EXHIBIT 4.27
MASTER AGREEMENT
THIS AGREEMENT is dated April 22, 2001
AMONG:
XXXXXXX X. XXXXXX, of
0000 00xx Xxxxxx X., Xx. 0
Xxxxxxx, XX 00000
("GBM")
AND:
WORLDWIDE FIBER HOLDINGS LTD., an Alberta corporation with an
office at 1000 - 0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx
("WFH")
AND:
360NETWORKS INC., a Nova Scotia corporation with an office at
1500 - 0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx
("360")
WHEREAS:
(A) 360 currently employs GBM as its Chief Executive Officer. In connection
with GBM's employment, GBM purchased from 360 62,000,000 shares of 360
(the "PURCHASED SHARES") pursuant to the Stock Purchase Agreement. To
finance GBM's purchase of the Purchased Shares, he delivered the
Original Note.
(B) Pursuant to Section 8 of the Stock Purchase Agreement, GBM was granted
the Prior GBM Put, whereby GBM has the right to require 360 to purchase
certain Purchased Shares at their fair market value, as determined
pursuant to the Stock Purchase Agreement. Prior to any of the
transactions contemplated hereby, GBM had informed 360 that he may be
compelled to exercise the Prior GBM Put to reduce the risk to him of
his recourse obligations under the Original Note.
(C) 360 does not currently have a right to set-off its obligations under
the Prior GBM Put against the Original Note. Further, the Prior GBM Put
is not currently delegable to WFH under present circumstances. If GBM
were to exercise the Prior GBM Put, it could therefore adversely affect
360's liquidity and capital resources, cause compliance issues under
360's existing credit facilities, and be perceived adversely by the
public investment
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community. Accordingly, neither WFH nor 360 believe it would be in its
best interests for GBM to exercise the Prior GBM Put.
(D) 360 and WFH wish to avoid the risks described in recital C and, to do
so, they have requested GBM's cooperation and agreement to facilitate a
transaction whereby WFH would assume 360's obligation for GBM's put
rights contained in the Stock Purchase Agreement and clarify and amend
WFH's put obligations to GBM in the form of the GBM Put provided herein
and GBM would agree to cancel his put rights against 360, and 360 would
cause the GBM Note to be sold to WFH in exchange for a recourse
promissory note made by WFH in favour of 360finance ltd. in an amount
equal to the principal and interest owing under the GBM Note. GBM has
agreed to release 360 from its obligations with respect to the Prior
GBM Put only in the event that WFH, 360 and GBM enter into this
Agreement, whereby, among other things, WFH delivers the GBM Put.
(E) WFH would not be willing to purchase the GBM Note unless GBM agrees to
increase the interest rate charged on the GBM Note by 0.1% and would
not be willing to deliver the GBM Put unless GBM agrees to forbear his
rights to exercise the GBM Put for a period of up to 9 months (on the
terms and conditions set forth in the Forbearance Agreement) and GBM
agrees to grant to WFH certain set-off rights. GBM is willing to enter
into the Forbearance Agreement and increase the interest rate on his
note, and thereby facilitate the sale of the GBM Note to WFH and 360's
delegation of its put obligations to WFH, on the condition that the GBM
Note be amended to, among other things, make it non-recourse (except to
the Shares) and to grant GBM certain set-off rights, and the further
condition that the parties execute this Agreement.
(F) After giving effect to the transactions contemplated by this Agreement
and the documents referenced herein, GBM will be indebted to WFH in the
amount of $77,500,000, plus accrued but unpaid interest, as evidenced
by the Revised GBM Note issued in substitution for the GBM Note.
(G) In consideration of revisions which are incorporated in the Revised GBM
Note and the provision by WFH of the GBM Put, GBM has agreed to pledge
the Shares, and deliver possession of certificates evidencing the
Shares, to WFH to be dealt with as provided herein.
(H) 360 shall retain the Repurchase Right to repurchase some of GBM's
Shares, which may be exercised pursuant to the Stock Purchase
Agreement.
(I) The transactions described in Recitals C through G are occurring
concurrently with the execution of this Agreement and each such
transaction is dependent upon a concurrent occurrence of the others.
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual
agreements and covenants described above, contained herein, contained in
documents contemplated herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
mutually agree as follows:
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DEFINITIONS AND EXHIBITS
1. In this Agreement the following terms have the meaning ascribed
thereto:
AGGREGATE PUT AMOUNT LIMIT means that number of Shares which, when
multiplied by the Fair Market Value applicable to such Shares on an
Exercise Date, would at such time satisfy the outstanding principal and
interest on the Revised GBM Note;
ALTERNATIVE FAIR MARKET VALUE (LISTED SECURITIES) means, for the
purposes of this Agreement:
(a) at any time the Subordinate Voting Shares are Listed Securities,
the Alternative Fair Market Value (Listed Securities) of a Subordinate
Voting Share shall equal the simple average of the closing sale prices
of the Subordinate Voting Shares on the Applicable Canadian Exchange
(defined in (b) below) for each of the trading days on which there is a
closing price falling not more than 20 trading days immediately prior
to the Exercise Date, provided that:
(i) if there is no published market for Subordinate Voting
Shares in Canada, the calculation above will be made solely by
reference to the published market outside Canada on which the greatest
volume of trading in the Subordinate Voting Shares occurred during the
said 20 trading days;
(ii) if there has been trading of the Subordinate Voting
Shares on the relevant published market for fewer than 10 of the said
20 trading days, the Alternative Fair Market Value (Listed Securities)
of a Subordinate Voting Share is the average of the following prices
for each day of the said 20 trading days:
(A) the average of the bid and ask prices for
each day on which there was no trading ; and
(B) the closing price of Subordinate Voting
Shares for each day that there was trading;
(b) "Applicable Canadian Exchange" means, if there is only one
published market for Subordinate Voting Shares in Canada such published
market (which at the date hereof is the TSE), and if there is more than
one published market in Canada for Subordinate Voting Shares, the
exchange on which the greatest volume of trading of Subordinate Voting
Shares occurred during the said 20 trading days;
(c) for purposes of this definition, the Alternative Fair Market Value
(Listed Securites) of a Multiple Voting Share will be equal to the
Alternative Fair Market Value (Listed Securities) of a Subordinate
Voting Share;
(d) for purposes of this definition, all references to closing prices
and bid and ask prices shall be as published in the Eastern Edition of
The Wall Street Journal, or if not published therein, as published in
The Globe & Mail, and shall be expressed in US dollars.
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AMENDED STOCK PURCHASE AGREEMENT means the Amended and Restated Stock
Purchase Agreement dated April 22, 2001 between GBM and 360;
CERTIFICATE means a certificate signed by GBM and an officer of 360
(other than GBM) confirming the number of Vested Shares and Unvested
Shares as of the date thereof.
CLOSING has the meaning ascribed thereto in s.6;
CLOSING DATE has the meaning ascribed thereto in s.6;
EXERCISE DATE means the date on which GBM notifies WFH of GBM's
exercise of the GBM Put;
FAIR MARKET VALUE means, for purposes of this Agreement:
(a) at any time when the Subordinate Voting Shares are not traded on
any one or more of the Nasdaq National Market Quotation System
("NASDAQ"), the New York Stock Exchange ("NYSE"), the American Stock
Exchange ("AMEX") or the Toronto Stock Exchange ("TSE" and together
with NASDAQ, NYSE AND AMEX, the "EXCHANGES") (a listed security traded
on any of NASDAQ, NYSE, AMEX or TSE being a "LISTED SECURITY"), the
fair market value of a Subordinate Voting Share of 360 as determined,
at WFH's sole expense, by an appraisal firm or investment bank of
national standing experienced in the valuation of such securities
("VALUATION FIRM") selected in good faith by GBM and approved by WFH,
which approval shall not be unreasonably withheld or delayed. The
determination of Fair Market Value of a share of a Subordinate Voting
Share shall be based on the value in U.S. dollars that a willing buyer
with knowledge of all relevant facts would pay a willing seller for all
the outstanding equity securities of 360 in connection with an auction
of 360 as a going concern assuming bidders are prepared to pay a
control premium and without any discount for lesser voting rights, lack
of liquidity, lack of control, minority holder status or similar
factors. The Fair Market Value shall be determined by the Valuation
Firm as soon as practicable but in any event not later than 60 days
following the date of the appointment of the Valuation Firm. If WFH has
not approved a Valuation Firm within 15 days of the proposal of such
Valuation Firm by GBM hereunder, then (without prejudice to GBM's other
rights and remedies) GBM may request the President of the American
Arbitration Association to appoint a Valuation Firm, which will then be
the Valuation Firm for the transaction in question. 360 shall furnish
to the Valuation Firm all reasonably available information requested by
the Valuation Firm. The Fair Market Value established by the Valuation
Firm (or by the written agreement of all parties to the transaction)
shall be final and binding with respect to each required Valuation;
(b) at any time the Subordinate Voting Shares are Listed Securities,
the Fair Market Value of a share of Subordinate Voting Shares shall
equal the average of the closing sale prices of the Subordinate Voting
Shares (and in the event that the Subordinate Voting Shares are traded
on more than one Exchange, the average of the closing sale prices on
each such Exchange on which they are traded) (or, if no sales take
place on any such trading day on any Exchange on which the Subordinate
Voting Shares are traded, the
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closing sale price for the Subordinate Voting Shares on such Exchange
shall be the average of the closing bid and ask prices of the
Subordinate Voting Shares on such trading day on such Exchange)
expressed in U.S. dollars and as published in the Eastern Edition of
The Wall Street Journal (except with respect to the TSE, which shall be
as published in The Globe & Mail) for the 20 consecutive trading days
immediately prior to the Exercise Date;
(c) for purposes of this definition, the Fair Market Value of a
Multiple Voting Share will be equal to the Fair Market Value of a
Subordinate Voting Share;
FORBEARANCE AGREEMENT means the Forbearance Agreement made April 22,
2001 between GBM and WFH, a copy of which is attached as Exhibit 3;
GBM NOTE means the Original Note which has been assigned by 360finance
ltd. and reissued by GBM in favour of WFH, a copy of which is attached
hereto as Exhibit 2;
GBM PUT means the put right described herein;
MARKET VALUE, with respect to any Share, means Fair Market Value;
provided, however, that if the Subordinate Voting Shares are Listed
Securities and Fair Market Value is 115% or greater than Alternative
Fair Market Value (Listed Securities), then Market Value means
Alternative Fair Market Value (Listed Securities);
MULTIPLE VOTING SHARES means multiple voting shares of 360;
NOTICE means a written notice from any party addressed to all other
parties hereto;
ORIGINAL NOTE means the promissory note dated December 22, 1999
delivered pursuant to the Stock Purchase Agreement;
PERMITTED TRANSFEREE shall mean:
(a) GBM's spouse or children or grandchildren (in each
case, natural or adopted);
(b) any trust established solely for GBM's benefit or
the benefit of GBM's spouse or children or grandchildren (in
each case, natural or adopted);
(c) any corporation or partnership in which the direct
and beneficial owner of all of the equity interest is GBM or
GBM's spouse or children or grandchildren (in each case,
natural or adopted) (or any trust for the benefit of such
persons); or
(d) the heirs, executors, administrators or personal
representatives upon the death of GBM or upon the incompetency
or disability of GBM for purposes of the protection and
management of the assets of GBM;
where such Permitted Transferee agrees in a writing satisfactory to WFH
that (A) the provisions of this Agreement including without limitation
acknowledgement that the
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Shares are subject to the security interest constituted by the Pledge
and the provisions of this Agreement including the set-off rights
contained herein, will continue to apply to the transferred Shares in
the hands of such Permitted Transferee and (B) such Permitted
Transferee will not transfer, or permit any transfer, of the equity in
such Permitted Transferee to any entity other than one that also
constitutes a Permitted Transferee;
PLEDGE has the meaning ascribed thereto in s.3 hereof;
PRIOR GBM PUT means the put right described in the Stock Purchase
Agreement;
REPURCHASE PRICE means the price per Share payable by 360 upon exercise
of the Repurchase Right;
REPURCHASE RIGHT means the right described in the Amended Stock
Purchase Agreement whereby 360 has the right in certain circumstances
to purchase Unvested Shares;
REVISED GBM NOTE means the GBM Note as amended and restated in order to
make clear the agreed amendments, a copy of which is attached as
Exhibit 1;
SALE means a sale, or a hedge or other monetization, of any Vested
Shares by GBM;
SHARES means the Vested Shares and the Unvested Shares (as adjusted
from time to time after the date hereof for stock splits, stock
dividends, reverse stock splits, combinations, recapitalizations and
similar transactions affecting the Shares);
SPECIFIED SHARE PRICE means, with respect to one Subordinate Voting
Share, the sum of US$1.25 (as adjusted for stock splits, stock
dividends, reverse stock splits, combinations, recapitalizations and
similar transactions affecting the Subordinate Voting Shares) and
interest thereon in an amount equal to 6.20% per annum, compounded
annually on December 21, 2000, from December 22, 1999 to April 21,
2001, and thereafter in an amount equal to 6.30% per annum, compounded
annually, on December 21 in each year thereafter;
STOCK PURCHASE AGREEMENT means the stock purchase agreement dated as of
December 22, 1999 between GBM and 360 (then known as Worldwide Fibre
Inc.);
SUBORDINATE VOTING SHARES means subordinate voting shares of 360;
UNVESTED SHARES means Shares owned by GBM which remain subject to the
Repurchase Right, being at the date hereof 30,690,008 Subordinate
Voting Shares; and
VESTED SHARES means Shares owned by GBM which are not subject to the
Repurchase Right, being at the date hereof 21,469,992 Subordinate
Voting Shares and 9,840,000 Multiple Voting Shares.
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DELIVERY OF REVISED GBM NOTE AND THE FORBEARANCE AGREEMENT
2. GBM agrees to deliver concurrently herewith the Revised GBM Note evidencing
the agreed amendments referred to in the Recitals and the parties shall xxxx the
GBM Note "Cancelled". Such replacement of the GBM Note by the Revised GBM Note
shall not be considered in any way a repayment of the GBM Note. GBM and WFH will
further execute and deliver the Forbearance Agreement concurrently herewith.
PLEDGE BY GBM IN FAVOUR OF WFH
3. GBM hereby mortgages, pledges, charges, assigns and grants a continuing
security interest in and to the Shares together with any substitutions therefor
and the proceeds (subject to, and as limited by, the terms of s.5 hereof)
thereof and all dividends (including stock dividends and dividends consisting of
securities), interest, income or other distributions in respect of such shares
to and in favour of WFH, as general and continuing collateral security for the
payment of the Revised GBM Note (the "PLEDGE"). GBM herewith delivers to WFH the
certificate(s) representing the Shares (other than a certificate or certificates
for 5,660,000 Vested Subordinate Voting Shares) for the purposes of perfecting
the security interest and pledge hereof, together with duly executed stock
transfer powers in respect thereof. GBM will deliver a certificate or
certificates for the said 5,660,000 Shares if required by s.5 hereof.
Upon payment in full of the Revised GBM Note, the Vested Shares and Unvested
Shares shall be released from the Pledge and
(a) certificate(s) for the Vested Shares shall be delivered to GBM; and
(b) certificates for the Unvested Shares shall be delivered to and held
by 360 until the expiry of the Repurchase Option.
The parties shall mutually agree upon the respective number of Vested Shares and
Unvested Shares that are subject to the Pledge at the time of the said release.
Upon appointment of any collateral agent pursuant to s.4 , WFH will deliver any
Shares then held pursuant to the Pledge to the collateral agent.
APPOINTMENT OF COLLATERAL AGENT
4. WFH, GBM and 360 agree that they will use reasonable commercial efforts in
good faith to appoint an institutional trustee as a collateral agent to hold the
Shares subject to the Pledge and to deal with them on reasonably satisfactory
terms. The identity of the collateral agent and the terms of the agreement under
which the collateral agent holds the Shares shall be subject to the approval of
WFH, GBM and 360, acting reasonably and in good faith. In the event that the
parties are unable to reach agreement on the identity of the institutional
trustee or the terms of the agreement within 21 days of the date of this
Agreement, the matters shall be referred to and finally resolved by arbitration
under the Rules of the British Columbia International Commercial Arbitration
Centre (the "CENTRE"). The appointing authorities shall be the Centre. The case
shall be administered by the Centre in accordance with its "Procedures for Cases
Under the BCICAC Rules". The place of arbitration shall be Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, Xxxxxx.
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PARTIAL RELEASE ON SALE BY GBM
5. Notwithstanding the Pledge, GBM shall have the right to enter into a Sale,
provided that GBM shall pay to WFH, within 30 days of the closing of any Sale,
as a partial payment on a pro-rata basis of the principal amount (and accrued
and unpaid interest on such principal amount) of the Revised GBM Note, an amount
equal to the Specified Share Price for each Share subject to the Sale. For
greater certainty, it is acknowledged and agreed that an Unvested Share may not
be the subject of a Sale. In connection with any Sale of the Shares, WFH shall
make appropriate arrangements to timely release such Shares from the Pledge, so
as to allow the sale to occur in the normal course, so long as, as of the date
GBM requests the release of such Shares from the Pledge, the Fair Market Value
of the Shares which will remain subject to the Pledge (after giving effect to
the Shares requested to be released from the Pledge) is at least 125% of the
outstanding principal and accrued interest remaining due under the Revised GBM
Note (after giving effect to the payment of the Specified Share Price to be made
by GHM to WFH for each Share included in the Sale). GBM and WFH agree that the
5,660,000 Vested Subordinate Voting Shares in respect of which a certificate or
certificates were not delivered pursuant to s.3 may be the subject of a Sale
and GBM agrees that on or before June 30, 2001 he will pay the Specified Share
Price in respect thereof to WFH or will deliver the certificate or certificates
representing such Shares to WFH to be held pursuant to the Pledge.
GBM PUT
6. Upon the occurrence of any of the events specified below, GBM or any
Permitted Transferee shall have the right to sell all or any portion of his
Vested Shares or Unvested Shares, to WFH (the "GBM PUT") as set forth below:
(a) if GBM ceases to be employed by 360 for any reason, GBM or any
Permitted Transferee or, upon the death of either GBM or any Permitted
Transferee, his or her beneficiary, shall at any time after such date
of termination be entitled to exercise the GBM Put:
(i) with respect to any Vested Share at a per Share price
equal to the Market Value of the Shares calculated as of the
Exercise Date; and
(ii) with respect to any Unvested Share at a per Share price
equal to the lesser of
(A) the Market Value of a Share calculated as of the
Exercise Date or
(B) the Specified Share Price per Share;
provided, however, that the aggregate number of Shares that may be put
to WFH pursuant to clause (i) or clause (ii) shall not at any time
exceed the Aggregate Put Amount Limit;
(b) during GBM's employment by 000, XXX or any Permitted Transferee or,
upon the death of either GBM or any Permitted Transferee, his or her
beneficiary, shall be entitled to exercise the GBM Put with respect to
any Vested Share at a per Share price
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equal to the Market Value of the Shares calculated as of the Exercise
Date; provided, however, that the aggregate amount of Shares that may
be put to WFH pursuant to this s.6(b) shall not exceed the Aggregate
Put Amount Limit;
(c) the closing (the "CLOSING") of any purchase and sale of Shares to
be effected as a result of GBM's exercise of the GBM Put shall take
place at the offices of WFH at 11:00 a.m. (Pacific Coast Time) on the
fifth business day (the "CLOSING DATE") following the later of
(i) the Exercise Date, and
(ii) in the event that Subordinate Voting Shares are not
Listed Securities on the Exercise Date, the date upon which
the Valuation Firm determines the Fair Market Value,
or upon such other date and/or at such other time upon which WFH and
GBM may agree in writing;
(d) at the Closing of any purchase and sale of Shares pursuant to or as
a result of GBM's exercise of the GBM Put, subject always to the
set-off provisions contained herein:
(i) in the event the Subordinate Voting Shares are Listed
Securities on the Exercise Date, WFH shall deliver by wire
transfer of immediately available U.S. funds to an account
designated by GBM (A) if GBM is exercising the GBM Put in
respect of that number of Shares that is equal to the
Aggregate Put Amount Limit, an amount equal to the product
obtained by multiplying such number of Shares by the Market
Value thereof calculated in accordance with paragraphs (b) and
(c) of the definition of Fair Market Value, or in accordance
with the definition of Alternative Fair Market Value (Listed
Securities), as the case may be, or (B) if GBM is exercising
the GBM Put in respect of that number of Shares that is less
than the Aggregate Put Amount Limit, an amount equal to the
product obtained by multiplying such number of shares by the
Market Value thereof calculated in accordance with paragraphs
(b) and (c) of the definition of Fair Market Value, or in
accordance with the definition of Alternative Fair Market
Value (Listed Securities), as the case may be, and GBM shall
deliver the certificate representing the Shares being
purchased and sold pursuant to the exercise of the GBM Put;
and
(ii) in the event the Subordinate Voting Shares are not Listed
Securities on the Exercise Date, WFH shall deliver by wire
transfer of immediately available U.S. funds to an account
designated by GBM (A) if GBM is exercising the GBM Put in
respect of that number of Shares that is equal to the
Aggregate Put Amount Limit, an amount equal to the product
obtained by multiplying such number of Shares by the Fair
Market Value thereof calculated in accordance with paragraphs
(a) and (c) of the definition of Fair Market Value, or (B) if
GBM is exercising the GBM Put in respect of that number of
Shares that is less than the Aggregate Put Amount Limit, an
amount equal to the product obtained by multiplying such
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number of shares by the Fair Market Value thereof calculated
in accordance with paragraphs (a) and (c) of the definition of
Fair Market Value, and GBM shall deliver the certificate
representing the Shares being purchased and sold pursuant to
the exercise of the GBM Put.
GBM confirms and agrees that the GBM Put on the terms and conditions described
herein is WFH's sole obligation with respect to any put right GBM has as of the
date hereof or ever has had.
SHARES SUBJECT TO THE REPURCHASE RIGHT
7. The parties acknowledge that 360 continues to have the Repurchase Right. So
long as WFH continues to hold Shares pursuant to the Pledge, WFH will hold the
Unvested Shares in escrow for 360 to permit 360 to exercise its Repurchase
Right. For the purposes of establishing WFH's obligation herein, 360 and GBM
covenant to deliver to WFH a Certificate monthly after each release of Unvested
Shares to GBM. If 360 exercises its Repurchase Right with respect to any
Unvested Shares held by WFH pursuant to the Pledge, 360 will pay the purchase
price pursuant to the Repurchase Right so exercised to WFH if and to the extent
of any amounts remaining due under the Revised GBM Note, and otherwise to GBM,
and such payment, if made to WFH, will fulfil 360's payment obligation to GBM
with respect to the Repurchase Right so exercised. The amount of such payment if
made to WFH will be applied by WFH as a payment on the Revised GBM Note.
VOTING OF SHARES
8. As long as the Shares that are represented by the share certificates are held
pursuant to this Agreement, GBM shall be entitled to vote such Shares and be
entitled, subject to s.9, to all rights and privileges of a shareholder of 360.
STOCK DIVIDEND
9. If any stock dividend or other distribution of shares is paid or made on or
in respect of any of the Shares represented by the share certificates included
in the Collateral Documents while such share certificates are held pursuant to
this Agreement, GBM will, forthwith upon his receipt thereof, deliver any share
certificates representing such stock dividend or distribution to WFH to be held
by WFH pursuant to the provisions of this Agreement, and WFH will accept such
share certificates in this regard.
GBM RIGHT TO SETOFF.
10. Notwithstanding anything contained herein to the contrary, GBM shall have
the right (but not the obligation), at his sole discretion, to deliver Shares to
WFH pursuant to the GBM Put and elect that any amount owed to him by WFH (or any
assignee) as a result of the GBM Put automatically reduce the amount owed by GBM
under the Revised GBM Note by an equal amount. Without limiting the generality
of the foregoing, in the event that GBM exercises the GBM Put and WFH (or any
assignee) fails to honor its obligations in accordance with the terms hereof,
then GBM shall have the right (but not the obligation), at his sole discretion,
to reduce the amount due under the Revised GBM Note by any amount that would
have been paid
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to GBM if WFH (or such assignee) had honored its obligations under the GBM Put,
and the Shares so attempted to be put shall be transferred to WFH.
WFH RIGHT TO SETOFF
11. Notwithstanding anything contained herein to the contrary, if GBM exercises
the GBM Put and delivers Shares to WFH (or its assignee), WFH (or its assignee)
shall have the right (but not the obligation), at its sole discretion, to
discharge amounts owed to GBM under the GBM Put, up to the full amount remaining
due under the Revised GBM Note, by cancelling the amount owed by GBM under the
Revised GBM Note. The right of WFH (or its assignee) under this s.11 shall not
be limited or affected by any mortgage, pledge or charge over the Revised GBM
Note created by or pursuant to the general security agreement dated as of April
22, 2001 granted by WFH to 360finance ltd.
CONDITIONS FOR WFH OBLIGATIONS
12. The obligations of WFH under s.5 and s.6 shall be conditional upon the
receipt by WFH of a Certificate, dated not more than two days prior to the
closing of a Sale or the Closing Date, as the case may be, which confirms that
GBM has a sufficient number of Vested Shares or Unvested Shares to effect the
transaction contemplated by the applicable paragraph.
COVENANT OF WFH
13. So long as the Revised GBM Note is outstanding , WFH agrees with GBM that:
(a) it will not engage in any business other than the direct or
indirect holding or disposing of shares in 360 and Urbanlink Holdings
Ltd. (and, in either case, successors); and
(b) it will not create any indebtedness other than indebtedness in the
ordinary course for day-to-day operating expenses including for
professional fees, other indebtedness to affiliates which is
subordinate to all other indebtedness and the note to 360finance ltd.
referred to in recital D.
WFH OBLIGATIONS WITH REGARD TO IRS FORM W-8 BEN
14. With respect to the Revised GBM Note, WFH will provide a duly executed IRS
Form W-8 BEN and a statement that WFH is not a bank within the meaning of
section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the
"Code"), or a controlled foreign corporation within the meaning of section
881(c)(3)(C) of the Code and that WFH intends to claim exemption from U.S.
Federal withholding tax under section 881(c) of the Code. WFH shall indicate
whether it is entitled to treaty benefits on such Form W-8 BEN. WFH shall
deliver such Form W-8 BEN to GBM within thirty (30) days after WFH's acquisition
of the Revised GBM Note. WFH represents that it is not a U.S. person (as such
term is defined in section 7701(a)(30) of the Code) and agrees that it will
deliver to GBM new, accurate and complete forms or documentation prescribed by
applicable law if such forms and documentation are required to be updated so as
to permit interest payments to be made without withholding tax or at a reduced
rate of withholding tax.
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NOTICE
15. Any notice, request, direction or other instrument required or permitted to
be given hereunder by any party to another will be deemed to be well and
sufficiently given if in writing and delivered by hand (including commercial
courier service) to the applicable party at the applicable address set out in
the initial pages of this Agreement or to such other address as is specified by
the particular party by notice to each other party hereto.
DEEMED RECEIPT
16. Any notice delivered as aforesaid will be deemed conclusively to have been
effectively given and received on the day such notice was delivered as
aforesaid, if it was delivered by hand (including commercial courier).
GENDER AND NUMBER
17. In this Agreement, words importing the masculine gender include the feminine
or neuter, words in the singular include the plural, words importing a corporate
entity include individuals and vice versa.
SEVERABILITY
18. If one or more provisions of this Agreement are held to be unenforceable
under applicable law, the parties agree to renegotiate such provision in good
faith. In the event that the parties cannot reach a mutually agreeable and
enforceable replacement for such provision, then such provision will be enforced
to the maximum extent possible and the other provisions will remain fully
effective and enforceable, but only to the extent that such enforcement does not
fundamentally alter the intent of the parties as evidenced by this Agreement.
GOVERNING LAW
19. This Agreement is and will be deemed to have been made in the Province of
British Columbia, for all purposes will be governed exclusively by and construed
in accordance with the laws prevailing in British Columbia and the laws of
Canada applicable therein, and the rights and remedies of the parties hereto
will be determined in accordance with those laws.
ATTORNMENT
20. The parties hereto irrevocably attorn to the exclusive jurisdiction of the
courts of British Columbia and all courts having appellate jurisdiction
thereover, and agree that any proceeding commenced or maintained in respect of
or arising as a consequence of this Agreement will be commenced and maintained
only in such of those courts as is appropriate.
ENUREMENT; TRANSFER TO WFH SUBSIDIARY
21. This Agreement shall inure to the benefit of the successors and assigns of
WFH and 360 and, subject to the restrictions on transfer set forth in this
Agreement, be binding upon GBM, GBM's heirs, executors, administrators,
successors, and Permitted Transferees.
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Notwithstanding anything contained in this Agreement to the contrary, WFH shall
not delegate any of its obligations hereunder without the prior written consent
of GBM, and any such delegation without GBM's written consent shall be void and
of no effect; provided that WFH may, with the consent of GBM which shall not be
unreasonably withheld, transfer its rights and obligations under this Agreement
to a wholly-owned subsidiary of WFH if WFH transfers the Revised GBM Note to
such subsidiary concurrently therewith. It shall not be unreasonable for GBM to
withhold his consent to any transfer if he is of the opinion, reasonably held,
that, as a result of such transfer, his rights and obligations under this
Agreement would be prejudiced or subject to risk which does not exist with
respect to WFH.
COUNTERPARTS
22. This Agreement may be executed by any party hereto and delivered, in
original form or by electronic facsimile, in several counterparts, each of which
together will be read and construed and will constitute one and the same
instrument as if all of the parties hereto executed the same document.
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IN WITNESS WHEREOF the parties have executed and delivered this Agreement on the
day and year first above written.
Signed
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WORLDWIDE FIBER HOLDINGS LTD.
Per: Signed____________________________
Authorized Signatory
360 NETWORKS INC.
Per: Signed____________________________
Authorized Signatory
