Worldwide Fiber Inc.
U.S. $500,000,000
12% Series A Senior Notes due 2009
Purchase Agreement
July 23, 1999
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
TD Securities (USA) Inc.
U.S. $500,000,000
12% Series A Senior Notes due 2009
of WORLDWIDE FIBER INC.
PURCHASE AGREEMENT
July 23, 1999
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
TD Securities (USA) Inc.
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Worldwide Fiber Inc., a corporation incorporated under the laws of Alberta
(the "Company"), proposes to issue and sell to ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Inc. and TD Securities (USA) Inc. (each, an "Initial Purchaser" and, together,
the "Initial Purchasers") an aggregate of U.S. $500,000,000 in principal amount
of its 12% Series A Senior Notes due 2009 (the "Series A Notes"), subject to the
terms and conditions set forth herein. The Series A Notes are to be issued
pursuant to the provisions of an indenture (the "Indenture"), to be dated as of
the Closing Date (as defined below), between the Company and HSBC Bank USA, as
trustee (the "Trustee"). The Series A Notes and the Series B Notes (as defined
below) issuable in exchange therefor are collectively referred to herein as the
"Notes." Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Indenture.
1. Offering Memorandum. The Series A Notes will be offered and sold to the
Initial Purchasers pursuant to one or more exemptions from the registration
requirements under the Securities Act of 1933, as amended (the "Act"). The
Company has prepared a preliminary offering memorandum, dated July 1, 1999 (the
"Preliminary Offering Memorandum"), a preliminary Canadian addendum, dated July
1, 1999 (the "Preliminary Wrap"), a final offering memorandum, dated July 23,
1999 (the "Offering Memorandum"), and a final Canadian addendum, dated July 23,
1999 (the "Final Wrap"), in each case, relating to the Series A Notes. The
Issuer hereby confirms that it has authorized the use of the Preliminary
Offering Memorandum, the Preliminary Wrap, the Offering Memorandum and the Final
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Wrap, and any amendment or supplement thereto, in connection with the offer and
sale of the Series A Notes by the Initial Purchasers. Unless stated to the
contrary, all references herein (i) to the "Preliminary Canadian Memorandum" are
to the Preliminary Offering Memorandum as supplemented by the Preliminary Wrap;
and (ii) to the "Final Canadian Memorandum" are to the Offering Memorandum as
supplemented by the Final Wrap.
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Series A Notes (and all
securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER: (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE ACT)(A "QIB"), (B) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR (C) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),(2),(3)
OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"), (2) AGREES
THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904
OF THE ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE
OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH
THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION
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REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED, A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER
THE ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE
TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."
2. Agreements to Sell and Purchase. On the basis of the representations,
warranties and covenants contained in this Agreement, and subject to the terms
and conditions contained herein, the Company agrees to issue and sell to the
Initial Purchasers, and each Initial Purchaser agrees, severally and not
jointly, to purchase from the Company, the principal amounts of Series A Notes
set forth opposite the name of such Initial Purchaser on Schedule A hereto at a
purchase price equal to 97.0% of the principal amount thereof (the "Purchase
Price").
3. Terms of Offering. The Initial Purchasers have advised the Company that
the Initial Purchasers will make offers (the "Exempt Resales") of the Series A
Notes purchased hereunder on the terms set forth in the Offering Memorandum, as
amended or supplemented, solely to (i) persons whom the Initial Purchasers
reasonably believe to be "qualified institutional buyers" as defined in Rule
144A under the Act ("QIBs"), and (ii) persons permitted to purchase the Series A
Notes in offshore transactions in reliance upon Regulation S under the Act
(each, a "Regulation S Purchaser") (such persons specified in clauses (i) and
(ii) being referred to herein as the "Eligible Purchasers"). The Initial
Purchasers will offer the Series A Notes to Eligible Purchasers initially at a
price equal to 100% of the principal amount thereof. Such price may be changed
at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will have
the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated the Closing Date, in substantially
the form of Exhibit A hereto, for so long as such Series A Notes constitute
"Transfer Restricted Securities" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company will
agree to file with the Securities and Exchange Commission (the "Commission")
under the circumstances set forth therein, (i) a registration statement under
the Act (the
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"Exchange Offer Registration Statement") relating to the Company's 12% Series B
Senior Notes due 2009 (the "Series B Notes"), to be offered in exchange for the
Series A Notes (such offer to exchange being referred to as the "Exchange
Offer") and (ii) a shelf registration statement pursuant to Rule 415 under the
Act (the "Shelf Registration Statement" and, together with the Exchange Offer
Registration Statement, the "Registration Statements") relating to the resale by
certain holders of the Series A Notes and to use its reasonable best efforts to
cause such Registration Statements to be declared and remain effective and
usable for the periods specified in the Registration Rights Agreement and to
consummate the Exchange Offer. This Agreement, the Indenture, the Notes, and the
Registration Rights Agreement are hereinafter sometimes referred to collectively
as the "Operative Documents."
4. Delivery and Payment.
(a) Delivery of, and payment of the Purchase Price for, the Series A Notes
shall be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other location as may be mutually acceptable. Such
delivery and payment shall be made at 9:00 a.m. New York City time, on July 28,
1999 or at such other time on the same date or such other date as shall be
agreed upon by the Initial Purchasers and the Company. The time and date of such
delivery and the payment for the Series A Notes are herein called the "Closing
Date."
(b) One or more of the Series A Notes in definitive global form, registered
in the name of Cede & Co., as nominee of the Depository Trust Company ("DTC"),
having an aggregate principal amount corresponding to the aggregate principal
amount of the Series A Notes (collectively, the "Global Note"), shall be
delivered by the Company to the Initial Purchasers (or as the Initial Purchasers
direct) in each case with any transfer taxes thereon duly paid by the Company
against payment by the Initial Purchasers of the Purchase Price thereof by wire
transfer in same day funds to the order of the Company. The Global Note shall be
made available to the Initial Purchasers for inspection not later than 10:00
a.m., New York City time, on the business day immediately preceding the Closing
Date.
5. Agreements of the Company. The Company hereby agrees with the Initial
Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested by the
Initial Purchasers, confirm such advice in writing, (i) of the issuance by any
state securities commission or any securities commission of a Relevant Province
(as defined below) of any stop order suspending the qualification or exemption
from qualification of any Series A Notes for offering or sale in any
jurisdiction designated by the Initial Purchasers pursuant to Section 5(e)
hereof, or the initiation of any proceeding by any state securities commission
or any other federal, state or provincial regulatory authority for such purpose
and (ii) of the happening of any
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event during the period referred to in Section 5(c) below that makes any
statement of a material fact made in the Preliminary Offering Memorandum,
Preliminary Canadian Memorandum, the Offering Memorandum, or the Final Canadian
Memorandum untrue or that requires any additions to or changes in the
Preliminary Offering Memorandum, the Preliminary Canadian Memorandum, the
Offering Memorandum, or the Final Canadian Memorandum in order to make the
statements therein not misleading. The Company shall use its best efforts to
prevent the issuance of any stop order or order suspending the qualification or
exemption of any Series A Notes under any state securities or Blue Sky laws or
Canadian Securities Laws (as defined below) and, if at any time any state
securities commission or other federal or state regulatory authority shall issue
an order suspending the qualification or exemption of any Series A Notes under
any state securities or Blue Sky laws or Canadian Securities Laws (as defined
below), the Company shall use its best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons identified by the
Initial Purchasers to the Company as many copies of the Preliminary Offering
Memorandum, the Preliminary Canadian Memorandum, the Offering Memorandum and the
Final Canadian Memorandum, and any amendments or supplements thereto, as the
Initial Purchasers may reasonably request for the time period specified in
Section 5(c). Subject to the Initial Purchasers' compliance with its
representations and warranties and agreements set forth in Section 7 hereof, the
Company consents to the use of the Preliminary Offering Memorandum, the
Preliminary Canadian Memorandum, the Offering Memorandum and the Final Canadian
Memorandum, and any amendments and supplements thereto required pursuant hereto,
by the Initial Purchasers in connection with Exempt Resales.
(c) During such period as in the opinion of counsel for the Initial
Purchasers an Offering Memorandum is required by law to be delivered in
connection with Exempt Resales by the Initial Purchasers, (i) not to make any
amendment or supplement to the Offering Memorandum or the Final Canadian
Memorandum of which the Initial Purchasers shall not previously have been
advised or to which the Initial Purchasers shall reasonably object after being
so advised and (ii) to prepare promptly upon the Initial Purchasers' reasonable
request, any amendment or supplement to the Offering Memorandum or the Final
Canadian Memorandum which may be necessary or advisable in connection with such
Exempt Resales.
(d) If, during the period referred to in Section 5(c) above, any event
shall occur or condition shall exist as a result of which, in the opinion of
counsel to the Initial Purchasers, it becomes necessary to amend or supplement
the Offering Memorandum or the Final Canadian Memorandum in order to make the
statements therein, in the light of the circumstances when such Offering
Memorandum or the Final Canadian Memorandum is delivered to an Eligible
Purchaser, not misleading, or if, in the opinion of counsel to the Initial
Purchasers, it is necessary to amend or supplement the Offering Memorandum or
the Final Canadian
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Memorandum to comply with any applicable law, forthwith to prepare an
appropriate amendment or supplement to such Offering Memorandum or Final
Canadian Memorandum so that the statements therein, as so amended or
supplemented, will not, in the light of the circumstances when it is so
delivered, be misleading, or so that such Offering Memorandum or Final Canadian
Memorandum will comply with applicable law, and to furnish to the Initial
Purchasers and such other persons as the Initial Purchasers may designate such
number of copies thereof as the Initial Purchasers may reasonably request.
(e) Prior to the sale of all Series A Notes pursuant to Exempt Resales as
contemplated hereby, to cooperate with the Initial Purchasers and counsel to the
Initial Purchasers in connection with the registration or qualification of the
Series A Notes for offer and sale to the Initial Purchasers and pursuant to
Exempt Resales under the securities or Blue Sky laws of such jurisdictions or
the Canadian Securities Laws as the Initial Purchasers may request and to
continue such registration or qualification in effect so long as required for
Exempt Resales and to file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification; provided, however, that the Company shall not be required in
connection therewith to qualify as a foreign corporation in any jurisdiction in
which it is not now so qualified or to take any action that would subject it to
general consent to service of process or taxation other than as to matters and
transactions relating to the Preliminary Offering Memorandum, the Offering
Memorandum or Exempt Resales, in any jurisdiction in which it is not now so
subject.
(f) So long as the Notes are outstanding, whether or not the Company is
subject to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the Company shall file with the Commission and
furnish to the holders of the Notes and the Trustee (i) within 140 days after
the end of each fiscal year, annual reports on Form 20-F or 40-F, as applicable
(or any successor form), containing the information required to be contained
therein (or required in such successor form) and (ii) (x) within 45 days after
the end of each of the first three fiscal quarters of each fiscal year, reports
on Form 10-Q or (y) within 60 days after the end of each of the first three
fiscal quarters of each fiscal year, reports on Form 6-K (or any successor form)
which, regardless of applicable requirements, shall, at a minimum, contain a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
(g) So long as the Notes are outstanding, to furnish to the Initial
Purchasers as soon as available copies of all reports or other communications
furnished by the Company to its security holders or furnished to or filed with
the Commission, any securities commission of a Relevant Province or any national
securities exchange on which any class of securities of the Company is listed
and such other publicly available information concerning the Company and/or its
subsidiaries as the Initial Purchasers may reasonably request.
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(h) So long as the Notes are outstanding, the Company will furnish to the
holders of Notes the information ("Rule 144A Information") required to be
delivered pursuant to Rule 144A(d)(4) under the Act.
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the obligations of the Company under
this Agreement, including: (i) the fees, disbursements and expenses of counsel
to the Company and accountants of the Company in connection with the sale and
delivery of the Series A Notes to the Initial Purchasers and pursuant to Exempt
Resales, and all other fees and expenses in connection with the preparation,
printing, filing and distribution of the Preliminary Offering Memorandum, the
Preliminary Canadian Memorandum, the Offering Memorandum, the Final Canadian
Memorandum, and all amendments and supplements to any of the foregoing
(including financial statements), including the mailing and delivering of copies
thereof to the Initial Purchasers and persons designated by them in the
quantities specified herein, (ii) all costs and expenses related to the transfer
and delivery of the Series A Notes to the Initial Purchasers and pursuant to
Exempt Resales, including any transfer or other taxes payable thereon, (iii) all
expenses in connection with the registration or qualification of the Series A
Notes for offer and sale under the securities or Blue Sky laws of the several
states and the Canadian Securities Laws (as defined below) and all costs of
printing or producing any preliminary and supplemental Blue Sky memoranda in
connection therewith (including the filing fees and fees and disbursements of
counsel for the Initial Purchasers in connection with such registration or
qualification and memoranda relating thereto), (iv) the cost of printing
certificates representing the Series A Notes, (v) all expenses and listing fees
in connection with the application for quotation of the Series A Notes in the
National Association of Securities Dealers, Inc. ("NASD") Automated Quotation
System PORTAL ("PORTAL"), (vi) the fees and expenses of the Trustee and the
Trustee's counsel in connection with the Indenture, and the Notes, (vii) the
costs and charges of any transfer agent, registrar and/or depository (including
DTC), (viii) any fees charged by rating agencies for the rating of the Notes,
(ix) all costs and expenses of the Exchange Offer and any Registration
Statement, as set forth in the Registration Rights Agreement, and (x) and all
other costs and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this Section.
(j) To use its reasonable best efforts to effect the inclusion of the
Series A Notes in PORTAL and to maintain the listing of the Series A Notes on
PORTAL for so long as the Series A Notes are outstanding.
(k) To obtain the approval of DTC for "book-entry" transfer of the Notes,
and to comply with all of its agreements set forth in the representation letters
of the Company to DTC relating to the approval of the Notes by DTC for
"book-entry" transfer.
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(l) During the period beginning on the date hereof and continuing to and
including the Closing Date, not to offer, sell, contract to sell or otherwise
transfer or dispose of any debt securities of the Company or any subsidiary of
the Company or any warrants, rights or options to purchase or otherwise acquire
debt securities of the Company or any subsidiary of the Company substantially
similar to the Notes (other than (i) the Notes and (ii) commercial paper issued
in the ordinary course of business), without the prior written consent of the
Initial Purchasers.
(m) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that would be
integrated with the sale of the Series A Notes to the Initial Purchasers or
pursuant to Exempt Resales in a manner that would require the registration of
any such sale of the Series A Notes under the Act.
(n) Not to voluntarily claim, and to actively resist any attempts to claim,
the benefit of any usury laws against the holders of any Notes.
(o) To cause the Exchange Offer to be made in the appropriate form to
permit Series B Notes to be offered in exchange for the Series A Notes and to
comply with all applicable federal, state, and provincial securities laws in
connection with the Exchange Offer.
(p) To comply with all of its agreements set forth in the Registration
Rights Agreement.
(q) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by it prior to the
Closing Date and to satisfy all conditions precedent to the delivery of the
Series A Notes.
6. Representations, Warranties and Agreements of the Company. As of the
date hereof, the Company represents and warrants to, and agrees with, the
Initial Purchasers that:
(a) The Preliminary Offering Memorandum, the Preliminary Canadian
Memorandum, the Offering Memorandum and the Final Canadian Memorandum, do not,
and any supplement or amendment to them will not, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph (a) shall not apply
to statements in or omissions from the Preliminary Offering Memorandum, the
Preliminary Canadian Memorandum, the Offering Memorandum and the Final Canadian
Memorandum (or any supplement or amendment thereto) based upon information
relating to the Initial Purchasers furnished to the Company in writing by the
Initial Purchasers expressly for use therein. No stop order preventing the use
of the Preliminary Offering Memorandum, the Pre-
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liminary Canadian Memorandum, the Offering Memorandum or the Final Canadian
Memorandum, or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.
(b) Each of the Company and its subsidiaries has been duly organized, is
validly existing as a corporation or limited liability company, as applicable,
in good standing under the laws of its jurisdiction of incorporation,
organization, amalgamation or continuance and has the requisite, corporate or
other, power and authority to carry on its business as described in the
Preliminary Offering Memorandum, the Preliminary Canadian Memorandum, the
Offering Memorandum and the Final Canadian Memorandum, and to own, lease and
operate its properties, and each is duly qualified and is in good standing as a
foreign corporation or limited liability company, as applicable, authorized to
do business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole (a "Material Adverse Effect").
(c) All outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid, non-assessable and not subject
to any preemptive or similar rights, and are owned by Ledcor Inc., an Alberta
corporation ("Ledcor"), directly or indirectly through two wholly-owned
subsidiaries, free and clear of any security interest, claim, lien, encumbrance
or adverse interest of any nature (each, a "Lien"), except for security
interests and pledges in favor of The Toronto-Dominion Bank granted pursuant to
the Fiber Optic Network Financing Credit Agreement, dated as of October 14, 1998
(the "Fiber Optic Network Financing Credit Agreement"), by and between Ledcor
Industries Limited and The Toronto-Dominion Bank.
(d) The entities listed on Schedule B hereto are the only subsidiaries,
direct or indirect, of the Company (collectively, the "Subsidiaries"). The only
Subsidiaries that are material for purposes of this Agreement (the "Material
Subsidiaries") are listed on Schedule C attached hereto. Each of Ledcor
Engineering Inc., Pacific Fiber Link SEA-POR, Inc. and Pacific Fiber Link
MON-ALB, Inc. carries on no active business. All of the outstanding shares of
capital stock of each of the Company's Material Subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable, and, except
for Worldwide Fiber (USA), Inc., WFI-CN Fiber Inc., Worldwide Fiber IC LLC,
Worldwide Fiber Networks, Inc., IC Fiber Alabama LLC, IC Fiber Illinois LLC, IC
Fiber Iowa LLC, IC Fiber Kentucky LLC, IC Fiber Louisiana LLC, IC Fiber
Mississippi LLC, IC Fiber Tennessee LLC, and Ledcom Holdings Ltd., are owned by
the Company, directly or indirectly through one or more subsidiaries, free and
clear of any Lien. Worldwide Fiber (USA), Inc. is owned 75% by the Company and
25% by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Construction Inc., in each case, directly or indi-
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rectly through one or more subsidiaries, free and clear of any Lien. Worldwide
Fiber Networks, Inc. is a wholly-owned subsidiary of Worldwide Fiber (USA), Inc.
Ledcom Holdings Ltd. is owned 50% by the Company and 50% by Ledcor Inc., in the
case of the Company, directly or indirectly, through one or more subsidiaries,
free and clear of any Lien except for the security interest granted to Ledcor
Inc. pursuant to the Unanimous Shareholders Agreement, dated as of December 1,
1998, by and among Worldwide Fiber Communications Ltd. Ledcor Inc., Ledcor
Industries Limited and Ledcor Holdings Ltd. WFI-CN Inc. is owned 75% by the
Company and 25% by the Canadian National Railway Company ("CN"), in the case of
the Company, directly or indirectly through one or more subsidiaries, free and
clear of any Lien. Worldwide Fiber IC LLC is owned 75% by the Company and 25% by
IC Fiber Holdings Inc., a subsidiary of the Illinois Central Railroad Company
("IC"), in the case of the Company, directly or indirectly through one or more
subsidiaries, free and clear of any Lien. Each of IC Fiber Alabama LLC, IC Fiber
Illinois LLC, IC Fiber Iowa LLC, IC Fiber Kentucky LLC, IC Fiber Louisiana LLC,
IC Fiber Mississippi LLC and IC Fiber Tennessee LLC are owned by Worldwide Fiber
IC LLC, free and clear of any Lien.
(e) There are no restrictions on the corporate power and capacity of the
Company to enter into this Agreement or any other Operative Document, to execute
and sell the Series A Notes or to carry out its obligations hereunder and
thereunder, in each case, except as would not have a Material Adverse Effect.
(f) This Agreement has been duly authorized, executed and delivered by the
Company.
(g) The Indenture has been duly authorized by the Company and, on the
Closing Date, will have been validly executed and delivered by the Company. When
the Indenture has been duly executed and delivered by the Company, the Indenture
will be a valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms except as the enforceability thereof may be
limited by (i) bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law). On the Closing Date, the Indenture will conform in all material respects
to the requirements of the Trust Indenture Act of 1939, as amended (the "TIA" or
"Trust Indenture Act"), the rules and regulations of the Commission applicable
to an indenture which is qualified thereunder.
(h) The Series A Notes have been duly authorized and, on the Closing Date,
will have been validly executed and delivered by the Company. When the Series A
Notes have been issued, executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Series A Notes
will be entitled to the benefits of the Indenture and will
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be valid and binding obligations of the Company, enforceable in accordance with
their terms except as the enforceability thereof may be limited by (i)
bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
creditors' rights generally and (ii) general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law). On the
Closing Date, the Series A Notes will conform as to legal matters to the
description thereof contained in the Offering Memorandum.
(i) On the Closing Date, the Series B Notes will have been duly authorized
by the Company. When the Series B Notes are issued, executed and authenticated
in accordance with the terms of the Exchange Offer and the Indenture, the Series
B Notes will be entitled to the benefits of the Indenture and will be the valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforceability thereof may be limited
by (i) bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
creditors' rights generally and (ii) general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
(j) The Registration Rights Agreement has been duly authorized by the
Company and, on the Closing Date, will have been duly executed and delivered by
the Company. When the Registration Rights Agreement has been duly executed and
delivered, the Registration Rights Agreement will be a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms except as the enforceability thereof may be limited by (i) bankruptcy,
insolvency, fraudulent conveyance or similar laws affecting creditors' rights
generally, (ii) general principles of equity (regardless of whether enforcement
is considered in a proceeding in equity or at law) and (iii) the enforcement of
indemnification and contribution provisions thereof may be limited by federal
and state securities laws and public policy considerations underlying such laws.
On the Closing Date, the Registration Rights Agreement will conform as to legal
matters to the description thereof in the Offering Memorandum.
(k) Neither the Company nor any of its Material Subsidiaries is in
violation of its respective articles or by-laws or in default in the performance
of any obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound.
(l) The execution, delivery and performance of this Agreement and the other
Operative Documents by the Company, compliance by the Company with all
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required or previously
ob-
-12-
tained under the securities or Blue Sky laws of the various states or the
Canadian Securities Laws), (ii) conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the articles or by-laws of the
Company or any of its Material Subsidiaries or any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is material to the Company
and its subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
their respective property is bound, (iii) violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree of any court
or any governmental body or agency having jurisdiction over the Company, any of
its Material Subsidiaries or their respective property, (iv) result in the
imposition or creation of (or the obligation to create or impose) a Lien under,
any agreement or instrument to which the Company or any of its Material
Subsidiaries is a party or by which the Company or any of its subsidiaries or
their respective property is bound except as would not have a Material Adverse
Effect, or (v) result in the termination, suspension or revocation of any
Authorization (as defined below) of the Company or any of its Material
Subsidiaries or result in any other impairment of the rights of the holder of
any such Authorization except such terminations, suspensions, revocations or
impairments as would not have a Material Adverse Effect.
(m) There are no legal or governmental proceedings pending or, to the best
of the Company's knowledge, threatened to which the Company or any of its
Material Subsidiaries is or could be a party or to which any of their respective
property is or could be subject, which might result, singly or in the aggregate,
in a Material Adverse Effect or materially and adversely affect the ability of
the Company, or any of its subsidiaries to perform its obligations under this
Agreement or any of the other Operative Documents, or to consummate the
transactions contemplated hereby or thereby.
(n) Except as disclosed in the Offering Memorandum and the Final Canadian
Memorandum, neither the Company nor any of its subsidiaries is a party or
subject to the provision of any injunction, judgment, decree or order of any
court, regulatory body, administrative agency or other governmental body except
as would not have a Material Adverse Effect.
(o) The Company and each of its Material Subsidiaries is in compliance with
all applicable statutes, laws, ordinances, administrative or governmental rules
and regulations of the jurisdictions in which it is conducting its business
except where a failure to be in such compliance would not have a Material
Adverse Effect.
(p) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state, provincial or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), any
provisions of the Employee Retirement Income
-13-
Security Act of 1974, as amended ("ERISA") and provisions of any federal or
provincial pension standards legislation (or rules, regulations and
administration policies thereunder) in Canada, or any provisions of the Foreign
Corrupt Practices Act or the rules and regulations promulgated thereunder,
except for such violations which, singly or in the aggregate, would not have a
Material Adverse Effect.
(q) There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up (including, without limitation, to remediate any substance which
exceeds decommissioning, remediation or similar guidelines, standards or
criteria under Environmental Laws or applied by governmental authorities acting
under Environmental Laws), closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties or as a result of
government action) which would, singly or in the aggregate, have a Material
Adverse Effect.
(r) Except as disclosed in the Offering Memorandum and the Final Canadian
Memorandum, each of the Company and its Material Subsidiaries has all permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "Authorization") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Except as disclosed
in the Offering Memorandum and the Final Canadian Memorandum, each such
Authorization is valid and in full force and effect and each of the Company and
its Material Subsidiaries is in compliance with all the terms and conditions
thereof and with the rules and regulations of the authorities and governing
bodies having jurisdiction with respect thereto; and no event has occurred
(including, without limitation, the receipt of any notice from any authority or
governing body) which allows or, after notice or lapse of time or both, would
allow, revocation, suspension or termination of any such Authorization or
results or, after notice or lapse of time or both, would result in any other
impairment of the rights of the holder of any such Authorization; and such
Authorizations contain no restrictions that are burdensome to the Company or any
of its Material Subsidiaries except as would not, singly or in the aggregate,
have a Material Adverse Effect.
(s) The accountants, PriceWaterhouseCoopers and Deloitte & Touche, that
have certified the financial statements and supporting schedules included in the
Preliminary Offering Memorandum, the Preliminary Canadian Memorandum, the
Offering Memorandum and the Final Canadian Memorandum are independent public
accountants with respect to the Company, as required by the Act and the Exchange
Act. To the best knowledge of the Com-
-14-
pany, the historical financial statements, together with related schedules and
notes, set forth in the Preliminary Offering Memorandum, the Preliminary
Canadian Memorandum, the Offering Memorandum and the Final Canadian Memorandum
comply as to form in all material respects with the requirements applicable to
registration statements on Form F-4 under the Act.
(t) The historical financial statements, together with related schedules
and notes forming part of the Offering Memorandum and the Final Canadian
Memorandum (and any amendment or supplement thereto), present fairly the
consolidated financial position, results of operations and changes in financial
position of the Company and its subsidiaries and the former telecommunications
division of Ledcor on the basis stated in the Offering Memorandum and the Final
Canadian Memorandum at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved, except as
disclosed therein; and the other financial and statistical information and data
set forth in the Offering Memorandum and the Final Canadian Memorandum (and any
amendment or supplement thereto) are, in all material respects, accurately
presented and prepared on a basis consistent with such financial statements and
the books and records of the Company and its subsidiaries.
(u) The pro forma financial statements and statistical data included in the
Preliminary Offering Memorandum, the Preliminary Canadian Memorandum, the
Offering Memorandum and the Final Canadian Memorandum have been prepared on a
basis consistent with the historical financial statements and statistical data
of the Company and its subsidiaries and give effect to assumptions used in the
preparation thereof on a reasonable basis and in good faith and present fairly
the historical and proposed transactions contemplated by the Preliminary
Offering Memorandum, the Preliminary Canadian Memorandum, the Offering
Memorandum and the Final Canadian Memorandum. The other pro forma financial and
statistical information and data included in the Offering Memorandum and the
Final Canadian Memorandum are, in all material respects, accurately presented
and prepared on a basis consistent with the pro forma financial statements.
(v) The Company is not and, after giving effect to the offering and sale of
the Series A Notes and the application of the net proceeds thereof as described
in the Offering Memorandum, will not be, an "investment company," as such term
is defined in the Investment Company Act of 1940, as amended.
(w) Except as disclosed in the Offering Memorandum and the Final Canadian
Memorandum, there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any securities of
the Company or to require the
-15-
Company to include such securities with the Notes registered pursuant to any
Registration Statement.
(x) Neither the Company nor any of its subsidiaries nor any agent thereof
acting on the behalf of them has taken, and none of them will take, any action
that might cause this Agreement or the issuance or sale of the Series A Notes to
violate Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or
Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal
Reserve System.
(y) No "nationally recognized statistical rating organization" as such term
is defined for purposes of Rule 436(g)(2) under the Act (i) has imposed (or has
informed the Company that it is considering imposing) any condition (financial
or otherwise) on the Company's retaining any rating assigned to the Company, any
securities of the Company or (ii) has indicated to the Company that it is
considering (a) the downgrading, suspension, or withdrawal of, or any review for
a possible change that does not indicate the direction of the possible change
in, any rating so assigned or (b) any change in the outlook for any rating of
the Company, or any securities of the Company.
(z) Since the respective dates as of which information is given in the
Offering Memorandum and the Final Canadian Memorandum other than as set forth in
the Offering Memorandum and the Final Canadian Memorandum, respectively,
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there has not occurred any material adverse change or any
development involving a prospective material adverse change in the condition,
financial or otherwise, or the earnings, business, management or operations of
the Company and its subsidiaries, taken as a whole, (ii) there has not been any
material adverse change or any development involving a prospective material
adverse change in the capital stock or in the long-term debt of the Company or
any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries has incurred any material liability or obligation, direct or
contingent.
(aa) Each of the Offering Memorandum and the Final Canadian Memorandum, as
of its date, contains all the information specified in, and meeting the
requirements of, Rule 144A(d)(4) under the Act.
(bb) When the Series A Notes are issued and delivered pursuant to this
Agreement, the Series A Notes will not be of the same class (within the meaning
of Rule 144A under the Act) as any security of the Company that is listed on a
national securities exchange registered under Section 6 of the Exchange Act or
that is quoted in a United States automated inter-dealer quotation system.
(cc) No form of general solicitation or general advertising (as defined in
Regulation D under the Act) was used by the Company, or any of their respective
representa-
-16-
tives (other than the Initial Purchasers, as to whom the Company makes no
representation) in connection with the offer and sale of the Series A Notes
contemplated hereby, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising. No
securities of the same class as the Series A Notes have been issued and sold by
the Company within the six-month period immediately prior to the date hereof.
(dd) Neither the Company, nor any person acting on its behalf, has,
directly or indirectly, (i) made offers or sales of any security, or solicited
offers to buy any security, under circumstances that would require the
distribution of the Series A Notes in the Provinces of Ontario and British
Columbia (the "Relevant Provinces") to be qualified by a prospectus filed in
accordance with the securities laws, and the regulations thereunder, of, and the
applicable published rules, policy statements, blanket orders and notices of the
securities regulatory authorities in, the Relevant Provinces (the "Canadian
Securities Laws") or (ii) has engaged in any advertisement of the Series A Notes
in any printed media of general and regular paid circulation, radio or
television or any other form of advertising in connection with the offer and
sale of the Series A Notes in the Relevant Provinces; provided that no
representation is made as to the Initial Purchasers or any person acting on
their behalf.
(ee) Prior to the effectiveness of any Registration Statement, the
Indenture is not required to be qualified under the TIA, and except for such
determinations and approvals which have already been obtained, no filing with or
authorization, approval, consent, license, order, registration, qualification or
decree of any court or governmental authority or agency in Canada (including any
provincial securities commission or securities regulatory authority) is
necessary to permit the issue, sale and delivery of the Series A Notes by the
Company or the consummation on the Closing Date by the Company of its
obligations under this Agreement, the other Operative Documents, the Offering
Memorandum and the Final Canadian Memorandum.
(ff) None of the Company or any of its affiliates, nor any person acting on
its or their behalf (other than the Initial Purchasers, as to whom the Company
makes no representation) has engaged or will engage in any directed selling
efforts within the meaning of Regulation S under the Act ("Regulation S") with
respect to the Series A Notes.
(gg) The Series A Notes offered and sold in reliance on Regulation S have
been and will be offered and sold only in offshore transactions.
(hh) The sale of the Series A Notes pursuant to Regulation S is not part of
a plan or scheme to evade the registration provisions of the Act.
-17-
(ii) Except for the Company's 12 1/2% Senior Notes due December 15, 2005,
there is no substantial U.S. market interest (as defined in Rule 902(n) under
the Act) in any debt security of the Company.
(jj) The Company is a "foreign issuer" as defined in Rule 902 under the
Act.
(kk) No registration under the Act of the Series A Notes is required for
the sale of the Series A Notes to the Initial Purchasers as contemplated hereby
or for the Exempt Resales assuming the accuracy of the Initial Purchasers'
representations and warranties and agreements set forth in Section 7 hereof.
(ll) Assuming (i) that the representations and warranties of the Initial
Purchasers in Section 7 hereof are true and (ii) compliance by the Initial
Purchasers with the covenants set forth in Section 7 hereof, it is not necessary
in connection with the offer, sale and delivery of the Series A Notes in the
manner contemplated by this Agreement, the other Operative Documents and the
Final Canadian Memorandum to file a prospectus in accordance with the Canadian
Securities Laws to qualify the distribution of the Series A Notes in the
Relevant Provinces.
(mm) Each certificate signed by any officer of the Company and delivered to
the Initial Purchasers or counsel for the Initial Purchasers shall be deemed to
be a representation and warranty by the Company to the Initial Purchasers as to
the matters covered thereby.
(nn) The Company and its Material Subsidiaries have good and marketable
title to all real property and good title to all personal property owned by them
which is material to the business of the Company and its Material Subsidiaries,
in each case free and clear of all Liens and defects, except such as are
described in the Offering Memorandum and the Final Canadian Memorandum or such
as do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company and its
Material Subsidiaries; and any real property and buildings held under lease by
the Company and its Material Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries, in each case except as described
in the Offering Memorandum and the Final Canadian Memorandum.
(oo) The Company and each of its Canadian affiliates as set forth in
Schedule D (collectively, the "Canadian Companies") and Ledcor Industries
Limited hold all Canadian Radio-television and Telecommunications Commission
("CRTC") and Industry Canada licenses or authorizations and possess adequate
certificates, authorities or permits issued by appropriate governmental agencies
or bodies necessary to conduct the business now oper-
-18-
ated by them, other than those the absence of which could not reasonably be
expected to, individually or in the aggregate, have a Material Adverse Effect
and have not received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if determined
adversely, could reasonably be expected to, individually or in the aggregate,
have a Material Adverse Effect.
(pp) (i) Each of Ledcor Industries Limited and Worldwide Fiber (F.O.T.S.)
Ltd. is eligible to operate as a telecommunications common carrier in Canada, as
defined under and in accordance with the Telecommunications Act (Canada) (the
"Telecommunications Act") and the Canadian Telecommunications Common Carrier
Ownership and Control Regulations (the "Ownership Regulations"); (ii) neither
Ledcor Industries Limited nor Worldwide Fiber (F.O.T.S.) Ltd. violates the
prohibition contained in subsection 16(4) of the Telecommunications Act against
operating in Canada as a telecommunications common carrier when ineligible to do
so; (iii) control of each of Ledcor Industries Limited and Worldwide Fiber
(F.O.T.S.) Ltd. is not exercised by any person(s) that is (are) not Canadian, in
accordance with the meanings ascribed to the term "control" under the
Telecommunications Act and the term "Canadian" under the Ownership Regulations;
and (iv) the Canadian Companies are not in violation of any judgment, decree,
order, writ, law, statute, rule or regulation rendered or enacted in Canada
respecting telecommunications and the regulation within Canada of
telecommunications common carriers, as defined in the Telecommunications Act,
applicable to the Canadian Companies, or any interpretation or policy relating
thereto known to be applicable by and to them.
(qq) (i) Not less than eighty percent of the members of the board of
directors of each of Ledcor Industries Limited and Worldwide Fiber (F.O.T.S.)
Ltd. are individual Canadians, as defined under the Ownership Regulations; (ii)
Canadians, as defined under the Ownership Regulations, beneficially own,
directly or indirectly, in the aggregate and otherwise than by way of security
only, not less than eighty percent of the issued and outstanding voting shares,
as defined under the Ownership Regulations, of each of Ledcor Industries Limited
and Worldwide Fiber (F.O.T.S.) Ltd.; (iii) Ledcor Inc., in respect of its
ownership of and control over Ledcor Industries Limited, and Worldwide Fiber
Networks Ltd., in respect of its ownership and control over Worldwide Fiber
(F.O.T.S.) Ltd., is a carrier holding corporation, as defined under the
Ownership Regulations; and (iv) each of Ledcor Inc. and Worldwide Fiber Networks
Ltd. is a carrier holding corporation that is a qualified corporation, as
defined under the Ownership Regulations.
(rr) With the exception of Ledcor Industries Limited and Worldwide Fiber
(F.O.T.S.) Ltd., no other Canadian Company or subsidiary of Ledcor Inc. operates
in Canada as a telecommunications common carrier as that term is defined in the
Telecommunications Act.
-19-
(ss) Except as disclosed in the Offering Memorandum and the Final Canadian
Memorandum, neither the Company nor its subsidiaries is currently, nor will the
conduct of its business as described in the Offering Memorandum cause it to be
in the future, subject to the provisions of the Communications Act of 1934, as
amended by the Telecommunications Act of 1996 (the "Communications Act") or to
any rules, regulations and policies of the Federal Communications Commission
(the "FCC") related hereto.
(tt) The Company and its subsidiaries are in compliance with all federal,
state and local telecommunications laws, rules, regulations and policies in the
United States to which they are subject, including the Communications Act and
the related rules, regulations and policies of the FCC except as would not have
a Material Adverse Effect.
(uu) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks and trade names ("intellectual property") currently employed by
them in connection with the business now operated by them except where the
failure to own or possess or otherwise be able to acquire such intellectual
property would not, singly or in the aggregate, have a Material Adverse Effect;
and neither the Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to any
of such intellectual property which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a Material Adverse
Effect.
(vv) Except as disclosed in the Offering Memorandum and the Final Canadian
Memorandum, no relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries or affiliates on the one hand, and the
directors, officers, stockholders, customers or suppliers of the Company or any
of its subsidiaries or affiliates on the other hand, which would be required by
the Act to be described in the Offering Memorandum if the Offering Memorandum
were a prospectus included in a registration statement on Form F-4 filed with
the Commission.
(ww) There is no (i) significant unfair labor practice complaint, grievance
or arbitration proceeding pending or threatened against the Company or any of
its subsidiaries before the National Labor Relations Board, Canada Labor
Relations Board or any state, provincial, or local labor relations board, (ii)
strike, labor dispute, slowdown or stoppage pending or threatened against the
Company or any of its subsidiaries or (iii) union representation question
existing with respect to the employees of the Company or any of its
subsidiaries, except in the case of clauses (i), (ii) and (iii) for such actions
which, singly or in the aggregate, would not have a Material Adverse Effect. To
the best knowledge of the Company, no col-
-20-
lective bargaining organizing activities are taking place with respect to the
Company or any of its subsidiaries.
(xx) The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with the United States
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(yy) All material tax returns required to be filed by the Company and each
of its subsidiaries in any jurisdiction have been filed, other than those
filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due pursuant to such returns or otherwise or pursuant to any assessment received
by the Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
(zz) The indebtedness represented by the Series A Notes is being incurred
for proper purposes and in good faith and the Company will be on the Closing
Date (after giving effect to the application of the proceeds from the issuance
of the Series A Notes) solvent, and will have on the Closing Date (after giving
effect to the application of the proceeds from the issuance of the Series A
Notes) sufficient capital for carrying on its respective business and will be on
the Closing Date (after giving effect to the application of the proceeds from
the issuance of the Series A Notes) able to pay its debts as they mature.
(aaa) No action has been taken and no law, statute, rule or regulation or
order has been enacted, adopted or issued by any governmental agency or body
which prevents the execution, delivery and performance of any of the Operative
Documents or, the issuance of the Series A Notes, or suspends the sale of the
Series A Notes in any jurisdiction referred to in Section 5(e); and no
injunction, restraining order or other order or relief of any nature by a
federal or state court or other tribunal of competent jurisdiction has been
issued with respect to the Company or any of its subsidiaries which would
prevent or suspend the issuance or sale of the Series A Notes in any
jurisdiction referred to in Section 5(e), including the Relevant Provinces.
(bbb) Except as set forth in the Offering Memorandum and the Final Canadian
Memorandum, there have been no transactions, agreements, arrangements or
understandings between the Company or any of its Subsidiaries that would be
required to be disclosed under Item 404 of Regulation S-K under the Securities
Act, if the Offering Memoran-
-21-
dum were a prospectus included in a registration statement on Form F-4 filed
with the Commission.
(ccc) The Company has delivered to the Initial Purchasers true and complete
copies of all agreements between the Company or any of its directors, officers
or employees on one hand and Ledcor, CN, IC or ▇▇▇▇▇▇▇ Pipeline Construction
Inc. or any of their respective directors, officers or employees on the other
hand.
(ddd) Neither the Company nor any of its subsidiaries has, nor is any of
its or their respective property or assets subject to, any obligation
(including, without limitation, any mortgage, assignment, pledge, charge or
other security interest) under the Fiber Optic Network Financing Credit
Agreement.
The Company acknowledges that the Initial Purchasers and, for purposes of
the opinions to be delivered to the Initial Purchasers pursuant to Section 9
hereof, counsel to the Company and counsel to the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and hereby consents
to such reliance.
7. Initial Purchasers' Representations and Warranties. Each of the Initial
Purchasers, severally and not jointly, represents and warrants to the Company,
and agrees that:
(a) Such Initial Purchaser is either a QIB or an Accredited Institution, in
either case, with such knowledge and experience in financial and business
matters as is necessary in order to evaluate the merits and risks of an
investment in the Series A Notes.
(b) Such Initial Purchaser (A) is not acquiring the Series A Notes with a
view to any distribution thereof or with any present intention of offering or
selling any of the Series A Notes in a transaction that would violate the Act or
the securities laws of any state of the United States or any other applicable
jurisdiction and (B) will be reoffering and reselling the Series A Notes only to
(x) QIBs in reliance on the exemption from the registration requirements of the
Act provided by Rule 144A and (y) in offshore transactions in reliance upon
Regulation S under the Act.
(c) Such Initial Purchaser agrees that no form of general solicitation or
general advertising (within the meaning of Regulation D under the Act) has been
or will be used by such Initial Purchaser or any of its representatives in
connection with the offer and sale of the Series A Notes pursuant hereto,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.
-22-
(d) Such Initial Purchaser agrees that, in connection with Exempt Resales,
such Initial Purchaser will solicit offers to buy the Series A Notes only from,
and will offer to sell the Series A Notes only to, Eligible Purchasers. Each
Initial Purchaser further agrees that it will offer to sell the Series A Notes
only to, and will solicit offers to buy the Series A Notes only from (A)
Eligible Purchasers that the Initial Purchaser reasonably believes are QIBs, (B)
Regulation S Purchasers, in each case, that agree that (x) the Series A Notes
purchased by them may be resold, pledged or otherwise transferred within the
time period referred to under Rule 144(k) (taking into account the provisions of
Rule 144(d) under the Act, if applicable) under the Act, as in effect on the
date of the transfer of such Series A Notes, only (I) to the Company or any of
its subsidiaries, (II) to a person whom the seller reasonably believes is a QIB
purchasing for its own account or for the account of a QIB in a transaction
meeting the requirements of Rule 144A under the Act, (III) in an offshore
transaction (as defined in Rule 902 under the Act) meeting the requirements of
Rule 904 of the Act, (IV) in a transaction meeting the requirements of Rule 144
under the Act, (V) in accordance with another exemption from the registration
requirements of the Act (and based upon an opinion of counsel acceptable to the
Company) or (VI) pursuant to an effective registration statement and, in each
case, in accordance with the applicable securities laws of any state of the
United States or any other applicable jurisdiction and (y) they will deliver to
each person to whom such Series A Notes or an interest therein is transferred a
notice substantially to the effect of the foregoing.
(e) Such Initial Purchaser and its affiliates or any person acting on its
or their behalf have not engaged or will not engage in any directed selling
efforts within the meaning of Regulation S with respect to the Series A Notes.
(f) The Series A Notes offered and sold by such Initial Purchaser pursuant
hereto in reliance on Regulation S have been and will be offered and sold only
in offshore transactions.
(g) The sale of the Series A Notes offered and sold by such Initial
Purchaser pursuant hereto in reliance on Regulation S is not part of a plan or
scheme to evade the registration provisions of the Act.
(h) Neither such Initial Purchaser nor its affiliates or any person acting
on its or its affiliates' behalf has made or will make offers or sales of the
Series A Notes in the Relevant Provinces by means of any printed media of
general and regular paid circulation, radio or television or any other forms of
advertising.
(i) The Series A Notes have only been offered and will only be sold in
Canada to purchasers resident in the Relevant Provinces.
(j) Such Initial Purchaser acknowledges that no prospectus has been filed
in accordance with the Canadian Securities Laws qualifying the distribution of
the Series A
-23-
Notes in the Relevant Provinces and that the Series A Notes may not be offered
or sold in the Relevant Provinces except pursuant to an applicable exemption
from the prospectus requirements of the applicable Canadian Securities Laws and
from a dealer appropriately registered under the applicable Canadian Securities
Laws or, other than in Ontario, in accordance with an exemption from the
registration requirements of such laws.
(k) Assuming the purchasers' representations, covenants and resale
restrictions set forth in the Final Canadian Memorandum are true as to each
purchaser of Series A Notes in Canada, such Initial Purchaser will not offer,
sell or deliver any of the Series A Notes, directly or indirectly, in Canada or
to or for the benefit of any person who such Initial Purchaser knows is a
resident thereof in violation of the Canadian Securities Laws.
(l) Such Initial Purchaser will provide the Company with information
regarding the sale of the Series A Notes to purchasers in the Relevant Provinces
required to be disclosed under applicable Canadian Securities Laws and will
cooperate with the Company in ensuring that such disclosures are made within the
time periods specified under such laws.
Such Initial Purchaser acknowledges that the Company and, for purposes of
the opinions to be delivered to each Initial Purchaser pursuant to Section 9
hereof, counsel to the Company and counsel to the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and each such
Initial Purchaser hereby consents to such reliance.
8. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Initial
Purchasers, their respective directors and officers and each person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and judgments (including, without limitation, any legal or
other expenses incurred in connection with investigating or defending any
matter, including any action, that could give rise to any such losses, claims,
damages, liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Offering Memorandum (or any
amendment or supplement thereto), the Final Canadian Memorandum (or any
amendment or supplement thereto), the Preliminary Offering Memorandum, the
Preliminary Canadian Memorandum or any Rule 144A Information provided by the
Company to any holder or prospective purchaser of Series A Notes pursuant to
Section 5(h) or caused by any omission or alleged omission to state therein 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, except insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information furnished in writing to the Company
by such Initial Purchasers expressly for use in the Preliminary Offering
Memorandum, the Preliminary Canadian Memorandum, the Offering Memo-
-24-
randum or the Final Canadian Memorandum; provided, however, that the foregoing
indemnity agreement with respect to any Preliminary Offering Memorandum or
Preliminary Canadian Memorandum, as the case may be, shall not inure to the
benefit of any Initial Purchaser who failed to deliver an Offering Memorandum or
Final Canadian Memorandum, as then amended or supplemented, (so long as the
Offering Memorandum or Final Canadian Memorandum and any amendment or supplement
thereto was provided by the Company to the Initial Purchasers in the requisite
quantity and on a timely basis to permit proper delivery on or prior to the
Closing Date) to the person asserting any losses, claims, damages, liabilities
or judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum or Preliminary
Canadian Memorandum, as the case may be, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such material
misstatement or omission or alleged material misstatement or omission was cured
in the Offering Memorandum or the Final Canadian Memorandum, as so amended or
supplemented.
(b) The Initial Purchasers agree severally, not jointly, to indemnify and
hold harmless the Company, its directors and officers and each person, if any,
who controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) the Company, to the same extent as the foregoing indemnity from
the Company to the Initial Purchasers but only with reference to information
furnished in writing to the Company by the Initial Purchaser expressly for use
in the Preliminary Offering Memorandum, the Preliminary Canadian Memorandum, the
Offering Memorandum or the Final Canadian Memorandum, as applicable.
(c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), the Initial Purchasers shall not be required to
assume the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Initial Purchasers). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the
-25-
indemnifying party, and the indemnified party shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party (in
which case the indemnifying party shall not have the right to assume the defense
of such action on behalf of the indemnified party). In any such case, the
indemnifying party shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys with respect to matters of
U.S. law and one separate firm of attorneys with respect to matters of Canadian
law (in each case, in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firms shall be designated in writing by ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation, in the case of the parties indemnified pursuant to Section 8(a),
and by the Company, in the case of parties indemnified pursuant to Section 8(b).
The indemnifying party shall indemnify and hold harmless the indemnified party
from and against any and all losses, claims, damages, liabilities and judgments
by reason of any settlement of any action (i) effected with its written consent
or (ii) effected without its written consent if the settlement is entered into
more than twenty business days after the indemnifying party shall have received
a request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 8 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Initial Purchasers on the other hand from the
offering of the Series A Notes or (ii) if the allocation provided by clause
8(d)(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Company, on the one hand, and
the Initial Purchasers, on the other hand, in connection with the statements or
omissions which resulted in
-26-
such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, on the one hand and the Initial Purchasers, on the other hand, shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Series A Notes (after underwriting discounts and commissions, but before
deducting expenses) received by the Company, and the total discounts and
commissions received by the Initial Purchasers bear to the total price to
investors of the Series A Notes, in each case as set forth in the table on the
cover page of the Offering Memorandum. The relative fault of the Company, on the
one hand, and the Initial Purchasers, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, on the one hand, or the Initial
Purchasers, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Initial Purchasers were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, the Initial
Purchasers shall not be required to contribute any amount in excess of the
amount by which the total discounts and commissions received by such Initial
Purchasers exceeds the amount of any damages which the Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers' obligation to contribute pursuant to
this Section 8(d) are several and in proportion to the respective principal
amount of Series A Notes purchased by each of the Initial Purchasers hereunder
and not joint.
(e) The remedies provided for in this Section 8 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(f) For purposes of this Section 8, the Company and the Initial Purchasers
agree that the only information furnished in writing to the Company by the
Initial Purchasers expressly for use in the Preliminary Offering Memorandum, the
Preliminary Canadian Memo-
-27-
randum, the Offering Memorandum or the Final Canadian Memorandum is set forth in
the third, fourth, fifth, sixth (excluding the first three sentences), seventh,
eighth and ninth paragraphs under the heading "Plan of Distribution."
9. Conditions of Initial Purchasers' Obligations. The obligations of the
Initial Purchasers to purchase the Series A Notes under this Agreement are
subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in this
Agreement that are qualified as to materiality shall be true and correct on the
Closing Date and all the representations and warranties of the Company contained
in this Agreement that are not qualified as to materiality shall be true and
correct in all material respects on the Closing Date, in each case with the same
force and effect as if made on and as of the Closing Date.
(b) On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have been given
of any potential or intended downgrading, suspension or withdrawal of, or of any
review (or of any potential or intended review) for a possible change that does
not indicate the direction of the possible change in, any rating of the Company
or any securities of the Company (including, without limitation, the placing of
any of the foregoing ratings on credit watch with negative or developing
implications or under review with an uncertain direction) by any "nationally
recognized statistical rating organization" as such term is defined for purposes
of Rule 436(g)(2) under the Act, (ii) there shall not have occurred any change,
nor shall any notice have been given of any potential or intended change, in the
outlook for any rating of the Company or any securities of the Company by any
such rating organization and (iii) no such rating organization shall have given
notice that it has assigned (or is considering assigning) a lower rating to the
Notes than that on which the Notes were marketed.
(c) Since the respective dates as of which information is given in the
Offering Memorandum and the Final Canadian Memorandum other than as set forth in
the Offering Memorandum and the Final Canadian Memorandum (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there shall not have been any change or any development involving
a prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 9(c)(i),
9(c)(ii) or 9(c)(iii), in your judgment, is material and adverse and,
-28-
in your judgment, makes it impracticable to market the Series A Notes on the
terms and in the manner contemplated in the Offering Memorandum and the Final
Canadian Memorandum.
(d) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by the President and the Chief Financial Officer of the
Company, confirming the matters set forth in Sections 6(z), 9(a) and 9(b) and
stating that the Company has complied with all the agreements and satisfied all
of the conditions herein contained and required to be complied with or satisfied
on or prior to the Closing Date.
(e) You shall have received on the Closing Date an opinion (satisfactory to
you and counsel for the Initial Purchasers), dated the Closing Date, of ▇▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, special U.S. counsel for the Company, to the effect that:
(i) assuming due authorization of the Series A Notes by the Company,
the Series A Notes, when executed and delivered in accordance with the
provisions of the Indenture (assuming the due authorization, execution and
delivery of the Indenture by the Trustee and the due authentication and
delivery of the Series A Notes by the Trustee in accordance with the
Indenture) and paid for by the Initial Purchasers in accordance with the
terms of this Agreement, will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company enforceable
against the Company in accordance with their terms (A) except as the
enforceability thereof may be limited (i) by (x) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
now or hereafter in effect relating to or affecting creditors' rights
generally and (y) general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity) and (ii) with
respect to Section 6.12 of the Indenture to the extent it provides for the
Company's indemnity against loss in connection with a court judgment in
another currency and (B) that such firm need express no opinion as to the
enforceability of the waiver of rights or defenses contained in Section
4.06 of the Indenture;
(ii) assuming the due authorization of the Indenture by the Company,
the Indenture has been duly executed and delivered by the Company, to the
extent execution and delivery are governed by New York laws, and, assuming
the due authorization, execution and delivery thereof by the Trustee,
constitutes a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms (A) except as the
enforceability thereof may be limited (i) by (x) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
now or hereafter in effect relating to or affecting creditors' rights
generally and (y) general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity) and (ii) with
respect to Section 6.12 of the Indenture to the extent it provides for the
Company's indemnity against loss in connection with a court
-29-
judgment in another currency and (B) that such firm need express no opinion
as to the enforceability of the waiver of rights or defenses contained in
Section 4.06 of the Indenture;
(iii) assuming due authorization by the Company, this Agreement has
been duly executed and delivered by the Company, to the extent that
execution and delivery are governed by New York law;
(iv) assuming the due authorization of the Registration Rights
Agreement by the Company and the due authorization, execution and delivery
thereof by the Initial Purchasers, the Registration Rights Agreement has
been duly executed and delivered by the Company, to the extent that
execution and delivery are governed by New York laws, and constitutes a
valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except as the enforceability thereof may be
limited by (x) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally, (y) general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity) and (z) any rights to indemnity or
contribution thereunder may be limited by federal and state securities laws
and public policy considerations;
(v) the statements under the captions "Description of Notes,"
"Description of Other Indebtedness -- 1998 Notes," "Description of IC and
CN Agreements" and "Description of WFI-USA Agreements" in the Offering
Memorandum, insofar as such statements constitute a summary of the
documents referred to therein, fairly summarize in all material respects
such documents;
(vi) the statements in the Offering Memorandum under the caption
"Certain United States and Canadian Income Tax Considerations," to the
extent they constitute matters of United States law or legal conclusions
with respect thereto, have been prepared or reviewed by us and are correct
in all material respects and fairly summarize the matters set forth
therein;
(vii) the execution, delivery and performance by the Company of this
Agreement, the Indenture, the Series A Notes and the Registration Rights
Agreement, the compliance by the Company with all provisions hereof and
thereof and the consummation of the transactions contemplated hereby and
thereby: (i) do not conflict with or violate any federal statute of the
United States of America or any statute of the State of New York or any
rule or regulation thereunder (provided that no opinion is expressed in
this paragraph as to compliance with the Act, any state securities or blue
sky laws or the Telecommunications Act of 1996, as amended, and the rules
and regulations thereunder); or (ii) conflict with or constitute a breach
of any of the terms
-30-
or provisions of, or a default under the Governing Agreement, dated as of
August 31, 1998, by and among Worldwide Fiber Ltd., Mi-Tech Communications,
LLC, Ledcor Inc., ▇▇▇▇▇▇▇ Pipeline Construction, Inc., Ledcor Industries
Inc. and Worldwide Fiber (USA), Inc. or the limited liability company
agreement of Worldwide Fiber IC LLC, dated as of May 28, 1999, between
Worldwide Fiber IC Holdings Inc. and IC Fiber Holdings Inc.;
(viii) the Company is not and, after giving effect to the offering and
sale of the Series A Notes and the application of the net proceeds thereof
as described in the Offering Memorandum, will not be, an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended;
(ix) the Indenture complies as to form in all material respects with
the requirements of the TIA, as amended, and as in effect on the date
hereof, and the rules and regulations of the Commission applicable to an
indenture which is qualified thereunder;
(x) assuming that (i) each Initial Purchaser is a QIB or a Regulation
S Purchaser, (ii) the accuracy of, and compliance with, the Initial
Purchasers' representations and agreements contained in Section 7 of this
Agreement and (iii) the accuracy of the representations of the Company set
forth in Sections 6(bb), (cc), (ff), (gg),(hh), (ii) and (jj) of this
Agreement, (A) no registration under the Act of the Series A Notes is
required for the sale of the Series A Notes to the Initial Purchasers as
contemplated by this Agreement or for the Exempt Resales, (B) it is not
necessary in connection with the offer, sale and delivery of the Series A
Notes to the Initial Purchasers in the manner contemplated by this
Agreement or in connection with the Exempt Resales to qualify the Indenture
under the TIA, and (C) no consent, approval, authorization or other order
of, or qualification with, any court or governmental body or agency (except
such as may be required under the securities or Blue Sky laws of the
various states) is required for the valid authorization, issuance, sale and
delivery of the Series A Notes;
(xi) assuming the due authorization, execution and delivery of this
Agreement, the Indenture and the Registration Rights Agreement by each
party thereto, the Company has validly and irrevocably submitted to the
jurisdiction of any United States or state court in the State of New York,
County of New York, has expressly accepted the non-exclusive jurisdiction
of any such court and has validly and irrevocably appointed CT Corporation
System as its authorized agent in any suit or proceeding against them
instituted by the Initial Purchasers based on or arising under the
Indenture, the Purchase Agreement or the Registration Rights Agreement;
(xii) each of Worldwide Fiber IC LLC, IC Fiber Alabama LLC, IC Fiber
Illinois LLC, IC Fiber Iowa LLC, IC Fiber Kentucky LLC, IC Fiber Louisiana
LLC, IC
-31-
Fiber Mississippi LLC and IC Fiber Tennessee LLC (collectively, the
"Delaware Companies") has been duly organized as a Delaware limited
liability company, and is validly existing and in good standing under the
laws of Delaware; there are no restrictions on the power and capacity of
each of the Delaware Companies to own and lease property and assets and to
carry on business.
The opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ described in Section 9(e) above
shall be rendered to you at the request of the Company and shall so state
therein. In addition, such counsel shall state that it has participated in
conferences, by person or by telephone, with officers and other representatives
of the Company, with representatives of the chartered accountants for the
Company and with representatives of the Initial Purchasers and their counsel. At
such meetings the contents of the Offering Memorandum and related matters were
discussed among the parties present at such meetings. Although such counsel will
not be passing upon and will not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Offering Memorandum
except as set forth in paragraphs (v) and (vi) above, such counsel shall advise
the Initial Purchasers that on the basis of the foregoing (relying as to
materiality to a the extent we deem appropriate upon the opinions of officers
and other authorized representatives of the Company) no facts have come to its
attention which lead it to believe that the Offering Memorandum, as of its date
or on the date of such opinion, contained or contains an untrue statement of a
material fact or omitted or omits 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 (it being understood
that such counsel has not been asked to, and will not, comment on the financial
statements, including the notes thereto, or any other financial or statistical
data contained in or omitted from the Offering Memorandum).
(f) You shall have received on the Closing Date an opinion (satisfactory to
you and counsel for the Initial Purchasers), dated the Closing Date, of ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇, Canadian counsel for the Company, to the effect that:
(i) each of the Canadian Companies is a corporation duly incorporated
and validly existing under the laws of its jurisdiction of incorporation;
each of the Canadian Companies has the corporate power and capacity to own
and lease property and assets and to carry on business;
(ii) each of the Canadian Companies is qualified or registered to
carry on business as an extra-provincial corporation in each jurisdiction
in which it carries on business;
(iii) the outstanding shares of capital stock of each of the Canadian
Companies have been duly authorized and validly issued and are outstanding
as fully paid and non-assessable;
-32-
(iv) all of the outstanding shares of capital stock of the Company are
registered in the name of Worldwide Fiber Holdings Ltd. All of the
outstanding shares of capital stock of Worldwide Fiber Communications Ltd.
and Worldwide Fiber Networks Ltd. are registered in the name of the
Company. All of the outstanding shares of capital stock of Ledcor
Communications Ltd. are registered in the name of Worldwide Fiber
Communications Ltd. All of the shares of capital stock of Worldwide Fiber
(F.O.T.S.) Ltd. are registered in the name of Worldwide Fiber Networks
Ltd.;
(v) the execution, issuance and sale of the Series A Notes and the
Series B Notes have been duly authorized by all necessary corporate action
on the part of the Company;
(vi) the execution, delivery and performance of the Operative
Documents, and the execution, issuance and sale of the Series A Notes, by
the Company, will not result in any violation, contravention or breach of
the articles or by-laws of the Company;
(vii) the execution, delivery and performance of the amended and
restated share purchase agreement dated as of the 28th day of June, 1999
between Ledcor Industries Limited and Ledcor Industries Inc. and the
Company (the "Additional Fiber Agreement"), the Non-Competition Agreement
and the Rail Plough License Agreement, dated as of May 31, 1998, by and
between Ledcor Industries Limited and Worldwide Fiber Communications Ltd.,
as assigned by Ledcor Industries Limited to Ledcom Holdings Ltd. and then
assigned by Worldwide Fiber Communications Ltd. to Ledcor Communications
Ltd. (collectively, the "Ledcor Agreements") will not result in any
violation, contravention or breach of the articles or by-laws of Ledcor
Industries Limited, Ledcor Inc. or Worldwide Fiber Holdings Ltd.
(collectively, the "Ledcor Companies") or any one or more of the Canadian
Companies which are parties to the Ledcor Agreements;
(viii) each of the Operative Documents and the Series A Notes has been
duly authorized, executed and delivered by the Company;
(ix) the Company has the corporate power and capacity to enter into
each of the Operative Documents and to carry out its obligations under each
of the Operative Documents; the execution and delivery of each of the
Operative Documents and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate
action on the part of the Company;
(x) each of the Ledcor Companies and the Canadian Companies has the
corporate power and capacity to enter into each of the Ledcor Agreements to
which it is a party and to carry out its obligations thereunder; the
execution and delivery of each
-33-
of the Ledcor Agreements and the consummation of the transactions
contemplated thereby have been duly authorized by all necessary corporate
action on the part of each of the Ledcor Companies and the Canadian
Companies which is a party to the Ledcor Agreements;
(xi) each of the Company and WFI-CN Fiber Inc. has the corporate power
and capacity to enter into the License Agreement dated May 28, 1999 among
CN, the Company and WFI-CN Fiber Inc. (the "CN License"); the execution and
delivery of the CN License and the consummation of the transactions
contemplated thereby have been duly authorized by all necessary corporate
action on the part of each of the Company and WFI-CN Fiber Inc.;
(xii) the Company has the corporate power and capacity to enter into
the License Agreements dated May 28, 1999 among IC, the Company and each of
the Delaware Companies (the "IC Licenses"); the execution and delivery of
the IC Licenses and the consummation of the transactions contemplated
thereby have been duly authorized by all necessary corporate action on the
part of the Company;
(xiii) each of the Ledcor Agreements, the CN License and IC Licenses
has been duly executed and delivered by each of the Ledcor Companies and
the Canadian Companies which are parties to such agreements, and the
Additional Fiber Agreement constitutes a legal, valid and binding
obligation of the parties thereto, enforceable against each party thereto
in accordance with its terms, subject, however, to limitations with respect
to enforcement imposed by law in connection with bankruptcy or similar
proceedings and to the extent that equitable remedies such as specific
performance and injunction are in the discretion of the court from which
they are sought;
(xiv) the form of certificate for the Series A Notes has been duly
approved and adopted by the Company and complies with the provisions of the
Business Corporations Act (Alberta);
(xv) the statements contained in the Offering Memorandum under the
caption "Material United States and Canadian Income Tax
Considerations--Canada" and in the Final Wrap under the caption "Certain
Canadian Federal Income Tax Considerations" fairly and accurately describe
the principal Canadian federal income tax consequences under the Income Tax
Act (Canada) to a purchaser described therein;
(xvi) the disclosure contained in the Offering Memorandum under the
captions "Transactions With Our Parent--Description of Reorganization and
Related Agreements" and "--Other Agreements with Ledcor,"
"Regulation--Canada" and "Risk Factors--Extensive Regulation--Canada" in
each case, insofar as such disclo-
-34-
sure describes or summarizes matters of Canadian law or constitutes
conclusions of Canadian law, fairly summarizes such matters of law or
conclusions of law;
(xvii) no filing, license, consent, permission, approval,
authorization, or order of any court or governmental agency or body in
Canada is required to be obtained by the Canadian Companies under the laws
of the Provinces of British Columbia and Alberta, or the federal laws of
Canada applicable therein, to permit the issue, delivery and sale by the
Company of the Notes, except such filings, licenses, consents, permissions,
approvals, authorizations or orders that have been obtained;
(xviii) the Alberta Securities Commission has determined that the
issue of the Notes is not a distribution to the public pursuant to the
Business Corporations Act (Alberta). As a consequence of the foregoing
determination by the Alberta Securities Commission, the Indenture is not
subject to the provisions of Part 7, Division 1, of the Business
Corporations Act (Alberta);
(xix) none of the issue and sale of the Series A Notes to the Initial
Purchasers, the execution and delivery by the Company of this Agreement,
the Indenture and the Registration Rights Agreement or the consummation of
the transactions herein or therein contemplated, will conflict with, result
in a material breach or violation of, or constitute a material default
under any material indenture or other material agreement or instrument
known to such counsel and to which the Canadian Companies are a party or
bound;
(xx) the offering, sale and delivery of the Series A Notes pursuant to
the Final Canadian Memorandum are exempt from the prospectus requirements
of the securities laws of the Relevant Provinces in which sales of Series A
Notes have been effected by the Initial Purchasers and no prospectus is
required nor are there any documents required to be filed, proceedings
taken or approvals, permits, consents, or authorizations obtained under the
securities laws of such provinces in respect of the offering, sale and
delivery of the Series A Notes to the Purchasers in such Relevant
Provinces, except for such proceedings which have been taken and approvals,
permits, consents or authorizations which have been obtained and except for
the filing, together with the appropriate fee, within prescribed time
periods after the Closing Date, of a report of the trade and, if
applicable, copies of the offering document, with the securities
commissions of the Relevant Provinces;
(xxi) the statements in the Final Canadian Memorandum under the
heading "Rights of Action" are correct insofar as such statements are, or
refer to, statements of law or legal conclusions relating to the laws of
the Relevant Provinces;
-35-
(xxii) except for filings, registrations and recordings which have
been made, no registration, filing or recording of the Indenture under the
laws of Canada or the Provinces of Alberta and British Columbia is
necessary in order to preserve or protect the validity or enforceability of
the Indenture or the Notes issued thereunder;
(xxiii) to the knowledge of such counsel, there is no pending or
threatened action or suit or judicial, arbitral or other administrative
proceeding to which the Canadian Companies are subject that, singly or in
the aggregate, (A) questions the validity of any of the Operative Documents
or any action taken or to be taken pursuant thereto, or (B) if determined
adversely to the Canadian Companies, is reasonably likely to have a
Material Adverse Effect;
(xxiv) the choice of law provisions set forth in Section 11 hereof, in
the Indenture, the Registration Rights Agreement and the Notes are legal,
valid and binding under the laws of the Province of British Columbia and
the federal laws of Canada applicable therein, provided that such choice of
law is bona fide (in the sense that it was not made with a view to avoiding
the consequences of the laws of any other jurisdiction) and provided that
such choice of law is not contrary to public policy, as that term is
applied by the courts in the Province of British Columbia ("Public
Policy"); such counsel knows of no Public Policy reason why the courts in
the Province of British Columbia (a "Canadian Court") would not give effect
to the choice of New York law as the proper law of this Agreement, the
Indenture, the Registration Rights Agreement and the Notes and if the
Indenture, this Agreement, the Registration Rights Agreement or the Notes
are sought to be enforced in the Province of British Columbia in accordance
with the laws applicable thereto as chosen by the parties, namely New York
law, a Canadian Court would, subject to the foregoing, recognize the choice
of New York law, and, upon appropriate evidence as to such law being
adduced, apply such law; provided that none of the provisions of this
Agreement, the Indenture, the Notes or the Registration Rights Agreement,
or of applicable New York law, are contrary to Public Policy or foreign
revenue, expropriation or penal laws; provided, however, that, in matters
of procedure, the laws of the Province of British Columbia will be applied
and a Canadian Court will retain discretion to decline to hear such action
if it is contrary to Public Policy for it to do so, or if it is not the
proper forum to hear such an action, or if concurrent proceedings are being
brought elsewhere;
(xxv) there are no reasons, to such counsel's knowledge, under the
laws of the Province of British Columbia or the federal laws of Canada
applicable therein or with respect to the application of New York law by a
Canadian Court, why enforcement of the Indenture or the Notes would be
avoided on the grounds of Public Policy;
-36-
(xxvi) The Company has the legal capacity to sue and be sued in its
own name under the laws of the Province of British Columbia and the federal
laws of Canada applicable therein; the Company has the power to submit, and
has irrevocably submitted, to the non-exclusive jurisdiction of the federal
or state courts located in the Borough of Manhattan in The City of New York
(a "New York Court") and has validly and irrevocably appointed CT
Corporation System as its authorized agent for the purpose described in
Section 11 hereof; the Company has the power to submit, and has irrevocably
submitted, to the non-exclusive jurisdiction of the New York Court and has
validly and irrevocably appointed CT Corporation System as its authorized
agent for the purpose described in the Indenture, the Notes and the
Registration Rights Agreement under the laws of the Province of British
Columbia and the federal laws of Canada applicable therein; the irrevocable
submission of the Company to the non-exclusive jurisdiction of the New York
Court and the waivers by it of any immunity and any objection to the venue
of the proceeding in a New York Court herein is legal, valid and binding
under the laws of the Province of British Columbia and the federal laws of
Canada applicable therein, and such counsel knows of no reason why a
Canadian Court would not give effect to such submission and waivers; the
irrevocable submission of the Company to the non-exclusive jurisdiction of
the New York Court and the waivers by the Company of any immunity and any
objection to the venue of the proceeding in a New York Court in the
Indenture, the Notes and the Registration Rights Agreement is legal, valid
and binding under the laws of the Province of British Columbia and the
federal laws of Canada applicable therein, and such counsel knows of no
reason why a Canadian Court would not give effect to such submission and
waivers;
(xxvii) service of process in the manner set forth in Section 11
hereof will be effective to confer valid personal jurisdiction over the
Company under the laws of the Province of British Columbia and the federal
laws of Canada applicable therein; service of process in the manner set
forth in the Indenture, the Notes and the Registration Rights Agreement
will be effective to confer valid personal jurisdiction over the Company
under the laws of the Province of British Columbia and the federal laws of
Canada applicable therein;
(xxviii) a Canadian Court will recognize as valid and final, and will
enforce, any final and conclusive judgment in personam, of any New York
Court that is not impeachable as void or voidable under the internal laws
of the State of New York for a sum certain in respect of the enforcement of
the obligations of the Company under this Agreement, the Indenture, the
Notes and the Registration Rights Agreement, if (i) the court rendering
such judgment had jurisdiction over the judgment debtor, as recognized by
the Canadian Court (and submission by the Company in this Agreement, the
Indenture, the Notes and the Registration Rights Agreement to the
jurisdiction of the
-37-
New York Court, will be sufficient for this purpose), (ii) such judgment
was not obtained by fraud or in a manner contrary to natural justice and
the enforcement thereof would not be inconsistent with Public Policy, or
contrary to any order made by the Attorney General of Canada under the
Foreign Extraterritorial Measures Act (Canada), (iii) the enforcement of
such judgment does not constitute, directly or indirectly, the enforcement
of foreign revenue, expropriatory or penal laws, (iv) the action to enforce
such judgment is commenced within the applicable limitation period and (v)
such counsel knows of no Public Policy reason for avoiding the recognition
of judgments of a New York Court under this Agreement, the Indenture, the
Notes and the Registration Rights Agreement under the laws of the Province
of British Columbia and the federal laws of Canada applicable therein;
(xxix) no withholding tax imposed under the federal laws of Canada or
the laws of the Province of British Columbia will be payable in respect of
the payment or crediting of any discount, commission or fee as contemplated
by this Agreement to an Initial Purchaser that is not resident in Canada,
but resident in the United States or if a partnership, all the members of
which are not resident in Canada but resident in the United States, in each
case, for purposes of the Income Tax Act (Canada) and the Canada-U.S.
Income Tax Convention, 1980 (a "U.S. Initial Purchaser") or on any interest
or deemed interest on the resale of Series A Notes by a U.S. Initial
Purchaser to U.S. residents, provided that such U.S. Initial Purchaser
deals at arm's length with the Company and that any such discount,
commission or fee is payable in respect of services rendered by such U.S.
Initial Purchaser outside of Canada that are performed by such U.S. Initial
Purchaser in the ordinary course of business carried on by it that includes
the performance of such services for a fee and any such amount is
reasonable in the circumstances.
(xxx) no goods and services tax imposed under the federal laws of
Canada will be collectible by a U.S. Initial Purchaser in respect of the
payment or crediting of any discount, commission or fee as contemplated by
this Agreement to any U.S. Initial Purchaser, provided that any such
discount, commission or fee is payable in respect of services performed by
such Initial Purchaser wholly outside of Canada.
(xxxi) no stamp duty, registration or documentary taxes, duties or
similar charges are payable under the federal laws of Canada or the laws of
the Province of British Columbia in connection with the creation, issuance,
sale and delivery to a U.S. Initial Purchaser of the Series A Notes or the
authorization, execution and delivery and performance of this Agreement,
any pricing agreement, or the Indenture or the resale of Series A Notes by
a U.S. Initial Purchaser to U.S. residents.
-38-
(xxxii) after giving effect to the performance by the Company of its
obligations under this Agreement on the Closing Date; (a) each of Ledcor
Industries Limited and Worldwide Fiber (F.O.T.S.) Ltd. is eligible to
operate as a telecommunications common carrier in Canada, as defined under
and in accordance with the Telecommunications Act (Canada) (the
"Telecommunications Act") and the Canadian Telecommunications Common
Carrier Ownership and Control Regulations (the "Ownership Regulations");
(b) neither Ledcor Industries Limited nor Worldwide Fiber (F.O.T.S.) Ltd.
violates the prohibition contained in subsection 16(4) of the
Telecommunications Act against operating in Canada as a telecommunications
common carrier when ineligible to do so; (c) control of each of Ledcor
Industries Limited and Worldwide Fiber (F.O.T.S.) Ltd. is not exercised by
any person(s) that is (are) not Canadian, in accordance with the meanings
ascribed to the term "control" under the Telecommunications Act and the
term "Canadian" under the Ownership Regulations; and (d) none of the
Canadian Companies is in violation of any judgment, decree, order, writ,
law, statute, rule or regulation rendered or enacted in Canada respecting
telecommunications and the regulation within Canada of telecommunications
common carriers, as defined in the Telecommunications Act, applicable to
any of the Canadian Companies or the Ledcor Companies, or any
interpretation or policy relating thereto known to such counsel to be
applicable to them;
(xxxiii) after giving effect to the performance by the Company of its
obligations under this Agreement on the Closing Date:
(xxxiv) not less than eighty percent of the members of the board of
directors of each of Ledcor Industries Limited and Worldwide Fiber
(F.O.T.S.) Ltd. are individual Canadians, as defined under the Ownership
Regulations;
(xxxv) Canadians, as defined under the Ownership Regulations
beneficially own, directly or indirectly, in the aggregate and otherwise
than by way of security only, all of the issued and outstanding voting
shares, as defined under the Ownership Regulations of each of the Canadian
Companies and Ledcor Industries Limited;
(xxxvi) each of Ledcor Inc., in respect of its ownership of and
control over Ledcor Industries Limited, and Worldwide Fiber Networks Ltd.,
in respect of its ownership and control over Worldwide Fiber (F.O.T.S.)
Ltd., is a carrier holding corporation, as defined under the Ownership
Regulations;
(xxxvii) each of Ledcor Inc. and Worldwide Fiber Networks Ltd. is a
carrier holding corporation that is a qualified corporation, as defined
under the Ownership Regulations;
-39-
(xxxviii) no notices, reports or other filings are required to be made
by any of the Canadian Companies or the Ledcor Companies, either prior to
or immediately after giving effect to the performance by the Company of its
obligations under this Agreement on the Closing Date, with, nor are any
consents, registrations, applications, approvals, permits, licenses or
authorizations required to be obtained by any of the Canadian Companies or
the Ledcor Companies, from any court or governmental agency or other
regulatory body or tribunal or similar entity pursuant to Canadian
telecommunications law in connection with the performance by the Company of
its obligations under this Agreement on the Closing Date;
(xxxix) to the knowledge of such counsel, and except as described in
the Offering Memorandum, no litigation, regulatory proceeding or
investigation is pending against the Canadian Companies or the Ledcor
Companies in connection with the requirements of Canadian
telecommunications law existing on the Closing Date; and
(xl) with the exception of Ledcor Industries Limited and Worldwide
Fiber (F.O.T.S.) Ltd., no other Canadian Company or Ledcor Company operates
in Canada as a telecommunications common carrier as that term is defined in
the Telecommunications Act.
Such counsel shall also confirm that at the date of the Offering Memorandum
and on the Closing Date that no facts have come to their attention in the course
of their review that lead them to believe that the Offering Memorandum contained
or contains any untrue statement of a material fact, or omitted or omits to
state a material fact necessary to make a statement therein not misleading in
light of the circumstances under which it was made, within the meaning of the
Securities Act (British Columbia).
The opinion of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇ described in Section 9(f)
above (i) shall be rendered to you at the request of the Company and shall so
state therein, (ii) as to matters of Alberta law, will rely upon the opinion of
the Company's Alberta Counsel, ▇▇▇▇▇▇▇▇ ▇▇▇▇, and (iii) as to matters of law in
the Relevant Provinces, other than British Columbia, will rely upon counsel
acceptable to you.
(g) You shall have received on the Closing Date an opinion (satisfactory to
you and counsel for the Initial Purchasers), dated the Closing Date, of ▇▇▇▇▇▇▇,
Singleton, Jemison, Cobeaga & List, Chtd., special Nevada counsel for the
Company, to the effect that:
(i) each of PFL Holdings, Inc., Worldwide Fiber (USA), Inc., Ledcor
Communications, Inc., Worldwide Fiber IC Holdings, Inc. (fka Worldwide
Fiberlink, Inc.), Worldwide Fiber Networks, Inc. (fka Pacific Fiber Link
POR-SAC, Inc.) and Worldwide Fiber (FOTS), Inc. (collectively, the "Nevada
Subsidiaries") has been duly incorporated, is validly existing as a
corporation in good standing under the laws
-40-
of the State of Nevada and has the corporate power and authority to carry
on its business as described in the Offering Memorandum and to own, lease
and operate its properties;
(ii) each of the Nevada Subsidiaries is duly qualified and is in good
standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure
to be so qualified would not have a Material Adverse Effect;
(iii) all of the outstanding shares of capital stock of each of the
Nevada Subsidiaries has been duly authorized and validly issued and is
fully paid and non-assessable, and are owned by the Company, free and clear
of any Lien;
(iv) the execution, delivery, and performance of this agreement and
the other Operative Documents will not conflict with or constitute a breach
of any of the terms or provisions of, or a default under, the Articles or
Bylaws of each of the Nevada Subsidiaries, or any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is
material to the Nevada Subsidiaries, taken as a whole, to which any of the
Nevada Subsidiaries is a party or by which any of the Nevada Subsidiaries
is bound; violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body
or agency having jurisdiction over any of the Nevada Subsidiaries or their
respective property; result in the imposition or creation of (or the
obligation to create or impose) a Lien under, any agreement or instrument
to which any of the Nevada Subsidiaries or their respective property is
bound; or result in the termination, suspension or revocation of any
Authorization of any of the Nevada Subsidiaries or result in any other
impairment of the rights of the holder of such Authorization; and
(v) there are no known legal or governmental proceedings pending or
threatened to which any of the Nevada Subsidiaries is or could be a party
or to which any of their property is or could be subject, which might
result, singly or in the aggregate, in a Material Adverse Effect.
The opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & List, Chtd. described
in Section 9(g) above shall be rendered to you at the request of the Company and
shall so state therein.
(h) You shall have received on the Closing Date an opinion (satisfactory to
you and counsel for the Initial Purchasers), dated the Closing Date, of ▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇, special regulatory counsel for the Company, to the effect that
the statements, with respect to federal communications law, under the captions
"Regulation--United States," and "Risk
-41-
Factors--Extensive Regulation--United States" in the Offering Memorandum,
insofar as such statements as a whole constitute a summary of the legal matters,
documents and proceedings referred to therein, fairly present in all material
respects such legal matters, documents and proceedings. The opinion of ▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇ described in this Section 9(h) shall be rendered to you at the
request of the Company and shall so state therein.
(i) The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, of each of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ and ▇▇▇▇▇, ▇▇▇▇▇▇ &
Harcourt, counsel for the Initial Purchasers, in form and substance reasonably
satisfactory to the Initial Purchasers.
(j) The Initial Purchasers shall have received, at the time this Agreement
is executed and at the Closing Date, letters dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to the
Initial Purchasers from PricewaterhouseCoopers and Deloitte & Touche independent
public accountants, containing the information and statements of the type
ordinarily included in accountants' "comfort letters" to the Initial Purchasers
with respect to the financial statements and certain financial information
contained in the Offering Memorandum.
(k) The Series A Notes shall have been approved by the NASD for trading and
duly listed in PORTAL.
(l) The Initial Purchasers shall have received a counterpart, conformed as
executed, of the Indenture which shall have been entered into by the Company,
and the Trustee.
(m) The Company shall have executed the Registration Rights Agreement and
the Initial Purchasers shall have received an original copy thereof, duly
executed by the Company.
(n) The Company shall not have failed at or prior to the Closing Date to
perform or comply in any material respect with any of the agreements herein
contained and required to be performed or complied with by the Company, as the
case may be, at or prior to the Closing Date.
10. Effectiveness of Agreement and Termination. This Agreement shall become
effective upon the execution and delivery of this Agreement by the parties
hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by the Initial Purchasers by written notice to the Company if any of the
following has occurred: (i) any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic conditions or
in the financial markets of the United States or
-42-
elsewhere that, in the Initial Purchasers' judgment, is material and adverse
and, in the Initial Purchasers' judgment, makes it impracticable to market the
Series A Notes on the terms and in the manner contemplated in the Offering
Memorandum, (ii) the suspension or material limitation of trading in securities
or other instruments on the New York Stock Exchange, the Toronto Stock Exchange,
the American Stock Exchange or the Nasdaq National Market or limitation on
prices for securities or other instruments on any such exchange or the Nasdaq
National Market, (iii) the suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market, (iv) the enactment,
publication, decree or other promulgation of any federal, state, provincial or
municipal statute, regulation, rule or order of any court or other governmental
authority which in your opinion materially and adversely affects, or will
materially and adversely affect, the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole, (v)
the declaration of a banking moratorium by either federal or New York State
authorities or authorities in Canada or any province thereof, (vi) the taking of
any action by any federal, state, provincial, municipal or local government or
agency in respect of its monetary or fiscal affairs which in your opinion has a
material adverse effect on the financial markets in the United States or Canada.
If on the Closing Date any one or more of the Initial Purchasers shall fail
or refuse to purchase the Series A Notes which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of the Series
A Notes which such defaulting Initial Purchaser or Initial Purchasers, as the
case may be, agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of the Series A Notes to be purchased on such
date by all Initial Purchasers, each non-defaulting Initial Purchaser shall be
obligated severally, in the proportion which the principal amount of the Series
A Notes set forth opposite its name in Schedule A bears to the aggregate
principal amount of the Series A Notes which all the non-defaulting Initial
Purchasers, as the case may be, have agreed to purchase, or in such other
proportion as you may specify, to purchase the Series A Notes which such
defaulting Initial Purchaser or Initial Purchasers, as the case may be, agreed
but failed or refused to purchase on such date; provided that in no event shall
the aggregate principal amount of the Series A Notes which any Initial Purchaser
has agreed to purchase pursuant to Section 2 hereof be increased pursuant to
this Section 10 by an amount in excess of one-ninth of such principal amount of
the Series A Notes without the written consent of such Initial Purchaser. If on
the Closing Date any Initial Purchaser or Initial Purchasers shall fail or
refuse to purchase the Series A Notes and the aggregate principal amount of the
Series A Notes with respect to which such default occurs is more than one-tenth
of the aggregate principal amount of the Series A Notes to be purchased by all
Initial Purchasers and arrangements satisfactory to the Initial Purchasers and
the Company for purchase of such the Series A Notes are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Initial Purchaser and the Company. In any such case which
does not result in termination of this Agreement, either you or the Company
shall have the right to
-43-
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Offering Memorandum or any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Initial Purchaser from liability in respect of
any default of any such Initial Purchaser under this Agreement.
11. Jurisdiction. The Company and its subsidiaries agree that any suit,
action or proceeding against them brought by any Initial Purchaser, the
directors, officers, employees and agents of any Initial Purchaser, or by any
person who controls any Initial Purchaser, arising out of or based upon this
Agreement or the transactions contemplated hereby, may be instituted in any
State or Federal court in The City of New York, and waive any objection which
they may now or hereafter have to the laying of venue of any such proceeding,
and irrevocably submit to the non-exclusive jurisdiction of such courts in any
suit, action or proceeding. The Company has appointed CT Corporation System as
its authorized agent (the "Authorized Agent") upon whom process may be served in
any suit, action or proceeding arising out of or based upon this Agreement or
the transactions contemplated herein that may be instituted in any State or
Federal court in The City of New York, by any Initial Purchaser, the directors,
officers, employees and agents of any Initial Purchaser, or by any person, if
any, who controls any Initial Purchaser, and expressly accept the non-exclusive
jurisdiction of any such court in respect of any such suit, action or
proceeding. The Company hereby represents and warrants that the Authorized Agent
has accepted such appointment and has agreed to act as said agent for service of
process, and the Company agrees to take any and all action, including the filing
of any and all documents that may be necessary to continue such appointment in
full force and effect as aforesaid. Service of process upon the Authorized Agent
shall be deemed, in every respect, effective service of process upon the
Company. Notwithstanding the foregoing, any action arising out of or based upon
this Agreement may be instituted by any Initial Purchaser, the directors,
officers, employees and agents of any Initial Purchaser, or by any person who
controls any Initial Purchaser, in any court of competent jurisdiction in
Canada.
12. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Company, to Worldwide
Fiber Inc., attention: ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ and (ii) if to the Initial Purchasers,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate Department, or in any case to such other
address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, and the Initial Purchasers set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive
-44-
delivery of and payment for the Series A Notes, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
the Initial Purchasers, the officers or directors of the Initial Purchasers, any
person controlling the Initial Purchasers, the Company, the officers or
directors of the Company, or any person controlling the Company and (ii)
acceptance of the Series A Notes and payment for them hereunder. The respective
agreements, covenants and indemnities set forth in Sections 5(i) and 8 hereof
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement.
If for any reason the Series A Notes are not delivered by or on behalf of
the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 10), the Company agrees to reimburse the
Initial Purchasers for all reasonable out-of-pocket expenses (including the fees
and disbursements of counsel) incurred by them. Notwithstanding any termination
of this Agreement, the Company shall be liable for all expenses which it has
agreed to pay pursuant to Section 5(i) hereof. The Company also agrees to
reimburse the Initial Purchasers and its officers, directors and each person, if
any, who controls such Initial Purchaser within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act for any and all fees and expenses
(including without limitation the fees and expenses of counsel) incurred by them
in connection with enforcing their rights under this Agreement (including
without limitation its rights under Section 8).
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Initial
Purchasers, the Initial Purchasers' directors and officers, any controlling
persons referred to herein, the directors of the Company and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Series A Notes from the Initial Purchasers merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
-45-
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Initial Purchasers.
Very truly yours,
Worldwide Fiber Inc.
By:
----------------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
By:______________________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By:______________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By:______________________________
Name:
Title:
TD SECURITIES (USA) INC.
By:______________________________
Name:
Title:
SCHEDULE A
Principal Amount
Initial Purchasers of Notes
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation..... $272,500,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated....................... 91,000,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc................................ 91,000,000
45,500,000
------------
TD Securities (USA) Inc.................................
Total.............................................. $500,000,000
============
SCHEDULE B
Subsidiaries
Worldwide Fiber Communications Ltd.
Ledcor Communications Ltd.
Ledcor ▇▇▇▇▇ Inc.
Worldwide Fiber Networks Ltd.
Worldwide Fiber (F.O.T.S.) Ltd.
Worldwide Fiber (F.O.T.S.) Inc.
Worldwide Fiber F.O.T.S. No. 2, Inc.
PFL Holdings, Inc.
Worldwide Fiber (USA), Inc.
Pacific Fiber Link SEA-POR, Inc.
Pacific Fiber Link MON-ALB, Inc.
Ledcor Communications, Inc.
Ledcom Holdings Ltd.
WFI-CN Fiber Inc.
Worldwide Fiber IC Holdings, Inc.
Worldwide Fiber IC LLC
IC Fiber Alabama LLC
IC Fiber Illinois LLC
IC Fiber Iowa LLC
IC Fiber Kentucky LLC
IC Fiber Louisiana LLC
IC Fiber Mississippi LLC
IC Fiber Tennessee LLC
Worldwide Fiber Finance Ltd.
Worldwide Fiber Networks, Inc.
WFI Liquidity Management Hungary Limited
SCHEDULE C
Material Subsidiaries
Worldwide Fiber Communications Ltd.
Ledcor Communications Ltd.
Ledcor ▇▇▇▇▇ Inc.
Worldwide Fiber Networks Ltd.
Worldwide Fiber (F.O.T.S.) Ltd.
Worldwide Fiber (F.O.T.S.) Inc.
Worldwide Fiber F.O.T.S. No. 2, Inc.
Worldwide Fiber (USA), Inc.
Ledcor Communications, Inc.
Ledcom Holdings Ltd.
WFI-CN Fiber Inc.
Worldwide Fiber IC Holdings, Inc.
Worldwide Fiber IC LLC
IC Fiber Alabama LLC
IC Fiber Illinois LLC
IC Fiber Iowa LLC
IC Fiber Kentucky LLC
IC Fiber Louisiana LLC
IC Fiber Mississippi LLC
IC Fiber Tennessee LLC
Worldwide Fiber Finance Ltd.
Worldwide Fiber Networks, Inc.
WFI Liquidity Management Hungary Limited
SCHEDULE D
Canadian Affiliates
Worldwide Fiber Communications Ltd.
Worldwide Fiber Networks Ltd.
Ledcor Communications Ltd.
Worldwide Fiber (F.O.T.S.) Ltd.
Ledcor ▇▇▇▇▇ Inc.
Ledcom Holdings Ltd.
WFI-CN Fiber Inc.
Worldwide Fiber (FOTS) No. 2, Inc.
Worldwide Fiber Finance Ltd.
EXHIBIT A
Form of Registration Rights Agreement
