AMENDED AND RESTATED
YPTEL AGREEMENT
This YPTEL AMENDED AND RESTATED AGREEMENT (THE "RESTATED AGREEMENT") is made
and entered into as of October 26, 1999 by and among Advanced Communications
Group, Inc., a Delaware corporation ("PARENT"), YPtel Corporation, a corporation
incorporated under the laws of Canada (THE "COMPANY"), the shareholders of the
Company listed on the attached EXHIBIT A, Xxxxxx Xxxxxx, Xxxxxxx X. XxXxxxxx,
Xxxxxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxxx, The J.L.R. Family Trust and The Paisley
Family Trust (COLLECTIVELY, THE "ICL PRINCIPALS"), Cold Trust, Global Investment
Trust, Freezer Trust, Storage Trust, Directory Trust and Publisher Trust
("BARBADIAN TRUSTS") (the shareholders listed on EXHIBIT A, the ICL Principals
and the Barbadian Trusts are collectively referred to herein as the
"SHAREHOLDERS") and Imperial Capital Limited, a corporation incorporated under
the laws of the Province of Ontario ("ICL"). The ICL Principals are executing
this Restated Agreement solely for the purpose of making the representations and
warranties of the ICL Principals set forth in ARTICLE II and for agreeing to the
indemnification obligations of the ICL Principals set forth in ARTICLE IX, and
for agreeing to the obligations of the ICL Principals set forth in SECTION 4.1,
SECTION 6.6 and the other provisions of this Restated Agreement. ICL is the
attorney-in-fact pursuant to certain powers of attorney (THE "POWERS OF
ATTORNEY"), pursuant to which all Shareholders other than Xxxxxx Xxxxxx,
Xxxxxxx X. XxXxxxxx, The J.L.R. Family Trust, The Paisley Family Trust and the
Barbadian Trusts have granted to ICL the right to vote and to dispose of all of
the Company Common Stock. ICL is executing this Restated Agreement as
attorney-in-fact for the Shareholders other than Xxxxxx Xxxxxx, Xxxxxxx X.
XxXxxxxx, The J.L.R. Family Trust, The Paisley Family Trust and the Barbadian
Trusts to bind such Shareholders to their obligations set forth in this Restated
Agreement.
RECITALS
A. The Company is the beneficial owner, directly and indirectly, and holder
of record of all of the issued and outstanding shares of the capital stock of
YPtel, Inc. ("YPTI") and Pacific Coast Publishing, Ltd. ("PCP") (COLLECTIVELY,
THE "SUBSIDIARIES") and desires to have itself and, indirectly, all of its
assets, including the capital stock of each of the Subsidiaries, acquired
directly or indirectly by Parent on the terms and subject to the conditions set
forth in this Restated Agreement.
B. Parent desires to cause Newco II, an indirect subsidiary of Parent, to
be formed prior to the Closing, to acquire all of the issued and outstanding
capital stock of the Company, and Parent desires to acquire all of the
outstanding common stock of YPTI, all on the terms and subject to the conditions
set forth in this Restated Agreement.
C. The Boards of Directors of each of the Company and Parent believe it is
in the best interests of each company and their respective stockholders and the
Board of Directors of Parent has directed or will direct that the Restated
Agreement be submitted to the shareholders of Parent with the recommendation
that the Restated Agreement, including but not limited to the issuance of shares
of Parent Common Stock pursuant to the Exchange and Voting Trust Agreement, be
approved by the Parent's stockholders.
D. The Shareholders own all of the issued and outstanding Company capital
stock and some of the Shareholders propose to transfer their shares to
corporations or limited partnerships established by them so that such entities
(together with the Shareholders not so transferring their shares) will at the
time of Closing own all of the outstanding Company Common Stock other than the
shares of Company Common Stock issued to the Subordinated Lenders upon exercise
of the warrants issued pursuant to the Subordinated Loan Agreement.
E. The parties intend that the Closing will occur concurrently with or
after, among other actions, (i) the closing of the acquisition by Parent or a
direct or indirect subsidiary of Parent of all of the outstanding capital stock
of Web YP, Inc. ("WEB") and Big Stuff, Inc. ("BIG STUFF") on terms reasonably
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acceptable to the Company (WEB AND BIG STUFF ARE SOMETIMES COLLECTIVELY REFERRED
TO AS "WORLDPAGES") whether by merger, exchange or otherwise (THE "WORLDPAGES
ACQUISITION"); (ii) the redemption of the promissory notes (COLLECTIVELY, THE
"GREAT WESTERN NOTES") in the aggregate original principal amount of Fifteen
Million Dollars (U.S. $15,000,000) (plus accrued but unpaid interest at the time
of redemption) owed by Parent to Xxxxxxx X'Xxxx and certain other former
shareholders of Great Western Directories, Inc. (COLLECTIVELY, THE "GREAT
WESTERN SHAREHOLDERS") by the issuance of Parent Common Stock to the Great
Western Shareholders; (iii) the execution and delivery of the Exchange and
Voting Trust Agreement and the Support Agreement; (iv) the Company
Recapitalization; (v) the YPTI Recapitalization and purchase by Parent from the
Company of all of the outstanding common stock of YPTI; and (vi) the
satisfaction of the other conditions to Closing set forth in this Restated
Agreement.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:
ARTICLE I--THE TRANSACTIONS
1.1 TRANSACTIONS PRIOR TO CLOSING. Immediately prior to Closing and
subject to and upon the terms and conditions of the Restated Agreement:
(a) RECAPITALIZATION OF THE PARENT. The Parent shall be recapitalized
(THE "PARENT RECAPITALIZATION") so that immediately after the Parent
Recapitalization, the authorized capital stock of the Parent shall consist
of (A) 180,000,000 shares of the Parent Common Stock and (B) 20,000,000
shares of preferred stock of Parent from which the Board of Directors of
Parent (or a committee thereof) shall further authorize a class of voting
preferred stock to be issued to the Trustee pursuant to the Exchange and
Voting Trust Agreement and having the rights, preferences and designations
to be agreed upon prior to Closing (THE "PARENT CLASS B VOTING PREFERRED
STOCK").
(b) FORMATION OF NEWC I AND NEWCO II. Parent shall (i) form an
unlimited liability company under the laws of Nova Scotia which will be
owned by Parent ("NEWCO I"), the authorized capital stock of which shall
consist of common stock ("NEWCO I COMMON STOCK"), and (ii) form an unlimited
liability company under the laws of Nova Scotia ("NEWCO II"), the authorized
capital stock of which shall consist of (a) common stock ("NEWCO II COMMON
STOCK"); and (b) non-voting special shares having the rights, preferences
and designations set forth in EXHIBIT B hereto (THE "CLASS A SPECIAL
SHARES"), the holders of which shall have the right to exchange such shares
on a one-for-one basis for shares of Parent Common Stock pursuant to the
Exchange and Voting Trust Agreement. The first issuance of Newco I Common
Stock to Parent and Newco II Common Stock to Newco I, each for nominal
consideration, shall be effected such that at all times all of the issued
and outstanding Newco I Common Stock shall be owned by Parent and all of the
issued and outstanding Newco II Common Stock shall be owned by Newco I.
(c) RECAPITALIZATION OF THE COMPANY. The Shareholders and the Company
shall cause the Company to be recapitalized (THE "COMPANY RECAPITALIZATION")
so that immediately after the Company Recapitalization, (i) the authorized
capital stock of the Company shall consist only of common stock (THE
"COMPANY COMMON STOCK"); and (ii) the exchange into Company Common stock of
all outstanding shares of Class A preferred stock, Class B preferred stock,
Class C preferred stock and Class D preferred stock of the Company has
occurred.
(d) CONTINUANCE AND AMALGAMATION. The Company shall take such steps as
may be necessary to discontinue its existence as a corporation governed by
the Canada Business Corporations Act and to continue as a corporation
governed by the laws of Nova Scotia and immediately after such continuance,
shall amalgamate with an unlimited liability corporation caused to be
incorporated by the Company Shareholders under the laws of Nova Scotia.
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(e) THE YPTI RECAPITALIZATION. (a) The Company shall cause YPTI to be
recapitalized (THE "YPTI RECAPITALIZATION") by amending YPTI's articles of
incorporation to create a class of non-voting cumulative preferred stock
(THE "YPTI PREFERRED STOCK") (with an aggregate redemption amount equal to
the fair market value of YPTI less the adjusted cost base of Company in YPTI
and having the rights, preferences and designations to be agreed upon prior
to Closing (THE "YPTI CERTIFICATE OF PREFERRED STOCK DESIGNATION") to be
filed with the Secretary of State of the State of Washington and
(b) thereafter, YPTI shall declare and pay to the Company a dividend of the
YPTI Preferred Stock.
(f) TRANSFER OF COMPANY SHARES.
(i) Some of the Shareholders will transfer their Company Common Stock
to corporations or limited partnerships (on a tax-deferred basis) so that
effective upon delivery to Parent of a duly executed assignment and
assumption agreement reasonably acceptable to Parent (A) such transferee
Shareholder shall become subject to the rights and obligations of the
transferor Shareholder under this Restated Agreement to the same extent
as if they had signed this Restated Agreement individually or through ICL
as the attorney-in-fact and (B) such transferor Shareholder shall be
released from any and all obligations hereunder and (C) thereafter
(together with such Shareholders not so transferring) shall be considered
the Shareholders hereunder in substitution for the transferors.
(ii) To the extent that any Person receives shares of Company Common
Stock from an ICL Principal, directly or indirectly, in connection with a
transfer contemplated in SECTION 1.1(f)(i) hereof, such transferee
Shareholder shall be deemed to be an ICL Principal for purposes of this
Restated Agreement. Effective upon delivery to Parent of a duly executed
assignment and assumption agreement reasonably acceptable to Parent
(A) such transferee Shareholder shall become subject to the rights and
obligations of the transferor ICL Principal under this Restated Agreement
to the same extent as if they had signed this Restated Agreement
individually and (B) such transferor ICL Principal shall be released from
any and all obligations hereunder and (C) thereafter (together with such
ICL Principals not so transferring) shall be considered the ICL
Principals hereunder in substitution for the transferor ICL Principal.
1.2 TRANSACTIONS AT CLOSING. At the Closing, and subject to and upon the
terms and conditions of this Restated Agreement:
(a) TRANSFER OF PARENT STOCK. In consideration for the issuance of
Newco I Common Stock to Parent and Newco II Common Stock to Newco I (each as
contemplated by SECTION 1.1(b) hereof), Parent shall transfer and deliver to
Newco I and Newco I shall transfer and deliver to Newco II, respectively,
that number of shares of Parent Common Stock necessary to accomplish the
exchange with certain Shareholders described in SECTION 1.2(b).
(b) EXCHANGE OF COMPANY COMMON STOCK. (i) The Shareholders shall
transfer and deliver to Newco II the Company Common Stock free and clear of
any and all liens, claims and encumbrances, together with stock powers duly
executed in blank by the Shareholders that are executing this Restated
Agreement and by ICL on behalf of the Shareholders (other than those that
are executing this Restated Agreement) with signatures of ICL and the
Shareholders who are executing this Restated Agreement guaranteed;
(ii) Newco II shall transfer and deliver, at the election of each
Shareholder, either (A) shares of Class A Special Shares or (B) shares of
Parent Common Stock for the shares of Company Common Stock exchanged under
(i) above, or a combination thereof. The procedure for the exchange of
shares of Company Common Stock by each Shareholder and the number of
Class A Special Shares and Parent Common Stock to be received by each
Shareholder at the Closing will be substantially in accordance with the
procedures agreed to in writing by the parties hereto. The total number of
(i) shares of Parent Common Stock
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issuable upon the exchange of Class A Special Shares, plus (ii) the number
of shares of Parent Common Stock to be issued at Closing to the Shareholders
under this SECTION 1.2(b), shall equal 15,000,000 shares and no more.
(c) SALE OF PARENT CLASS B VOTING PREFERRED STOCK. In exchange for
nominal cash consideration, Parent shall issue to the trustee (THE
"TRUSTEE") under the Exchange and Voting Trust Agreement, one or more shares
of Parent Class B Voting Preferred Stock.
(d) SALE OF YPTI COMMON STOCK. Parent shall purchase from the Company,
free and clear of any and all liens, claims and encumbrances, all shares of
YPTI Common Stock owned by the Company, which shall constitute all of the
outstanding shares of YPTI Common Stock, for an aggregate purchase price
equal to the adjusted cost base of the shares of YPTI, which the parties
hereto agree shall be equal to the fair market value thereof (approximately
$21,000,000 Canadian) (THE "YPTI CONSIDERATION"), payable in cash or in
exchange for a promissory note, with terms, mutually acceptable to the
parties, to be agreed upon prior to closing.
1.3 EFFECTIVE DATE; FAIRNESS OPINION. Despite its execution, no term,
provision, right or obligation under or pursuant to this Restated Agreement
shall be effective, unless and until the later of (a) the execution of this
Restated Agreement; and (b) the receipt by Parent's Board of Directors from its
financial advisors, PaineWebber Incorporated, or such other investment banking
firm selected by Parent's Board of Directors, of a written opinion addressed to
it for inclusion in the Proxy Statement/ Prospectus to the effect that the
consideration to be paid, in the aggregate, by the Parent in the transactions
contemplated by this Restated Agreement, the Restated Web YP Agreement, the
Restated Big Stuff Agreement, including the lending by Xxxxxxx X'Xxxx and
Xxxxxxx Xxxx to Web YP and/or Big Stuff of up to an aggregate of Six Million
Dollars ($6,000,000) and the agreement relating to the redemption of the Great
Western Notes, is fair to Parent from a financial point of view. Unless and
until the fairness opinion referenced in this SECTION 1.3 is received by Parent,
the June 3 YPtel Agreement shall remain in full force and effect, subject to
termination of such agreement in accordance with its terms. Parent shall notify
ICL immediately upon receipt of the fairness opinion referenced in this
SECTION 1.3. Immediately upon receipt of the fairness opinion referenced in this
SECTION 1.3 by Parent, this Restated Agreement shall become effective and the
June 3 YPtel Agreement shall terminate.
1.4 CLOSING. Unless this Restated Agreement is earlier terminated pursuant
to ARTICLE VIII, the closing of the transactions contemplated by this Restated
Agreement (THE "CLOSING") will take place three (3) business days after the
conditions set forth in ARTICLE VII are satisfied or waived, at the offices of
Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xx. Xxxxx,
Xxxxxxxx 00000 and is anticipated to be on or before January 31, 2000; PROVIDED,
HOWEVER, that if such conditions are not satisfied or waived by January 31,
2000, the Closing shall be automatically postponed for seven (7) days and will
continue to be postponed for continuous seven (7) day periods until
February 28, 2000, unless another place or time is agreed to in writing by
Parent and the Company. If such conditions are not satisfied or waived by
February 28, 2000, the Closing shall be automatically postponed until March 1,
1999, unless another time is agreed to in writing by Parent and the Company. The
date upon which the Closing actually occurs is herein referred to as the
"CLOSING DATE." At the Closing: (a) the Company shall deliver to Parent the
various certificates, instruments and documents required to be delivered by the
Company pursuant to this Restated Agreement; (b) Parent shall deliver to the
Company the various certificates, instruments and documents required to be
delivered by Parent pursuant to this Restated Agreement; (c) the Company shall
provide to Parent evidence reasonably satisfactory to Parent that the Company
Recapitalization has been completed; (d) the Company shall provide to Parent
evidence reasonably satisfactory to Parent that the YPTI Recapitalization has
been completed and as a part thereof, YPTI has distributed the YPTI Preferred
Stock as a dividend to Company in accordance with SECTION 1.1(e); (e) the
Shareholders shall transfer their shares of Company Common Stock to Newco II in
accordance with SECTION 1.2(b)(i); (f) Newco II shall issue and deliver to the
Shareholders the
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Class A Special Shares and/or Parent Common Stock in accordance with
SECTION 1.2(b)(ii); (g) Parent shall sell to the Trustee the Parent Class B
Voting Preferred Stock in accordance with SECTION 1.2(c); (h) the Trustee shall
pay to Parent the consideration for the Parent Class B Voting Preferred Stock;
(i) the Company shall sell to the Parent the YPTI Common Stock in accordance
with SECTION 1.2(d); (j) Parent shall pay to the Company the YPTI Consideration;
and (k) an election statement, in a form agreed to, shall be signed by the
appropriate parties in accordance with the provisions set forth in section 338
of the Code.
1.5 PARENT NAME CHANGE AND DIRECTORS.
(a) PARENT NAME CHANGE. Parent shall recommend, and submit to its
shareholders entitled to vote thereon, a resolution for their approval to
amend the Certificate of Incorporation of Parent. Such resolution shall
require Parent to change its name to "XxxxxXxxxx.xxx, Inc." or a variation
thereof and take all reasonable measures to have such name change become
effective on the Closing Date.
(b) DIRECTORS. Immediately following the Closing Date, the Board of
Directors of the Parent shall be restructured to be composed of eight
(8) members as follows: (i) one director chosen by Parent and one director
chosen by ICL to serve three year terms, (ii) one director chosen by Parent
and one director chosen by ICL and one director to be agreed to by Parent,
ICL and WorldPages to serve two year terms, and (iii) one director chosen by
Parent and one director chosen by ICL and one director to be agreed to by
Parent, ICL and WorldPages to serve one year terms. The Parent currently
intends to nominate Xxxxxxx X'Xxxx and two (2) individuals to be named at or
prior to Closing. The directors to be nominated by ICL are currently
anticipated to be Xxxxxx Xxxxxxxx, Xxxxxx Xxxxxxxx and Xxxxxx Xxxxx. In
addition, for a period of one (1) year following the Closing Date, each of
Parent and ICL may designate one party to attend any and all Board of
Directors meetings, as non-voting, non-participating observers only (THE
"OBSERVERS"). Parent shall reimburse the Observers for those expenses
incurred in connection with attending Board of Directors meetings, including
travel expenses, in the same manner and to the same extent that Parent
reimburses its directors for such expenses. The parties hereto expressly
acknowledge and agree that this SECTION 1.5(b) is not intended to, and does
not, except with regard to the initial Board of Directors of Parent
referenced in this SECTION 1.5(b), impose any requirement that the Board of
Directors of Parent be comprised of the individuals listed in this
SECTION 1.5(b) or that any Person has a right to designate a certain
individual or a certain number of individuals as nominees to the Board of
Directors of Parent.
1.6 TAX DEFERRED EXCHANGE. From the date hereof through and including the
Closing Date, neither the Company, nor the Subsidiaries, nor any of the
Shareholders nor any of their respective affiliates, nor Parent, or any of
Parent's subsidiaries or any of their respective affiliates, shall
(i) knowingly take any action, or knowingly fail to take any action, that would
jeopardize qualification of the transactions contemplated by SECTION 1.2(b) of
this Restated Agreement (with respect to the issuance of Class A Special Shares
to residents of Canada holding such shares as capital property) as a tax
deferred transfer pursuant to Subsection 85(1) of Income Tax Act [Canada] SC
1985 [5(th) Supp.] c.1, as amended ("INCOME TAX ACT [CANADA]"), provided a joint
election is filed on a timely basis in prescribed form; or (ii) enter into any
contract, agreement, commitment or arrangement with any such effect. ICL, on
behalf of each Shareholder, and Newco II agree to jointly elect that the
proceeds of the disposition of the Company Common Stock pursuant to this
Restated Agreement shall be the Canadian dollar adjusted cost base of the
transferred shares of Company Common Stock, unless otherwise agreed to by the
transferring Shareholders. Class A Special Shares and/or Parent Common Stock, at
such Shareholder's option, will be issued only to transferring Shareholders who
are resident in Canada for purposes of the Income Tax Act [Canada].
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1.7 TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time after the
Closing Date, any further action is necessary or desirable to carry out the
purposes of this Restated Agreement; including but not limited to vesting
Newco II with full right and title to and possession of the Company Common
Stock; vesting the Shareholders with full right and title to and possession of
the Class A Special Shares and/or Parent Common Stock, vesting the Trustee with
full right and title to and possession of the Parent Class B Voting Preferred
Stock; vesting Parent with full right and title to and possession of the YPTI
Common Stock; and vesting the Company with full right and title to the YPTI
Preferred Stock, subject to the requirements of SECTION 6.8, the parties hereto
will take all such lawful and necessary and/or desirable action so long as such
action is not inconsistent with this Restated Agreement.
1.8 AGGREGATE ISSUABLE PARENT COMMON STOCK. Exclusive of any options
listed on SCHEDULE 6.5(b)(i) attached hereto, the Shareholders, collectively,
shall not have the right to receive more than, nor shall the Parent be obligated
to transfer more than, 15,000,000 shares of Parent Common Stock, in the
aggregate, to the Shareholders, whether at Closing or pursuant to the subsequent
exchange for Parent Common Stock of Class A Special Shares issued to the
Shareholders at the Closing.
ARTICLE II--REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND THE ICL PRINCIPALS
The Company and the ICL Principals severally and not jointly and severally,
and jointly and severally as between the ICL Principals, represent and warrant
to Parent as follows:
2.1 ORGANIZATION AND GOOD STANDING. Company and each of the Subsidiaries
is a corporation duly organized and validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. Company and each of the
Subsidiaries is duly qualified or licensed and in good standing to do business
in each jurisdiction in which the character of the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to be so duly
qualified or licensed and in good standing would not have a Company Material
Adverse Effect. SCHEDULE 2.1 sets forth a complete and accurate list of the
jurisdictions of incorporation or organization and qualification or license of
Company and the Subsidiaries. Company has heretofore delivered to Parent
accurate and complete copies of the Certificates or Articles of Incorporation
and Bylaws, or equivalent governing instruments, as currently in effect, of
Company and each of the Subsidiaries.
2.2 CAPITALIZATION. As of the date hereof, the authorized capital stock of
Company (THE "COMPANY STOCK") consists of an unlimited number of Common Shares,
an unlimited number of Class A Shares, an unlimited number of Class B Shares,
1,841,000 Class C Shares, and an unlimited number of Class D Shares. As of the
date hereof, 13,500,000 shares of Common Stock, no Class A Shares, 100 Class B
Shares, 100 Class D Shares, and no Class C Shares of Company Stock are issued
and outstanding. No other capital stock of Company is issued or outstanding. All
issued and outstanding shares of the Company Stock are duly authorized, validly
issued, fully paid and non-assessable and are issued free of preemptive rights
and in compliance with applicable corporate and securities Laws. Except as set
forth on SCHEDULE 2.2 attached hereto, as of the date of this Restated Agreement
there are no outstanding rights, reservations of shares, subscriptions,
warrants, puts, calls, unsatisfied preemptive rights, options or other
agreements of any kind relating to any of the capital stock or any other
security of Company, and there is no authorized or outstanding security of any
kind convertible into or exchangeable for any such capital stock or other
security. There are no restrictions upon the transfer of or otherwise pertaining
to the securities (including, but not limited to, the ability to pay dividends
thereon) or retained earnings of Company and the Subsidiaries or the ownership
thereof other than those, if any, described on SCHEDULE 2.2 attached hereto or
those imposed generally
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by the Securities Act, the Securities Exchange Act, applicable state or foreign
securities Laws or applicable corporate Law.
2.3 SUBSIDIARIES. SCHEDULE 2.3(a) attached hereto sets forth the name and
percentages of any outstanding capital stock or other interest held, directly or
indirectly, by Company. Except as set forth on SCHEDULE 2.3(b) attached hereto,
all of the capital stock and other interests so held by Company are owned by it
or a Subsidiary as indicated on said SCHEDULE 2.3(a), free and clear of any
claim, lien, encumbrance, security interest or agreement with respect thereto.
All of the outstanding shares of capital stock in each of the Subsidiaries are
duly authorized, validly issued, fully paid and non-assessable and were issued
free of preemptive rights and in compliance with applicable corporate and
securities Laws. Except as set forth on SCHEDULE 2.3(c) attached hereto, there
are no irrevocable proxies, voting agreements or similar obligations with
respect to such capital stock of the Subsidiaries and no equity securities or
other interests of any of the Subsidiaries are or may become required to be
issued or purchased by reason of any options, warrants, rights to subscribe to,
puts, calls, reservation of shares or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for,
shares of any capital stock of any Subsidiary, and there are no contracts,
commitments, understandings or arrangements by which any Subsidiary is bound to
issue additional shares of its capital stock, or options, warrants or rights to
purchase or acquire any additional shares of its capital stock or securities
convertible into or exchangeable for such shares.
2.4 AUTHORIZATION; BINDING AGREEMENT. Company, the ICL Principals, the
Barbadian Trusts and ICL, as attorney-in-fact for the Shareholders not signing
this Restated Agreement, have all requisite power and authority to execute and
deliver this Restated Agreement and the Company Transaction Agreements and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Restated Agreement and the other agreements and documents
referred to herein and to be executed in connection herewith to which Company,
the ICL Principals, the Barbadian Trusts, ICL or any Shareholder is or will be a
party or a signatory (THE "COMPANY TRANSACTION AGREEMENTS") and the consummation
of the transactions contemplated hereby and thereby have been duly and validly
authorized by Company's Board of Directors, ICL's Board of Directors, and the
trustees of The J.L.R. Family Trust, The Paisley Family Trust and the Barbadian
Trusts and no other corporate or other proceedings on the part of Company, any
Subsidiary, the ICL Principals, ICL or any Shareholder are necessary to
authorize the execution and delivery of this Restated Agreement and the Company
Transaction Agreements or to consummate the transactions contemplated hereby or
thereby, except for the concurrence of the Subordinated Lenders. This Restated
Agreement has been duly and validly executed and delivered by Company, the ICL
Principals, the Barbadian Trusts and ICL, as attorney-in-fact for the
Shareholders not signing this Restated Agreement, and constitutes, and upon
execution and delivery thereof as contemplated by this Restated Agreement, the
Company Transaction Agreements will constitute, the legal, valid and binding
obligations of Company, the ICL Principals and the Shareholders, enforceable
against Company, the ICL Principals and the Shareholders in accordance with its
and their respective terms, except to the extent that enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors' rights generally and by principles
of equity regarding the availability of remedies (COLLECTIVELY, THE
"ENFORCEABILITY EXCEPTIONS"). The Powers of Attorney are in full force and
effect and ICL has full authority under the Powers of Attorney to execute this
Restated Agreement and the Company Transaction Agreements as attorney-in-fact
for the Shareholders not signing this Restated Agreement, to bind such
Shareholders to the obligations of the Shareholders set forth in this Restated
Agreement and the Company Transaction Agreements, and to transfer the Company
Common Shares of such Shareholders to Newco II as contemplated by this Restated
Agreement.
2.5 GOVERNMENTAL APPROVALS. No consent, approval, waiver or authorization
of, notice to or declaration or filing with ("CONSENT") any nation or
government, any state, province, or other political subdivision thereof, any
Person, authority or body exercising executive, legislative, judicial,
regulatory or
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administrative functions of or pertaining to government including, without
limitation, any governmental or regulatory authority, agency, department, board,
commission or instrumentality, any court, tribunal or arbitrator and any
self-regulatory organization ("GOVERNMENTAL AUTHORITY") on the part of the
Shareholders, ICL, the ICL Principals, the Company or any of the Subsidiaries is
required in connection with the execution or delivery by the ICL Principals,
ICL, as attorney-in-fact for the Shareholders, or the Company of this Restated
Agreement and the Company Transaction Agreements or the consummation by Company
or the Shareholders of the transactions contemplated hereby or thereby other
than (i) filings with the SEC and state and provincial securities laws
administrators and other filings and/or court orders required under the Canada
Business Corporations Act, (ii) those Consents from or with Governmental
Authorities set forth on SCHEDULE 2.5 attached hereto, (iii) filings under the
HSR Act, (iv) filings with the Committee on Foreign Investment in the United
States for a determination as to whether the transaction contemplated by this
Restated Agreement is permitted under the Exon-Xxxxxx Amendment (Section 721) to
the Defense Production Act of 1950 (THE "EXON-XXXXXX FILING"), (v) filings under
Investment Canada Act and the Competition Act, (vi) any filings required by the
U.S. Department of Commerce's reporting requirements for foreign investment in
the United States, and (vii) those Consents that, if they were not obtained or
made, do not or would not have a Company Material Adverse Effect.
2.6 NO VIOLATIONS. The execution and delivery of this Restated Agreement
and the Company Transaction Agreements, the consummation of the transactions
contemplated hereby and thereby and compliance by Company, ICL, the ICL
Principals and Shareholders with any of the provisions hereof or thereof will
not (i) conflict with or result in any breach of any provision of the
Certificate and/or Articles of Incorporation or Bylaws or other governing
instruments of Company or any of the Subsidiaries or of any provision of the
trust agreements of the Shareholders that are trusts, (ii) except as set forth
on SCHEDULE 2.6 attached hereto, require any Consent under or result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration or augment the performance required) under any of the terms,
conditions or provisions of any Company Material Contract or other obligation to
which Shareholders, ICL, Company or any Subsidiary is a party or by which any of
them or any of their properties or assets may be bound, (iii) result in the
creation or imposition of any lien or encumbrance of any kind upon any of the
assets of Company or any Subsidiary, or (iv) subject to obtaining the Consents
from Governmental Authorities referred to in SECTION 2.5 above contravene any
applicable provision of any constitution, treaty, statute, law, code, rule,
regulation, ordinance, policy or order of any Governmental Authority, including
without limitation those Governmental Authorities in the United States and
Canada, or other matters having the force of law including, but not limited to,
any orders, decisions, injunctions, judgments, awards and decrees of or
agreements with any court or other Governmental Authority ("LAW") currently in
effect to which any Shareholder, ICL, the Company or any Subsidiary or its or
any of their respective assets or properties are subject, except in the case of
clauses (ii), (iii) and (iv), above, for any deviations from the foregoing which
do not or would not have a Company Material Adverse Effect.
2.7 LITIGATION. Except as set forth in SCHEDULE 2.7 attached hereto,
(i) the Company represents and warrants to Parent that there is no action, cause
of action, claim, demand, suit, proceeding, citation, summons, subpoena, inquiry
or investigation of any nature, civil, criminal, regulatory or otherwise, in law
or in equity, by or before any court, tribunal, arbitrator, mediator or other
Governmental Authority ("LITIGATION") pending or, to the knowledge of Company,
threatened against the Company, any Subsidiary, or any officer, director,
employee or agent thereof, in his or her capacity as such, or as a fiduciary
with respect to any Benefit Plan of Company, or otherwise relating, in a manner
that could have a Company Material Adverse Effect, to Company, any Subsidiary,
or the securities of any of them, or any properties or rights of Company or any
of the Subsidiaries or that could prevent or delay the consummation of the
transactions contemplated by this Restated Agreement; and (ii) the ICL
Principals represent and warrant to Parent that to the knowledge of the
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ICL Principals there is no Litigation pending or threatened against Company, any
Subsidiary, or any officer, director, employee or agent thereof, in his or her
capacity as such, or as a fiduciary with respect to any Benefit Plan of Company,
or otherwise relating, in a manner that could have a Company Material Adverse
Effect, to the Company, any Subsidiary, or the securities of any of them, or any
properties or rights of Company or any of the Subsidiaries or that could prevent
or delay the consummation of the transactions contemplated by this Restated
Agreement.
2.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
SCHEDULE 2.8 attached hereto, since November 1, 1998, through the date of this
Restated Agreement, to the knowledge of the ICL Principals, there has not been
any event, occurrence, fact, condition, change, development or effect ("EVENT")
that could reasonably be expected to have a Company Material Adverse Effect.
2.9 FINDERS AND INVESTMENT BANKERS. Neither Company nor any Subsidiary nor
any of its respective officers or directors has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated hereby other than a fee of U.S.
$265,000 payable to ICL by Parent or any direct or indirect subsidiary of Parent
immediately following Closing. There are no other fees due from the Company or
any Subsidiary to ICL and upon Closing neither the Company nor any Subsidiary
will have any further obligations to ICL pursuant to any management agreement or
other similar agreement.
2.10 CONTRACTS. Except as set forth in the PCP Acquisition Agreement or
SCHEDULE 2.10 attached hereto, the Company represents and warrants to Parent,
and the ICL Principals represent and warrant to the Parent that to their
knowledge, neither Company nor any Subsidiary is a party or is subject to any
Company Material Contract. Company has made available to Parent true and
accurate copies of the Company Material Contracts.
2.11 LIABILITIES. From November 1, 1998, through the date of this Restated
Agreement, except as expressly disclosed in SCHEDULE 2.11 or elsewhere is this
Restated Agreement or the Schedules attached hereto, to the knowledge of ICL
Principals, Company does not have any direct or indirect indebtedness,
liability, claim, loss, damage, deficiency, obligation or responsibility, fixed
or unfixed, xxxxxx or inchoate, liquidated or unliquidated, secured or
unsecured, accrued, absolute, contingent or otherwise, whether or not of a kind
required by Canadian generally accepted accounting principles to be set forth in
a financial statement other than those incurred in the ordinary course of
business or in an amount not in excess of U.S. $50,000 individually or U.S.
$100,000 in the aggregate. Except as set forth on SCHEDULE 2.11 attached hereto
or elsewhere in this Restated Agreement or the Schedules, as of the date of this
Restated Agreement, Company is not subject to (i) obligations in respect of
borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other
similar instruments, (iii) to the knowledge of ICL Principals, obligations which
would be required by generally accepted accounting principles to be classified
as "capital leases," (iv) to the knowledge of ICL Principals, obligations to pay
the deferred purchase price of property or services, except trade accounts
payable arising in the ordinary course of business and payable not more than
twelve (12) months from the date of incurrence, and (v) to the knowledge of the
ICL Principals any guaranties of any obligations of any other Person.
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2.12 REAL ESTATE.
(a) Neither the Company nor any of the Subsidiaries owns any real
property.
(b) SCHEDULE 2.12(b) attached hereto sets forth a true, correct and
complete schedule as of the date of this Restated Agreement of all leases,
subleases, easements, rights-of-way, licenses or other agreements entered
into after the PCP Closing Date under which Company or any of the
Subsidiaries uses or occupies, or has the right to use or occupy, now or in
the future, any real property or improvements thereon (THE "COMPANY REAL
PROPERTY LEASES"). Except for the matters listed on said SCHEDULE 2.12(b),
Company or a Subsidiary, as indicated thereon, to the knowledge of the ICL
Principals, holds the leasehold estate under or other interest in each
Company Real Property Lease and each lease for real property that existed on
the PCP Closing Date free and clear of all liens, encumbrances and other
rights of occupancy other than statutory landlords, or mechanics' liens
which have not been executed upon. All of the real property and improvements
occupied by the Company or any Subsidiary under the Company Real Property
Leases and each lease for real property that existed on the PCP Closing Date
are used by the Company as office and graphic design space only.
2.13 CORPORATE RECORDS. The corporate record books of or relating to
Company made available to Parent by Company contain accurate and complete
records of (i) all corporate actions of the stockholders and directors (and
committees thereof) of Company, (ii) the Certificate and/or Articles of
Incorporation, Bylaws and/or other governing instruments, as amended, of
Company, and (iii) the issuance and transfer of stock of Company. Except as set
forth on SCHEDULE 2.13 attached hereto, Company does not have any of its
material records or information recorded, stored, maintained or held off the
premises of Company or at other than its solicitors' offices.
2.14 LABOR MATTERS. The Company has only two employees.
2.15 TAX. Neither the Company nor the ICL Principals know of any fact or
have knowingly taken any action that could be reasonably expected to prevent the
transfer of shares contemplated by SECTION 1.2(b) of this Restated Agreement
(with respect to the issuance of Class A Special Shares to residents of Canada
holding such shares as capital property) from qualifying as a tax deferred
transfer pursuant to Subsection 85(1) of Income Tax Act [Canada]; provided a
joint election is filed on a timely basis in prescribed form.
2.16 PCP ACQUISITION AGREEMENT. Neither Company nor any of the ICL
Principals had any knowledge on the date of the closing (THE "PCP CLOSING DATE")
under the Asset Purchase Agreement by and among the Company, Pacific Coast
Publishing, Inc., a Washington corporation, Xxxxxxx Xxxxxxx ("XXXXXXX") and Xxxx
Xxxxxxx ("XXXXXXX") and Pacific Coast Publishing, Ltd. (formerly PCP
Acquisition Inc.), a Washington corporation (THE "PCP ACQUISITION AGREEMENT") or
has had at any time after the PCP Closing Date or currently has any knowledge
(i) that any of the representations and warranties made by Pacific Coast
Publishing, Inc., Xxxxxxx and Xxxxxxx (COLLECTIVELY, THE "PCP SELLERS") to the
Company and PCP were untrue, inaccurate or incomplete; (ii) that the PCP
Sellers, or any of them, would be unable to fully satisfy any of their
indemnification or other obligations set forth in the PCP Acquisition Agreement;
or (iii) of any Event that would result in a violation or breach of, or
constitute (with or without due notice of lapse of time or both) a default by
Company or any Subsidiary of any of their respective obligations under the PCP
Acquisition Agreement or any of the other agreements entered into in connection
with the acquisition of PCP (THE "PCP TRANSACTION DOCUMENTS") or any other Event
that would allow the PCP Sellers, or any of them, to offset against or otherwise
reduce their respective indemnification obligations under the PCP Acquisition
Agreement. Company and the ICL Principals agree that they will give prompt
written notice to Parent if between the date of this Restated Agreement and the
Closing Date they obtain knowledge of any fact that would make the
representations and warranties set forth in this SECTION 2.16 untrue if they
were made at that time. Neither the Company nor any of the Subsidiaries have
assigned, transferred or otherwise
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conveyed any of their respective rights or entitlements under the PCP
Acquisition Agreement or the PCP Transaction Documents.
2.17 KNOWLEDGE. When a representation or warranty of the ICL Principals
contained in ARTICLE II hereof is qualified (i) by the "knowledge" of such ICL
Principals, or (ii) by a statement that the ICL Principals "have no knowledge"
of factual matters comprising the representation or warranty, or (iii) by a
statement that the ICL Principals are "unaware" of factual matters comprising
the representation or warranty, or (iv) by words of similar import, such
"knowledge qualifiers" mean that each of the ICL Principals has affirmatively
and actively made due inquiry of Xxxx Xxxxxxx and Xxx Xxxxxx or any of their
respective replacements and that none of the ICL Principals has learned of any
information, fact or event that would make the representation or warranty of the
ICL Principal untrue, inaccurate, incorrect or incomplete. Knowledge possessed
by or otherwise obtained by any one ICL Principal after due inquiry as provided
herein with respect to a representation or warranty qualified by "knowledge"
shall be deemed to be known by, or learned of by all of the ICL Principals.
ARTICLE III--REPRESENTATIONS AND WARRANTIES
OF PARENT
Parent represents and warrants to the Company and the Shareholders as
follows:
3.1 ORGANIZATION AND GOOD STANDING. Parent is a corporation duly organized
and validly existing under the laws of the State of Delaware and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. Each of the Active Parent
Subsidiaries is a corporation, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
and has all requisite corporate, power and authority to own, lease and operate
its properties and to carry on its business as now being conducted, except where
the failure to be so duly organized, validly existing and in good standing or to
have such power and authority would not have a Parent Material Adverse Effect.
Parent and each of the Active Parent Subsidiaries is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the character
of the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where
the failure to be so duly qualified or licensed and in good standing would not
have a Parent Material Adverse Effect. Parent has heretofore made available to
Company accurate and complete copies of the Certificates or Articles of
Incorporation and Bylaws, or equivalent governing instruments, as currently in
effect, of Parent and each of the Active Parent Subsidiaries.
3.2 CAPITALIZATION. As of the date hereof, the authorized capital stock of
Parent consists of 180,000,000 shares of common stock of Parent, par value
$0.0001 per share ("PARENT COMMON STOCK") and 20,000,000 shares of preferred
stock, par value $0.0001. As of the opening of business on the date of this
Restated Agreement, (a) 20,083,953 shares of Parent Common Stock were
outstanding, (b) no shares of the Parent preferred stock were issued and
outstanding and (c) 163,307 shares of Parent Common Stock were held as treasury
shares. No other capital stock of Parent is issued or outstanding. All issued
and outstanding shares of the Parent Common Stock are duly authorized, validly
issued, fully paid and non-assessable and were issued free of preemptive rights
and in compliance with applicable corporate and securities Laws. Except as set
forth on SCHEDULE 3.2 attached hereto, as of the date of this Restated Agreement
there are no outstanding rights, reservations of shares, subscriptions,
warrants, puts, calls, unsatisfied preemptive rights, options or other
agreements of any kind relating to any of the capital stock or any other
security of Parent, and there is no authorized or outstanding security of any
kind convertible into or exchangeable for any such capital stock or other
security. There are no restrictions upon the transfer of or otherwise pertaining
to the securities (including, but not limited to, the ability to pay dividends
thereon) or retained earnings of Parent and the Active Parent Subsidiaries or
the ownership thereof other than those pursuant to the Parent Guaranty or the
Great Western
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Credit Agreement or those imposed generally by the Securities Act, the
Securities Exchange Act, applicable state or foreign securities Laws or
applicable corporate Law.
3.3. SUBSIDIARIES. Except as set forth on SCHEDULE 3.3, all of the capital
stock and other interests of the Active Parent Subsidiaries held by Parent are
owned by it or a Parent subsidiary, free and clear of any claim, lien,
encumbrance, security interest or agreement with respect thereto. All of the
outstanding shares of capital stock in each of the Active Parent Subsidiaries
held directly or indirectly by Parent are duly authorized, validly issued, fully
paid and non-assessable and were issued free of preemptive rights and in
compliance with applicable corporate and securities Laws. Except as set forth on
SCHEDULE 3.3 attached hereto, there are no irrevocable proxies, voting
agreements or similar obligations with respect to such capital stock of the
Active Parent Subsidiaries and no equity securities or other interests of any of
the Active Parent Subsidiaries are or may become required to be issued or
purchased by reason of any obligations, options, warrants, rights to subscribe
to puts, calls, reservation of shares or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for,
shares of any capital stock of any Active Parent Subsidiary, and there are no
contracts, commitments, understandings or arrangements by which any Active
Parent Subsidiary is bound to issue additional shares of its capital stock, or
options, warrants or rights to purchase or acquire any additional shares of its
capital stock or securities convertible into or exchangeable for such shares.
3.4 AUTHORIZATION; BINDING AGREEMENT. Parent has all requisite corporate
power and authority to execute and deliver this Restated Agreement and the
Parent Transaction Agreements and to consummate the transactions contemplated
hereby. The execution and delivery of this Restated Agreement and the other
agreements and documents referred to herein and to be executed in connection
herewith to which Parent is or will be a party or a signatory (THE "PARENT
TRANSACTION AGREEMENTS") and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized by the Board of
Directors of Parent and except for the approval of the holders of the Parent
Common Stock, no other corporate proceedings on the part of Parent are necessary
to consummate the transactions contemplated hereby or thereby except for the
concurrence of Bank of America National Trust and Savings Association under the
Great Western Credit Agreement. This Restated Agreement has been duly and
validly executed and delivered by Parent and constitutes, and upon execution and
delivery thereof as contemplated by this Restated Agreement, the Parent
Transaction Agreements will constitute, the legal, valid and binding obligations
of Parent, enforceable against Parent in accordance with its and their
respective terms, subject to the Enforceability Exceptions.
3.5 GOVERNMENTAL APPROVALS. No Consent from or with any Governmental
Authority on the part of Parent or any of the Active Parent Subsidiaries, is
required in connection with the execution or delivery by Parent of this Restated
Agreement and the Parent Transaction Agreements or the consummation by Parent of
the transactions contemplated hereby or thereby other than (i) filings with the
SEC, state securities laws administrators and the NYSE, (ii) those Consents from
or with Governmental Authorities set forth on SCHEDULE 3.5 hereto, (iii) the
Exon-Xxxxxx Filings, filings under the HSR Act, filings with the Ontario
Securities Commission and those required under the Canada Business Corporations
Act, the Investment Canada Act and the Competition Act, (iv) any filings
required by the U.S. Department of Commerce's reporting requirements for foreign
investment in the United States; and (v) those Consents that, if they were not
obtained or made, do not or would not have a Parent Material Adverse Effect.
3.6 NO VIOLATIONS. The execution and delivery of this Restated Agreement
and the Parent Transaction Agreements, the consummation of the transactions
contemplated hereby and thereby and compliance by Parent with any of the
provisions hereof or thereof will not (i) conflict with or result in any breach
of any provision of the Certificate and/or Articles of Incorporation or Bylaws
or other governing instruments of Parent or any of the Active Parent
Subsidiaries, except as set forth on
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SCHEDULE 3.6, (ii) require any Consent under or result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration
or augment the performance required) under any of the terms, conditions or
provisions of any Parent Material Contract or other obligation to which Parent
or any Parent subsidiary, is a party or by which any of them or any of their
properties or assets may be bound, except for compliance with the requirements
under that certain Guaranty of Parent (THE "PARENT GUARANTY") given pursuant to
the Loan Agreement dated as of May 14, 1999 by and among Great Western
Directories, Inc., the Lenders signatories thereto, and Bank of America National
Trust and Savings Association as Administrative Agent (THE "GREAT WESTERN CREDIT
AGREEMENT"), (iii) result in the creation or imposition of any lien or
encumbrance of any kind upon any of the assets of Parent or any Parent
Subsidiary, or (iv) subject to obtaining the Consents from Governmental
Authorities referred to in SECTION 3.5 above, contravene any Law currently in
effect to which Parent or any Parent subsidiary or its or any of their
respective assets or properties are subject, except in the case of clauses (ii),
(iii) and (iv) above, for any deviations from the foregoing which do not or
would not have a Parent Material Adverse Effect.
3.7 SECURITIES FILINGS AND LITIGATION. Parent has made available to
Company true and complete copies of (i) its Annual Reports on Form 10-K, as
amended, for the years ended December 31, 1997 and 1998, as filed with the SEC,
(ii) its proxy statement relating to the meeting of shareholders held on
July 29, 1998, as filed with the SEC, and (iii) all other reports, statements
and registration statements and amendments thereto (including, without
limitation, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as
amended) filed by Parent with the SEC since February 18, 1998. The reports and
statements set forth in clauses (i) through (iii), above, and those subsequently
provided or required to be provided pursuant to this section, are referred to
collectively as the "PARENT SECURITIES FILINGS." As of their respective dates,
or as of the date of the last amendment thereof, if amended after filing, none
of the Parent Securities Filings (including all schedules thereto and disclosure
documents incorporated by reference therein), contained or, as to Parent
Securities Filings subsequent to the date hereof, will contain any untrue
statement of a material fact or omitted or, as to Parent Securities Filings
subsequent to the date hereof, will omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of the Parent
Securities Filings at the time of filing or as of the date of the last amendment
thereof, if amended after filing, complied or, as to Parent Securities Filings
subsequent to the date hereof, will comply in all material respects with the
Securities Exchange Act or the Securities Act, as applicable. Except as set
forth in SCHEDULE 3.7, there is no Litigation pending or, to the knowledge of
Parent, threatened against Parent or any Parent subsidiary, any officer,
director, employee or agent thereof, in his or her capacity as such, or as a
fiduciary with respect to any Benefit Plan of Parent, or otherwise relating, in
a manner that could have a Parent Material Adverse Effect, to Parent, any Parent
subsidiary or the securities of any of them, or any properties or rights of
Parent or any of the Parent subsidiaries that could prevent or delay the
consummation of the transactions contemplated by this Restated Agreement. No
event has occurred as a consequence of which Parent would be required to file a
Current Report on Form 8-K pursuant to the requirements of the Securities
Exchange Act as to which such a report has not been timely filed with the SEC.
Any reports, statements and registration statements and amendments thereof
(including, without limitation, Reports on Form 10-K, Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K, as amended) filed by Parent with the
SEC after the date hereof shall be provided to Company upon such filing.
3.8 PARENT FINANCIAL STATEMENTS. The audited consolidated and unaudited
interim financial statements of Parent and the Parent subsidiaries included in
the Parent Securities Filings (THE "PARENT FINANCIAL STATEMENTS")have been made
available to Company. Except as noted thereon, the Parent Financial Statements
were prepared in accordance with generally accepted accounting principles
applicable to the business of Parent and the Parent subsidiaries consistently
applied in accordance with past accounting practices and fairly present
(including, but not limited to, the inclusion of all
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adjustments with respect to interim periods which are necessary to present
fairly the financial condition and assets and liabilities or the results of
operations of Parent and the Parent subsidiaries, subject to normal year-end
adjustments in the ordinary course with respect to certain items immaterial in
amount or effect and the exclusion of footnote disclosure in interim Parent
Financial Statements) the financial condition and assets and liabilities or the
results of operations of Parent and the Parent subsidiaries as of the dates and
for the periods indicated. Except as set forth in SCHEDULE 3.8 or as reflected
in the Parent Financial Statements, as of their respective dates, neither Parent
nor any Parent subsidiary had any debts, obligations, guaranties of obligations
of others or liabilities (contingent or otherwise) that would be required in
accordance with generally accepted accounting principles to be disclosed in the
Parent Financial Statements.
3.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in the
Parent Securities Filings made available by Parent to Company prior to the date
of this Restated Agreement or in SCHEDULE 3.9 attached hereto, since June 30,
1999, through the date of this Restated Agreement, there has not been: (i) any
Event that could reasonably be expected to have a Parent Material Adverse
Effect; or (ii) any agreement by Parent to take any action that would result in
a breach of SECTION 6.5 below.
3.10 COMPLIANCE WITH LAWS. The business of Parent and the Parent
subsidiaries, has been operated in compliance with all Laws applicable thereto,
except for any instances of non-compliance which do not and would not have a
Parent Material Adverse Effect.
3.11 PERMITS. (i) Parent and the Parent subsidiaries have all permits,
certificates, licenses, approvals, tariffs and other authorizations required in
connection with the operation of their business (COLLECTIVELY, "PARENT
PERMITS"), (ii) neither Parent nor any Parent Subsidiary is in violation of any
Parent Permit, and (iii) no proceedings are pending or, to the knowledge of
Parent, threatened, to revoke or limit any Parent Permit, except, in the case of
clause (i) or (ii) above, those the absence or violation of which do not and
would not have a Parent Material Adverse Effect.
3.12 FINDERS AND INVESTMENT BANKERS. Neither Parent nor any of its
officers or directors has employed any broker or finder or otherwise incurred
any liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated hereby, except that PaineWebber Incorporated
has been engaged to deliver the fairness opinion required to be delivered
pursuant to SECTION 1.3 and NationsBanc Xxxxxxxxxx Securities, L.L.C. has been
engaged to assist in the sale(s) of the CLEC Operations and a copy of the
engagement letters and other related documents have been furnished to the
Company.
3.13 CONTRACTS. Except as set forth in SCHEDULE 3.13, neither Parent nor
any Parent subsidiary is a party to any material note, bond, mortgage,
indenture, contract, lease, license, agreement, understanding, instrument, bid
or proposal ("PARENT MATERIAL CONTRACT"). Parent has made available to Company
true and accurate copies of the Parent Material Contracts. All such Parent
Material Contracts are valid and binding and are in full force and effect and
enforceable in accordance with their respective terms, subject to the
Enforceability Exceptions.
3.14 CORPORATE RECORDS. The respective corporate record books of or
relating to Parent and each of the Active Parent Subsidiaries made available to
Company by Parent contain accurate and complete records of (i) all corporate
actions of the respective shareholders and directors (and committees thereof) of
Parent and the Active Parent Subsidiaries, (ii) the Certificate and/or Articles
of Incorporation, Bylaws and/or other governing instruments, as amended, of
Parent and the Active Parent Subsidiaries, and (iii) the issuance and transfer
of stock of Parent and the Active Parent Subsidiaries.
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ARTICLE IV--ADDITIONAL COVENANTS OF THE COMPANY AND THE ICL PRINCIPALS
The Company and the ICL Principals severally and not jointly, and severally
and not jointly and severally as between the ICL Principals, covenant and agree
as follows:
4.1 NOTIFICATION OF CERTAIN MATTERS. The Company and the ICL Principals
shall give prompt notice to Parent if any of the following occur from the date
of this Restated Agreement through the Closing Date: (i) receipt of any notice
of, or other communication relating to, a default or Event which, with notice or
lapse of time or both, would become a default under any Company Material
Contract; (ii) receipt of any notice or other communication from any third party
alleging that the Consent of such third party is or may be required in
connection with the transactions contemplated by this Restated Agreement;
(iii) receipt of any material notice or other communication from any
Governmental Authority in connection with the transactions contemplated by this
Restated Agreement; (iv) receipt of any notice of or other communication
regarding or otherwise obtaining knowledge of an Event which would have a
Company Material Adverse Effect; (v) receipt of any notice of or other
communication regarding or otherwise obtaining knowledge of the commencement or
threat of any Litigation involving or affecting any Shareholder that might
adversely impact the transactions contemplated by this Restated Agreement, the
Company or any Subsidiary, or any of their respective properties or assets, or,
to its knowledge, any employee, agent, director or officer of the Company or any
Subsidiary, in his or her capacity as such or as a fiduciary under a Benefit
Plan of the Company, which, if pending on the date hereof, would have been
required to have been disclosed pursuant to SECTION 2.7, and (vi) receipt of any
notice of or other communication regarding or otherwise obtaining knowledge of
any Event that would cause a breach by the Company, a Subsidiary, or any
Shareholder of any provision of this Restated Agreement or a Company Transaction
Agreement, including such a breach that would occur if such event had taken
place on or prior to the date of this Restated Agreement.
4.2 ACCESS AND INFORMATION. Between the date of this Restated Agreement
and the Closing Date, the Company and the Subsidiaries, upon reasonable notice,
will give, and shall direct its accountants and legal counsel to give, Parent,
its lenders and their respective authorized representatives (including, without
limitation, financial advisors, accountants and legal counsel) at all reasonable
times access to all offices and other facilities and to all contracts,
agreements, commitments, books and records (including, but not limited to, Tax
returns) of or pertaining to the Company and the Subsidiaries, will permit the
foregoing to make such inspections as they may require and will cause its
officers promptly to furnish Parent with (a) such financial and operating data
and other information with respect to the business and properties of the Company
and Subsidiaries as Parent may from time to time reasonably request including,
but not limited to, data and information required for inclusion in Parent's
pending registration statements and/or other Parent Securities Filings, and
(b) a copy of each material report, schedule and other document filed or
received by the Company or any Subsidiary pursuant to the requirements of
applicable securities Laws. The Company further agrees to permit an independent
accounting firm selected by Parent to either prepare or review the separate
company and consolidated corporate income tax returns and supporting schedules
for U.S., Canadian and state income tax purposes of the Company and the
Subsidiaries for fiscal year beginning November 1, 1998 and ending on the
earlier of October 31, 1999 or the date the Company is acquired, provided that
all of the costs and expenses of such services are paid by the Parent. The
foregoing access will be subject to government security restrictions and
restrictions contained in confidentiality agreements to which the Company is
subject and of which Parent has been advised prior to the date of this Restated
Agreement; provided that the Company shall use its reasonable best efforts to
obtain waivers of such restrictions.
4.3 REASONABLE BEST EFFORTS. Subject to the terms and conditions herein
provided, the Company and ICL on behalf of the Shareholders agree to use their
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or advisable to
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consummate and make effective as promptly as practicable, but in any event,
prior to the Closing, the transactions contemplated by this Restated Agreement
and the Company Transaction Agreements including, but not limited to
(i) obtaining the Consent of others to this Restated Agreement, the Company
Transaction Agreements and the transactions contemplated hereby and thereby,
(ii) the defending of any Litigation against the Company, ICL, any Subsidiary,
or any Shareholder challenging this Restated Agreement, the Transaction
Agreements or the consummation of the transactions contemplated hereby or
thereby, (iii) obtaining all Consents from Governmental Authorities required for
the consummation of the transactions contemplated hereby, (iv) timely making all
necessary filings under the HSR Act, and (v) timely making the Exon-Xxxxxx
Filings and any filings required under the laws of Nova Scotia, and the
Investment Canada Act and by the U.S. Department of Commerce's reporting
requirements for foreign investments in the United States. Upon the terms and
subject to the conditions hereof, the Company and ICL on behalf of the
Shareholders agree to use their reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary to
satisfy the other conditions of the Closing set forth herein. The Company and
ICL on behalf of the Shareholders will consult with counsel for Parent as to,
and will permit such counsel to participate in, at Parent's expense, any
Litigation referred to in clause (ii) above brought against or involving the
Company, any Subsidiary or any Shareholder.
4.4 COMPLIANCE. In consummating the transactions contemplated hereby, the
Company and ICL on behalf of the Shareholders shall comply in all material
respects with the provisions of the Securities Exchange Act and the Securities
Act and shall comply, and/or cause the Subsidiaries to comply or to be in
compliance, in all material respects, with all other applicable Laws.
4.5 BENEFIT PLANS. Between the date of this Restated Agreement and through
the Closing Date, no discretionary award or grant under any Benefit Plan of the
Company or a Subsidiary shall be made without the consent of Parent; nor shall
the Company or a Subsidiary take any action or permit any action to be taken to
accelerate the vesting of any warrants or options previously granted pursuant to
any such Benefit Plan. Neither the Company nor any Subsidiary shall make any
amendment to any Benefit Plan, any awards thereunder or the terms of any
security convertible into or exchangeable for capital stock without the consent
of Parent. Parent acknowledges the granting of the options listed on
SCHEDULE 6.5(b)(i).
4.6 TAX OPINION CERTIFICATION. Prior to the Closing Date, the Company and
the Shareholders shall provide tax counsel rendering an opinion under
SECTION 7.1(l) with a certificate concerning such factual matters as such
counsel identifies are relevant to its opinion.
4.7 SHAREHOLDERS AGREEMENT AND VOTING TRUST AGREEMENTS. The Company and
ICL on behalf of the Shareholders shall cause all voting trust agreements
between the Shareholders, ICL and the Company and any powers of attorney or
other agreements relating to the voting or disposition of the capital stock of
the Company (COLLECTIVELY, "THE VOTING TRUST AGREEMENTS") and the Unanimous
Shareholders Agreement to be cancelled as of the Closing Date.
4.8 TRANSFER RESTRICTIONS. In addition to any other restrictions imposed
by Law on the Shareholders' ability to transfer any Class A Special Shares or
Parent Common Stock received by the Shareholders pursuant to this Restated
Agreement and the Exchange and Voting Trust Agreement, each Shareholder agrees
that, with respect to Class A Special Shares, the restrictions on transfer set
forth in the Exchange and Voting Trust Agreement shall apply.
4.9 SUBORDINATED LOAN AGREEMENT. The Company shall cause PCP to satisfy
all of its obligations under the Subordinated Loan Agreement dated as of
November 1, 1998 (THE "SUBORDINATED LOAN AGREEMENT") by and among PCP (f/k/a PCP
Acquisition, Inc.), the lenders which are parties thereto (THE "SUBORDINATED
LENDERS") and Canterbury Mezzanine Capital, L.P., as agent, including, without
limitation, the repayment in full of the Loans (as defined in the Subordinated
Loan Agreement) and all interest accrued thereon.
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The Company shall use its reasonable best efforts to cause the Subordinated
Lenders to exercise the warrants evidenced by the Warrant Certificates (as
defined in the Subordinated Loan Agreement) and to convert the Company Class B
stock issued to the Subordinated Lenders thereunder into Company Common Stock.
4.10 CONDUCT OF BUSINESS OF COMPANY AND THE SUBSIDIARIES. The Company
covenants, represents and warrants that from the date of this Restated Agreement
through the Closing Date, unless the Parent shall otherwise expressly consent in
writing, the Company shall, and the Company shall cause each Subsidiary to, use
its or their reasonable best efforts to comply in all material respects with all
Laws applicable to it or any of its properties, assets or business and maintain
in full force and effect all authorizations and permits necessary for, or
otherwise material to, such business.
ARTICLE V--ADDITIONAL COVENANTS OF PARENT
Parent covenants and agrees as follows:
5.1 CONDUCT OF BUSINESS OF PARENT AND THE ACTIVE PARENT
SUBSIDIARIES. Parent covenants, represents and warrants that from the date of
this Restated Agreement through the Closing Date, unless the Company shall
otherwise expressly consent in writing, Parent shall, and Parent shall cause
each Active Parent Subsidiary to, use its or their reasonable best efforts to
comply in all material respects with all Laws applicable to it or any of its
properties, assets or business and maintain in full force and effect all the
Parent Authorizations necessary for, or otherwise material to, such business.
5.2 NOTIFICATION OF CERTAIN MATTERS. Parent shall give prompt notice to
the Company if any of the following occur from the date of this Restated
Agreement through the Closing Date: (i) any notice of, or other communication
relating to, a default or Event which, with notice or lapse of time or both,
would become a default under any Parent Material Contract which could have a
Parent Material Adverse Effect; (ii) receipt of any notice or other
communication from any third party alleging that the Consent of such third party
is or may be required in connection with the transactions contemplated by this
Restated Agreement; (iii) receipt of any material notice or other communication
from any regulatory authority (including, but not limited to, the NYSE or any
other securities exchange) in connection with the transactions contemplated by
this Restated Agreement; (iv) receipt of any notice of or other communication
regarding or otherwise obtaining knowledge of an Event which would have a Parent
Material Adverse Effect; (v) receipt of any notice of or other communication
regarding or otherwise obtaining knowledge of the commencement or threat of
which Parent has knowledge of any Litigation involving or affecting Parent or
any Parent subsidiary or any of their respective properties or assets, or, to
its knowledge, any employee, agent, director or officer, in his or her capacity
as such, of Parent or any Parent subsidiary which, if pending on the date
hereof, would have been required to have been disclosed pursuant to
SECTION 3.7; (vi) receipt of any notice of or other communication regarding or
otherwise obtaining knowledge of any Event that could cause a breach by Parent
of any provision of this Restated Agreement or a Parent Transaction Agreement,
including such a breach that could occur if such Event had taken place on or
prior to the date of this Restated Agreement; and (vii) amendment, modification
or waiver of any provision of the Ionex Agreement referenced on SCHEDULE 3.7
hereto.
5.3 ACCESS AND INFORMATION. Between the date of this Restated Agreement
and the Closing Date, Parent (i) will, upon reasonable notice, give the Company
and its authorized representatives (including, without limitation, its financial
advisors, accountants and legal counsel) at all reasonable times access as
reasonably requested to the offices and other facilities and to all material
contracts, agreements, commitments, books and records (including, but not
limited to, Tax returns) of or pertaining to Parent and the Active Parent
Subsidiaries; (ii) will permit the Company to make such reasonable inspections
as it may require; and (iii) will cause its officers promptly to furnish the
Company with (a) such financial and operating data and other information with
respect to the business and properties of
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Parent and the Active Parent Subsidiaries as the Company may from time to time
reasonably request, and (b) a copy of each material report, schedule and other
document filed or received by Parent or any Active Parent Subsidiary pursuant to
the requirements of applicable securities Laws, the NYSE or other securities
exchange, in each case as necessary in connection with the transactions
contemplated hereby. The foregoing access will be subject to restrictions
contained in SECTION 6.7 hereof.
5.4 COMPLIANCE. In consummating the transactions contemplated hereby,
Parent shall comply in all material respects with the provisions of the
Securities Exchange Act and the Securities Act and shall comply, and/or cause
the Active Parent Subsidiaries to comply or to be in compliance, in all material
respects, with all other applicable Laws.
5.5 SEC AND SHAREHOLDER FILINGS. Parent shall send to the Company a copy
of all material public reports and materials as and when it sends the same to
its shareholders, the SEC, the NYSE or any other securities commission or
exchange.
5.6 TAX TREATMENT. Prior to the Closing Date, Parent shall provide tax
counsel rendering an opinion under Subsection 7.1(l) with a certificate
concerning such factual matters as such counsel identifies are relevant to its
opinion.
5.7 REASONABLE BEST EFFORTS. Subject to the terms and conditions herein
provided, Parent agrees to use its reasonable best efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective as promptly as practicable,
but in any event, prior to the Closing, the transactions contemplated by this
Restated Agreement and the Parent Transaction Agreements including, but not
limited to (i) obtaining the Consent of others to this Restated Agreement, the
Parent Transaction Agreements and the transactions contemplated hereby and
thereby, (ii) the defending of any Litigation against the Parent or any Parent
subsidiary, or any Shareholder challenging this Restated Agreement, the Parent
Transaction Agreements or the consummation of the transactions contemplated
hereby or thereby, (iii) obtaining all Consents from Governmental Authorities
required for the consummation of the transactions contemplated hereby,
(iv) timely making all necessary filings under the HSR Act, and (v) timely
making the Exon-Xxxxxx Filings and any filings required under the laws of Nova
Scotia, the Investment Canada Act and by the U.S. Department of Commerce's
reporting requirements for foreign investments in the United States. Upon the
terms and subject to the conditions hereof, Parent agrees to use its reasonable
best efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary to satisfy the other conditions of the Closing set
forth herein. Parent will consult with counsel for Company as to, and will
permit such counsel to participate in, at the Company's expense, any Litigation
referred to in clause (ii) above brought against or involving Parent or any
Parent subsidiary.
5.8 EMPLOYEE BENEFIT PLANS. After the Closing Date, Parent shall arrange
for each employee participating in the Benefit Plan of the Company and the
Subsidiaries at such time to participate in any counterpart Benefit Plans of
Parent in accordance with the eligibility criteria thereof, provided that
(i) such participants shall receive full credit for years of service with the
Company or any of the Subsidiaries prior to the transactions contemplated by
this Restated Agreement for all purposes for which such service was recognized
under the Benefit Plan of the Company and the Subsidiaries including, but not
limited to, recognition of service for eligibility, vesting, and, to the extent
not duplicative of benefits received under such Benefit Plan of the Company and
the Subsidiaries, the amount of benefits, and (ii) such participants shall
participate in the Benefit Plans of Parent on terms no less favorable than those
offered by Parent to similarly situated employees of Parent. Notwithstanding the
foregoing, Parent may continue one or more of the Benefit Plans of the Company
and the Subsidiaries, in which case Parent shall have satisfied its obligations
hereunder with respect to the benefits so provided.
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5.9 EXPENSES. The fees and expenses incurred in connection with the
transactions contemplated by this Restated Agreement shall be paid by the party
or parties set forth below at the time and subject to the satisfaction of the
conditions set forth below:
(a) If this Restated Agreement becomes effective pursuant to
SECTION 1.3 hereof, Parent shall pay, at such time as this Restated
Agreement becomes effective pursuant to SECTION 1.3, to ICL $75,000, which
amount shall represent reimbursement of ICL for services provided to Parent
by Xxxxxx Xxxxxx. The parties hereto agree that Parent shall have no payment
obligation with regard to the study of and report on Big Stuff prepared by
Ernst & Young LLP.
(b) If the transactions contemplated by this Restated Agreement are
consummated, at Closing Parent shall: (i) pay ICL a fee of $265,000;
(ii) upon receipt by Parent of an invoice or other similar documentation,
reimburse ICL for all other fees and expenses incurred by a party to this
Restated Agreement or a stockholder of any such party in connection with the
negotiation and effectuation of the terms and conditions of this Restated
Agreement and the June 3 YPtel Agreement and the transactions contemplated
hereby, including but not limited to all legal, accounting, financial
advisory and consulting fees, except for those previously paid pursuant to
SECTION 5.9(a) hereof; and (iii) upon receipt by Parent of an invoice or
other similar documentation, reimburse ICL for expenses incurred by ICL
relating to the renegotiation of the Company's and the Subsidiaries'
outstanding debt. The fees and expenses described in this SECTION 5.9(b) are
referred to collectively hereinafter as the "TRANSACTION FEES AND EXPENSES".
If the transactions contemplated by this Restated Agreement are not
consummated, all Transaction Fees and Expenses shall be and remain the
obligation of the respective parties that incurred them.
5.10 INDEMNIFICATION AND INSURANCE.
(a) Subject to SECTION 9.1(b), Parent shall cause the Company, to the
full extent required under the Company's Articles of Incorporation or Bylaws
in effect on the date of this Restated Agreement, to indemnify and hold
harmless each present and former director, officer, employee or agent of the
Company and the Subsidiaries (COLLECTIVELY, THE "INDEMNIFIED PARTIES") with
respect to matters occurring through the Closing Date, for a period of three
(3) years after the Closing Date.
(b) For a period of three (3) years after the Closing Date and to the
extent available, Parent shall cause the Company to maintain in effect
directors' and officers' liability insurance covering those Persons who are
currently covered by the Company's directors and officers' liability
insurance policy on terms (including the amounts of coverage and the amounts
of deductibles, if any) that are no less favorable to them in any material
respect than the terms now applicable to them under the Company's current
insurance policies.
ARTICLE VI--ADDITIONAL COVENANTS OF THE PARENT,
THE COMPANY AND THE SHAREHOLDERS
6.1 REGISTRATION OF SECURITIES.
(a) On or before the Closing Date, the Parent shall use its reasonable
best efforts to cause the following securities to be registered with the SEC
under the Securities Act and with the appropriate Governmental Authorities
under state blue sky Laws:
(i) the 15,000,000 shares of Parent Common Stock to be transferred to
the Shareholders, whether at Closing or pursuant to the subsequent
exchange of the Class A Special Shares; and
(ii) the 75,000 warrants to purchase 75,000 shares of Parent Common
Stock to be granted to the current directors and/or officers of the
Company as listed on SCHEDULE 6.5(b)(i) hereof; and
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(iii) the 75,000 shares of Parent Common Stock issuable upon the exercise
of the 75,000 warrants referenced in SECTION 6.1(a)(ii) above.
(b) On or before the Closing Date, the Parent shall use its reasonable
best efforts to cause the following securities to be registered with the
appropriate Governmental Authorities or exempted from the registration and
prospectus requirements under the Canadian and provincial securities Laws
and the rules and regulations thereunder:
(i) Class A Special Shares;
(ii) Parent Common Stock transferable to the Shareholders by Newco II
pursuant to SECTION 1.2(b)(ii) hereof upon exchange by such
Shareholder of Company Common Stock; and
(iii) Parent Common Stock transferable to the Shareholders by Newco II
pursuant to SECTION 1.2(b)(ii) hereof upon exchange by such
Shareholder of the Class A Special Shares.
(c) As soon as reasonably practicable after the Closing Date, the Parent
shall use its reasonable best efforts to cause the following securities to
be registered with the SEC under the Securities Act and with the appropriate
Governmental Authorities under state blue sky Laws and where applicable, the
Canadian federal and provincial securities Laws and the rules and
regulations thereunder:
(i) the 186,281 warrants to purchase 186,281 shares of Parent Common
Stock to be granted to the current directors of the Company as
listed on SCHEDULE 6.5(b)(i) attached hereto;
(ii) the 186,281 shares of Parent Common Stock issuable upon the
exercise of the 186,281 warrants referenced in SECTION 6.1(c)(i)
above;
(iii) the 90,000 warrants to purchase 90,000 shares of Parent Common
Stock granted to the certain current or former non-employee
directors of the Parent pursuant to SECTION 6.9(ii) hereof; and
(iv) the 90,000 shares of Parent Common Stock issuable upon the exercise
of the 90,000 warrants referenced in SECTION 6.1(c)(iii) above.
(d) The registration statements referenced in SECTIONS 6.1(a)-(c) hereof
are hereinafter referred to collectively as the "REGISTRATION STATEMENTS."
(e) The Registration Statements shall state, if permitted on the
applicable registration statement form, that such Registration Statement
also registers such indeterminate number of additional shares of Parent
Common Stock as may become issuable to prevent dilution resulting from stock
splits, stock dividends or similar transactions with regard to Parent Common
Stock or Class A Special Shares.
(f) The Parent shall promptly prepare and file such amendments
(including post-effective amendments) and supplements to the Registration
Statements and the prospectus(es) used in connection with the Registration
Statements, as may be necessary to keep the Registration Statements
effective at all times during the periods the Class A Special Shares are
exchangeable and the warrants and options referenced in SECTIONS
6.1(a)(iii), 6.1(b)(iii), 6.1(c)(ii) and 6.1(c)(iv) are exercisable. The
Parent shall use its reasonable best efforts to cause such amendment and/or
new registration statements to become effective as soon as practicable
following the filing thereof.
(g)
(i) On or before the Closing Date, Parent shall cause all Parent
Common Stock issuable upon the exercise of the warrants referenced in
SECTION 6.1(a)(ii) to be listed on each securities exchange on which the
Parent Common Stock is then listed for trading.
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(ii) As soon as reasonably practicable after the Closing Date, Parent
shall use its reasonable best efforts to cause all Parent Common Stock
issuable upon the exercise of the warrants referenced in Sections and
6.1(c)(iii) to be listed on each securities exchange on which the Parent
Common Stock is then listed for trading.
6.2 LEGAL REQUIREMENTS. Subject to the terms and conditions provided in
this Restated Agreement, each of the parties hereto shall use its reasonable
best efforts to take promptly, or cause to be taken, all reasonable actions, and
to do promptly, or cause to be done, all things necessary, proper or advisable
under applicable Laws to consummate and make effective the transactions
contemplated hereby, to obtain all necessary waivers, consents and approvals,
and to effect all necessary registrations and filings and to remove any
injunctions or other impediments or delays, legal or otherwise, in order to
consummate and make effective the transactions contemplated by this Restated
Agreement for the purpose of securing for the parties hereto the benefits
contemplated by this Restated Agreement.
6.3 EXCHANGE AND VOTING TRUST AGREEMENT. At the Closing, Parent, Newco I,
Newco II, a trustee mutually satisfactory to Parent and Company, and those
Shareholders who will become the holders of all the Class A Special Shares on
the Closing Date (by ICL, as attorney-in-fact for certain Shareholders plus The
J.L.R. Family Trust and The Paisley Family Trust) shall enter into an Exchange
and Voting Trust Agreement substantially in the form of EXHIBIT C attached
hereto and which sets forth the agreement of the parties thereto with respect to
the procedures for voting the Parent Class B Voting Preferred Stock and the
exchange of the Class A Special Shares for Parent Common Stock (THE "EXCHANGE
AND VOTING TRUST AGREEMENT").
6.4 PUBLIC ANNOUNCEMENTS. All press releases and other disseminations of
information to employees, customers or suppliers relating to the transactions
contemplated by this Restated Agreement by any party hereto shall require the
prior approval of Parent and the Company, provided Parent shall have the right
to make such public announcements without the approval of the other parties
hereto should such disclosure be required by Law or the policies or requirements
of Canadian or United States securities regulators, stock exchanges, or other
relevant entities in the opinion of Parent's legal counsel. Should such
disclosure be required, Parent agrees to provide the others with reasonable
advance notice of and a copy of the proposed disclosure.
6.5 CONDUCT OF BUSINESS PRIOR TO CLOSING DATE. Except as expressly
contemplated by this Restated Agreement, during the period from the date of this
Restated Agreement to the Closing Date, the Company shall conduct, and it shall
cause the Subsidiaries to conduct, its or their businesses in the ordinary
course and consistent with past practice, subject to the limitations contained
in this Restated Agreement, and the Company shall, and it shall cause the
Subsidiaries to, use its or their reasonable best efforts to preserve intact its
business organization, to keep available the services of its officers, agents
and employees and to maintain satisfactory relationships with all Persons with
whom it does business. Except as expressly contemplated by this Restated
Agreement, and it being acknowledged and agreed by each of the parties to this
Restated Agreement that Parent is in the process of a substantial reduction in
workforce, and, subject to the sale of the CLEC Operations, Parent shall, and it
shall cause the Active Parent Subsidiaries to, use its or their reasonable best
efforts to preserve intact its business organization, consistent with the budget
adopted by the Executive Committee of the Board of Directors of Parent, to keep
available the services of only those officers, agents and employees whom Parent
believes are required to maintain satisfactory relationships with all Persons
with whom it does business. Without limiting the generality of the foregoing,
and except as otherwise expressly provided in this Restated Agreement, after the
date of this Restated Agreement and prior to the Closing Date, (i) neither the
Company nor any Subsidiary will, without the prior written consent of Parent;
and
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(ii) subject to the sale of the CLEC Operations, neither Parent nor any Active
Parent Subsidiary will, without the prior written consent of the Company:
(a) except as provided for in this Restated Agreement, amend or propose
to amend its Certificate or Articles of Incorporation or Bylaws (or
comparable governing instruments) in any material respect;
(b) except as set forth on SCHEDULE 6.5(b)(i), with regard to the
Company or the Subsidiaries, or on SCHEDULE 6.5(b)(ii), with regard to
Parent or the Parent subsidiaries, authorize for issuance, issue, grant,
sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose
of any shares of, or any options, warrants, commitments, subscriptions or
rights of any kind to acquire or sell any shares of, the capital stock or
other securities of the Company or any Subsidiary, or of Parent or any
Parent subsidiary, including, but not limited to, any securities convertible
into or exchangeable for shares of stock of any class of the Company or any
Subsidiary, or of Parent or any Parent subsidiary, as the case may be;
(c) except as provided for in this Restated Agreement, split, combine or
reclassify any shares of its capital stock or declare, pay or set aside any
dividend or other distribution (whether in cash, stock or property or any
combination thereof) in respect of its capital stock, other than dividends
or distributions to the Company or a Subsidiary, or to Parent or a Parent
subsidiary, as the case may be, or redeem, purchase or otherwise acquire or
offer to acquire any shares of its capital stock or other securities;
(d) except for debt (including, but not limited to, obligations in
respect of capital leases) disclosed on the financial statements of the
Company delivered to Parent prior to the date of this Restated Agreement and
changes thereto occurring in the ordinary course of business, (i) create,
incur or assume any short-term debt, long-term debt or obligations in
respect of capital leases, and indebtedness contemplated by this Restated
Agreement; (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, indirectly, contingently or otherwise) for
the obligations of any Person, except for obligations permitted by this
Restated Agreement of any subsidiary or Parent subsidiary, as the case may
be, in the ordinary course of business consistent with past practice;
(iii) except as contemplated in this Restated Agreement, make any capital
expenditures or make any loans, advances or capital contributions to, or
investments in, any other Person (other than customary advances to employees
made in the ordinary course of business consistent with past practice),
PROVIDED the Company will continue to make capital expenditures in
accordance with its budget, maintain, upgrade or expand its facilities and
those of the Subsidiaries, as the case may be, and otherwise operate in the
ordinary course and consistent with past practice; (iv) acquire the stock or
assets of, or merge or consolidate with, any other Person except as
contemplated in this Restated Agreement and the contemplated WorldPages
Acquisition; or (v) voluntarily incur any material liability or obligation
(absolute, accrued, contingent or otherwise), except in the ordinary course
of business;
(e) except in the ordinary course of business or as set forth in
SCHEDULE 6.5(e) or as otherwise permitted by this Restated Agreement, sell,
transfer, mortgage, pledge or otherwise dispose of, or encumber, or agree to
sell, transfer, mortgage, pledge or otherwise dispose of or encumber, any
material assets or properties, real, personal or mixed, except the sale of
the CLEC Operations, in the case of Parent and the Active Parent
Subsidiaries;
(f) increase in any manner the compensation of any of its officers,
agents or employees other than any increases required pursuant to their
employment agreements in accordance with their terms in effect on the date
of this Restated Agreement and increases in the ordinary course of business
consistent with past practice not in excess on an individual basis of the
lesser of 10% of the current compensation of such individual or U.S. $10,000
per annum;
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(g) enter into, establish, amend, make non-routine or material
interpretations or determinations with respect to, or terminate any
employment, consulting, retention, change in control, collective bargaining,
bonus or other incentive compensation, profit sharing, health or other
welfare, stock option, stock purchase, restricted stock, or other equity,
pension, retirement, vacation, severance, deferred compensation or other
compensation or benefit plan, policy, agreement, trust, fund or arrangement
with, for or in respect of, any shareholder, officer, director, other
employee, agent, consultant or affiliate, other than actions contemplated by
this Restated Agreement or in the ordinary course of business or those
agreements in connection with the WorldPages Acquisition.
(h) except with regard to the Xxxxxxx matter referenced on SCHEDULE 3.7
attached hereto, compromise, settle, grant any waiver or release relating to
or otherwise adjust any Litigation, except routine Litigation in the
ordinary course of business consistent with past practice, involving only a
payment not in excess of U.S. $50,000 individually or U.S. $100,000 when
aggregated with all such payments by the Company and the Subsidiaries
combined or Parent and the Active Parent Subsidiaries combined, as the case
may be;
(i) (i) with respect to the Company or the Shareholders, take any action
or omit to take any action, which action or omission would result in a
breach of any of the covenants, representations and warranties of the
Company or Shareholders set forth in this Restated Agreement or which would
have a Company Material Adverse Effect and (ii) with respect to Parent, take
any action or omit to take any action, which action or omission would result
in a breach of any of the covenants, representations and warranties of the
Parent set forth in this Restated Agreement or which would have a Parent
Adverse Effect;
(j) except in the ordinary course of business, enter into any lease or
other agreement, or amend any lease or other agreement, with respect to real
property;
(k) (i) except as set forth in SECTION 6.5(k)(ii) or SECTION 11.2
hereof, and except in the ordinary course of business, enter into or amend
any agreement or transaction (A) pursuant to which the aggregate financial
obligation of the Company or a Subsidiary, or of Parent or a Parent
Subsidiary as the case may be, or the value of the services to be provided
could exceed U.S. $50,000, (B) having a term of more than 12 months and
pursuant to which the aggregate financial obligation of the Company or a
Subsidiary, or of Parent or a Parent Subsidiary as the case may be, or the
value of the services to be provided could exceed U.S. $100,000 per year, or
(C) which is not terminable upon no more than 30 days' notice without
penalty in excess of U.S. $50,000 individually or U.S. $100,000 when
aggregated with the penalties under all such agreements or transactions;
(ii) The parties hereto expressly agree that notwithstanding
anything in this Restated Agreement to the contrary, Parent may modify,
amend or waive its rights, including those respecting its indemnification
obligations, under (A) the Ionex Agreement referenced on SCHEDULE 3.13
attached hereto; (B) the Restated Web YP Agreement; and (C) the Restated Big
Stuff Agreement; PROVIDED that such modifications, amendments and/or waivers
do not, or would not reasonably be expected to, materially increase Parent's
obligations or materially adversely affect Parent's rights under each
respective agreement, or otherwise materially affect the consideration to be
received under each respective agreement.
(l) subject to SECTION 6.5(k)(ii) hereof, take any action with respect
to the indemnification of any Person;
(m) change any accounting practices or policies, except as required by
generally accepted accounting principles or Laws as agreed to or requested
by the Company's or Parent's auditors after consultation with Parent's or
the Company's auditors, as the case may be;
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(n) subject to SECTION 6.5(k)(ii) hereof, or except in the ordinary
course of business, enter into, amend, modify, terminate or waive any rights
under any Company Material Contract or Parent Material Contract;
(o) adopt a plan of liquidation, dissolution, exchange, consolidation,
share exchange, restructuring, recapitalization, or other reorganization;
PROVIDED, HOWEVER, that Parent may adopt such a plan and may cause the
liquidation or dissolution of any Parent subsidiary if Parent is unable to
sell such Parent subsidiary (i) at a price which Parent determines to be
reasonable; and (ii) during a time period which Parent determines to be
reasonable; or
(p) resolve, agree, commit or arrange to do any of the foregoing.
Furthermore, the Company covenants, represents and warrants that from and
after the date hereof, unless Parent shall otherwise expressly consent in
writing, the Company shall, and the Company shall cause each Subsidiary to, use
its or their reasonable best efforts to:
(A) keep in full force and effect insurance comparable in amount and
scope of coverage to insurance now carried by it;
(B) pay all accounts payable and other obligations in the ordinary
course of business consistent with past practice and with the provisions of
this Restated Agreement, except if the same are contested in good faith,
and, in the case of the failure to pay any material accounts payable or
other obligations which are contested in good faith, only after consultation
with Parent; and
(C) comply in all material respects with all Laws applicable to it or
any of its properties, assets or business and maintain in full force and
effect all Company Permits necessary for, or otherwise material to, such
business.
Furthermore, Parent covenants, represents and warrants that from and after
the date hereof, unless Company shall otherwise expressly consent in writing,
Parent shall, and Parent shall cause each Active Parent Subsidiary to, use its
or their reasonable best efforts to:
(1) keep in full force and effect insurance comparable in amount and
scope of coverage to insurance now carried by it;
(2) pay all accounts payable and other obligations consistent with
prudent cash management principles, except if the same are contested in good
faith, and, in the case of the failure to pay any material accounts payable
or other obligations which are contested in good faith, only after
consultation with Company; and
(3) comply in all material respects with all Laws applicable to it or
any of its properties, assets or business, except for such Laws the failure
to comply with which would not have a Parent Material Adverse Effect, and
maintain in full force and effect all Parent Permits necessary for, or
otherwise material to, such business, except for such Parent Permits the
failure of which to maintain would not have a Parent Material Adverse
Effect.
6.6 NO SOLICITATION OF ACQUISITION PROPOSAL. Unless Parent, the Company,
ICL and the ICL Principals shall agree in advance, in writing, neither Parent,
the Company, ICL, the ICL Principals nor any of their respective affiliates
(including, without limitation, directors, officers, employees, agents,
representatives and shareholders or any affiliates or associates thereof)
("ASSOCIATES") shall, directly or indirectly, make, encourage, facilitate,
solicit, assist or initiate any inquiry or proposal, or provide any information
to or participate in any negotiations with, any Person (other than the parties
to this Restated Agreement and their Associates) relating to any of the
following transactions ("EXTRAORDINARY TRANSACTIONS"): (i) liquidation,
dissolution, recapitalization, share exchange, business combination, exchange or
consolidation of the Company or a Subsidiary or Parent or a Parent subsidiary,
(ii) sale of
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a significant amount of assets of the Company or a Subsidiary or Parent or a
Parent subsidiary, (iii) purchase or sale of shares of capital stock of the
Company or a Subsidiary or Parent or a Parent subsidiary, or (iv) any similar
actions or transactions involving the Company or a Subsidiary or Parent or a
Parent subsidiary (other than the transactions contemplated by this Restated
Agreement), or agree to or consummate any Extraordinary Transaction. The parties
hereto shall immediately inform Parent and the Company of any inquiry, proposal,
or request for information or offer (including the terms thereof and the Person
making such inquiry, proposal, request or offer) which it may receive in respect
of an Extraordinary Transaction and provide Parent and Company with a copy of
any such written inquiries, proposals, requests for information and offers, and
thereafter keep Parent and Company fully informed of the status and details
thereof. The parties hereto acknowledge and agree that the provisions of this
SECTION 6.6 shall not apply to: (a) the sale of the CLEC Operations by Parent or
any Parent subsidiary; (b) the WorldPages Acquisition; or (c) any communications
between or actions by Parent (or any Parent subsidiary), the Company and ICL,
acting jointly, on the one hand, and any Person not a party to this Restated
Agreement, on the other hand, which occurred prior to the date that this
Restated Agreement becomes effective pursuant to SECTION 1.3 hereof.
6.7 CONFIDENTIALITY. Unless (i) otherwise expressly provided in this
Restated Agreement, (ii) required by Applicable Law or any listing agreement
with, or the rules and regulations of, any applicable securities exchange,
(iii) necessary to secure any required Consents as to which the other party has
been advised, or (iv) consented to in writing by Parent and the Company, this
Restated Agreement and any information or documents furnished in connection
herewith shall be kept strictly confidential by the Company, Parent and their
respective officers, directors, employees and agents. Prior to any disclosure
pursuant to the preceding sentence, the party intending to make such disclosure
shall consult with the other party regarding the nature and extent of the
disclosure. Nothing contained herein shall preclude disclosures to the extent
necessary to comply with accounting, SEC and other disclosure obligations
imposed by applicable Law. To the extent required by such disclosure
obligations, Parent, after consultation with the Company, may file with the SEC
a Report on Form 8-K pursuant to the Securities Exchange Act with respect to the
Transactions contemplated by this Restated Agreement, which report may include,
among other things, financial statements and pro forma financial information
with respect to the other party. In connection with any filing with the SEC of a
registration statement or amendment thereto under the Securities Act, Parent,
after consultation with the Company, may include a prospectus containing any
information required to be included therein with respect to the Transactions
contemplated by this Restated Agreement, including, but not limited to,
financial statements and pro forma financial information with respect to the
other party, and thereafter distribute said prospectus. Parent and the Company
shall cooperate with the other and provide such information and documents as may
be required in connection with any such filings. In the event the Transactions
contemplated by this Restated Agreement are not consummated, Parent and the
Company shall return to the other all documents furnished by the other and will
hold in absolute confidence any information obtained from the other party except
to the extent (i) such party is required to disclose such information by Law or
such disclosure is necessary or desirable in connection with the pursuit or
defense of a claim, (ii) such information was known by such party prior to such
disclosure or was thereafter developed or obtained by such party independent of
such disclosure, (iii) such party received such information on a
non-confidential basis from a source, other than the other party, which is not
known by such party to be bound by a confidentiality obligation with respect
thereto or (iv) such information becomes generally available to the public or is
otherwise no longer confidential. Prior to any disclosure of information
pursuant to the exception in clause (i) of the preceding sentence, the party
intending to disclose the same shall so notify the party which provided the same
in order that such party may seek a protective order or other appropriate remedy
should it choose to do so.
6.8 CAPITAL STOCK AND DERIVATIVE SECURITIES. In addition to the capital
stock of Parent to be issued pursuant to ARTICLE I of this Restated Agreement,
the Board of Directors of Parent shall have the right to grant or issue (i) the
options to acquire shares of Parent Common Stock pursuant to the Parent's
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1997 Stock Awards Plan which are listed on the attached SCHEDULE 6.5(b)(ii);
(ii) restricted stock valued at, or warrants to purchase up to 90,000 shares of
Parent Common Stock at an exercise price of U.S. $6.96 per share to be issued to
certain non-employee directors of Parent who were responsible for negotiating
the June 3 YPtel Agreement and the WorldPages Acquisition; (iii) the shares of
Parent Common Stock issuable upon conversion at Closing of the Great Western
Notes at a conversion price of U.S. $5.50 per share; (iv) up to 1,090,909 shares
of Parent Common Stock issuable at U.S. $5.50 per share upon redemption of one
or more notes which may be issued to the current shareholders of Web and Big
Stuff who may lend up to Six Million Dollars (U.S. $6,000,000.00) to Web or Big
Stuff as provided in the agreements by which Parent may acquire Web and Big
Stuff; (v) the shares of Parent Common Stock to be issued upon exercise of
options or warrants to be granted at Closing to those persons and at such
exercise prices as listed in SCHEDULE 6.5(b)(i); and (vi) one (1) share of
Parent Class B Voting Preferred Stock to be issued to the trustee under the
Exchange and Voting Trust Agreement pursuant to SECTION 1.2(c) hereof.
ARTICLE VII--CONDITIONS TO CLOSING
7.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO CLOSING. The respective
obligations of each party to this Restated Agreement to consummate and effect
this Restated Agreement and the transactions contemplated hereby shall be
subject to the satisfaction or waiver at or prior to the Closing Date of the
following conditions:
(a) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary restraining
order, preliminary or permanent injunction or other order issued by any
court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the transactions contemplated by this
Restated Agreement shall be in effect, nor shall any proceeding brought by
an administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, seeking any of the foregoing be
pending; nor shall there be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
transactions contemplated by this Restated Agreement, which makes the
consummation of the transactions contemplated by this Restated Agreement
illegal.
(b) EXCHANGE AND VOTING TRUST AGREEMENT. The Exchange and Voting Trust
Agreement shall have been duly executed and delivered by all parties thereto
and shall be in full force and effect.
(c) GOVERNMENT APPROVALS. All consents, other than consents the
failure of which to be obtained, in the judgment of Parent, would not have a
Company Material Adverse Effect, of any domestic or foreign Governmental
Authority required for the consummation of the transactions contemplated by
this Restated Agreement shall have been obtained by Final Order.
(d) RELATED TRANSACTIONS. The acquisition by Parent, or a direct or
indirect Subsidiary of Parent, of Web and Big Stuff in a tax free
reorganization shall have been consummated and any registration statement(s)
required for the registration of Parent Common Stock issued to Web and Big
Stuff as consideration in connection with the acquisition by Parent shall
have been declared effective and no stop order suspending the effectiveness
of such registration statement(s) shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the SEC; and the
Great Western Notes shall have been satisfied by the issuance of Parent
Common Stock to the Great Western Shareholders.
(e) FINANCING. Parent and the Active Parent Subsidiaries and the
Company and the Subsidiaries shall have received from their lenders (both in
Canada and in the United States) an extension of all of their and their
subsidiaries' debt owing by them on terms and conditions satisfactory to
Parent and the Company or all such debts shall be refinanced on terms
satisfactory to Parent and the Company or any consents and approvals
required from such lenders is received.
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(f) SHAREHOLDER APPROVAL. All necessary approvals of the Shareholders
and the shareholders of Parent in connection with the transactions
contemplated by this Restated Agreement shall have been obtained.
(g) REQUIRED CONSENTS. Any required Consents of any Person to the
transactions contemplated by this Restated Agreement shall have been
obtained on terms and conditions reasonably acceptable to Parent and the
Company and be in full force and effect, except for those the failure of
which to obtain, in the reasonable judgment of Parent and Company, would not
have a Company Material Adverse Effect or Parent Material Adverse Effect.
(h) HSR ACT, EXON-XXXXXX FILINGS AND INVESTMENT CANADA ACT. A
determination that the transactions contemplated by this Restated Agreement
are permitted shall have been received from the Committee on Foreign
Investment in connection with the Exon-Xxxxxx Filings and any waiting period
applicable to the transactions contemplated by this Restated Agreement under
the HSR Act and the Investment Canada Act shall have expired or earlier
termination thereof shall have been granted and no action shall have been
instituted by either the United States Department of Justice or the United
States Federal Trade Commission or appropriate Canadian Governmental
Authorities to prevent the consummation of the transactions contemplated by
this Restated Agreement or to modify or amend such transactions in any
material manner, or if any such action shall have been instituted, it shall
have been withdrawn or a final judgment shall have been entered against such
Department or Commission or Canadian Governmental Authority, as the case may
be.
(i) REGISTRATION STATEMENT. The Registration Statement(s) shall have
been declared effective and no stop order suspending the effectiveness of
the Registration Statement(s) shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the SEC or any
Governmental Authority, whether state, federal, Canadian federal or
provincial.
(j) BLUE SKY. Parent shall have received all state securities Law and
Canadian federal or provincial authorizations or exemptions necessary to
consummate the transactions contemplated hereby.
(k) FAIRNESS OPINION. The written opinion received by Parent's Board
of Directors from its financial advisors, PaineWebber Incorporated, pursuant
to SECTION 1.3 shall not have been withdrawn.
(l) TAX OPINION. Parent and the Company shall have received an opinion
from Xxxxxxx Xxxxx & Xxxxxxxxx based on customary representations contained
in certificates of Parent, and the Company, to the effect that, if the
transactions contemplated by SECTION 1.2(b) of this Restated Agreement are
consummated in accordance with the provisions of this Restated Agreement,
the Shareholders who do not immediately exchange the Company Common Stock
owned by them for Parent Common Stock pursuant to this Restated Agreement
and who are residents of Canada and hold shares as capital property will be
able to treat the transactions contemplated by this Restated Agreement as a
tax deferred transfer pursuant to Subsection 85(1) utilizing the provisions
of Subsection 85(1) of the Income Tax Act [Canada] provided that such
Shareholders and Newco II timely make all joint elections.
(m) NYSE LISTING APPROVAL. Parent shall have received from the NYSE
approval for listing with the NYSE of the Parent Common Stock to be issued
pursuant to this Restated Agreement, the Restated Web YP Agreement and the
Restated Big Stuff Agreement.
(n) TRANSACTION FEES AND EXPENSES. ICL shall have received payment of
the Transaction Fees and Expenses pursuant to SECTION 5.9(b).
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(o) SUPPORT AGREEMENT. The Support Agreement, substantially in the
form of EXHIBIT D attached hereto, shall have been duly executed and
delivered by all parties thereto and shall be in full force and effect.
(p) SALE OF CLEC OPERATIONS. The sale of the CLEC Operations,
contemplated under the Ionex Agreement referenced on SCHEDULE 3.13 hereof,
shall have closed.
7.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF SHAREHOLDERS AND COMPANY. The
obligations of the Company, ICL, the ICL Principals and the Shareholders to
consummate and effect this Restated Agreement and the transactions contemplated
hereby shall be subject to the satisfaction at or prior to the Closing Date of
each of the following conditions, any of which may be waived, in writing, by the
Company, ICL, the ICL Principals and a majority of the Shareholders:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS.
(i) The representations and warranties of Parent in this Restated
Agreement that are modified by materiality or Parent Material Adverse
Effect ("PARENT MODIFIED REPRESENTATION") shall be true and correct in
all respects and those that are not so modified ("PARENT NONMODIFIED
REPRESENTATION") shall be true and correct in all material respects on
the date hereof and, except for changes not prohibited by this Restated
Agreement, as of the Closing Date as if made at the Closing Date.
Furthermore, none of the representations or warranties of Parent
contained in this Restated Agreement, disregarding any qualifications
therein or in this SECTION 7.2(a) regarding Materiality or Parent
Material Adverse Effect, shall be untrue or incorrect to the extent that
such untrue or incorrect representations or warranties, when taken
together as a whole, have had or would have a Parent Material Adverse
Effect; and
(ii) Parent shall have performed and complied with all of the
covenants and agreements in all material respects and satisfied in all
material respects all of the conditions required by this Restated
Agreement to be performed or complied with or satisfied by Parent at or
prior to the Closing Date. Notwithstanding anything in this Restated
Agreement to the contrary, the parties hereto acknowledge and agree that
the consummation of the transactions contemplated by this Restated
Agreement and subsequent disposition of the CLEC Operations constitutes a
significant change from the plans and strategies described in the 1998
Form 10-K such that the representations and warranties of Parent that
reference the 1998 Form 10-K will not be true and correct as of the
Closing Date as they relate to the plans and strategies of the business
of Parent at Closing.
(b) CERTIFICATE OF PARENT AND OTHER DELIVERIES. The Company, ICL, the
ICL Principals and the Shareholders shall have been provided, with (i) a
certificate executed on behalf of Parent by an Officer to the effect that,
as of the Closing Date, all representations and warranties made by Parent
under this Restated Agreement are true and complete except as set forth in
SECTION 7.2(a); and all covenants, obligations and conditions of this
Restated Agreement to be performed by Parent on or before such date have
been so performed; (ii) a certificate of good standing from the Secretary of
State of the State of Delaware that Parent is a validly existing
corporation; (iii) duly adopted resolutions of the Board of Directors of
Parent approving the execution, delivery and performance of this Restated
Agreement and the Company Transaction Agreements to which it is a party and
the instruments contemplated hereby and thereby, certified by its Secretary
or Assistant Secretary; and (iv) such other documents and instruments as the
Company may reasonably request.
(c) LEGAL OPINION. The Company and the Shareholders shall have
received a legal opinion as to U.S. law issues from Xxxxxxxxx Xxxxxxx Xxxxx
Xxxxxx LLP, legal counsel to Parent (and if requested by the Company from
Canadian legal counsel for Parent as to Canadian law issues), in a form
reasonably acceptable to the Company and its legal counsel that addresses
matters typically
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covered in legal opinions in transactions similar to the transactions
contemplated by this Restated Agreement, including without limitation, the
authority of Parent to enter into this Restated Agreement and the Parent
Transaction Agreements and consummate the transactions contemplated hereby
and thereby and that the securities referenced in SECTION 6.1(a) or
SECTION 6.1(b) hereof shall have been registered with the SEC under the
Securities Act and shall have been listed for trading on the NYSE on or
before the Closing Date.
(d) KPMG OPINION. Parent shall have received the opinion from KPMG LLP
referenced in SECTION 7.3(d) hereof, and such opinion shall not have been
withdrawn.
(e) ICL PAYMENT. Parent shall have paid U.S. $75,000 to ICL, in
satisfaction of its obligation under SECTION 5.9(a) hereof.
(f) OUTSTANDING PARENT STOCK. Not more than the number of shares of
Parent as reflected in the 1998 10-K shall be outstanding on a fully diluted
basis, except as permitted by SECTION 6.9.
(g) NO MATERIAL ADVERSE CHANGE. There shall not have occurred after
the date hereof any Event that has or reasonably could be expected to have a
Parent Material Adverse Effect.
(h) LITIGATION. Except as set forth on SCHEDULE 3.7 hereof, there
shall be no action, suit, claim or proceeding of any nature pending, or
overtly threatened, against Parent or the Company, their respective
properties or any of their officers or directors, arising out of, or in any
way connected with, the Transactions contemplated by this Restated Agreement
or the other transactions contemplated by the terms of this Restated
Agreement which individually or in the aggregate may cause a Material
Adverse Effect.
(i) STOCK OPTIONS. The stock options listed on SCHEDULE 6.5(b)(i)
attached hereto shall have been granted by the Parent.
(j) ASSIGNMENT AND ASSUMPTION AGREEMENTS. To the extent that any
Shareholder has transferred shares pursuant to SECTION 1.1(f) hereof, the
assignment and assumption agreements referenced in SECTION 1.1(f) shall have
been duly executed and delivered by Parent.
7.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF PARENT. The obligations of
Parent to consummate and effect this Restated Agreement and the transactions
contemplated hereby shall be subject to the satisfaction at or prior to the
Closing Date of each of the following conditions, any of which may be waived, in
writing, exclusively by Parent:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS.
(i) The Company Modified Representations shall be true and correct in
all respects, and the Company Nonmodified Representations shall be true
and correct in all material respects, on the date hereof and, except for
changes not prohibited by this Restated Agreement, as of the Closing Date
as if made at the Closing Date. Furthermore, none of the representations
or warranties of the Company or Shareholders contained in this Restated
Agreement, disregarding any qualifications therein or in this
SECTION 7.3(a) regarding materiality or Company Material Adverse Effect,
shall be untrue or incorrect to the extent that such untrue or incorrect
representations or warranties, when taken together as a whole, have had
or would have a Company Material Adverse Effect; and
(ii) The Company and Shareholders shall have performed and complied
with all the covenants and agreements in all material respects and
satisfied in all material respects all the conditions required by this
Restated Agreement to be performed or complied with or satisfied by the
Company and Shareholders at or prior to the Closing Date.
(b) CERTIFICATE OF THE COMPANY AND OTHER DELIVERIES. Parent shall have
been provided with (i) a certificate executed on behalf of the Company by
its Chief Executive Officer to the effect
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that, as of the Closing Date all representations and warranties made by the
Company in this Restated Agreement are true and correct; and all covenants,
obligations and conditions of this Restated Agreement to be performed by the
Company and ICL on behalf of the Shareholders on or before such date have
been so performed; (ii) a certificate of good standing from the proper
authority in the jurisdictions in which the Company and the Subsidiaries are
incorporated or qualified to do business stating that each is a validly
existing corporation in good standing; (iii) duly adopted resolutions of the
Board of Directors of the Company approving the execution, delivery and
performance of this Restated Agreement and the Parent Transaction Agreements
to which the Company is a party and the instruments contemplated hereby and
thereby, certified by the Secretary or Assistant Secretary of the Company;
(iv) a true and complete copy of the Articles or Certificate of
Incorporation or comparable governing instruments, as amended, of the
Company and each of the Subsidiaries certified by the Secretary of State of
the state of incorporation or comparable authority in other jurisdictions,
and a true and complete copy of the Bylaws or comparable governing
instruments, as amended, of Parent and each of the Subsidiaries certified by
the Secretary thereof; (v) the duly executed Resignations on terms and
conditions reasonably acceptable to Parent; and (vi) such other documents
and instruments as Parent reasonably may request.
(c) LEGAL OPINION. Parent shall have received (i) a legal opinion as
to Canadian law issues from Xxxxxxx Xxxxx & Xxxxxxxxx, legal counsel to the
Company, (and if requested by Parent from U.S. legal counsel for the Company
as to U.S. law issues) in a form reasonably acceptable to Parent and its
legal counsel that addresses matters typically covered in legal opinions in
transactions similar to the transactions contemplated by this Restated
Agreement, including without limitation, the authority of all of the
Shareholders, the Company and ICL to enter into this Restated Agreement and
consummate the transactions contemplated hereby and, if required by Parent,
that the shares of Company Common Stock to be transferred to Newco II are
subject to the Powers of Attorney; and (ii) an opinion from Barbadian legal
counsel that the trustees of the Barbadian Trusts have the authority to
execute this Restated Agreement on behalf of the Barbadian Trusts and that
the Barbadian Trusts have the authority to enter into this Restated
Agreement and the Company Transaction Agreements and consummate the
transactions contemplated hereby and thereby and to hold the Parent Common
Stock that will be issued to the Barbadian Trusts pursuant to this Restated
Agreement.
(d) KPMG OPINION. Parent shall have received an opinion from KPMG LLP,
its independent certified public accountants, that upon completion of the
reorganization described in SECTIONS 1.1(a), 1.2(c) and 1.2(d) hereof,
Parent can properly file a consolidated income Tax return on behalf of a
consolidated group which would include Parent, YPTI and the Subsidiaries and
that the YPTI transactions can be accomplished as a tax free reorganization
under the Code, and such opinion shall not have been withdrawn.
(e) LITIGATION. There shall be no action, suit, claim or proceeding of
any nature pending, or overtly threatened, against Parent or the Company,
their respective properties or any of their officers or directors, arising
out of, or in any way connected with, the transactions contemplated by this
Restated Agreement or the other transactions contemplated by the terms of
this Restated Agreement which individually or in the aggregate may cause a
Parent Material Adverse Effect or a Company Material Adverse Effect.
(f) NO MATERIAL ADVERSE CHANGE. There shall have not occurred after
the date hereof any Event that has or reasonably could be expected to have a
Company Material Adverse Effect.
(g) YPTI TRANSACTIONS. Parent shall have received evidence from the
Company reasonably satisfactory to Parent that the YPTI Reclassification has
been completed and Parent shall have completed the purchase of the YPTI
Common Stock in accordance with SECTION 1.2(d).
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(h) SUBORDINATED LOAN AGREEMENT AND UNANIMOUS SHAREHOLDERS
AGREEMENT. PCP shall have satisfied all of its obligations under the
Subordinated Loan Agreement including, without limitation, the repayment in
full of the Loans (as defined in the Subordinated Loan Agreement) and all
interest accrued thereon. The Subordinated Lenders shall have exercised the
warrants evidenced by the Warrant Certificates (as defined in the
Subordinated Loan Agreement) and the Company Class B stock issued to the
Subordinated Lenders thereunder shall have been converted into Company
Common Stock. The Subordinated Loan Agreement shall be terminated, no party
thereto shall have any remaining or continuing rights or obligations
thereunder, and all Liens (as defined in the Subordinated Loan Agreement)
granted thereunder shall have been released. The Unanimous Shareholders
Agreement shall be terminated and no party thereto shall have any continuing
rights or obligations thereunder.
(i) ICL AGREEMENTS. All management and other agreements between ICL
and the Company shall have been terminated and no party thereto shall have
any continuing rights or obligations thereunder.
(j) ASSIGNMENT AND ASSUMPTION AGREEMENTS. To the extent that any
Shareholder has transferred shares pursuant to SECTION 1.1(f) hereof, the
assignment and assumption agreements referenced in SECTION 1.1(f) shall have
been duly executed and delivered to Parent.
ARTICLE VIII--TERMINATION AND ABANDONMENT
8.1 TERMINATION. This Restated Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing Date only as follows:
(a) by mutual written consent of Company and Parent, duly authorized by
the Board of Directors of each;
(b) by the Company or Parent if the Closing shall not have occurred on
or before January 31, 2000, as such date may be extended pursuant to
SECTION 1.4 (or such other date as may be agreed to by Company and Parent);
PROVIDED, THAT, no party may terminate this Restated Agreement under this
SECTION 8.1(b) if such party's breach of this Restated Agreement has caused
or resulted in the failure of the Closing to occur on or before such date;
(c) by the Company if (i) there are any breaches of any Parent Modified
Representation or any material breaches of any Parent Nonmodified
Representation, or (ii) Parent has breached or failed to perform,
notwithstanding satisfaction or due waiver of all conditions thereto, any of
its material covenants or agreements contained herein as to which notice
specifying such breach or failure has been given to Parent promptly after
the discovery thereof and Parent has failed to cure or otherwise resolve the
same to the reasonable satisfaction of the Company within thirty (30) days
after receipt of such notice;
(d) by Parent if (i) there are any breaches of any Company Modified
Representations or any material breaches of any Company Nonmodified
Representations, or (ii) Company has breached or failed to perform,
notwithstanding satisfaction or due waiver of all conditions thereto, any of
its material covenants or agreements contained herein as to which notice
specifying such breach or failure has been given to Company promptly after
the discovery thereof and Company has failed to cure or otherwise resolve
the same to the reasonable satisfaction of the Parent within thirty (30)
days after receipt of such notice;
(e) by Company or Parent if a court of competent jurisdiction or other
Governmental Authority shall have issued an order, decree or ruling or taken
any other action permanently restraining, enjoining or otherwise prohibiting
this Restated Agreement or any of the transactions contemplated by this
Restated Agreement and such order, decree, ruling or other action shall have
become final and nonappealable;
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(f)(i) by the Company if the stockholders of Parent fail to approve the
issuance of the Parent Common Stock pursuant to this Restated Agreement or
the other transactions contemplated or otherwise referenced herein, as
applicable, at the meeting duly convened therefor;
(f)(ii) by Parent if the stockholders of Parent fail to approve the
issuance of the Parent Common Stock pursuant to this Restated Agreement or
the other transactions contemplated or otherwise referenced herein, as
applicable, at the meeting duly convened therefor;
(g) by Parent, if Company or its Board of Directors breaches any
provision of SECTION 6.6; or
(h) by the Company, if Parent or its Board of Directors breaches any
provision of SECTION 6.6.
The party desiring to terminate this Restated Agreement pursuant to this
SECTION 8.1 shall give written notice of such termination to the other party in
accordance with SECTION 11.1, below.
8.2 PROCEDURE UPON TERMINATION. In the event of termination pursuant to
this ARTICLE VIII, the transactions contemplated by this Restated Agreement
shall be abandoned without further action by the Company or Parent, provided
that the obligations of the applicable parties to this Restated Agreement
contained in ARTICLE IX hereof shall remain in full force and effect. If this
Restated Agreement is terminated as provided herein, each party shall use its
reasonable best efforts to redeliver all documents, work papers and other
material (including any copies thereof) of any other party relating to the
transactions contemplated hereby, whether obtained before or after the execution
hereof, to the party furnishing the same.
ARTICLE IX--SURVIVAL OF REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION
9.1 INDEMNIFICATION BY THE ICL PRINCIPALS.
(a) If the Closing has occurred, subject to the terms and conditions of
this ARTICLE IX, the ICL Principals shall indemnify Parent, and its
officers, directors, agents and representatives (THE "INDEMNITEES"), from
and in respect of, and hold the Indemnitees harmless against, any and all
damages, fines, penalties, losses, liabilities, judgments, and deficiencies
(including without limitation amounts paid in settlement and interest and
reasonable legal and accounting fees), but which amount shall be offset or
reduced by the amount of any insurance proceeds received by Parent in
respect of any of the foregoing, incurred or suffered by any of the
Indemnitees ("DAMAGES") resulting from, relating to or in connection with
any misrepresentation or breach of warranty of the ICL Principals or for any
other matters referred to elsewhere in this Restated Agreement.
(b) The ICL Principals acknowledge that their indemnification
obligations hereunder are solely in their capacity as former shareholders of
the Company, and, accordingly, the indemnification obligations in this
ARTICLE IX shall not entitle any ICL Principal who was or is a current or
former officer, director or employee of the Company to any indemnification
from the Company or the Parent pursuant to the organizational or governing
documents of the Company or the Parent or pursuant to this Restated
Agreement.
9.2 METHOD OF ASSERTING CLAIMS.
(a) Prior to the expiration of six (6) months from the Closing Date,
each Indemnitee shall give written notice (THE "CLAIM NOTICE") to the ICL
Principals, of any and all claims or events known to it which gives rise or
may give rise to a claim for indemnification hereunder by the Indemnitee
against the ICL Principals (AN "INDEMNIFIABLE CLAIM"). The Claim Notice
shall specify the nature and estimated amount of such Damages (THE "CLAIMED
AMOUNT"). In the case of any claim for indemnification hereunder arising out
of a claim, action, suit or proceeding brought by any Person who is not a
party to this Restated Agreement (A "THIRD-PARTY CLAIM"), prior to
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expiration of six (6) months from the Closing Date, the Indemnitee also
shall give the ICL Principals, copies of any written claims, process or
legal pleadings with respect to such Third-Party Claim.
(b) Within forty-five (45) days after delivery of a Claim Notice, the
ICL Principals shall notify the Parent in writing of their objections, if
any, to the claim. If the ICL Principals have no objections to the claim,
the ICL Principals shall remit to the Parent the Claimed Amount within
thirty (30) days. If the ICL Principals have objections to the claim, the
ICL Principals and the Indemnitee shall proceed in good faith to negotiate a
resolution of the dispute regarding the claim, and, if not resolved through
negotiations, such dispute shall be resolved by litigation in an appropriate
court of competent jurisdiction.
9.3 THIRD PARTY CLAIMS.
(a) Except as otherwise provided in paragraph (c) below, the ICL
Principals may elect to compromise or defend, at the ICL Principals' own
expense and by the ICL Principals' own counsel reasonably satisfactory to
the Indemnitee, any Third-Party Claim; provided that (i) the ICL Principals
provide the Indemnitee with reasonable evidence that the ICL Principals will
have the financial resources to defend against such claim and fulfill their
indemnification obligations hereunder; and (ii) the giving of a Defense
Notice (as defined below) by the ICL Principals shall constitute an
acknowledgment by the ICL Principals of their obligation to indemnify the
Indemnitee with respect to such Third-Party Claim in accordance with the
terms of this ARTICLE IX. If the ICL Principals elect to compromise or
defend a Third-Party Claim, the ICL Principals shall, within thirty
(30) days of their receipt of the notice provided pursuant to
SECTION 9.2(a) hereof (or sooner, if the nature of such Third-Party Claim so
requires), notify the related Indemnitee of their intent to do so (A
"DEFENSE NOTICE"), and such Indemnitee shall reasonably cooperate in the
compromise of, or defense against, such Third-Party Claim. The ICL
Principals shall be responsible for the payment of such Indemnitee's actual
reasonable out-of-pocket expenses (including reasonable legal and accounting
fees) incurred in connection with such cooperation, and such expenses shall
constitute Damages incurred or suffered by Parent within the meaning of
SECTION 9.1(a) hereof. After notice from the ICL Principals, to an
Indemnitee of their election to assume the defense of a Third-Party Claim,
the ICL Principals shall not be liable to such Indemnitee under this
ARTICLE IX for any legal expenses subsequently incurred by such Indemnitee
in connection with the defense thereof. If the ICL Principals elect not to
compromise or defend against a Third-Party Claim, or fail to notify an
Indemnitee of their election as provided in this SECTION 9.3, such
Indemnitee may pay, compromise or defend such Third-Party Claim on behalf of
and for the account and risk of the ICL Principals (and any amount paid or
expenses incurred in connection therewith shall constitute Damages (within
the meaning of SECTION 9.1(a) hereof) incurred or suffered by Parent. The
ICL Principals may not consent to entry of any judgment or enter into any
settlement without the written consent of each related Indemnitee (which
consent shall not be unreasonably withheld), unless such judgment or
settlement provides solely for money damages or other money payments for
which such Indemnitee is entitled to indemnification hereunder and includes
as an unconditional term thereof the giving by the claimant or plaintiff to
such Indemnitee of a release from all liability in respect of such
Third-Party Claim.
(b) If there is a reasonable likelihood that a Third-Party Claim may
have a material adverse effect on an Indemnitee, other than as a result of
money damages or other money payments for which such Indemnitee is entitled
to indemnification hereunder, such Indemnitee will have the right, after
consultation with the ICL Principals, and at the cost and expense of the ICL
Principals (which costs and expenses, other than legal and accounting fees,
shall constitute Damages (within the meaning of SECTION 9.1(a) hereof) to
the extent provided therein to defend such Third-Party Claim.
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9.4 SURVIVAL. The representations and warranties of the Company set forth
in this Restated Agreement shall survive the Closing and shall continue for six
(6) months following the Closing Date. The representations and warranties shall
not be affected by any examination made for or on behalf of Parent or the
knowledge of any of Parent's officers, directors, stockholders, employees or
agents, except that the representations and warranties are qualified by the
matters disclosed in the Schedules to the representations and warranties of the
Company and the ICL Principals and Parent agrees that Parent has knowledge of
such matters. Notwithstanding anything to the contrary herein, if a claim for
indemnification is made before the expiration of the periods of survival set
forth above in this SECTION 9.4, then (notwithstanding the expiration of such
time period) the representation or warranty applicable to such claim shall
survive until, but only for purposes of, the resolution of such claim.
9.5 LIMITATIONS.
(a) The ICL Principals shall not be liable under this ARTICLE IX unless
and until the aggregate amount of Damages incurred or suffered by
Indemnitees exceeds U.S. $100,000. For purposes of the preceding sentence,
no independent claims of less than U.S. $10,000 may be made; PROVIDED,
HOWEVER, that all claims arising out of a common set of facts shall be
aggregated for purposes of determining whether the U.S. $10,000 threshold
has been met.
(b) The ICL Principals' aggregate liability under this ARTICLE IX shall
not exceed U.S. $4,125,000. The ICL Principals' liability under this
ARTICLE IX shall be joint and several; PROVIDED, HOWEVER, that the liability
of each of The J.L.R. Family Trust and The Paisley Family Trust under this
ARTICLE IX shall be limited to (i) Parent Common Stock received on the
Closing Date and held by such trust, or Parent Common Stock obtained upon
exchange of Class A Special Shares received on the Closing Date, and held by
such trust, or (ii) if the Parent Common Stock referred to in clause (i)
above has been sold or otherwise transferred, the after-tax proceeds from
the disposition of such Parent Common Stock.
(c) The ICL Principals may, at their option, satisfy their
indemnification obligations under this Restated Agreement by (i) the payment
of that amount of cash (in U.S. dollars) sufficient to satisfy such
indemnification claim, but in any event not exceeding the amount set forth
in SECTION 9.5(b) hereof, and subject to the provisions of SECTION 9.5(a)
hereof; or (ii) the delivery of stock certificates representing that number
of shares of Parent Common Stock or Class A Special Shares sufficient to
satisfy such indemnification claim, the value of which shall be determined
in accordance with SECTION 9.5(d) hereof; PROVIDED, HOWEVER, that any stock
certificates delivered in satisfaction of an indemnification claim must be
delivered to Parent within three (3) business days following (as applicable)
(A) the date calculated in accordance with SECTION 9.2 or SECTION 9.3
hereof, if the claim is not in dispute; (B) resolution of such
indemnification claim, whether prior to or following commencement of
litigation; or (C) the entry of a final and non-appealable judgment by a
court of competent jurisdiction.
(d)(i) The parties hereto agree that, for purposes of valuing shares
of Parent Common Stock delivered pursuant to SECTION 9.5(c) to satisfy
any indemnification claims pursuant to SECTION 9.2 or SECTION 9.3, Parent
Common Stock shall be valued at a price per share equal to the greater
of: (A) the weighted average of the closing prices, as reported on the
NYSE, of the Parent Common Stock on the twenty (20) trading days prior to
the date on which the stock certificates for the Parent Common Stock are
to be delivered pursuant to clause (ii) of SECTION 9.5(c), or (B) $5.50.
(ii) The parties hereto agree that, for purposes of valuing shares of
Class A Special Shares delivered to satisfy any indemnification claims
pursuant to SECTION 9.5(c), Class A Special Shares shall be valued at a
price per share equal to the greater of: (A) the weighted average of the
closing prices, as reported on the NYSE, of the Parent Common Stock into
which the Class A Special Shares are exchangeable on the twenty
(20) days prior to the date
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on which the stock certificates for the Class A Special Shares are to be
delivered pursuant to clause (ii) of SECTION 9.5(c), or (B) $5.50.
(e) No claim for indemnification pursuant to SECTION 9.1 shall be made
unless asserted by a written notice given to the ICL Principals on or before
six (6) months from the Closing Date. For greater certainty, no Claim Notice
may be given after six (6) months from the Closing Date.
9.6 INDEMNIFICATION BY THE PARENT.
(a) INDEMNITY. If the Closing has occurred, subject to the terms and
conditions of this SECTION 9.6, Parent shall indemnify the Company, the ICL
Principals, ICL and the Shareholders from and in respect of all, and hold
the Company, the ICL Principals, ICL and the Shareholders harmless against,
any and all damages, fines, penalties, losses, liabilities, judgments and
deficiencies (including without limitation amounts paid in settlement and
interest and reasonable legal and accounting fees) ("ICL PRINCIPAL
DAMAGES")resulting from, relating to or in connection with any
misrepresentation or breach of warranty of the Parent contained in this
Restated Agreement or for any other matters referred to elsewhere in this
Restated Agreement.
(b) SURVIVAL. The representations and warranties of Parent set forth
in this Restated Agreement shall survive the Closing and shall continue
until six (6) months after Closing Date. The representations and warranties
shall not be affected by any examination made for or on behalf of the
Company or ICL Principals or the knowledge of any of the Company's officers,
directors, stockholders, employees or agents, except that the
representations and warranties are qualified by the matters disclosed in the
Schedules to the representations and warranties of the Parent, and the
Company agrees that the Company has knowledge of such matters.
Notwithstanding anything to the contrary herein, if a claim for
indemnification is made before the expiration of the periods of survival set
forth above in this SECTION 9.6, then (notwithstanding the expiration of
such time period) the representation or warranty applicable to such claim
shall survive until, but only for purposes of, the resolution of such claim.
(c) LIMITATIONS. Parent shall not be liable under this SECTION 9.6
unless and until the aggregate amount of ICL Principal Damages incurred or
suffered by the ICL Principals exceeds U.S. $100,000. Furthermore, the
liability of Parent under this SECTION 9.6 shall not exceed U.S. $4,125,000.
No claim for indemnification pursuant to SECTION 9.6 shall be made unless
asserted by a written notice given to Parent on or before six (6) months
from the Closing Date. For greater certainty, no notice of a claim for
indemnification may be given after six (6) months from the Closing Date.
ARTICLE X--MUTUAL RELEASE
10.1 MUTUAL RELEASE OF ALL CLAIMS.
(a) Parent, for itself and for all of its stockholders, directors,
officers, agents, employees, representatives, divisions, subsidiaries,
affiliates, insurers, successors and assigns, hereby releases, remises,
acquits and forever discharges the Company, ICL and the ICL Principals, and
each of them and each of their respective stockholders, directors, officers,
agents, employees, representatives, divisions, parents, subsidiaries,
affiliates, insurers, successors and assigns, of and from any and all manner
of claims, actions, causes of action, suits, debts, dues, accounts,
contracts, agreements, continuing obligations, judgments, claims and demands
whatsoever, whether in law or in equity, which may exist or may hereafter
arise from any matter, fact, circumstance, happening or thing whatsoever
occurring or failing to occur in connection with the negotiation, execution
and performance of their respective obligations under the June 3 YPtel
Agreement.
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(b) The Company, ICL and the ICL Principals, each for itself and for all
of their respective stockholders, directors, officers, agents, employees,
representatives, divisions, subsidiaries, affiliates, insurers, successors
and assigns, hereby releases, remises, acquits and forever discharges Parent
and its stockholders, directors, officers, agents, employees,
representatives, divisions, parents, subsidiaries, affiliates, insurers,
successors and assigns, of and from any and all manner of claims, actions,
causes of action, suits, debts, dues, accounts, contracts, agreements,
continuing obligations, judgments, claims and demands whatsoever, whether in
law or in equity, which may exist or may hereafter arise from any matter,
fact, circumstance, happening or thing whatsoever occurring or failing to
occur in connection with the negotiation, execution and performance of its
obligations under the June 3 YPtel Agreement.
(c) Parent and each of the Company, ICL and the ICL Principals hereby
represent, warrant and acknowledge that the mutual covenants and agreements
in this ARTICLE X are made in good faith.
10.2 COVENANT NOT TO XXX.
(a) Parent hereby agrees that it will not institute any action against
the Company, ICL or the ICL Principals, including, but not limited to, any
claim for contractual indemnity or implied indemnity, arising out of the
June 3 YPtel Agreement.
(b) Each of the Company, the Shareholders, ICL and the ICL Principals
hereby agrees that it will not institute any action against Parent,
including, but not limited to, any claim for contractual indemnity or
implied indemnity, arising out of the June 3 YPtel Agreement.
10.3 NO ADMISSION OF LIABILITY. None of Parent, the Company, ICL or the
ICL Principals admits liability to any other party hereto and, in fact, each of
Parent, the Company, ICL and the ICL Principals denies any liability relating to
the June 3 YPtel Agreement.
ARTICLE XI--AMENDMENT AND WAIVER
11.1 AMENDMENT OF THIS RESTATED AGREEMENT. Prior to Parent stockholder
approval and except as is otherwise required by Applicable Law, this Restated
Agreement may be amended by the parties hereto at any time by execution of an
instrument in writing signed on behalf of each of the parties hereto. Following
receipt of approval by the Parent shareholders, the parties hereto acknowledge
and agree that this Restated Agreement may be amended by the parties hereto by
execution of an instrument in writing signed on behalf of each of the parties
hereto; PROVIDED, HOWEVER, that any such amendment may not affect a substantive
issue under this Restated Agreement, including, but not limited to, the economic
consideration to be paid or received hereunder.
11.2 DEVIATION FROM FORM OF EXCHANGE AND VOTING TRUST AGREEMENT, THE
SUPPORT AGREEMENT AND APPENDI A. Parent, the Company, the ICL Principals and
ICL agree that (i) the form of Exchange and Voting Trust Agreement attached
hereto as EXHIBIT C, the form of Support Agreement attached hereto as EXHIBIT D
and the form of Class A Special Shares Certificate of Designation attached
hereto as EXHIBIT B represent the agreement of the parties with regard to the
material terms and the economics of the Canadian tax deferral transaction; and
(ii) the Exchange and Voting Trust Agreement, the Support Agreement and the
Class A Special Shares Certificate of Designation which are executed by the
parties may differ from the forms attached hereto as EXHIBIT C, EXHIBIT D and
EXHIBIT B, respectively, only to the extent that such deviations (a) involve
solely procedural or mechanical elements of the Exchange and Voting Trust
Agreement, the Support Agreement and the Class A Special Shares Certificate of
Designation or the transactions contemplated thereunder; or (b) do not represent
deviations from the forms set forth in EXHIBIT C, EXHIBIT D and EXHIBIT B which
affect or may affect a substantive issue under the Exchange and Voting Trust
Agreement or which affect or may affect the economic consideration to paid or
received under the Exchange and Voting Trust Agreement,
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the Support Agreement or the Class A Special Shares Certificate of Designation.
The parties hereto acknowledge and agree that the terms of this SECTION 11.2 are
intended to, and shall, continue to apply following receipt of approval by the
Parent shareholders of the terms of this Restated Agreement and the transactions
contemplated herein.
11.3 EXTENSION; WAIVER. At any time prior to the Closing Date, Parent, on
the one hand, and the Company, ICL on behalf of the Shareholders and ICL
Principals, on the other, may, but shall not be obligated to (i) extend the time
for the performance of any of the obligations of the other party hereto,
(ii) waive any inaccuracies in the representations and warranties made by such
other party contained herein or in any document delivered pursuant hereto, and
(iii) waive compliance with any of the agreements or conditions for the benefit
of such party contained herein. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party; PROVIDED, HOWEVER, that an extension
pursuant to SECTION 1.4 hereof need not be set forth in writing in order to be
effective, unless such extension is to a date after March 1, 2000.
ARTICLE XII--GENERAL PROVISIONS
12.1 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with acknowledgment of complete transmission)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to Parent, to:
Advanced Communications Group, Inc.
000 Xxxxx Xxxxx Xxxx Xxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx
XXX 63017
Attn: Xx. Xxxxxxx X'Xxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx
XXX 00000-0000
Attn: Xx. Xxxxx X. Adoor
Facsimile: (000) 000-0000
(b) if to the Company and Shareholders, to:
Imperial Capital Ltd.
0 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attn: Managing Partner
Facsimile: (000) 000-0000
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with a copy to:
Xxxxxxx Xxxxx & Xxxxxxxxx
Scotia Plaza--Suite 2100
00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attn: Xx. Xxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
12.2 INTERPRETATION. The words "include", "includes" and "including" when
used herein shall be deemed in each case to be followed by the words "without
limitation." The table of contents and headings contained in this Restated
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Restated Agreement. All Exhibits and Schedules
to this Restated Agreement are hereby incorporated in and made a part of this
Restated Agreement as if set forth in full herein. References herein to
"dollars", "Dollars", "U.S. $" and "$" shall be deemed, in each case, to mean
U.S. dollars, unless expressly stated otherwise herein.
12.3 COUNTERPARTS. This Restated Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart. One or more of the parties hereto
may sign this Restated Agreement and deliver this Restated Agreement by
facsimile transmission. The parties hereto agree that a facsimile of a signature
shall be deemed an original signature.
12.4 ENTIRE AGREEMENT; ASSIGNMENT. Subject to its becoming effective in
accordance with SECTION 1.3 hereof, this Restated Agreement including, but not
limited to, the Recitals hereto, the Schedules and Exhibits hereto, and the
documents and instruments and other agreements among the parties hereto
referenced herein: (i) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof including, but not limited to, (A) the June 3 YPtel
Agreement; and (B) the Letter of Intent dated April 11, 1999 by and among
Parent, the Company, Web, Big Stuff and X'Xxxx and the Confidentiality Agreement
dated April 11, 1999 by and among Parent, the Company, Web, Big Stuff and
X'Xxxx; (ii) are not intended to confer upon any Person not a party hereto any
rights or remedies hereunder; and (iii) shall not be assigned by operation of
law or otherwise except as otherwise specifically provided, except that Parent
may assign its rights and delegate its obligations hereunder to its affiliates,
provided Parent shall remain liable hereunder.
12.5 SEVERABILITY. In the event that any provision of this Restated
Agreement or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Restated Agreement will continue in full force and effect and the
application of such provision to other Persons or circumstances will be
interpreted so as reasonably to effect the intent of the parties hereto so long
as consideration of the Agreement is not materially affected for any party
hereof. The parties further agree to replace such void or unenforceable
provision of this Restated Agreement with a valid and enforceable provision that
will achieve, to the extent possible, the economic, business and other purposes
of such void or unenforceable provision.
12.6 OTHER REMEDIES. Subject to the limitations contained in this Restated
Agreement, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy.
12.7 GOVERNING LAW. This Restated Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern
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under applicable principles of conflicts of laws thereof. Each of the parties
hereto irrevocably consents to the exclusive jurisdiction and venue of any court
within the State of Delaware, in connection with any matter based upon or
arising out of this Restated Agreement or the matters contemplated herein,
agrees that process may be served upon them in any manner authorized by the laws
of the State of Delaware for such Persons and waives and covenants not to assert
or plead any objection which they might otherwise have to such jurisdiction,
venue and such process.
12.8 RULES OF CONSTRUCTION. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Restated
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.
12.9 LIMITATION OF LIABILITY OF TRUSTEE. The parties hereto agree that
none of the trustees of any trust referred to in this Restated Agreement has any
personal liability or obligations in respect of the obligations of the trusts
and that the sole recourse against the trust and the trustees pursuant to this
Restated Agreement shall be solely against the ICL Principals. For greater
certainty, the term "trust" includes the trustees and where any reference is
made herein to an act to be performed by or on behalf of the trust, such
reference shall be construed and applied for all purposes as if it referred to
an act to be performed by or on behalf of the trustees, each in his
representative capacity as trustee of the trust, and where any reference is made
hereto to an act to be performed by or for or on behalf of any of the trustees,
such reference shall be construed and applied for all purposes as if it referred
to an act to be performed by or for or on behalf of each of the trustees in his
capacity as a trustee.
12.10 TIME OF THE ESSENCE. Time shall be of the essence of this Restated
Agreement and every part hereof.
ARTICLE XIII--DEFINITIONS
13.1 DEFINITIONS.
"Active Parent Subsidiaries" means Xxxxx; FirsTel; Value; Great Western
Directories, Inc.; Telecom Resources, Inc.; the Switchboard of Oklahoma
City, Inc.; Long Distance Management of Kansas, Inc.; Long Distance Management
II, Inc.; and National Telecom, a proprietorship.
"Affiliate Agreements" shall have the meaning set forth in SECTION 4.11.
"Anniversary Date" shall mean the first anniversary of the Closing Date.
"Associates" shall have the meaning set forth in SECTION 6.6.
"Barbadian Trusts" means collectively, Cold Trust, Global Investment Trust,
Freezer Trust, Storage Trust, Directory Trust and Publisher Trust.
"Benefit Plan" shall mean (i) an employee benefit plan as defined in
Section 3(3) of ERISA, even if, because of some other provision of ERISA, such
plan is not subject to any other provision of ERISA, such plan is not subject to
any or all of ERISA's provisions, and (ii) whether or not described in the
preceding clause, (a) any pension, profit sharing, stock bonus, deferred or
supplemental compensation, retirement, thrift, stock purchase or stock purchase
or stock option plan, or any other compensation, welfare, insurance, medical,
hospitalization, fringe benefit or retirement plan, program, policy, course of
conduct, understanding or arrangement of any kind whatsoever, whether formal or
informal, oral or written, providing for benefits for or the welfare of any or
all of the current or former employees or agents of the employer or their
beneficiaries or dependents, (b) Multi-employer Plan, or (c) a multiple employer
plan as defined in Section 413 of the Code or in any other applicable Law.
"Big Stuff" shall have the meaning set forth in RECITAL E hereto.
"Claim Notice" shall have the meaning set forth in SECTION 9.2(a).
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"Claimed Amount" shall have the meaning set forth in SECTION 9.2(a).
"Class A Special Shares" shall have the meaning set forth in
SECTION 1.1(b).
"CLEC Operations" shall mean Xxxxx, FirsTel, Valu, and such other non-yellow
pages operating subsidiaries or operations of Parent as shall be determined by
the Board of Directors of Parent.
"Closing" shall mean the closing of the transactions contemplated by this
Restated Agreement.
"Closing Date" shall mean the date upon which the Closing actually occurs.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
Treasury regulations thereunder.
"Company" shall have the meaning set forth in the preamble hereto.
"Company Common Stock" shall have the meaning set forth in SECTION 1.1(c).
"Company Material Adverse Effect" shall mean a material adverse effect on
(i) the business, assets, condition (financial or otherwise), properties,
liabilities or the results of operations of Company and the Subsidiaries taken
as a whole, (ii) the ability of Company to perform its obligations set forth in
this Restated Agreement and the Company Transaction Agreements (as herein
defined), or (iii) the ability to timely consummate the transactions
contemplated by this Restated Agreement and the Company Transaction Agreements.
"Company Material Contract" shall mean a material note, bond, mortgage,
indenture, contract, lease, license, agreement, understanding, instrument, bid
or proposal to which Company or any Subsidiary is a party and which is with an
affiliate of Company or of a Subsidiary, if the financial obligation of Company
or a Subsidiary thereunder or applicable to the assets or properties of Company
or a Subsidiary could exceed U.S. $50,000 after the Closing Date or if it
provides for recurring monthly revenues to Company or a Subsidiary in excess of
U.S. $100,000 or includes any exclusivity or non-competition restrictions
applicable to Company or a Subsidiary.
"Company Modified Representations" shall mean the representations and
warranties of the Company and the ICL Principals contained in this Restated
Agreement that are modified by materiality or Company Material Adverse Effect.
"Company Nonmodified Representations" shall mean the representations and
warranties of the Company and Shareholders contained in this Restated Agreement
that are not modified by materiality or Company Material Adverse Effect.
"Company Permits" shall mean all permits, certificates, licenses, approvals,
and other authorization required in connection with the operation of the
business of the Company and the Subsidiaries.
"Company Real Property Leases" shall have the meaning set forth in
SECTION 2.12(b).
"Company Tax Goal" shall have the meaning set forth in SECTION 6.8.
"Company Transaction Agreements" shall have the meaning set forth in
SECTION 2.4.
"Consent" shall have the meaning set forth in SECTION 2.5.
"Damages" shall have the meaning set forth in SECTION 9.1(a).
"Defense Notice" shall have the meaning set forth in SECTION 9.3(a).
"Enforceability Exceptions" shall have the meaning set forth in
SECTION 2.4.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, together with all regulations thereunder.
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"Event" shall have the meaning set forth in SECTION 2.8.
"Exchange and Voting Trust Agreement" shall have the meaning set forth in
SECTION 6.3.
"Exon-Xxxxxx Filing" shall have the meaning set forth in SECTION 2.5.
"Extraordinary Transactions" shall have the meaning set forth in
SECTION 6.6.
"Xxxxx" shall mean Xxxxx Long Distance Service, Inc.
"Final Order," with respect to any Consent of a Governmental Authority,
shall mean an action by the appropriate Governmental Authority as to which:
(i) no request for stay by such Governmental Authority of the action is pending,
no such stay is in effect, and, if any deadline for filing any such request is
designated by statute or regulation, it has passed; (ii) no petition for
rehearing or reconsideration of the action is pending before such Governmental
Authority, and no appeal or comparable administrative remedy is pending before
such Governmental Authority, and the time for filing any such petition, appeal
or administrative remedy has passed; (iii) such Governmental Authority does not
have the action under reconsideration on its own motion and the time for such
reconsideration has passed; and (iv) no appeal to a court, or request for stay
by a court, of the Governmental Authority action is pending or in effect, and if
any deadline for filing any such appeal or request is designated by statute or
rule, it has passed.
"FirsTel" shall mean FirsTel, Inc.
"Governmental Authority" shall have the meaning set forth in SECTION 2.5.
"Great Western Credit Agreement" shall have the meaning set forth in
SECTION 3.6.
"Great Western Shareholders" shall have the meaning set forth in RECITAL E.
"Great Western Notes" shall have the meaning set forth in RECITAL E.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"ICL" shall have the meaning set forth in the preamble hereto.
"ICL Principal Damages" shall have the meaning set forth in SECTION 9.7(a).
"Income Tax Act [Canada]" shall have the meaning set forth in SECTION 1.6.
"Indemnifiable Claim" shall have the meaning set forth in SECTION 9.2(a).
"Indemnitees" shall have the meaning set forth in SECTION 9.1(a).
"June 3 YPtel Agreement" shall mean the Agreement dated as of June 3, 1999
by and among Parent, the Company, the Shareholders and ICL.
"Law" shall have the meaning set forth in SECTION 2.6.
"Litigation" shall have the meaning set forth in SECTION 2.7.
"Multi-employer Plan" shall mean a multi-employer plan as defined in
Section 3(37) of ERISA or in any other applicable Law.
"Newco I Common Stock" shall have the meaning set forth in SECTION 1.1(b).
"Newco II Common Stock" shall have the meaning set forth in SECTION 1.1(b).
"NYSE" shall mean the New York Stock Exchange, Inc.
"Observers" shall have the meaning set forth in SECTION 1.5(b).
A-41
"Parent Class B Voting Preferred Stock" shall have the meaning set forth in
SECTION 1.1(a).
"Parent Common Stock" shall have the meaning set forth in SECTION 3.2.
"Parent Financial Statements" shall have the meaning set forth in
SECTION 3.8.
"Parent Guaranty" shall have the meaning set forth in SECTION 3.6.
"Parent Material Adverse Effect" shall mean a material adverse effect on
(i) the business, assets, condition (financial or otherwise), properties,
liabilities or the results of operations of Parent and the Active Parent
Subsidiaries taken as a whole, (ii) the ability of Parent to perform its
obligations set forth in this Restated Agreement and the Parent Transaction
Agreements, or (iii) the ability of Parent to timely consummate the transactions
contemplated by this Restated Agreement and the Parent Transaction Agreements.
"Parent Material Contract" shall have the meaning set forth in
SECTION 3.13.
"Parent Modified Representation" shall have the meaning set forth in
SECTION 7.2(a)(i).
"Parent Nonmodified Representation" shall have the meaning set forth in
SECTION 7.2(a)(i).
"Parent Permits" shall have the meaning set forth in SECTION 3.11.
"Parent Recapitalization" shall have the meaning set forth in
SECTION 1.1(a).
"Parent Securities Filings" shall have the meaning set forth in
SECTION 3.7.
"Parent Tax Goals" shall have the meaning set forth in SECTION 6.8(b).
"Parent Transaction Agreements" shall have the meaning set forth in
SECTION 3.4.
"PCP" shall have the meaning set forth in RECITAL A.
"PCP Acquisition Agreement" shall have the meaning set forth in
SECTION 2.16.
"PCP Closing Date" shall have the meaning set forth in SECTION 2.16.
"Person" shall mean and include an individual, corporation, partnership,
association, trust or other entity or organization, including a Governmental
Authority.
"Registration Statements" shall have the meaning set forth in
SECTION 6.1(d).
"Restated Agreement" shall have the meaning set forth in the preamble
hereto.
"Restated Big Stuff Agreement" shall mean that certain Amended and Restated
Acquisition Agreement dated as of October 26, 1999 by and among Parent, ACG
Acquisition VII Corp., Big Stuff, Xxxxxxx X'Xxxx and Xxxx Xxxx.
"Restated Web YP Agreement" shall mean that certain Amended and Restated
Acquisition Agreement dated as of October 26, 1999 by and among Parent, ACG
Acquisition VI Corp., Web, Xxxxxxx X'Xxxx and Xxxx Xxxx.
"SEC" shall mean the U.S. Securities and Exchange Commission.
"Securities Exchange Act" shall mean the United States Securities Exchange
Act of 1934, as amended, and all rules and regulations promulgated thereunder.
"Securities Act" shall mean the United States Securities Act of 1933, as
amended, and all rules and regulations promulgated thereunder.
"Shareholders" shall have the meaning set forth in the preamble hereto.
"Subordinated Lenders" shall have the meaning set forth in SECTION 4.9.
A-42
"Subordinated Loan Agreement" shall have the meaning set forth in
SECTION 4.9.
"Subsidiaries" shall have the meaning set forth in RECITAL A.
"Support Agreement" means the Support Agreement to be entered into at the
Closing between Parent, Newco II and the Shareholders who are expected to become
the holders of Class A Special Shares.
"Tax Goals" shall have the meaning set forth in SECTION 6.8(b).
"Third-Party Claim" shall have the meaning set forth in SECTION 9.2(a).
"Transaction Fees and Expenses" shall have the meaning set forth in
SECTION 5.9(b).
"Unanimous Shareholders Agreement" shall mean the Unanimous Shareholders
Agreement dated as of the 1(st) day of November, 1998 among Imperial Capital
Limited, a corporation incorporated under the laws of Ontario, the J.L.R. Family
Trust, an inter vivos trust duly formed and organized the laws of Ontario, the
Paisley Family Trust, an inter vivos trust duly formed and organized under the
laws of Ontario, Cold Trust, Global Investment Trust, Freezer Trust, Storage
Trust, Directory Trust and Publisher Trust, inter vivos trusts duly formed and
organized under the laws of Barbados, Canterbury Mezzanine Capital, L.P. and
Canterbury Detroit Partners, L.P., limited partnerships formed under the laws of
Delaware, and YPtel Corporation, a corporation incorporated under the laws of
Canada, as amended to date.
"Valu" shall mean, collectively, Valu-line of Louisiana, Inc. and Valu-line
of Longview, Inc.
"Web" shall have the meaning set forth in RECITAL E hereof.
"WorldPages" shall have the meaning set forth in RECITAL E hereof.
"YPTI Certificate of Preferred Stock Designation" shall have the meaning set
forth in SECTION 1.1(e).
"YPTI Consideration" shall have the meaning set forth in SECTION 1.2(d).
"YPTI Preferred Stock" shall have the meaning set forth in SECTION 1.1(e).
"YPTI Recapitalization" shall have the meaning set forth in SECTION 1.1(e).
[SIGNATURES ON FOLLOWING PAGES]
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[Signature pages to the Amended and Restated YPtel Agreement]
IN WITNESS WHEREOF, Parent, the Company, the Shareholders, the ICL
Principals and ICL have caused this Amended and Restated Agreement to be signed
by their duly authorized respective officers, if appropriate, all as of the date
first written above.
ADVANCED COMMUNICATIONS GROUP, INC.
By: /s/ XXXXXXX XXXXX
-----------------------------------------
Name: Xxxxxxx Xxxxx
Title: Chief Financial Officer and
Secretary
YPTEL CORPORATION
By: /s/ XXXXXXX XXXXXXXX
-----------------------------------------
Title: President & CEO
SHAREHOLDERS OF YPTEL CORPORATION
By: Imperial Capital Limited as
attorney-in-fact
By: /s/ X. XXXXXX
-----------------------------------------
Title:
THE J.L.R. FAMILY TRUST, by its trustees
By: /s/ XXXX XXXXXXXXX
-----------------------------------------
Xxxxxxx X. Xxxxxxxxx, as trustee and with
no personal liability
/s/ XXXXXXX XXXXXXX
-----------------------------------------
Xxxxxxx Xxxxxxx, as trustee and with no
personal liability
A-44
THE PAISLEY FAMILY TRUST
By: /s/ X. XXXXXX
-----------------------------------------
Xxxxxxx X. Xxxxxx, as trustee and with no
personal liability
/s/ XXXXXXX XXXXXXX
-----------------------------------------
Xxxxxxx Xxxxxxx, as trustee and with no
personal liability
/s/ XXXXXX XXXXXX
-----------------------------------------
Xxxxxx Xxxxxx
/s/ XXXXXXX XXXXXXXX
-----------------------------------------
Xxxxxxx X. XxXxxxxx
COLD TRUST
By: /s/
-----------------------------------------
Concorde Bank Limited, as trustee and with
no personal liability
-----------------------------------------
, as trustee and with no personal
liability
GLOBAL INVESTMENT TRUST
By: /s/
-----------------------------------------
Concorde Bank Limited, as trustee and with
no personal liability
-----------------------------------------
, as trustee and with no personal
liability and with liability limited to
its trust assets
A-45
FREEZER TRUST
By: /s/ XXXXX X. XXXX
-----------------------------------------
Xxxxx X. Xxxx, as trustee and with no
personal liability and with liability
limited to its trust assets
/s/ XXXXXXXX X. XXXXXXX
-----------------------------------------
Xxxxxxxx X. Xxxxxxx, as trustee and with
no personal liability and with liability
limited to its trust assets
STORAGE TRUST
By: /s/ XXXXX X. XXXX
-----------------------------------------
Xxxxx X. Xxxx, as trustee and with no
personal liability
/s/ XXXXXXXX X. XXXXXXX
-----------------------------------------
Xxxxxxxx X. Xxxxxxx, as trustee and with
no personal liability
DIRECTORY TRUST
By: /s/
-----------------------------------------
Concorde Bank Limited, as trustee and with
no personal liability
-----------------------------------------
, as trustee and with no personal
liability and with liability limited to
its trust assets
A-46
PUBLISHER TRUST
By: /s/ XXXXX X. XXXX
-----------------------------------------
Xxxxx X. Xxxx, as trustee and with no
personal liability
/s/ XXXXXXXX X. XXXXXXX
-----------------------------------------
Xxxxxxxx X. Xxxxxxx, as trustee and with
no personal liability
IMPERIAL CAPITAL LIMITED, a corporation
incorporated under the laws of the Province of
Ontario
By: /s/ XXXX XXXXXXXXX
-----------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Director
/s/ XXXX XXXXXXXXX
-----------------------------------------
Xxxxxxx X. Xxxxxxxxx
/s/ X. XXXXXX
-----------------------------------------
Xxxxxxx X. Xxxxxx
A-47
ARTICLE I--THE TRANSACTIONS........................................ A-2
1.1 Transactions Prior to Closing: Corporate.................... A-2
1.2 Transactions Simultaneous with Closing...................... A-3
1.3 Effective Date; Fairness Opinion............................ A-4
1.4 Closing..................................................... A-4
1.5 Parent Name Change and Directors............................ A-5
1.6 Tax Deferred Exchange....................................... A-5
1.7 Taking of Necessary Action; Further Action.................. A-6
1.8 Aggregate Issuable Parent Common Stock...................... A-6
ARTICLE II--REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND THE ICL PRINCIPALS.......................................... A-6
2.1 Organization and Good Standing.............................. A-6
2.2 Capitalization.............................................. A-6
2.3 Subsidiaries................................................ A-7
2.4 Authorization; Binding Agreement............................ A-7
2.5 Governmental Approvals...................................... A-7
2.6 No Violations............................................... A-8
2.7 Litigation.................................................. A-8
2.8 Absence of Certain Changes or Events........................ A-9
2.9 Finders and Investment Bankers.............................. A-9
2.10 Contracts................................................... A-9
2.11 Liabilities................................................. A-9
2.12 Real Estate................................................. A-10
2.13 Corporate Records........................................... A-10
2.14 Labor Matters............................................... A-10
2.15 Tax......................................................... A-10
2.16 PCP Acquisition Agreement................................... A-10
2.17 Knowledge................................................... A-11
ARTICLE III--REPRESENTATIONS AND WARRANTIES OF PARENT.............. A-11
3.1 Organization and Good Standing.............................. A-11
3.2 Capitalization.............................................. A-11
3.3. Subsidiaries................................................ A-12
3.4 Authorization; Binding Agreement............................ A-12
3.5 Governmental Approvals...................................... A-12
3.6 No Violations............................................... A-12
3.7 Securities Filings and Litigation........................... A-13
3.8 Parent Financial Statements................................. A-13
3.9 Absence of Certain Changes or Events........................ A-14
3.10 Compliance with Laws........................................ A-14
3.11 Permits..................................................... A-14
3.12 Finders and Investment Bankers.............................. A-14
3.13 Contracts................................................... A-14
3.14 Corporate Records........................................... A-14
ARTICLE IV--ADDITIONAL COVENANTS OF THE COMPANY
AND THE ICL PRINCIPALS........................................... A-15
4.1 Notification of Certain Matters............................. A-15
4.2 Access and Information...................................... A-15
4.3 Reasonable Best Efforts..................................... A-15
4.4 Compliance.................................................. A-16
4.5 Benefit Plans............................................... A-16
4.6 Tax Opinion Certification................................... A-16
4.7 Shareholders Agreement and Voting Trust Agreements.......... A-16
4.8 Transfer Restrictions....................................... A-16
4.9 Subordinated Loan Agreement................................. A-16
4.10 Conduct of Business of Parent and the Parent Subsidiaries... A-17
ARTICLE V--ADDITIONAL COVENANTS OF PARENT.......................... A-17
5.1 Conduct of Business of Parent and the Parent Subsidiaries... A-17
5.2 Notification of Certain Matters............................. A-17
5.3 Access and Information...................................... A-17
5.4 Compliance.................................................. A-18
5.5 SEC and Shareholder Filings................................. A-18
5.6 Tax Treatment............................................... A-18
5.7 Reasonable Best Efforts..................................... A-18
5.8 Employee Benefit Plans...................................... A-18
5.9 Expenses.................................................... A-19
5.10 Indemnification and Insurance............................... A-19
ARTICLE VI--ADDITIONAL COVENANTS OF THE PARENT, THE COMPANY
AND THE SHAREHOLDERS............................................. A-19
6.1 Registration of Securities.................................. A-19
6.2 Legal Requirements.......................................... A-21
6.3 Exchange and Voting Trust Agreement......................... A-21
6.4 Public Announcements........................................ A-21
6.5 Conduct of Business Prior to Closing Date................... A-21
6.6 No Solicitation of Acquisition Proposal..................... A-24
6.7 Confidentiality............................................. A-25
6.8 Capital Stock and Derivative Securities..................... A-25
ARTICLE VII--CONDITIONS TO CLOSING................................. A-26
7.1 Conditions to Obligations of Each Party to Closing.......... A-26
7.2 Additional Conditions to Obligations of Shareholders and
Company................................................... A-28
7.3 Additional Conditions to the Obligations of Parent.......... A-29
ARTICLE VIII--TERMINATION AND ABANDONMENT.......................... A-31
8.1 Termination................................................. A-31
8.2 Procedure Upon Termination.................................. A-32
ARTICLE IX--SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION.................................................... A-32
9.1 Indemnification by the ICL Principals....................... A-32
9.2 Method of Asserting Claims.................................. A-32
9.3 Third Party Claims.......................................... A-33
9.4 Survival.................................................... A-34
9.5 Limitations................................................. A-34
9.6 Indemnification by the Parent............................... A-35
ARTICLE X--MUTUAL RELEASE.......................................... A-35
10.1 Mutual Release of All Claims................................ A-35
10.2 Covenant Not to Xxx......................................... A-36
10.3 No Admission of Liability................................... A-36
ARTICLE XI--AMENDMENT AND WAIVER................................... A-36
11.1 Amendment of this Restated Agreement........................ A-36
11.2 Deviation from Form of Exchange and Voting Trust Agreement,
Support Agreement and Appendix A.......................... X-00
00.0 Xxxxxxxxx; Waiver........................................... A-37
ARTICLE XII--GENERAL PROVISIONS.................................... A-37
12.1 Notices..................................................... A-37
12.2 Interpretation.............................................. A-38
12.3 Counterparts................................................ A-38
12.4 Entire Agreement; Assignment................................ A-38
12.5 Severability................................................ A-38
12.6 Other Remedies.............................................. A-38
12.7 Governing Law............................................... A-38
12.8 Rules of Construction....................................... A-39
12.9 Limitation on Liability of Trustee.......................... A-39
12.10 Time of the Essence......................................... A-39
ARTICLE XIII--DEFINITIONS.......................................... A-39
13.1 Definitions................................................. A-39
EXHIBIT LIST
Exhibit A List of Shareholders
Exhibit B Form of Class A Special Shares Certificate of Designation
Exhibit C Form of Exchange and Voting Trust Agreement
Exhibit D Form of Support Agreement
SCHEDULE LIST
Schedule 2.1 List of the jurisdictions of incorporation or organization
and qualification or license of Company and the
Subsidiaries
Schedule 2.2 Transfer restrictions
Schedule 2.3(a) Outstanding capital stock or other interest held by Company
Schedule 2.3(b) Restrictions on outstanding capital stock
Schedule 2.3(c) List of irrevocable proxies, voting agreements or similar
obligations with respect to capital stock
Schedule 2.5 Governmental Authorities
Schedule 2.6 Required consents
Schedule 2.7 Litigation
Schedule 2.8 List of changes or events
Schedule 2.10 Contracts
Schedule 2.11 Liabilities
Schedule 2.12(b) Company Real Property Leases
Schedule 2.13 Corporate Records
Schedule 3.2 Capitalization
Schedule 3.3 Subsidiaries
Schedule 3.5 Governmental Approvals
Schedule 3.7 Parent Litigation
Schedule 3.8 Parent Financial Statements
Schedule 3.9 Changes or Events
Schedule 3.13 Contracts
Schedule 6.5(b)(i) Company Options
Schedule 6.5(b)(ii) Parent Options
Schedule 6.7(e) Sale or Encumbrances