6796508 CANADA INC.
as Purchaser
and
BCE INC.
as Company
DEFINITIVE AGREEMENT
JUNE 29, 2007
DEFINITIVE AGREEMENT
THIS AGREEMENT is made as of June 29, 2007,
B E T W E E N:
6796508 CANADA INC., a corporation incorporated under the laws of Canada (the
"PURCHASER")
- and -
BCE INC., a corporation existing under the laws of Canada ("BCE" or the "COMPANY").
NOW THEREFORE, in consideration of the covenants and agreements herein contained,
the Parties agree as follows:
ARTICLE 1
INTERPRETATION
SECTION 1.1 DEFINITIONS
In this Agreement, unless something in the subject matter or the context is inconsistent
therewith:
"1933 ACT" means the United States Securities Act of 1933;
"1934 ACT" means the United States Securities Exchange Act of 1934;
"ACQUISITION PROPOSAL" means, other than the transactions contemplated by this
Agreement (including, for greater certainty, the Telesat Transaction) and other
than any transaction involving only the Company and/or one or more of its wholly-owned
Subsidiaries, any offer, proposal or inquiry from any Person or group of Persons
(other than any Purchaser Party) after the date hereof relating to (i) any acquisition
or purchase, direct or indirect, of assets representing 20% or more of the consolidated
assets or contributing 20% or more of the consolidated revenue of the Company and
its Subsidiaries or 20% or more of the voting or equity securities of the Company
or any of its Subsidiaries (or rights or interests therein or thereto) whose assets
or revenues, individually or in the aggregate, constitute 20% or more of the consolidated
assets or consolidated revenue, as applicable, of the Company, (ii) any take-over
bid or exchange offer that, if consummated, would result in such Person or group
of Persons beneficially owning 20% or more of any class of voting or equity securities
of the Company or any of its Subsidiaries whose assets or revenues, individually
or in the aggregate, constitute 20% or more of the consolidated assets or consolidated
revenue, as applicable, of the Company or (iii) a plan of arrangement, merger, amalgamation,
consolidation, share exchange, business combination, reorganization, recapitalization,
liquidation, dissolution or other similar transaction involving the Company or any
of its Subsidiaries whose assets or revenues, individually or in the aggregate,
constitute 20% or more of the consolidated assets or revenue, as applicable, of
the Company, but excluding for greater certainty the ordinary course conversion
from time to time of issued and outstanding Preferred Shares of one or more series
into Preferred Shares of a different series in accordance with their terms and the
ordinary course refinancing of existing indebtedness of the Company or its Subsidiaries
as permitted by the terms hereof;
"ADDITIONAL REGULATORY APPROVALS" means the approvals listed on Schedule D hereto;
"AFFECTED SHAREHOLDERS" means the Common Shareholders and the Preferred Shareholders;
"AFFILIATE" has the meaning ascribed thereto in Section 1.2 of National Instrument
45-106 - Prospectus and Registration Exemptions as in effect on the date hereof,
but with respect to the Company does not include Telesat (so long as the Telesat
Purchase Agreement has not been terminated) or the Bell Aliant Entities;
"AGREEMENT" means this definitive agreement as the same may be amended, supplemented
or otherwise modified from time to time in accordance with the terms hereof;
"AMF" means the Autorite des marches financiers, and includes any successor thereto;
"APPLICABLE LAW" means, with respect to any Person, any domestic or foreign federal,
national, state, provincial or local law (statutory, common or otherwise), constitution,
treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment,
decree, ruling or other similar requirement enacted, adopted, promulgated or applied
by a Governmental Authority that is binding upon or applicable to such Person, as
amended unless expressly specified otherwise;
"ARRANGEMENT" means an arrangement under Section 192 of the CBCA on the terms
and subject to the conditions set out in the Plan of Arrangement, subject to any
amendments or variations thereto made in accordance with Section 10.2 hereof or
the Plan of Arrangement or made at the direction of the Court in the Final Order
with the consent of the Company and the Purchaser, each acting reasonably;
"ARRANGEMENT RESOLUTION" means the special resolution approving the Plan of Arrangement
to be considered at the Company Meeting, to be substantially in the form and content
of Schedule B hereto;
"ARTICLES OF ARRANGEMENT" means the articles of arrangement of the Company in
respect of the Arrangement, required by the CBCA to be sent to the Director after
the Final Order is made, which shall be in a form and content satisfactory to the
Company and the Purchaser, each acting reasonably;
"BCE CURRENT PUBLIC DISCLOSURE RECORD" means (i) the annual information form
of the Company dated March 7, 2007 for the year ended December 31, 2006, (ii) the
audited consolidated financial statements of the Company as at and for the years
ended December 31, 2006 and 2005, including the notes thereto and the management's
discussion and analysis thereof, (iii) the unaudited interim consolidated financial
statements of the Company as at and for the three months ended March 31, 2007, including
the notes thereto and the management's discussion and analysis thereof, and (iv)
the management proxy circular of the Company dated April 13, 2007;
"BELL ALIANT ENTITIES" means Bell Aliant Regional Communications Income Fund,
Bell Aliant Holdings Trust, Bell Aliant Regional Communications Holdings Inc., Bell
Aliant Regional Communications Holdings, Limited Partnership, Bell Nordiq Trust,
Bell Aliant Regional Communications Inc., Bell Aliant Regional Communications, Limited
Partnership, Bell Nordiq Group Inc., Telebec, Limited Partnership, Northern Tel,
Limited Partnership and any of their respective direct or indirect Subsidiaries;
"BOARD" means the board of directors of the Company as the same is constituted
from time to time;
"BREAK-UP FEE" has the meaning ascribed thereto in Section 10.6(6);
"BROADCASTING ACT" means the Broadcasting Act (Canada);
"BUSINESS DAY" means a day, other than a Saturday, Sunday or other day on which
commercial banks in Montreal, Quebec, Toronto, Ontario or New York, New York are
closed;
"CANADIAN EQUITY SPONSORS" has the meaning ascribed thereto in Section 6.6;
"CBCA" means the Canada Business Corporations Act;
"CERTIFICATE OF ARRANGEMENT" means the certificate of arrangement to be issued
by the Director pursuant to subsection 192(7) of the CBCA in respect of the Articles
of Arrangement;
"CHANGE IN RECOMMENDATION" has the meaning ascribed thereto in Section 9.1(1)(c)(i);
"CODE" means the United States Internal Revenue Code of 1986;
"COLLECTIVE AGREEMENTS" has the meaning ascribed thereto in paragraph (o) of
Schedule E;
"COMMITMENT LETTER" has the meaning ascribed thereto in paragraph (f) of Schedule
F;
"COMMON SHAREHOLDERS" means the registered or beneficial holders of Common Shares,
as the context requires;
"COMMON SHARES" means the common shares in the capital of the Company, as currently
constituted;
"COMPANY BALANCE SHEET" means the consolidated balance sheet of the Company as
of March 31, 2007 and the footnotes thereto;
"COMPANY CIRCULAR" means the notice of the Company Meeting and accompanying management
information circular, including all schedules, appendices and exhibits thereto,
to be sent to the Affected Shareholders in connection with the Company Meeting,
as amended, supplemented or otherwise modified from time to time;
"COMPANY DISCLOSURE LETTER" means the disclosure letter dated the date hereof
regarding this Agreement that has been provided by the Company to the Purchaser;
"COMPANY EMPLOYEES" means the employees of the Company and its Subsidiaries;
"COMPANY FILINGS" means all documents publicly filed under the profile of the
Company on the System for Electronic Document Analysis Retrieval (SEDAR) since December
31, 2005;
"COMPANY MEETING" means the special meeting of Affected Shareholders, including
any adjournment or postponement thereof, to be called and held in accordance with
the Interim Order to consider the Arrangement Resolution;
"COMPANY SHARES" means, collectively, the Common Shares and the Preferred Shares;
"COMPETITION ACT" means the Competition Act (Canada);
"COMPETITION ACT COMPLIANCE" means that the applicable waiting period under Part
IX of the Competition Act shall have expired or been waived or terminated and there
shall be no order in place issued by the Competition Tribunal established under
the Competition Tribunal Act (Canada) which would preclude completion of the transactions
contemplated by this Agreement;
"COMPETITION LAWS" means the Competition Act, the HSR Act and any other applicable
foreign antitrust or competition laws;
"CONFIDENTIALITY AGREEMENTS" means: (i) the confidentiality agreements (or related
undertaking) dated as of June 5, 2007 between each of the Equity Sponsors and the
Company pursuant to which the Equity Sponsors and the Purchaser have been provided
with access to confidential information of the Company, as amended from time to
time in accordance with their terms, and (ii) any other letter agreements entered
into between the Company and any of the Equity Sponsors regarding confidential information
of the Company;
"CONSIDERATION" means an amount in cash per Company Share as set out in Exhibit
I to the Plan of Arrangement;
"CONTRACT" means any legally binding contract, agreement, license, franchise,
lease, arrangement or commitment (written or oral) to which the Company or any of
its Subsidiaries is a party;
"COURT" means the Quebec Superior Court;
"CRTC" means the Canadian Radio-television and Telecommunications Commission,
and includes any successor thereto;
"CRTC APPLICATIONS" means applications to the CRTC pursuant to the Broadcasting
Act and related regulations for approval of a change in control of the CRTC Licensees
and to approve new licensees of Express-Vu if requested by the Purchaser (provided
that such licensees are Subsidiaries of the Company);
"CRTC APPROVAL" means that all required approvals by the CRTC of the CRTC Applications
shall have been received;
"CRTC LICENSEES" means the Company and those affiliates of the Company that hold
CRTC Licenses, treating for this purpose the Bell Aliant Entities as affiliates
of the Company;
"CRTC LICENSES" means those licenses issued by the CRTC to the Company and affiliates
of the Company under the Broadcasting Act and related regulations, treating for
this purpose the Bell Aliant Entities as affiliates of the Company;
"DATA ROOM" means the material contained in the virtual data room established
by the Company as at 3:15 p.m. on June 29, 2007, the index of documents of which
is appended to the Company Disclosure Letter;
"DEPOSITARY" means Computershare Investor Services Inc.;
"DIVIDEND REINVESTMENT PLAN" means the Shareholder Dividend Reinvestment and
Stock Purchase Plan of the Company, as the same may be amended from time to time
in compliance with this Agreement;
"DIRECTION" means the Direction to the CRTC (Ineligibility of Non-Canadians);
"DIRECTOR" means the Director appointed pursuant to Section 260 of the CBCA;
"DISSENT RIGHTS" means the rights of dissent in respect of the Arrangement described
in the Plan of Arrangement;
"D&O INSURANCE" has the meaning ascribed thereto in Section 6.2(2);
"DSUS" means deferred share units issued under the Company's 1997 Share Unit
Plan for Non-Employee Directors or the Company's 1997 Share Unit Plan for Senior
Executives and Other Key Employees, in each case as amended from time to time;
"EFFECTIVE DATE" means the date shown on the Certificate of Arrangement giving
effect to the Arrangement;
"EFFECTIVE TIME" has the meaning ascribed thereto in the Plan of Arrangement;
"EMPLOYEE PLANS" has the meaning ascribed thereto in paragraph (n) of Schedule
E hereto;
"EMPLOYEE SAVINGS PLANS" means the 1970 Employees' Savings Plan and the 2000
Employees' Savings Plan (US) of the Company, in each case as amended from time to
time;
"ENVIRONMENTAL LAWS" means any Applicable Law relating to the environment or
pollutants, contaminants, wastes or chemicals or any toxic, radioactive, ignitable,
corrosive, reactive or hazardous substances, wastes or materials;
"EQUITY COMMITMENT LETTERS" has the meaning ascribed thereto in paragraph (f)
of Schedule F;
"EQUITY SPONSORS" has the meaning ascribed thereto in paragraph (f) of Schedule
F;
"EXCHANGE" or "EXCHANGES" means the Toronto Stock Exchange and/or the New York
Stock Exchange, as applicable;
"EXECUTIVE OFFICER" has the meaning ascribed thereto in National Instrument 51-102
- Continuous Disclosure Obligations;
"FCC" means the United States Federal Communications Commission, and includes
any successor thereto;
"FCC APPLICATIONS" means the applications and declaratory rulings to the FCC
in relation to the FCC Licenses for approval of the change in control of the Company
or its applicable Subsidiaries (treating for this purpose the Bell Aliant Entities
and Telesat, in Telesat's case for so long as the Telesat Transaction has not been
completed, as Subsidiaries of the Company) on the completion of the transactions
contemplated herein;
"FCC APPROVAL" means that all required approvals of the FCC Applications shall
have been received from the FCC or relevant FCC staff pursuant to delegated authority;
"FCC LICENSES" means the authorizations, licenses and declaratory rulings issued
by the FCC to the Company or a Subsidiary thereof (treating for this purpose the
Bell Aliant Entities and Telesat, in Telesat's case for so long as the Telesat Transaction
has not been completed, as Subsidiaries of the Company) for the provision of service
in the United States or between the United States and any foreign points as disclosed
in the Company Disclosure Letter;
"FINAL ORDER" means the final order of the Court in a form acceptable to the
Company and the Purchaser, acting reasonably, approving the Arrangement as such
order may be amended by the Court (with the consent of both the Company and the
Purchaser, each acting reasonably) at any time prior to the Effective Date or, if
appealed, then, unless such appeal is withdrawn or denied, as affirmed or as amended
(provided that any such amendment is acceptable to both the Company and the Purchaser,
each acting reasonably) on appeal;
"FINANCIAL ADVISORS" means, collectively, Goldman, Sachs & Co., CIBC World Markets
Inc., BMO Nesbitt Burns Inc., RBC Dominion Securities Inc. and Greenhill & Co. Canada
Ltd.;
"GAAP" means accounting principles generally accepted in Canada including those
set out in the Handbook of the Canadian Institute of Chartered Accountants, at the
relevant time applied on a consistent basis;
"GOVERNMENTAL AUTHORITY" means any (a) multinational, federal, national, provincial,
state, regional, municipal, local or other government, governmental or public department,
central bank, court, tribunal, arbitral body, commission, board, bureau, ministry
or agency, domestic or foreign, (b) any subdivision, agent, commission, board, or
authority of any of the foregoing, (c) any quasi-governmental or private body exercising
any regulatory, self-regulatory, expropriation or taxing authority under or for
the account of any of the foregoing, or (d) any stock exchange;
"HERITAGE MINISTER" has the meaning ascribed thereto in Section 6.5(1);
"HSR ACT" means the United States Hart-Scott-Rodino Antitrust Improvements Act
of 1976;
"HSR APPROVAL" means the expiration or early termination of any waiting period,
and any extension thereof, applicable to the completion of the transactions contemplated
hereby under the HSR Act;
"INDEMNIFIED PERSON" has the meaning ascribed thereto in Section 6.2(1);
"INDUSTRY CANADA" means the Minister of Industry acting in accordance with the
powers and discretion accorded to the Minister under the Radiocommunication Act;
"INDUSTRY CANADA APPLICATIONS" means applications to Industry Canada in respect
of Industry Canada Licenses under the Radiocommunication Act and related regulations
for approval of the change in control of the Industry Canada Licensees on the completion
of the transactions set out herein;
"INDUSTRY CANADA APPROVAL" means that all required approvals by Industry Canada
of the Industry Canada Applications shall have been received;
"INDUSTRY CANADA LICENSEES" means those affiliates of the Company who hold Industry
Canada Licenses, treating for this purpose the Bell Aliant Entities and Telesat,
in Telesat's case for so long as the Telesat Transaction has not been completed,
as affiliates of the Company;
"INDUSTRY CANADA LICENSES" means only those radio or spectrum licenses issued
by Industry Canada pursuant to the Radiocommunication Act to affiliates of the Company
(treating for this purpose the Bell Aliant Entities and Telesat, in Telesat's case
for so long as the Telesat Transaction has not been completed, as affiliates of
the Company) which contain, as a condition of license, the requirement to seek the
prior approval of Industry Canada for a material change in ownership or control
of the licensee, a complete list of which is set out in the Company Disclosure Letter;
"INTELLECTUAL PROPERTY RIGHTS" has the meaning ascribed thereto in paragraph
(u) of Schedule E;
"INTERNAL CONTROLS" has the meaning ascribed thereto in Rule 13a-15 of the 1934
Act;
"INTERIM ORDER" means the interim order of the Court in a form acceptable to
the Company and the Purchaser, acting reasonably, providing for, among other things,
the calling and holding of the Company Meeting, as the same may be amended by the
Court with the consent of the Company and the Purchaser, each acting reasonably;
"INVESTMENT CANADA ACT" means the Investment Canada Act;
"INVESTMENT CANADA ACT APPROVAL" means, if required, that the Minister designated
for the purposes of the Investment Canada Act shall have confirmed to the Purchaser
that he or she has determined, or shall have been deemed to have determined, that
the transactions contemplated by this Agreement are of "net benefit" to Canada;
"KEY REGULATORY APPROVALS" means the approvals listed on Schedule C hereto;
"KNOWLEDGE" means the actual knowledge of any of the individuals expressly identified
for these purposes in the Company Disclosure Letter;
"LEASED REAL PROPERTY" has the meaning ascribed thereto in paragraph (q) of Schedule
E;
"LEASED NETWORK FACILITIES" means all of the Company's and its Subsidiaries'
Network Facilities that are not owned by the Company or its Subsidiaries but are
provided under lease, license or other agreement between the Company or the Subsidiary
and one or more other Persons;
"LENDERS" has the meaning ascribed thereto in paragraph (f) of Schedule F;
"LIEN" means, with respect to any property or asset, any mortgage, lien, hypothec,
pledge, charge, security interest, encumbrance, defect of title, restriction or
other rights of third parties, or other adverse claim of any kind in respect of
such property or asset;
"MARKETING PERIOD" shall mean, unless otherwise agreed to by the Parties, the
first period of 20 consecutive calendar days after the Required Information Schedule
is delivered, during which (A) the Purchaser shall have the Required Information
that the Company is required to provide to the Purchaser pursuant to Section 5.3
and (B) all conditions set forth in Section 8.1 and Section 8.2 (other than those
that by their nature will not be satisfied until the Effective Time or conditions
set forth in Section 8.1 with respect to which any Purchaser Party shall have failed
to comply with its obligations hereunder) have been satisfied and no event has occurred
and no conditions exist that would cause any of the conditions set forth in Section
8.1 (other than conditions set forth in Section 8.1 that are not satisfied as a
result of any Purchaser Party having failed to comply with its obligations hereunder)
or Section 8.2 to fail to be satisfied assuming the Effective Time were to be scheduled
for any time during such 20 consecutive calendar day period; provided, however,
that the Marketing Period shall end on any earlier date that is the date on which
the debt financing contemplated by the Commitment Letter is otherwise obtained;
provided further that if the Marketing Period would not end on or prior to December
19, 2007, the Marketing Period shall commence no earlier than January 7, 2008, and
if the Marketing Period would not end on or prior to August 15, 2008, the Marketing
Period shall commence no earlier than September 8, 2008; provided further that the
Marketing Period shall not be deemed to have commenced if, (i) after the date hereof
and prior to the completion of the Marketing Period, Deloitte and Touche LLP shall
have withdrawn its audit opinion with respect to any of the financial statements
contained in the Company Filings or refuses to issue a customary comfort letter
(in accordance with its normal practices) or (ii) the financial statements included
in the Required Information that is available to the Purchaser on the first day
of any such 20 consecutive calendar day period would not be sufficiently current
on any day during such 20 consecutive calendar day period to permit a registration
statement using such financial statements to be declared effective by the SEC on
the last day of the 20 consecutive calendar day period;
"MATERIAL ADVERSE EFFECT" means an effect that, individually or in the aggregate
with other such effects, is or would reasonably be expected to be material and adverse
to the financial condition, business or the results of operations of the Company
and its Subsidiaries, taken as a whole, (treating for purposes of this definition
the Bell Aliant Entities and, for so long as the Telesat Transaction has not been
completed, Telesat, as Subsidiaries of the Company), except any such effect resulting
from or arising in connection with: (a) any change in GAAP; (b) any adoption, proposal,
implementation or change in Applicable Law or any interpretation thereof by any
Governmental Authority; (c) any change in global, national or regional political
conditions (including the outbreak of war or acts of terrorism) or in general economic,
business, regulatory, political or market conditions or in national or global financial
or capital markets; (d) any change affecting any of the industries in which the
Company or any of its Subsidiaries operate; (e) any natural disaster; (f) the execution,
announcement or performance of the Agreement or consummation of the transactions
contemplated hereby, including any loss or threatened loss of, or adverse change
or threatened adverse change in, the relationship of the Company or any of its Subsidiaries
with any of their employees, financing sources, bondholders or shareholders; (g)
any change in the market price or trading volume of any securities of the Company
(it being understood that the causes underlying such change in market price may
be taken into account in determining whether a Material Adverse Effect has occurred),
or any suspension of trading in securities generally on any securities exchange
on which any securities of the Company trade; (h) the Company ceasing to be a "qualified
corporation" for purposes of the Telecommunications Regulations, or ceasing to be
a "Canadian" for purposes of the Radiocommunication Regulations, or ceasing to be
a "Canadian" for purposes of the Direction or ceasing to be in compliance with the
Direction; (i) the failure of the Company in and of itself to meet any internal
or public projections, forecasts or estimates of revenues or earnings (it being
understood that the causes underlying such failure may be taken into account in
determining whether a Material Adverse Effect has occurred); (j) the failure of
the Telesat Transaction to be completed for any reason; (k) any actions taken (or
omitted to be taken) upon the request of the Purchaser; or (l) any action taken
by the Company or any of its Subsidiaries which is required pursuant to the Agreement;
provided, however, that with respect to clauses (c), (d) and (e), such matter does
not have a materially disproportionate effect on the Company and its Subsidiaries,
taken as a whole, relative to other comparable companies and entities operating
in the industries in which the Company and/or its Subsidiaries operate, and unless
expressly provided in any particular section of this Agreement, references in certain
sections of this Agreement to dollar amounts are not intended to be, and shall not
be deemed to be, illustrative or interpretive for purposes of determining whether
a "MATERIAL ADVERSE EFFECT" has occurred;
"MATERIAL CONTRACT" means: (a) any Contract which, if terminated or modified
or if it ceased to be in effect, would reasonably be expected to have a Material
Adverse Effect; (b) any partnership agreement, limited liability company agreement,
joint venture agreement or similar agreement or arrangement relating to the formation,
creation or operation of any partnership, limited liability company or joint venture,
the properties and assets of which exceed $400 million (book value or fair market
value), in which the Company or any of its Subsidiaries is a partner, member or
joint venturer (or other participant) and in which the interest of the Company and
its Subsidiaries has a fair market value which exceeds $200 million, but excluding
any such partnership, limited liability company or joint venture which is a wholly-owned
Subsidiary of the Company; (c) any Contract under which indebtedness in excess of
$250 million is or may become outstanding, other than any such Contract between
two or more wholly-owned Subsidiaries of the Company or between the Company and
one or more or its wholly-owned Subsidiaries; (d) any Contract providing for the
sale or exchange of, or option to sell or exchange, any property or asset where
the sale price or agreed value or fair market value of such property or asset is
in excess of $200 million, or the purchase or exchange of, or option to purchase
or exchange, any property or asset where the purchase price or agreed value or fair
market value of such property or asset is in excess of $200 million, in either case
entered into in the past 12 months or entered into more than 12 months prior to
the date hereof in respect of which the applicable transaction has not yet been
substantially consummated, other than any such Contract between two or more wholly-owned
Subsidiaries of the Company or between the Company and one or more or its wholly-owned
Subsidiaries; or (e) any Contract restricting the incurrence of indebtedness by
the Company or any of its Subsidiaries or (including by requiring the granting of
an equal and rateable Lien) the incurrence of any Liens on any properties or assets
of the Company or any of its Subsidiaries which are material to the Company and
its Subsidiaries, taken as a whole, or restricting the payment of dividends by the
Company, other than any such Contract between two or more wholly-owned Subsidiaries
of the Company or between the Company and one or more or its wholly-owned Subsidiaries
which may be amended, and the terms of which may be waived without the consent of
any other Party (the "LIEN RESTRICTIONS"); (f) any Contract under which the Company
or its wholly-owned Subsidiaries are obligated to make or expect to receive payments
on an annual basis in excess of $100 million or $300 million over the remaining
term of the Contract; and (g) any Contract that limits or otherwise restricts, in
a manner material to the Company and its Subsidiaries, taken as a whole, (i) the
ability of the Company or any of its wholly-owned Subsidiaries to compete in any
material geographic area or material line of business or (ii) the scope of Persons
to whom the Company or any of its Subsidiaries may sell products or deliver services;
"MATERIAL FACT" has the meaning ascribed thereto in the Securities Act;
"MATERIAL SUBSIDIARIES" means those subsidiaries of Company which are identified
as such in the Company Disclosure Letter;
"MISREPRESENTATION" has the meaning ascribed thereto in the Securities Act;
"NETWORK FACILITIES" means all of the Company's and its Subsidiaries' material
network facilities (including cable, wires, conduits, switches and other equipment
and facilities) and related material operating support equipment systems, network
operations centres, and land and buildings, whether owned or leased;
"NETWORK FACILITY AGREEMENTS" means agreements under which third Persons provide
Network Facilities to the Company and/or its Subsidiaries;
"OPTION" means an option to purchase Common Shares granted under any of the Stock
Option Plans;
"OWNED NETWORK FACILITIES" means Network Facilities that are owned by the Company
or one of its Subsidiaries;
"OWNED REAL PROPERTY" has the meaning ascribed thereto in paragraph (q) of Schedule
E;
"OUTSIDE DATE" means June 30, 2008, or such later date as the Purchaser and the
Company may agree in writing, provided that if the Effective Date has not occurred
by the Outside Date as a result of the failure to obtain all of the Key Regulatory
Approvals, then either the Purchaser or the Company may from time to time elect
in writing, provided that the Party so electing is then in compliance in all material
respects with its obligations under the Agreement, to extend the Outside Date by
a specified period of not less than five Business Days, provided that in aggregate
such extensions shall not exceed three months, and provided further that the Outside
Date may only be extended if the Party so extending the Outside Date reasonably
believes that all of the Key Regulatory Approvals are capable of being obtained
prior to the Outside Date, as it may be so extended; and provided that, after the
Key Regulatory Approvals have been obtained, the Outside Date shall not occur prior
to the end of the Marketing Period;
"PARTIES" means, collectively, the Purchaser and the Company, and "PARTY" means
any of them;
"PERMITTED DIVIDEND" means, in respect of the Common Shares, a dividend not in
excess of $0.365 per Common Share per quarter (adjusted for any stock split, stock
dividend, reorganization or similar event after the date hereof), and in respect
of any Preferred Share, a dividend in an amount and with a payment frequency as
provided for or contemplated by the terms of such Preferred Share, including as
such dividend rate may be reset by the Company from time to time, in each case with
customary record and payment dates;
"PERMITTED LIENS" means: (i) the reservations, limitations, provisos and conditions
expressed in the original grant from the Crown and any statutory exceptions to title;
(ii) inchoate or statutory liens of contractors, subcontractors, mechanics, workers,
suppliers, materialmen, carriers and others in respect of the construction, maintenance,
repair or operation of real or personal property; (iii) easements, servitudes, restrictions,
restrictive covenants, party wall agreements, rights of way, licenses, permits and
other similar rights in real property (including, without limiting the generality
of the foregoing, easements, rights of way and agreements for sewers, drains, gas
and water mains or electric light and power or telephone, telecommunications or
cable conduits, poles, wires and cables); (iv) liens for Taxes in respect of real
property not yet due and payable; (v) zoning and building by-laws and ordinances,
regulations made by public authorities and other restrictions affecting or controlling
the use, marketability or development of real property; (vi) agreements with any
municipal, provincial or federal governments or authorities and any public utilities
or private suppliers of services, including (without limitation) subdivision agreements,
development agreements, site control agreements, engineering, grading or landscaping
agreements and similar agreements; and (vii) such other imperfections or irregularities
of title or Liens as do not materially affect the use of the properties or assets
subject thereto or affected thereby or otherwise materially impair business operations
at such properties; which in the case of (iii), (v) and (vi), do not materially
impair the use of the applicable real property subject thereto as such property
is being used at the date hereof;
"PERSON" includes any individual, firm, partnership, limited partnership, limited
liability partnership, joint venture, venture capital fund, limited liability company,
unlimited liability company, association, trust, trustee, executor, administrator,
legal personal representative, estate, body corporate, corporation, company, unincorporated
association or organization, Governmental Authority, syndicate or other entity,
whether or not having legal status;
"PLAN OF ARRANGEMENT" means the plan of arrangement, substantially in the form
of Schedule A hereto, and any amendments or variations thereto made in accordance
with Section 10.2 hereof or the Plan of Arrangement or made at the direction of
the Court in the Final Order with the consent of the Company and the Purchaser,
each acting reasonably;
"PRE-ACQUISITION REORGANIZATION" has the meaning ascribed thereto in Section
5.5;
"PREFERRED SHAREHOLDERS" means the registered or beneficial holders of Preferred
Shares, as the context requires;
"PREFERRED SHARES" means the first preferred shares in the capital of the Company,
as constituted on the date hereof, and includes all series thereof (and, for greater
certainty, includes, as the context requires, the series of preferred shares into
which one or more outstanding series may be converted in accordance with their terms);
"PROCEEDINGS" means any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative;
"PURCHASER PARTIES" means the Purchaser and each of the Equity Sponsors;
"RADIOCOMMUNICATION ACT" means the Radiocommunication Act (Canada);
"RADIOCOMMUNICATION REGULATIONS" means the Radiocommunication Regulations made
under the Radiocommunication Act;
"REGULATORY APPROVALS" means the Key Regulatory Approvals and the Additional
Regulatory Approvals;
"REPRESENTATIVES" has the meaning ascribed thereto in Section 5.2(1);
"REQUIRED INFORMATION" has the meaning ascribed thereto in Section 5.3;
"REQUIRED INFORMATION SCHEDULE" has the meaning ascribed thereto in Section 5.3;
"RETURNS" means all reports, forms, elections, designations, schedules, statements,
estimates, declarations of estimated tax, information statements and returns required
to be filed with a Governmental Authority with respect to Taxes;
"RIGHT-OF-WAY AGREEMENT" has the meaning ascribed thereto in paragraph (r) of
Schedule E;
"RSUS" means restricted share units issued under the Company's 2004 Restricted
Share Unit Plan for Executives and Other Key Employees, as amended from time to
time;
"SECURITIES ACT" means the Securities Act (Quebec);
"SECURITIES AUTHORITIES" means the United States Securities and Exchange Commission,
the AMF and the applicable securities commissions and other securities regulatory
authorities in each of the other provinces and territories of Canada;
"SECURITIES LAWS" means the Securities Act and all other applicable Canadian
provincial and territorial, United States federal and state securities laws, rules
and regulations and published policies thereunder;
"SOLVENT" when used with respect to the Company, means that, as of any date of
determination (a) the amount of the "fair saleable value" of the assets of the Company
will, as of such date, exceed (i) the value of all "liabilities of the Company,
including contingent and other liabilities," as of such date, as such quoted terms
are generally determined in accordance with Applicable Laws governing determinations
of the insolvency of debtors, and (ii) the amount that will be required to pay the
probable liabilities of the Company on its existing debts (including contingent
and other liabilities) as such debts become absolute and mature, (b) the Company
will not have, as of such date, an unreasonably small amount of capital for the
operation of the businesses and transactions in which it intends to engage or proposes
to be engaged following the Effective Date, (c) the Company will be able to meet
its obligations as they generally become due and to pay its liabilities, including
contingent and other liabilities, as they mature, and (d) the aggregate of the property
of the Company is, at a fair valuation, sufficient, or, if disposed of at a fairly
conducted sale under legal process, would be sufficient, to enable payment of all
its obligations, due and accruing due. For purposes of this definition, "not have
an unreasonably small amount of capital for the operation of the businesses in which
it is engaged or proposed to be engaged" and "able to pay its liabilities, including
contingent and other liabilities, as they mature" means that the Company will be
able to generate enough cash from operations, asset dispositions or refinancing,
or a combination thereof, to meet its obligations as they become due;
"STOCK OPTION PLANS" means, collectively, the BCE Inc. Long Term Incentive (Stock
Option) Program (1999), the BCE Inc. Replacement Stock Option Plan (Plan of Arrangement
2000) and any other existing stock option plan of the Company, in each case as amended
from time to time;
"SUBSIDIARY" has the meaning ascribed thereto in Section 1.1 of National Instrument
45-106 - Prospectus and Registration Exemptions as in effect on the date hereof,
but with respect to the Company does not include Telesat (so long as the Telesat
Purchase Agreement has not been terminated) or the Bell Aliant Entities;
"SUPERIOR PROPOSAL" shall mean any written Acquisition Proposal: (i) to acquire
not less than 50.1% of the outstanding Common Shares or assets of the Company on
a consolidated basis, (ii) that is reasonably capable of being completed, taking
into account to the extent considered appropriate by the Board, all financial, legal,
regulatory and other aspects of such proposal and the Person making such proposal,
(iii) in respect of which, where applicable, financing commitment letters reasonably
satisfactory to the Company shall have been furnished to the Company, (iv) that
is not subject to a due diligence condition, and (v) that the Board determines,
in its good faith judgment, after receiving the advice of its outside legal and
financial advisors and after taking into account all the terms and conditions of
the Acquisition Proposal, is on terms and conditions that are more favourable from
a financial point of view to the Affected Shareholders than those contemplated by
this Agreement (after taking into account for greater certainty any modifications
to this Agreement proposed by the Purchaser as contemplated by Section 5.2);
"TAX ACT" means the Income Tax Act (Canada);
"TAXES" means any and all domestic and foreign federal, state, provincial, municipal
and local taxes, assessments and other governmental charges, duties, impositions
and liabilities imposed by any Governmental Authority, including Canada Pension
Plan and provincial pension plan contributions, tax instalment payments, unemployment
insurance contributions and employment insurance contributions, worker's compensation
and deductions at source, including taxes based on or measured by gross receipts,
income, profits, sales, capital, use, and occupation, and including goods and services,
value added, ad valorem, sales, capital, transfer, franchise, non-resident withholding,
customs, payroll, recapture, employment, excise and property duties and taxes, together
with all interest, penalties, fines and additions imposed with respect to such amounts;
"TECHNOLOGY" has the meaning ascribed thereto in paragraph (u) of Schedule E;
"TELECOMMUNICATIONS ACT" means the Telecommunications Act (Canada);
"TELECOM LAWS" means the Telecommunications Act, the Broadcasting Act and the
Radiocommunication Act, and the respective regulations, rules, policies and directions
made thereunder, as well as any applicable foreign telecommunications or communications
laws, regulations, rules, policies and directions including those administered by
the FCC;
"TELECOMMUNICATIONS REGULATIONS" means the Canadian Telecommunications Common
Carrier Ownership and Control Regulations made under the Telecommunications Act;
"TELESAT" means Telesat Canada, a corporation continued under the laws of Canada;
"TELESAT PURCHASE AGREEMENT" means the share purchase agreement dated as of December
16, 2006 among the Company, Telesat and 4363213 Canada Inc. as the same has been
or may be amended from time to time in accordance with its terms and this Agreement;
"TELESAT TRANSACTION" means the purchase and sale transaction, and related transactions,
contemplated by Telesat Purchase Agreement;
"TERMINATION FEE" has the meaning ascribed thereto in Section 10.6(2); and
"TERMINATION FEE EVENT" has the meaning ascribed thereto in Section 10.6(2).
SECTION 1.2 INTERPRETATION NOT AFFECTED BY HEADINGS
The division of this Agreement into Articles and Sections and the insertion of
a table of contents and headings are for convenience of reference only and do not
affect the construction or interpretation of this Agreement. The terms "hereof",
"hereunder" and similar expressions refer to this Agreement and not to any particular
Article, Section or other portion hereof. Unless something in the subject matter
or context is inconsistent therewith, references herein to Articles, Sections and
Schedules are to Articles and Sections of and Schedules to this Agreement.
SECTION 1.3 INTERPRETATION
In this Agreement words importing the singular number include the plural and
vice versa, and words importing any gender include all genders. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation", whether or not they are in fact
followed by those words or words of like import. The term "made available" means
that (i) copies of the subject materials were included in the Data Room on or prior
to 3:15 p.m. on June 29, 2007, (ii) copies of the subject materials were provided
to the Purchaser or any of the Purchaser Parties, or (iii) the subject material
was listed in the Company Disclosure Letter or referred to in the Data Room on or
prior to 3:15 p.m. on June 29, 2007 and copies were provided to the Purchaser or
any of the Purchaser Parties by the Company if requested. Any capitalized terms
used in any Schedule or in the Company Disclosure Letter but not otherwise defined
therein, shall have the meaning as defined in this Agreement.
SECTION 1.4 DATE FOR ANY ACTION
If the date on which any action is required to be taken hereunder by a Party
is not a Business Day, such action shall be required to be taken on the next succeeding
day which is a Business Day. In this Agreement, references from or through any date
mean, unless otherwise specified, from and including that date and/or through and
including that date, respectively.
SECTION 1.5 ENTIRE AGREEMENT
This Agreement, the agreements and other documents herein referred to, and the
Confidentiality Agreements, constitute the entire agreement between the Parties
pertaining hereto and supersede all other prior agreements, understandings, negotiations
and discussions, whether oral or written, between the Parties hereto. Except as
expressly represented and warranted herein or in any other binding agreement relating
hereto executed by the Parties after the date hereof, no Party shall be considered
to have given any other express or implied representations or warranties, including
without limitation as a result of oral or written statements or management or other
presentations or memoranda. The Parties acknowledge that in order to induce the
Company to enter into this Agreement, the Equity Sponsors have, contemporaneously
with the execution and delivery of this Agreement, executed and delivered to the
Company a guarantee of certain of the obligations of the Purchaser hereunder.
SECTION 1.6 STATUTORY REFERENCES, REFERENCES TO PERSONS AND REFERENCES TO CONTRACTS
In this Agreement, unless something in the subject matter or context is inconsistent
therewith or unless otherwise herein provided, a reference to any statute, regulation,
direction or instrument is to that statute, regulation, direction or instrument
as now enacted or as the same may from time to time be amended, re-enacted or replaced,
and in the case of a reference to a statute, includes any regulations, rules, policies
or directions made thereunder. Any reference in this Agreement to a Person includes
its heirs, administrators, executors, legal personal representatives, predecessors,
successors and permitted assigns. References to any contract are to that agreement
or contract as amended, modified or supplemented from time to time in accordance
with its terms.
SECTION 1.7 CURRENCY
Unless otherwise stated, all references in this Agreement to sums of money are
expressed in lawful money of Canada and "$" refers to Canadian dollars.
SECTION 1.8 ACCOUNTING PRINCIPLES
Unless otherwise stated, all accounting terms used in this Agreement shall have
the meanings attributable thereto under GAAP, and all determinations of an accounting
nature required to be made shall be made in a manner consistent with GAAP.
SECTION 1.9 SCHEDULES
The following Schedules are annexed to this Agreement and are incorporated by
reference into this Agreement and form a part hereof:
Schedule A - Plan of Arrangement
Schedule B - Special Resolution
Schedule C - Key Regulatory Approvals
Schedule D - Additional Regulatory Approvals
Schedule E - Representations and Warranties of the Company
Schedule F - Representations and Warranties of the Purchaser
Schedule G - Pre-Approved Equity Partners
ARTICLE 2 THE ARRANGEMENT
SECTION 2.1 ARRANGEMENT
The Company and the Purchaser agree that the Arrangement will be implemented
in accordance with and subject to the terms and conditions contained in this Agreement
and the Plan of Arrangement.
SECTION 2.2 INTERIM ORDER
The Company agrees that as soon as reasonably practicable after the date hereof,
but in any event in sufficient time to permit the Company Meeting to be convened
in accordance with Section 2.3(1), the Company shall apply in a manner reasonably
acceptable to the Purchaser pursuant to Section 192 of the CBCA and, in cooperation
with the Purchaser, prepare, file and diligently pursue an application for the Interim
Order, which shall provide, among other things:
(a) for the class of persons to whom notice is to be provided in respect of the
Arrangement and the Company Meeting and for the manner in which such notice is to
be provided;
(b) that the requisite approval for the Arrangement Resolution shall be two-thirds
of the votes cast on the Arrangement Resolution by Affected Shareholders present
in person or represented by proxy at the Company Meeting;
(c) that, in all other respects, the terms, restrictions and conditions of the
Company's articles of amalgamation and by-laws, including quorum requirements and
all other matters, shall apply in respect of the Company Meeting;
(d) for the grant of the Dissent Rights;
(e) for the notice requirements with respect to the presentation of the application
to the Court for the Final Order; and
(f) that the Company Meeting may be adjourned or postponed from time to time
by the Company without the need for additional approval of the Court.
SECTION 2.3 THE COMPANY MEETING
(1) Subject to the terms of this Agreement, the Company agrees to convene and
conduct the Company Meeting in accordance with the Interim Order, the Company's
articles of amalgamation and by-laws and Applicable Laws on or before October 29,
2007, and not to propose to adjourn or postpone the Company Meeting:
(a) except as required for quorum purposes or by Applicable Law;
(b) except as required under Section 7.6(2) of this Agreement; or
(c) except for an adjournment for the purpose of attempting to obtain the requisite
approval of the Arrangement Resolution.
(2) Subject to the terms of this Agreement and compliance by the directors and
officers of the Company with their fiduciary duties, the Company will use its commercially
reasonable efforts to solicit proxies in favour of the approval of the Arrangement
Resolution, including, if so requested by the Purchaser, acting reasonably, using
dealer and proxy solicitation services and cooperating with any Persons engaged
by the Purchaser to solicit proxies in favour of the approval of the Arrangement
Resolution.
(3) The Company will give notice to the Purchaser of the Company Meeting and
allow the Purchaser's representatives and legal counsel to attend the Company Meeting.
(4) The Company will advise the Purchaser as the Purchaser may reasonably request,
and at least on a daily basis on each of the last five Business Days prior to the
date of the Company Meeting, as to the aggregate tally of the proxies received by
the Company in respect of the Arrangement Resolution.
(5) The Company will promptly advise the Purchaser of any written notice of dissent
or purported exercise by any Affected Shareholder of Dissent Rights received by
the Company in relation to the Arrangement Resolution and any withdrawal of Dissent
Rights received by the Company and, subject to Applicable Laws, any written communications
sent by or on behalf of the Company to any Affected Shareholder exercising or purporting
to exercise Dissent Rights in relation to the Arrangement Resolution. The Company
shall not settle any claims with respect to Dissent Rights without first consulting
with the Purchaser.
SECTION 2.4 THE COMPANY CIRCULAR
(1) Promptly after the execution of this Agreement, the Company shall prepare
and complete, in consultation with the Purchaser, the Company Circular together
with any other documents required by the CBCA, Securities Laws and other Applicable
Laws in connection with the Company Meeting and the Arrangement, and the Company
shall, promptly after obtaining the Interim Order, cause the Company Circular and
other documentation required in connection with the Company Meeting to be filed
and to be sent to each Affected Shareholder and other Persons as required by the
Interim Order and Applicable Laws, in each case so as to permit the Company Meeting
to be held within the time required by Section 2.3(1).
(2) The Company shall ensure that the Company Circular complies in all material
respects with all Applicable Laws, and, without limiting the generality of the foregoing,
that the Company Circular (including with respect to any information incorporated
therein by reference) will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements contained therein not misleading in light of the circumstances in
which they are made (other than in each case with respect to any information furnished
by the Purchaser Parties) and
shall provide Affected Shareholders with information in sufficient detail to permit
them to form a reasoned judgement concerning the matters to be placed before them
at the Company Meeting. Subject to Section 5.2(6), the Company Circular will include
the recommendation of the Board that Affected Shareholders vote in favour of the
Arrangement Resolution.
(3) The Purchaser and its legal counsel shall be given a reasonable opportunity
to review and comment on drafts of the Company Circular and other documents related
thereto, and reasonable consideration shall be given to any comments made by the
Purchaser and its counsel, provided that all information relating solely to the
Purchaser Parties included in the Company Circular shall be in form and content
satisfactory to the Purchaser, acting reasonably.
(4) The Purchaser will furnish to the Company all such information concerning
the Purchaser Parties as may be reasonably required by the Company in the preparation
of the Company Circular and other documents related thereto, and the Purchaser shall
ensure that no such information will contain any untrue statement of a material
fact or omit to state a material fact required to be stated in the Company Circular
in order to make any information so furnished or any information concerning the
Purchaser Parties not misleading in light of the circumstances in which it is disclosed.
(5) The Purchaser will indemnify and save harmless the Company, its Subsidiaries
and their respective directors, officers, employees, agents, advisors and representatives
from and against any and all liabilities, claims, demands, losses, costs, damages
and expenses to which the Company, any Subsidiary or any of their respective directors,
officers, employees, agents, advisors or representatives may be subject or may suffer,
in any way caused by, or arising, directly or indirectly, from or in consequence
of:
(a) any misrepresentation or alleged misrepresentation in any information included
in the Company Circular that is provided by the Purchaser Parties for the purpose
of inclusion in the Company Circular; and
(b) any order made, or any inquiry, investigation or proceeding by any Securities
Authority or other Governmental Authority, based on any misrepresentation or any
alleged misrepresentation in any information related solely to the Purchaser Parties
and provided by the Purchaser Parties for the purpose of inclusion in the Company
Circular.
(6) The Company and the Purchaser shall each promptly notify each other if at
any time before the Effective Date it becomes aware (in the case of the Company
only with respect to the Company and in the case of the Purchaser only with respect
to it or a Purchaser Party) that the Company Circular contains an untrue statement
of a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements contained therein not misleading in light of
the circumstances in which they are made, or that otherwise requires an amendment
or supplement to the Company Circular, and the Parties shall co-operate in the preparation
of any amendment or supplement to the Circular, as required or appropriate, and
the Company shall promptly mail or otherwise publicly disseminate any amendment
or supplement to the Company Circular to Affected Shareholders and, if
required by the Court or Applicable Laws, file the same with the Securities Authorities
and as otherwise required.
SECTION 2.5 FINAL ORDER
If the Interim Order is obtained, the Arrangement Resolution is passed at the
Company Meeting as provided for in the Interim Order and as required by Applicable
Law and the condition in Section 8.1(d) has been satisfied or waived by each of
the Parties, and subject to the terms of this Agreement, the Company shall as soon
as reasonably practicable thereafter take all steps necessary or desirable to submit
the Arrangement to the Court and diligently pursue an application for the Final
Order pursuant to Section 192 of the CBCA.
SECTION 2.6 COURT PROCEEDINGS
The Purchaser and the Company will cooperate in seeking the Interim Order and
the Final Order, including by the Purchaser providing to the Company on a timely
basis any information required to be supplied by any Purchaser Party in connection
therewith. The Company will provide legal counsel to the Purchaser with reasonable
opportunity to review and comment upon drafts of all material to be filed with the
Court in connection with the Arrangement, and will give reasonable consideration
to all such comments. The Company will also provide legal counsel to the Purchaser
on a timely basis with copies of any notice of appearance and evidence served on
the Company or its legal counsel in respect of the application for the Final Order
or any appeal therefrom. Subject to Applicable Laws, the Company will not file any
material with the Court in connection with the Arrangement or serve any such material,
and will not agree to modify or amend materials so filed or served, except as contemplated
hereby or with the Purchaser's prior written consent, such consent not to be unreasonably
withheld, conditioned or delayed; provided that nothing herein shall require the
Purchaser to agree or consent to any increase in Consideration or other modification
or amendment to such filed or served materials that expands or increases the Purchaser's
obligations set forth in any such filed or served materials or under this Agreement.
SECTION 2.7 STOCK COMPENSATION PLANS
(1) Subject to the terms and conditions of this Agreement, pursuant to the Arrangement,
each holder of Options, whether vested or unvested, will be entitled to receive
from the Company in respect of each Option an amount equal to the Consideration
per Common Share less the applicable exercise price in respect of such Option, as
well as any applicable related special compensation payments, and the Company shall
take all such reasonable steps as may be necessary or desirable to give effect to
the foregoing.
(2) Subject to the terms and conditions of this Agreement, pursuant to the Arrangement,
all DSUs and all RSUs (other than any interests in RSUs held by individuals eligible
to participate in the Company's retention plan, which will be paid out on the earlier
of 12 months from the date hereof and six months from the Effective Date for an
amount provided under such retention plan, a description of which was provided to
the Purchaser on June 22, 2007), will be acquired or cancelled by the Company for
cash equal to the Consideration per Common Share per DSU or
RSU, as the case may be, and the Company shall take all such reasonable steps as
may be necessary or desirable to give effect to the foregoing.
SECTION 2.8 ARTICLES OF ARRANGEMENT AND EFFECTIVE DATE
The Articles of Arrangement shall implement the Plan of Arrangement. The Articles
of Arrangement shall include the form of the Plan of Arrangement attached to this
Agreement as Schedule A, as it may be amended at the reasonable request of the Purchaser
to include such terms and conditions as may be determined by the Purchaser, acting
reasonably, to be necessary or desirable provided that no such term or condition
(i) shall be prejudicial to the Affected Shareholders or other Persons to be bound
by the Plan of Arrangement or be inconsistent with the provisions of this Agreement
or (ii) creates a reasonable risk of delaying, impairing or impeding in any material
respect the receipt of any Key Regulatory Approval or the satisfaction of any condition
set forth in Article 8 hereof. Subject to the Interim Order, the Final Order and
any Applicable Law, the Company agrees to amend the Plan of Arrangement at any time
prior to the Effective Time in accordance with Section 10.2 of this Agreement to
add, remove or amend any steps or terms determined to be necessary or desirable
by the Purchaser, acting reasonably, provided that the Plan of Arrangement shall
not be amended in any manner which is (i) prejudicial to the Affected Shareholders
or other Persons to be bound by the Plan of Arrangement or is inconsistent with
the provisions of this Agreement or (ii) creates a reasonable risk of delaying,
impairing or impeding in any material respect the receipt of any Key Regulatory
Approval or the satisfaction of any condition set forth in Article 8 hereof. On
the later of (i) the second Business Day following the last day of the Marketing
Period and (ii) the fifth Business Day after the satisfaction or, where not prohibited,
the waiver by the applicable Party or Parties in whose favour the condition is,
of the conditions (excluding conditions that, by their terms, cannot be satisfied
until the Effective Date, but subject to the satisfaction or, where not prohibited,
the waiver by the applicable Party or Parties in whose favour the condition is,
of those conditions as of the Effective Date) set forth in Article 8, unless another
time or date is agreed to in writing by the Parties, the Articles of Arrangement
shall be filed by the Company with the Director. From and after the Effective Time,
the Plan of Arrangement will have all of the effects provided by Applicable Law,
including the CBCA. The closing of the transactions contemplated hereby will take
place at the offices of Stikeman Elliott LLP, 1155 Rene-Levesque Blvd. West, 40th
Floor, Montreal, Quebec, or at such other location as may be agreed upon by the
Parties.
SECTION 2.9 PAYMENT OF CONSIDERATION
The Purchaser will, following receipt of the Final Order and prior to the filing
by the Company of the Articles of Arrangement with the Director, provide the Depositary
with sufficient funds in escrow (the terms and conditions of such escrow to be satisfactory
to the Company, acting reasonably) to complete all of the transactions contemplated
by the Plan of Arrangement, as provided in the Plan of Arrangement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in (i) the Company Filings filed before the date of this
Agreement or (ii) the Company Disclosure Letter, the Company represents and warrants
to the Purchaser as set forth in Schedule E. For greater certainty, for purposes
of Schedule E Telesat shall be deemed not to be a Subsidiary or affiliate of the
Company, regardless of whether the Telesat Purchase Agreement has been terminated.
SECTION 3.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The representations and warranties of Company contained in this Agreement shall
not survive the completion of the Arrangement and shall expire and be terminated
on the earlier of the Effective Time and the date on which this Agreement is terminated
in accordance with its terms.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company as set forth in Schedule
F.
SECTION 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The representations and warranties of the Purchaser contained in this Agreement
shall not survive the completion of the Arrangement and shall expire and be terminated
on the earlier of the Effective Time and the date on which this Agreement is terminated
in accordance with its terms.
ARTICLE 5
COVENANTS OF THE COMPANY
SECTION 5.1 CONDUCT OF BUSINESS
The Company covenants and agrees that, during the period from the date of this
Agreement until the earlier of the Effective Time and the time that this Agreement
is terminated in accordance with its terms, except as set out in the Company Disclosure
Letter, as required or permitted by the Agreement, as required by Applicable Law
or Governmental Authority, as required by the terms of any existing Contract, or
as contemplated by (i) the Company's 2007 business plans specifically identified
in the Company Disclosure Letter and made available to the Purchaser and as updated
in the written management presentation provided on June 7, 2007 or (ii) the Company's
2008 business plans which are approved by the Board, acting in good faith and following
reasonable consultation with the Purchaser that are consistent in all material respects
with the 2008 forecasts provided to the Purchaser Parties at the management presentation
held on June 7, 2007 and the related documents provided in the Data Room, the Company
shall, and shall cause each of its Subsidiaries to, conduct its business in the
ordinary course consistent with past practice, and shall use
its commercially reasonable efforts to preserve intact the present business organization
of the Company and its Subsidiaries and to preserve the current relationships of
the Company and its Subsidiaries with customers, suppliers, distributors, licensors,
employees and other Persons with which the Company or any of its Subsidiaries has
significant business relations. Without limiting the generality of the foregoing,
from the date of this Agreement until the earlier of the Effective Time and the
time that this Agreement is terminated in accordance with its terms, except as set
forth in the Company Disclosure Letter, as required or permitted by this Agreement,
as required by Applicable Law, Governmental Authority or as required by the terms
of any existing Contract, or as contemplated by (i) the Company's 2007 business
plans specifically identified in the Company Disclosure Letter and made available
to the Purchaser and as updated in the written management presentation provided
on June 7, 2007 or (ii) the Company's 2008 business plans which are approved by
the Board, acting in good faith and following reasonable consultation with the Purchaser
that are consistent in all material respects with the 2008 forecasts provided to
the Purchaser Parties at the management presentation held on June 7, 2007 and the
related documents provided in the Data Room, the Company shall not, nor shall it
permit any of its Subsidiaries to, except with the prior consent of Purchaser (which
consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend its articles of incorporation, articles of amalgamation, by-laws or,
in the case of any Subsidiary which is not a corporation, its similar organizational
documents;
(b) split, combine or reclassify any shares of the Company or declare, set aside
or pay any dividend or other distribution (whether in cash, stock or property or
any combination thereof), other than: (i) Permitted Dividends; (ii) dividends or
distributions from a Subsidiary of the Company to the Company or another wholly-owned
Subsidiary of the Company; or (iii) as required by the terms thereof and in accordance
with such terms, including without limitation in order to effect the conversion
from time to time of issued and outstanding Preferred Shares of one or more series
into Preferred Shares of a different series and/or to reset the dividend rate from
time to time on such Preferred Shares;
(c) redeem, repurchase, or otherwise acquire or offer to redeem, repurchase or
otherwise acquire any shares of capital stock of the Company or any of its Subsidiaries,
except: (i) for the acquisition of shares of capital stock of any wholly-owned Subsidiary
of the Company by the Company or by any other wholly-owned Subsidiary of the Company;
(ii) as required by the terms thereof and in accordance with such terms, including
without limitation in order to effect the conversion from time to time of issued
and outstanding Preferred Shares of one or more series into Preferred Shares of
a different series; or (iii) for the acquisition of Common Shares pursuant to the
Company's normal course issuer bid at prices per share that are less than the applicable
Consideration;
(d) issue, deliver or sell, or authorize the issuance, delivery or sale of any
shares of capital stock, any options, warrants or similar rights exercisable or
exchangeable for or convertible into such capital stock, of the Company or any of
its Subsidiaries, or any RSUs, other than: (i) the issuance of Common Shares on
the exercise or termination of Options
outstanding on the date hereof or as granted hereafter in compliance with this Section
5.1(d), (ii) the issuance of up to a maximum of 1,000,000 Options in the ordinary
course operation of existing share issuance plans of the Company (iii) the issuance
of additional Preferred Shares on the conversion from time to time of issued and
outstanding Preferred Shares of one or more series into Preferred Shares of a different
series in accordance with the terms thereof, or (iv) the issuance of any shares
of capital stock of any Subsidiary of the Company to the Company or any other wholly-owned
Subsidiary of the Company;
(e) acquire (by merger, consolidation, acquisition of stock or assets or otherwise),
directly or indirectly, in one transaction or in a series of related transactions,
assets, securities, properties, interests or businesses having a cost, on a per
transaction or series of related transactions basis, in excess of $100 million and
subject to a maximum of $300 million for all such transactions, other than for greater
certainty ordinary course procurement contracts or the acquisition of inventory
or other assets for resale or use by the Company and/or any of its Subsidiaries
or their respective customers in connection with the ordinary course operation of
their businesses;
(f) sell, lease or otherwise transfer, in one transaction or in a series of related
transactions, any assets, securities, properties, interests or businesses, having
a cost or proceeds, as applicable, on a per transaction or series of related transactions
basis, in excess of $200 million and subject to a maximum of $500 million for all
such transactions, other than: (i) for greater certainty, the sale, lease or other
use or transfer of inventories and products in the ordinary course of business consistent
with past practice; (ii) in connection with the Telesat Transaction; or (iii) in
respect of obsolete, damaged or destroyed assets;
(g) make, in one transaction or in a series of related transactions, any loans,
advances or capital contributions to, or investments in, in an amount on a per transaction
or series of related transactions basis in excess of $100 million individually and
$300 million in the aggregate, in any other Person, other than the Company or any
wholly-owned Subsidiary of the Company and other than pursuant to the exercise of
existing pre-emptive or similar rights or existing capital call obligations;
(h) prepay any long-term indebtedness before its scheduled maturity or create,
incur, assume or otherwise become liable, in one transaction or in a series of related
transactions, with respect to any indebtedness for borrowed money or guarantees
thereof in an amount, on a per transaction or series of related transactions basis,
in excess of $200 million provided that the amount contemplated by subsection (j)(ii)
of Schedule E shall not be increased by more than $800 million as a result of the
net effect of all such transactions, other than (i) indebtedness owing by one Subsidiary
of the Company to the Company or another Subsidiary of the Company or of the Company
to another Subsidiary of the Company; (ii) in connection with the refinancing of
indebtedness outstanding on the date hereof; (iii) in connection with advances under
the Company's or any Subsidiary's existing credit facilities; or (iv) indebtedness
entered into in the ordinary course consistent with past
practice, including for greater certainty lease financing transactions (including
real property leasing financing transactions) and the issuance of commercial paper
from time to time; provided that any indebtedness created, incurred, refinanced,
assumed or for which the Company or any Subsidiary becomes liable in accordance
with (ii) - (iv) shall be prepayable at the Effective Time without premium, penalty
or other incremental costs (including breakage costs) in excess of $5 million, in
the aggregate;
(i) except as required by Applicable Law or by the terms of the Employee Plans
or Contracts in effect on the date hereof: (i) increase any severance, change of
control or termination pay to (or amend any existing arrangement with) any Company
Employee, director or executive officer of the Company or any of its Subsidiaries;
(ii) increase the benefits payable under any existing severance or termination pay
policies with any Company Employee, director or executive officer of the Company
or any of its Subsidiaries; (iii) increase the benefits payable under any employment
agreements with any Company Employee, director or executive officer of the Company
or any of its Subsidiaries (other than, in the case of a Company Employee other
than a director or executive officer of the Company or Bell Canada, in a manner
consistent with past practice); (iv) enter into any employment, deferred compensation
or other similar agreement (or amend any such existing agreement) with any director
or executive officer of the Company or Bell Canada; or (v) increase compensation,
bonus levels or other benefits payable to any director or executive officer of the
Company or Bell Canada or to any Company Employee (other than, in the case of a
Company Employee other than a director or executive officer of the Company or Bell
Canada, in a manner consistent with past practice); provided that the foregoing
shall not prohibit the Company from paying, establishing or increasing the compensation
of the members of the Strategic Oversight Committee;
(j) make any material change in the Company's methods of accounting, except as
required by concurrent changes in GAAP, or pursuant to written instructions, comments
or orders from the SEC, the AMF or any applicable Securities Authority;
(k) waive, release, assign, settle or compromise any claim in a manner that could
require a payment by, or release another Person of an obligation to, the Company
or any of its Subsidiaries of $100 million individually, or $200 million in aggregate,
or could reasonably be expected to have a Material Adverse Effect or to adversely
affect in any material respect the ability of the Company to complete the transactions
contemplated by this Agreement;
(l) amend or modify any Contract referred to in clause (aa) of Schedule E to
increase the amounts payable to any of the Financial Advisors or amend or modify
in any material respect or terminate or waive any material right under any Material
Contract or enter into any contract or agreement that would be a Material Contract
if in effect on the date hereof except for (i) any Contract or agreement for the
sale or procurement of goods or services entered into on arm's length terms with
a customer or supplier of the Company or any Subsidiary, (ii) any Contract that
does not provide for the possible payment or
receipt by the Company and/or its Subsidiaries over the remaining life of such Contract
of an amount in excess of $400 million, (iii) any other revenue-generating Contract
entered into in the ordinary course of business that provides for payment or revenues
of less than $200 million per annum and $500 million over the remaining life of
such Contract, or (iv) any renewal or extension of any existing Contract (other
than the agreements listed in Section 5.1(l) of the Company Disclosure Letter) on
substantially similar terms; provided that the exceptions set out in clauses (i),
(ii) and (iii) above shall not apply in respect of any Contract that is a Material
Contract by virtue of clause (g) of the definition of Material Contract set out
in Section 1.1;
(m) enter into, amend or modify any union recognition agreement, collective agreement
or similar agreement with any trade union or representative body other than in the
ordinary course of business consistent with past practice and upon reasonable consultation
with the Purchaser;
(n) for greater certainty, except as contemplated in Section 6.2, amend, modify
or terminate any material insurance policy of the Company or any Subsidiary in effect
on the date of this Agreement, except for scheduled renewals of any insurance policy
of the Company or any Subsidiary in effect on the date hereof in the ordinary course
of business consistent with past practice;
(o) grant or commit to grant an exclusive licence or otherwise transfer any Intellectual
Property or exclusive rights in or in respect thereto that is material to the Company
and its Subsidiaries taken as a whole, other than in the ordinary course of business
or to wholly-owned Subsidiaries;
(p) make, change or revoke any material Tax election or settle or compromise
any material Tax liability;
(q) materially change the business or regulatory strategy of the Company or its
Subsidiaries;
(r) to the extent that Telesat or any Bell Aliant Entity is required to obtain
the consent of the Company or its Subsidiaries under any Contract, provide any consent
under such Contract that would permit Telesat or such Bell Aliant Entity to take
any action that would be restricted by this Section 5.1 if Telesat or such Bell
Aliant Entity was a Subsidiary of the Company; or
(s) agree, resolve or commit to do any of the foregoing.
Notwithstanding the provisions of (e), (f), (g) and (h) above, the Company and
its Subsidiaries shall not be restricted from efficiently managing excess cash balances
(including the proceeds from the Telesat Transaction) in a tax efficient manner
consistent with past practice including (i) investing in or disposing of money market
instruments and (ii) repaying short-term indebtedness or maturing other indebtedness.
The Company shall not, however, redeem any long term indebtedness maturing after
December 31, 2010.
SECTION 5.2 NON-SOLICITATION
(1) Except as expressly provided in this Section 5.2, the Company shall not,
directly or indirectly, through any officer, director, employee, representative
(including any financial or other advisor) or agent of the Company or any of its
Subsidiaries (collectively, "REPRESENTATIVES"): (i) solicit, initiate or knowingly
encourage (including by furnishing information or entering into any Contract) any
inquiries or proposals regarding an Acquisition Proposal; (ii) participate in any
substantive discussions or negotiations with any Person (other than the Purchaser
Parties) regarding an Acquisition Proposal; (iii) make a Change in Recommendation;
(iv) accept, approve, endorse or recommend, or propose publicly to accept, approve,
endorse or recommend, any Acquisition Proposal (it being understood that publicly
taking no position or a neutral position with respect to an Acquisition Proposal
for a period of no more than ten Business Days following the formal announcement
of such Acquisition Proposal shall not be considered to be in violation of this
Section 5.2(1) unless such position has not been withdrawn by or before the end
of such ten Business Day period); or (v) accept, approve, endorse or recommend or
enter into, or publicly propose to accept, approve, endorse or recommend or enter
into, any Contract in respect of an Acquisition Proposal.
(2) Except as otherwise provided in this Section 5.2, the Company shall, and
shall cause its Subsidiaries and Representatives to, immediately cease and cause
to be terminated any solicitation, encouragement, discussion or negotiation with
any Persons conducted heretofore by the Company, its Subsidiaries or any Representatives
with respect to any Acquisition Proposal, and, in connection therewith, the Company
will discontinue access to the Data Room (and not establish or allow access to any
other data rooms, virtual or otherwise or otherwise furnish information) and shall
as soon as possible request, to the extent that it is entitled to do so (and exercise
all rights it has to require) the return or destruction of all confidential information
regarding the Company and its Subsidiaries previously provided to any such Person
or any other Person and will request (and exercise all rights it has to require)
the destruction of all material including or incorporating or otherwise reflecting
any material confidential information regarding the Company and its Subsidiaries.
The Company agrees that neither it, nor any of its Subsidiaries, shall terminate,
waive, amend or modify any provision of any existing confidentiality agreement relating
to an Acquisition Proposal or any standstill agreement to which it or any of its
Subsidiaries is a party (except that the Purchaser acknowledges that the automatic
termination of the standstill provisions and clubbing restrictions of such agreements
as a result of the entering into and announcement of this Agreement shall not be
a violation of this Section 5.2(2)).
(3) Notwithstanding Section 5.2(1) and any other provision of this Agreement
or of any other agreement between the Parties or between the Company and any other
Person, including without limitation the provisions of any confidentiality or standstill
agreement, if at any time following the date of this Agreement and prior to obtaining
the approval of the Arrangement Resolution by Affected Shareholders at the Company
Meeting, the Company receives any written Acquisition Proposal, other than any Acquisition
Proposal that resulted from a wilful and intentional breach of this Section 5.2
by the Company or any director or officer of the Company or any Representative acting
at the direction of or on behalf of the Company or any director or officer of the
Company, that the Board determines in good faith, after consultation
with its financial advisors and outside counsel, constitutes or could reasonably
be expected to lead to a Superior Proposal, then the Company may:
(a) furnish information with respect to the Company and its Subsidiaries to the
Person making such Acquisition Proposal; and/or
(b) enter into, participate, facilitate and maintain discussions or negotiations
with, and otherwise cooperate with or assist, the Person making such Acquisition
Proposal, provided that the Company shall not, and shall not allow its Representatives
to, disclose any non-public information to such Person without having entered into
a confidentiality agreement with such Person that contains provisions that are no
less favourable in the aggregate to the Company and that are not individually or
in the aggregate materially more favourable to such Person than those contained
in the Confidentiality Agreements, except that such agreement may contain a less
restrictive or no standstill restriction and may specifically release such party
from any existing standstill restriction (a correct and complete copy of which confidentiality
agreement shall be provided to the Purchaser before any such non-public information
is provided) and provided that such confidentiality agreement may not include any
provision calling for an exclusive right to negotiate with the Company and may not
restrict the Company or its Subsidiaries from complying with this Section 5.2, and
will promptly provide to the Purchaser any material non-public information concerning
the Company or its Subsidiaries provided to such other Person which was not previously
provided to the Purchaser. Notwithstanding the foregoing, the Company shall not
provide any commercially sensitive non-public information to any competitor that
has made an Acquisition Proposal, except in a manner consistent with the Company's
past practice in dealing with the disclosure of such information in the context
of considering Acquisition Proposals prior to the date of this Agreement.
(4) The Company shall promptly (and in any event within 24 hours) notify the
Purchaser (orally and in writing) in the event it receives a written Acquisition
Proposal, including the identity of the Person making such Acquisition Proposal
and the material terms and conditions thereof, and shall, at the Purchaser's reasonable
request, inform the Purchaser as to the status of developments and negotiations
with respect to such Acquisition Proposal, including any changes to the material
terms or conditions of such Acquisition Proposal.
(5) The Company shall not accept, approve, recommend or enter into any agreement
relating to an Acquisition Proposal (other than a confidentiality agreement complying
with Section 5.2(3)) unless (i) the Acquisition Proposal did not result from the
wilful and intentional breach of this Section 5.2 by the Company or any director
or officer of the Company or any Representative acting at the direction of or on
behalf of the Company or any director or officer of the Company, (ii) the Board
determines in good faith, after consultation with its financial advisors and outside
counsel, that such Acquisition Proposal constitutes a Superior Proposal, (iii) the
Company has provided the Purchaser with a copy of such Acquisition Proposal, (iv)
a period (the "MATCHING PERIOD") of five Business Days has lapsed from the date
(the "NOTICE DATE") that is the later of (a) the date the Purchaser received
written notice of the Company's proposed determination to take such action, and
(b) the date the Purchaser received a copy of the Acquisition Proposal, (v) during
the Matching Period, the Purchaser shall have the opportunity (but not an obligation)
to offer to amend the terms and conditions of this Agreement such that the Acquisition
Proposal would cease to be a Superior Proposal, (vi) after the Matching Period,
the Board (a) determines in good faith, after consultation with its financial advisors
and outside counsel, that such Acquisition Proposal continues to constitute a Superior
Proposal and (b) determines in good faith, after consultation with outside legal
counsel, that failure to take such action would reasonably be expected to be inconsistent
with its fiduciary duties under Applicable Law, (vii) prior to or simultaneously
with taking such action, the Company (a) terminates this Agreement pursuant to Section
9.1(1)(d)(i) and (b) pays the Termination Fee pursuant to Section 10.6(2), and (viii)
promptly following such termination, the Company enters into a definitive agreement
with the Person making such Superior Proposal. Each successive material modification
(including any increase in the proposed price) of any Acquisition Proposal shall
constitute a new Acquisition Proposal for purposes of Section 5.2(5), provided that
the Matching Period in respect of such new Acquisition Period shall extend only
until the later of the end of the initial five Business Day Matching Period and
36 hours after the Notice Date in respect of the new Acquisition Proposal.
(6) Nothing contained in this Agreement, including Section 5.2(1), shall prohibit
the Board from making a Change in Recommendation or from making any disclosure to
any securityholders of the Company prior to the Effective Time, including for greater
certainty disclosure of a Change in Recommendation, if, in the good faith judgment
of the Board, after consultation with outside legal counsel, failure to take such
action or make such disclosure would reasonably be expected to be inconsistent with
the Board's exercise of its fiduciary duties or such action or disclosure is otherwise
required under Applicable Law (including without limitation by responding to an
Acquisition Proposal under a directors' circular or otherwise as required under
Securities Laws), provided that for greater certainty in the event of a Change of
Recommendation and a termination by the Purchaser of this Agreement pursuant to
Section 9.1(1)(c)(i), the Company shall pay the Termination Fee as required by Section
10.6(2). The Board may not make a Change in Recommendation pursuant to the preceding
sentence unless the Company gives the Purchaser at least two Business Days prior
written notice of its intention to make such Change in Recommendation, provided
that, for greater certainty, the foregoing limitation shall not apply in respect
of any actions taken under Section 5.2(5). In addition, nothing contained in this
Agreement shall prevent the Company or the Board from calling and holding a meeting
of Shareholders, or any of them, requisitioned by Shareholders, or any of them,
in accordance with the CBCA or ordered to be held by a court in accordance with
Applicable Laws.
SECTION 5.3 ASSISTANCE WITH PURCHASER FINANCING
The Company will, and will cause its Subsidiaries to, and each shall use commercially
reasonable efforts to cause its Representatives to, provide such co-operation to
the Purchaser as the Purchaser may reasonably request in connection with the arrangements
by the Purchaser to obtain the advance of the debt financing referred to in Section
6.4 as contemplated in the Commitment Letter and/or any alternative financing proposed
by the Purchaser pursuant to
Section 6.4, (provided that such request is made on reasonable notice and reasonably
in advance of the proposed commencement of the Marketing Period and/or the Effective
Time, as applicable, and provided such co-operation does not unreasonably interfere
with the ongoing operations of the Company and its Subsidiaries or interfere with
or hinder or delay the performance by the Company or its Subsidiaries of their other
obligations), including (and subject to the foregoing) as so requested: (a) participating
in a reasonable number of meetings, drafting sessions, presentations, road shows,
due diligence sessions and sessions with rating agencies, (b) assisting the Purchaser
and the Lenders in the preparation of offering documents for any debt raised to
complete the Arrangement and materials for rating agency, Lender or investor presentations,
(c) cooperating with the Purchaser in connection with applications to obtain such
consents, approvals or authorizations which may be reasonably necessary or desirable
in connection with such debt financing, (d) using commercially reasonable efforts
to seek to take advantage of the Company's existing lending relationships, including
encouraging the Company's existing lenders to participate in the syndicate organized
by the Lenders, (e) reasonably cooperating with the marketing efforts of the Purchaser
and the Lenders for any debt raised by the Purchaser to complete the Arrangement,
including participating in presentations to the Lenders and by facilitating direct
contact between the Company's senior management and the Lenders, (f) having officers
execute, without personal liability, any reasonably necessary officer's certificates
or management representation letters to the Company's accountants to issue reports
with respect to the financial statements to be included in any offering documents
to the extent customary for similar offerings and solvency certificates or other
certificates customarily requested by lenders in transactions of this type, (g)
provided that all Key Regulatory Approvals have been obtained, subject to the terms
of the Company's and its Subsidiaries' existing indebtedness, giving timely redemption
or prepayment notices, as applicable, in connection with the refinancing of the
Company's or its Subsidiaries' existing indebtedness outstanding on or after the
Effective Time as may be reasonably required by the Purchaser, (h) providing advance
estimates of payout amounts in respect of indebtedness being repaid on the Effective
Date and arranging for releases and discharge of Liens securing indebtedness being
repaid on the Effective Date, (i) the execution and delivery of a customary purchase
agreement and related documentation on terms reasonably satisfactory to the Company
in connection with any offering of debt securities, (j) subject to Applicable Laws
and the obtaining of any necessary consents in connection therewith (which the Company
shall use reasonable commercial efforts to obtain), executing and delivering any
pledge and security documents, currency or interest hedging arrangements or other
definitive financing documents or other certificates and documents as may be reasonably
requested by the Purchaser or otherwise facilitating the pledging of collateral
as may be reasonably requested by the Purchaser; provided that any obligations contained
in such documents shall be effective no earlier than as of the Effective Time, (k)
furnishing the Purchaser and its financing sources as promptly as practicable (and
in any event no later than 30 days prior to the Outside Date) with financial and
other pertinent information regarding the Company and its Subsidiaries as may be
reasonably requested by the Purchaser, including Canadian GAAP financial statements
together with a reconciliation to US GAAP prepared substantially in accordance with
Item 17 of Form 20-F, of the type and form customarily included in offering documents
used in private placements by foreign private issuers under Rule 144A of the 1933
Act, to consummate the offerings of debt securities contemplated by the Commitment
Letters at the time during the Company's fiscal year such offerings will be made
including but not limited to annual audited financial statements (with accompanying
audit reports), interim financial
statements (consistent with the Company's regular quarterly reporting) and corresponding
LTM data and pro forma financial statements (information required to be delivered
pursuant to this clause (k) being referred to as the "Required Information"), provided
that the Purchaser shall provide the Company with a list of the form and types of
financial and other information requested pursuant to this clause (k) by no later
than August 1, 2007 (the "REQUIRED INFORMATION SCHEDULE"), (l) obtaining customary
accountants' comfort letters, accountants' consents, and legal opinions as reasonably
requested by the Purchaser (provided that the Purchaser shall arrange to provide
any opinion required by the terms of any of the Company's or any of its Subsidiaries'
existing trust indentures in connection with any such financing or related actions)
and (m) taking all actions reasonably necessary to permit the Lenders to evaluate
the Company's and its Subsidiaries' current assets, cash management and accounting
systems, policies and procedures relating thereto for the purpose of establishing
collateral arrangements. Notwithstanding the foregoing, none of the Company nor
any Subsidiary of the Company will be required to (a) pay any commitment, consent
or other fee or incur any other liability in connection with any such financing
prior to the Effective Time, (b) take any action or do anything that would contravene
any Applicable Law, contravene any Contract of the Company or any Subsidiary that
relates to borrowed money or be capable of impairing or preventing the satisfaction
of any condition set forth in Article 8 hereof, (c) commit to take any action that
is not contingent on the consummation of the transactions at the Effective Time,
or (d) disclose any information that in the reasonable judgment of the Company would
result in the disclosure of any trade secrets or similar information or violate
any obligations of the Company or any other Person with respect to confidentiality.
The Purchaser agrees to indemnify the Company, its affiliates and their respective
officers, directors and employees from and against any and all liabilities, losses,
damages, claims, costs, expenses, interest, awards, judgments and penalties suffered
or incurred by any of them in connection with any financing or potential financing
by the Purchaser or any actions or omissions by any of them in connection with any
request by the Purchaser made hereunder and for any alleged misstatement or omission
in any information provided hereunder at the request of the Purchaser (other than
historical factual information to the extent prepared by the Company and relating
to the Company and its Subsidiaries). The Purchaser will promptly upon request by
the Company and from time to time (other than in circumstances where this Agreement
is terminated by the Purchaser pursuant to Section 9.1(1)(c)(ii) due to willful
and intentional breach or fraud) reimburse the Company for all reasonable out-of-pocket
costs (including legal fees) incurred by the Company or its Subsidiaries and their
respective advisers, agents and representatives in connection with any of the foregoing.
The Company hereby consents to the use of its and its Subsidiaries' logos in connection
with the financing; provided that such logos are used solely in a manner that is
not intended to or reasonably likely to harm or disparage the Company or any of
its Subsidiaries or the reputation or goodwill of the Company or any of its Subsidiaries.
SECTION 5.4 COMPLETION OF THE TELESAT TRANSACTION
The Company will use all commercially reasonable efforts to complete as promptly
as practicable the Telesat Transaction on substantially the terms and conditions
outlined in the Telesat Purchase Agreement. The Company shall promptly update the
Purchaser as to any material developments relating to the Telesat Transaction and
in no event shall the Company make any material amendments or waivers to the Telesat
Purchase Agreement without the prior written consent of the Purchaser (such consent
not to be unreasonably withheld, conditioned or delayed). In the event that the
Telesat Purchase Agreement is terminated in accordance with its terms, then Telesat
shall, from the date of
such termination, be deemed to be a Subsidiary of the Company for purposes of Section
5.1.
SECTION 5.5 COOPERATION REGARDING REORGANIZATION
(1) Upon the reasonable request or requests of the Purchaser (not less than 30
Business Days prior to the Effective Time), the Company shall, and shall cause its
Subsidiaries to, use all commercially reasonable efforts to (i) effect, in the period
immediately prior to the Effective Time, such reorganizations of their business,
operations and assets as the Purchaser may request, acting reasonably (each a "PRE-ACQUISITION
Reorganization"); (ii) cooperate fully with the Purchaser and its advisors to determine
the nature of the Pre-Acquisition Reorganizations that might be undertaken and the
manner in which they would most effectively be undertaken; and (iii) cooperate fully
with the Purchaser in the preparation and filing of a request for an advance income
tax ruling to be requested by the Purchaser from the Canada Revenue Agency (and
provincial taxing authorities as applicable) respecting such income tax matters
as the Purchaser may determine including, in particular, rulings relating to paragraphs
88(1)(c) and (d) of the Tax Act, and to cooperate as requested during the process
of obtaining such tax ruling. The obligations of the Company pursuant to this Section
5.5 shall be conditional on the understanding that: (i) any Pre-Acquisition Reorganization
shall not delay, impair or impede the completion of the Arrangement or the ability
of the Purchaser to obtain any financing required by it in connection with the transactions
contemplated by this Agreement; (ii) any Pre-Acquisition Reorganization shall not
unreasonably interfere in the ongoing operations of the Company or any of its Subsidiaries;
(iii) any Pre-Acquisition Reorganization shall not require the Company or any Subsidiary
to contravene any Applicable Laws, their respective organizational documents or
any Contract; (iv) any Pre-Acquisition Reorganization shall not become effective
unless the Purchaser shall have waived or confirmed in writing the satisfaction
of all conditions in its favour under Section 8.1 and Section 8.2 and shall have
confirmed in writing that it is prepared to promptly and without condition (other
than satisfaction of the condition contemplated by Section 8.2(a)) proceed to effect
the Arrangement; (v) the Company and its Subsidiaries shall not be obligated to
take any action that would reasonably be expected to result in any Taxes being imposed
on, or any adverse Tax or other consequences to, any securityholder of the Company
incrementally greater than the Taxes or other consequences to such party in connection
with the consummation of the Arrangement in the absence of any Pre-Acquisition Reorganization;
and (vi) the Company, its Subsidiaries and their respective officers, directors,
employees, agents, advisors and representatives shall have received an indemnity,
in form and substance satisfactory to the Company, acting reasonably, from the Purchaser
Parties from and against any and all liabilities, losses, damages, claims, costs,
expenses, interest, awards, judgements and penalties suffered or incurred by any
of them in connection with or as a result of any Pre-Acquisition Reorganization.
The Purchaser acknowledges and agrees that the Pre-Acquisition Reorganizations shall
not be considered in determining whether a representation, warranty or covenant
of the Company hereunder has been breached, it being acknowledged by the Purchaser
that these actions could require the consent of third parties under applicable Contracts.
The Purchaser and the Company shall, at the expense of the Purchaser, work cooperatively
and use commercially reasonable efforts to prepare prior to the
Effective Time all documentation necessary and do such other acts and things as
are necessary to give effect to such Pre-Acquisition Reorganizations.
(2) The Company shall use its reasonable best efforts to, and shall use its reasonable
best efforts to cause its Subsidiaries to, maintain in good standing the tax loss
monetization (the "MONETIZATION") among Bell Canada, Bell Mobility Inc. and others,
in a manner consistent with the advance income tax ruling issued on March 27, 2007.
The Company and its Subsidiaries shall not unwind, terminate or amend the Monetization,
in whole or in part, without the consent of the Purchaser, acting reasonably.
SECTION 5.6 CONDUCT OF THE COMPANY
For the period commencing on the date hereof and ending on the Effective Time,
and except as required by Applicable Law, the Company shall not, and shall not permit
its Subsidiaries to enter into any merger, acquisition, joint venture, disposition,
lease, contract or debt or equity financing, or agree to do any of the foregoing,
that would reasonably be likely to delay, impair or impede in any material respect
the receipt of any Regulatory Approval or the satisfaction of any condition set
forth in Article 8 hereof.
SECTION 5.7 DIVIDEND REINVESTMENT PLAN; EMPLOYEE SAVINGS PLANS
(a) From and after the date of this Agreement until the Effective Time, all Common
Shares delivered to participants under the Dividend Reinvestment Plan shall be acquired
only by open market or third party arm's length purchases, and not for greater certainty
from treasury.
(b) Upon the execution of this Agreement, the Company shall not issue or otherwise
authorize the issuance of any Common Shares from treasury in respect of the Employee
Savings Plans and all Common Shares delivered to participants under the Employee
Savings Plans for the period commencing on the date of this Agreement and ending
at the Effective Time shall be acquired by open market or third party arm's length
purchases. The Company shall take all steps necessary to cause the Employee Savings
Plans to be terminated at the Effective Time.
SECTION 5.8 COOPERATION WITH SOLVENCY OPINION
Each of the Purchaser and the Company shall use their respective reasonable best
efforts to (a) make available their respective officers, agents or other representatives
on a customary basis and on reasonable notice and (b) provide or make available
such information and documents concerning the business, properties, Contracts, assets
and liabilities of the Company and, in the case of the Purchaser, the financing
contemplated by the Commitment Letter and Equity Commitment Letters, as may reasonably
be requested by the firm preparing the opinion contemplated by Section 8.1(f).
ARTICLE 6
COVENANTS OF THE PURCHASER PARTIES
SECTION 6.1 CONDUCT OF THE PURCHASER
For the period commencing on the date hereof and ending on the Effective Time,
and except as required by Applicable Law, no Purchaser Party shall enter into any
merger, acquisition, joint venture, disposition, lease, contract or debt or equity
financing, or agree to do any of the foregoing, that would reasonably be likely
to (a) result in any of the representations and warranties referred to in Section
4.1 becoming false or inaccurate in any material respect, or (b) delay, impair or
impede in any material respect the receipt of any Regulatory Approval or the satisfaction
of any condition set forth in Article 8 hereof.
SECTION 6.2 DIRECTOR AND OFFICER LIABILITY
(1) From and after the Effective Time, the Purchaser shall, and shall cause the
Company to, indemnify and hold harmless, to the fullest extent permitted under Applicable
Law (and to also advance expenses as incurred to the fullest extent permitted under
Applicable Law), each present and former director, officer, trustee and employee
of the Company and its Subsidiaries (each, an "INDEMNIFIED PERSON") against any
costs or expenses (including reasonable attorneys' fees), judgments, fines, losses,
claims, damages or liabilities incurred in connection with any claim, inquiry, action,
suit, proceeding or investigation, whether civil, criminal, administrative or investigative,
arising out of or related to such Indemnified Person's service as a director, officer,
trustee or employee of the Company and/or any of its Subsidiaries or services performed
by such Persons at the request of the Company and/or any of its Subsidiaries at
or prior to or following the Effective Time, whether asserted or claimed prior to,
at or after the Effective Time, including the approval or completion of this Agreement,
the Arrangement or any of the other transactions contemplated by this Agreement
or arising out of or related to this Agreement and the transactions contemplated
hereby. Neither the Purchaser nor the Company shall settle, compromise or consent
to the entry of any judgment in any claim, action, suit, proceeding or investigation
or threatened claim, action, suit, proceeding or investigation involving or naming
an Indemnified Person or arising out of or related to an Indemnified Person's service
as a director, officer, trustee or employee of the Company and/or any of its Subsidiaries
or services performed by such Persons at the request of the Company and/or any of
its Subsidiaries at or prior to or following the Effective Time without the prior
written consent of that Indemnified Person.
(2) Prior to the Effective Time, the Company shall and, if the Company is unable
to, the Purchaser shall cause the Company as of the Effective Time, to obtain and
fully pay the premium for the extension of the directors', officers', trustees'
and employees' liability coverage of the Company's and its Subsidiaries' existing
directors', officers', trustees' and employees' insurance policies for a claims
reporting or run-off and extended reporting period and claims reporting period of
at least six years from and after the Effective Time with respect to any claim related
to any period or time at or prior to the Effective Time from an insurance carrier
with the same or better credit rating as the Company's current insurance carriers
with respect to directors', officers', trustees' and employees' liability insurance
("D&O INSURANCE"), and with terms, conditions, retentions and limits of
liability that are no less advantageous to the Indemnified Persons than the coverage
provided under the Company's and its Subsidiaries' existing policies with respect
to any actual or alleged error, misstatement, misleading statement, act, omission,
neglect, breach of duty or any matter claimed against a director, officer, trustee
or employee of the Company or any of its Subsidiaries by reason of him or her serving
in such capacity that existed or occurred at or prior to the Effective Time (including
in connection with the approval or completion of this Agreement, the Arrangement
or the other transactions contemplated by this Agreement or arising out of or related
to this Agreement and the transactions contemplated hereby). If the Company for
any reason fails to obtain such "run off" insurance policies as of the Effective
Time, the Company shall continue to maintain in effect for a period of at least
six years from and after the Effective Time the D&O Insurance in place as of the
date hereof with terms, conditions, retentions and limits of liability that are
no less advantageous in the aggregate than the coverage provided under the Company's
and its Subsidiaries' existing policies as of the date hereof, or the Company shall
purchase comparable D&O Insurance for such six-year period with terms, conditions,
retentions and limits of liability that are at least as favourable to the Indemnified
Persons as provided in the Company's existing policies as of the date hereof.
(3) If the Company or the Purchaser or any of their successors or assigns shall:
(a) amalgamate, consolidate with or merge or wind-up into any other Person and,
if applicable, shall not be the continuing or surviving corporation or entity; or
(b) transfer all or substantially all of its properties and assets to any Person
or Persons, then, and in each such case, proper provisions shall be made so that the successors,
assigns and transferees of the Company or the Purchaser, as the case may be, shall
assume all of the obligations set forth in this Section 6.2.
(4) If any Indemnified Person makes any claim for indemnification or advancement
of expenses under this Section 6.2 that is denied by the Company or the Purchaser,
and a court of competent jurisdiction determines that the Indemnified Person is
entitled to such indemnification, then the Company and the Purchaser shall pay such
Indemnified Person's costs and expenses, including reasonable legal fees and expenses,
incurred in connection with pursuing such claim against the Company or the Purchaser.
(5) The rights of the Indemnified Persons under this Section 6.2 shall be in
addition to any rights such Indemnified Persons may have under the constating documents
of the Company or any of its Subsidiaries, or under any Applicable Law or under
any Contract of any Indemnified Person with the Company or any of its Subsidiaries.
All rights to indemnification and exculpation from liabilities for acts or omissions
occurring at or prior to the Effective Time and rights to advancement of expenses
relating thereto in favour of any Indemnified Person as provided in the constating
documents of the Company or any Subsidiary of the Company or any Contract, the form
of which is in the Data Room as at the date hereof, between such Indemnified Person
and the Company or any of its Subsidiaries shall survive the Effective Time and
shall
not be amended, repealed or otherwise modified in any manner that would adversely
affect any right thereunder of any such Indemnified Person.
(6) For purposes of this Section 6.2, the Bell Aliant Entities and Telesat shall
be deemed to be Subsidiaries of the Company.
(7) This Section 6.2 shall survive the consummation of the Arrangement and is
intended to be for the benefit
