OZEMAIL LIMITED
UUNET HOLDINGS AUSTRALIA PTY LIMITED
SUBSCRIPTION AGREEMENT
XXXXXX XXXXXXX
Lawyers
Xxxxxx Xxxxxxx Building
00 Xxxxxx Xxxxx
XXXXXX XXX 0000
DX 000 XXXXXX
Telephone (00) 0000 0000
Facsimile (00) 000 0000
Ref: ECT:DLW:10733123
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION.................................1
1.1 Definitions..........................................1
1.2 Interpretation.......................................1
2. AGREEMENT TO SUBSCRIBE.........................................2
2.1 Agreement to subscribe and issue Shares..............2
2.2 Confidentiality......................................2
3. SUBSCRIPTION FOR THE SHARES....................................2
3.1 Obligations of UUNET Australia.......................2
3.2 Obligations of the Company...........................2
3.3 Application for Quotation............................3
3.4 Securities Act Acknowledgment; Registration Rights...3
4. MEMBERS REGISTER...............................................4
5. WARRANTIES.....................................................5
5.1 Warranties by the Company............................5
5.2 Warranty by UUNET Australia..........................5
6. ANNOUNCEMENTS..................................................5
7. NOTICES........................................................6
7.1 Service of notices...................................6
7.2 Deemed receipt.......................................6
8. WAIVER.........................................................6
9. GOVERNING LAW AND JURISDICTION.................................7
10. GENERAL PROVISIONS.............................................7
10.1 Further action.......................................7
10.2 Counterparts.........................................8
11. NON-MERGER.....................................................8
SCHEDULE 1 - UUNET AUSTRALIA ANNOUNCEMENT.................................9
SCHEDULE 2 - OZEMAIL ANNOUNCEMENT........................................10
SCHEDULE 3 - APPLICATION FORM............................................11
SUBSCRIPTION AGREEMENT dated 12 December, 1998 (Sydney time)
BETWEEN
OZEMAIL LIMITED ACN 066 387 157 of Ground Floor, Building B, 00
Xxxxxxx Xxxxxx, Xx Xxxxxxxx, Xxx Xxxxx Xxxxx ("Company")
AND
UUNET HOLDINGS AUSTRALIA PTY LIMITED ACN 000 000 000 of 00 Xxxxxx
Xxxxx, Xxxxxx, Xxx Xxxxx Xxxxx ("UUNET Australia")
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this agreement, the following words and phrases have the following
meanings, unless the contrary intention appears:
"Announcements" means the announcements set out substantially in the form
of Schedule 1 and Schedule 2.
"Application Form" means the application form set out in Schedule 3.
"Shares" means 21,863,174 ordinary shares in the capital of the Company
(representing in aggregate no more than 14.9% of the ordinary share capital
of the Company, after the issue of the Shares).
"Subscription Date" means 12 December 1998 (Sydney time).
"Subscription Price" means US$43,726,348, representing US$2.00 per Share.
1.2 Interpretation
In this agreement, unless the contrary intention appears:
(a) headings are for ease of reference only and do not affect the meaning
of this agreement;
(b) the singular includes the plural and vice versa, and words importing a
gender include other genders;
(c) a reference to a clause, paragraph or schedule is a reference to a
clause or paragraph of or schedule to this agreement, and a reference
to this agreement includes any schedules;
(d) a reference to a document, agreement or deed, including this
agreement, includes a reference to that document or agreement or deed
as novated, altered or replaced from time to time; and
(e) a reference to a specific time for the performance of an obligation is
a reference to that time in New South Wales, Australia.
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2. AGREEMENT TO SUBSCRIBE
2.1 Agreement to subscribe and issue Shares
On the terms and conditions of this agreement, UUNET Australia agrees to
subscribe for the Shares, and the Company agrees to issue and allot the
Shares to UUNET Australia, at the Subscription Price on the Subscription
Date.
2.2 Confidentiality
The parties hereby terminate the confidentiality agreement dated 22 October
1998 between Xxxxxxx Sachs Australia L.L.C. (on behalf of the Company) and
UUNET Technologies, Inc, provided that UUNET Australia will not disclose in
its takeover documents any confidential information provided by Xxxxxxx
Xxxxx or the Company without the prior written approval of the Company (not
to be unreasonably withheld) except as required by law.
3. SUBSCRIPTION FOR THE SHARES
3.1 Obligations of UUNET Australia
On the Subscription Date, UUNET Australia must:
(a) deliver to the Company a duly completed Application Form; and
(b) pay the Subscription Price by delivery of a cheque made payable to the
Company to Xxxxxxx Xxxx Slate Xxxxxxx & Xxxx L.L.P acting as nominee
for the Company, at UUNET Technologies, Inc's offices at Fairfax,
Virginia, USA,
simultaneously with, and in consideration of, the performance of the
Company's obligations under clause 3.2.
3.2 Obligations of the Company
On the Subscription Date, the Company must:
(a) make a representative of Xxxxxxx Xxxx Slate Xxxxxxx & Xxxx L.L.P
available at UUNET Technologies, Inc's offices at Fairfax, Virginia,
USA between 9.30am and 11.30am on the Subscription Date (between
4.30pm and 8pm on December 11, 1998, New York time);
(b) issue and allot the Shares to UUNET Australia;
(c) on or before 11.30am on the Subscription Date, hand deliver a share
certificate for the Shares (or its uncertificated equivalent) to a
representative of Xxxxxx Xxxxxxx, 00 Xxxxxx Xxxxx, Xxxxxx, Xxx Xxxxx
Xxxxx, Xxxxxxxxx, acting as nominee for UUNET Australia; and
(d) enter UUNET Australia's name in the register of members of the Company
in respect of the Shares,
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simultaneously with, and in consideration of, the performance of UUNET
Australia's obligations under clause 3.1.
3.3 Application for Quotation
The Company must apply to Australian Stock Exchange Limited for quotation
of the Shares within two business days of the Subscription Date, and use
its best endeavours to ensure that the Shares are quoted by Australian
Stock Exchange Limited as soon as possible after the Subscription Date.
3.4 Securities Act Acknowledgment; Registration Rights
(a) Securities Act Acknowledgment. UUNET Australia represents and warrants
to the Company that it is acquiring the Shares for investment purposes
and not with a view to distribution. UUNET Australia understands that
the Shares have not been and will not be registered under the United
States Securities Act of 1933 (as amended) (Securities Act"), and
agrees that it will only offer and sell the Shares:
(i) pursuant to a registration statement in accordance with the
Securities Act;
(ii) pursuant to an exemption from the registration requirements of
the Securities Act; or
(iii) in a transaction not subject to the Securities Act.
Notwithstanding any other provision of this clause 3.4, the Company
agrees that UUNET Australia may sell or dispose of such Shares, and
the Company will promptly register such transfer, upon receipt of a
certificate from UUNET Australia that such sale or disposition will
be:
(1) effected in a transaction outside the United States; or
(2) effected pursuant to an exemption from the registration
requirements of the Securities Act (including, without
limitation, a transaction effected on the Australian Stock
Exchange in compliance with Rule 904 under the Securities Act).
The Company agrees that it will not require an opinion of counsel to
effect any such transfer.
UUNET Australia further agrees that it will not deposit the Shares
into any unrestricted depositary receipt facility in respect of the
ordinary shares of the Company established or maintained by a
depositary bank unless and until such time as the Shares are no longer
subject to the restrictions on transfer applicable to "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities
Act.
(b) Notwithstanding the foregoing, the parties acknowledge that in the
event of an offer for the ordinary shares of the Company by a party
other than UUNET Australia or its direct or indirect parent
corporations, UUNET Australia will be entitled to sell the Shares, or
4
any other shares in the Company acquired pursuant to the offer
referred to in the Announcements, or any amended offer, to such
bidder.
(c) Registration Rights. In the event that UUNET Australia makes a
takeover bid that is subsequently terminated or otherwise does not
become entitled to proceed under the Australian Corporations Law to
compulsory acquisition of all of the Company's shares, the Company
agrees, upon the request of UUNET Australia, to promptly file one
registration statement under the Securities Act and applicable
Australian laws, if any, relating to the sale of the Shares and any
other shares in the Company acquired pursuant to the offer referred to
in the Announcements, or any amended offer, to use its best efforts to
cause such registration statement to become effective, unless, in the
written opinion of counsel to the Company, in form and substance
reasonably satisfactory to UUNET Australia, such registration is not
required for the sale and distribution of the shares covered thereby
in the manner proposed by UUNET Australia, provided, however, the
Company shall be entitled to reasonable "black-out periods" during the
pendency of the registration statement. The Company agrees to use its
best efforts to maintain the effectiveness of such registration
statement, and to amend, supplement and update, if necessary, until
completion of the distribution or until such time as, in the written
opinion of counsel to the Company, in form and substance reasonably
satisfactory to UUNET Australia, such registration is not required for
the sale and distribution of the shares covered thereby in the manner
proposed by UUNET Australia. The Company agrees to co-operate in good
faith and take such other actions as are customarily required of an
issuer in a US registration rights agreement. The registration
effected under this clause 3.4(c) shall be effected at the Company's
expense except for any underwriting commissions applicable to the sale
of the shares, fees and disbursements of UUNET Australia's counsel and
any experts engaged by UUNET Australia. The Company and UUNET
Australia agree to hold harmless and indemnify each other and their
respective controlling persons, and make contribution, to the same
extent as is customary in a US registration rights agreement between
an issuer and a minority stockholder, including with respect to
advancement of expenses. The rights of UUNET Australia in this
paragraph may be assigned to any transferee who acquires the Shares or
any other shares in the Company acquired pursuant to the offer
referred to in the Announcements, or any amended offer.
4. MEMBERS REGISTER
The Company must provide a hard copy and, if the register is kept on a
computer, a copy on computer disk or computer tape, of the information on
the register of members of the Company as at the date advised by UUNET
Australia, within two business days of written request by UUNET Australia.
5. WARRANTIES
5.1 Warranties by the Company
The Company warrants and represents to UUNET Australia that:
5
(a) the Shares represent in aggregate no more than 14.9% of the share
capital of the Company (after the issue of the Shares);
(b) the Company is under no obligation to issue or allot, and has not
granted any person the right to call for the issue or allotment of,
any shares or other securities in the capital of the Company, other
than under any employee share option plan of the Company;
(c) except for the issue of the Shares under this agreement, the Company
will not issue and allot any shares in the Company for a period of
three months after the date of this agreement, other than pursuant to
existing rights under any employee share option plan of the Company or
on exercise of existing options;
(d) the Company has the power and authority to enter into and perform its
obligations under this agreement;
(e) the issue of the Shares has been approved by the shareholders of the
Company, and the issue of the Shares by the Company will not breach
the Listing Rules of Australian Stock Exchange Limited or the
Company's constitution, subject to the accuracy of the warranty set
out in clause 5.2; and
(f) no meeting has been convened, resolution proposed, petition presented
or order made for the winding up of the Company, and no receiver,
receiver and manager, provisional liquidator, liquidator or other
officer of a court has been appointed in relation to any of its
assets, and no mortgagee has taken or attempted or indicated in any
manner any intention to take possession of any of its assets.
5.2 Warranty by UUNET Australia
UUNET Australia warrants that neither it nor any associate voted in respect
of the resolution passed at the shareholders meeting of the Company on 14
September 1998 to approve the issue of up to 50million shares.
6. ANNOUNCEMENTS
After signing of this agreement by the parties, the parties will make the
Announcements on the next business day after the Subscription Date.
7. NOTICES
7.1 Service of notices
A party giving notice or notifying under this agreement must do so in
writing:
(a) directed to the recipient's address specified in this clause, as
varied by any notice; and
(b) hand delivered or sent by facsimile to that address.
The parties' addresses and facsimile numbers are:
6
UUNET Australia: UUNET Holdings Australia Pty Limited
Attention: Xxxxx Xxxxx/Xxxxx Xxxxxx
Address: c/- Xxxxxx Xxxxxxx
00 Xxxxxx Xxxxx
Xxxxxx XXX 0000
Facsimile No.: x00 0 0000 0000
Company: OzEmail Limited
Attention: Xxxxxxx Xxxxxxxx
Address: c/- Xxxxxxx Xxxxx Australia L.L.C.
Xxxxx 00
Xxxxxxxx Xxxxxxx Xxxxx
0 Xxxxxx Xxxxx
Xxxxxx XXX 0000
Facsimile No.: + 61 2 9320 1009
7.2 Deemed receipt
A notice given in accordance with clause 7.1 is taken to be received:
(a) if hand delivered, on delivery; and
(b) if sent by facsimile, when the sender's facsimile system generates a
message confirming successful transmission of the total number of
pages of the notice unless, within eight hours after that
transmission, the recipient informs the sender that it has not
received the entire notice.
8. WAIVER
The failure of a party at any time to require performance of any obligation
under this agreement is not a waiver of that party's right:
(a) to insist on performance of, or claim damages for breach of, that
obligation unless that party acknowledges in writing that the failure
is a waiver; and
(b) at any other time to require performance of that or any other
obligation under this agreement.
9. GOVERNING LAW AND JURISDICTION
9.1 This agreement is governed by, and is to be construed in accordance with,
the law applicable in New South Wales, Australia.
9.2 Each party submits to the non-exclusive jurisdiction of the courts of New
South Wales, Australia.
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10. GENERAL PROVISIONS
10.1 Further action
Each party must:
(a) use its best efforts to do all things necessary or desirable to give
full effect to this agreement; and
(b) refrain from doing anything that might hinder performance of this
agreement.
10.2 Counterparts
This agreement may be executed in any number of counterparts.
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11. NON-MERGER
None of the terms or conditions of this agreement, or any act, matter or
thing done under or by virtue of this agreement or any other agreement,
instrument or document, or judgment or order of any court or judicial
proceeding, will operate as a merger of any of the rights and remedies of
the parties under this agreement, and those rights and remedies will at all
times continue in force.
EXECUTED as an agreement.
EXECUTED by UUNET HOLDINGS AUSTRALIA PTY LIMITED )
)
)
/s/ XXXX X. XXXXXXXX /s/ XXXXXXX XXXXX XXXXXXX
................................ ...........................................
Signature of director Signature of company secretary
(Please delete as applicable)
XXXX X. SIGDMORE XXXXXXX XXXXX XXXXXXX
................................ ...........................................
Name of director (print) Name of company secretary (print)
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EXECUTED by OZEMAIL LIMITED )
)
)
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/s/ XXXX XXXXXX XXXXXX /s/ XXXXX MORAY XXXXXX
................................ ...........................................
Signature of director Signature of director/company secretary
(Please delete as applicable)
XXXX XXXXXX XXXXXX XXXXX MORAY XXXXXX
................................ ...........................................
Name of director (print) Name of director/company secretary (print)
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SCHEDULE 1 - UUNET AUSTRALIA ANNOUNCEMENT
MCI WorldCom Announces Intention to Acquire Australia's OzEmail Limited
Telecom Firm Has Purchased 14.9 Percent of Australian ISP
Xxxxxxx, Miss. and Sydney, Australia, Dec. 14,1998 -- MCI WorldCom,
Inc. (Nasdaq: WCOM) today acquired 21,863,174 newly issued ordinary shares in
OzEmail Limited ("OzEmail") and announced that it will make a cash offer for all
of the issued ordinary shares (including ADSs) of OzEmail (Nasdaq: OZEMY,
ASX: OZM).
UUNET Holdings Australia Pty Limited, a wholly owned subsidiary of MCI
WorldCom, will make an all cash offer to acquire all of the issued ordinary
shares of OzEmail at a price of US$2.20 per share, currently equivalent to
approximately A$3.54 per share(1), including ADSs at a price of US$22.00 per
ADS. OzEmail has 146,732,714 ordinary shares issued and outstanding after the
placement to MCI WorldCom, representing a total value for OzEmail's ordinary
issued and outstanding shares of approximately US$322.8 million, currently
equivalent to approximately A$520.0 million(1), based on MCI WorldCom's offer
price.
MCI WorldCom acquired the relevant interest in 21,863,174 ordinary shares
by way of a share subscription agreement with OzEmail at US$2.00 per share,
currently equivalent to approximately A$3.22 per share(1). The share
subscription agreement gave MCI WorldCom a relevant interest in approximately
14.9 percent of OzEmail's expanded issued and outstanding ordinary shares.
Subject to completion of the transaction, OzEmail would become the
Australian Internet operating arm of MCI WorldCom's UUNET subsidiary, a global
leader in Internet communications solutions.
"The Asia-Pacific region is of key strategic importance to us and the
synergies between OzEmail and MCI WorldCom are clear," said MCI WorldCom Vice
Chairman Xxxx Xxxxxxxx. "The local fiber we are deploying in Australia
complements OzEmail's Internet presence and the vast international resources of
MCI WorldCom, particularly our worldwide Internet backbone, will bring improved
global connectivity to OzEmail's customers."
OzEmail is one of the most successful Internet Service Providers (ISPs) in
Australia. Based in Sydney, the firm offers a wide range of Internet services
throughout both Australia and New Zealand. OzEmail's network includes
approximately 80 Points of Presence (POPs) covering virtually the entire
Australian population, as well as 15 POPs in New Zealand, which provides equally
comprehensive coverage in that market. OzEmail's services include dial-up and
leased line Internet access, wholesale services to other ISPs, web hosting
services through its subsidiary WebCentral and Internet-based voice offerings.
The offer provides OzEmail shareholders with a premium of approximately 50
percent over the weighted average trading price of OzEmail shares over the last
three months on the Nasdaq National Market(2).
The offer will remain open, unless extended, for at least one month from
the date of the offer, which is expected to be in early January. Pending
commencement of the offer, a copy of any offering documents filed with the
Australian Securities and Investments Commission ("ASIC") will also be filed by
MCI WorldCom with the United States Securities and Exchange Commission ("SEC")
as an exhibit to its current report on Form 8-K, as soon as practicable after
their registration with the ASIC.
The offer will be conditional upon, among other things:
MCI WorldCom being entitled to proceed, under the Australian
Corporations Law, to compulsory acquisition of all of OzEmail's shares
at the expiration of the offer;
all Australian and other necessary governmental and regulatory
approvals being received, including approval by the Foreign Investment
Review Board in Australia; and
no prescribed occurrences (as defined in the Australian Corporations
Law) (including, for example, the grant of options, liquidation or
asset disposition) occurring in relation to OzEmail or any of its
subsidiaries during the offer period.
Under the offer, OzEmail shareholders will be able to elect to receive
payment in either US or Australian dollars. Australian dollar payment will be
converted from US dollars using the exchange rate when funds are paid by MCI
WorldCom.
Xxxxxxx Xxxxx & Co. will act as Dealer Manager for the offer in the United
States and as financial adviser to MCI WorldCom. For further information in
relation to the offer, please contact Xxxxx XxXxxxxx or Fleur Jouault at Xxxxxxx
Xxxxx in Australia on x000-0000-0000/5342.
MCI WorldCom is a global communications company with revenue of more than
$30 billion and established operations in over 65 countries encompassing the
Americas, Europe and the Asia-Pacific regions. MCI WorldCom is a premier
provider of facilities-based and fully integrated local, long distance,
international and Internet services. MCI WorldCom's global networks, including
its state-of-the-art pan-European network and transoceanic cable systems,
provide end-to-end high-capacity connectivity to more than 38,000 buildings
worldwide. For more information on MCI WorldCom, visit the World Wide Web at
xxxx://xxx.xxxxxxxxxxx.xxx or xxxx://xxx.xxxx.xxx.
(1) Exchange rate of US$1: A$0.6208 as of December 11, 1998.
(2) Per Bloomberg Financial Markets from Friday December 11, 1998.
10
SCHEDULE 2 - OZEMAIL ANNOUNCEMENT
PRESS RELEASE
OzEmail Announces Issue of 14.9% Stake to MCI WorldCom
OzEmail Limited announced that it has issued 21,863,174 ordinary shares
(equivalent to 2,186,317 ADSs), constituting approximately 14.9% of the
outstanding shares following the issuance, to UUNET Holdings Australia Pty
Limited, a wholly owned subsidiary of MCI WorldCom Inc., at a purchase price
equal to US$2.00 per share (equivalent to US$20.00 per ADS). OzEmail said that
its Board of Directors had approved the issue of the shares.
MCI WorldCom has advised the Company that MCI WorldCom intends to make a
takeover bid for all outstanding shares of the Company at a price of US$22.00
per ADS (US$2.20 per share) net to the seller in cash. At the OzEmail board
meeting, Xxxxxxx Xxxxxxxx, Xxxx Xxxxxx, and Xxxxxx Xxxxxxx, directors of the
Company (who together beneficially owned approximately 54% of the outstanding
OzEmail shares prior to the MCI WorldCom issuance) indicated that, subject to
reviewing the offer documents to be prepared by MCI WorldCom and absent a more
favourable offer, they intended to accept the offer. The Board indicated that it
intends to make a recommendation to OzEmail shareholders after it has had an
opportunity to review MCI WorldCom's offer document and Part A statement.
11
SCHEDULE 3 - APPLICATION FORM
The Directors
OzEmail Limited
Ground Floor, Building B
00 Xxxxxxx Xxxxxx
Xx Xxxxxxxx XXX 0000
Dear Directors
Application for Allotment of Shares
UUNET Holdings Australia Pty Limited ("UUNET Australia") of 00 Xxxxxx Xxxxx,
Xxxxxx, Xxx Xxxxx Xxxxx, applies for 21,863,174 fully paid ordinary shares in
OzEmail Limited.
UUNET Australia authorises you to record its name in the register of
shareholders of OzEmail Limited in respect of the shares the subject of this
application.
UUNET Australia has arranged for the delivery of a cheque payable to OzEmail
Limited in the amount of US$43,726,348 to Xxxxxxx Xxxx Slate Xxxxxxx & Xxxx
L.L.P acting as nominee for the Company, at UUNET Technologies, Inc's offices at
Fairfax, Virginia, USA, representing the allotment money payable for the shares
the subject of this application.
UUNET Australia agrees to be bound by the constitution of OzEmail Limited.
Yours faithfully
...............................................................
Director
