EXHIBIT 99.3
EXCEL SHAREHOLDERS AGREEMENT
AGREEMENT, dated June 5, 1997 (this "Agreement"), by and
among
TELCO COMMUNICATIONS GROUP INC., a Virginia corporation ("Telco"), and each of
the other parties signatory hereto (each, a "Shareholder" and, collectively,
the
"Shareholders").
W I T N E S S E T H:
WHEREAS, concurrently herewith, EXCEL Communications, Inc.,
a
Delaware corporation (the "Company"), New RES, INC., a Delaware corporation
and
a direct wholly-owned subsidiary of the Company ("Holdings"), E-Sub, Inc., a
Delaware corporation and a wholly-owned subsidiary of Holdings ("Merger
Subsidiary"), T-Sub, Inc., a Virginia corporation and a wholly-owned
subsidiary
of Holdings, and Telco are entering into an Agreement and Plan of Merger (as
such agreement may hereafter be amended from time to time, the "Merger
Agreement"; capitalized terms used and not defined herein have the respective
meanings ascribed to them in the Merger Agreement) pursuant to which, inter
alia, Merger Subsidiary will be merged with and into the Company (the "Company
Merger");
WHEREAS, each of the Shareholders Beneficially Owns (as
defined herein) the number of shares of common stock, par value $0.001 per
share, of the Company (the "Shares" or "Company Common Stock") set forth
opposite such Shareholder's name on Schedule I hereto;
WHEREAS, as an inducement and a condition to entering into
the
Merger Agreement, Telco has required that the Shareholders agree, and the
Shareholders have agreed, to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
mutual premises, representations, warranties, covenants and agreements
contained
herein, the parties hereto hereby agree as follows:
1. Provisions Concerning Company Common Stock. Each
Shareholder hereby agrees that during the period commencing on the date hereof
and continuing until the first to occur of the Effective Time and termination
of
the Merger Agreement in accordance with its terms, at any meeting of the
holders
of Company Common Stock, however called, or in connection with any written
consent of the holders of Company Common Stock, such Shareholder shall vote
(or
cause to be voted) the Shares held of record or Beneficially Owned
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by such Shareholder, whether heretofore owned or hereafter acquired, (i) in
favor of approval of the Merger Agreement and any actions required in
furtherance thereof and hereof; (ii) against any action or agreement that
would
result in a breach in any respect of any covenant, representation or warranty
or
any other obligation or agreement of the Company under the Merger Agreement
(after giving effect to any materiality or similar qualifications contained
therein) and (iii) except to the extent the action is not prohibited to be
taken
by the Company under the Merger Agreement or as otherwise agreed to in writing
in advance by Telco, against any action which is intended, or could reasonably
be expected, to impede, interfere with, materially delay or postpone, or
materially adversely affect the Company Merger and the transactions
contemplated
by the Agreement and the Merger Agreement. Such Shareholder shall not enter
into
any agreement or understanding with any Person (as defined below) the effect
of
which would be inconsistent or violative of the provisions and agreements
contained in Section 1 or 2 hereof. For purposes of this Agreement,
"Beneficially Own" or "Beneficial Ownership" with respect to any securities
shall mean having "beneficial ownership" of such securities (as determined
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), including pursuant to any agreement, arrangement or
understanding, whether or not in writing. Without duplicative counting of the
same securities by the same holder, securities Beneficially Owned by a Person
shall include securities Beneficially Owned by all other Persons with whom
such
Person would constitute a "group" as within the meanings of Section 13(d)(3)
of
the Exchange Act. For purposes of this Agreement, "Person" shall mean an
individual, corporation, partnership, joint venture, association, trust,
unincorporated organization or other entity.
2. Representations and Warranties. Each Shareholder hereby
represents and warrants to Telco as follows:
(a) Ownership of Shares. Such Shareholder is the record
owner
and Beneficial Owner of the number of Shares set forth opposite such
Shareholder's name on Schedule I hereto free and clear of all liens, claims
and
encumbrances. On the date hereof, the Shares set forth opposite such
Shareholder's name on Schedule I hereto constitute all of the Shares owned of
record or Beneficially Owned by such Shareholder. Such Shareholder has sole
voting power and sole power to issue instructions with respect to the matters
set forth in Section 1 hereof, sole power of disposition, sole power of
conversion, sole power to demand appraisal rights and sole power to agree to
all
of the matters set forth in this Agreement, in each case with respect to all
of
the Shares set forth opposite such Shareholder's name on Schedule I hereto,
with
no limitations, qualifications or restrictions on such rights.
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(b) Power; Binding Agreement. Such Shareholder has the legal
capacity, power and authority to enter into and perform all of such
Shareholder's obligations under this Agreement. The execution, delivery and
performance of this Agreement by such Shareholder will not violate any other
agreement to which such Shareholder is a party including, without limitation,
any voting agreement, shareholder agreement or voting trust. This Agreement
has
been duly and validly executed and delivered by such Shareholder and
constitutes
a valid and binding agreement of such Shareholder, enforceable against such
Shareholder in accordance with its terms, subject to the Bankruptcy Exception.
There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which such Shareholder is Trustee whose consent is
required for the execution and delivery of this Agreement or the consummation
by
such Shareholder of the transactions contemplated hereby. If such Shareholder
is
married and such Shareholder's Shares constitute community property, this
Agreement has been duly authorized, executed and delivered by, and constitutes
a
valid and binding agreement of, such Shareholder's spouse, enforceable against
such person in accordance with its terms.
(c) No Conflicts. (A) No filing with, and no permit,
authorization, consent or approval of, any state or federal public body or
authority is necessary for the execution of this Agreement by such Shareholder
and the consummation by such Shareholder of the transactions contemplated
hereby
and (B) none of the execution and delivery of this Agreement by such
Shareholder, the consummation by such Shareholder of the transactions
contemplated hereby or compliance by such Shareholder with any of the
provisions
hereof will (1) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or
acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, commitment, arrangement, understanding,
agreement
or other instrument or obligation of any kind to which such Shareholder is a
party or by which such Shareholder or any of such Shareholder's properties or
assets may be bound, or (2) violate any order, writ, injunction, decree,
judgment, order, statute, rule or regulation applicable to such Shareholder or
any of such Shareholder's properties or assets.
(d) Reliance by Telco. Such Shareholder understands and
acknowledges that Telco is entering into the Merger Agreement in reliance upon
such Shareholder's execution and delivery of this Agreement.
(e) No Finder's Fees. Other than existing financial advisory
and investment banking arrangements and agreements between the Company and
Xxxxxx Brothers Inc., no broker, investment banker, financial advisor or other
person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection
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with the transactions contemplated by the Merger Agreement based upon
arrangements made by or on behalf of the Company, such Shareholder or any of
their respective affiliates.
3. Restriction on Transfer and Proxies.
(a) Each Shareholder hereby agrees that during the period
commencing on the date hereof and continuing until the first to occur of the
Effective Time and termination of the Merger Agreement in accordance with its
terms, such Shareholder shall not, directly or indirectly: (i) except as
contemplated by the Merger Agreement, offer for sale, sell, transfer, tender,
pledge, encumber, assign or otherwise dispose of, or enter into any contract,
option or other arrangement or understanding with respect to or consent to the
offer for sale, sale, transfer, tender, pledge, encumbrance, assignment or
other
disposition of (collectively, "Transfer"), any or all of such Shareholder's
Shares or any interest therein; (ii) grant any proxies or powers of attorney,
deposit any Shares into a voting trust or enter into a voting agreement with
respect to any Shares; or (iii) take any action that would make any
representation or warranty of such Shareholder contained herein untrue or
incorrect or have the effect of preventing or disabling such Shareholder form
performing such Shareholder's obligations under this Agreement.
(b) Notwithstanding the provisions of paragraph (a)(i)
above,
a Transfer shall not include (A) with respect to any Shareholder, a Transfer
to
any other Shareholder, (B) with respect to any Shareholder that is an
individual, a Transfer to (1) a sibling, ancestor or descendant, spouse of any
of the foregoing, spouse of such Shareholder, or descendants of any of the
foregoing or (2) any trust or family partnership for the primary benefit of
such
Shareholder or any Persons described in clause (1); or (C) with respect to any
Shareholder that is a trust or family partnership, the beneficiaries or
partners
of the trust or family partnership or another trust or family partnership
established for the primary benefit of such beneficiaries or partners.
4. Further Assurances. From time to time, at the other
party's
reasonable request and without further consideration, each party hereto shall
execute and deliver such additional documents (including, in the case of the
applicable Shareholders, a tax certificate to the extent required under
Section
8.2(d) of the Merger Agreement) and take all such further lawful action as may
be necessary or desirable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this
Agreement.
5. Restrictive Legend. All certificates representing any of
such Shareholder's Shares shall contain the following legend:
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"The securities represented by this certificate,
including certain voting rights with respect thereto,
are subject to the terms of a Shareholders Agreement,
dated June 5, 1997, among Telco Communications Group,
Inc., the Issuer and the parties listed on the
signature pages thereto, a copy of which is on file
in the principal office of the Issuer."
6. Termination. Except as otherwise provided herein, the
covenants and agreements contained herein with respect to the Shares shall
terminate upon the earlier of (a) termination of the Merger Agreement in
accordance with its terms and (b) the Effective Time.
7. Shareholder Capacity. No person executing this Agreement
who is or becomes during the term hereof a director of the Company makes any
agreement or understanding herein in his or her capacity as such director.
Each
Shareholder signs solely in his or her capacity as the record and/or
Beneficial
Owner of such Shareholder's Shares.
8. Confidentiality. The Shareholders recognize that
successful
consummation of the transactions contemplated by this Agreement may be
dependent
upon confidentiality with respect to the matters referred to herein. In this
connection, pending public disclosure thereof, each Shareholder hereby agrees
not to disclose or discuss such matters with anyone not a party to this
Agreement (other than such Shareholder's counsel and advisors, if any) without
the prior written consent of Telco, except for disclosures such Shareholder's
counsel advises are necessary in order to fulfill such Shareholder's
obligations
imposed by law, in which event such Shareholder shall give notice of such
disclosure to Telco as promptly as practicable so as to enable Telco to seek a
protective order from a court of competent jurisdiction with respect thereto.
9. Authority Relative to this Agreement. Telco has the
necessary corporate power and authority to enter into this Agreement and to
carry out its obligations hereunder. The execution and delivery of this
Agreement by Telco and the consummation by Telco of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action
on the part of Telco. This Agreement has been duly executed and delivered by
Telco and, assuming the due authorization, execution and delivery thereof by
the
other parties hereto, constitutes a legal, valid and binding obligation of
Telco, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent
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conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to general
principles of equity.
10. Miscellaneous.
(a) Entire Agreement. This Agreement and the Merger
Agreement
constitute the entire agreement between the parties with respect to the
subject
matter hereof and supersede all other prior agreements and understandings,
both
written and oral, between the parties with respect to the subject matter
hereof.
(b) Certain Events. Each Shareholder agrees that this
Agreement and the obligations hereunder shall attach to such Shareholder's
Shares and shall be binding upon any person or entity to which legal or
beneficial ownership of such Shares shall pass, whether by operation of law or
otherwise, including, without limitation, such Shareholder's heirs, guardians,
administrators or successors. Notwithstanding any transfer of Shares, the
transferor shall remain liable for the performance of all obligations under
this
Agreement of the transferor.
(c) Assignment. This Agreement shall not be assigned by
operation of law or otherwise without the prior written consent of the other
parties hereto.
(d) Amendments, Waivers, Etc. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated,
with
respect to any one or more Shareholders, except upon the execution and
delivery
of a written agreement executed by the relevant parties hereto.
(e) Notices. All notices, requests, claims, demands and
other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram,
telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express,
providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
If to any Shareholder: At the addresses set forth
on Schedule I hereto
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with a copy to: Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxxx, Esq. and
Xxxxxxxxx X. Xxxxx, Esq.
If to Telco: Telco Communications Group, Inc.
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
with a copy to: Xxxxxxx & Berlin, Chartered
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(f) Severability. Whenever possible, each provision or
portion
of any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of
any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
(g) Specific Performance. Each of the parties hereto
recognizes and acknowledges that a breach by it of any covenants or agreements
contained in this Agreement will cause the other party to sustain damages for
which it would not have an adequate remedy at law for money damages, and
therefore each of the parties hereto agrees that in the event of any such
breach
the aggrieved party shall be entitled to the remedy of specific
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performance of such covenants and agreements and injunctive and other
equitable
relief in addition to any other remedy to which it may be entitled, at law or
in
equity.
(h) Remedies Cumulative. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law
or
in equity shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
(i) No Waiver. The failure of any party hereto to exercise
any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by
such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
(j) No Third Party Beneficiaries. This Agreement is not
intended to be for the benefit of, and shall not be enforceable by, any person
or entity who or which is not a party hereto.
(k) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
(l) WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
ANY
RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY SUCH ACTION, SUIT OR
PROCEEDING.
(m) Descriptive Headings. The descriptive headings used
herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
(n) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of
which,
taken together, shall constitute one and the same Agreement.
IN WITNESS WHEREOF, Telco and each Shareholder have caused
this Agreement to be duly executed as of the day and year first above written.
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TELCO COMMUNICATIONS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief Eecutive
Officer
XXXXXX PARTNERS, LTD.
By: The Xxxxxx Family Trust,
its general partner
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Xxxxx X. Xxxxxx, Trustee
THE XXXXXX FAMILY TRUST
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Xxxxx X. Xxxxxx, Trustee
/s/ Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx, individually
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NYFS05...:\41\44241\0003\84\AGR5307L.34D
Schedule I to
Shareholders Agreement
Name and Address Number of Shares
of Shareholder Beneficially Owned
Xxxxxx Partners, Ltd.
53,000,000
The Xxxxxx Family Trust
11,180,000
Xxxxx X. Xxxxxx
800
c/o: EXCEL Communications, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: X. Xxxxxxxxxxx Dance, Esq.
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