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EXHIBIT 10.1
SUBSCRIPTION AND SHAREHOLDERS AGREEMENT
dated as of
[ ], 2000
among
GLOBAL CROSSING LTD.,
SOFTBANK CORP.,
MICROSOFT CORPORATION
and
ASIA GLOBAL CROSSING LTD.
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.........................................................1
ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS..........................5
Section 2.1 Organization and Qualification.............................5
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Section 2.2 Authorization; Consents; No Conflicts......................5
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Section 2.3 Compliance with Applicable Law.............................6
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Section 2.4 Company Representations and Warranties.....................6
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Section 2.5 No Binding Commitments To Transfer.........................6
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ARTICLE III AGREEMENTS........................................................6
Section 3.1 Non-Competition............................................6
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Section 3.2 Additional Obligations of Softbank and Microsoft...........8
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Section 3.3 Technology.................................................9
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Section 3.4 Pacific Crossing..........................................10
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Section 3.5 Corporate Governance......................................10
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Section 3.6 Requirements for Board Action.............................11
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Section 3.7 Agreement to Bind Affiliates..............................12
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ARTICLE IV MISCELLANEOUS.....................................................13
Section 4.1 Confidentiality...........................................13
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Section 4.2 Choice of Forum...........................................13
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Section 4.3 Injunctive Relief; Specific Performance...................13
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Section 4.4 Assignment................................................14
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Section 4.5 Notices...................................................14
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Section 4.6 Third Party Beneficiary...................................16
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Section 4.7 Section Headings..........................................16
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Section 4.8 Choice of Law.............................................16
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Section 4.9 Entire Agreement..........................................16
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Section 4.10 Severability..............................................16
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Section 4.11 Cumulative Rights.........................................16
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Section 4.12 Counterparts..............................................16
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Section 4.13 Other Covenants.....................................16
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SCHEDULE 1 18
SCHEDULE 3.5(B) 19
Schedule 1 Territory
Schedule 3.5(b) Existing Affiliated Contracts
Exhibit A Memorandum of Association of the Company
Exhibit B Amended and Restated Bye-Laws of the Company
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SUBSCRIPTION AND SHAREHOLDERS AGREEMENT, dated as of [ ], 2000 (this
"Agreement"), among GLOBAL CROSSING LTD., a company incorporated under the laws
of Bermuda ("Global Crossing"), SOFTBANK CORP., a Japanese corporation
("Softbank"), MICROSOFT CORPORATION, a Washington corporation ("Microsoft") and
ASIA GLOBAL CROSSING LTD., a company incorporated under the laws of Bermuda (the
"Company").
W H E R E A S:
WHEREAS, this Agreement sets forth certain understandings regarding
the Shareholders' (as defined herein) relationship with the Company and each
other.
NOW, THEREFORE, in consideration of the mutual promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 (a) As used in this Agreement, the following capitalized terms
shall have the following meanings:
"Affiliate" of a Person means any other Person that, directly or
indirectly through one or more intermediaries, Controls, is Controlled by
or is under common Control with such first Person.
"Agreement" as defined in the preamble hereto.
"Board of Directors" means the board of directors of the Company or
the Operating Company, as the case may be.
"Business Day" means any day other than a Saturday, a Sunday or a
United States federal or Bermuda holiday.
"Bye-Laws" means the Bye-Laws of the Company, as in effect from time
to time.
"Capacity Commitment Agreement" means the Capacity Commitment
Agreement, dated as of November 24, 1999, among the Company, Global
Crossing USA, Inc., a wholly owned subsidiary of Global Crossing Ltd.,
Softbank and Microsoft, as the same may be amended, supplemented or
otherwise modified from time to time.
"Class A Common Shares" means the Class A Common Shares of the
Company, par value $0.01 per share.
"Class B Common Shares" means the Class B Common Shares of the
Company, par value $0.01 per share.
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"Common Shares" means collectively the Class A Common Shares, the
Class B Common Shares and any common shares of any other class that the
Company may issue from time to time.
"Company" as defined in the preamble hereto.
"Company Business" means the development, creation, launch,
acquisition, ownership and the provision of services through or in
connection with (i) undersea cable systems into or within the Territory,
(ii) intercity networks within the Territory, (iii) Intracity Networks and
(iv) the GlobalCenter Asia Business within the Territory.
"Competing Entity" as defined in Section 3.1(a).
"Confidential Information" as defined in Section 4.1(a).
"Control" means, with respect to any Person, the power to direct or
cause the direction of the management of such Person, directly or
indirectly, whether through the ownership of voting securities, by
contract or otherwise. The terms "Controlling" and "Controlled" have
meanings correlative to the foregoing.
"Controlled Subsidiary" means (a) with respect to Microsoft, a
wholly-owned Subsidiary of Microsoft, (b) with respect to Softbank, a
Subsidiary of Softbank that is (x) a corporation as to which the
percentage referred to in clause (i) of the definition of "Subsidiary" is
80% or more or (y) an entity of the kind referred to in clause (ii) of the
definition of "Subsidiary" that is Controlled by Softbank and as to which
the percentage referred to in clause (ii) of the definition of "Subsidiary
is 80% or more and (c) with respect to Global Crossing, a Subsidiary of
Global Crossing that is (x) a corporation as to which the percentage
referred to in clause (i) of the definition of "Subsidiary" is more than
50% or (y) an entity of the kind referred to in clause (ii) of the
definition of "Subsidiary" that is Controlled by Global Crossing and as to
which the percentage referred to in clause (ii) of the definition of
"Subsidiary" is more than 50%.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended.
"Fiscal Year" means the 12-months (or shorter) period ending on
December 31 of each calendar year.
"GlobalCenter Asia Business" means the Web Hosting Business within
the Territory; provided, however, for the purposes of Section 3.1 this
definition shall mean complex web hosting services and server farms.
"Global Crossing" as defined in the preamble hereto.
"Governing Law" means the laws of Bermuda.
"Governmental Approval" means any consent, approval, order or
authorization of, or registration, declaration or filing with, any
Bermuda, United States federal, state or municipal, Japanese or any other
foreign or other governmental department, commission,
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board, bureau, agency or instrumentality required to authorize or permit
the execution or delivery by any Person of this Agreement or the
performance by such Person of any transaction contemplated hereby or
thereby.
"Governmental Entity" means any foreign, federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality.
"HGC Contribution Agreement" means the Purchase, Contribution and
Indemnification Agreement, dated as of May 11, 2000, among Global
Crossing, Microsoft, Softbank, the Company and the other parties named
therein.
"Intracity Network" as defined in Section 3.1(f).
"Invest In" as defined in Section 3.1(a).
"Memorandum of Association" means the Memorandum of Association of
the Company or the Operating Company, as the case may be, as amended from
time to time.
"Microsoft" as defined in the preamble hereto.
"Permitted Holder" means, with respect to Global Crossing, any of
(i) Pacific Capital Group, Inc. and its Affiliates, (ii) CIBC Xxxxxxxxxxx
Corp. and its Affiliates and (iii) any other "person" (as such term is
used in Section 13(d)(3) of the Exchange Act) which, together with such
person's Affiliates, is the "beneficial owner" (as such term is defined in
Rule 13d-3 and Rule 13d-5 under the Exchange Act) on the date hereof of
more than 20% of the common stock of Global Crossing.
"Permitted Transferee" as defined in Section 3.1(g).
"Person" means any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, governmental authority or
other entity.
"Representatives" of a Person means the directors, officers,
employees, agents, advisors and consultants of such Person.
"Service" of any Person means the collective reference to the one or
more data, Internet or telecom services and GlobalCenter Asia Businesses
developed, owned, offered, licensed or operated by such Person.
"Shareholder" means each of Global Crossing, Softbank and Microsoft
and each other Person, if any, that hereafter becomes a party to this
Agreement, in each case for as long as Global Crossing, Microsoft,
Softbank or such other Person, as the case may be, together with their
respective Affiliates, shall own, directly or indirectly, beneficially or
of record, at least 5% of the outstanding Common Shares of the Company.
"Softbank" as defined in the preamble hereto.
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"Subsidiary" means as to any Person, (i) any corporation of which
more than 50% of the outstanding stock of any class or classes having by
the terms thereof ordinary voting power to elect a majority of the
directors of such corporation (irrespective of whether or not at the time
stock of any class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time
owned by such person and/or one or more Subsidiaries of such person and
(ii) any partnership, association, joint venture or other entity in which
such person and/or one or more Subsidiaries of such person have more than
a 50% equity interest therein.
"Territory" means the collective reference to the countries listed
in Schedule 1 hereto.
"Transfer" means, directly or indirectly, (i) to sell, transfer,
tender, assign, encumber, grant security interests in or otherwise dispose
of (including pursuant to a merger, amalgamation or otherwise by operation
of law) or enter into any contract, pledge, option or other agreement,
arrangement or understanding with respect to the sale, transfer, tender,
assignment or other disposition of (including pursuant to a merger,
amalgamation or otherwise by operation of law); provided, however, that in
the case of Softbank, Microsoft and Global Crossing, a merger,
amalgamation, consolidation or similar transaction involving any such
Shareholder shall not be deemed a Transfer, or (ii) to grant any proxies
or power of attorney, deposit into a voting trust or enter into a voting
agreement or otherwise transfer voting power (including by general or
specific, revocable or irrevocable proxy or otherwise) with respect to, in
each case, any Common Shares. The terms "Transferred", "Transferring",
"Transferor" and "Transferee" have the meanings correlative to the
foregoing.
"Web Hosting Business" means the provision of the web hosting
services in or in connection with a data center facility, including
information technology consulting services, data security services,
managed solutions, day-to-day operational management, distribution of web
content, electronic commerce support, application hosting and related
Internet infrastructure products and services.
(a) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.
(b) All references herein to Articles, Sections and Schedules shall
be deemed to be references to Articles and Sections of and Schedules to this
Agreement, unless the context shall otherwise require. All Schedules attached
hereto shall be deemed incorporated herein as if set forth in full herein.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provisions of this Agreement.
(d) The words "include", "includes" and "including" shall be deemed
to be followed by the phrase "without limitation".
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ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.1 Organization and Qualification. Each Shareholder hereby
represents and warrants to each other Shareholder and the Company that, as of
the date hereof, such Shareholder is duly organized and validly existing under
the laws of the jurisdiction of its organization and has all requisite power and
authority to own, lease and operate its properties, to carry out its business as
it is now being conducted and to perform its obligations hereunder, and under
its constitutive documents, and to consummate the transactions contemplated
hereby and thereby.
Section 2.2 Authorization; Consents; No Conflicts. Each Shareholder
hereby represents and warrants to each other Shareholder and the Company that,
as of the date hereof, such Shareholder has all the necessary corporate or
company, as applicable, power and all legal authority required to enter into,
execute and deliver this Agreement and to perform fully such Shareholder's
obligations hereunder. Each Shareholder hereby represents and warrants to each
other Shareholder and the Company that, as of the date hereof, the execution of
this Agreement by such Shareholder and the consummation of the transactions
contemplated hereby have been duly authorized by all requisite corporate or
company, as the case may be, action on the part of such Shareholder. Each
Shareholder hereby represents and warrants to each other Shareholder and the
Company that, as of the date hereof, this Agreement has been duly executed and
delivered by such Shareholder and constitutes the valid and binding obligation
of such Shareholder enforceable against such Shareholder in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other similar laws relating to or affecting creditors'
rights generally from time to time in effect and to general principles of equity
(including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing), regardless of whether considered in a proceeding in
equity or at law, and that, as of the date hereof, no Governmental Approval and
no approval or consent of any other Person is required in connection with the
execution and delivery by such Shareholder of this Agreement and the
consummation and performance by such Shareholder of the transactions
contemplated hereby, other than such approvals and consents which failure to
obtain would not have a material adverse effect upon the Company or such
Shareholder acting as a Shareholder hereunder or on any other transaction
contemplated hereby. Each Shareholder hereby represents and warrants to each
other Shareholder and the Company that, as of the date hereof, the execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby and the performance by such Shareholder of its obligations under this
Agreement in accordance with its terms and conditions will not conflict with or
result in a breach or violation of any of the terms or conditions of, or
constitute (or with notice or lapse of time or both would constitute) a default
(or give rise to any right of termination, cancellation or acceleration) under,
as applicable, (i) the charter, articles of association, Bye-Laws or other
constitutive document of such Shareholder, as applicable, (ii) any instrument,
contract, bond, note, mortgage, indenture, license or other agreement to which
such Shareholder is a party or by or to which such Shareholder or such
Shareholder's assets or properties are bound or subject or (iii) any statute or
regulation of any applicable law or any order, judgment, injunction or decree of
any court other than, in the case of clauses (ii) and (iii), conflicts,
breaches, violations or
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defaults which would not in the aggregate have a material adverse effect upon
such Shareholder acting as a Shareholder hereunder or on any other transactions
contemplated hereby.
Section 2.3 Compliance with Applicable Law. Each Shareholder
hereby represents and warrants to each other Shareholder and the Company that,
as of the date hereof, such Shareholder is in compliance with all applicable
requirements of law, other than where the failure to be in compliance would not
have a material adverse effect upon the ability of such Shareholder to perform
its obligations hereunder or on any transaction contemplated hereby.
Section 2.4 Company Representations and Warranties. The Company
hereby represents and warrants to each Shareholder that:
(a) The Company has been duly incorporated and is validly existing
under the laws of Bermuda.
(b) True and correct copies of the Memorandum of Association and
Bye-Laws of the Company, which are in effect as of the date hereof, are attached
hereto as Exhibits A and B, respectively.
Section 2.5 No Binding Commitments To Transfer. Each Shareholder
hereby represents and warrants to the Company and each other Shareholder that
such Shareholder has no binding commitments as of the date hereof to Transfer
any part of its equity interest in the Company to any Person.
ARTICLE III
AGREEMENTS
Section 3.1 Non-Competition. (a) Each of Global Crossing, Softbank
and Microsoft (i) agrees not to engage in, and agrees to cause its Controlled
Subsidiaries not to engage in, directly or indirectly, any service or activity
within the scope of the Company Business in the Territory other than through the
Company, and (ii) agrees, and agrees to cause its Controlled Subsidiaries, not
to form, enter into any agreement or other arrangement (other than this
Agreement) with any third party for an investment in or otherwise invest in,
(collectively, "Invest In") any entity other than the Company engaged or, in the
case of an entity with no significant operations or operating history, expressly
intending to engage, primarily, in any service or activity within the scope of
the Company Business in the Territory (a "Competing Entity") except as otherwise
provided in this Section 3.1.
(b) Notwithstanding clause (a) of this Section 3.1, (i) Global
Crossing and its Subsidiaries may Invest In Global Access Ltd., (ii) each of
Global Crossing, Softbank and Microsoft and its Controlled Subsidiaries may
Invest in any Competing Entity so long as the consolidated revenues of such
Competing Entity from any service or activity within the scope of the Company
Business do not in the aggregate exceed 33"% of the total consolidated revenues
of such Competing Entity, (iii) each of Global Crossing, Softbank and Microsoft
may Invest In up to 15% of the outstanding capital stock or voting stock of any
Competing Entity whose
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consolidated revenues from any service or activity within the scope of the
Company Business exceed 33"% of the total consolidated revenues of such
Competing Entity and (iv) each of Global Crossing, Softbank and Microsoft and
its Controlled Subsidiaries may maintain any investment in which it has Invested
In or with respect to which it has a binding commitment to Invest In as of
September 8, 1999. For purposes of this clause (b), revenues of a Competing
Entity shall be determined on the basis of financial information for the most
recent period of twelve months for which financial information is available or,
in the case of any entity with no significant operations or operating history
(as determined in good faith by the Shareholder or Controlled Subsidiary making
such investment), on the basis of the entity's projections or operating plan for
the twenty-four month period following the date of such investment.
(c) Global Crossing, Softbank and Microsoft agree that Intracity
Network activities conducted by each of them and their Controlled Subsidiaries
in Korea will not be conducted by the Company or its Subsidiaries and further
agree to conduct such activities through an entity to be formed on substantially
the same terms as those applicable to the Company hereunder; provided, however,
that Softbank and Microsoft shall own in the aggregate 62% of the capital stock
of such entity (excluding capital stock required to be owned by local partners
in Korea) and Global Crossing shall own 38% of such capital stock (excluding
stock held by such local partners). Notwithstanding clause (a) of Section 3.1,
each of the Company, Global Crossing, Microsoft and Softbank is free to pursue
any activity, whether or not in competition with any of the other parties
hereto, in the Peoples Republic of China (including Hong Kong), subject, in the
case of each of Global Crossing and the Company, to the provisions of the
Shareholders Agreement, dated January 12, 2000, among Xxxxxxxxx
Telecommunications Limited, Xxxxxxxxx Whampoa Ltd., Global Crossing, Global
Crossing Holdings Ltd. and HCL Holdings Limited.
(d) Each of Microsoft and Softbank agrees, and agrees to cause each
of its Controlled Subsidiaries, not to develop, construct or Invest In any
undersea cable system in, into or within the Territory other than through the
Company during the period ending December 31, 2000.
(e) Microsoft agrees that any software which it or any of its
Subsidiaries makes available to any Competing Entity will be made available to
the Company on terms (including, without limitation, price, features and
functionality) which are consistent with other strategic partners of Microsoft
recognizing such factors as the class of customer utilizing the software, the
type of software, volume discounts and distribution channels.
(f) "Intracity Network" refers to a terrestrial network and related
infrastructure dedicated to the provision of end-to-end connectivity of data,
internet and telecom services marketed primarily to business and commercial
customers within a metropolitan area in the Territory other than Japan. It is
understood that the Shareholders, on an individual or collective basis, may
independently pursue a business of providing data, internet and telecom
services, marketed primarily on a retail basis, to a broad distribution of
residential, business and commercial customers (a "Permitted Business"). It is
further understood that a Permitted Business will not be directed to business
and commercial customers seeking end-to-end connectivity of data, internet and
telecom services. Any such Permitted Business shall utilize the Intracity
Network where available and commercially and technologically feasible and, if
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necessary, may supplement the infrastructure of the Intracity Network with
necessary network facilities and infrastructure to provide for consumer
connectivity; and otherwise the Permitted Business may utilize alternative
networks and infrastructure, including its own. Any such Permitted Business and
any proprietary network and infrastructure relating to such Permitted Business
shall not be considered part of any Intracity Network.
The use of non-Intracity Network facilities by any Permitted
Business within a metropolitan area shall not excuse the Permitted Business from
its obligations, detailed elsewhere in this agreement, to purchase capacity from
the Company for intercity or undersea transmission. It is understood that in the
development of a Permitted Business, a Shareholder may target the potential
customers of an Intracity Network. Notwithstanding the foregoing, it is the
express intention of Global Crossing, Microsoft and Softbank that, where
possible and to the extent in compliance with applicable laws, the Company and
such Shareholders shall coordinate the development of their respective networks
within a metropolitan area in a commercially reasonable manner.
(g) Each of Global Crossing, Softbank and Microsoft covenants that
if it develops or acquires or holds any development rights or other intellectual
property with respect to an Intracity Network (other than in Korea or the
People's Republic of China (not including Hong Kong)), such person shall grant a
perpetual, non-exclusive, royalty free license to the Company for the use of
such rights or intellectual property at no additional cost to the Company solely
to engage in and conduct the Company Business in the Territory.
(h) The obligations of Softbank under this Section 3.1 and Section
3.2 shall terminate on September 8, 2004, and the obligations of Microsoft under
this Section 3.1 and Section 3.2 shall terminate at the earlier of (i) September
8, 2004 and (ii) such time as Microsoft and its Permitted Transferees shall
cease to own any equity interest in the Company. The obligations of Global
Crossing under this Section 3.1 and Section 3.3 shall terminate at the earlier
of (i) September 8, 2004 and (ii) the date on which the obligations of both
Softbank and Microsoft shall have terminated pursuant to Sections 3.1 and 3.2.
(i) Notwithstanding clause (a) of Section 3.1, Global Crossing and
its Controlled Subsidiaries shall be permitted to engage in (and enter into
investments that are engaged in) any service or activity within the scope of the
Company Business in the Territory (whether or not through the Company and its
subsidiaries) to the extent that such service, activity or investment was
considered by the Board of Directors of the Company under Bye-Law 96(2) and was
not approved.
Section 3.2 Additional Obligations of Softbank and Microsoft. (a)
(i) Microsoft hereby agrees, and agrees to cause its Controlled Subsidiaries, to
use the Company's facilities and assets for the procurement distribution of all
their respective Layer 1 Transmission Systems (either self-healing SDH or WDM
systems) Services in the Territory, during the term of this Agreement, subject
to the provisions relating to availability, compatibility, quality and cost set
forth in Section 3.2(b), and Microsoft hereby further agrees to use its
commercially reasonable efforts (consistent with its fiduciary obligations to
minority shareholders) to cause its Subsidiaries (other than Controlled
Subsidiaries), following receipt of a request from the Company or an executive
officer of Microsoft obtaining actual knowledge that such Subsidiary
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is evaluating facilities and assets for its capacity needs and Services in the
Territory, to use the Company's facilities and assets for the procurement
distribution of all their respective Layer 1 Transmission Systems Services in
the Territory, during the term of this Agreement, subject to the provisions
relating to availability, compatibility, quality and cost set forth in Section
3.2(b).
(ii) Softbank hereby agrees to use its best efforts, and agrees to use
its best efforts to cause its Controlled Subsidiaries, to use the Company's
facilities and assets for all of their respective capacity and Service needs in
the Territory and the distribution of all of their respective Services in the
Territory, during the term of this Agreement, subject to the provisions relating
to availability, compatibility, quality and cost set forth in Section 3.2(b),
and Softbank hereby further agrees to use its commercially reasonable efforts
(consistent with its fiduciary obligations to minority shareholders) to cause
each of its Subsidiaries (other than Controlled Subsidiaries), following receipt
of a request from the Company or an executive officer of Softbank obtaining
actual knowledge that such Subsidiary is evaluating facilities and assets for
its capacity and Service needs in the Territory, to use the Company's facilities
and assets for all of their respective capacity and Service needs in the
Territory and the distribution of all of their respective Services in the
Territory, during the term of this Agreement, subject to the provisions relating
to availability, compatibility, quality and cost set forth in Section 3.2(b).
(b) Except as provided in the Capacity Commitment Agreement with
respect to aggregate purchases of $200 million of capacity, the obligation of
each of Softbank and Microsoft and their respective Controlled Subsidiaries and
Subsidiaries to use the Company's facilities, assets and Services in accordance
with paragraph (a) of this Section will be subject to (i) the Company's Layer 1
Transmission Systems Services, in the case of Microsoft and its Controlled
Subsidiaries and Subsidiaries, and the Company's capacity and/or Services, in
the case of Softbank and its Controlled Subsidiaries and Subsidiaries, meeting
the reasonable availability, compatibility and quality specifications of
Softbank or Microsoft (or their relevant Controlled Subsidiaries or
Subsidiaries), as applicable, for the applicable Layer 1 Transmission Systems
Services or capacity or Services, as the case may be, (ii) the cost of using the
Company's Layer 1 Transmission Systems assets and facilities or capacity or
Services, as the case may be, being at least as low as the lowest priced
available alternative (taking into account any applicable discounts) for the
same portion of such capacity or Services and (iii) the fiduciary obligations of
Softbank and Microsoft to minority shareholders; provided that if (i) and (ii)
are not met, Softbank and Microsoft shall provide the Company a reasonable
opportunity to meet such conditions for such similar portion of such Services.
Section 3.3 Technology. (a) The Company agrees, when considering the
purchase of technical products and related services for the Company Business, to
use its commercially reasonable efforts to purchase products and services
provided by Microsoft and Microsoft solution partners; provided, however, that
(i) the Company's obligation described in this Section 3.3 shall apply to
products and services used only in the Territory, (ii) such products and
services are consistent with the overall network operating and maintenance
objectives of the Company and Global Crossing and meet the compatibility and
quality specifications that Global Crossing uses for the rest of its network and
(iii) such products and services are priced at least as low as the lowest priced
available alternative (taking into consideration volume discounts and any other
applicable discounts, including discounts available with respect to Global
Crossing's network as a whole); provided further, that if (ii) and (iii) are not
met, the Company shall
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provide Microsoft a reasonable opportunity to meet such conditions.
Notwithstanding anything in this Section 3.3 to the contrary, it is the
understanding of each of the Company and Microsoft that nothing herein shall
restrict in any manner the management of the Company from taking any actions or
making any decision with respect to its business, including with respect to the
purchase of technical equipment and services, which such management believes is
in the best interest of the Company.
Section 3.4 Pacific Crossing. In the event that Global Crossing
acquires any portion of the equity interest in Pacific Crossing Ltd. not owned
by it on the date hereof, the Company shall have an option (subject to receipt
of all necessary Governmental Approvals), exercisable within one year from the
date of such acquisition, to purchase such interest for cash. If such option is
exercised, the consideration paid to Global Crossing shall be its Reacquisition
Cost. The determination whether to exercise the option granted to the Company
under this Section 3.4 shall be made by a majority of the members of the Board
of Directors other than those nominated by Global Crossing and shall be
conditional upon the Company's ability (as determined by the Board of Directors
(including the members nominated by Global Crossing)) to obtain necessary and
appropriate financing.
Section 3.5 Corporate Governance. (a) Each of Global Crossing,
Softbank and Microsoft shall be entitled to nominate a number of directors to
the Board of Directors of the Company equal to the total number of directors of
the Company multiplied by the percentage that the Common Shares owned of record
or beneficially owned by Global Crossing, Softbank or Microsoft, as the case may
be, represent of the aggregate voting power of all issued and outstanding Common
Shares (with any resulting fraction rounded up or down to the nearest whole);
provided, however, that each of Global Crossing, Softbank and Microsoft shall
have the right to nominate at least one director to the Board of Directors of
the Company for so long as such Shareholder, together with its Affiliates, holds
of record or owns beneficially at least 5% of the outstanding Common Shares.
Each Shareholder acknowledges and agrees that nothing in this paragraph shall be
construed so as to limit in any way the size of the Board of Directors of the
Company.
(b) For as long as each Shareholder, together with its Affiliates,
shall own, directly or indirectly, beneficially or of record, at least 5% of the
outstanding Common Shares of the Company, such Shareholder hereby agrees, and
agrees to cause its Affiliates, to vote or act by written consent with respect
to (or cause to be voted or acted upon by written consent) (i) all Common Shares
held of record or owned beneficially, directly or indirectly, by such
Shareholder or its Affiliates at the time of such vote or action by written
consent and (ii) all Common Shares as to which such Shareholder or its
Affiliates has voting control at the time of such vote or action by written
consent, in each case (A) in favor of the election of the Persons nominated by
each Shareholder pursuant to Bye-Law 79 of the Bye-Laws to serve on the Board of
Directors of the Company as directors and (B) against the election of any other
Person nominated to be a director of the Company. In addition, the Company
hereby agrees, for so long as each Shareholder has the right to nominate any
Persons to serve as directors of the Company pursuant to Bye-Law 79 of the
Bye-Laws, to vote or act by written consent with respect to (or cause to be
voted or acted upon by written consent) (i) all Common Shares held of record or
owned beneficially, directly or indirectly, by the Company at the time of such
vote or action by written consent and (ii) all Common Shares as to which the
Company has voting control at the time of such vote or action
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by written consent, in each case (A) in favor of the election of the Persons
nominated by such Shareholder pursuant to Bye-Law 79 of the Bye-Laws to serve on
the Board of Directors of the Company as directors and (B) against the election
of any other Person nominated to be a director of the Company.
(c) At the request of any Shareholder with respect to a director
(including an independent director) nominated by such Shareholder pursuant to
this Section 3.4, each other Shareholder entitled to nominate one or more
directors and the Company hereby agrees to vote or act by written consent with
respect to (or cause to be voted or acted upon by written consent) all Common
Shares held of record or owned beneficially, directly or indirectly, by such
other Shareholder or the Company, as the case may be, or as to which such other
Shareholder or the Company, as the case may be, has voting control at the time
of such vote or action by written consent to remove or cause the removal from
office of such director at any meeting or action by written consent of the
shareholders called or taken for the purpose of determining whether or not such
director shall be removed from office (and otherwise shall not vote or act by
written consent to remove or cause the removal of any director).
(d) In the event that a vacancy has been created on the Board of
Directors as a result of the absence of a director that had been nominated by
Global Crossing, Microsoft or Softbank, the appointment by the Board of
Directors of any such individual to be a director so as to fill such vacancy
shall be subject to the prior approval of any existing directors that had been
nominated by Global Crossing, Microsoft or Softbank, as applicable.
Section 3.6 Requirements for Board Action. (a) Except as provided in
Section 3.5(b) or mandatorily required by the laws of Bermuda, all actions taken
by the Board of Directors shall require the consent of the majority of the
directors present or represented and entitled to vote on such actions at a
meeting which has been duly called and at which a quorum was present at the time
such vote was taken.
(b) The following actions shall require the consent of a majority of
the Board of Directors, but must include the consent of the directors who are
nominated by both Softbank and Microsoft:
(i) the amalgamation, merger or consolidation of the Company or any of
its Subsidiaries with any other entity;
(ii) any acquisition or investment by the Company or any of its
Subsidiaries involving aggregate consideration paid by the Company and its
Subsidiaries of in excess of $1.0 billion, or any acquisition or investment by
the Company or any of its Subsidiaries if the aggregate consideration paid by
the Company and its Subsidiaries in any Fiscal Year for acquisitions or
investments after such acquisition or investment exceeds $2.0 billion;
(iii) any sale, transfer or other disposition of material assets of the
Company or any of its Subsidiaries (other than an initial public offering by the
Company and other than dispositions of worn-out or obsolete assets in the
ordinary course of business) in one or more related transactions;
(iv) any material change in the Company's purposes as described in Bye-
Law 2(2);
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(v) any amendment to the Memorandum of Association or Bye-Laws of
the Company that materially adversely affects rights of Softbank and Microsoft
under Bye-Law 96(2) or the right of Softbank and Microsoft to nominate directors
to the Board of Directors pursuant to Bye-Law 79;
(vi) the incurrence by the Company or any of its Subsidiaries of
indebtedness in excess of $1.0 billion in the aggregate at any one time
outstanding, excluding indebtedness incurred (A) to finance expenditures
incurred in accordance with the Company's initial strategic plan, including in
connection with East Asia Crossing, (B) to finance capital expenditures approved
by the Board of Directors in accordance with clause (vii) of this Section 3.5(b)
or, (C) pursuant to the PC-1 credit facility existing on September 8, 1999, and
any refinancing thereof, so long as the aggregate principal amount of such
refinancing does not exceed the aggregate principal outstanding as of any such
refinancing plus the principal amount, if any, available to be borrowed under
such facility as of such refinancing plus any accrued and unpaid interest and
plus all fees and expenses arising in connection with any such refinancing;
(vii) capital expenditures by the Company or any of its Subsidiaries
in excess of $1.0 billion on a project by project basis or in excess of $2.0
billion in any Fiscal Year;
(viii) the issuance of additional equity by the Company or any of its
Subsidiaries after the date hereof other than, in each case, in connection with
stock option plans, benefit and pension plans, other employee compensation
plans;
(ix) the commencement of any proceeding for voluntary bankruptcy of the
Company or any of its Subsidiaries;
(x) any transaction (including, without limitation, any transaction,
agreement or arrangement to provide services) between Global Crossing or any of
its Subsidiaries and the Company or any of its Subsidiaries for consideration
having a value in excess of $5.0 million and to be entered into on terms less
favorable to the Company than those that could have been obtained at the time of
such transaction in an arms' length transaction with an unrelated third party,
other than (A) transactions between the Company or any of its Subsidiaries and
Global Crossing or any of its Affiliates, entered into on an arm's length basis
involving the provision of Services and/or capacity to a customer in regions
both within and outside of the Territory (and including operation,
administrative and maintenance arrangements entered into on an arms' length
basis), (B) transactions set forth on Schedule 3.5(b) and (C) transactions
contemplated by the HGC Contribution Agreement;
(xi) the discontinuance of the Company as a Bermuda company; and
(xii) the dissolution of the Company upon the occurrence of a
Termination Event (as defined in the Bye-Laws).
Section 3.7 Agreement to Bind Affiliates. In the event that any
Shareholder Transfers any Common Shares to any Affiliate of such Shareholder,
such Shareholder hereby agrees to cause such Affiliate to become a party to this
Agreement, and such Shareholder shall remain liable (jointly and severally with
such Affiliate) for all obligations of such Affiliate under this Agreement and
shall remain bound by the terms of this Agreement; provided, however, that,
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in the event that such Affiliate shall fail to become a party hereto as provided
in this Section 3.6, such Transfer shall be null and void, and the Company
hereby agrees not to register such Transfer.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Confidentiality. (a) The Company and each Shareholder
hereby agree that the Company and such Shareholder will not, and will cause its
Affiliates and their respective Representatives not to, disclose to any person
(other than the Company, the Shareholders and their Representatives) or use for
any purpose (other than the evaluation of its investment in the Company) (i) any
non-public, confidential or proprietary information relating to the Company, the
Company Business or any Shareholder (other than, in the case of confidential
information relating to any Shareholder, as authorized by such Shareholder) or
(ii) the contents of this Agreement (collectively, "Confidential Information")
except as required by law or upon the order of any court, administrative agency
or regulatory authority; provided , however, that each party hereto shall
cooperate with each other party hereto in seeking to obtain a protective order
protecting the confidentiality of such information.
(b) The parties shall not be permitted to make any press release or
other public announcement with respect to this Agreement and/or the transactions
contemplated hereby without the consent of each party hereto, except that a
party may make such an announcement to the extent necessary to comply with its
obligations under applicable law after prior consultation with the other parties
hereto.
Section 4.2 Choice of Forum. With respect to any proceedings, claim
or suit arising under or relating to this Agreement, each party hereto expressly
agrees to submit hereby to the non-exclusive jurisdiction of the Federal and
state courts located in the Borough of Manhattan in New York City and hereby (i)
waives any objection which such party may have at any time to the laying of
venue of any such proceeding, claim or suit brought in any such court, waives
any claim that such proceeding, claim or suit has been brought in an
inconvenient forum and further waives the right to object, with respect to such
proceeding, claim or suit that such court does not have jurisdiction over such
party and (ii) irrevocably consents to service of process given in the manner
provided for notices in Section 4.5; provided that nothing in this Agreement
shall affect the right of any Party to serve process in any other manner
permitted by law.
Section 4.3 Injunctive Relief; Specific Performance. The parties
recognize that the obligations imposed on them in this Agreement are special,
unique and of extraordinary character, and that in the event of breach by any
party, damages will be an insufficient remedy; consequently, it is agreed that
the parties hereto shall be entitled to an injunction, restraining order or
other equitable relief to prevent breaches of the provisions of this Agreement
and to have specific performance (in addition to damages) as a remedy for the
enforcement hereof, without proving damages. No party shall raise any argument
as to the sufficiency of money damages.
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Section 4.4 Assignment. Except as otherwise provided herein, the
terms and conditions of this Agreement shall be for the benefit of and be
binding upon the permitted successors and assigns of the parties hereto; this
Agreement may not be assigned without the prior written consent of the
non-assigning party or parties.
Section 4.5 Notices. (a) Except as otherwise expressly provided in
this Agreement, all notices, requests and other communications to any
Shareholder shall be in writing (including a facsimile or similar writing) and
shall be given to such Shareholder at the following addresses or facsimile
numbers, as applicable:
If to the Company to:
Asia Global Crossing Ltd.
Wessex House
00 Xxxx Xxxxxx
Xxxxxxxx XX00
Xxxxxxx
Xxxxxxxxx of Xxxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention of Xxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
If to Global Crossing to:
Global Crossing Ltd.
Xxxxxx Xxxxx
00 Xxxx Xxxxxx
Xxxxxxxx XX00
Xxxxxxx
Attention of Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention of D. Xxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Softbank to:
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Softbank Corp.
00-0, Xxxxxxxxxx-Xxxxxxxxxxx, Xxxx-xx
Xxxxx, Xxxxx 103-8501
Attention of Chief Executive Officer
Facsimile: (000) 0000-0000
and
Softbank Inc.
00 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention of Xxx Xxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000
Attention of: Xxxxxx X. Xxxxxxx, Esq. and Xxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
If to Microsoft to:
Microsoft Corporation
Microsoft Corporation
Xxx Xxxxxxxxx Xxx
Xxxxxxx, XX 00000
Attention of Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
Microsoft Corporation
Xxx Xxxxxxxxx Xxx
Xxxxxxx, XX 00000
Attention of General Counsel, Finance and Operations
Facsimile: (000) 000-0000
(b) Each notice, request or other communication to any Shareholder
shall be effective (i) if given by facsimile, at the time such facsimile is
transmitted and the appropriate confirmation is received (or, if such time is
not during a Business Day, at the beginning of the following Business Day), (ii)
if given by mail, three Business Days or, if to an address outside the United
States, seven calendar days, after such communication is deposited in the mails
with first-class postage prepaid or (iii) if given by any other means, when
delivered at the applicable address specified in Section 4.5(a). Any Shareholder
may change address by reasonable prior written notice to each other Shareholder.
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Section 4.6 Third Party Beneficiary. Nothing in this Agreement,
express or implied, is intended or shall confer upon anyone other than the
parties hereto (and their permitted successors and assigns) any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
Section 4.7 Section Headings. Headings contained in this Agreement
are inserted only as a matter of convenience and in no way define, limit or
extend the scope or intent of this Agreement or any provisions hereof.
Section 4.8 Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of Bermuda.
Section 4.9 Entire Agreement. This Agreement (together with any
schedules and exhibits attached hereto) contains the entire understanding of the
parties hereto with respect to the subject matter hereof and thereof and
supersedes all prior agreements, discussions and understandings with respect to
such subject matter.
Section 4.10 Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provisions were omitted.
Section 4.11 Cumulative Rights. The rights of each party under this
Agreement are cumulative and in addition to all other rights or remedies that
any party may otherwise have at law or in equity.
Section 4.12 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same agreement of the parties
hereto.
Section 4.13 Other Covenants. Subject to applicable law, to the
extent that any terms of this Agreement conflict with any terms of the Company's
Memorandum of Association or Bye-Laws, the terms of this Agreement shall
control.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
GLOBAL CROSSING LTD.
By:
-------------------------------------
Name:
Title:
SOFTBANK CORP.
By:
-------------------------------------
Name:
Title:
MICROSOFT CORPORATION
By:
-------------------------------------
Name:
Title:
ASIA GLOBAL CROSSING LTD.
By:
-------------------------------------
Name:
Title:
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SCHEDULE 0
Xxxxxxxxx
Xxxxxx
Xxxxx
Xxxxxxxx
Xxxxx (including Hong Kong)
Fiji
Indonesia
Japan
Kiribati
Laos
Macau
Malaysia
Xxxxxxxx Islands
Micronesia, Federated States of
Mongolia
Nauru
North Korea
Palau
Papua New Guinea
Philippines
Samoa (formerly Western Samoa)
Singapore
Solomon Islands
South Korea
Taiwan
Thailand
Tonga
Tuvalu
Vanuatu
Vietnam
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SCHEDULE 3.5(b)
Existing Affiliated Contracts
Marketing Agreement, dated as of May 6, 1998, between Pacific Crossing Ltd.
and an affiliate of Global Crossing Ltd., as amended, supplemented or
otherwise modified from time to time.
Financial Services Agreement, dated as of May 6, 1998, between Pacific
Crossing Ltd. and an affiliate of Global Crossing Ltd., as amended,
supplemented or otherwise modified from time to time.
Operation, Administration and Maintenance Agreement, dated as of September,
1999, between Pacific Crossing Ltd. and an affiliate of Global Crossing Ltd.,
as amended, supplemented or otherwise modified from time to time.
Operation and Maintenance Agreement, dated as of September, 1999, between
Pacific Crossing Ltd. and an affiliate of Global Crossing Ltd., as amended,
supplemented or otherwise modified from time to time.
