or (d) any stock exchange;
"HOLDERS" means (a) when used with reference to the Company Shares, except where
the context otherwise requires, the holders of Company Shares shown from time to
time in the registers maintained by or on behalf of the Company in respect of
the Company Shares, and (b) when used with reference to the ECP Interests, the
holders of ECP Interests shown from time to time in the registers or accounts
maintained by or on behalf of the Company in respect of the Equity Compensation
Plans;
"INTERIM ORDER" means the interim order of the Court in a form acceptable to the
Company and the Purchaser, acting reasonably, as contemplated by Section 2.2 of
the Definitive Agreement providing for, among other things, the calling and
holding of the Company Meeting, as the same may be amended by the Court with the
consent of the Company and the Purchaser, each acting reasonably;
"LIENS" means any hypothecations, mortgages, liens, charges, security interests,
pledges, claims, encumbrances and adverse rights or claims;
"LETTER OF TRANSMITTAL" means the letter of transmittal sent to holders of
Company Shares for use in connection with the Arrangement;
"OPTION" means an option to purchase Common Shares granted under any of the
Equity Compensation Plans;
"PERSON" includes any individual, firm, partnership, limited partnership,
limited liability partnership, joint venture, venture capital fund, limited
liability company, unlimited liability company, association, trust, trustee,
executor, administrator, legal personal representative, estate, body corporate,
corporation, company, unincorporated association or organization, Governmental
Authority, syndicate or other entity, whether or not having legal status;
"PLAN OF ARRANGEMENT" means this plan of arrangement proposed under Section 192
of the CBCA, and any amendments or variations thereto made in accordance with
the Definitive Agreement or this Plan of Arrangement or made at the direction of
the Court in the Final Order with the consent of the Company and the Purchaser,
each acting reasonably;
"PREFERRED SHARES" means the first preferred shares in the capital of the
Company and includes all series thereof;
"PURCHASER" means 6796508 Canada Inc., a corporation existing under the laws of
Canada;
3
"SUBCO" has the meaning ascribed thereto in step f) of Exhibit II;
"SUBSIDIARY" has the meaning ascribed thereto in the Definitive Agreement; and
"TAX ACT" means the Income Tax Act (Canada) and the regulations made thereunder.
1.2 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.
The division of this Plan of Arrangement into Articles, sections, and other
portions and the insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation hereof. Unless otherwise
indicated, all references to an "Article" or "section" followed by a number
and/or a letter refer to the specified Article or section of this Plan of
Arrangement. The terms "hereof", "herein" and "hereunder" and similar
expressions refer to this Plan of Arrangement and not to any particular Article,
section or other portion hereof.
1.3 RULES OF CONSTRUCTION.
In this Plan of Arrangement, unless the context otherwise requires, (a) words
importing the singular number include the plural and vice versa, (b) words
importing any gender include all genders, and (c) "include", "includes" and
"including" shall be deemed to be followed by the words "without limitation".
1.4 CURRENCY
Unless otherwise stated, all references in this Plan of Arrangement to sums of
money are expressed in lawful money of Canada and "$" refers to Canadian
dollars.
1.5 DATE FOR ANY ACTION
If the date on which any action is required or permitted to be taken hereunder
by a Person is not a Business Day, such action shall be required or permitted to
be taken on the next succeeding day which is a Business Day.
1.6 REFERENCES TO DATES, STATUTES, ETC.
In this Agreement, references from or through any date mean, unless otherwise
specified, from and including that date and/or through and including that date,
respectively.
In this Plan of Arrangement, unless something in the subject matter or context
is inconsistent therewith or unless otherwise herein provided, a reference to
any statute, regulation, direction or instrument is to that statute, regulation,
direction or instrument as now enacted or as the same may from time to time be
amended, re-enacted or replaced, and in the case of a reference to a statute,
includes any regulations, rules, policies or directions made thereunder. Any
reference in this Agreement to a Person includes its heirs, administrators,
executors, legal personal representatives, predecessors, successors and
permitted assigns. References to any contract are to that agreement or contract
as amended, modified or supplemented from time to time in accordance with its
terms.
4
1.7 TIME
Time shall be of the essence in every matter or action contemplated hereunder.
All times expressed herein are local time (Montreal, Quebec) unless otherwise
stipulated herein.
ARTICLE 2
THE ARRANGEMENT
2.1 DEFINITIVE AGREEMENT
This Plan of Arrangement is made pursuant to the Definitive Agreement.
2.2 BINDING EFFECT
This Plan of Arrangement and the Arrangement, upon the filing of the Articles of
Arrangement and the issuance of the Certificate of Arrangement, will become
effective, and be binding on the Purchaser, the Company, all holders and
beneficial owners of Company Shares (including those described in Section 3.1),
Options and ECP Interests, at and after, the Effective Time without any further
act or formality required on the part of any Person, except as expressly
provided herein.
2.3 EFFECTIVE TIME
At the Effective Time the steps set out in Exhibit II shall occur and shall be
deemed to occur as set out in Exhibit II without any further authorization, act
or formality.
ARTICLE 3
RIGHTS OF DISSENT
3.1 RIGHTS OF DISSENT
Holders of Company Shares may exercise dissent rights ("DISSENT RIGHTS") in
connection with the Arrangement pursuant to and in the manner set forth in
Section 190 of the CBCA as modified by the Interim Order and this Section 3.1;
provided that, notwithstanding subsection 190(5) of the CBCA, the written
objection to the Arrangement Resolution referred to in subsection 190(5) of the
CBCA must be received by the Company not later than 5:00 p.m. (Montreal time) on
the Business Day immediately preceding the date of the Company Meeting (as it
may be adjourned or postponed from time to time). Dissenting Shareholders who
duly exercise their Dissent Rights shall be deemed to have transferred the
Company Shares held by them and in respect of which Dissent Rights have been
validly exercised to the Purchaser free and clear of all Liens, as provided in
step b) of Exhibit II, and if they:
(a) ultimately are entitled to be paid fair value for such Company
Shares, will be entitled to be paid the fair value of such
Company Shares, and will not be entitled to any other payment
or consideration, including any payment that would be payable
under the Arrangement had such holders not exercised their
Dissent Rights in respect of such Company Shares; or
5
(b) ultimately are not entitled, for any reason, to be paid fair
value for such Company Shares shall be deemed to have
participated in the Arrangement on the same basis as a
non-dissenting holder of Company Shares.
3.2 RECOGNITION OF DISSENTING SHAREHOLDERS
(a) In no circumstances shall the Purchaser, the Company or any
other Person be required to recognize a Person exercising
Dissent Rights unless such Person is the holder of those
Company Shares in respect of which such rights are sought to
be exercised.
(b) For greater certainty, in no case shall the Purchaser, the
Company or any other Person be required to recognize
Dissenting Shareholders as holders of Company Shares in
respect of which Dissent Rights have been validly exercised
after the completion of step c) of Exhibit II, and the names
of such Dissenting Shareholders shall be removed from the
registers of holders of Company Shares in respect of which
Dissent Rights have been validly exercised at the same time as
the event described in step c) of Exhibit II occurs. In
addition to any other restrictions under Section 190 of the
CBCA, none of the following shall be entitled to exercise
Dissent Rights: (i) holders of Options or ECP Interests and
(ii) holders of Company Shares who vote or have instructed a
proxyholder to vote such Company Shares in favour of the
Arrangement Resolution (but only in respect of such Company
Shares).
ARTICLE 4
CERTIFICATES AND PAYMENTS
4.1 PAYMENT OF CONSIDERATION
(a) Prior to the filing of the Articles of Arrangement, the
Purchaser shall deposit for the benefit of holders of Company
Shares, Options and ECP Interests cash with the Depositary in
the aggregate amount equal to the payments in respect thereof
required by the Plan of Arrangement, with the amount per
Company Share in respect of which Dissent Rights have been
exercised being deemed to be the Cash Amount per applicable
Company Share for this purpose) net of applicable withholdings
for the benefit of the holders of Company Shares, Options and
ECP Interests. The cash deposited with the Depositary shall be
held in an interest-bearing account, and any interest earned
on such funds shall be for the account of the Purchaser.
(b) Upon surrender to the Depositary for cancellation of a
certificate which immediately prior to the Effective Time
represented outstanding Company Shares that were transferred
pursuant to step d) of Exhibit II, together with a duly
completed and executed Letter of Transmittal and such
additional documents and instruments as the Depositary may
reasonably require, the holder of Company Shares represented
by such surrendered certificate shall be entitled to receive
in exchange therefor, and the Depositary shall deliver to such
holder, the cash which such holder has the right to receive
under the Arrangement for such Company Shares, less any
6
amounts withheld pursuant to Section 4.3, and any certificate
so surrendered shall forthwith be cancelled.
(c) As soon as practicable following the Effective Date, the
Depositary shall deliver, on behalf of the Company, to each
holder of Options and ECP Interests as reflected on the
register maintained by or on behalf of the Company in respect
of Options and ECP Interests, a cheque representing the cash
payment, if any, which such holder of Options and ECP
Interests is entitled to receive pursuant to steps b) or e) of
Exhibit II, less any amounts required to be withheld pursuant
to Section 4.3, and the Company shall deliver to each such
holder a cheque in the amount of any applicable related
special compensation payments.
(d) Until surrendered as contemplated by this Section 4.1, each
certificate that immediately prior to the Effective Time
represented Company Shares shall be deemed after the Effective
Time to represent only the right to receive upon such
surrender a cash payment in lieu of such certificate as
contemplated in this Section 4.1, less any amounts withheld
pursuant to Section 4.3. Any such certificate formerly
representing Company Shares not duly surrendered on or before
the sixth anniversary of the Effective Date shall cease to
represent a claim by or interest of any former holder of
Company Shares of any kind or nature against or in the Company
or the Purchaser. On such date, all cash to which such former
holder was entitled shall be deemed to have been surrendered
to the Purchaser or the Company, as applicable.
(e) Any payment made by way of cheque by the Depositary pursuant
to the Plan of Arrangement that has not been deposited or has
been returned to the Depositary or that otherwise remains
unclaimed, in each case, on or before the sixth anniversary of
the Effective Time, and any right or claim to payment
hereunder that remains outstanding on the sixth anniversary of
the Effective Time shall cease to represent a right or claim
of any kind or nature and the right of the holder to receive
the consideration for Company Shares pursuant to this Plan of
Arrangement shall terminate and be deemed to be surrendered
and forfeited to the Purchaser or the Company, as applicable,
for no consideration.
(f) No holder of Company Shares, Options or ECP Interests shall be
entitled to receive any consideration with respect to such
Company Shares, Options or ECP Interests other than any cash
payment to which such holder is entitled to receive in
accordance with Exhibit II and this Section 4.1 and, for
greater certainty, no such holder with be entitled to receive
any interest, dividends, premium or other payment in
connection therewith, other than any declared but unpaid
dividends.
4.2 LOST CERTIFICATES
In the event any certificate which immediately prior to the Effective Time
represented one or more outstanding Company Shares that were transferred
pursuant to step d) of Exhibit II shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the Person claiming such
certificate to be lost, stolen or destroyed, the Depositary will issue in
exchange for such lost, stolen or destroyed certificate, cash deliverable in
accordance with such holder's Letter of Transmittal. When authorizing such
7
payment in exchange for any lost, stolen or destroyed certificate, the Person to
whom such cash is to be delivered shall as a condition precedent to the delivery
of such cash, give a bond satisfactory to the Purchaser and the Depositary
(acting reasonably) in such sum as the Purchaser may direct, or otherwise
indemnify the Purchaser and the Company in a manner satisfactory to Purchaser
and the Company, acting reasonably, against any claim that may be made against
the Purchaser and the Company with respect to the certificate alleged to have
been lost, stolen or destroyed.
4.3 WITHHOLDING RIGHTS
The Purchaser, the Company or the Depositary shall be entitled to deduct and
withhold from any amount payable to any Person under the Plan of Arrangement
(including, without limitation, any amounts payable pursuant to Section 3.1),
such amounts as the Purchaser, the Company or the Depositary determines, acting
reasonably, are required or permitted to be deducted and withheld with respect
to such payment under the Tax Act, the United States Internal Revenue Code of
1986 or any provision of any other Applicable Law. To the extent that amounts
are so withheld, such withheld amounts shall be treated for all purposes hereof
as having been paid to the Person in respect of which such withholding was made,
provided that such amounts are actually remitted to the appropriate taxing
authority.
ARTICLE 5
AMENDMENTS
5.1 AMENDMENTS TO PLAN OF ARRANGEMENT
(a) The Company may amend, modify and/or supplement this Plan of
Arrangement at any time and from time to time prior to the
Effective Time, provided that each such amendment,
modification and/or supplement must (i) be set out in writing,
(ii) be approved by the Purchaser, (iii) filed with the Court
and, if made following the Company Meeting, approved by the
Court, and (iv) communicated to holders of Company Shares if
and as required by the Court.
(b) Any amendment, modification or supplement to this Plan of
Arrangement may be proposed by the Company at any time prior
to the Company Meeting (provided that the Purchaser shall have
consented thereto) with or without any other prior notice or
communication, and if so proposed and accepted by the Persons
voting at the Company Meeting (other than as may be required
under the Interim Order), shall become part of this Plan of
Arrangement for all purposes.
(c) Any amendment, modification or supplement to this Plan of
Arrangement that is approved or directed by the Court
following the Company Meeting shall be effective only if (i)
it is consented to by each of the Company and the Purchaser
(in each case, acting reasonably), and (ii) if required by the
Court, it is consented to by holders of some or all of the
Company Shares voting in the manner directed by the Court.
(d) Any amendment, modification or supplement to this Plan of
Arrangement may be made following the Effective Date
unilaterally by the Purchaser, provided that it concerns a
8
matter which, in the reasonable opinion of the Purchaser, is
of an administrative nature required to better give effect to
the implementation of this Plan of Arrangement and is not
adverse to the economic interest of any former holder of
Company Shares, Options or ECP Interests.
ARTICLE 6
FURTHER ASSURANCES
6.1 NOTWITHSTANDING
Notwithstanding that the transactions and events set out herein shall occur and
shall be deemed to occur in the order set out in this Plan of Arrangement
without any further act or formality, each of the parties to the Definitive
Agreement shall make, do and execute, or cause to be made, done and executed,
all such further acts, deeds, agreements, transfers, assurances, instruments or
documents as may reasonably be required by either of them in order further to
document or evidence any of the transactions or events set out herein.
9
EXHIBIT I
OUTSTANDING COMPANY SHARES
-------------------------------------- --------------------------------------
SECURITY CONSIDERATION PER SHARE
-------------------------------------- --------------------------------------
COMMON SHARES $42.75
-------------------------------------- --------------------------------------
-------------------------------------- --------------------------------------
FIRST PREFERRED SHARES
-------------------------------------- --------------------------------------
Series R $25.65*
-------------------------------------- --------------------------------------
Series S $25.50*
-------------------------------------- --------------------------------------
Series T $25.77*
-------------------------------------- --------------------------------------
Series Y $25.50*
-------------------------------------- --------------------------------------
Series Z $25.25*
-------------------------------------- --------------------------------------
Series AA $25.76*
-------------------------------------- --------------------------------------
Series AC $25.76*
-------------------------------------- --------------------------------------
Series AE $25.50*
-------------------------------------- --------------------------------------
Series AF $25.41*
-------------------------------------- --------------------------------------
Series AG $25.56*
-------------------------------------- --------------------------------------
Series AH $25.50*
-------------------------------------- --------------------------------------
Series AI $25.87*
-------------------------------------- --------------------------------------
*Together with accrued but unpaid dividends to the Effective Date.
EXHIBIT II
ARRANGEMENT STEPS
a) At the Effective Time, the articles of the Company shall be amended to
create an unlimited number of Class A voting non-participating shares,
which shall have such attributes as the Purchaser may designate in
writing before the Effective Time, and the Company shall issue such
number of Class A voting non-participating shares in its capital stock
as may be designated in writing by the Purchaser prior to the Effective
Time to such Person as may be so designated by the Purchaser in
consideration for such consideration as may be so designated by the
Purchaser.
b) Five minutes following the Effective Time, each unvested Option shall
be deemed, without further act or formality, to have been vested, and
immediately thereafter each outstanding Option as of such time shall be
deemed to have been transferred without any further act or formality to
the Company (free and clear of any Liens) in exchange for a cash amount
equal to the amount by which the Cash Amount per Common Share exceeds
the exercise price of the Option. Each holder of Options shall cease to
be the holder of such Options and such holder's name shall be removed
from the register of Options, and the Employee Compensation Plans
related to such Options shall be cancelled.
c) Ten minutes following the Effective Time, the Company Shares held by
Dissenting Shareholders in respect of which Dissent Rights have been
validly exercised shall be deemed to have been transferred without any
further act or formality to the Purchaser (free and clear of any
Liens), and:
1. such Dissenting Shareholders shall cease to be the holder of
such Company Shares and to have any rights as holders of such
Company Shares other than the right to be paid fair value for
such Company Shares as set out in Section 3.1;
2. such Dissenting Shareholder's name shall be removed as the
holder of such Company Shares from the registers of Company
Shares maintained by or on behalf of the Company; and
3. the Purchaser shall be deemed to be the transferee of such
Company Shares (free and clear of any Liens) and shall be
entered in the registers of Company Shares maintained by or on
behalf of the Company.
d) Concurrently with step c), each Company Share outstanding immediately
prior to the Effective Time (other than Company Shares subject to step
c) and any Company Shares held by the Purchaser) shall be transferred
without any further act or formality to the Purchaser (free and clear
of any Liens) for the Cash Amount per Company Share, and:
1. the holders of such Company Shares immediately before the
Effective Time shall cease to be the holders thereof and to
have any rights as holders of such Company Shares other than
the right to be paid the Cash Amount per Company Share in
accordance with the Plan of Arrangement and other than the
right to receive any declared but unpaid dividends on such
Company Shares;
2. such holders' names shall be removed as the holders from the
registers of Company Shares maintained by or on behalf of the
Company; and
3. the Purchaser shall be deemed to be the transferee of such
Company Shares (free and clear of any Liens) and shall be
entered in the registers of Company Shares maintained by or on
behalf of the Company.
e) Fifteen minutes after the Effective Time, all ECP Interests shall be
cancelled and terminated without any further act or formality, and:
1. each holder of such ECP Interests shall be entitled to receive
from the Company or ▇▇▇▇ Canada, as applicable, in exchange
therefor a cash amount equal to the product of (i) the
aggregate number of deferred or restricted share units that
are recorded for the benefit of the holder pursuant to the
applicable Equity Compensation Plans and vested at the
Effective Time, and (ii) the Cash Amount per Common Share;
2. each holder of such ECP Interests shall cease to be the holder
of such ECP Interests;
3. each such holder's name shall be removed from the register or
account of ECP Interests; and
4. the Employee Compensation Plans shall be cancelled (without,
however, prejudice to the right of any individuals eligible to
participate in the Company's retention plan to receive their
entitlements under and in accordance with the provisions of
such plan).
f) Upon the later of twenty minutes after the Effective Time and the
Company having filed a prescribed form of election under the Tax Act to
cease to be a public corporation for purposes of the Tax Act, the
Purchaser shall transfer the Company Shares to a Subsidiary of the
Purchaser prior to the Effective Time designated by the Purchaser in
writing prior to the Effective Time ("SUBCO") in consideration for (i)
the issuance of a non-interest bearing promissory note of Subco, (ii)
the issuance of interest bearing promissory notes of Subco and (iii)
the issuance of Class B non-voting participating shares of Subco, such
promissory notes of Subco having such terms and being in such amounts
as may be designated by the Purchaser in writing prior to the Effective
Time and such Class B non-voting participating shares of Subco being in
such number as may be so designated by the Purchaser .
g) Following the completion of step f), Subco and the Company shall
amalgamate under Section 192 of the CBCA to form BCE Amalco. Upon the
amalgamation:
1. all of the property (except shares in the capital stock of the
Company) of each of the Company and Subco continues to be the
property of BCE Amalco;
2. BCE Amalco continues to be liable for the obligations of each
of the Company and Subco (other than any obligation of the
Company or Subco to the other);
2
3. any existing cause of action, claim or liability to
prosecution is unaffected;
4. a civil, criminal or administrative action or proceeding
pending by or against the Company and Subco may continue to be
prosecuted by or against BCE Amalco;
5. a conviction against, or ruling, order or judgement in favour
of or against, the Company or Subco may be enforced by or
against BCE Amalco;
6. the articles of Subco immediately before the Effective Time
are deemed to be the articles of incorporation of BCE Amalco,
and the Certificate of Arrangement is deemed to be the
certificate of incorporation of BCE Amalco; and
7. each Class B non-voting participating share in the capital
stock of Subco held by the Purchaser shall be converted into a
Class B non-voting participating share in the capital stock of
BCE Amalco, each Class A voting non-participating share in the
capital stock of Subco owned by the Purchaser shall be
converted into such number of Class A voting non-participating
shares in the capital stock of BCE Amalco as the Purchaser may
designate in writing before the Effective Time, each Class A
voting non-participating share in the capital stock of the
Company and each Class A voting non-participating share in the
capital stock of Subco held by holders other than the
Purchaser shall be converted into such number of Class A
voting non-participating shares in the capital stock of BCE
Amalco as the Purchaser may designate in writing before the
Effective Time, and all shares in the capital stock of the
Company that were transferred to Subco pursuant to step f)
shall be cancelled without any repayment of capital in respect
thereof.
3
SCHEDULE B
SPECIAL RESOLUTION
BE IT RESOLVED THAT:
1. The arrangement (the "ARRANGEMENT") under Section 192 of the Canada Business
Corporations Act (the "CBCA") of BCE Inc. (the "COMPANY"), as more particularly
described and set forth in the management proxy circular (the "CIRCULAR") dated
o, 2007 of the Company accompanying the notice of this meeting (as the
Arrangement may be amended, modified or supplemented in accordance with the
definitive agreement (the "ARRANGEMENT AGREEMENT") made as of June 29, 2007
between the Company and 6796508 Canada Inc.), is hereby authorized, approved and
adopted.
2. The plan of arrangement of the Company (as it has been or may be amended,
modified or supplemented in accordance with the Arrangement Agreement (the "PLAN
OF ARRANGEMENT")), the full text of which is set out in Appendix "o" to the
Circular, is hereby authorized, approved and adopted.
3. The (i) Arrangement Agreement and related transactions, (ii) actions of the
directors of the Company in approving the Arrangement Agreement, and (iii)
actions of the directors and officers of the Company in executing and delivering
the Arrangement Agreement, and any amendments, modifications or supplements
thereto, are hereby ratified and approved.
4. The Company be and is hereby authorized to apply for a final order from the
Quebec Superior Court to approve the Arrangement on the terms set forth in the
Arrangement Agreement and the Plan of Arrangement (as they may be amended,
modified or supplemented and as described in the Circular).
5. Notwithstanding that this resolution has been passed (and the Arrangement
adopted) by the shareholders of the Company or that the Arrangement has been
approved by the Quebec Superior Court, the directors of the Company are hereby
authorized and empowered to, without notice to or approval of the shareholders
of the Company, (i) amend, modify or supplement the Arrangement Agreement or the
Plan Arrangement to the extent permitted by the Arrangement Agreement and (ii)
subject to the terms of the Arrangement Agreement, not to proceed with the
Arrangement and related transactions.
6. Any officer or director of the Company is hereby authorized and directed for
and on behalf of the Company to execute and deliver for filing with the Director
under the CBCA articles of arrangement and such other documents as are necessary
or desirable to give effect to the Arrangement in accordance with the
Arrangement Agreement, such determination to be conclusively evidenced by the
execution and delivery of such articles of arrangement and any such other
documents.
7. Any officer or director of the Company is hereby authorized and directed for
and on behalf of the Company to execute or cause to be executed and to deliver
or cause to be delivered all such other documents and instruments and to perform
or cause to be performed all such other acts and things as such person
determines may be necessary or desirable to give full effect to the foregoing
resolution and the matters authorized thereby, such determination to be
conclusively evidenced by the execution and delivery of such document or
instrument or the doing of any such act or thing.
2
SCHEDULE C
KEY REGULATORY APPROVALS
o Competition Act Compliance
o HSR Approval
o CRTC Approval
o Industry Canada Approval
o FCC Approval
o If required pursuant to Section 6.5(3), Investment Canada Act Approval
SCHEDULE D
ADDITIONAL REGULATORY APPROVALS
o All approvals relating to a change in control of the Company required
by the States of California, Georgia, Minnesota, New York, Ohio,
Pennsylvania and Texas and necessary for one or more Subsidiaries of
the Company to provide certain intra state communications services in
the relevant State.
o All approvals by a Governmental Authority in Brazil necessary for the
transfer of control of a company which exploits a telecom service or
which has the right to exploit a satellite.
o Any approvals required by CTVglobemedia Inc. in connection with or as a
result of the transactions contemplated hereby.
SCHEDULE E
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
(a) CORPORATE EXISTENCE AND POWER. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of
Canada and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to carry on
its business as now conducted, except for those licenses,
authorizations, permits, consents and approvals the absence of which
would not be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect.
(b) CORPORATE AUTHORIZATION. The execution, delivery and performance by the
Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby are within the Company's corporate
powers and have been duly authorized by the Board and no other
corporate proceedings on the part of the Company are necessary to
authorize this Agreement or the transactions contemplated hereby other
than in connection with the approval by the Board of the Company
Circular and the approval by Affected Shareholders in the manner
required by the Interim Order and Applicable Laws and approval by the
Court. This Agreement constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms.
As of the date hereof, the Board has (i) determined that the
Arrangement is in the best interests of the Company and (ii) resolved,
subject to Section 5.2(6), to recommend that the Affected Shareholders
vote in favour of the Arrangement.
(c) GOVERNMENTAL AUTHORIZATION. The execution, delivery and performance by
the Company of this Agreement and the consummation by the Company of
the transactions contemplated hereby require no action by or in respect
of, or filing with, any Governmental Authority other than (i) the
Interim Order and any approvals required by the Interim Order; (ii) the
Final Order; (iii) filings with the Director under the CBCA; (iv) the
Regulatory Approvals; (v) compliance with any applicable Securities
Laws, stock exchange rules and policies; and (vi) any actions or
filings the absence of which would not be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect.
(d) NON-CONTRAVENTION. The execution, delivery and performance by the
Company of its obligations under this Agreement and the consummation of
the transactions contemplated by the Plan of Arrangement do not and
will not (i) contravene, conflict with, or result in any violation or
breach of any provision of the articles of incorporation or by-laws of
the Company, (ii) assuming compliance with the matters, or obtaining
the approvals, referred to in paragraph (c) above, contravene, conflict
with or result in a violation or breach of any provision of any
Applicable Law, (iii) require any consent or other action by any Person
under, constitute a default, or an event that, with or without notice
or lapse of time or both, would constitute a default, under, or cause
or permit the termination, cancellation, acceleration or other change
of any right or obligation or the loss of any benefit to which the
Company or any of its Subsidiaries is entitled under any provision of
any agreement or other instrument binding upon the Company or any of
its Subsidiaries or (iv) result in the creation or imposition of any
Lien on any asset of the Company or any of its Subsidiaries, with such
exceptions, in the case of each of clauses (ii) through (iv), as would
not be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect.
(e) CAPITALIZATION. The authorized share capital of the Company consists of
an unlimited number of Common Shares, an unlimited number of Preferred
Shares, issuable in series, an unlimited number of second preferred
shares, issuable in series and an unlimited number of Class B shares.
As of the close of business on June 28, 2007, there were issued and
outstanding the number of Common Shares and the number of Preferred
Shares set out in the Company Disclosure Letter and no second preferred
shares or Class B shares were issued and outstanding. The Company
Disclosure Letter sets forth, as of date hereof, the number of
outstanding Options, the outstanding RSUs and DSUs, and the exercise
price or issuance price, as applicable, and vested percentage, where
applicable, of such Options, RSUs and DSUs. Except for outstanding
rights under the Stock Option Plans, and pursuant to the terms of the
Preferred Shares, there are no pre-emptive or other outstanding rights,
options, warrants, conversion rights, stock appreciation rights,
redemption rights, repurchase rights, agreements, arrangements, calls,
commitments or rights of any kind that obligate the Company or any of
its Subsidiaries to issue or sell any shares of capital stock or other
securities of the Company or any of its Subsidiaries or any securities
or obligations convertible or exchangeable into or exercisable for, or
giving any Person a right to subscribe for or acquire, any securities
of the Company or any of its Subsidiaries, and no securities or
obligations evidencing such rights are authorized, issued or
outstanding. Except for outstanding Options, RSUs and DSUs and rights
under the Stock Option Plans, there are no outstanding contractual
rights to which the Company or any of its Subsidiaries is a party, the
value of which is based on the value of the Common Shares. All
outstanding Company Shares have been duly authorized and validly
issued, are fully paid and nonassessable, and all Common Shares
issuable upon the exercise of rights under the Options in accordance
with their respective terms have been duly authorized and, upon
issuance, will be validly issued as fully paid and non-assessable.
(f) MATERIAL SUBSIDIARIES. Each Material Subsidiary is a corporation,
partnership, trust or limited partnership, as the case may be, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, organization or formation, as the
case may be, and has all requisite corporate, trust or partnership
power and authority, as the case may be, to own, lease and operate its
properties and assets and to carry on its business as now being
conducted, except where the failure to be so organized, validly
existing, qualified or in good standing, or to have such power or
authority, would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Company is, directly or
indirectly, the record and beneficial owner of all of the outstanding
shares of capital stock or other equity interests of each of the
Material Subsidiaries, free and clear of any Liens. All of such shares
and other equity interests so owned by the Company are validly issued,
2
fully paid and nonassessable (and no such shares have been issued in
violation of any preemptive or similar rights).
(g) SECURITIES LAWS MATTERS.
(i) The Company is a "reporting issuer" under applicable Canadian
Securities Laws in each of the provinces of Canada in which
such concept exists and is not in default of any material
requirements of any Securities Laws applicable in such
jurisdictions or stock exchange on which its securities are
listed for trading. No delisting, suspension of trading in or
cease trading order with respect to the Company Shares is
pending or, to the knowledge of the Company, threatened. The
documents comprising the BCE Current Public Disclosure Record
did not at the time filed with Securities Authorities, contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein, not misleading in light of the
circumstances under which they were made. The Company has
timely filed with the Securities Authorities all material
forms, reports, schedules, statements and other documents
required to be filed by the Company with the Securities
Authorities since December 31, 2005. The Company has not filed
any confidential material change report which at the date
hereof remains confidential.
(ii) The Company has established and maintains disclosure controls
and procedures (as defined in Rule 13a-15 under the 1934 Act).
Such disclosure controls and procedures are designed to ensure
that material information relating to the Company, including
its consolidated Subsidiaries, is made known to the Company's
principal executive officer and its principal financial
officer by others within those entities, particularly during
the periods in which the periodic reports required under the
1934 Act are being prepared.
(iii) The Company and its Subsidiaries have established and maintain
a system of internal control over financial reporting. Such
internal controls are designed to provide reasonable assurance
regarding the reliability of the Company's financial reporting
and the preparation of Company financial statements for
external purposes in accordance with GAAP. Based on its most
recent evaluation of internal controls prior to the date
hereof, the Company has disclosed to its auditors and audit
committee (x) that there were no significant deficiencies or
material weaknesses in the design or operation of internal
controls that are reasonably likely to adversely affect the
Company's ability to record, process, summarize and report
financial information and (y) that there was no fraud, whether
or not material, that involves management or other employees
who have a significant role in internal controls.
(h) FINANCIAL STATEMENTS. The audited consolidated financial statements and
unaudited consolidated interim financial statements of the Company
included in the BCE Current Public Disclosure Record fairly present, in
3
all material respects, in conformity with GAAP applied on a consistent
basis (except as may be indicated in the notes thereto), the
consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and their consolidated results of
operations and cash flows for the periods then ended (subject to normal
year-end adjustments and the absence of footnotes in the case of any
unaudited interim financial statements).
(i) ABSENCE OF CERTAIN CHANGES. Since December 31, 2006, other than the
transactions contemplated in this Agreement, the business of the
Company and its Subsidiaries has been conducted in the ordinary course
consistent with past practices and there has not been any event,
occurrence, development or state of circumstances or facts that has had
or would be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect.
(j) NO UNDISCLOSED MATERIAL LIABILITIES. (i) There are no liabilities or
obligations of the Company or any of its Subsidiaries of any kind
whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, other than: (A) liabilities or obligations
disclosed in the Company Balance Sheet or in the notes thereto or in
the Company Filings; (B) liabilities or obligations incurred in the
ordinary course of business consistent with past practice since
December 31, 2006; (C) liabilities or obligations incurred in
connection with the transactions contemplated hereby; and (D)
liabilities or obligations that would not be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect; (ii)
as of the date of this Agreement, the principal amount of all
indebtedness for borrowed money, including capital leases and the
amount drawn pursuant to securitization programs of the Company and its
Subsidiaries, was as disclosed in the Company Disclosure Letter. Except
as disclosed in the Company Disclosure Letter, neither the Company nor
any of its Subsidiaries is a party to any Contract containing Lien
Restrictions.
(k) COMPLIANCE WITH LAWS. The Company and each of its Subsidiaries is, and
since January 1, 2006 has been, in compliance with, and to the
knowledge of the Company is not under investigation with respect to and
has not been threatened to be charged with or given notice of any
violation of, any Applicable Law, except for failures to comply or
violations that have not had and would not be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect.
(l) LITIGATION. As of the date hereof, there is no Proceeding pending
against, or, to the knowledge of the Company, threatened against or
affecting, the Company or any of its Subsidiaries before any
Governmental Authority or other Person, that would be reasonably
expected to have, individually or in the aggregate, a Material Adverse
Effect.
(m) TAXES. All material Returns required by Applicable Laws to be filed
with any Governmental Authority by, or on behalf of, the Company or any
of its Material Subsidiaries have been filed when due in accordance
with all Applicable Laws (taking into account any applicable
extensions), and all such material Returns are, or shall be at the time
4
of filing, true and complete in all material respects. The Company and
each of the Material Subsidiaries has paid (or has had paid on its
behalf) or has collected, withheld and remitted to the appropriate
Governmental Authority all material Taxes due and payable on a timely
basis, other than those Taxes being contested in good faith, or, where
payment is not yet due, has established (or has had established on its
behalf and for its sole benefit and recourse) in accordance with GAAP
an adequate accrual for all material Taxes through the end of the last
period for which the Company and the Material Subsidiaries ordinarily
record items on their respective books. There is no claim, audit,
action, suit, proceeding or investigation now pending or, to the
Company's knowledge, threatened against or with respect to the Company
or its Material Subsidiaries in respect of any material Tax or Tax
asset that would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. There are no currently effective
material elections, agreements or waivers extending the statutory
period or providing for an extension of time with respect to the
assessment or reassessment of any Taxes, or of the filing of any Return
or any payment of Taxes by the Company and any of its Material
Subsidiaries. Each of the Company, ▇▇▇▇ Canada, 4119649 Canada Inc.,
▇▇▇▇ Mobility Holdings Inc., ▇▇▇▇ Mobility Inc., 3499201 Canada Inc.
and 3552381 Canada Inc. is a taxable Canadian corporation as defined in
the Tax Act.
(n) EMPLOYEE PLANS.
(i) The Data Room contains all material health, welfare,
supplemental unemployment benefit, bonus, profit sharing,
option, insurance, incentive, incentive compensation, deferred
compensation, share purchase, share compensation, disability,
pension or supplemental retirement plans and other material
employee or director compensation or benefit plans, policies,
trusts, funds, agreements or arrangements for the benefit of
directors or former directors of the Company or any of the
Material Subsidiaries, Company Employees or former Company
Employees, which are maintained by or binding upon the Company
or any of the Material Subsidiaries or in respect of which the
Company or any of the Material Subsidiaries has any actual or
potential liability (collectively, the "EMPLOYEE PLANS").
(ii) All of the Employee Plans are and have been established,
registered, qualified and, in all material respects,
administered in accordance with all Applicable Laws, and in
accordance with their terms, the terms of the material
documents that support such Employee Plans and the terms of
agreements between the Company and/or any of the Material
Subsidiaries, as the case may be, and their respective
employees and former employees who are members of, or
beneficiaries under, the Employee Plans.
(iii) All current obligations of the Company or any of the Material
Subsidiaries regarding the Employee Plans have been satisfied
in all material respects. All contributions, premiums or taxes
required to be made or paid by the Company or any of the
Material Subsidiaries, as the case may be, under the terms of
5
each Employee Plan or by Applicable Laws in respect of the
Employee Plans have been made in a timely fashion in
accordance with Applicable Laws in all material respects and
in accordance with the terms of the applicable Employee Plan.
As of the date hereof, no currently outstanding notice of
underfunding, non-compliance, failure to be in good standing
or otherwise has been received by the Company or any of the
Material Subsidiaries from any applicable Governmental
Authority in respect of any Employee Plan that is a pension or
retirement plan.
(iv) To the knowledge of the Company, no Employee Plan is subject
to any pending investigation, examination or other proceeding,
action or claim initiated by any Governmental Authority, or by
any other party (other than routine claims for benefits) and,
to the knowledge of the Company, there exists no state of
facts which after notice or lapse of time or both would
reasonably be expected to give rise to any such investigation,
examination or other proceeding, action or claim or to affect
the registration or qualification of any Employee Plan
required to be registered or qualified.
(v) To the knowledge of the Company, no event has occurred
regarding any Employee Plan that would entitle any Person
(without the consent of the Company) to wind-up or terminate
any Employee Plan, in whole or in part, or which could
reasonably be expected to adversely affect the tax status
thereof.
(vi) The Company has not received any payments of surplus out of
any Employee Plan and there have been no improper withdrawals
or transfers of assets from any Employee Plan other than such
payments, withdrawals or transfers which would not have a
Material Adverse Effect.
(vii) There are no material unfunded liabilities in respect of any
Employee Plan that is a registered pension plan (as defined
under the Tax Act), including going concern unfunded
liabilities, solvency deficiencies or wind-up deficiencies
where applicable.
(viii) Except as provided in this Agreement, the execution of this
Agreement or the consummation of any of the transactions
contemplated in this Agreement will not: (A) result in any
material payment (including, without limitation, bonus, golden
parachute, retirement, severance, unemployment compensation,
or other benefit or enhanced benefit) becoming due or payable
to any of the Company Employees or to any former employee of
the Company or of any of its Subsidiaries; (B) materially
increase the compensation or benefits otherwise payable to any
of the Company Employees or any former employee of the Company
or any of its Subsidiaries; (C) entitle any Company Employee
to any job security or similar benefit; or (D) result in the
acceleration of the time of payment or vesting of any material
benefits or entitlements otherwise available pursuant to any
Employee Plan (except for outstanding Options, RSUs and DSUs).
6
(o) COLLECTIVE AGREEMENTS. The Company Disclosure Letter sets forth a
complete list of all collective bargaining agreements or union
agreements currently applicable to the Company and/or any of its
Subsidiaries (collectively, the "COLLECTIVE AGREEMENTS"), and neither
the Company nor any of its Subsidiaries is in default of any of its
material obligations under such agreements. To the knowledge of the
Company, there are no outstanding material labour tribunal proceedings
of any kind, including any proceedings which could result in
certification of a trade union as bargaining agent for any Company
Employees not already covered by a Collective Agreement. To the
knowledge of the Company, there are no apparent union organizing
activities involving Company Employees not already covered by a
Collective Agreement. Neither the Company nor any of its Subsidiaries
currently has any material unresolved grievances or material pending
arbitration cases outstanding under any Collective Agreement.
(p) ENVIRONMENTAL MATTERS. Except as would not be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect: (i)
no written notice, order, complaint or penalty has been received by the
Company or any of the Material Subsidiaries alleging a violation by or
liability of the Company or any of the Material Subsidiaries under any
Environmental Law, and, to the Company's knowledge, there are no
judicial, administrative or other actions, suits or proceedings pending
or threatened which allege a violation by the Company or any of the
Material Subsidiaries of any Environmental Laws; (ii) the Company and
each of the Material Subsidiaries have all environmental permits
necessary for their operations to comply with all Environmental Laws;
and (iii) the operations of the Company and each of the Material
Subsidiaries are in compliance in all material respects with the terms
of Environmental Laws.
(q) REAL PROPERTY. Except in any such case as would not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse
Effect, with respect to the real property owned by the Company or its
Subsidiaries (the "OWNED REAL PROPERTY"), (i) the Company or one of its
Subsidiaries, as applicable, has good and marketable title to the Owned
Real Property, free and clear of any Liens, except for Permitted Liens,
and (ii) there are no outstanding options or rights of first refusal to
purchase the Owned Real Property, or any portion thereof or interest
therein. With respect to the real property leased or subleased to the
Company or its Subsidiaries (the "LEASED REAL PROPERTY"), (i) the lease
or sublease for such property is valid, legally binding, enforceable
and in full force and effect, and none of the Company or any of its
Subsidiaries or, to the knowledge of the Company, the landlord, is in
breach of or default under such lease or sublease, and no event has
occurred which, with notice, lapse of time or both, would constitute a
breach or default by any of the Company or its Subsidiaries or permit
termination, modification or acceleration by any third party
thereunder, and (ii) no third party has repudiated or has the right to
terminate or repudiate such lease or sublease (except for the normal
exercise of remedies in connection with a default thereunder or any
termination rights set forth in the lease or sublease) or any provision
thereof, except in each case, for such invalidity, failures to be
binding, unenforceability, ineffectiveness, breaches, defaults,
7
terminations, modifications, accelerations, repudiations and rights to
terminate or repudiate that would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse
Effect.
(r) RIGHT-OF-WAY AGREEMENTS. Except in any such case as would not,
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect, (i) it has all right-of-way agreements,
license agreements or other agreements or consents permitting or
requiring the Company or any of its Subsidiaries to lay, build,
operate, maintain or place cable, wires, conduits or other equipment
and facilities over land or underground, that are material to the
conduct of the business, as presently conducted, of the Company and its
Subsidiaries taken as a whole, (each, a "RIGHT-OF-WAY AGREEMENT"), and
each such Right-of-Way Agreement is valid, legally binding, enforceable
and in full force and effect, and none of the Company or any of its
Subsidiaries is in breach of or default under any Right-of-Way
Agreement, (ii) no event has occurred which, with notice or lapse of
time, would constitute a breach or default by any of the Company or its
Subsidiaries or permit termination, modification or acceleration by any
third party under any Right-of-Way Agreement, and (iii) no third party
has repudiated or has the right to terminate or repudiate any
Right-of-Way Agreement.
(s) NETWORK FACILITIES. Except in any such case as would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect, (i) all Owned Network Facilities and Leased Network Facilities
are in good working order and condition and are operated, installed and
maintained by the Company and/or its Subsidiaries in a manner that is
in compliance with general industry standards, (ii) the Company or one
of its Subsidiaries owns, free of Liens, other than Permitted Liens,
the Owned Network Facilities, and (iii) each Network Facility Agreement
is valid, legally binding, enforceable and in full force and effect,
and none of the Company or any of its Subsidiaries is in material
breach of, or has materially defaulted under, any Network Facility
Agreement.
(t) PERSONAL PROPERTY. The Company and its Subsidiaries have good and valid
title to, or a valid and enforceable leasehold interest in, all
personal property owned or leased by them, except as would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(u) INTELLECTUAL PROPERTY. Except as would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect: (i)
the Company and/or its Material Subsidiaries own all right, title and
interest in and to, or are validly licensed (and are not in material
breach of such licenses), all patents, trade-marks, trade names, domain
names and copyrights that are material to the conduct of the business,
as presently conducted, of the Company and its Subsidiaries taken as a
whole (collectively, the "INTELLECTUAL PROPERTY RIGHTS"); (ii) all such
Intellectual Property Rights that are owned by or licensed to the
Company and/or its Material Subsidiaries are sufficient, in all
material respects, for conducting the business, as presently conducted,
of the Company and its Material Subsidiaries taken as a whole; (iii) to
the knowledge of the Company, all Intellectual Property Rights owned by
the Company and/or its Material Subsidiaries are valid and enforceable
(subject to the effects of bankruptcy, insolvency, reorganization,
moratorium or laws relating to or affecting creditors' rights
generally), and to the knowledge of the Company the Technology (as
hereinafter defined) owned by the Company and/or its Material
Subsidiaries does not infringe in any material way upon any third
parties' intellectual property rights in Canada; (iv) to the knowledge
of the Company, no third party is infringing upon the Intellectual
Property Rights owned by the Company and/or its Material Subsidiaries
8
in a manner that currently would reasonably be expected to adversely
affect such Intellectual Property Rights in any material respect; (v)
all computer hardware and associated firmware and operating systems,
application software, database engines and processed data, technology
infrastructure and other computer systems used in connection with the
conduct of the business, as presently conducted, of the Company and its
Material Subsidiaries taken as a whole (collectively, the "TECHNOLOGY")
are sufficient, in all material respects, for conducting the business,
as presently conducted, of the Company and its Material Subsidiaries
taken as a whole; and (vi) the Company and its Material Subsidiaries
own or have validly licensed or leased (and are not in material breach
of such licenses) such Technology.
(v) MATERIAL CONTRACTS. Except as would not be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect, (i)
neither the Company nor any of its Subsidiaries is in breach of or
default under the terms of any Material Contract, (ii) as of the date
hereof, to the knowledge of the Company, no other party to any Material
Contract is in breach of or default under the terms of any such
Material Contract and (iii) each Material Contract is a valid and
binding obligation of the Company or its Subsidiary that is a party
thereto and is in full force and effect.
(w) INSURANCE. Each of the Company and its Subsidiaries is, and has been
continuously since January 1, 2006, insured by reputable and
financially responsible insurers. The insurance policies of the Company
and its Subsidiaries are in all material respects in full force and
effect in accordance with their terms.
(x) OPINION OF FINANCIAL ADVISORS. The Board has received opinions from
some or all of the Financial Advisors to the effect that, as of the
date of this Agreement, the Consideration is fair to the Affected
Shareholders from a financial point of view.
(y) LICENCES. All licences and authorizations issued by the CRTC, Industry
Canada and the FCC that the Company or any of its Subsidiaries are
required to obtain that are related to their respective businesses or
the ownership or operation of their respective properties and assets
have been obtained, are currently valid, in full force and effect and
in good standing in all material respects, except to the extent that
the failure to be valid, in full force and in good standing, would not
reasonably be expected to have a Material Adverse Effect, and no
proceedings specific to the Company or any of its Subsidiaries in
relation to such licenses and authorizations are pending (other than
renewal proceedings as a result of expirations in accordance with the
terms thereof) or, to the knowledge of the Company, threatened, which
could reasonably be expected to result in a Material Adverse Effect.
9
(z) BOOKS AND RECORDS. All books and records of the Company and its
Subsidiaries fairly disclose in all material respects the financial
position of the Company and its Subsidiaries and all material financial
transactions relating to the businesses carried on by the Company and
its Subsidiaries have been accurately recorded in all material respects
in such books and records.
(aa) FINDERS' FEES. Except for the Financial Advisors, there is no
investment banker, broker, finder or other intermediary that has been
retained by or is authorized to act on behalf of the Company or any of
its Subsidiaries who might be entitled to any fee or commission from
the Company or any of its Subsidiaries in connection with the
transactions contemplated by this Agreement. The Company has made full
disclosure to the Purchaser of all fees to be paid to the Financial
Advisors under the terms of the agreements with the Financial Advisors.
10
SCHEDULE F
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
(a) CORPORATE EXISTENCE AND POWER. The Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of
Canada and has not carried on any active business prior to the date of
this Agreement other than activities in connection with this Agreement,
the documents ancillary hereto and the transactions contemplated hereby
and thereby.
(b) CORPORATE AUTHORIZATION. The execution, delivery and performance by the
Purchaser of this Agreement and the consummation by the Purchaser of
the transactions contemplated hereby are within the corporate powers of
the Purchaser and have been duly authorized, and no other corporate
proceedings on the part of the Purchaser are necessary to authorize
this Agreement or the transactions contemplated hereby. This Agreement
constitutes a valid and binding agreement of the Purchaser enforceable
against the Purchaser in accordance with its terms.
(c) GOVERNMENTAL AUTHORIZATION. The execution, delivery and performance by
the Purchaser of this Agreement and the consummation by the Purchaser
of the transactions contemplated hereby require no action by or in
respect of, or filing with, any Governmental Authority other than (i)
the Interim Order and any approvals required by the Interim Order; (ii)
the Final Order; (iii) filings with the Director under the CBCA; (iv)
the Regulatory Approvals; (v) compliance with any applicable Securities
Laws; and (vi) any actions or filings the absence of which would not
reasonably be expected to materially or adversely impair the ability of
the Purchaser to complete the transactions contemplated by the
Agreement on or prior to the Outside Date.
(d) NON-CONTRAVENTION. The execution, delivery and performance by the
Purchaser of this Agreement and the consummation of the transactions
contemplated hereby do not and will not (i) contravene, conflict with,
or result in any violation or breach of any provision of the articles
of incorporation or bylaws of the Purchaser, (ii) assuming compliance
with the matters referred to in paragraph (c) above, contravene,
conflict with or result in a violation or breach of any provision of
any Applicable Law, (iii) require any consent or other action by any
Person under, constitute a default, or an event that, with or without
notice or lapse of time or both, would constitute a default, under, or
cause or permit the termination, cancellation, acceleration or other
change of any right or obligation or the loss of any benefit to which
the Purchaser is entitled under any provision of any material contract
to which the Purchaser is a party or by which it or any of its
properties or assets may be bound; or (iv) result in the creation or
imposition of any Lien on any material asset of the Purchaser, with
such exceptions, in the case of (ii) through (iv), as would not be
reasonably expected to materially impede or delay the ability of the
Purchaser to consummate the transactions contemplated by this
Agreement.
(e) LITIGATION. As of the date hereof, there is no Proceeding pending
against, or, to the knowledge of the Purchaser, threatened against or
affecting the Purchaser that in any manner challenges or seeks to
prevent, enjoin, alter or materially delay the Arrangement or any of
the other transactions contemplated hereby.
(f) SUFFICIENT FUNDS. Prior to the execution and delivery of this
Agreement, the Purchaser has delivered to the Company true and complete
copies of the following commitment letters, which are unamended,
evidencing: (i) the availability of committed credit facilities
pursuant to an executed commitment letter (the "COMMITMENT LETTER")
dated June 29, 2007 made by Citigroup Global Markets Inc., Deutsche
Bank AG, Canada Branch, Deutsche Bank Securities Inc., The
Toronto-Dominion Bank, The Royal Bank of Scotland PLC, and RBS
Securities Inc. (collectively the "LENDERS") in favour of the
Purchaser, and (ii) equity commitments pursuant to executed equity
commitment letters (the "EQUITY COMMITMENT LETTERS") dated June 29,
2007 made by each of the Ontario Teachers' Pension Plan Board and
affiliates of Providence Equity Partners, Inc. and Madison Dearborn
Partners, LLC (collectively, the "EQUITY SPONSORS") in favour of the
Purchaser, pursuant to which the Lenders, in the case of the Commitment
Letter, and the Equity Sponsors, in the case of the Equity Commitment
Letters, have committed to provide the Purchaser with debt and equity
financing. The commitments described in the Commitment Letter and
the Equity Commitment Letters are not subject to any condition
precedent other than the conditions expressly set forth therein. As of
the date hereof each of the Commitment Letter and the Equity Commitment
Letters are in full force and effect and is a legal, valid and binding
obligation of the Purchaser, the Equity Sponsors and the Lenders, no
amendment or modification to the Commitment Letter or the Equity
Commitment Letters are contemplated, and as of the date hereof no event
has occurred which, with or without notice, lapse of time or both,
would constitute a default or breach on the part of the Purchaser under
the Commitment Letter or the Equity Commitment Letters, respectively.
As of the date hereof the Purchaser has no reason to believe that it
will be unable to satisfy on a timely basis any term or condition of
closing of the financing to be satisfied by it contained in the
Commitment Letter or the Equity Commitment Letters and is not aware of
any fact, occurrence or condition that may cause either of such
financing commitments to terminate or be ineffective or any of the
terms or conditions of closing of such financings not to be met or of
any impediment to the funding of the cash payment obligations of the
Purchaser under the Arrangement. Assuming the financing contemplated in
the Commitment Letter and the Equity Commitment Letters is funded, the
net proceeds contemplated by the Commitment Letter and the Equity
Commitment Letters will in the aggregate be sufficient for the
Purchaser to pay the aggregate Consideration to be paid pursuant to the
Arrangement and any other amounts required to be paid by the Purchaser
under this Agreement in connection with the consummation of the
transactions contemplated by this Agreement and to pay all related fees
and expenses.
2
(g) CONSORTIUM MEMBERSHIP. The Exhibit delivered to the Company
concurrently with the execution of this Agreement identifies all
Persons holding as of the date hereof (i) a direct economic or voting
interest in the Purchaser, and (ii) an indirect (which for purposes
hereof shall not include interests held as limited partners) economic
or voting interest in the Purchaser of 5% or more, as well as a
description of the direct and indirect economic and voting interests of
such Persons and specifying which of these Persons are Canadian (within
the meaning of the Direction and the Telecommunications Act). The
information disclosed in that Exhibit hereto relating to the structure
and governance of the Purchaser is complete and accurate in all
material respects.
(h) INVESTMENT CANADA ACT. The Purchaser is a Canadian, and is not
controlled in fact by one or more non-Canadians, all within the meaning
of the Investment Canada Act.
(i) RESIDENCY AND OWNERSHIP RESTRICTIONS. The Purchaser is: (i) eligible to
be a parent corporation of a subsidiary which is a "Canadian" within
the meaning of the Direction, (ii) a "qualified corporation" within the
meaning of the Telecommunications Regulations and (iii) a "Canadian"
within the meaning of the Radiocommunication Regulations. The Purchaser
has knowledge of and is familiar with the restrictions imposed under
Applicable Laws with respect to the ownership and control of the
Company, including the restrictions set forth under the Broadcasting
Act, the Telecommunications Act and the Radiocommunication Act, and the
related regulations and directions thereto, and the ownership and
control of the Company, after the consummation of the transactions
contemplated by this Agreement, shall comply with all such
requirements.
(j) SECURITY OWNERSHIP. Other than as has been previously disclosed to the
Company in writing, none of the Purchaser or any of the Purchaser
Parties beneficially owns any securities of BCE or any of its
affiliates.
(k) GUARANTEE. Concurrently with the execution of this Agreement, the
Purchaser has caused each of the Equity Sponsors to execute and deliver
to the Company a guarantee of the obligations of the Purchaser
hereunder, which guarantee is in full force and effect and, subject to
the express qualifications in the guarantee, is a valid, binding and
enforceable obligation of each Equity Sponsor, and no event has
occurred which, with or without notice, lapse of time or both, would
constitute a default on the part of any Equity Sponsor under such
guarantee.
(l) FINDERS' FEES. Except for Citi Global Investment Banking and TD
Securities Inc., whose fees will be paid by the Purchaser and/or the
Purchaser Parties, there is no investment banker, broker, finder or
other intermediary that has been retained by or is authorized to act on
behalf of the Purchaser or any of the Purchaser Parties who might be
entitled to any fee or commission from the Company or any of its
affiliates upon consummation of the transactions contemplated by this
Agreement.
3