AGREEMENT AND PLAN OF REORGANIZATION
among
ICG COMMUNICATIONS, INC.,
ICG CANADIAN ACQUISITION, INC.,
ICG HOLDINGS (CANADA), INC.,
and
ICG HOLDINGS (CANADA) CO.
Dated as of November 4, 1998
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND CONSTRUCTION......................................1
1.1 Certain Definitions...............................................1
1.2 Terms Generally...................................................4
ARTICLE II
THE REORGANIZATION AND RELATED MATTERS............................4
2.1 The Reorganization................................................4
(a) Exchange of Class A Shares...............................4
(b) Acquisition of Company Common Shares Owned by ICG........5
(c) Treatment of Warrants....................................5
(d) Continuation of the Company..............................5
2.2 Closing...........................................................6
2.3 Exchange of Shares................................................6
(a) Appointment of Exchange Agent............................6
(b) Letter of Transmittal....................................6
(c) Exchange Procedure.......................................6
(d) Unregistered Transfers of Company Common Shares..........6
(e) Lost, Stolen or Destroyed Certificates...................7
(f) No Dividends Before Surrender of Certificates............7
(g) No Further Ownership Rights in Company Common Shares.....7
(h) Abandoned Property Laws..................................7
ARTICLE III
CERTAIN ACTIONS...................................................8
3.1 Shareholder Meeting...............................................8
3.2 Reasonable Efforts................................................8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................9
4.1 Organization and Qualification....................................9
4.2 Authorization and Validity of Agreement...........................9
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ICG, ACQUISITION AND NOVA
SCOTIA............................................................9
5.1 Organization......................................................9
5.2 Authorization and Validity of Agreement..........................10
ARTICLE VI
TRANSACTIONS PRIOR TO CLOSING....................................10
6.1 Access to Information............................................10
6.2 Expenses.........................................................10
6.3 Notification of Certain Matters..................................10
6.4 Actions by ICG and Acquisition...................................11
ARTICLE VII
CONDITIONS PRECEDENT.............................................11
7.1 Conditions Precedent to the Obligations of ICG, Acquisition,
Nova Scotia and the Company......................................11
(a) Shareholder Approval....................................11
(b) Absence of Injunctions..................................11
7.2 Conditions Precedent to the Obligations of ICG, Acquisition and
Nova Scotia......................................................11
(a) Accuracy of Representations and Warranties..............12
(b) Performance of Agreements...............................12
(c) Officers' Certificates..................................12
(d) No Adverse Enactments...................................12
(e) Receipt of Licenses, Permits and Consents...............12
7.3 Conditions Precedent to the Obligations of the Company...........12
(a) Accuracy of Representations and Warranties..............13
(b) Performance of Agreements...............................13
(c) Officers' Certificates..................................13
(d) No Adverse Enactments...................................13
(e) Receipt of Licenses, Permits and Consents...............13
ARTICLE VIII
TERMINATION......................................................13
8.1 Termination and Abandonment......................................13
8.2 Effect of Termination............................................14
ARTICLE IX
MISCELLANEOUS....................................................14
9.1 Effectiveness of Representations, Warranties and Agreements......14
9.2 Notices..........................................................14
9.3 Entire Agreement.................................................15
9.4 Assignment; Binding Effect; Benefit..............................15
9.5 Amendment........................................................15
9.6 Extension; Waiver................................................15
9.7 Headings.........................................................16
9.8 Counterparts.....................................................16
9.9 Applicable Law...................................................16
9.10 Limited Liability................................................16
9.11 Severability.....................................................16
Exhibit A Articles of Amendment
Exhibit B Sole Shareholder's Resolution
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into as of the fourth day of November, 1998, by and among ICG
Communications, Inc., a Delaware corporation ("ICG"), ICG Canadian Acquisition,
Inc., a Delaware corporation ("Acquisition"), ICG Holdings (Canada), Inc., a
corporation organized under the Canadian Business Corporations Act (the
"Company"), and ICG Holdings (Canada) Co. ("Nova Scotia"), a newly organized
unlimited liability company organized under the laws of the Province of Nova
Scotia.
WHEREAS, ICG is the parent of the Company and beneficially owns
approximately 99.93% of the outstanding common shares of the Company;
WHEREAS, ICG desires to cause Acquisition to acquire ownership of all of
the common shares of the Company not owned by it;
WHEREAS, the Boards of Directors of ICG, Acquisition and the Company each
have determined that it is advisable and in the best interests of their
respective stockholders for ICG to so acquire such shares and, to that end, for
Acquisition to acquire all of the outstanding shares of the Company upon the
terms and subject to the conditions of this Agreement, and thereafter for the
Company to be continued as an unlimited liability company under the laws of Nova
Scotia; and
WHEREAS, for United States federal income tax purposes, it is intended that
the Reorganization (as defined below) qualify as a tax-free reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code").
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
I.1 Certain Definitions. As used in this Agreement, the following terms
will have the following meanings unless the context otherwise requires:
"Acquisition" has the meaning specified in the preamble.
"Affiliate" means, with respect to any Person, any Person controlling,
controlled by or under common control with such Person.
"Agreement" means this Agreement and Plan of Reorganization, including
the attached Exhibits.
"Articles of Amendment" has the meaning set forth in Section 2.1(a).
"Certificates" means certificates evidencing shares of Company Common
Shares held by Persons other than ICG or Acquisition.
"Closing" means the consummation of the transactions contemplated by
this Agreement.
"Closing Date" means the date on which the Closing occurs pursuant to
Section 2.2.
"Code" has the meaning specified in the preamble.
"Company" has the meaning specified in the preamble.
"Company Board" means the Board of Directors of the Company.
"Company Charter" means the Articles of Arrangement of the Company, as
amended to the date of this Agreement and as they may be further amended
prior to the Closing.
"Company Common Shares" means shares of the Company's Class A Shares.
"Control" means, with respect to any Person, the possession, direct or
indirect, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting
securities or partnership interests, by contract or otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"Exchange Agent" has the meaning specified in Section 2.3(a).
"Exchange Agent Agreement" has the meaning specified in Section
2.3(a).
"Governmental Entity" means any court, arbitrator, administrative or
other governmental department, agency, commission, authority or
instrumentality, domestic or foreign.
"ICG" has the meaning specified in the preamble.
"ICG Common Stock" means shares of common stock of ICG, par value $.01
per share.
"Injunction" has the meaning specified in Section 3.2.
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"License" means any license, franchise, ordinance, authorization,
permit, certificate, variance, exemption, concession, lease, right of way,
easement, instrument, order and approval, domestic or foreign.
"Material Adverse Effect" means (A) with respect to ICG, a material
adverse effect on the business, properties, operations or financial
condition of ICG and its subsidiaries (including the Company and its
subsidiaries) taken as a whole, other than any such effect arising out of
or resulting from general business or economic conditions in the United
States, and (B) with respect to the Company, a material adverse effect on
the business, properties, operations or financial condition of the Company
and its subsidiaries taken as a whole, other than any such effect arising
out of or resulting from general business or economic conditions in areas
where the Company does business.
"Nova Scotia" has the meaning set forth in the preamble.
"Person" means an individual, partnership, corporation, limited
liability company, trust, unincorporated organization, association,
unlimited liability company, or joint venture or a government, agency,
political subdivision, or instrumentality thereof.
"Reorganization" has the meaning specified in Section 2.1.
"Special Meeting" has the meaning specified in Section 3.1.
"Subsidiary" when used with respect to any Person, means any other
Person, of which (x) in the case of a corporation, at least (A) a majority
of the equity and (B) a majority of the voting interests are owned or
controlled, directly or indirectly, by such first Person, by any one or
more of its subsidiaries, or by such first Person and one or more of its
subsidiaries or (y) in the case of any Person other than a corporation,
such first Person, one or more of its subsidiaries, or such first Person
and one or more of its subsidiaries (A) owns a majority of the equity
interests thereof and (B) has the power to elect or direct the election of
a majority of the members of the governing body thereof or otherwise has
control over such organization or entity; provided that, for purposes of
the agreements set forth in Article 3 and Article 6, references to
subsidiaries will not include any Person as to which such first Person's
voting interests are subject to a voting agreement, proxy, management
contract or other arrangement as a result of which such first Person does
not control such other Person. For purposes of this Agreement, unless
otherwise specified, neither the Company nor any of its subsidiaries will
be deemed to be subsidiaries of ICG or any of ICG's subsidiaries, whether
or not they otherwise would be subsidiaries of ICG or any of ICG's
subsidiaries under the foregoing definition.
"Warrant Agreement" means the Warrant Agreement between Intelcom Group
Inc. and Norwest Bank Colorado National Association, dated August 8, 1995.
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"Warrants" means each of the rights to subscribe for shares of Company
Common Shares issued and outstanding under the Warrant Agreement.
"Wholly-Owned Subsidiary" will mean, as to any Person, a Subsidiary of
such Person 100% of the equity and voting interest in which is owned,
directly or indirectly, by such Person.
I.2 Terms Generally. The definitions in Section 1.1 will apply equally
to both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun will include the corresponding masculine, feminine and
neuter forms. The words "include," "includes" and "including" will be deemed to
be followed by the phrase "without limitation." The words "herein," "hereof" and
"hereunder" and words of similar import refer to this Agreement (including the
Exhibits) in its entirety and not to any part hereof unless the context will
otherwise require. All references herein to Articles, Sections, and Exhibits
will be deemed references to Articles and Sections of, and Exhibits to, this
Agreement unless the context otherwise requires. Unless the context otherwise
requires, any references to any agreement or other instrument or statute or
regulation are to it as amended and supplemented from time to time (and, in the
case of a statute or regulation, to any successor provisions). Any reference in
this Agreement to a "day" or number of "days" (without the explicit
qualification of "business") will be interpreted as a reference to a calendar
day or number of calendar days. If any action or notice is to be taken or given
on or by a particular calendar day, and such calendar day is not a business day,
then such action or notice will be deferred until, or may be taken or given on,
the next business day. As used herein, the phrase "made available" means that
the information referred to has been made available if requested by the party to
whom such information is to be made available.
ARTICLE II
THE REORGANIZATION AND RELATED MATTERS
2.1 The Reorganization.
The "Reorganization" will consist of the following transactions,
all of which will be considered part of one integrated and mutually
interdependent plan undertaken by the parties:
(a) Exchange of Class A Shares. The following actions will be
undertaken to facilitate the acquisition of Class A Shares held by Persons
other than ICG or Acquisition:
(i) The Company will prepare and file with the Director
appointed under the Canada Business Corporations Act,
Articles of Amendment to the provisions of the Company
Charter attaching to the Company Shares, in the form
attached as Exhibit A (the "Articles of Amendment").
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(ii) The Company will declare an Automatic Redemption Date on
December 1, 1998 or as soon as possible thereafter.
(iii)ICG will assign the Redemption Call Right contained in the
Company Charter to Acquisition and Acquisition will exercise
the Redemption Call Right in respect of the Automatic
Redemption Date declared pursuant to the foregoing clause
(ii).
(iv) The effect of the foregoing clauses (i), (ii) and (iii) will
be to provide for the automatic exchange on the Closing Date
of each Company Common Share outstanding and held by Persons
other than ICG or Acquisition for an equal number of shares
of ICG Common Stock. As a result, on the Closing Date,
Acquisition will acquire all of the Company Common Shares
held by Persons other than ICG or Acquisition in exchange
for an equal number of shares of ICG Common Stock.
(b) Acquisition of Company Common Shares Owned by ICG. On or prior to
the Closing Date, in addition to the Company Common Shares held by Persons
other than ICG or Acquisition acquired by Acquisition pursuant to Section
2.1(a), Acquisition will acquire from ICG, in exchange for 100 newly issued
shares of Acquisition common stock (representing all of Acquisition's
issued capital stock), all of the Company Common Shares owned by ICG and
22,370 shares of ICG Common Stock. Notwithstanding the prior sentence, the
consideration for the Company Common Shares acquired by Acquisition from
ICG shall be deemed to be an equal number of shares of ICG Common Stock
deemed to have been contributed to the capital of Acquisition by ICG. Thus,
to avoid the inconvenience of authorizing, issuing, contributing and
returning actual shares of ICG Common Stock, ICG and Acquisition will
dispense with this formality, resulting in a constructive contribution of
ICG Common Stock by ICG to Acquisition and a constructive issuance of ICG
Common Stock by Acquisition to ICG in exchange for the Company Common
Shares owned by ICG.
(c) Treatment of Warrants. On and after January 1, 1999, as a result
of and pursuant to the Reorganization, (i) each of the Warrants will no
longer be exercisable for Company Common Shares; (ii) each of the Warrants
will become exercisable for ICG Common Stock issuable by ICG (and not
issuable by the Company); and (iii) the holders of the Warrants will be
entitled to purchase ICG Common Stock solely from ICG (and not from the
Company) on the same terms and conditions as are set forth in the Warrant
Agreement with respect to the purchase of Company Common Shares. In
accordance with this Section 2.1(c), on and after the Closing Date the
Warrant Agreement will provide solely for the issuance of ICG Common Stock
by ICG upon the exercise of Warrants rather than Company Common Shares. All
other terms and conditions of the Warrant Agreement will remain in full
force and effect.
(d) Continuation of the Company. On or prior to the Closing Date,
Acquisition will organize Nova Scotia. Promptly after the Closing,
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Acquisition will adopt a sole shareholder's resolution (the form of which
is attached as Exhibit B) approving the continuation of the Company under
the laws of the Province of Nova Scotia. As soon as practicable following
such continuance, the Company will be amalgamated with and into Nova
Scotia, with Nova Scotia as the survivor, and the Company will continue as
an unlimited liability company organized under the laws of the Province of
Nova Scotia.
2.2 Closing. Unless this Agreement shall have been terminated pursuant
to Section 8.1 and subject to the satisfaction or, when permissible, waiver
of the conditions set forth in Article 7, the Closing will take place (a)
at 10:00 a.m. (Denver time) at the executive offices of ICG in Denver,
Colorado, on the later of (i) December 1, 1998 or (ii) the date on which
the last of the conditions set forth in Article 7 (other than any such
conditions which by their terms are not capable of being satisfied until
the Closing Date or thereafter) is satisfied or, when permissible, waived,
or (b) on such other date and/or at such other time and/or place as the
parties may mutually agree.
2.3 Exchange of Shares.
(a) Appointment of Exchange Agent. On or before the Closing Date, ICG
and the Company will enter into an agreement (the "Exchange Agent
Agreement") with an exchange agent selected by ICG and reasonably
acceptable to the Company (the "Exchange Agent"), authorizing such Exchange
Agent to act as Exchange Agent hereunder.
(b) Letter of Transmittal. Prior to the Closing, ICG will instruct the
Exchange Agent to mail to each holder of record (other than ICG or
Acquisition) of a Certificate or Certificates which immediately prior to
such mailing evidenced issued and outstanding Company Common Shares: (i) a
Management Proxy Circular describing the Articles of Amendment and (ii) a
letter of transmittal (which will state that delivery will be effected, and
risk of loss and title to the Certificates will pass, only upon proper
delivery of the Certificates to the Exchange Agent) with instructions for
use in effecting the surrender and exchange of the Certificates. Such
notice, letter of transmittal and instructions will contain such provisions
and be in such form as ICG and the Company may jointly specify.
(c) Exchange Procedure. Promptly following the surrender, in
accordance with such instructions, of a Certificate to the Exchange Agent
(or such other agent or agents as may be appointed by the Exchange Agent or
ICG pursuant to the Exchange Agent Agreement), together with such letter of
transmittal (duly executed) and any other documents required by such
instructions or letter of transmittal, ICG will, subject to Section 2.3(d),
cause to be distributed to the Person in whose name such Certificate shall
have been issued a certificate registered in the name of such Person
representing the number of shares of ICG Common Stock into which the shares
previously represented by the surrendered Certificate will have been
exchanged at the Closing pursuant to this Article 2. Each Certificate so
surrendered will be canceled.
(d) Unregistered Transfers of Company Common Shares. In the event of a
transfer of ownership of Company Common Shares which is not registered in
6
the transfer records of the Company, a certificate representing the proper
number of shares of ICG Common Stock may be issued to the transferee of
such shares if the Certificate evidencing such shares of Company Common
Shares surrendered to the Exchange Agent in accordance with Section 2.3(c)
is properly endorsed for transfer or is accompanied by appropriate and
properly endorsed stock powers and is otherwise in proper form to effect
such transfer, if the Person requesting such transfer pays to the Exchange
Agent any transfer or other taxes payable by reason of such transfer or
establishes to the satisfaction of the Exchange Agent that such taxes have
been paid or are not required to be paid and if such Person establishes to
the satisfaction of ICG that such transfer would not violate applicable
federal or state securities laws.
(e) Lost, Stolen or Destroyed Certificates. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the Person claiming such Certificate to be
lost, stolen or destroyed satisfactory to ICG and complying with any other
reasonable requirements imposed by ICG, ICG will cause to be delivered to
such Person in respect of such lost, stolen or destroyed Certificate the
shares of ICG Common Stock or other property deliverable in respect thereof
as determined in accordance with this Article 2. ICG may, in its
discretion, require the owner of such lost, stolen or destroyed Certificate
to give ICG a bond in such sum as it may direct as indemnity against any
claim that may be made against ICG or the Company with respect to the
Certificate alleged to have been lost, stolen or destroyed.
(f) No Dividends Before Surrender of Certificates. No dividends or
other distributions declared or made after the Closing with respect to ICG
Common Stock with a record date after the Closing Date will be paid to the
holder of any unsurrendered Certificate with respect to the shares of ICG
Common Stock represented thereby, until the holder of record of such
Certificate surrenders such Certificate as provided herein. Subject to the
effect of applicable laws, following surrender of any such Certificate,
there will be paid to the record holder of the certificates representing
whole shares of ICG Common Stock issued in exchange therefor, without
interest, (i) at the time of such surrender, the amount of dividends or
other distributions, if any, with a record date after the Closing
theretofore paid by ICG with respect to such whole shares of ICG Common
Stock, and (ii) at the appropriate payment date, the amount of dividends or
other distributions, if any, with a record date after the Closing but prior
to surrender and with a payment date subsequent to surrender payable with
respect to such whole shares of ICG Common Stock.
(g) No Further Ownership Rights in Company Common Shares. All shares
of ICG Common Stock issued to holders of Certificates upon the surrender
for exchange of Company Common Shares in accordance with the terms of this
Article 2 will be deemed to have been issued in full satisfaction of all
rights pertaining to such Company Common Shares, and there will be no
further registration of transfers on the stock transfer books of the
Company of the Company Common Shares which were outstanding immediately
prior to the Closing (other than shares owned by ICG or Acquisition prior
to the Closing). Subject to Section 2.3(i), if, after the Closing,
Certificates are presented to the Company for any reason, they will be
exchanged as provided in this Article 2.
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(h) Abandoned Property Laws. Payment or delivery of the shares of ICG
Common Stock and any dividends or distributions with respect thereto in
accordance with the terms hereof will be subject to applicable abandoned
property, escheat and similar laws and none of ICG, Acquisition or the
Company will be liable to any holder of Company Common Shares or ICG Common
Stock for any such shares, for any dividends or distributions with respect
thereto or for any cash in lieu of fractional shares which may be delivered
to any public official pursuant to any abandoned property, escheat or
similar law.
ARTICLE III
CERTAIN ACTIONS
3.1 Shareholder Meeting. The Company, acting through the Company Board,
will, in accordance with applicable law, the Company Charter and the Company's
By-laws, duly call, give notice of, convene and hold, as soon as reasonably
practicable after the date of this Agreement, a meeting of the Company's
shareholders (the "Special Meeting") for the purpose of considering and voting
upon the Articles of Amendment, and the Company will, through the Company Board,
recommend to its shareholders the adoption of the Articles of Amendment.
3.2 Reasonable Efforts. Subject to the terms and conditions of this
Agreement and applicable law, each of the parties hereto will use its reasonable
best efforts to take, or cause to be taken, all actions, and to do, or cause to
be done, all things reasonably necessary, proper or advisable under applicable
laws and regulations or otherwise to consummate and make effective the
Reorganization and the other transactions contemplated by this Agreement as soon
as reasonably practicable, including such actions or things as any other party
hereto may reasonably request in order to cause any of the conditions to such
other party's obligation to consummate such transactions specified in Article 7
to be fully satisfied. Without limiting the generality of the foregoing, the
parties will (and will cause their respective directors, officers and
subsidiaries, and use their reasonable best efforts to cause their respective
affiliates, employees, agents, attorneys, accountants and representatives, to)
consult and fully cooperate with and provide reasonable assistance to each other
in (i) obtaining all necessary consents, approvals, waivers, licenses, permits,
authorizations, registrations, qualifications, or other permission or action by,
and giving all necessary notices to and making all necessary filings with and
applications and submissions to, any Governmental Entity or other Person; (ii)
lifting any permanent or preliminary injunction or restraining order or other
similar order issued or entered by any court or Governmental Entity of competent
jurisdiction (an "Injunction") of any type referred to in Section 7.1(b); and
(iii) in general, consummating and making effective the transactions
contemplated hereby; provided, however, that in order to obtain any consent,
approval, waiver, license, permit, authorization, registration, qualification,
or other permission or action or the lifting of any Injunction referred to in
clause (i) or (ii) of this sentence, no party will be required to pay any
consideration, to divest itself of any of, or otherwise rearrange the
composition of, its assets or to agree to any conditions or requirements which,
individually or in the aggregate, would have a Material Adverse Effect on the
8
Company or ICG. Prior to making any application to or filing with any
Governmental Entity or other Person in connection with this Agreement, each
party will provide the other party with drafts thereof and afford the other
party a reasonable opportunity to comment on such drafts.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to ICG and Acquisition as
follows:
4.1 Organization and Qualification. The Company (i) is a corporation, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, (ii) has all requisite power
and authority to own, lease and operate its properties and to carry on its
business as it is now being conducted and (iii) is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or license necessary, except in such jurisdictions
where the failure to be so duly qualified or licensed or in good standing has
not had and is not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on the Company. The Company has heretofore furnished
or made available to ICG a true and complete copy of the Company Charter and the
Company's By-laws, each as amended through and in effect on the date hereof.
4.2 Authorization and Validity of Agreement. The Company has all requisite
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder and consummate the transactions contemplated hereby. The
execution, delivery and performance by the Company of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by the Company Board and by all other necessary corporate action on the part of
the Company, subject, in the case of the consummation by it of the automatic
exchange described in Section 2.1(a), to the approval of the Company's
shareholders. This Agreement has been duly executed and delivered by the Company
and (assuming the due execution and delivery of this Agreement by the other
parties hereto) constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms (except insofar as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, or by principles governing the availability of equitable remedies).
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF
ICG, ACQUISITION AND NOVA SCOTIA
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ICG, Acquisition and Nova Scotia each hereby represents and warrants, as to
itself, to the Company as follows:
5.1 Organization. It (i) is a corporation or unlimited liability company,
as the case may be, duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization, (ii) has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted and (iii) is duly qualified
or licensed and in good standing to do business in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or license necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed or in good
standing has not had and is not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on ICG, Acquisition or Nova Scotia, as
the case may be.
5.2 Authorization and Validity of Agreement. It has all requisite corporate
power and authority to enter into this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution,
delivery and performance by it of this Agreement and the consummation by it of
the transactions contemplated hereby have been approved by its respective Board
of Directors and, in the case of Acquisition, by ICG as the sole stockholder of
Acquisition, and have been duly authorized by all other necessary corporate
action on its part. This Agreement has been duly executed and delivered by it
and (assuming the due execution and delivery of this Agreement by the other
parties to this Agreement) constitutes a valid and binding agreement of it,
enforceable against it in accordance with its terms (except insofar as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, or by principles governing the availability of equitable remedies).
ARTICLE VI
TRANSACTIONS PRIOR TO CLOSING
6.1 Access to Information. From the date hereof to the Closing, upon
reasonable notice, each of ICG and the Company will (and will cause each of its
subsidiaries, and use its reasonable best efforts to cause its other Affiliates,
to) afford to the officers, employees, counsel, accountants and other authorized
representatives of the other reasonable access during normal business hours to
all its properties, personnel, books and records and furnish promptly to such
Persons such information concerning its business, properties, personnel and
affairs as such Persons will from time to time reasonably request.
6.2 Expenses. Except as otherwise provided in this Section 6.2, whether or
not the Reorganization is consummated, all costs and expenses incurred or to be
incurred in connection with this Agreement and the transactions contemplated
hereby will be paid by the party incurring such cost or expense.
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6.3 Notification of Certain Matters. Between the date hereof and the
Closing, each party will give prompt notice in writing to the other party of (i)
any information that indicates that any of its representations or warranties
contained herein was not true and correct as of the date hereof or will not be
true and correct at and as of the Closing with the same force and effect as if
made at and as of the Closing (except for changes permitted or contemplated by
this Agreement), (ii) the occurrence or non-occurrence of any event which will
result, or has a reasonable prospect of resulting, in the failure of any
condition, covenant or agreement contained in this Agreement to be complied with
or satisfied, (iii) any failure of the Company or ICG (or Acquisition or Nova
Scotia), as the case may be, to comply with or satisfy any condition, covenant
or agreement to be complied with or satisfied by it hereunder and (iv) any
notice or other communication from any third party alleging that the consent of
such third party is or may be required in connection with the transactions
contemplated by this Agreement or that such transactions otherwise may violate
the rights of or confer remedies upon such third party.
6VI.4 Actions by ICG and Acquisition. In its capacity as a beneficial owner
of Company Common Shares, ICG hereby consents to the adoption of this Agreement
and agrees to cause the Company Common Shares beneficially owned by ICG to be
voted in favor of the adoption of Articles of Amendment at the Special Meeting.
In its capacity as the sole stockholder of Acquisition, ICG will cause
Acquisition to take all corporate action necessary on its part to consummate the
Reorganization and the transactions contemplated hereby.
ARTICLE VII
CONDITIONS PRECEDENT
7VII.1 Conditions Precedent to the Obligations of ICG, Acquisition, Nova
Scotia and the Company. The respective obligations of ICG, Acquisition, Nova
Scotia and the Company to consummate the transactions contemplated by this
Agreement are subject to the satisfaction at or prior to the Closing of each of
the following conditions, any or all of which, to the extent permitted by
applicable law, may be waived by ICG, for itself, Acquisition and Nova Scotia
(but not for the Company), or by the Company for itself (but not for ICG,
Acquisition or Nova Scotia):
(a) Shareholder Approval. The Articles of Amendment shall have been
duly adopted by the requisite vote of the shareholders of the Company at
the Special Meeting, in accordance with the Canadian Business Corporations
Act, the Company Charter and the Company's By-laws.
(b) Absence of Injunctions. No permanent or preliminary Injunction or
restraining order or other order by any court or other Governmental Entity
of competent jurisdiction, or other legal restraint or prohibition,
preventing consummation of the transactions contemplated by this Agreement
shall be in effect, or permitting such consummation only subject to any
condition or restriction that has or would have a Material Adverse Effect
on ICG or the Company.
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7.2 Conditions Precedent to the Obligations of ICG, Acquisition and Nova
Scotia. The obligations of ICG, Acquisition and Nova Scotia to consummate the
transactions contemplated by this Agreement are also subject to the satisfaction
at or prior to the Closing Date of each of the following conditions, unless
waived by ICG:
(a) Accuracy of Representations and Warranties. All representations
and warranties of the Company contained in this Agreement shall be true and
correct in all material respects in each case as of the date of this
Agreement and (except to the extent such representations and warranties
speak as of a specified earlier date) on and as of the Closing Date as
though made on and as of the Closing Date, except for changes permitted or
contemplated by this Agreement.
(b) Performance of Agreements. The Company shall have performed in all
material respects all obligations and agreements, and complied in all
material respects with all covenants and conditions, contained in this
Agreement to be performed or complied with by it prior to or on the Closing
Date.
(c) Officers' Certificates. ICG, Acquisition and Nova Scotia shall
have received such certificates of the Company, dated the Closing Date, in
each case signed by an executive officer of the Company (but without
personal liability thereto), to evidence satisfaction of the conditions set
forth in Sections 7.1(a), 7.2(a) and 7.2(b) (insofar as each relates to the
Company), as may be reasonably requested by ICG.
(d) No Adverse Enactments. There shall not have been any action taken,
or any statute, rule, regulation, order, judgment or decree proposed,
enacted, promulgated, entered, issued, enforced or deemed applicable by any
foreign or United States federal, state or local Governmental Entity, and
there shall be no action, suit or proceeding pending or, to the knowledge
of the parties, threatened, which (i) makes or may make this Agreement, the
Reorganization, or any of the other transactions contemplated by this
Agreement illegal or imposes or may impose material damages or penalties in
connection therewith; or (ii) otherwise prohibits, restricts, or
unreasonably delays consummation of the Reorganization or any of the other
transactions contemplated by this Agreement or increases or may increase in
any material respect the liabilities or obligations of ICG arising out of
this Agreement, the Reorganization, or any of the other transactions
contemplated by this Agreement.
(e) Receipt of Licenses, Permits and Consents. All consents as are
required in connection with the consummation of the transactions
contemplated by this Agreement shall have been obtained and shall be in
full force and effect, and all governmental filings as are required in
connection with the consummation of such transactions shall have been made,
other than those which, if not obtained, in force or effect, or made (as
the case may be) would not, either individually or in the aggregate, (i)
have a material adverse effect on the transactions contemplated hereby or
(ii) assuming consummation of the Reorganization, have a Material Adverse
Effect, as of or after the Closing, on the Company or ICG.
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7VII.3 Conditions Precedent to the Obligations of the Company. The
obligation of the Company to consummate the transactions contemplated by this
Agreement is also subject to the satisfaction at or prior to the Closing Date of
each of the following conditions, unless waived by the Company:
(a) Accuracy of Representations and Warranties. All representations
and warranties of ICG, Acquisition and Nova Scotia contained in this
Agreement shall be true and correct in all material respects in each case
as of the date of this Agreement and (except to the extent such
representations and warranties speak of a specified earlier date) on and as
of the Closing Date as though made on and as of the Closing Date, except
for changes permitted or contemplated by this Agreement.
(b) Performance of Agreements. Each of ICG, Acquisition and Nova
Scotia shall have performed in all material respects all obligations and
agreements, and complied in all material respects with all covenants and
conditions, contained in this Agreement to be performed or complied with by
each of them prior to or on the Closing Date.
(c) Officers' Certificates. The Company shall have received such
certificates of ICG, dated the Closing Date, in each case signed by an
executive officer of ICG (but without personal liability thereto) to
evidence satisfaction of the conditions set forth in Sections 7.1(b),
7.3(a) and 7.3(b) (insofar as each relates to ICG, Acquisition or Nova
Scotia), as may be reasonably requested by the Company.
(d) No Adverse Enactments. There shall not have been any action taken,
or any statute, rule, regulation, order, judgment or decree proposed,
enacted, promulgated, entered, issued, enforced or deemed applicable by any
foreign or United States federal, state or local Governmental Entity, and
there shall be no action, suit or proceeding pending or, to the knowledge
of the parties, threatened, which makes or may make this Agreement, the
Reorganization, or any of the other transactions contemplated by this
Agreement illegal or imposes or may impose material damages or penalties in
connection therewith.
(e) Receipt of Licenses, Permits and Consents. All consents as are
required in connection with the consummation of the transactions
contemplated by this Agreement shall have been obtained and shall be in
full force and effect, and all governmental filings as are required in
connection with the consummation of such transactions shall have been made,
other than those which, if not obtained, in force or effect, or made (as
the case may be), would not, either individually or in the aggregate,
assuming consummation of the Reorganization, have a Material Adverse
Effect, as of or after the Closing, on ICG or the Company.
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ARTICLE VIII
TERMINATION
8.1 Termination and Abandonment. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing, whether before or after adoption of the Articles of Amendment by the
stockholders of the Company:
(a) by mutual consent of ICG and the Company; or
(b) by either the Company, on the one hand, or ICG, Acquisition and
Nova Scotia, on the other hand: (i) if the Reorganization shall not have
been consummated before January 1, 1999, provided that the right to
terminate this Agreement pursuant to this clause (b)(i) will not be
available to any party whose failure to perform any of its obligations
under this Agreement required to be performed by it at or prior to the
Closing has been the cause of or resulted in the failure of the
Reorganization to be consummated before such date, (ii) if there has been a
material breach of any representation, warranty, covenant or agreement on
the part of the other party contained in this Agreement and such breach is
incapable of being cured, (iii) if any court of competent jurisdiction or
other competent governmental authority will have issued an order, decree or
ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the Reorganization and such order, decree, ruling or
other action will have become final and nonappealable, or (iv) if the
required adoption of the Articles of Amendment by the stockholders of the
Company shall not have been duly obtained.
8.2 Effect of Termination. In the event of any termination of this
Agreement by the Company or ICG pursuant to Section 8.1, this Agreement
forthwith will become void and there will be no liability or obligation on the
part of ICG, Acquisition, Nova Scotia, the Company or their respective
Affiliates, stockholders, directors, officers, agents or representatives except
to the extent such termination results from the willful breach by ICG,
Acquisition, Nova Scotia or the Company of any of its representations,
warranties, covenants or agreements contained in this Agreement.
ARTICLE IX
MISCELLANEOUS
IX.1 Effectiveness of Representations, Warranties and Agreements. Except as
set forth in the next sentence, the respective representations, warranties and
agreements of the parties contained in this Agreement or in any certificate or
other instrument delivered pursuant hereto prior to or at the Closing will
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of the other parties hereto, whether prior to or after the
execution of this Agreement. The representations, warranties, covenants or
agreements contained in this Agreement or in any certificate or other instrument
14
delivered pursuant to this Agreement will terminate at the Closing, except for
the agreements contained in Article 2, Section 6.3 and in this Article 9.
9.2 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement will be in
writing and will be deemed to have been duly given if delivered to a party
personally or mailed, certified or registered mail with postage prepaid, or sent
by telegram or confirmed telex or telecopier, addressed as follows:
c/o ICG Communications, Inc.
161 Inverness Drive West
Englewood, Colorado 80112
Attention: H. Don Teague
Executive Vice President,
General Counsel and Secretary
Facsimile: (303) 414-8839
or to such other Person or address as any party will specify by notice in
writing to the other party. All such notices, requests, demands, waivers and
communications will be deemed to have been received on the date of delivery or
on the third business day after the mailing thereof, except that any notice of a
change of address will be effective only upon actual receipt thereof.
9.3 Entire Agreement. This Agreement (including the Exhibits) constitutes
the entire agreement of the parties and supersedes all prior agreements and
understandings, oral and written, between the parties with respect to the
subject matter hereof.
9.4 Assignment; Binding Effect; Benefit. Neither this Agreement nor any of
the rights, benefits or obligations hereunder may be assigned by any party
(whether by operation of law or otherwise) without the prior written consent of
each other party. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns. Nothing in this Agreement, expressed or
implied, is intended to confer on, or to make enforceable by, any Person other
than the parties or their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
9.5 Amendment. This Agreement may be amended by the parties hereto, by
action taken or authorized by their respective Boards of Directors, at any time
prior to the Closing. This Agreement may not be amended except by an instrument
in writing signed by the parties.
9.6 Extension; Waiver. At any time prior to the Closing, any of the
parties, by action taken or authorized by such party's Board of Directors, may,
to the extent legally allowed, (i) extend the time specified herein for the
performance of any of the obligations of any other party, (ii) waive any
inaccuracies in the representations and warranties of any other party contained
herein or in any document delivered pursuant hereto, (iii) waive compliance by
any other party with any of the agreements or covenants of such other party
15
contained herein or (iv) waive any condition to such waiving party's obligation
to consummate the transactions contemplated hereby or to any of such waiving
party's other obligations hereunder. Any such extension or waiver will be valid
only if set forth in a written instrument signed by the party or parties to be
bound thereby. Any such extension or waiver by any party will be binding on such
party but not on the other party entitled to the benefits of the provision of
this Agreement affected unless such other party also has agreed to such
extension or waiver. No such waiver will constitute a waiver of, or estoppel
with respect to, any subsequent or other breach or failure to strictly comply
with the provisions of this Agreement. The failure of any party to exercise any
of its rights, powers or remedies hereunder or with respect hereto or to insist
on strict compliance with this Agreement will not constitute a waiver by such
party of its right to exercise any such or other rights, powers or remedies or
to demand such compliance. Whenever this Agreement requires or permits consent
or approval by any party, such consent or approval will be effective if given in
writing in a manner consistent with the requirements for a waiver of compliance
as set forth in this Section 9.6.
9.7 Headings. The table of contents and headings contained in this
Agreement are for reference purposes only and will not affect in any way the
meaning or interpretation of this Agreement.
9.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original, and all of which
together will be deemed to be one and the same instrument.
9.9 Applicable Law. This Agreement and the legal relations between the
parties will be governed by and construed in accordance with the laws of the
State of Delaware, without regard to the conflict of laws rules thereof.
9.10 Limited Liability. Notwithstanding any other provision of this
Agreement, no stockholder, director, officer, Affiliate, agent or representative
of any party (other than ICG as the sole stockholder of Acquisition or
Acquisition as the sole shareholder of Nova Scotia) will have any liability in
respect of or relating to the covenants, obligations, representations or
warranties of such party hereunder or in respect of any certificate delivered
with respect thereto and, to the fullest extent legally permissible, each party,
for itself and its stockholders, directors, officers and Affiliates, waives and
agrees not to seek to assert or enforce any such liability which any such Person
otherwise might have pursuant to applicable law.
9.11 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement will nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any Section or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
will negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement and Plan of Reorganization as of the date first above written.
ICG COMMUNICATIONS, INC.
By: /s/ H. Don Teague
--------------------------------------------
H. Don Teague
Executive Vice President, General Counsel and
Secretary
ICG CANADIAN ACQUISITION, INC.
By: /s/ H. Don Teague
--------------------------------------------
H. Don Teague
Executive Vice President, General Counsel and
Secretary
ICG HOLDINGS (CANADA), INC.
By: /s/ H. Don Teague
--------------------------------------------
H. Don Teague
Executive Vice President, General Counsel and
Secretary
ICG HOLDINGS (CANADA) CO.
By: /s/ H. Don Teague
--------------------------------------------
H. Don Teague
Executive Vice President, General Counsel and
Secretary
17
EXHIBIT A
Articles of Amendment
18
EXHIBIT B
Sole Shareholder's Resolution
19