EXHIBIT 10.1
THIS AGREEMENT is made on 29 February, 2000 BETWEEN:
(1) CABLE AND WIRELESS FAR EAST LIMITED whose principal office is at 39th
Floor, Hongkong Telecom Tower, Taikoo Place, 000 Xxxxx Xxxx, Xxxxxx Xxx,
Xxxx Xxxx (the "Company"); and
(2) CMGI, INC. whose principal office is at 000, Xxxxxxxxxx Xxxxxx, Xxxxxxx, XX
00000, XXX (the "CMGI").
WHEREAS:
(A) The Company is the registered owner of approximately 54 per cent. of the
issued share capital of HKT.
(B) PCCW intends to make the Offer for the whole of the issued share capital of
HKT.
(C) The Company intends to accept the Offer.
(D) CMGI is willing, on the terms set out in this agreement to issue the New
CMGI Shares to the Company in consideration for the issue or transfer to it
of the New Shares at the direction of or by the Company.
IT IS AGREED as follows:
1. INTERPRETATION
In this agreement:
"Base Ratio" means the average of the ratio of the closing sale price for
CMGI Shares on Nasdaq and PCCW Shares on the Hong Kong Stock Exchange
(converted into US$ in accordance with the spot rate as shown on the New
York Federal Noon Rate) for the 20 Business Days up to and including 25
February, 2000, (being 0.0244), as such ratio may be adjusted for any
subsequent splits, consolidations, combinations or reclassifications of
CMGI Shares or PCCW Shares subsequent to 25 February, 2000;
"Business Day" means a day (other than a Saturday or Sunday) on which banks
in Hong Kong, London and New York are open for general business;
"CMGI Shares" means the ordinary shares of common stock, par value US$0.01
per share of CMGI;
"C&W" means Cable and Wireless plc (registered number 238525) whose
registered office is at 000 Xxxxxxxxx Xxxx, Xxxxxx XX0X 0XX;
"C&W Group" means C&W and each of its subsidiaries (as such term is defined
in the Companies Xxx 0000 of England and Wales);
"Exchange Ratio" means the average of the ratio of the closing sale price
for CMGI Shares on Nasdaq and PCCW Shares on the Hong Kong Stock Exchange
(converted into US$ in
accordance with clause 2(2) below) for the 15 Business Days immediately
prior to the Settlement Date;
"HK$" means Hong Kong dollars, the official currency of the Hong Kong
Special Administrative Region;
"HKT" means Cable and Wireless HKT Limited whose principal place of
business is at 39th Floor, Hong Kong Telecom Tower, Taikoo Place, 000 Xxxxx
Xxxx, Xxxxxx Xxx, Xxxx Xxxx;
"Hong Kong Stock Exchange" means The Stock Exchange of Hong Kong Limited;
"Nasdaq" means the Nasdaq National Market;
"New CMGI Shares" means the new shares of common stock, per value $0.01 per
share of CMGI issued pursuant to this agreement;
"New Shares" means the new ordinary shares of HK$0.05 each in the capital
of PCCW issued pursuant to the Offer, which are to be transferred pursuant
to this agreement;
"Offer" means the offer by Doncaster Group Limited to acquire the whole of
the issued ordinary share capital of HKT (other than the shares currently
owned by PCCW or any of its wholly-owned subsidiaries) on the terms and
subject, inter alia, to the Conditions set out in the Announcement;
"PCCW" means Pacific Century Cyber Works Limited whose principal office is
at 00xx Xxxxx, Xxxxxxxx Xxxxx, Xxxxxxxx Plaza, 0 Xxxxxx Xxxx, Xxxxxxx,
Xxxxxxxx;
"PCCW Shares" means the ordinary shares of HK$0.05 each in the capital of
PCCW;
"Securities Act" means the United States Securities Act of 1933, as
amended;
"subsidiary" means a subsidiary as defined in section 736 of the Companies
Xxx 0000; and
"US$" means United States dollars, the official currency of the United
States of America.
2. SHARE SALE
(1) Conditional upon the Offer being declared wholly unconditional in all
respects and settlement of the consideration due to the Company by PCCW
being duly made (the "Offer Closing"), CMGI agrees to issue the number of
CMGI Shares determined under clause 2(2) below to the Company (or as it
directs) in consideration for the Company agreeing to:
(i) use its reasonable endeavours to procure the issue of New Shares
determined under clause 2(2) below to CMGI (or as it directs); or
(ii) in the event of it failing to procure the issue of those shares to
CMGI, it transferring (or procuring the transfer of) the New Shares to
CMGI.
(2) The number of CMGI Shares to be issued pursuant to clause 2(1) above shall
be such number as have a value of US$500 million, based on the average of
the closing sale prices for CMGI Shares on Nasdaq over the 15 Business Days
immediately prior to Settlement Date. The
number of New Shares to be transferred pursuant to clause 2(1) above shall
be such number as have a value of US$500 million based on the average of
the closing sale prices for PCCW Shares on the Hong Kong Stock Exchange
over the 15 Business Days immediately prior to the Settlement Date. For the
purpose of this clause 2(2), the exchange rate for calculating the value of
the New Shares in US$ shall be the spot rate of exchange (the closing mid-
point) for HK$ into US$ on the Business Day immediately preceding the
Settlement Date as shown on the New York Federal Noon Rate or where no such
rate is published in respect of that currency for such date at the rate
quoted by HSBC as at the close of business in Hong Kong as at such date.
(3) If the Exchange Ratio is greater than or equal to 115 per cent. of the
Base Ratio or less than or equal to 85 per cent. of the Base Ratio, then
either party may elect to terminate this agreement by notice in writing to
the other. If an election is made then this agreement shall cease to have
any effect and neither of the parties shall have any rights or liabilities
under this agreement.
3. SETTLEMENT
(1) At 2.00 p.m. local time on the second Business Day (or such other date and
time as the parties agree) (the "Settlement Date") after the date on which
the New Shares are issued to the Company (or as it directs) pursuant to the
Offer (which date shall be notified by the Company to CMGI as soon as it
becomes aware thereof) the Company shall deliver, or cause to be delivered,
to CMGI share certificate(s) in respect of the New Shares in favour of CMGI
(or as it directs) and unless such New Shares shall have been issued to
CMGI (or as it directs), an executed instrument of transfer in favour of
CMGI (or as it directs), and such other documents and shall do or procure
to be done such other things as shall be required to effect the issue or
transfer of the New Shares to CMGI or as it may direct, whereupon CMGI
shall issue the New CMGI Shares providing for the registration rights set
forth in Schedule 1 and having such other terms as are customary for
registration rights providing for registration rights of that type.
(2) In the event that prior to the Offer being declared wholly unconditional in
all respects, the Company transfers its interest in HKT to another member
of the C&W Group (the "Transferee") then the Transferee shall take all
actions, sign all documents and do all things necessary to give effect to
the issue or transfer of the New Shares to CMGI as set out in clause 3(1)
above, whereupon CMGI will issue the New CMGI Shares to the Transferee (or
as it directs) and shall deliver a registration rights agreement in
relation to the New CMGI Shares providing for the registration rights set
forth in Schedule 1 and having such other terms as are customary for
registration rights providing for registration rights of that type.
(3) In the event that the condition in 2(i) the Company undertakes to use its
reasonable endeavours to procure the issue of the New Shares to CMGI (or as
it directs) pursuant to this agreement. In the event that it is unable to
procure the issue of the New Shares directly to CMGI (or as it directs) and
any stamp duty or other transfer tax or duty arises as a result of the
transfer to CMGI of the New Shares hereunder, then this shall be borne by
the Company.
(4) The Company shall not and shall procure that any Transferee shall not,
directly or indirectly, sell, dispose of or otherwise transfer any of the
Company's interest in, or acquire or sell any options or other securities
relating to, or that would be intended to reduce the Company's risk
relative to, the New CMGI Shares for a period of six (6) months from the
Settlement Date with respect to one half of the CMGI Shares and for a
period of one year from the Settlement Date for the other one half of the
CMGI Shares unless the sale, disposition or transfer is made to a member of
the C&W Group and such entity has signed an agreement acceding to the
obligations of the parties to this Agreement. In the event the Company or
the transferee as the case may be effects a sale, disposition or transfer
to an entity pursuant to and, subsequent thereto, the entity ceases to be a
member of the C&W Group, all necessary steps shall be taken to transfer as
soon as practicable the New CMGI Shares held by the entity to a member of
the C&W Group.
4. WARRANTIES
(1) The Company warrants that it is entitled to execute and perform this
agreement and to transfer the full legal and beneficial ownership of the
New Shares to CMGI on the terms of this agreement and that the same will be
acquired by CMGI hereunder fully paid and free from all encumbrances and
free of any contractual limitation upon transfer.
(2) CMGI warrants that it has the corporate power and authority to execute and
perform this agreement and that the New CMGI Shares will be issued as fully
paid up and will rank pari passu with the existing issued ordinary shares
of common stock, par value US$0.01 per share of CMGI.
(3) The Company hereby represents, warrants and undertakes to CMGI (to the
intent that the provision of this Clause shall continue to have full force
and effect notwithstanding completion of the issue and transfer provided
for in clause 3 above) that:
(i) Purchase for Own Account. The New CMGI Shares are being acquired
for investment for the Company's own account, not as a nominee or
agent, and not with a view to the public resale or distribution
thereof within the meaning of the Securities Act and the Company
had no present intention of selling or granting any particpation in
or otherwise distributing the service. The Company also represents
that it has not been formed for the specific purpose of acquiring
the New CMGI Shares.
(ii) Investment Experience. The Company understands that the purchase of
the New CMGI Shares involves substantial risk. The Company has
experience as an investor in securities of companies and
acknowledges that it is able to fend for itself, can bear the
economic risk of its investment in the New CMGI Shares and has such
knowledge and experience in financial or business matters that it
is capable of evaluating the merits and risks of this investment in
the New CMGI Shares and protecting its own interests in connection
with this investment.
(iii) Accredited Investor Status. The Company is an "accredited
investor" within the meaning of Regulation D promulgated under the
Securities Act
(iv) Restricted Securities. The Company hereby acknowledges and agrees
with CMGI that the New CMGI Shares have not been registered under
the Securities Act and may not be offered or sold except pursuant
to registration statement or to an exemption from the registration
requirements of the Securities Act, the Company further agrees that
it has not entered and will not enter into any contractual
arrangement with respect to the distribution or delivery of the New
CMGI Shares, other than (i) pursuant to Rule 144 under the
Securities Act, (ii) pursuant to an effective registration
statement or (iii) pursuant to any transaction that does not
require registration under the Securities Act. The Company is
familiar with Rule 144 under the Securities Act, as presently in
effect, and understands the resale limitations imposed thereby and
by the Securities Act.
(v) Legends. The Company agrees that the certificates for the New CMGI
Shares shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR WITH ANY STATE SECURITIES
COMMISSION, AND MAY NOT BE TRANSFERRED OR DISPOSED OF BY THE HOLDER IN
THE ABSENCE OF A REGISTRATION STATEMENT WHICH IS EFFECTIVE UNDER THE
SECURITIES ACT OF 1933 AND APPLICABLE STATE LAWS AND RULES, OR,
UNLESS, IMMEDIATELY PRIOR TO THE TIME SET FOR TRANSFER, SUCH TRANSFER
MAY BE EFFECTED WITHOUT VIOLATION OF THE SECURITIES ACT OF 1933 AND
OTHER APPLICABLE STATE LAWS AND RULES. THE SHARES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER CONTAINED IN THE
AGREEMENT MADE ON [DATE], 2000, BETWEEN THE COMPANY AND [NAME OF C&W
FE], A COPY OF WHICH IS ON FILE WITH THE COMPANY.
In addition, the Company agrees that in the event CMGI reasonably
believes that the Company has failed to comply with the terms of this
Agreement or the requirements of the Securities Act, CMGI may place
stop transfer orders with its transfer agents with respect to such
certificates. The appropriate portion of the legend and the stop
transfer orders will be removed promptly upon delivery to CMGI of such
satisfactory evidence as reasonably may be required by CMGI, that such
legend or stop orders are not required to ensure compliance with the
Securities Act.
5. EXPENSES
Each party to this agreement shall bear their own costs in relation hereto.
6. SUPPLEMENTAL
(1) Time is of the essence in relation to any obligation under this agreement.
(2) This agreement is governed by and shall be construed in accordance with
English law and CMGI submits to the jurisdiction of the English courts for
all purposes relating to this agreement. For these purposes CMGI irrevocably
appoints Xxxxxxx Xxxx Slate Xxxxxxx & Xxxx, London as its agent for service
of process.
(3) The Company agrees that it will after the transfer of the New Shares execute
and do all such deeds, documents, acts and things as CMGI may from time to
time reasonably require in order to vest the New Shares in CMGI.
(4) This agreement may be executed in counterparts, both of which taken together
shall constitute one and the same agreement.
(5) This agreement shall be binding on and inure solely to the benefit of CMGI
and the Company and their respective successors and assigns. Neither party
shall assign any of its rights hereunder without the prior consent of the
other party, which consent shall not be unreasonably withheld or delayed.
(6) The exercise of or failure to exercise any right or remedy of any breach of
this agreement shall not, except as provided herein, constitute a waiver by
such party of any other right or remedy it may have in respect of that
breach.
(7) Any right or remedy conferred by this agreement on any party for breach of
this agreement by the other party (including without limitation the breach
of any representations and warranties) shall be in addition and without
prejudice to all other rights and remedies available to it in respect of
that breach.
(8) This agreement constitutes the entire agreement between the parties with
respect to its subject matter (neither party having relied on any
representation or warranty made by the other party which is not contained
in this agreement) and no variation of this agreement shall be effective
unless made in writing and signed by both parties.
(9) This agreement supersedes all and any previous agreements, arrangements or
understanding between the parties relating to the matters referred to in
this agreement and all such previous agreements, arrangements or
understanding (if any) shall cease to have any effect from the date hereof.
(10) If at any time a provision of this agreement which is not a fundamental
term is or becomes illegal, void or unenforceable in any respect, the
remaining provisions hereof shall in no way be affected or impaired
thereby.
AS WITNESS the hands of the duly authorised representatives of the parties on
the date which appears first on page 1.
SIGNED on behalf of )
CABLE AND WIRELESS )
FAR EAST LIMITED )
by Xxxxx X. Xxxxx ) /s/ Xxxxx X. Xxxxx
in the presence of: )
/s/ illegible
SIGNED on behalf of )
CMGI INC. )
By Xxxxxx X. Xxxxxxxx III ) /s/ Xxxxxx X. Xxxxxxxx III
in the presence of: )
/s/ illegible
SCHEDULE 1
Demand Registration Rights:
During the period commencing six months after the Settlement Date and ending 12
months after the Settlement Date (the "Initial Registration Period") the Company
shall be entitled to request that CMGI file and cause to be declared effective
one registration statement under the Securities Act of 1933 that registers up to
50% of the New CMGI Shares (it being understood that there shall be no blackouts
for previously filed registration statements).
If, during the period commencing 12 months after the Settlement Date and ending
24 months after the Settlement Date, the Company is unable to sell under Rule
144 under the Securities Act all of the New CMGI Shares then held by the Company
(except for any New CMGI Shares included on a registration statement requested
to be filed during the Initial Registration Period) having regard only to the
volume limitations under Rule 144(e) of the Securities Act, then the Company
shall be entitled to request that CMGI file and cause to be declared effective
one registration statement under the Securities Act of 1933 that registers up to
all of the New CMGI Shares then held by the Company, except for any New CMGI
Shares included on a registration statement requested to be filed during the
Initial Registration Period (it being understood that there shall be no
blackouts for previously filed registration statements).
Piggy-back Registration Rights:
None
