EXHIBIT 10.14
UNDERWRITING AGREEMENT
April 28, 2003
ACS MEDIA INCOME FUND
79 Wellington Street West
Suite 3000
Toronto, Ontario
M5A 4R4
ATTENTION: Trustees
- - and -
ACS MEDIA LLC
3601 C Street
Anchorage, Alaska
99503
ATTENTION: President
- - and -
ALASKA COMMUNICATIONS SYSTEMS HOLDINGS, INC.
600 Telephone Avenue, MS 65
Anchorage, Alaska
99503
ATTENTION: General Counsel
- - and -
THE OTHER ACS PARTIES
Dear Sirs:
We understand that ACS Media Income Fund (the "FUND") proposes to issue
and sell to the Underwriters (as defined below) previously unissued trust units
of the Fund (the "UNITS") and has prepared and filed a Preliminary Prospectus
(as amended and restated) with respect to the Units in each of the provinces and
territories of Canada (the "QUALIFYING JURISDICTIONS"). We also understand that
Alaska Communications Systems Holdings, Inc. ("ALASKA COMMUNICATIONS SYSTEMS")
is the promoter of the Fund and that the Fund intends to use the proceeds of the
sale of the Units to indirectly, through ACS Media Canada Inc. ("ACS CANADA"),
acquire a 87.4% interest in ACS Media LLC (the "COMPANY") from ACS Media
Holdings LLC ("ACS HOLDINGS"), a wholly-owned subsidiary of ACS InfoSource, Inc.
("ACS INFOSOURCE"). Upon and subject to the terms and conditions contained in
this agreement, CIBC World Markets Inc. ("CIBC WM"), RBC Dominion Securities
Inc. ("RBC DS"), Scotia Capital Inc. ("SCOTIA"), BMO Nesbitt Burns Inc. ("BMO
NB"), National Bank Financial Inc. ("NBF") and Westwind Partners Inc.
("WESTWIND") (collectively, the "UNDERWRITERS", and each, an "UNDERWRITER")
hereby severally offer to purchase from the Fund in the respective percentages
set out in Section 25 of this agreement, and the Fund hereby agrees to sell to
the Underwriters, all but not less than all of the 17,500,000 Units (the
"INITIAL UNITS") at the purchase price of $10.00 per Unit, being an aggregate
purchase price of $175,000,000.
By acceptance of this agreement, the Fund grants to the Underwriters an
irrevocable right (the "OVER-ALLOTMENT OPTION") to purchase, severally and not
jointly, up to 1,500,000 additional Units (or such lesser amount, such that
following the exercise of the Over-Allotment Option in full, ACS Holdings will
continue to own at least 5% of the issued and outstanding Company Interests)
(the "ADDITIONAL UNITS") from the Fund on the same basis (including as to the
fee payable to the Underwriters per Additional
Unit) as the purchase of the Initial Units. If CIBC WM, on behalf of the
Underwriters, elects to exercise the Over-Allotment Option (which election may
occur on no more than one occasion), CIBC WM shall notify the Fund in writing
not later than noon on the 30th day following the Closing Date, which notice
shall specify the number of Additional Units to be purchased by the Underwriters
and the date and time at which such Additional Units are to be purchased (the
"OVER-ALLOTMENT CLOSING TIME"). Such date may be the same as the Closing Date
but not earlier than the later of (i) the Closing Date and (ii) three business
days after the delivery date of such notice, nor later than five business days
after the date of such notice. Additional Units may be purchased solely for the
purpose of covering over-allotments made in connection with the offering of the
Initial Units. If any Additional Units are purchased, each Underwriter agrees,
severally and not jointly, to purchase the number of Additional Units (subject
to such adjustments to eliminate fractional Units as CIBC WM may determine) that
bears the same proportion to the total number of Additional Units to be
purchased as the number of Initial Units set out in Section 25 opposite the name
of such Underwriter bears to the total number of Initial Units.
The Initial Units and the Additional Units are hereinafter referred to,
collectively, as the "PURCHASED UNITS")
In consideration of the agreement of the Underwriters to purchase the
Initial Units and to offer them to the public pursuant to the Prospectus, the
Fund agrees to pay to the Underwriters, at the Time of Closing (as defined
below), an aggregate fee of $10,062,500, being a fee equal to 5.75% of the
aggregate purchase price for the Initial Units, or $0.575 per Initial Unit.
TERMS AND CONDITIONS
The following are additional terms and conditions of this agreement
among the Fund, ACS Canada, the Company, ACS Holdings, ACS InfoSource, Alaska
Communications Systems and the Underwriters.
1. DEFINITIONS.
Where used in this agreement, or in any amendment to this agreement,
the following terms will have the following meanings, respectively:
1.1 "ACS CANADA" means ACS Media Canada Inc., a corporation
existing under the laws of the Province of Ontario;
1.2 "ACS CREDIT DOCUMENTS" means any or all of the credit
agreements, indentures or other similar documents to which
Alaska Communications Systems Group, Inc. and/or Alaska
Communications Systems Holdings, Inc. and/or any of their
respective affiliates are a party or are bound, together with
all instruments and other agreements entered into in
connection with such agreements, each as amended,
supplemented, or otherwise modified from time to time;
1.3 "ACS HOLDINGS" means ACS Media Holdings LLC, a limited
liability company existing under the laws of the State of
Alaska;
1.4 "ACS INFOSOURCE" means ACS InfoSource, Inc., a corporation
existing under the laws of the State of Alaska;
1.5 "ACS NOTES" means the notes issued pursuant to the Note
Indenture;
1.6 "ACS PARTIES" means, collectively, the Fund, ACS Canada, the
Company, ACS Holdings, ACS InfoSource and Alaska
Communications Systems Holdings, Inc.;
1.7 "AFFILIATE" means an affiliated entity for purposes of Section
1.2 of Ontario Securities Commission Rule 45-501 [Revised] -
Exempt Distributions;
1.8 "BENEFICIARIES" has the meaning given to that term in Section
16.8;
1.9 "BUSINESS" means the business carried on by ACS InfoSource,
and to be carried on by the Fund, indirectly through the
Company, immediately following the Time of Closing, as
described in the Prospectus;
1.10 "BUSINESS DAY" means a day other than a Saturday, a Sunday or
a day on which banks are not open for business either in
Toronto, Ontario or Anchorage, Alaska;
1.11 "CLAIM" has the meaning given to that term in Section 16;
1.12 "CLOSING" means the completion of the offering of the Initial
Units under the Prospectus and the transactions contemplated
in Articles 2, 3, 4, 5, 6, 7 and 8 of the Investment Agreement
on the Closing Date;
1.13 "CLOSING DATE" means May 8, 2003 or any earlier or later date
as may be agreed to in writing by the Fund, Alaska
Communications Systems and the Underwriters, each acting
reasonably, but will in any event not be later than May 30,
2003;
1.14 "CODE" means the U.S. Internal Revenue Code of 1986, as
amended;
1.15 "COMPANY" means ACS Media LLC, a limited liability company
existing under the laws of the State of Alaska;
1.16 "COMPANY INTERESTS" means membership interests in the capital
of the Company, as subsequently consolidated or subdivided, or
any other securities resulting from a reclassification or
amendment thereto;
1.17 "CONTINUING UNDERWRITERS" has the meaning given to that term
in Section 25;
1.18 "DECLARATION OF TRUST" means the declaration of trust dated
March 5, 2003, pursuant to which the Fund was created, as
amended and restated from time to time;
1.19 "DEFAULTED UNITS" has the meaning given to that term in
Section 25;
1.20 "DISCLOSURE LETTER" means the letter dated the date of this
agreement from the Company to the Underwriters in respect of
the representations and warranties related to the Company and
the Business, in form satisfactory to the Underwriters, and
which letter forms an integral part of this agreement;
1.21 "DISTRIBUTION" means a distribution or distribution to the
public, as the case may be, for the purposes of the Securities
Laws or any of them;
1.22 "EMPLOYMENT AGREEMENTS" means, collectively, the employment
agreements to be dated the Closing Date between the Company
and each of Wesley E. Carson, Wayne P. Graham and Vicki L.
Pedersen in respect of his/her services as President and Chief
Executive Officer, Executive Vice President and Chief
Financial Officer and Vice President, Operations of the
Company, respectively.
1.23 "ENVIRONMENT" means soils, land surface or subsurface strata,
surface waters (including navigable waters, ocean waters,
streams, ponds, drainage basins and wetlands), groundwaters,
draining water supply, stream sediments, air, plant and animal
life, and any other environmental medium or natural resource;
1.24 "ENVIRONMENTAL LAWS" means any U.S. federal, state, municipal
or local law, statute, by-law, ordinance, regulation, rule,
order, decree, permit agreement, judicial or administrative
decision, injunction or legally binding requirement of any
governmental authority which relates to or otherwise imposes
liability or standards of conduct concerning discharges,
spills, releases or threatened releases of noises, odours or
any Substances into, or the presence of noises, odours or any
Substances in, ambient air, ground or surface water or land,
municipal or other works (including sewers and storm drains)
or otherwise relating to
the manufacture, processing, generation, distribution, use,
treatment storage, discharge, release, disposal, clean-up,
transport or handling of Substances or to the protection of
the environment, as now or at any time hereafter in effect;
1.25 "ENVIRONMENTAL PERMITS" means all permits, certificates,
consents, authorizations, registrations, licences or other
approvals issued by any Governmental Body pursuant to any
Environmental Laws;
1.26 "EXCHANGE AGREEMENT" means the exchange agreement to be
entered into on the closing of the offering under the
Prospectus among the Fund, ACS Canada, the Company, ACS
Holdings and ACS InfoSource and such other Persons who from
time to time execute the exchange agreement or are deemed to
be party thereto, regarding the Exchange Rights;
1.27 "EXCHANGE RIGHTS" means the rights granted pursuant to, and
referred to as the "Investor Exchange Right" in, the Exchange
Agreement;
1.28 "EXISTING SECURITYHOLDERS" has the meaning given to that term
in Section 20;
1.29 "FINAL MRRS DECISION DOCUMENT" means a receipt for the
Prospectus issued in accordance with the MRRS;
1.30 "FINANCIAL INFORMATION" means:
a. the selected consolidated financial information of
ACS InfoSource set forth in the Prospectus under the
headings "Prospectus Summary - Summary of
Distributable Cash Flows of the Fund", "Prospectus
Summary - Selected Consolidated Financial
Information", "Summary of Distributable Cash Flows of
the Fund", "Reconciliation of Income Before Income
Taxes to EBITDA", "Selected Consolidated Financial
Information" and "Consolidated Capitalization";
b. the selected consolidated financial information of
the Fund set forth in the Prospectus under the
headings "Prospectus Summary - Summary of
Distributable Cash Flows of the Fund" and "Summary of
Distributable Cash Flows of the Fund";
c. management's discussion and analysis of financial
condition and results of operations set forth in the
Prospectus under the heading "Management's Discussion
and Analysis of Financial Condition and Results of
Operations"; and
d. the financial statements (including pro forma
financial statements) of the Fund and ACS InfoSource;
e. in each case, included in the Prospectus, together
with the reports of Deloitte & Touche LLP, on those
financial statements, if applicable, and including
the notes with respect to those financial statements,
if applicable;
1.31 "FUND" means ACS Media Income Fund, a trust formed under the
laws of the Province of Ontario;
1.32 "GOVERNMENTAL BODY" means any (i) multinational, federal,
provincial, state, municipal, local or other governmental or
public department, central bank, court, commission, board,
bureau, agency or instrumentality, domestic or foreign; (ii)
any subdivision or authority of any of the foregoing; (iii)
any quasi-governmental, self-regulatory organization or
private body exercising any regulatory, expropriation or
taxing authority under or for the account of its members or
any of the above; or (iv) any arbitrator exercising
jurisdiction over the affairs of the applicable Person, asset,
obligation or other matter;
1.33 "GOVERNMENTAL CHARGES" means all taxes, duties, levies,
assessments, reassessments and other charges together with all
related penalties, interest and fines, payable in respect of
periods ending on or before the Closing Date to any domestic
or foreign government
(federal, provincial, state, municipal or otherwise) or to any
regulatory authority, agency, commission or board of any
domestic or foreign government, or imposed by any court or any
other law, regulation or rule making entity having
jurisdiction in the relevant circumstances, applicable to any
of ACS InfoSource, ACS Holdings, the Company, or the Business;
1.34 "HSR ACT" means the United States Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the regulations
promulgated thereunder;
1.35 "INDEMNIFIED PARTY" and "Indemnified Parties" have the
meanings given to those terms in Section 16.1;
1.36 "INVESTMENT AGREEMENT" means the investment agreement to be
entered into on the date of the Prospectus among the Fund, ACS
Canada, the Company, ACS Holdings, ACS InfoSource and Alaska
Communications Systems respecting, among other things, the
investment by the Fund of the proceeds of the offering under
the Prospectus in ACS Canada and the purchase by ACS Canada of
87.4% of the existing and outstanding Company Interests from
ACS Holdings;
1.37 "IPO OFFERING DOCUMENTS" has the meaning given to that term in
Section 16.1.2;
1.38 "LAW" means any and all laws, including all federal, state,
provincial and local statutes, codes, ordinances, guidelines,
decrees, rules, regulations and municipal by-laws and all
judicial, arbitral, administrative, ministerial, departmental
or regulatory judgments, orders, directives, decisions,
rulings or awards or other requirements of any other
Governmental Body, binding on or affecting the Person referred
to in the context in which the term was used;
1.39 "LIEN" means any mortgage, charge, pledge, hypothecation,
security interest, assignment, Lien (statutory or otherwise),
charge, title retention agreement or arrangement, restrictive
covenant or other encumbrance of any nature, or any other
arrangement or condition which, in substance, secures payment
or performance of an obligation;
1.40 "LLC AGREEMENT" means the limited liability company agreement
of the Company dated April 28, 2003;
1.41 "LTIP" means the long-term incentive plan for the managers,
officers and senior management employees of the Company;
1.42 "MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE" means
any effect or change on the Fund, ACS Canada, the Company or
the Business that is or is reasonably likely to be materially
adverse to the results of operations, financial condition,
assets, properties, capital, liabilities (contingent or
otherwise), cash flow, income or business operations of the
Fund, ACS Canada, the Company or the Business, after giving
effect to this agreement and the transactions contemplated
hereby or that is materially adverse to the completion of the
transactions contemplated by this agreement or the Related
Agreements, in each case taken as a whole and as a going
concern and, for greater certainty, where applicable, applying
the multiple or yield based upon which Units are priced and
sold under the Prospectus and the consequential loss or
diminution of value resulting from such effect or change;
1.43 "MATERIAL AGREEMENTS" means, collectively, (i) the Directory
Publishing Services Agreement between ACS InfoSource and L.M.
Berry and Company, (ii) the Publishing Rights Agreement, the
PRA Licence Agreement, the PRA Subscriber List Information
Agreement, the PRA Directory Agreement, the Directory
Publication and Distribution Agreement, the License Agreement,
the Subscriber List Information License Agreement, the Data
Services Agreement, the Billing and Collection Agreement, each
described in the Prospectus, (iii) the Non-Competition
Agreement among Alaska Communications Systems, the Company and
others, described in the Prospectus, and (iv) the Transition
Services
Agreement among the Company, Alaska Communications Systems and
others, described in the Prospectus;
1.44 "MATERIAL FACT" means a fact that significantly affects, or
would reasonably be expected to have a significant effect on,
the market price or value of the Purchased Units;
1.45 "MISREPRESENTATION" means (i) an untrue statement of a
material fact, or (ii) an omission to state a material fact
that is required to be stated or that is necessary to make a
statement not misleading in light of the circumstances in
which it was made;
1.46 "MRRS" means the mutual reliance review system procedures
provided for under National Policy 43-201- Mutual Reliance
Review System for Prospectuses and Annual Information Forms,
as amended;
1.47 "NON-U.S. UNITHOLDER" means any holder of Units that is not a
U.S. Unitholder.
1.48 "NOTE INDENTURE" means the note indenture providing for the
issuance of the 14% unsecured, subordinated notes of ACS
Canada, dated the Closing Date, among ACS Canada and the Trust
Company, as trustee;
1.49 "OCCUPATIONAL SAFETY AND HEALTH LAW" means any U.S. federal,
state, municipal or local statute, law, by-law, ordinance,
code, rule, regulation, order or decree regulating, relating
to or imposing liability or standards of conduct concerning
employee health and/or safety;
1.50 "OFFERING" means the offering of trust units to the public
under the Prospectus, including pursuant to the exercise of
the Over-Allotment Option;
1.51 "ORDINARY COURSE" means, with respect to an action taken by a
Person, that such action is consistent in all material
respects with past practices of the Person and is taken in
ordinary course of the normal day-to-day operations of the
Person;
1.52 "PERMITTED ENCUMBRANCES" means (i) Liens for taxes,
assessments or governmental charges or levies on property not
yet due and delinquent; and (ii) easements, encroachments and
other minor imperfections of title which do not, individually
or in the aggregate, materially detract from the value of or
impair the use or marketability of any real property;
1.53 "PERSON" means any individual, partnership, limited
partnership, limited liability company, joint venture,
syndicate, sole proprietorship, company or corporation with or
without share capital, unincorporated association, trust,
trustee, executor, administrator or other legal personal
representative, regulatory body or agency, government or
governmental agency, authority or entity however designated or
constituted;
1.54 "PLANS" has the meaning given to that term in Section
13.1.18.2;
1.55 "PRELIMINARY PROSPECTUS" means the preliminary prospectus of
the Fund dated March 6, 2003, as amended and restated on April
9, 2003, in each case approved, signed and certified in
accordance with the Securities Laws relating to the
qualification for distribution of the Purchased Units under
applicable Securities Laws in the Qualifying Jurisdictions;
1.56 "PROPOSED CREDIT FACILITY" means the senior secured credit
facility to be established pursuant to a note purchase
agreement and a revolving loan agreement, in the aggregate
principal amount of U.S.$40 million, between the Company,
Metropolitan Life Insurance Company, the Lenders thereunder
and the Guarantors thereto;
1.57 "PROSPECTUS" means the (final) prospectus of the Fund dated
the date of this agreement, approved, signed and certified in
accordance with the Securities Laws, relating to the
qualification for distribution of the Purchased Units under
applicable Securities Laws in the Qualifying Jurisdictions;
1.58 "REFUSING UNDERWRITER" has the meaning given to that term in
Section 25;
1.59 "RELATED AGREEMENTS" means the Declaration of Trust, the
Investment Agreement, the Securityholders Agreement, the
Proposed Credit Facility, the Exchange Agreement, the Note
Indenture, the LLC Agreement and the Employment Agreements;
1.60 "RELEASE" means any discharge, including any emission,
release, deposit, issuance, spray, escape, spill or leak;
1.61 "SECURITIES COMMISSION" means the applicable securities
commission or regulatory authority in each of the Qualifying
Jurisdictions;
1.62 "SECURITIES LAWS" means, collectively, and, as the context may
require, the applicable securities laws of each of the
Qualifying Jurisdictions and the respective regulations and
rules made under those securities laws together with all
applicable policy statements, blanket orders and rulings of
the Securities Commissions and all discretionary orders or
rulings, if any, of the Securities Commissions made in
connection with the transactions contemplated by this
agreement, together with applicable published policy
statements of the Canadian Securities Administrators;
1.63 "SECURITYHOLDERS AGREEMENT" means the securityholders
agreement to be entered into on the Closing Date, among ACS
Canada, ACS Holdings and the Company respecting, among other
things, appointment of the managers of the Company,
pre-emptive rights to purchase Company Interests and certain
approval rights of ACS Holdings over the affairs of the
Company;
1.64 "STANDARD LISTING CONDITIONS" has the meaning given to that
term in Section 5.5.3;
1.65 "SUBSIDIARY" means a subsidiary entity for purposes of Section
1.2 of Ontario Securities Commission Rule 45-501 [Revised] -
Exempt Distributions;
1.66 "SUBSTANCE" means any substances or material which under any
Environmental Law is defined to be "hazardous", "toxic",
"deleterious", "caustic", "dangerous", a "contaminant", a
"pollutant", a "dangerous good", a "waste", a "special waste",
a "source of contamination" or a "source of pollutant" and any
substances or materials the discharge of or release to, or the
concentration of which in soil, sediment, ground water or
surface water or ambient air are regulated under any
Environmental Law;
1.67 "SUPPLEMENTARY MATERIAL" means, collectively, any amendment to
the Prospectus or U.S. Placement Memorandum, any amendment or
supplemental prospectus or ancillary materials that may be
filed by or on behalf of the Fund under the Securities Laws
and the Securities Laws of the United States relating to the
qualification for distribution of, the Purchased Units;
1.68 "TAX ACT" has the meaning given to that term in Section
13.1.18.2;
1.69 "TIME OF CLOSING" means 8:00 a.m. (Toronto time) on the
Closing Date, or any other time on the Closing Date as may be
mutually agreed to by the Fund, Alaska Communications Systems
and the Underwriters;
1.70 "TRUST COMPANY" means CIBC Mellon Trust Company;
1.71 "TSX" means the Toronto Stock Exchange;
1.72 "UNITED STATES" means the United States of America, its
territories and possessions, and any state of the United
States and the District of Columbia;
1.73 "U.S. PLACEMENT MEMORANDUM" means the placement memorandum, if
any, of the Fund, and any amendment thereto, prepared in
accordance with the U.S. Securities Laws, in
connection with a private placement of Units in the United
States as contemplated by Section 23;
1.74 "U.S. EXCHANGE ACT" has the meaning given to that term in
Section 23;
1.75 "U.S. SECURITIES ACT" has the meaning given to that term in
Section 23;
1.76 "U.S. SECURITIES LAWS" means the U.S. Securities Act, the U.S.
Exchange Act, all rules and regulations promulgated
thereunder, and any state securities laws; and
1.77 "U.S. UNITHOLDER" means any holder of Units that is (i) a
citizen or individual resident in the United States for U.S.
federal tax purposes, (ii) a corporation or other entity
taxable as a corporation created or organized under the laws
of the United States or any political subdivision thereof,
(iii) an estate, the income of which is subject to United
States federal income tax regardless of the source, or (iv) a
trust, if a court within the United States is able to exercise
primary supervision over the trust's administration and one or
more United States persons have the authority to control all
its substantial decisions.
Capitalized terms used but not defined in this agreement have the
meanings given to them in the Prospectus.
Unless otherwise indicated, all references to monetary amounts in this
agreement are to lawful money of Canada.
Any reference in this agreement to a Section, paragraph, subsection,
subparagraph, clause or subclause will refer to a Section, paragraph,
subsection, subparagraph, clause or subclause of this agreement.
All words and personal pronouns relating to those words will be read
and construed as the number and gender of the party or parties referred
to in each case required and the verb will be construed as agreeing
with the required word and/or pronoun.
Wherever the words "include", "includes" or "including" are used in
this agreement, they shall be deemed to be followed by the words
"without limitation".
References in this agreement to actions to be taken by the Fund, mean
actions to be taken by the trustees of the Fund on behalf of the Fund,
or their duly authorized agent or attorney.
2. ATTRIBUTES OF THE PURCHASED UNITS.
The Purchased Units to be issued and sold under this agreement by the Fund will
be duly and validly created and issued by the Fund and, when issued and sold by
the Fund, those Purchased Units will have the attributes set out in the
Declaration of Trust, subject to those modifications or changes (if any) prior
to the Closing Date as may be permitted under the Declaration of Trust and
agreed to in writing by the Fund and the Underwriters.
3. FILING OF PROSPECTUS.
3.1 The Fund will, as soon as possible following the execution of
this agreement, prepare and file the Prospectus in each of the
Qualifying Jurisdictions with the Securities Commissions under
the Securities Laws, and will obtain the Final MRRS Decision
Document as soon as possible after the filing and, in any
event, not later than 5:00 p.m. (Toronto time) on April 30,
2003 (or such other time and/or later date as the Fund and the
Underwriters may agree) and will have taken all other steps
and proceedings that may be necessary in order to qualify the
Purchased Units for distribution in each of the Qualifying
Jurisdictions by the Underwriters and other persons who are
registered in a category permitting them to distribute the
Purchased Units under the Securities Laws and who comply with
the Securities Laws.
3.2 Until the distribution of the Purchased Units is completed,
the Fund will promptly take, or cause to be taken, all
additional steps and proceedings that may from time to time be
required under the Securities Laws to continue to qualify the
distribution of the Purchased Units or, in the event that the
Purchased Units have, for any reason, ceased so to qualify, to
so qualify again the Purchased Units, as applicable, for
distribution.
4. DISTRIBUTION AND CERTAIN OBLIGATIONS OF UNDERWRITERS.
4.1 During the course of the distribution of the Purchased Units
to the public by or through the Underwriters, the Underwriters
will offer and sell those Purchased Units to the public, only
in those jurisdictions where they may be lawfully offered for
sale or sold and only at the price per Unit set out on the
cover page of the Prospectus. The Underwriters will comply
with applicable Securities Laws (including the U.S. Securities
Act) in connection with the offer to sell or distribution of
the Purchased Units. Except in the Qualifying Jurisdictions,
the Underwriters will not, directly or indirectly, solicit
offers to purchase or sell the Purchased Units or deliver the
Prospectus or any Supplementary Material so as to require
registration of those Units or filing of a prospectus with
respect to those Units under the laws of any jurisdiction,
including, without limitation, the United States. Any offer or
sale of the Purchased Units in the United States will be made
in accordance with Section 23 of this agreement. Each
Underwriter will cause similar undertakings to be contained in
any agreements among the members of the banking, selling or
other groups formed for the distribution of the Purchased
Units and will require any member of the banking, selling or
other group formed for the distribution of the Purchased Units
to comply with applicable Securities Laws (including the U.S.
Securities Act) and any applicable Securities Laws in the
United States.
4.2 The Underwriters will complete and will use their reasonable
best efforts to cause members of their selling group (if any)
to complete the distribution of the Purchased Units as
promptly as possible after the Time of Closing. The
Underwriters will notify the Fund and the TSX, in writing,
when, in the Underwriters' opinion, the Underwriters and the
members of their selling group (if any) have ceased
distribution of the Purchased Units and, promptly after
completion of the distribution, will provide the Fund, in
writing, with a breakdown of the number of Purchased Units
distributed in each of the Qualifying Jurisdictions where that
breakdown is required by the Securities Commission of that
jurisdiction for the purpose of calculating fees payable to
that Securities Commission.
4.3 No Underwriter will be liable to the Fund under this Section 4
with respect to a default by any of the other Underwriters but
will be liable to the Fund for its own default.
5. DELIVERY OF PROSPECTUS AND RELATED MATTERS.
5.1 The Fund will cause to be delivered to the Underwriters, at
those delivery points as the Underwriters reasonably request,
as soon as possible and in any event no later than 12:00 p.m.
(Toronto time) on May 1, 2003, and thereafter from time to
time during the distribution of the Purchased Units, as many
commercial copies of the Prospectus in the English language
and French language as the Underwriters may reasonably
request. The Fund will similarly cause to be delivered to the
Underwriters, at those delivery points as the Underwriters may
reasonably request, commercial copies of any Supplementary
Material required to be delivered to purchasers or prospective
purchasers of the Purchased Units. The Fund has previously
delivered to the Underwriters copies of the Preliminary
Prospectus as approved, signed and certified as required by
the Securities Laws. Each delivery of the Preliminary
Prospectus, the Prospectus or any Supplementary Material will
have constituted or constitute, as the case may be, consent by
the Fund, ACS Canada, the Company, ACS Holdings, ACS
InfoSource and Alaska Communications Systems to the use by the
Underwriters and members of their selling group (if any) of
those documents in connection with the distribution of the
Purchased Units for sale in all of the Qualifying
Jurisdictions, subject to the Securities Laws.
5.2 The Fund will cause to be delivered to the Underwriters, at
those delivery points as the Underwriters may reasonably
request, copies of the U.S. Placement Memorandum. Each
delivery of the U.S. Placement Memorandum will constitute
consent by the Fund, ACS Canada, the Company, ACS Holdings,
ACS InfoSource and Alaska Communications Systems to the use of
the U.S. Placement Memorandum and any Supplementary Material
required to be prepared and/or filed under Securities Laws of
the United States by the U.S. broker affiliates of the
Underwriters and members of their selling group (if any) for
the distribution of the Purchased Units for sale by them in
the United States in accordance with this agreement.
5.3 Each delivery of the Preliminary Prospectus, the Prospectus
and any Supplementary Material to the Underwriters by the Fund
in accordance with Section 5.1 will constitute a
representation and warranty of the Fund, ACS Canada and the
Company to the Underwriters that (except for information and
statements relating to the Underwriters and furnished by
them), at the respective times of delivery:
5.3.1 the information and statements contained in each of
the Preliminary Prospectus, the Prospectus and any
Supplementary Material:
5.3.1.1 are true and correct in all material
respects and contain no Misrepresentation;
and
5.3.1.2 constitute full, true and plain disclosure
of all material facts relating to the
Purchased Units as required by the
Securities Laws; and
5.3.2 no material fact has been omitted from any of those
documents which is required to be stated in any of
such documents or is necessary to make the statements
therein not misleading in the light of the
circumstances in which they were made; and
5.3.3 each of those documents complies with applicable
Securities Laws, other than as to non-material
matters.
5.4 Each delivery of the Preliminary Prospectus, the Prospectus
and any Supplementary Material to the Underwriters by the Fund
in accordance with Section 5.1 will constitute a
representation and warranty of ACS Holdings, ACS InfoSource
and Alaska Communications Systems to the Underwriters that
(except for information and statements relating to the
Underwriters and furnished by them), at the respective times
of delivery, the information and statements contained in each
of the Preliminary Prospectus, the Prospectus and any
Supplementary Material are true and correct in all material
respects and contain no Misrepresentation.
5.5 The Fund will deliver to the Underwriters, without charge, in
Toronto, Ontario, contemporaneously with or prior to the
filing of the Prospectus, unless otherwise indicated:
5.5.1 a copy of the Prospectus in the English language and
a copy of the Prospectus in the French language, each
signed on behalf of the Fund and Alaska
Communications Systems, in its capacity as promoter,
as required by the Securities Laws of each of the
Qualifying Jurisdictions;
5.5.2 a copy of any other document required to be filed by
the Fund under the Securities Laws in connection with
the offering of the Purchased Units contemplated by
this agreement;
5.5.3 evidence satisfactory to the Underwriters of the
approval of the listing and posting for trading on
the TSX of the Purchased Units, subject only to
satisfaction by the Fund of customary post-closing
conditions imposed by the TSX in similar
circumstances (the "STANDARD LISTING CONDITIONS");
5.5.4 a "long-form" comfort letter dated the date of the
Prospectus, in form and substance satisfactory to the
Underwriters, addressed to the Underwriters, the
trustees of the Fund and the managers of the Company
from the auditors of the Fund and the Company, and
based on a review completed not more than three
business days prior to the date of the letter, with
respect to certain financial and accounting
information relating to the Fund and to the Company
in the Prospectus, which letter shall be in addition
to the auditors' report contained in the Prospectus
and any auditors' comfort letter addressed to the
Securities Commissions;
5.5.5 as soon as possible, but in any event
contemporaneously with the filing of the Prospectus
with the Securities Commission in the Province of
Quebec, an opinion of Quebec counsel to the Fund and
the Company, addressed to the Underwriters, the Fund
and the Company, and their respective counsel in form
and substance satisfactory to the Underwriters,
acting reasonably, to the effect that the French
language version of the Prospectus, other than the
Financial Information, is, in all material respects,
a complete and proper translation of the English
language version thereof;
5.5.6 as soon as possible, but in any event
contemporaneously with the filing of the Prospectus
with the Securities Commission in the Province of
Quebec, an opinion of the auditors of the Fund and
the Company, addressed to the Underwriters, the Fund
and the Company and their respective counsel in form
and substance satisfactory to the Underwriters,
acting reasonably, to the effect that the French
translation of the Financial Information, is, in all
material respects, a complete and proper translation
of the English language version; and
5.6 Opinions, comfort letters and other documents substantially
similar to those referred to in Section 5.5 will be delivered
to the Underwriters, the Fund and the Company, and their
respective counsel, as applicable, with respect to any
Supplementary Material, concurrently with the execution of the
Supplementary Material.
6. MATERIAL CHANGE.
6.1 The Fund and the Company will promptly inform the Underwriters
in writing during the period prior to the completion of the
distribution of the Purchased Units of the full particulars
of:
6.1.1 any Material Adverse Change (whether actual,
anticipated, contemplated, proposed or threatened);
6.1.2 any material fact which has arisen or has been
discovered and would have been required to have been
stated in the Prospectus or any Supplementary
Material had that fact arisen or been discovered on,
or prior to, the date of any of the Prospectus or any
Supplementary Material; or
6.1.3 any change in any material fact contained in any of
the Prospectus or any Supplementary Material or
whether any event or state of facts has occurred
after the date of this agreement, which, in any case,
is of such a nature as to render any of the
Prospectus or any Supplementary Material untrue or
misleading in any material respect or to result in
any Misrepresentation in any of the Prospectus or any
Supplementary Material.
6.2 During the period from the date hereof until the completion of
the distribution under the Prospectus, the Fund will comply
with Section 57 of the Securities Act (Ontario) and with the
comparable provisions of the other Securities Laws and any
applicable U.S. Securities Laws, and the Fund and the Company
will prepare, with the input of the Underwriters, and the Fund
will file promptly at the request of the Underwriters any
Supplementary Material
which, in the opinion of the Underwriters, acting reasonably,
may be necessary or advisable, and will otherwise comply with
all legal requirements necessary, to continue to qualify the
Purchased Units for distribution in each of the Qualifying
Jurisdictions.
6.3 In addition to the provisions of Sections 6.1 and 6.2, the
Fund and the Company will, in good faith, discuss with the
Underwriters any change, event or fact contemplated in
Sections 6.1 and 6.2 which is of such a nature that there may
be reasonable doubt as to whether notice should be given to
the Underwriters under Section 6.1 and will consult with the
Underwriters with respect to the form and content of any
Supplementary Material proposed to be filed by the Fund, it
being understood and agreed that no such Supplementary
Material will be filed with any Securities Commission prior to
the review and approval by the Underwriters and their counsel,
acting reasonably.
7. REGULATORY APPROVALS.
7.1 The Fund and the Company will file or cause to be filed with
the TSX all necessary documents and will take or cause to be
taken all necessary steps to ensure that the Purchased Units
have been approved for listing and posting for trading on the
TSX, prior to the filing of the Prospectus with the Securities
Commissions, subject only to satisfaction by the Fund of the
Standard Listing Conditions.
7.2 The Fund and the Company will make all necessary filings,
obtain all necessary regulatory consents and approvals (if
any) and the Fund and the Company will pay all filing fees
required to be paid in connection with the transactions
contemplated in this agreement.
7.3 The Fund and the Company will notify the Underwriters of any
notice or other correspondence received by any of the ACS
Parties from any Governmental Body requesting any information,
meeting or hearing relating to the Company, the Fund, the
Offering or any other event or state of affairs that the Fund
or the Company reasonably believes may be material to the
Underwriters or the unitholders of the Fund.
8. REPRESENTATIONS AND WARRANTIES OF THE FUND, ACS CANADA AND THE COMPANY.
The Fund, ACS Canada and the Company, jointly and severally, represent
and warrant to the Underwriters as follows and acknowledge that the
Underwriters are relying upon the following representations and
warranties in completing the transactions contemplated by this
agreement:
8.1 the Fund has been created and is existing as a trust under the
laws of the Province of Ontario; pursuant to the Declaration
of Trust, the trustees have been appointed as trustees of the
Fund and the trustees have the power to carry on the business
and affairs of the Fund as described in the Prospectus,
including the business proposed to be conducted as described
in the Prospectus, and to enter into and perform its
obligations under this agreement and each of the Related
Agreements to which it is a party;
8.2 ACS Canada is a corporation existing under the laws of the
Province of Ontario and has all requisite corporate power and
authority to carry on its business as described in the
Prospectus and to enter into and perform its obligations under
this agreement and each of the Related Agreements to which it
is a party;
8.3 the Company is a limited liability company duly organized and
existing under the laws of the State of Alaska and has all
requisite corporate power and authority to carry on its
business, including the business as described in the
Prospectus, and to own or lease and to operate its assets and
to enter into and perform its obligations under this agreement
and each of the Related Agreements to which it is a party;
8.4 the Company does not own an interest in any Person;
8.5 the execution, delivery and performance by each of the Fund,
ACS Canada and the Company of this agreement and each of the
Related Agreements to which it is a party, and the issuance,
sale and delivery of the Purchased Units by the Fund, as
applicable:
8.5.1 has been, or will at the Time of Closing be, duly
authorized by all necessary action of the Fund, ACS
Canada and the Company;
8.5.2 except as disclosed in Section 8.5 of the Disclosure
Letter, does not require the consent, approval,
authorization, registration or qualification of or
with any governmental authority, stock exchange,
Securities Commission or other securities regulatory
authority or other third party, except: (i) those
which have been obtained; (ii) those as may be
required (and will be obtained prior to the Time of
Closing) under applicable Securities Laws or the
Related Agreements; or (iii) those which have not
been obtained and would not result in a Material
Adverse Effect;
8.5.3 does not (or will not with the giving of notice, the
lapse of time or the happening of any other event or
condition) result in a breach or a violation of, or
conflict with or result in a default under, or allow
any other person to exercise any rights under, any of
the terms or provisions of the constating documents
or by-laws or resolutions of the trustees or
directors or managers (or any committee thereof), or
securityholders of the Fund, ACS Canada or the
Company or any judgement, decree, order or award of
any court, governmental body or arbitrator having
jurisdiction over the Fund, ACS Canada or the
Company, or any agreement, license or permit to which
the Fund, ACS Canada or the Company is a party or by
which its business may be affected, except, in each
case, any breach, violation, conflict, default or
right that would not result in a Material Adverse
Effect;
8.5.4 will not result in the violation of any Law; and
8.5.5 will not give rise to any Lien of any kind whatsoever
other than Permitted Encumbrances, in or with respect
to the properties or assets now owned or acquired at
or prior to the Time of Closing by the Fund, ACS
Canada or the Company or the acceleration of or the
maturity of any debt under any material indenture,
mortgage, lease, agreement or instrument binding or
affecting any of them or any of their properties, in
any case;
8.6 this agreement and the Related Agreements to which the Fund,
ACS Canada or the Company is a party have been or, as the case
may be, will be, at the Time of Closing, duly executed and
delivered by or on behalf of the Fund, ACS Canada or the
Company and constitute or, will constitute, when so executed
and delivered, legal, valid and binding obligations of the
Fund, ACS Canada and the Company enforceable in accordance
with their respective terms, provided that enforceability may
be limited by bankruptcy, insolvency and other similar laws
affecting creditors' rights generally, that specific
performance, injunctive relief and other equitable remedies
may only be granted in the discretion of a court of competent
jurisdiction and that rights of indemnity and/or contribution
set out in this agreement and the Investment Agreement may be
limited by applicable Law;
8.7 ACS InfoSource is conducting its Business and affairs, as
described in the Prospectus, in compliance in all material
respects with all applicable Laws, rules, regulations,
licences and permits and is, and the Company will be at the
Time of Closing, licensed, registered or qualified and has,
and the Company will have at the Time of Closing, all
necessary licences and permits in all jurisdictions in which
it carries on business to enable the Business, as now
conducted and as presently proposed to be conducted, to be
carried on, and to enable its assets to be owned or to be
leased and to be operated, except where the failure to be so
licensed, registered or qualified would not have a Material
Adverse Effect, and all such licences, registrations,
qualifications and permits held, or to be held at the Time of
Closing,
by the Company are valid and existing and in good standing and
none of them contains, or will contain at the Time of Closing,
any term, provision, condition or limitation which would
reasonably be expected to have a Material Adverse Effect;
neither the Fund nor the Company nor ACS InfoSource is aware
of any legislation, regulation, by-law or other lawful
requirement currently in force or proposed to be brought into
force by any Governmental Body with which the Company will be
unable to comply and which would reasonably be expected to
have a Material Adverse Effect;
8.8 except as disclosed in the Prospectus, each property,
operation and facility comprising (currently or following
Closing) part of the assets of the Company:
8.8.1 complies and the Business is operated in compliance
with (i) all applicable Environmental Laws, and (ii)
all applicable Occupational Safety and Health Laws,
except where such instances, if any of
non-compliance, in the aggregate, would not have a
Material Adverse Effect; and
8.8.2 is not subject to any judicial, administrative or
other proceeding alleging the violation of any
Environmental Law or Occupational Safety and Health
Law, except where such proceedings, if any, in the
aggregate, would not have a Material Adverse Effect.
8.9 except as disclosed in the Prospectus, in connection with the
Business or its operation:
8.9.1 neither ACS InfoSource nor the Company has received
any written notice (i) alleging that it may be in
violation of any Environmental Law or Occupational
Safety and Health Law, or (ii) threatening the
commencement of any proceeding relating to alleged
non-compliance with any Environmental Law or
Occupational Safety and Health Law, or (iii) alleging
that it is or may be responsible for any response,
clean-up, or corrective action, including any
remedial investigation/feasibility study, under any
Environmental Law or Occupational Safety and Health
Law;
8.9.2 neither ACS InfoSource nor the Company has received
any written notice that it is the subject of federal,
state or municipal government investigation
evaluating whether any investigation, remedial action
or other response is needed to respond to (i) a
spillage, disposal or release or threatened release
into the environment of any Substance, or (ii) any
alleged violation of any Occupational Safety and
Health Law;
8.9.3 neither ACS InfoSource nor the Company has filed any
written notice under or relating to any Environmental
Law or Occupational Safety and Health Law indicating
or reporting (i) any past or present spillage,
disposal or release (other than permitted releases)
into the environment of, or treatment, storage or
disposal of (other than permitted treatment, storage
or disposal), any Substance in excess of quantities
requiring notification under any Environmental Law,
or (ii) any violation of any Occupational Safety and
Health Law; and
8.9.4 there are no Substances on, in or under any property
or facilities currently or formerly, owned, operated,
leased or controlled by ACS InfoSource or the Company
in connection with the Business or comprising
(currently or following Closing) part of the assets
of the Company that, under applicable Environmental
Laws or Occupational Safety and Health Laws (i)
impose a liability in the aggregate for
investigation, removal, remediation, or other
clean-up or damage to natural resources, or (ii)
would have a Material Adverse Effect.
8.10 other than as set out in Section 8.10 of the Disclosure Letter
and as set out in the Prospectus and the Securityholders
Agreement or the LLC Agreement, there is currently no, and
will not at the Time of Closing be any, agreement in force or
effect which in any manner affects
or will affect the voting or control of any of the securities
of the Fund, ACS Canada or the Company;
8.11 the authorized and issued and outstanding capital of the
Company at the date of this agreement and immediately before
the Time of Closing and, provided that the Closing occurs, the
Over-Allotment Closing Time, is and shall be, as applicable,
as set forth in Schedule 8.11. All issued and outstanding
Company Interests are, and all Company Interests shown on
Schedule 8.11 to be issued at Closing and the Over-Allotment
Closing Time will be, validly issued and outstanding,
fully-paid and non-assessable and not subject to pre-emptive
rights (except as set out in the Securityholders Agreement to
be entered into on Closing) or rights of first refusal created
by statute or any agreement to which the Company (except as
set out in the Securityholders Agreement to be entered into on
Closing) is a party or by which it is bound; and with the
exception of the LLC Agreement and the Securityholders
Agreement to be entered into on Closing, and as set out in
Section 8.10 of the Disclosure Letter there are, and will be
at the Time of Closing and the Over-Allotment Closing Time, no
shareholder agreements, pooling agreements, voting trusts or
other agreements with respect to the voting of Company
Interests;
8.12 except as contemplated by the Investment Agreement, the
Securityholders Agreement and the Exchange Agreement, there
are no agreements, options, warrants, rights of conversion or
other rights pursuant to which the Company is, or may become,
obligated to issue any membership interests or any securities
convertible or exchangeable, directly or indirectly, into
membership interests;
8.13 at the Time of Closing, provided that not more than two
business days elapse between the initiation of the procedures
of Closing (including the transactions set out in Articles 2,
3, 4, 5, 6, 7, and 8 of the Investment Agreement) and the
completion of the Closing, immediately following the
distribution of the Company Interests to ACS Holdings, as
contemplated by Article 5 of the Investment Agreement, ACS
Holdings shall own all of the issued and outstanding Company
Interests as the sole registered and beneficial owner and free
of any Liens, other than any Liens created by or imposed under
this agreement and the Related Agreements as to which it is a
party;
8.14 as of the Time of Closing, provided that not more than two
business days elapse between the initiation of the procedures
of Closing (including the transactions set out in Articles 2,
3, 4, 5, 6, 7, and 8 of the Investment Agreement) and the
completion of the Closing, following the completion of the
transactions contemplated by Articles 2, 3, 4, 5, 6, 7 and 8
of the Investment Agreement, assuming no exercise of the
Over-Allotment Option:
8.14.1 the authorized capital of ACS Canada will consist of
an unlimited number of common shares and an unlimited
number of preferred shares, of which 80,271,009
common shares and no preferred shares will be issued
and outstanding; and
8.14.2 the authorized capital of the Company will consist of
an unlimited number of membership interests, of which
138,047,321 membership interests will be issued and
outstanding;
8.15 as of the Time of Closing, following the completion of the
transactions contemplated by Articles 2, 3, 4, 5, 6, 7 and 8
of the Investment Agreement, assuming no exercise of the
Over-Allotment Option, provided that not more than two
business days elapse between the initiation of the procedures
of Closing (including the transactions set out in Articles 2,
3, 4, 5, 6, 7, and 8 of the Investment Agreement) and the
completion of the Closing:
8.15.1 the Fund will be the registered and beneficial owner
of 80,271,009 common shares of ACS Canada, respecting
all of the issued and outstanding equity securities
of ACS Canada, on a fully-diluted basis, and ACS
Notes in the principal amount of $80,271,009 and will
hold those securities free and clear of any Liens
except as disclosed in Section 8.15 of the Disclosure
Letter;
8.15.2 ACS Canada will be the registered and beneficial
owner of 120,680,968 Company Interests of the
Company, representing 87.4% of the issued and
outstanding Company Interests, on a fully-diluted
basis, and will hold those securities free and clear
of all Liens except as disclosed in Section 8.15 of
the Disclosure Letter;
8.15.3 ACS Holdings will be the registered and beneficial
owner of 17,366,353 Company Interests, representing
12.6% of the issued and outstanding Company
Interests, on a fully-diluted basis, and will hold
these securities free and clear of all Liens except
as disclosed in Section 8.15 of the Disclosure
Letter;
8.16 except for investments in the securities of ACS Canada,
including the ACS Notes, the Fund does not, directly or
indirectly, hold any shares, other securities, options or
rights to subscribe for shares or other securities of any
corporation, partnership or other entity;
8.17 the Fund is authorized to issue an unlimited number of Units,
of which, as of the date of this agreement, one Unit is issued
and outstanding as a fully paid Unit of the Fund;
8.18 the Trust Company has been duly appointed as the registrar and
transfer agent of the Fund with respect to its Units;
8.19 except as contemplated by this agreement, the Declaration of
Trust, the Investment Agreement, the Securityholders
Agreement, the Exchange Agreement or as disclosed in the
Prospectus, no Person has any written or oral agreement,
option, understanding or commitment, or any right or privilege
capable of becoming such (i) under which the Fund, ACS Canada
or the Company is, or may become, obligated to issue any of
its securities, or (ii) for the purchase of any security
(including debt) of the Fund, ACS Canada or the Company;
8.20 except as disclosed in the Prospectus, there is no material
action, suit, proceeding or investigation, at law or in
equity, by any person, nor any arbitration, administrative or
other proceeding by or before any Governmental Body pending,
or, to the best of the knowledge of the Fund or the Company,
threatened against or affecting the Fund, ACS Canada, ACS
InfoSource or the Company, or any of their respective
properties, rights or assets;
8.21 the TSX has conditionally approved the listing of the
Purchased Units, subject to satisfaction by the Fund of the
Standard Listing Conditions;
8.22 the form and terms of the certificate for the Units have been
approved and adopted by the trustees of the Fund and do not
conflict with the Declaration of Trust;
8.23 the Purchased Units to be issued as described in this
agreement and in the Prospectus will, at the Time of Closing,
be duly created and, when issued, delivered and paid for in
full, will be validly issued as fully paid Units of the Fund,
and will not have been issued in violation of or subject to
any pre-emptive rights or contractual rights to purchase
securities issued by the Fund;
8.24 as of the date of this agreement, the information and
statements contained in the Prospectus, including the industry
data, description of the Business and the Financial
Information, are true and correct in all material respects and
contain no Misrepresentation;
8.25 the Financial Information with respect to the Fund has been
prepared in accordance with Canadian generally accepted
accounting principles consistently applied throughout the
periods indicated and is complete and accurate in all material
respects and presents fairly, in all material respects, the
financial condition and the results of operations, and cash
flow of the Fund as at the dates and for the periods referred
to in such Financial Information, and there has been no
Material Adverse Change in the financial position of the Fund
from that reflected in such Financial Information;
8.26 the Financial Information with respect to ACS InfoSource, has
been prepared in accordance with United States generally
accepted accounting principles (except for the note disclosure
regarding a reconciliation to Canadian generally accepted
accounting principles which has been prepared in accordance
with Canadian generally accepted accounting principles)
consistently applied throughout the periods indicated and is
complete and accurate in all material respects and presents,
fairly, in all material respects, the financial condition and
the results of operations and cash flow of ACS InfoSource at
the dates and for the periods referred to in such Financial
Information, and there has been no Material Adverse Change in
the financial position of the Fund from that reflected in such
Financial Information;
8.27 except as disclosed in the Prospectus, since December 31,
2002, the Business has been carried on in the Ordinary Course;
8.28 the Company and ACS InfoSource and any affiliated, combined or
unitary group of which the Company and/or ACS InfoSource is or
was a member, as the case may be (a "TAX AFFILIATE"), has (i)
timely filed (or has had timely filed on their behalf) all
returns, declarations, reports, estimates, information,
returns, elections and statements ("RETURNS") required to be
filed or sent in respect of any Governmental Charges or
required to be filed or sent by it to any taxing authority
having jurisdiction since incorporation or organization to and
including the Time of Closing and all such Returns have been
prepared in accordance with the provisions of the applicable
legislation are true, correct and complete in all material
respects; (ii) timely and properly paid (or has had paid on
its behalf), or will pay when due, all Governmental Charges
and all professional fees incurred in connection such
Governmental Charges due or claimed to be due by an
Governmental Body; and (iii) has properly withheld or
collected and remitted all amounts required to be withheld or
collected and remitted by it in respect of any Governmental
Charges;
8.29 there are no Liens for Governmental Charges upon any assets of
ACS InfoSource or the Company;
8.30 no refinancing for any Governmental Charges has been proposed,
asserted or assessed against ACS InfoSource or the Company or
any Tax Affiliate;
8.31 there are no proceedings either in progress, pending or, to
the knowledge of the Company, threatened in connection with
any Governmental Charges in respect of the Business which in
the aggregate would have a Material Adverse Effect;
8.32 except as set out in the Financial Information, neither the
Fund nor the Company has outstanding any bonds, debentures,
notes, mortgages or other indebtedness which are material to
the Fund and the Company considered as a whole and, except as
disclosed in Section 8.32 of the Disclosure Letter or as
described in the Prospectus, neither the Fund nor the Company
has agreed to create or issue any bonds, debentures, notes,
mortgages or other indebtedness;
8.33 each of ACS InfoSource and the Company has performed all
obligations required to be performed by it in connection with
all material contracts, agreements (including the Material
Agreements), leases or other instruments to which it is a
party or by which it may be bound, is entitled to all
benefits, rights and privileges thereunder, is not in default
or alleged to be in default under any such contract,
agreement, lease or other instrument and is not aware of any
material breaches thereof by any other parties thereto except
where such failure to perform or lack of entitlement would not
cause a Material Adverse Effect;
8.34 the lease of real property to be leased by the Company as
disclosed in the Prospectus, is the only lease of the Company.
Such lease is in full force and effect and the Company holds a
valid, existing and binding leasehold interest under such
lease for the term disclosed in the Prospectus, free and clear
of any Liens. The Company is not in default and, to the
knowledge of the Company, no circumstances exist which, if
unremedied, would, with or without notice or lapse of time or
both, result in such default under such lease;
8.35 all material equipment and other material tangible assets used
by ACS InfoSource (and to be used by the Company) in the
context of the Business are in good condition and repair,
ordinary wear and tear excepted, and are adequate and suitable
for the purposes for which they are currently being used;
8.36 Section 8.36 of the Disclosure Letter describes all trade
marks and trade mark applications, trade names, certification
marks, patents and patent applications, copyrights and
industrial designs used by ACS InfoSource in connection with
the Business (the "INTELLECTUAL PROPERTY"), along with the
offices (if any) in which the same is registered (being the
only offices where such registration is necessary to preserve
the rights thereto) and the applicable expiry dates of any
registrations. The Intellectual Property (other than computer
systems software licensed by third parties to ACS InfoSource)
which is used by ACS InfoSource in connection with the
Business is owned by ACS InfoSource and ACS InfoSource has the
sole and exclusive right to use the same, except as noted in
Section 8.36 of the Disclosure Letter and except where the
failure to possess such right would not result in a Material
Adverse Effect. No Person has made a claim or a demand that
conduct of the Business infringes on any Intellectual Property
owned by any other person and, to the knowledge of ACS
InfoSource, ACS Holdings, the Company and the Fund, the
conduct of the Business does not infringe on any Intellectual
Property owned by any other person.
8.37 except as set forth in Section 8.37 of the Disclosure Letter,
with respect to all employees and former employees of ACS
InfoSource (and, following Closing, the Company) and all
dependants and beneficiaries of such employees and former
employees, (i) the Company does not, and will not at the Time
of Closing, maintain or contribute to any nonqualified
deferred compensation or retirement plans, contracts or
arrangements; (ii) the Company does not, and will not at the
Time of Closing, maintain or contribute to any qualified
defined contribution plans (as defined in Section 3(34) of the
U.S. Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 414(i) of the Code (as defined
below)); (iii) the Company does not, and will not at the Time
of Closing, maintain or contribute to any qualified defined
benefit plans (as defined in Section 3(35) of ERISA or Section
414(j) of the Code); and (iv) the Company does not, and will
not at the Time of Closing, maintain or contribute to any
employee welfare benefit plans (as defined in Section 3(1) of
ERISA);
8.38 prior to and at the Time of Closing, all employee benefit
plans (as defined in Section 3(3) of ERISA) which the Company
maintains or to which it contributes (collectively, the
"PLANS") comply with the requirements of ERISA and the Code;
8.39 the Underwriters have received true and complete copies of (i)
the most recent determination letter, if any, received by
either ACS InfoSource or the Company from the Internal Revenue
Service regarding the Plans which either ACS InfoSource or the
Company maintains or to which it contributes and any amendment
to any Plan made subsequent to any Plan amendments covered by
any such determination letter; (ii) the most recent financial
statements and annual report or return for the Plans; and
(iii) the most recently prepared actuarial valuation reports;
8.40 except as set forth in Section 8.37 of the Disclosure Letter,
neither the Company nor ACS InfoSource contributes (and has
not ever contributed) to any multi-employer plan, as defined
in Section 3(37) of ERISA. Neither ACS, InfoSource nor the
Company has any actual or potential liabilities under Section
4201 of ERISA for any complete or partial withdrawal from a
multi-employer plan. Neither ACS, InfoSource nor the Company
has any actual or potential liability for death or medical
benefits after separation from employment;
8.41 neither ACS InfoSource nor the Company nor any of their
respective directors, managers, officers, employees or other
"fiduciaries", as such term is defined in Section 3(21) of
ERISA, has committed any breach of fiduciary responsibility
imposed by ERISA or any
other applicable Law with respect to the Plans which would
subject the Company or any of its managers, officers or
employees to any liability under ERISA or any applicable Law;
8.42 neither ACS InfoSource nor the Company has incurred any
liability for any tax or civil penalty or any disqualification
of any employee benefit plan (as defined in Section 3(3) of
ERISA) imposed by Sections 4980B and 4975 of the Code and Part
6 of Title I and Section 502(i) of ERISA;
8.43 all policies, binders and insurance contracts under which the
Company or any of the properties or assets to be acquired by
the Company on Closing are insured are in full force and are
in amounts, with regard to deductibles and co-insurance
clauses, as are adequate to fully insure the Company, such
properties and assets and the Business and are customary in
the Company's industry and market and business;
8.44 except as disclosed in the Prospectus, since December 31,
2002, there has not been any Material Adverse Change and, to
the knowledge of the Company, no event has occurred or
circumstance exists which results in such a Material Adverse
Change except for general economic changes and changes that
may affect the industries of the Business generally;
8.45 none of the Fund, ACS Canada and the Company has taken, and
agree that none of them will take, any action that would cause
any of them to become liable to any claim or demand for a
brokerage commission, finder's fee or other similar payment in
connection with the transactions contemplated hereby, other
than with respect to any underwriters' fees as described in
the Prospectus;
8.46 there has not been any reportable disagreement (within the
meaning of National Policy Statement No. 31 of the Canadian
Securities Administrators) with the auditors of the Fund or
the Company;
8.47 the Material Agreements permit and provide for the conduct of
the Business substantially in the manner in which it has been
conducted since January 2001, assuming compliance by the
parties with the material terms thereof; and
8.48 except under the Material Agreements and Related Agreements
and as disclosed in the Prospectus, none of the trustees,
directors, managers, officers or employees of the Fund, ACS
Canada or the Company, any person who owns, directly or
indirectly, more than 10% of any class of securities of the
Fund or securities of any person exchangeable for more than
10% of any class of securities of the Fund, or any associate
or affiliate of any of the foregoing, had within the three
years preceding the date of this agreement that is continuing,
or has any material interest, direct or indirect, in any
material transaction or any proposed material transaction with
the Fund, ACS Canada or the Company which, as the case may be,
materially affects, is material to or will materially affect
the Fund, ACS Canada or the Company.
9. REPRESENTATIONS AND WARRANTIES OF ACS HOLDINGS
ACS Holdings represents and warrants to the Underwriters as follows and
acknowledges that the Underwriters are relying upon the following
representations and warranties in completing the transactions
contemplated hereby:
9.1 ACS Holdings is a limited liability company duly organized and
existing under the laws of the State of Alaska. ACS Holdings
is duly qualified to carry on its business in each
jurisdiction in which the conduct of its business or the
ownership, leasing or operation of its property and assets
requires such qualification, except to the extent that the
failure to be so qualified would not have a Material Adverse
Effect;
9.2 ACS Holdings has the corporate power and capacity to enter
into and perform its obligations under this agreement and the
Related Agreements to which it is a party and to carry out the
transactions contemplated by such agreements and the
Prospectus. Each of
this agreement and the Related Agreements to which it is a
party has been, or shall be at the Time of Closing, duly
authorized, executed and delivered by or on behalf of ACS
Holdings and is, or shall be at the Time of Closing, a legal,
valid and binding obligation of ACS Holdings, enforceable
against ACS Holdings in accordance with its terms, provided
that enforceability may be limited by bankruptcy, insolvency
and other similar laws affecting creditors' rights generally,
that specific performance, injunctive relief and other
equitable remedies may only be granted in the discretion of a
court of competent jurisdiction and that rights of indemnity
and/or contribution set out in this agreement or the
Investment Agreement may be limited by applicable law;
9.3 the authorized and issued and outstanding capital of the
Company at the date of this agreement and immediately before
the Time of Closing and, provided that the Closing occurs, the
Over-Allotment Closing Time, is and shall be, as applicable,
as set forth in Schedule 8.11. All issued and outstanding
Company Interests are, and all Company Interests shown on
Schedule 8.11 to be issued at Closing and the Over-Allotment
Closing Time will be, validly issued and outstanding,
fully-paid and non-assessable and not subject to pre-emptive
rights (except as set out in the Securityholders Agreement to
be entered into on Closing) or rights of first refusal created
by statute or any agreement to which the Company (except as
set out in the Securityholders Agreement to be entered into on
Closing) is a party or by which it is bound; and with the
exception of the Securityholders Agreement and the LLC
Agreement to be entered into on Closing, and as set out in
Section 8.10 of the Disclosure Letter there are, and will be
at the Time of Closing and the Over-Allotment Closing Time, no
shareholder agreements, pooling agreements, voting trusts or
other agreements with respect to the voting of the Company
Interests;
9.4 except as contemplated by the Investment Agreement, the
Securityholders Agreement and the Exchange Agreement, there
are no agreements, options, warrants, rights of conversion or
other rights pursuant to which the Company is, or may become,
obligated to issue any membership interests or any securities
convertible or exchangeable, directly or indirectly, into
membership interests;
9.5 at the Time of Closing following the distribution of the
Company Interests contemplated by Article 5 of the Investment
Agreement, provided that not more than two business days
elapse between the initiation of the procedures of Closing
(including the transactions set out in Articles 2, 3, 4, 5, 6,
7, and 8 of the Investment Agreement) and the completion of
the Closing, ACS Holdings shall own all of the issued and
outstanding Company Interests as the sole registered and
beneficial owner and free of any Liens, other than any Liens
created by or imposed under this agreement and the Related
Agreements as to which it is a party; and ACS Holdings will be
(provided that the Closing occurs), at the Over-Allotment
Closing Time, the registered and beneficial owner of the
Company Interests to be sold and transferred by it to ACS
Canada under the Investment Agreement, free of any Liens other
than any Liens created by or imposed under this agreement and
the Related Agreements;
9.6 except as disclosed in Section 8.5 of the Disclosure Letter,
no consent, approval, authorization or order of, and no
filing, registration or recording with, any Governmental Body
is required in connection with the execution and delivery of
this agreement and the Related Agreements to which ACS
Holdings is a party or the performance by ACS Holdings of its
obligations hereunder and thereunder and the consummation by
ACS Holdings of the transactions contemplated herein and
therein;
9.7 the execution and delivery by ACS Holdings of this agreement
and the Related Agreements to which it is a party, the
performance by ACS Holdings of its obligations hereunder and
thereunder and compliance with the provisions hereof and
thereof does not and shall not contravene, breach or result in
any default under its organizational documents or under any
mortgage, indenture, lease, agreement, other legally binding
instrument, licence, permit or Law to which ACS Holdings is a
party or by which it is bound;
9.8 other than as contemplated by this agreement, the Investment
Agreement and the Exchange Agreement, no Person has any
written or oral agreement, option or warrant or any right or
privilege (whether by Law, pre-emptive or contractual) capable
of becoming such for the purchase or acquisition, (i) from ACS
Holdings of any of ACS Holdings' membership interests in ACS
Holdings, or (ii) from ACS Holdings of any Company Interests;
and
9.9 to the knowledge of ACS Holdings, as of the date of its filing
with the Securities Commissions and as of the Closing Time,
the Prospectus does not and will not contain any
Misrepresentation.
10. REPRESENTATIONS AND WARRANTIES OF ACS INFOSOURCE
ACS InfoSource represents and warrants to the Underwriters as follows
and acknowledges that the Underwriters are relying upon the following
representations and warranties in completing the transactions
contemplated hereby:
10.1 ACS InfoSource is a corporation duly organized and existing
under the laws of the State of Alaska. ACS InfoSource is duly
qualified to carry on its business in each jurisdiction in
which the conduct of its business or the ownership, leasing or
operation of its property and assets requires such
qualification, except to the extent that the failure to be so
qualified would not have a Material Adverse Effect;
10.2 ACS InfoSource has the corporate power and capacity to enter
into and perform its obligations under this agreement and the
Related Agreements to which it is a party and to carry out the
transactions contemplated by such agreements and the
Prospectus. Each of this agreement and the Related Agreements
to which it is a party has been, or shall be at the Time of
Closing, duly authorized, executed and delivered by or on
behalf of ACS InfoSource and is, or shall be at the Time of
Closing, a legal, valid and binding obligation of ACS
InfoSource, enforceable against ACS InfoSource in accordance
with its terms, provided that enforceability may be limited by
bankruptcy, insolvency and other similar laws affecting
creditors' rights generally, that specific performance,
injunctive relief and other equitable remedies may only be
granted in the discretion of a court of competent jurisdiction
ant that rights of indemnity and/or contribution set out in
this agreement or the Investment Agreement may be limited by
applicable law;
10.3 the authorized and issued and outstanding capital of the
Company at the date of this agreement and immediately before
the Time of Closing and, provided that the Closing occurs, the
Over-Allotment Closing Time, is and shall be, as applicable,
as set forth in Schedule 8.11. All issued and outstanding
Company Interests are, and all Company Interests shown on
Schedule 8.11 to be issued at Closing and the Over-Allotment
Closing Time will be, validly issued and outstanding,
fully-paid and non-assessable and not subject to pre-emptive
rights (except as set out in the Securityholders Agreement to
be entered into on Closing) or rights of first refusal created
by statute or any agreement to which the Company (except as
set out in the Securityholders Agreement to be entered into on
Closing) is a party or by which it is bound; and with the
exception of the LLC Agreement and the Securityholders
Agreement to be entered into on Closing, and as set out in
Section 8.10 of the Disclosure Letter there are, and will be
at the Time of Closing and the Over-Allotment Closing Time, no
shareholder agreements, pooling agreements, voting trusts or
other agreements with respect to the voting of the Company
Interests;
10.4 except as contemplated by the Investment Agreement, the
Securityholders Agreement and the Exchange Agreement, there
are no agreements, options, warrants, rights of conversion or
other rights pursuant to which the Company is, or may become,
obligated to issue any membership interests or any securities
convertible or exchangeable, directly or indirectly, into
membership interests;
10.5 at the Time of Closing, provided that not more than two
business days elapse between the initiation of the procedures
of Closing (including the transactions set out in Articles 2,
3, 4, 5, 6, 7, and 8 of the Investment Agreement) and the
completion of the Closing, immediately following the
distribution of the Company Interests to ACS Holdings, as
contemplated by Article 5 of the Investment Agreement, ACS
Holdings shall own all of the issued and
outstanding Company Interests as the sole registered and
beneficial owner and free of any Liens, other than any Liens
created by or imposed under this agreement and the Related
Agreements as to which it is a party;
10.6 the Company and ACS InfoSource and any affiliated, combined or
unitary group of which the Company and/or ACS InfoSource is or
was a member, as the case may be (a "TAX AFFILIATE"), has (i)
timely filed (or has had timely filed on their behalf) all
returns, declarations, reports, estimates, information,
returns, elections and statements ("RETURNS") required to be
filed or sent in respect of any Governmental Charges or
required to be filed or sent by it to any taxing authority
having jurisdiction since incorporation or organization to and
including the Time of Closing and all such Returns have been
prepared in accordance with the provisions of the applicable
legislation and are true, correct and complete in all material
respects; (ii) timely and properly paid (or has had paid on
its behalf), or will pay when due, all Governmental Charges
and all professional fees incurred in connection such
Governmental Charges due or claimed to be due by any
Governmental Body; and (iii) has properly withheld or
collected and remitted all amounts required to be withheld or
collected and remitted by it in respect of any Governmental
Charges;
10.7 there are no Liens for Governmental Charges upon any assets of
ACS InfoSource or the Company;
10.8 no refinancing for any Governmental Charges has been proposed,
asserted or assessed against ACS InfoSource or the Company or
any Tax Affiliate;
10.9 there are no proceedings either in progress, pending or, to
the knowledge of the Company, threatened in connection with
any Governmental Charges in respect of the Business which in
the aggregate would have a Material Adverse Effect;
10.10 except as disclosed in Section 8.5 of the Disclosure Letter,
no consent, approval, authorization or order of, and no
filing, registration or recording with, any Governmental Body
is required in connection with the execution and delivery of
this agreement and the Related Agreements to which ACS
InfoSource is a party or the performance by ACS InfoSource of
its obligations hereunder and thereunder and the consummation
by ACS InfoSource of the transactions contemplated herein and
therein;
10.11 the execution and delivery by ACS InfoSource of this agreement
and the Related Agreements to which it is a party, the
performance by ACS InfoSource of its obligations hereunder and
thereunder and compliance with the provisions hereof and
thereof does not and shall not contravene, breach or result in
any default under its organizational documents or under any
mortgage, indenture, lease, agreement, other legally binding
instrument, licence, permit or Law to which ACS InfoSource is
a party or by which it is bound;
10.12 other than as contemplated by the Investment Agreement, no
Person has any written or oral agreement, option or warrant or
any right or privilege (whether by Law, pre-emptive or
contractual) capable of becoming such for the purchase or
acquisition, (i) from ACS InfoSource of any of ACS
InfoSource's membership interests in ACS Holdings, or (ii)
from ACS Holdings of any Company Interests; and
10.13 to the knowledge of ACS InfoSource, as of the date of its
filing with the Securities Commissions and as of the Closing
Time, the Prospectus does not and will not contain any
Misrepresentation.
11. REPRESENTATIONS AND WARRANTIES OF ALASKA COMMUNICATIONS SYSTEMS
Alaska Communications Systems represents and warrants to the
Underwriters as follows and acknowledges that the Underwriters are
relying upon the following representations and warranties in completing
the transactions contemplated hereby:
11.1 Alaska Communications Systems is a corporation duly
amalgamated and existing under the laws of the State of
Delaware. Alaska Communications Systems is duly qualified to
carry on its business in each jurisdiction in which the
conduct of its business or the ownership, leasing or operation
of its property and assets requires such qualification, except
to the extent that the failure to be so qualified would not
have a Material Adverse Effect;
11.2 Alaska Communications Systems has the corporate power and
capacity to enter into and perform its obligations under this
agreement and the Related Agreements to which it is a party
and to carry out the transactions contemplated by such
agreements and the Prospectus. Each of this agreement and the
Related Agreements to which it is a party has been, or shall
be at the Time of Closing, duly authorized, executed and
delivered by or on behalf of Alaska Communications Systems and
is, or shall be at the Time of Closing, a legal, valid and
binding obligation of Alaska Communications Systems,
enforceable against Alaska Communications Systems in
accordance with its terms, provided that enforceability may be
limited by bankruptcy, insolvency and other similar laws
affecting creditors' rights generally, that specific
performance, injunctive relief and other equitable remedies
may only be granted in the discretion of a court of competent
jurisdiction ant that rights of indemnity and/or contribution
set out in this agreement or the Investment Agreement may be
limited by applicable law;
11.3 except as disclosed in Section 8.5 of the Disclosure Letter,
no consent, approval, authorization or order of, and no
filing, registration or recording with, any Governmental Body
is required in connection with the execution and delivery of
this agreement and the Related Agreements to which Alaska
Communications Systems is a party or the performance by Alaska
Communications Systems of its obligations hereunder and
thereunder and the consummation by Alaska Communications
Systems of the transactions contemplated herein and therein;
11.4 the execution and delivery by Alaska Communications Systems of
this agreement and the Related Agreements to which it is a
party, the performance by Alaska Communications Systems of its
obligations hereunder and thereunder and compliance with the
provisions hereof and thereof does not and shall not
contravene, breach or result in any default under its
organizational documents or under any mortgage, indenture,
lease, agreement, other legally binding instrument, licence,
permit or Law to which Alaska Communications Systems is a
party or by which it is bound;
11.5 to the knowledge of Alaska Communications Systems, as of the
date of its filing with the Securities Commissions and as of
the Closing Time, the Prospectus does not and will not contain
any Misrepresentation.
12. COVENANTS OF THE FUND AND THE COMPANY.
Each of the Fund and the Company, jointly and severally, covenants and
agrees with the Underwriters that:
12.1 it will advise the Underwriters, promptly after receiving
notice thereof, of the time when the Prospectus and any
Supplementary Material has been filed and receipts have been
obtained and will provide evidence satisfactory to the
Underwriters of each filing and the issuance of receipts;
12.2 it will advise the Underwriters, promptly after receiving
notice or obtaining knowledge, of: (i) the issuance by any
Securities Commission of any order suspending or preventing
the use of the Preliminary Prospectus, the Prospectus, the
U.S. Placement Memorandum or any Supplementary Material; (ii)
the suspension of the qualification of the Purchased Units for
offering or sale in any of the Qualifying Jurisdictions; (iii)
the institution, threatening or contemplation of any
proceeding for any of those purposes; or (iv) any requests
made by any Securities Commission for amending or
supplementing the Prospectus or for additional information,
and will use its reasonable best efforts to prevent the
issuance of any such order and, if any such order is issued,
to obtain the withdrawal of the order promptly;
12.3 it will, and will cause ACS Canada to, apply the net proceeds
from the issue and sale of the Purchased Units substantially
in accordance with the disclosure set out under the heading
"Use of Proceeds" in the Prospectus; and
12.4 it will cause ACS Canada to maintain and ACS Canada shall
maintain, while Units are outstanding, a "substantial Canadian
presence" (as that term is understood for the purposes of
subsection 206(1.1) of the Tax Act) in order that the Units of
the Fund will not be considered "foreign property" for the
purposes of the Tax Act.
13. CONDITIONS OF CLOSING.
The obligation of the Underwriters to purchase the Purchased Units will
be subject to the following:
13.1 the Fund, ACS Canada and the Company will cause their legal
counsel to deliver to the Underwriters and their legal counsel
a legal opinion, subject to ordinary qualifications and
assumptions and reliance on a certificate of an officer of the
Fund, ACS Canada or the Company, as applicable, where
reasonable and appropriate, dated and delivered on the Closing
Date, in form and substance satisfactory to the Underwriters
and their legal counsel, acting reasonably, with respect to
those matters as the Underwriters may reasonably request
relating to the distribution of the Purchased Units, including
without limitation that:
13.1.1 the Fund has been created and is existing as a trust
under the laws of the Province of Ontario and the
trustees have been appointed as trustees of the Fund,
and the trustees have the power to carry on the
business and affairs of the Fund as described in the
Prospectus in compliance with the terms and
provisions of the Declaration of Trust;
13.1.2 ACS Canada (i) is a corporation incorporated and
existing under the laws of the Province of Ontario,
and (ii) has all requisite corporate power and
capacity to carry on its business and to own, lease
and operate its property and assets, as described in
the Prospectus;
13.1.3 the Company (i) is a limited liability company
organized and existing under the laws of the State of
Alaska, and (ii) has all requisite corporate power
and capacity to carry on its business and to own,
lease and operate its property and assets, as
described in the Prospectus;
13.1.4 the authorized capital of the Fund consists of an
unlimited number of Units;
13.1.5 the authorized capital of ACS Canada consists of an
unlimited number of common shares and an unlimited
number of preferred shares, and following completion
of the transactions contemplated in the Investment
Agreement, 80,271,009 common shares will be issued
and outstanding;
13.1.6 the authorized capital of the Company consists of an
unlimited number of membership interests, and
following completion of the transactions contemplated
by the Investment Agreement, 138,047,321 membership
interests will be issued and outstanding;
13.1.7 the Fund is, and following Closing will be, the
registered and beneficial owner of all of the issued
and outstanding shares in the capital of ACS Canada
on a fully-diluted basis;
13.1.8 ACS Holdings is the registered and beneficial owner
of all of the issued outstanding Company Interests
and, following completion of the transactions
contemplated by the Investment Agreement, ACS Canada
and ACS Holdings
will be the registered and beneficial owners of 87.4%
and 12.6%, respectively, of all of the issued and
outstanding Company Interests;
13.1.9 each of the Preliminary Prospectus and the
Prospectus, in both the French and English languages,
and its execution by the trustees of the Fund and the
filing of each of the Preliminary Prospectus and the
Prospectus, in both the French and English languages,
with the Securities Commissions have been duly
approved and authorized by all necessary action on
the part of the trustees of the Fund and each of the
Preliminary Prospectus and the Prospectus, in both
the French and English languages, have been duly
executed by and on behalf of the Fund;
13.1.10 all necessary action has been taken by the trustees
of the Fund to validly issue and sell to the
Underwriters the Purchased Units;
13.1.11 the Initial Units, when issued and delivered by the
Fund pursuant to this agreement against payment of
the purchase price therefor to the Fund will be
validly issued and outstanding as fully paid Units of
the Fund;
13.1.12 the Over-Allotment Option to purchase the Additional
Units has been validly created by the Fund, and upon
proper exercise of the option by the Underwriters and
payment of the purchase price therefor to the Fund,
the Additional Units will be validly issued and
outstanding as fully-paid Units of the Fund;
13.1.13 all necessary action has been taken by the trustees,
managers and directors of the Fund, ACS Canada and
the Company to authorize the execution and delivery
by the Fund, ACS Canada and the Company of this
agreement and the execution and delivery by the Fund,
ACS Canada and the Company of the Related Agreements
to which any of them is a party and the performance
of their respective obligations under those
agreements, and this agreement and the Related
Agreements to which any of them is a party have been
duly executed and delivered by the trustees, managers
and directors of the Fund, ACS Canada and the Company
and constitute legal, valid and binding obligations
of the Fund, ACS Canada and the Company enforceable
against them in accordance with their terms, provided
that enforcement may be limited by bankruptcy,
insolvency and other similar laws of general
application affecting the enforcement of creditors'
rights generally, specific performance, injunctive
relief and other equitable remedies may be granted
only in the discretion of a court of competent
jurisdiction and that rights of indemnity and/or
contribution set out in this agreement and the
Investment Agreement may be limited by applicable
law;
13.1.14 the attributes of the Units are consistent in all
material respects with the description thereof under
the headings "Description of the Fund - Units", "-
Issuance of Units", "- Cash Distributions", "-
Redemption Right" and "- Meetings of Unitholders" in
the Prospectus;
13.1.15 the form of the certificate representing the Units
has been approved and adopted by the trustees of the
Fund and does not conflict with the Declaration of
Trust;
13.1.16 the Trust Company at its principal office in the City
of Toronto has been appointed the transfer agent and
registrar for the Units;
13.1.17 the execution and delivery of this agreement and the
Related Agreements, the fulfilment of the terms of
those agreements by the Fund, ACS Canada and the
Company, as applicable, and the issuance, sale and
delivery of the Purchased Units:
13.1.17.1 do not and will not result in a breach of
or default under, and do not and will not
create a state of facts which, after notice
or lapse
of time or both, will result in a breach of
or default under, and do not and will not
conflict with:
(i) any of the terms, conditions or
provisions of the constating
documents or resolutions of the
securityholders, trustees, managers
or directors, or any committee of
trustees, managers or directors of
the Fund, ACS Canada or the
Company;
(ii) based solely on such counsel's
knowledge, any material indenture,
mortgage, deed of trust, agreement
or instrument (including the Credit
Documents) to which the Fund, ACS
Canada and the Company, as
applicable, is a party or by which
it or its properties is to be
subject or be bound; or
(iii) any federal laws of Canada, or the
laws of Ontario or Alaska,
applicable to the Fund, ACS Canada
or the Company; and
13.1.17.2 based solely on such counsel's knowledge,
will not give rise to the acceleration of or
the maturity of any debt under any material
indenture, agreement or instrument
(including the Credit Documents) governed by
the federal laws of Canada, or the laws of
Ontario or Alaska, binding or affecting any
of the Fund, ACS Canada and the Company
(other than those which terminate on the
Closing Date or in respect of which waivers
or consents have been received or will be
received prior to the Time of Closing);
13.1.18 the Purchased Units:
13.1.18.1 subject to compliance with the prudent
investor standards and general provisions
and restrictions of the federal or Ontario
statutes listed under the heading
"Eligibility for Investment" in the
Prospectus (and, where applicable, the
regulations under those statutes) and, in
certain cases, subject to the satisfaction
of additional requirements relating to
investment or lending policies, standards,
procedures or goals and, in certain cases,
subject to the filing of those policies,
standards, procedures or goals, will not at
the date of their issue be precluded as
investments under those statutes;
13.1.18.2 will be qualified investments under the
Income Tax Act (Canada) and the regulations
thereunder (the "TAX ACT") for trusts
governed by registered retirement savings
plans, registered retirement income funds,
deferred profit sharing plans (together, the
"PLANS") and for trusts governed by
registered education savings plans provided
the Fund is a mutual fund trust under the
Tax Act; and
13.1.18.3 do not constitute "foreign property" for
the purposes of the tax imposed under Part
XI of the Tax Act on Plans, registered
investments and other tax exempt entities,
including most registered pension funds or
plans; and
13.1.19 subject to the qualifications, assumptions,
limitations and understandings set out therein, the
statements as to matters of the laws of Canada set
out in the Prospectus under the heading "Certain
Income Tax Considerations - Certain Canadian Federal
Income Tax Considerations" fairly describe the
principal Canadian federal income tax considerations
as at the date hereof generally applicable under the
Tax Act to a holder of Units who acquires such
securities pursuant to the offering and who, for the
purposes of the Tax Act, is resident in
Canada, holds the Units as capital property and deals
at arm's length with the Fund;
13.1.20 subject to the qualifications, assumptions,
limitations and understandings set out therein, the
statements as to matters of the laws of the United
States set out in the Prospectus under the heading
"Certain Income Tax Considerations - Certain U.S.
Federal Income Tax Considerations" fairly describes
the principal U.S. federal income tax considerations
as at the date hereof generally applicable to a
non-U.S. Unitholder who acquires such securities
pursuant to the offering;
13.2 each of ACS Holdings, ACS InfoSource and Alaska Communications
Systems will cause its counsel, acceptable to the Underwriters
acting reasonably, to deliver to the Underwriters and their
legal counsel a legal opinion dated and delivered on the
Closing Date, in form and substance satisfactory to the
Underwriters and their legal counsel, acting reasonably, that:
13.2.1 ACS Holdings (i) is a limited liability company
organized and existing under the laws of the State of
Alaska, and (ii) has all requisite corporate power
and capacity to carry on its business and to own,
lease and operate its property and assets;
13.2.2 ach of ACS InfoSource and Alaska Communications
Systems: (i) is a corporation incorporated and
existing under the laws of the State of Alaska and
the State of Delaware, respectively, and (ii) has all
requisite corporate power and capacity to carry on
its business and to own, lease and operate its
property and assets; and
13.2.3 all necessary action has been taken by its managers
or directors, as applicable, to authorize the
execution and delivery by it of this agreement and
the Related Agreements to which it is a party and the
performance of its obligations under such agreements,
and this agreement and the Related Agreements to
which it is a party have been duly executed and
delivered by it and constitute legal, valid and
binding obligations of it enforceable against it in
accordance with their terms, provided that
enforcement may be limited by bankruptcy, insolvency
and other similar laws of general application
affecting the enforcement of creditors' rights
generally, specific performance, injunctive relief
and other equitable remedies may be granted only in
the discretion of a court of competent jurisdiction
and that rights of indemnity and/or contribution set
out in this agreement and the Investment Agreement
may be limited by applicable law;
13.2.4 neither the execution and delivery by each of ACS
InfoSource, ACS Holdings and Alaska Communications
Systems of this agreement and the Related Agreements
to which it is a party, nor the consummation of any
of the transactions contemplated thereby, nor
compliance with any of the terms and provisions
thereof, and based solely on counsel's knowledge,
conflict or will conflict with, or result or will
result in a breach of or default under (whether or
not after notice or lapse of time or both), any of
the terms, conditions or provisions of, or constitute
a default under, or result in any violation of, any
material indenture, mortgage, deed of trust,
agreement or instrument (including the ACS Credit
Documents), to which ACS InfoSource, ACS Holdings and
Alaska Communications Systems, as applicable, is a
party or by which it or its properties known to such
counsel is or is to be subject or be bound;
13.2.5 each of the Preliminary Prospectus and the
Prospectus, in both the French and English languages,
and its execution by Alaska Communications Systems,
in its capacity as promoter, and the filing of each
of the Preliminary Prospectus and the Prospectus in
both the French and English languages with the
Securities Commissions have been duly approved and
authorized by all necessary action on the part of the
board of directors of Alaska Communications Systems,
and each of the Preliminary Prospectus and the
Prospectus, in both the French and
English languages, have been duly executed by and on
behalf of Alaska Communications Systems;
13.3 opinions of counsel to the Fund in each of the Qualifying
Jurisdictions addressed to the Underwriters, the Fund and the
Company and their respective counsel that:
13.3.1 subject to compliance with the prudent investor
standards and general provisions and restrictions of
the statutes listed under the heading "Eligibility
for Investment" in the Prospectus (and, where
applicable, the regulations under those statutes)
and, in certain cases, subject to the satisfaction of
additional requirements relating to investment or
lending policies, standards, procedures or goals and,
in certain cases, subject to the filing of those
policies, standards, procedures or goals, the
Purchased Units, at the date of their issue, will be
eligible investments or will not be precluded as
investments under such statutes, in form and
substance satisfactory to the Underwriters, acting
reasonably; and
13.3.2 all necessary documents have been filed, all
requisite proceedings have been taken and all other
legal requirements have been fulfilled under the laws
of each of the Qualifying Jurisdictions in order to
qualify the distribution of the Purchased Units
through investment dealers or brokers who are
registered under applicable legislation of the
Qualifying Jurisdictions and who have complied with
the relevant provisions of such applicable
legislation;
13.4 an opinion of Quebec counsel to the Fund, addressed to the
Underwriters, regarding compliance with all the laws of Quebec
relating to the use of the French language in connection with
the distribution of the Purchased Units;
13.5 if any Purchased Units are to be offered or sold in the United
States, the Fund will cause its U.S. counsel to deliver to the
Underwriters a favourable legal opinion to the effect that no
registration of the Purchased Units is required under the U.S.
Securities Act, provided that, in each case, the offer or sale
is made in accordance with Section 23 of this agreement and
all other offers and sales of Purchased Units are made in
accordance with the provisions of this agreement;
13.6 the Underwriters will have received from each of their
counsel, Goodmans LLP and Goodwin Procter LLP, legal opinions
dated and delivered on the Closing Date, in form and substance
satisfactory to the Underwriters, with respect to those
matters as the Underwriters may reasonably require relating to
the distribution of the Purchased Units. In connection with
its opinion, Goodmans LLP may rely on the opinion of counsel
to the Fund and the Company and any underlying certificates
and, with respect to matters governed by the laws of
jurisdictions other than the Province of Ontario, on the
opinions of local counsel to the Fund and the Company;
13.7 the Underwriters will have received certificates dated the
Closing Date signed by those senior officers of the Fund, ACS
Canada, ACS Holdings, ACS InfoSource, Alaska Communications
Systems and the Company, in form and content satisfactory to
the Underwriters, acting reasonably, with respect to:
13.7.1 the constating documents of each such entity;
13.7.2 the resolutions of the trustees, managers or
directors (as the case may be) of the Fund, ACS
Canada, ACS Holdings, ACS InfoSource, Alaska
Communications Systems and the Company relevant to
the allotment, issue and sale, as the case may be, of
the Purchased Units and the authorization of the
other agreements and transactions contemplated by
this agreement and the Related Agreements to which
they are a party; and
13.7.3 the incumbency and signatures of signing officers of
the Fund, ACS Canada, ACS Holdings, ACS InfoSource,
Alaska Communications Systems and the Company;
13.8 the Fund and the Company will cause the auditors of the Fund
and of the Company to deliver to the Underwriters a comfort
letter, dated the Closing Date, in form and substance
satisfactory to the Underwriters, acting reasonably, bringing
forward to the Closing Date the information contained in the
comfort letter referred to in Section 5.5.4;
13.9 the Fund will deliver to the Underwriters, at and as of the
Time of Closing, a certificate dated the Closing Date
addressed to the Underwriters and signed by the trustees of
the Fund, certifying for and on behalf of the Fund, after
having made due inquiries, to those matters as the
Underwriters may reasonably request, including to the effect
that:
13.9.1 the Fund has complied with all the covenants and
satisfied all the terms and conditions of this
agreement on its part to be complied with and
satisfied at or prior to the Time of Closing;
13.9.2 subsequent to the respective dates as at which
information is given in the Prospectus, there has not
been any Material Adverse Change in the condition
(financial or otherwise) or results of operations of
the Fund, ACS Canada or the Company, other than as
disclosed in the Prospectus or any Supplementary
Material, as the case may be;
13.9.3 subsequent to the respective dates as at which
information is given in the Prospectus, no
transaction out of the ordinary course of business,
material to the Fund, ACS Canada or the Company has
been entered into by the Fund, ACS Canada or the
Company or has been approved by the management of any
of them, which results in a Material Adverse Change,
other than as disclosed in the Prospectus or any
Supplementary Material, as the case may be;
13.9.4 the representations and warranties of the Fund
contained in this agreement, and in any certificates
of the Fund delivered pursuant to or in connection
with this agreement, are true and correct as at the
Time of Closing (except in each case, for those
representations and warranties that are subject to a
materiality qualification, which will be true and
correct in all respects and except in respect of any
representations and warranties that are to be true
and correct as of a specified date, in which case
they will be true and correct as of that date only),
with the same force and effect as if made on and as
at the Time of Closing, after giving effect to the
transactions contemplated by this agreement;
13.9.5 receipts have been issued by the appropriate
Securities Commissions for the Prospectus and no
order, ruling or determination having the effect of
ceasing the trading or suspending the sale of the
Units of the Fund has been issued and no proceedings
for that purpose have been instituted or are pending
or, to the knowledge of those officers, contemplated
or threatened by any regulatory authority; and
13.9.6 the representations and warranties of the Fund
arising by reason of the delivery of the Preliminary
Prospectus, the Prospectus and any Supplementary
Material are true and correct on and as at the Time
of Closing as if those documents had been dated the
Closing Date and delivered to the Underwriters on
that date;
and all of those matters will in fact be true and correct as
at the Time of Closing;
13.10 ACS Canada will deliver to the Underwriters, at the Time of
Closing, a certificate dated the Closing Date addressed to the
Underwriters and signed by two senior officers of ACS Canada
acceptable to the Underwriters, acting reasonably, certifying
for and on behalf of
ACS Canada, after having made due inquiries, to those matters
as the Underwriters may reasonably request, including to the
effect that:
13.10.1 ACS Canada has complied with all the covenants and
satisfied all the terms and conditions of this
agreement on its part to be complied with and
satisfied at or prior to the Time of Closing;
13.10.2 subsequent to the respective dates as at which
information is given in the Prospectus, there has not
been any Material Adverse Change in the condition
(financial or otherwise) or results of operations of
the Fund, ACS Canada or the Company, other than as
disclosed in the Prospectus or any Supplementary
Material, as the case may be;
13.10.3 subsequent to the respective dates as at which
information is given in the Prospectus, no
transaction out of the ordinary course of business,
material to the Fund, ACS Canada or the Company has
been entered into by the Fund, ACS Canada or the
Company or has been approved by the management of any
of them, which results in a Material Adverse Change,
other than as disclosed in the Prospectus or any
Supplementary Material, as the case may be;
13.10.4 the representations and warranties of ACS Canada
contained in this agreement, and in any certificates
of the Fund delivered pursuant to or in connection
with this agreement, are true and correct as at the
Time of Closing (except in each case, for those
representations and warranties that are subject to a
materiality qualification, which will be true and
correct in all respects and except in respect of any
representations and warranties that are to be true
and correct as of a specified date, in which case
they will be true and correct as of that date only),
with the same force and effect as if made on and as
at the Time of Closing, after giving effect to the
transactions contemplated by this agreement;
13.10.5 receipts have been issued by the appropriate
Securities Commissions for the Prospectus and no
order, ruling or determination having the effect of
ceasing the trading or suspending the sale of the
Units of the Fund has been issued and no proceedings
for that purpose have been instituted or are pending
or, to the knowledge of those officers, contemplated
or threatened by any regulatory authority; and
13.10.6 the representations and warranties of ACS Canada
arising by reason of the delivery of the Preliminary
Prospectus, the Prospectus and any Supplementary
Material are true and correct on and as at the Time
of Closing as if those documents had been dated the
Closing Date and delivered to the Underwriters on
that date;
and all of those matters will in fact be true and correct as
at the Time of Closing;
13.11 the Company will deliver to the Underwriters, at the Time of
Closing, a certificate dated the Closing Date addressed to the
Underwriters and signed by the chief executive officer and the
chief financial officer of the Company, certifying for and on
behalf of the Company, after having made due inquiries, to
those matters as the Underwriters may reasonably request,
including to the effect that:
13.11.1 the Fund, ACS Canada and the Company have complied
with all the covenants and satisfied all the terms
and conditions of this agreement on their respective
parts to be complied with and satisfied at or prior
to the Time of Closing;
13.11.2 subsequent to the respective dates as at which
information is given in the Prospectus, there has not
been any Material Adverse Change in the condition
(financial or otherwise) or results of operations of
the Fund, ACS Canada or the
Company, other than as disclosed in the Prospectus or
any Supplementary Material, as the case may be;
13.11.3 subsequent to the respective dates as at which
information is given in the Prospectus, no
transaction out of the ordinary course of business,
material to the Fund, ACS Canada or the Company, has
been entered into by the Fund, ACS Canada or the
Company or has been approved by the management of any
of them, which results in a Material Adverse Change,
other than as disclosed in the Prospectus or any
Supplementary Material, as the case may be;
13.11.4 the representations and warranties of the Company
contained in this agreement, and in any certificates
of the Company delivered pursuant to or in connection
with this agreement, are true and correct as at the
Time of Closing (except in each case, for those
representations and warranties that are subject to a
materiality qualification, which will be true and
correct in all respects and except in respect of any
representations and warranties that are to be true
and correct as of a specified date, in which case
they will be true and correct as of that date only),
with the same force and effect as if made on and as
at the Time of Closing, after giving effect to the
transactions contemplated by this agreement;
13.11.5 receipts have been issued by the appropriate
Securities Commissions for the Prospectus and no
order, ruling or determination having the effect of
ceasing the trading or suspending the sale of the
Units of the Fund has been issued and no proceedings
for that purpose have been instituted or are pending
or, to the knowledge of those officers, contemplated
or threatened by any regulatory authority; and
13.11.6 the representations and warranties of the Company
arising by reason of the delivery of the Preliminary
Prospectus, the Prospectus and any Supplementary
Material are true and correct on and as at the Time
of Closing as if those documents had been dated the
Closing Date and delivered to the Underwriters on
that date;
and all of those matters will in fact be true and correct as
at the Time of Closing;
13.12 each of ACS Holdings, ACS InfoSource and Alaska Communications
Systems will deliver to the Underwriters, at the Time of
Closing, a certificate dated the Closing Date addressed to the
Underwriters and signed by its chief executive officer and the
chief financial officer, certifying for and on behalf of it,
after having made due inquiries, to those matters as the
Underwriters may reasonably request, including to the effect
that:
13.12.1 it has complied with all the covenants and satisfied
all the terms and conditions of this agreement on its
part to be complied with and satisfied at or prior to
the Time of Closing;
13.12.2 the representations and warranties of it contained in
this agreement, and in any certificates of it
delivered pursuant to or in connection with this
agreement, are true and correct as at the Time of
Closing in all material respects (except in the case
of representations or warranties that are already
qualified by materiality, in which case such
representations and warranties shall be true in all
respects, and except in respect of any
representations and warranties that are to be true
and correct as of a specified date, in which case
they will be true and correct as of that date only)
with the same force and effect as if made on and as
at the Time of Closing, after giving effect to the
transactions contemplated by this agreement; and
13.12.3 in the case of Alaska Communications Systems, the
representations and warranties of Alaska
Communications Systems arising by reason of the
delivery
of the Preliminary Prospectus, the Prospectus and any
Supplemental Material are true and correct on and as
at the Time of Closing as if those documents had been
dated the Closing Date and delivered to the
Underwriters on that date,
and all of those matters will in fact be true and correct as
at the Time of Closing;
13.13 each of the Related Agreements shall have been executed and
delivered and not terminated, and the transactions
contemplated by the Related Agreements will be completed prior
to or contemporaneous with the sale of the Initial Units;
without limiting the generality of the foregoing, the Company
and the lenders under the Proposed Credit Facility shall have
entered into the Proposed Credit Facility on terms and
conditions satisfactory to the Underwriters, Alaska
Communications Systems and the Company, each acting
reasonably, and the Company shall have drawn down sufficient
funds under the Proposed Credit Facility to permit the Company
to make the payments contemplated by Article 6 of the
Investment Agreement and the Company shall have, in the
opinion of the Underwriters, the unfettered right and ability,
following such drawdown under the Proposed Credit Facility, to
operate the Business without material liquidity risk;
13.14 all actions required to be taken by or on behalf of the Fund
including the passing of all requisite resolutions of the sole
unitholder and trustees of the Fund and all requisite filings
with governmental authorities, Securities Commissions or
courts will have occurred at or prior to the Time of Closing
so as to validly authorize the execution and filing of the
Preliminary Prospectus, the Prospectus and any Supplementary
Material and to create and issue the Purchased Units having
the attributes contemplated by the Prospectus;
13.15 the Purchased Units will have been approved for listing and
posting for trading on the TSX on the business day immediately
preceding the Closing Date, subject only to the Standard
Listing Conditions; and
13.16 the Underwriters will have received such other certificates,
opinions, agreements, materials or documents, in form and
substance satisfactory to the Underwriters, as the
Underwriters may reasonably request.
14. CLOSING.
The closing of the purchase and sale of the Initial Units or the
Additional Units, as the case may be, will be completed at the Time of
Closing or the Over-Allotment Closing Time at the offices of Torys LLP,
Maritime Life Tower, Toronto-Dominion Centre, Suite 3000, Toronto,
Ontario M5K 1N2, or at any other place determined in writing by the
Fund and the Underwriters. At the Time of Closing, or the
Over-Allotment Closing Time, as the case may be, the Fund will deliver
to CIBC WM:
14.1 for the respective accounts of the Underwriters, the Purchased
Units through the facilities of The Canadian Depository for
Securities Limited; the Fund will pay all fees and expenses
payable to or incurred by the Trust Company and all fees
payable to The Canadian Depository for Securities Limited; and
14.2 all further documentation as may be contemplated in this
agreement or as counsel to the underwriters may reasonably
require;
against payment by the Underwriters to the Fund of the purchase price
for the Initial Units or the Additional Units, as the case may be, net
of (i) the fees payable by the Fund to the Underwriters as provided in
the second paragraph of this agreement, and (ii) the reimbursable
expenses payable by the Fund to the Underwriters as provided for in
Section 19 of this agreement by certified cheque, bank draft or wire
transfer payable to, or as directed by, the Fund.
15 RESTRICTIONS ON FURTHER ISSUES OR SALES.
15.1 For purposes of this Section 15, "TRANSFER" means, in respect
of a security, any sale, exchange, transfer, assignment, gift,
Lien, hypothecation, alienation or other transaction, whether
voluntary, involuntary or by operation of law, by which the
legal or beneficial ownership or, or any security interest or
other interest in, the security passes from one person to
another, or to the same person in a different capacity,
whether or not the value, and any change in ownership of the
legal or beneficial owner of the security or any person which
owns, directly or indirectly, in any manner whatsoever, such
legal or beneficial owner of the security, provided that the
defined term "Transfer" as used in this agreement shall not
include any Transfer to the extent that the prohibitions or
restrictions contained in this agreement with respect to such
Transfer would be prohibited by or constitute a default under
any of the ACS Credit Documents.
15.2 During the period commencing the date of this agreement and
ending on the day which is 180 days following the Closing
Date, the Fund agrees that it will not, directly or
indirectly, without the prior written consent of CIBC WM,
given by instrument in writing duly authorized and executed on
behalf of CIBC WM, issue, offer, sell, contract to sell, grant
any option to purchase, transfer, assign or otherwise dispose
of any Units or financial instruments or any securities
convertible into or exchangeable for any Units, or announce
any intention to effect the foregoing, other than Units of the
Fund, or rights, options or warrants to acquire such Units,
issued or granted under the Exchange Agreement.
15.3 ACS Holdings hereby covenants and agrees that, except with the
prior written consent of CIBC WM, given by instrument in
writing duly authorized and executed on behalf of CIBC WM, it
shall not Transfer any Exchange Rights currently held by it or
any Units issuable on the exercise of the Exchange Rights
(collectively, with the Exchange Rights, the "RESTRICTED
SECURITIES") until the expiry of 180 days from the closing of
the Offering, provided that, following the expiry of the
Over-Allotment Option, ACS Holdings may Transfer Restricted
Securities to ACS InfoSource or Alaska Communications Systems.
For the purposes of the foregoing, any issuance or Transfer of
securities in the capital of ACS Holdings or ACS InfoSource
that would have the same effective economic effect as a direct
Transfer of Restricted Securities shall be deemed to be a
Transfer of Restricted Securities by ACS Holdings and,
accordingly, each of ACS Holdings, ACS InfoSource and Alaska
Communications Systems hereby covenants and agrees not to
issue or permit the Transfer of any securities to any Person
that would have such effect except in accordance with the
terms of this agreement, and further covenants and agrees to
abide and be bound by the same restrictions applicable to ACS
Holdings under this Section 15 in respect of any Restricted
Securities which it receives from ACS Holdings. Without
limiting the generality of the foregoing, any agreement,
contract, option, short sale, hedging transaction, swap or
other arrangement of similar economic effect requiring ACS
Holdings to Transfer, or providing another with the right to
acquire, whether any such transaction is to be settled by
delivery of Units, other securities, cash or otherwise, shall
be deemed to be a Transfer of such Restricted Securities as at
the date such agreement, contract, option, short sale, hedging
transaction, swap or arrangement is entered into.
16. INDEMNIFICATION.
16.1 The Fund, ACS Canada and the Company jointly and severally
hereby agree to protect, hold harmless and indemnify each of
the Underwriters and their respective affiliates and their
respective directors, officers, employees, advisors,
shareholders, partners and agents (collectively, the
"INDEMNIFIED PARTIES" and individually an "INDEMNIFIED PARTY")
from and against all losses (other than losses of profit in
connection with the distribution of the Purchased Units),
claims, actions, suits, proceedings, damages, liabilities,
costs and expenses, including, without limitation, all amounts
paid to settle actions, suits, proceedings, or satisfy
judgements or awards and all reasonable fees, disbursements
and taxes of their counsel (collectively, a "CLAIM") caused by
or arising directly or indirectly by reason of:
16.1.1 any breach of or default under any representation,
warranty, covenant or agreement of the Fund, ACS
Canada or the Company in this agreement or any
other document to be delivered pursuant hereto or the
failure of the Fund, ACS Canada or the Company to
comply with any of its obligations hereunder or
thereunder;
16.1.2 any information or statement (except any information
or statement relating to the Underwriters, or any of
them, provided by the Underwriters) contained in any
of the Preliminary Prospectus, the Prospectus, the
U.S. Placement Memorandum or any Supplementary
Material or any other document or material filed or
delivered by or on behalf of the Fund pursuant to
this agreement (collectively, the "IPO OFFERING
DOCUMENTS") being or being alleged to be a
Misrepresentation
16.1.3 any order made or any inquiry, investigation or
proceeding instituted, threatened or announced by any
court, securities regulatory authority, stock
exchange or by any other competent authority, based
upon any Misrepresentation (except a
Misrepresentation relating to the Underwriters, or
any of them, provided by the Underwriters) contained
in any of the IPO Offering Documents, preventing or
restricting the trading in or the sale or
distribution of the Purchased Units; or
16.1.4 the Fund, ACS Canada or the Company not complying
prior to the completion of the distribution of the
Purchased Units with any requirement of any
Securities Laws relating to the sale of the Purchased
Units,
and will reimburse the Indemnified Parties for all reasonable
costs, charges and expenses, as incurred, which any of them
may pay or incur in connection with investigating or disputing
any Claim or action related thereto.
16.2 Each of ACS Holdings, ACS InfoSource and Alaska Communications
Systems, subject to Sections 16.3 and 16.4, severally, and not
jointly, hereby agrees to protect, hold harmless and indemnify
each of the Indemnified Parties from and against all Claims
caused by or arising directly or indirectly by reason of any
breach of or default under any representation, warranty,
covenant or agreement given by it in this agreement or any
other document to be delivered pursuant hereto (including all
Related Agreements) or its failure to comply with any of its
obligations hereunder or thereunder, and will reimburse the
Indemnified Parties for all reasonable costs, charges and
expenses, as incurred, which any of them may pay or incur in
connection with investigating or disputing any Claim or action
related thereto.
16.3 The obligation of each of ACS InfoSource and Alaska
Communications Systems to indemnify the Indemnified Parties
pursuant to Section 16.2 shall be limited to an amount equal
to, in the aggregate, the gross proceeds received in the
Offering, plus the value of ACS InfoSource's indirect retained
interest in the Company, plus the amount that Alaska
Communications Systems will receive from the Proposed Credit
Facility on Closing.
16.4 The obligation of an indemnifying party under Section 16.1 or
Section 16.2 (collectively, the "INDEMNIFYING PARTIES") to
indemnify the Indemnified Parties pursuant to this Section 16
will be subject to an initial, aggregate, one-time deductible
of U.S.$500,000.
16.5 The indemnities set out in Sections 16.1 and 16.2 will be in
addition to any liability which the Indemnifying Parties
thereunder may otherwise have.
16.6 If any Claim contemplated by this Section 16 is asserted
against any of the Indemnified Parties, or if any potential
Claim contemplated by this Section 16 comes to the knowledge
of any of the Indemnified Parties, the Indemnified Party
concerned will notify in writing the Fund, ACS Canada and the
Company and, if applicable, one or more of ACS Holdings, ACS
InfoSource and Alaska Communications Systems (collectively,
the "NOTIFIED PARTIES" and individually a "NOTIFIED PARTY"),
as soon as reasonably practicable, of the nature of the Claim
(provided that any failure to so notify in respect of any
potential Claim will not affect the liability of any of the
Notified Parties under this Section 16 unless that delay or
failure prejudices the defence of the Claim or increases the
liability which the Notified Parties have
under this Section 16). The Notified Parties will, subject to
the following, be entitled (but not required) to assume the
defence on behalf of the Indemnified Party of any suit brought
to enforce the Claim; provided that the defence will be
through legal counsel selected by the Notified Parties and
acceptable to the Indemnified Party, acting reasonably, and no
admission of liability will be made by the Notified Parties or
the Indemnified Party without, in each case, the prior written
consent of all the Indemnified Parties affected and the
Notified Parties, in each case, which consent will not be
unreasonably withheld or delayed. An Indemnified Party will
have the right to employ separate counsel in any such suit and
participate in its defence but the fees and expenses of that
counsel will be at the expense of the Indemnified Party
unless:
16.6.1 the Notified Parties fail to assume the defence of
the suit on behalf of the Indemnified Party within
ten days of receiving notice of the suit;
16.6.2 the employment of that counsel has been authorized by
the Notified Parties; or
16.6.3 the named parties to the suit (including any added or
third parties) include the Indemnified Party and the
Notified Parties and the Indemnified Party has been
advised in writing by counsel that there are legal
defences available to the Indemnified Parties that
are different or in addition to those available to
any of the Notified Parties or that representation of
the Indemnified Party by counsel for the Notified
Parties or any of them is inappropriate as a result
of the potential or actual conflicting interests of
those represented;
(in each of the cases set out in Section 16.6.1, 16.6.2 or
16.6.3, the Notified Parties will not have the right to assume
the defence of the suit on behalf of the Indemnified Party,
but the Notified Parties will be liable to pay the reasonable
fees and expenses of separate counsel for all Indemnified
Parties and, in addition, of local counsel in each applicable
jurisdiction.) Notwithstanding the foregoing, no settlement,
compromise, or termination of the Claim may be made by an
Indemnified Party without the prior written consent of the
Notified Parties, which consent will not be unreasonably
withheld or delayed.
16.7 The rights of indemnity contained in this Section 16 will not
enure to the benefit of the Underwriters if the Fund and the
Company have complied with the provisions of Sections 5 and 6
and the person asserting any Claim contemplated by this
Section 16 was not provided with a copy of any Prospectus or
Supplementary Material which corrects any Misrepresentation
(for the purposes of Securities Laws or any of them) which is
the basis of the Claim and which is required under Securities
Laws to be delivered to that person by the Underwriters or
members of their banking or selling group (if any).
16.8 The Indemnifying Parties hereby acknowledge and agree that,
with respect to Sections 16 and 17, the Underwriters are
contracting on their own behalf and as agents for their
affiliates', directors, officers, employees and agents and
their respective affiliates, directors, officers, employees
and agents (collectively, the "BENEFICIARIES"). In this
regard, each of the Underwriters will act as trustee for the
Beneficiaries of the covenants of the Indemnified Parties
under Sections 16 and 17 with respect to the Beneficiaries and
accepts these trusts and will hold and enforce those covenants
on behalf of the Beneficiaries.
17. CONTRIBUTION.
In order to provide for just and equitable contribution in
circumstances in which an indemnity provided in Section 16.1 or 16.2
would otherwise be available in accordance with its terms but is, for
any reason not solely attributable to any one or more of the
Indemnified Parties, held to be unavailable to or unenforceable by the
Indemnified Parties or enforceable otherwise than in accordance with
its terms, the Underwriters and the applicable Indemnifying Parties
will contribute to the aggregate of all claims, damages, liabilities,
costs and expenses and all losses (other than losses of profits in
connection with the distribution of the Purchased Units) of the nature
contemplated in Section 16.1 or 16.2, as applicable, and suffered or
incurred by the Indemnified Parties in proportions so that the
Underwriters will be responsible for the portion
represented by the percentage that the total fee paid to the
Underwriters in connection with the sale of the Purchased Units bears
to the aggregate purchase price of the Purchased Units, both as
determined pursuant to the provisions of this agreement, and the
Indemnifying Parties will, subject to Section 18.2, be responsible for
the balance, whether or not they have been sued or sued separately;
provided that the Underwriters will not in any event be liable to
contribute, in the aggregate, any amount in excess of the total fee or
any portion actually received.
18. LIMITATION ON RIGHTS OF INDEMNITY AND CONTRIBUTION.
18.1 No party who has engaged in any fraud, wilful default,
fraudulent misrepresentation, gross negligence, wilful
misconduct or reckless disregard will be entitled to claim
indemnification under Section 16.1 or 16.2 or contribution
under Section 17 from any person who has not engaged in that
fraud, wilful default, fraudulent misrepresentation or gross
negligence, wilful misconduct or reckless disregard.
18.2 For greater certainty, the Indemnifying Parties will not have
any obligation to contribute pursuant to Section 17 in respect
of any Claim except to the extent the indemnity given by them
in Sections 16.1 and 16.2 would have been applicable to that
Claim in accordance with its terms, had that indemnity been
found to be enforceable and available to the Indemnified
Parties.
18.3 The rights to contribution provided in Section 17 will be in
addition to and not in derogation of any other right to
contribution which the Indemnified Parties may have by statute
or otherwise at law provided that Sections 17 and 18.2 will
apply, mutatis mutandis, in respect of that other right.
18.4 The obligations under Sections 16 and 17 shall survive the
completion of transactions contemplated under this agreement
and the Investment Agreement for a period of three (3) years,
provided that, in respect of any Claim brought during such
three (3) year period, the obligations under Sections 16 and
17 in respect of such Claim shall continue until final expiry
of any appeal periods in connection therewith, and provided
further that, in respect of any Claims brought at any time for
breach of any representation and warranty that, pursuant to
Section 17.5, survives indefinitely, the obligations under
Sections 16 and 17 survive indefinitely in connection with
such Claim.
19. EXPENSES.
19.1 Whether or not the purchase and sale of the Purchased Units is
completed, all expenses of or incidental to the contribution
by ACS InfoSource of the Business to ACS Holdings, the
contribution by ACS Holdings of the Business to the Company,
the subscription by the Fund for the common shares of ACS
Canada and ACS Notes, the acquisition by ACS Canada of
membership interests of the Company and the creation, issuance
and delivery of the Purchased Units and of or incidental to
all matters in connection with the transactions set out in
this agreement or the Investment Agreement will be borne by
the Fund (or by ACS InfoSource if the issuance and sale of the
Purchased Units does not close) including, without limitation:
19.1.1 expenses payable in connection with the qualification
for distribution of the Purchased Units under
applicable Securities Laws;
19.1.2 the fees, expenses and disbursements of the auditors,
counsel to all and any of the Fund, ACS Canada, the
Company, ACS Holdings, ACS InfoSource and Alaska
Communications Systems and all related foreign/local
counsel;
19.1.3 the fees of any experts retained in connection with
the sale of the Purchased Units;
19.1.4 the reasonable out-of-pocket expenses incurred by the
Underwriters, including the reasonable fees,
expenses, taxes and disbursements of the
Underwriters' legal
counsel and all related foreign/local counsel, and
any advertising, printing, courier,
telecommunications, data searches, roadshow
presentation, travel, entertainment and any other
reasonable expenses incurred by the Underwriters,
subject to a maximum aggregate amount of $400,000 (or
such greater amount as is agreed to by the Company in
writing);
19.1.5 all costs incurred in connection with the
preparation, translation, filing and printing of the
Preliminary Prospectus, the "green sheet", the
Prospectus, any Supplementary Material, the U.S.
Placement Memorandum and any Unit certification
costs;
19.1.6 all fees and expenses of the Trust Company; and
19.1.7 all expenses associated with the "road shows" and
marketing activities of the Fund, including all
travel and lodging expenses;
including Canadian federal goods and services tax and provincial sales
tax exigible in respect of any of the foregoing.
20. SUBORDINATION
Each of ACS Holdings, ACS InfoSource and Alaska Communications Systems
(collectively, the "EXISTING SECURITYHOLDERS") covenants and agrees
with the Underwriters, the Fund and the Company that it shall
subordinate (the "SUBORDINATION") any entitlement, which such Existing
Securityholder may have to make a Claim against the Fund, ACS Canada or
the Company (including under Securities Laws by virtue of such Existing
Securityholder having received a distribution of the Exchange Rights
under the Prospectus), to any Claim made by the Underwriters, the Fund
or any unitholder of the Fund (other than the Existing Securityholders)
against the Fund, ACS Canada or the Company. The Subordination shall
apply to all Claims by the Existing Securityholders, regardless of
whether or not such Claims are also made by an Underwriter, the Fund or
other unitholder of the Fund and whether or not made first in time. The
Subordination shall apply to prevent any Existing Securityholder from
enforcing or realizing on a judgment in respect of a Claim until the
final adjudication or settlement of any other Claims by the
Underwriters, the Fund or any unitholder of the Fund. The Subordination
shall not be interpreted or constructed to in any manner limit or
otherwise detract from any of the rights of the Fund, the Company or
any unitholder of the Fund under this Agreement or otherwise.
21. ALL TERMS TO BE CONDITIONS.
Each of the Fund, ACS Canada, the Company and the Existing
Securityholders agrees that the conditions contained in Section 13 will
be complied with insofar as they relate to acts to be performed or
caused to be performed by it, and that it will use its reasonable best
efforts to cause all of those conditions to be complied with, provided
that such conditions (except to the extent that they constitute
representations, warranties or covenants under any other provision of
this agreement) shall merge on the Closing. All representations,
warranties, covenants and other terms of this agreement will be and
will be deemed to be conditions, and any breach or failure to comply
with any of them or any of the conditions set out in Section 13 will
entitle the Underwriters to terminate their obligation to purchase the
Purchased Units, by written notice to that effect given to the Fund and
the Company at or prior to the Time of Closing. It is understood that
the Underwriters may waive, in whole or in part, or extend the time for
compliance with, any of those terms and conditions without prejudice to
the rights of the Underwriters in respect of any of those terms and
conditions or any other or subsequent breach or non-compliance,
provided that to be binding on the Underwriters any such waiver or
extension must be in writing.
22. TERMINATION BY UNDERWRITERS IN CERTAIN EVENTS.
22.1 Each Underwriter will also be entitled to terminate its
obligation to purchase the Purchased Units by written notice
to that effect given to the Fund and the Company at or prior
to the Time of Closing if:
22.1.1 any:
22.1.1.1 inquiry, investigation or other proceeding,
or
22.1.1.2 order, ruling or other pronouncement
(whether current or contemplated),
is issued, announced or threatened under or pursuant
to any relevant statute or by any stock exchange,
Governmental Body (including the Canada Customs and
Revenue Agency, the United States Internal Revenue
Service and/or the United States Treasury Department)
or other regulatory authority, or there is any change
of Law (including any Law relating to the taxation of
the Fund, ACS Canada and/or the Company), or in the
interpretation or administration thereof (in each
case whether current or contemplated), which, in the
reasonable opinion of that Underwriter, after
consultation with the Fund and the Company, operates
or could operate to prevent, suspend, hinder, delay,
restrict, inhibit or otherwise adversely affect the
trading in, or which adversely impacts the
distribution or the marketability of, the Purchased
Units or any of them;
22.1.2 any:
22.1.2.1 Material Adverse Change (actual, imminent or
reasonably expected) occurs in the business,
affairs, operations, assets, liabilities
(contingent or otherwise), capital or
ownership of the Fund, ACS Canada or the
Company, howsoever caused, or
22.1.2.2 material fact arises or is discovered that
would have been required to have been stated
in the Prospectus or any Supplementary
Material had that fact arisen or been
discovered on, or prior to, the date of any
of the Prospectus or any Supplementary
Material, or
22.1.2.3 change occurs in any material fact contained
in any of the Prospectus or any
Supplementary Material or any event or state
of facts occurs after the date of this
agreement, which, in any case, is of such a
nature as to render any of the Prospectus or
any Supplementary Material untrue or
misleading in any material respect or to
result in any Misrepresentation in any of
the Prospectus or any Supplementary
Material,
which fact or change, as the case may be, in the
opinion of that Underwriter, after consultation with
the Fund and the Company, could reasonably be
expected to result in the purchasers of a material
number of Purchased Units exercising their right
under Securities Laws to withdraw from or rescind
their purchase thereof or sue for damages in respect
thereof or which has or could reasonably be expected
to have a significant adverse effect on the market
price, value or marketability of the Purchased Units
or any of them;
22.1.3 the state of the Canadian financial markets becomes
such that the Purchased Units cannot, in the
reasonable opinion of that Underwriter, be profitably
marketed; or
22.1.4 there should develop, occur or come into effect or
existence any event, action, state, condition or
major financial occurrence of national or
international consequence, including any act of
terrorism, war or like event, or any governmental
action, law, regulation, inquiry or other occurrence
of any nature which, in the reasonable opinion of
that Underwriter, materially adversely affects or may
materially affect the financial markets in Canada or
the United
States or the business, operations or affairs of the
Fund or the Company or the market price, value or
marketability of the Purchased Units or any of them.
22.2 If this agreement is terminated by any of the Underwriters
pursuant to Section 22.1, there will be no further liability
on the part of that Underwriter or of the Fund or the Company
to that Underwriter, except in respect of any liability which
may have arisen or may later arise under Sections 16, 17, and
19.
22.3 The right of the Underwriters or any of them to terminate
their respective obligations under this agreement is in
addition to all other remedies they may have in respect of any
default, act or failure to act of the Fund, ACS Canada, the
Company or any of the Existing Securityholders in respect of
any of the matters contemplated by this agreement. A notice of
termination given by one Underwriter under this Section 22
will not be binding upon the other Underwriters.
23. OFFERING IN THE UNITED STATES
23.1 For the purposes of this agreement, the following terms will
have the meanings indicated:
23.1.1 "DIRECTED SELLING EFFORTS" means directed selling
efforts as that term is defined in Regulation S.
Without limiting the foregoing, but for greater
clarity in this agreement, it means, subject to the
exclusions from the definition of directed selling
efforts contained in Regulation S, any activity
undertaken for the purpose of, or that could
reasonably be expected to have the effect of,
conditioning the market in the United States for any
of the Purchased Units and shall include, without
limitation, the placement of any advertisement in a
publication with a general circulation in the United
States that refers to the offering of any of the
Purchased Units;
23.1.2 "FOREIGN ISSUER" means a foreign issuer as that term
is defined in Regulation S. Without limiting the
foregoing, but for greater clarity in this agreement,
it means any issuer that is (a) the government of any
country, or of any political subdivision of a
country, other than the United States; or (b) a
corporation or other organization incorporated under
the laws of any country other than the United States,
except an issuer meeting the following conditions:
(1) more than 50 percent of the outstanding voting
securities of such issuer are directly or indirectly
owned of record by residents of the United States;
and (2) any of the following: (i) the majority of the
executive officers or directors are United States
citizens or residents, (ii) more than 50 percent of
the assets of the issuer are located in the United
States, or (iii) the business of the issuer is
administered principally in the United States;
23.1.3 "GENERAL SOLICITATION" and "GENERAL ADVERTISING"
means "general solicitation" and "general
advertising", respectively, as used in Rule 502(c) of
Regulation D, including, without limitation,
advertisements, articles, notices or other
communication published in any newspaper, magazine or
similar media or broadcast over television or radio,
or any seminar or meeting whose attendees had been
invited by general solicitation or general
advertising;
23.1.4 "QUALIFIED INSTITUTIONAL BUYER" means a "qualified
institutional buyer" as defined in Rule l44A;
23.1.5 "REGULATION D" means Regulation D adopted by the SEC
under the U.S. Securities Act;
23.1.6 "REGULATION S" means Regulation S adopted by the SEC
under the U.S. Securities Act;
23.1.7 "RULE 144A" means Rule 144A adopted by the SEC under
the U.S. Securities Act;
23.1.8 "SEC" means the United States Securities and Exchange
Commission;
23.1.9 "SUBSTANTIAL U.S. MARKET INTEREST" means "substantial
U.S. market interest" as that term is defined in
Regulation S;
23.1.10 "UNITED STATES" means the United States of America,
its territories and possessions, any state of the
United States, and the District of Columbia;
23.1.11 "U.S. EXCHANGE ACT" means the United States
Securities Exchange Act of 1934, as amended;
23.1.12 "U.S. PLACEMENT MEMORANDUM" means the placement
memorandum of the Fund in respect of the offering and
sale of Purchased Units in the United States, and any
amendment thereto, prepared in accordance with the
securities laws of the United States; and
23.1.13 "U.S. SECURITIES ACT" means the United States
Securities Act of 1933, as amended.
23.2 The Underwriters may offer and sell the Purchased Units within
the United States on the terms and subject to the conditions
of this Section 23. In connection therewith, the Fund and the
Company jointly and severally represent, warrant and covenant
that:
23.2.1 the Fund is a Foreign Issuer and reasonably believes
there is no Substantial U.S. Market Interest with
respect to the Purchased Units;
23.2.2 none of the Fund, ACS Canada, the Company or any
person acting on its or their behalf (other than the
Underwriters, U.S. affiliates of the Underwriters
("U.S. AFFILIATES"), or any members of the banking
and selling group formed by them collectively, the
"SELLING FIRMS", in respect of whose activities the
Fund and the Company make no representation), has
engaged or will engage in any Directed Selling
Efforts in the United States with respect to the
Purchased Units and the press release relating to the
filing of the Preliminary Prospectus issued by Alaska
Communications Systems Group, Inc. on March 6, 2003
does not constitute Directed Selling Efforts in the
United States in respect to the Purchased Units;
23.2.3 the Fund is not, and as a result of the sale of the
Purchased Units will not be, an open-end investment
company, unit investment trust or face amount
certificate company that is or is required to be
registered or a closed-end investment company that is
required to be, but is not, registered under Section
8 of the United States Investment Company Act of
1940, as amended;
23.2.4 none of the Fund, ACS Canada, the Company, their
affiliates or any person acting on its or their
behalf, (other than the Underwriters, U.S.
Affiliates, or any members of the Selling Firms, in
respect of whose activities the Fund and the Company
make no representation), has engaged in any form of
General Solicitation or General Advertising in
connection with any offer or sale of the Purchased
Units or any security convertible or exchangeable
into Purchased Units in the United States within the
six month period prior to the date of this agreement
and the press release relating to the filing of the
Preliminary Prospectus issued by Alaska
Communications Systems Group, Inc. on March 6, 2003
does not constitute a General Solicitation or General
Advertising in connection with any offer or sale of
the Purchased Units;
23.2.5 so long as any of the Purchased Units are outstanding
and are "restricted securities" within the meaning of
Rule 144(a)(3) under the U.S. Securities Act, the
Fund will, unless it becomes subject to and complies
with the reporting requirements of Section 13 or
Section 15(d) of the U.S. Exchange Act or the
information furnishing requirements of Rule 12g3-2(b)
thereunder, provide to any holder of those restricted
securities, or to any prospective purchaser of those
restricted securities designated by a holder, upon
the request of that holder or prospective purchaser,
at or prior to the time of sale, the information
required to be provided by Rule 144A(d)(4)(i) under
the U.S. Securities Act (so long as that requirement
is necessary in order to permit holders of the
restricted securities to effect resales under Rule
l44A) to a Qualified Institutional Buyer which is a
holder of the restricted securities;
23.2.6 none of the Fund, ACS Canada, the Company or their
affiliates: (i) will take any action for a period of
forty (40) days from the Closing Date that would
cause the registration exemptions in Regulation S,
Rule 144A or Rule 506 of Regulation D to be
unavailable for the offer and sale of Units pursuant
to this agreement, or (ii) has been subject to any
order, judgment or decree of any court of competent
jurisdiction temporarily, preliminarily or
permanently enjoining that person for failure to
comply with Rule 503 of Regulation D;
23.2.7 the Units are not, and as of the Time of Closing the
Units will not be, and no securities of the same
class as the Units are or will be, (i) listed on a
national securities exchange in the United States,
(ii) quoted in an "automated inter-dealer quotation
system", as such term is used in the U.S. Exchange
Act, or (iii) convertible or exchangeable at an
effective conversion premium (calculated as specified
in paragraph (a)(6) of Rule 144A) of less than ten
percent for securities so listed or quoted; and
23.2.8 the Fund will, within prescribed time periods,
prepare and file any forms or notices required under
the U.S. Securities Act or applicable blue sky laws.
23.3 Each Underwriter acknowledges that the Purchased Units have
not been and will not be registered under the U.S. Securities
Act and may be offered and sold in transactions exempt from or
not subject to the registration requirements of the U.S.
Securities Act. Accordingly, each Underwriter separately and
not jointly represents, warrants and covenants that:
23.3.1 it has not offered or sold, and will not offer or
sell, any of the Purchased Units constituting part of
its allotment except in accordance with Regulation S
or Rule 144A;
23.3.2 it has not entered and will not enter into any
contractual arrangement with respect to the
distribution of the Purchased Units, except with its
U.S. Affiliates and other Selling Firms or with the
prior written consent of the Company; and
23.3.3 it shall use its reasonable efforts to ensure that
each Selling Firm complies with the provisions of
Sections 23.4 and 23.5 as if such provisions applied
to such Selling Firm.
23.4 Each Underwriter covenants to and agrees with the Fund that:
23.4.1 all offers and sales of the Purchased Units in the
United States will be effected through a U.S.
Affiliate in accordance with all applicable U.S.
Broker-dealer requirements;
23.4.2 its U.S. Affiliate is a Qualified Institutional
Buyer;
23.4.3 it will not, either directly or through its U.S.
Affiliate, solicit offers for, or offer to sell, the
Purchased Units in the United States by means of any
form of
General Solicitation or General Advertising and
neither it nor its U.S. Affiliate, nor any persons
acting on its or their behalf have engaged or will
engage in any Directed Selling Efforts with respect
to the Purchased Units;
23.4.4 it will solicit, and will cause its U.S. Affiliate to
solicit, offers for the Purchased Units in the United
States only from, and will offer the Purchased Units
only to, persons it reasonably believes to be
Qualified Institutional Buyers in accordance with
Rule 144A. It also agrees that it will solicit offers
for the Purchased Units only from, and will offer the
Purchased Units only to, persons that in purchasing
such Purchased Units will be deemed to have
represented and agreed as provided in paragraphs
(3)(a) through (d) below (to the extent such
representations are applicable to the purchaser
concerned);
23.4.5 it will inform, and cause its U.S. Affiliate to
inform, all purchasers of the Purchased Units in the
United States that the Purchased Units have not been
and will not be registered under the U.S. Securities
Act and are being sold to them without registration
under the U.S. Securities Act in reliance on Rule
144A;
23.4.6 it will deliver, or cause to be delivered, a copy of
the U.S. Placement Memorandum to each person in the
United States purchasing Purchased Units from it;
23.4.7 it shall cause its U.S. Affiliate, at the request of
the Fund, to agree, for the benefit of the Fund, to
the same provisions as are contained in Sections 23.3
and 23.4 of this agreement;
23.4.8 at least one business day prior to closing, it shall
request CIBC WM to provide the Trust Company with a
list of all purchasers of the Purchased Units in the
United States; and
23.4.9 at closing it, together with its U.S. Affiliate
selling Purchased Units in the United States, will
provide a certificate, substantially in the form of
Schedule 23.4.9.
23.5 It is understood and agreed by the Underwriters that the
Purchased Units may be offered and resold by the Underwriters,
its U.S. Affiliates and Selling Firms in the United States
pursuant to the provisions of Rule 144A to persons who are, or
are reasonably believed by them to be, Qualified Institutional
Buyers in transactions meeting the requirements of Rule 144A
and in compliance with any applicable state securities laws of
the United States, provided that by purchasing Purchased
Units, each purchaser shall be deemed to have represented and
warranted for the benefit of the Company and the Underwriters
that:
23.5.1 it is a Qualified Institutional Buyer and
acknowledges that the sale of Purchased Units to it
is being made in reliance on Rule 144A, and it is
acquiring such Purchased Units for its own account or
for the account of one or more Qualified
Institutional Buyers with respect to which it
exercises sole investment discretion;
23.5.2 it understands and acknowledges that the Purchased
Units will not be and have not been registered under
the U.S. Securities Act or the securities laws of any
state of the United States, and are therefore
"restricted securities" within the meaning of the
Rule 144, and that if in the future it shall decide
to resell, pledge or otherwise transfer such
Purchased Units, the same may be resold, pledged or
otherwise transferred only (A) to ACS Media Income
Fund, (B) in the United States, in accordance with
Rule 144A to a person it reasonably believes is a
Qualified Institutional Buyer that purchases for its
own account or for the account of a Qualified
Institutional Buyer and to whom notice is given that
the offer, sale or transfer is being made in reliance
on Rule 144A, (C) outside the United States, in
accordance with Rule 904 of Regulation S and in
compliance
with applicable local laws and regulations, (D) in a
transaction exempt from registration under the U.S.
Securities Act pursuant to Rule 144 and in compliance
with any applicable state securities laws of the
United States, or (E) in a transaction that does not
require registration under the U.S. Securities Act or
any applicable United States state securities laws,
and it has furnished to ACS Media Income Fund an
opinion of counsel of recognized standing reasonably
satisfactory to ACS Media Income Fund to that effect;
23.5.3 it understands that all Purchased Units sold in the
United States as part of this offering under the
Prospectus will bear a legend to the following
effect:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING
SUCH SECURITIES, AGREES FOR THE BENEFIT OF ACS MEDIA
INCOME FUND THAT SUCH SECURITIES MAY BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED ONLY (A) TO ACS MEDIA INCOME
FUND, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE
WITH RULE 904 OF REGULATION S UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES IN ACCORDANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (D) PURSUANT TO
THE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER, OR (E) PURSUANT
TO ANOTHER EXEMPTION FROM REGISTRATION AFTER
PROVIDING A LEGAL OPINION SATISFACTORY TO ACS MEDIA
INCOME FUND.
A NEW CERTIFICATE BEARING NO LEGEND MAY BE OBTAINED
FROM CIBC MELLON TRUST COMPANY UPON DELIVERY OF THIS
CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A
FORM SATISFACTORY TO CIBC MELLON TRUST COMPANY AND
ACS MEDIA INCOME FUND, TO THE EFFECT THAT THE SALE OF
THE SECURITIES REPRESENTED HEREBY IS BEING MADE IN
COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT."
If the Purchased Units are being sold in compliance
with the requirements of Rule 904 of Regulation S,
the legend may be removed by providing a declaration
to CIBC Mellon Trust Company to the following effect
(or as the Fund may prescribe from time to time).
"The undersigned (A) acknowledges that the sale of
the securities to which this declaration relates is
being made in reliance on Rule 904 of Regulation S
under the U.S. Securities Act of 1933, as amended,
and (B) certifies that (1) it is not an "affiliate"
(as defined in Rule 405 under the Securities Act, as
amended) of ACS Media Income Fund, (2) the offer of
such securities was not made to a person in the
United States and either (a) at the time the buy
order was originated, the buyer was outside the
United States, or the seller and any person acting on
its behalf reasonably believed that the buyer was
outside the United States or (b) the transaction was
executed on or through the facilities of the Toronto
Stock Exchange and neither the seller nor any person
acting on its behalf knows that the transaction has
been prearranged with a buyer in the United States,
and (3) neither the seller nor any person acting on
its behalf engaged in any directed selling efforts in
connection with the offer and sale of such
securities. Terms used herein have the meanings given
to them by Regulation S."; and
23.5.4 it understands and acknowledges that it is making the
representations and warranties and agreements
contained herein with the intent that they may be
relied upon by the Fund, the Company and the
Underwriters in determining its
eligibility or (if applicable) the eligibility of
others on whose behalf it is contracting hereunder to
purchase the Purchased Units.
24. STABILIZATION.
In connection with the distribution of the Purchased Units, the
Underwriters and members of their selling group (if any) may over-allot
or effect transactions which stabilize or maintain the market price of
the Purchased Units at levels above those which might otherwise prevail
in the open market, in compliance with Securities Laws. Those
stabilizing transactions, if any, may be discontinued at any time.
25. OBLIGATIONS OF THE UNDERWRITERS TO BE SEVERAL.
Subject to the terms and conditions of this agreement, the obligation
of the Underwriters to purchase the Initial Units or the Additional
Units, as the case may be, will be several and not joint. The
percentage of the Purchased Units to be severally purchased and paid
for by each of the Underwriters will be as follows:
CIBC World Markets Inc. 35%
RBC Dominion Securities Inc. 20%
Scotia Capital Inc. 20%
BMO Nesbitt Burns Inc. 12%
National Bank Financial Inc. 12%
Westwind Partners Inc. 1%
If an Underwriter (a "REFUSING UNDERWRITER") does not complete the
purchase and sale of the Initial Units which that Underwriter has
agreed to purchase under this agreement (the "DEFAULTED UNITS"), CIBC
WM may delay the closing date for not more than five days and the
remaining Underwriters (the "CONTINUING UNDERWRITERS") will be
entitled, at their option, to purchase all but not less than all of the
Defaulted Units pro rata according to the number of Initial Units to
have been acquired by the Continuing Underwriters under this agreement
or in any proportion agreed upon, in writing, by the Continuing
Underwriters. If no such arrangement has been made and the number of
Defaulted Units to be purchased by the Refusing Underwriter does not
exceed 10% of the Initial Units the Continuing Underwriters will be
obligated to purchase the Defaulted Units on the terms set out in this
agreement in proportion to their obligations under this agreement. If
the number of Defaulted Units to be purchased by the Refusing
Underwriters exceeds 10% of the Initial Units, the Continuing
Underwriters will not be obliged to purchase the Defaulted Units and,
if the Continuing Underwriters do not elect to purchase the Defaulted
Units:
25.1 the Continuing Underwriters will not be obliged to purchase
any of the Initial Units;
25.2 the Fund will not be obliged to sell less than all of the
Initial Units; and
25.3 the Fund and the Company will be entitled to terminate their
obligations under this agreement arising from their acceptance
of this offer, in which event there will be no further
liability on the part of the Continuing Underwriters or the
Fund, ACS Canada, the Company and the Existing Securityholders
except pursuant to the provisions of Sections 16, 17, and 19.
26. NOTICE.
Any notice or other communication required or permitted to be given
under this agreement will be in writing and will be delivered to:
(a) in the case of the Fund:
79 Wellington Street West
Suite 3000, Maritime Life Building
Toronto-Dominion Centre
Toronto, Ontario M5K 1N2
Attention: Trustees of ACS Media Income Fund c/o Philip
Brown
Facsimile: (416) 865-7380
(b) in the case of ACS Canada:
79 Wellington Street West
Suite 3000, Maritime Life Building
Toronto-Dominion Centre
Toronto, Ontario M5K 1N2
Attention: Directors of ACS Media Canada Inc. c/o Philip
Brown
Facsimile: (416) 865-7380
(c) in the case of ACS Holdings, ACS InfoSource and Alaska
Communications Systems:
6000 Telephone Avenue, MS65
Anchorage, AK 99503
U.S.A.
Attention: General Counsel
Facsimile: (907) 297-3153
in each case under (a), (b) or (c), with a copy to the Fund
and the Company.
(d) in the case of the Company:
3601 C Street
Anchorage, AK 19503
U.S.A.
Attention: President
Facsimile: (907) 564-1422
with a copy to the Fund.
(e) in the case of CIBC WM:
Canadian Equity Capital Markets
161 Bay Street, 6th Floor
Toronto, Ontario M5J 2S8
Attention: Kevin W. Dalton
Facsimile: (416) 956-6958
in the case of RBC DS:
P.O. Box 50, 200 Bay Street
4th Floor, South Tower
Royal Bank Plaza
Toronto, Ontario M5J 2W7
Attention: Karin Treiberg
Facsimile: (416) 842-7555
in the case of Scotia:
Scotia Plaza
40 King Street West
P.O. Box 4085, Station "A"
Toronto, Ontario M5W 2X6
Attention: Sarah B. Kavanagh
Facsimile: (416) 863-7117
in the case of BMO NB:
1 First Canadian Place
4th Floor, PO Box 150
Toronto, Ontario M5X 1H3
Attention: Ashish P. Mathur
Facsimile: (416) 359-5685
in the case of NBF:
130 King Street West
Suite 3200, PO Box 21
Toronto, Ontario M5X 1J9
Attention: Jim Hardy
Facsimile: (416) 869-6411
in the case of Westwind:
70 York Street
10th Floor
Toronto, Ontario M5J 1S9
Attention: Lionel F. Conacher
Facsimile: (416) 815-1808
in each case under (e), with a copy to Goodmans LLP:
Suite 2400
250 Yonge Street
Toronto, Ontario M5B 2M6
Attention: Allan Goodman
Facsimile: (416) 979-1234
The parties may change their respective addresses for notices by notice
given in the manner set out above. Any notice or other communication
will be in writing, and unless delivered personally to the addressee or
to a responsible officer of the addressee, as applicable, will be given
by telecopy and will be deemed to have been given when (i) in the case
of a notice delivered personally to a responsible officer of the
addressee, when so delivered; and (ii) in the case of a notice
delivered or given by telecopy, on the first business day following the
day on which it is sent.
27. MISCELLANEOUS.
27.1 Except with respect to Sections 16, 17, and 22, all actions,
determinations and notices on behalf of the Underwriters under
this agreement or contemplated by this agreement may be
carried out, made or given on behalf of the Underwriters by
CIBC WM and CIBC WM will in good faith discuss with the other
Underwriters the nature of any of the transactions and notices
prior to giving effect to them or the delivery of them, as the
case may be.
27.2 This agreement will be governed by and interpreted in
accordance with the laws of the Province of Ontario and the
federal laws of Canada applicable therein.
27.3 Time will be of the essence in this agreement and, following
any waiver or indulgence by any party, time will again be of
the essence in this agreement.
27.4 The words "agreement", "hereof", "hereunder" and similar
phrases mean and refer to the agreement formed as a result of
the acceptance by the Fund of this offer by the Underwriters
to purchase the Purchased Units.
27.5 All representations, warranties, covenants and agreements of
the Fund, ACS Canada, the Company and the Existing
Securityholders contained in this agreement or contained in
documents submitted pursuant to this agreement and in
connection with the transaction of purchase and sale
contemplated by this agreement will survive and will continue
in full force and effect for a period of three years from the
Closing Date (other than Sections 8.1, 8.2, 8.3, 8.4, 8.5.1,
8.5.2, 8.5.4, 8.6, Sections 8.10 to and including 8.15,
Sections 8.17, 8.19 and 8.23, Sections 9.1 to and including
9.5, Sections 9.7 (but only with respect to contraventions,
breaches or defaults under organizational documents, licenses,
permits and Laws) and 9.8, Section 10.1 to and including 10.5,
Sections 10.11 (but only with respect to contraventions,
breaches or defaults under organizational documents, licenses,
permits and Laws) and 10.12, and Sections 11.1, 11.2 and 11.4
(but only with respect to contraventions, breaches or defaults
under organizational documents, licenses, permits and Laws),
each of which will survive and will continue in full force and
effect indefinitely) for the benefit of the Underwriters,
regardless of any subsequent disposition of the Purchased
Units or any investigation by or on behalf of the Underwriters
with respect thereto. The Underwriters will be entitled to
rely on the representations and warranties of the Fund, ACS
Canada, the Company, ACS Holdings, ACS InfoSource and Alaska
Communications Systems contained in this agreement or
delivered pursuant to this agreement notwithstanding any
investigation which the Underwriters may undertake or which
may be undertaken on the Underwriters' behalf.
27.6 Each of the parties to this agreement will be entitled to rely
on delivery of a facsimile copy of this agreement and
acceptance by each party of any such facsimile copy will be
legally effective to create a valid and binding agreement
between the parties to this agreement in accordance with the
terms of this agreement.
27.7 Each of the parties hereto acknowledges that the obligations
of the Fund under this agreement and that such obligations
shall not be personally binding upon any of the trustees of
the Fund, any registered or beneficial holder of Units or any
beneficiary under a plan of which a holder of such Units acts
as a trustee or carrier, and that resort shall not be had to,
nor shall recourse be sought from, any of the foregoing or the
private property of any of the foregoing in respect of any
indebtedness, obligation or liability of the Fund arising
hereunder, and recourse for such indebtedness, obligations or
liabilities of the Fund shall be limited to, and satisfied
only out of, the assets of the Fund.
27.8 This agreement may be executed in any number of counterparts,
each of which when so executed will be deemed to be an
original and all of which, when taken together, will
constitute one and the same agreement.
27.9 To the extent permitted by applicable law, the invalidity or
unenforceability of any particular provision of this agreement
will not affect or limit the validity or enforceability of the
remaining provisions of this agreement.
27.10 This agreement and the other documents referred to in this
agreement constitute the entire agreement between the parties
hereto relating to the subject matter of this agreement and
supersede all prior agreements between those parties with
respect to their respective rights and obligations in respect
of the transactions contemplated under this agreement.
27.11 The terms and provisions of this agreement will be binding
upon and enure to the benefit of the Fund, ACS Canada, the
Company, and the Existing Securityholders and the Underwriters
and their respective successors and assigns; provided that,
except as otherwise
provided in this agreement, this agreement will not be
assignable by any party without the written consent of the
others and any purported assignment without that consent will
be invalid and of no force and effect.
27.12 The parties acknowledge and agree that the obligations of the
Fund hereunder are not personally binding upon any trustee
thereof, any registered or beneficial holder of units in the
Fund or any annuitant under a plan of which such unitholder
acts as trustee or carrier, and resort shall not be had to,
nor shall recourse or satisfaction be sought from, any of the
foregoing or the private property of any of the foregoing, but
the property of the Fund only shall be bound by such
obligations. Any obligation of the Fund set out in this
agreement shall, to the extent necessary to give effect to
such obligation, be deemed to constitute, subject to the
provisions of the previous sentence, an obligation of the
trustees of the Fund in their capacity as trustees of the Fund
only.
27.13 Notwithstanding any provision of this agreement to the
contrary, nothing in this agreement shall be construed to
require or permit the Fund or any individual or entity acting
on behalf of the Fund to take any action that would result in
the Fund failing to qualify as an "investment trust" within
the meaning of United States Treasury Regulations Section
301.7701-4(c).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
If this letter accurately reflects the terms of the transactions which
we are to enter into and are agreed to by you, please communicate your
acceptance by executing the enclosed copies of this letter where indicated and
returning them to us.
Yours very truly,
CIBC WORLD MARKETS INC.
/s/ Kevin W. Dalton
-----------------------------------------
Name: Kevin W. Dalton
Title: Managing Director
RBC DOMINION SECURITIES INC.
/s/ Karin Treiberg
-----------------------------------------
Name: Karin Treiberg
Title: Vice President
SCOTIA CAPITAL INC.
/s/ Sarah B. Kavanagh
-----------------------------------------
Name: Sarah B. Kavanagh
Title: Managing Director
BMO NESBITT BURNS INC.
/s/ Ashish P. Mathur
-----------------------------------------
Name: Ashish P. Mathur
Title: Vice President
NATIONAL BANK FINANCIAL INC.
/s/ Jim Hardy
-----------------------------------------
Name: Jim Hardy
Title: Managing Director
WESTWIND PARTNERS INC.
/s/ Lionel F. Conacher
-----------------------------------------
Name: Lionel F. Conacher
Title: Managing Director
Accepted and agreed to by the undersigned as of the date of this letter
first written above.
ACS MEDIA INCOME FUND, BY ITS TRUSTEES
/s/ Mark A. Davis
-----------------------------------------
Name: Mark A. Davis
Title: Trustee
/s/ Andre L. Hidi
-----------------------------------------
Name: Andre L. Hidi
Title: Trustee
/s/ Alain Rheaume
-----------------------------------------
Name: Alain Rheaume
Title: Trustee
/s/ Ronald J. Daniels
-----------------------------------------
Name: Ronald J. Daniels
Title: Trustee
ACS MEDIA CANADA INC.
/s/ Wesley E. Carson
-----------------------------------------
Name: Wesley E. Carson
Title: President
ACS MEDIA LLC
/s/ Wesley E. Carson
-----------------------------------------
Name: Wesley E. Carson
Title: President, Chief Executive
Officer and Manager
ACS MEDIA HOLDINGS LLC
/s/ Kevin Hemenway
-----------------------------------------
Name: Kevin Hemenway
Title: Manager
ACS INFOSOURCE, INC.
/s/ Kevin Hemenway
-----------------------------------------
Name: Kevin Hemenway
Title: Director
ALASKA COMMUNICATIONS SYSTEMS HOLDINGS,
INC.
/s/ Kevin Hemenway
-----------------------------------------
Name: Kevin Hemenway
Title: Senior Vice President, Treasurer
and Chief Financial Officer
SCHEDULE 8.11
CAPITAL OF THE COMPANY
Capital of the Company as of the date of this agreement and immediately before
the Time of Closing:
Authorized: unlimited number of membership
interests
Issued and Outstanding: 1 membership interest issued to ACS
Media Holdings LLC
Capital of the Company immediately before the Over-Allotment Closing Time
(provided that the Closing occurs and there are no Defaulted Units):
Authorized: unlimited number of membership
interests
Issued and Outstanding: 17,366,353 membership interest issued
to ACS Media Holdings LLC
120,680,968 membership interest
issued to ACS Media Canada Inc.
SCHEDULE 23.4.9
UNDERWRITERS' CERTIFICATE
In connection with the private placement in the United States
of the units (the "UNITS") of ACS Media Income Fund (the "FUND") pursuant to the
underwriting agreement dated April 28, 2003 among the Fund, ACS Media LLC and
others and the Underwriters named therein (the "UNDERWRITING AGREEMENT"), each
of the undersigned does hereby certify as follows:
I. [NAME OF U.S. BROKER-DEALER AFFILIATE] is a duly
registered broker or dealer with the United States
Securities and Exchange Commission and is a member of
and in good standing with the National Association of
Securities Dealers, Inc. on the date hereof;
II. each offeree was provided with a copy of the U.S.
private placement memorandum (the "U.S. PLACEMENT
MEMORANDUM"), including the Canadian (final)
prospectus (without the compilation report referred
to therein) dated April 29, 2003 for the offering of
the Units in the United States;
III. immediately prior to our transmitting such U.S.
Placement Memorandum to such offerees, we had
reasonable grounds to believe and did believe that
each offeree was, and continue to believe that each
such offeree who is a U.S. person purchasing Units
from us is, a "qualified institutional buyer", as
defined in Rule 144A under the Securities Act of
1933, as amended (the "1933 ACT");
IV. no form of general solicitation or general
advertising (as those terms are used in Regulation D
under the 1933 Act) was used by us, in connection
with the offer or sale of the Units in the United
States; and
V. the offering of the Units in the United States has
been conducted by us in accordance with the terms of
the Underwriting Agreement.
Unless otherwise defined, terms used in this certificate have
the meanings given to them in the Underwriting Agreement.
Dated this ________day of _______________, 2003.
[UNDERWRITER] [U.S. BROKER-DEALER AFFILIATE]
By: ____________________________ By: ________________________________
Name: Name:
Title: Title: