RCI/RCMCI BUSINESS AREAS AND TRANSFER AGREEMENT dated as
of August 1, 1991, between ROGERS COMMUNICATIONS INC., a
corporation continued under the laws of British Columbia
("RCI"), and ROGERS CANTEL MOBILE COMMUNICATIONS INC., a
corporation incorporated under the laws of Canada (the
"Company").
WHEREAS, RCI and the Company, a subsidiary of RCI, acknowledge that it is
desirable to set forth their mutual understanding as to the future conduct by
RCI of its cellular telephone operations and related communications businesses
(including local area personal communications networks), and as to the possible
transfer to the Company of the interest of RCI in certain assets and/or
operations that may be acquired in the Mobile Communications Businesses (as
defined below) in order to, among other things, reduce the potential for
conflicts of interest involving RCI, the Company and directors and officers of
RCI, who are also directors and officers of the Company; and
WHEREAS, in connection with an initial public offering of Class B
Subordinate Voting Shares of the Company by RCI or its subsidiaries and in
consideration of the interests of the holders of such Shares (other than RCI and
its affiliates) from time to time, RCI and the Company have agreed as set forth
below.
NOW, THEREFORE, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, RCI and the Company agree as follows:
ARTICLE I
CONDUCT AND TRANSFER OF BUSINESS
Section 1.01. Conduct of Business. Subject to Section 1.03, RCI hereby
agrees to continue to conduct all of its Mobile Communications Businesses
through the Company (including its subsidiaries). For purposes of this
Agreement, "Mobile Communications Businesses" shall mean all communications
services where either the terminal from which the communication originated or
the terminal on which
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the communication was alternately received, or both such terminals, are mobile
radiocommunications devices (including, in each case, mobile communications
devices that are being used in a fixed mode) and include, but are not limited
to, cellular telephone equipment sales and related services, paging and mobile
voice/data equipment sales and related services, and local area personal
communications networks.
Section 1.02. Transfer. Subject to Section 1.03, in the event that after
August 1, 1991, RCI acquires (through one or more transactions) a controlling
interest in assets and/or operations which represent all of, a significant part
of or an interest in one or more Mobile Communications Businesses, RCI shall,
within 30 days or as promptly as is reasonably practicable under the
circumstances, offer to transfer its interest in such assets and/or operations
to the Company at a purchase price equal to (x) RCI's costs if readily
determinable, or (y) RCI's reasonable determination of the fair value thereof,
if RCI's cost is not readily determinable, plus, in either case, the costs and
expenses incurred by RCI in carrying and transferring such assets and operations
(including, without limitation, the cost of capital incurred by RCI in carrying
such assets and/or operations (determined using the rate of interest charged or
which would have been charged to RCI during the applicable period under its then
existing revolving credit facility), RCI's legal fees and other reasonable
disbursements). Until the Company accepts or declines the offer by RCI or such
offer by RCI otherwise expires and, if the Company accepts RCI's offer, until
such assets and/or operations are transferred to the Company, RCI shall operate
such assets and/or operations to be transferred to the Company in the ordinary
course. RCI's cost or the fair value, as applicable, of the assets and/or
operations to be transferred to the Company hereunder shall be (i) reduced by
the fair market value of any dividends or distributions (whether in cash or
other property) paid to RCI from the business being transferred and (ii)
increased by the fair market value of any additional investments in or
contributions (whether in cash or other property) to the business being
transferred, in each case, during the period such assets and/or operations are
owned by RCI and subject to this Agreement.
In the event that RCMCI accepts an offer by RCI to transfer RCI's interest
in certain assets or operations
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as referred to above in circumstances where the price to be paid is RCI's
reasonable determination of fair value as provided above, and if:
(i) the fair value as proposed by RCI is in excess of $10 million; and
(ii) the independent directors of RCMCI disagree as to the fair value
proposed by RCI
than such fair value shall be determined by an "Independent Valuer" as defined
in the Shareholder Protection Agreement between RCI and RCMCI of even date
herewith.
Section 1.03. Conditions Precedent. The obligations of RCI set forth in
Sections 1.01 and 1.02 are subject to the prior approval of any lender or other
person required under the terms of any agreement or instrument to which RCI or
any of its affiliates (including the Company and its subsidiaries) is currently
or hereafter a party and to the satisfaction of any term or condition which is
currently or hereafter imposed or required by any regulatory authority or
otherwise required by law. RCI and the Company each agree to use its best
reasonable efforts to obtain all approvals, consents and waivers, to eliminate
any term or condition to the contrary binding upon it, and to take or cause to
be taken all reasonable actions and to do or cause to be done all reasonable
things, necessary, proper or advisable to effectuate the purposes of this
Agreement; provided, however, that in any such case, RCI and the Company shall
not be required for purposes of this Section 1.03 to pay any additional fees or
other amounts (other than incidental fees and amounts and other out-of-pocket
expenses, in each case, as shall be reasonable under the circumstances) to the
Company or any third party or agree to or have imposed on it any additional or
different terms, conditions or other limitations of any kind.
ARTICLE II
TERMINATION
This Agreement and the provisions hereof shall automatically terminate at
such time as RCI no longer holds, directly or indirectly, Class A Multiple
Voting Shares, without par value, of the Company and/or Class B Subordinate
Voting Shares, without par value, of the
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Company and/or any other voting shares of the Company that may be issued from
time to time (collectively, the "Equity Shares"), representing in the aggregate
20% or more of the combined voting power of all outstanding Equity Shares.
ARTICLE III
MISCELLANEOUS
Section 3.01. Amendments; Assignment. Neither this Agreement nor any
provision hereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by RCI and the Company which
shall have been approved, in the case of the Company, by a majority of directors
of the Company independent of RCI and the Company. This Agreement may not be
assigned. Any attempt to assign this Agreement in whole or in part, including
the attempted assignment of any obligation of any party hereunder to any
assignee without the consent of the other party hereunder shall be null and
void.
Section 3.02. Binding Effect. This Agreement shall become effective when
it shall have been executed by RCI and the Company, and thereafter shall be
binding upon and inure to the benefit of RCI and the Company and their
respective successors.
Section 3.03. Entire Agreement. This Agreement constitutes the entire
contract between the parties relative to the subject matter hereof. Any previous
agreement among the parties with respect to the subject matter hereof is
superseded by this Agreement.
Section 3.04. Good Faith. The parties hereto agree to act hereunder in
good faith and in a commercially reasonable manner.
Section 3.05. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract.
Section 3.06. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Province of Ontario and the parties
hereto
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irrevocably attorn to the jurisdiction of the courts of such province.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
ROGERS COMMUNICATIONS INC.,
by
/s/ G W Savage
-----------------------------------
Name: Graham W. Savage
Title: Senior Vice President, Finance
by
/s/ M L Daly
-----------------------------------
Name: M. Lorraine Daly
Title: Vice President, Treasurer
ROGERS CANTEL MOBILE COMMUNICATIONS INC.,
by
/s/ James F. Sward
-----------------------------------
Name: James F. Sward
Title: President, Chief Operating Officer
and Director
by
/s/ William W. Linton
-----------------------------------
Name: William W. Linton
Title: Vice President, Finance and Chief
Financial Officer