Document:

exv4w9

 

EXHIBIT 4.9

CONFIDENTIAL TREATMENT REQUESTED

Asterisks [ * ] denote omissions.

 

EXHIBIT 4.9

Global Settlement Agreement

 

 

GLOBAL SETTLEMENT AGREEMENT

between

360NETWORKS INC.

and

360NETWORKS (CDN FIBER) LTD.

and

360NETWORKS (USA) INC.

and

CALL-NET ENTERPRISES INC.

and

SPRINT CANADA INC.

and

CALL-NET TECHNOLOGY SERVICES INC.

and

CNCS INC.

and

LIL LIMITED

and

LEDCOR INDUSTRIES (USA) INC.

August 20, 2002

2

 

EXHIBIT 4.9

CONFIDENTIAL TREATMENT REQUESTED

GLOBAL SETTLEMENT AGREEMENT

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	1	 	 	 	INTERPRETATION
	 	 	3	 
	 	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 	1.1	 	 	Definitions
	 	 	3	 
	 	 	 	 	 	1.2	 	 	Construction
	 	 	10	 
	 	 	 	 	 	1.3	 	 	Amendment
	 	 	11	 
	 	 	 	 	 	1.4	 	 	Schedules and Exhibits
	 	 	11	 
	 	 	 	 	 	1.5	 	 	Priority of Agreements
	 	 	11	 
	 	 	 	 	 	 
	 	 	 	 
	 	2	 	 	 	SETTLEMENT AND AGREEMENT
	 	 	11	 
	 	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 	2.1	 	 	Adversary Proceeding
	 	 	11	 
	 	 	 	 	 	2.2	 	 	Ledcor Build Assets
	 	 	12	 
	 	 	 	 	 	2.3	 	 	Portland-Sacramento IRU Agreement
	 	 	12	 
	 	 	 	 	 	2.4	 	 	Sacramento-Los Angeles IRU Agreement
	 	 	12	 
	 	 	 	 	 	2.5	 	 	360 Sale Agreement and 360 IRU Agreement
	 	 	12	 
	 	 	 	 	 	2.6	 	 	Mutual Releases
	 	 	13	 
	 	 	 	 	 	2.7	 	 	Products and Services
	 	 	16	 
	 	 	 	 	 	2.8	 	 	Canadian FOTS Agreement
	 	 	20	 
	 	 	 	 	 	2.9	 	 	Maintenance Agreements
	 	 	22	 
	 	 	 	 	 	2.10	 	 	Reciprocal Sub-License Agreement
	 	 	22	 
	 	 	 	 	 	[ * ]	 	 	[ * ] Fibre Sale Agreement
	 	 	23	 
	 	 	 	 	 	2.12	 	 	Data Services Agreement
	 	 	23	 
	 	 	 	 	 	2.13	 	 	360 Cash Payment
	 	 	23	 
	 	 	 	 	 	2.14	 	 	Call-Net Cash Payment
	 	 	23	 
	 	 	 	 	 	2.15	 	 	Method of Payments
	 	 	23	 
	 	 	 	 	 	 
	 	 	 	 
	 	3	 	 	 	ESCROW MATTERS
	 	 	24	 
	 	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 	3.1	 	 	Escrow Agent Directions
	 	 	24	 
	 	 	 	 	 	3.2	 	 	Releases and Termination
	 	 	24	 
	 	 	 	 	 	 
	 	 	 	 
	 	4	 	 	 	WARRANTIES, REPRESENTATIONS AND COVENANTS
	 	 	25	 
	 	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 	4.1	 	 	Warranties, Representations and Covenants of Call-Net Group
	 	 	25	 
	 	 	 	 	 	4.2	 	 	Warranties, Representations and Covenants of 360 Group
	 	 	26	 
	 	 	 	 	 	4.3	 	 	Warranties, Representations and Covenants of Ledcor Canada and Ledcor US
	 	 	27	 
	 	 	 	 	 	 
	 	 	 	 
	 	5	 	 	 	CONDITIONS PRECEDENT
	 	 	27	 
	 	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 	5.1	 	 	Effective Date
	 	 	27	 
	 	 	 	 	 	5.2	 	 	Completion of Sections 2.8(a),(b),(c), 2.9 and 2.11 Matters
	 	 	29	 
	 	 	 	 	 	5.3	 	 	Non-Satisfaction of Conditions Precedent
	 	 	29	 
	 	 	 	 	 	5.4	 	 	Use of this Agreement
	 	 	29	 
	 	 	 	 	 	 
	 	 	 	 
	 	6	 	 	 	GENERAL
	 	 	29	 
	 	 	 	 	 	 
	 	 	 	 
	 	 	 	 	 	6.1	 	 	Time of the Essence
	 	 	29	 

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	6.2	 	 	Further Assurances
	 	 	29	 
	 	 	 	 	 	6.3	 	 	Entire Agreement
	 	 	29	 
	 	 	 	 	 	6.4	 	 	Reliance & Non-Waiver
	 	 	30	 
	 	 	 	 	 	6.5	 	 	Governing Law and Attornment
	 	 	30	 
	 	 	 	 	 	6.6	 	 	Assignments
	 	 	30	 
	 	 	 	 	 	6.7	 	 	Counterparts and Facsimile
	 	 	30	 
	 	 	 	 	 	6.8	 	 	Severability
	 	 	31	 
	 	 	 	 	 	6.9	 	 	Good Faith
	 	 	31	 
	 	 	 	 	 	6.10	 	 	Agreement Binding
	 	 	31	 
	 	 	 	 	 	6.11	 	 	No Other Provisions Affected and Assumption
	 	 	31	 
	 	 	 	 	 	6.12	 	 	Survival
	 	 	32	 
	 	 	 	 	 	6.13	 	 	Notices
	 	 	32	 
	 	 	 	 	 	6.14	 	 	Confidentiality
	 	 	33	 

2

 

GLOBAL SETTLEMENT AGREEMENT

THIS GLOBAL SETTLEMENT AGREEMENT dated as of August 20, 2002,

B E T W E E N:

	 	360NETWORKS INC., a corporation continued under the

laws of the Province of Nova Scotia,

	 	(hereinafter referred to as “360”)

	 	- and -

	 	360NETWORKS (CDN FIBER) LTD., a corporation amalgamated

under the laws of the Province of Alberta (the

resulting corporation from the amalgamation between

360networks (Cdn.) ltd. (formerly 360networks (CN)

ltd.), 360networks (fiber 1) ltd., 360networks (fiber

2) ltd. and 360networks (fiber 3) ltd.),

	 	(hereinafter referred to as “360 Cdn”),

	 	- and -

	 	360NETWORKS (USA) INC., a corporation merged under the

laws of the State of Nevada (the surviving corporation

from the merger between 360networks (USA) inc.,

360networks services inc. and 360 fiber (USA 1) inc.),

	 	(hereinafter referred to as “360 USA”)

	 	- and -

	 	CALL-NET ENTERPRISES INC., a corporation amalgamated

under the federal laws of Canada,

	 	(hereinafter referred to as “Call-Net”)

	 	- and -

	 	SPRINT CANADA INC., a corporation amalgamated under the

federal laws of Canada,

	 	(hereinafter referred to as “Sprint Canada”)

	 	- and -

	 	CALL-NET TECHNOLOGY SERVICES INC., a corporation

amalgamated under the federal laws of Canada,

	 	(hereinafter referred to as “CNTS”)

	 	- and -

 

 

	 	CNCS INC., a corporation incorporated under the laws of

the State of Delaware (as successor in interest to CNE

Fiber Development Inc., now known as USTR Fiber

Development Inc.),

	 	(hereinafter referred to as “CNCS”)

	 	- and -

	 	LIL LIMITED, a corporation incorporated under the laws

of the Province of Alberta (formerly Ledcor (360

Investment) Limited, formerly Ledcor Industries

Limited),

	 	(hereinafter referred to as “Ledcor Canada”)

	 	- and -

	 	LEDCOR INDUSTRIES (USA) INC., a corporation

incorporated under the laws of the State of Washington

(formerly Ledcor Industries Inc.),

	 	(hereinafter referred to as “Ledcor US”)

WHEREAS:

A.     Pursuant to the May 2, 1998 Amending Agreement, Ledcor Canada and Ledcor US
agreed, inter alia, to build, sell and transfer to CNTS and Sprint Canada the
fibre optic assets referred to and more particularly described therein,
including, without limitation, the Ledcor Build Assets.

B.     The rights and obligations of Ledcor Canada and Ledcor US were transferred
and assigned to 360networks (fiber 3) ltd. (now 360 Cdn).

C.     Call-Net and 360 negotiated and completed on August 25, 2000 a transaction
involving the purchase and sale of certain fibre optic assets and such
transaction consisted of, inter alia, (i) the sale of and/or the assignment of
indefeasible rights of use and/or the granting of sub-indefeasible rights of
use relating to certain fibre optic assets from Call-Net and its Affiliates to
360 and its Affiliates, (ii) the sale of and/or the assignment of indefeasible
rights of use and/or the granting of sub-indefeasible rights of use relating to
certain fibre optic assets from 360 and its Affiliates to Call-Net and its
Affiliates, and (iii) certain related transactions and such transaction was
evidenced by certain of the Transaction Documents entered into, executed and
delivered on or about August 25, 2000 (the “August 2000 Transaction”).

D.     As part of the fibre optic transaction referred to in Recital C above,
Ledcor Canada and Ledcor US entered into, executed and delivered the Ledcor
Undertaking.

E.     Pursuant to the US FOTS Escrow Agreement, 360fiber (USA 1) inc. (now 360
USA) deposited with the Escrow Agent [ * ] of the purchase price payable to the
applicable members of the Call-Net Group under the US FOTS Agreement to be
dealt with in accordance with the terms of the US FOTS Escrow Agreement.

F.     Pursuant to the General Escrow Agreement, the applicable members of the 360
Group, as purchasers under the applicable Fibre Sale Agreements (as defined in
the General Escrow Agreement) deposited with the Escrow Agent from time to time
portions of the purchase price payable to the applicable members of the
Call-Net Group under such Fibre Sale Agreements (as defined in the General
Escrow Agreement) to be dealt with in accordance with the terms of the General
Escrow Agreement.

- 2 -

 

G.     Pursuant to the First Supplemental and Amending Agreement the Call-Net Group
and the 360 Group supplemented and amended certain provisions of one or more of
the Transaction Documents and provided for various releases and payments of
funds held in escrow pursuant to the US FOTS Escrow Agreement and the General
Escrow Agreement.

H.     On or about June 28, 2001, the members of the 360 Group and certain of their
Affiliates filed for relief pursuant to the Companies’ Creditors Arrangement
Act (the “CCAA”) in Canada (the “Canadian Bankruptcy Cases”) and title 11 of
United States Code (the “Bankruptcy Code”) in the United States (the “US
Bankruptcy Cases”), respectively.

I.     On or about November 22, 2001, 360 USA commenced the 360 USA Action and on
or about February 14, 2002, CNCS commenced the Call-Net Counterclaim.

J.     On or about July 18, 2002 the members of the 360 Group and certain of their
Affiliates filed plans of reorganization in Canada and the United States
pursuant to the CCAA and the Bankruptcy Code, respectively.

K.     In addition to the Adversary Proceeding, other disputes and disagreements
have arisen among and between the parties hereto and the parties hereto wish to
settle all such disputes and disagreements and want to provide for additional
releases and payments of funds, including funds held in escrow pursuant to the
US FOTS Escrow Agreement and the General Escrow Agreement.

NOW THEREFORE IN CONSIDERATION of the premises and mutual covenants and
agreements set forth in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties, the parties covenant and agree as follows:

	1.	 	INTERPRETATION

Unless otherwise defined or provided for herein, capitalized terms used in this
Agreement shall have the respective meanings attributed to such terms in the
Canadian Non-FOTS Agreement.

	1.1	 	Definitions

In this Agreement, the following terms shall have the following meanings:

“Adversary Proceeding” means collectively the 360 USA Action and the Call-Net
Counterclaim.

“Affiliates” means, for any Person, those Persons who are affiliates of such
Person within the meaning specified in the Canada Business Corporations Act.

“Agreement” means this Agreement, including the recitals and the Schedules to
this Agreement, as it may from time to time be amended, supplemented, restated
or modified.

“[ * ] Agreement” has the meaning ascribed to such term in Section 2.8(b) hereof.

“August 2000 Amending Agreement” means the August 2000 Amending Agreement dated
August 25, 2000 among CNE Fiber, Sprint Canada, CNTS and 360networks (fiber 3)
ltd. (now 360 Cdn), as amended, supplemented, restated or modified from time to
time.

- 3 -

 

“August 2000 Transaction” has the meaning ascribed to such term in the Recitals hereof.

“Bankruptcy Code” has the meaning ascribed thereto in the Recitals hereof.

“[ * ] Strands” has the meaning ascribed to such term in Section 2.8 hereof.

“[ * ] Fibre Sale Agreement” means the Amended and Restated Agreement of Purchase
and Sale and Grant of Lease dated as of April 9, 1998 between [ * ] , fONOROLA
Telecommunications, Limited Partnership (predecessor in interest to CNTS),
fONOROLA Fiber Development Inc. (predecessor in interest to CNCS), Ledcor
Canada and Ledcor US, as amended, supplemented, restated or modified from time
to time.

“Business Day” means any day, excluding Saturdays, Sundays and statutory
holidays, on which banks in Vancouver, British Columbia and Toronto, Ontario
are open to the public for the transaction of business.

“Canadian Bankruptcy Cases” has the meaning ascribed to such term in the
Recitals hereof.

“Call-Net Cash Payment” has the meaning ascribed to such term in Section 2.14
hereof.

“Call-Net Counterclaim” means the action commenced by CNCS against 360 USA in
the United States Bankruptcy Court, Southern District of New York as Adversary
Proceeding No. 01-3583 (ALG) in response to the 360 USA Action.

“Call-Net Group” means collectively Call-Net, Sprint Canada, CNCS and CNTS, or
any one or more of them as the context requires.

“Call-Net/Ledcor Litigation” means the action commenced by the Call-Net Group
against Ledcor Canada and Ledcor US in the Superior Court of Justice of Ontario
as Court File No. 02-CV-230395CM1.

“Call-Net/360 Agreements” has the meaning ascribed to such term in Section
6.11(a) hereof.

“Canadian Emergence Date” has the meaning ascribed to such term in Section
6.11(c) hereof.

“Canadian FOTS Agreement” means the Fibre Sale Agreement (Canadian FOTS) dated
August 25, 2000 among 360, 360 Cdn, Call-Net and Sprint Canada, as amended,
supplemented, restated or modified from time to time.

“Canadian Non-FOTS Agreement” means the Fibre Sale Agreement (Canadian
Non-FOTS) dated August 25, 2000, among 360, 360networks (CN) ltd. (now 360
Cdn), Call-Net and Sprint Canada, as amended, supplemented, restated or
modified from time to time.

“Canadian FOTS Fibre Exchange Agreement” means the Fibre Exchange Agreement
(Canadian FOTS) dated as of August 25, 2000 among 360, 360networks (CN) ltd.
(now 360 Cdn), Call-Net and Sprint Canada, as amended, supplemented, restated
or modified from time to time.

“Canadian Non-FOTS Fibre Exchange Agreement” means the Fibre Exchange Agreement
(Canadian Non-FOTS) dated August 25, 2000 among 360, 360networks (CN) ltd. (now
360 Cdn), Call-Net and Sprint Canada, as amended, supplemented, restated or
modified from time to time.

“Canadian Non-FOTS Notice of Claim” means the Notice of Claim dated November
22, 2000 by 360 Cdn to the Escrow Agent and Sprint Canada.

“CCAA” has the meaning ascribed to such term in the Recitals hereof.

- 4 -

 

“CCAA Approval Order” has the meaning ascribed to such term in Section 5.1(f)
hereof.

“Cdn.” means, when used in reference to currency, the lawful currency of
Canada.

“Claimed Deficiency” has the meaning ascribed to such term in Section 3.2
hereof.

“Claims” means claims, obligations, costs, losses, liabilities, debts, demands,
actions, causes of action, damages, judgments, liens, set off, recoupment,
indebtedness, suits, expenses and disbursements which are known or unknown,
contingent or existing including, without limitation, any claims as defined in
Section 101(5) of the Bankruptcy Code and in Section 12 of the CCAA.

“CNE Fiber” means CNE Fiber Development Inc., the predecessor in interest to
CNCS, and now known as USTR Fiber Development Inc.

“Commitment Amount” has the meaning ascribed to such term in Section 2.7(a)
hereof.

“Commitment Term” has the meaning ascribed to such term in Section 2.7(a)
hereof.

“Compensation Amount” has the meaning ascribed to such term in Section 2.7
hereof.

“Data Services Agreement” means the Data Services Agreement dated April 28,
2000 between Sprint Canada and 360networks Services inc., as amended,
supplemented, restated or modified from time to time.

“Definitive Agreements” has the meaning ascribed to such term in Section 5.1(b)
hereof.

“Edmonton MP 95.8 Leduc Subdivision” has the meaning ascribed to such term in
Section 2.8(b) hereof.

“Edmonton MP 96.7 Leduc Subdivision” has the meaning ascribed to such term in
Section 2.8(a) hereof.

“Edmonton MP 266.7 Wainwright Subdivision” has the meaning ascribed to such
term in Section 2.8(b) hereof.

“Effective Date” means the later of: (i) the 23rd day following the entry of
the CCAA Approval Order; and (ii) the 13th day following the entry of the US
Bankruptcy Court Approval Order, and if such day is not a Business Day, then
the Effective Date shall be the next succeeding Business Day unless otherwise
agreed to between the parties hereto.

“Escrow Agent” means The Trust Company of Bank of Montreal.

“Excess Amount” has the meaning ascribed to such term in Section 2.7 hereof.

“First Supplemental and Amending Agreement” means the Supplemental and Amending
Agreement dated as of June 27, 2001 among 360, 360 Cdn, 360 USA, Call-Net,
Sprint Canada, CNTS and CNCS, as amended, supplemented, restated or modified
from time to time.

“FOTS Fibre Swap Agreement” means the Fibre Swap Agreement dated August 25,
2000 among 360, 360networks (USA) inc. (now 360 USA), 360networks (CN) ltd.
(now 360 Cdn), 360fiber (USA 1) inc. (now 360 USA), Call-Net, Sprint Canada and
CNE Fiber (predecessor in interest to CNCS), as amended, supplemented, restated
or modified from time to time.

“General Escrow Agreement” means the Escrow Agreement dated August 25, 2000,
among 360, Call-Net, CNTS, Sprint Canada, 360fiber (USA 1) inc. (now 360 USA),
360networks (CN) ltd. (now 360

- 5 -

 

Cdn), CNE Fiber (predecessor in interest to CNCS), 360networks (USA) inc. (now
360 USA) and Escrow Agent, as amended, supplemented, restated or modified from
time to time.

“Information” has the meaning ascribed thereto in Section 6.14 hereof.

“IRU” means an indefeasible right of use.

“Ledcor Build Assets” means the fibre optic assets comprising and forming Unit
F (12 strands of single mode fibre between Portland (707 Washington Street),
Sacramento (1407 Jay St.), Oakland (1970 Broadway St.) and Los Angeles (1
Wilshire Blvd.)), as such term is referred to and more particularly described
in the May 2, 1998 Amending Agreement.

“Ledcor Build Agreement” means collectively, Build Agreement No. 1, Build
Agreement No. 2, Build Agreement No. 3, Build Agreement No. 4, Build Agreement
No. 5 (each as defined in the August 2000 Amending Agreement), all as amended
by the May 2, 1998 Amending Agreement, the Edmonton-Toronto Build Agreement (as
defined in the August 2000 Amending Agreement), as amended by the September 17,
1997 Amending Agreement, the February 3, 1998 Amending Agreement and the
February 12, 1998 Amending Agreement (each as defined in the August 2000
Amending Agreement), as each may have been further amended, supplemented,
restated or modified from time to time,.

“Ledcor Undertaking” means the Undertaking to be Bound by the Other Members of
the WFI Group dated August 25, 2000 by Ledcor Canada and Ledcor US in favour of
Sprint Canada, CNTS and CNE Fiber, entered into pursuant to the provisions of
the August 2000 Amending Agreement.

“Maintenance Agreements” has the meaning ascribed to such term in Section 2.9
hereof.

“Master Services Agreement” has the meaning ascribed to such term in Section
2.7(f) hereof.

“May 2, 1998 Amending Agreement” has the meaning ascribed to such term in the
August 2000 Amending Agreement.

“Non-FOTS Fibre Swap Agreement” means the Fibre Swap Agreement dated August 25,
2000 among 360, 360networks (CN) ltd. (now 360 Cdn), 360networks (USA) inc.
(now 360 USA), Call-Net and Sprint Canada, as amended, supplemented, restated
or modified from time to time.

“Offer” has the meaning ascribed to such term in Section 2.7(a) attached
hereto.

“On-Network Products and/or Services” means those products and/or services that
the members of the 360 Group have available for sale from time to time,
including, without limitation, transport and wavelength services, dark fibre,
conduit and equipment, but which will at all times include, but not be limited
to, those products and/or services outlined and described in Schedule “B”
attached hereto.

“Outstanding Amounts” has the meaning ascribed to such term in Section 2.7(d)
hereof.

“Person” means a natural person, corporation, firm, limited or unlimited
liability company, partnership or other form of legal entity.

“Portland-Sacramento Assets” means the fibre optic assets described in the
Portland-Sacramento IRU Agreement, including, without limitation, the Purchaser
Fibre Assets and the Associated Property (each as defined in the
Portland-Sacramento IRU Agreement).

“Portland-Sacramento IRU Agreement” means the Fibre IRU Agreement dated August
25, 2000 among 360, 360networks (USA) inc. (now 360 USA), Call-Net and Sprint
Canada, as amended, supplemented, restated or modified from time to time.

- 6 -

 

“Product and/or Service Purchase Agreement” has the meaning ascribed to such
term in Section 2.7(c) hereof;

“Purchase Commitment” has the meaning ascribed to such term in Section 2.7(a)
hereof.

“Reciprocal Sub-License Agreement” has the meaning ascribed to such term in the
August 2000 Amending Agreement, as amended by the Reciprocal Sub-License
Amending Agreement #1 dated August 25, 2000 between CNE Fiber (predecessor in
interest to CNCS), CNTS and 360networks (fiber 3) ltd. (now 360 Cdn), as same
may have been further amended, supplemented, restated or modified from time to
time.

“Reciprical Sub-Licensing Fee Cash Payment” has the meaning ascribed to such
term in Section 2.10 hereof.

“Reciprocal Sub-Licensing Fees” has the meaning ascribed to such term in
Section 2.10 hereof.

“Reimbursement Amount” has the meaning ascribed to such term in Section 2.7(d)
hereof.

“Replacement Strands” has the meaning ascribed to such term in Section 2.8
hereof.

“Routes 360-1 and 360-2” means the Purchaser Assets (as defined in the 360 Sale
Agreement) and the Purchaser Fibre Assets (as defined in the 360 IRU Agreement)
relating to Segment Nos. (as defined in the 360 Sale Agreement and the 360 IRU
Agreement, respectively) 360-1 (Albany-Boston) and 360-2 (Seattle-Vancouver),
each as identified on Schedule “B” of the 360 Sale Agreement and the 360 IRU
Agreement, respectively, to be sold, transferred and delivered pursuant to the
360 Sale Agreement and the 360 IRU Agreement, respectively.

“Routes 360-1 and 360-2 Purchase Price” mean the aggregate sums of [ * ] and
[ * ] on
account of the purchase and sale of the Routes 360-1 and 360-2, respectively,
under the 360 Sale Agreement and the 360 IRU Agreement.

“Sacramento-Los Angeles Assets” means the fibre optic assets described in the
Sacramento-Los Angeles IRU Agreement, including, without limitation, the
Purchaser Fibre Assets and the Associated Property (each as defined in the
Sacramento-Los Angeles IRU Agreement).

“Sacramento-Los Angeles IRU Agreement” means the Fibre IRU Agreement dated
August 25, 2000 among 360, 360networks (USA) inc. (now 360 USA), Call-Net and
Sprint Canada, as amended, supplemented, restated or modified from time to
time.

“Segment No. 1” means Segment No. (as defined in each of the Canadian FOTS
Agreement and the US FOTS Agreement, respectively) 1 (Vancouver to Victoria to
Seattle), as identified on Schedule “B” of each of the Canadian FOTS Agreement
and the US FOTS Agreement, respectively, which was sold, transferred and/or
delivered pursuant to the Canadian FOTS Agreement and the US FOTS Agreement,
respectively.

“Segment No. 3” means Segment No. (as defined in the Canadian FOTS Agreement) 3
(Edmonton- Calgary), as identified on Schedule “B” of the Canadian FOTS
Agreement which was sold, transferred and delivered pursuant to the Canadian
FOTS Agreement.

“Segment No. 28” means Segment No. (as defined in the US Non-FOTS Agreement) 28
(Buffalo to Albany to New York), as identified on Schedule “B” of the US
Non-FOTS Agreement which was sold, transferred and delivered pursuant to the US
Non-FOTS Agreement.

“Segment Transfer Documents” has the corresponding meaning provided in each of
the Transaction Documents, as applicable.

- 7 -

 

“Shortfall Amount” has the meaning ascribed to such term in Section 2.7 hereof.

“Transaction Documents” means:

	 	(a)	 	this Agreement;
	 
	 	(b)	 	all Segment Transfer Documents;
	 
	 	(c)	 	all other agreements executed or to be executed and delivered
pursuant to the terms of this Agreement;
	 
	 	(d)	 	the Fibre Sale Agreement (Canadian Fibre) dated August 25,
2000 among 360, 360networks (CN) ltd. (now 360 Cdn), Call-Net and
CNTS, as amended, supplemented, restated or modified from time to
time;
	 
	 	(e)	 	the Fibre IRU Agreement (United States Fibre) dated August
25, 2000 among 360, 360networks (USA) inc. (now 360 USA), Call-Net
and CNE Fiber (predecessor in interest to CNCS), as amended,
supplemented, restated or modified from time to time;
	 
	 	(f)	 	the Canadian FOTS Agreement;
	 
	 	(g)	 	the Canadian Non-FOTS Agreement;
	 
	 	(h)	 	the US Non-FOTS Agreement;
	 
	 	(i)	 	the US FOTS Agreement;
	 
	 	(j)	 	the 360 IRU Agreement;
	 
	 	(k)	 	the 360 Sale Agreement;
	 
	 	(l)	 	the Non-FOTS Fibre Swap Agreement;
	 
	 	(m)	 	the Canadian Non-FOTS Fibre Exchange Agreement;
	 
	 	(n)	 	the Portland-Sacramento IRU Agreement;
	 
	 	(o)	 	the General Escrow Agreement;
	 
	 	(p)	 	the US FOTS Escrow Agreement;
	 
	 	(q)	 	the FOTS Fibre Swap Agreement;
	 
	 	(r)	 	the Canadian FOTS Fibre Exchange Agreement;
	 
	 	(s)	 	the US FOTS Fibre Exchange Agreement;
	 
	 	(t)	 	the Sacramento-Los Angeles IRU Agreement;
	 
	 	(u)	 	the First Supplemental and Amending Agreement; and

- 8 -

 

	 	(v)	 	all other agreements executed or to be executed and delivered
pursuant to the terms of such agreements, including, without
limitation, the Ledcor Undertaking and the August 2000 Amending
Agreement.

“US Bankruptcy Cases” has the meaning ascribed to such term in the Recitals
hereof.

“US Bankruptcy Court Approval Order” has the meaning ascribed to such term in
Section 5.1(g) hereof.

“US Emergence Date” has the meaning ascribed to such term in Section 6.11(c)
hereof.

“USD” means, when used in reference to currency, the lawful currency of the
United States of America.

“US FOTS Agreement” means the Fibre Sale Agreement (US FOTS) dated August 25,
2000, among 360, 360fiber (USA 1) inc. (now 360 USA), Call-Net and CNE Fiber
(predecessor in interest to CNCS), as amended, supplemented, restated or
modified from time to time.

“US FOTS Fibre Exchange Agreement” means the Fibre Exchange Agreement (United
States FOTS) dated August 25, 2000 among 360, 360fiber (USA 1) inc. (now 360
USA) and CNE Fiber (predecessor in interest to CNCS), as amended, supplemented,
restated or modified from time to time.

“US FOTS Escrow Agreement” means the Escrow Agreement (US FOTS) dated August
25, 2000, among 360, Call-Net, 360 fiber (USA 1) inc. (now 360 USA), CNE Fiber
(predecessor in interest to CNCS) and Escrow Agent, as amended, supplemented,
restated or modified from time to time.

“US Non-FOTS Agreement” means the Fibre Sale Agreement (United States Non-FOTS)
dated as of August 25, 2000 between 360, 360networks (USA) inc. (now 360 USA),
Call-Net and CNE Fiber (predecessor in interest to CNCS), as amended,
supplemented, restated or modified from time to time.

“US Non-FOTS Notice of Claim” means the Notice of Claim dated November 22, 2000
by 360fiber (USA 1) inc. (now 360 USA) to the Escrow Agent and CNE Fiber
(predecessor in interest to CNCS).

“360 Cash Payment” has the meaning ascribed to such term in Section 2.13
hereof.

- 9 -

 

“360 Group” means collectively, 360, 360 Cdn and 360 USA or any one or more of
them, as the context requires.

“360 IRU Agreement” means the Fibre IRU Agreement dated August 25, 2000 among
360, 360networks (USA) inc. (now 360 USA), Call-Net and CNE Fiber (predecessor
in interest to CNCS, and now USTR Fiber Development Inc.) (Route 360-1-Albany
to Boston; Route 360-2-Seattle to Vancouver; Route 360-3- Detroit to London to
Toronto), as amended, supplemented, restated or modified from time to time.

“360 Sale Agreement” means the Canadian Fibre Sale Agreement (including
agreement for purchase of products and services) dated August 25, 2000 among
360, Call-Net, 360networks (CN) ltd. (now 360 Cdn), and CNTS (Route
360-1-Albany to Boston; Route 360-2-Seattle to Vancouver; Route 360-3- Detroit
to London to Toronto), as amended, supplemented, restated or modified from time
to time.

“360 USA Action” means the action commenced by 360 USA against CNCS and USTR
Fiber Development Inc. (formerly CNE Fiber) in the United States Bankruptcy
Court Southern District of New York as Adversary Proceeding No. 01-3583 (ALG).

	1.2	 	Construction

In this Agreement, except as otherwise expressly provided or as the context
otherwise requires:

	(a)	 	all references to a designated “Article”, “Section”, “Subsection” or
other subdivision or to a “Schedule” are to the designated article,
section, subsection or other subdivision of, or schedule to, this
Agreement;
	 
	(b)	 	the words “herein”, “hereof” and “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular
Article, Section, Subsection or other subdivision or Schedule;
	 
	(c)	 	the headings and captions are for convenience only and do not form a part
of this Agreement and are not intended to interpret, define, or limit the
scope, extent or intent of this Agreement or any provision hereof;
	 
	(d)	 	the singular of any term includes the plural, and vice versa, the use of
any term is equally applicable to any gender and, where applicable, any
Person that is not a human being; the word “or” is not exclusive and the
word “including” is not limiting (whether or not non-limiting language,
such as “without limitation” or “but not limited to” or words of similar
import, is used with reference thereto);
	 
	(e)	 	any accounting term not otherwise defined has the meaning assigned to it
by GAAP and all accounting matters will be determined in accordance with
GAAP, applied on a consistent basis;
	 
	(f)	 	any reference to a statute includes and is a reference to that statute
and to the regulations, rules and policies made pursuant thereto, with all
amendments made thereto and in force from time to time, and to any
statute, regulation, rule or policy that may be passed which has the
effect of supplementing or superseding that statute, regulation, rule or
policy;
	 
	(g)	 	unless indicated otherwise, all references to currency mean Canadian
currency and all sums of money are expressed in Canadian currency;
	 
	(h)	 	any other term defined within the text of this Agreement has the meaning
so ascribed;

- 10 -

 

	(i)	 	a reference to a time or date is to the local time or date at Toronto,
Ontario;
	 
	(j)	 	a reference to an approval, authorization, consent, designation, waiver
or notice means written approval, authorization, consent, designation,
waiver or notice; and
	 
	(k)	 	a capitalized cognate of a defined term has a meaning corresponding to
that of the defined term.
	 
	1.3	 	Amendment

No amendment, waiver, termination or variation of the terms, conditions,
warranties, covenants, agreements and undertakings set out herein will be of
any force or effect unless the same is reduced to writing duly executed by all
parties hereto in the same manner and with the same formality as this Agreement
is executed, except that, as between any two parties solely, such may be
binding on such parties if executed by them, and a waiver in writing executed
by one party shall be binding on such party.

	1.4	 	Schedules and Exhibits

The following Schedules and Exhibits to this Agreement are an integral part of this Agreement:

	 	 	 	 	 
	Schedules	 	Description
	
	 	

	Schedule “A”
	 	Reciprocal Sub-Licensing Fees
	Schedule “B”
	 	On-Network Products and Services

	 	 	 	 	 
	Exhibits	 	Description
	
	 	

	Exhibit 2.6(c)
	 	Mutual Release for Adversary Proceeding
	Exhibit 3.2
	 	Release for Escrow Items

	1.5	 	Priority of Agreements

In the event of any inconsistency or other conflict between the terms of the
main body of this Agreement and the terms of any Schedule or Exhibit, the terms
of the main body of this Agreement shall prevail and have priority over the
terms of such Schedule or Exhibit.

	2.	 	SETTLEMENT AND AGREEMENT
	 
	2.1	 	Adversary Proceeding

Subject to the terms contained in this Agreement, the applicable members of the
360 Group and the applicable members of the Call-Net Group hereby agree to
dismiss the Adversary Proceeding by joint stipulation against all parties named
in the Adversary Proceeding, with prejudice and without costs. In
consideration of the dismissal of the 360 USA Action [ * ] and,
(ii) [ * ] .

- 11 -

 

	2.2	 	Ledcor Build Assets

The Call-Net Group hereby acknowledges and agrees that the applicable members
of the 360 Group, Ledcor Canada and/or Ledcor US are no longer obligated to
sell, grant or deliver the Ledcor Build Assets pursuant to the provisions of
the May 2, 1998 Amending Agreement and that all of the obligations, liabilities
and responsibilities of the applicable members of the 360 Group, Ledcor Canada
and/or Ledcor US arising under, pursuant to or in connection with the sale,
grant and delivery of such Ledcor Build Assets shall, as of the Effective Date,
be terminated without any further action required by the parties. The 360
Group, Ledcor Canada and Ledcor US hereby acknowledge and agree that the
applicable members of the Call-Net Group shall no longer be required to
purchase and accept the Ledcor Build Assets pursuant to the provisions of the
May 2, 1998 Amending Agreement and that all of the obligations, liabilities and
responsibilities of the applicable members of the Call-Net Group arising under,
pursuant to or in connection with the purchase and acceptance of such Ledcor
Build Assets, shall, as of the Effective Date, be terminated without any
further action required by the parties.

	2.3	 	Portland-Sacramento IRU Agreement

The Call-Net Group hereby acknowledges and agrees that the applicable members
of the 360 Group are no longer obligated to sell, grant or deliver the
Portland-Sacramento Assets pursuant to the provisions of the
Portland-Sacramento IRU Agreement and that the Portland-Sacramento IRU
Agreement and all of the obligations, liabilities and responsibilities of the
applicable members of the 360 Group arising under, pursuant to or in connection
with the sale, grant and delivery of such Portland-Sacramento Assets shall, as
of the Effective Date, be terminated without any further action required by the
parties. The 360 Group hereby acknowledges and agrees that the applicable
members of the Call-Net Group shall no longer be required to take an IRU and/or
purchase and accept the Portland-Sacramento Assets pursuant to the provisions
of the Portland-Sacramento IRU Agreement and that the Portland-Sacramento IRU
Agreement and all of the obligations, liabilities and responsibilities of the
applicable members of the Call-Net Group arising under, pursuant to or in
connection with the purchase and acceptance of such Portland-Sacramento Assets,
shall, as of the Effective Date, be terminated without any further action
required by the parties.

	2.4	 	Sacramento-Los Angeles IRU Agreement

The Call-Net Group hereby acknowledges and agrees that the applicable members
of the 360 Group are no longer obligated to sell, grant or deliver the
Sacramento-Los Angeles Assets pursuant to the provisions of the Sacramento-Los
Angeles IRU Agreement and that the Sacramento-Los Angeles IRU Agreement and all
of the obligations, liabilities and responsibilities of the applicable members
of the 360 Group arising under, pursuant to or in connection with the sale,
grant and delivery of such Sacramento-Los Angeles Assets shall, as of the
Effective Date, be terminated without any further action required by the
parties. The 360 Group hereby acknowledges and agrees that the applicable
members of the Call-Net Group shall no longer be required to take an IRU and/or
purchase and accept the Sacramento-Los Angeles Assets pursuant to the
provisions of the Sacramento-Los Angeles IRU Agreement and that the
Sacramento-Los Angeles IRU Agreement and all of the obligations, liabilities
and responsibilities of the applicable members of the Call-Net Group arising
under, pursuant to or in connection with the purchase and acceptance of such
Sacramento-Los Angeles Assets, shall, as of the Effective Date, be terminated
without any further action required by the parties.

	2.5	 	360 Sale Agreement and 360 IRU Agreement

The Call-Net Group hereby acknowledges and agrees that the applicable members
of the 360 Group are no longer obligated to sell, grant or deliver Routes 360-1
and 360-2 pursuant to the provisions of the 360

- 12 -

 

Sale Agreement and the 360 IRU Agreement, and that the 360 Sale Agreement and
the 360 IRU Agreement and all of the obligations, liabilities and
responsibilities of the applicable members of the 360 Group arising under,
pursuant to or in connection with the sale, grant and delivery of Routes 360-1
and 360-2 shall, as of the Effective Date, be terminated without any further
action required by the parties. The 360 Group hereby acknowledges and agrees
that the applicable members of the Call-Net Group shall no longer be required
to take an IRU and/or purchase and accept Routes 360-1 and 360-2 pursuant to
the provisions of the 360 Sale Agreement and the 360 IRU Agreement or to pay
the Routes 360-1 and 360-2 Purchase Price and that all of the obligations,
liabilities and responsibilities of the applicable members of the Call-Net
Group arising under, pursuant to or in connection with the purchase and
acceptance of Routes 360-1 and 360-2, including the obligation to pay the
Routes 360-1 and 360-2 Purchase Price, shall, as of the Effective Date, be
terminated without any further action required by the parties.

	2.6	 	Mutual Releases
	 
	(a)	 	As of the Effective Date, the 360 Group and the Call-Net Group (on behalf
of each of them, and each and every predecessor, successor and assign of
each of them, and each of their respective officers, directors, parents,
partners, members, Affiliates, subsidiaries, agents, shareholders,
employees, attorneys and assigns) hereby forever release, remise, waive,
acquit and forever discharge each of such parties (and their respective
predecessors (save and except for USTR Fiber Development Inc. (formerly
CNE Fiber) which is specifically addressed in Section 2.6(c) hereof),
successors and assigns of each of them and each of their respective
officers, directors, parents, partners, members, Affiliates, subsidiaries,
agents, shareholders, employees, attorneys and assigns and their heirs,
administrators and representatives) from any and all Claims, known or
unknown, suspected or unsuspected, contingent or existing, suffered or
that may be suffered, including, without limitation, any Claims arising
under Chapter 5 of the Bankruptcy Code, that any of them ever had, up to
and including the Effective Date as a result of or relating to or arising
out of the Adversary Proceeding under any legal theory, including, without
limitation, under contract, tort or otherwise, which they now have, may
claim to have, ever had or may hereafter acquire.
	 
	(b)	 	As of the Effective Date, Ledcor Canada, Ledcor US and the Call-Net Group
(on behalf of each of them, and each and every predecessor, successor and
assign of each of them, and each of their respective officers, directors,
parents, partners, members, Affiliates, subsidiaries, agents,
shareholders, employees, attorneys and assigns) hereby forever release,
remise, waive, acquit and forever discharge each of such parties (and
their respective predecessors (save and except for USTR Fiber Development
Inc. (formerly CNE Fiber) which is specifically addressed in Section
2.6(c) hereof), successors and assigns of each of them and each of their
respective officers, directors, parents, partners, members, Affiliates,
subsidiaries, agents, shareholders, employees, attorneys and assigns and
their heirs, administrators and representatives) from any and all Claims,
known or unknown, suspected or unsuspected, contingent or existing,
suffered or that may be suffered, including, without limitation, any
Claims arising under Chapter 5 of the Bankruptcy Code, that any of them
ever had, up to and including Effective Date as a result of or relating to
or arising out of the Call-Net Counterclaim under any legal theory,
including, without limitation, under contract, tort or otherwise, which
they now have, may claim to have, ever had or may hereafter acquire.
	 
	(c)	 	The applicable members of the 360 Group, Ledcor Canada and Ledcor US
shall, and the applicable members of the Call-Net Group shall cause USTR
Fiber Development Inc. (formerly CNE Fiber), to enter into, execute and
deliver a mutual release to and in favour of each such parties in respect
of the Adversary Proceeding, such release to be substantially in the form
of Exhibit 2.6(c) attached hereto.
	 
	(d)	 	As of the Effective Date, the 360 Group and the Call-Net Group (on behalf
of each of them, and each and every predecessor, successor and assign of
each of them, and each of their respective

- 13 -

 

	 	 	officers, directors, parents, partners, members, Affiliates,
subsidiaries, agents, shareholders, employees, attorneys and assigns)
hereby forever release, remise, waive, acquit and forever discharge each
of such parties (and their respective predecessors, successors and
assigns of each of them and each of their respective officers, directors,
parents, partners, members, Affiliates, subsidiaries, agents,
shareholders, employees, attorneys and assigns and their heirs,
administrators and representatives) from any and all obligations,
liabilities and responsibilities arising under, pursuant to or in
connection with the purchase and sale of the Ledcor Build Assets pursuant
to the May 2, 1998 Amending Agreement, including, without limitation, any
and all Claims, known or unknown, suspected or unsuspected, contingent or
existing, suffered or that may be suffered as a result of or relating to
or arising out of the non-completion of the sale and/or delivery of the
Ledcor Build Assets. Without limiting the generality of Section 6.11
hereof, nothing contained in this Agreement shall be deemed to release,
or be interpreted as releasing, the 360 Group or the Call-Net Group from
their other obligations, liabilities and responsibilities arising under,
pursuant to or in connection with the May 2, 1998 Amending Agreement and
the Ledcor Build Agreement (or any other agreements which such parties
are a party to with the Call-Net Group or any of their Affiliates save
and except for any agreements specifically referred to, and addressed, in
this Agreement) which, by their terms, do not relate to the Ledcor Build
Assets.
	 
	(e)	 	As of the Effective Date, Ledcor Canada, Ledcor US and the Call-Net Group
(on behalf of each of them, and each and every predecessor, successor and
assign of each of them, and each of their respective officers, directors,
parents, partners, members, Affiliates, subsidiaries, agents,
shareholders, employees, attorneys and assigns) hereby forever release,
remise, waive, acquit and forever discharge each of such parties (and
their respective predecessors, successors and assigns of each of them and
each of their respective officers, directors, parents, partners, members,
Affiliates, subsidiaries, agents, shareholders, employees, attorneys and
assigns and their heirs, administrators and representatives) from any and
all obligations, liabilities and responsibilities arising under, pursuant
to or in connection with the purchase and sale of the Ledcor Build Assets
pursuant to the May 2, 1998 Amending Agreement, including, without
limitation, any and all Claims, known or unknown, suspected or
unsuspected, contingent or existing, suffered or that may be suffered as a
result of or relating to or arising out of the non-completion of the sale
and/or delivery of the Ledcor Build Assets. Without limiting the
generality of Section 6.11 hereof, nothing contained in this Agreement
shall be deemed to release, or be interpreted as releasing, Ledcor Canada,
Ledcor US or the Call-Net Group from their other obligations, liabilities
and responsibilities arising under, pursuant to or in connection with the
May 2, 1998 Amending Agreement and the Ledcor Build Agreement (or any
other agreements which such parties are a party to with the Call-Net Group
or any of their Affiliates save and except for any agreements specifically
referred to, and addressed, in this Agreement) which, by their terms, do
not relate to the Ledcor Build Assets.
	 
	(f)	 	As of the Effective Date, the 360 Group and the Call-Net Group (on behalf
of each of them, and each and every predecessor, successor and assign of
each of them, and each of their respective officers, directors, parents,
partners, members, Affiliates, subsidiaries, agents, shareholders,
employees, attorneys and assigns) hereby forever release, remise, waive,
acquit and forever discharge each of such parties (and their respective
predecessors, successors and assigns of each of them and each of their
respective officers, directors, parents, partners, members, Affiliates,
subsidiaries, agents, shareholders, employees, attorneys and assigns and
their heirs, administrators and representatives) from any and all
obligations, liabilities and responsibilities arising under, pursuant to
or in connection with:

	 	(i)	 	the Portland-Sacramento IRU Agreement, including, without
limitation, the taking of an IRU and/or purchase and acceptance of
the Portland-Sacramento Assets;

- 14 -

 

	 	(ii)	 	the Sacramento-Los Angeles IRU Agreement, including, without
limitation, the taking of an IRU and/or purchase and acceptance of
the Sacramento-Los Angeles Assets; and
	 
	 	(iii)	 	the 360 Sale Agreement and the 360 IRU Agreement, including,
without limitation, the taking of an IRU and/or purchase and
acceptance of Routes 360-1 and 360-2

		
	 	including, without limitation, any and all Claims, known or unknown,
suspected or unsuspected, contingent or existing, suffered or that may be
suffered as a result of or relating to or arising out of the
non-completion of the grant of an IRU and/or sale and/or delivery of the
Portland-Sacramento Assets, the Sacramento-Los Angeles Assets or the
Routes 360-1 and 360-2, respectively. Without limiting the generality of
Section 6.11 hereof, nothing contained in this Agreement shall be deemed
to release, or be interpreted as releasing, any of the parties from their
other obligations, liabilities and responsibilities arising under,
pursuant to or in connection with the Non-FOTS Fibre Swap Agreement, the
Canadian Non-FOTS Fibre Exchange Agreement, the FOTS Fibre Swap
Agreement, the Canadian FOTS Fibre Exchange Agreement or the US FOTS
Fibre Exchange Agreement.

	(g)	 	As of the Effective Date, Ledcor Canada, Ledcor US and the Call-Net Group
(on behalf of each of them, and each and every predecessor, successor and
assign of each of them, and each of their respective officers, directors,
parents, partners, members, Affiliates, subsidiaries, agents,
shareholders, employees, attorneys and assigns) hereby forever release,
remise, waive, acquit and forever discharge each of such parties (and
their respective predecessors, successors and assigns of each of them and
each of their respective officers, directors, parents, partners, members,
Affiliates, subsidiaries, agents, shareholders, employees, attorneys and
assigns and their heirs, administrators and representatives) from any and
all Claims, known or unknown, suspected or unsuspected, contingent or
existing, suffered or that may be suffered that any of them ever had up to
and including the Effective Date as a result of or relating to or arising
out of the Call-Net/Ledcor Litigation under any legal theory, including,
without limitation, under contract, tort or otherwise, which they now
have, may claim to have, ever had or may hereafter acquire.
	 
	(h)	 	As of the Effective Date, the 360 Group, Ledcor Canada and Ledcor US (on
behalf of each of them, and each and every predecessor, successor and
assign of each of them, and each of their respective officers, directors,
parents, partners, members, Affiliates, subsidiaries, agents,
shareholders, employees, attorneys and assigns) hereby forever release,
remise, waive, acquit and forever discharge the Call-Net Group (and their
respective predecessors, successors and assigns of each of them and each
of their respective officers, directors, parents, partners, members,
Affiliates, subsidiaries, agents, shareholders, employees, attorneys and
assigns and their heirs, administrators and representatives) from any and
all Claims, known or unknown, suspected or unsuspected, contingent or
existing, suffered or that may be suffered, that any of them ever had, as
a result of or relating to or arising out of invoices issued up to and
inclusive of August 9, 2002 and delivered by the 360 Group, or any of
their respective Affiliates, to the Call-Net Group, or any of their
respective Affiliates, in respect of fibre maintenance, hydro costs
related to fibre maintenance, payments to third party maintenance
providers, fibre administration and costs to refuel fibre tanks, under any
legal theory, including, without limitation, under contract, tort or
otherwise, which they now have, may claim to have, ever had or may
hereafter acquire.
	 
	(i)	 	As of the Effective Date, the Call-Net Group (on behalf of each and every
predecessor, successor and assign of each of them, and each of their
respective officers, directors, parents, partners, members, Affiliates,
subsidiaries, agents, shareholders, employees, attorneys and assigns)
hereby forever release, remise, waive, acquit and forever discharge the
360 Group, Ledcor Canada and Ledcor US (and their respective predecessors,
successors and assigns and each of their respective officers, directors,
parents, partners, members, Affiliates, subsidiaries, agents,
shareholders,

- 15 -

 

	 	 	employees, attorneys and assigns and their heirs, administrators and
representatives) from any and all Claims, known or unknown, suspected or
unsuspected, contingent or existing, suffered or that may be suffered,
that any of them ever had, as a result of or relating to or arising out
of (i) moves, additions and changes made by the Call-Net Group to the
United States and Canadian fibre optic networks of the 360 Group for and
on behalf of the 360 Group or any of its Affiliates invoiced before
August 9, 2002; and (ii) routine and preventive maintenance, co-location
and engineering services due and payable before August 1, 2002 (save and
except for any emergency maintenance and restoration related costs due
and payable after June 28, 2001 for which the 360 Group shall continue to
be liable for their proportionate share) under any legal theory,
including, without limitation, under contract, tort or otherwise, which
they now have, may claim to have, ever had or may hereafter acquire.
	 
	2.7	 	Products and Services

		
	[ * ]	Call-Net hereby agrees to purchase from the 360 Group, or from any of
their respective Affiliates, and the 360 Group, on behalf of each of them
and each such Affiliate, hereby agrees to sell to Call-Net, a minimum of [ * ] (the “Purchase Commitment”) [ * ] (the “Commitment Term”), [ * ] (each a “Commitment
Amount”). [ * ]

 

- 16 -

 

 

[ * ]

 

	(b)	 	In the event that Call-Net purchases On-Network Products and/or Services
which are worth in aggregate less than the applicable Commitment Amount
in any calendar year as indicated in (i), (ii) and (iii) in Section
2.7(a) (the difference between such Commitment Amount and the amount
actually purchased is hereinafter referred to as the “Shortfall Amount”),
then Call-Net shall pay to the 360 Group, within forty five (45) days
from the end of the calendar year in which such Shortfall Amount occurs,
an amount which is equal to such Shortfall Amount (the “Compensation
Amount”).
	 
	(c)	 	In the event that Call-Net purchases On-Network Products and/or Services
which are worth in aggregate greater than the applicable Commitment Amount
in any calendar year as indicated in (i), (ii) and (iii) in Section 2.7(a)
(the difference between such amount actually purchased and the Commitment
Amount is hereinafter referred to as the “Excess Amount”), then Call-Net
shall be entitled to elect to off set such Excess Amount (or any part
thereof) against any Shortfall Amounts which occur in any future calendar
years for purposes of calculating the Compensation Amount in such calendar
years. The determination of whether a Shortfall Amount or an Excess
Amount has occurred will be determined at a meeting between the
representatives of the parties to be held within thirty (30) days after
the end of each of calendar years 2003, 2004 and 2005, respectively. In
order to determine whether a Shortfall Amount or an Excess Amount has
occurred in any given year during the Commitment Term, Call-Net and the
360 Group hereby agree that the date on which Call-Net, or any of its
Affiliates, and the 360 Group, or any of their respective Affiliates,
enter into, execute and deliver a service order form pursuant to the
provisions of the Master Services Agreement, or a purchase order, or an
IRU agreement, or a sub-IRU agreement, or an agreement of purchase and
sale, or a binding letter of intent, or a binding memorandum of
understanding, or other similar instrument or agreement (each a “Product
and/or Service Purchase Agreement”) in respect of an On-Network Product
and/or Service shall be considered to be the date on which such On-Network
Product and/or Service is purchased for purposes of this Section 2.7,
provided that Call-Net and/or its Affiliates is not in default of its
payment obligations for such On-Network Product and/or Service pursuant to
and in accordance with the terms and conditions contained in such Product
and/or Service Purchase Agreement and to the extent that default in making
such payment is only in respect of a part of such payment, then the date
on which such Product and/or Service Purchase Agreement is

- 17 -

 

	 	 	entered into, executed and delivered by the parties shall be considered
to be the date on which such On-Network Product and/or Service is
purchased for purposes of this Section 2.7 but only to the extent of that
portion of the payment which is not in default. In the event that
Call-Net and/or any of its Affiliates, are in default of their payment
obligations for an On-Network Product and/or Service pursuant to and in
accordance with the terms and conditions contained in the Product and/or
Service Purchase Agreement relating to such On-Network Product and/or
Service, then the date on which payment is made by Call-Net or any of its
Affiliates, shall be considered to be the date on which such On-Network
Products and/or Service is purchased for purposes of this Section 2.7 but
only to the extent and in respect of the amount which is in default.

		
	 	For greater certainty and by way of example, if Call-Net and the 360
Group enter into, execute and deliver a Product and/or Service Purchase
Agreement on December 20, 2003 and such Product and/or Service Purchase
Agreement provides that payment is to be made within thirty (30) days and
such payment is made in full by Call-Net in January 2004 and still within
such thirty (30) day period, then for purposes of the calculations to be
made pursuant to Section 2.7 hereof, the purchase date for such
On-Network Product and/or Service shall be considered to be December 20,
2003 and 100% of the purchase price so paid in respect of such On-Network
Product and/or Service shall be applied towards the Commitment Amount to
be satisfied in the calendar year 2003. To continue this example, if
only 50% of the payment was made in January 2004, and such 50% of the
payment is still within such thirty (30) day period, and the other 50% of
the payment was not made within such thirty (30) day period, then only
50% of the purchase price so paid in respect of such On-Network Product
and/or Service shall be applied towards the Commitment Amount to be
satisfied in the calendar year 2003.

	(d)	 	In the event that during the Commitment Term Call-Net has paid
Compensation Amounts to the 360 Group in accordance with Section 2.7(b)
hereof and such Compensation Amounts plus the amount of On-Network
Products and/or Services that Call-Net has actually purchased (by
executing and delivering a purchase order or like instrument) from the 360
Group hereunder exceeds [ * ] , then at the end of the Commitment Term the 360
Group shall pay to Call-Net an amount which is equal to the following (the
“Reimbursement Amount”):

	 	(i)	 	the sum of all such actual purchases of On-Network Products
and/or Services; plus
	 
	 	(ii)	 	the aggregate amount of all Compensation Amounts; less
	 
	 	(iii)	 	the greater of (A) [ * ] and (B) the amount set out in subparagraph (i) above.

 

[ * ]

 

- 18 -

 

 

[ * ]

 

	(e)	 	The 360 Group and the Call-Net Group hereby agree that to the extent that
Call-Net or any of its Affiliates have purchased On-Network Products
and/or Services in accordance with this Section 2.7 but have not yet paid
(in accordance with the terms and conditions contained in a Product and/or
Service Purchase Agreement) for such On-Network Products and/or Services
by the end of the Commitment Term (collectively, the “Outstanding
Amounts”) and at the end of the Commitment Term there is a Reimbursement
Amount payable by the 360 Group to Call-Net pursuant to this Section
2.7(d), then the 360 Group shall have the right to off set such
Reimbursement Amount against the Outstanding Amounts and such Outstanding
Amounts shall be reduced by an amount equal to such Reimbursement Amount,
provided however that if such Reimbursement Amount is greater than the
Outstanding Amounts the 360 Group shall still be obligated to pay to
Call-Net the difference between the Reimbursement Amount and the
Outstanding Amounts.
	 
	(f)	 	On the Effective Date, Call-Net and the applicable members of the 360
Group shall execute and deliver a definitive master services agreement
taking into account the provisions of this Section 2.7 (the “Master
Services Agreement”). In the event of any inconsistency between the terms
of the Master Services Agreement and the provisions of this Section 2.7,
the provisions of this Section 2.7 shall govern.
	 
	(g)	 	In the event that Call-Net and the 360 Group fail to agree on:

	 	(i)	 	the terms and conditions in respect of the purchase and sale
of On-Network Products and/or Services as set forth in this Section
2.7, including, without limitation, the purchase price of such
On-Network Products and/or Services to be determined as provided for
in Section 2.7(a), within thirty (30) days of Call-Net or any of its
Affiliates placing an order; or
	 
	 	(ii)	 	whether a Shortfall Amount or Excess Amount has occurred in
any given year during the Commitment Term, or the magnitude thereof,
within thirty (30) days after the end of each of calendar years
2003, 2004 and 2005, respectively;

		
	 	then either Call-Net or the 360 Group may assert to the other that it
desires that such matter be resolved by binding arbitration by giving the
other party written notice to that effect and specifying the issues to be
so addressed by such arbitration. Such arbitration shall take place in
Vancouver, British Columbia pursuant to the terms of the Commercial
Arbitration Act (British Columbia). The arbitral tribunal shall be
composed of a single arbitrator to be selected and agreed upon by
Call-Net and the 360 Group and if such parties are unable to agree on the
appointment of an arbitrator within fifteen (15) days from the date of
delivery of a request for

- 19 -

 

		
	 	arbitration by either party to the other, a request for the appointment
of the arbitrator may be made to the Executive Director of the British
Columbia International Commercial Arbitration Centre. Each party shall
bear its own costs of legal representation and assistance. All other
costs, including the fees and expenses of the arbitrator and
administrative fees and charges, shall be shared equally between Call-Net
and the 360 Group.

	2.8	 	 	Canadian FOTS Agreement

		
	[ * ]	The applicable members of the Call-Net Group and the applicable members
of the 360 Group hereby acknowledge that [ * ]

 

 

 

 

- 20 -

 

	 	 	[ * ]
	 
	(b)	 	In addition, the applicable members of the Call-Net Group will arrange a
fibre swap agreement with [ * ] wherein [ * ] will provide title, a long term lease,
an IRU or sub-IRU (as the case may be) to [ * ] fibre strands between Edmonton
(pedestal at MP 95.8, Leduc Subdivision) (“Edmonton MP 95.8 Leduc
Subdivision”) and Edmonton (manhole at MP 266.7, Wainwright Subdivision)
(“Edmonton MP 266.7 Wainwright Subdivision”) to the applicable members of
the 360 Group, or to the applicable members of the Call-Net Group for the
benefit of such applicable members of the 360 Group, in exchange (by way
of title, long term lease, an IRU or a sub-IRU) for [ * ] fibre strands between
Edmonton MP 95.8 Leduc Subdivision and Edmonton MP 266.7 Wainwright
Subdivision (an “[ * ] Agreement”). The agreement must provide that [ * ] will
grant or procure a license or sublicense and make commercially reasonable
best efforts to procure a non-disturbance agreement in the name of the
applicable members of the 360 Group with respect to each right of way
along the [ * ] fibre strand route, specifying an initial right of way term
ending not earlier than May 31, 2016, during which time no member of the
360 Group will be required to pay a fee in respect of such license(s),
sublicense(s) and non-disturbance agreement(s). In the event that the
applicable members of the Call-Net Group arrange such an [ * ] Agreement, then
in accordance with the provisions of Section 5.2 hereof, the applicable
members of the Call-Net Group and the applicable members of the 360 Group
shall negotiate in good faith, enter into, execute, deliver and obtain
the documents, agreements and instruments reasonably necessary to
complete and effectuate the provision of title, grant of a lease, an IRU
or a sub-IRU (as the case may be) and delivery of these additional [ * ] fibre
strands to the applicable members of the 360 Group. In the event that
the applicable members of the Call-Net Group are not able to arrange an
[ * ] Agreement, Call-Net hereby agrees to provide the applicable members of
the 360 Group with a reasonably satisfactory and acceptable alternative
to the foregoing.
	 
	(c)	 	[ * ]
	 
	(d)	 	On the Effective Date, the applicable members of the Call-Net Group will
enter into, execute and deliver a waiver of right of first refusal in favour of
360 Cdn in respect of the transfer and assignment of [ * ] fibre strands
numbered [ * ] on [ * ] by 360 Cdn to a third party.

- 21 -

 

	2.9	 	Maintenance Agreements

In accordance with the provisions of Section 5.2 hereof, the applicable members
of the Call-Net Group and the applicable members of the 360 Group shall enter
into one or more maintenance agreements in accordance with the provisions of
the applicable Transaction Documents (collectively, the “Maintenance
Agreements”) provided that notwithstanding the provisions of such applicable
Transaction Documents, the applicable members of the Call-Net Group shall be
the maintenance provider for the applicable members of the 360 Group save and
except with respect to Segment No. 3. The parties will negotiate in good
faith, enter into, execute and deliver such Maintenance Agreements to be in a
form reasonably satisfactory to the parties thereto.

	2.10	 	Reciprocal Sub-License Agreement
	 
	(a)	 	On the Effective Date, the 360 Group shall pay to the Call-Net Group the sum of
[ * ] (the “Reciprocal Sub-Licensing Fee
Cash Payment”) in satisfaction of all
amounts, liabilities and sums owing
by Ledcor Canada, Ledcor US or the
360 Group to the Call-Net Group
pursuant to the Reciprocal
Sub-License Agreement in respect of
licensing fees as indicated and
represented by the information in
Schedule “A” attached hereto
(collectively, the “Reciprocal
Sub-Licensing Fees”).
	 
	(b)	 	As of the Effective Date, the 360 Group and the Call-Net Group (on behalf
of each of them, and each and every predecessor, successor and assign of
each of them, and each of their respective officers, directors, parents,
partners, members, Affiliates, subsidiaries, agents, shareholders,
employees, attorneys and assigns) hereby forever release, remise, waive,
acquit and forever discharge each of such parties (and their respective
predecessors, successors and assigns of each of them and each of their
respective officers, directors, parents, partners, members, Affiliates,
subsidiaries, agents, shareholders, employees, attorneys and assigns and
their heirs, administrators and representatives) from any and all Claims
relating to the Reciprocal Sub-Licensing Fees.
	 
	(c)	 	As of the Effective Date, the Call-Net Group, Ledcor Canada and Ledcor US
(on behalf of each of them, and each and every predecessor, successor and
assign of each of them, and each of their respective officers, directors,
parents, partners, members, Affiliates, subsidiaries, agents,
shareholders, employees, attorneys and assigns) hereby forever release,
remise, waive, acquit and forever discharge each of such parties (and
their respective predecessors, successors and assigns of each of them and
each of their respective officers, directors, parents, partners, members,
Affiliates, subsidiaries, agents, shareholders, employees, attorneys and
assigns and their heirs, administrators and representatives) from any and
all Claims relating to the Reciprocal Sub-Licensing Fees.
	 
	(d)	 	Nothing contained in this Agreement shall be deemed to release, or be
interpreted as releasing, the 360 Group, the Call-Net Group, Ledcor Canada
or Ledcor US from their obligations with respect to amounts, liabilities
and sums in respect of licensing fees which may have been, or will be,
incurred or which may be, or become, due and payable under the Reciprocal
Sub-License Agreement other than the Reciprocal Sub-Licensing Fees, or any
of their other obligations or

- 22 -

 

	 	 	responsibilities arising under, pursuant to or in connection with the
Reciprocal Sub-License Agreement.
	 
	2.11	 	[ * ] Fibre Sale Agreement

Ledcor Canada, Ledcor US and the applicable members of the Call-Net Group
shall, in accordance with the provisions of Section 5.2 hereof, negotiate in
good faith, enter into, execute and deliver with [ * ] , and/or its Affiliates, as
applicable, the documents, agreements and instruments reasonably necessary to
complete and carry out their obligations under the [ * ] Fibre Sale Agreement
including, without limitation:

	(a)	 	a Bill of Sale Absolute (United States) or (i) a Bill of Sale for all of the fibre between [ * ] and (ii) a
confirmation of IRU rights for all of the fibre between [ * ] and an inventory of such fibre;
	 
	(b)	 	a Bill of Sale Absolute (Canada) or (i) a Bill of Sale for all of the fibre between [ * ] and (ii) a
confirmation of IRU rights for all of the fibre between [ * ] and an inventory of such fibre;
	 
	(c)	 	any necessary bring down certificates;
	 
	(d)	 	a Fibre IRU Agreement with the applicable members of the Call-Net Group on one hand, and [ * ] , and/or its
Affiliates, as applicable, on the other, in respect of the fibre
between [ * ] . In addition, Ledcor Canada and Ledcor US shall enter into a Fibre IRU Agreement,
in such form, with the
applicable members
of the Call-Net
Group in respect of
all of the marine
fibres conveyed by
Ledcor Canada and
Ledcor US pursuant
to Build Agreement
No. 1 (as defined
in the August 2000
Amending
Agreement).
	 
	2.12	 	Data Services Agreement

On the Effective Date, Sprint Canada and the applicable members of the 360
Group shall execute and deliver an amendment to the Data Services Agreement
therein amending the monthly rate in respect of the [ * ] Inter-Exchange (IX) and
Loop between [ * ] from [ * ] to per month for a period of [ * ] , such amended rate to take
effect from and after the first billing cycle after the Effective Date.

	2.13	 	360 Cash Payment

On the Effective Date, the 360 Group shall pay to the Call-Net Group the sum of
[ * ] (the “360 Cash Payment”) on account of additional consideration of the releases
by the Call-Net Group referred to in Section 2.6 hereof.

	2.14	 	Call-Net Cash Payment

On the Effective Date, the Call-Net Group shall pay to the 360 Group the sum of
[ * ] (the “Call-Net Cash Payment”) as additional consideration of the release by the
360 Group referred to in Section 3.2 hereof.

	2.15	 	Method of Payments

All payments required to be made by the parties hereto pursuant to this Section
2 shall be made by way of bank draft or wire transfer in accordance with any
applicable directions delivered by the parties hereto.

- 23 -

 

	3.	 	ESCROW MATTERS
	 
	3.1	 	Escrow Agent Directions

The applicable members of the 360 Group and the applicable members of the
Call-Net Group hereby agree to execute and deliver the following directions to
the Escrow Agent in respect of the amounts set out below (each such direction
to be in form and substance in accordance with the applicable provisions of the
General Escrow Agreement and the US FOTS Escrow Agreement):

	(a)	 	a direction to the
Escrow Agent directing
the Escrow Agent to
release and pay to the
applicable members of
the Call-Net Group the
sum of [ * ] together with interest thereon,
from the Escrow Fund (United States
Non-FOTS) (as defined in the General
Escrow Agreement) representing funds
being released from escrow in respect of
item number 1 set out in Schedule “D” to
the First Supplemental and Amending
Agreement and originally relating to
item number 1 set out in the US Non-FOTS
Notice of Claim;
	 
	(b)	 	a direction to the
Escrow Agent directing
the Escrow Agent to
release and pay to the
applicable members of
the Call-Net Group the
sum of [ * ] together with interest thereon,
from the Escrow Fund (United States
Non-FOTS) (as defined in the General
Escrow Agreement) representing funds
being released from escrow in respect of
item number 2 set out in Schedule “D” to
the First Supplemental and Amending
Agreement and originally relating to
item number 2 set out in the US Non-FOTS
Notice of Claim;
	 
	(c)	 	a direction to the
Escrow Agent directing
the Escrow Agent to
release and pay to the
applicable members of
the Call-Net Group the
sum of [ * ] , together with interest
thereon, and to release and pay to the
applicable members of the 360 Group the
sum of [ * ] without interest, each from the
Escrow Fund (Canadian Non-FOTS) (as
defined in the General Escrow Agreement)
representing funds being released from
escrow in respect of item number 3 set
out in Schedule “D” to the First
Supplemental and Amending Agreement and
originally relating to item number 1 set
out in the Canadian Non-FOTS Notice of
Claim;
	 
	(d)	 	a direction to the
Escrow Agent directing
the Escrow Agent to
release and pay to the
applicable members of
the 360 Group the sum
of [ * ] without interest, from the Escrow Fund
(Canadian Non-FOTS) (as defined in the
General Escrow Agreement) representing
funds being released from escrow in
respect of item number 4 set out in
Schedule “D” of the First Supplemental
and Amending Agreement and originally
relating to item number 2 set out in the
Canadian Non-FOTS Notice of Claim;
	 
	(e)	 	a direction to the
Escrow Agent directing
the Escrow Agent to
release and pay to the
applicable members of
the Call-Net Group the
sum of [ * ] together with interest thereon,
from the Escrow Fund (Canadian Non-FOTS)
(as defined in the General Escrow
Agreement) representing funds being
released from escrow in respect of item
number 5 set out in Schedule “D” to the
First Supplemental and Amending
Agreement and originally relating to
item number 4 set out in the Canadian
Non-FOTS Notice of Claim; and
	 
	(f)	 	a direction to the
Escrow Agent directing
the Escrow Agent to
release and pay to the
applicable members of
the Call-Net Group the
sum of [ * ] together with interest thereon,
from the Escrow Fund (as defined in the
US FOTS Escrow Agreement) representing
funds being released from escrow
pursuant to the provisions of the US
FOTS Escrow Agreement and relating to
item number 6 set out on Schedule “D” to
the First Supplemental and Amending
Agreement.

- 24 -

 

	3.2	 	Releases and Termination

The 360 Group hereby acknowledges and agrees that the Call-Net Group is no
longer responsible [ * ] (collectively, the “Claimed Deficiencies”) and the 360 Group
shall, on the Effective Date, enter into, execute and deliver a release therein
releasing and discharging the Call-Net Group and their respective Affiliates,
successors and assigns and each of their respective officers, directors,
employees, representatives and agents from any Claims the 360 Group may now or
hereafter have with respect to such Claimed Deficiencies, including, without
limitation, item numbers 1 and 2 set out in the US Non-FOTS Notice of Claim and
item numbers 1, 2 and 4 set out in the Canadian Non-FOTS Notice of Claim, such
release to be in the form of Exhibit 3.2 attached hereto. In addition, on the
Effective Date, the applicable members of the Call-Net Group and the applicable
members of the 360 Group shall terminate the General Escrow Agreement and the
US FOTS Escrow Agreement and provide notice in writing to the Escrow Agent
advising the Escrow Agent of such termination and directing the Escrow Agent to
pay any and all amounts that may still be remaining in any Escrow Funds (as
defined in each of the General Escrow Agreement and the US FOTS Escrow
Agreement, respectively), if any, to the Call-Net Group. Notwithstanding such
termination and release, each member of the Call-Net Group acknowledges that
the applicable member of the Call-Net Group shall use their best efforts to
rectify the deficiencies referred to in Sections 3.1(a), 3.1(b), 3.1(e) and
3.1(f) hereof, respectively.

	4.	 	WARRANTIES, REPRESENTATIONS AND COVENANTS
	 
	4.1	 	Warranties, Representations and Covenants of Call-Net Group

Each member of the Call-Net Group warrants and represents to, and covenants
with each member of the 360 Group, Ledcor Canada and Ledcor US that:

	(a)	 	Status. Each member of the Call-Net Group is a corporation incorporated,
existing and in good corporate standing under the laws of the jurisdiction
of its incorporation, amalgamation or continuance with respect to all
filings required under such laws.
	 
	(b)	 	Authority. Each member of the Call-Net Group has all necessary corporate
capacity, power, and authority to carry on its business, and has the
necessary corporate capacity, power and authority to enter into this
Agreement and to carry out the terms of this Agreement.
	 
	(c)	 	Compliance with Constating Documents, Agreements and Laws. The making of
this Agreement, the completion of the transactions contemplated by this
Agreement and the performance of and compliance with the terms of this
Agreement, does not and will not:

	 	(i)	 	conflict with or result in a breach of or violate any of the
terms, conditions or provisions of the constating documents of any
member of the Call-Net Group; or
	 
	 	(ii)	 	conflict with or result in a breach of or violate any of the
terms, conditions or provisions of any law, judgment, order,
injunction, decree, regulation or ruling of any governmental

- 25 -

 

	 	 	 	authority, or constitute or result in a material default under any
agreement, contract or commitment to which any member of the
Call-Net Group is a party or by which their properties or assets
are bound, which would have a material adverse effect upon the
ability of any member of the Call-Net Group to perform any of its
obligations under this Agreement;

	(d)	 	Valid, Binding and Enforceable. This Agreement constitutes a valid and
binding agreement and obligation, enforceable against each member of the
Call-Net Group in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, arrangement, winding-up, moratorium and
similar laws of general application affecting the enforcement of
creditors’ rights generally, and subject to general equitable principles,
including the fact that the availability of equitable remedies, such as
injunctive relief or specific performance, is in the discretion of the
court.
	 
	(e)	 	Parties and Non-Assignment. Other than the Call-Net Group, there are no
other Affiliates of Call-Net which are party to or that can claim any
interest in any of the Transaction Documents. Each member of the Call-Net
Group is and continues to be bound and subject to the provisions of the
Transaction Documents and no member of the Call-Net Group has assigned or
transferred any of its rights or obligations arising under, pursuant to or
in connection with the Transaction Documents.
	 
	4.2	 	Warranties, Representations and Covenants of 360 Group

Each member of the 360 Group warrants and represents to, and covenants with
each member of the Call-Net Group, Ledcor Canada and Ledcor US that:

	(a)	 	Status. Each member of the 360 Group is a corporation incorporated,
existing and in good corporate standing under the laws of the jurisdiction
of its incorporation, amalgamation or continuance with respect to all
filings required under such laws.
	 
	(b)	 	Authority. Each member of the 360 Group has all necessary corporate
capacity, power, and authority to carry on its business, and, subject to
the US Bankruptcy Court Approval Order and the CCAA Approval Order, has
the necessary corporate capacity, power and authority to enter into this
Agreement and to carry out the terms of this Agreement.
	 
	(c)	 	Compliance with Constating Documents, Agreements and Laws. Subject only
to obtaining the court approvals referred to in Section 5.1 hereof, the
making of this Agreement, the completion of the transactions contemplated
by this Agreement and the performance of and compliance with the terms of
this Agreement, does not and will not:

	 	(i)	 	conflict with or result in a breach of or violate any of the
terms, conditions or provisions of the constating documents of any
member of the 360 Group; or
	 
	 	(ii)	 	conflict with or result in a breach of or violate any of the
terms, conditions or provisions of any law, judgment, order,
injunction, decree, regulation or ruling of any governmental
authority, or constitute or result in a material default under any
agreement, contract or commitment to which any member of the 360
Group is a party or by which their properties or assets are bound,
which would have a material adverse effect upon the ability of any
member of the 360 Group to perform any of its obligations under this
Agreement;

- 26 -

 

	(d)	 	Valid, Binding and Enforceable. Subject to the US Bankruptcy Court
Approval Order and the CCAA Approval Order, this Agreement constitutes a
valid and binding agreement and obligation, enforceable against each
member of the 360 Group in accordance with its terms.
	 
	(e)	 	Parties and Non-Assignment. Other than the 360 Group, there are no other
Affiliates of 360 which are party to or that can claim any interest in any
of the Transaction Documents. Each member of the 360 Group is and
continues to be bound and subject to the provisions of the Transaction
Documents and no member of the 360 Group has assigned or transferred any
of its rights or obligations arising under, pursuant to or in connection
with the Transaction Documents.
	 
	4.3	 	Warranties, Representations and Covenants of Ledcor Canada and Ledcor US

Each of Ledcor Canada and Ledcor US, on a joint and several basis, warrants and
represents to, and covenants with each member of the Call-Net Group and each
member of the 360 Group that:

	(a)	 	Status. Each of Ledcor Canada and Ledcor US is a corporation
incorporated, existing and in good corporate standing under the laws of
the jurisdiction of its incorporation, amalgamation or continuance with
respect to all filings required under such laws.
	 
	(b)	 	Authority. Each of Ledcor Canada and Ledcor US has all necessary
corporate capacity, power, and authority to carry on its business, and has
the necessary corporate capacity, power and authority to enter into this
Agreement and to carry out the terms of this Agreement.
	 
	(c)	 	Compliance with Constating Documents, Agreements and Laws. The making of
this Agreement, the completion of the transactions contemplated by this
Agreement and the performance of and compliance with the terms of this
Agreement, does not and will not:

	 	(i)	 	conflict with or result in a breach of or violate any of the
terms, conditions or provisions of the constating documents of
either Ledcor Canada or Ledcor US; or
	 
	 	(ii)	 	conflict with or result in a breach of or violate any of the
terms, conditions or provisions of any law, judgment, order,
injunction, decree, regulation or ruling of any governmental
authority, or constitute or result in a material default under any
agreement, contract or commitment to which either Ledcor Canada or
Ledcor US is a party or by which their properties or assets are
bound, which would have a material adverse effect upon the ability
of either Ledcor Canada or Ledcor US to perform any of its
obligations under this Agreement;

	(d)	 	Valid, Binding and Enforceable. This Agreement constitutes a valid and
binding agreement and obligation, enforceable against each of Ledcor
Canada and Ledcor US in accordance with its terms subject to bankruptcy,
insolvency, reorganization, arrangement, winding-up, moratorium and
similar laws of general application affecting the enforcement of
creditors’ rights generally, and subject to equitable principles,
including the fact that availability of equitable remedies, such as
injunctive relief or specific performance is in the discretion of the
court.
	 
	5.	 	CONDITIONS PRECEDENT
	 
	5.1	 	Effective Date

The transactions contemplated by this Agreement shall be completed on the
Effective Date at the offices of Fraser Milner Casgrain LLP, 1 First Canadian
Place, 100 King Street West, Toronto, Ontario, M5X

- 27 -

 

1B2, provided however that the transactions contemplated by this Agreement
shall not become or be deemed to be effective until each of the following
conditions precedent shall have been satisfied or waived in writing by the
applicable parties hereto;

	(a)	 	the parties shall have executed and delivered to each other party hereto
a copy of this Agreement;
	 
	(b)	 	except as provided by Section 5.2 hereof, the parties hereto shall have
negotiated in good faith, entered into, executed and delivered each
document, agreement and instrument required to be entered into pursuant to
the provisions of this Agreement, including, without limitation, (i) all
releases and waivers, whether or not attached as Exhibits hereto,
including, without limitation, the releases and waivers referred to in
Sections 2.1, 2.8(d), and 3.2 hereof; (ii) the documents, agreements and
instruments required to be entered into pursuant to Sections 2.7, 2.12 and
3.2 hereof; and (iii) all terminations and all directions and notices to
the Escrow Agents pursuant to Sections 3.1 and 3.2 hereof (collectively,
the “Definitive Agreements”);
	 
	(c)	 	the parties shall have executed and delivered a joint stipulation that
dismisses, with prejudice, the Adversary Proceeding;
	 
	(d)	 	the Call-Net Group shall have executed and delivered a notice of
abandonment with respect to the Call-Net/Ledcor Litigation;
	 
	(e)	 	all payments required to be made hereunder shall have been made in
accordance with the provisions of Section 2.15 hereof, including, without
limitation, the 360 Cash Payment, the Call-Net Cash Payment, the Ledcor
Cash Payment and all payments to be paid by the Escrow Agent hereof;
	 
	(f)	 	the 360 Group shall have filed a motion or brought an application with,
and have obtained an order from, the British Columbia Supreme Court, in
bankruptcy, in Action No. L011792, Vancouver Registry, authorizing the 360
Group to enter into this Agreement and to perform their obligations
hereunder and approving this Agreement (the “CCAA Approval Order”) in a
form reasonably satisfactory to the Call-Net Group, Ledcor Canada and
Ledcor US. Each party shall bear its own fees and costs associated with
obtaining such Court order;
	 
	(g)	 	the 360 Group shall have filed a motion with, and have obtained an order
from, the US court having jurisdiction over the US Bankruptcy Cases
pursuant to Bankruptcy Rule 9019 authorizing the 360 Group to enter into
this Agreement and perform their obligations hereunder and approving this
Agreement (the “US Bankruptcy Approval Order”) in a form reasonably
satisfactory to the Call-Net Group, Ledcor Canada and Ledcor US. Each
party shall bear its own fees and costs associated with obtaining such
Court order; and
	 
	(h)	 	notwithstanding the releases contained in Sections 2.6(a), 2.6(b) and
2.6(i), any and all amounts payable by the applicable members of the 360
Group to the applicable members of Call-Net Group with respect to (i)
moves, additions and changes made by the Call-Net Group to the United
States and Canadian fibre optic networks of the 360 Group for and on
behalf of the 360 Group or any of its Affiliates invoiced on and after
August 9, 2002 up until and including the Effective Date; and (ii)
maintenance (routine, preventative, emergency, restoration or otherwise),
co-location and engineering services becoming due and payable on and after
August 1, 2002 up until and including the Effective Date, shall have been
paid and satisfied by the 360 Group save and except for any amounts being
disputed in good faith by the 360 Group with respect to charges and
amounts invoiced after the date of this Agreement.

- 28 -

 

	5.2	 	Completion of Sections 2.8(a),(b),(c), 2.9 and 2.11 Matters

In addition to the completion of the transactions contemplated by this
Agreement to be completed on the Effective Date, the parties shall execute and
deliver each document, agreement and instrument reasonably necessary to
complete and effectuate the transactions contemplated by Sections
2.8(a),(b),(c), 2.9 and 2.11 on or before December 31, 2002, or such other
later date as may be agreed to between the parties.

	5.3	 	Non-Satisfaction of Conditions Precedent

In the event that any of the conditions precedent contained in Section 5.1
hereof are not satisfied or waived (as the case may be) by September 30, 2002,
or such other later date as may be agreed to between the parties, and the
parties have acted in good faith in accordance with Section 6.9 hereof, then
the transactions contemplated by this Agreement shall be considered null and
void and unenforceable by or against the parties hereto and this Agreement
shall not be referred to or used for any purpose by any of the parties hereto
or any other party for any reason and the parties’ rights and obligations under
any and all of the Transaction Documents and the Ledcor Build Agreement or any
disputes or litigation related thereto shall continue as though this Agreement
had never been entered into, each party agreeing that neither this Agreement
nor any of the discussions or negotiations giving rise thereto shall be
admissible in any such litigation proceeding.

	5.4	 	Use of this Agreement

On and after the Effective Date, this Agreement may be pleaded as a full and
complete defence to any action, suit, claim, or other proceeding that may be
instituted, prosecuted or attempted for, upon, or in respect of any of the
Claims released by or through this Agreement. Each of the parties hereto
agrees that any such proceeding would cause irreparable injury to the party
against whom it is brought and that any court of competent jurisdiction may
enter an injunction restraining prosecution of any such proceeding. Each of
the parties hereto further agrees that this Agreement may be pleaded as
necessary for purposes of enforcing this Agreement in a court of competent
jurisdiction. Nothing contained in this Agreement shall prevent a party hereto
from commencing a separate action or actions for any breach of any of the
provisions of this Agreement.

	6.	 	GENERAL
	 
	6.1	 	Time of the Essence

Time shall be of the essence of this Agreement.

	6.2	 	Further Assurances

Subject to the terms of this Agreement, each party shall execute and deliver
all such further documents and instruments and do all acts and things as the
other party may reasonably require to carry out the full intent and meaning of
this Agreement.

	6.3	 	Entire Agreement

This Agreement, together with the other Transaction Documents and other
agreements referenced therein and herein, and the amended and restated mutual
non-disclosure and confidentiality agreement dated August 25, 2000 between 360
and Call-Net, constitute the entire agreement between the parties hereto
pertaining to the subject matter of this Agreement and such other agreements
and supersede all prior agreements, understandings, negotiations and
discussions, whether oral or written, express or implied, statutory or
otherwise between the parties.

- 29 -

 

	6.4	 	Reliance & Non-Waiver

Each signatory to this Agreement acknowledges and agrees that the other
signatories have entered into this Agreement relying on the representations,
warranties, covenants and agreements and other terms and conditions of this
Agreement. No waiver of any condition or other provision, in whole or in part,
shall constitute a waiver of any other condition or provision (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.

	6.5	 	Governing Law and Attornment

This Agreement shall be governed by and construed in accordance with the laws
of the Province of British Columbia and the federal laws of Canada applicable
in the Province of British Columbia, without regard for the conflict of law
rules of such laws. Subject to Section 2.7(g) hereof, each party agrees (i)
that any action or proceeding relating to this Agreement may (but need not) be
brought in any court of competent jurisdiction in the Province of British
Columbia or the Southern District of New York, and for that purpose now
irrevocably and unconditionally attorns and submits to the jurisdiction of
either court; (ii) that it irrevocably waives any right to and will not oppose
any such action or proceeding on any jurisdictional basis, including forum non
conveniens; and (iii) not to oppose the enforcement against it in any other
jurisdiction of any judgment or order duly obtained from such a court as
contemplated by this Section 6.5.

	6.6	 	Assignments

Notwithstanding any provision in any Transaction Document requiring the consent
of the applicable members of the Call-Net Group to assign such Transaction
Documents, this Agreement and any Transaction Document may be assigned by the
applicable members of the 360 Group without obtaining such consent in
accordance with and pursuant to:

	(a)	 	the terms of a plan of reorganization filed and approved by the court
having jurisdiction over the US Bankruptcy Cases;
	 
	(b)	 	the terms of a plan of arrangement filed and approved by the court having
jurisdiction over the Canadian Bankruptcy Cases; or
	 
	(c)	 	a sale of assets of the 360 Group which is approved by the court having
jurisdiction over either the US Bankruptcy Cases or the Canadian
Bankruptcy Cases;

provided however that if such assignment is to be made in accordance with and
pursuant to the terms of a plan of reorganization filed and approved by the
court having jurisdiction over the US Bankruptcy Cases or in accordance with
and pursuant to a sale of assets which is approved by the court having
jurisdiction over the US Bankruptcy Cases then such right to assign shall be
exercised only in accordance with and subject to the provisions of Section 365
of the Bankruptcy Code.

	6.7	 	Counterparts and Facsimile
	 
	(a)	 	This Agreement and any amendment, supplement, restatement or termination
of any provision of this Agreement may be executed and delivered in any
number of counterparts, each of which

		
	 	     when executed and delivered is an original but all of which taken
together constitute one and the same instrument.

	(b)	 	This Agreement may be executed by facsimile and the facsimile execution
pages will be binding upon the executing party to the same extent as the
original executed pages. The executing party

- 30 -

 

	 	 	covenants to provide originals of the facsimile execution pages for
insertion into the original Agreement in place of the facsimile pages.
	 
	6.8	 	Severability

If any clause or part of a clause in this Agreement shall be illegal, it shall
be considered separate and severable from this Agreement and the remaining
provisions shall remain in full force and effect and shall be binding upon the
parties as though the said clause or part thereof had never been included,
provided that this Agreement as thus modified remains operable.

	6.9	 	Good Faith

Each member of the Call-Net Group and of the 360 Group shall have a duty to act
in good faith in the performance and enforcement of this Agreement.

	6.10	 	Agreement Binding

Subject to the entry of the US Bankruptcy Court Approval Order and the CCAA
Approval Order, this Agreement will enure to the benefit of and be binding upon
each of the parties and their successors and permitted assigns.

	6.11	 	No Other Provisions Affected and Assumption
	 
	(a)	 	Nothing contained in this Agreement shall be deemed to be a waiver of any
covenant or agreement contained in or a waiver of any breach or default
under, any of the Transaction Documents, the Ledcor Build Agreement, the
May 2, 1998 Amending Agreement or any other agreement to which the parties
hereto may be a party to (collectively, the “Call-Net/360 Agreements”)
(save and except for any agreements specifically referred to, and
addressed, in this Agreement) and each of the parties hereto agree that,
except as modified, amended and supplemented by the provisions of this
Agreement all of the covenants, agreements, obligations, liabilities and
other provisions contained in the Call-Net/360 Agreements are hereby
ratified and confirmed in all respects and shall remain in full force and
effect and unamended or modified in any way.
	 
	(b)	 	The applicable members of the 360 Group hereby agree that as of and from
the date of this Agreement they shall not reject or terminate, or take any
steps to reject or terminate, any of the Call-Net/360 Agreements pursuant
to Section 365 of the Bankruptcy Code or pursuant to the provisions of the
CCAA (save and except to the extent that an applicable member of the
Call-Net Group materially breaches any of its obligations under a
particular Call-Net/360 Agreement or to the extent that any such
Call-Net/360 Agreements have not been rejected or terminated prior to the
date hereof or terminated pursuant to the provisions of this Agreement).
	 
	(c)	 	The 360 Group and the Call-Net Group hereby agree that the CCAA Approval
Order and the US Bankruptcy Court Approval Order shall provide that:

	 	(i)	 	upon the effective date of a plan of reorganization in the US
Bankruptcy Cases or a sale of all, or substantially all of the
assets of the applicable members of the 360 Group in the US
Bankruptcy Cases (collectively, the “US Emergence Date”); and
	 
	 	(ii)	 	upon the effective date of a plan of arrangement in the
Canadian Bankruptcy Cases or a sale of all, or substantially all, of
the assets of the applicable members of the 360 Group in the
Canadian Bankruptcy Cases (collectively, the “Canadian Emergence
Date”); and

- 31 -

 

	 	(iii)	 	so long as the applicable members of the Call-Net Group do
not materially breach any of their obligations under the applicable
Call-Net/360 Agreements,

		
	 	then all of the Call-Net/360 Agreements, or those Call-Net/360 Agreements
pursuant to which the applicable members of the Call-Net Group are not in
material breach of any of their obligations, as the case may be, shall,
as of the US Emergence Date and the Canadian Emergence Date, as
applicable, be assumed by the applicable members of the 360 Group party
thereto to the extent that such Call-Net/360 Agreements are assumable
under Section 365 of the Bankruptcy Code.

	(d)	 	The applicable members of the Call-Net Group agree that in connection
with the assumption of the Call-Net/360 Agreements contemplated by Section
6.11(c) hereof (except in connection with a future Chapter 11 case, if
any, of any applicable members of the 360 Group) the applicable members of
the 360 Group need not take any further steps to provide adequate
assurance of future performance in the context of Section 365 of the
Bankruptcy Code, provided however that, for greater clarity, the benefit
of the covenant in this Section 6.11(d) does not extend to any such
adequate assurance of future performance to be provided by any unrelated
third party to whom the 360 Group seeks to assign any of the Call-Net/360
Agreements.
	 
	6.12	 	Survival

Notwithstanding the entering into of the Definitive Agreements and the
documents, agreements and instruments required to be entered into pursuant to
Sections 2.8(a),(b),(c) 2.9 and 2.11 hereof and the transactions contemplated
by this Agreement becoming effective on the Effective Date or thereafter, as
the case may be, all covenants, agreements, representations and warranties
contained in this Agreement shall survive the execution of this Agreement, the
Definitive Agreements and the documents, agreements and instruments required to
be entered into pursuant to Sections 2.8(a),(b),(c) 2.9 and 2.11 hereof and the
completion of the transactions contemplated hereby and thereby, respectively.

	6.13	 	Notices

Any notices, requests, demands or other communications by the terms hereof
required or permitted to be give by one party to any other shall be given in
writing by personal delivery (which shall be deemed to include express courier
delivery service) or by facsimile or similar form of communication addressed to
such other party or delivered to such other party and marked “Private and
Confidential” as follows:

	(a)	 	If to Call-Net and the members of the Call-Net Group:

		
	 	Call-Net Enterprises Inc.

2235 Sheppard Avenue E.

Atria II, Suite 1800

North York, Ontario M2J 5G1

		
	 	Facsimile: (416) 718-6410

Attention: General Counsel

	(b)	 	With a copy to:

		
	 	Call-Net Enterprises Inc.

2235 Sheppard Avenue E.

Atria II, Suite 1800

North York, Ontario M2J 5G1

		
	 	Facsimile: (416) 496-4922

Attention: Director, Fibre and Infrastructure

- 32 -

 

	(c)	 	If to 360 or the members of the 360 Group:

		
	 	360networks (USA) inc.

12202 Airport Way, Suite 300

Broomfield, Colorado 80021

		
	 	Facsimile: (303) 854-5100

Attention: Legal Department

	(d)	 	If to Ledcor Canada and/or Ledcor US:

		
	 	LIL Limited

2200 1066 West Hastings Street

Vancouver, British Columbia V6E 3X1
	 
	 	Facsimile: (604) 681-5609

Attention: Rodney R. Neys, General Legal Counsel

or at such other address as any party may from time to time specify by notice
in writing given to the other parties. Notice, request, demands or other
communications, if sent by personal delivery or courier, shall be deemed to
have been received on the date of receipt by or on behalf of the addressee or,
if sent by facsimile or similar form of communication, upon receipt by the
sender of electronic confirmation of completion of the transmission showing the
correct answer back or other similar identification of the addressee.

	6.14	 	Confidentiality

Each of the parties to this Agreement agrees that it will not use, or permit
the use of, any of the information relating to any of the transactions,
agreements and settlements contemplated by this Agreement (collectively,
“Information”) in a manner or for a purpose detrimental to such other party or
otherwise and that they will not disclose, divulge, provide or make accessible,
or permit the disclosure of, any of the Information to any person or entity,
other than their respective directors, officers, employees, independent
contractors, consultants, counsel, accountants, investment advisors and other
representatives and agents, except as may be required by judicial or
administrative process or, by other requirements of applicable law; provided
however that prior to any disclosure of any Information as provided by this
Section 6.14, the disclosing party will first obtain the consent of the other
parties hereto and                
obtain                 the

recipients’ undertaking to comply with the provisions of this Section 6.14 with
respect to such Information; provided further however that the parties may
disclose any of the Information as required and in accordance with the process
for obtaining the CCAA Approval Order and the US Bankruptcy Court Approval
Order.

[Signature Page Follows]

- 33 -

 

IN WITNESS WHEREOF the parties have executed this Agreement effective as of the
date specified on the first page of this Agreement.

	 	360NETWORKS INC.

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	360NETWORKS (CDN FIBER) LTD.

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	360NETWORKS (USA) INC.

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	CALL-NET ENTERPRISES INC.

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

- 34 -

 

	 	SPRINT CANADA INC.

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	CALL-NET TECHNOLOGY SERVICES INC.

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	CNCS INC.

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	LIL LIMITED

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	LEDCOR INDUSTRIES (USA) INC.

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

- 35 -

 

SCHEDULE “A”

RECIPROCAL SUB-LICENSING FEES [ * ]

	 	 	 	    	 	    	 	      	 	 	 	 	 
	Company	 	Amount Paid	 	Date	 	Applicable Calendar Year
	
	 	
	 	
	 	

	[ * ]
	 	 	[ * ]	 	 	 	[ * ]	 	 	 	[ * ]	 
	

	 
	

	 
	

	 
	

	 
	

	 
	

	TOTAL
	 	 	[ * ]	 	 	 	 	 	 	 	 	 
	

	TOTAL owing [ * ]
	 	 	[ * ]	 	 	 	 	 	 	 	 	 
	

	TOTAL settlement amount [ * ]
	 	 	[ * ]	 	 	 	 	 	 	 	 	 
	

	 
	

	1   Inv J4997 June 30, 2001-Dec 31, 2000, K0503 June 30, 2001-Dec 31, 2000

 

 

SCHEDULE “B”

ON-NETWORK PRODUCTS AND SERVICES

 

 

EXHIBIT 2.6(c)

MUTUAL RELEASE FOR ADVERSARY PROCEEDING

     THIS MUTUAL RELEASE (this “Release”) is entered into this <> day of
<>, 2002 by and between 360networks inc. (“360”), 360networks (Cdn fiber)
ltd. (“360 Cdn”), 360networks (USA) inc. (“360 USA”), LIL Limited (“Ledcor
Canada”), Ledcor Industries (USA) Inc. (“Ledcor US”) and USTR Fiber Development
Inc. (formerly CNE Fiber Development Inc.) (“USTR”).

     This Release is being entered into pursuant to Section 2.6(c) of the
Global Settlement Agreement dated <>, 2002 made among 360, 360 Cdn, 360
USA, Call-Net Enterprises Inc., Sprint Canada Inc., Call-Net Technology
Services Inc., CNCS Inc., Ledcor Canada and Ledcor US (as amended,
supplemented, restated or modified from time to time the “Settlement
Agreement”).

AGREEMENT

     IN CONSIDERATION of the premises and mutual covenants and agreements set
forth herein and in the Settlement Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties, the parties covenant and agree as follows:

1.     Each of 360, 360 Cdn, 360 USA, Ledcor Canada and Ledcor US on behalf of each
of them, and each and every predecessor, successor and assign of each of them,
and each of their respective officers, directors, parents, members, Affiliates,
subsidiaries, agents, shareholders, employees, attorneys and assigns
(collectively, the “360 Releasors”) hereby forever release, remise, waive,
acquit, and discharge USTR, and its predecessors, successors and assigns and
each of its officers, directors, parents, partners, members, Affiliates,
subsidiaries, agents, shareholders, employees, attorneys and assigns and its
heirs, executors, administrators and representatives (collectively, the “USTR
Releasees”), from any and all claims, obligations, costs, losses, liabilities,
debts, demands, actions, causes of action, damages, judgments, liens, set off,
recoupment, indebtedness, suits, expenses and disbursements, including, without
limitation, any claims as defined in Section 101(5) of the Bankruptcy Code and
in Section 12 of the CCAA (collectively, the “Claims”), known or unknown,
suspected or unsuspected, contingent or existing, suffered or that may be
suffered by any of the 360 Releasors or that the 360 Releasors may now or
hereafter have against the USTR Releasees, including, without limitation, any
Claims arising under Chapter 5 of the Bankruptcy Code, connected with, arising
out of or being the subject of the action commenced by 360 USA against USTR and
CNCS Inc. in the United States Bankruptcy Court, Southern District of New York
as Adversary Proceeding No. 01-3583 (ALG) (the “360 Action”) or the action
commenced by CNCS Inc. against 360 USA in the United States Bankruptcy Court,
Southern District of New York as Adversary Proceeding No. 01-3583 (ALG) in
response to the 360 Action (the “CNCS Counterclaim” and collectively with the
360 Action herein referred to as the “Adversary Proceeding”).

2.     The USTR Releasees hereby forever release, remise, waive, acquit and
discharge the 360 Releasors from any and all Claims known or unknown, suspected
or unsuspected, contingent or existing, suffered or that may be suffered by any
of the USTR Releasees or that the USTR Releasees may now or hereafter have
against the 360 Releasors, including, without limitation, any Claims arising
under Chapter 5 of the Bankruptcy Code, connected with, arising out of or being
the subject of the Adversary Proceeding.

3.     Each of the 360 Releasors and the USTR Releasees represents that it has read
this Release and understands each of its terms. Each of the 360 Releasors and
the USTR Releasees further represents that no representations, promises,
agreements, stipulations, or statements have been made by any of the 360
Releasors and the USTR Releasees to induce the entering into of this Release,
beyond

 

 

those contained herein and those contained in the Settlement Agreement or in
any other agreement entered into in connection therewith.

4.     If any provision of this Release should be declared to be unenforceable by
an administrative agency or court of law, the remainder of the Release should
remain in full force and effect, and shall be binding upon the 360 Releasors
and the USTR Releasees as if the invalidated provision were not part of this
Release.

5.     This Release shall enure to the benefit of each of the 360 Releasors and the
USTR Releasees and their respective successors and assigns and shall be binding
upon each of the 360 Releasors and the USTR Releasees and their respective
successors and assigns.

6.     Unless otherwise defined, all capitalized terms used herein shall have the
respective meanings ascribed to such terms as follows:

"Affiliates” means, for any Person, those Persons who are affiliates of such
Persons within the meaning specified in the Canada Business Corporations Act.

"Bankruptcy Code” means title 11 of the United States Code.

"CCAA” means the Companies’ Creditors Arrangement Act.

"Person” means a natural person, corporation, firm, limited or unlimited
liability company, partnership or other form of legal entity.

[signature page follows]

- 2 -

 

IN WITNESS WHEREOF each of the undersigned has executed this Release or caused
this Release to be executed, all as of the date and year first above written.

	 	360NETWORKS INC.

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	360NETWORKS (CDN FIBER) LTD.

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	360NETWORKS (USA) INC.

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	LIL LIMITED

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

- 3 -

 

	 	LEDCOR INDUSTRIES (USA) INC.

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	USTR FIBER DEVELOPMENT INC.

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

- 4 -

 

EXHIBIT 3.2

FORM OF RELEASE FOR ESCROW ITEMS

	TO:	 	CALL-NET ENTERPRISES INC., SPRINT CANADA INC., CNCS INC. and CALL-NET
TECHNOLOGY SERVICES INC.
	 
	RE:	 	Global Settlement Agreement dated <>, 2002 among 360networks
inc., 360networks (Cdn fiber) ltd., 360networks (USA) inc., Call-Net
Enterprises Inc., Sprint Canada Inc., Call-Net Technology Services
Inc., CNCS Inc., LIL Limited and Ledcor Industries (USA) Inc. (the
“Settlement Agreement”)

     This Release is being entered into, executed and delivered pursuant to
Section 3.2 of the Settlement Agreement. Unless otherwise defined, capitalized
terms used herein shall have the meaning ascribed to such terms in the
Settlement Agreement.

AGREEMENT

     IN CONSIDERATION of the premises and mutual covenants and agreements
contained in the Settlement Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each of the undersigned, each of the undersigned agrees as follows:

1.     Each of the undersigned on behalf of each of them, and each and every
predecessor, successor and assign of each of them, and each of their respective
officers, directors, parents, members, Affiliates, subsidiaries, agents,
shareholders, employees, attorneys and assigns (collectively, the “360
Releasors”) hereby acknowledge, confirm and agree that the obligations,
liabilities and responsibilities of the addressees hereof with respect to any
Claimed Deficiencies are hereby terminated and that each of the 360 Releasors,
hereby forever release, remise, waive, acquit and discharge the addressees
hereof and their respective predecessors, successors and assigns of each of
them and each of their respective officers, directors, parents, partners,
members, Affiliates, subsidiaries, agents, shareholders, employees, attorneys
and assigns and their heirs, executors, administrators and representatives
(collectively, the “Releasees”) from any obligations, liabilities and
responsibilities arising under, pursuant to or in connection with any such
Claimed Deficiencies, and each of the 360 Releasors, hereby forever release,
remise, waive, acquit and discharge the Releasees of and from any Claims, known
or unknown, suspected or unsuspected, contingent or existing, suffered or that
may be suffered by any of the 360 Releasors or that any of the 360 Releasors
may now or hereafter have against the Releasees arising under, pursuant to or
in connection with any such Claimed Deficiencies.

2.     Each of the 360 Releasors represents that it has read this Release and
understands each of its terms. Each of the 360 Releasors further represents
that no representations, promises, agreements, stipulations, or statements have
been made by the Releasees to induce the entering into of this Release, beyond
those contained herein and those contained in the Settlement Agreement or in
any other agreement entered into in connection therewith.

3.     If any provision of this Release should be declared to be unenforceable by
an administrative agency or court of law, the remainder of the Release should
remain in full force and effect, and shall be binding upon each of the 360
Releasors as if the invalidated provision were not part of this Release.

 

 

4.     This Release shall enure to the benefit of the Releasees and their
respective successors and assigns and shall be binding upon each of the 360
Releasors and their respective successors and assigns.

IN WITNESS WHEREOF each of the undersigned has executed this Release or caused
this Release to be executed on the <> day of July, 2002.

	 	360NETWORKS INC.

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	360NETWORKS (CDN FIBER) LTD.

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	360NETWORKS (USA) INC.

	 	Per:	 	 
	 	 	
	 
	 	 	Name:

Title:	 

	 	 	 	 
	 	 	
	 
	 	 	Name:

Title:	 

- 2 -exv10w1

 

EXHIBIT 10.1

GLOSSARY

Set forth below are the meanings of certain terms defined as they are used in
this Annual Report on Form 20-F:

ADSL (Asymmetrical Digital Subscriber Line) means an Internet and network
access technology providing speeds of up to 50 times standard phone line
Internet access.

ASP (Application Solutions Provider) means an e-commerce provider of business
solutions via the Internet, including application hosting and remote access
services.

ATM (Asynchronous Transfer Mode) means a data services technology which allows
the transmittal of many small, fixed-sized cells of data at very high-speeds.

Broadband means a network capable of transporting voice, data and IP services
at higher capacities than traditional telephone networks.

CLEC (Competitive Local Exchange Carrier) means a CRTC authorized provider of
telecommunications services in Canada.

CRTC (Canadian Radio-television and Telecommunications Commission) means the
governmental body in Canada which oversees the regulation of the
telecommunications industry.

DSL (Digital Subscriber Line) means a family of evolving digital services
provided over local switched telephone networks generally associated with
high-speed Internet services.

Equal Ease of Access means interconnection with ILEC toll offices in a manner
which is equivalent to long distance service provided by an ILEC (i.e., with no
requirement for extra dialling by the subscriber).

FCC (Federal Communications Commission), means an independent agency of the
United States (U.S.) federal government charged under the Communications Act of
1934, as amended, and the Telecommunications Act (U.S.) (collectively “the
Communications Act”).

IFL means International Facilities Licence.

ILEC (Incumbent Local Exchange Carrier) means one of the telecommunications
providers in Canada which operated prior to the deregulation of the long
distance market in 1992, in respect of the geographic market in which the
carrier then provided telecommunications services.

 

 

Incumbent means former monopoly phone companies (those Canadian
telecommunications companies which were members of the alliance known as
Stentor, prior to its break-up).

IP Network means an infrastructure dedicated to the transport, routing and
management of Internet protocol data.

IP-VPN (Internet Protocol — Virtual Private Network) means a service used to
connect branch offices and remote workers over a single provider’s IP network
or through several networks (the Internet). Data traverses a public data
infrastructure, but offers the appearance, functionality and usefulness of a
dedicated network.

IRU (Indefeasible Right of Use) means a long-term right to use a fibre optic
facility, including a right to use underlying rights and support structures.

IXCs means Interexchange Carriers.

LAN (Local Area Network) means a short distance data communications network
(typically within a building or campus) used to link together computers and
peripheral devices under some form of standard protocol.

LEC (Local Exchange Carrier) means a telecommunications company offering local
services.

LMCS (Local Multi-point Communications System) means a line-of-sight broadband
wireless service capable of carrying basic and advanced communications
services.

LNP means Local Number Portability.

Local Services means the Canadian local telephone services, including local
network services (such as dial tone, enhanced calling features and data
services), network access services and other services (such as the publication
of telephone directories).

MAN means operational Metro Area Network.

MNS (Managed Network Services) means the outsourcing to a telecommunications
provider of certain complex hosting solutions including enterprise network
monitoring, network security and network architecture, design and
implementation.

NAS means Network Access Service.

PCS (Personal Communications Service) means a low-powered wireless
communications technology similar to cellular.

PUCs (Public Utilities Commissions) means Telecommunications services providers
in the United States who are also regulated at the state level by state public
utilities commissions and/or other authorities.

 

 

SME (Small and Medium-sized Enterprise) means businesses ranging in size from 5
to 500 employees, requiring a range of communications products.

SOHO (Small Office, Home Office) means the customer segment made up of
businesses with fewer than 10 employees requiring unique communications
solutions.

SONET (Synchronous Optical Network) means an international standard for
transmitting digital signals over fibre optic networks.

Stentor means Stentor Canadian Network Management, an organization formed by
the nine major provincial and regional Canadian telephone companies, and
Telesat Canada, the monopoly provider of satellite broadcasts in Canada.

TLS (Transparent LAN Service) means a service that provides connectivity
between a company’s remote LANs without the need for conversion of LAN data to
a different Wide Area Network protocol (such as frame relay). All users appear
to be on the same LAN regardless of their location.

TSR means Total Subsidy Requirement.

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