EXHIBIT NO. 2
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
DATED AS OF JUNE 14, 1998
AMONG
TELEGLOBE INC.
NORTH MERGER SUB CORPORATION
and
EXCEL COMMUNICATIONS, INC.
GLOSSARY OF DEFINED TERMS
Definition Location of Definition
Acquisition Proposal.............................................ss. 5.5(a)(i)
Affiliates.......................................................ss. 8.11
Agreement........................................................Preamble
Alternative Transaction..........................................ss. 5.5(c)
Average Price....................................................ss. 2.5(b)
Blue Sky Laws....................................................ss. 3.1(d)(iii)
Board of Directors...............................................ss. 8.11(c)
Business Day.....................................................ss. 8.11(d)
CBCA.............................................................Preamble
Canadian GAAP....................................................Recitals
Canadian Securities Laws.........................................ss. 8.11(e)
Canadian Teleglobe Employee Plans................................ss. 3.2(t)
Century-Based Data...............................................ss. 3.1(aa)
Certificate......................................................ss. 1.8(b)
Closing..........................................................ss. 1.2
Closing Date.....................................................ss. 1.2
Code.............................................................Recitals
Common Stock ....................................................ss. 1.5
Communications Act...............................................ss. 3.1(d)(iii)
Competing Share Transaction......................................ss. 7.1(f)
Confidentiality Agreement........................................ss. 5.3
Contract.........................................................ss. 3.1(d)(ii)
Converted Option.................................................ss. 1.8(e)
CSA..............................................................ss.3.2(e)
Delaware Certificate of Merger...................................ss. 1.3
DGCL.............................................................ss. 1.1
Effective Time...................................................ss. 1.3
Environmental Law................................................ss. 3.1(r)(iv)
ERISA............................................................ss. 3.1(s)(i)
Excel............................................................Preamble
Excel Board Approval.............................................ss. 3.1(h)
Excel Common Stock...............................................Recitals
Excel Consent and Voting Agreement...............................Recitals
Excel Disclosure Documents.......................................ss. 3.1(e)
Excel Disclosure Schedule........................................ss. 3.1
Excel Employee Plans.............................................ss. 3.1(s)(i)
Excel Fairness Opinion...........................................ss. 3.1(k)
Excel Fairness Opinion Banker....................................ss. 3.1(j)
Excel Intellectual Property......................................ss. 3.1(o)
Excel Material Contracts.........................................ss. 3.1(p)
Excel Permits....................................................ss. 3.1(d)(iv)
Excel Stockholders Consent.......................................ss. 5.1(b)
Excel Stockholders Meeting.......................................ss. 5.1(b)
Definition Location of Definition
Excel Stock Option..............................................ss. 1.8(e)
Excel Stock Option Agreement....................................Recitals
Excel Stock Plans...............................................ss. 1.8(e)
Excel Voting Debt...............................................ss. 3.1(c)(ii)
Exchange Act....................................................ss. 3.1(b)
Exchange Agent..................................................ss. 2.1
Exchange Fund...................................................ss. 2.1
Exchange Ratio..................................................ss. 1.8(a)
Exchanges ......................................................ss. 3.2(d)(iii)
Expenses........................................................ss. 5.6
FCC.............................................................ss. 3.1(d)(iii)
Federal Communications Laws.....................................ss. 3.1(d)(iii)
Form F-4........................................................ss. 5.1(a)
Governmental Entity ............................................ss. 3.1(d)(iii)
HSR Act.........................................................ss. 3.1(d)(iii)
Hazardous Substance.............................................ss. 3.1(r)(v)
IRS.............................................................ss. 3.1(m)(i)
Joint Information Statement/Proxy Statement/Prospectus..........ss. 5.1(a)
Laws............................................................ss. 1.5
Material Adverse Effect.........................................ss. 8.11(f)
Material Leases.................................................ss. 3.1(n)(i)
ME..............................................................ss. 3.2(d)(iii)
Merger..........................................................Recitals
Merger Consideration............................................ss. 1.8(a)
Merger Sub......................................................Preamble
Merger Sub Common Stock.........................................ss. 1.8(d)
NYSE............................................................ss. 2.5(b)
Permit..........................................................ss. 3.1(d)(ii)
Person..........................................................ss. 8.11(h)
PUCs............................................................ss. 3.1(d)(iii)
Recent Excel Disclosure Documents...............................ss. 3.1(e)
Recent Teleglobe Disclosure Documents...........................ss. 3.2(e)
Registration Rights Agreement ..................................Recitals
Regulatory Law..................................................ss. 5.4(b)
Required Articles Amendment Vote................................ss. 3.2(i)
Required By-Law Amendment Vote..................................ss. 3.2(d)(i)
Required Consents...............................................ss. 3.1(d)(iii)
Required Excel Vote.............................................ss. 3.l(i)
Required Share Issuance Vote ...................................ss. 3.2(i)
Required Teleglobe Vote.........................................ss. 3.2(i)
Restricted Period...............................................ss. 5.13
Rule 145 Affiliates.............................................ss. 5.11
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Definition Location of Definition
SAS 72...........................................................ss. 5.9
SEC..............................................................ss. 1.8(e)
Securities Act...................................................Recitals
Share Issuance...................................................ss. 3.2(d)(i)
Software.........................................................ss.3.1(aa)
Stock Option Agreements..........................................Recitals
Subsidiary.......................................................ss. 8.11(i)
Superior Proposal................................................ss. 5.5(a)
Surviving Corporation............................................Recitals
Surviving Corporation Shares.....................................Recitals
Surviving Corporation Stock .....................................Recitals
Tax or Taxes.....................................................ss. 3.1(m)(ii)
Teleglobe........................................................Preamble
Teleglobe Articles Amendment.....................................Recitals
Teleglobe Board Approval.........................................ss. 3.2(h)
Teleglobe By-Law Amendment.......................................Recitals
Teleglobe Common Shares..........................................Recitals
Teleglobe Consent and Voting Agreements..........................Recitals
Teleglobe Disclosure Documents...................................ss. 3.2(e)
Teleglobe Disclosure Schedule....................................ss. 3.2
Teleglobe Employee Plans.........................................ss. 3.2(t)
Teleglobe Fairness Opinion.......................................ss. 3.2(k)
Teleglobe Fairness Opinion Banker................................ss. 3.2(j)
Teleglobe Intellectual Property..................................ss. 3.2(o)
Teleglobe Material Contracts.....................................ss. 3.2(p)
Teleglobe Option Plan............................................ss. 3.2(c)(i)
Teleglobe Permits................................................ss. 3.2(d)(iv)
Teleglobe Shareholders Consent...................................ss. 5.1(c)
Teleglobe Shareholders Meeting...................................ss. 5.1(c)
Teleglobe Stock Dividend.........................................ss. 1.8(a)
Teleglobe Stock Option Agreement.................................Recitals
Teleglobe Voting Debt............................................ss.3.2(c)(ii)
Termination Date.................................................ss. 7.1(b)
Termination Fee..................................................ss. 7.3(a)
the other party..................................................ss. 8.11(g)
Third Party......................................................ss. 5.5(c)
Transaction Documents ...........................................ss. 8.11(j)
TSE..............................................................ss. 3.2(d)(iii)
US GAAP..........................................................Recitals
US Teleglobe Employee Plans......................................ss. 3.2(s)(i)
Violation........................................................ss. 3.1(d)(ii)
Voting Agreements................................................Recitals
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TABLE OF CONTENTS
ARTICLE I
THE MERGER................ 3
1.1 The Merger...................................................... 3
1.2 Closing......................................................... 3
1.3 Effective Time.................................................. 3
1.4 Effects of the Merger........................................... 3
1.5 Certificate of Incorporation.................................... 4
1.6 By-Laws of Surviving Corporation................................ 4
1.7 Officers and Directors of Surviving Corporation................. 4
1.8 Effect on Capital Stock......................................... 5
1.9 Teleglobe Articles Amendment; Teleglobe By-Law Amendment........ 6
ARTICLE II
EXCHANGE OF CERTIFICATES......... 6
2.1 Exchange Fund................................................... 6
2.2 Exchange Procedures............................................. 7
2.3 Distributions with Respect to Unexchanged Shares................ 7
2.4 No Further Ownership Rights in Excel Common Stock .............. 8
2.5 No Fractional Teleglobe Common Shares........................... 8
2.6 Termination of Exchange Fund.................................... 8
2.7 No Liability.................................................... 9
2.8 Investment of the Exchange Fund................................. 9
2.9 Lost Certificates............................................... 9
2.10 Withholding Rights.............................................. 9
2.11 Further Assurances.............................................. 9
2.12 Stock Transfer Books............................................10
ARTICLE III
REPRESENTATIONS AND WARRANTIES......10
3.1 Representations and Warranties of Excel.........................10
(a) Organization, Standing and Power.......................10
(b) Subsidiaries...........................................10
(c) Capital Structure......................................11
(d) Authority; No Conflicts................................12
(e) Reports and Financial Statements.......................14
(f) Information Supplied...................................14
(g) Absence of Certain Changes or Events...................15
(h) Board Approval.........................................15
(i) Vote Required..........................................15
(j) Brokers or Finders.....................................15
(k) Opinion of Excel Fairness Opinion Banker...............16
(l) No Undisclosed Liabilities.............................16
(m) Taxes................................................16
(n) Properties...........................................17
(o) Intellectual Property................................17
(p) Agreements, Contracts and Commitments................18
(q) Litigation...........................................18
(r) Environmental Matters................................18
(s) Employee Benefit Plans...............................19
(t) Compliance With Laws.................................20
(u) Accounting and Tax Matters...........................21
(v) Labor Matters........................................21
(w) Insurance............................................21
(x) No Existing Discussions..............................22
(y) Anti-Takeover Laws; Stockholder Rights Plan..........22
(z) DGCL Section 203.....................................22
(aa) Year 2000............................................22
(ab) Pooling Letters......................................22
(ac) Certain Regulatory Matters...........................23
3.2 Representations and Warranties of Teleglobe.....................23
(a) Organization, Standing and Power.......................24
(b) Subsidiaries...........................................24
(c) Capital Structure......................................24
(d) Authority; No Conflicts................................25
(e) Reports and Financial Statements.......................27
(f) Information Supplied...................................27
(g) Absence of Certain Changes or Events...................28
(h) Board Approval.........................................28
(i) Vote Required..........................................28
(j) Brokers or Finders.....................................29
(k) Opinion of Teleglobe Fairness Opinion Banker...........29
(l) No Undisclosed Liabilities.............................29
(m) Taxes..................................................29
(n) Properties.............................................30
(o) Intellectual Property..................................30
(p) Agreements, Contracts and Commitments..................31
(q) Litigation.............................................31
(r) Environmental Matters..................................31
(s) US Employee Benefit Plans..............................32
(t) Canadian Employee Benefit Plans........................33
(u) Compliance With Laws...................................34
(v) Accounting and Tax Matters.............................34
(w) Labor Matters..........................................34
(x) Insurance..............................................35
(y) No Existing Discussions................................35
(z) Anti-Takeover Laws; Shareholder Rights Plan............35
(aa) Year 2000..............................................35
(ab) Pooling Letters........................................36
(ac) Certain Regulatory Matters.............................36
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(ad) No Plan or Intention to Dispose of Surviving
Corporation............................................37
3.3 Representations and Warranties of Teleglobe and Merger Sub......37
(a) Organization and Corporate Power.......................37
(b) Capital Structure......................................37
(c) Corporate Authorization................................37
(d) Non-Contravention......................................38
(e) No Business Activities.................................38
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS38
4.1 Covenants of Excel..............................................38
(a) Ordinary Course........................................38
(b) Dividends; Changes in Share Capital....................39
(c) Issuance of Securities.................................39
(d) Governing Documents....................................39
(e) No Acquisitions........................................39
(f) No Dispositions........................................39
(g) Investments; Indebtedness..............................40
(h) Pooling-of-Interests; Tax-Free Qualification...........40
(i) Other Actions..........................................40
(j) Accounting Methods; Income Tax Elections...............40
(k) Excel Employee Plans...................................40
4.2 Covenants of Teleglobe..........................................41
(a) Ordinary Course........................................41
(b) Dividends; Changes in Share Capital....................41
(c) Issuance of Securities.................................42
(d) Governing Documents....................................42
(e) No Acquisitions........................................42
(f) No Dispositions........................................42
(g) Investments; Indebtedness..............................42
(h) Pooling-of-Interests; Tax-Free Qualification...........43
(i) Other Actions..........................................43
(j) Accounting Methods; Income Tax Elections...............43
(k) Teleglobe Employee Plans...............................43
4.3 Advice of Changes; Governmental Filings.........................44
4.4 Transition Planning.............................................44
4.5 Control of Other Party's Business...............................44
4.6 Network Transition..............................................44
ARTICLE V
ADDITIONAL AGREEMENTS..........45
5.1 Preparation of Proxy Statement; Stockholders Approval...........45
5.2 Teleglobe Board of Directors; Officers..........................46
5.3 Access to Information...........................................47
5.4 Best Efforts....................................................47
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5.5 Acquisition Proposals...........................................49
5.6 Fees and Expenses...............................................50
5.7 Directors' and Officers' Indemnification and Insurance..........50
5.8 Public Announcements............................................51
5.9 Accountants' Letters............................................51
5.10 Listing of Teleglobe Common Shares..............................51
5.11 Rule 145 Affiliates of Teleglobe and Excel; Pooling Letters.....51
5.12 Stockholder Litigation..........................................52
5.13 Restriction on Certain Dispositions.............................52
5.14 Compliance with Section 228 of the DGCL.........................53
5.15 Registration Rights Agreement...................................53
ARTICLE VI
CONDITIONS PRECEDENT...........53
6.1 Conditions to Each Party's Obligation to Effect the Merger......53
(a) Stockholder Approval...................................53
(b) No Injunctions or Restraints, Illegality...............54
(c) HSR Act; Competition Act (Canada); Required Consents...54
(d) NYSE, TSE and ME Listings..............................54
(e) Effectiveness of the Form F-4..........................54
6.2 Additional Conditions to Obligations of Teleglobe and Merger Sub54
(a) Representations and Warranties.........................54
(b) Performance of Obligations of Excel....................55
(c) Tax Opinion............................................55
(d) No Material Adverse Change.............................55
(e) Excel Consent and Voting Agreement.....................55
(f) Third-Party Consents...................................55
6.3 Additional Conditions to Obligations of Excel...................55
(a) Representations and Warranties.........................55
(b) Performance of Obligations of Teleglobe................56
(c) Tax Opinion............................................56
(d) No Material Adverse Change.............................56
(e) Teleglobe Consent and Voting Agreements...............56
(f) IRS Ruling.............................................56
(g) Third-Party Consents...................................57
ARTICLE VII
TERMINATION AND AMENDMENT........57
7.1 Termination.....................................................57
7.2 Effect of Termination...........................................58
7.3 Payment by Excel................................................59
7.4 Payment by Teleglobe............................................59
7.5 Amendment.......................................................60
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7.6 Extension; Waiver.............................................. 60
ARTICLE VIII
GENERAL PROVISIONS........... 60
8.1 Survival of Representations, Warranties and Covenants.......... 60
8.2 Notices........................................................ 61
8.3 Interpretation................................................. 62
8.4 Counterparts................................................... 62
8.5 Entire Agreement; No Third Party Beneficiaries................. 62
8.6 Governing Law.................................................. 63
8.7 Severability................................................... 63
8.8 Assignment..................................................... 63
8.9 Submission to Jurisdiction; Waivers............................ 63
8.10 Enforcement.................................................... 64
8.11 Definitions.................................................... 64
8.12 Waiver of Jury Trial........................................... 65
Exhibits
Exhibit A Excel Consent and Voting Agreement
Exhibit B Teleglobe Consent and Voting Agreements
Exhibit C Excel Stock Option Agreement
Exhibit D Teleglobe Stock Option Agreement
Exhibit E Registration Rights Agreement
Exhibit F Teleglobe Articles Amendment; Teleglobe By-Law Amendment
Exhibit G Teleglobe Tax Certificate
Exhibit H Excel Tax Certificate
Exhibit I Excel Affiliates Letter
Exhibit J Teleglobe Affiliates Letter
v
AGREEMENT AND PLAN OF MERGER, dated as of June 14, 1998 (this
"Agreement"), among TELEGLOBE INC., a corporation governed by the Canada
Business Corporations Act (the "CBCA") ("Teleglobe"), NORTH MERGER SUB
CORPORATION, a Delaware corporation and a direct wholly owned subsidiary of
Teleglobe ("Merger Sub"), and EXCEL COMMUNICATIONS, INC., a Delaware corporation
("Excel"). Certain capitalized terms used herein but not defined when used have
the meanings assigned to such terms in Section 8.11.
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Teleglobe and Excel deem
it advisable and in the best interests of each corporation and of their
respective shareholders that Teleglobe and Excel combine their respective
businesses, stockholders, managements, employees and other constituencies in a
merger of equals in order to advance the long-term business interests of
Teleglobe and Excel;
WHEREAS, the combination of Teleglobe and Excel shall be
effected by the terms of this Agreement through a merger as described below;
WHEREAS, in furtherance thereof, the respective Boards of
Directors of Teleglobe, Merger Sub and Excel have approved the merger of Merger
Sub with and into Excel (the "Merger"), with Excel to be the surviving
corporation in such Merger (the "Surviving Corporation"), upon the terms and
subject to the conditions set forth in this Agreement, pursuant to which each
outstanding share of common stock, par value $.001 per share, of Excel ("Excel
Common Stock") issued and outstanding immediately prior to the Effective Time
(as defined in Section 1.3), will be converted into the right to receive common
shares, without par value, of Teleglobe (all such shares to be issued in the
Merger, "Teleglobe Common Shares") based upon the Exchange Ratio (as defined in
Section 1.8(a));
WHEREAS, the Board of Directors of Teleglobe deems it
advisable and in the best interest of Teleglobe and Excel to amend and restate
as of the Effective Time either Teleglobe's Articles of Incorporation (the
"Teleglobe Articles Amendment") or Teleglobe's by-laws (the "Teleglobe By-Law
Amendment") to incorporate certain governance provisions in respect of certain
actions by and the composition of the Board of Directors of Teleglobe;
WHEREAS, Teleglobe will receive at the Effective Time full
equity ownership of the outstanding stock of the Surviving Corporation through
the simultaneous conversion at the Effective Time of the issued and outstanding
common stock of Merger Sub into common stock of the Surviving Corporation and
cancellation of Excel Common Stock;
WHEREAS, the holders of shares of Excel Common Stock
immediately prior to the Effective Time have the right to receive Teleglobe
Common Shares in the Merger and, in consideration of Teleglobe's agreeing to
deliver such Teleglobe Common Shares to the Exchange Agent (as defined in
Section 2.1), as set forth in Section 2.1, and in exchange for their issuance,
Teleglobe is entitled to subscribe and will subscribe to a number of shares of
common stock, par value $.001 per share, of the Surviving Corporation
("Surviving
2
Corporation Common Stock") equivalent to the number of shares of Excel Common
Stock outstanding immediately prior to the Effective Time (the "Surviving
Corporation Shares"), as set forth in Section 1.8(f);
WHEREAS, Teleglobe, Merger Sub and Excel desire to make
certain representations, warranties, covenants and agreements in connection with
the transactions contemplated hereby and also to prescribe various conditions to
the transactions contemplated hereby;
WHEREAS, Teleglobe, Merger Sub and Excel intend that the
Merger be accounted for as a pooling-of-interests for financial statements
purposes under generally accepted accounting principles in the United States of
America ("US GAAP") and under generally accepted accounting principles in Canada
("Canadian GAAP");
WHEREAS, Teleglobe, Merger Sub and Excel intend, by approving
resolutions authorizing this Agreement, to adopt this Agreement as a plan of
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"), and the rules and regulations promulgated
thereunder;
WHEREAS, Teleglobe and Merger Sub have required, as a
condition to their willingness to enter into this Agreement, that certain
stockholders of Excel contemporaneously enter into the consent and voting
agreement (the "Excel Consent and Voting Agreement") attached hereto as Exhibit
A and execute and deliver the Excel Stockholders Consent (as defined herein)
immediately following the execution and delivery of this Agreement;
WHEREAS, Excel has required, as a condition to its willingness
to enter into this Agreement, that certain shareholders of Teleglobe
contemporaneously enter into consent and voting agreements in the forms attached
hereto as Exhibit B (the "Teleglobe Consent and Voting Agreements" and, together
with the Excel Consent and Voting Agreement, the "Voting Agreements") and
execute and deliver the Teleglobe Shareholders Consents (as defined herein)
immediately following the execution and delivery of this Agreement;
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition and inducement to each of Teleglobe's and Excel's
willingness to enter into this Agreement, Teleglobe and Excel have entered into
(i) a stock option agreement dated as of the date of this Agreement and attached
hereto as Exhibit C (the "Excel Stock Option Agreement"), pursuant to which
Excel granted Teleglobe an option to purchase shares of Excel Common Stock under
certain circumstances, and (ii) a stock option agreement dated as of the date of
this Agreement and attached hereto as Exhibit D (the "Teleglobe Stock Option
Agreement" and, together with the Excel Stock Option Agreement, the "Stock
Option Agreements"), pursuant to which Teleglobe granted Excel an option to
purchase common shares of Teleglobe capital stock under certain circumstances;
and
WHEREAS, in connection with the Merger, Teleglobe desires to
grant to certain of Excel's affiliates (as defined for purposes of Rule 145
promulgated under the Securities Act of 1933, as amended (the "Securities Act"))
at the time of execution of the
3
Excel Stockholders Consent (including those persons identified on the signature
pages thereof) certain registration rights pursuant to a Registration Rights
Agreement to be entered into and delivered at the Closing in the form attached
hereto as Exhibit E (the "Registration Rights Agreement");
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the Delaware General
Corporation Law (the "DGCL"), Merger Sub shall be merged with and into Excel at
the Effective Time. Following the Merger, the separate corporate existence of
Merger Sub shall cease and Excel shall continue as the Surviving Corporation
under the name "Excel Communications, Inc."
1.2 Closing. The closing of the Merger (the "Closing") will
take place at 10:00 a.m., New York time, on the fifth Business Day after the
satisfaction or waiver of the conditions (excluding conditions that, by their
terms, cannot be satisfied until the Closing Date, but subject to satisfaction
or waiver of such conditions) set forth in Article VI (the "Closing Date"),
unless another time or date is agreed to in writing by the parties hereto. The
Closing shall be held at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, unless another place is agreed to
in writing by the parties hereto.
1.3 Effective Time. As soon as practicable following the
Closing, the parties shall (i) file a certificate of merger (the "Delaware
Certificate of Merger") in such form as is required by and executed in
accordance with the relevant provisions of the DGCL and (ii) make all other
filings or recordings required under the DGCL. The Merger shall become effective
at such time as the Delaware Certificate of Merger is duly filed with the
Delaware Secretary of State or at such subsequent time as Teleglobe and Excel
shall agree and be specified in the Delaware Certificate of Merger (the date and
time the Merger becomes effective being the "Effective Time").
1.4 Effects of the Merger. At and after the Effective Time,
the Merger will have the effects set forth in the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of Excel and Merger Sub
shall be vested in the Surviving Corporation, and all debts, liabilities and
duties of Excel and Merger Sub shall become the debts, liabilities and duties of
the Surviving Corporation.
4
1.5 Certificate of Incorporation of Surviving Corporation. The
certificate of incorporation of Excel, as in effect immediately prior to the
Effective Time, shall be the certificate of incorporation of the Surviving
Corporation, until thereafter changed or amended as provided therein or by
applicable Law (as defined in Section 3.1(d)(ii)), except that Article Fourth of
the Certificate of Incorporation of the Surviving Corporation shall be amended
to read in its entirety as follows:
"The total number of shares of stock which the Corporation
shall have authority to issue is [insert actual number of
shares of Excel Common Stock outstanding at the Effective Time
plus 1,000] shares of common stock, par value $0.001 per share
("Common Stock").
(a) Each share of Common Stock of the Corporation
shall have identical rights and privileges in every respect.
The holders of shares of Common Stock shall be entitled to
vote upon all matters submitted to a vote of the stockholders
of the Corporation and shall be entitled to one vote for each
share of Common Stock held.
(b) The holders of shares of Common Stock shall be
entitled to receive such dividends (payable in cash, stock or
otherwise) as may be declared thereon by the Board of
Directors at any time and from time to time out of any funds
of the Corporation legally available therefor.
(c) In the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation, the
holders of shares of Common Stock shall be entitled to receive
all of the assets of the Corporation available for
distribution to its stockholders, ratably in proportion to the
number of share of Common Stock held by them. A liquidation,
dissolution or winding-up of the Corporation, as such terms
are used in this Paragraph (c), shall not be deemed to be
occasioned by or to include any consolidation or merger of the
Corporation with or into any other corporation or corporations
or other entity or a sale, lease, exchange or conveyance of
all or part of the assets of the Corporation."
1.6 By-Laws of Surviving Corporation. The by-laws of Merger
Sub, as in effect immediately prior to the Effective Time, shall be the by-laws
of the Surviving Corporation until thereafter changed or amended as provided
therein or by applicable Law.
1.7 Officers and Directors of Surviving Corporation. The
officers of Excel as of the Effective Time shall be the officers of the
Surviving Corporation, until the earlier of their resignation or removal or
otherwise ceasing to be an officer or until their respective successors are duly
elected or appointed and qualified, as the case may be. The directors of
5
Merger Sub as of the Effective Time (which shall be comprised of an equal number
of representatives designated by Teleglobe and Excel) shall be the directors of
the Surviving Corporation until the earlier of their resignation or removal or
otherwise ceasing to be a director or until their respective successors are duly
elected or appointed and qualified.
1.8 Effect on Capital Stock. (a) At the Effective Time by
virtue of the Merger and without any action on the part of the holder thereof,
each share of Excel Common Stock issued and outstanding immediately prior to the
Effective Time shall be converted into the right to receive 0.885 (the "Exchange
Ratio") of a common share of Teleglobe capital stock (which together with any
cash in lieu of fractional Teleglobe Common Shares shall be the "Merger
Consideration"). It is understood and agreed by the parties that on June 15,
1998, Teleglobe will pay a dividend (the "Teleglobe Stock Dividend") of one
common share of Teleglobe capital stock in respect of each outstanding common
share of Teleglobe capital stock and of one First Series Preferred Share of
Teleglobe capital stock in respect of each outstanding First Series Preferred
Share of Teleglobe capital stock to shareholders of record on such date, and
that the Exchange Ratio has been calculated after giving effect to such
dividend.
(b) As a result of the Merger and without any action on the
part of the holders thereof, at the Effective Time, all shares of Excel Common
Stock shall cease to be outstanding and shall be canceled and retired and shall
cease to exist, and each holder (other than Teleglobe, Merger Sub and Excel) of
a certificate which, immediately prior to the Effective Time, represented any
such shares of Excel Common Stock (a "Certificate") shall thereafter cease to
have any rights with respect to such shares of Excel Common Stock, except the
right to receive the applicable Merger Consideration in accordance with Article
II upon the surrender of such Certificate.
(c) Each share of Excel Common Stock issued and owned or held
by Teleglobe, Merger Sub or Excel at the Effective Time shall, by virtue of the
Merger, cease to be outstanding and shall be canceled and retired and no
Teleglobe Common Shares or other consideration shall be delivered in exchange
therefor.
(d) Each share of common stock, par value $.001 per share, of
Merger Sub ("Merger Sub Common Stock") issued and outstanding immediately prior
to the Effective Time shall be converted into and shall become one validly
issued fully paid and nonassessable share of Surviving Corporation Common Stock
as of the Effective Time, and the Surviving Corporation shall become a wholly
owned Subsidiary of Teleglobe.
(e) At the Effective Time, each outstanding option to purchase
or right to receive Excel Common Stock (an "Excel Stock Option") issued pursuant
to the (a) Excel Communications, Inc. Employee Ownership Plan, (b) Excelcom,
Inc. 1995 Stock Option Plan, (c) Excelcom, Inc. 1997 Director Stock Option Plan,
(d) Excelcom, Inc. Director Stock Option Plan with Xxxxxx X. XxXxxxxxx, (e)
Telco Communications Group, Inc. Amended and Restated 1994 Stock Option Plan,
(f) Excel Communications, Inc. 1997 Stock Option Plan and (g) Excel
Communications, Inc. 1997 Director Stock Option Plan (collectively, the "Excel
Stock Plans"), whether vested or unvested, shall be deemed to constitute an
option to acquire, on the same terms and conditions as were applicable under
such Excel Stock Option (taking
6
into account any acceleration of vesting as a result of the Merger), that number
of common shares of Teleglobe capital stock which the holder of such Excel Stock
Option would have been entitled to receive pursuant to the Merger if such holder
had exercised such Excel Stock Option in full immediately prior to the Effective
Time (rounded up to the nearest whole number), at an exercise price per share
equal to (y) the exercise price per share for the shares of Excel Common Stock
purchasable pursuant to such Excel Stock Option divided by (z) the Exchange
Ratio (a "Converted Option"). Teleglobe shall take such actions as are necessary
for the assumption of the Excel Stock Options pursuant to this Section 1.8(e),
including the reservation, issuance and listing of common shares of Teleglobe
capital stock as are necessary to effectuate the transactions contemplated by
this Section 1.8(e). Teleglobe shall prepare and file with the Securities and
Exchange Commission (the "SEC") a registration statement on Form S-8 or other
appropriate form with respect to common shares of Teleglobe capital stock
subject to Excel Stock Options issued under such Excel Stock Plans and shall use
its best efforts to have such registration statement declared effective
immediately following the Effective Time and to maintain the effectiveness of
such registration statement or registration statements covering such Excel Stock
Options (and maintain the current status of the prospectus or prospectuses
contained therein) for so long as such Excel Stock Options remain outstanding.
(f) In exchange for and in consideration of the issuance of
the Teleglobe Common Shares, Teleglobe will be entitled to subscribe and
undertakes and agrees to subscribe, at the Effective Time, for the Surviving
Corporation Common Stock. The Surviving Corporation Common Stock will at the
Effective Time have been duly authorized and, when issued to Teleglobe pursuant
to this Agreement, will be validly issued and outstanding as fully paid and
non-assessable.
(g) At the Effective Time, the Registration Rights Agreement
dated as of October 14, 1997, between Excel and the stockholders of Excel named
on the signature pages thereto shall, by virtue of the Merger, become applicable
to the common shares of Teleglobe capital stock on the same terms and conditions
applicable to the Excel Common Stock and Teleglobe shall assume the obligations
of Excel with respect thereto.
1.9 Teleglobe Articles Amendment; Teleglobe By-Law Amendment.
Subject to the receipt of the Required Articles Amendment Vote or the Required
By-Law Amendment Vote (each as defined in Section 3.2(i)), the articles of
incorporation or the by-laws of Teleglobe, as in effect immediately prior to the
Effective Time, shall be amended and restated as of the Effective Time to
include the provisions set forth in Exhibit F.
ARTICLE II
EXCHANGE OF CERTIFICATES
2.1 Exchange Fund. Prior to the Effective Time, Teleglobe
shall appoint a commercial bank or trust company reasonably acceptable to Excel
having net capital of not less than $100,000,000, to act as exchange agent
hereunder for the purpose of exchanging Certificates for the Merger
Consideration (the "Exchange Agent"). At or prior to the
7
Effective Time, Teleglobe shall deposit with the Exchange Agent, in trust for
the benefit of holders of shares of Excel Common Stock, certificates
representing the Teleglobe Common Shares issuable pursuant to Section 1.8(a) in
exchange for outstanding shares of Excel Common Stock. Teleglobe agrees to make
available to the Exchange Agent from time to time as needed, cash sufficient to
pay cash in lieu of fractional shares pursuant to Section 2.5 and any dividends
and other distributions pursuant to Section 2.3. Any cash and certificates
representing Teleglobe Common Shares deposited with the Exchange Agent shall
hereinafter be referred to as the "Exchange Fund." At the Effective Time, the
Surviving Corporation shall deposit with the Exchange Agent, in trust for the
benefit of Teleglobe, a certificate representing the Surviving Corporation
Shares issuable pursuant to Section 1.8(f).
2.2 Exchange Procedures. As soon as reasonably practicable
after the Effective Time, Teleglobe shall cause the Exchange Agent to mail to
each holder of a Certificate (i) a letter of transmittal which shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon due delivery of the Certificates and other required
documents to the Exchange Agent, and which letter shall be in customary form and
have such other provisions as Teleglobe may reasonably specify and (ii)
instructions for effecting the surrender of such Certificates in exchange for
the applicable Merger Consideration. Upon surrender of a Certificate to the
Exchange Agent together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, and such other documents
as may reasonably be required by the Exchange Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor (A) a certificate
representing one or more Teleglobe Common Shares representing, in the aggregate,
the whole number of shares that such holder has the right to receive pursuant to
Section 1.8(a) (after taking into account all shares of Excel Common Stock then
held by such holder) and (B) a check in the amount (after giving effect to any
required tax withholdings) equal to the cash that such holder has the right to
receive pursuant to the provisions of this Article II, including cash in lieu of
any fractional Teleglobe Common Shares pursuant to Section 2.5 and any unpaid
dividends and other distributions to which such holder is entitled pursuant to
Section 2.3, and the Certificate so surrendered shall forthwith be canceled. No
interest will be paid or will accrue on any cash payable pursuant to Section 2.3
or Section 2.5. In the event of a transfer of ownership of Excel Common Stock
which is not registered in the transfer records of Excel, one or more
certificates evidencing, in the aggregate, the proper number of Teleglobe Common
Shares and a check in the proper amount of cash in lieu of any fractional
Teleglobe Common Shares pursuant to Section 2.5 and any dividends or other
distributions to which such holder is entitled pursuant to Section 2.3 may be
issued with respect to such Excel Common Stock to such a transferee if the
Certificate representing such shares of Excel Common Stock is presented to the
Exchange Agent, accompanied by all documents required to evidence and effect
such transfer and the ownership of such shares of Excel Common Stock by such
transferee and to evidence that any applicable stock transfer taxes have been
paid.
2.3 Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made with respect to common shares
of Teleglobe capital stock with a record date after the Effective Time shall be
paid to the holder of any unsurrendered Certificate with respect to the
Teleglobe Common Shares that such holder would be entitled to receive upon
surrender of such Certificate pursuant to the Merger and no cash payment in
8
lieu of fractional Teleglobe Common Shares shall be paid to any such holder
pursuant to Section 2.5 until such holder shall surrender such Certificate in
accordance with Section 2.2. Subject to the effect of applicable Law, following
surrender of any such Certificate, there shall be paid to such holder, without
interest, (a) promptly after the time of such surrender, the amount of any cash
payable in lieu of fractional Teleglobe Common Shares to which such holder is
entitled pursuant to Section 2.5 and the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to such whole Teleglobe Common Shares, and (b) at the appropriate
payment date, the amount of dividends or other distributions with a record date
after the Effective Time but prior to such surrender and a payment date
subsequent to such surrender payable with respect to such Teleglobe Common
Shares. For purposes of dividends or other distributions in respect of common
shares of Teleglobe capital stock, all Teleglobe Common Shares to be issued
pursuant to the Merger shall be deemed issued and outstanding as of the
Effective Time.
2.4 No Further Ownership Rights in Excel Common Stock . All
Teleglobe Common Shares issued and cash paid upon conversion of shares of Excel
Common Stock in accordance with the terms of Article I and this Article II
(including any stock dividends or cash paid pursuant to Section 2.3 or cash paid
pursuant to Section 2.5) shall be issued or paid in full satisfaction of all
rights pertaining to the shares of Excel Common Stock.
2.5 No Fractional Teleglobe Common Shares. (a) No certificates
or scrip or Teleglobe Common Shares representing fractional Teleglobe Common
Shares shall be issued upon the surrender for exchange of Certificates and such
fractional share interests will not entitle the owner thereof to vote or to have
any rights of a shareholder of Teleglobe or a holder of Teleglobe Common Shares.
(b) Notwithstanding any other provision of this Agreement,
each holder of shares of Excel Common Stock exchanged pursuant to the Merger who
would otherwise have been entitled to receive a fraction of a Teleglobe Common
Share (after taking into account all Certificates delivered by such holder)
shall be entitled to receive, in lieu thereof, cash (without interest) in an
amount equal to the product of (i) such fractional part of a Teleglobe Common
Share and (ii) the average closing price of the Teleglobe Common Shares on the
New York Stock Exchange, Inc. (the "NYSE"), as reported on the NYSE Composite
Tape for the ten trading days prior to and ending on the trading day immediately
preceding the Closing Date (the "Average Price"). As promptly as practicable
after the determination of the amount of cash, if any, to be paid to holders of
fractional interests, the Exchange Agent shall so notify Teleglobe, and
Teleglobe shall deposit such amount with the Exchange Agent and shall cause the
Exchange Agent to forward payments to such holders of fractional interests
subject to and in accordance with the terms hereof.
2.6 Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the holders of Certificates for twelve
months after the Effective Time shall be delivered to Teleglobe or otherwise on
the instruction of Teleglobe, and any holders of the Certificates who have not
theretofore complied with this Article II shall thereafter look only to
Teleglobe for the Merger Consideration with respect to the shares of Excel
Common Stock formerly represented thereby to which such holders are entitled
pursuant to Section 1.8 and Section 2.2, including any cash in lieu of
fractional Teleglobe Common Shares to which
9
such holders are entitled pursuant to Section 2.5, and any dividends or
distributions with respect to Teleglobe Common Shares to which such holders are
entitled pursuant to Section 2.3, in each case, without any interest thereon.
Any such portion of the Exchange Fund remaining unclaimed by holders of shares
of Excel Common Stock immediately prior to such time as such amounts would
otherwise escheat to or become property of any Governmental Entity (as defined
in Section 3.1(d)(iii)) shall, to the extent permitted by Law, become the
property of Teleglobe free and clear of any claims or interest of any Person
previously entitled thereto.
2.7 No Liability. None of Teleglobe, Merger Sub, Excel, the
Surviving Corporation or the Exchange Agent shall be liable to any Person in
respect of any Merger Consideration or any cash in respect of dividends or other
distributions from the Exchange Fund delivered to a public official pursuant to
any applicable abandoned property, escheat or similar Law.
2.8 Investment of the Exchange Fund. The Exchange Agent shall
invest any cash included in the Exchange Fund as directed by Teleglobe on a
daily basis. Any interest and other income resulting from such investments shall
promptly be paid to Teleglobe.
2.9 Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed, and if
required by Teleglobe, the posting by such Person of a bond in such reasonable
amount as Teleglobe may direct as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent will deliver in
exchange for such lost, stolen or destroyed Certificate the applicable Merger
Consideration with respect to the shares of Excel Common Stock formerly
represented thereby (including any cash in lieu of fractional Teleglobe Common
Shares), and any unpaid dividends and distributions on Teleglobe Common Shares
deliverable in respect thereof, pursuant to this Agreement.
2.10 Withholding Rights. Each of the Surviving Corporation and
Teleglobe shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of shares of Excel
Common Stock such amounts as it is required to deduct and withhold with respect
to the making of such payment under the Code and the rules and regulations
promulgated thereunder, or any other provision of applicable Law. To the extent
that amounts are so withheld by the Surviving Corporation or Teleglobe, as the
case may be, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the shares of Excel Common Stock
in respect of which such deduction and withholding was made by the Surviving
Corporation or Teleglobe, as the case may be.
2.11 Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of Excel or Merger Sub, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of Excel or Merger Sub, any other actions and things to vest,
perfect or confirm of record or otherwise in Teleglobe or in the Surviving
Corporation any and all right, title and interest in, to and under any of the
rights, properties or
10
assets acquired or to be acquired by Teleglobe or the Surviving Corporation as a
result of, or in connection with, the Merger.
2.12 Stock Transfer Books. At the close of business, New York
City time, on the day the Effective Time occurs, the stock transfer books of
Excel shall be closed and there shall be no further registration of transfers of
shares of Excel Common Stock thereafter on the records of Excel. From and after
the Effective Time, the holders of Certificates shall cease to have any rights
with respect to such shares of Excel Common Stock formerly represented thereby,
except as otherwise provided herein or by applicable Law. Subject to Sections
2.6 and 2.7, on or after the Effective Time, any Certificates presented to the
Exchange Agent or Teleglobe for any reason shall be converted into the Merger
Consideration with respect to the shares of Excel Common Stock formerly
represented thereby (including any cash in lieu of fractional Teleglobe Common
Shares to which the holders thereof are entitled pursuant to Section 2.5) and
shall represent the right to receive dividends or other distributions to which
the holders thereof are entitled pursuant to Section 2.3.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Excel. Excel represents
and warrants to Teleglobe and Merger Sub that the statements contained in this
Section 3.1 are true and correct except as set forth herein and in the
disclosure schedule delivered by Excel to Teleglobe (the "Excel Disclosure
Schedule"). The Excel Disclosure Schedule is arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this
Agreement and the section of the disclosure schedule corresponding to any
numbered and lettered paragraph shall qualify other paragraphs in this Agreement
only to the extent that it is reasonably apparent from a reading of such
disclosure that it also qualifies or applies to such other paragraphs. Inclusion
of information in the Excel Disclosure Schedule shall not be construed as an
admission that such information is material to the operations or financial
condition of Excel and its Subsidiaries.
(a) Organization, Standing and Power. Each of Excel and each
of its Subsidiaries is a corporation or other entity duly incorporated or
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted and is duly qualified and in good standing to do business
in each jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification necessary other than in such
jurisdictions where the failure so to qualify or to be in good standing would
not, either individually or in the aggregate, have a Material Adverse Effect on
Excel. The copies of the certificate of incorporation and by-laws of Excel which
were previously furnished to Teleglobe are true, complete and correct copies of
such documents as in effect on the date of this Agreement.
(b) Subsidiaries. Excel does not own, directly or indirectly,
any equity or other ownership interest in any corporation, partnership, joint
venture or other entity or
11
enterprise, except for the Subsidiaries and other entities set forth in the
Excel Disclosure Documents (as defined in Section 3.1(e)), which are all the
Subsidiaries of Excel that are "Significant Subsidiaries" as such term is
defined in Rule 1-02 of Regulation S-X under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Except as set forth in the Excel
Disclosure Documents filed prior to the date of this Agreement, neither Excel
nor any of its Subsidiaries is subject to any obligation or requirement to
provide a material amount of funds to or make any material investment (in the
form of a loan, capital contribution or otherwise) in any such entity that is
not directly or indirectly wholly owned by Excel. Except as would not, either
individually or in the aggregate, have a Material Adverse Effect on Excel, each
of the outstanding shares of capital stock (or other ownership interests having
by their terms ordinary voting power to elect directors or others performing
similar functions with respect to such Subsidiary) owned by Excel of each of
Excel's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable, and is owned directly or indirectly by Excel free and clear of
all liens, pledges, security interests, claims or other encumbrances of any kind
whatsoever (including voting, transfer or similar rights such as rights of first
offer or rights of first refusal).
(c) Capital Structure. (i) As of the date hereof, the
authorized capital stock of Excel consisted of (A) 500,000,000 shares of Excel
Common Stock, of which, at the close of business on June 14, 1998, 132,259,389
shares were outstanding and 2,045,250 shares were reserved for issuance pursuant
to options or rights under the Excel Stock Plans (as defined in Section 1.8(e))
and (B) 10,000,000 shares of preferred stock, par value $.001 per share, of
which at the close of business on June 14, 1998, no shares were outstanding. All
issued and outstanding shares of the capital stock of Excel are duly authorized,
validly issued, fully paid and nonassessable, and no class of capital stock is
entitled to preemptive rights. There were outstanding as of June 14, 1998 no
options, warrants or other rights to acquire capital stock from Excel other than
options to acquire 9,459,032 shares of Common Stock. No Subsidiaries of Excel
own any shares of Excel Common Stock.
(ii) As of the date of this Agreement, no bonds, debentures,
notes or other indebtedness of Excel having the right to vote on any matters on
which shareholders may vote ("Excel Voting Debt") are issued or outstanding.
(iii) Except as otherwise set forth in this Section 3.1(c),
there are no securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which Excel or any of
its Subsidiaries is a party or by which any of them is bound obligating Excel or
any of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting securities
of Excel or any of its Subsidiaries or obligating Excel or any of its
Subsidiaries to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking. There
are no outstanding obligations of Excel or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock of Excel or
any of its Subsidiaries. There are no agreements or arrangements pursuant to
which Excel is or could be required to register shares of Excel Common Stock or
other securities under the Securities Act, or other agreements or arrangements
with or among any securityholders of Excel with respect to securities of Excel.
There are no voting, sale, transfer or other similar agreements to which Excel
or any of its Subsidiaries is a party with respect to the capital
12
stock of Excel or its Subsidiaries or any other securities of Excel or its
Subsidiaries which are convertible or exchangeable into or exercisable for
shares of the capital stock of Excel or its Subsidiaries.
(d) Authority; No Conflicts. (i) Excel has all requisite
corporate power and authority to enter into this Agreement and the other
Transaction Documents to which it is or may become a party and to consummate the
transactions contemplated hereby and thereby, subject in the case of the
consummation of the Merger to the adoption of this Agreement by the Required
Excel Vote (as defined in Section 3.1(i)). The execution and delivery by Excel
of this Agreement and the other Transaction Documents to which it is or may
become a party and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of Excel, subject in the case of the consummation of the Merger to the approval
and adoption of this Agreement by the Required Excel Vote. This Agreement has
been, and the other Transaction Documents to which Excel is or may become a
party have been or will be when executed by Excel, duly executed and delivered
by Excel, and each constitutes or will constitute a valid and binding agreement
of Excel, enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or affecting creditors
generally, by general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) or by an
implied covenant of good faith and fair dealing.
(ii) The execution and delivery by Excel of this Agreement and
the other Transaction Documents to which it is or may become a party do not and
will not, and the consummation by Excel of the Merger and the other transactions
contemplated hereby or thereby will not, conflict with, or result in any
violation of, or constitute a default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, amendment, cancellation
or acceleration of any obligation or the loss of a material benefit under, or
the creation of a lien, pledge, security interest, charge or other encumbrance
on any assets (any such conflict, violation, default, right of termination,
amendment, cancellation or acceleration, loss or creation, a "Violation")
pursuant to (A) any provision of the certificate of incorporation or by-laws of
Excel or any Subsidiary of Excel or (B) except as are not, individually or in
the aggregate, reasonably likely to have a Material Adverse Effect on Excel or
prevent or materially delay the performance of this Agreement by Excel and,
subject to obtaining or making the consents, approvals, orders, authorizations,
registrations, declarations and filings referred to in paragraph (iii) below,
any loan or credit agreement, note, mortgage, bond, indenture, lease, benefit
plan or other agreement, obligation, commitment, contract or instrument (any of
the foregoing a "Contract"), Permit or Federal or national, state or provincial,
municipal or local law, rule, regulation, statute, ordinance, decree, order,
permit, authorization, opinion, judgment or other legislation, whether of the
U.S., Canada or another foreign jurisdiction ("Laws"), applicable to Excel or
any Subsidiary of Excel or their respective properties or assets. For purposes
of this agreement, "Permit" shall mean any franchise, concession, grant,
authorization, license, permit, easement, variance, exception, consent,
certificate, approval, clearance or order of any Governmental Entity required by
Law, including any Environmental Law.
13
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Federal, national, state,
provincial, municipal or local government, any instrumentality, subdivision,
court, administrative agency or commission or other authority thereof, or any
quasi-governmental or private body exercising any regulatory, taxing, importing
or any other governmental or quasi-governmental authority, whether of the U.S.,
Canada or another foreign jurisdiction (a "Governmental Entity"), is required by
or with respect to Excel or any Subsidiary of Excel in connection with the
execution and delivery by Excel of this Agreement and the other Transaction
Documents to which it may be a party or the consummation by Excel of the Merger
and the other transactions contemplated hereby or thereby, except for those
required under or in relation to (A) the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act") and the Competition Act
(Canada), (B) the Communications Act of 1934, as amended (the "Communications
Act"), and any rules, regulations, orders, practices and policies promulgated by
the U.S. Federal Communications Commission (the "FCC") (such rules the "Federal
Communications Laws"), (C) state securities or "blue sky" laws (the "Blue Sky
Laws"), (D) the Securities Act, (E) the Exchange Act, (F) the Canadian
Securities Laws, (G) the DGCL with respect to the filing of the Delaware
Certificate of Merger, (H) the laws, rules, regulations, orders, practices and
policies of any state legislature or public utility or service commission
("PUCs"), foreign (including multi-national) telecommunications regulatory
agencies or similar state or foreign regulatory bodies, (I) rules and
regulations of the NYSE, (J) antitrust or other competition Laws of other
jurisdictions and (K) such consents, approvals, orders, authorizations,
registrations, declarations and filings the failure of which to make or obtain
are not, individually or in the aggregate, reasonably likely to have a Material
Adverse Effect on Excel or prevent or materially delay the performance of this
Agreement by Excel. Consents, approvals, orders, authorizations, registrations,
declarations and filings required under or in relation to any of the foregoing
clauses (A) through (J) are hereinafter referred to as the "Required Consents."
Neither the execution and delivery by Excel of this Agreement and the other
Transaction Documents to which Excel is a party nor the consummation and
performance by Excel of the Merger and the other transactions contemplated
hereby or thereby will result in a violation of (a) the Federal Communications
Laws, (b) the laws, rules, regulations, orders, practices or policies of any
state legislature or PUC, foreign (including multi-national) telecommunications
regulatory agency or similar state or foreign regulatory body or (c) any order,
writ, judgment, injunction, decree or award of the FCC, any entity listed in
clause (b) above, or any court of competent jurisdiction binding upon Excel,
other than any violation which is not, individually or in the aggregate,
reasonably likely to have a Material Adverse Effect on Excel.
(iv) Each of Excel and its Subsidiaries is in possession of
all Permits from appropriate Governmental Entities necessary for Excel or any of
its Subsidiaries to own, lease and operate its properties or to carry on their
respective businesses as they are now being conducted (the "Excel Permits"), and
all such Excel Permits are valid and in full force and effect, except where the
failure to have, or the suspension, cancellation or restriction of, any of the
Excel Permits does not and would not, individually or in the aggregate, (a) have
or be reasonably likely to have a Material Adverse Effect on Excel or (b)
prevent or materially delay the performance of this Agreement by Excel. No
suspension, cancellation or restriction of any of the Excel Permits is pending
or, to the actual knowledge of the executive officers of Excel, threatened,
except where the failure to have, or the suspension or cancellation of, any
14
of Excel Permits does not and would not, individually or in the aggregate, (x)
have or be reasonably likely to have a Material Adverse Effect on Excel or (y)
prevent or materially delay the performance of this Agreement by Excel. Neither
Excel nor any of its Subsidiaries is in conflict with, or in default, breach or
violation of, any Excel Permits, except for such conflicts, defaults, breaches
or violations that do not and would not, individually or in the aggregate, (A)
have or be reasonably likely to have a Material Adverse Effect on Excel or (B)
prevent or materially delay the performance of this Agreement by Excel.
(e) Reports and Financial Statements. Excel has filed all
required reports, schedules, forms, statements and other documents required to
be filed by it with the SEC since January 1, 1996 (collectively, including all
exhibits thereto and any registration statement filed with the SEC since such
date, the "Excel Disclosure Documents"). No Subsidiary of Excel is required to
file any form, report or other document with the SEC. None of the Excel
Disclosure Documents filed since January 1, 1998 (the "Recent Excel Disclosure
Documents"), as of their respective dates (and, if amended or superseded by a
filing prior to the date of this Agreement or the Closing Date, then on the date
of such filing), contained or will contain any untrue statement of a material
fact or omitted or will omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of the financial
statements (including the related notes) included in the Excel Disclosure
Documents presents fairly, in all material respects, the consolidated financial
position and consolidated results of operations and cash flows of Excel and its
Subsidiaries as of the respective dates or for the respective periods set forth
therein, all in conformity with US GAAP consistently applied during the periods
involved except as otherwise noted therein, and subject, in the case of the
unaudited interim financial statements, to normal and recurring year-end
adjustments that have not been and are not expected to be material in amount
(and except for the absence of footnotes in the case of such interim financial
statements). All of the Recent Excel Disclosure Documents, as of their
respective dates (and as of the date of any amendment to the respective Recent
Excel Disclosure Documents), complied as to form in all material respects with
the applicable requirements of the Securities Act and the Exchange Act and the
rules and regulations promulgated thereunder.
(f) Information Supplied. (i) None of the information supplied
or to be supplied by Excel for inclusion in, or incorporated by reference from
the Excel Disclosure Documents in, (A) the Form F-4 (as defined in Section 5.1)
will, at the time the Form F-4 is filed with the SEC, at any time it is amended
or supplemented or at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and (B) the Joint Information Statement/Proxy
Statement/Prospectus (as defined in Section 5.1) will, on the date it is first
mailed to the stockholders of Excel or the shareholders of Teleglobe or at the
time of the Excel Stockholders Meeting, if any, or the Teleglobe Shareholders
Meeting (each as defined in Section 5.1), contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Form F-4 and the
Joint Information Statement/Proxy Statement/ Prospectus will comply as to form
in all material respects with the applicable
15
requirements of the Exchange Act and the Securities Act and the rules and
regulations of the SEC thereunder.
(ii) Notwithstanding the foregoing provisions of this Section
3.1(f), no representation or warranty is made by Excel with respect to
statements made or incorporated by reference in the Form F-4 or the Joint
Information Statement/Proxy Statement/Prospectus based on information supplied
by Teleglobe for inclusion or incorporation by reference therein.
(iii) If at any time prior to the Effective Time any event
relating to Excel or any of its Affiliates, officers or directors should be
discovered by Excel which should be set forth in an amendment to the Form F-4 or
a supplement to the Joint Information Statement/ Proxy Statement/Prospectus,
Excel shall promptly inform Teleglobe.
(g) Absence of Certain Changes or Events. Except as disclosed
in the Excel Disclosure Documents filed prior to the date of this Agreement,
since December 31, 1997, Excel and its Subsidiaries have in all material
respects conducted their business in the ordinary course consistent with past
practice, and there has not been any change in the business, condition
(financial or otherwise), assets, liabilities or results of operations of Excel
or any of its Subsidiaries or any event involving Excel or any of its
Subsidiaries which has had, or is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Excel.
(h) Board Approval. The Board of Directors of Excel, by
resolutions adopted at a meeting duly called and held and not subsequently
rescinded or modified (the "Excel Board Approval"), has (i) determined that this
Agreement and the other Transaction Documents to which Excel is a party and the
transactions contemplated hereby and thereby, including the Merger, are in the
best interests of Excel and its stockholders, (ii) approved this Agreement and
the other Transaction Documents to which Excel is a party and the transactions
contemplated hereby and thereby, including the Merger, and (iii) recommended
that the stockholders of Excel approve this Agreement and the Merger.
(i) Vote Required. The affirmative approval, by vote or
written consent, of the holders of a majority of the outstanding shares of Excel
Common Stock to approve the Merger (the "Required Excel Vote") is the only vote
of the holders of any class or series of Excel capital stock necessary to
approve and adopt this Agreement and approve the Merger and no other vote of the
stockholders of Excel is required to approve the other transactions contemplated
hereby or by any other Transaction Documents to which it is or may be a party.
(j) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Excel, except Xxxxxx Brothers Inc. (the "Excel Fairness Opinion
Banker") or Xxxxx Xxxxxx Incorporated, whose fees and expenses will be paid by
Excel in accordance with Excel's agreements with such firms based upon
arrangements made by or on behalf of Excel and previously disclosed to
Teleglobe.
16
(k) Opinion of Excel Fairness Opinion Banker. Excel has
received the opinion of the Excel Fairness Opinion Banker, dated the date of
this Agreement, to the effect that, as of such date, the Exchange Ratio is fair,
from a financial point of view, to the holders of shares of Excel Common Stock
(the "Excel Fairness Opinion"), a copy of which opinion has been made available
to Teleglobe.
(l) No Undisclosed Liabilities. Except as disclosed in the
Excel Disclosure Documents filed prior to the date hereof, and except for normal
or recurring liabilities incurred since December 31, 1997 in the ordinary course
of business consistent with past practices, Excel and its Subsidiaries do not
have any liabilities, either accrued, contingent or otherwise (whether or not
required to be reflected in financial statements in accordance with US GAAP),
and whether due or to become due, which, individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect on Excel.
(m) Taxes.
(i) Except for such matters that would not,
individually or in the aggregate, have a Material Adverse Effect on Excel: (A)
Excel and each of its Subsidiaries have (x) timely filed all Federal, national,
state and local tax returns and reports, whether U.S. or foreign, required to be
filed by them prior to the date of this Agreement (taking into account
extensions), (y) timely paid or accrued all Taxes due and payable thereon, and
(z) timely paid or accrued all Taxes for which a notice of assessment or
collection has been received (other than amounts being contested in good faith
by appropriate proceedings); (B) no tax return of Excel or any of its
Subsidiaries contains a disclosure statement under Section 6662(d)(2)(B)(ii)(l)
of the Code or any similar provision of applicable Law; (C) neither Excel nor
any of its Subsidiaries currently is the beneficiary of any extension of time
within which to file any tax return, other than with respect to the fiscal year
ended December 31, 1997; (D) Excel has delivered to Teleglobe correct and
complete copies of all Federal tax returns, examination reports and statements
of deficiencies assessed against or agreed to by Excel or any of its
Subsidiaries for the past three taxable years of Excel; (E) with respect to any
period for which tax returns are not yet due (including extensions), or for
which Taxes are not yet due and owing, Excel and each of its Subsidiaries has
made due and sufficient current accruals for such Taxes in the financial
statements included in the Recent Excel Disclosure Documents; (F) neither the
Internal Revenue Service (the "IRS") nor any other taxing authority has asserted
in writing to Excel any claim for Taxes, or to the actual knowledge of the
executive officers of Excel, is threatening to assert any claims for Taxes; (G)
Excel and each of its Subsidiaries have withheld or collected and paid over to
the appropriate governmental authorities (or are properly holding for such
payment) all Taxes required by Law to be withheld or collected; (H) neither
Excel nor any of its Subsidiaries has made an election under Section 341(f) of
the Code; (I) neither Excel nor any of its Subsidiaries has made any payments,
is obligated to make any payments, or is a party to any agreement that under
certain circumstances could obligate it to make any payments that will not be
deductible under Sections 162(m) or 280G of the Code or that will be subject to
excise tax under Section 4999 of the Code; (J) neither Excel nor any of its
Subsidiaries (x) has been a member of an affiliated group within the meaning of
Section 1504(a) of the Code (or any similar group defined under a similar
provision of applicable Law) other than an affiliated group the common parent of
which is Excel and (y) has any liability under Treasury
17
Regulations Section 1.1502-6 (or any similar provision of applicable Law), as a
transferee or successor, by contract or otherwise for Taxes of any affiliated
group of which Excel is not the common parent; (K) there are no liens for Taxes
upon the assets of Excel or any of its Subsidiaries (other than liens for Taxes
that are not yet due or that are being contested in good faith by appropriate
proceedings); (L) neither Excel nor any of its Subsidiaries is the subject of
any currently ongoing Tax audit, other than in the ordinary course of business
consistent with past practice; (M) there are no pending requests for waivers of
the time to assess any Tax, other than those made in the ordinary course and for
which payment has been made or there are adequate reserves; and (N) neither
Excel nor any of its Subsidiaries has waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(ii) For the purposes of this Agreement, a "Tax"
or, collectively, "Taxes," means any and all material Federal, state, local and
foreign taxes, assessments and other governmental charges, duties, impositions
and liabilities, including taxes based upon or measured by gross receipts,
income, profits, sales, use and occupation, and value added, ad valorem,
transfer, gains, franchise, withholding, payroll, recapture, employment, excise,
unemployment insurance, social security, business license, occupation, business
organization, stamp, environmental, customs duty, capital stock, severance,
disability, production and property taxes, together with all interest, penalties
and additions imposed with respect to such amounts and any obligations under any
agreements or arrangements with any other person with respect to such amounts
and including any liability for taxes of a predecessor entity.
(n) Properties.
(i) Section 3.1(n)(i) of the Excel Disclosure
Schedule contains a true and complete list of all real property leased by Excel
or its Subsidiaries pursuant to leases providing for the occupancy of facilities
in excess of 20,000 square feet (collectively "Material Leases"). Each of Excel
and its Subsidiaries is not in default under any of such leases, except where
the existence of such defaults, individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect on Excel.
(ii) The Excel Disclosure Schedule contains a true
and complete list of all real property that Excel or any of its Subsidiaries
owns. With respect to each such item of real property, except for such matters
which are not reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect on Excel: (x) Excel or one of its Subsidiaries has good
and marketable title to such property, free and clear of any security interest,
easement, covenant or other restriction, except for recorded easements,
covenants and other restrictions which do not materially impair the current uses
or occupancy of such property; and (y) the improvements constructed on such
property are in good condition, and all mechanical and utility systems servicing
such improvements are in good condition, free in each case of material defects.
(o) Intellectual Property. To the actual knowledge of the
executive officers of Excel, Excel and its Subsidiaries own, or are licensed or
otherwise possess the rights to use, all intellectual property, including
patents, inventions, discoveries, technology, know-how, copyrights and
copyrightable works (including computer software, databases, code and related
18
systems, files and applications), trademarks, service marks, trade names, trade
dress, Internet domain names, trade secrets, confidential information,
specifications and designs that are necessary to conduct the business of Excel
and its Subsidiaries in all material respects as currently conducted (the "Excel
Intellectual Property"). All of the Excel Intellectual Property necessary to
conduct the business of Excel as currently conducted in all material respects is
subsisting and unexpired, has not been abandoned, does not infringe or otherwise
impair the intellectual property rights of any third party, is not subject to
any lien or other encumbrance, and does not require the consent of any other
Person to be used by the Surviving Corporation upon the consummation of the
transactions contemplated by this Agreement (except for any such consent already
obtained). No action, suit or proceeding is pending, or to the actual knowledge
of the executive officers of Excel, threatened by any third party or
Governmental Entity that seeks to limit, cancel or question the validity of, or
Excel's rights to, any Excel Intellectual Property. Excel has taken reasonable
steps to protect, maintain and safeguard the Excel Intellectual Property,
including any Excel Intellectual Property for which improper or unauthorized
disclosure would impair its value or validity. To the actual knowledge of the
executive officers of Excel, no other Person is infringing or otherwise
impairing any of the Excel Intellectual Property.
(p) Agreements, Contracts and Commitments. Neither Excel nor
any of its Subsidiaries has breached, or received in writing any claim or notice
that it has breached, any of the terms or conditions of any material Contract to
which it is a party ("Excel Material Contracts"), other than any breaches which,
individually or in the aggregate, would have a Material Adverse Effect on Excel.
Each Excel Material Contract that has not expired by its terms is in full force
and effect.
(q) Litigation. Except as disclosed in the Excel Disclosure
Documents filed prior to the date hereof, as of the date hereof, there are no
actions, suits, investigations or proceedings (adjudicatory, rulemaking or
otherwise) pending or, to the actual knowledge of the executive officers of
Excel, threatened, nor any outstanding orders, decrees or judgments issued,
against Excel or any of its Subsidiaries (or any Employee Plan or Benefit
Arrangement), or any property of Excel or any such Subsidiary (including Excel
Intellectual Property), before any arbitrator of any kind or in or before or by
any Governmental Entity, except actions, suits, investigations, proceedings,
orders, decrees or judgments, which, individually and in the aggregate, do not
and are not reasonably likely to (a) have a Material Adverse Effect on Excel or
(b) prevent or materially delay the performance of this Agreement by Excel.
(r) Environmental Matters.
(i) Except for such matters that, individually or
in the aggregate, are not reasonably likely to have a Material Adverse Effect on
Excel: (a) Excel and its Subsidiaries comply and within all applicable statutes
of limitations periods have complied with all applicable Environmental Laws (as
defined in Section 3.1(r)(iv)) and all applicable Permits under applicable
Environmental Laws; (b) Hazardous Substances (as defined in Section 3.1(r)(v))
are not present at any of the properties (including soils, groundwater, surface
water, buildings or other structures) owned or operated by Excel or any of its
Subsidiaries in violation of or at concentrations that would require remediation
under any
19
Environmental Law; (c) neither Excel nor any of its Subsidiaries is subject to
liability for any Hazardous Substance disposal or contamination on any third
party property; (d) neither Excel nor any of its Subsidiaries has been
associated with any release or threat of release of any Hazardous Substance in
violation or otherwise in excess of levels of concentration permitted by any
Environmental Laws; (e) neither Excel nor any of its Subsidiaries has received
any written notice, demand, letter, claim or request for information alleging
that Excel or any of its Subsidiaries may be in violation of or liable under any
Environmental Law; (f) neither Excel nor any of its Subsidiaries is subject to
any orders, decrees, injunctions or other arrangements with any Governmental
Entity or is subject to any indemnity or other agreement with any third party
relating to liability under any Environmental Law or relating to Hazardous
Substances; (g) there are no circumstances or conditions involving Excel or any
of its Subsidiaries that would reasonably be expected to result in any claims,
liability, investigations, costs or restrictions on the ownership, use or
transfer of any property of Excel or any of its Subsidiaries pursuant to any
Environmental Law; and (h) to the actual knowledge of the executive officers of
Excel and its Subsidiaries, the foregoing representations and warranties also
apply to any liability that Excel or any of its Subsidiaries retained or assumed
either contractually or by operation of law.
(ii) To the actual knowledge of the executive
officers of Excel, (A) no underground storage tanks are or have been located on
any real property owned, operated or leased by Excel or its Subsidiaries, except
for those that are maintained in material compliance with Environmental Laws and
(B) no real property owned, operated or leased by Excel or its Subsidiaries has
been used or is used as a landfill or waste disposal site.
(iii) Excel has made available to Teleglobe copies
of all environmentally related audits, assessments, studies, reports, analyses,
and results of investigations of any real property currently or formerly owned,
operated or leased by Excel or its Subsidiaries that are in the possession,
custody or control of Excel.
(iv) As used herein, the term "Environmental Law"
means any Law or agency requirement relating to: (x) the protection,
investigation or restoration of the environment, health and safety of workers or
natural resources, (y) the handling, use, presence, disposal, release or
threatened release of any Hazardous Substance or (z) noise, odor, wetlands,
pollution, contamination or any injury or threat of injury to persons or
property in connection with any Hazardous Substance.
(v) As used herein, the term "Hazardous Substance"
means: (x) any substance that is listed, classified or regulated pursuant to or
that could result in liability under any Environmental Law; (y) any petroleum
product or by-product, asbestos-containing material, lead-containing paint or
plumbing, polychlorinated biphenyls, radioactive materials or radon; or (z) any
other substance which is the subject of regulatory action by any Governmental
Entity pursuant to any Environmental Law.
(s) Employee Benefit Plans.
(i) Excel has listed in Section 3.1(s) of the Excel
Disclosure Schedule all employee benefit plans (as defined in Section 3(3) of
the Employee Retirement
20
Income Security Act of 1974, as amended ("ERISA")) and all bonus, stock option,
stock purchase, incentive, deferred compensation, supplemental retirement,
severance and other similar employee benefit plans, and all unexpired severance
agreements, written or otherwise, for the benefit of, or relating to, any
current or former employee of Excel or any trade or business (whether or not
incorporated) which is a member or which is under common control with Excel
within the meaning of Section 414 of the Code, or any Subsidiary of Excel
(together, the "Excel Employee Plans").
(ii) With respect to each Excel Employee Plan, Excel
has made available to Teleglobe, a true and correct copy of (w) the most recent
annual report (Form 5500) filed with the IRS, (x) such Excel Employee Plan, (y)
each trust agreement and group annuity contract, if any, relating to such Excel
Employee Plan and (z) the most recent actuarial report or valuation relating to
an Excel Employee Plan subject to Title IV of ERISA.
(iii) With respect to the Excel Employee Plans,
individually and in the aggregate, such plans are being administered in
accordance with their terms and applicable Laws and no event has occurred, and
to the actual knowledge of the executive officers of Excel, there exists no
condition or set of circumstances in connection with which Excel could be
subject to any liability which would have a Material Adverse Effect on Excel
under ERISA, the Code or any other applicable Law.
(iv) With respect to the Excel Employee Plans,
individually and in the aggregate, there are no funded benefit obligations for
which contributions have not been made or properly accrued under the terms of
such plans and applicable Laws and there are no unfunded benefit obligations
which have not been accounted for by reserves, or otherwise properly footnoted
in accordance with US GAAP, on the financial statements of Excel contained in
the Excel Disclosure Documents, except for any such funded or unfunded benefit
obligations which are not reasonably likely to have a Material Adverse Effect on
Excel.
(v) Except as disclosed in Excel Disclosure
Documents filed prior to the date of this Agreement, and except as provided for
in this Agreement, neither Excel nor any of its Subsidiaries is a party to any
oral or written (x) agreement with any officer or other key employee of Excel or
any of its Subsidiaries, the benefits of which are contingent, or the terms of
which are materially altered, upon the occurrence of a transaction involving
Excel of the nature contemplated by this Agreement, (y) agreement with any
officer of Excel providing any term of employment or compensation guarantee
extending for a period longer than one year from the date hereof and for the
payment of compensation in excess of $100,000 per annum or (z) agreement or
plan, including any stock option plan, stock appreciation right plan, restricted
stock plan or stock purchase plan, any of the benefits of which will be
increased, or the vesting of the benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this Agreement or the
value of any of the benefits of which will be calculated on the basis of any of
the transactions contemplated by this Agreement.
(t) Compliance With Laws. (i) Excel has complied with, is not
in violation of, and has not received any written notices of violation with
respect to, any Law applicable to Excel or any of its Subsidiaries or by which
any property, asset or operation of
21
Excel or any of its Subsidiaries is bound or affected with respect to the
conduct of its business, or the ownership or operation of its business, except
for failures to comply or violations which would not, individually or in the
aggregate, have a Material Adverse Effect on Excel.
(ii) Excel's marketing and direct sales programs, including
Excel's multi-level marketing program, have in all material respects been
conducted in accordance with all applicable Laws and there is not any action,
suit, proceeding, inquiry, arbitration or litigation pending or, to the actual
knowledge of the executive officers of Excel, threatened in connection with such
programs which, individually or in the aggregate, would have a Material Adverse
Effect on Excel.
(iii) No action, suit, proceeding, inquiry, arbitration or
litigation is pending against Excel or, to the actual knowledge of the executive
officers of Excel, threatened by any Governmental Entity or individual regarding
"slamming" (i.e., changing customers' long-distance services without
authorization) or "cramming" (i.e., charging customers for services they have
not requested), which, individually or in the aggregate, would have a Material
Adverse Effect on Excel.
(u) Accounting and Tax Matters. Neither Excel nor any of its
Subsidiaries has taken or agreed to take any action which (i) would reasonably
be expected to prevent Teleglobe from accounting for the business combination to
be effected by the Merger as a pooling of interests under US GAAP or Canadian
GAAP or (ii) would cause any representation contained in the certificates
relating to the tax-free reorganization treatment attached hereto as Exhibits G
and H to be untrue.
(v) Labor Matters. Neither Excel nor any of its Subsidiaries
is a party to or otherwise bound by any collective bargaining agreement,
contract or other agreement or understanding with a labor union or labor
organization, nor is any such contract or agreement presently being negotiated,
nor is there, nor has there been in the last five years, any application for
certification or recognition by any union or organization respecting any of the
employees of Excel or its Subsidiaries, nor is Excel or any of its Subsidiaries
a party to, or bound by, any consent decree with, or citation by, any
Governmental Entity relating to employees or employment practices and, to the
actual knowledge of the executive officers of Excel, there are no campaigns
being conducted to solicit cards from employees of Excel or its Subsidiaries to
authorize representation by any labor organization. As of the date hereof,
neither Excel nor any of its Subsidiaries is the subject of any material
proceeding asserting that Excel or any of its Subsidiaries has committed an
unfair labor practice or is seeking to compel it to bargain with any labor union
or labor organization nor, as of the date of this Agreement, is there pending
or, to the actual knowledge of the executive officers of Excel, threatened, any
material labor strike, dispute, walkout, work stoppage, slow-down or lockout
involving Excel or any of its Subsidiaries nor has there been one in the past
five years.
(w) Insurance. All material fire and casualty, general
liability, business interruption, product liability, and sprinkler and water
damage insurance policies and directors and officers liability insurance
policies maintained by Excel or any of its Subsidiaries are with reputable
insurance carriers, provide full and adequate coverage for all normal risks
incident
22
to the business of Excel and its Subsidiaries and their respective properties
and assets, and are in character and amount at least equivalent to that carried
by persons engaged in similar businesses and subject to the same or similar
perils or hazards, except for any such failures to maintain insurance policies
that, individually or in the aggregate, are not reasonably likely to have a
Material Adverse Effect on Excel.
(x) No Existing Discussions. As of the date hereof, Excel is
not engaged, directly or indirectly, in any discussions or negotiations with any
other party with respect to an Acquisition Proposal (as defined in Section 5.5).
(y) Anti-Takeover Laws; Stockholder Rights Plan. Except for
Section 203 of the DGCL, no "fair price," "moratorium," "control share
acquisition" or other similar anti-takeover statute or regulation is applicable,
by reason of Excel's being a party to the Merger, this Agreement or any of the
other Transaction Documents to which it is a party or the transactions
contemplated hereby or thereby or by reason of the execution by Excel's
stockholders party thereto of the Excel Consent and Voting Agreement and the
transactions contemplated thereby and neither Excel nor any of its Subsidiaries
is a party to any "stockholder rights" plan or any similar anti-takeover plan or
device.
(z) DGCL Section 203. Prior to the time this Agreement was
executed, the Board of Directors of Excel has taken all action necessary, if
any, to exempt under or make not subject to Section 203 of the DGCL: (i) the
execution of this Agreement, the Excel Consent and Voting Agreement and the
Excel Stock Option Agreement, (ii) the Merger and (iii) the other transactions
contemplated hereby and by the other Transaction Documents.
(aa) Year 2000. Excel has developed and is in the process of
implementing a plan which it believes in good faith is sufficient to ensure that
in all material respects all hardware, software, firmware, systems, files,
applications, interfaces, databases and other computer-related materials
("Software") that it owns, possesses and/or uses is or will be designed to be
used prior to, during and after the calendar year 2000 A.D., and will operate in
all material respects during each such time period, either on a stand-alone
basis, or by interacting or interoperating with third-party Software, without
material error relating to the processing, calculating, comparing, sequencing or
other use of date data, including (i) any material error relating to or
resulting from date data which represents or references more than one century
("Century-Based Data"); (ii) any abnormal ending or provision of materially
invalid or incorrect results as a result of any Century-Based Data; or (iii) any
material error relating to century recognition or calculations accommodating
Century-Based Data, values or formulae, and the implementation of such plan is
expected in good faith to be completed in a timely manner. Excel has performed
all necessary due diligence and is in the process of performing tests and
implementing modifications to all Software that it owns, possesses and/or uses
to design an appropriate plan and to ensure the accuracy of this representation
and warranty.
(ab) Pooling Letters. Excel has received two letters from
Xxxxxx Xxxxxxxx LLP, each addressed to Excel, regarding its concurrence with
Excel's management's conclusions as to the appropriateness of pooling of
interests accounting under US GAAP (under Accounting Principles Board Opinion
No. 16) and under Canadian GAAP (under
23
Section 1580 of The Canadian Institute of Chartered Accountants Handbook),
respectively, for the Merger, as contemplated to be effected as of the date of
the letters.
(ac) Certain Regulatory Matters.
(i) Except for billing disputes with customers arising in the
ordinary course of business that in the aggregate involve immaterial amounts,
there are no proceedings or investigations pending or, to the actual knowledge
of the executive officers of Excel, threatened, before any Governmental Entity
directed specifically at Excel or, in the case of matters of general
applicability to the telecommunications industry, in which Excel is identified
for possible disparate treatment or whose outcome may have a disparate impact on
Excel, in which any of the following matters are being considered which are
reasonably likely to have a Material Adverse Effect on Excel, nor has Excel or
any of its Subsidiaries received written notice or inquiry from any Governmental
Entity, indicating that any of such matters should be considered or may become
the object of consideration or investigation specifically regarding Excel which
are reasonably likely to have a Material Adverse Effect on Excel or, in the case
of matters of general applicability to the telecommunications industry, in which
Excel is identified for possible disparate treatment or whose outcome may have a
disparate impact on Excel; (u) increases in access charges, universal service
contributions or the like; (v) traffic routing restrictions or restrictions on
use of facilities; (w) reduction or restriction of rates charged to customers;
(x) reduction of earnings; (y) refunds or other forfeitures of amounts
previously charged to customers; or (z) failure to meet any expense,
infrastructure, service quality or other commitments previously made to or
imposed by any Governmental Entity.
(ii) Neither Excel nor any of its Subsidiaries has any
outstanding commitments made in the context of a matter or proceeding related
specifically to Excel or, in the case of matters of general applicability to the
telecommunications industry, in which Excel is identified for possible disparate
treatment or whose outcome may have a disparate impact on Excel (and no such
obligations have been imposed upon Excel and remain outstanding), regarding; (u)
increases in access charges, universal service contributions or the like; (v)
traffic routing restrictions or restrictions on use of facilities; (w) reduction
or restriction of rates charged to customers; (x) reduction of earnings; (y)
refunds or other forfeitures of amounts previously charged to customers; or (z)
expenses, infrastructure expenditures, service quality or other regulatory
requirements, to or by any Governmental Entity, in each case which are
reasonably likely to have a Material Adverse Effect on Excel.
(iii) Other than in the context of a reorganization involving
pro forma transfer of authorizations, Excel has not transferred, sold any
interest in or otherwise taken action to reduce its control over any Federal or
state regulatory licenses, certificates, approvals or other authorizations under
which it operates, and the transfer of such authorizations, subject to
regulatory approval, would not violate the terms of any agreement to which Excel
is a party or by which Excel is bound, or impinge the rights of any third party.
3.2 Representations and Warranties of Teleglobe. Teleglobe
represents and warrants to Excel that the statements contained in this Section
3.2 are true and correct except as set forth herein and in the disclosure
schedule delivered by Teleglobe to Excel (the
24
"Teleglobe Disclosure Schedule"). The Teleglobe Disclosure Schedule is arranged
in paragraphs corresponding to the numbered and lettered paragraphs contained in
this Agreement and the section of the disclosure schedule corresponding to any
numbered and lettered paragraph shall qualify other paragraphs in this Agreement
only to the extent that it is reasonably apparent from a reading of such
disclosure that it also qualifies or applies to such other paragraphs. Inclusion
of information in the Teleglobe Disclosure Schedule shall not be construed as an
admission that such information is material to the operations or financial
condition of Teleglobe and its Subsidiaries.
(a) Organization, Standing and Power. Each of Teleglobe and
each of its Subsidiaries is a corporation or other entity duly incorporated or
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted and is duly qualified and in good standing to do business
in each jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification necessary other than in such
jurisdictions where the failure so to qualify or to be in good standing would
not, either individually or in the aggregate, have a Material Adverse Effect on
Teleglobe. The copies of the certificate of incorporation and by-laws, or
comparable documents, of Teleglobe which were previously furnished to Excel are
true, complete and correct copies of such documents as in effect on the date of
this Agreement.
(b) Subsidiaries. Teleglobe does not own, directly or
indirectly, any equity or other ownership interest in any corporation,
partnership, joint venture or other entity or enterprise, except for the
Subsidiaries and other entities set forth in the Teleglobe Disclosure Documents
(as defined in Section 3.2(e)), which are all the Subsidiaries of Teleglobe that
are required to be disclosed pursuant to item 1 of Part II of Schedule IX of the
Regulation Respecting Securities enacted under the Securities Act (Quebec).
Except as set forth in the Teleglobe Disclosure Documents filed prior to the
date of this Agreement, neither Teleglobe nor any of its Subsidiaries is subject
to any obligation or requirement to provide a material amount of funds to or
make any material investment (in the form of a loan, capital contribution or
otherwise) in any such entity that is not directly or indirectly wholly owned by
Teleglobe. Except as would not, either individually or in the aggregate, have a
Material Adverse Effect on Teleglobe, each of the outstanding shares of capital
stock (or other ownership interests having by their terms ordinary voting power
to elect directors or others performing similar functions with respect to such
Subsidiary) owned by Teleglobe of each of Teleglobe's Subsidiaries is duly
authorized, validly issued, fully paid and nonassessable, and is owned directly
or indirectly by Teleglobe free and clear of all liens, pledges, security
interests, claims or other encumbrances of any kind whatsoever (including
voting, transfer or similar rights such as rights of first offer or rights of
first refusal).
(c) Capital Structure. (i) As of the date hereof, the
authorized capital stock of Teleglobe consisted of (A) an unlimited number of
common shares of Teleglobe capital stock, of which, at the close of business on
June 14, 1998 (after giving effect to the Teleglobe Stock Dividend), 129,306,908
shares were outstanding and 7,106,364 shares were reserved for issuance pursuant
to options or rights under Teleglobe's Executive Stock Option Plan (the
"Teleglobe Option Plan") and (B) an unlimited number of Class A non-voting
shares and
25
preferred shares, all without par value, of which, at the close of business on
June 14, 1998 (after giving effect to the Teleglobe Stock Dividend), 5,000,000
Third Series Preferred Shares were outstanding. All issued and outstanding
shares of the capital stock of Teleglobe are duly authorized, validly issued,
fully paid and nonassessable and no class of capital stock is entitled to
preemptive rights. There were outstanding as of June 14, 1998 no options,
warrants or other rights to acquire capital stock from Teleglobe other than
options or rights to acquire 3,577,706 common shares of Teleglobe capital stock.
(ii) As of the date of this Agreement, no bonds, debentures,
notes or other indebtedness of Teleglobe having the right to vote on any matters
on which shareholders may vote ("Teleglobe Voting Debt") are issued or
outstanding.
(iii) Except as otherwise set forth in this Section 3.2(c),
there are no securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which Teleglobe or any
of its Subsidiaries is a party or by which any of them is bound obligating
Teleglobe or any of its Subsidiaries to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other voting
securities of Teleglobe or any of its Subsidiaries or obligating Teleglobe or
any of its Subsidiaries to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or undertaking.
There are no outstanding obligations of Teleglobe or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock of Teleglobe
or any of its Subsidiaries. There are no agreements or arrangements pursuant to
which Teleglobe is or could be required to register or qualify common shares of
Teleglobe capital stock or other securities under the Securities Act or any
Canadian Securities Laws, or other agreements or arrangements with or among any
securityholders of Teleglobe with respect to securities of Teleglobe. There are
no voting, sale, transfer or other similar agreements to which Teleglobe or any
of its Subsidiaries is a party with respect to the capital stock of Teleglobe or
Teleglobe's Subsidiaries or any other securities of Teleglobe or Teleglobe's
Subsidiaries which are convertible or exchangeable into or exercisable for
shares of the capital stock of Teleglobe or Teleglobe's Subsidiaries.
(d) Authority; No Conflicts. (i) Teleglobe has all requisite
corporate power and authority to enter into this Agreement and the other
Transaction Documents to which it is or may become a party and, subject to the
approval by the Required Articles Amendment Vote or the Required By-Law
Amendment Vote of the Teleglobe Articles Amendment or the Teleglobe By-Law
Amendment, respectively, to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the other Transaction
Documents to which it is or may become a party and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of Teleglobe, subject in the case of the
Teleglobe Articles Amendment or the Teleglobe By-Law Amendment, as the case may
be, to the approval by the Required Articles Amendment Vote or the Required
By-Law Amendment Vote, as the case may be. This Agreement has been, and the
other Transaction Documents to which Teleglobe is or may become a party have
been or will be when executed by Teleglobe, duly executed and delivered by
Teleglobe, and each constitutes or will constitute a valid and binding agreement
of Teleglobe, enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and
26
similar laws relating to or affecting creditors generally, by general equity
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law) or by an implied covenant of good faith and fair
dealing.
(ii) The execution and delivery by Teleglobe of this Agreement
and the other Transaction Documents to which it is or may become a party do not
and will not, and the consummation by Teleglobe and Merger Sub of the Merger and
the other transactions contemplated hereby or thereby will not, conflict with,
or result in a Violation pursuant to: (A) any provision of the certificate of
incorporation or by-laws or similar constitutive documents of Teleglobe or any
Subsidiary of Teleglobe, or (B) except as are not, individually or in the
aggregate, reasonably likely to have a Material Adverse Effect on Teleglobe or
prevent or materially delay the performance of this Agreement by Teleglobe and,
subject to obtaining or making the consents, approvals, orders, authorizations,
registrations, declarations and filings referred to in paragraph (iii) below,
any Contract, Law or Permit applicable to Teleglobe or any Subsidiary of
Teleglobe or their respective properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required by
or with respect to Teleglobe or any Subsidiary of Teleglobe in connection with
the execution and delivery by Teleglobe of this Agreement and the other
Transaction Documents to which Teleglobe may be a party or the consummation by
Teleglobe of the Merger and the other transactions contemplated hereby or
thereby, except for the Required Consents, if applicable, and those required
under or in relation to the Telecommunications Act (Canada), the
Radiocommunication Act (Canada) or the Telegraphs Act (Canada), the Montreal
Exchange (the "ME") and The Toronto Stock Exchange (the "TSE" and, together with
the ME and the NYSE, the "Exchanges") and such consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of which to
make or obtain are not individually or in the aggregate, reasonably likely to
have a Material Adverse Effect on Teleglobe or prevent or materially delay the
performance of this Agreement by Teleglobe. Neither the execution and delivery
by Teleglobe of this Agreement, and the other Transaction Documents to which
Teleglobe is a party nor the consummation and performance by Teleglobe of the
Merger and the other transactions contemplated hereby or thereby will result in
a violation of (a) the Federal Communications Laws, (b) the laws, rules,
regulations, orders, practices or policies of any state legislature or PUC,
foreign (including multi-national) telecommunications regulatory agency or
similar state or foreign regulatory body, or (c) any order, writ, judgment,
injunction, decree or award of the FCC, any entity listed in clause (b) above,
or any court of competent jurisdiction binding upon Teleglobe, other than any
violation which is not, individually or in the aggregate, reasonably likely to
have a Material Adverse Effect on Teleglobe.
(iv) Each of Teleglobe and its Subsidiaries is in possession
of all Permits from appropriate Governmental Entities necessary for Teleglobe or
any of its Subsidiaries to own, lease and operate its properties or to carry on
their respective businesses as they are now being conducted (the "Teleglobe
Permits"), and all such Teleglobe Permits are valid and in full force and
effect, except where the failure to have, or the suspension, cancellation or
restriction of, any of the Teleglobe Permits does not and would not,
individually or in the aggregate, (a) have or be reasonably likely to have a
Material Adverse Effect on Teleglobe or (b) prevent or materially delay the
performance of this Agreement by Teleglobe. No
27
suspension, cancellation or restriction of any of the Teleglobe Permits is
pending or, to the actual knowledge of the executive officers of Teleglobe,
threatened, except where the failure to have, or the suspension or cancellation
of, any of Teleglobe Permits does not and would not, individually or in the
aggregate, (x) have or be reasonably likely to have a Material Adverse Effect on
Teleglobe or (y) prevent or materially delay the performance of this Agreement
by Teleglobe. Neither Teleglobe nor any of its Subsidiaries is in conflict with,
or in default, breach or violation of any Teleglobe Permits, except for such
conflicts, defaults, breaches or violations that do not and would not,
individually or in the aggregate, (A) have or be reasonably likely to have a
Material Adverse Effect on Teleglobe or (B) prevent or materially delay the
performance of this Agreement by Teleglobe.
(e) Reports and Financial Statements. Teleglobe has filed all
required reports, schedules, forms, statements and other documents required to
be filed by it with the Canadian securities regulatory authorities (the "CSA")
and, to the extent applicable, the SEC since January 1, 1996 (collectively,
including all exhibits thereto and any registration statement filed since such
date, the "Teleglobe Disclosure Documents"). No Subsidiary of Teleglobe is
required to file any form, report or other document with the CSA or the SEC.
None of the Teleglobe Disclosure Documents filed since January 1, 1998 (the
"Recent Teleglobe Disclosure Documents"), as of their respective dates (and, if
amended or superseded by a filing prior to the date of this Agreement or the
Closing Date, then on the date of such filing), contained or will contain any
untrue statement of a material fact or omitted or will omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. Each
of the financial statements (including the related notes) included in the
Teleglobe Disclosure Documents presents fairly, in all material respects, the
consolidated financial position and consolidated results of operations and cash
flows of Teleglobe and its Subsidiaries as of the respective dates or for the
respective periods set forth therein, all in conformity with Canadian GAAP
consistently applied during the periods involved except as otherwise noted
therein, and subject, in the case of the unaudited interim financial statements,
to normal and recurring year-end adjustments that have not been and are not
expected to be material in amount (and except for the absence of footnotes in
the case of such interim financial statements). All of the Recent Teleglobe
Disclosure Documents, as of their respective dates (and as of the date of any
amendment to the respective Recent Teleglobe Disclosure Documents), complied as
to form in all material respects with the applicable requirements of the
Canadian Securities Laws and, to the extent applicable, to the Securities Act
and the Exchange Act and the rules and regulations promulgated thereunder.
(f) Information Supplied. (i) None of the information supplied
or to be supplied by Teleglobe for inclusion in, or incorporated by reference
in, (A) the Form F-4 will, at the time the Form F-4 is filed with the SEC, at
any time it is amended or supplemented or at the time it becomes effective under
the Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and (B) the Joint Information Statement/Proxy
Statement/Prospectus will, on the date it is first mailed to the stockholders of
Excel or the shareholders of Teleglobe or at the time of the Excel Stockholders
Meeting, if any, or the Teleglobe Shareholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the
28
statements therein, in light of the circumstances under which they were made,
not misleading. The Form F-4 and the Joint Information Statement/Proxy
Statement/Prospectus will comply as to form in all material respects with the
applicable requirements of the Exchange Act and the Securities Act and the rules
and regulations of the SEC thereunder and with the applicable requirements of
the Canadian Securities Laws.
(ii) Notwithstanding the foregoing provisions of this Section
3.2(f), no representation or warranty is made by Teleglobe with respect to
statements made or incorporated by reference in the Form F-4 or the Joint
Information Statement/Proxy Statement/Prospectus based on information supplied
by Excel for inclusion or incorporation by reference therein.
(iii) If at any time prior to the Effective Time any event
relating to Teleglobe or any of its Affiliates, officers or directors should be
discovered by Teleglobe which should be set forth in an amendment to the Form
F-4 or a supplement to the Joint Information Statement/ Proxy
Statement/Prospectus, Teleglobe shall promptly inform Excel.
(g) Absence of Certain Changes or Events. Except as disclosed
in the Teleglobe Disclosure Documents filed prior to the date of this Agreement,
since December 31, 1997, Teleglobe and its Subsidiaries have in all material
respects conducted their business in the ordinary course consistent with past
practice, and there has not been any change in the business, condition
(financial or otherwise), assets, liabilities or results of operations of
Teleglobe or any of its Subsidiaries or any event involving Teleglobe or any of
its Subsidiaries which has had, or is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Teleglobe.
(h) Board Approval. The Board of Directors of Teleglobe, by
resolutions adopted at a meeting duly called and held and not subsequently
rescinded or modified (the "Teleglobe Board Approval"), has (i) determined that
this Agreement, and the other Transaction Documents to which Teleglobe is a
party and the transactions contemplated hereby and thereby, including the Share
Issuance, the Teleglobe Articles Amendment and the Teleglobe By-Law Amendment,
are in the best interests of Teleglobe and its shareholders, (ii) approved this
Agreement and the other Transaction Documents to which Teleglobe is a party and
the transactions contemplated hereby and thereby, including the Share Issuance,
the Teleglobe Articles Amendment and the Teleglobe By-Law Amendment, and (iii)
recommended that the shareholders of Teleglobe approve the Share Issuance, the
Teleglobe Articles Amendment and the Teleglobe By-Law Amendment.
(i) Vote Required. No vote of the holders of any class of
Teleglobe capital stock is required to approve the Share Issuance under
applicable Canadian law or the rules of the Exchanges. The affirmative vote of
holders of common shares of Teleglobe capital stock representing (i) two thirds
of the total votes cast at a meeting of the holders of outstanding common shares
of Teleglobe capital stock (such vote, the "Required Articles Amendment Vote")
and (ii) a majority of the total votes cast at a meeting of the holders of
outstanding common shares of Teleglobe capital stock (such vote, the "Required
By-Law Amendment Vote") is the only vote of the holders of any class or series
of Teleglobe capital stock necessary to approve the Teleglobe Articles Amendment
and the Teleglobe By-Law
29
Amendment, respectively, and no other vote of the holders of any class of
capital stock of Teleglobe is required to approve the other transactions
contemplated hereby or by any other Transaction Documents to which it is or may
be a party.
(j) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Teleglobe, except Bear, Xxxxxxx & Co. Inc. (the "Teleglobe
Fairness Opinion Banker") and Xxx Xxxxxx & Co Inc, each of whose fees and
expenses will be paid by Teleglobe in accordance with Teleglobe's agreements
with such firms based upon arrangements made by or on behalf of Teleglobe and
previously disclosed to Excel.
(k) Opinion of Teleglobe Fairness Opinion Banker. Teleglobe
has received the opinion of the Teleglobe Fairness Opinion Banker dated the date
of this Agreement, to the effect that, as of such date, the Exchange Ratio is
fair, from a financial point of view, to the holders of common shares of
Teleglobe capital stock (the "Teleglobe Fairness Opinion"), a copy of which
opinion has been made available to Excel.
(l) No Undisclosed Liabilities. Except as disclosed in the
Teleglobe Disclosure Documents filed prior to the date hereof, and except for
normal or recurring liabilities incurred since December 31, 1997 in the ordinary
course of business consistent with past practices, Teleglobe and its
Subsidiaries do not have any liabilities, either accrued, contingent or
otherwise (whether or not required to be reflected in financial statements in
accordance with Canadian GAAP), and whether due or to become due, which,
individually or in the aggregate, are reasonably likely to have a Material
Adverse Effect on Teleglobe.
(m) Taxes.
(i) Except for such matters that would not,
individually or in the aggregate, have a Material Adverse Effect on Teleglobe:
(A) Teleglobe and each of its Subsidiaries have (x) timely filed all Federal,
national, state, provincial and local tax returns and reports, whether of the
U.S., Canada or another foreign jurisdiction, required to be filed by them prior
to the date of this Agreement (taking into account extensions), (y) timely paid
or accrued all Taxes due and payable thereon, and (z) timely paid or accrued all
Taxes for which a notice of assessment or collection has been received (other
than amounts being contested in good faith by appropriate proceedings); (B) no
tax return of Teleglobe or any of its Subsidiaries contains a disclosure
statement under Section 6662(d)(2)(B)(ii)(l) of the Code or any similar
provision of applicable Law; (C) neither Teleglobe nor any of its Subsidiaries
currently is the beneficiary of any extension of time within which to file any
tax return, other than with respect to the fiscal year ended December 31, 1997;
(D) Teleglobe has delivered to Excel correct and complete copies of all Federal
tax returns, examination reports and statements of deficiencies assessed against
or agreed to by Teleglobe or any of its Subsidiaries for the past three taxable
years of Teleglobe; (E) with respect to any period for which tax returns are not
yet due (including extensions), or for which Taxes are not yet due and owing,
Teleglobe and each of its Subsidiaries has made due and sufficient current
accruals for such Taxes in the financial statements included in the Recent
Teleglobe
30
Disclosure Documents; (F) neither the IRS nor any other taxing authority has
asserted in writing to Teleglobe any claim for Taxes, or to the actual knowledge
of the executive officers of Teleglobe, is threatening to assert any claims for
Taxes; (G) Teleglobe and each of its Subsidiaries have withheld or collected and
paid over to the appropriate governmental authorities (or are properly holding
for such payment) all Taxes required by Law to be withheld or collected; (H)
neither Teleglobe nor any of its Subsidiaries has made an election under Section
341(f) of the Code; (I) neither Teleglobe nor any of its Subsidiaries has made
any payments, is obligated to make any payments, or is a party to any agreement
that under certain circumstances could obligate it to make any payments that
will not be deductible under Sections 162(m) or 280G of the Code or that will be
subject to excise tax under Section 4999 of the Code; (J) neither Teleglobe nor
any of its Subsidiaries (x) has been a member of an affiliated group within the
meaning of Section 1504(a) of the Code (or any similar group defined under a
similar provision of applicable Law) other than an affiliated group the common
parent of which is Teleglobe and (y) has any liability under Treasury
Regulations Section 1.1502-6 (or any similar provision of applicable Law), as a
transferee or successor, by contract or otherwise for Taxes of any affiliated
group of which Teleglobe is not the common parent; (K) there are no liens for
Taxes upon the assets of Teleglobe or any of its Subsidiaries (other than liens
for Taxes that are not yet due or that are being contested in good faith by
appropriate proceedings); (L) neither Teleglobe nor any of its Subsidiaries is
the subject of any currently ongoing Tax audit, other than in the ordinary
course of business consistent with past practice; (M) there are no pending
requests for waivers of the time to assess any Tax, other than those made in the
ordinary course and for which payment has been made or there are adequate
reserves; and (N) neither Teleglobe nor any of its Subsidiaries has waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.
(n) Properties.
(i) Section 3.2(n)(i) of the Teleglobe Disclosure
Schedule contains a true and complete list of all real property leased by
Teleglobe or its Subsidiaries pursuant to Material Leases. Each of Teleglobe and
its Subsidiaries is not in default under any of such leases, except where the
existence of such defaults, individually or in the aggregate, are not reasonably
likely to have a Material Adverse Effect on Teleglobe.
(ii) The Teleglobe Disclosure Schedule contains a
true and complete list of all real property that Teleglobe or any of its
Subsidiaries owns. With respect to each such item of real property, except for
such matters which are not reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect on Teleglobe: (x) Teleglobe or the identified
Subsidiary has good and marketable title to such property, free and clear of any
security interest, easement, covenant or other restriction, except for recorded
easements, covenants and other restrictions which do not materially impair the
current uses or occupancy of such property; and (y) the improvements constructed
on such property are in good condition, and all mechanical and utility systems
servicing such improvements are in good condition, free in each case of material
defects.
(o) Intellectual Property. To the actual knowledge of the
executive officers of Teleglobe, Teleglobe and its Subsidiaries own, or are
licensed or otherwise possess the
31
rights to use, all intellectual property, including patents, inventions,
discoveries, technology, know-how, copyrights and copyrightable works (including
computer software, databases, code and related systems, files and applications),
trademarks, service marks, trade names, trade dress, Internet domain names,
trade secrets, confidential information, specifications and designs that are
necessary to conduct the business of Teleglobe and its Subsidiaries in all
material respects as currently conducted (the "Teleglobe Intellectual
Property"). All of the Teleglobe Intellectual Property necessary to conduct the
business of Teleglobe as currently conducted in all material respects is
subsisting and unexpired, has not been abandoned, does not infringe or otherwise
impair the intellectual property rights of any third party, is not subject to
any lien or other encumbrance, and does not require the consent of any other
Person to be used by Teleglobe upon the consummation of the transactions
contemplated by this Agreement (except for any such consent already obtained).
No action, suit or proceeding is pending, or to the actual knowledge of the
executive officers of Teleglobe, threatened by any third party or any
Governmental Entity that seeks to limit, cancel or question the validity of, or
Teleglobe's rights to, any Teleglobe Intellectual Property. Teleglobe has taken
reasonable steps to protect, maintain and safeguard the Teleglobe Intellectual
Property, including any Teleglobe Intellectual Property for which improper or
unauthorized disclosure would impair its value or validity. To the actual
knowledge of the executive officers of Teleglobe, no other Person is infringing
or otherwise impairing any of the Teleglobe Intellectual Property.
(p) Agreements, Contracts and Commitments. Neither Teleglobe
nor any of its Subsidiaries has breached, or received in writing any claim or
notice that it has breached, any of the terms or conditions of any material
Contract to which it is a party ("Teleglobe Material Contracts"), other than any
breaches which, individually or in the aggregate, would have a Material Adverse
Effect on Teleglobe. Each Teleglobe Material Contract that has not expired by
its terms is in full force and effect.
(q) Litigation. Except as disclosed in the Teleglobe
Disclosure Documents filed prior to the date hereof, there are no actions,
suits, investigations or proceedings (adjudicatory, rulemaking or otherwise)
pending or, to the actual knowledge of the executive officers of Teleglobe,
threatened, nor any orders, decrees or judgments issued, against Teleglobe or
any of its Subsidiaries (or any Teleglobe Employee Plan), or any property of
Teleglobe or any such Subsidiary (including Teleglobe Intellectual Property),
before any arbitrator of any kind or in or before or by any Governmental Entity,
except actions, suits, investigations, proceedings orders, decrees or judgments
which, individually or in the aggregate, do not and are not reasonably likely to
(a) have a Material Adverse Effect on Teleglobe or (b) prevent or materially
delay the performance of this Agreement by Teleglobe.
(r) Environmental Matters.
(i) Except for such matters that, individually or in
the aggregate, are not reasonably likely to have a Material Adverse Effect on
Teleglobe: (a) Teleglobe and its Subsidiaries comply and within all applicable
statutes of limitations periods have complied with all applicable Environmental
Laws and all applicable Permits under applicable Environmental Laws; (b)
Hazardous Substances are not present at any of the properties (including soils,
groundwater, surface water, buildings or other structures) owned or operated
32
by Teleglobe or any of its Subsidiaries in violation of or at concentrations
that would require remediation under any Environmental Law; (c) neither
Teleglobe nor its Subsidiaries is subject to liability for any Hazardous
Substance disposal or contamination on any third party property; (d) neither
Teleglobe nor any of its Subsidiaries has been associated with any release or
threat of release of any Hazardous Substance in violation or otherwise in excess
of levels of concentration permitted by any Environmental Laws; (e) neither
Teleglobe nor any of its Subsidiaries has received any written notice, demand,
letter, claim or request for information alleging that Teleglobe or any of its
Subsidiaries may be in violation of or liable under any Environmental Law; (f)
neither Teleglobe nor any of its Subsidiaries is subject to any orders, decrees,
injunctions or other arrangements with any Governmental Entity or is subject to
any indemnity or other agreement with any third party relating to liability
under any Environmental Law or relating to Hazardous Substances; (g) there are
no circumstances or conditions involving Teleglobe or any of its Subsidiaries
that would reasonably be expected to result in any claims, liability,
investigations, costs or restrictions on the ownership, use or transfer of any
property of Teleglobe or any of its Subsidiaries pursuant to any Environmental
Law and (h) to the actual knowledge of the executive officers of Teleglobe and
its Subsidiaries, the foregoing representations and warranties also apply to any
liability that Teleglobe or any of its Subsidiaries retained or assumed either
contractually or by operation of law.
(ii) To the actual knowledge of the executive
officers of Teleglobe, (A) no underground storage tanks are or have been located
on any real property owned, operated or leased by Teleglobe or its Subsidiaries,
except for those that are maintained in material compliance with Environmental
Laws and (B) no real property owned, operated or leased by Teleglobe or its
Subsidiaries has been used or is used as a landfill or waste disposal site.
(iii) Teleglobe has made available to Excel copies of
all environmentally related audits, assessments, studies, reports, analyses and
results of investigations of any real property currently or formerly owned,
operated or leased by Teleglobe or its Subsidiaries that are in the possession,
custody or control of Teleglobe.
(s) US Employee Benefit Plans.
(i) Teleglobe has listed in Section 3.2(s) of the
Teleglobe Disclosure Schedule all employee benefit plans (as defined in Section
3(3) of ERISA) and all bonus, stock option, stock purchase, incentive, deferred
compensation, supplemental retirement, severance and other similar US employee
benefit plans, and all unexpired severance agreements, written or otherwise, for
the benefit of, or relating to, any current or former US employee of Teleglobe
or any trade or business (whether or not incorporated) which is a member or
which is under common control with Teleglobe within the meaning of Section 414
of the Code, or any Subsidiary of Teleglobe (together, the "US Teleglobe
Employee Plans").
(ii) With respect to each US Teleglobe Employee Plan,
Teleglobe has made available to Excel, a true and correct copy of (w) the most
recent annual report (Form 5500) filed with the IRS, (x) such US Teleglobe
Employee Plan, (y) each trust agreement and group annuity contract, if any,
relating to such US Teleglobe Employee Plan
33
and (z) the most recent actuarial report or valuation relating to a US Teleglobe
Employee Plan subject to Title IV of ERISA.
(iii) With respect to the US Teleglobe Employee
Plans, individually and in the aggregate, such plans are being administered in
accordance with their terms and applicable Laws and no event has occurred, and
to the actual knowledge of the executive officers of Teleglobe, there exists no
condition or set of circumstances in connection with which Teleglobe could be
subject to any liability which would have a Material Adverse Effect on Teleglobe
under ERISA, the Code or any other applicable Law.
(iv) With respect to the US Teleglobe Employee Plans,
individually and in the aggregate, there are no funded benefit obligations for
which contributions have not been made or properly accrued and there are no
unfunded benefit obligations which have not been accounted for by reserves, or
otherwise properly footnoted in accordance with Canadian GAAP, on the financial
statements of Teleglobe contained in the Teleglobe Disclosure Documents, except
for any such funded or unfunded benefit obligations which are not reasonably
likely to have a Material Adverse Effect on Teleglobe.
(v) Except as disclosed in Teleglobe Disclosure
Documents filed prior to the date of this Agreement, and except as provided for
in this Agreement, neither Teleglobe nor any of its Subsidiaries is a party to
any oral or written (x) agreement with any US officer or other US key employee
of Teleglobe or any of its Subsidiaries, the benefits of which are contingent,
or the terms of which are materially altered, upon the occurrence of a
transaction involving Teleglobe of the nature contemplated by this Agreement,
(y) agreement with any US officer of Teleglobe providing any term of employment
or compensation guarantee extending for a period longer than one year from the
date hereof and for the payment of compensation in excess of $100,000 per annum
or (z) US agreement or plan, including any stock option plan, stock appreciation
right plan, restricted stock plan or stock purchase plan, any of the benefits of
which will be increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement.
(t) Canadian Employee Benefit Plans. Teleglobe has listed in
Section 3.2(t) of the Teleglobe Disclosure Schedule a list of all pension,
retirement, bonus, profit sharing, compensation, incentive, stock purchase,
stock option, savings, insurance, medical, hospitalization, disability, death,
and other similar plans, programs, arrangements or practices (written or
otherwise) covering any or all of its Canadian employees or its Subsidiaries
(the "Canadian Teleglobe Employee Plans" and, together with the US Teleglobe
Employee Plans, the "Teleglobe Employee Plans").
(i) With respect to each Canadian Teleglobe Employee
Plan, Teleglobe has made available to Excel a true and correct copy of (x) such
Canadian Teleglobe Employee Plan and (y) the most recent actuarial report or
valuation relating to a Canadian Teleglobe Employee Plan, if any;
34
(ii) With respect to the Canadian Teleglobe Employee
Plans, individually and in the aggregate, such plans are being administered in
accordance with their terms and applicable Canadian Laws and no event has
occurred, and to the actual knowledge of the executive officers of Teleglobe,
there exists no condition or set of circumstances in connection with which
Teleglobe could be subject to any liability which would have a Material Adverse
Effect on Teleglobe under any applicable Canadian Law;
(iii) With respect to the Canadian Teleglobe Employee
Plans, individually and in the aggregate, there are no funded benefit
obligations for which contributions have not been made or properly accrued under
the terms of such plans and applicable Canadian Laws and there are no unfunded
benefit obligations which have not been accounted for by reserves, or otherwise
properly footnoted in accordance with Canadian GAAP, on the financial statements
of Teleglobe contained in the Teleglobe Disclosure Documents, which obligations
would have a Material Adverse Effect on Teleglobe;
(iv) Except as disclosed in Teleglobe Disclosure
Documents filed prior to the date of this Agreement, and except as provided for
in this Agreement, neither Teleglobe nor any of its Subsidiaries is a party to
any oral or written (x) agreement with any Canadian officer or other Canadian
key employee of Teleglobe or any of its Subsidiaries, the benefits of which are
contingent, or the terms of which are materially altered, upon the occurrence of
a transaction involving Teleglobe of the nature contemplated by this Agreement,
(y) agreement with any Canadian officer of Teleglobe providing any term of
employment or compensation guarantee extending for a period longer than one year
from the date thereof and for the payment of compensation in excess of $100,000
per annum, or (z) Canadian agreement or plan, including any stock option plan,
stock appreciation right plan, restricted stock plan or stock purchase plan, any
of the benefits of which will be increased, or the vesting of the benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which will
be calculated on the basis of any of the transactions contemplated by this
Agreement.
(u) Compliance With Laws. Teleglobe has complied with, is not
in violation of, and has not received any written notices of violation with
respect to, any Law applicable to Teleglobe or any of its Subsidiaries or by
which any property, asset or operation of Teleglobe or any of its Subsidiaries
is bound or affected with respect to the conduct of its business, or the
ownership or operation of its business, except for failures to comply or
violations which would not, individually or in the aggregate, have a Material
Adverse Effect on Teleglobe.
(v) Accounting and Tax Matters. Neither Teleglobe nor any of
its Subsidiaries has taken or agreed to take any action which (i) would
reasonably be expected to prevent Teleglobe from accounting for the business
combination to be effected by the Merger as a pooling of interests under US GAAP
or Canadian GAAP or (ii) would cause any representation contained in the
certificates relating to the tax-free reorganization treatment attached hereto
as Exhibits G and H to be untrue.
(w) Labor Matters. Except as disclosed in the Teleglobe
Disclosure Documents filed prior to the date hereof, neither Teleglobe nor any
of its Subsidiaries is a
35
party to or otherwise bound by any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization, nor
is any such contract or agreement presently being negotiated, nor is there, nor
has there been in the last five years, any application for certification or
recognition by any union or organization respecting any of the employees of
Teleglobe or its Subsidiaries, nor is Teleglobe or any of its Subsidiaries a
party to, or bound by, any consent decree with, or citation by, any Governmental
Entity relating to employees or employment practices and, to the actual
knowledge of the executive officers of Teleglobe, there are no campaigns being
conducted to solicit cards from employees of Teleglobe or its Subsidiaries to
authorize representation by any labor organization. As of the date hereof,
neither Teleglobe nor any of its Subsidiaries is the subject of any material
proceeding asserting that Teleglobe or any of its Subsidiaries has committed an
unfair labor practice or is seeking to compel it to bargain with any labor union
or labor organization nor, as of the date of this Agreement, is there pending
or, to the actual knowledge of the executive officers of Teleglobe, threatened,
any material labor strike, dispute, walkout, work stoppage, slow-down or lockout
involving Teleglobe or any of its Subsidiaries nor has there been one in the
past five years.
(x) Insurance. All material fire and casualty, general
liability, business interruption, product liability, and sprinkler and water
damage insurance policies and directors and officers liability insurance
policies maintained by Teleglobe or any of its Subsidiaries are with reputable
insurance carriers, provide full and adequate coverage for all normal risks
incident to the business of Teleglobe and its Subsidiaries and their respective
properties and assets, and are in character and amount at least equivalent to
that carried by Canadian persons engaged in similar businesses and subject to
the same or similar perils or hazards, except for any such failures to maintain
insurance policies that, individually or in the aggregate, are not reasonably
likely to have a Material Adverse Effect on Teleglobe.
(y) No Existing Discussions. As of the date hereof, Teleglobe
is not engaged, directly or indirectly, in any discussions or negotiations with
any other party with respect to an Acquisition Proposal.
(z) Anti-Takeover Laws; Shareholder Rights Plan. No "fair
price," "moratorium," "control share acquisition" or other similar anti-takeover
statute or regulation is applicable, by reason of Teleglobe's being a party to
the Merger, this Agreement or any of the other Transaction Documents to which it
is a party or the transactions contemplated hereby or thereby or by reason of
the execution by Teleglobe's shareholders party thereto of the Teleglobe Consent
and Voting Agreement and the transactions contemplated thereby and neither
Teleglobe nor its Subsidiaries is a party to any "shareholders rights" plan or
similar anti-takeover plan.
(aa) Year 2000. Teleglobe has developed and is in the process
of implementing a plan which it believes in good faith is sufficient to ensure
that in all material respects all Software that it owns, possesses and/or uses
is or will be designed to be used prior to, during and after the calendar year
2000 A.D., and will operate in all material respects during each such time
period, either on a stand-alone basis, or by interacting or interoperating with
third-party Software, without material error relating to the processing,
calculating, comparing, sequencing or other use of date data, including (i) any
material error
36
relating to or resulting from Century-Based Data, (ii) any abnormal ending or
provision of materially invalid or incorrect results as a result of any
Century-Based Data or (iii) any material error relating to century recognition
or calculations accommodating Century-Based Data, values or formulae, and that
the implementation of such plan is expected in good faith to be completed in a
timely manner. Teleglobe has performed all necessary due diligence and is in the
process of performing tests and implementing modifications to all Software that
it owns, possesses and/or uses to design an appropriate plan and to ensure the
accuracy of this representation and warranty.
(ab) Pooling Letters. Teleglobe has received a letter from
KPMG Peat Marwick LLP addressed to Teleglobe regarding its concurrence with
Teleglobe's management's conclusions as to the appropriateness of the pooling of
interests accounting under US GAAP (under Accounting Principles Board Opinion
No. 16) and a letter from KPMG as to the appropriateness of pooling of interests
accounting under Canadian GAAP (under Section 1580 of The Canadian Institute of
Chartered Accountants Handbook), respectively, for the Merger, as contemplated
to be effected as of the date of the letters.
(ac) Certain Regulatory Matters.
(i) Except for billing disputes with customers arising in the
ordinary course of business that in the aggregate involve immaterial amounts,
there are no proceedings or investigations pending or, to the actual knowledge
of the executive officers of Teleglobe, threatened, before any Governmental
Entity directed specifically at Teleglobe or, in the case of matters of general
applicability to the telecommunications industry, in which Teleglobe is
identified for possible disparate treatment, or whose outcome may have a
disparate impact on Teleglobe, in which any of the following matters are being
considered which are reasonably likely to have a Material Adverse Effect on
Teleglobe, nor has Teleglobe or any of its Subsidiaries received written notice
or inquiry from any Governmental Entity, indicating that any of such matters
should be considered or may become the object of consideration or investigation
specifically regarding Teleglobe which are reasonably likely to have a Material
Adverse Effect on Teleglobe or, in the case of matters of general applicability
to the telecommunications industry, in which Teleglobe is identified for
possible disparate treatment, or whose outcome may have a disparate impact on
Teleglobe: (u) increases in access charges, universal service contributions or
the like; (v) traffic routing restrictions or restrictions on use of facilities;
(w) reduction or restriction of rates charged to customers; (x) reduction of
earnings; (y) refunds or other forfeitures of amounts previously charged to
customers; or (z) failure to meet any expense, infrastructure, service quality
or other commitments previously made to or imposed by Governmental Entity.
(ii) Neither Teleglobe nor any of its Subsidiaries has any
outstanding commitments made in the context of a matter or proceeding related
specifically to Teleglobe or, in the case of matters of general applicability to
the telecommunications industry, in which Teleglobe is identified for possible
disparate treatment or whose outcome may have a disparate impact on Teleglobe
(and no such obligations have been imposed upon Teleglobe and remain
outstanding) regarding (u) increases in access charges, universal service
contributions or the like; (v) traffic routing restrictions or restrictions on
use of facilities; (w) reduction or restriction of rates charged to customers;
(x) reduction of earnings; (y) refunds or
37
other forfeitures of amounts previously charged to customers; or (z) expenses,
infrastructure expenditures, service quality or other regulatory requirements,
to or by any Governmental Entity, in each case which are reasonably likely to
have a Material Adverse Effect on Teleglobe.
(iii) Teleglobe has not transferred, sold any interest in or
otherwise taken any action to reduce its control over any Federal or national or
state or provincial regulatory licenses, certificates, approvals or other
authorizations under which it operates, U.S., Canadian or foreign, and the
transfer of such authorizations, subject to regulatory approval, would not
violate the terms of any agreement to which Teleglobe is a party or by which
Teleglobe is bound, or impinge the rights of any third party.
(ad) No Plan or Intention to Dispose of Surviving Corporation.
Teleglobe has no plan or intention to dispose in any manner of any of the
Surviving Corporation Common Stock or to dispose in any manner, or permit or
cause the Surviving Corporation to dispose in any manner, of any of the assets
of the Surviving Corporation, other than dispositions of assets of the Surviving
Corporation in the ordinary course of business which do not constitute
dispositions of all or a substantial portion (within the meaning of Treasury
Regulation Section 1.367(a)-3T(g)(3)) of the assets of the Surviving
Corporation.
3.3 Representations and Warranties of Teleglobe and Merger
Sub. Each of Teleglobe and Merger Sub, jointly and severally, represents and
warrants to Excel as follows:
(a) Organization and Corporate Power. Merger Sub was
incorporated on June 11, 1998, and is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware. Merger Sub is a direct
wholly owned Subsidiary of Teleglobe.
(b) Capital Structure. (i) The authorized capital stock of
Merger Sub consists of 1,000 shares of Merger Sub Common Stock, of which 1,000
shares are outstanding as of the date hereof. All issued and outstanding shares
of the capital stock of Merger Sub are duly authorized, validly issued, fully
paid and nonassessable. There are not as of the date hereof and there will not
be as of the Effective Time any outstanding or authorized options, warrants,
calls, rights, commitments or any other agreements of any character to or by
which Merger Sub is a party or may be bound requiring it to issue, transfer,
sell, purchase, redeem or acquire any shares of capital stock or any securities
or rights convertible into, exchangeable for, or evidencing the right to
subscribe for or acquire, any shares of capital stock of Merger Sub.
(c) Corporate Authorization. Merger Sub has all requisite
corporate power and authority to enter into this Agreement and any other
Transaction Document to which it may become a party and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance by Merger Sub of this Agreement and any other Transaction Document
to which it may become a party and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of Merger Sub. This Agreement has been, and any
other Transaction Document to which it may become a party will be, duly executed
and delivered by Merger Sub and each constitutes or will constitute a valid and
binding agreement of
38
Merger Sub, enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws relating to or affecting
creditors generally, by general equity principles (regardless or whether such
enforceability is considered in a proceeding in equity or at law) or by an
implied covenant of good faith and fair dealing.
(d) Non-Contravention. The execution, delivery and performance
by Merger Sub of this Agreement and any other Transaction Document to which it
may be a party and the consummation by Merger Sub of the transactions
contemplated hereby and thereby do not and will not contravene or conflict with
the certificate of incorporation or by-laws of Merger Sub or any Contract, Law
or Permit applicable to Merger Sub or its properties or assets.
(e) No Business Activities. Merger Sub was formed for the
purpose of consummating the transactions contemplated hereby and has not
conducted any activities other than in connection with the organization of
Merger Sub, the negotiation and execution of this Agreement and the consummation
of the transactions contemplated hereby. Merger Sub has no Subsidiaries and no
material assets or liabilities and is not a party to any agreement (except this
Agreement).
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1 Covenants of Excel. During the period from the date of
this Agreement and continuing until the Effective Time, Excel agrees as to
itself and its Subsidiaries that (except as expressly contemplated or permitted
by this Agreement or as set forth in the Excel Disclosure Schedule or to the
extent that Teleglobe shall otherwise consent in writing, which consent shall
not unreasonably be withheld):
(a) Ordinary Course. (i) Excel and its Subsidiaries shall
carry on their respective businesses in the usual, regular and ordinary course
in all material respects, in substantially the same manner as heretofore
conducted, and shall use all reasonable efforts to preserve intact their present
lines of business, maintain their rights and franchises and preserve their
relationships with customers, suppliers, regulators, distributors, creditors,
lessors, employees and others having business dealings with them to the end that
their ongoing businesses shall not be impaired in any material respect at the
Effective Time; provided, however, that no action by Excel or its Subsidiaries
with respect to matters specifically addressed by any other provision of this
Section 4.1 shall be deemed a breach of this Section 4.1(a)(i) unless such
action would constitute a breach of one or more of such other provisions.
(ii) Excel shall not, and shall not permit any of its
Subsidiaries to, (A) alter the fundamental nature of its business or enter into
material new lines of business outside the communications industry, except as
disclosed in the Excel Disclosure Documents or as set forth in Excel's current
business plan, a copy of which has been previously provided to
39
Teleglobe, or (B) incur or commit to any capital expenditures other than capital
expenditures incurred or committed to in the ordinary course of business
consistent with past practice.
(b) Dividends; Changes in Share Capital. Excel shall not, and
shall not permit any of its Subsidiaries to, and shall not propose to, (i)
declare, set aside or pay any dividends on or make other distributions in
respect of any of its capital stock, except dividends by wholly owned
Subsidiaries of Excel, (ii) split, combine, subdivide or reclassify any of its
capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for, shares of its
capital stock, except for any such transaction by a wholly owned Subsidiary of
Excel, or (iii) repurchase, redeem or otherwise acquire any shares of its
capital stock or any securities convertible into or exercisable for any shares
of its capital stock.
(c) Issuance of Securities. Excel shall not, and shall not
permit any of its Subsidiaries to, issue, deliver, sell, transfer, pledge or
otherwise encumber or authorize or propose the issuance, delivery, sale,
transfer, pledge or encumbrance of, any shares of its capital stock of any
class, any Excel Voting Debt or any securities convertible into or exercisable
for, or any rights, warrants or options to acquire, any such shares or Excel
Voting Debt, or enter into any agreement with respect to any of the foregoing,
other than (i) the issuance of Excel Common Stock upon the exercise of stock
options or in connection with other stock-based benefits plans outstanding on
the date hereof in accordance with their current terms and (ii) issuances by a
wholly owned Subsidiary of Excel of capital stock to such Subsidiary's parent or
another wholly owned Subsidiary of Excel.
(d) Governing Documents. Except as expressly set forth herein
or as required by applicable Law, Excel and its Subsidiaries shall not amend, in
the case of Subsidiaries, in any material respect, or propose to amend their
respective certificates of incorporation, by-laws or other governing documents.
(e) No Acquisitions. Other than acquisitions for cash in
existing or related lines of business of Excel the fair market value of the
total consideration (including the value of indebtedness or other liability
acquired or assumed) for which does not exceed $100 million in the aggregate,
Excel shall not, and shall not permit any of its Subsidiaries to, acquire or
agree to acquire by merging or consolidating with, or by purchasing a
substantial equity interest in or a substantial portion of the assets of, or by
any other manner, any business or any corporation, partnership, association or
other business organization or division thereof or otherwise acquire or agree to
acquire any assets (other than the acquisition of assets used in the operations
of the business of Excel and its Subsidiaries in the ordinary course); provided,
however, that the foregoing shall not prohibit (x) internal reorganizations or
consolidations involving existing Subsidiaries of Excel or (y) the creation of
new Subsidiaries of Excel organized to conduct or continue activities otherwise
permitted by this Agreement.
(f) No Dispositions. Other than (i) internal reorganizations
or consolidations involving existing Subsidiaries of Excel, (ii) dispositions
referred to in the Excel Disclosure Documents filed prior to the date of this
Agreement or (iii) other dispositions of assets having a fair market value at
the time of disposition not in excess of $100,000,000, Excel shall not, and
shall not permit any Subsidiary of Excel to, sell, lease, encumber or otherwise
dispose of,
40
or agree to sell, lease, encumber or otherwise dispose of, any of its assets
(including capital stock of Subsidiaries of Excel) which are material,
individually or in the aggregate, to Excel and its Subsidiaries, taken as a
whole.
(g) Investments; Indebtedness. Excel shall not, and shall not
permit any of its Subsidiaries to, (i) other than in connection with actions
permitted by Section 4.1(e), make any loans, advances or capital contributions
to, or investments in, any other Person, other than by Excel or a Subsidiary of
Excel to or in Excel or any wholly owned Subsidiary of Excel or (ii) pay,
discharge or satisfy any claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), or settle any litigation,
other than indebtedness, issuances of debt securities, guarantees, loans,
advances, capital contributions, investments, payments, discharges or
satisfactions incurred or committed to in the ordinary course of business
consistent with past practice.
(h) Pooling-of-Interests; Tax-Free Qualification. Excel shall
not, and shall not permit any of its Subsidiaries to, take any action which (i)
would reasonably be expected to prevent or impede the Merger from qualifying for
pooling-of-interests accounting treatment under US GAAP or Canadian GAAP or (ii)
would cause any representation contained in the certificates relating to the
tax-free reorganization treatment attached hereto as Exhibits G and H to be
untrue.
(i) Other Actions. Excel shall not, and shall not permit any
of its Subsidiaries to, take any action that would reasonably be expected to
result in any of the conditions to the Merger set forth in Article VI not being
satisfied.
(j) Accounting Methods; Income Tax Elections. Except as
disclosed in the Excel Disclosure Documents filed prior to the date of this
Agreement, or as required by a Governmental Entity, Excel shall not change its
methods of accounting in effect at March 31, 1998, except as required by changes
in US GAAP as concurred in by Excel's independent auditors. Excel shall not (i)
change its fiscal year or (ii) make any material Tax election, except as
required by Law.
(k) Excel Employee Plans. Excel agrees as to itself and its
Subsidiaries that it will not (i) enter into, adopt, amend (except as may be
required by Law), renew or terminate any Excel Employee Plan, or any other
employee benefit plan or any agreement, arrangement, plan or policy between
Excel or any of its Subsidiaries and one or more of its directors or officers,
(ii) increase or accelerate the compensation or fringe benefits of any of its
directors, officers or employees, except for normal increases in salary or wages
of employees of Excel who are not directors or executive officers of Excel in
the ordinary course of business consistent with past practice that, in the
aggregate, do not result in a material increase in benefits or compensation
expense to Excel, (iii) grant any stock options, stock appreciation rights,
restricted stock, restricted stock units or performance units or shares other
than as required by existing agreements with individual employees, or enter into
any contract, agreement, commitment or arrangement to do any of the foregoing or
(iv) enter into or renew any contract, agreement, commitment or arrangement
providing for the payment to any director, officer or employee of such party of
compensation or benefits contingent, or the
41
terms of which are materially altered, upon the occurrence of any of the
transactions contemplated by this Agreement.
(l) Contracts. Excel agrees, as to itself and its
Subsidiaries, not to take or omit to take any act which would cause a breach of
any Contract if the result would reasonably be expected to have a Material
Adverse Effect on Excel.
4.2 Covenants of Teleglobe. During the period from the date of
this Agreement and continuing until the Effective Time, Teleglobe agrees as to
itself and its Subsidiaries that (except as expressly contemplated or permitted
by this Agreement or as set forth in the Teleglobe Disclosure Schedule or to the
extent that Excel shall otherwise consent in writing, which consent shall not
unreasonably be withheld):
(a) Ordinary Course. (i) Teleglobe and its Subsidiaries shall
carry on their respective businesses in the usual, regular and ordinary course
in all material respects, in substantially the same manner as heretofore
conducted, and shall use all reasonable efforts to preserve intact their present
lines of business, maintain their rights and franchises and preserve their
relationships with customers, suppliers, regulators, distributors, creditors,
lessors, employees and others having business dealings with them to the end that
their ongoing businesses shall not be impaired in any material respect at the
Effective Time; provided, however, that no action by Teleglobe or its
Subsidiaries with respect to matters specifically addressed by any other
provision of this Section 4.2 shall be deemed a breach of this Section 4.2(a)(i)
unless such action would constitute a breach of one or more of such other
provisions.
(ii) Teleglobe shall not, and shall not permit any of its
Subsidiaries to, (A) alter the fundamental nature of its business or enter into
material new lines of business outside the communications industry, except as
disclosed in the Teleglobe Disclosure Documents or as set forth in Teleglobe's
current business plan, a copy of which has been previously provided to Excel, or
(B) incur or commit to any capital expenditures other than capital expenditures
incurred or committed to in the ordinary course of business consistent with past
practice.
(b) Dividends; Changes in Share Capital. Except for the
Teleglobe Stock Dividend, Teleglobe shall not, and shall not permit any of its
Subsidiaries to, and shall not propose to, (i) declare, set aside or pay any
dividends on or make other distributions in respect of any of its capital stock,
except (A) Teleglobe may continue the declaration and payment of regular
quarterly cash dividends in amounts and at times consistent with past practice
(including increases in such amounts consistent with past practice), (B)
Teleglobe may declare and/or pay a dividend for the period from the last
dividend record date prior to the Closing Date through, but not including, the
Closing Date to Teleglobe shareholders of record as of a date prior to the
Closing Date in an amount not in excess of the product of (a) the quotient of
(I) the number of days from and including the last dividend payment date through
but not including the Closing Date over (II) the number of days in the quarter
in which such dividend is being paid and (b) the amount per common share of
Teleglobe capital stock of the dividend paid by Teleglobe in the immediately
preceding quarter and (C) dividends by wholly owned Subsidiaries of Teleglobe,
(ii) split, combine, subdivide or
42
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for, shares of its capital stock, except for any such transaction by a wholly
owned Subsidiary of Teleglobe or (iii) repurchase, redeem or otherwise acquire
any shares of its capital stock or any securities convertible into or
exercisable for any shares of its capital stock.
(c) Issuance of Securities. Teleglobe shall not, and shall not
permit any of its Subsidiaries to, issue, deliver, sell, transfer, pledge or
otherwise encumber or authorize or propose the issuance, delivery, sale,
transfer, pledge or encumbrance of any shares of its capital stock of any class,
any Teleglobe Voting Debt or any securities convertible into or exercisable for,
or any rights, warrants or options to acquire, any such shares or Teleglobe
Voting Debt, or enter into any agreement with respect to any of the foregoing,
other than (i) the issuance of common shares of Teleglobe capital stock upon the
exercise of stock options or in connection with other stock-based benefits plans
outstanding on the date hereof in accordance with their current terms, (ii) the
conversion of shares of Convertible Preferred Stock of Teleglobe outstanding on
the date hereof and (iii) issuances by a wholly owned Subsidiary of Teleglobe of
capital stock to such Subsidiary's parent or another wholly owned Subsidiary of
Teleglobe.
(d) Governing Documents. Except as expressly set forth herein
or as required by applicable Law, Teleglobe and its Subsidiaries shall not
amend, in the case of Subsidiaries, in any material respect, or propose to amend
their respective certificates of incorporation, by-laws or other governing
documents.
(e) No Acquisitions. Other than acquisitions for cash in
existing or related lines of business of Teleglobe the fair market value of the
total consideration (including the value of indebtedness or other liability
acquired or assumed) for which does not exceed $100 million in the aggregate,
Teleglobe, shall not, and shall not permit any of its Subsidiaries to, acquire
or agree to acquire by merging or consolidating with, or by purchasing a
substantial equity interest in or a substantial portion of the assets of, or by
any other manner, any business or any corporation, partnership, association or
other business organization or division thereof or otherwise acquire or agree to
acquire any assets (other than the acquisition of assets used in the operations
of the business of Teleglobe and its Subsidiaries in the ordinary course);
provided, however, that the foregoing shall not prohibit (x) internal
reorganizations or consolidations involving existing Subsidiaries of Teleglobe
or (y) the creation of new Subsidiaries of Teleglobe organized to conduct or
continue activities otherwise permitted by this Agreement.
(f) No Dispositions. Other than (i) internal reorganizations
or consolidations involving existing Subsidiaries of Teleglobe, (ii)
dispositions referred to in the Teleglobe Disclosure Documents filed prior to
the date of this Agreement or (iii) other dispositions of assets having a fair
market value at the time of disposition not in excess of $100,000,000, Teleglobe
shall not, and shall not permit any Subsidiary of Teleglobe to, sell, lease,
encumber or otherwise dispose of, or agree to sell, lease, encumber or otherwise
dispose of, any of its assets (including capital stock of Subsidiaries of
Teleglobe) which are material, individually or in the aggregate, to Teleglobe
and its Subsidiaries, taken as a whole.
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(g) Investments; Indebtedness. Teleglobe shall not, and shall
not permit any of its Subsidiaries to, (i) other than in connection with actions
permitted by Section 4.2(e), make any loans, advances or capital contributions
to, or investments in, any other Person, other than by Teleglobe or a Subsidiary
of Teleglobe to or in Teleglobe or any wholly owned Subsidiary of Teleglobe or
(ii) pay, discharge or satisfy any claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), or settle any
litigation, other than indebtedness, issuances of debt securities, guarantees,
loans, advances, capital contributions, investments, payments, discharges or
satisfactions incurred or committed to in the ordinary course of business
consistent with past practice.
(h) Pooling-of-Interests; Tax-Free Qualification. Teleglobe
shall not, and shall not permit any of its Subsidiaries to, take any action
which (i) would reasonably be expected to prevent or impede the Merger from
qualifying for pooling-of-interests accounting treatment under US GAAP or
Canadian GAAP (ii) would cause any representation contained in the certificates
relating to the tax-free reorganization treatment attached hereto as Exhibits G
and H to be untrue.
(i) Other Actions. Teleglobe shall not, and shall not permit
any of its Subsidiaries to, take any action that would reasonably be expected to
result in any of the conditions to the Merger set forth in Article VI not being
satisfied.
(j) Accounting Methods; Income Tax Elections. Except as
disclosed in the Teleglobe Disclosure Documents filed prior to the date of this
Agreement, or as required by a Governmental Entity, Teleglobe shall not change
its methods of accounting in effect at March 31, 1998, except as required by
changes in Canadian GAAP as concurred in by Teleglobe's independent auditors.
Teleglobe shall not (i) change its fiscal year or (ii) make any material Tax
election, except as required by Law.
(k) Teleglobe Employee Plans. Teleglobe agrees as to itself
and its Subsidiaries that it will not (i) enter into, adopt, amend (except as
may be required by Law), renew or terminate any Teleglobe Employee Plan, or any
other employee benefit plan or any agreement, arrangement, plan or policy
between Teleglobe or any of its Subsidiaries and one or more of its directors or
officers, (ii) increase or accelerate the compensation or fringe benefits of any
of its directors, officers or employees, except for normal increases in salary
or wages of employees of Teleglobe who are not directors or executive officers
of Teleglobe in the ordinary course of business consistent with past practice
that, in the aggregate, do not result in a material increase in benefits or
compensation expense to Teleglobe, (iii) grant any stock options, stock
appreciation rights, restricted stock, restricted stock units or performance
units or shares other than as required by existing agreements with individual
employees, or enter into any contract, agreement, commitment or arrangement to
do any of the foregoing or (iv) enter into or renew any contract, agreement,
commitment or arrangement providing for the payment to any director, officer or
employee of such party of compensation or benefits contingent, or the terms of
which are materially altered, upon the occurrence of any of the transactions
contemplated by this Agreement.
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(l) Contracts. Teleglobe agrees, as to itself and its
Subsidiaries, not to take or omit to take any act which could cause a breach of
any Contract if the result would reasonably be expected to have a Material
Adverse Effect on Teleglobe.
4.3 Advice of Changes; Governmental Filings. Each party shall
(a) confer on a regular and frequent basis with the other and (b) report (to the
extent permitted by applicable Law or any applicable confidentiality agreement)
on operational matters. Excel and Teleglobe shall file all reports required to
be filed by each of them with the SEC and the CSA (and all other Governmental
Entities) between the date of this Agreement and the Effective Time and shall
(to the extent permitted by applicable Law or any applicable confidentiality
agreement) deliver to the other party copies of all such reports, announcements
and publications promptly after the same are filed. Subject to applicable Laws
relating to the exchange of information, each of Excel and Teleglobe shall have
the right to review in advance, and will consult with the other with respect to,
all the information relating to the other party and each of their respective
Subsidiaries which appears in any filings, announcements or publications made
with, or written materials submitted to, any third party or any Governmental
Entity in connection with the transactions contemplated by this Agreement. In
exercising the foregoing right, each of the parties hereto agrees to act
reasonably and as promptly as practicable. Each party agrees that, to the extent
practicable and as timely as practicable, it will consult with, and provide all
appropriate and necessary assistance to, the other party with respect to the
obtaining of all permits, consents, approvals and authorizations of all third
parties and Governmental Entities necessary or advisable to consummate the
transactions contemplated by this Agreement and each party will keep the other
party apprised of the status of matters relating to completion of the
transactions contemplated hereby.
4.4 Transition Planning. Teleglobe and Excel shall each
appoint four officers, including in each case its chief financial officer, to
serve from time to time as their respective representatives on a committee that
will be responsible for coordinating transition planning and implementation
relating to the Merger. Either party may remove and replace its appointees at
any time. During the period between the date of this Agreement and the Effective
Time, such committee shall (i) examine various alternatives regarding the manner
in which to best organize and manage the businesses of Teleglobe and Excel after
the Effective Time and (ii) coordinate policies and strategies with respect to
regulatory authorities and bodies, in all cases subject to applicable law and
regulation.
4.5 Control of Other Party's Business. Nothing contained in
this Agreement shall give Excel, directly or indirectly, the right to control or
direct Teleglobe's operations prior to the Effective Time. Nothing contained in
this Agreement shall give Teleglobe, directly or indirectly, the right to
control or direct Excel's operations prior to the Effective Time. Prior to the
Effective Time, each of Excel and Teleglobe shall exercise, consistent with the
terms and conditions of this Agreement, complete control and supervision over
its respective operations.
4.6 Network Transition. Promptly following the date hereof,
Teleglobe and
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Excel shall, to the extent not violative in any material respect of any Law or
of any Contracts to which any party hereto or any of its Subsidiaries or
controlled Affiliates is a party, commence to negotiate in good faith an
agreement to transition Excel's international traffic onto Teleglobe's network,
offer Teleglobe's products through Excel's marketing and sales force and review
Teleglobe's and Excel's U.S. domestic network to obtain the maximum network
optimization and other synergies as necessary for Teleglobe's and Excel's future
business plans.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Preparation of Proxy Statement; Stockholders Approval. (a)
As promptly as practicable following the date hereof, Teleglobe and Excel shall
prepare and file with the SEC preliminary proxy materials or an information
statement, as applicable, which shall constitute a joint information statement,
proxy statement and prospectus (such information statement/ proxy
statement/prospectus, and any amendments or supplements thereto, the "Joint
Information Statement/Proxy Statement/Prospectus"), and Teleglobe shall, in
cooperation with Excel, prepare and file with the SEC a registration statement
on Form F-4 with respect to the issuance of Teleglobe Common Shares in the
Merger (the "Form F-4"). The Joint Information Statement/Proxy
Statement/Prospectus will be included in the Form F-4 as Teleglobe's prospectus.
The Form F-4 and the Joint Information Statement/Proxy Statement/Prospectus
shall comply as to form in all material respects with the applicable provisions
of the Securities Act and the Exchange Act and the rules and regulations
thereunder, and the Joint Information Statement/ Proxy Statement/Prospectus
shall comply as to form in all material respects with the requirements of the
Canadian Securities Laws. Each of Teleglobe and Excel shall use all reasonable
efforts to have the Form F-4 declared effective by the SEC as promptly as
practicable after filing with the SEC and to keep the Form F-4 effective as long
as is necessary to consummate the Merger. The parties shall promptly provide
copies, consult with each other and prepare written responses with respect to
any written comments received from the SEC with respect to the Joint Information
Statement/Proxy Statement/Prospectus and the Form F-4 and advise one another of
any oral comments with respect to the Joint Information Statement/Proxy
Statement/Prospectus and the Form F-4 received from the SEC. The parties will
cooperate in preparing and filing with the SEC any amendment or supplement to
the Joint Information Statement/Proxy Statement/Prospectus or the Form F-4. No
amendment or supplement to the Joint Information Statement/Proxy
Statement/Prospectus shall be filed without the approval of both parties, which
approvals shall not be unreasonably withheld or delayed. A copy of the Joint
Information Statement/Proxy Statement/Prospectus shall also be filed by
Teleglobe with the CSA in accordance with the applicable requirements of the
Canadian Securities Laws.
(b) Each Stockholder who is a party to the Excel Consent and
Voting Agreement has agreed to execute, or cause to be executed, immediately
following execution and delivery of this Agreement, a written consent with
respect to all shares of Excel Common Stock owned by it or which it has the
right to vote or consent in favor of approval and adoption of the Merger and
this Agreement (the "Excel Stockholders Consent").
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Notwithstanding the foregoing, if Teleglobe so requests, Excel shall, as
promptly as practicable following such request, take all action necessary in
accordance with applicable Law and its Certificate of Incorporation and By-Laws
to duly call, give notice of and convene a meeting of its stockholders (the
"Excel Stockholders Meeting") to consider and vote upon the approval and
adoption of this Agreement and the Merger, and to submit this Agreement to the
stockholders of Excel for their approval, and Excel and its Board of Directors
shall take all lawful reasonable action to solicit, and use all reasonable
efforts to obtain, such approval. The Board of Directors of Excel shall
recommend approval of the Merger Agreement to the stockholders of Excel.
(c) Each Shareholder who is a party to a Teleglobe Consent and
Voting Agreement has agreed (i) to execute, or cause to be executed, immediately
following execution and delivery of this Agreement, a written consent with
respect to all Teleglobe Common Shares owned by it or which it has the right to
vote or consent in favor of approval of the Share Issuance (each a "Teleglobe
Shareholders Consent") and (ii) to vote or consent (or cause to be voted or
consented), in person or by proxy, all Teleglobe Common Shares owned by it or
which it has the right to vote or consent in favor of approval of the Teleglobe
Articles Amendment and the Teleglobe By-Law Amendment. Teleglobe shall, as
promptly as practicable following the execution of this Agreement, and in any
event within 60 days hereof in the case of the Teleglobe Articles Amendment,
duly call, give notice of and convene a meeting of its shareholders (the
"Teleglobe Shareholders Meeting") for the purpose of obtaining the Required
Articles Amendment Vote, shall recommend to its shareholders approval and
adoption thereof and shall take all lawful action to solicit the approval of the
Teleglobe Articles Amendment by the Required Articles Amendment Vote.
(d) The Board of Directors of Teleglobe shall recommend
approval of the Share Issuance and the Teleglobe Articles Amendment to the
shareholders of Teleglobe. Nothing in this Agreement shall permit either
Teleglobe or Excel to terminate this Agreement (except as specifically provided
in Article VII hereof) or recommend any other Acquisition Proposal or change or
withdraw its recommendation in favor of the Share Issuance, the Teleglobe
Articles Amendment or the Teleglobe By-Law Amendment or the approval and
adoption of the Merger and this Agreement, as the case may be.
(e) Teleglobe agrees that in the event the Required Articles
Amendment Vote is not obtained, it will duly call, give notice of and convene a
meeting of its shareholders for the purpose of obtaining the Required By-Law
Amendment Vote, shall recommend approval and adoption thereof and shall take all
lawful action to solicit the approval of its shareholders for the Teleglobe
By-Law Amendment.
5.2 Teleglobe Board of Directors; Officers. At or prior to the
Effective Time, the Board of Directors of Teleglobe will take all necessary
action (a) so that the Board of Directors of Teleglobe shall be constituted as
set forth in Exhibit F hereto, the members thereof to serve until the next
annual meeting of shareholders of Teleglobe and (b) to appoint Xxxxx X. Xxxxxx
as Vice-Chairman, President and Chief Operating Officer of Teleglobe, which
office he will hold in addition to his position as Chairman, Chief Executive
Officer and President of Excel. The composition and size of the Board of
Directors of Teleglobe as set forth in Exhibit F may be modified prior to the
approval by Teleglobe's shareholders of the
47
Teleglobe By-Law Amendment or the Teleglobe Articles Amendment without further
amendment of this Agreement only by written approval of the Chief Executive
Officers of each of Teleglobe and Excel. From and after the Effective Time until
December 31 of the fifth calendar year following the calendar year in which the
Merger occurs, the slate of individuals nominated to serve on the Board of
Directors of Teleglobe shall be selected in accordance with the provisions of
the Teleglobe Articles Amendment or the Teleglobe ByLaw Amendment, as the case
may be.
5.3 Access to Information. Upon reasonable notice, each party
shall (and shall cause its Subsidiaries to) afford to the officers, employees,
accountants, counsel, financial advisors and other representatives of the other
party reasonable access during normal business hours, during the period prior to
the Effective Time, to all its properties, books, contracts, commitments and
records and, during such period, such party shall (and shall cause its
Subsidiaries to) furnish promptly to the other party (a) a copy of each report,
schedule, registration statement and other document filed, published, announced
or received by it during such period pursuant to the requirements of applicable
Law (other than documents which such party is not permitted to disclose under
applicable Law), and (b) consistent with its legal obligations, all other
information concerning its business, properties and personnel as such other
party may reasonably request; provided, however, that either party may restrict
the foregoing access to the extent that (i) a Governmental Entity requires such
party or any of its Subsidiaries to restrict access to any properties or
information reasonably related to any such contract on the basis of applicable
Laws with respect to national security matters or (ii) any applicable Law
requires such party or its Subsidiaries to restrict access to any properties or
information. The parties will hold any such information which is non-public in
confidence to the extent required by, and in accordance with, the provisions of
the agreement dated April 21, 1998 between Excel and Teleglobe (the
"Confidentiality Agreement"). Any investigation by Teleglobe or Excel shall not
affect the representations and warranties of Excel or Teleglobe or Merger Sub,
as the case may be.
5.4 Best Efforts. (a) Subject to the terms and conditions of
this Agreement, each party will cooperate with each other and use (and shall
cause its Subsidiaries to use) its best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable Laws to cause the conditions to closing set forth in
Article VI to be satisfied and to consummate the Merger and the other
transactions contemplated by this Agreement as soon as practicable after the
date hereof. In furtherance and not in limitation of the foregoing, each party
hereto agrees to make an appropriate filing of a Notification and Report Form
pursuant to the HSR Act and the Competition Act (Canada) with respect to the
transactions contemplated hereby as promptly as practicable and in any event
within twenty Business Days after the date hereof and to supply as promptly as
practicable any additional information and documentary material that may be
requested pursuant to the HSR Act and the Competition Act (Canada) and to take
all other actions necessary to cause the expiration or termination of the
applicable waiting periods under the HSR Act and the Competition Act (Canada) as
soon as practicable. Each party shall, to the extent practicable, promptly
notify the other party of any communication to such party from any Governmental
Entity in connection with any required filing with, or approval or review by,
such Governmental Entity in connection with the Merger and shall, to the extent
48
practicable, permit the other party to review in advance any proposed
communication to any Governmental Entity in such connection to the extent
permitted by applicable Law.
(b) Each of Teleglobe and Excel shall, in connection with the
efforts referenced in this Section 5.4 to obtain all requisite approvals and
authorizations for the transactions contemplated by this Agreement under any
Regulatory Law (as defined below), use its best efforts to, to the extent
permitted by applicable Law, (i) cooperate in all respects with each other in
connection with any filing or submission and in connection with any
investigation or other inquiry, including any proceeding initiated by a private
party, (ii) promptly inform the other party of any communication received by
such party from, or given by such party to any Governmental Entity and of any
material communication received or given in connection with any proceeding by a
private party, in each case regarding any of the transactions contemplated
hereby, and (iii) permit the other party to review any communication given by it
to, and consult with each other in advance of any meeting or conference with any
Governmental Entity or, in connection with any proceeding by a private party,
with any other Person, and to the extent permitted by such Governmental Entity
or other Person, give the other party the opportunity to attend and participate
in such meetings and conferences. For purposes of this Agreement, "Regulatory
Law" means the Xxxxxxx Act, as amended, the Xxxxxxx Act, as amended, the HSR
Act, the U.S. Federal Trade Commission Act, as amended, the Federal
Communications Laws, the Telecommunications Act (Canada), the Teleglobe Act
(Canada), the Competition Act (Canada) and all other Laws that are designed or
intended to prohibit, restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade or lessening of competition through
merger or acquisition or otherwise regulate the telecommunications industry.
(c) In furtherance and not in limitation of the covenants of
the parties contained in Sections 5.4(a) and 5.4(b), if any administrative or
judicial action or proceeding, including any proceeding by a private party, is
instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement as violative of any Regulatory Law, each of
Teleglobe and Excel shall cooperate in all respects with each other and use its
respective best efforts to contest and resist any such pending or threatened
action or proceeding and to have vacated, lifted, reversed or overturned any
decree, judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement. Notwithstanding
the foregoing or any other provision of this Agreement, nothing in this Section
5.4 shall limit a party's right to terminate this Agreement pursuant to Section
7.1(b) or 7.1(c) so long as such party has up to then complied in all material
respects with its obligations under this Section 5.4.
(d) If any objections are asserted with respect to the
transactions contemplated hereby under any Regulatory Law or if any suit is
instituted by any Governmental Entity or any private party challenging any of
the transactions contemplated hereby as violative of any Regulatory Law, each of
Teleglobe and Excel shall use its best efforts to resolve any such objections or
challenge as such Governmental Entity or private party may have to such
transactions under such Regulatory Law so as to permit consummation of the
transactions contemplated by this Agreement, subject to Section 5.4(f).
49
(e) Each of Teleglobe, Merger Sub and Excel shall use its best
efforts to cause the Merger to qualify and will not (both before and after
consummation of the Merger) take any actions which could reasonably be expected
to prevent the Merger from qualifying for pooling-of-interests treatment under
US GAAP and Canadian GAAP and as a reorganization under the provisions of
Section 368(a) of the Code.
(f) Notwithstanding any other provision of this Agreement, in
connection with any filing or submission required or action to be taken by
either Excel or Teleglobe or any of their respective Subsidiaries to effect the
Merger and to consummate the other transactions contemplated hereby, neither
Excel nor Teleglobe nor any of their respective Subsidiaries shall be required
to commit to any divestiture or hold separate or similar transactions or
otherwise take (or refrain from taking) or commit to take (or refrain from
committing to take) any action that limits its freedom of action with respect
to, or its ability to retain, any of its Subsidiaries or any material portion of
the business, services, product lines or assets of Excel and its Subsidiaries or
any material portion of the business, services, product lines or assets of
Teleglobe or any of its Subsidiaries, or any other action, if any of the
foregoing, individually or in the aggregate would have a Material Adverse Effect
on any of Excel or Teleglobe (either with or without including Teleglobe's
ownership of Excel after the Merger).
5.5 Acquisition Proposals.
(a) Teleglobe and Excel each shall not, directly or
indirectly, through any officer, director, employee, stockholder, financial
advisor, agent or other representative of such party (including any investment
banker, attorney or accountant retained by such party or by any of such party's
Subsidiaries or stockholders) (i) solicit, initiate, encourage or knowingly
facilitate (including by way of furnishing information) any inquiries or
proposals that constitute, or could reasonably be expected to lead to, (x) a
breach of this Agreement, either Voting Agreement or either Stock Option
Agreement or otherwise interfere in any material respect with the completion of
the Merger or (y) a proposal or offer for an Alternative Transaction (as defined
below) involving such party or any of its Subsidiaries (any of the foregoing
inquiries or proposals being referred to in this Agreement as an "Acquisition
Proposal"), (ii) engage in negotiations or discussions concerning, or provide
any non-public information to any Person relating to, or otherwise facilitate
any effort or attempt to make or implement, any Acquisition Proposal, or (iii)
agree to or recommend to its stockholders or shareholders, as applicable, any
Acquisition Proposal; provided, however, that nothing contained in this
Agreement shall prevent Teleglobe or Excel from complying with Rule 14e-2 under
the Exchange Act or similar provisions of the Canadian Securities Laws with
respect to an Acquisition Proposal. Each of Teleglobe and Excel agrees that it
will immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any Acquisition Proposal. Each of Excel and Teleglobe agrees not to release
any third party from, or waive any provision of, any standstill agreement to
which it is a party or any confidentiality agreement between it and another
Person who has made or who may reasonably be considered likely to make an
Acquisition Proposal. Each of Teleglobe and Excel agrees that it will take the
necessary steps to inform promptly the individuals or entities referred to in
the first sentence of this Section 5.5 of the obligations undertaken in this
Section 5.5.
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(b) Teleglobe and Excel shall each notify the other
party immediately after receipt by Teleglobe or Excel (or their advisors) of any
Acquisition Proposal or any request for nonpublic information in connection with
an Acquisition Proposal or for access to the properties, books or records of
such party by any person or entity that informs such party that it is
considering making, or has made, an Acquisition Proposal. Such notice shall be
made orally and in writing and shall indicate in reasonable detail the identity
of the offeror and the terms and conditions of such proposal, inquiry or
contact.
(c) As used in this Agreement, "Alternative
Transaction" means either (i) a transaction pursuant to which any person (or
group of persons) other than Teleglobe or Excel or their respective Affiliates
(a "Third Party"), would acquire more than 10% of the outstanding shares of
Excel Common Stock or common shares of Teleglobe capital stock, as the case may
be, whether pursuant to a tender offer or exchange offer or otherwise, (ii) a
merger or other business combination involving Teleglobe or Excel pursuant to
which any Third Party acquires more than 10% of the outstanding shares of Excel
Common Stock or common shares of Teleglobe capital stock, as the case may be, or
shares exercisable or convertible into or exchangeable for more than 10% of the
outstanding shares of Excel Common Stock or common shares of Teleglobe capital
stock, or of the entity surviving such merger or business combination, (iii) any
other transaction pursuant to which any Third Party acquires control of assets
or businesses (including for this purpose the outstanding equity securities of
Subsidiaries of Teleglobe or Excel, and the entity surviving any merger or
business combination including any of them) of Teleglobe or Excel having a fair
market value (as determined by the Board of Directors of Teleglobe or Excel, as
the case may be, in good faith) equal to more than 10% of the fair market value
of all the assets or businesses of Teleglobe or Excel, as the case may be, and
its Subsidiaries, taken as a whole, immediately prior to such transaction, (iv)
any recapitalization, restructuring or other transaction which could reasonably
be expected to prevent or materially impair or delay the consummation of the
Merger or (v) any public announcement of a proposal, plan or intention to do any
of the foregoing or any agreement to engage in any of the foregoing.
5.6 Fees and Expenses. Whether or not the Merger is
consummated, all Expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
Expenses, except that (a) if the Merger is consummated, the Surviving
Corporation shall pay, or cause to be paid, any and all property or transfer
taxes imposed on Excel or its Subsidiaries, (b) Expenses incurred in connection
with the filing, printing and mailing of the Joint Information Statement/Proxy
Statement/ Prospectus shall be shared equally by Teleglobe and Excel and (c) the
filing fees incurred pursuant to the requirements of the HSR Act and the
Competition Act (Canada), which shall be shared equally by Teleglobe and Excel.
As used in this Agreement, "Expenses" includes all out-of-pocket expenses
(including all fees and expenses of counsel, accountants, investment bankers,
experts and consultants to a party hereto and its Affiliates) incurred by a
party or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement, the
Voting Agreements, the Stock Option Agreements and the transactions contemplated
hereby and thereby, including the preparation, printing, filing and mailing of
the Joint Information Statement/Proxy Statement/Prospectus, the solicitation of
shareholder and stockholder approvals and all other matters related to the
transactions contemplated hereby, including registration fees in
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connection with the Form F-4, costs incurred in connection with any shareholder
litigation or costs incurred in the course of any contest involved in obtaining
any Regulatory Approvals.
5.7 Directors' and Officers' Indemnification and Insurance.
Teleglobe shall cause the Surviving Corporation to maintain in effect in its
certificate of incorporation and by-laws (i) for a period of six years after the
Effective Time, the current provisions regarding limitation of liability of
directors and indemnification of officers, directors and employees contained in
the certificate of incorporation and by-laws of Excel, and Teleglobe shall
guarantee such obligation of the Surviving Corporation and (ii) for a period of
six years, the current policies of directors' and officers' liability insurance
and fiduciary liability insurance maintained by Excel (provided that the
Surviving Corporation may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions which are, in the
aggregate, no less advantageous to the insured) with respect to claims arising
from facts or events that occurred at or before the Effective Time; provided,
however, that in no event shall the Surviving Corporation be required to expend
in any one year an amount in excess of 200% of the annual premiums currently
paid by Excel for such insurance; and, provided, further, that if the annual
premiums of such insurance coverage exceed such amount, the Surviving
Corporation shall be obligated to obtain a policy with the greatest coverage
available for a cost not exceeding such amount.
5.8 Public Announcements. Teleglobe and Excel shall use all
reasonable efforts to develop a joint communications plan and each party shall
use all reasonable efforts (i) to ensure that all press releases and other
public statements with respect to the transactions contemplated hereby shall be
consistent with such joint communications plan, and (ii) unless otherwise
required by applicable Law or by obligations pursuant to any listing agreement
with or rules of any securities exchange, to consult with each other before
issuing any press release or otherwise making any public statement with respect
to this Agreement or the transactions contemplated hereby.
5.9 Accountants' Letters. Upon reasonable notice from the
other, Teleglobe and Excel shall use their respective best efforts to cause
Xxxxxx Xxxxxxxx LLP and Xxxxxxx Xxxxxx Xxxxx Xxxxxxxx, respectively, to deliver
to Teleglobe or Excel, as the case may be, a letter, dated within two Business
Days of the date of effectiveness of the Form F-4 covering such matters as are
requested by Teleglobe or Excel, as the case may be, and as are customarily
addressed in accountant's "comfort" letters. In connection with Teleglobe's
efforts to obtain such letter, if requested by Xxxxxxx Xxxxxx Xxxxx Xxxxxxxx,
Excel shall provide a representation letter to Xxxxxxx Xxxxxx Xxxxx Xxxxxxxx
complying with the statement on Auditing Standards No. 72 ("SAS 72") or the
comparable Canadian auditing standards, if then required. In connection with
Excel's efforts to obtain such letter, if requested by Xxxxxx Xxxxxxxx LLP,
Teleglobe shall provide a representation letter to Xxxxxx Xxxxxxxx LLP complying
with SAS 72, if then required.
5.10 Listing of Teleglobe Common Shares. Teleglobe shall use
its best efforts to cause the Teleglobe Common Shares to be issued in the Merger
and the Teleglobe Common Shares to be reserved for issuance upon exercise of the
Converted Options to be approved for listing, subject to official notice of
issuance, on the NYSE, and subject to customary requirements, on the TSE and the
ME.
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5.11 Rule 145 Affiliates of Teleglobe and Excel; Pooling
Letters. Concurrently with the execution of this Agreement, each of the
directors of Excel and of Teleglobe has executed an agreement in the form
attached hereto as Exhibit I or J or as applicable. No later than 30 days
following the date of this Agreement, Excel shall deliver to Teleglobe a letter
identifying all other Persons who, to Excel's knowledge, at the time of
execution of the Excel Stockholders Consent, at any Excel Stockholders Meeting
or at the Effective Time, may be deemed to be "affiliates" of Excel for purposes
of Rule 145 under the Securities Act or who may otherwise be deemed to be
Affiliates of Excel (the "Rule 145 Affiliates"). Excel shall use its best
efforts to cause each Person who is identified as a Rule 145 Affiliate in such
list to deliver to Teleglobe at or prior to the Effective Time a written
agreement to the effect that such Rule 145 Affiliate will not (a) sell, pledge,
transfer or otherwise dispose of any Teleglobe Common Shares issued to such Rule
145 Affiliate pursuant to the Merger, except pursuant to an effective
registration statement or in compliance with Rule 145 under the Securities Act
or an exemption from the registration requirements of the Securities Act, or (b)
sell, pledge, transfer or otherwise dispose of, or hedge or otherwise reduce its
risk with respect to, any common shares of Teleglobe capital stock or any shares
of Excel Common Stock from the 30th day prior to the Effective Time to such time
as results covering at least 30 days of combined operations of Teleglobe and
Excel have been published by Teleglobe in the form of a quarterly earnings
report, an effective registration statement filed with the SEC, a report to the
SEC on Form 6-K or any other public filing or announcement which includes the
combined results of operations of Teleglobe and Excel except for transfers or
other dispositions that, in the reasonable opinion of Teleglobe's independent
public accountants, will not prevent Teleglobe from accounting for the Merger as
a pooling of interests, taking into account the actions of other Affiliates of
Excel, Teleglobe or their respective Stockholders. Teleglobe shall use its best
efforts to cause each Person who would be deemed to be an Affiliate with respect
to Teleglobe other than its directors, no later than 30 days following the date
of this Agreement, to deliver to Excel a letter in the form attached hereto as
Exhibit J.
5.12 Stockholder Litigation. Teleglobe, Merger Sub and Excel
shall cooperate and consult with one another, to the fullest extent possible, in
connection with any stockholder litigation against any of them or any of their
respective directors or officers with respect to the transactions contemplated
by this Agreement. In furtherance of and without in any way limiting the
foregoing, each of Teleglobe and Excel shall use its respective best efforts to
defeat such litigation so as to permit the consummation of the transactions
contemplated by this Agreement in the manner contemplated by this Agreement. In
the event that an Acquisition Proposal shall be pending with respect to
Teleglobe or Excel, neither party shall make any material strategic decision
with respect to any pending stockholder litigation or any other third party
litigation which challenges the enforceability of this Agreement or otherwise
seeks to impede, impair, delay or otherwise interfere with the transaction
contemplated hereby without the prior written consent of the other party, which
consent shall not unreasonably be withheld or delayed.
5.13 Restriction on Certain Dispositions. In order to assist
in ensuring that all holders of shares of Excel Common Stock receive tax-free
treatment under the Code, Teleglobe agrees that during the two year period
beginning on the Closing Date (the "Restricted Period"), it will not dispose in
any manner of any shares of the Surviving
53
Corporation Common Stock or dispose in any manner, or cause or permit the
Surviving Corporation to dispose in any manner, of any of the assets of the
Surviving Corporation, other than dispositions of assets of the Surviving
Corporation in the ordinary course of business which do not constitute
dispositions of "all or a substantial portion" of the assets of the Surviving
Corporation for purposes of Treasury Regulation Section 1.367(a)-3T(g)(3)(iii)
and "Permitted Dispositions". "Permitted Dispositions" shall be defined as: (a)
transfers or successive transfers of Excel Common Stock or Excel assets to one
or more corporations controlled (within the meaning of Section 368(c) of the
Code) in each case by the transferor, provided such transfer or transfers
qualify under Treasury Regulation Section 1.367(a)- 3T(g)(7), (b) a disposition
made with respect to a liquidation of the Surviving Corporation subject to the
provisions of Treasury Regulation Section 1.367(a)-3T(g)(3)(iv) and (c) any
other transaction for which Excel or Teleglobe receives a private letter ruling
from the IRS, holding that such transactions will not result in the recognition
of gain according to the gain recognition agreements into which certain of the
holders of Excel Common Stock will enter under Treasury Regulation Section
1.367(a)-3T(g)(3); provided, however, that any such transfer, disposition or
transaction may be consummated only if the transferee shall agree in writing
beforehand (i) to be bound by Teleglobe's agreements and covenants in this
Section 5.13 during any then remaining portion of the Restricted Period, (ii)
not to effect any subsequent transfer, disposition or transaction or any sale,
disposition, lease, transfer, mortgage, merger, consolidation, amalgamation,
combination, liquidation or dissolution referred to in paragraph 2 of the
Teleglobe By-Law Amendment without the affirmative vote of at least 66-2/3% of
the entire Board of Directors (disregarding vacancies) of Teleglobe and (iii) to
cause any subsequent transferee to agree to be bound by all of the foregoing;
and, provided, further, that no transfer, disposition or transaction entered
into by Teleglobe in accordance with this Section 5.13, or by any transferee of
Teleglobe or any subsequent transferee, shall relieve Teleglobe from any
liability to any third party beneficiary of this Section 5.13 that arises out of
or is otherwise based upon any violation of the provisions of this Section 5.13.
5.14 Compliance with Section 228 of the DGCL. Excel has
delivered, concurrently with the delivery to it of the Excel Stockholders
Consent, a certificate of its Secretary as to the sufficiency of the Excel
Stockholders Consent to adopt and approve the Merger Agreement and the Merger.
Pursuant to the Joint Information Statement/Proxy Statement/Prospectus, Excel
shall notify its Stockholders who have not consented in writing to the adoption
and approval of the Merger Agreement and the Merger and who, if such action had
been taken at a meeting, would have been entitled to notice of the meeting if
the record date for such meeting had been the date of the Excel Stockholder
Consent.
5.15 Registration Rights Agreement. On or prior to the
Closing Date Teleglobe will execute and deliver the Registration Rights
Agreement.
54
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Each Party's Obligation to Effect the
Merger. The obligations of Teleglobe, Merger Sub and Excel to effect the Merger
are subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) Stockholder Approval. In connection with the approval and
adoption of this Agreement, Excel shall have obtained the Required Excel Vote in
accordance with applicable Law and the certificate of incorporation and by-laws
of Excel.
(b) No Injunctions or Restraints, Illegality. No Laws shall
have been adopted or promulgated, and no temporary restraining order,
preliminary or permanent injunction or other order issued by a court or other
Governmental Entity of competent jurisdiction shall be in effect, having the
effect of making the Merger illegal or otherwise prohibiting consummation of the
Merger; provided, however, that the provisions of this Section 6.1(b) shall not
be available to any party whose failure to fulfill its obligations pursuant to
Section 5.4 shall have been the cause of, or shall have resulted in, such order
or injunction.
(c) HSR Act; Competition Act (Canada); Required Consents. The
waiting period (and any extension thereof) applicable to the Merger under the
HSR Act shall have been terminated or shall have expired; the waiting period
prescribed under the Competition Act (Canada) shall have expired, and the
Director of Investigation and Research under said Act shall have advised
Teleglobe in writing that the Director has determined not to make an application
for an order under Section 92 of the Competition Act (Canada) in respect of the
Merger and no order shall have been issued by the Competition Tribunal in
connection with same; and all other Required Consents shall have been granted
and be in full force and effect; provided, however, that a Required Consent
shall not be deemed to have been obtained if in connection with the grant
thereof or in another proceeding there shall have been an imposition by any
Governmental Entity of any condition, requirement, restriction or change of
regulation, or any other action directly or indirectly related to such grant
taken by such Governmental Entity, which could reasonably be expected to have a
Material Adverse Effect on either of Excel or Teleglobe (either with or without
including Teleglobe's ownership of Excel and its Subsidiaries after the Merger).
(d) NYSE, TSE and ME Listings. The Teleglobe Common Shares to
be issued in the Merger and such other shares to be reserved for issuance in
connection with this Agreement shall have been approved for listing on the NYSE
(subject to official notice of issuance) and the TSE and the ME (subject to
customary requirements).
(e) Effectiveness of the Form F-4. The Form F-4 shall have
been declared effective by the SEC under the Securities Act. No stop order
suspending the effectiveness of the Form F-4 shall have been issued by the SEC
and no proceedings for that purpose shall have been initiated or threatened by
the SEC that have not been withdrawn.
55
6.2 Additional Conditions to Obligations of Teleglobe and
Merger Sub. The obligations of Teleglobe and Merger Sub to effect the Merger are
subject to the satisfaction of, or waiver by Teleglobe on or prior to the
Closing Date of the following additional conditions:
(a) Representations and Warranties. Each of the
representations and warranties of Excel set forth in this Agreement that is
qualified as to materiality or Material Adverse Effect shall have been true and
correct on the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date, and each of the
representations and warranties of Excel that is not so qualified shall have been
true and correct in all material respects on the date of this Agreement and
(except to the extent such representations and warranties speak as of an earlier
date) as of the Closing Date as though made on and as of the Closing Date, and
Teleglobe shall have received a certificate of the chief executive officer and
the chief financial officer of Excel to such effect.
(b) Performance of Obligations of Excel. Excel shall have
performed or complied with all agreements and covenants required to be performed
by it under this Agreement at or prior to the Closing Date that are qualified as
to materiality and shall have performed or complied in all material respects
with all other agreements and covenants required to be performed by it under
this Agreement at or prior to the Closing Date that are not so qualified as to
materiality, and Teleglobe shall have received a certificate of the chief
executive officer and the chief financial officer of Excel to such effect.
(c) Tax Opinion. Teleglobe shall have received an opinion,
dated the Closing Date, based on the representations of Excel and Teleglobe
attached hereto as Exhibits G and H and appropriate representations of certain
shareholders of Excel and Teleglobe, of Xxxxxxx, Xxxxxxxx & Xxxxxxxx, counsel to
Teleglobe, to the effect that (i) the Merger will be treated for U.S. Federal
income tax purposes as a reorganization within the meaning of Section 368(a) of
the Code, (ii) Teleglobe, Merger Sub and Excel will each be a party to the
reorganization within the meaning of Section 368(b) of the Code and (iii) no
gain or loss will be recognized by Teleglobe, Merger Sub or Excel as a result of
the Merger.
(d) No Material Adverse Change. Since the date of this
Agreement, there shall not have occurred any event or circumstance that shall
have caused, or shall be reasonably likely to cause, a material adverse change
in the business, condition (financial or otherwise), assets, liabilities or
results of operations of Excel and its Subsidiaries, taken as a whole (without
taking into account the Merger), other than any change relating to (i) the
economy, foreign exchange rates or securities markets in general or (ii) the
telecommunications industry, if, in any of (i) or (ii) the effect on Excel and
its Subsidiaries, taken as a whole, is not either (A) particularized or unique
to Excel and its Subsidiaries, taken as a whole, or (B) disproportionate
relative to the effect on Teleglobe and its Subsidiaries, taken as a whole
(without taking into account the Merger), or relative to the effect on the
competitors of Excel and its Subsidiaries, taken as a whole.
56
(e) Excel Consent and Voting Agreement. There shall not have
been a material breach of the Excel Consent and Voting Agreement by any of the
stockholders of Excel party thereto.
(f) Third-Party Consents. Excel or its Subsidiaries shall have
obtained in writing any third-party consents identified with an asterisk on
Section 3.1(d)(ii) of the Excel Disclosure Schedule and the same shall be in
full force and effect at the Closing.
6.3 Additional Conditions to Obligations of Excel. The
obligations of Excel to effect the Merger are subject to the satisfaction or
waiver by Excel, on or prior to the Closing Date, of the following additional
conditions:
(a) Representations and Warranties. Each of the
representations and warranties of Teleglobe and Merger Sub set forth in this
Agreement that is qualified as to materiality or Material Adverse Effect shall
have been true and correct on the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as of
the Closing Date as though made on and as of the Closing Date, and each of the
representations and warranties of each of Teleglobe and Merger Sub that is not
so qualified shall have been true and correct in all material respects on the
date of this Agreement and (except to the extent such representations and
warranties speak as of an earlier date) as of the Closing Date as though made on
and as of the Closing Date, and Excel shall have received a certificate of the
chief executive officer and the chief financial officer of Teleglobe to such
effect.
(b) Performance of Obligations of Teleglobe. Teleglobe shall
have performed or complied with all agreements and covenants required to be
performed by it under this Agreement at or prior to the Closing Date that are
qualified as to materiality and shall have performed or complied in all material
respects with all agreements and covenants required to be performed by it under
this Agreement at or prior to the Closing Date that are not so qualified as to
materiality, and Excel shall have received a certificate of the chief executive
officer and the chief financial officer of Teleglobe to such effect.
(c) Tax Opinion. Excel shall have received an opinion, dated
the Closing Date, based on the representations of Excel and Teleglobe attached
hereto as Exhibits G and H and appropriate representations of certain
shareholders of Excel and Teleglobe, and based on the IRS ruling referred to in
paragraph (f) below, of Weil, Gotshal & Xxxxxx LLP, counsel to Excel, to the
effect that (i) the Merger will be treated for U.S. Federal income tax purposes
as a reorganization within the meaning of Section 368(a) of the Code, (ii)
Teleglobe, Merger Sub and Excel will each be a party to the reorganization
within the meaning of Section 368(b) of the Code and (iii) no gain or loss will
be recognized by the shareholders of Excel as a result of the Merger (except
with respect to any cash received in lieu of fractional shares).
(d) No Material Adverse Change. Since the date of this
Agreement, there shall not have occurred any event or circumstance that shall
have caused, or shall be reasonably likely to cause, a material adverse change
in the business, condition (financial or otherwise), assets, liabilities or
results of operations of Teleglobe and its Subsidiaries, taken
57
as a whole (without taking into account the Merger), other than any change
relating to (i) the economy, foreign exchange rates or securities markets in
general or (ii) the telecommunications industry, if, in any of (i) or (ii) the
effect on Teleglobe and its Subsidiaries, taken as a whole without giving effect
to the Merger, is not either (A) particularized or unique to Teleglobe and its
Subsidiaries taken as a whole, or (B) disproportionate relative to the effect on
Excel and its Subsidiaries, taken as a whole, or relative to the effect on the
competitors of Teleglobe and its Subsidiaries, taken as a whole (without taking
into account the Merger).
(e) Teleglobe Consent and Voting Agreements. There shall not
have been a material breach of the Teleglobe Consent and Voting Agreements by
any of the shareholders of Teleglobe party thereto.
(f) IRS Ruling. A ruling shall have been received from the IRS
under Treasury Regulation Section 1.367(a)-3(c)(9) to the effect that Excel is
substantially in compliance with the requirements of Treasury Regulation
sections 1.367(a)-3(c)(1)(ii)-(iv) within the meaning of Treasury Regulation
section 1.367-3(c)(9)(i); and the transfer of Excel Common Stock pursuant to the
Merger will be deemed to comply with the substantiality test requirement of the
active trade or business test described in Treasury Regulation Section
1.367-3(c)(1)(iv).
(g) Third-Party Consents. Teleglobe or its Subsidiaries shall
have obtained in writing any third-party consents identified with an asterisk on
Section 3.2(d)(ii) of the Teleglobe Disclosure Schedule and the same shall be in
full force and effect at the Closing.
(h) Registration Rights Agreement. The Registration Rights
Agreement shall have been executed and delivered by Teleglobe.
(i) Shareholder Approval. Either (i) the Teleglobe Articles
Amendment shall have been approved by the Required Articles Amendment Vote or
(ii) the Teleglobe By-Law Amendment shall have been approved by the Required
By-Law Amendment Vote, in either case in accordance with applicable Law and the
certificate of incorporation and by-laws of Teleglobe.
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, by action taken or authorized by the Board of
Directors of the terminating party or parties, in the following circumstances:
(a) By mutual written consent of Teleglobe and Excel;
(b) By either Teleglobe or Excel if the Effective Time shall
not have occurred on or before June 14, 1999 (the "Termination Date"); provided,
however, that the right to
58
terminate this Agreement under this Section 7.1(b) shall not be available to any
party whose failure to fulfill any obligation under this Agreement (including
Section 5.4) has to any extent been the cause of, or resulted in, the failure of
the Effective Time to occur on or before the Termination Date; and provided,
further, that if on the Termination Date the conditions to the Closing set forth
in Section 6.1(c) shall not have been fulfilled but shall be capable of being
fulfilled, but all other conditions to the Closing shall be fulfilled or shall
be capable of being fulfilled, then the Termination Date shall be extended to
December 31, 1999;
(c) By either Teleglobe or Excel if any Governmental Entity
(i) shall have issued an order, decree or ruling or taken any other action
(which the parties shall have used their best efforts to resist, resolve or
lift, as applicable, in accordance with Section 5.4) permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement, and such order, decree, ruling or other action shall have become
final and nonappealable or (ii) shall have failed to issue an order, decree or
ruling or to take any other action (which order, decree, ruling or other action
the parties shall have used their best efforts to obtain, in accordance with
Section 5.4), in the case of each of (i) and (ii), which is necessary to fulfill
the condition set forth in Section 6.1(c) and such action or inaction shall have
become final and nonappealable; provided, however, that the right to terminate
this Agreement under this Section 7.1(c) shall not be available to any party
whose failure to comply with Section 5.4 has to any extent been the cause of
such action or inaction;
(d) By Excel if neither (i) the Required Articles Amendment
Vote shall have been obtained nor (ii) the Required By-Law Amendment Vote shall
have been obtained by reason of the failure to obtain either such vote upon the
taking of such vote at a duly held meeting of shareholders of Teleglobe on or
prior to the 150th day following the date of this Agreement;
(e) By Teleglobe or Excel if (i) the other party shall have
materially breached or failed to comply with any of its obligations under this
Agreement or (ii) any representation or warranty made by the other that is
qualified as to materiality or Material Adverse Effect shall have been incorrect
when made or any representation or warranty not so qualified shall have been
incorrect in any material respect when made or in either case shall have since
ceased to be true and correct or true and correct in all material respects, as
the case may be, and such breach, failure or misrepresentation has not been
cured within 30 days after notice thereof and the continuance of such breach,
failure or misrepresentation would have a Material Adverse Effect on Excel or
Teleglobe (whether before or after giving effect to the Merger);
(f) By Excel if any person or group shall have become the
beneficial owner (determined in accordance with Rule 13d-3 under the Exchange
Act) of securities representing more than 25% of the outstanding voting stock of
Teleglobe, other than any such person or group who satisfies such criteria as of
the date of this Agreement (a "Competing Share Transaction");
(g) By Teleglobe if any person or group shall have become the
beneficial owner (determined as set forth above) of securities representing more
than 25% of the
59
outstanding voting stock of Excel, other than any such person or group that
satisfies such criteria as of the date of this Agreement.
Notwithstanding anything else contained in this Agreement, the
right to terminate this Agreement under this Section 7.1 shall not be available
to any party (a) that is in material breach of its obligations hereunder or (b)
whose failure to fulfill its obligations or to comply with its covenants under
this Agreement has been the cause of, or resulted in, the failure to satisfy any
conditions to the obligations of either party hereunder.
7.2 Effect of Termination. In the event of termination of this
Agreement by either Teleglobe or Excel as provided in Section 7.1, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Teleglobe or Excel or their respective officers or
directors except (i) with respect to Section 3.1(j), Section 3.2(j), the second
sentence of Section 5.3, Section 5.7, this Section 7.2, Section 7.3, Section 7.4
and Article VIII and (ii) nothing herein will release any party from any
liability arising from any breach of this Agreement.
7.3 Payment by Excel. (a) Teleglobe and Excel agree that if
Teleglobe shall terminate this Agreement pursuant to Section 7.1(g), then Excel
shall pay to Teleglobe an amount equal to $120 million (the "Termination Fee")
plus Teleglobe's Expenses. Notwithstanding anything in this Agreement (including
Section 8.10) to the contrary, in the case of a termination pursuant to Section
7.1(g), the payment of any amount pursuant to this Section 7.3(a) shall
constitute liquidated damages in full and complete satisfaction of, and shall be
Teleglobe's sole and exclusive remedy, together with its rights under the Excel
Stock Option Agreement, against Excel for any loss, liability, damage or claim
arising out of or in connection with any such termination of this Agreement or
the facts and circumstances resulting in such termination or otherwise related
thereto or otherwise arising out of or in connection with this Agreement.
Excel acknowledges that the agreements contained in this
Section 7.3(a) are critical provisions of the transactions contemplated hereby
and that without these agreements Teleglobe and Merger Sub would not enter into
this Agreement. Accordingly, if Excel fails to pay promptly the Termination Fee
and the Expenses due pursuant to this Section 7.3(a) and, in order to obtain
such payment, Teleglobe or Merger Sub commences litigation which results in a
judgment against Excel for the Termination Fee and the Expenses, Excel shall pay
to Teleglobe its costs and expenses (including attorneys' fees) in connection
with such litigation, together with interest on the amount of the Termination
Fee and the Expenses at the prime rate of The Chase Manhattan Bank, N.A., in
effect on the date and from the date such amounts were originally required to
have been paid.
(b) The Termination Fee required to be paid pursuant to
Section 7.3(a) shall be paid by Excel no later than two Business Days after
Teleglobe shall have notified Excel of such termination. The Expenses required
to be paid pursuant to Section 7.3(a) shall be paid to Teleglobe not later than
two Business Days after Teleglobe shall have provided Excel with an invoice for
the Expenses. All payments under Section 7.3(a) shall be made by wire transfer
of immediately available funds to an account designated by the party entitled to
receive payment.
60
7.4 Payment by Teleglobe. (a) Teleglobe and Excel agree that
if (i) Excel shall terminate this Agreement pursuant to Section 7.1(f) or (ii)
Excel shall terminate this Agreement pursuant to Section 7.1(d) and at the time
of the meeting of the shareholders of Teleglobe at which the Teleglobe By-Law
Amendment is considered an Acquisition Proposal (for purposes of this Section
7.4(a) only with respect to the definition of Acquisition Proposal, replacing in
the definition of Alternative Transaction the number 10% with the number 25% in
each of the four instances such number appears therein) shall be pending with
respect to Teleglobe, then Teleglobe shall pay to Excel the Termination Fee plus
Excel's Expenses. Notwithstanding anything in this Agreement (including Section
8.10) to the contrary, in the case of a termination pursuant to Section 7.1(f),
the payment of any amount pursuant to this Section 7.4(a) shall constitute
liquidated damages in full and complete satisfaction of, and shall be Excel's
sole and exclusive remedy, together with its rights under the Teleglobe Stock
Option Agreement, against Teleglobe for any loss, liability, damage or claim
arising out of or in connection with any such termination of this Agreement or
the facts and circumstances resulting in such termination or otherwise related
thereto or otherwise arising out of or in connection with this Agreement.
Teleglobe acknowledges that the agreements contained in this
Section 7.4(a) are critical provisions of the transactions contemplated hereby
and that without these agreements Excel would not enter into this Agreement.
Accordingly, if Teleglobe fails to pay promptly the Termination Fee and the
Expenses due pursuant to this Section 7.4(a) and, in order to obtain such
payment, Excel commences litigation which results in a judgment against
Teleglobe for the Termination Fee and the Expenses, Teleglobe shall pay to Excel
its costs and expenses (including attorneys' fees) in connection with such
litigation, together with interest on the amount of the Termination Fee and the
Expenses at the prime rate of The Chase Manhattan Bank, N.A. in effect on the
date and from the date such amounts were originally required to have been paid.
(b) The Termination Fee required to be paid pursuant to
Section 7.4(a) shall be paid by Teleglobe no later than two Business Days after
Excel shall have notified Teleglobe of such termination. The Expenses required
to be paid pursuant to Section 7.4(a) shall be paid to Excel not later than two
Business Days after Excel shall have provided Teleglobe with an invoice for the
Expenses. All payments under Section 7.4(a) shall be made by wire transfer of
immediately available funds to an account designated by Excel.
7.5 Amendment. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after approval of the matters presented in connection with
the Merger by the stockholders of Excel or the shareholders of Teleglobe, as the
case may be, but, after any such approval, no amendment shall be made which by
Law or in accordance with the rules of any relevant stock exchange requires
further approval by such stockholders or shareholders without such further
approval. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
7.6 Extension; Waiver. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
Boards of Directors, may, to the extent legally allowed, (i) extend the time for
the performance of any of the obligations or
61
other acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights nor shall any single or partial exercise
thereof include any other or further exercise thereof or the exercise of any
other right, power or privilege.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Survival of Representations, Warranties and Covenants. The
respective representations and warranties of the parties to this Agreement
contained herein or in any certificates or other documents delivered prior to or
at the Closing shall terminate at the Effective Time. The respective covenants
and agreements of the parties contained herein or in any certificates or other
documents delivered prior to or at the Closing shall survive the execution and
delivery of this Agreement and shall terminate only in accordance with their
terms.
8.2 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed duly given (a) on the date of delivery
if delivered personally, or by telecopy or facsimile, upon confirmation of
receipt, (b) on the first Business Day following the date of dispatch if
delivered by a recognized next-day courier service, or (c) on the third Business
Day following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
(a) if to Teleglobe or Merger Sub, to
Teleglobe Inc.
0000, xxx xx Xx Xxxxxxxxxxx xxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Attention: Vice President, Legal Affairs
and Corporate Secretary
Facsimile: 000-000-0000
with a copy to
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx III, Esq.
Facsimile: 000-000-0000
62
(b) if to Excel, to
Excel Communications, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Executive Vice President, Secretary
and General Counsel
Facsimile: 000-000-0000
with a copy to
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
Facsimile: 000-000-0000
8.3 Interpretation. When a reference is made in this Agreement
to Articles, Sections or Exhibits, such reference shall be to an Article of,
Section of or Exhibit to this Agreement unless otherwise indicated. The table of
contents, glossary of defined terms and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation". Whenever the word "material" is used with
respect to any Person and its Subsidiaries, it shall mean, unless otherwise
specified, such Person and its Subsidiaries taken as a whole. All references
herein to "$" or "dollars" shall be to U.S.
dollars.
8.4 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original and all of
which shall be considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other party, it being understood that both parties need not
sign the same counterpart.
8.5 Entire Agreement; No Third Party Beneficiaries. (a) This
Agreement, the Voting Agreements and the Stock Option Agreements and the
Confidentiality Agreement constitute the entire agreement among the parties and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof and thereof.
(b) This Agreement shall be binding upon and inure solely to
the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement, other
than Sections 3.2(ad), 5.7 and 5.13 (which are intended to be for the benefit of
the Persons covered thereby (including, where appropriate, the
63
stockholders of Excel and Teleglobe as of the date of this Agreement) and may be
enforced by such Persons at any time).
8.6 Governing Law. This Agreement shall be governed and
construed in accordance with the Laws of the State of Delaware without regard to
the principles of conflicts of laws thereof.
8.7 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
8.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise), without
the prior written consent of the other party and the written undertaking of the
assignee to be bound by the terms of this Agreement, and any attempt to make any
such assignment without such consent shall be null and void, except that Merger
Sub may assign, in its sole discretion, any or all of its rights, interests and
obligations under this Agreement to any direct wholly owned Subsidiary of
Teleglobe without the consent of Excel; provided, however, that no such
assignment shall relieve Teleglobe of its obligations under this Agreement.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and permitted assigns.
8.9 Submission to Jurisdiction; Waivers. Each of Teleglobe and
Excel irrevocably agrees that any legal action or proceeding with respect to
this Agreement or for recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns may be
brought and determined in the Chancery or other Courts of the State of Delaware,
and each of Teleglobe and Excel hereby irrevocably submits with regard to any
such action or proceeding for itself and in respect to its property, generally
and unconditionally, to the nonexclusive jurisdiction of the aforesaid courts.
Each of Teleglobe and Excel hereby irrevocably waives, and agrees not to assert,
by way of motion, as a defense, counterclaim or otherwise, in any action or
proceeding with respect to this Agreement, (a) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any reason
other than the failure to serve process in accordance with this Section 8.9, (b)
that it or its property is exempt or immune from jurisdiction of any such court
or from any legal process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise), and (c) to the fullest extent
permitted by applicable Law, that (i) the suit, action or proceeding in any such
court is brought in an inconvenient forum, (ii) the venue of such suit, action
or proceeding is improper or (iii) this Agreement, or the subject matter hereof,
may not be enforced in or by such courts.
64
8.10 Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed that
the parties shall be entitled to specific performance of the terms hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity, provided that the party seeking such relief is not in material default
of its representations, warranties or covenants hereunder.
8.11 Definitions. As used in this Agreement:
(a) "Affiliates", when used with respect to any Person, means
any other Person directly or indirectly controlling, controlled by or under
common control with such Person. As used in the definition of Affiliate, the
term control means possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
(b) "Board of Directors" means the Board of Directors of any
specified Person and any committees thereof.
(c) "Business Day" means any day (other than a Saturday or a
Sunday) on which banks are not required or authorized to close in either the
City of New York or the City of Montreal.
(d) "Canadian Securities Laws" means the CBCA, the Securities
Act (Quebec) and the equivalent legislation in the other provinces of Canada,
all as now enacted or as the same may from time to time be amended, re-enacted
or replaced, and the applicable rules, regulations, rulings, orders and forms
made or promulgated under such statutes and the published policies of the
regulatory authorities administering such statutes, as well as the rules,
regulations, by-laws and policies of the ME and the TSE.
(e) "Material Adverse Effect" means, with respect to any
entity, a material adverse effect on the business, condition (financial or
otherwise), results of operations, assets or liabilities of such entity and its
Subsidiaries taken as a whole.
(f) "the other party" means, with respect to Excel, Teleglobe
and Merger Sub and means, with respect to Teleglobe and Merger Sub, Excel.
(g) "Person" means an individual, corporation, limited
liability company, partnership, association, trust, unincorporated organization,
other entity or group (as defined in the Exchange Act).
(h) "Subsidiary" when used with respect to any party means any
corporation or other organization, whether incorporated or unincorporated, (i)
of which such party or any other Subsidiary of such party is a general partner
(excluding partnerships, the general partnership interests of which held by such
party or any Subsidiary of such party do not have a majority of the voting
interests in such partnership) or (ii) at least a majority of the securities or
other interests of which having by their terms ordinary voting power to elect a
majority of the Board of Directors or others performing similar functions with
respect to such
65
corporation or other organization is directly or indirectly owned or controlled
by such party or by any one or more of its Subsidiaries, or by such party and
one or more of its Subsidiaries.
(i) "Transaction Documents" means, collectively, this
Agreement, the Voting Agreements, the Stock Option Agreements, the Registration
Rights Agreement and the documents, certificates or instruments to be delivered
pursuant to the transactions contemplated thereby.
8.12 Waiver of Jury Trial. Each party hereto waives, to the
fullest extent permitted by applicable law, any right it may have to a trial by
jury in respect of any litigation directly or indirectly arising out of, under
or in connection with this Agreement.
66
IN WITNESS WHEREOF, Teleglobe, Merger Sub and Excel have
caused this Agreement to be signed by their respective officers thereunto duly
authorized, all as of June 14, 1998.
TELEGLOBE INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxx
Title:Chairman and Chief Executive
Officer
NORTH MERGER SUB CORPORATION
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: President
EXCEL COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman, President and Chief
Executive Officer
EXHIBIT A
EXECUTION COPY
EXCEL CONSENT AND VOTING AGREEMENT
EXCEL CONSENT AND VOTING AGREEMENT, dated as of June 14, 1998
(this "Agreement"), by and among TELEGLOBE INC., a corporation governed by the
Canada Business Corporations Act ("Teleglobe"), and each of the other
signatories hereto (each, a "Stockholder" and, collectively, the
"Stockholders").
WHEREAS, concurrently herewith, Teleglobe, North Merger Sub Corporation, a
Delaware corporation and a wholly owned subsidiary of Teleglobe ("North Sub"),
and Excel Communications, Inc., a Delaware corporation (the "Company"), are
entering into an Agreement and Plan of Merger (the "Merger Agreement";
capitalized terms used without definition herein having the meanings ascribed
thereto in the Merger Agreement);
WHEREAS, each Stockholder is the record and beneficial owner of the number of
shares ("Shares") of common stock, par value $.001 per share, of the Company
("Company Common Stock") set forth opposite such Stockholder's name in Schedule
I hereto;
WHEREAS, approval and adoption of the Merger Agreement by the
Company's stockholders is a condition to the consummation of the Merger;
WHEREAS, the Board of Directors of the Company has, prior to the execution of
this Agreement, duly and validly approved and adopted the Merger Agreement and
approved this Agreement, and such approvals and adoption have not been
withdrawn;
WHEREAS, the Stockholders are executing this Agreement (i) as an inducement to
Teleglobe to enter into and execute and to cause North Sub to enter into and
execute the Merger Agreement and (ii) in reliance upon the representations,
warranties, agreements and covenants of Teleglobe set forth in Sections 3.2(ad)
and 5.13 thereof; and
WHEREAS, certain holders of common shares of Teleglobe capital stock are
concurrently executing the Teleglobe Consent and Voting Agreements as an
inducement to Excel to enter into and execute the Merger Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements set forth herein, the parties hereto agree as follows:
Section 1. Consent and Agreement to Vote. Each Stockholder
agrees (for itself and not as to any other Stockholder) that immediately
following the execution and delivery of this Agreement and the Merger Agreement,
it shall execute and deliver, or cause to be executed and delivered by the
record owner thereof, in accordance with Section 228 of the DGCL, the Excel
Stockholders Consent in the form of Exhibit A hereto (the "Consent"), which
shall be irrevocable, with respect to all Shares that are owned beneficially or
of record by such Stockholder or as to which such Stockholder has, directly or
indirectly, the right to vote or direct the voting.
Each Stockholder hereby further agrees (for itself and not as
to any other Stockholder) that, during the term of this Agreement, it shall,
from time to time, at the request of Teleglobe, at any meeting (whether annual
or special and whether or not an adjourned or postponed meeting) of stockholders
of the Company, however called, or in connection with any written consent of the
holders of Company Common Stock, in either case, prior to the earlier of the
Effective Time and the termination of this Agreement, if a meeting is held,
appear at such meeting or otherwise cause the Shares to be counted as present
thereat for purposes of establishing a quorum, and it shall vote or consent (or
cause to be voted or consented), in person or by proxy, all Shares, and any
other voting securities of the Company (whether acquired heretofore or
hereafter), that are beneficially owned by such Stockholder or its wholly owned
Affiliates or as to which such Stockholder has, directly or indirectly, the
right to vote or direct the voting, in favor of the approval and adoption of the
Merger Agreement. Each Stockholder agrees, during the period commencing on the
date hereof and ending on the earlier of the Effective Time and the termination
of this Agreement, not to, and not to permit any of its wholly owned Affiliates
to, vote or execute any written consent in lieu of a stockholders meeting or
vote of the Company, if such consent or vote by the stockholders of the Company
would be inconsistent with or frustrate the purposes of the other agreements of
such Stockholder pursuant to this paragraph.
In furtherance and not in limitation of the foregoing, each
Stockholder hereby grants to, and appoints, Teleglobe and each of Xxxxxx Xxxxxx,
Xxxxxxxx Xxxxxx and
2
Xxxxx Xxxxxxxxxxx, in their respective capacities as officers of Teleglobe, and
any individual who shall hereafter succeed to any such officer of Teleglobe, and
any other designee of Teleglobe, each of them individually, its irrevocable
proxy and attorney-in-fact (with full power of substitution) to vote the Shares
as indicated in this Section 1. Each Stockholder intends this proxy to be
irrevocable and coupled with an interest and will take such further action and
execute such other instruments as may be necessary to effectuate the intent of
this proxy.
Each Stockholder hereby revokes any and all previous proxies
with respect to such Person's Shares or any other voting securities of the
Company that relate to the approval of the Merger Agreement.
Section 2. Securities Act Covenants and Representations. In
addition to, and not in lieu of, the other covenants and representations set
forth herein, each Stockholder hereby agrees and represents to Teleglobe that
such Stockholder understands that, to the extent such Stockholder is an
"affiliate" (as such term is defined in Rule 405 under the Securities Act) of
the Company at the time the Consent is executed or the Merger Agreement is
submitted for a vote of the stockholders of the Company, any public offering,
sale or other disposition by such Stockholder or any of its wholly owned
Affiliates of any Teleglobe Common Shares received by such Person in the Merger
(collectively, the "Restricted Sales") will, under current law, require any of
(i) the further registration under the Securities Act of any Teleglobe Common
Shares to be sold by such Person, (ii) compliance with applicable provisions of
Rule 145 promulgated by the SEC under the Securities Act or (iii) the
availability of another exemption from such registration under the Securities
Act. Each Stockholder agrees not to, and not to cause or permit any of its
wholly owned Affiliates to, make any Restricted Sale unless the conditions of
clause (i), (ii) or (iii) are met.
Section 3. Pooling Covenants and Representations. In addition
to, and not in lieu of, the other covenants and representations set forth
herein, each Stockholder that is an "affiliate" of the Company hereby agrees and
represents to Teleglobe that from and after the date hereof, such Stockholder
will not, and will not permit any of its wholly owned Affiliates to, sell,
pledge, transfer or otherwise dispose of, or hedge or otherwise reduce its risk
with respect to, any Shares (whether owned as of the date hereof or hereafter
3
acquired) or any Teleglobe Common Shares received by such Stockholder in the
Merger or other shares of capital stock of Teleglobe, from the 30th day prior to
the Effective Time to such time as results covering at least 30 days of combined
operations of the Company and Teleglobe have been published by Teleglobe in the
form of a quarterly earnings report, an effective registration statement filed
with the SEC, a report to the SEC on Form 6-K or any other public filing or
announcement which includes the combined results of operations of Teleglobe and
Excel, except for transfers or other dispositions that, in the reasonable
opinion of Excel's or Teleglobe's independent accountants, will not prevent
Teleglobe from accounting for the Merger as a pooling of interests, taking into
account the actions of other wholly owned Affiliates of the Company, Teleglobe
or the Stockholders.
Section 4. Further Assurances. Each party shall execute and
deliver such additional instruments and other documents and shall take such
further actions as may be necessary or appropriate to effectuate, carry out and
comply with all of its obligations under this Agreement. Without limiting the
generality of the foregoing, none of the parties hereto shall enter into any
agreement or arrangement (or alter, amend or terminate any existing agreement or
arrangement) if such action would materially impair the ability of such party to
effectuate, carry out or comply with all of the terms of this Agreement.
Section 5. Representations and Warranties of Teleglobe.
Teleglobe represents and warrants to each Stockholder as follows:
(a) This Agreement has been approved by the Board of Directors
of Teleglobe, representing all necessary corporate action on the part of
Teleglobe for the execution and performance hereof and thereof by Teleglobe (no
action by the stockholders of Teleglobe being required).
(b) This Agreement has been duly executed and delivered by a
duly authorized officer of Teleglobe.
(c) This Agreement constitute a valid and binding agreement of
Teleglobe, enforceable against Teleglobe in accordance with their terms, except
as such enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws relating to or affecting
creditors generally by general
4
equity principles (regardless of whether enforceability is considered in a
proceeding in equity or at law) or by an implied covenant of good faith and fair
dealing.
(d) The execution and delivery of this Agreement by Teleglobe
does not violate or breach, and will not give rise to any violation or breach,
of Teleglobe's charter or bylaws, or, except as will not materially impair its
ability to effectuate, carry out or comply with all of the terms of this
Agreement, any Law, Governmental Entity approval or Contract by which Teleglobe
or its Subsidiaries or their respective assets or properties may be bound.
Section 6. Representations and Warranties of the Stockholders.
Each Stockholder, as to such Stockholder only, represents and warrants to
Teleglobe as follows:
(a) Schedule I sets forth, opposite such Stockholder's name,
the number and type of Shares of which such Stockholder is the record or
beneficial owner. Such Stockholder is the lawful owner of such Shares, free and
clear of all liens, charges, options, rights, encumbrances, stockholders
agreements, voting agreements, agreements to transfer or otherwise dispose of
such Shares and commitments of every kind, other than this Agreement and as
disclosed in Schedule I and has the sole power to vote (or cause to be voted)
the Shares as set forth in this Agreement and the Consent. Except as set forth
on such Schedule I, neither such Stockholder nor any of its Affiliates owns or
holds any rights to acquire any additional shares of Company Common Stock or
other securities of the Company or any interest therein or any voting rights
with respect to any additional shares of Company Common Stock or any other
securities of the Company.
(b) This Agreement and the Consent each have been duly
executed and delivered by a duly authorized officer of such Stockholder or, if
the Stockholder is a natural person, the Stockholder has the legal capacity to
execute this Agreement.
(c) This Agreement and the Consent constitute the valid and
binding agreements of such Stockholder, enforceable against such Stockholder in
accordance with their terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors generally by general equity
principles (regardless of whether
5
enforceability is considered in a proceeding in equity or at law) or by an
implied covenant of good faith and fair dealing.
(d) The execution and delivery of this Agreement and the
Consent by such Stockholder does not violate or breach, and will not give rise
to any violation or breach, of such Stockholder's charter, by-laws, trust
instrument or partnership agreement, to the extent applicable or, except as will
not materially impair the ability of such Stockholder to effectuate, carry out
or comply with all of the terms of this Agreement, any Law, third party consent,
Governmental Entity approval or Contract by which such Stockholder or its assets
or properties may be bound.
Section 7. Effectiveness and Termination. In the event the Merger
Agreement is terminated in accordance with its terms, this Agreement shall
automatically terminate and be of no further force or effect. Upon such
termination, except for any rights any party may have in respect of any breach
by any other party of its obligations hereunder, none of the parties hereto
shall have any further obligation or liability hereunder; provided however (A)
that any amendment by the parties to the Merger Agreement to (x) the Exchange
Ratio or the Merger Consideration (each as defined in Section 1.8(a) of the
Merger Agreement), (y) Article VI of the Merger Agreement entitled "Conditions
Precedent" or (z) Article VII of the Merger Agreement entitled "Termination and
Amendment" or (B) the waiver on or prior to the Closing Date by Teleglobe and/or
Excel of any material Condition Precedent set forth in Article VI of the Merger
Agreement, shall require the written consent of the Shareholders, failing which
this Agreement may be terminated in writing by any Shareholder who has not
consented to such amendment or such waiver. In any event, if the Effective Time
shall not have occurred on or before December 31, 1999, this Agreement may be
terminated in writing by any Shareholder and it shall be of no further force or
effect as to such Shareholder.
Section 8. Miscellaneous.
(a) Notices. All notices, requests and other communications
hereunder shall be in writing and shall be deemed duly given (a) on the date of
delivery if delivered personally, or by telecopy or facsimile, upon confirmation
of receipt, (b) on the first Business Day following the date of dispatch if
delivered by a recognized next-day courier service or (c) on the third Business
Day following the date
6
of mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid. All notices hereunder shall be delivered as set
forth below, or pursuant to such other instructions as may be designated in
writing by the party to receive such notice:
(i) if to Teleglobe, to
Teleglobe Inc.
0000, xxx xx Xx Xxxxxxxxxxx xxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Attention: Vice President, Legal Affairs and
Corporate Secretary
Facsimile: 000-000-0000
with a copy to
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx III, Esq.
Facsimile: 000-000-0000
(ii) if to any Stockholder, to
Excel Communications, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Executive Vice President,
Secretary and General Counsel
Facsimile: 000-000-0000
with a copy to
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
Facsimile: 000-000-0000
(b) Interpretation. When a reference is made in this Agreement
to Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or "including" are used
7
in this Agreement, they shall be deemed to be followed by the
words "without limitation".
(c) Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
both parties need not sign the same counterpart.
(d) Entire Agreement; No Third Party Beneficiaries. This
Agreement constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
(e) Waiver of Jury Trial. Each party hereto waives, to the
fullest extent permitted by applicable law, any right it may have to a trial by
jury in respect of any litigation directly or indirectly arising out of, under
or in connection with this Agreement.
(f) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws of such state.
(g) Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
(h) Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by
8
operation of law or otherwise), without the prior written consent of the other
party and the written undertaking of the assignee to be bound by the terms of
this Agreement, and any attempt to make any such assignment without such consent
shall be null and void. Subject to the preceding sentence, this Agreement will
be binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and permitted assigns.
(i) Submission to Jurisdiction; Waivers. Each of Teleglobe and
each Stockholder irrevocably agrees that any legal action or proceeding with
respect to this Agreement or for recognition and enforcement of any judgment in
respect hereof brought by the other party hereto or its successors or assigns
may be brought and determined in the Chancery or other Courts of the State of
Delaware, and each of Teleglobe and each Stockholder hereby irrevocably submits
with regard to any such action or proceeding for itself and in respect to its
property, generally and unconditionally, to the exclusive jurisdiction of the
aforesaid courts. Each of Teleglobe and each Stockholder hereby irrevocably
waives, and agrees not to assert, by way of motion, as a defense, counterclaim
or otherwise, in any action or proceeding with respect to this Agreement, (a)
any claim that it is not personally subject to the jurisdiction of the
above-named courts for any reason other than the failure to serve process in
accordance with this Section 8(i), (b) that it or its property is exempt or
immune from jurisdiction of any such court or from any legal process commenced
in such courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise),
and (c) to the fullest extent permitted by applicable law, that (i) the suit,
action or proceeding in any such court is brought in an inconvenient forum, (ii)
the venue of such suit, action or proceeding is improper or (iii) this
Agreement, or the subject matter hereof, may not be enforced in or by such
courts.
(j) Specific Performance. Each party acknowledges that if it
fails to perform any of its obligations under this Agreement, immediate and
irreparable harm or injury would be caused to the other party for which money
damages would not be an adequate remedy. In such event, each party agrees that
the other party shall have the right, in addition to any other rights it may
have, to specific performance of this Agreement. Accordingly, if either party
should institute an action or proceeding seeking specific enforcement of the
provisions hereof, the other party in respect of such claim hereby waives the
claim or defense that the other party has an adequate remedy at law and hereby
agrees not to assert in any such action or proceeding the claim or defense that
such a remedy at law exists. Each party further agrees to waive
9
any requirements for the securing or posting of any bond in connection with
obtaining any such equitable relief.
(k) Expenses. Each of Teleglobe and each Stockholder shall
bear its own expenses incurred in connection with this Agreement and the
transactions contemplated hereby.
(l) Action in Stockholder Capacity Only. No Stockholder makes
any agreement or understanding herein as a director or officer of the Company or
in any capacity other than as a stockholder of the Company. Each Stockholder
signs solely in its capacity as a record holder and beneficial owner of Shares
and nothing herein shall limit or affect any actions taken by a representative
of such Stockholder in such representative's capacity as an officer or director
of the Company.
(m) Obligations Several. The obligations of each Stockholder
under this Agreement shall be several and not joint. No Stockholder shall have
any liability, duty or obligation arising out of or resulting from any failure
by any other Stockholder (or any Affiliate thereof) to comply with the terms and
conditions of this Agreement.
10
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
TELEGLOBE INC.
By: /s/ Xxxxxxx Xxxxxx
------------------------------
Name: Xxxxxxx Xxxxxx
Title: Chairman and Chief
Executive Officer
XXXXXX PARTNERS, LTD.
By: The Xxxxxx Family Trust, its
general partner
By: /s/ Xxxxx X. Xxxxxx
--------------------
Name: Xxxxx X. Xxxxxx
Title: Trustee
THE XXXXXX FAMILY TRUST
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Name: Xxxxx X. Xxxxxx
Title: Trustee
AUSTEX ENTERPRISES, LTD.
By: Starah Corporation, its
general partner
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: President
11
NYFS05...:\41\44241\0005\2097\EXH6188R.190
EXHIBIT A
STOCKHOLDER CONSENT
Action Taken by the Written
Consent of Stockholders
of
Excel
June 14, 1998
The undersigned stockholders of Excel, a Delaware corporation,
acting by written consent in lieu of a meeting pursuant to Section 228 of the
General Corporation Law of the State of Delaware, hereby irrevocably consent to
the adoption of and adopt the following resolution with respect to the shares of
the common stock, par value $.001 per share, of Excel owned of record by such
stockholders on the date hereof:
RESOLVED, that the Merger Agreement, dated as of June 14, 1998
(the "Merger Agreement"), among Teleglobe, a corporation amalgamated under the
Canada Business Corporations Act, North Sub, a direct and wholly-owned
subsidiary of Teleglobe, and Excel, a Delaware corporation, a copy of which has
been furnished to the undersigned stockholders, be, and it hereby is, adopted
and approved by the undersigned stockholders.
The action of the stockholders of Excel approved pursuant
hereto shall become effective when one or more consents have been (a) signed by
stockholders holding shares having a majority of the outstanding shares of Excel
Common Stock, being not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted and (b) delivered to Excel at
its principal place of business.
(Print Name)
By:
Name:
Title:
Number of Shares:
Address of the stockholder:
Date of Execution:
12
Schedule I
Share Ownership
Name and Address Number of Shares
of Shareholder Beneficially Owned
---------------- ------------------
Xxxxxx Partners, Ltd. 53,000,000
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Xxxxxx Family Trust 10,680,000
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Austex Enterprises, Ltd. 7,367,933
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
13
Schedule II
Liens on Shares
[Austex has liens on portions of shares.]
14
EXHIBIT B
TELEGLOBE CONSENT AND VOTING AGREEMENT
RE: FUNDS NO. 650 AND 724
TELEGLOBE CONSENT AND VOTING AGREEMENT, dated as of June 14, 1998 (this
"Agreement"), by and among Excel Communications, Inc., a Delaware corporation
("Excel"), and Funds No. 650 and 724 by its manager, Mackenzie Financial
Corporation, (the "Shareholder").
WHEREAS, concurrently herewith, Excel, Teleglobe Inc., a corporation
governed by the Canada Business Corporations Act (the "Corporation"), and North
Merger Sub Corporation, a Delaware corporation and a wholly-owned subsidiary of
the Corporation ("Merger Sub"), are entering into an Agreement and Plan of
Merger (the "Merger Agreement"; capitalized terms used without definition herein
having the meanings ascribed thereto in the Merger Agreement);
WHEREAS, the Shareholder is the beneficial owner of the number of
common shares of the capital stock of the Corporation ("Shares") set forth in
Schedule I hereto;
WHEREAS, the Share Issuance has to be approved by the Corporation's
shareholders prior to the consummation of the Merger to satisfy the listing
requirements of the Exchanges;
WHEREAS, the Teleglobe By-Law Amendment has to be approved by the
Corporation's shareholders prior to the consummation of the Merger under
Canadian law;
WHEREAS, Teleglobe will in due course convene its shareholders to
approve the Teleglobe Articles Amendment;
WHEREAS, the Board of Directors of the Corporation has, prior to the
execution of this Agreement, duly and validly approved and adopted the Merger
Agreement and the transactions contemplated thereby and approved this Agreement
and the Teleglobe Articles of Amendment and the Teleglobe By-Law Amendment (and
has recommended approval of the same to the Shareholders), and such approvals
and adoption have not been withdrawn;
WHEREAS, the Shareholder is executing this Agreement (i) as an
inducement to Excel to enter into and execute the Merger Agreement; and (ii) as
an inducement to certain holders of shares of Excel Common Stock (the "Excel
Stockholders") to enter into and execute the Excel Consent and Voting Agreement;
- 2 -
WHEREAS, approval and adoption of the Merger Agreement by Excel's
stockholders is also a condition to the consummation of the Merger; and
WHEREAS, the Excel Stockholders are concurrently executing the Excel
Consent and Voting Agreement as an inducement to The Corporation to enter into
and execute the Merger Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
Section 1. Consent and Agreement to Vote. In order to provide the
Exchanges with evidence that holders of more than 50% of the voting shares of
The Corporation are in favour of the Merger, the Shareholder hereby agrees that
immediately upon the execution and delivery of this Agreement and the Merger
Agreement, it shall execute and deliver or cause to be executed and delivered by
the record owner thereof, a Shareholder's Consent in the form of Schedule II
hereto, which shall be irrevocable, with respect to all Shares that are owned
beneficially or of record by the Shareholder or as to which the Shareholder has,
directly or indirectly, the right to vote or direct the voting, such Consent to
be executed in lieu of a formal approval of the shareholders at a meeting duly
held therefor.
The Shareholder also agrees that, during the term of this Agreement, it
shall, from time to time at the request of Excel, at any meeting (whether annual
or special and whether or not an adjourned or postponed meeting) of shareholders
of the Corporation however called, or in connection with any written consent of
the holders of Shares (if required by any of the Exchanges), for the purposes of
the approval of the Share Issuance, the Teleglobe By-Law Amendment and/or the
Teleglobe Articles Amendment or any action required in furtherance thereof or in
furtherance of the Merger, in either case, prior to the earlier of the Effective
Time and the termination of this Agreement, appear at the meeting or otherwise
cause the Shares to be counted as present thereat for purposes of establishing a
quorum, and shall vote or consent (or cause to be voted or consented), in person
or by proxy, all Shares, and any other voting securities of the Corporation
(whether acquired heretofore or hereafter), that are beneficially owned by such
Shareholder or its wholly-owned Affiliates or as to which such Shareholder has,
directly or indirectly, the right to vote or direct the voting, in favour of the
approval of the Share Issuance, the Teleglobe By-Law Amendment and/or the
Teleglobe Articles Amendment and any other action required in furtherance
thereof or in furtherance of the Merger Agreement, the Merger, each of the
actions contemplated by the Merger Agreement and any other action required in
furtherance thereof or hereof. The Shareholder agrees, during the period
commencing on the date hereof and ending on the earlier of the Effective Time
and the termination of this Agreement, not to, and not to permit any of its
- 3 -
wholly-owned Affiliates to, vote or execute any written consent in lieu of a
shareholders meeting or vote of the Corporation, if such consent or vote by the
shareholders of the Corporation would be inconsistent with or frustrate the
purposes of the other agreements of such Shareholder pursuant to this paragraph.
In furtherance of the agreements in the foregoing paragraphs, the
Shareholder hereby agrees to, and to cause its respective wholly-owned
Affiliates to, cooperate with Excel and the Corporation in connection with the
Merger Agreement and the consummation of the transactions contemplated thereby.
Excel agrees to cooperate with the Shareholder in connection with any filings
required to be made by such Shareholder pursuant to the HSR Act and the
Competition Act (Canada) in connection with the Merger Agreement and
consummation of the transactions contemplated thereby, including in connection
with any filing with Governmental Entities or otherwise in connection with
Section 5.4 of the Merger Agreement.
Section 2. Further Assurances. Each party shall execute and deliver
such additional instruments and other documents and shall take such further
actions as may be necessary or appropriate to effectuate, carry out and comply
with all of its obligations under this Agreement, including making such
modifications as the Exchanges acting reasonably may require as to the form of
the Consent (none of which shall affect the validity or enforceability of the
Consent). Without limiting the generality of the foregoing, none of the parties
hereto shall enter into any agreement or arrangement (or alter, amend or
terminate any existing agreement or arrangement) if such action would materially
impair the ability of such party to effectuate, carry out or comply with all of
the terms of this Agreement.
Section 3. Representations and Warranties of Excel. Excel represents
and warrants to the Shareholder as follows:
(a) This Agreement has been approved by the Board of Directors of
Excel, representing all necessary corporate action on the part of Excel for the
execution and performance hereof and thereof by Excel (no action by the
stockholders of Excel being required).
(b) This Agreement has been duly executed and delivered by a duly
authorized officer of Excel.
(c) This Agreement constitutes a valid and binding agreement of Excel,
enforceable against Excel in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws
- 4 -
relating to or affecting creditors generally by general equity principles
(regardless of whether enforceability is considered in a proceeding in equity or
at law) or by an implied covenant of good faith and fair dealing.
(d) The execution and delivery of this Agreement by Excel does not
violate or breach, and will not give rise to any violation or breach, of Excel's
charter or by-laws or, except as will not materially impair its ability to
effectuate, carry out or comply with all of the terms of this Agreement, any
Law, Governmental Entity approval or Contract by which Excel or its Subsidiaries
or their respective assets or properties may be bound.
Section 4. Representations and Warranties of the Shareholder. The
Shareholder represents and warrants to Excel as follows:
(a) Schedule I sets forth the number of Shares of which the Shareholder
is the record or beneficial owner. Such Shareholder is the lawful owner of such
Shares, free and clear of all liens, charges, encumbrances, shareholders
agreements, voting agreements, agreements to transfer such Shares and, to the
actual knowledge of the Shareholder, commitments of every other kind, to which
the Shareholder is a party, other than this Agreement and as disclosed in
Schedule I and has the sole power to vote (or cause to be voted) the Shares as
set forth in this Agreement and the Consent. Except as set forth on such
Schedule I, neither the Shareholder nor any of its Affiliates owns or holds any
rights to acquire any additional common shares or other securities of the
capital stock of the Corporation or any interest therein or any voting rights
with respect to any additional common shares or any other securities of the
capital stock of the Corporation.
(b) This Agreement and the Consent have been duly executed and
delivered by a duly authorized officer of such Shareholder.
(c) This Agreement and the Consent constitute valid and binding
agreements of the Shareholder, enforceable against such Shareholder in
accordance with their terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors generally by general equity
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law) or by an implied covenant of good faith and fair dealing.
(d) The execution and delivery of this Agreement and the Consent by the
Shareholder do not violate or breach, and will not give rise to any violation or
breach, of such Shareholder's charter, by-laws, trust instrument or partnership
agreement, to the extent applicable or, except as will not materially impair (x)
the ability of such Shareholder to
- 5 -
effectuate, carry out or comply with all of the terms of this Agreement or (y)
its business activities, any Law, third party consent, Governmental Entity
approval or Contract by which such Shareholder or its properties or assets may
be bound.
Section 5. Effectiveness and Termination. In the event the Merger
Agreement is terminated in accordance with its terms, this Agreement shall
automatically terminate and be of no further force or effect. Upon such
termination, except for any rights any party may have in respect of any breach
by any other party of its obligations hereunder, none of the parties hereto
shall have any further obligation or liability hereunder; provided however (A)
that any amendment by the parties to the Merger Agreement to (x) the Exchange
Ratio or the Merger Consideration (each as defined in Section 1.8(a) of the
Merger Agreement), (y) Article VI of the Merger Agreement entitled "Conditions
Precedent" or (z) Article VII of the Merger Agreement entitled "Termination and
Amendment" or (B) the waiver on or prior to the Closing Date by The Corporation
of any material condition precedent set forth in Article VI of the Merger
Agreement, shall require the written consent of the Shareholder, failing which
this Agreement may be terminated in writing by the Shareholder. In any event,
this Agreement may be terminated in writing by the Shareholder and it shall be
of no further force or effect if the Effective Time shall not have occurred on
or before December 31, 1999.
Section 6. Miscellaneous.
(a) Notices. All notices, requests and other communications hereunder
shall be in writing and shall be deemed duly given (a) on the date of delivery
if delivered personally, or by telecopy or facsimile, upon confirmation of
receipt, (b) on the first Business Day following the date of dispatch if
delivered by a recognized next-day courier service or (c) on the third Business
Day following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
(i) If to Excel, to:
EXCEL COMMUNICATIONS, INC.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: X. Xxxxxxxxxxx Dance
Facsimile: 000-000-0000
- 6 -
with a copy to:
WEIL, GOTSHAL & XXXXXX LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-00000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
Facsimile: 000-000-0000
(ii) If to the Shareholder, to
MACKENZIE FINANCIAL CORPORATION
000 Xxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx Xxxxx
Facsimile: 000-000-0000
(b) Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation".
(c) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that both
parties need not sign the same counterpart.
(d) Entire Agreement; No Third Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
(e) Governing Law. This Agreement shall be governed and construed in
accordance with the laws in force in the Province of Ontario, Canada.
(f) Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
(g) Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto, in
whole or in part (whether by operation of law or otherwise), without the prior
written consent of the other party and the written undertaking of the assignee
to be bound by the terms of this Agreement, and any attempt to make any such
assignment without such consent shall be null and void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and permitted
assigns.
(h) Submission to Jurisdiction; Waivers. Each of Excel and the
Shareholder irrevocably agrees that any legal action or proceeding with respect
to this Agreement or for recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns may be
brought and determined in any court of competent jurisdiction of the Province of
Ontario and each of Excel and the Shareholder hereby irrevocably submits with
regard to any such action or proceeding for itself and in respect to its
property, generally and unconditionally, to the exclusive jurisdiction of the
aforesaid courts. Each of Excel and the Shareholder hereby irrevocably waives,
and agrees not to assert, by way of motion, as a defence, counterclaim or
otherwise, in any action or proceeding with respect to this Agreement, (a) any
claim that it is not personally subject to the jurisdiction of the above-named
courts for any reason other than the failure to serve proceedings in accordance
with this Section 7(h), (b) that it or its property is exempt or immune from
jurisdiction of any such court or from any legal proceedings commenced in such
courts, and (c) to the fullest extent permitted by applicable law, that (i) the
suit, action or proceeding in any such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper or (iii)
this Agreement, or the subject matter hereof, may not be enforced in or by such
courts.
(i) Specific Performance. Each party acknowledges that if it fails to
perform any of its obligations under this Agreement, except if such
non-performance by the Shareholder is due to fiduciary duties owed to its
unitholders, immediate and irreparable harm or injury
- 8 -
would be caused to the other party for which money damages would not be an
adequate remedy. In such event, each party agrees that the other party shall
have the right, in addition to any other rights it may have, to specific
performance of this Agreement. Accordingly, if any party should institute an
action or proceeding, seeking specific enforcement of the provisions hereof,
each party in respect of such claim hereby waives the claim or defence that the
other party has an adequate remedy at law and hereby agrees not to assert in any
such action or proceeding the claim or defence that such a remedy at law exists.
Each party further agrees to waive any requirements for the securing or posting
of any bond in connection with obtaining any such equitable relief.
- 9 -
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
EXCEL COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President and Chief
Executive Officer
FUND NO. 650 AND 724
BY ITS MANAGER, MACKENZIE FINANCIAL
CORPORATION
By: /s/ Xxxx XxXxxx
------------------------------------
Name: Xxxx XxXxxx
Title: Officer, Bluewater Investment
Management Inc., proxy holder
for Mackenzie Financial
Corporation
SCHEDULE I
SHARE OWNERSHIP
Number of Shares Rights to Acquire
Beneficially Owned Liens Additional Shares
------------------ ----- -----------------
2,481,400(1) None None
-------------------------
1. Before giving effect to the Teleglobe Stock Dividend.
SCHEDULE II
SHAREHOLDER CONSENT
June 14, 1998
The undersigned shareholder of Teleglobe Inc. ("Teleglobe") hereby
irrevocably consents to the adoption of and adopt the following resolutions with
respect to the common shares of the capital stock of Teleglobe owned
beneficially by the undersigned on the date hereof as listed below.
RESOLVED, that the Share Issuance, as defined in the Merger Agreement,
dated as of June 14, 1998, among Teleglobe, North Merger Sub Corporation, a
wholly-owned subsidiary of Teleglobe, and Excel Communications, Inc., a Delaware
corporation, a copy of which has been furnished to the undersigned shareholder,
be, and it hereby is, approved by the undersigned shareholder.
FUNDS NO 650 AND 724 by its manager,
Mackenzie Financial Corporation
(Print Name)
By: -----------------------------
Name: Xxxx XxXxxx
Title: Officer, Bluewater
Investment Management Inc.,
proxy holder for Mackenzie
Financial Corporation
Number of Shares: 2,481,400 Common
Shares 1
Address of the shareholder:
000 Xxxx Xxxxxx Xxxx
Xxxxx 0000, Xxx 00
Xxxxxxx, Xxxxxxx
X0X 0X0
Date of Execution: June 14, 1998
--------
1 Before giving effect to the Teleglobe Stock Dividend.
NYFS05...:\41\44241\0005\2097\EXH6188Y.260
TELEGLOBE CONSENT AND VOTING AGREEMENT
RE: TELESYSTEM TELECOM LTD.
TELEGLOBE CONSENT AND VOTING AGREEMENT, dated as of June 14, 1998 (this
"Agreement"), by and among Excel Communications, Inc., a Delaware corporation
("Excel"), and Telesystem Telecom Ltd. (the "Shareholder").
WHEREAS, concurrently herewith, Excel, Teleglobe Inc., a corporation
governed by the Canada Business Corporations Act (the "Corporation"), and North
Merger Sub Corporation, a Delaware corporation and a wholly-owned subsidiary of
the Corporation ("Merger Sub"), are entering into an Agreement and Plan of
Merger (the "Merger Agreement"; capitalized terms used without definition herein
having the meanings ascribed
thereto in the Merger Agreement);
WHEREAS, the Shareholder is the beneficial owner of the number of
common shares of the capital stock of the Corporation ("Shares") set forth in
Schedule I hereto;
WHEREAS, the Share Issuance has to be approved by the Corporation's
shareholders prior to the consummation of the Merger to satisfy the listing
requirements of the Exchanges;
WHEREAS, the Teleglobe By-Law Amendment has to be approved by the
Corporation's shareholders prior to the consummation of the Merger under
Canadian law;
WHEREAS, Teleglobe will in due course convene its shareholders to
approve the Teleglobe Articles Amendment;
WHEREAS, the Board of Directors of the Corporation has, prior to the
execution of this Agreement, duly and validly approved and adopted the Merger
Agreement and the transactions contemplated thereby and approved this Agreement
and the Teleglobe Articles of Amendment and the Teleglobe By-Law Amendment (and
has recommended approval of the same to the Shareholders), and such approvals
and adoption have not been withdrawn;
WHEREAS, the Shareholder is executing this Agreement (i) as an
inducement to Excel to enter into and execute the Merger Agreement; and (ii) as
an inducement to certain holders of shares of Excel Common Stock (the "Excel
Stockholders") to enter into and execute the Excel Consent and Voting Agreement;
WHEREAS, approval and adoption of the Merger Agreement by Excel's
stockholders is also a condition to the consummation of the Merger; and
- 2 -
WHEREAS, the Excel Stockholders are concurrently executing the Excel
Consent and Voting Agreement as an inducement to the Corporation to enter into
and execute the Merger Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
Section 1. Consent and Agreement to Vote. In order to provide the
Exchanges with evidence that holders of more than 50% of the voting shares of
the Corporation are in favour of the Merger, the Shareholder hereby agrees that
immediately upon the execution and delivery of this Agreement and the Merger
Agreement, it shall execute and deliver or cause to be executed and delivered by
the record owner thereof, a Shareholder's Consent in the form of Schedule II
hereto, which shall be irrevocable, with respect to all Shares that are owned
beneficially or of record by the Shareholder or as to which the Shareholder has,
directly or indirectly, the right to vote or direct the voting, such Consent to
be executed in lieu of a formal approval of the shareholders at a meeting duly
held therefor.
The Shareholder also agrees that, during the term of this Agreement, it
shall, from time to time at the request of Excel, at any meeting (whether annual
or special and whether or not an adjourned or postponed meeting) of shareholders
of the Corporation however called, or in connection with any written consent of
the holders of Shares (if required by any of the Exchanges), for the purposes of
the approval of the Share Issuance, the Teleglobe By-Law Amendment and/or the
Teleglobe Articles Amendment or any action required in furtherance thereof or in
furtherance of the Merger, in either case, prior to the earlier of the Effective
Time and the termination of this Agreement, appear at the meeting or otherwise
cause the Shares to be counted as present thereat for purposes of establishing a
quorum, and shall vote or consent (or cause to be voted or consented), in person
or by proxy, all Shares, and any other voting securities of the Corporation
(whether acquired heretofore or hereafter), that are beneficially owned by such
Shareholder or its wholly-owned Affiliates or as to which such Shareholder has,
directly or indirectly, the right to vote or direct the voting, in favour of the
approval of the Share Issuance, the Teleglobe By-Law Amendment and/or the
Teleglobe Articles Amendment and any other action required in furtherance
thereof or in furtherance of the Merger Agreement, the Merger, each of the
actions contemplated by the Merger Agreement and any other action required in
furtherance thereof or hereof. The Shareholder agrees, during the period
commencing on the date hereof and ending on the earlier of the Effective Time
and the termination of this Agreement, not to, and not to permit any of its
wholly-owned Affiliates to, vote or execute any written consent in lieu of a
shareholders meeting or vote of the Corporation, if such consent or vote by the
shareholders of the Corporation would be inconsistent with or frustrate the
purposes of the other agreements of such Shareholder pursuant to this paragraph.
In furtherance and not in limitation of the foregoing, the Shareholder
hereby grants to, and appoints, Excel and each of Xxxxx X. Xxxxxx, Xxxxxxxx X.
Xxxxxxx and X. Xxxxxxxxxxx Dance, in their respective capacities as officers of
Excel, and any individual who shall hereafter succeed to any such officer of
Excel, and any other designee of Excel, each of them
- 3 -
individually, its irrevocable proxy and attorney-in-fact (with full power of
substitution) to vote the Shares, if applicable, as indicated in this Section 1.
The Shareholder intends this proxy to be irrevocable and coupled with an
interest and will take such further action and execute such other instruments as
may be necessary to effectuate the intent of this proxy.
(a) In furtherance of the agreements in the foregoing paragraphs, the
Shareholder hereby agrees to, and to cause its respective wholly-owned
Affiliates to, cooperate with Excel and the Corporation in connection with the
Merger Agreement and the consummation of the transactions contemplated thereby.
Excel agrees to cooperate with the Shareholder in connection with any filings
required to be made by such Shareholder pursuant to the HSR Act and the
Competition Act (Canada) in connection with the Merger Agreement and
consummation of the transactions contemplated thereby, including in connection
with any filing with Governmental Entities or otherwise in connection with
Section 5.4 of the Merger Agreement.
(b) The Shareholder hereby revokes any and all previous proxies with
respect to its Shares or any other voting securities of the Corporation that
relate to the approval of the Share Issuance, the Teleglobe By-Law Amendment
and/or the Teleglobe Articles Amendment or any other action required in
furtherance thereof or in furtherance of the transactions contemplated hereby or
by the Merger Agreement.
Section 2. Pooling Covenants and Representations. In addition to, and
not in lieu of, the other covenants and representations set forth herein, the
Shareholder that is an "affiliate" (as such term is defined in Rule 405 under
the Securities Act) of the Corporation hereby agrees and represents to Excel
that from and after the date hereof, such Shareholder will not, and will not
permit any of its Affiliates to, sell, pledge Shares as collateral for a
non-recourse loan (or for any recourse loan the effect of which would cause the
loss of pooling of interests accounting treatment for the Merger), transfer, or
otherwise dispose of, or hedge or otherwise reduce its risk with respect to, any
Shares (whether owned as of the date hereof or thereafter acquired) or other
shares of the capital stock of the Corporation, from the 30th day prior to the
Effective Time to such time as results covering at least 30 days of combined
operations of the Corporation and Excel have been published by the Corporation
in the form of a quarterly earnings report, an effective registration statement
filed with the SEC, a report to the SEC on Form 6-K or any other public filing
or announcement which includes the combined results of operations, except for
transfers or other dispositions that, in that reasonable opinion of Excel's or
the Corporation's independent accountants, will not prevent the Corporation from
accounting for the Merger as a pooling of interests, taking into account the
actions of other Affiliates of the Corporation, Excel or the Shareholder.
Section 3. Further Assurances. Each party shall execute and deliver
such additional instruments and other documents and shall take such further
actions as may be necessary or appropriate to effectuate, carry out and comply
with all of its obligations under this Agreement, including making such
modifications as the Exchanges may require as to the form of the Consent (none
of which shall affect the validity or enforceability of the Consent). Without
limiting the generality of the foregoing, none of the parties hereto shall enter
into any
- 4 -
agreement or arrangement (or alter, amend or terminate any existing agreement or
arrangement) if such action would materially impair the ability of such party to
effectuate, carry out or comply with all of the terms of this Agreement.
Section 4. Representations and Warranties of Excel. Excel represents
and warrants to the Shareholder as follows:
(a) This Agreement has been approved by the Board of Directors of
Excel, representing all necessary corporate action on the part of Excel for the
execution and performance hereof and thereof by Excel (no action by the
stockholders of Excel being required).
(b) This Agreement has been duly executed and delivered by a duly
authorized officer of Excel.
(c) This Agreement constitutes a valid and binding agreement of Excel,
enforceable against Excel in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or affecting creditors
generally by general equity principles (regardless of whether enforceability is
considered in a proceeding in equity or at law) or by an implied covenant of
good faith and fair dealing.
(d) The execution and delivery of this Agreement by Excel does not
violate or breach, and will not give rise to any violation or breach, of Excel's
charter or by-laws or, except as will not materially impair its ability to
effectuate, carry out or comply with all of the terms of this Agreement, any
Law, Governmental Entity approval or Contract by which Excel or its Subsidiaries
or their respective assets or properties may be bound.
Section 5. Representations and Warranties of the Shareholder. The
Shareholder represents and warrants to Excel as follows:
(a) Schedule I sets forth the number of Shares of which the Shareholder
is the record or beneficial owner. Such Shareholder is the lawful owner of such
Shares, free and clear of all liens, charges, encumbrances, shareholders
agreements, voting agreements, agreements to transfer such Shares and
commitments of every kind to which the Shareholder is a party, other than this
Agreement and as disclosed in Schedule I and has the sole power to vote (or
cause to be voted) the Shares as set forth in this Agreement and the Consent.
Except as set forth on such Schedule I, neither the Shareholder nor any of its
Affiliates owns or holds any rights to acquire any additional common shares or
other securities of the capital stock of the Corporation or any interest therein
or any voting rights with respect to any additional common shares or any other
securities of the capital stock of the Corporation.
(b) This Agreement and the Consent have been duly executed and
delivered by a duly authorized officer of such Shareholder.
- 5 -
(c) This Agreement and the Consent constitute valid and binding
agreements of the Shareholder, enforceable against such Shareholder in
accordance with their terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors generally by general equity
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law) or by an implied covenant of good faith and fair dealing.
(d) The execution and delivery of this Agreement and the Consent by the
Shareholder do not violate or breach, and will not give rise to any violation or
breach, of such Shareholder's charter, by-laws, trust instrument or partnership
agreement, to the extent applicable or, except as will not materially impair (x)
the ability of such Shareholder to effectuate, carry out or comply with all of
the terms of this Agreement or (y) its business activities, any Law, third party
consent, Governmental Entity approval or Contract by which such Shareholder or
its properties or assets may be bound.
Section 6. Effectiveness and Termination. In the event the Merger
Agreement is terminated in accordance with its terms, this Agreement shall
automatically terminate and be of no further force or effect. Upon such
termination, except for any rights any party may have in respect of any breach
by any other party of its obligations hereunder, none of the parties hereto
shall have any further obligation or liability hereunder; provided however (A)
that any amendment by the parties to the Merger Agreement to (x) the Exchange
Ratio or the Merger Consideration (each as defined in Section 1.8(a) of the
Merger Agreement), (y) Article VI of the Merger Agreement entitled "Conditions
Precedent" or (z) Article VII of the Merger Agreement entitled "Termination and
Amendment" or (B) the waiver on or prior to the Closing Date by the Corporation
of any material condition precedent set forth in Article VI of the Merger
Agreement, shall require the written consent of the Shareholder, failing which
this Agreement may be terminated in writing by the Shareholder. In any event,
this Agreement may be terminated in writing by the Shareholder and it shall be
of no further force or effect if the Effective Time shall not have occurred on
or before December 31, 1999.
Section 7. Miscellaneous.
(a) Notices. All notices, requests and other communications hereunder
shall be in writing and shall be deemed duly given (a) on the date of delivery
if delivered personally, or by telecopy or facsimile, upon confirmation of
receipt, (b) on the first Business Day following the date of dispatch if
delivered by a recognized next-day courier service or (c) on the third Business
Day following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
- 6 -
(i) If to Excel, to:
EXCEL COMMUNICATIONS, INC.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: X. Xxxxxxxxxxx Dance
Facsimile: 000-000-0000
with a copy to:
WEIL, GOTSHAL & XXXXXX LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-00000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
Facsimile: 000-000-0000
(ii) If to the Shareholder, to
TELESYSTEM TELECOM LTD.
0000 xx Xx Xxxxxxxxxxx Xxxxxx West
25th Floor
Montreal, Quebec
H3B 4W5
Attention: Xxxx-Xxxx Xxxxxxx
Facsimile: 000-000-0000
(b) Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation".
(c) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that both
parties need not sign the same counterpart.
(d) Entire Agreement; No Third Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
- 7 -
(e) Governing Law. This Agreement shall be governed and construed in
accordance with the laws in force in the Province of Ontario, Canada.
(f) Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
(g) Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto, in
whole or in part (whether by operation of law or otherwise), without the prior
written consent of the other party and the written undertaking of the assignee
to be bound by the terms of this Agreement, and any attempt to make any such
assignment without such consent shall be null and void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and permitted
assigns.
(h) Submission to Jurisdiction; Waivers. Each of Excel and the
Shareholder irrevocably agrees that any legal action or proceeding with respect
to this Agreement or for recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns may be
brought and determined in any court of competent jurisdiction of the Province of
Ontario and each of Excel and the Shareholder hereby irrevocably submits with
regard to any such action or proceeding for itself and in respect to its
property, generally and unconditionally, to the exclusive jurisdiction of the
aforesaid courts. Each of Excel and the Shareholder hereby irrevocably waives,
and agrees not to assert, by way of motion, as a defence, counterclaim or
otherwise, in any action or proceeding with respect to this Agreement, (a) any
claim that it is not personally subject to the jurisdiction of the above-named
courts for any reason other than the failure to serve proceedings in accordance
with this Section 7(h), (b) that it or its property is exempt or immune from
jurisdiction of any such court or from any legal proceedings commenced in such
courts, and (c) to the fullest extent permitted by applicable law, that (i) the
suit, action or proceeding in any such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper or (iii)
this Agreement, or the subject matter hereof, may not be enforced in or by such
courts.
(i) Specific Performance. Each party acknowledges that if it fails to
perform any of its obligations under this Agreement, immediate and irreparable
harm or injury would be caused to the other party for which money damages would
not be an adequate remedy. In such event, each party agrees that the other party
shall have the right, in addition to any other rights it may have, to specific
performance of this Agreement. Accordingly, if any party should institute an
action or proceeding, seeking specific enforcement of the provisions hereof,
- 8 -
each party in respect of such claim hereby waives the claim or defence that the
other party has an adequate remedy at law and hereby agrees not to assert in any
such action or proceeding the claim or defence that such a remedy at law exists.
Each party further agrees to waive any requirements for the securing or posting
of any bond in connection with obtaining any such equitable relief.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
EXCEL COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------
Name: Xxxxx X. Xxxxxx
Title: President and Chief
Executive Officer
TELESYSTEM TELECOM LTD.
By: /s/ Xxxxxxx Xxxxxx
------------------------
Name: Xxxxxxx Xxxxxx
Title: President and
Chairman of the Board
SCHEDULE I
SHARE OWNERSHIP
NUMBER OF SHARES RIGHTS TO ACQUIRE
BENEFICIALLY OWNED LIENS(2) ADDITIONAL SHARES
------------------ -------- -----------------
11,314,983(1) 1,531,536 shares pledged with Montreal n/a
Trust (in connection with the issuance of
Exchangeable Debentures on November 18, 1992)
2,000,000 shares pledged with Montreal
Trust (in connection with the issuance of
Series 1 First Ranking Preferred Shares on
August 31, 1993)
1,500,000 shares pledged with
Royal Bank (in connection with a
credit agreement dated April 23, 1996)
1,500,000 shares pledged with
Scotia Bank (in connection with a
credit agreement dated April 23, 1996)
4,783,447 shares pledged with
Syndicate (in connection with a
credit agreement dated April 22, 1997)
1. 22,629,966 Common Shares after giving effect to the Teleglobe Stock
Dividend.
2. Before giving effect to the Teleglobe Stock Dividend.
SCHEDULE II
SHAREHOLDER CONSENT
June , 1998
The undersigned shareholder of Teleglobe Inc. ("Teleglobe") hereby
irrevocably consents to the adoption of and adopt the following resolutions with
respect to the common shares of the capital stock of Teleglobe owned
beneficially by the undersigned on the date hereof as listed below.
RESOLVED, that the Share Issuance, as defined in the Merger Agreement,
dated as of June 14, 1998, among Teleglobe, North Merger Sub Corporation, a
wholly-owned subsidiary of Teleglobe, and Excel Communications, Inc., a Delaware
corporation, a copy of which has been furnished to the undersigned shareholder,
be, and it hereby is, approved by the undersigned shareholder.
Telesystem Telecom Ltd.
(Print Name)
By: ---------------------------------
Name: Xxxxxxx Xxxxxx
Title: President and Chairman
of the Board
Number of Shares: 11,314,983 Common
Shares 1
Address of the shareholder:
0000 xx Xx
Xxxxxxxxxxx Xxxxxx
West 25th Floor
Xxxxxxxx, Xxxxxx
X0X 0X0
Date of Execution: June , 1998
--------
1 22,629,966 Common Shares after giving effect to the Teleglobe Stock Dividend.
TELEGLOBE CONSENT AND VOTING AGREEMENT
RE: BCE INC.
TELEGLOBE CONSENT AND VOTING AGREEMENT, dated as of June 14, 1998 (this
"Agreement"), by and among Excel Communications, Inc., a Delaware corporation
("Excel"), and BCE Inc. (the "Shareholder").
WHEREAS, concurrently herewith, Excel, Teleglobe Inc., a corporation
governed by the Canada Business Corporations Act (the "Corporation"), and North
Merger Sub Corporation, a Delaware corporation and a wholly owned subsidiary of
the Corporation ("Merger Sub"), are entering into an Agreement and Plan of
Merger (the "Merger Agreement"; capitalized terms used without definition herein
having the meanings ascribed thereto in the Merger Agreement);
WHEREAS, the Shareholder is the beneficial owner of the number of
common shares of the capital stock of the Corporation ("Shares") set forth in
Schedule I hereto;
WHEREAS, the Share Issuance has to be approved by the Corporation's
shareholders prior to the consummation of the Merger to satisfy the listing
requirements of the Exchanges;
WHEREAS, the Teleglobe By-Law Amendment has to be approved by the
Corporation's shareholders prior to the consummation of the Merger under
Canadian law;
WHEREAS, Teleglobe will in due course convene its shareholders to
approve the Teleglobe Articles Amendment;
WHEREAS, the Board of Directors of the Corporation has, prior to the
execution of this Agreement, duly and validly approved and adopted the Merger
Agreement and the transactions contemplated thereby and approved this Agreement
and the Teleglobe Articles of Amendment and the Teleglobe By-Law Amendment (and
has recommended approval of the same to the Shareholders), and such approvals
and adoption have not been withdrawn;
WHEREAS, the Shareholder is executing this Agreement (i) as an
inducement to Excel to enter into and execute the Merger Agreement; and (ii) as
an inducement to certain holders of shares of Excel Common Stock (the "Excel
Stockholders") to enter into and execute the Excel Consent and Voting Agreement;
- 2 -
WHEREAS, approval and adoption of the Merger Agreement by Excel's
stockholders is also a condition to the consummation of the Merger; and
WHEREAS, the Excel Stockholders are concurrently executing the Excel
Consent and Voting Agreement as an inducement to the Corporation to enter into
and execute the Merger Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
Section 1. Consent and Agreement to Vote. In order to provide the
Exchanges with evidence that holders of more than 50% of the voting shares of
the Corporation are in favour of the Merger, the Shareholder hereby agrees that
immediately upon the execution and delivery of this Agreement and the Merger
Agreement, it shall execute and deliver or cause to be executed and delivered by
the record owner thereof, a Shareholder's Consent in the form of Schedule II
hereto, which shall be irrevocable, with respect to all Shares that are owned
beneficially or of record by the Shareholder or as to which the Shareholder has,
directly or indirectly, the right to vote or direct the voting, such Consent to
be executed in lieu of a formal approval of the shareholders at a meeting duly
held therefor.
The Shareholder also agrees that, during the term of this Agreement, it
shall, from time to time at the request of Excel, at any meeting (whether annual
or special and whether or not an adjourned or postponed meeting) of shareholders
of the Corporation however called, or in connection with any written consent of
the holders of Shares (if required by any of the Exchanges), for the purposes of
the approval of the Share Issuance, the Teleglobe By-Law Amendment and/or the
Teleglobe Articles Amendment or any action required in furtherance thereof or in
furtherance of the Merger, in either case, prior to the earlier of the Effective
Time and the termination of this Agreement, appear at the meeting or otherwise
cause the Shares to be counted as present thereat for purposes of establishing a
quorum, and shall vote or consent (or cause to be voted or consented), in person
or by proxy, all Shares, and any other voting securities of the Corporation
(whether acquired heretofore or hereafter), that are beneficially owned by such
Shareholder or its wholly-owned Affiliates or as to which such Shareholder has,
directly or indirectly, the right to vote or direct the voting, in favour of the
approval of the Share Issuance, the Teleglobe By-Law Amendment and/or the
Teleglobe Articles Amendment and any other action required in furtherance
thereof or in furtherance of the Merger Agreement, the Merger, each of the
actions contemplated by the Merger Agreement and any other action required in
furtherance thereof or hereof. The Shareholder agrees, during the period
commencing on the date hereof and ending on the earlier of the Effective Time
and the termination of this Agreement, not to, and not to permit any of its
wholly-owned Affiliates to, vote or execute any written consent in lieu of a
shareholders meeting or vote of the Corporation, if such consent or vote by the
shareholders of the Corporation would be inconsistent with or frustrate the
purposes of the other agreements of such Shareholder pursuant to this paragraph.
- 3 -
In furtherance and not in limitation of the foregoing, the Shareholder
hereby grants to, and appoints, Excel and each of Xxxxx X. Xxxxxx, Xxxxxxxx X.
Xxxxxxx and X. Xxxxxxxxxxx Dance in their respective capacities as officers of
Excel, and any individual who shall hereafter succeed to any such officer of
Excel, and any other designee of Excel, each of them individually, its
irrevocable proxy and attorney-in-fact (with full power of substitution) to vote
the Shares, if applicable, as indicated in this Section 1. The Shareholder
intends this proxy to be irrevocable and coupled with an interest and will take
such further action and execute such other instruments as may be necessary to
effectuate the intent of this proxy.
(a) In furtherance of the agreements in the foregoing paragraphs, the
Shareholder hereby agrees to, and to cause its respective wholly-owned
Affiliates to, cooperate with Excel and the Corporation in connection with the
Merger Agreement and the consummation of the transactions contemplated thereby.
Excel agrees to cooperate with the Shareholder in connection with any filings
required to be made by such Shareholder pursuant to the HSR Act and the
Competition Act (Canada) in connection with the Merger Agreement and
consummation of the transactions contemplated thereby, including in connection
with any filing with Governmental Entities or otherwise in connection with
Section 5.4 of the Merger Agreement.
(b) The Shareholder hereby revokes any and all previous proxies with
respect to its Shares or any other voting securities of the Corporation that
relate to the approval of the Share Issuance, the Teleglobe By-Law Amendment
and/or the Teleglobe Articles Amendment or any other action required in
furtherance thereof or in furtherance of the transactions contemplated hereby or
by the Merger Agreement.
Section 2. Pooling Covenants and Representations. In addition to, and
not in lieu of, the other covenants and representations set forth herein, if the
Shareholder is an "affiliate" (as such term is defined in Rule 405 under the
Securities Act) of the Corporation, it hereby agrees and represents to Excel
that from and after the date hereof, such Shareholder will not, and will not
permit any of its wholly-owned Affiliates to, sell, pledge, transfer, or
otherwise dispose of, or hedge or otherwise reduce its risk with respect to, any
Shares (whether owned as of the date hereof or thereafter acquired) or other
shares of the capital stock of the Corporation, from the 30th day prior to the
Effective Time to such time as results covering at least 30 days of combined
operations of the Corporation and Excel have been published by the Corporation
in the form of a quarterly earnings report, an effective registration statement
filed with the SEC, a report to the SEC on Form 6-K or any other public filing
or announcement which includes the combined results of operations, except for
transfers or other dispositions that, in that reasonable opinion of Excel's or
the Corporation's independent accountants, will not prevent the Corporation from
accounting for the Merger as a pooling of interests, taking into account the
actions of other Affiliates of the Corporation, Excel or the Shareholder.
Section 3. Further Assurances. Each party shall execute and deliver
such additional instruments and other documents and shall take such further
actions as may be necessary or
- 4 -
appropriate to effectuate, carry out and comply with all of its obligations
under this Agreement, including making such modifications as the Exchanges may
require as to the form of the Consent (none of which shall affect the validity
or enforceability of the Consent). Without limiting the generality of the
foregoing, none of the parties hereto shall enter into any agreement or
arrangement (or alter, amend or terminate any existing agreement or arrangement)
if such action would materially impair the ability of such party to effectuate,
carry out or comply with all of the terms of this Agreement.
Section 4. Representations and Warranties of Excel. Excel represents
and warrants to the Shareholder as follows:
(a) This Agreement has been approved by the Board of Directors of
Excel, representing all necessary corporate action on the part of Excel for the
execution and performance hereof and thereof by Excel (no action by the
stockholders of Excel being required).
(b) This Agreement has been duly executed and delivered by a duly
authorized officer of Excel.
(c) This Agreement constitutes a valid and binding agreement of Excel,
enforceable against Excel in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or affecting creditors
generally by general equity principles (regardless of whether enforceability is
considered in a proceeding in equity or at law) or by an implied covenant of
good faith and fair dealing.
(d) The execution and delivery of this Agreement by Excel does not
violate or breach, and will not give rise to any violation or breach, of Excel's
charter or by-laws or, except as will not materially impair its ability to
effectuate, carry out or comply with all of the terms of this Agreement, any
Law, Governmental Entity approval or Contract by which Excel or its Subsidiaries
or their respective assets or properties may be bound.
Section 5. Representations and Warranties of the Shareholder. The
Shareholder represents and warrants to Excel as follows:
(a) Schedule I sets forth the number of Shares of which the Shareholder
is the record or beneficial owner. Such Shareholder is the lawful owner of such
Shares, free and clear of all liens, charges, encumbrances, shareholders
agreements, voting agreements, agreements to transfer such Shares and
commitments of every kind to which the Shareholder is a party, other than this
Agreement and as disclosed in Schedule I and has the sole power to vote (or
cause to be voted) the Shares as set forth in this Agreement and the Consent.
Except as set forth on such Schedule I, neither the Shareholder nor any of its
Affiliates owns or holds any rights to acquire any additional common shares or
other securities of the capital stock of
- 5 -
the Corporation or any interest therein or any voting rights with respect to any
additional common shares or any other securities of the capital stock of the
Corporation.
(b) This Agreement and the Consent have been duly executed and
delivered by a duly authorized officer of such Shareholder.
(c) This Agreement and the Consent constitute valid and binding
agreements of the Shareholder, enforceable against such Shareholder in
accordance with their terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors generally by general equity
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law) or by an implied covenant of good faith and fair dealing.
(d) The execution and delivery of this Agreement and the Consent by the
Shareholder do not violate or breach, and will not give rise to any violation or
breach, of such Shareholder's charter, by-laws, trust instrument or partnership
agreement, to the extent applicable or, except as will not materially impair (x)
the ability of such Shareholder to effectuate, carry out or comply with all of
the terms of this Agreement or (y) its business activities, any Law, third party
consent, Governmental Entity approval or Contract by which such Shareholder or
its properties or assets may be bound.
Section 6. Effectiveness and Termination. In the event the Merger
Agreement is terminated in accordance with its terms, this Agreement shall
automatically terminate and be of no further force or effect. Upon such
termination, except for any rights any party may have in respect of any breach
by any other party of its obligations hereunder, none of the parties hereto
shall have any further obligation or liability hereunder; provided however (A)
that any amendment by the parties to the Merger Agreement to (x) the Exchange
Ratio or the Merger Consideration (each as defined in Section 1.8(a) of the
Merger Agreement), (y) Article VI of the Merger Agreement entitled "Conditions
Precedent" or (z) Article VII of the Merger Agreement entitled "Termination and
Amendment" or (B) the waiver on or prior to the Closing Date by the Corporation
of any material condition precedent set forth in Article VI of the Merger
Agreement, shall require the written consent of the Shareholder, failing which
this Agreement may be terminated in writing by the Shareholder. In any event,
this Agreement may be terminated in writing by the Shareholder and it shall be
of no further force or effect if the Effective Time shall not have occurred on
or before June 14, 1999.
Section 7. Miscellaneous.
(a) Notices. All notices, requests and other communications hereunder
shall be in writing and shall be deemed duly given (a) on the date of delivery
if delivered personally, or by telecopy or facsimile, upon confirmation of
receipt, (b) on the first Business Day following the date of dispatch if
delivered by a recognized next-day courier service or (c) on the third Business
Day following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth
- 6 -
below, or pursuant to such other instructions as may be designated in writing by
the party to receive such notice:
(i) If to Excel, to:
EXCEL COMMUNICATIONS, INC.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: X. Xxxxxxxxxxx Dance
Facsimile: 000-000-0000
with a copy to:
WEIL, GOTSHAL & XXXXXX LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-00000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
Facsimile: 000-000-0000
(ii) If to BCE, to
BCE INC.
1000 de la Gauchetiere Street West
Suite 3700
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: J. Xxxx Xxxx
Facsimile: 000-000-0000
(b) Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation".
(c) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that both
parties need not sign the same counterpart.
(d) Entire Agreement; No Third Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and
- 7 -
oral, among the parties with respect to the subject matter hereof. This
Agreement shall be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
(e) Governing Law. This Agreement shall be governed and construed in
accordance with the laws in force in the Province of Ontario, Canada.
(f) Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
(g) Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto, in
whole or in part (whether by operation of law or otherwise), without the prior
written consent of the other party and the written undertaking of the assignee
to be bound by the terms of this Agreement, and any attempt to make any such
assignment without such consent shall be null and void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and permitted
assigns.
(h) Submission to Jurisdiction; Waivers. Each of Excel and the
Shareholder irrevocably agrees that any legal action or proceeding with respect
to this Agreement or for recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns may be
brought and determined in any court of competent jurisdiction of the Province of
Ontario and each of Excel and the Shareholder hereby irrevocably submits with
regard to any such action or proceeding for itself and in respect to its
property, generally and unconditionally, to the exclusive jurisdiction of the
aforesaid courts. Each of Excel and the Shareholder hereby irrevocably waives,
and agrees not to assert, by way of motion, as a defence, counterclaim or
otherwise, in any action or proceeding with respect to this Agreement, (a) any
claim that it is not personally subject to the jurisdiction of the above-named
courts for any reason other than the failure to serve proceedings in accordance
with this Section 7(h), (b) that it or its property is exempt or immune from
jurisdiction of any such court or from any legal proceedings commenced in such
courts, and (c) to the fullest extent permitted by applicable law, that (i) the
suit, action or proceeding in any such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper or (iii)
this Agreement, or the subject matter hereof, may not be enforced in or by such
courts.
- 8 -
(i) Specific Performance. Each party acknowledges that if it fails to
perform any of its obligations under this Agreement, immediate and irreparable
harm or injury would be caused to the other party for which money damages would
not be an adequate remedy. In such event, each party agrees that the other party
shall have the right, in addition to any other rights it may have, to specific
performance of this Agreement. Accordingly, if any party should institute an
action or proceeding, seeking specific enforcement of the provisions hereof,
each party in respect of such claim hereby waives the claim or defence that the
other party has an adequate remedy at law and hereby agrees not to assert in any
such action or proceeding the claim or defence that such a remedy at law exists.
Each party further agrees to waive any requirements for the securing or posting
of any bond in connection with obtaining any such equitable relief.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
EXCEL COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------
Name: Xxxxx X. Xxxxxx
Title: President and Chief
Executive Officer
BCE INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title:
SCHEDULE I
SHARE OWNERSHIP
Number of Shares Rights to Acquire
Beneficially Owned Liens Additional Shares
------------------- ----- -----------------
14,815,186(1) None None
1,285,000(2) None None
1. 29,630,372 giving effect to the Teleglobe Stock Dividend.
2. 1,285,000 First Series Preferred Shares (2,570,000 giving effect to the
Teleglobe Stock Dividend). The Shareholder has given unconditional and
irrevocable notice to convert its 1,285,000 First Series Preferred Shares
of the capital stock of the Corporation into an equal number of Common
Shares of the capital stock of the Corporation (2,570,000 giving effect to
the Teleglobe Stock Dividend) and hereby agrees that it will vote the
converted shares as provided in this Agreement.
SCHEDULE II
SHAREHOLDER CONSENT
June 14, 1998
The undersigned shareholder of Teleglobe Inc. ("Teleglobe") hereby
irrevocably consents in accordance with the Teleglobe Consent and Voting
Agreement executed as of the date hereof to the adoption of and adopt the
following resolution with respect to the common shares of the capital stock of
Teleglobe owned beneficially by the undersigned on the date hereof as listed
below.
RESOLVED, that the Share Issuance, as defined in the Merger Agreement,
dated as of June 14, 1998, among Teleglobe, North Merger Sub Corporation, a
wholly-owned subsidiary of Teleglobe, and Excel Communications, Inc., a Delaware
corporation, a copy of which has been furnished to the undersigned shareholder,
be, and it hereby is, approved by the undersigned shareholder.
BCE INC.
(Print Name)
By: --------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
Number of Shares: 14,815,186 Common
Shares 1 and
1,285,000 First Series
Preferred Shares 2
Address of the shareholder:
1000 de La Gauchetiere Street West
Suite 3700
Xxxxxxxx, Xxxxxx, X0X 0X0
Date of Execution : June 14, 1998
--------
1 29,630,372 giving effect to the Teleglobe Stock Dividend.
2 2,570,000 giving effect to the Teleglobe Stock Dividend. The Shareholder
has given unconditional and irrevocable notice to convert its 1,285,000
First Series Preferred Shares of the capital stock of the Corporation into
an equal number of Common Shares of the capital stock of the Corporation
(2,570,000 giving effect to the Teleglobe Stock Dividend) and hereby
agrees that it will vote the converted shares as provided in this
Agreement.
TRANSLATION
TELEGLOBE CONSENT AND VOTING AGREEMENT
RE: CAPITAL COMMUNICATIONS CDPQ INC.
TELEGLOBE CONSENT AND VOTING AGREEMENT, dated as of June 14, 1998 (this
"Agreement"), by and among Excel Communications, Inc., a Delaware corporation
("Excel"), and Capital Communications CDPQ Inc. (the "Shareholder").
WHEREAS, concurrently herewith, Excel, Teleglobe Inc., a corporation
governed by the Canada Business Corporations Act (the "Corporation"), and North
Merger Sub Corporation, a Delaware corporation and a wholly owned subsidiary of
the Corporation ("Merger Sub"), are entering into an Agreement and Plan of
Merger (the "Merger Agreement"; capitalized terms used without definition herein
having the meanings ascribed thereto in the Merger Agreement);
WHEREAS, the Shareholder is the beneficial owner of the number of
common shares of the capital stock of the Corporation ("Shares") set forth in
Schedule I hereto;
WHEREAS, the Share Issuance has to be approved by the Corporation's
shareholders prior to the consummation of the Merger to satisfy the listing
requirements of the Exchanges;
WHEREAS, the Teleglobe By-Law Amendment has to be approved by the
Corporation's shareholders prior to the consummation of the Merger under
Canadian law;
WHEREAS, Teleglobe will in due course convene its shareholders to
approve the Teleglobe Articles Amendment;
WHEREAS, the Board of Directors of the Corporation has, prior to the
execution of this Agreement, duly and validly approved and adopted the Merger
Agreement and the transactions contemplated thereby and approved this Agreement
and the Teleglobe Articles of Amendment and the Teleglobe By-Law Amendment (and
has recommended approval of the same to the Shareholders), and such approvals
and adoption have not been withdrawn;
WHEREAS, the Shareholder is executing this Agreement (i) as an
inducement to Excel to enter into and execute the Merger Agreement; and (ii) as
an inducement to certain holders of shares of Excel Common Stock (the "Excel
Stockholders") to enter into and execute the Excel Consent and Voting Agreement;
- 2 - TRANSLATION
WHEREAS, approval and adoption of the Merger Agreement by Excel's
stockholders is a condition to the consummation of the Merger; and
WHEREAS, the Excel Stockholders are concurrently executing the Excel
Consent and Voting Agreement as an inducement to the Corporation to enter into
and execute the Merger Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
Section 1. Consent and Agreement to Vote. In order to provide the
Exchanges with evidence that holders of more than 50% of the voting shares of
the Corporation are in favour of the Merger, the Shareholder hereby agrees that
immediately upon the execution and delivery of this Agreement and the Merger
Agreement, it shall execute and deliver or cause to be executed and delivered by
the record owner thereof, a Shareholder's Consent in the form of Schedule II
hereto, which shall be irrevocable, with respect to all Shares that are owned
beneficially or of record by the Shareholder or as to which the Shareholder has,
directly or indirectly, the right to vote or direct the voting, such Consent to
be executed in lieu of a formal approval of the shareholders at a meeting duly
held therefor.
The Shareholder also agrees that, during the term of this Agreement, it
shall, from time to time at the request of Excel, at any meeting (whether annual
or special and whether or not an adjourned or postponed meeting) of shareholders
of the Corporation however called, or in connection with any written consent of
the holders of Shares (if required by any of the Exchanges), for the purposes of
the approval of the Share Issuance, the Teleglobe By-Law Amendment and/or the
Teleglobe Articles Amendment or any action required in furtherance thereof or in
furtherance of the Merger, in either case, prior to the earlier of the Effective
Time and the termination of this Agreement, appear at the meeting or otherwise
cause the Shares to be counted as present thereat for purposes of establishing a
quorum, and shall vote or consent (or cause to be voted or consented), in person
or by proxy, all Shares, and any other voting securities of the Corporation
(whether acquired heretofore or hereafter), that are beneficially owned by such
Shareholder or its wholly-owned Affiliates or as to which such Shareholder has,
directly or indirectly, the right to vote or direct the voting, in favour of the
approval of the Share Issuance, the Teleglobe By-Law Amendment and/or the
Teleglobe Articles Amendment and any other action required in furtherance
thereof or in furtherance of the Merger Agreement, the Merger, each of the
actions contemplated by the Merger Agreement and any other action required in
furtherance thereof or hereof. The Shareholder agrees, during the period
commencing on the date hereof and ending on the earlier of the Effective Time
and the termination of this Agreement, not to, and not to permit any of its
wholly-owned Affiliates to, vote or execute any written consent in lieu of a
shareholders meeting or vote of the Corporation, if such consent or vote by the
shareholders of the Corporation would be inconsistent with or frustrate the
purposes of the other agreements of such Shareholder pursuant to this paragraph.
- 3 - TRANSLATION
In furtherance of the agreements in the foregoing paragraphs, the
Shareholder hereby agrees to, and to cause its respective wholly-owned
Affiliates to, cooperate with Excel and the Corporation in connection with the
Merger Agreement and the consummation of the transactions contemplated thereby.
Excel agrees to cooperate with the Shareholder in connection with any filings
required to be made by such Shareholder pursuant to the HSR Act and the
Competition Act (Canada) in connection with the Merger Agreement and
consummation of the transactions contemplated thereby, including in connection
with any filing with Governmental Entities or otherwise in connection with
Section 5.4 of the Merger Agreement.
Section 2. Further Assurances. Each party shall execute and deliver
such additional instruments and other documents and shall take such further
actions as may be necessary or appropriate to effectuate, carry out and comply
with all of its obligations under this Agreement, including making such
modifications as the Exchanges may require as to the form of the Consent (none
of which shall affect the validity or enforceability of the Consent). Without
limiting the generality of the foregoing, none of the parties hereto shall enter
into any agreement or arrangement (or alter, amend or terminate any existing
agreement or arrangement) if such action would materially impair the ability of
such party to effectuate, carry out or comply with all of the terms of this
Agreement, provided that the Shareholder shall in no way be limited to sell or
otherwise dispose of any of the Shares during the term of this Agreement.
Section 3. Representations and Warranties of Excel. Excel represents
and warrants to the Shareholder as follows:
(a) This Agreement has been approved by the Board of Directors of
Excel, representing all necessary corporate action on the part of Excel for the
execution and performance hereof and thereof by Excel (no action by the
stockholders of Excel being required).
(b) This Agreement has been duly executed and delivered by a duly
authorized officer of Excel.
(c) This Agreement constitutes a valid and binding agreement of Excel,
enforceable against Excel in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or affecting creditors
generally by general equity principles (regardless of whether enforceability is
considered in a proceeding in equity or at law) or by an implied covenant of
good faith and fair dealing.
(d) The execution and delivery of this Agreement by Excel does not
violate or breach, and will not give rise to any violation or breach, of Excel's
charter or by-laws or, except as will not materially impair its ability to
effectuate, carry out or comply with all of the terms of this Agreement, any
Law, Governmental Entity approval or Contract by which Excel or its Subsidiaries
or their respective assets or properties may be bound.
- 4 - TRANSLATION
Section 4. Representations and Warranties of the Shareholder. The
Shareholder represents and warrants to Excel as follows:
(a) Schedule I sets forth the number of Shares of which the Shareholder
is the beneficial owner. Such Shareholder is the lawful owner of such Shares,
free and clear of all liens, charges, encumbrances, shareholders agreements,
voting agreements, agreements to transfer such Shares and commitments of every
kind to which the Shareholder is a party, other than this Agreement and as
disclosed in Schedule I and has the sole power to vote (or cause to be voted)
the Shares as set forth in this Agreement and the Consent. Except as set forth
on such Schedule I, neither the Shareholder nor any of its Affiliates owns or
holds any rights to acquire any additional common shares or other securities of
the capital stock of the Corporation or any interest therein or any voting
rights with respect to any additional common shares or any other securities of
the capital stock of the Corporation.
(b) This Agreement and the Consent have been duly executed and
delivered by a duly authorized officer of such Shareholder.
(c) This Agreement and the Consent constitute valid and binding
agreements of the Shareholder, enforceable against such Shareholder in
accordance with their terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors generally by general equity
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law) or by an implied covenant of good faith and fair dealing
and are subject to Crown privilege.
(d) The execution and delivery of this Agreement and the Consent by the
Shareholder do not violate or breach, and will not give rise to any violation or
breach, of such Shareholder's charter, by-laws, trust instrument or partnership
agreement, to the extent applicable or, except as will not materially impair (x)
the ability of such Shareholder to effectuate, carry out or comply with all of
the terms of this Agreement and the Consent or (y) its business activities, any
Law, third party consent, Governmental Entity approval or Contract by which such
Shareholder or its properties or assets may be bound.
Section 5. Effectiveness and Termination. In the event the Merger
Agreement is terminated in accordance with its terms, this Agreement shall
automatically terminate and be of no further force or effect. Upon such
termination, except for any rights any party may have in respect of any breach
by any other party of its obligations hereunder, none of the parties hereto
shall have any further obligation or liability hereunder; provided however (A)
that any amendment by the parties to the Merger Agreement to (x) the Exchange
Ratio or the Merger Consideration (each as defined in Section 1.8(a) of the
Merger Agreement), (y) Article VI of the Merger Agreement entitled "Conditions
Precedent" or (z) Article VII of the Merger Agreement entitled "Termination and
Amendment" or (B) the waiver on or prior to the Closing Date by the Corporation
of any material condition precedent set forth in Article VI of the Merger
Agreement, shall require the written consent of the Shareholder, failing which
this Agreement may be terminated in writing by the Shareholder. In any event,
this
- 5 - TRANSLATION
Agreement may be terminated in writing by the Shareholder and it shall be of no
further force or effect if the Effective Time shall not have occurred on or
before June 14, 1999.
Section 6. Miscellaneous.
(a) Notices. All notices, requests and other communications hereunder
shall be in writing and shall be deemed duly given (a) on the date of delivery
if delivered personally, or by telecopy or facsimile, upon confirmation of
receipt, (b) on the first Business Day following the date of dispatch if
delivered by a recognized next-day courier service or (c) on the third Business
Day following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
(i) If to Excel, to:
EXCEL COMMUNICATIONS, INC.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: X. Xxxxxxxxxxx Dance
Facsimile: 000-000-0000
with a copy to:
WEIL, GOTSHAL & XXXXXX LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-00000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
Facsimile: 000-000-0000
(ii) If to the Shareholder, to
CAPITAL COMMUNICATIONS CDPQ INC.
0000 XxXxxx Xxxxxxx Xxxxxx
0xx xxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: The President
Facsimile: 000-000-0000
- 6 - TRANSLATION
with a copy to:
XXXXXX XX XXXXX XX XXXXXXXXX XX XXXXXX
0000 XxXxxx Xxxxxxx Xxxxxx
0xx xxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxxx Xxxxxxxx
Facsimile: 000-000-0000
(b) Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation".
(c) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that both
parties need not sign the same counterpart.
(d) Entire Agreement; No Third Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
(e) Governing Law. This Agreement shall be governed and construed in
accordance with the laws in force in the Province of Quebec, Canada.
(f) Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
(g) Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto, in
whole or in part (whether by operation of law or otherwise), without the prior
written consent of the other
- 7 - TRANSLATION
party and the written undertaking of the assignee to be bound by the terms of
this Agreement, and any attempt to make any such assignment without such consent
shall be null and void. Subject to the preceding sentence, this Agreement will
be binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and permitted assigns.
(h) Submission to Jurisdiction; Waivers. Each of Excel and the
Shareholder irrevocably agrees that any legal action or proceeding with respect
to this Agreement or for recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns may be
brought and determined in any court of competent jurisdiction of the Province of
Quebec and each of Excel and the Shareholder hereby irrevocably submits with
regard to any such action or proceeding for itself and in respect to its
property, generally and unconditionally, to the exclusive jurisdiction of the
aforesaid courts which constitutes a submission to the jurisdiction of a Quebec
authority as provided for in Section 3148(5) of the Civil Code of Quebec. Each
of Excel and the Shareholder hereby irrevocably waives, and agrees not to
assert, by way of motion, as a defence, counterclaim or otherwise, in any action
or proceeding with respect to this Agreement, (a) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any reason
other than the failure to serve proceedings in accordance with this Section
7(h), (b) that it or its property is exempt or immune from jurisdiction of any
such court or from any legal proceedings commenced in such courts (whether
through service of a writ of seizure, seizure prior to judgment, post-judgment
seizure, execution of judgment or otherwise), and (c) to the fullest extent
permitted by applicable law, that (i) the suit, action or proceeding in any such
court is brought in an inconvenient forum, (ii) the venue of such suit, action
or proceeding is improper or (iii) this Agreement, or the subject matter hereof,
may not be enforced in or by such courts.
(i) Specific Performance. Each party acknowledges that if it fails to
perform any of its obligations under this Agreement, immediate and irreparable
harm or injury would be caused to the other party for which money damages would
not be an adequate remedy. In such event, each party agrees that the other party
shall have the right, in addition to any other rights it may have, to specific
performance of this Agreement. Accordingly, if any party should institute an
action or proceeding, seeking specific enforcement of the provisions hereof,
each party in respect of such claim hereby waives the claim or defence that the
other party has an adequate remedy at law and hereby agrees not to assert in any
such action or proceeding the claim or defence that such a remedy at law exists.
Each party further agrees to waive any requirements for the securing or posting
of any bond in connection with obtaining any such equitable relief.
- 8 - TRANSLATION
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
EXCEL COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Name: Xxxxx X. Xxxxxx
Title: President and Chief
Executive Officer
CAPITAL COMMUNICATIONS
CDPQ INC.
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxxxx
By: /s/ Xxxxxx Xxxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxxx
Title: President
We hereby consent to Capital Communications CDPQ Inc. taking in our name the
undertakings contained in this Agreement.
CAISSE DE DEPOT ET PLACEMENT
DU QUEBEC
By: /s/ Xxxxxx Xxxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxxx
By: /s/ Xxxxxxx Xxxxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxxxx
SCHEDULE I TRANSLATION
SHARE OWNERSHIP
Number of Shares Rights to Acquire
Beneficially Owned Liens Additional Shares
------------------ ----- -----------------
4,028,424(1) None None
1. 8,056,848 giving effect to the Teleglobe Stock Dividend.
SCHEDULE II TRANSLATION
SHAREHOLDER CONSENT
June 14, 1998
The undersigned shareholder of Teleglobe Inc. ("Teleglobe") hereby
irrevocably consents to the adoption of and adopt the following resolution with
respect to the common shares of the capital stock of Teleglobe owned
beneficially or of record by the undersigned on the date hereof as listed below.
RESOLVED, that the Share Issuance, as defined in the Merger Agreement,
dated as of June 14, 1998 among Teleglobe, North Merger Sub Corporation, a
wholly-owned subsidiary of Teleglobe, and Excel Communications, Inc., a Delaware
corporation, a copy of which has been furnished to the undersigned shareholder,
be, and it hereby is, approved by the undersigned shareholder.
Capital Communications CDPQ Inc.
(Print Name)
By: /s/ Xxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxx
Title: President
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------------
Name:Xxxxxxx Xxxxxxxxx
Number of Shares: 4,028,424 Common
Shares 1
Address of the shareholder:
0000 XxXxxx Xxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
Date of Execution: June 14, 1998
--------
1 8,056,848 giving effect to the Teleglobe Stock Dividend.
NYFS05...:\41\44241\0005\2097\EXH6188Y.320
EXHIBIT C
EXECUTION COPY
EXCEL STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of June 14, 1998 (the
"Agreement"), between TELEGLOBE INC., a corporation governed by the Canada
Business Corporations Act (the "Grantee"), and EXCEL COMMUNICATIONS, INC., a
Delaware corporation (the "Grantor").
WHEREAS, the Grantee, the Grantor and North Merger Sub
Corporation, a Delaware corporation and a wholly owned subsidiary of the Grantee
("Merger Sub"), are, concurrently with the execution and delivery of this
Agreement, entering into an Agreement and Plan of Merger, dated as of the date
hereof (the "Merger Agreement"; capitalized terms used without definition herein
have the meanings assigned to them in the Merger Agreement), which provides,
among other things, for the merger (the "Merger") of Merger Sub with and into
Grantor;
WHEREAS, as a condition to its willingness to enter into the
Merger Agreement, the Grantee has requested that the Grantor grant to the
Grantee an option to purchase the shares of Common Stock, $.001 par value per
share, of the Grantor (the "Common Stock") covered hereby, upon the terms and
subject to the conditions hereof; and
WHEREAS, in order to induce the Grantee to enter into the
Merger Agreement, the Grantor is willing to grant the Grantee the requested
option.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements set forth herein, the parties hereto agree as
follows:
1. The Option; Exercise; Adjustments; Payment of Spread;
Termination.
(a) Subject to the other terms and conditions set forth
herein, the Grantor hereby grants to the Grantee an irrevocable option (the
"Option") to purchase up to 26,300,000 duly authorized, validly issued, fully
paid and nonassessable shares of Common Stock (the "Shares") (representing
19.9%, rounded down to the nearest whole multiple of 50,000 shares, of the
outstanding shares of Common Stock as of the date hereof) at a cash purchase
price equal to $27.563 per Share (the "Purchase Price"). The Option may be
exercised by the Grantee, in whole or in part, at any
time, or from time to time, following the occurrence of the event referred to in
Section 2(c) hereof and prior to the expiration of the Option in accordance with
Section 1(e) of this Agreement.
(b) In the event of any change in the number of issued and
outstanding Shares of Common Stock by reason of any stock dividend, stock split,
split-up, recapitalization, merger or other change in the corporate or capital
structure of the Grantor, the number of Shares subject to the Option and the
Purchase Price shall be appropriately adjusted to restore the Grantee to its
economic and other rights hereunder.
(c) In the event the Grantee wishes to exercise the Option,
the Grantee shall send a written notice to the Grantor (the "Exercise Notice")
specifying a date (subject to the requirements of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act")) not later than
10 Business Days and not earlier than two Business Days following the date such
notice is given for the closing of such purchase.
(d) If an Acquisition Proposal involving Grantor is
consummated within 12 months after termination of the Merger Agreement, then the
Grantee may, at any time the Option is then exercisable pursuant to the terms of
Section 1(a) hereof, elect, in lieu of exercising the Option to purchase Shares
provided in Section 1(a) hereof, to send a written notice to the Grantor (the
"Cash Exercise Notice") specifying a date not later than 20 Business Days and
not earlier than 10 Business Days following the date such notice is given on
which date the Grantor shall pay to the Grantee an amount in cash in United
States dollars equal to the Spread (as hereinafter defined) multiplied by all or
such portion of the Shares subject to the Option as Grantee shall specify. As
used herein "Spread" shall mean the excess, if any, over the Purchase Price of
the higher of (x) if applicable, the highest price per share of Common Stock
(including any brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by any person in an Acquisition Proposal (the "Alternative Purchase
Price") or (y) the average of the closing sales prices of the Shares of Common
Stock on the NYSE Composite Tape for the ten trading days ending on and
including the fifth trading day prior to the date of the Cash Exercise Notice.
If the Alternative Purchase Price includes any property other than cash, the
Alternative Purchase Price shall be the sum of (A) the fixed cash amount, if
any, included in the Alternative Purchase Price plus (B) the fair market value
of such other property determined in accordance with the procedures set forth in
Section 6(b) hereof (but using the date of the Cash Exercise Notice). Upon
exercise of the Grantee's right to receive cash pursuant to this Section
2
1(d) and the payment of such cash to the Grantee, the obligations of the Grantor
to deliver Shares pursuant to Section 3 hereof shall be terminated with respect
to such number of Shares for which the Grantee shall have elected to be paid the
Spread.
(e) The Option and the rights and obligations of the parties
hereunder shall terminate at the earliest of (i) the Effective Time (as defined
in the Merger Agreement), (ii) the termination of the Merger Agreement pursuant
to circumstances under which the Grantee is not entitled to receive the
Termination Fee in accordance with Section 7.3 of the Merger Agreement (other
than a termination by Teleglobe pursuant to Section 7.1(e) if an Acquisition
Proposal with respect to Excel shall be pending at the time of such
termination), (iii) the date on which the Grantee realizes a Total Profit equal
to the Profit Limit (as such terms are defined in Section 9) and (iv) 30 days
after the first anniversary of the date (the "Merger Termination Date") on which
the Merger Agreement is terminated (the date referred to in clause (iii) being
hereinafter referred to as the "Option Expiration Date"); provided that if the
Option cannot be exercised or the Shares cannot be delivered to Grantee upon
such exercise because the conditions set forth in Section 2(a) or Section 2(b)
hereof have not yet been satisfied (other than because of a permanent injunction
or final unappealable order of a Governmental Entity of competent jurisdiction
prohibiting delivery of the Shares), the Option Expiration Date shall be
extended until 30 days after such impediment to exercise has been removed.
(f) The Grantor will not, by amendment of its certificate of
incorporation or through any consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Agreement, or diminish the economic value of the Option, but will at all times
in good faith assist in the carrying out of all such terms and in the taking of
all action as may be necessary or appropriate in order to protect the rights of
the Grantee against dilution or other impairment. In furtherance and not in
limitation of the foregoing, in the event that after the date of this Agreement,
the Grantor shall issue Shares of Common Stock at a price below their fair
market value (as such term is used in Section 6(b) hereof) at such time, the
Purchase Price shall be adjusted accordingly so that the economic value of the
Option relative to the fair market value of the Shares at the time of such
issuance shall be maintained.
2. Conditions to Delivery of Shares. The Grantor's obligation
to deliver Shares upon exercise of the Option is subject only to the conditions
that:
3
(a) No preliminary or permanent injunction or
other order issued by any federal or state court of competent jurisdiction in
the United States prohibiting the delivery of the Shares shall be in effect; and
(b) Any applicable waiting periods under the
HSR Act shall have expired or been terminated; and
(c) The Termination Fee shall be payable
pursuant to Section 7.3 of the Merger Agreement or the Merger Agreement shall
have been terminated by Teleglobe pursuant to Section 7.1(e) thereof and an
Acquisition Proposal with respect to Excel shall have been pending at the time
of such termination.
3. The Closing.
(a) Any closing hereunder shall take place on
the date specified by the Grantee in its Exercise Notice at 9:00 A.M., local
time, at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or, if the conditions set forth in Section 2(a) or
2(b) have not then been satisfied, on the second Business Day following the
satisfaction of such conditions, or at such other time and place as the parties
hereto may agree (the "Closing Date"). On the Closing Date, the Grantor will
deliver to the Grantee a certificate or certificates, duly endorsed (or
accompanied by duly executed stock powers), representing the Shares in the
denominations designated by the Grantee in its Exercise Notice and the Grantee
will purchase such Shares from the Grantor at the price per Share equal to the
Purchase Price, subject to Section 9. Any payment made by the Grantee to the
Grantor, or by the Grantor to the Grantee, pursuant to this Agreement shall be
made by certified or official bank check or by wire transfer of federal funds to
a bank designated by the party receiving such funds.
(b) The certificates representing the Shares
may bear an appropriate legend relating to the fact that such Shares have not
been registered under the Securities Act.
4. Representations and Warranties of the Grantee. The Grantee
represents and warrants to the Grantor that the Grantee (a) is a sophisticated
investor capable of evaluating the merits and risks of an investment in the
Option and Common Stock and (b) is acquiring the Option and, if and when it
exercises the Option, will be acquiring the Shares issuable upon the exercise
thereof for its own account and not
4
with a view to distribution or resale in any manner which would be in violation
of the Securities Act or any "blue sky" or state securities laws.
5. Listing of Shares; HSR Act Filings; Governmental Consents.
Subject to applicable law and the rules and regulations of the NYSE, the Grantor
shall (i) promptly file a notice to list the Shares on the NYSE and (ii) make,
as promptly as practicable, all necessary filings by the Grantor under the HSR
Act and use its reasonable best efforts to obtain all necessary approvals
thereunder as promptly as practicable in respect of the grant of the Option,
exercise of the Option and listing of the underlying shares of Excel Common
Stock; provided, however, that if the Grantor is unable to effect such listing
on the NYSE by the Closing Date, the Grantor will nevertheless be obligated to
deliver the Shares upon the Closing Date. Each of the parties hereto will use
its best efforts to obtain consents of all third parties and Governmental
Entities, if any, necessary to the consummation of the transactions contemplated
hereby.
6. Right of First Refusal. If the Grantee, at any time prior
to 30 days after the first anniversary of the Merger Termination Date, seeks to
sell, transfer or dispose of all or any part of the Shares to any third person
in any type of transaction, it shall give the Grantor (or a designee of the
Grantor) the opportunity, in the following manner, to purchase such Shares:
(a) The Grantee shall give notice to the
Grantor in writing of its intent to sell Shares (a "Disposition Notice"),
specifying the number of Shares to be sold, the price and, if applicable, the
material terms of any agreement relating thereto. For purposes of this Section
6, if the Disposition Notice is given with respect to the sale of the Shares
pursuant to a tender or exchange offer, it shall be assumed that all Shares
tendered will be accepted for payment. The Disposition Notice may be given at
any time, including prior to the giving of any Exercise Notice.
(b) The Grantor or its designee shall have the
right, exercisable by written notice given to the Grantee within fifteen
Business Days after receipt of a Disposition Notice (or, if applicable, in the
case of a proposed sale pursuant to a tender or exchange offer for shares of
Common Stock, by written notice given to the Grantee at least two Business Days
prior to the then announced expiration date of such tender or exchange offer
(the "Expiration Date"), it being understood that any such Disposition Notice in
the case of a tender or exchange offer shall be given at least four Business
Days prior to such Expiration Date), to purchase all, but not less
5
than all, of the Shares specified in the Disposition Notice at the price set
forth in the Disposition Notice. If the purchase price specified in the
Disposition Notice includes any property other than cash, the purchase price to
be paid by the Grantor shall be an amount of cash in United States dollars equal
to the sum of (i) the cash included in the purchase price plus (ii) the fair
market value of such other property at the date of the Disposition Notice. If
such other property consists of securities with an existing public trading
market, the average closing price (or the average closing bid and asked price if
closing prices are unavailable) for such securities on their principal public
trading market for the five trading days ending five days prior to the date of
the Disposition Notice shall be deemed to equal the fair market value of such
property. If such other property consists of something other than cash or
securities with an existing public trading market and at the time of the closing
referred to in paragraph (c) below, agreement on the value of such other
property has not been reached, the higher of (i) the cash included in the
purchase price and (ii) the average closing price of the Common Stock on the New
York Stock Exchange for the five trading days ending five days prior to the date
of the Disposition Notice shall be used as the per share purchase price;
provided, however, that promptly after the closing, the Grantee and the Grantor
or its designee, as the case may be, shall settle any additional amounts to be
paid or returned as a result of the determination of fair market value of such
other property made by a nationally recognized investment banking firm selected
by the Grantor and approved by the Grantee within 30 days of the closing. Such
determination shall be final and binding on all parties hereto.
(c) If the Grantor exercises its right of first
refusal hereunder, the closing of the purchase of the Shares with respect to
which such right has been exercised shall take place within twenty Business Days
after the notice of such exercise (or, if applicable, in the case of a tender or
exchange offer, no later than one Business Day prior to the expiration date of
the offer if written notice was given within the time set forth in the
parenthetical in the first sentence of paragraph (b) above).
(d) If the Grantor does not exercise its right
of first refusal hereunder within the time specified for such exercise, the
Grantee shall be free for 90 days following the expiration of such time for
exercise to sell the Shares (or enter into an agreement to sell the Shares)
specified in the Disposition Notice, at the price specified in the Disposition
Notice or any price in excess thereof and otherwise on substantially the same
terms set forth in the Disposition Notice; provided, that if such sale is not
consummated within such 90-day period (or the agreement to sell entered
6
into in such 90 day period is not thereafter performed in accordance with its
terms), then the provisions of this Section 6 will again apply to the sale of
such Shares.
7. Repurchase of Shares. Beginning on the first anniversary
date of the Merger Termination Date, the Grantor shall have the right to
purchase (the "Repurchase Right") all, but not less than all, of the Shares at
the greater of (i) the Purchase Price or (ii) the average closing price of the
Common Stock on the NYSE for the ten trading days ending on and including the
fifth trading day prior to the date the Grantor gives written notice of its
intention to exercise the Repurchase Right. If the Grantor does not exercise the
Repurchase Right within 30 days following the first anniversary of the Merger
Termination Date, the Repurchase Right shall terminate. In the event the Grantor
wishes to exercise the Repurchase Right, the Grantor shall send a written notice
to the Grantee specifying a date (not later than 10 Business Days and not
earlier than two Business Days following the date such notice is given) for the
closing of such purchase.
8. Registration Rights.
(a) In the event that the Grantee shall desire
to sell 25% or more of the Shares within two years after the purchase of such
Shares pursuant hereto, and such sale requires, in the opinion of counsel to the
Grantee, which opinion shall be reasonably satisfactory to the Grantor and its
counsel, registration of such Shares under the Securities Act, the Grantor
shall, at its option, either repurchase said shares at a price established
pursuant to the procedure set forth in Section 7, or cooperate with the Grantee
and any underwriters in registering such Shares for resale in a bona fide firm
commitment underwritten public offering in which the Grantee and the
underwriters will effect as wide a distribution of such Shares as is reasonably
practicable and shall use their best efforts to prevent any person from
purchasing through such offering more than 2% of the outstanding Shares,
including, without limitation, promptly filing a registration statement which
complies with the requirements of applicable foreign, federal and state
securities laws and entering into an underwriting agreement with such
underwriters upon such terms and conditions as are customarily contained in
underwriting agreements with respect to secondary distributions; provided that
the Grantor shall not be required to have declared effective more than two
registration statements hereunder and shall be entitled to delay the filing or
effectiveness of any registration statement for up to 135 days if the offering
would, in the judgment of the Board of Directors of the Grantor, require
premature disclosure of any material corporate development or otherwise
interfere with or adversely affect any pending or
7
proposed offering of securities of the Grantor or any other material transaction
involving the Grantor.
(b) If the Common Stock is registered pursuant
to the provisions of this Section 8, the Grantor agrees (i) to furnish copies of
the registration statement and the prospectus relating to the Shares covered
thereby in such numbers as the Grantee may from time to time reasonably request
and (ii) if any event shall occur as a result of which it becomes necessary to
amend or supplement any registration statement or prospectus, to prepare and
file under the applicable securities laws such amendments and supplements as may
be necessary to keep available for at least 90 days a prospectus covering the
Common Stock meeting the requirements of such securities laws, and to furnish to
the Grantee such numbers of copies of the registration statement as amended or
supplemented as may reasonably be requested. The Grantor shall bear the cost of
the registration, including, but not limited to, all registration and filing
fees, printing expenses, and fees and disbursements of counsel and accountants
for the Grantor, except that the Grantee shall pay the fees and disbursements of
its counsel and the underwriting fees and selling commissions applicable to the
Shares sold by the Grantee. The Grantor shall indemnify and hold harmless
Grantee, its affiliates and its officers and directors from and against any and
all losses, claims, damages, liabilities and expenses arising out of or based
upon any statements contained in, omissions or alleged omissions from, each
registration statement filed pursuant to this paragraph; provided, however, that
this provision does not apply to any loss, liability, claim, damage or expense
to the extent it arises out of any statement or omission made in reliance upon
and in conformity with written information furnished to the Grantor by the
Grantee, its affiliates or its officers expressly for use in any registration
statement (or any amendment thereto) or any preliminary or final prospectus
filed pursuant to this paragraph ("Grantee Information"). The Grantee shall
indemnify and hold harmless Grantor, its affiliates and its officers and
directors from and against any and all losses, claims, damages, liabilities and
expenses arising out of or based upon any Grantee Information. The Grantor shall
also indemnify and hold harmless each underwriter and each person who controls
any underwriter within the meaning of either the Securities Act or the Exchange
Act against any and all losses, claims, damages, liabilities and expenses
arising out of or based upon any statements contained in, omissions or alleged
omissions from, each registration statement and prospectus filed pursuant to
this paragraph; provided, however, that this provision does not apply to any
loss, liability, claim, damage or expense to the extent it arises out of any
statement or omission made in reliance upon and in conformity with written
information furnished to the Grantor
8
by the underwriters expressly for use in any registration statement (or any
amendment thereto) or any preliminary or final prospectus filed pursuant to this
paragraph.
9. Profit Limitation.
(a) Notwithstanding any other provision of this
Agreement, in no event shall the Grantee's Total Profit (as hereinafter defined)
exceed $120,000,000 (the "Profit Limit") and, if it otherwise would exceed such
amount, the Grantee, at its sole election, shall either (i) deliver to the
Grantor for cancellation Shares previously purchased by Grantee, (ii) pay cash
or other consideration to the Grantor or (iii) undertake any combination
thereof, so that Grantee's Total Profit shall not exceed the Profit Limit after
taking into account the foregoing actions.
(b) Notwithstanding any other provision of this
Agreement, the Option may not be exercised for a number of Shares as would, as
of the date of the Exercise Notice, result in a Notional Total Profit (as
defined below) of more than the Profit Limit. If exercise of the Option
otherwise would exceed the Profit Limit, the Grantee, at its discretion, may
increase the Purchase Price for that number of Shares set forth in the Exercise
Notice so that the Notional Total Profit shall not exceed the Profit Limit, or
elect to reduce the amount of the Termination Fee payable to Grantee pursuant to
Section 7.3 of the Merger Agreement; provided that nothing in this sentence
shall be construed to restrict any exercise of the Option permitted hereby on
any subsequent date at the Purchase Price set forth in Section 1(a) hereof or to
reduce the amount of the Termination Fee payable to Grantee pursuant to Section
7.3 of the Merger Agreement on any subsequent date.
(c) As used herein, the term "Total Profit"
shall mean the aggregate amount (before taxes) of the following: (i) the amount
of cash to be received by Grantee pursuant to Section 7.3 of the Merger
Agreement, (ii) (x) the amount received by Grantee pursuant to the Grantor's
repurchase of Shares pursuant to Sections 1(d), 6 or 7 hereof, less (y) the
Purchase Price, (iii) the amount received by Grantee in respect of a Cash
Exercise Notice pursuant to Section 1(d) hereof, and (iv) (x) the net cash
amounts received by Grantee pursuant to the sale of Shares (or any other
securities into which such Shares are converted or exchanged) to any
unaffiliated party, less (y) the Purchase Price.
(d) As used herein, the term "Notional Total
Profit" with respect to any number of Shares as to which Grantee may propose to
exercise the Option shall be the Total Profit determined as of the date of the
Exercise Notice
9
assuming that the Option was exercised on such date for such number of Shares
and assuming that such Shares, together with all other Shares held by Grantee
and its affiliates as of such date, were sold for cash at the closing market
price for the Common Stock as of the close of business on the preceding trading
day (less customary brokerage commissions).
10. Expenses. Each party hereto shall pay its own expenses
incurred in connection with this Agreement, except as otherwise specifically
provided herein.
11. Specific Performance. Each party acknowledges that if it
fails to perform any of its obligations under this Agreement, immediate and
irreparable harm or injury would be caused to the other party for which money
damages would not be an adequate remedy. In such event, each party agrees that
the other party shall have the right, in addition to any other rights it may
have, to specific performance of this Agreement. Accordingly, if either party
should institute an action or proceeding seeking specific enforcement of the
provisions hereof, the other party in respect of such claim hereby waives the
claim or defense that the other party has an adequate remedy at law and hereby
agrees not to assert in any such action or proceeding the claim or defense that
such a remedy at law exists. Each party further agrees to waive any requirements
for the securing or posting of any bond in connection with obtaining any such
equitable relief.
12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed duly given (a) on the date of delivery
if delivered personally, or by telecopy or facsimile, upon confirmation of
receipt, (b) on the first Business Day following the date of dispatch if
delivered by a recognized next-day courier service, or (c) on the third Business
Day following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
(a) if to the Grantee, to
Teleglobe Inc.
0000 xxx xx Xx Xxxxxxxxxxx xxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Attention: Vice President, Legal Affairs and
Corporate Secretary
Facsimile: 000-000-0000
10
with a copy to
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx III, Esq.
Facsimile No.: 000-000-0000
(b) if to the Grantor, to
Excel Communications, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Executive Vice President,
Secretary and General Counsel
Facsimile: 000-000-0000
with a copy to
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. Xxxxx
Facsimile No.: 000-000-0000
13. Interpretation. When a reference is made in this Agreement
to Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation".
14. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
both parties need not sign the same counterpart.
11
15. Entire Agreement; No Third Party Beneficiaries. (a) This
Agreement, the Teleglobe Inc. Stock Option Agreement, the Voting Agreements, the
Merger Agreement, the Registration Rights Agreement and the Confidentiality
Agreement constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
16. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws of such state.
17. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
18. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise), without
the prior written consent of the other party, and any attempt to make any such
assignment without such consent shall be null and void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
19. Submission to Jurisdiction; Waivers. Each of the Grantee
and the Grantor irrevocably agree that any legal action or proceeding with
respect to this Agreement or for recognition and enforcement of any judgment in
respect hereof brought by the other party hereto or its successors or assigns
may be brought and determined in the Chancery or other Courts of the State of
Delaware, and each of the Grantee and the Grantor hereby irrevocably submit with
regard to any such action or
12
proceeding for itself and in respect to its property, generally and
unconditionally, to the nonexclusive jurisdiction of the aforesaid courts. Each
of the Grantee and the Grantor hereby irrevocably waive, and agree not to
assert, by way of motion, as a defense, counterclaim or otherwise, in any action
or proceeding with respect to this Agreement, (a) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any reason
other than the failure to serve process in accordance with this Section 19, (b)
that it or its property is exempt or immune from jurisdiction of any such court
or from any legal proceedings commenced in such courts (whether through service
of notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise), and (c) to the fullest extent
permitted by applicable law, that (i) the suit, action or proceeding in any such
court is brought in an inconvenient forum, (ii) the venue of such suit, action
or proceeding is improper and (iii) this Agreement, or the subject matter
hereof, may not be enforced in or by such courts.
20. Waiver of Jury Trial. Each party hereto hereby waives, to
the fullest extent permitted by applicable law, any right it may have to a trial
by jury in respect of any litigation directly or indirectly arising out of,
under or in connection with this Agreement.
13
IN WITNESS WHEREOF, the Grantee and the Grantor have caused
this Agreement to be duly executed and delivered on the day and year first above
written.
TELEGLOBE INC.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxx
Title: Chairman and Chief
Executive Officer
EXCEL COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman, Chief
Executive Officer, and
President
14
NYFS05...:\41\44241\0005\2097\AGR6188V.300
EXHIBIT D
EXECUTION COPY
TELEGLOBE STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of June 14, 1998 (the "Agreement"),
between TELEGLOBE, INC., a corporation governed by the Canada Business
Corporations Act (the "Grantor" or the "Corporation"), and EXCEL COMMUNICATIONS,
INC., a Delaware corporation (the "Grantee").
WHEREAS, the Grantee, the Grantor and North Merger Sub Corporation, a
Delaware corporation and a wholly owned subsidiary of the Grantor ("Merger Sub")
are, concurrently with the execution and delivery of this Agreement, entering
into an Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"; capitalized terms used without definition herein have the meanings
assigned to them in the Merger Agreement), which provides, among other things,
for the merger (the "Merger") of Merger Sub with and into Grantee;
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Grantee has requested that the Grantor grant to the Grantee an
option to purchase Common Shares of the capital stock of the Grantor (the
"Common Shares"), upon the terms and subject to the conditions hereof; and
WHEREAS, in order to induce the Grantee to enter into the Merger
Agreement, the Grantor is willing to grant the Grantee the requested option.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
1. The Option; Exercise; Adjustments; Payment of Spread; Termination.
(a) Subject to the other terms and conditions set forth herein,
the Grantor hereby grants to the Grantee an irrevocable option (the "Option") to
purchase up to 25,700,000 duly authorized, validly issued, fully paid and
non-assessable Common Shares (representing 19.9%, rounded down to the nearest
whole multiple of 50,000 Common Shares, of the outstanding Common Shares of the
capital stock of the Grantor as of the date hereof) at a cash purchase price
equal to $25.812 per Common Share (the "Purchase Price"). (The number of Common
Shares and the Purchase Price specified in the immediately preceding sentence
have been determined after giving effect to the Teleglobe Stock Dividend). The
Option may be exercised by the Grantee, in whole or in part, at any time, or
from time to time, following the occurrence of the event referred to in Section
2(c) hereof and prior to the expiration of the Option in accordance with Section
1(e) of this Agreement.
-2-
(b) In the event of any change in the number of issued and
outstanding Common Shares by reason of any stock dividend, stock split,
split-up, recapitalization, merger or other change in the corporate or capital
structure of the Grantor (other than the Teleglobe Stock Dividend), the number
of Common Shares subject to the Option and the Purchase Price shall be
appropriately adjusted to restore the Grantee to its economic and other rights
hereunder.
(c) In the event the Grantee wishes to exercise the Option, the
Grantee shall send a written notice to the Grantor (the "Exercise Notice")
specifying a date (subject to the requirements of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act") and the
Competition Act (Canada) (the "Competition Act")) not later than 10 Business
Days and not earlier than two Business Days following the date such notice is
given for the closing of such purchase.
(d) If an Acquisition Proposal involving Grantor is consummated
within 12 months after termination of the Merger Agreement, then the Grantee
may, at any time the Option is then exercisable pursuant to the terms of Section
1(a) hereof, elect, in lieu of exercising the Option to purchase Common Shares
provided in Section 1(a) hereof, to send a written notice to the Grantor (the
"Cash Exercise Notice") specifying a date not later than 20 Business Days and
not earlier than 10 Business Days following the date such notice is given on
which date the Grantor shall pay to the Grantee an amount in cash in United
States dollars equal to the Spread (as hereinafter defined) multiplied by all or
such portion of the Common Shares subject to the Option as Grantee shall
specify. As used herein "Spread" shall mean the excess, if any, over the
Purchase Price of the higher of (x) if applicable, the highest price per Common
Share (including any brokerage commissions, transfer taxes and soliciting
dealers' fees) paid by any person in an Acquisition Proposal (the "Alternative
Purchase Price") or (y) the weighted average of the closing sales prices of the
Common Shares on the NYSE, TSE and ME, for the ten trading days ending on and
including the fifth trading day prior to the date of the Cash Exercise Notice
converted, in the case of the TSE and ME, to United States dollars using, in the
weighted average formula, the Bank of Canada's noontime currency conversion rate
for each of the days concerned. If the Alternative Purchase Price includes any
property other than cash, the Alternative Purchase Price shall be the sum of (A)
the fixed cash amount, if any, included in the Alternative Purchase Price plus
(B) the fair market value of such other property determined in accordance with
the procedures set forth in Section 6(b) hereof (but using the date of the Cash
Exercise Notice). Upon exercise of the Grantee's right to receive cash pursuant
to this Section 1(d) and the payment of such cash to the Grantee, the
obligations of the Grantor to deliver Common Shares pursuant to Section 3 hereof
shall be terminated with respect to such number of Common Shares for which the
Grantee shall have elected to be paid the Spread.
-3-
If the Grantee receives official notice that all approvals of
the Exchanges in respect of the granting of the Option or the issuance of the
Common Shares purchasable upon the exercise thereof will not be granted or
issued (or, if the Option is then exercisable and a reasonable period of time
has lapsed without receiving such official notice after application therefor has
been made), then the Grantee shall be entitled to receive, and shall receive at
any time the Option is then exercisable pursuant to the terms of Section 1(a)
hereof, in lieu of the grant of the Option or the exercise of the Option to
purchase the Common Shares subject thereto, an amount in cash equal to the
Spread multiplied by such number of the Common Shares subject to the Option as
Grantee shall specify in a written notice to the Grantor. Such cash amount shall
be payable by the Grantor to the Grantee within two business days of such
notice.
(e) The Option and the rights and obligations of the parties
hereunder shall terminate at the earliest of (i) the Effective Time (as defined
in the Merger Agreement), (ii) the termination of the Merger Agreement pursuant
to circumstances under which the Grantee is not entitled to receive the
Termination Fee in accordance with Section 7.4 of the Merger Agreement (other
than a termination by Excel pursuant to Section 7.1(e) if an Acquisition
Proposal with respect to Teleglobe shall be pending at the time of such
termination), and (iii) the date on which Grantee realizes a Total Profit equal
to the Profit Limit (as such terms are defined in Section 9) and (iv) 30 days
after the first anniversary of the date (the "Merger Termination Date") on which
the Merger Agreement is terminated (the date referred to in clause (iii) being
hereinafter referred to as the "Option Expiration Date"); provided that if the
Option cannot be exercised or the Common Shares cannot be delivered to Grantee
upon such exercise because the conditions set forth in Section 2(a) or Section
2(b) hereof have not yet been satisfied (other than because of a permanent
injunction or final unappealable order of a Governmental Entity of competent
jurisdiction prohibiting delivery of the Shares), the Option Expiration Date
shall be extended until 30 days after such impediment to exercise has been
removed.
(f) The Grantor will not, by amendment of its certificate of
incorporation or through any consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Agreement or diminish the economic value of the Option, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
action as may be necessary or appropriate in order to protect the rights of the
Grantee against dilution or other impairment. In furtherance and not in
limitation of the foregoing, in the event that after the date of this Agreement,
the Grantor shall issue Common Shares at a price below their fair market value
(as such term is used in Section 6(b) hereof) at such time, the Purchase Price
shall be adjusted accordingly so that the economic value of the Option relative
to the fair market value of the Common Shares at the time of such issuance shall
be maintained.
-4-
2. Conditions to Delivery of the Common Shares. The Grantor's
obligation to deliver the Common Shares upon exercise of the Option is subject
only to the conditions that:
(a) No preliminary or permanent injunction or other order issued
by any federal, state or provincial court of competent jurisdiction prohibiting
the delivery of the Common Shares shall be in effect; and
(b) Any applicable waiting periods under the HSR Act and the
Competition Act shall have expired or been terminated; and
(c) The Termination Fee shall be payable pursuant to Section 7.4
of the Merger Agreement or the Merger Agreement shall have been terminated by
Excel pursuant to Section 7.1(e) thereof and an Acquisition Proposal with
respect to Teleglobe shall have been pending at the time of such termination.
3. The Closing.
(a) Any closing hereunder shall take place on the date specified
by the Grantee in its Exercise Notice at 9:00 A.M., local time, at the offices
of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, if
the conditions set forth in Section 2(a) or 2(b) have not then been satisfied,
on the second Business Day following the satisfaction of such conditions, or at
such other time and place as the parties hereto may agree (the "Closing Date").
On the Closing Date, the Grantor will deliver to the Grantee a certificate or
certificates, duly endorsed (or accompanied by duly executed stock powers),
representing the Common Shares in the denominations designated by the Grantee in
its Exercise Notice and the Grantee will purchase such Common Shares from the
Grantor at the price per Common Share equal to the Purchase Price. Any payment
made by the Grantee to the Grantor, or by the Grantor to the Grantee, pursuant
to this Agreement shall be made by certified or official bank check or by wire
transfer of funds to a bank designated by the party receiving such funds.
(b) The certificates representing the Common Shares may bear an
appropriate legend relating to the fact that such Common Shares have not been
registered under the Securities Act.
4. Representations and Warranties of the Grantee. The Grantee
represents and warrants to the Grantor that the Grantee (a) is a sophisticated
investor capable of evaluating the merits and risks of an investment in the
Option and the capital stock of the Grantor and (b) is acquiring the Option and,
if and when it exercises the Option, will be acquiring the Common Shares
issuable upon the exercise thereof for its own account and not with a view to
distribution
-5-
or resale in any manner which would be in violation of the Securities Act, any
"blue sky" or state securities law or the Canadian Securities Laws.
5. Listing of the Underlying Shares; HSR Act and Competition Act
Filings; Governmental Consents. Subject to applicable law and the rules and
regulations of the NYSE, the TSE and the ME, the Grantor shall promptly file a
notice to reserve for listing the Common Shares on the NYSE, the TSE and the ME,
provided, however that if the Grantor is unable to effect the listings on the
NYSE, the TSE and the ME by the Closing Date, the Grantor will nevertheless be
obligated to deliver the Common Shares upon the Closing Date. Each of the
Grantor and the Grantee shall make, as promptly as practicable, all necessary
filings under (i) the HSR Act, (ii) the Competition Act and (iii) the Canadian
Securities Laws, and use its best efforts to obtain all necessary approvals
thereunder in respect of the grant of the Option, exercise of the option and
listing of the underlying Common Shares as promptly as practicable. Each of the
parties hereto will use its best efforts to obtain consents of all third parties
and Governmental Entities, if any, necessary to the consummation of the
transactions contemplated hereby.
6. Right of First Refusal. If the Grantee, at any time prior to 30 days
after the first anniversary of the Merger Termination Date, seeks to sell,
transfer or dispose of all or any part of the Common Shares to any third person
in any type of transaction, it shall give the Grantor (or a designee of the
Grantor) the opportunity, in the following manner, to purchase such Common
Shares:
(a) The Grantee shall give notice to the Grantor in writing of
its intent to sell Common Shares (a "Disposition Notice"), specifying the number
of Common Shares to be sold, the price and, if applicable, the material terms of
any agreement relating thereto. For purposes of this Section 6, if the
Disposition Notice is given with respect to the sale of the Common Shares
pursuant to a tender or exchange offer, it shall be assumed that all Common
Shares tendered will be accepted for payment. The Disposition Notice may be
given at any time, including prior to the giving of any Exercise Notice.
(b) The Grantor or its designee shall have the right,
exercisable by written notice given to the Grantee within fifteen Business Days
after receipt of a Disposition Notice (or, if applicable, in the case of a
proposed sale pursuant to a tender or exchange offer for Common Shares, by
written notice given to the Grantee at least two Business Days prior to the then
announced expiration date of such tender or exchange offer (the "Expiration
Date"), it being understood that any such Disposition Notice in the case of a
tender or exchange offer shall be given at least four Business Days prior to
such Expiration Date), to purchase all, but not less than all, of the Common
Shares specified in the Disposition Notice at the price set forth in the
Disposition Notice. If the purchase price specified in the Disposition Notice
includes any
-6-
property other than cash, the purchase price to be paid by the Grantor shall be
an amount of cash in United States dollars equal to the sum of (i) the cash
included in the purchase price plus (ii) the fair market value of such other
property at the date of the Disposition Notice. If such other property consists
of securities with an existing public trading market, the average closing price
(or the average closing bid and asked price if closing prices are unavailable)
for such securities on their principal public trading market for the five
trading days ending five days prior to the date of the Disposition Notice shall
be deemed to equal the fair market value of such property. If such other
property consists of something other than cash or securities with an existing
public trading market and at the time of the closing referred to in paragraph
(c) below, agreement on the value of such other property has not been reached,
the higher of (i) the cash included in the purchase price and (ii) the weighted
average of the closing sales price of the Common Shares on the NYSE, TSE and ME
for the ten trading days ending on and including the fifth trading day prior to
the date of the Disposition Notice shall be used as the per share purchase
price, in the case of the MSE and the TE, to United States dollars using, in the
weighted average formula, the Bank of Canada's noontime currency conversion rate
for each of the days concerned, provided, however, that promptly after the
closing, the Grantee and the Grantor or its designee, as the case may be, shall
settle any additional amounts to be paid or returned as a result of the
determination of fair market value of such other property made by a nationally
recognized investment banking firm selected by the Grantor and approved by the
Grantee within 30 days of the closing. Such determination shall be final and
binding on all parties hereto.
(c) If the Grantor exercises its right of first refusal
hereunder, the closing of the purchase of the Common Shares with respect to
which such right has been exercised shall take place within twenty Business Days
after the notice of such exercise (or, if applicable, in the case of a tender or
exchange offer, no later than one Business Day prior to the expiration date of
the offer if written notice was given within the time set forth in the
parenthetical in the first sentence of paragraph (b) above).
(d) If the Grantor does not exercise its right of first refusal
hereunder within the time specified for such exercise, the Grantee shall be free
for 90 days following the expiration of such time for exercise to sell the
Common Shares (or enter into an agreement to sell the Common Shares) specified
in the Disposition Notice, at the price specified in the Disposition Notice or
any price in excess thereof and otherwise on substantially the same terms set
forth in the Disposition Notice; provided, that if such sale is not consummated
within such 90-day period (or the agreement to sell entered into in such 90 day
period is not thereafter performed in accordance with its terms), then the
provisions of this Section 6 will again apply to the sale of such Common Shares.
-7-
7. Repurchase of Shares. Beginning on the first anniversary date of the
Merger Termination Date, the Grantor shall have the right to purchase (the
"Repurchase Right") all, but not less than all, of the Common Shares at the
greater of (i) the Purchase Price or (ii) the weighted average of the closing
price of the Common Shares on the NYSE, TSE and ME for the ten trading days
ending on and including the fifth trading day prior to the date the Grantor
gives written notice of its intention to exercise the Repurchase Right. If the
Grantor does not exercise the Repurchase Right within 30 days following the
first anniversary of the Merger Termination Date, the Repurchase Right shall
terminate. In the event the Grantor wishes to exercise the Repurchase Right, the
Grantor shall send a written notice to the Grantee specifying a date (not later
than 10 Business Days and not earlier than two Business Days following the date
such notice is given) for the closing of such purchase.
8. Registration Rights.
(a) In the event that the Grantee shall desire to sell 25% or
more of the Common Shares within two years after the purchase of such shares
pursuant hereto, and such sale requires, in the opinion of counsel to the
Grantee, which opinion shall be reasonably satisfactory to the Grantor and its
counsel, registration of such Common Shares under the Securities Act, the
Grantor shall, at its option, either repurchase said Common Shares at a price
established pursuant to the procedure set forth in Section 7, or cooperate with
the Grantee and any underwriters in registering such Common Shares for resale in
a bona fide firm commitment underwritten public offering in which the Grantees
and the underwriters will effect as wide a distribution of such Common Shares as
is reasonably practicable and shall use their best efforts to prevent any person
from purchasing through such offering more than 2% of such outstanding shares,
including, without limitation, promptly filing a registration statement which
complies with the requirements of applicable foreign, federal and state
securities laws and entering into an underwriting agreement with such
underwriters upon such terms and conditions as are customarily contained in
underwriting agreements with respect to secondary distributions; provided that
the Grantor shall not be required to have declared effective more than two
registration statements hereunder and shall be entitled to delay the filing or
effectiveness of any registration statement for up to 135 days if the offering
would, in the judgment of the Board of Directors of the Grantor, require
premature disclosure of any material corporate development or otherwise
interfere with or adversely affect any pending or proposed offering of
securities of the Grantor or any other material transaction involving the
Grantor.
(b) If the Common Shares are registered pursuant to the
provisions of this Section 8, the Grantor agrees (i) to furnish copies of the
registration statement and the prospectus relating to the Common Shares covered
thereby in such numbers as the Grantee may from time to time reasonably request
and (ii) if any event shall occur as a result of which it becomes necessary to
amend or supplement any registration statement or prospectus, to prepare
-8-
and file under the applicable securities laws such amendments and supplements as
may be necessary to keep available for at least 90 days a prospectus covering
the Common Shares meeting the requirements of such securities laws, and to
furnish to the Grantee such numbers of copies of the registration statement as
amended or supplemented as may reasonably be requested. The Grantor shall bear
the cost of the registration, including, but not limited to, all registration
and filing fees, printing expenses, and fees and disbursements of counsel and
accountants for the Grantor, except that the Grantee shall pay the fees and
disbursements of its counsel and the underwriting fees and selling commissions
applicable to the Common Shares sold by the Grantee. The Grantor shall indemnify
and hold harmless Grantee, its affiliates and its officers and directors from
and against any and all losses, claims, damages, liabilities and expenses
arising out of or based upon any statements contained in, omissions or alleged
omissions from, each registration statement filed pursuant to this paragraph;
provided, however, that this provision does not apply to any loss, liability,
claim, damage or expense to the extent it arises out of any statement or
omission made in reliance upon and in conformity with written information
furnished to the Grantor by the Grantee, its affiliates or its officers
expressly for use in any registration statement (or any amendment thereto) or
any preliminary or final prospectus filed pursuant to this paragraph ("Grantee
Information"). The Grantee shall indemnify and hold harmless Grantor, its
affiliates and officers and directors from and against any and all losses,
claims, damages, liabilities and expenses arising out of or based upon any
Grantee Information. The Grantor shall also indemnify and hold harmless each
underwriter and each person who controls any underwriter within the meaning of
either the Securities Act or the Exchange Act against any and all losses,
claims, damages, liabilities and expenses arising out of or based upon any
statements contained in, omissions or alleged omissions from, each registration
statement and prospectus filed pursuant to this paragraph; provided, however,
that this provision does not apply to any loss, liability, claim, damage or
expense to the extent it arises out of any statement or omission made in
reliance upon and in conformity with written information furnished to the
Grantor by the underwriters expressly for use in any registration statement (or
any amendment thereto) or any preliminary or final prospectus filed pursuant to
this paragraph.
9. Profit Limitation.
(a) Notwithstanding any other provision of this Agreement, in no
event shall the Grantee's Total Profit (as hereinafter defined) exceed
U.S.$120,000,000 (the "Profit Limit") and, if it otherwise would exceed such
amount, the Grantee, at its sole election, shall either (i) deliver to the
Grantor for cancellation Shares previously purchased by Grantee, (ii) pay cash
or other consideration to the Grantor or (iii) undertake any combination
thereof, so that Grantee's Total Profit shall not exceed the Profit Limit after
taking into account the foregoing actions.
-9-
(b) Notwithstanding any other provision of this Agreement, the
Option may not be exercised for a number of Shares as would, as of the date of
the Exercise Notice, result in a Notional Total Profit (as defined below) of
more than the Profit Limit. If exercise of the Option otherwise would exceed the
Profit Limit, the Grantee, at its discretion, may increase the Purchase Price
for that number of Shares set forth in the Exercise Notice so that the Notional
Total Profit shall not exceed the Profit Limit, or elect to reduce the amount of
the Termination Fee payable to Grantee pursuant to Section 7.4 of the Merger
Agreement; provided that nothing in this sentence shall be construed to restrict
any exercise of the Option permitted hereby on any subsequent date at the
Purchase Price set forth in Section 1(a) hereof or to reduce the amount of the
Termination Fee payable to Grantee pursuant to Section 7.4 of the Merger
Agreement on any subsequent date.
(c) As used herein, the term "Total Profit" shall mean the
aggregate amount (before taxes) of the following: (i) the amount of cash to be
received by Grantee pursuant to Section 7.4 of the Merger Agreement, (ii) (x)
the amount received by Grantee pursuant to the Grantor's repurchase of Shares
pursuant to Sections 1(d), 6 or 7 hereof, less (y) the Purchase Price, (iii) the
amount received by Grantee in respect of a Cash Exercise Notice pursuant to
Section 1(d) hereof, and (iv) (x) the net cash amounts received by Grantee
pursuant to the sale of Shares (or any other securities into which such Shares
are converted or exchanged) to any unaffiliated party, less (y) the Purchase
Price.
(d) As used herein, the term "Notional Total Profit" with
respect to any number of Shares as to which Grantee may propose to exercise the
Option shall be the Total Profit determined as of the date of the Exercise
Notice assuming that the Option was exercised on such date for such number of
Shares and assuming that such Shares, together with all other Shares held by
Grantee and its affiliates as of such date, were sold for cash at the closing
market price for the Common Stock as of the close of business on the preceding
trading day (less customary brokerage commissions).
10. Expenses. Each party hereto shall pay its own expenses incurred in
connection with this Agreement, except as otherwise specifically provided
herein.
11. Specific Performance. Each party acknowledges that if it fails to
perform any of its obligations under this Agreement, immediate and irreparable
harm or injury would be caused to the other party for which money damages would
not be an adequate remedy. In such event, each party agrees that the other party
shall have the right, in addition to any other rights it may have, to specific
performance of this Agreement. Accordingly, if either party should institute an
action or proceeding, seeking specific enforcement of the provisions hereof, the
other party in respect of such claim hereby waives the claim or defense that the
other party has an adequate remedy at law and hereby agrees not to assert in any
such action or proceeding the claim or
-10-
defense that such a remedy at law exists. Each party further agrees to waive any
requirements for the securing or posting of any bond in connection with
obtaining any such equitable relief.
12. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed duly given (a) on the date of delivery if delivered
personally, or by telecopy or facsimile, upon confirmation of receipt, (b) on
the first Business Day following the date of dispatch if delivered by a
recognized next-day courier service, or (c) on the third Business Day following
the date of mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid. All notices hereunder shall be delivered as set
forth below, or pursuant to such other instructions as may be designated in
writing by the party to receive such notice:
(a) if to the Grantee, to
Excel Communications, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Executive Vice President, Secretary
and General Counsel
Facsimile: 000-000-0000
with a copy to
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. Xxxxx
Facsimile: 000-000-0000
(b) if to the Grantor, to
Teleglobe Inc.
0000, xxx xx Xx Xxxxxxxxxxx xxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Attention: Vice President, Legal Affairs and
Corporate Secretary
Facsimile: 000-000-0000
-11-
with a copy to
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: 000-000-0000
13. Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation".
14. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that both
parties need not sign the same counterpart.
15. Entire Agreement; No Third Party Beneficiaries. (a) This Agreement,
the Excel Communications, Inc. Stock Option Agreement, the Voting Agreements,
the Merger Agreement, the Registration Rights Agreement and the Confidentiality
Agreement constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
16. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Province of Quebec, Canada, without regard to
the principles of conflicts of laws of such jurisdiction.
17. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an
-12-
acceptable manner in order that the transactions contemplated hereby are
consummated as originally contemplated to the greatest extent possible.
18. Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto, in
whole or in part (whether by operation of law or otherwise), without the prior
written consent of the other party, and any attempt to make any such assignment
without such consent shall be null and void. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
19. Submission to Jurisdiction; Waivers. Each of the Grantee and the
Grantor irrevocably agree that any legal action or proceeding with respect to
this Agreement or for recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns may be
brought and determined in any court of competent jurisdiction of the Province of
Ontario and each of the Grantee and the Grantor hereby irrevocably submit with
regard to any such action or proceeding for itself and in respect to its
property, generally and unconditionally, to the nonexclusive jurisdiction of the
aforesaid courts which constitutes a submission to the jurisdiction of the
Province of Ontario. Each of the Grantee and the Grantor hereby irrevocably
waive, and agree not to assert, by way of motion, as a defence, counterclaim or
otherwise, in any action or proceeding with respect to this Agreement, (a) any
claim that it is not personally subject to the jurisdiction of the above-named
courts for any reason other than the failure to serve process in accordance with
this Section 19, (b) that it or its property is exempt or immune from
jurisdiction of any such court or from any legal proceedings commenced in such
courts (whether through service of a writ of seizure, seizure prior to judgment,
post-judgment seizure, execution of judgment or otherwise), and (c) to the
fullest extent permitted by applicable law, that (i) the suit, action or
proceeding in any such court is brought in an inconvenient forum, (ii) the venue
of such suit, action or proceeding is improper and (iii) this Agreement, or the
subject matter hereof, may not be enforced in or by such courts.
20. Waiver of Jury Trial. Each party hereto hereby waives, to the
fullest extent permitted by applicable law, any right it may have to a trial by
jury in respect of any litigation directly or indirectly arising out of, under
or in connection with this Agreement.
-13-
IN WITNESS WHEREOF, the Grantee and the Grantor have caused this
Agreement to be duly executed and delivered on the day and year first above
written.
TELEGLOBE INC.
By: /s/ Xxxxxxx Xxxxxx
-----------------------
Name: Xxxxxxx Xxxxxx
Title: Chairman and
Chief Executive
Officer
EXCEL COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman, Chief
Executive Officer
and President
EXHIBIT E
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of ____________, 199_
(this "Agreement"), among TELEGLOBE INC., a corporation governed by the Canada
Business Corporations Act (the "Company"), and the holders signatory hereto (the
"Shareholders") of common shares of Company capital stock (the "Company Common
Shares").
W I T N E S S E T H :
WHEREAS, in connection with and pursuant to Section 6.3(h) of
the Agreement and Plan of Merger, dated as of June 14, 1998 (the "Merger
Agreement"), among the Company, North Merger Sub Corporation, a Delaware
corporation ("North Sub"), and Excel Communications, Inc., a Delaware
corporation ("Excel"), the Company agreed to enter into this Agreement for the
benefit of the Shareholders;
WHEREAS, pursuant to the Merger, North Sub was merged with and
into Excel, with Excel surviving the Merger as a wholly owned subsidiary of the
Company, and the shares of the Common Stock, par value $.001 per share, of Excel
(the "Excel Common Stock") that were outstanding immediately prior to the Merger
were automatically converted pursuant to the Merger into Company Common Shares
based on the Exchange Ratio;
WHEREAS, pursuant to the Merger Agreement, the Company has
agreed to grant to the Shareholders certain registration rights with respect to
the Company Common Shares issued to the Shareholders in the Merger and
constitute Registrable Securities (as hereinafter defined), as well as certain
other securities to which the Shareholders may be entitled as provided below,
upon the terms and subject to the conditions set forth herein; and
WHEREAS, it is intended by the Company that this
Agreement shall become effective immediately;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company, intending to be legally bound hereby, hereby agrees as follows:
1. DEFINITIONS. Capitalized terms used but not
defined in this Agreement shall have the meanings assigned
to such terms in the Merger Agreement.
2. REGISTRATION RIGHTS.
(a) Registration Upon Request. (i) At any time, and from time
to time, commencing with the Effective Time and ending on December 31, 200_
[INSERT FIFTH CALENDAR YEAR FOLLOWING THE CALENDAR YEAR IN WHICH THE MERGER
OCCURRED] (the "Effective Period"), upon the written request (a "demand") of any
Qualified Holder(s) (as hereinafter defined) requesting that the Company effect
the registration for sale under the Securities Act of 1933, as amended (the
"Securities Act"), of Registrable Securities held by such holders (or qualify
such Registrable Securities for distribution under the securities laws of any
Canadian jurisdiction), the Company promptly shall use its best efforts to
register under the Securities Act (a "Demand Registration") and, if reasonably
required by the Managing Underwriter(s) (as such term is defined in Rule 12b-2
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) to
file a prospectus under applicable Canadian securities laws, the Registrable
Securities which the Company has been requested to register, all to the extent
necessary to permit the disposition of such Registrable Securities in accordance
with the methods intended by the sellers thereof; provided that (i) each such
demand shall cover at least U.S. $50,000,000 in Company Common Shares based on
the closing price for the Company Common Shares on the NYSE Composite Tape for
the last trading day immediately preceding the date of the demand, (ii) the
Qualified Holder(s) shall not be permitted to make a demand within 60 days
following the effective date of any registration statement for equity securities
of the Company (other than on Form F-4, Form S-4 or Form S-8 or any successor or
equivalent form) and (iii) the Company shall not be required to effect more than
five Demand Registrations for the Shareholders pursuant to this Section 2(a). An
exercise of a Demand Registration right will not count as the use of such right
unless the registration statement to which it relates is declared effective
under the Securities Act. However, an exercise of a Demand Registration right
will count as the use of such right even though the registration statement to
which it relates is declared effective if such effective registration statement
is interfered with by any stop order, injunction or other
2
order or requirement of the Securities and Exchange Commission (the
"Commission") or of another governmental agency or court due to a material
misrepresentation in or material omission from information provided in writing
by such Qualified Holder expressly for inclusion by such Qualified Holder in
such registration statement.
(ii) As used in this Agreement, the term
"Registrable Securities" means any and all (A) Company Common Shares acquired by
the Qualified Holders pursuant to the Merger and (B) any other securities issued
or issuable with respect to any shares of the Company Common Shares described in
clause (A) of this paragraph by way of a stock dividend or stock split or in
connection with a combination, exchange, reorganization, recapitalization or
reclassification of any securities of the Company, or pursuant to a merger,
consolidation or other similar business combination transaction involving the
Company.
(iii) As to any particular Registrable
Securities, such securities shall cease to constitute Registrable Securities
when (A) a registration statement with respect to the sale of such securities
shall have been declared effective under the Securities Act and such securities
shall have been disposed of in accordance with the plan of distribution
contemplated by the registration statement, (B) such securities shall have been
sold in satisfaction of all applicable conditions to the resale provisions of
Rule 144 under the Securities Act (or any successor provision thereto), (C) such
securities shall have been transferred, sold or disposed of by a Qualified
Holder to any person that is not a Qualified Holder or (iv) such securities
shall have ceased to be issued and outstanding.
(iv) (A) The term "Qualified Holder(s)"
means any holder of Registrable Securities and any transferee of any such holder
who or which has agreed to be bound by the terms of this Agreement and has
succeeded to the interest of such Shareholder by gift or by virtue of the laws
of descent and distribution.
(v) The Company shall be required to
register the Company Common Shares pursuant to Section 2(a) only if such Company
Common Shares are to be offered and sold in a Broad Public Distribution. For
purposes hereof, "Broad Public Distribution" means an underwritten distribution
registered under the Securities Act or a
3
distribution exempt from registration thereunder in which the Qualified Holders
making the demand use their best efforts to cause the Managing Underwriter(s)
expressly to agree in writing that they collectively will not sell Company
Common Shares to any "person" within the meaning of Section 13(d)(3) of the
Exchange Act who, to the best of such underwriters' knowledge after inquiry,
would own, immediately after such distribution, common shares or other voting
securities of the Company having aggregate voting power of more than 5% of the
voting power of all the then outstanding common shares or other voting
securities.
(B) The term "Majority Qualified
Holder(s)" means a majority in interest of the Qualified Holders participating
in a registration of Registrable Securities pursuant hereto.
(vi) It is hereby further agreed that with
respect to any Demand Registration requested pursuant to this Section 2(a), the
Company may defer the filing or effectiveness of the registration statement for
a period of up to 135 days if (A) the Company is, at such time, working on an
underwritten public offering of the Company Common Shares and is advised by its
Managing Underwriter(s) that such offering would in such Managing Underwriter(s)
opinion be adversely affected in any material respect by such filing or (B) the
general counsel of the Company, in his good faith judgment, determines that any
such filing or the offering of any Registrable Securities would impair or
interfere in any material respect with any proposed financing, other offer or
sale of securities, acquisition, corporate reorganization or other significant
transaction involving the Company, or would require the Company to make public
disclosure of information which would have an material adverse effect on the
Company.
(vii) The Company shall have the right to
cause the registration of additional securities for sale for the account of any
person (including the Company) in any registration of Registrable Securities
requested by the Qualified Holder(s) pursuant to Section 2(a); provided, that
the Company shall not have the right to cause the registration of such
additional securities to the extent the Qualified Holder(s) is advised in
writing (with a copy to the Company) by the Managing Underwriter(s) for such
Demand Registration that, in such firm's opinion, registration of such
additional securities would impair or interfere in any
4
material respect with the marketing and sale of the Registrable Securities
proposed to be registered in the offering by the Qualified Holder(s), and in no
event shall any Qualified Holder be obligated to reduce the number of
Registrable Securities to be included in any offering in order to accommodate
the addition of any other person (including the Company). The Qualified
Holder(s) may require that any such additional securities be included in the
offering proposed by the Qualified Holder(s) on the same terms and conditions as
the Registrable Securities that are included therein.
(viii) If the Managing Underwriter(s) for a
Demand Registration pursuant to this Section 2(a) that involves an underwritten
offering shall advise the Company or the Shareholders on whose behalf the
offering is to be effected that, in its opinion, the inclusion of the amount and
kind of Registrable Securities to be sold for the account of Qualified Holders
would impair or interfere in any material respect with the marketing and sale of
the securities proposed to be registered in the offering, then the number and
kind of Registrable Securities to be sold for the account of such Qualified
Holders shall be reduced (and may be reduced to zero), pro rata among all
requesting Qualified Holders on the basis of the relative number of shares of
such Registrable Securities owned of record or beneficially by each such
Qualified Holder at the time of the request for a Demand Registration. If, as a
result of these proration provisions, any Qualified Holder shall not be entitled
to include all Registrable Securities in a registration pursuant to this Section
2(a)(vii) that such Qualified Holder has requested be included, such Qualified
Holder may elect to withdraw its Registrable Securities from the registration;
provided, however, that such withdrawal election shall be irrevocable and, after
making a withdrawal election, a Qualified Holder shall no longer have any right
to include Registrable Securities in the registration as to which such
withdrawal election was made.
(b) Registration Procedures. If and whenever the Company is
required by the provisions of this Agreement to effect or cause the registration
of any Registrable Securities under the Securities Act as provided in this
Agreement, the Company shall use its best efforts to:
(i) prepare and file with the Commission a
registration statement on a form which is available for the
5
sale of Registrable Securities by the holders thereof in accordance with the
intended plan of distribution therefor (subject to Section 2(a)(v)), and is
reasonably acceptable to the Majority Qualified Holders of Registrable
Securities participating therein (and, if reasonably requested by the Managing
Underwriter(s), prepare and file with the applicable securities regulatory
authority in each Canadian province or with the Director under the CBCA,
preliminary and final prospectuses), and use its best efforts to cause such
registration statement to become and remain effective under the Securities Act
for not less than a period of 60 days (unless the Registrable Securities
registered thereunder have been sold or disposed of prior to the expiration of
such 60-day period); provided, however, that with respect to any demand for
registration pursuant to Section 2(a) made within the period commencing 60 days
next preceding the end of the Company's fiscal year and ending 90 days after the
end of the Company's fiscal year only, if the Company is not then eligible to
effect a registration under the Securities Act by use of Form F-3, Form F-10 or
Form S-3 (or other comparable short-form registration statement), the Company
shall be entitled to delay such registration until ten days after the earlier of
(x) such time as the Company receives audited financial statements for such
fiscal year and (y) the expiration of 75 days after the last day of such fiscal
year;
(ii) prepare and file with the Commission
such amendments, post-effective amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to
keep such registration statement effective for such period of time as is
necessary to complete the offering and the distribution of the securities
covered thereby (but, in no event, longer than 60 days after such registration
statement becomes effective) in each case exclusive of any period during which
the prospectus used in connection with such registration statement shall not
comply with the requirements of Section 10 of the Securities Act; and to comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during said 60-day period;
(iii) furnish to each seller of Registrable
Securities and each underwriter of the securities being sold by such seller, (A)
such number of copies of such registration statement and of each such amendment
thereof
6
and supplement thereto (including all annexes, appendices, schedules and
exhibits), (B) such number of copies of the prospectus used in connection with
such registration statement (including each preliminary prospectus and any
summary prospectus and the final prospectus filed pursuant to Rule 424(b) under
the Securities Act) and (C) such number of copies of other documents, as such
seller and underwriter may reasonably request in order to facilitate the
disposition of Registrable Securities in accordance with the methods intended by
the sellers thereof and, in each of the foregoing cases, afford the seller a
reasonable opportunity to review and comment on drafts of each of the foregoing
documents prior to their filing or distribution, as the case may be;
(iv) register or qualify the Registrable
Securities covered by such registration statement under the securities or "blue
sky" laws of such jurisdictions as any seller and each underwriter of the
Registrable Securities shall reasonably request, and do any and all other acts
and things which may be necessary or desirable to enable such seller and
underwriter to consummate the offering and disposition of Registrable Securities
in such jurisdictions; provided, however, the Company shall not be required to
qualify generally to do business as a foreign corporation, subject itself to
taxation, or consent to general service of process, in any jurisdiction wherein
it would not, but for the requirements of this Section 2(b), be obligated to be
qualified;
(v) cause the Registrable Securities covered
by such registration statement to be registered with, or approved by, such other
public, governmental or regulatory authorities as may be necessary to facilitate
the disposition of such Registrable Securities in accordance with the methods of
disposition intended by the sellers thereof;
(vi) notify each seller of any Registrable
Securities covered by such registration statement and the Managing
Underwriter(s), if any, promptly and, if requested by any such person, confirm
such notification in writing, (A) when a prospectus or any prospectus supplement
has been filed with the Commission, and, with respect to a registration
statement or any post-effective amendment thereto, when the same has been
declared effective by the Commission, (B) of any request by the Commission for
amendments or
7
supplements to a registration statement or related prospectus, or for additional
information, (C) of the issuance by the Commission of any stop order or the
initiation of any proceedings for such or a similar purpose (and the Company
shall make every reasonable effort to obtain the withdrawal of any such order at
the earliest practicable moment), (D) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose (and the Company shall make every
reasonable effort to obtain the withdrawal of any such suspension at the
earliest practicable moment), (E) of the occurrence of any event which requires
the making of any changes to a registration statement or related prospectus so
that such documents will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading (and the Company shall as promptly as practicable prepare
and furnish to such seller and the Managing Underwriter(s) a reasonable number
of copies of a supplemented or amended prospectus such that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading), and (F) of the Company's determination that the filing of a
post-effective amendment to the Registration Statement shall be necessary or
appropriate. Each holder of Registrable Securities agrees that such holder will,
as expeditiously as possible, notify the Company at any time when a prospectus
relating to a registration statement covering such seller's Registrable
Securities is required to be delivered under the Securities Act, of the
happening of any event of the kind described in this Section 2(b)(vi) as a
result of any information provided by such seller in writing specifically for
inclusion in such prospectus included in such registration statement and, at the
request of the Company, promptly prepare and furnish to it such information as
may be necessary so that, after incorporation into a supplement or amendment of
such prospectus as thereafter delivered to the purchasers of such securities,
the information provided by such seller shall not include an untrue statement of
a material fact or omit to state a material fact required to
8
be stated therein or necessary to make the statements made therein, in the light
of the circumstances under which they were made, not misleading. Each holder of
Registrable Securities shall be deemed to have agreed by acquisition of such
Registrable Securities that upon the receipt of any notice from the Company of
the occurrence of any event of the kind described in clause (E) of this Section
2(b)(vi), such holder shall forthwith discontinue such holder's offer and
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such holder shall have received
copies of a supplemented or amended prospectus which is no longer defective as
contemplated by clause (E) of this Section 2(b)(vi) and, if so directed by the
Company, shall deliver to the Company, at the Company' expense, all copies
(other than permanent file copies) of the defective prospectus covering such
Registrable Securities which are then in such holder's possession. In the event
the Company shall provide any notice of the type referred to in the preceding
sentence, the 60-day period mentioned in Sections 2(b)(i) and 2(b)(ii) shall be
extended by the number of days from and including the date such notice is
provided, to and including the date when each seller of any Registrable
Securities covered by such registration statement shall have received copies of
the corrected prospectus contemplated by clause (E) of this Section 2(b)(vi);
(vii) use its reasonable best efforts to
comply with all applicable rules and regulations of the Commission, as the same
may hereafter be amended, and make available to its security holders, as soon as
reasonably practicable, an earnings statement, which shall satisfy the
provisions of Section 11(a) of the Securities Act;
(viii) in the case of a qualification under
Canadian securities laws, take such reasonable actions as may be necessary to
facilitate the sale of Registrable Securities on a public basis in Canada,
including making any necessary filings with Canadian securities authorities or
any Canadian stock exchange on which the Registrable Securities may be listed
from time to time;
(ix) cause all such Registrable Securities
covered by such registration statement to be listed on each securities exchange
on which similar securities issued by the Company are then listed, if the
listing of such
9
Registrable Securities is then permitted under the rules and regulations of such
exchange;
(x) engage and provide a transfer agent
(which may be an existing transfer agent) for all Registrable Securities covered
by such registration statement not later than the effective date of such
registration statement;
(xi) enter into one or more underwriting
agreements (in customary form and substance) and take all such other actions
(including, without limitation, to the extent reasonably consistent with work
commitments but without diminishment of the Company's obligations hereunder, and
upon reasonable notice, participation in a reasonable number of "roadshow"
presentations) as the participating holders shall reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities in
accordance with the plan of distribution intended by the sellers thereof; it
being hereby acknowledged and agreed that in all cases the selection of any
Managing Underwriter(s) shall be made by the Company with the consent of the
Majority Qualified Holders (which consent may not be unreasonably withheld or
delayed); and
(xii) obtain an opinion from counsel to the
Company, and a "cold comfort" letter from an independent certified public
accounting firm of Canadian or U.S. national recognition and standing who have
certified the Company's financial statements included in the registration
statement or any amendment thereto, in each case in form and substance
reasonably satisfactory to the Majority Qualified Holders, and covering such
matters of the type customarily covered by such opinions and "cold comfort"
letters as the Majority Qualified Holders shall reasonably request.
(c) Custody Agreement and Power of Attorney. Upon the
Company's request, the Qualified Holder(s) will execute and deliver a custody
agreement and power of attorney in form and substance reasonably satisfactory to
the Company with respect to the Registrable Securities to be registered pursuant
to this Section 2 (a "Custody Agreement and Power of Attorney"). The Custody
Agreement and Power of Attorney will provide, among other things, that the
Qualified Holders will deliver to and deposit in custody with the custodian and
attorney-in-fact named therein a certificate or certificates representing such
shares of
10
Registrable Securities (duly endorsed in blank by the registered owner or owners
thereof or accompanied by duly executed stock powers in blank) and irrevocably
appoint said custodian and attorney-in-fact as the Qualified Holder's agent and
attorney-in-fact with full power and authority to act under the Custody
Agreement and Power of Attorney on behalf of the Qualified Holders with respect
to the matters specified therein.
(d) Registration Expenses. Whether or not any registration
statement prepared and filed pursuant to this Section 2 is declared effective by
the Commission, the Company shall pay (A) all Commission, Canadian securities
regulatory authority, CBCA and any NYSE, TSE or ME registration and filing fees
and expenses; (B) all listing, transfer and/or exchange agent and registrar
fees; (C) fees and expenses in connection with the qualification of the
Registrable Securities under securities or "blue sky" laws including reasonable
fees, disbursements and related charges of counsel for the underwriters in
connection therewith; (D) printing expenses; (E) messenger and delivery
expenses; (F) fees and out-of-pocket expenses of counsel for the Company and its
independent certified public accountants (including the expenses of any audit,
review and/or "cold comfort" letters) and other persons, including special
experts, retained by the Company; (G) the reasonable fees and disbursements of
one counsel in each of the U.S. and Canada, other than the Company's counsel,
selected by the Majority Qualified Holders of the Registrable Securities being
registered to represent all Qualified Holders of the Registrable Securities
being registered in connection with each such registration (it being understood
that any Qualified Holder may, at its own expense, retain separate counsel to
represent it in connection with such registration); and (H) any other costs and
expenses of such registration and the disposition of the securities pursuant to
the registration statement therefor (collectively, clauses (A) through (H),
"Registration Expenses"); provided, however, that the Company shall not be
required to pay, and the Qualified Holders shall pay, all transfer taxes and all
discounts, commissions or fees of underwriters, selling brokers and dealers.
(e) Indemnification; Contribution.
(i) The Company shall indemnify and hold
harmless, to the fullest extent permitted by law, each
11
holder (a "Participating Holder") of Registrable Securities registered pursuant
to Section 2(a) or Section 2(b) hereof, its officers and directors, if any, and
each person, if any, who controls such holder within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, from and against all
losses, claims, damages, liabilities (or proceedings in respect thereof) and
expenses (including the reasonable costs of investigation and reasonable
attorneys' fees, disbursements and related charges) (under the Securities Act,
the Canadian Securities Acts, common law and otherwise) (collectively,
"Claims"), joint or several, which arise out of or are based upon (A) any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement, prospectus, preliminary prospectus, any amendment or
supplement thereto or any document incorporated by reference or in any filing
made in connection with the registration or qualification of the offering under
"blue sky" or other securities laws of jurisdictions in which the Participating
Holder's Registrable Securities are offered (collectively, "Security Filings"),
or any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and (B) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, if used prior to the effective date of
such registration statement (unless such statement is corrected in the final
prospectus and the Company has previously furnished copies thereof to any
Participating Holder seeking such indemnification and to the underwriters of the
registration in question), or contained in the final prospectus (as amended or
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) if used within the period during which the
Company is required to keep the registration statement to which such prospectus
relates current, or the omission or alleged omission to state therein a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; and the Company shall,
and it hereby agrees to, reimburse such holders for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such claim or proceeding; provided, however, that such indemnification shall not
extend to any Claims which are caused by any untrue statement or alleged untrue
statement contained in, or by any omission or alleged omission from, information
furnished in writing to the
12
Company by any Qualified Holder expressly for use in any such Security Filing.
(ii) In the case of an underwritten offering
in which the registration statement covers Registrable Securities, the Company
agrees to enter into an underwriting agreement in customary form and substance
with such underwriters and to indemnify the underwriters, their officers and
directors, if any, and each person, if any, who controls such underwriters
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, to the same extent as provided in the preceding paragraph with
respect to the indemnification of the holders of Registrable Securities;
provided, however, the Company shall not be required to indemnify any such
underwriter, or any officer or director of such underwriter or any person who
controls such underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, to the extent that the loss, claim, damage,
liability (or proceedings in respect thereof) or expense for which
indemnification is sought results from (i) such underwriter's failure to deliver
or otherwise provide a copy of the final prospectus to the person asserting an
untrue statement or omission or alleged untrue statement or omission at or prior
to the written confirmation of the sale of securities to such person, if such
statement or omission was in fact corrected in such final prospectus or (ii) an
untrue statement or omission or alleged untrue statement or omission relating to
information furnished in writing by such underwriter expressly for inclusion in
any Security Filing.
(iii) Each Participating Holder shall
furnish to the Company in writing such information regarding such holder and the
intended method of distribution as shall be reasonably requested by the Company
and as required by law or the Commission for use in any Security Filing (and the
Company may exclude from registration the Registrable Securities of any such
Participating Holder if such holder fails to furnish such information within a
reasonable time after receiving such request) and hereby severally indemnifies,
to the fullest extent permitted by law, the Company, its officers and directors
and each person, if any, who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, against any Claims
resulting from any untrue statement or alleged untrue statement of a material
fact or any omission
13
or alleged omission of a material fact required to be stated or necessary to
make the statements in the registration statement or prospectus, or any
amendment thereof or supplement thereto (in the case of any prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading; provided, however, (A) each such Participating Holder shall be
liable hereunder if and only to the extent that any such Claim arises out of or
is based upon any such untrue statement or omission made in reliance upon and in
conformity with information pertaining to such holder that is furnished in
writing to the Company by such holder expressly for use in any such Security
Filing and (B) no such Participating Holder shall be liable hereunder in an
amount exceeding the net proceeds to be received by such Participating Holder
(before deducting expenses) from the sale of Registrable Securities hereunder.
(iv) In the case of an underwritten offering
of Registrable Securities, each Participating Holder, as a condition to its
right to participate in such offering, shall enter into an underwriting
agreement in customary form and substance with such underwriters, and agree to
indemnify such underwriters, their officers and directors, if any, and each
person, if any, who controls such underwriters within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, to the same extent and
subject to the same limitations as provided in the preceding paragraph with
respect to indemnification by such holder to the Company, but subject to the
same limitation as provided in Section 2(e)(ii) with respect to indemnification
by the Company of such underwriters, officers, directors and control persons;
provided, however, that no such Participating Holder shall be liable hereunder
in an amount exceeding the net proceeds to be received by such Participating
Holder (before deducting expenses) from the sale of Registrable Securities
hereunder.
(v) Any person seeking indemnification under
the provisions of this Section 2(e) shall, promptly after receipt by such person
of notice of the commencement of any action, suit, claim or proceeding, notify
each party against whom indemnification is to be sought in writing of the
commencement thereof; provided, however, the failure so to notify an
indemnifying party shall not relieve the indemnifying party from any liability
which it may have under this Section 2(e) (except to the extent that it has been
materially prejudiced by such failure) or from any
14
liability which the indemnifying party may otherwise have. In case any such
action, suit, claim or proceeding is brought against any indemnified party, and
it notifies an indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent it may elect
by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party. Notwithstanding
the foregoing, the indemnified party shall have the right to employ its own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (A) the employment of such counsel
shall have been authorized in writing by the indemnifying party in connection
with the defense of such suit, action, claim or proceeding, (B) the indemnifying
party shall not have employed counsel (reasonably satisfactory to the
indemnified party) to take charge of the defense of such action, suit, claim or
proceeding within a reasonable time after notice of commencement of the action,
suit, claim or proceeding, or (C) such indemnified party shall have reasonably
concluded that there may be defenses available to it which are different from or
additional to those available to the indemnifying party which, if the
indemnifying party and the indemnified party were to be represented by the same
counsel, could result in a conflict of interest for such counsel or materially
prejudice the prosecution of the defenses available to such indemnified party.
If any of the events specified in clauses (B) or (C) of the preceding sentence
shall have occurred or shall otherwise be applicable, then the reasonable fees,
disbursements and related charges of one counsel or firm of counsel selected by
a majority in interest of the indemnified parties shall be borne by the
indemnifying party. The indemnifying party shall have the right to direct the
defense of such action, suit, claim or proceeding on behalf of the indemnified
party whether or not the indemnified party employs separate counsel, unless the
indemnifying party has failed to perform his or its indemnification obligations
hereunder. Anything in this paragraph to the contrary notwithstanding, an
indemnifying party shall not be liable for the settlement of any action, suit,
claim or proceeding effected without its prior written consent (which consent in
the case of an action, suit, claim or proceeding exclusively seeking monetary
relief shall not be unreasonably withheld or delayed). Such indemnification
shall remain in full force
15
and effect irrespective of any investigation made by or on behalf of an
indemnified party.
(vi) If the indemnification from the
indemnifying party as provided in this Section 2(e) is unavailable or is
otherwise insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then the
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative benefits
received by and the relative fault of the indemnifying party and indemnified
parties in connection with the actions which resulted in such losses, claims,
damages, liabilities or expenses. The relative fault of such indemnifying party
shall be determined by reference to, among other things, whether any action in
question, including any untrue (or alleged untrue) statement of a material fact
or omission (or alleged omission) to state a material fact, has been made, or
relates to information supplied by such indemnifying party or such indemnified
party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in Section 2(e)(v) hereof, any legal or other fees or expenses reasonably
incurred by such party in connection with any such investigation or proceeding.
Notwithstanding the foregoing, no Participating Holder shall be liable hereunder
in an amount exceeding the net proceeds to be received by such Participating
Holder (before deducting expenses) from the sale of Registrable Securities
hereunder.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 2(c) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations described above. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
16
If, however, indemnification is available under this Section
2(e), the indemnifying parties shall indemnify each indemnified party to the
fullest extent provided in Sections 2(e)(i) through 2(e)(v) hereof without
regard to the relative fault of said indemnifying party or indemnified party or
any other equitable consideration.
(f) Certain Requirements in Connection with Registration
Rights. If the holders of Registrable Securities initially requesting such
Demand Registration have entered into one or more underwriting agreements in
connection therewith, or if a proposed registration under Section 2(b) involves
an underwritten offering, all shares constituting Registrable Securities to be
included in such registration shall be subject to such underwriting agreements
and no person may participate in such registration unless such person agrees to
sell his or its securities on the basis provided in the underwriting
arrangements and completes all questionnaires, powers of attorney, indemnities,
underwriting agreements, "lock up" letters and other documents which are
reasonable and customary under the circumstances.
3. RULE 144(C).
The Company shall file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and the regulations
of the Commission thereunder so as to make available current public information
to the extent required to enable any Qualified Holder to sell Registrable
Securities without registration under the Securities Act pursuant to Rule 144
(or any similar rule or regulation); provided, however, that the Company's
compliance with the requirements of this Section 3 and the availability of Rule
144 for the sale of any Qualified Holders securities shall not limit a
Shareholder's rights to request registration under this Agreement so long as
such person's securities constitute Registrable Securities within the meaning
thereof under this Agreement.
4. NOTICES.
Except as otherwise provided below, whenever it is provided in
this Agreement that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties hereto, or whenever any of the parties hereto, desires to provide to
17
or serve upon any person any other communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and either shall be delivered in person with
receipt acknowledged or sent by registered or certified mail (return receipt
requested, postage prepaid), or by overnight mail, courier, or delivery service
or by telecopy and confirmed by telecopy addressed as follows:
(a) If to the Company, to:
TELEGLOBE INC.
0000, xxx xxx Xx Xxxxxxxxxxx xxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Telephone: 514-
Facsimile: 000-000-0000
Attention: Vice President, Legal Affairs and
Corporate Secretary
- With a copy to -
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxxx III, Esq.
(b) If to the Shareholders to:
Their respective addresses set forth in the stock
records of the Company prepared pursuant to the
Merger for purposes of the exchange of the Excel
Common Stock into the Company Common Shares, as
changed from time to time pursuant to procedures
established by the Company or the transfer agent of
the Company, as the case may be
- 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: Xxxxxxxxx X. Xxxxx, Esq.
18
or at such other address as may be substituted by notice delivered as provided
herein. The furnishing of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly furnished or served on (i) the date on which personally
delivered, with receipt acknowledged, (ii) the date on which telecopied and
confirmed by telecopy answerback, (iii) the next business day if delivered by
overnight or express mail, courier or delivery service, or (iv) three business
days after the same shall have been deposited in the United States mail, as the
case may be. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to the persons
designated above to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration or
other communication.
5. ENTIRE AGREEMENT.
This Agreement represents the entire agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersedes any and all prior oral and written agreements, arrangements and
understandings among the parties hereto with respect to such subject matter; and
can be amended, supplemented or changed, and any provision hereof can be waived,
only by a written instrument making specific reference to this Agreement signed
by the Company on the one hand, and the holders of a majority of the Registrable
Securities on the other hand.
6. ASSIGNS AND SUCCESSORS.
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective assigns and successors.
7. PARAGRAPH HEADINGS.
The paragraph headings contained in this Agreement are for
general reference purposes only and shall not affect in any manner the meaning,
interpretation or construction of the terms or other provisions of this
Agreement.
19
8. APPLICABLE LAW.
This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of New York, applicable to contracts to be
made, executed, delivered and performed wholly within such state and, in any
case, without regard to the conflicts of law principles and policies of such
state.
9. SEVERABILITY.
If at any time subsequent to the date hereof, any provision of
this Agreement shall be held by any court of competent jurisdiction to be
illegal, void or unenforceable, such provision shall be of no force and effect,
but the illegality or unenforceability of such provision shall have no effect
upon and shall not impair the enforceability of any other provision of this
Agreement.
20
10. NO WAIVER.
The failure of any party at any time or times to require
performance of any provision hereof shall not affect the right at a later time
to enforce the same. No waiver by any party of any condition, and no breach of
any provision, term, covenant, representation or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be construed as a further or continuing waiver of any such
condition or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.
11. COUNTERPARTS.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute but one and the same original instrument.
12. NO INCONSISTENT RIGHTS.
The Company will not hereafter enter into any agreement with
respect to its securities which is inconsistent in any material respect with the
rights granted to the holders of Registrable Securities in this Agreement. The
Company is not a party to any agreement, with respect to any of its securities,
granting any registration rights to any person, which agreement is inconsistent
with the rights granted to the holders of Registrable Securities in this
Agreement and is in effect on the date hereof.
13. LIMIT ON INDIVIDUAL SHAREHOLDERS.
Notwithstanding anything to the contrary contained in this
Agreement, the rights granted to each Shareholder under Section 2(a) hereof
shall terminate and cease to apply to such Shareholder at such time as such
Shareholder has received an aggregate of U.S. $750,000,000 in proceeds from the
sale of Registrable Securities pursuant to this Agreement.
14. EXECUTION BY SHAREHOLDERS.
The obligations of the Company under this
Agreement shall be irrevocable but the rights of any
21
Shareholder under this Agreement with respect thereto shall be and become
effective only upon the delivery to the Company by any Qualified Holder
requesting registration under this Agreement of a duly executed counterpart
signature page to this Agreement.
22
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed and delivered by its duly officers thereunto duly authorized as of
the date first above written.
TELEGLOBE, INC.
By:__________________________
Name:
Title:
-----------------------------
23
NYFS05...:\41\44241\0005\2482\AGR6058V.35G
EXHIBIT F
TELEGLOBE INC.
BY-LAW OR ARTICLES AMENDMENT
Notwithstanding any other provision in the By-laws of the Corporation,
(1) (a) The Board of Directors of the Corporation shall
consist at the Effective Time (as defined in the Agreement and Plan of Merger
(the "Merger Agreement") dated as of June 14, 1998 among the Corporation, North
Merger Sub Corporation and Excel Communications, Inc. ("Excel"), a Delaware
corporation) of a total of fifteen members as follows:
(i) 7 members shall be Teleglobe Directors (as
defined in paragraph (e) below);
(ii) 7 members shall be Excel Directors (as defined
in paragraph (e) below); and
(iii) member shall be named jointly by the
Teleglobe Directors and the Excel Directors.
(b) In connection with any annual, annual and special or
special meeting of shareholders of the Corporation during the period from the
Effective Time until December 31 of the fifth complete calendar year after the
calendar year in which the Effective Time occurs (the "Time Period") involving
an election of directors:
(i) the Excel Directors shall be entitled to nominate
5 qualified individuals (or such greater number as
shall be necessary to ensure that the nominees for
Excel Directors represent at least 34% of the total
number of directors comprising the Teleglobe Board)
to stand for election at any such meeting;
(ii) the Teleglobe Directors shall be entitled to
nominate 5 qualified individuals (or such greater
number equal to or, subject to the 34% requirement in
clause (b)(i) above, greater than the number of
individuals nominated pursuant to such clause (b)(i)
above) to stand for election at any such meeting; and
(iii) the Teleglobe Directors and Excel Directors
shall be entitled to jointly nominate 3 qualified
individuals to stand for election at any such
meeting.
(c) Any vacancy in the Board of Directors among the Teleglobe
Directors during the Time Period shall be filled by the Board of Directors with
a qualified individual nominated by the remaining Teleglobe Directors.
(d) Any vacancy in the Board of Directors among the Excel
Directors during the Time Period shall be filled by the Board of Directors with
a qualified individual nominated by the remaining Excel Directors.
(e) For purposes of this section (1), a Teleglobe Director
means (i) any person serving as a director of the Corporation who is designated
by the Board of Directors of the Corporation prior to the Effective Time for
purposes of continuing as a director of the
2
Corporation under clause (a)(i) above, and (ii) any person who becomes a
director of the Corporation in the manner contemplated by either clause (b)(ii)
or paragraph (c) above. For purposes of this section (1), an Excel Director
means (i) any person designated by the Board of Directors of Excel prior to the
Effective Time for purposes of becoming a director of the Corporation under
clause (a)(ii) above, and (ii) any person who becomes a director of the
Corporation in the manner contemplated by either clause (b)(i) or paragraph (d)
above.
(f) There shall at no time be more than two members of the
Board of Directors who are employed by the Corporation or its affiliates, one of
whom shall be the Chief Executive Officer of the Corporation and the other of
whom shall be the Chief Executive Officer of Excel.
(2) During the Time Period, any sale, disposition, transfer or
pledge of any shares of a Subsidiary (as defined below) or any sale,
disposition, lease, transfer or mortgage of all or a substantial portion of the
assets of a Subsidiary or any merger, consolidation, amalgamation, combination,
liquidation or dissolution involving any Subsidiary shall, in addition to any
other approval, require approval by an affirmative vote of at least 66-2/3% of
the entire Board of Directors (disregarding vacancies) of the Corporation.
For purposes of this section (2), Subsidiary means a
subsidiary (as defined in the Canada Business Corporations Act) of the
Corporation which is incorporated under the laws of one of the United States of
America and has a net book value of more than U.S.
$400 million.
3
(3) This By-law shall come into force at the Effective Time
and shall remain in effect until the expiration of the Time Period and may be
amended, modified or repealed in any manner provided for under applicable law if
accompanied by an affirmative vote of at least 66-2/3% of the entire Board of
Directors (disregarding vacancies) of the Corporation.
4
NYFS05...:\41\44241\0005\2097\EXH6188T.500
Exhibit G
[FORM OF]
TELEGLOBE
CERTIFICATE
In connection with the merger (the "Merger") of North Merger
Sub Corporation, Inc. ("North Sub"), a Delaware corporation and a direct
wholly-owned subsidiary of Teleglobe, Inc., a corporation amalgamated under the
Canada Business Corporations Act ("Teleglobe"), with and into Excel
Communications, Inc., a Delaware corporation ("EXCEL"), pursuant to the
Agreement and Plan of Merger dated as of June 14, 1998 (the "Merger Agreement"),
among Teleglobe, North Sub and EXCEL, Teleglobe hereby certifies, on behalf of
Teleglobe and North Sub, the following:
1. The consideration to be issued in the Merger to the
shareholders of EXCEL was the result of arm's length
negotiation between the managements of Teleglobe and EXCEL.
The fair market value of the common stock of Teleglobe
("Parent Common Stock") and any cash in lieu of fractional
shares to be received by each shareholder of EXCEL will be
approximately equal to the fair market value of the common
stock of EXCEL ("EXCEL Common Stock") surrendered in the
Merger.
2. In connection with the Merger, none of the EXCEL Common Stock
will be acquired by Teleglobe or any person related to
Teleglobe (within the meaning of Treasury Regulation Section
1.368-1(e)(3)) for consideration other than Parent Common
Stock and cash in lieu of fractional share interests therein.
3. In the Merger, shares of EXCEL Common Stock representing
control of EXCEL, as defined in Section 368(c) of the Internal
Revenue Code of 1986, as amended (the "Code"), will be
exchanged solely for Parent Common Stock. For purposes of this
representation, any shares of EXCEL Common Stock exchanged for
cash or other property originating with Teleglobe or a direct
or indirect subsidiary of Teleglobe will be treated as
outstanding EXCEL Common Stock on the date of the Merger.
4. Following the Merger, Teleglobe will cause EXCEL to hold at
least 90% of the fair market value of its net assets and at
least 70% of the fair market value of its gross assets held
immediately prior to the Merger and at least 90% of the fair
market value of the net assets and at least 70% of the fair
market value of the gross assets of North Sub held immediately
before the Merger. For purposes of this representation, assets
transferred from Teleglobe to North Sub are not included as
assets of North Sub immediately before the Merger where such
assets are used to pay dissenters, to pay reorganization
expenses, to pay creditors of EXCEL or to enable North Sub to
satisfy state minimum capitalization requirements (where the
money is returned to Teleglobe as part of the transaction).
5. Following the Merger, EXCEL will continue its historic
business or use a significant portion of its historic business
assets in a business (within the meaning of Treasury
Regulation Section 1.368-1(d)).
6. Teleglobe has no plan or intention to liquidate EXCEL; to
merge EXCEL with or into another corporation; to sell,
distribute or otherwise dispose of EXCEL Common Stock acquired
in the Merger except for transfers or successive transfers of
EXCEL Common Stock to one or more corporations controlled
(within the meaning of Section 368(c) of the Code) in each
case by the transferor; or to cause EXCEL to sell or otherwise
dispose of any of its assets or of any of the assets acquired
from North Sub, except for dispositions made in the ordinary
course of business or transfers or successive transfers of
assets to one or more corporations controlled (within the
meaning of Section 368(c) of the Code) in each case by the
transferor corporation.
7. In connection with the Merger, neither Teleglobe nor any
person related to Teleglobe (within the meaning of Treasury
Regulation Section 1.368- 1(e)(3)) will purchase, exchange
redeem or otherwise acquire (directly or indirectly) any
Parent Common Stock issued to holders of EXCEL Common Stock in
the Merger.
8. Teleglobe and North Sub will pay their respective expenses, if
any, incurred in connection with the Merger, and will not pay
any of the expenses of the shareholders of EXCEL incurred in
connection with the Merger.
9. Neither Teleglobe nor any person related to Teleglobe (within
the meaning of Treasury Regulation Section 1.368-1(e)(3)) has
owned during the past five (5) years any shares of stock of
EXCEL.
10. Neither Teleglobe nor North Sub is an investment company as
defined in Section 368(a)(2)(F)(iii) and (iv) of the Code.
11. Before the Merger, Teleglobe will be in control of North Sub
within the meaning of Section 368(c) of the Code.
12. Teleglobe has no plan or intention to cause EXCEL to issue
additional shares of EXCEL Common Stock that would result in
Teleglobe losing control of EXCEL within the meaning of
Section 368(c) of the Code.
13. There is no intercorporate indebtedness existing between
Teleglobe and EXCEL or between North Sub and EXCEL that was
issued, acquired or will be settled at a discount.
14. North Sub will have no liabilities assumed by EXCEL, and will
not transfer to EXCEL any assets subject to liabilities, in
the Merger.
15. None of the compensation to be received by any
shareholder-employee of EXCEL in the Merger will be separate
consideration for, or allocable to, any of such person's
shares of EXCEL Common Stock; none of the shares of Parent
Common Stock to be received by any shareholder- employee of
EXCEL will be separate consideration for, or allocable to, any
past or future services; and the compensation to be paid to
any shareholder-employee after the Merger will be for services
actually rendered and will be commensurate with amounts paid
to third parties bargaining at arm's length for similar
services.
16. The Merger is being affected for bona fide business reasons,
as described in the Proxy Statement.
17. The Merger Agreement (including all exhibits and attachments
thereto) represents the full and complete agreement between
Teleglobe, North Sub and EXCEL regarding the Merger, and there
are no other written or oral agreements regarding the Merger.
18. The Merger is not pursuant to an agreement that was binding on
or before January 28, 1998.
19. The payment of cash in lieu of fractional shares of Parent
Common Stock in the Merger is solely for the purpose of
avoiding the expense and inconvenience to Teleglobe of issuing
fractional shares, if any, and does not represent separately
bargained-for consideration.
20. Parent Common Stock entitles the holder to vote for the board
of directors of Teleglobe.
21. U.S. transferors (as defined in Treasury Regulation Section
1.367(a)- 3(c)(5)(v)) will, in the aggregate, receive (taking
into account any attribution or constructive ownership rules
of Treasury Regulation Section 1.367(a)-3(c)) in the Merger
50% or less of both the total voting power and the total value
of all of the capital stock of Teleglobe outstanding
immediately after the Merger.
22. Officers, directors and five-percent target shareholders (as
defined in Treasury Regulation Section 1.367(a)-3(c)(5)(iii))
of EXCEL will own (taking into account any attribution or
constructive ownership rules of Treasury Regulation Section
1.367(a)-3(c)) 50% or less of both the total voting power and
total value of all of the capital stock of Teleglobe
outstanding immediately after the Merger.
23. Teleglobe or one or more of its qualified subsidiaries (as
defined in Treasury Regulation Section 1.367(a)-3(c)(5)(vii))
or one or more of its qualified partnerships (as defined in
Treasury Regulation Section 1.367(a)-3(c)(5)(viii)) has been
engaged in an active trade or business outside the United
States, within the meaning of Treasury Regulation Sections
1.367(a)-2T(b)(2) and (3) and 1.367(a)-3(c)(3)(ii), for the
entire 36-month period immediately before the Merger.
24. None of Teleglobe, its qualified subsidiaries or its qualified
partnerships has an intention to substantially dispose of or
discontinue such trade or business referred to in paragraph 23
(within the meaning of Treasury Regulation Sections
1.367(a)-2T(b)(2) and (3)) that any of them are involved in
outside the United States.
25. At the time of the Merger, the substantiality test (as defined
in Treasury Regulation Section 1.367(a)-3(c)(3)(iii)) will be
satisfied based on that certain Internal Revenue Service
ruling (referred to in Section 6.3(f) of the Merger Agreement)
received by EXCEL prior to the date of the Merger.
26. Following the Merger, Teleglobe will cause EXCEL to comply
with the reporting requirements of Treasury Regulation Section
1.367(a)-3(c)(6).
27. Teleglobe has neither issued or acquired options (or an
interest similar to an option) with for a principal purpose
(within the meaning of Treasury Regulation Section
1.367(a)-3(c)(4)(ii)) of avoiding the general rule of Section
367(a)(1) of the Code.
28. EXCEL will not, immediately after the transfer, own directly
or indirectly (applying the attribution rules of Sections
267(c)(1) and (5) of the Code) any stock of Teleglobe.
IN WITNESS WHEREOF, Teleglobe, on behalf of Teleglobe and
North Sub, has executed this Certificate on this -- day of -------, 1998.
TELEGLOBE, INC.
By: ------------------------------
Name:
Title:
NYFS05...:\41\44241\0005\2097\CRT6188U.400
Exhibit H
[FORM OF]
EXCEL
CERTIFICATE
In connection with the merger (the "Merger") of North Merger
Sub Corporation, Inc. ("North Sub"), a Delaware corporation and a direct
wholly-owned subsidiary of Teleglobe, Inc., a corporation amalgamated under the
Canada Business Corporations Act ("Teleglobe"), with and into Excel
Communications, Inc., a Delaware corporation ("EXCEL"), pursuant to the
Agreement and Plan of Merger dated as of June 14, 1998 (the "Merger Agreement"),
among Teleglobe, North Sub and EXCEL, EXCEL hereby certifies the following:
1. The consideration to be received in the Merger by the
shareholders of EXCEL was the result of arm's length
bargaining between the managements of Teleglobe and EXCEL. The
fair market value of the common stock of Teleglobe ("Parent
Common Stock") and any cash received in lieu of fractional
shares to be received by each shareholder of EXCEL will be
approximately equal to the fair market value of the common
stock of EXCEL ("EXCEL Common Stock") surrendered in the
Merger.
2. Prior to and in connection with the Merger, no outstanding
stock of EXCEL has been or will be (i) redeemed by EXCEL, (ii)
acquired by a person related to EXCEL (within the meaning of
Treasury Regulation Section 1.368-1(e)(3) determined without
regard to Treasury Regulation Section 1.368-1(e)(3)(i)(A)) for
consideration other than Parent Common Stock or EXCEL Common
Stock, or (iii) the subject of any extraordinary distribution
by EXCEL.
3. There is no plan or intention on the part of any shareholder
of EXCEL who owns five percent or more of the EXCEL Common
Stock as of the date of the Merger, and to the best knowledge
of EXCEL there is no plan or intention on the part of any of
the remaining shareholders of EXCEL, to sell, exchange or
otherwise dispose of Parent Common Stock to be received in the
Merger by such holder of EXCEL Common Stock directly or
indirectly to Teleglobe or to
a person related to Teleglobe (within the meaning of Treasury
Regulation Section 1.368-1(e)(3)) for consideration other than
Parent Common Stock.
4. On the date of the Merger, EXCEL will not have outstanding any
warrants, options, convertible securities, or any other type
of right pursuant to which any person could acquire stock in
EXCEL that, if exercised or converted, would affect
Teleglobe's acquisition or retention of "control" of EXCEL
within the meaning of Section 368(c) of the Internal Revenue
Code of 1986, as amended (the "Code").
5. EXCEL has no plan or intention to issue additional shares of
its stock that would result in Teleglobe losing "control" of
EXCEL within the meaning of Section 368(c) of the Code.
6. EXCEL and its shareholders will pay their respective expenses,
if any, incurred in connection with the Merger.
7. EXCEL is not an investment company as defined in Section
368(a)(2)(F)(iii) and (iv) of the Code.
8. EXCEL is not under the jurisdiction of a court in a Title 11
or similar case within the meaning of Section 368(a)(3)(A) of
the Code.
9. There is no intercorporate indebtedness existing between
Teleglobe and EXCEL or between North Sub and EXCEL that was
issued, acquired or will be settled at a discount.
10. In the Merger, shares of EXCEL Common Stock representing
control of EXCEL within the meaning of Section 368(c) of the
Code will be exchanged solely for Parent Common Stock. For
purposes of this representation, any shares of EXCEL Common
Stock exchanged for cash or other property originating with
Teleglobe or a direct or indirect subsidiary of Teleglobe will
be treated as outstanding EXCEL Common Stock on the date of
the Merger.
11. In connection with the Merger, EXCEL has not sold, transferred
or otherwise disposed of any of its assets as would prevent
Teleglobe or members of its qualified group (within the
meaning of Treasury Regulation 1.368-1(d)(4)(ii)) from causing
EXCEL after the Merger to continue the historic business of
EXCEL or to use a significant portion of EXCEL's historic
business assets in a business.
12. On the date of the Merger, the fair market value of the assets
of EXCEL will exceed the sum of its liabilities, plus the
amount of liabilities, if any, to which the assets are
subject.
13. Following the Merger, EXCEL will hold at least 90% of the fair
market value of its net assets and at least 70% of the fair
market value of its gross assets held immediately prior to the
Merger. For purposes of this representation, amounts paid by
EXCEL to dissenters, amounts paid by EXCEL to EXCEL
shareholders who receive cash or other property in the Merger,
amounts used by EXCEL to pay its reorganization expenses and
those of its shareholders, and all redemptions and
distributions (except for regular, normal dividends) made by
EXCEL will be included as assets of EXCEL immediately prior to
the Merger.
14. The Merger is being affected for bona fide business reasons,
as described in the Proxy Statement.
15. The Merger Agreement (including all exhibits and attachments
thereto) represents the full and complete agreement between
Teleglobe and EXCEL regarding the Merger, and there are no
other written or oral agreements regarding the Merger.
16. The Merger is not pursuant to an agreement that was binding on
or before January 28, 1998.
17. The payment of cash in lieu of fractional shares of Parent
Common Stock in the Merger is solely for the purpose of
avoiding the expense and inconvenience to Teleglobe of issuing
fractional shares, if any, and does not represent separately
bargained-for consideration.
18. U.S. transferors (as defined in Treasury Regulation Section
1.367(a)-3(c)(5)(v)) will, in the aggregate, receive (taking
into account any attribution or constructive ownership rules
of Treasury Regulation Section 1.367(a)-3(c)) in the Merger
50% or less of both the total voting power and the total value
of all of the outstanding stock of Teleglobe outstanding
immediately after the Merger.
19. Officers, directors and five-percent target shareholders (as
defined in Treasury Regulation Section 1.367(a)-3(c)(5)(iii))
of EXCEL will own (taking into account any attribution or
constructive ownership rules of Treasury Regulation Section
1.367(a)-3(c)) 50% or less of both the total voting power and
total
value of all of the capital stock of Teleglobe outstanding
immediately after the Merger.
20. Each U.S. person exchanging EXCEL Common Stock for Parent
Common Stock in the Merger that is a five percent transferee
shareholder (as defined in Treasury Regulation Section
1.367(a)-3(c)(5)(ii)) of Teleglobe will comply with the
requirements of Treasury Regulation Section 1.367(a)-3T(g).
21. At the time of the Merger, the shareholders of EXCEL Common
Stock have no intention to substantially dispose of or
discontinue any active trade or business (within the meaning
of Treasury Regulation Sections 1.367(a)-2T(b)(2) and (3) and
1.367(a)-3(c)(3)(i)) that Teleglobe, any qualified subsidiary
of Teleglobe or any qualified partnership of Teleglobe is
engaged in outside the United States.
22. At the time of the Merger, the substantiality test (as defined
in Treasury Regulation Section 1.367(a)-3(c)(3)(iii)) will be
satisfied based on that certain Internal Revenue Service
ruling (referred to in Section 6.3(f) of the Merger Agreement)
received by EXCEL prior to the date of the Merger.
23. EXCEL has neither issued or acquired options (or an interest
similar to an option) for a principal purpose (within the
meaning of Treasury Regulation Section 1.367(a)-3(c)(4)(ii))
of avoiding the general rule of Section 367(a)(1) of the Code.
24. EXCEL will not, immediately after the transfer, own directly
or indirectly (applying the attribution rules of Sections
267(c)(1) and (5) of the Code) any stock of Teleglobe.
IN WITNESS WHEREOF, EXCEL has executed this Certificate on
this day of , 1998.
EXCEL COMMUNICATIONS, INC.
By:
Name:
Title:
NYFS05...:\41\44241\0005\2097\CRT6188U.370
EXHIBIT I
[FORM OF]
AFFILIATE'S LETTER
EXCEL
June __, 1998
Teleglobe Inc.
0000, xxx xx xx Xxxxxxxxxxx xxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Xxxxxx
Excel Communications, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Ladies and Gentlemen:
Pursuant to the terms of the Agreement and Plan of Merger dated as of
June 14, 1998 (the "AGREEMENT") among North, a corporation amalgamated under the
Canada Business Corporations Act ("TELEGLOBE"), Excel Communications, Inc., a
Delaware corporation ("EXCEL"), and North Merger Sub Corporation, a Delaware
corporation ("NORTH SUB"), North Sub will be merged with and into Excel with
Excel to be the surviving corporation in the Merger (the "MERGER").
The undersigned represents, warrants and covenants with and to
Teleglobe and Excel that:
A. I understand that the Merger is intended to be accounted
for using the "pooling-of-interests" method and that such treatment for
financial accounting purposes is dependent upon the accuracy of certain
of the representations and warranties, and the undersigned's compliance
with certain of the covenants and agreements, set forth herein.
Accordingly, I will not sell, pledge, transfer or otherwise dispose of
or hedge or otherwise reduce my risk with respect to, my shares of
Excel Common Stock from Teleglobe capital stock from the 30th day prior
to the effective time of the Merger to such time as results covering at
least 30 days of combined operations of Teleglobe and Excel have been
published by Teleglobe (such publication, the "COMBINED
FINANCIAL RESULTS REPORT"), except for transfers or other disposition
that, in the reasonable opinion of Teleglobe's independent public
accountants, will not prevent Teleglobe from accounting for the Merger
as a pooling of interests, taking into account the actions of
Teleglobe, Excel and their other stockholders and affiliates.
B. I also understand that stop transfer instructions will be
given to the transfer agents of Teleglobe and Excel in order to prevent
any breach of the covenants and agreements make by the undersigned in
paragraph A, although such stop transfer instructions will be promptly
rescinded upon the publication of the Combined Financial Results
Report.
C. I understand and agree that this letter agreement shall
apply to all shares of the capital stock of Teleglobe and Excel that
are deemed to be beneficially owned by the undersigned pursuant to
applicable United States and Canadian securities laws.
Very truly yours,
By: -----------------------
Name:
Accepted this ___ day of
June, 1998.
EXCEL COMMUNICATIONS, INC.
By: --------------------------
Name:
Title:
NYFS05...:\41\44241\0005\2097\EXH6188U.580
EXHIBIT J
[FORM OF]
AFFILIATE'S LETTER
TELEGLOBE
June __, 1998
Teleglobe Inc.
0000, xxx xx Xx Xxxxxxxxxxx xxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Xxxxxx
Excel Communications, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Ladies and Gentlemen:
Pursuant to the terms of the Agreement and Plan of Merger dated as of
June , 1998 (the "AGREEMENT") among Teleglobe Inc., a corporation amalgamated
under the Canada Business Corporations Act ("TELEGLOBE"), Excel Communications,
Inc., a Delaware corporation ("EXCEL"), and North Merger Sub Corporation, a
Delaware corporation ("NORTH SUB"), North Sub will be merged with and into Excel
with Excel to be the surviving corporation in the Merger (the "MERGER").
I represent, warrant and covenant with and to Teleglobe and Excel that:
A. I understand that the Merger is intended to be accounted for using
the "pooling-of-interests" method under both United States and Canadian
generally accepted accounting principles and that such treatment for financial
accounting purposes is dependent upon the accuracy of certain of the
representations and warranties, and my compliance with certain of the covenants
and agreements, set forth herein. Accordingly, I will not sell, pledge, transfer
or otherwise dispose of, or hedge or otherwise reduce my risk with respect to,
any common shares of Teleglobe capital stock or any shares of Excel Common Stock
from the 30th day prior to the effective time of the Merger, to such time as
results covering at least 30 days of combined operations of Teleglobe and Excel
have been published by Teleglobe (such publication,
the "COMBINED FINANCIAL RESULTS REPORT"), except for transfers or other
dispositions that, in the reasonable opinion of Teleglobe's independent public
accountants, will not prevent Teleglobe from accounting for the Merger as a
pooling of interests, taking into account the actions of Teleglobe, Excel and
their other stockholders and affiliates.
B. I also understand that stop transfer instructions will be given to
the transfer agents of Teleglobe and Excel in order to prevent any breach of the
covenants and agreements I make in paragraph A, although such stop transfer
instructions will be promptly rescinded upon the publication of the Combined
Financial Results Report.
2
C. I understand and agree that this letter agreement apply to all
shares of the capital stock of Teleglobe and Excel that are deemed to be
beneficially owned by me pursuant to applicable United States and Canadian
securities laws.
Very truly yours,
-------------------------
Name:
Accepted this ___ day of
June, 1998.
TELEGLOBE INC.
By: ----------------------------
Name:
Title:
3
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