<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) July 18, 1999
______________
GLOBAL CROSSING LTD.
________________________________________________________
(Exact Name of Registrant as Specified in Charter)
Bermuda 000-24565 98-0189783
--------------------------- ------------ ------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
Wessex House, 45 Reid Street, Hamilton HM12 Bermuda
___________________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (441) 296-8600
______________
NOT APPLICABLE
___________________________________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events.
On July 18, 1999, Global Crossing Ltd., a Bermuda company ("Global
Crossing"), and U S WEST, Inc., a Delaware corporation ("U S WEST"), announced
that they have terminated the Agreement and Plan of Merger (the "Merger
Agreement"), dated as of May 16, 1999, between Global Crossing and U S WEST.
A copy of the Termination Agreement (the "Termination Agreement"), dated as of
July 18, 1999, between Global Crossing and U S WEST pursuant to which Global
Crossing and U S WEST terminated the Merger Agreement is attached hereto as
Exhibit 10.1 and incorporated herein by reference. In connection therewith,
Global Crossing and U S WEST entered into Amendment No. 1 to Tender Offer and
Purchase Agreement ("Amendment No. 1"), dated as of July 18, 1999. A copy of
Amendment No. 1 is attached hereto as Exhibit 10.2 and is incorporated herein by
reference.
In addition, Global Crossing and Qwest Communications International Inc., a
Delaware corporation ("Qwest"), entered into an Agreement (the "Agreement"),
dated as of July 18, 1999, pursuant to which Global Crossing and Qwest agreed to
take certain actions in connection with the termination of the Merger Agreement.
A copy of the Agreement is attached hereto as Exhibit 10.3 and is incorporated
herein by reference. In connection therewith, Global Crossing Holdings Ltd., a
Bermuda company, and Qwest entered into an agreement (the "Capacity Agreement"),
dated as of July 18, 1999, pursuant to which Qwest has agreed to acquire
capacity on certain fiber optic cable systems owned by Global Crossing. A copy
of the Capacity Agreement is attached hereto as Exhibit 10.4 and is incorporated
herein by reference.
A copy of Global Crossing's July 18th press release relating to these
matters is attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits:
10.1 Termination Agreement, dated as of July 18,
1999, between Global Crossing Ltd. and U S
WEST, Inc.
10.2 Amendment No. 1 to Tender Offer and Purchase
Agreement, dated as of July 18, 1999,
between Global Crossing Ltd. and U S WEST,
Inc.
10.3 Agreement, dated as of July 18, 1999,
between Qwest Communications International
Inc. and Global Crossing Ltd.
10.4 Agreement, dated as of July 18, 1999,
between Global Crossing Holdings Ltd. and
Qwest Communications International Inc.
99.1 Press release of Global Crossing Ltd.,
dated July 18, 1999.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
GLOBAL CROSSING LTD.
By: /s/ Dan J. Cohrs
--------------------------------
Name: Dan J. Cohrs
Title: Senior Vice President and
Chief Financial Officer
Dated: July 19, 1999
<PAGE>
Exhibit Index
Exhibit No. Exhibit
- ----------- -------
10.1 Termination Agreement, dated as of July 18, 1999, between Global
Crossing Ltd. and U S WEST, Inc.
10.2 Amendment No. 1 to Tender Offer and Purchase Agreement, dated as
of July 18, 1999, between Global Crossing Ltd. and U S WEST, Inc.
10.3 Agreement, dated as of July 18, 1999, between Qwest Communications
International Inc. and Global Crossing Ltd.
10.4 Agreement, dated as of July 18, 1999, between Global Crossing
Holdings Ltd. and Qwest Communications International Inc.
99.1 Press release of Global Crossing Ltd. dated July 18, 1999.
<PAGE>
Exhibit 10.1
CONFORMED COPY
TERMINATION AGREEMENT
TERMINATION AGREEMENT dated as of July 18, 1999 between GLOBAL CROSSING
LTD., a company formed under the laws of Bermuda ("Global"), and U S WEST, Inc.,
a Delaware corporation ("USW").
W I T N E S S E T H
In consideration of the mutual covenants and agreements set forth herein,
and for other good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties hereto agree as set forth below:
SECTION 1. Termination. Pursuant to Section 9.1(a) of the Agreement and
Plan of Merger dated as of May 16, 1999 between USW and Global (the "Merger
Agreement"), Global and USW hereby agree to terminate the Merger Agreement.
SECTION 2. Payments to Global. (a) On the business day immediately
subsequent to the execution of this Termination Agreement, USW shall:
(i) pay to Global (without reduction for or on account of any taxes,
including withholding taxes, if any) $140,000,000 in immediately available
funds to the account designated by Global on Schedule A hereto; and
(ii) deliver to Global (without reduction for or on account of any
taxes, including withholding taxes, if any) 2,231,076 shares of common
stock of Global (subject to any adjustment for reclassification,
recapitalization, split-up, combination, or exchange of Global shares after
the date hereof).
(b) The parties agree that the payments provided in Section 2(a) above and
the entering into of the agreement of Qwest Communications International Inc.
("Qwest") in Section 4.02(a) of the Agreement dated as of the date hereof
between Qwest and Global are in full satisfaction and discharge of the
obligations of USW under the Merger Agreement in respect of the termination fees
thereunder as well as all other Claims by Global against USW in respect only of
the Merger Agreement (and not, for purposes of clarification, in respect of the
other agreements listed in Section 4 hereof or any other agreements between the
parties hereto).
<PAGE>
SECTION 3. Release. (a) USW, on behalf of itself and its successors and
assigns, and Global, on behalf of itself and its successors and assigns, each
mutually release and forever discharge the other, and all persons acting in
concert with the other, from all liabilities, rights, duties, claims, causes of
action, actions, suits, debts, sums of money, accounts, judgments, damages or
demands of any nature whatsoever, legal, equitable or otherwise, known or
unknown, contingent or fixed, in whole or in part (hereinafter collectively
referred to as the "Claims"), and agree not to sue or to bring any claim,
whether in tort, contract or otherwise, in each case directly or indirectly
arising from the conduct prior to the date hereof of USW, Global or their
respective directors, officers, employees or agents in connection with the
Merger Agreement (and not, for purposes of clarification, the other agreements
listed in Section 4 hereof), the offer made by Qwest to acquire USW on June 13,
1999, which offer was subsequently revised on June 23, 1999, and the proposed
combination of Qwest and USW.
(b) Each of USW and Global represents and warrants that it has not sold,
assigned, transferred, conveyed or otherwise disposed of any claim, demand or
cause of action or any part thereof relating to any matter covered by this
Section 2.
(c) Each of USW and Global represents and warrants that it is duly
authorized to execute the release contained in Section 2(a) above on behalf of
its affiliates, directors, officers, employees and agents.
SECTION 4. Survival of Other Agreements. The other agreements to which
Global and USW are parties, including the Tender Offer and Purchase Agreement,
the Tender and Voting Agreement, the Voting Agreement and the Standstill
Agreement each dated May 16, 1999, and the confidentiality letter dated May 3,
1999, shall each survive termination of the Merger Agreement pursuant hereto.
SECTION 5. Indemnity. (a) Subject to the provisions of this Section 5,
Global hereby agrees to indemnify USW with respect to any liability for United
States federal income taxes on Global enforced by withholding (including any
interest or penalties and costs and expenses (including reasonable attorney fees
with respect thereto) with respect to the payment and stock transfer by USW to
Global described in Section 2(a) of this Agreement ("Possible Withholding
Taxes").
(b) If USW is notified, in writing, as part of an audit or other
administrative proceeding related to taxes (a "Contest"), that the applicable
taxing authority is asserting a claim for Possible Withholding Taxes, then (i)
USW shall promptly notify Global of such claim, (ii) USW shall, subject to
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Section 5(c) below, permit Global, at Global's own cost and expense, to control
that portion of the Contest related to Possible Withholding Taxes, including the
execution of any powers-of-attorney or similar documents necessary for Global to
control such portion of the Contest; provided that in executing such powers-of-
attorney or similar documents, USW and Global agree that such powers shall be
limited to such portion of the Contest, and (iii) USW shall not settle or
otherwise compromise such portion of the Contest related to Possible Withholding
Taxes without the prior written consent of Global. Further, without the prior
written consent of Global, USW shall not take any position on any tax return or
similar filing that Possible Withholding Taxes may be due and owing, unless such
position is required by law pursuant to a final determination. USW's
indemnification rights pursuant to Section 5(a) are subject to the provisions of
this Section 5(b).
(c) Upon acknowledgment in writing by Global (i) that it intends to assume
responsibility for defense of a Contest related to Possible Withholding Taxes,
and (ii) that it intends to indemnify USW pursuant to this Agreement, Global
will thereafter be entitled to appoint lead defense counsel (reasonably
acceptable to USW) with respect to such claim and USW will thereafter be
responsible for all costs and expenses of its own counsel.
SECTION 6. Effectiveness. This Agreement shall be deemed effective as of
the date first set forth above.
SECTION 7. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed entirely within that
State without regard to the conflicts of laws provisions thereof.
SECTION 8. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original, but all of which shall
constitute one and the same agreement.
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IN WITNESS WHEREOF, USW and Global have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
GLOBAL CROSSING LTD.
By: /s/ Robert Annunziata
---------------------------------
Name: Robert Annunziata
Title: Chief Executive Officer
U S WEST, INC.
By: /s/ Solomon D. Trujillo
---------------------------------
Name: Solomon D. Trujillo
Title: Chairman, President and
Chief Executive Officer
4
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Exhibit 10.2
CONFORMED COPY
AMENDMENT NO. 1 TO TENDER OFFER
AND PURCHASE AGREEMENT
AMENDMENT NO. 1 (this "Amendment") dated as of July 18, 1999 to TENDER
OFFER AND PURCHASE AGREEMENT (as amended, the "TOP Agreement") dated as of May
16, 1999 between GLOBAL CROSSING LTD., a company formed under the laws of
Bermuda ("Global"), and U S WEST, Inc., a Delaware corporation ("USW").
W I T N E S S E T H
The parties hereto agree that the TOP Agreement is amended as follows:
SECTION 1. Amendment. (a) Section 4.1 of the TOP Agreement is hereby
amended by a new clause (g) to read as follows:
"(g) Global shall not enter into any agreement granting any person (an
"Other Security Holder") demand or piggyback registration rights with
respect to such Other Security Holder's securities of Global in any
registration on a basis more favorable to such Other Security Holder than
is provided to USW pursuant to this Agreement."
(b) Section 4.4 of the TOP Agreement is hereby amended by deleting it in
its entirety.
SECTION 2. Effectiveness. This Amendment shall be deemed effective as of
the date first set forth above. Except as amended hereby, the TOP Agreement
shall remain in full force and effect and shall be otherwise unaffected hereby.
SECTION 3. Governing Law. This Amendment shall be deemed to be a contract
made under the internal laws of the State of New York.
SECTION 4. Counterparts. This Amendment may be executed in two or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
<PAGE>
IN WITNESS WHEREOF, USW and Global have caused this Amendment to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
GLOBAL CROSSING LTD.
By: /s/ Robert Annunziata
---------------------------------
Name: Robert Annunziata
Title: Chief Executive Officer
U S WEST, INC.
By: /s/ Solomon D. Trujillo
---------------------------------
Name: Solomon D. Trujillo
Title: Chairman, President and Chief
Executive Officer
2
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Exhibit 10.3
CONFORMED COPY
AGREEMENT
dated as of
July 18, 1999
between
QWEST COMMUNICATIONS INTERNATIONAL INC.
and
GLOBAL CROSSING LTD.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
ARTICLE 1 Definitions
<S> <C>
Section 1.01. Definitions......................................................................2
ARTICLE 2Representations and Warranties of Qwest
Section 2.01. Corporate Existence and Power....................................................2
Section 2.02. Corporate Authorization..........................................................3
Section 2.03. Governmental Authorization.......................................................3
Section 2.04. Noncontravention.................................................................3
Section 2.05. Ownership of Frontier Shares.....................................................3
ARTICLE 3Representations and Warranties of Global
Section 3.01. Corporate Existence and Power....................................................3
Section 3.02. Corporate Authorization..........................................................4
Section 3.03. Governmental Authorization.......................................................4
Section 3.04. Noncontravention.................................................................4
Section 3.05. Ownership of U S WEST Shares.....................................................4
ARTICLE 4Covenants of Qwest
Section 4.01. Certain Actions..................................................................4
Section 4.02. Capacity Agreement...............................................................5
Section 4.03. Further Agreements...............................................................6
ARTICLE 5Covenants of Global
Section 5.01. Certain Actions..................................................................6
Section 5.02. Amendment of the U S WEST Agreements.............................................7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARTICLE 6Release of Claims
<S> <C>
Section 6.01. Release..........................................................................8
ARTICLE 7Termination
Section 7.01. Termination......................................................................8
ARTICLE 8Miscellaneous
Section 8.01. Specific Performance.............................................................9
Section 8.02. Notices..........................................................................9
Section 8.03. Amendments; No Waivers..........................................................10
Section 8.04. Expenses........................................................................10
Section 8.05. Successors and Assigns..........................................................10
Section 8.06. Counterparts; Effectiveness.....................................................10
Section 8.07. Entire Agreement................................................................10
Section 8.08. Governing Law...................................................................11
Section 8.09. Jurisdiction....................................................................11
</TABLE>
<PAGE>
AGREEMENT
AGREEMENT dated as of July 18, 1999 between Qwest Communications
International Inc., a Delaware corporation ("Qwest"), and Global Crossing Ltd.,
a Bermuda company ("Global").
RECITALS:
WHEREAS, Global, Frontier Corporation ("Frontier") and GCF Acquisition
Corp., a wholly owned subsidiary of Global, are parties to an Agreement and Plan
of Merger dated March 16, 1999, as amended by Consent and Amendment No. 1
thereto dated as of May 16, 1999 (the "Frontier Merger Agreement"), relating to
the proposed acquisition of Frontier by Global (the "Global Transaction");
WHEREAS, Global and U S WEST, Inc. ("U S WEST") are parties to an Agreement
and Plan of Merger dated as of May 16, 1999 (the "U S WEST Merger Agreement"
and, together with the Frontier Merger Agreement, the Global Merger
Agreements");
WHEREAS, on June 13, 1999 Qwest publicly announced that it had made
separate offers to acquire Frontier and U S WEST, which offers were subsequently
revised on June 23, 1999 (such offers, collectively, the "Qwest Offers");
WHEREAS, Qwest and U S WEST desire to enter into the business combination
(the "Qwest Transaction") pursuant to the Agreement and Plan of Merger dated as
of July 18, 1999 between U S WEST and Qwest (the "Qwest Merger Agreement");
WHEREAS, Qwest and Global recognize the regulatory and other uncertainties
in combining the operations of U S WEST and Frontier; and
WHEREAS, Qwest and Global recognize that each may have legal and other
claims against the other.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
<PAGE>
ARTICLE 1
Definitions
Section 1.01. Definitions. (a) The following terms, as used herein, have
the following meanings:
"Acquisition Proposal" means, with respect to any Person, any offer or
proposal for, or any indication of interest in, a merger or other business
combination involving such Person or any subsidiary of such Person or the
acquisition of any securities (or direct or indirect rights, warrants or options
to acquire any securities) or property of such Person or any subsidiary of such
Person.
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with, such other
Person. For the purposes of this definition, "control" when used with respect
to any Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"beneficial ownership" and "beneficially own" shall be determined in
accordance with Rules 13d-3 and 13d-5 under the Exchange Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
ARTICLE 2
Representations and Warranties of Qwest
Qwest represents and warrants to Global as of the date hereof that:
Section 2.01. Corporate Existence and Power. Qwest is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has all corporate powers and all material governmental
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licenses, authorizations, permits, consents and approvals required to carry on
its business as now conducted.
Section 2.02. Corporate Authorization. The execution, delivery and
performance by Qwest of this Agreement are within Qwest's corporate powers and
have been duly authorized by all necessary corporate action on the part of
Qwest. This Agreement constitutes a valid and binding agreement of Qwest,
enforceable against Qwest in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights.
Section 2.03. Governmental Authorization. The execution, delivery and
performance by Qwest of this Agreement require no action by or in respect of, or
filing with, any governmental body, agency or official.
Section 2.04. Noncontravention. The execution, delivery and performance by
Qwest of this Agreement do not and will not (i) violate the certificate of
incorporation or bylaws of Qwest, (ii) violate any applicable law, rule,
regulation, judgment, injunction, order or decree, or (iii) constitute a default
under or give rise to any right of termination, cancellation or acceleration of
any right or obligation of Qwest under any material agreement or other material
instrument binding upon Qwest or by which Qwest or any of its material assets is
or may be bound.
Section 2.05. Ownership of Frontier Shares. Other than 100 shares of the
common stock, par value $1.00 per share, of Frontier that are beneficially owned
by Qwest on the date hereof, Qwest and its subsidiaries do not beneficially own
any securities of Frontier.
ARTICLE 3
Representations and Warranties of Global
Global represents and warrants to Qwest as of the date hereof that:
Section 3.01. Corporate Existence and Power. Global is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Bermuda and has all corporate powers and all material
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted.
3
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Section 3.02. Corporate Authorization. The execution, delivery and
performance by Global of this Agreement are within Global's corporate powers and
have been duly authorized by all necessary corporate action on the part of
Global. This Agreement constitutes a valid and binding agreement of Global,
enforceable against Global in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights.
Section 3.03. Governmental Authorization. The execution, delivery and
performance by Global of this Agreement require no action by or in respect of,
or filing with, any governmental body, agency or official.
Section 3.04. Noncontravention. The execution, delivery and performance by
Global of this Agreement do not and will not (i) violate the articles of
association or bye-laws of Global, (ii) violate any applicable law, rule,
regulation, judgment, injunction, order or decree, or (iii) constitute a default
under or give rise to any right of termination, cancellation or acceleration of
any right or obligation of Global under any material agreement or other material
instrument binding upon Global or by which Global or any of its material assets
is or may be bound.
Section 3.05. Ownership of U S WEST Shares. Global and its subsidiaries do
not beneficially own any securities of U S WEST.
ARTICLE 4
Covenants of Qwest
As of the date hereof and during the term of this Agreement, Qwest agrees
that:
Section 4.01. Certain Actions. Following the termination of the U S WEST
Merger Agreement, Qwest will not, and will not permit its affiliates to (and to
the extent Qwest has consent rights in respect of any of the following actions
by U S WEST, Qwest will not grant consent to U S WEST to):
(a) acquire, offer or propose to acquire, or agree or seek to acquire,
directly or indirectly, by purchase, merger or otherwise, any securities (or
direct or indirect rights or options to acquire any securities) of Frontier or
any subsidiary thereof, or, except for the purchase of assets
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in the ordinary course of business, any assets of Frontier or any subsidiary or
division thereof;
(b) make, or take any action to solicit, initiate or encourage, an
Acquisition Proposal with respect to Frontier (including, without limitation, by
not terminating its current offer with respect to Frontier);
(c) "solicit", or become a "participant" in any "solicitation" of, any
"proxy" (as such terms are defined in Regulation 14A under the Exchange Act)
from any holder of any securities of Frontier in connection with any vote on any
matter with respect to Frontier, or agree or announce its intention to vote with
any Person undertaking a "solicitation";
(d) form, join or in any way participate in a "group" (within the meaning
of Section 13(d)(3) of the Exchange Act) with respect to any securities of
Frontier;
(e) otherwise act, alone or in concert with others, to seek to control or
influence the management, Board of Directors or policies of Frontier;
(f) in any other manner interfere with or seek to impede the Global
Transaction;
(g) disclose any intention, plan or arrangement inconsistent with any of
the foregoing;
(h) assist, advise or encourage (including by knowingly providing or
arranging financing for that purpose) any other Person in doing any of the
foregoing; or
(i) disclose publicly its intent to propose any amendment to this
Agreement.
Section 4.02. Capacity Agreement. (a) Qwest agrees to purchase $140
million of capacity from Global on the terms set forth in an agreement in the
form of Exhibit C hereto, and in connection therewith, Qwest and Global shall
enter into an agreement in the form of Exhibit C hereto simultaneously with
entering into this Agreement.
(b) The parties agree that the agreement pursuant to Section 402 above and
payments provided in Section 2 of the Termination Agreement dated as of the date
hereof between Global and U S WEST are in full satisfaction and
5
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discharge of the obligations of U S WEST under the U S WEST Merger Agreement in
respect of the termination fees thereunder as well as all other Claims (as
defined in Section 601) by Global against U S WEST in respect only of the U S
WEST Merger Agreement (and not, for purposes of clarification, in respect of the
other agreements listed in Section 807 or any other agreements between the
parties hereto), all in accordance with the Termination Agreement substantially
in the form of Exhibit A hereto.
Section 4.03. Further Agreements. Following the termination of the U S
WEST Merger Agreement, Qwest will immediately withdraw and terminate the Qwest
Offer for Frontier and Qwest shall not enter into any agreement with Frontier
relating to any of the subject matters of the Qwest Offer for Frontier without
Global's prior written consent.
ARTICLE 5
Covenants of Global
As of the date hereof and during the term of this Agreement, Global agrees
that:
Section 5.01. Certain Actions. Following the termination of the U S WEST
Merger Agreement, Global will not, and will not permit its Affiliates to (and to
the extent Global has consent rights in respect of any of the following actions
by Frontier, Global will not grant consent to Frontier to):
(a) acquire, offer or propose to acquire, or agree or seek to acquire,
directly or indirectly, by purchase, merger or otherwise, any securities (or
direct or indirect rights or options to acquire any securities) of U S WEST or
any subsidiary thereof, or, except for the purchase of assets in the ordinary
course of business, any assets of U S WEST or any subsidiary or division
thereof;
(b) make, or take any action to solicit, initiate or encourage, an
Acquisition Proposal with respect to U S WEST;
(c) "solicit", or become a "participant" in any "solicitation" of, any
"proxy" (as such terms are defined in Regulation 14A under the Exchange Act)
from any holder of any securities of U S WEST in connection with any vote on any
matter with respect to U S WEST, or
6
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agree or announce its intention to vote with any Person undertaking a
"solicitation";
(d) form, join or in any way participate in a "group" (within the meaning
of Section 13(d)(3) of the Exchange Act) with respect to any securities of U S
WEST;
(e) otherwise act, alone or in concert with others, to seek to control or
influence the management, Board of Directors or policies of U S WEST;
(f) in any other manner interfere with or seek to impede the Qwest
Transaction;
(g) disclose any intention, plan or arrangement inconsistent with any of
the foregoing;
(h) assist, advise or encourage (including by knowingly providing or
arranging financing for that purpose) any other Person in doing any of the
foregoing; or
(i) disclose publicly its intent to propose any amendment to this
Agreement.
Section 5.02. Amendment of the U S WEST Agreements. Simultaneous with the
execution and delivery of this Agreement, Global shall enter into (x) a
Termination Agreement substantially in the form of Exhibit A hereto and (y) an
amendment to the Tender Offer and Purchase Agreement dated as of May 16, 1999
between Global and U S WEST (the "TOP Agreement"), such amendment to be
substantially in the form of Exhibit B hereto, and shall not enter into any
other agreement with U S WEST relating to any of the subject matters of the U S
WEST Merger Agreement or TOP Agreement without Qwest's prior written consent.
ARTICLE 6
Release of Claims
Section 6.01. Release. (a) Qwest, on behalf of itself, its subsidiaries
and its and their successors and assigns (hereinafter collectively referred to
as the "Qwest Parties"), and Global, on behalf of itself, its subsidiaries and
its and their
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successors and assigns (hereinafter collectively referred to as
the "Global Parties"), each mutually release and forever discharge the other,
and all persons acting in concert with the other, from all liabilities, rights,
duties, claims, causes of action, actions, suits, debts, sums of money,
accounts, judgments, damages or demands of any nature whatsoever, legal,
equitable or otherwise, known or unknown, contingent or fixed, in whole or in
part (hereinafter collectively referred to as the "Claims"), and agree not to
sue or to bring any claim, whether in tort, contract or otherwise, in each case
directly or indirectly arising from the conduct prior to the date hereof of
Qwest, Global or their respective directors, officers, employees or agents in
connection with the Global Merger Agreements, the Qwest Offers, the Global
Transaction and the Qwest Transaction, it being understood, however, that this
release does not apply to any Claim arising out of any failure by Qwest or
Global to comply either with the terms of this Agreement (including Exhibit C
hereto) or with any commercial agreements between the Qwest Parties and the
Global Parties.
(b) Each of Qwest and Global represents and warrants that it has not sold,
assigned, transferred, conveyed or otherwise disposed of any claim, demand or
cause of action or any part thereof relating to any matter covered by this
Article 6.
ARTICLE 7
Termination
Section 7.01. Termination. The provisions of Articles 4 and 5 of this
Agreement shall terminate upon the occurrence of any of the following:
(a) the written agreement of Qwest and Global to terminate this Agreement;
or
(b) the third anniversary of the date hereof.
8
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ARTICLE 8
Miscellaneous
Section 8.01. Specific Performance. Each of Qwest and Global agrees that
any breach by it of any provision of this Agreement would irreparably injure the
other and that money damages would be an inadequate remedy therefor.
Accordingly, each of Qwest and Global agrees that the other shall be entitled to
one or more injunctions enjoining any such breach and requiring specific
performance of this Agreement and consents to the entry thereof, in addition to
any other remedy to which the other is entitled at law or in equity.
Section 8.02. Notices. All notices, requests and other communications to
either party hereunder shall be in writing (including telecopy or similar
writing) and shall be given:
if to Qwest, to:
Qwest Communications International Inc.
700 Qwest Tower
555 Seventeenth Street
Denver, Colorado 80202
Attention: General Counsel
Telecopy: (303) 992-1044
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Dennis S. Hersch, Esq.
Telecopy: (212) 450-4800
if to Global, to:
Global Crossing Ltd.
Wessex House
45 Reid Street
Hamilton HM12 Bermuda
Attention: James C. Gorton, Esq.
Telecopy: (441) 296-8606
with a copy to:
9
<PAGE>
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue
Los Angeles, California 90071
Attention: Brian J. McCarthy, Esq.
Telecopy: (213) 687-5600
Each such notice, request or other communication shall be effective when
delivered at the address specified in this Section 8.02.
Section 8.03. Amendments; No Waivers. (a) Any provision of this Agreement
may be amended or waived if, and only if, such amendment or waiver is in writing
and signed, in the case of an amendment, by Global and Qwest, or in the case of
a waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of
any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 8.04. Expenses. All costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or expense.
Section 8.05. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that neither of the parties may
assign, delegate or otherwise transfer any of its rights or obligations under
this Agreement without the written consent of the other party hereto. Except as
expressly provided herein, neither this Agreement nor any provision hereof is
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder.
Section 8.06. Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
a counterpart hereof signed by the other party hereto.
Section 8.07. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect thereto. For purposes of
clarification, this Agreement does not supersede agreements related to the U S
WEST Merger
10
<PAGE>
Agreement, including the TOP Agreement as amended by Amendment No. 1 to the TOP
Agreement dated as of the date hereof, the Tender and Voting Agreement, the
Voting Agreement and the Standstill Agreement, each dated as of May 16, 1999,
and the confidentiality letter between U S WEST and Global dated May 3, 1999. No
representation, inducement, promise, understanding, condition or warranty not
set forth herein or therein has been made or relied upon by any of the parties
hereto.
Section 8.08. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York.
Section 8.09. Jurisdiction. The parties hereto agree that any suit, action
or proceeding seeking to enforce any provision of, or based on any matter
arising out of, this Agreement may be brought in the United States District
Court for the Southern District of New York or any other New York State court
sitting in New York County, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party in the manner provided for notices in Section
8.02 shall be deemed effective service of process on such party.
11
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
QWEST COMMUNICATIONS INTERNATIONAL INC.
By: /s/ Joseph P. Nacchio
-------------------------------
Name: Joseph P. Nacchio
Title: Chairman and Chief Executive
Officer
GLOBAL CROSSING LTD.
By: /s/ Robert Annunziata
------------------------
Name: Robert Annunziata
Title: Chief Executive Officer
12
<PAGE>
Exhibit 10.4
THIS AGREEMENT (as amended, supplemented or otherwise modified from
time to time, this "Agreement"), entered into as of July 18, 1999, between
GLOBAL CROSSING HOLDINGS LTD., a corporation organized and existing under the
laws of Bermuda and having its principal office in Hamilton, Bermuda (said
company, and any permitted successor or assign hereunder, the "Grantor"), and
QWEST COMMUNICATIONS INTERNATIONAL INC., a corporation organized and existing
under the laws of Delaware and having its principal office in Denver, Colorado
(said company, and any permitted successor or assign hereunder, the
"Purchaser"). The Grantor and the Purchaser are herein sometimes collectively
referred to as the "Parties".
W I T N E S S E T H:
-------------------
WHEREAS, Atlantic Crossing Ltd. has constructed a fiber optic cable
system connecting the United States, the United Kingdom, the Netherlands and
Germany known as the Atlantic Crossing System or "AC-1"; Pacific Crossing Ltd.
is constructing a fiber optic cable system connecting the United States and
Japan known as the Pacific Crossing System or "PC-1"; Mid-Atlantic Crossing Ltd.
is constructing a fiber optic cable system connecting New York, Florida and St.
Croix, known as the Mid-Atlantic Crossing System or "MAC"; Pan American Crossing
Ltd. is constructing a fiber optic cable system connecting California, Mexico,
Panama, Venezuela and St. Croix, known as the Pan American Crossing System or
"PAC" (PAC also includes a terrestrial network which connects certain major
cities in Mexico); GC Pan European Crossing Holdings B.V. is constructing a
fiber optic cable network connecting various principal cities in Europe, known
as Pan-European Crossing or "PEC"; and South American Crossing Ltd. is
constructing a submarine fiber optic cable system connecting Panama, Colombia,
Peru, Chile, Argentina, Brazil and St. Croix, known as South American Crossing
or "SAC";
WHEREAS, Atlantic Crossing Ltd., Pacific Crossing Ltd., Mid-Atlantic
Crossing Ltd., Pan American Crossing Ltd., GC Pan European Crossing Holdings
B.V. and South American Crossing Ltd. are referred to herein as the "System
Companies" and AC-1, PC-1, MAC, PAC, PEC and SAC are referred to herein as the
"Systems";
WHEREAS, Grantor is affiliated with each of the System Companies and
can cause the System Companies to grant IRUs in capacity on the Systems to the
Purchaser;
WHEREAS, additional companies controlled by the Grantor may in the
future construct other systems, though there is no obligation to do so, in which
case such additional companies will, if the Purchaser elects, be deemed to be
ASystem Companies" under this Agreement and such additional systems will, if the
Purchaser elects, be deemed to be ASystems" under this Agreement; and
WHEREAS, the Purchaser desires to acquire rights with respect to
capacity on one or more of the Systems on an indefeasible right of use basis
("IRU");
NOW, THEREFORE, the Parties, in consideration of the mutual covenants
contained herein, and for other good and valuable consideration, the receipt of
which is hereby acknowledged, covenant and agree with each other as follows:
<PAGE>
1. DEFINITIONS. Unless otherwise defined herein, all terms which are commonly
used in the undersea telecommunications industry shall have the meanings
commonly given such terms in such industry. In addition to terms defined in the
preamble, the recitals and in the text of this Agreement, the following terms
shall have the following meanings:
"Dollars" or "$" means United States Dollars.
"Final Payment Date" means the last day of the Purchase Period.
"Minimum Capacity Unit" or "MCU" means, with respect to any System, the
minimum amount of capacity that is generally offered by the Grantor (or its
applicable affiliate) on such System to purchasers; provided, however, such
minimum capacity (for purposes of this Agreement) shall not be above the STM-1
level unless agreed to by the Purchaser in writing.
"Purchase Period" means the period beginning on the date hereof and ending
on the second anniversary of such date.
2. PURCHASE AGREEMENT.
(a) Purchaser hereby unconditionally and irrevocably agrees to purchase and
pay for (and/or cause one or more of its Affiliates (as defined below) to
purchase and pay for) MCUs on the Systems during the Purchase Period in an
aggregate amount equal to $140,000,000 (the "Commitment"). The commitment
contained herein to purchase MCUs is in addition to, and separate from, any and
all other commitments of the Purchaser and/or any of its affiliates to purchase
capacity on the Systems. For the avoidance of doubt, (i) a purchase of an MCU
hereunder will not be deemed to reduce or fulfill any other contractual
commitment or other obligation to purchase capacity on any System and (ii) a
purchase of an MCU by the Purchaser or any of its affiliates pursuant to any
other contractual commitment or other obligation shall not be credited toward
the Commitment. The Grantor hereby unconditionally and irrevocably agrees to
sell or cause the System Companies to sell MCUs to the Purchaser and/or its
Affiliates pursuant to, and in accordance with the terms of, this Agreement.
(b) The price for MCUs on any System purchased pursuant to Section 2(a)
hereof shall be at the lower of (i) the best "Tier 3" published prices available
as at the date hereof for such System and (ii) the best available "top Tier"
published prices (currently "Tier 3") for such System on the date the applicable
capacity purchase agreement is executed for such MCUs.
(c) Purchases of capacity on any System pursuant to this Agreement shall be
effected by Purchaser executing, delivering and complying with a Capacity
Purchase Agreement ("CPA") with the particular System Company or one of its
affiliates, such CPA to contain substantially the same terms and conditions
regarding capacity as set forth in the Capacity Purchase Agreement, dated as of
December 29, 1998, between Atlantic Crossing Ltd. and an affiliate of the
Purchaser and in the schedules and exhibits attached thereto.
(d) If, on the Final Payment Date, the Purchaser has paid less than the
entire Commitment to the Grantor by purchasing MCUs under this Agreement, the
Purchaser shall pay to the Grantor (or any of the Grantor's affiliates
designated by the Grantor), in immediately available funds, on the Final
<PAGE>
3
Payment Date, the amount equal to the difference between (x) $140,000,000 and
(y) the actual amount paid by the Purchaser for MCUs under this Agreement (such
difference being referred to herein as the "Unutilized Amount"). Such payment
shall be irrevocable; provided, however, during the period from the Final
Payment Date to and including the fourth anniversary of the date of this
Agreement, the Purchaser may utilize all or any portion of the Unutilized Amount
as a credit to purchase MCUs pursuant to a CPA, such CPA to contain
substantially the same terms and conditions regarding capacity as set forth in
the Capacity Purchase Agreement, dated as of December 29, 1998, between Atlantic
Crossing Ltd. and an affiliate of the Purchaser and in the schedules and
exhibits attached thereto.
3. REPRESENTATIONS
(a) The Grantor hereby represents and warrants to Purchaser that (i)
Grantor is a corporation duly organized and validly existing under the laws of
Bermuda; (ii) the execution, delivery and performance of this Agreement by
Grantor has been duly authorized by all necessary corporate action on the part
of Grantor and this Agreement is a valid, binding and enforceable obligation of
Grantor enforceable with its terms and (iii) the execution, delivery and
performance of this Agreement by Grantor does not violate, conflict with or
constitute a breach of, the organizational documents or any order, decree or
judgment of any court, tribunal or governmental authority binding on Grantor.
The Grantor hereby further represents, warrants and covenants that it is
affiliated with each of the System Companies and shall cause the applicable
System Companies to grant IRUs in MCUs on the Systems to the Purchaser and/or
its Affiliates pursuant to, and in accordance with the terms of, this Agreement.
(b) Purchaser hereby represents and warrants to Grantor that (i) Purchaser
is a corporation duly organized and validly existing under the laws of its
jurisdiction of organization; (ii) the execution, delivery and performance of
this Agreement by Purchaser has been duly authorized by all necessary corporate
action on the part of Purchaser and this Agreement is a valid, binding and
enforceable obligation of Purchaser enforceable in accordance with its terms;
and (iii) the execution, delivery and performance of this Agreement by Purchaser
does not violate, conflict with or constitute a breach of, the organizational
documents or any order, decree or judgment of any court, tribunal or
governmental authority binding on Purchaser.
4. SETTLEMENT OF DISPUTES.
(a) The Parties shall endeavor to settle amicably by mutual discussions any
disputes, differences, or claims whatsoever related to this Agreement.
(b) Failing such amicable settlement, any controversy, claim or dispute
arising under or relating to this Agreement, including the existence, validity,
interpretation, performance, termination or breach thereof, shall finally be
settled by arbitration in accordance with the International Arbitration Rules of
the American Arbitration Association ("AAA"). There shall be three (3)
arbitrators (the "Arbitration Tribunal"), the first of which shall be appointed
by the claimant in its notice of arbitration, the second of which shall be
appointed by the respondent within thirty (30) days of the appointment of the
first arbitrator and the third of which shall be jointly appointed by the party-
appointed arbitrators within thirty (30) days thereafter. The language of the
arbitration shall be English. The Arbitration Tribunal shall issue a written
opinion and will not have authority to award punitive damages to either party.
Each party shall bear its own expenses, but the parties shall share equally the
expenses of the Arbitration Tribunal and the AAA. This Agreement shall be
enforceable, and any arbitration award
<PAGE>
4
shall be final, and judgment thereon may be entered in any court of competent
jurisdiction. The arbitration shall be held in New York, New York, USA.
5. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA.
6. NO THIRD PARTY BENEFICIARIES
This Agreement does not provide and is not intended to provide third
parties (including, but not limited to, customers of the Purchaser) with any
remedy, claim, liability, reimbursement, cause of action, or any other right.
7. ASSIGNMENT.
(a) This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
(b) The Grantor shall solely be responsible for complying with all of the
terms binding on the "Grantor" hereunder and shall not be permitted to assign,
transfer or otherwise dispose of any or all of its right, title or interest
hereunder or delegate any or all of its obligations hereunder to any person or
entity except that the Grantor shall be permitted to assign, transfer or
otherwise dispose of any or all of its rights hereunder and delegate any or all
of its obligations hereunder to any present or future entity controlled by,
under the same control as, or controlling, the Grantor. The Grantor shall give
the Purchaser notice of any such assignment, transfer or other disposition or
any such delegation.
(c) The Purchaser shall solely be responsible for complying with all of the
terms binding on the APurchaser" hereunder and shall not be permitted to assign,
transfer or otherwise dispose of any or all of its right, title or interest
hereunder or delegate any or all of its obligations hereunder to any person or
entity; provided, that Purchaser may assign the right to enter into a CPA with
System Companies to any present or future entity controlled by, under the same
control as, or controlling the Purchaser (its "Affiliates").
(d) Any assignment, transfer or other disposition by either Party which is
in violation of this Section shall be void and of no force and effect.
<PAGE>
5
8. NOTICES.
Each notice, demand, certification or other communication given or made
under this Agreement shall be in writing and shall be delivered by hand or sent
by registered mail or by facsimile transmission to the address of the respective
Party as shown below (or such other address as may be designated in writing to
the other party hereto in accordance with the terms of this Section):
If to the Purchaser: Qwest Communications International Inc.
700 Qwest Tower
555 Seventeenth Street
Denver, Colorado 80202
Attn: General Counsel
Fax No. 303-992-1044
If to the Grantor: Global Crossing Holdings Ltd.
Wessex House
45 Reid Street
Hamilton HM12, Bermuda
Attn: President
Fax No.: 441-296-8606
Any change to the name, address and facsimile numbers may be made at any
time by giving fifteen (15) days prior written notice in accordance with this
Section. Any such notice, demand or other communication shall be deemed to have
been received, if delivered by hand, at the time of delivery or, if posted, at
the expiration of seven (7) days after the envelope containing the same shall
have been deposited in the post maintained for such purpose, postage prepaid,
or, if sent by facsimile, at the date of transmission if confirmed receipt is
followed by postal notice.
9. SEVERABILITY.
If any provision of this Agreement is found by an arbitral, judicial or
regulatory authority having jurisdiction to be void or unenforceable, such
provision shall be deemed to be deleted from this Agreement and the remaining
provisions shall continue in full force and effect.
10. HEADINGS
The Section headings of this Agreement are for convenience of reference
only and are not intended to restrict, affect or influence the interpretation or
construction of provisions of such Section.
<PAGE>
6
11. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which when executed
and delivered shall be deemed an original. Such counterparts shall together (as
well as separately) constitute one and the same instrument.
12. ENTIRE AGREEMENT
This Agreement supersedes all prior or written understandings between the
parties hereto and constitutes the entire agreement with respect to the subject
matter herein. This Agreement shall not be modified or amended except by a
writing signed by authorized representatives of the parties hereto.
13. PUBLICITY AND CONFIDENTIALITY.
The provisions of this Agreement and any non-public information, written or
oral, with respect to this Agreement ("Confidential Information") will be kept
confidential and shall not be disclosed, in whole or in part, to any person
other than affiliates, officers, directors, employees, agents or representatives
of a party (collectively, "Representatives") who need to know such Confidential
Information for the purpose of negotiating, executing and implementing this
Agreement. Each party agrees to inform each of its Representatives of the non-
public nature of the Confidential Information and to direct such persons to
treat such Confidential Information in accordance with the terms of this
Section. Nothing herein shall prevent a party from disclosing Confidential
Information (i) upon the order of any court or administrative agency, (ii) upon
the request or demand of, or pursuant to any regulation of, any regulatory
agency or authority, (iii) to the extent reasonably required in connection with
the exercise of any remedy hereunder, (iv) to a party's legal counsel or
independent auditors, (v) to prospective lenders to the Grantor, (vi) to the
extent necessary, to the operator, maintainor and administrator of any System
and/or (vii) to any actual or proposed assignee, transferee or lessee of all or
part of its rights hereunder provided that such actual or proposed assignee
agrees in writing to be bound by the provisions of this Section.
14. LIMITATION OF LIABILITY.
In no event shall the Purchaser or any Grantor be liable to the other for
consequential, incidental, indirect or special damages, including, but not
limited to, loss of revenue, loss of business opportunity, or the costs
associated therewith.
<PAGE>
7
IN WITNESS WHEREOF, the Parties have executed this Agreement in the
jurisdictions set forth beneath their signatures, effective on the date first
written above.
GLOBAL CROSSING HOLDINGS LTD.
By: /s/ Ian MacLean
________________________________
Name: Ian MacLean
Title: Senior Vice President
Jurisdiction: Bermuda
QWEST COMMUNICATIONS INTERNATIONAL INC.
By: /s/ Joseph P. Nacchio
______________________________
Name:
Title:
Jurisdiction:
<PAGE>
Exhibit 99.1
Shareholder Letter: Global Crossing Drops Bid for U S WEST;
Frontier Merger Agreement Intact
HAMILTON, Bermuda, July 18 - Global Crossing Ltd. (Nasdaq: GBLX) released today
the following letter to shareholders, signed by Co-Chairman Gary Winnick, Co-
Chairman Lod Cook, and Chief Executive Officer Bob Annunziata:
LETTER TO SHAREHOLDERS
July 18, 1999
To Our Fellow Global Crossing Shareholders:
On behalf of Global Crossing's Board of Directors and management team, we are
pleased to report developments which we believe are favorable to you as
shareholders and beneficial to the future of Global Crossing. Our definitive
merger agreement with Frontier remains intact, and on schedule to close in this
quarter. Without having to raise our own offer for Frontier, the competing bid
has been withdrawn.
Financial and management discipline have been hallmarks of Global Crossing since
its inception. We have practiced it both in the Frontier transaction and in the
transaction involving U S WEST. From our earliest discussions, we have felt that
U S WEST is a great company with great people. Our original agreement recognized
that value by offering a premium over U S WEST's then-current stock price. We
feel our original offer recognized a full and fair market price. We do not
believe your best interests would be served by increasing our bid by an
additional premium of approximately $5 billion in order to match or exceed the
competing offer.
U S WEST's Board of Directors has now accepted the competing proposal, and we
have advised them we will not increase our offer. In connection therewith, we
have entered into agreements with those parties under which the Global Crossing-
U S WEST merger agreement has been terminated, the competing bid for Frontier
has been terminated and a revised breakup fee for U S WEST negotiated.
These actions will benefit Global Crossing shareholders by:
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<PAGE>
avoiding potential time delays, regulatory uncertainties, and additional costs
in bringing Global Crossing and Frontier together
avoiding any dilution of shareholder value that would have been caused had we
matched the competing offer for U S WEST
achieving a financial outcome that is both certain and favorable, including a
negotiated breakup fee that can be used for strategic business initiatives.
We plan to complete our merger with Frontier under the terms our two boards have
already endorsed in our definitive merger agreement. We have continued our
integration planning with Frontier during the time the competing offer was
outstanding. The Global Crossing-Frontier integration team has sustained a
spirit of professionalism and cooperation from our very first meetings.
The team is very excited about combining Global Crossing's global fiber network
and Frontier's best-in-class U.S. domestic fiber network to create an unmatched
platform, positioning us exceptionally well to deliver seamless end-to-end
connectivity and value-added services to customers worldwide.
Looking forward, we intend to apply our human and financial resources to
expanding our global network in a manner that continues to offer our customers a
clearly superior value proposition. The combined management team of Global
Crossing and Frontier is unmatched at creating superior communications networks
at all levels: subsea, international, national, and local. We will put these
skills to work on a variety of initiatives to increase our penetration of
important markets around the world.
These initiatives will likely include a mix of strategic international and U.S.
acquisitions, selected local loop buildouts, and employment of advanced
technologies to link our network to key customers in proximity to the 160
business centers worldwide to be served by the expanded Global Crossing network.
As with all our business activities, these initiatives will be focused on
delivering added value to you as shareholders, as well as to our customers.
Our revised U S WEST breakup fee is one of many financial resources we can draw
upon for future initiatives. It totals $420 million, comprised of three equal
$140 million increments:
cash, to be paid immediately;
2 of 3
<PAGE>
returned Global Crossing stock from the tender offer (valued at the same $62.75
per share at which U S WEST acquired it);
and capacity purchase on the Global Crossing network, to be purchased over two
years at our published Tier 3 prices.
We want to thank our managers and associates for their dedicated efforts in
keeping our normal business activities moving forward smoothly through this past
month. As we said at the time of our original agreement in March, we believe
Global Crossing and Frontier are a great fit with a great future. We are excited
about bringing these companies together for the benefit of our shareholders,
customers, and employees.
Sincerely,
Gary Winnick
Lodwrick Cook
Bob Annunziata
Co-Chairman
Co-Chairman
Chief Executive Officer
About Global Crossing
Global Crossing is building and operating the world's first and most advanced
global IP-based datacentric network, an end-to-end fiber optic platform for
data, voice, video and Internet transmissions. The Global Crossing Network will
span five continents and address 80% of the world's international traffic.
Global Crossing's operations are headquartered in Hamilton, Bermuda, with
executive offices in Los Angeles.
Statements made in this press release that state the company's or management's
intentions, beliefs, expectations, or predictions for the future are forward-
looking statements. It is important to note that the company's actual results
could differ materially from those projected in such forward- looking
statements. Information concerning factors that could cause actual results to
differ materially from those in the forward-looking statements is contained from
time to time in the company's filings with the U.S. Securities and Exchange
Commission (SEC). Copies of these filings may be obtained by contacting the
company or the SEC.
Investors and analysts may contact:
Jensen Chow
310/385-5283
E-mail: [email protected]
Reporters and editors may contact:
Tom Goff
310/385-5231
E-mail: [email protected]
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