EXHIBIT 2.4
VOICE-TEL CANADA
WESTERN
COMPANIES
TRANSFER AGREEMENT
BY AND AMONG
PREMIERE TECHNOLOGIES, INC.,
AND
OWNERS OF THE WESTERN FRANCHISEES:
- 3325882 MANITOBA INC.
- 601965 ALBERTA LTD.
- 3266622 MANITOBA INC.
- 3337821 MANITOBA INC.
- 3266631 MANITOBA INC.
DATED AS OF MARCH 31, 1997
TRANSFER AGREEMENT
THIS TRANSFER AND REORGANIZATION AGREEMENT (this "Agreement") is entered
into as of March 31, 1997.
A M O N G S T:
PREMIERE TECHNOLOGIES, INC.
a Georgia corporation
(hereinafter referred to as "Premiere")
OF THE FIRST PART;
- AND -
PREMIERE TECHNOLOGIES, INC.
in trust, on behalf of a corporation to be incorporated under the
laws of the Province of Ontario (the "Acquisition Sub")
OF THE SECOND PART;
- AND -
▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇")
of the Province of Manitoba,
▇▇▇ ▇▇▇▇▇▇ ("Fields")
of the Province of Manitoba,
▇▇▇▇▇▇ EQUIPMENT LIMITED ("▇▇▇▇▇▇")
a Manitoba Corporation
(▇▇▇▇▇ and Fields sometimes
hereinafter collectively referred to the
"Primary Owners" and together with
▇▇▇▇▇▇, the "Owners")
OF THE THIRD PART.
WHEREAS, this Agreement provides for the incorporation of the Acquisition
Sub and the acquisition by it of the Companies (as hereafter defined);
AND WHEREAS, the respective boards of directors of Premiere and each of the
Holding Companies approved the terms and conditions set forth in this Agreement;
AND WHEREAS, by Transfer Agreement dated of even date and executed and
delivered earlier this day made amongst Premiere, the Acquisition Sub, the
Primary Owners, 1086237 Ontario Inc. ("Holdco"), ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, and
▇▇▇▇▇▇ Equipment Limited respecting the sale of all right, title and interest in
and to all of Equity Stock of 1086236 Ontario Inc. ("Vtech");
AND WHEREAS, The Primary Owners collectively own and shall convey or cause
to be conveyed here under, directly or indirectly, one hundred percent (100%) of
the Equity Stock of the Western Companies;
AND WHEREAS, it is also the intention of the parties hereto that the form
of the transactions hereunder with respect to the Companies, Premiere and the
Acquisition Sub shall qualify as a "reorganization within the meaning of Section
368(a) of the Code for federal income tax purposes and shall qualify as a
rollover pursuant to subsection 85(l) of the Income Tax Act (Canada) ("ITA");
AND WHEREAS, it is also the intention of the parties hereto that the
business combination to be effected by the subject form of transactions be
accounted for as a pooling of interests;
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which arc hereby acknowledged, the parties agree
as follows:
1. UNIFORM TERMS AND CONDITIONS
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1.1 Incorporation by Reference. The Uniform Terms and Conditions attached
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hereto as Exhibit A (the "Uniform Terms") are hereby made a part of and
incorporated herein as if fully restated herein. Capitalized terms not defined
herein shall have the meanings provided in the Uniform Terms.
1.2 Canadianized Terms and Conditions. In accordance with the provisions
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of the Uniform Terms expressing this Agreement to be paramount, attached hereto
as Exhibit AA (the "Canadianized Terms") are terms and conditions amending the
Uniform Terms to conform to matters pertaining to the law of Canada which
Canadianized Terms are hereby made a part of and incorporated herein as if fully
restated herein. Capitalized Terms not defined herein and not defined in the
Uniform Terms shall have the meanings provided in the Canadianized Terms.
1.3 Company. In this Agreement, the Uniform Terms, and the Canadianized
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Terms, references to the singular term "Company" shall be deemed to mean a
reference to all of the Holding Companies and all of the Operating Companies
considered collectively on a consolidated basis except where the context
requires the term to be interpreted as a reference to a particular Company.
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1.4 Owners. In this Agreement, the term "Owners" includes the Primary
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Owners who own any of the Equity Stock directly or indirectly of the corporate
Owners selling Holding Company Equity Stock hereunder as registered and
beneficial owner. In those circumstances, it is intended that, notwithstanding
any other provision in this Agreement or in the Uniform Terms:
(a) Whenever an Owner's liability hereunder is expressed to be
'several', such liability shall be borne severally by the Owners selling Holding
Company Equity Stock (the 'Selling Owners') and each such several liability
shall then be borne jointly and severally by such Selling Owner and all other
Owners holding a direct or indirect interest in the Equity Stock of such Selling
Owner; and
(b) Whenever the liability of an Owner is expressed to be 'joint and
several' with the liability of the other Owners hereunder, each Owner shall be
so jointly and severally liable together with all other Owners hereunder,
regardless of their relationship to any particular Selling Owner.
2. TERMS OF MERGER
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2.1 The Share Exchange. On or before the Closing Date, as more
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particularly set out herein, the following shall occur (collectively and
interchangeably referred to herein as either the "Merger", or the "Transfer
Transactions").
(a) Incorporation of Acquisition Sub: After the execution and
delivery of this Agreement, and prior to the Closing Date, Premiere shall cause
the Acquisition Sub to be incorporated as a wholly owned subsidiary pursuant to
Certificate of Articles of Incorporation (the "Articles"), filed under the OBCA
and under the name "Voice-Tel of Canada" or under such other name as Premiere,
in its discretion, may elect. The share capital of the Acquisition Sub shall be
divided into an unlimited number of common shares (the "Common Shares") and an
unlimited number of exchangeable non-voting special shares (the "Exchangeable
Shares") which Common Shares and Exchangeable Shares shall have the rights,
privileges, restrictions and conditions set out in Exhibit "G" annexed hereto.
Upon the incorporation of the Acquisition Sub as a wholly owned subsidiary of
Premiere, Premiere shall cause the Acquisition Sub to adopt the benefits and
burdens of this Agreement in accordance with Section 21 of the OBCA as the party
of the second part hereunder and if an original party hereto. Notwithstanding
such adoption by the Acquisition Sub, Premiere shall thereafter continue to be
jointly and severally liable with the Acquisition Sub for the obligations
hereunder of the Acquisition Sub to and including the Closing Date. After the
Closing Date and upon completion of the transactions contemplated hereunder on
the Closing Date, Premiere shall be released and forever discharged from any
further joint and several liability for the obligations hereunder of the
Acquisition Sub; save and except, in respect of any obligations specifically
adopted by Premiere as party of the first part hereunder and expressed to
survive the Closing or as may be embodied in any agreement delivered by Premiere
at the Closing.
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(b) Purchase and Sale: Subject to the terms and conditions hereof,
the Acquisition Sub shall purchase from the Owners, and the Owners shall sell to
the Acquisition Sub, the Holding Company Equity Stock on the Closing Date. The
Acquisition Sub and the Owners intend that the purchase price for the Holding
Company Equity Stock shall be equal to the Company Purchase Price determined in
accordance with Section 2.3 below;
(c) Satisfaction of Company Purchase Price: On the Closing Date, the
Acquisition Sub shall satisfy the Company Purchase Price payable to the Owners
for the Holding Company Equity Stock by issuing to the Owners the following
securities in full payment of the Company Purchase Price (the "Consideration"):
(i) each Owner will receive for all stock of a particular class of
stock of a particular Holding Company being sold by that Owner to
the Acquisition Sub hereunder (the "Particular Stock") that
number of Exchangeable Shares that is equal to the product that
is obtained when the number of shares of such Particular Stock
being sold by that Owner is multiplied by the Exchange Ratio
applicable to that class of Particular Stock.
Each Owner shall convey to the Acquisition Sub all of that Owner's right, title
and interest in and to all of the Holding Company Equity Stock to be sold by
that Owner hereunder free and Clear of all liens, claims and encumbrances of any
nature whatsoever. The Exchange Ratio for each Particular Stock will be
determined in accordance with Section 2.2 hereof and any fractional Exchange
Shares derived from the application of the foregoing formula will be handled in
accordance with Section 2.6 hereof;
(d) Section 85(1) Election: Notwithstanding that the purchase price
for all of the Holding Company Equity Stock sold hereunder shall be the Company
Purchase Price and that the aggregate issue price for the Exchangeable Share
Consideration issued therefore shall be that amount determined in accordance
with subsections 2.1 (b) and 2.l(c) above, the Acquisition Sub and each Selling
Owner shall complete and file an election (the "Election") pursuant to
subsection 85(l) of the ITA, electing that the purchase price for each block of
Particular Stock constituting the Company Equity Stock shall be equal to that
Owner's aggregate adjusted cost base therefore as of the date hereof for all
purposes of the ITA (the "Elected Amount"). For these purposes, the Selling
Owners advise that their respective Elected Amounts for each block of Particular
Stock sold by them hereunder shall be as advised by the Owner's Representative
by the Closing Date and, failing such advice, shall be as thereafter advised by
the accountants who, heretofore, have produced the financial statements for the
Company issuing the Particular Stock;
(e) Adjustment to Elected Amount: If, notwithstanding the manner in
which the Acquisition Sub and each Owner have agreed to determine the Elected
Amount pursuant to subsection 2.l(d) hereof for any block of Particular Stock:
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(i) there shall be issued to either the Acquisition Sub or the
particular Owner a notice of assessment or reassessment
pursuant to any taxing statute, which assessment or
reassessment is based upon in assumption of fact or a finding
by any taxing authority that there must be an adjustment or
deemed adjustment (the "Adjusted Election") to the Elected
Amount in subsection 2.1(d) hereof; or
(ii) any taxing authority notifies either the Acquisition Sub or the
particular Owner that it intends to issue such notice of
assessment or reassessment; then, subject to the rights of the
Acquisition Sub and the particular Owner, if any, to object to
or appeal such assessment to any authority, board or court of
competent jurisdiction and as applicable to such assessment or
reassessment;
(iii) the elected purchase price for that block of Particular Stock
fund to the Elected Amount therefore selected under subsection
2.1(e) shall, for the purposes of this Agreement, be deemed to
be and to have always been the Adjusted Election as finally
agreed to between such taxing authority and the Acquisition Sub
or the particular Owner, as the case may be, or where either
the Acquisition Sub or the Owner has objected to or appealed
any such assessment or reassessment, as finally determined by
such authority, board or court.
(f) Further Assurances: The Acquisition Sub and each particular
Owner shall execute such other documents, cause such meetings to be held, votes
cast, resolutions passed, bylaws enacted, and shall do all such things,
including filing an election pursuant to subsection 85(l) of the ITA as may be
necessary or desirable to give effect to subsections 2.1(d) and 2.1(e) and the
provisions thereof including in respect of the Adjusted Election(s), if any.
Provided the Position taken by a particular Owner in respect of an Adjusted
Election is not detrimental to other parties hereto, each such other party shall
reasonably cooperate with that Owner in respect of the Owner's position on the
Adjusted Election;
2.2 Exchange Ratio and Escrow Amounts. Subject to the provisions of this
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Section 2.2 and in consideration of the transactions contemplated hereby, at the
Closing Date, the Company Equity Stock shall be exchanged for Exchangeable
Shares in accordance with exchange ratios (the "Exchange Ratios") determined as
follows:
(a) The aggregate number of Exchangeable Shares to be issued
hereunder (the "Exchangeable Share Total") shall be determined by dividing the
Company Purchase Price (determined on a consolidated basis for all of the
Companies in accordance with Section 2.3 hereof) by the Average Closing Price
(determined in accordance with Section 2.3 hereof);
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(b) The Exchange Ratio in respect of each share of Particular Stock
shall be equal to the number, rounded to six (6) decimal places, that is
obtained when the product of the Contributing Factor for Particular Stock times
the Exchangeable Share Total is divided by the number of issued and outstanding
shares of that Particular Stock being purchased hereunder;
(c) For purposes of the foregoing calculation, the "Contributing
Factor" represents the proportion of the Company Purchase Price that is
allocatable to all shares of that Particular Stock being purchased hereunder.
For these purposes, the Owners have advised Premiere and the Acquisition Sub
that the Contributing Factors for each block of Particular Stock, constituting
in the aggregate the Holding Company Equity Stock, and each Owner's pro rata
share consistent with subsection 2.2(d) below, is that factor set Out Opposite
that block of Particular Stock in the table below:
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BLOCK OF PARTICULAR STOCK CONTRIBUTING FACTORS
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all issued and outstanding common 1,000
shares of VTM
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1,000 total
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(d) The parties agree that the Exchangeable Shares issuable to any
Owner pursuant to subsection 2.l(c) hereof, shall be further divided into:
(i) 10% of the Exchangeable Shares receivable by that particular
Owner (the "General Escrow Amount"); and
(ii) 90% of the Exchangeable Shares receivable by that Particular
Owner (the "Deliverable Shares").
Subject to subsection 2.2(e) below, and in accordance with Section 2.6, all
Owners shall be issued the Consideration payable hereunder pro rata in
accordance with their ownership of Holding Company Equity Stock and applicable
Exchange Ratios pursuant to which ownership the Owners represent has not been
adjusted in contemplation of the transactions described herein;
(e) Upon consummation of the share exchange set out in Section 2.1
hereof, each Owner shall deliver his particular General Escrow Amount in
negotiable form to the Escrow Agreement(s) to be held in escrow pursuant to the
terms and conditions of the Escrow Agreement(s) in the form (s) attached hereto
as Exhibit B, which shall be executed and delivered by Premiere, the Acquisition
Sub and the Owners at the Closing.
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2.3 Calculation of Consideration. For purposes of determining the
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Consideration issuable to the Owners pursuant to Section 2.2 above, the
following shall apply:
(a) "Average Closing Price" shall be the average of the daily last
sale US$ prices of Premiere Stock for the period consisting of twenty (20)
consecutive trading days on which such shares are actually traded on the Nasdaq
National Market (as reported by the Wall Street Journal or, if not reported
thereby, any other authoritative source selected by Premiere) ending at the
close of trading on the first trading day immediately preceding the Closing;
provided, however, that the Market Value Per Share shall not be less than
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US$22.50 nor more than US$30.50 (collectively, US$22.50 and US$30.50 are
referred to as the "Average Closing Price Limitations");
(b) "C$ Company Purchase Price" shall be the C$ sum of (i) the amount
determined by multiplying the Normalized EBITDA of the Company by the
appropriate Stock Multiple or Cash Multiple, plus (ii) the amount of cash
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reflected on the Closing Date Balance Sheet, minus (iii) the aggregate amount of
principal and accrued and unpaid interest under funded debt and capital lease
obligations reflected on the Closing Date Balance Sheet, minus (iv) the amount
by which the Transaction Costs exceed the Deductible Amount, and minus (v) one-
-----
half (1/2) of C$ costs and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP incurred by Premiere
in connection with preparation of the Audited Financial Statements for the
Company but not to exceed C$17,117.00;
(c) "Company Purchase Price" means the aforesaid C$ Company Purchase
Price expressed in US$ by multiplying the C$ Company Purchase Price by the noon
spot exchange rate (on the day on which the Average Closing Price is calculated)
for C$ expressed in US$ as reported by the Bank of Canada or, in the event such
spot exchange rate is not available, such exchange rate as is published in the
Toronto Globe and Mail on that date;
(d) "Deductible Amount" shall be an amount equal to C$3,435.00 to be
split amongst all Companies, if more than one Company hereunder;
(e) "Normalized EBITDA" of the Company shall be an amount equal to
C$1,057,619.00;
(f) "Registration Right" shall mean the right to include underlying
Premiere Stock issued pursuant to the attributes of the Exchangeable Shares in a
registration statement which Premiere intends to file promptly after the end of
the first full fiscal quarter of Premiere containing the period of post-merger
combined operations required by ASRs 130 and 135, pursuant to the terms and
conditions of the Stock Restriction and Registration Rights Agreement in the
form attached hereto as Exhibit C (the "Registration Rights Agreement");
(g) "Stock Multiple" shall be six (6);
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(h) "Transaction Costs" shall mean all C$ amounts Incurred but unpaid
by the Company in connection with (i) the negotiation and preparation of this
Agreement, (ii) the preparation of the Audited Financial Statements, (iii) the
consummation of the Transactions, and one-half ( 1/2) of the costs and expenses
of public record searches pursuant to Section 5.9(b) of the Uniform Terms, but
shall exclude the portion of the costs and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
incurred by Premiere in connection with the preparation of the Audited Financial
Statements for which the Owners are responsible;
2.4 Shareholders. Each of the Primary Owners jointly and severally
represents and warrants that the Owners collectively are the registered, legal
and beneficial owners of all of the Holding Company Equity Stock and that the
Holding Company, is the registered, legal and beneficial owner directly or
indirectly of all of the issued and outstanding shares and rights to shares in
the capital stock of all of the Operating Companies.
2.5 Closing. The Closing shall take place at the offices of
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▇▇▇▇▇▇/▇▇▇▇/▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, at 10:00 a.m. local time, on the date set
forth in the Uniform Terms, provided all conditions set forth in Articles V and
VI of the Uniform Terms and Articles IV and V of this Agreement have been
satisfied or waived, or on such other date or at such other place and time
mutually agreed upon by the parties.
2.6 Exchange Shares.
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(a) Promptly after the Effective Time, Premiere and the Acquisition
Sub shall cause to be mailed to the Owners appropriate transmittal materials for
the surrender of the certificate or certificates formerly representing their
shares of Holding Company Equity stock in exchange for Exchangeable Shares of
the Acquisition Sub as provided in this Agreement. The Owners shall use all
reasonable best efforts to escrow all Holding Company Equity Stock sold
hereunder with an attorney or equivalent escrow agent designated by the
Acquisition Sub which escrowed Holding Company Equity Stock shall be duly
endorsed for transfer to the Acquisition Sub so that physical exchange of Stock
hereunder may take place coincidentally with the determination of the
Exchangeable Share total and the transmittal of the requisite number of
Exchangeable Shares to each Owner. Until surrendered for exchange in accordance
herewith, each certificate theretofore representing shares of Holding Company
Equity Stock shall from and after the Effective Time represent only the right to
receive the Consideration provided in this Agreement in exchange therefore. No
certificates representing fractional shares will be issued as a result of this
Agreement. Each holder of shares of Holding Company Equity Stock exchanged
pursuant to this Agreement who would otherwise have been entitled to receive a
fraction of an Exchangeable Share shall receive, in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a share of Premiere
Common Stock multiplied by the Actual Closing Value;
(b) In the event that any certificate which immediately prior to the
Closing Date represented Holding Company Equity Stock purchased hereunder shall
have
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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, and upon
receipt of an appropriate bond of indemnity, the Acquisition Sub will issue in
exchange for such lost, stolen or destroyed certificate, certificates
representing Exchangeable Shares subject always to the representations,
warranties and covenants of such Owner in this Agreement with respect to title
to such Holding Company Equity Stock.
2.7 USA and Canadian Securities Issues: Purchase for Investment, Etc.,
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Each Owner represents and warrants the following to Premiere and for the benefit
of the Acquisition Sub:
(a) such Owner has accurately completed the Investor Questionnaire
required by Premiere prior to or contemporaneous with the execution of the
Transfer Agreement and the statements therein are true and correct and
acknowledges that Premiere has relied upon such statements in entering into this
Agreement;
(b) such Owner is acquiring the Acquisition Sub's Exchangeable shares
hereunder and the underlying Premiere Stock exchangeable for that stock
(collectively, the "Acquired Stock") for such Owner's own account and not with a
view to or for sale in connection with any public distribution thereof within
the meaning of the Securities Act;
(c) such Owner (i) has sufficient knowledge and experience in
financial and business matters to enable him, her or it to evaluate the merits
and risks of an investment in Acquired Stock, (ii) has the ability to bear the
economic risk of acquiring Acquired Stock for an indefinite period and to afford
a complete loss thereof and (iii) has had an opportunity to ask questions of and
to receive answers from the officers of Premiere and the Acquisition Sub and to
obtain additional information in writing as requested, which has been made
available to and examined by such Owner or such Owner's advisors; and
(d) such Owner (i) acknowledges that Acquired Stock has not been
registered under any securities laws and cannot be resold without registration
thereunder or exemption therefrom, (ii) agrees not to transfer all or any
Acquired Stock received by such Owner unless such transfer has been registered
or is exempt from registration under applicable securities laws and (iii)
acknowledges that the certificate(s) representing Acquired Stock shall bear the
following legend with respect to the restrictions on transfer under applicable
securities laws:
"The securities represented hereby have not been registered under the
Securities Act of 1933, as amended, and may not be offered, sold,
transferred or otherwise disposed of unless registered with the
Securities and Exchange Commission of the United States and the
securities regulatory authorities of applicable states or unless an
exemption from such registration is available."
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(e) Each Owner has not been provided with, has not requested, and
does not need to receive, a prospectus or an offering memorandum as defined in
the applicable securities legislation, or documents similar to the foregoing,
with respect to the transactions or the Acquired Stock. Accordingly, each Owner
acknowledges he will not obtain the statutory protections that would be
available to an investor in the Province of Ontario acquiring securities
pursuant to a prospectus or offering memorandum;
(f) The Owner's decision to execute this Agreement and the documents
referred to herein has not been based upon any verbal or written representation
as to fact or otherwise made on behalf of Premiere or of the Acquisition Sub
other than as set out herein;
(g) Such Owner acknowledges and agrees:
(i) Premiere is not, nor is it intended that the Acquisition
Sub be, a reporting issuer under the Securities Act
(Ontario) or under the securities legislation of any other
province or territory of Canada;
(ii) there is no market in Canada through which the Acquired
Stock may be sold and none is expected to develop in
Canada in the foreseeable future; and
(iii) the Acquired Stock will be highly illiquid and can only be
resold in the United States pursuant to subsection 2.7(d)
above; or in the Province of Ontario in reliance on (X) an
exemption front the prospectus requirements of the
Securities Act (Ontario), (Y) a prospectus which has been
duly filed With the Ontario Securities Commission or (Z) a
discretionary ruling obtained from the Ontario Securities
Commission; or in the other provinces and territories of
Canada pursuant to exemptions, if any, available in those
jurisdictions.
2.8 Accounting, Tax and Regulatory Matters. Each Owner and the Company,
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jointly and severally, represents and warrants to Premiere that neither the
Company, any Owner nor any Affiliate thereof has taken or agreed to take any
action or has any knowledge of any fact or circumstance that is reasonably
likely to (i) prevent the Merger from qualifying for pooling-of-interest
accounting treatment or as a reorganization within the meaning of Section 368(a)
of the Code, or (ii) materially impede or delay receipt of any consents referred
to in Section 5.6 of the Uniform Terms or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section.
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3. ADDITIONAL AGREEMENTS
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3.1 Conditions to Closing. The Company, the Owners and Premiere agree to
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use their commercially reasonable best efforts to satisfy the closing conditions
set forth in Articles IV and V of this Agreement by the date indicated therein
or the Closing Date, as applicable.
3.2 Termination. For greater certainty, the rights of termination set out
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in Section 7.2 of the Uniform Terms shall be deemed to include in subsection
7.2(b) thereof the additional closing conditions set out in Article 4 hereof,
and be deemed to include in subsection 7.2(c) thereof the additional conditions
of close set out in Article 5 of this Agreement.
3.3 Additional Indemnification Item. Subject to Sections 8.2 through 8.6
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of the Uniform Terms, the Owners and, if the Transactions involve an Asset
Transfer, the Company, shall, subject also to Section 1.3 of this Agreement,
jointly and severally indemnify and hold harmless Premiere, and its officers,
directors, agents or affiliates, from and against any and all losses suffered or
incurred by any such party by reason of or arising out of any of the following:
(a) a breach of Section 2.19 of the Uniform Terms as it relates to
liability for sales tax (irrespective of whether disclosed on Schedule 2.19 or
in the Financial Statements);
3.4 Tax Matters. Each of the Company, the Owners and Premiere undertakes
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and agrees to use its reasonable efforts to cause the Merger, and to take no
action which would cause the Merger not to qualify as a "reorganization" within
the meaning of Section 368(a) of the Code for federal income tax purposes.
Notwithstanding the foregoing, the Owners understand that (i) Premiere makes no
representation or warranty regarding the treatment of this Agreement or the
Merger, (ii) the Closing is not subject to a condition that an Internal Revenue
Service ruling or tax opinion be obtained as to the federal income tax
consequences of this Agreement or the Merger, and (iii) the Company and the
Owners shall look to their respective advisors for advice concerning the tax
consequences of this Agreement and the Merger.
3.5 Registration Rights. At the Closing, Premiere and the Owners shall
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execute and deliver the Registration Rights Agreement.
3.6 Accounting Treatment.
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(a) The Company and each of the Owners has accurately completed the
Pooling Questionnaire required by Premiere prior to or contemporaneous with the
execution of this Agreement, and the statements therein are true and correct.
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(b) Premiere, the Company and each of the Owners agrees to use its
reasonable efforts to cause the Merger, and to take no action which would cause
the Merger not to qualify as a pooling of interests for accounting purposes.
Without limiting the foregoing, the Company and each of the Owners agrees not to
sell, transfer, or otherwise dispose of his, her or its interests in, or reduce
his, her or their risk relative to, any of the shares of Premiere Common Stock
received in connection with the Merger until such time as Premiere notifies the
Company and each such Owner that the requirements of ASRs 130 and 135 have been
met. The Company and each of the Owners understands that ASRs 130 and 135
relate to the publication of financial results of at least thirty (30) days of
post-Merger combined operations of Premiere and the Company. Premiere agrees
that it shall publish such results within forty-five (45) days after the end of
the first fiscal quarter of Premiere containing the required period of post-
merger combined operations and that it shall notify the Company and each of the
Owners promptly following such publication. Premiere shall be entitled to place
the following restrictive legend on the shares of Premiere Stock issued pursuant
to the Merger to enforce the foregoing restrictions:
The shares represented by this certificate were issued pursuant to a
business combination which is accounted for as a "pooling of interests" and
may not be sold, nor may the owner thereof reduce his risks relative
thereto in any way, until such time as Premiere Technologies, Inc.
('Premiere") has published the financial results covering at least 30 days
of combined operations after the effective date of the merger through which
the business combination was effected.
3.7 Affiliate Agreements. The Company has disclosed in Schedule 3.7 all
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Persons whom it reasonably believes is an "affiliate" of the Company for
purposes of Rule 145 under the 1933 Act. The Company shall use its reasonable
efforts to cause each such Person to deliver to Premiere as soon as reasonably
practicable following the execution of this Agreement a written agreement,
substantially in the form attached hereto as Exhibit D.
3.8 Exchange Listing. Premiere shall use its reasonable efforts to list,
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prior to the Effective Time, on the Nasdaq National Market the shares of
Premiere Stock underlying the Exchangeable Shares to be issued to the Owners
pursuant to the Transactions, and Premiere shall give all notices and make all
filings with the NASD required in connection with the Transactions.
3.9 Ancillary Documents/Reservation of Shares. Provided all other
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conditions of this Agreement have been satisfied or waived by the time of
closing:
(a) Premiere and the Acquisition Sub shall execute and deliver a
support agreement between Premiere and the Acquisition Sub containing the terms
and conditions set forth in Exhibit H hereto (the "Support Agreement"), together
with such other terms and conditions as may be agreed to by the parties hereto
acting reasonably;
(b) Premiere, the Acquisition Sub and a Canadian trust company, or
such other suitable entity as may be appropriate, to be selected by Premiere
shall execute
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and deliver a voting and exchange trust agreement containing the terms and
conditions set forth in Exhibit I hereto (the "Voting Trust Agreement"),
together with such other terms and conditions as may be agreed to by the parties
hereto acting reasonably;
(c) Premiere shall create the Special Premiere Voting Share in
substantially the form annexed as Exhibit J hereto, issued in the name of the
Trustee and deposit the same with the Trustee to be voted in accordance with the
Voting Trust Agreement;
(d) On or prior to the Effective Time, Premiere will reserve for
issuance such number of shares of Premiere Common Stock as shall be necessary to
give effect to the exchanges and conversions and call rights applicable to the
Exchangeable Shares in accordance with the attributes thereof and in accordance
with the Support Agreement.
4. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF PREMIERE
------------------------------------------------------
In addition to the conditions of Premiere contained in Article V of the
Uniform Terms, the obligation of Premiere to consummate the Transactions is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions:
4.1 Approval of Owners. The Owners and the Holding Companies shall have
------------------
approved the transfers hereunder in accordance with governing law and shall have
provided Premiere certified copies of such resolutions.
4.2 Grand Solution Documents. VTNLP, VTE, the NAP and each of the
------------------------
Franchisee Companies shall have executed and delivered the Grand Solution
Documents reflecting the terms described in Exhibit E hereto in form and
substance reasonably satisfactory to Premiere.
4.3 Audited Financial Statements. Premiere shall have received balance
----------------------------
sheets of the Companies as of January 31, 1996 and 1997 and related statements
of operations, cash flows, and changes in Owner's equity for the fiscal years
ended on such dates (the "Audited Financial Statements") prepared in accordance
with GAAP and Regulation S-X promulgated by the Commission, accompanied by an
unqualified audit opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP relating thereto. The Audited
Financial Statements shall not reflect any material change in the Company's
financial condition or results of operations from the condition and results
reported in the Financial Statements for the corresponding periods delivered by
the Company prior to the execution of this Agreement.
4.4 Pooling Letter. Premiere shall have received a letter, dated as of
--------------
the Effective Time, in form and substance reasonably acceptable to Premiere,
from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP to the effect that the transfer will qualify for
pooling of interests accounting treatment. and no action shall have been taken
by any regulatory authority or any statute, rule, regulation or order enacted,
promulgated or issued by any regulatory authority, or any proposal made for any
such action by any regulatory authority which is reasonably likely to
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be put into effect, that would prevent Premiere from accounting for the business
combination to be effected by the transfer as a pooling of interests.
4.5 The Director of investigation and Research (the "Director") appointed
under the Competition Act (Canada) shall have advised Premiere in form and on
terms satisfactory to it that the Director shall not oppose or threaten to
oppose the purchase of any of the Holding Company Equity Stock on the basis
hereunder, nor make or threaten to make an application under Part VII of the
said act in respect of the purchase of the Holding Company Equity Stock.
5. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF THE COMPANY
---------------------------------------------------------
AND THE OWNERS
--------------
In addition to the conditions of the Company and the Owners contained in
Article VI of the Uniform Term. the obligation of the Company and the Owners to
consummate the Transactions is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions:
5.1 Approval of Premiere and Acquisition Sub. The Board of Directors of
----------------------------------------
Premiere and the Board of Directors and the shareholder of Acquisition Sub shall
have approved the transfer in accordance with the requirement of applicable
state law. Premiere and Acquisition Sub shall have provided the Company
certified copies of such resolutions.
5.2 Registration Rights. Premiere and each Owner shall have executed and
-------------------
delivered a Registration Rights Agreement.
5.3 Ancillary Agreements. Premiere and the Acquisition Sub shall have
--------------------
executed and delivered the Support Agreement, Premiere, the Acquisition Sub and
an appropriate Trustee shall have executed and delivered the Voting Trust
Agreement, and Premiere shall have created the special Premium Voting Share and
issued the same in the name of, and deposited the same with, the Trustee.
6. MISCELLANEOUS
------------------
6.1 Notices. The addresses for notices in accordance with Section 10.1 of
-------
the Uniform Terms for the Company and the Owners are as follows:
If to the Company, or to any Owners:
▇▇▇▇▇▇ Equipment Limited
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇ OJ8
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
6.2 Owner's Representative. The Owners' Representative for purposes of
----------------------
Section 10.2 of the Uniform Terms shall be D. ▇▇▇▇▇ ▇▇▇▇▇ who shall serve as the
Owner's Representative under the terms of said Section 10.2 of the Uniform
Terms.
6.3 Certain Definitions. In addition to the terms defined elsewhere
-------------------
herein and in the Uniform Terms, as used in this Agreement:
(a) "Anticipated Closing Date" shall mean April 30, 1997.
------------------------
(b) "Canadian Owners" means, collectively, the Eastern Owners and the
---------------
Western Owners;
(c) "C$" means the lawful current of Canada;
--
(d) "Companies" means the Western Companies;
---------
(e) "Effective Time" means that time on the Closing Date when all of the
--------------
transactions contemplated hereunder have been completed in accordance with the
terms hereof;
(f) "Equity Stock" when used in relation to the stock of any corporation
------------
means all equity securities of that corporation of any type, including but not
limited to common stock, preferred stock limited partnership interests, general
partnership interests, limited liability company interests, options to purchase
any of the foregoing and securities convertible into any of the foregoing;
(g) "Holding Companies" means 125976 Canada Inc. ("VTM");
-----------------
(h) "Holding Company Equity Stock" means the Equity-Stock of The Holding
----------------------------
Companies;
(i) "Joint Companies" means 1086236 Ontario Inc. and 1042546 Ontario Inc.;
---------------
(j) "Knowledge" of the Company shall mean the personal knowledge after due
inquiry of those facts that are known or should reasonably have been known after
due inquiry by the Primary Owners and the knowledge of any such Persons obtained
or which would have been obtained from a reasonable investigation.
-15-
(k) "OBCA" means the Business Corporations Act (Ontario);
----
(1) "Operating Companies" means the Western Companies, excluding the
-------------------
Holding company (being VTM);
(m) "Outside Closing Date" shall mean June 30, 1997.
(n) "Owners" mean the Primary Owners together with ▇▇▇▇▇▇;
------
(o) "Primary Owners" mean those parties of designated in the recitals of
--------------
parties to this Agreement;
(p) "Special Premiere Voting Share" means the one (1) share of Premiere
-----------------------------
Class Preferred Stock, US Dollar 0.001 par value, issued by Premiere to and
deposited with the Trustee which entitled the holder of record to a number of
votes at meetings of holders of Premiere Common Shares equal to that number of
votes that holders of the Exchangeable Shares outstanding from time to time
(other than exchangeable shares held by Premiere, its subsidiaries and
affiliates) would be entitled to if such Exchangeable Shares were exchanged for
Premiere Common Shares;
(q) "Trustee" means Trust company of Canada and any successor
trustee.
(r) "US$" means the lawful currency of the United States of America;
(s) "Vendor Company" means ▇▇▇▇▇▇;
(t) "Western Companies" means VTM, 3325882 Manitoba, Inc., 601965
Alberta Ltd., 3266622 Manitoba, Inc., 3337821 Manitoba Inc. and 3266631
Manitoba, Inc.;
(u) "Western Owners" means ▇▇▇▇▇▇ Equipment Limited, ▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇.
6.4 Exhibits. The following exhibits are annexed hereto and incorporated
--------
as part hereof:
A. Uniform Terms
AA. Canadianized Terms
B. Escrow Agreement
C. Registration Rights Agreement
D. Affiliation Agreement
E. Grand Solution Documents
F. Company Pooling of Interests Representations
G. Acquisition Sub Share Capital
H. Support Agreement
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I. Voting Trust Agreement
J. Special Premiere Voting Share
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
/s/ ▇.▇. ▇▇▇▇▇▇
______________________________ ------------------------------
Witness ▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇▇
______________________________ ------------------------------
Witness ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ EQUIPMENT LIMITED PREMIERE TECHNOLOGIES, INC.
Per: /s/ ▇.▇. ▇▇▇▇▇▇ Per: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------ ------------------------
Name: ▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Title: Sr. V.P.
PREMIERE TECHNOLOGIES, INC.
on behalf of the party of
the third part hereunder, a
corporation to be incorporated
Per: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Sr. V.P.
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