UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 2)
Under the Securities Exchange Act of 1934
TELEGLOBE INC.
(Name of Issuer)
----------------------------------------
Common Shares, No Par Value
(Title of Class of Securities)
----------------------------------------
87941V100
(CUSIP Number)
----------------------------------------
<TABLE>
<S> <C> <C> <C>
Timothy E. McGee Martine Turcotte Timothy E. McGee
Corporate Secretary Chief Legal Officer Chief Legal Officer and
Bell Canada Holdings Inc. BCE Inc. Corporate Secretary
1000 rue de La Gauchetiere Ouest 1000 rue de La Gauchetiere Ouest Bell Canada
Bureau 3700 Bureau 3700 1000 rue de La Gauchetiere Ouest
Montreal (Quebec) H3B 4Y7 Montreal (Quebec) H3B 4Y7 Bureau 4100
Canada Canada Montreal (Quebec) H3B 5H8
Telephone: (416) 581-4488 Telephone: (514) 870-4637 Canada
Telephone: (416) 581-4488
</TABLE>
David G. Masse David G. Masse
Secretary Secretary and Treasurer
129201 Canada Inc. 3632709 Canada Inc.
1000 rue de La Gauchetiere Ouest 1000 rue de La Gauchetiere Ouest
Bureau 3700 Bureau 4100
Montreal (Quebec) H3B 4Y7 Montreal (Quebec) H3B 5H8
Canada Canada
Telephone: (514) 786-3891 Telephone: (514) 786-3891
<PAGE>
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
Copy to:
Odin T. Larocque
Assistant General Counsel
Bell Canada
Bureau 4300
1000, rue de La Gaucheterie Ouest
Montreal (Quebec) H3B 5H8
Telephone: 514-870-6383
February 15, 2000
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box |_|.
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1 of 9
<PAGE>
CUSIP No. 87941V100
- --------------------------------------------------------------------------------
1. Name of Reporting Person
BCE Inc.
S.S. or I.R.S. Identification No. of Above Person
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of Group (See Instructions)
(a) |_|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Sources of Funds (See Instructions)
N/A
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Canada
- --------------------------------------------------------------------------------
7. Sole Voting Power
0
8. Number of Shares Shared Voting Power
Beneficially
Owned 58,660,728
By
Each
9. Reporting Person Sole Dispositive Power
With
0
10. Shared Dispositive Power
58,660,728
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
58,660,728
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
X
-------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
23.13%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
CO
- --------------------------------------------------------------------------------
2 of 9
<PAGE>
CUSIP No. 87941V100
- --------------------------------------------------------------------------------
1. Name of Reporting Person
Bell Canada Holdings Inc.
S.S. or I.R.S. Identification No. of Above Person
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of Group (See Instructions)
(a) |_|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Sources of Funds (See Instructions)
N/A
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Canada
- --------------------------------------------------------------------------------
7. Sole Voting Power
0
8. Number of Shares Shared Voting Power
Beneficially
Owned 58,660,728
By
Each
9. Reporting Person Sole Dispositive Power
With
0
10. Shared Dispositive Power
58,660,728
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
58,660,728
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
X
-------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
23.13%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
CO
- --------------------------------------------------------------------------------
3 of 9
<PAGE>
CUSIP No. 87941V100
- --------------------------------------------------------------------------------
1. Name of Reporting Person
Bell Canada
S.S. or I.R.S. Identification No. of Above Person
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of Group (See Instructions)
(a) |_|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Sources of Funds (See Instructions)
N/A
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Canada
- --------------------------------------------------------------------------------
7. Sole Voting Power
0
8. Number of Shares Shared Voting Power
Beneficially
Owned 58,660,728
By
Each
9. Reporting Person Sole Dispositive Power
With
0
10. Shared Dispositive Power
58,660,728
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
58,660,728
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
X
-------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
23.13%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
CO
- --------------------------------------------------------------------------------
4 of 9
<PAGE>
CUSIP No. 87941V100
- --------------------------------------------------------------------------------
1. Name of Reporting Person
129201 Canada Inc.
S.S. or I.R.S. Identification No. of Above Person
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of Group (See Instructions)
(a) |_|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Sources of Funds (See Instructions)
N/A
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Canada
- --------------------------------------------------------------------------------
7. Sole Voting Power
0
8. Number of Shares Shared Voting Power
Beneficially
Owned 54,660,728
By
Each
9. Reporting Person Sole Dispositive Power
With
0
10. Shared Dispositive Power
54,660,728
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
54,660,728
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
X
-------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
21.56%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
CO
- --------------------------------------------------------------------------------
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<PAGE>
CUSIP No. 87941V100
- --------------------------------------------------------------------------------
1. Name of Reporting Person
3632709 Canada Inc.
S.S. or I.R.S. Identification No. of Above Person
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of Group (See Instructions)
(a) |_|
(b) |_|
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Sources of Funds (See Instructions)
N/A
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Canada
- --------------------------------------------------------------------------------
7. Sole Voting Power
0
8. Number of Shares Shared Voting Power
Beneficially
Owned 4,000,000
By
Each
9. Reporting Person Sole Dispositive Power
With
0
10. Shared Dispositive Power
4,000,000
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
4,000,000
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
X
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
1.58%
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions)
CO
- --------------------------------------------------------------------------------
6 of 9
<PAGE>
This Amendment No. 2 supplements and amends the Statement on Schedule
13D filed with the Securities and Exchange Commission on March 10, 1999 as
amended by Amendment 1 thereto (as so amended, the "Schedule 13D") by BCE Inc.,
a corporation incorporated under the Canada Business Corporation Act ("BCE"),
with respect to the common shares, no par value (the "Common Shares"), of
Teleglobe Inc., a corporation incorporated under the Canada Business Corporation
Act (the "Company" or "Teleglobe"). The purpose of this Amendment No. 2 is to
report the entry by BCE and Teleglobe into the Support Agreement dated February
15, 2000 (the "Support Agreement", a copy of which is filed as Exhibit 2A hereto
and incorporated by reference herein) and the entry by BCE and certain
shareholders of Teleglobe into the Agreements dated February 15, 2000 (the
"Lock-up Agreements", copies of which are filed as Exhibit 2B-1 and 2B-2 hereto
and incorporated by reference herein). Terms used but not defined herein have
the meanings specified in the Schedule 13D.
Item 3. Source and Amount of Funds or other Consideration.
The Support Agreement and Lock-up Agreements provide for the
acquisition by BCE of the entire equity interest in Teleglobe in exchange for
between 0.85 and 0.97 BCE common shares per Teleglobe Common Share as provided
in the Support Agreement and as described in the Press Release by BCE dated
February 16, 2000, a copy of which is filed as Exhibit 2C hereto and
incorporated by reference herein (the "Press Release").
Item 4. Purpose of Transaction
The purpose of the Support Agreement and Lock-up Agreements is the
acquisition by BCE of all of the Common Shares of Teleglobe not owned by BCE or
its subsidiaries.
Pursuant to the Indemnification Letter dated February 15, 2000 (the
"Indemnification Letter", a copy of which is filed as Exhibit 2D hereto and
incorporated by reference herein) between BCE, Kenny A. Troutt and certain
related shareholders of Teleglobe (the "Troutt Group"), BCE has agreed, among
other things, to offer the opportunity, under certain circumstances, to the
Troutt Group to offer to acquire the multilevel marketing business of, and/or
the United States domestic telecommunications networth of, Excel Communications
Inc.
Except as described in this Amendment No. 2, in the Support Agreement,
the Lock-up Agreements, the Indemnification Letter or the Press Release, all of
which are incorporated by reference herein, none of BCE, BCH, Bell Canada,
129201 or 3632709 nor any person controlling such companies, nor any of the
persons named in Exhibit A to the Schedule 13D, has any plan or proposals which
relate to or would result in any of the transactions described in subparagraphs
(a) through (j) of Item 4 of Schedule 13D.
7
<PAGE>
Item 5. Interest in Securities of the Issuer.
As described in the Press Release and provided in the Lock-up
Agreements, both of which are incorporated by reference herein, the Teleglobe
shareholders which are parties to the Lock-up Agreements have agreed to the
acquisition by BCE of the 65,368,691 Teleglobe Common Shares owned by such
shareholders, representing approximately 25.78%B of the outstanding Teleglobe
Common Shares and, under certain circumstances, up to 750,712 Common Shares
issuable upon exercise of options by certain of such shareholders, representing
approximately 0.3% of the outstanding Teleglobe Common shares. Such Teleglobe
Common Shares are not included in the number of Teleglobe Common Shares, or the
percent of the class thereof which such Common Shares represent, reported on the
cover pages of this Amendment No. 2.
Schedule 1 hereto, which is incorporated herein by reference, sets
forth the ownership of Common Shares by Directors and Officers of BCE, BCH, Bell
Canada, 129201 and 3632709. No transaction in securities of the Company has been
effected during the last 60 days except as described in Item 4 and except for
the sale of 250 Common Shares by Mrs. Corriveau-Gougeon on February 16, 2000
in a regular brokerage transaction on the Toronto Stock Exchange at CDN$39.15
per share.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of Teleglobe.
BCE has entered into the Support Agreement and Lock-up Agreements which
are described in the Press Release and copies of which are filed as exhibits
hereto and incorporated by reference herein.
The Teleglobe Common Shares subject to the Lock-up Agreements represent
approximately 25.78% of the Teleglobe Common Shares currently outstanding and
the Teleglobe Common Shares subject to the Lock-up Agreements, both of which are
incorporated by reference herein, which are issuable on exercise of options
represent approximately 0.3% of the Teleglobe Common Shares currently
outstanding.
Item 7. Material to be Filed as Exhibits
Schedule 1 Ownership of Teleglobe Common Shares by Directors and Officers of
BCE, BCH, Bell Canada, 12920 and 3632709 (supersedes Schedule 1
filed November 30, 1999)
Exhibit A Directors and Officers of BCE, BCH, Bell Canada, 12920 and
3632709 (supersedes Exhibit A filed November 30, 1999)
Exhibit 2A Support Agreement dated February 15, 2000 between BCE and Teleglobe
Exhibit 2B-1 Agreement dated February 15, 2000 between BCE and the Troutt Group
Exhibit 2B-2 Agreement dated February 15, 2000 between BCE, Telesystem Telecom
Ltd. and Charles Sirois
Exhibit 2C Press Release by BCE dated February 15, 2000
Exhibit 2D Indemnification Letter dated February 15, 2000 between BCE and the
Troutt Group
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 14, 2000 BCE INC.
By /s/ Martine Turcotte
-----------------------------------
Name: Martine Turcotte
Title: Chief Legal Officer
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
8
<PAGE>
Dated: March 14, 2000 BELL CANADA HOLDINGS INC.
By /s/ Timothy E. McGee
-----------------------------------
Name: Timothy E. McGee
Title: Corporate Secretary
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 14, 2000 BELL CANADA
By /s/ Timothy E. McGee
-----------------------------------
Name: Timothy E. McGee
Title: Chief Legal Officer and
Corporate Secretary
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 14, 2000 129201 CANADA INC.
By /s/ David G. Masse
-----------------------------------
Name: David G. Masse
Title: Secretary
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 14, 2000 3632709 CANADA INC.
By /s/ David G. Masse
-----------------------------------
Name: David G. Masse
Title: Secretary and Treasurer
9
Schedule 1
BCE INC., BELL CANADA
AND BELL CANADA HOLDINGS INC.
DIRECTORS AND OFFICERS
HOLDINGS IN SHARES OF TELEGLOBE INC.
Directors of BCE Inc.
- ---------------------
Jean C. Monty 10,000
Guy Saint-Pierre 300
Lynton R. Wilson 1,142
Officers of BCE Inc.
- --------------------
Michael T. Boychuk 500
Barry W. Pickford 300
Directors of Bell Canada
- ------------------------
Jean C. Monty 10,000
Guy Saint-Pierre 300
Officers of Bell Canada
- -----------------------
Pierre J. Blouin 200
Michael T. Boychuk 500
Martine Corriv 0
Bernard A. Courtois 700
Tom S. Hope 200
Sylvie Lalande 600
Jean C. Monty 10,000
Barry W. Pickford 300
Directors of Bell Canada Holdings Inc.
- --------------------------------------
Jean C. Monty 10,000
Guy Saint-Pierre 300
Officers of Bell Canada Holdings Inc.
- -------------------------------------
Jean C. Monty 10,000
EXHIBIT A
<TABLE>
Corporation: 129201 Canada Inc.
- ----------------------------------------------------------------------------------------------------------
Directors and Citizenship Address Occupation
- ------------------------- ------- ----------
<S> <C> <C>
Bich, Genevieve 1000 rue de La Gauchetiere Ouest Vice-President and General Counsel
Canadian 4100 Bell Canada
Montreal, Quebec
Canada H3B 5H8
Masse, David G. 1000 rue de La Gauchetiere Ouest Assistant Corporate Secretary
Canadian 4100 Bell Canada
Montreal, Quebec
Canada H3B 5H8
McGee, Timothy E. 483 Bay Street Chief Legal Officer and
Canadian F8S Corporate Secretary
Toronto, Ontario Bell Canada
Canada M5G 2E1
Officers and Citizenship Address Occupation
- ------------------------ ------- ----------
Masse, David G. 1000 rue de La Gauchetiere Ouest Secretary
Canadian 4100
Montreal, Quebec
Canada H3B 5H8
McGee, Timothy E. 483 Bay Street Chairman and President
Canadian F8S
Toronto, Ontario
Canada M5G 2E1
Ruggins, Leonard F. 1000 rue de La Gauchetiere Ouest Vice-President and Treasurer
Canadian 3700
Montreal, Quebec
Canada H3B 4Y7
<PAGE>
Corporation: 3632709 Canada Inc.
- ----------------------------------------------------------------------------------------------------------
Directors and Citizenship Address Occupation
- ------------------------- ------- ----------
Bich, Genevieve 1000 rue de La Gauchetiere Ouest Vice-President and General Counsel
Canadian 4100 Bell Canada
Montreal, Quebec
Canada H3B 5H8
Masse, David G. 1000 rue de La Gauchetiere Ouest Assistant Corporate Secretary
Canadian 4100 Bell Canada
Montreal, Quebec
Canada H3B 5H8
Officers and Citizenship Address Occupation
- ------------------------ ------- ----------
Bich, Genevieve 1000 rue de La Gauchetiere Ouest President
Canadian 4100
Montreal, Quebec
Canada H3B 5H8
Masse, David G. 1000 rue de La Gauchetiere Ouest Secretary
Canadian 4100
Montreal, Quebec
Canada H3B 5H8
<PAGE>
Corporation BCE Inc.
- ----------------------------------------------------------------------------------------------------------
Directors and Citizenship Address Occupation
- ------------------------- ------- ----------
Barford, Ralph MacKenzie 1903-20 Eglinton Avenue West President
Canadian P.O. Box 2026 Valleydene Corporation Limited
Toronto, Ontario
Canada M4R 1K8
Currie, Richard J. 22 St. Clair Avenue East President
Canadian Suite 2100 George Weston Limited
Toronto ,Ontario
Canada M4T 2S7
Kaufman, Donna S. 2 St. Clair Avenue East Lawyer; Corporate Director
Canadian 800
Toronto, Ontario
Canada M4T 2T5
Kierans, Thomas E. 100 Richmond Street West Chairman
Canadian 331 Canadian Institute for Advanced
Toronto, Ontario Research
Canada M5H 3K6
Levitt, Brian M. 600 de Maisonneuve Blvd. West Corporate Director
Canadian 19th Floor
Montreal, Quebec
Canada H3A 3K7
Maxwell, Judith 250 Albert Economist
Canadian 600 Canadian Policy Research Network
Ottawa, Ontario
Canada K1P 6M1
McArthur, John H. Harvard University Dean Emeritus
Canadian Graduate School of Business Harvard University
Administration Graduate School of Business
Soldiers field Administration
Boston, Massachusetts 02163
USA
Monty, Jean C. 1000 rue de La Gauchetiere Ouest President and Chief Executive Officer
Canadian 3700 BCE Inc.
Montreal, Quebec
Canada H3B 4Y7
Newall, J. Edward 2015 Bankers Hall Chairman
Canadian 855 - 2nd Street S.W. Newall & Associates
Calgary, Alberta
Canada T2P 4J7
<PAGE>
Saint-Pierre, Guy 455 Rene-Levesque Blvd. West Chairman of the Board
Canadian 21st Floor Groupe SNC-Lavalin Inc.
Montreal, Quebec
Canada H2Z 1Z3
Tellier, Paul M. 935 rue de La Gauchetiere O. President and Chief Executive Officer
Canadian 16th Floor Canadian National Railway Co.
Montreal, Quebec
Canada H3B 2M9
Wilson, Lynton R. 181 Bay Street Chairman of the Board
Canadian 4700 BCE Inc.
BCE Place, P.O. Box 794
Toronto, Ontario
Canada M5J 2T3
Young, Victor L. 70 O'Leary Avenue Chairman and Chief Executive Officer
Canadian P.O. Box 550 Fishery Products Intl Limited
St. John's, Newfoundland
Canada A1C 5L1
Officers and Citizenship Address Occupation
- ------------------------ ------- ----------
Anderson, William D. 1000 rue de La Gauchetiere Ouest Chief Financial Officer
Canadian 3800
Montreal, Quebec
Canada H3B 4Y7
Boychuk, Michael T. 1000 rue de la Gauchetiere Ouest Corporate Treasurer
Canadian 3700
Montreal, Quebec
Canada H3B 4Y7
Monty, Jean C. 1000 rue de la Gauchetiere Ouest President and Chief Executive Officer
Canadian 3700
Montreal, Quebec
Canada H3B 4Y7
Nicholson, Peter J. M. 1000 rue de la Gauchetiere Ouest Chief Strategy Officer
Canadian 3700
Montreal, Quebec
Canada H3B 4Y7
Pickford, Barry W. 1000 rue de La Gauchetiere Ouest Vice-President, Taxation
Canadian 3700
Montreal, Quebec
Canada H3B 4Y7
<PAGE>
Ryan, Marc J. 1000 rue de La Gauchetiere Ouest Corporate Secretary
Canadian 3800
Montreal, Quebec
Canada H3B 4Y7
Scott, C. Wesley M. 181 Bay Street Chief Corporate Officer
Canadian 4700
P.O. Box 794
Toronto, Ontario
Canada M5J 2T3
Turcotte, Martine 1000 rue de La Gauchetiere Ouest Chief Legal Officer
Canadian 3800
Montreal, Quebec
Canada H3B 4Y7
<PAGE>
Corporation Bell Canada
- ----------------------------------------------------------------------------------------------------------
Directors and Citizenship Address Occupation
- ------------------------- ------- ----------
Jarman, Terence James Bell Trinity Square Vice-Chairman - Corporate
Canadian 483 Bay Street, Floor 6 North Bell Canada
Toronto, Ontario
Canada M5G 2E1
Kahan, James S. 175 East Houston Senior Vice-President,
American 11-A-50 Corporate Development
San Antonio, Texas SBC Communications Inc.
United States 78205
Levitt, Brian M. 600 de Maisonneuve Blvd. West Corporate Director
Canadian 19th Floor
Montreal, Quebec
Canada H3A 3K7
Monty, Jean C. 1000 rue de La Gauchetiere Ouest President and Chief
Canadian 3700 Executive Officer
Montreal, Quebec BCE Inc.
Canada H3B 4Y7
Mueller, Edward A. 175 East Houston President, SBC
American 10-A-50 International Operations
San Antonio, Texas SBC Communications Inc.
United States 78205
Newall, J. Edward 2015 Bankers Hall Chairman
Canadian 855 - 2nd Street S.W. Newall & Associates
Calgary, Alberta
Canada T2P 4J7
Saint-Pierre, Guy 455 Rene-Levesque Blvd. West Chairman of the Board
Canadian 21st Floor Groupe SNC-Lavalin Inc.
Montreal, Quebec
Canada H2Z 1Z3
Scott, C. Wesley M. 181 Bay Street Chief Corporate Officer
Canadian 4700 BCE Inc.
P.O. Box 794
Toronto, Ontario
Canada M5J 2T3
Sheridan, John William 483 Bay Street Vice-Chairman -Market Groups
Canadian 10 South Bell Canada
Bell Trinity Square
Toronto, Ontario
Canada M5G 2E1
<PAGE>
Tellier, Paul M. 935 rue de La Gauchetiere O. President and
Canadian 16th Floor Chief Executive Officer
Montreal, Quebec Canadian National Railway Co.
Canada H3B 2M9
Officers and Citizenship Address Occupation
- ------------------------ ------- ----------
Blouin, Pierre J. 2990 Matheson Blvd. East President, Bell Mobility
Canadian Mississauga, Ontario
Canada H3B 4L1
Bouchard, Marc 1000 rue de La Gauchetiere Ouest President - Bell Nexxia
Canadian 700
Montreal, Quebec
Canada H3B 4Y7
Boychuk, Michael T. 1000 rue de La Gauchetiere Ouest Vice-President and Treasurer
Canadian 3700
Montreal, Quebec
Canada H3B 4Y7
Corriveau-Gougeon, Martine 700 rue de La Gauchetiere Ouest Senior Vice-President
Canadian 2800 Special Projects
Montreal, Quebec
Canada H3B 2L1
Courtois, Bernard A. 105 rue Hotel de Ville Chief Strategy Officer
Canadian 6e etage sud
Hull, Quebec
Canada J8X 4H7
Cox, David Roderick 483 Bay Street Chief Information Officer
Canadian Floor 10 South
Toronto, Ontario
Canada M5G 2E1
Davis, Gary M. 1000 rue de La Gauchetiere Ouest Vice-President and
Canadian Suite 700 Corporate Controller
Montreal, Quebec
Canada H3B 4W5
Engel, Rudi M. E. 483 Bay Street Senior Vice-President
Canadian Floor 6-North Consumer Markets, Sales &
Toronto, Ontario Services
Canada M5G 2E1
Fortin, Serge 1600 boul. Rene-Levesque Ouest President, Bell ActiMedia
Canadian 1850
Montreal, Quebec
Canada H3H 1P9
<PAGE>
Gillette, Thomas J. 483 Bay Street Senior Vice-President - Sales
Canadian Floor 6 North
Toronto, Ontario
Canada M5G 2E1
Goulet, Josee 5055 Satellite Drive Acting President, BDI
Canadian Mississauga, Ontario
Canada L4W 5K7
Hope, Tomasz Stanislaw 483 Bay Street Chief Technology Officer
Canadian Floor 6N
Toronto, Ontario
Canada M5G 2E1
Jarman, Terence James Bell Trinity Square Vice-Chairman - Corporate
Canadian 483 Bay Street, Floor 6 North
Toronto, Ontario
Canada M5G 2E1
Lalande, Sylvie 700 rue de La Gauchetiere Ouest Chief Communications Officer
Canadian Bureau 2800
Montreal, Quebec
Canada H3B 4L1
Marier, Guy 87 rue Ontario Ouest President - Bell Quebec
Canadian 500
Montreal, Quebec
Canada H2X 1Y8
McGee, Timothy E. 483 Bay Street Chief Legal Officer and
Canadian F8S Corporate Secretary
Toronto, Ontario
Canada M5G 2E1
Monty, Jean C. 1000 rue de La Gauchetiere Ouest Chairman and Chief Executive
Canadian 3700 Officer
Montreal, Quebec Bell Canada
Canada H3B 4Y7
Mosey, Robert T. 483 Bay Street Senior Vice-President - Business,
Canadian Floor 10 South Sales and Services
Toronto, Ontario
Canada M5G 2E1
Pickford, Barry W. 1000 rue de La Gauchetiere Ouest Vice-President, Taxation
Canadian 3700
Montreal, Quebec
Canada H3B 4Y7
<PAGE>
Reising, Ronald Raymond 1000 rue de La Gauchetiere Ouest Chief Financial Officer
American 3700
Montreal, Quebec
Canada H3B 4Y7
Reynolds, Randall James 483 Bay Street President, Bell Ontario
Canadian F6-N
Toronto, Ontario
Canada M5G 2E1
Scott, Sheridan E. 105 Hotel de Ville Chief Regulatory Officer
Canadian Floor 6
Hull, Quebec
Canada J8X 4H7
Shedleur, Pierre 930 rue D'Aiguillon Senior Vice President -
Canadian 100 Business Markets, Quebec
Quebec, Quebec
Canada G1R 5M9
Sheridan, John William 483 Bay Street Vice-Chairman - Market Groups
Canadian 10 South
Bell Trinity Square
Toronto, Ontario
Canada M5G 2E1
Sheriff, Karen H. 483 Bay Street Chief Marketing Officer
American F6N
Toronto, Ontario
Canada M5G 2E1
Southwell, David A. 483 Bay Street President - Network Operations
Canadian Floor 10 South
Bell Trinity Square
Toronto, Ontario
Canada M5G 2E1
Went, Pamela A. 87 Ontario Street West Senior Vice-President -
Canadian 500 Consumer Markets
Montreal, Quebec
Canada H2X 1Y8
Wyman, Georgina 1000 rue de La Gauchetiere Ouest Chief Human Resources Officer
Canadian Suite 3700
Montreal, Quebec
Canada H3B 4Y7
<PAGE>
Corporation: Bell Canada Holdings Inc.
- ----------------------------------------------------------------------------------------------------------
Directors and Citizenship Address Occupation
- ------------------------- ------- ----------
Jarman, Terence James Bell Trinity Square Vice-Chairman - Corporate
Canadian 483 Bay Street, Floor 6 North Bell Canada
Toronto, Ontario
Canada M5G 2E1
Kahan, James S. 175 East Houston Senior Vice-President
American 11-A-50 Corporate Development
San Antonio, Texas SBC Communications Inc.
United States 78205
Levitt, Brian M. 600 de Maisonneuve Blvd West Corporate Director
Canadian 19th Floor
Montreal, Quebec
Canada H3A 3K7
Monty, Jean C. 1000 rue de La Gauchetiere Ouest President and
Canadian 3700 Chief Executive Officer
Montreal, Quebec BCE Inc.
Canada H3B 4Y7
Mueller, Edward A. 175 East Houston President, SBC
American 10-A-50 International Operations
San Antonio, Texas SBC Communications Inc.
United States 78205
Newall, J. Edward 2015 Bankers Hall Chairman
Canadian 855 - 2nd Street S.W. Newall & Associates
Calgary, Alberta
Canada T2P 4J7
Saint-Pierre, Guy 455 Rene-Levesque Blvd West Chairman of the Board
Canadian 21st Floor Groupe SNC-Lavalin Inc.
Montreal, Quebec
Canada H2Z 1Z3
Scott, C. Wesley M. 181 Bay Street Chief Corporate Officer
Canadian 4700 BCE Inc.
P.O. Box 794
Toronto, Ontario
Canada M5J 2T3
<PAGE>
Sheridan, John William 483 Bay Street Vice-Chairman -
Canadian 10 South Market Groups
Bell Trinity Square Bell Canada
Toronto, Ontario
Canada M5G 2E1
</TABLE>
EXHIBIT 2A
SUPPORT AGREEMENT
THIS AGREEMENT made the 15th day of February, 2000.
B E T W E E N:
BCE INC.,
a company existing under the laws of
Canada,
(hereinafter called "BCE"),
OF THE FIRST PART,
- and -
TELEGLOBE INC.,
a company existing under the laws of
Canada,
(hereinafter called the "Company"),
OF THE SECOND PART.
WHEREAS BCE desires to acquire (the "Acquisition") all of the common shares
not already owned by it or its affiliates (the "Common Shares") in the capital
of the Company and is prepared to make an offer to acquire such Common Shares or
enter into an alternative transaction structure which would result in the
acquisition by the Offeror of such Common Shares;
AND WHEREAS BCE has entered into agreements (the "Lock-up Agreements") with
Charles Sirois and Kenny A. Troutt and related parties (the "Locked-up
Shareholders") pursuant to which, among other things, BCE has agreed to make,
directly or indirectly, an offer to purchase all the issued and outstanding
Common Shares on the terms and subject to the conditions set forth in the
Lock-up Agreements and such Locked-up Shareholders have irrevocably agreed to
tender all of the Common Shares held by them to such offer and to otherwise
support such offer;
<PAGE>
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AND WHEREAS the board of directors of the Company (the "Board of
Directors") has determined, after receiving financial and legal advice, that it
would be advisable and in the best interests of the holders of the Common Shares
for the Board of Directors to support the Offer (as hereinafter defined) and to
recommend acceptance of the Offer to the holders of Common Shares and for the
Company to cooperate with the Offeror and take all reasonable action to support
the Offer, all on the terms and subject to the conditions contained herein;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual
covenants and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each party, the parties hereto hereby covenant and agree as follows:
ARTICLE 1
THE OFFER
1.1 The Offer
BCE shall promptly publicly announce its intention to make the Acquisition
and, subject to the terms and conditions set forth below, the Offeror shall make
an offer to purchase all outstanding Common Shares, including Common Shares
issuable upon the conversion, exchange or exercise of any securities of the
Company that are convertible into or exchangeable or exercisable for Common
Shares (the "Convertible Securities") (the "Offer"). The term "Offer" shall
include any further amendments to, or extensions of, the Offer made in
accordance with the terms of this Agreement, including, without limitation,
removing or waiving any condition or extending the date by which Common Shares
may be deposited.
(a) The Offer will be made to the holders of all the issued and outstanding
Common Shares on the basis of (the "Consideration"), for each Common Share, that
portion (the "Share Exchange Ratio") of a common share in the capital of BCE (a
"BCE Share") determined as follows:
(i) in the event the closing of the Nortel Transaction (as hereinafter
defined) occurs prior to the First Take-Up Date (as hereinafter
defined), the ratio (expressed to three decimal places with amounts
less than 0.0005 being rounded down and amounts equal to or greater
than 0.0005 being rounded up, in each case to the nearest
one-thousandth of a BCE Share) obtained by dividing (A) Cdn.$48.41 by
(B) the weighted average trading price of the BCE Shares on The
Toronto Stock Exchange (the "TSE") for the ten trading days ending on
the fifth business day immediately preceding the day on which BCE
first takes up Common Shares under the Offer (the "First Take-Up
Date"), such weighted average trading price being referred to as the
"BCE Weighted Average Trading Price"; and
<PAGE>
- 3 -
(ii) in the event the closing of the Nortel Transaction (as hereinafter
defined) has not been completed or is terminated prior to the First
Take-Up Date, 0.3 of a BCE Share per Common Share.
(b) The Share Exchange Ratio specified in paragraph (a)(i) above shall be
subject to a minimum of 0.85 of a BCE Share per Common Share and a maximum of
0.97 of a BCE Share per Common Share.
(c) Subject to subsection 5.8(c), the Offeror shall mail the Offer and
accompanying take-over bid circular (such circular, together with the Offer,
being referred to herein as the "Bid Circular") in accordance with applicable
laws to each holder of Common Shares (a "Shareholder") as soon as reasonably
practicable following the distribution to BCE's shareholders of most of its
interest in Nortel Networks Corporation, as announced on January 26, 2000 (the
"Nortel Transaction") but, in any event, by 5:00 p.m. (Montreal time) on July
31, 2000 (such time on such date being referred to herein as the "Latest Mailing
Time"); provided, however, that if the mailing of the Offer is delayed by (x) an
injunction or order made by a court or regulatory authority of competent
jurisdiction or (y) the Offeror not having obtained any regulatory waiver,
consent or approval which is necessary to permit the Offeror to mail the Offer
or to take-up and pay for any Common Shares tendered under the Offer, then,
provided that such injunction or order is being contested or appealed or such
regulatory waiver, consent or approval is being actively sought, as applicable,
the latest Mailing Time shall be extended for a period ending on the earlier of
November 30, 2000 and the fifth business day following the date on which such
injunction or order ceases to be in effect or such waiver, consent or approval
is obtained, as applicable.
(d) Prior to the mailing of the Bid Circular, the Offeror shall provide the
Company with an opportunity to review and comment on it, recognizing that
whether or not such comments are appropriate will be determined by the Offeror,
acting reasonably.
(e) The Offer will be made in accordance with applicable securities
legislation in Canada, the United States and other jurisdictions where the
Shareholders of the Company are located and shall be open for acceptance for a
period that does not expire prior to 12:01 a.m. (local time) on the 21st
business day after the day (the "Mailing Date") that the Offer is mailed to
Shareholders or such later time and date as may be required by applicable law,
subject to the right of the Offeror in its sole discretion to extend the period
during which Common Shares may be deposited under the Offer (the "Expiry Time").
The Offer shall be subject only to the conditions set forth in Schedule A
annexed hereto. The Offeror shall use all reasonable commercial efforts to
consummate the Offer, subject to the terms and conditions hereof and thereof.
(f) The Offer will provide that where a corporation ("Holdco"),
incorporated under the laws of Canada on or after February 1, 2000 and having no
assets other than Common Shares and no liabilities whatsoever is the beneficial
owner and holder of record of Common Shares, all the shareholders of Holdco (the
"Holdco Shareholders") shall be entitled to jointly elect (the "Holdco
Election") to accept the Offer by
<PAGE>
- 4 -
selling to the Offeror all the outstanding shares of Holdco (the "Holdco
Shares") for an aggregate consideration identical to that which Holdco would
have been entitled to receive had such Common Shares been deposited under the
Offer, provided that, at least seven business days prior to the Expiry Time,
such Holdco Shareholders shall have notified the Offeror that they desire to
tender Holdco Shares under the Offer and, at or prior to the Expiry Time of the
Offer, such Holder Shareholders and such Holdco shall have entered into a share
purchase agreement with the Offeror containing such representations and
warranties, terms and conditions and indemnities as the Offeror may reasonably
request in connection therewith, including, without limitation, the
representations and warranties, terms and conditions and indemnities set out in
Schedule B hereto, and containing the requirement for such holders to arrange
for the provision of a legal opinion of such holders' legal counsel in form
satisfactory to the Offeror, acting reasonably, in connection with the closing
of the purchase and sale of such Holdco Shares.
(g) Notwithstanding the provisions of the foregoing paragraph, in the event
that the Offeror proposes an Alternative Transaction (as hereinafter defined)
which would be more favourable to U.S. Shareholders of the Company from a tax
perspective, the Holdco Election shall be available to the Locked-Up
Shareholders in connection with such Alternative Transaction only if the Offeror
shall be satisfied that the Holdco Election will not adversely affect (i) the
ability of the Offeror to proceed with such Alternative Transaction and (ii) the
intended tax benefits to be conferred on such Shareholders by such Alternative
Transaction.
(h) It is understood and agreed that the Offeror may, in its sole
discretion, modify or waive any term or condition of the Offer; provided,
however, that the Offeror will not, without the prior consent of the Company,
decrease the consideration per Common Share, change the form of consideration
payable under the Offer (other than to add additional consideration), decrease
the number of Common Shares sought under the Offer, impose additional conditions
to the Offer, or otherwise vary the Offer in a manner which is adverse to the
Shareholders.
(i) The obligation of the Offeror to make the Offer is conditional on the
prior satisfaction of the following conditions, all of which conditions are
included for the sole benefit of the Offeror, any or all of which may be waived
by the Offeror in whole or in part in its sole discretion without prejudice to
any other rights it may have under this Agreement:
(i) the obligations of BCE hereunder shall not have been terminated
pursuant to section 6.1;
(ii) the Offeror shall have determined prior to March 14, 2000,
acting reasonably, that the Offer would not have an impact on
the grant of a favourable tax ruling with respect to the Nortel
Transaction;
(iii) the Board of Directors shall have recommended that Shareholders
accept the Offer and shall not have withdrawn such
recommendation or changed such
<PAGE>
- 5 -
recommendation in a manner that has substantially the same
effect as the withdrawal thereof;
(iv) the Board of Directors shall have prepared and approved in
final form, for distribution by the Company on the date the
Offer is made, the Directors' Circular (as hereinafter defined)
which circular shall contain (i) a recommendation that
Shareholders accept the Offer and (ii) a copy of the fairness
opinion from Lehman Brothers dated the date hereof opining that
the consideration to be received under the Offer by the
Shareholders is fair, from a financial point of view, to the
Shareholders;
(v) no circumstance, fact, change, event or occurrence caused by a
person other than BCE or its affiliates shall have occurred
that would render it impossible for one or more of the
conditions set out on Schedule A hereto to be satisfied, except
if any such circumstance, fact, change, event or occurrence has
been approved or ratified by the Chairman of the Board of
Directors; and
(vi) no cease trade order, injunction or other prohibition at law
shall exist against the Offeror making the Offer or taking up
or paying for any Common Shares to be deposited under the
Offer.
1.2 Company Approval of the Offer
The Company represents and warrants to and in favour of the Offeror, and
acknowledges that the Offeror is relying upon such representations and
warranties in entering into this Agreement, that, as of the date hereof:
(a) its Board of Directors, upon consultation with its financial
and legal advisors, has determined that the consideration to be
offered under the Offer is fair from a financial point of view
to the Shareholders and that the Offer is in the best interests
of the Shareholders, has approved this Agreement and has
resolved to recommend that the Shareholders accept the Offer;
and
(b) after reasonable inquiry, the Board of Directors has been
advised and believes that each of the directors and the Named
Executive Officers (as defined in the Company's Management
Proxy Circular dated March 31, 1999) intends to tender under
the Offer all Common Shares (excluding Common Shares issuable
upon the exercise of Options (as defined in Section 1.3) held
by such person) of which he or she is the beneficial owner.
The Company shall prepare and make available for distribution
contemporaneously with the Bid Circular, in both the English and French
languages as circumstances may require, sufficient copies
<PAGE>
- 6 -
of a directors' circular relating to the Offer (the "Directors' Circular"),
prepared in accordance with applicable laws, which shall reflect the foregoing
determinations and recommendation, and the Company shall take all reasonable
action to support the Offer. If prior to the Expiry Time another bona fide
written Acquisition Proposal (as defined in section 5.2 of this Agreement) is
made for which adequate financial arrangements have been made, then the Board of
Directors shall be entitled to withdraw, modify or change any recommendation
regarding the Offer provided that (i) the Board of Directors has determined in
good faith and in the proper discharge of its fiduciary duties (after receiving
advice from its financial and legal advisors) that such Acquisition Proposal
would, if consummated in accordance with its terms, result in a transaction that
is more favourable to Shareholders than the Offer (any such offer or proposal
being referred to herein as a "Superior Proposal"); and (ii) the Board of
Directors has complied with its obligations under section 5.2 of the Agreement
and BCE and the Offeror have declined to amend this Agreement and the Offer in
the manner contemplated in section 5.2(e) hereof. If the Board of Directors so
withdraws, modifies or changes any recommendation regarding the Offer, the
Company and the Board of Directors shall be entitled to cause any such
withdrawal, modification or change to be reflected in a public announcement and
in a directors' circular.
Prior to the final approval thereof by the Board of Directors, the Company
shall provide the Offeror with an opportunity to review and comment on the form
of the Directors' Circular, recognizing that whether any such comments are
appropriate will be determined by the Board of Directors of the Company, acting
reasonably.
The Company shall provide the Offeror, within two business days following
the execution and delivery of this Agreement, with a list (in both written and
electronic form) of the holders of Common Shares and 5.40% Convertible Third
Series Preferred Shares (the "Third Series Preferred Shares") and a list of
participants in book-based nominee registrants such as CDS & Co., together with
their addresses and respective holdings of Common Shares. The Company shall
concurrently provide the Offeror with the names, addresses and holdings of all
persons having rights to acquire Common Shares (including all Convertible
Securities) and the details of such rights (including the exercise or conversion
price and whether such rights have vested or are currently exercisable) and, to
the extent applicable, shall provide the Offeror with a list of participants in
book-based nominee registrants such as CDS & Co., together with their addresses
and respective holdings of Convertible Securities. The Company shall from time
to time furnish the Offeror with such additional information, including updated
or additional lists (in both written and electronic form) of Shareholders and/or
holders of Convertible Securities and lists of securities positions and other
assistance as the Offeror may reasonably request in order to be able to
communicate the Offer to the Shareholders and to holders of Convertible
Securities and to such other persons as are entitled to receive the Offer under
applicable laws.
1.3 Outstanding Stock Options
(a) The Company represents and warrants that it has not, and covenants and
agrees that it will not, take any action under the stock option plans of the
Company, Excel Communications Inc. and their
<PAGE>
- 7 -
respective subsidiaries (the "Stock Option Plans") to accelerate the time at
which any option or other rights issuable thereunder ("Options") may be first
exercised or the time during which any Option will become exercisable, except
(i) for 575,172 Options held by Charles Sirois which shall be accelerated
effective as of the date of this Agreement and (ii) that such acceleration shall
occur automatically between the date hereof and the First Take-Up Date, in
respect of unvested Options held by an optionholder whose employment is
terminated between such dates, other than for cause or voluntarily terminated,
in which case in addition to such acceleration, such accelerated Options shall
be exercisable for the period commencing on the date of such termination and
ending on (x) the date that is 90 days following the First Take-Up Date, if
prior to the First Take-Up Date such optionholder agrees to surrender all
unexercised Options in exchange for options to acquire BCE Shares as
contemplated in subsection 1.3(b) below, or (y) the Expiry Time, in any other
case.
(b) The Company agrees to use reasonable commercial efforts to enter into
arrangements with the holders of outstanding Options, in form and substance
satisfactory to the Offeror, acting reasonably, so that all unexercised Options
(including unvested Options) granted pursuant to the Stock Option Plans shall
have been surrendered in exchange for options to acquire BCE Shares which vest
on the same terms as the surrendered options and with an exercise price based on
the Share Exchange Ratio specified in section 1.1 hereof.
1.4 Directors and Officers
(a) Prior to or contemporaneously with the execution of this Agreement,
Charles Sirois shall have resigned or shall resign as Chief Executive Officer of
the Company, and the Board of Directors shall have appointed or shall appoint
Paolo Guidi and Christina Gold as co-Chief Executive Officers in his stead and
Jean C. Monty (the "Chairman of the Board") as Chairman of the Board of
Directors. An office of the Chairman shall be created contemporaneously
therewith composed of Jean C. Monty, Paolo Guidi and Christina Gold.
(b) Subject to the Articles of the Company, as they may be applicable from
time to time, promptly upon the purchase by the Offeror of any Common Shares
under the Offer and from time to time thereafter: (a) the Company acknowledges
that BCE shall be entitled to designate at least a majority of the Board of
Directors, and of any committees thereof, and (b) the Company and its Board of
Directors shall, upon request by BCE, but subject to applicable law, promptly
use its reasonable commercial efforts (i) to expand the Board of Directors, (ii)
secure the resignations of such number of directors, (iii) cause the Teleglobe
Directors (as defined in the articles of the Company) to nominate as directors
of the Company, and/or (iv) take all other action, in each case as is necessary
to enable BCE's designees to be elected or appointed to the Board of Directors
and shall use its reasonable commercial efforts to cause BCE/s designees to be
so elected or appointed.
<PAGE>
- 8 -
1.5 Subsequent Acquisition Transaction
The Company agrees with BCE that in the event the Offeror takes up and pays
for Common Shares under the Offer, it will assist the Offeror in any use by the
Offeror of the compulsory acquisition provisions of Section 206 of the Canada
Business Corporations Act (the "CBCA"), if available, (a "Compulsory
Acquisition") and will assist BCE and the Offeror in connection with any
proposed amalgamation, statutory arrangement, merger, capital reorganization,
consolidation, recapitalization or other transaction of or involving the Company
and BCE, the Offeror or another affiliate of BCE (a "Subsequent Acquisition
Transaction") to acquire the remaining Common Shares, provided that the
consideration offered in connection with the Subsequent Acquisition Transaction
is at least equivalent in value to the consideration offered under the Offer.
1.6 Guarantee of BCE
In the event that the Offeror is not BCE but is a direct or indirect
wholly-owned subsidiary thereof, BCE hereby unconditionally and irrevocably
guarantees the due and punctual performance by the Offeror of each and every
obligation of the Offeror arising under this Agreement, including, without
limitation, the making of the Offer and the taking up and paying for Common
Shares duly deposited thereunder, subject to the terms and conditions as
specified in this Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF BCE
BCE hereby represents and warrants to the Company as follows, and
acknowledges that the Company is relying upon these representations and
warranties in connection with the entering into of this Agreement:
2.1 Organization and Qualification
BCE is validly existing under the CBCA and has full corporate power and
authority to own its assets and conduct its business as now owned and conducted.
BCE is duly qualified to carry on business in each jurisdiction in which the
character of its properties, owned or leased, or the nature of its activities,
makes such qualification necessary, except where the failure to be so qualified
will not have a material adverse effect on the business, operations (including
results of operations), assets, properties or condition (financial or otherwise)
of BCE and its subsidiaries taken as a whole (a "BCE Material Adverse Effect").
For purposes of this Agreement, a BCE Material Adverse Effect shall not apply to
any event that applies to the telecommunications industry generally.
2.2 Authority Relative to this Agreement
<PAGE>
- 9 -
BCE has the requisite corporate power and authority to enter into this
Agreement and to perform its obligations hereunder. The execution and delivery
of this Agreement (including any Alternative Transaction) by BCE and the
consummation by it of the transactions contemplated by this Agreement have been
duly authorized by the board of directors of BCE and no other corporate
proceedings on the part of BCE are necessary to authorize this Agreement and the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by BCE and constitutes a valid and binding obligation of it,
enforceable by the Company against BCE in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency and other laws
affecting the enforcement of creditors' rights generally and subject to the
qualification that equitable remedies may only be granted in the discretion of a
court of competent jurisdiction. The execution and delivery by BCE of this
Agreement and the performance by it of its obligations hereunder and the
completion of the Offer, after obtaining any necessary regulatory approvals,
will not: (a) violate, conflict with or result in a breach of any provision of:
(i) the constating documents of BCE; (ii) any agreement, contract, indenture,
deed of trust, mortgage, bond, instrument, licence, franchise or permit to which
BCE is a party or by which it is bound; or (iii) any law, regulation, order,
judgment or decree to which BCE is subject or by which it is bound; (b) give
rise to any right of termination, or acceleration of indebtedness, or cause any
indebtedness to come due before its stated maturity, under any such agreement,
contract, licence, franchise or permit which is material to BCE and its
subsidiaries taken as a whole; or (c) result in the imposition of any
encumbrance, charge or lien upon any of the assets of BCE or any of its
subsidiaries, other than any such violations, conflicts, breaches, rights or
encumbrances, charges or liens which will not, individually or in the aggregate,
have a BCE Material Adverse Effect or prevent or materially delay the
consummation of the transactions contemplated by this Agreement.
2.3 Issuance of BCE Shares under Offer
The unissued BCE Shares to be issued by BCE to Shareholders pursuant to the
Offer have been duly and validly authorized and, when issued and delivered as
part of the consideration paid for any Common Shares acquired by the Offeror
pursuant to the Offer, will be duly and validly issued as fully paid and
non-assessable shares in the capital of BCE. BCE shall not convene a
shareholders meeting to approve the Offer (including any Alternative
Transaction), unless such meeting is required to satisfy stock exchange
requirements.
2.4 Filings
Documents or information filed by BCE under applicable securities laws
since and including January 1, 1999, including the annual report to shareholders
and annual information form of BCE, in each case, for the fiscal year ended
December 31, 1998 (collectively, the "BCE Public Documents"), did not, as of
their respective dates, contain any untrue statement of a material fact adverse
to BCE and its subsidiaries and their respective businesses or omit to state a
material fact adverse to BCE and its subsidiaries and their respective
businesses required to be stated therein or necessary to make the
<PAGE>
- 10 -
statements relating to BCE and its subsidiaries and their respective businesses
therein, in light of the circumstances under which they were made, not
misleading.
2.5 Financial Statements
The audited consolidated financial statements of BCE as at and for the
financial year ended December 31, 1998, including the notes thereto and the
report of BCE's auditors thereon, and the unaudited consolidated financial
statements of BCE as at and for the periods ended March 31, June 30 and
September 30, 1999 were prepared in accordance with generally accepted
accounting principles in Canada applied on a basis consistent with prior
periods, are correct and complete and present fairly the assets, liabilities
(whether accrued, absolute, contingent or otherwise) and financial condition of
BCE and its subsidiaries on a consolidated basis as at the respective dates
thereof and the revenues, earnings and results of operations of BCE and its
subsidiaries on a consolidated basis for the respective periods covered thereby.
2.6 Lock-up Agreements
BCE has entered into the Lock-up Agreements with the Locked-Up Shareholders
and, except as disclosed to the Company, has not entered into any other
agreements with such holders or other Shareholders in respect of the Offer.
2.7 Absence of Certain Changes or Events
Except as disclosed in the BCE Public Documents, since January 1, 1999: (a)
BCE and its subsidiaries have conducted their respective businesses only in the
usual, ordinary and regular course and consistent with past practice; (b) no
liability or obligation of any nature (whether absolute, accrued, contingent or
otherwise) which has had or is reasonably likely to have a BCE Material Adverse
Effect, has been incurred; and (c) there has not been any event which has had or
is reasonably likely to have a BCE Material Adverse Effect.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Offeror as follows, and
acknowledges that the Offeror is relying upon these representations and
warranties in connection with the entering into of this Agreement:
3.1 Organization and Qualification
<PAGE>
- 11 -
The Company is validly existing as a corporation under the CBCA and has
full corporate power and authority to own its assets and conduct its business as
now owned and conducted. The Company is duly qualified to carry on business, and
is in good standing, in each jurisdiction in which the character of its
properties, owned or leased, or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified will not
have a material adverse effect on the business, operations (including results of
operations), assets, properties or condition (financial or otherwise) of the
Company and its subsidiaries taken as a whole (a "Company Material Adverse
Effect"). For the purposes of this Agreement, a Company Material Adverse Effect
shall not apply to any event that applies to the telecommunications industry
generally. Copies of the articles of amalgamation of the Company dated January
1, 1999 and the by-laws of the Company heretofore delivered to BCE are accurate
and complete as of the date hereof and have not been amended or superseded, and
the Company has not taken any action to amend or supersede such documents.
3.2 Subsidiaries
Each subsidiary of the Company is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, has full corporate
power and authority to own its assets and conduct its business as now owned and
conducted by it and is duly qualified to carry on business in each jurisdiction
in which the character of its properties, owned or leased, or the nature of its
activities, makes such qualification necessary, except where the failure to be
so qualified will not have a Company Material Adverse Effect.
3.3 Compliance with Law
The Company and each of its subsidiaries has complied with and is in
compliance with all laws and regulations applicable to the operation of their
respective businesses, including applicable laws, except where failure so to
comply will not have a Company Material Adverse Effect, and each of them has all
licences, permits, orders or approvals of, and has made all required
registrations with, and has submitted all required regulatory reports and
tariffs payments to any governmental or regulatory body, except where the
failure to so obtain such licenses, permits, orders or approvals, or make such
registrations, filings or payments, will not have a Company Material Adverse
Effect.
3.4 Capitalization
The authorized equity capital of the Company consists of an unlimited
number of Common Shares, an unlimited number of Class A non-voting shares and an
unlimited number of preferred shares, issuable in series. As at February 14,
2000, 254,244,154 Common Shares, no Class A non-voting shares and 5,000,000
redeemable convertible third series preferred shares have been duly authorized
and are validly issued and outstanding as fully paid and non-assessable shares
in the capital of the Company. In addition, as at January 31, 2000, there were
outstanding 17,312,827 Options providing for the issuance of 17,312,827 Common
Shares upon the exercise thereof and on February 15, 2000, the Board of
<PAGE>
- 12 -
Directors granted in the normal course of business 819,431 Options providing for
the issuance of 819,431 Common Shares upon the exercise thereof and the terms of
Options granted to Optionholders (including exercise price and vesting) have
been disclosed in the disclosure statement delivered by the Company to BCE
contemporaneously with the execution and delivery of this Agreement (the
"Company Disclosure Statement"). Except as described in this section 3.4 and
except for the conversion rights attaching to the Third Series Preferred Shares
in the capital of the Company and the rights of BCE under an agreement dated May
7, 1987, as amended from time to time and except with respect to options granted
to employees or consultants of Orbcomm Global, L.P., there are no options,
warrants, conversion privileges, calls or other rights (including any rights
pursuant to any shareholder rights plan of the Company), agreements,
arrangements, commitments or obligations of the Company or its subsidiaries to
issue or sell any shares of any capital stock of the Company or of any of its
subsidiaries or securities or obligations of any kind convertible into or
exchangeable for any shares of capital stock of the Company or any of its
subsidiaries, nor are there outstanding any stock appreciation rights, phantom
equity or similar rights, agreements, arrangements or commitments based upon the
book value, income or any other attribute of the Company or any of its
subsidiaries, except for 333,000 performance units issued to Paolo Guidi and
50,000 restricted shares issued to Christina Gold. Except for BCE, the holders
of outstanding Common Shares are not entitled to any pre-emptive or other
similar rights.
3.5 Authority Relative to this Agreement
The Company has the requisite corporate power and authority to enter into
this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement by the Company and the consummation by the Company of
the transactions contemplated by this Agreement have been duly authorized by the
Board of Directors and no other corporate proceedings on the part of the Company
are necessary to authorize this Agreement and the transactions contemplated
hereby other than the Shareholders' approval contemplated in Schedule C. This
Agreement has been duly executed and delivered by the Company and constitutes a
valid and binding obligation of the Company, enforceable by BCE against the
Company in accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency and other laws affecting the enforcement of
creditors' rights generally and subject to the qualification that equitable
remedies may only be granted in the discretion of a court of competent
jurisdiction. The execution and delivery by the Company of this Agreement and
the performance by it of its obligations hereunder and the completion of the
Offer, after obtaining any necessary regulatory approvals, will not: (a)
violate, conflict with or result in a breach of any provision of: (i) the
constating documents of the Company or any of its subsidiaries; (ii) any
agreement, contract, indenture, deed of trust, mortgage, bond, instrument,
licence, franchise or permit to which it or any of its subsidiaries is a party
or by which it or any of its subsidiaries is bound; or (iii) any law,
regulation, order, judgment or decree to which it or any of its subsidiaries is
subject or by which it or any of its subsidiaries is bound; (b) give rise to any
right of termination, or acceleration of indebtedness, or cause any indebtedness
to come due before its stated maturity, under any such agreement, contract,
indenture, deed of trust, mortgage, bond, instrument, licence, franchise or
permit which is material to the Company and its subsidiaries taken as a whole;
or (c) give rise to any rights of first refusal or change in control or
influence or any restriction or
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limitation under any such agreement, contract, indenture, deed of trust,
mortgage, bond, instrument, licence, franchise or permit, or result in the
imposition of any encumbrance, charge or lien upon any of the Company's assets
or the assets of any of its subsidiaries, other than any such violations,
conflicts, breaches, rights or encumbrances, charges or liens which will not,
individually or in the aggregate, have a Company Material Adverse Effect or
prevent or materially delay the consummation of the transactions contemplated by
this Agreement.
3.6 Filings
Documents or information filed by the Company under applicable Canadian and
United States securities laws since and including January 1, 1999 to and
including the date hereof, including the Company's: (a) annual report to
shareholders for the financial year ended December 31, 1998; (b) management
information circular dated March 31, 1999 in respect of the annual meeting of
shareholders held May 12, 1999; (c) the 1998 annual information form dated May
17, 1999; (d) interim consolidated financial statements for the quarters ended
March 31, June 30 and September 30, 1999, (collectively, the "Company Public
Documents"), are, as of their respective dates, in compliance in all material
respects with such applicable securities laws and did not contain any untrue
statement of a material fact adverse to the Company and its subsidiaries and
their respective businesses or omit to state a material fact adverse to the
Company and its subsidiaries and their respective businesses required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3.7 Financial Statements
The audited consolidated financial statements of the Company for the
financial year ended December 31, 1998 including the notes thereto and the
report of the Company's auditors thereon (the "Audited Financial Statements"),
the unaudited consolidated financial statements of the Company as at and for the
periods ended March 31, June 30 and September 30, 1999, all as contained in the
Company Public Documents, and the unaudited consolidated financial statements of
the Company as at and for the year ended December 31, 1999 provided to BCE, were
in each case prepared in accordance with United States generally accepted
accounting principles (and, in the case of the Audited Financial Statements,
also in accordance with Canadian generally accepted accounting principles)
applied on a basis consistent with prior periods, are correct and complete and
present fairly the assets, liabilities (whether accrued, absolute, contingent or
otherwise) and financial condition of the Company and its subsidiaries on a
consolidated basis as at the respective dates thereof and the revenues, earnings
and results of operations of the Company and its subsidiaries on a consolidated
basis for the respective periods covered thereby.
3.8 Absence of Certain Changes or Events
Except as disclosed in the Company Public Documents or in the Company
Disclosure Statement, since January 1, 1999: (a) the Company and its
subsidiaries have conducted their respective businesses only in the usual,
ordinary and regular course and consistent with past practice; (b) no liability
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or obligation of any nature (whether absolute, accrued, contingent or otherwise)
which has had or is reasonably likely to have a Company Material Adverse Effect,
has been incurred; and (c) there has not been any event which has had or is
reasonably likely to have a Company Material Adverse Effect.
3.9 Severance and Employment Agreements
Except as disclosed in the Company Public Documents and for the employment
agreement of Christina Gold dated September 14, 1999, neither the Company nor
any of its subsidiaries has entered into any written or oral agreement providing
for, in excess of U.S.$500,000 individually or U.S.$5,000,000 in the aggregate,
severance or termination payments upon a change of control to any senior officer
or director of the Company or its subsidiaries.
3.10 Benefit Plans
Except as disclosed in the Company Disclosure Statement:
(a) each registered or supplementary pension, retirement, profit sharing,
bonus, savings, deferred compensation, stock option, purchase, appreciation,
group insurance or other material employee or retiree benefit plans, programmes
or arrangements, formal or informal, oral or written, maintained or contributed
to by the Company or any of its subsidiaries (each plan, programme or
arrangement, a "Plan") has been administered, operated and funded in material
compliance with its terms and all applicable laws or other legislative,
administrative or judicial promulgations applicable to such Plan and there are
no unfunded liabilities in respect of such pension or retirement plan and all
required contributions thereunder have been made in material compliance with (i)
all applicable laws or other legislative, administrative or judicial
promulgations applicable to such Plan and (ii) the terms of such Plan; and
(b) the assets of each Plan which is a registered pension plan are at least
equal to the liabilities, contingent or otherwise of such Plan on a plan
termination basis and each such Plan is fully funded on a going concern and
solvency basis in accordance with its terms, applicable actuarial assumptions
and applicable laws.
3.11 Litigation, Etc.
Except as reflected in the Company Public Documents, there is no claim,
action, proceeding or investigation pending or, to the knowledge of the Company,
threatened against or relating to the Company or any of its subsidiaries or
affecting any of their properties or assets before or by any court or
governmental or regulatory authority or body which, if adversely determined, is
likely to have a Company Material Adverse Effect or prevent or materially delay
the consummation of the transactions contemplated by this Agreement, nor is the
Company aware of any basis for any such claim, action, proceeding or
investigation. Neither the Company nor any of its subsidiaries is subject to any
outstanding
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order, writ, injunction or decree which has had or is reasonably likely to have
a Company Material Adverse Effect or prevent or materially delay consummation of
the transactions contemplated by this Agreement.
3.12 Taxes
The Company and each of its subsidiaries has duly and timely filed all tax
returns required to be filed by it and all such tax returns are true, complete
and correct in all material respects. The Company and each of its subsidiaries
has paid all Taxes which are due and payable, by it on or before the date
hereof, other than those which are being contested in good faith and in respect
of which adequate reserves have been provided in the most recently published
financial statements of the Company. There are no actions, suits, proceedings,
investigations or claims threatened against the Company or any of its
subsidiaries in respect of Taxes or any matters under discussion with any
governmental authority relating to Taxes asserted by any such authority, in each
case, which are likely to have a Company Material Adverse Effect. There are no
liens for Taxes upon any asset of the Company or any of its subsidiaries except
liens for Taxes not yet due. "Taxes" as used in this agreement, shall mean any
taxes, charges, fees, levies or other assessments, including all net income,
gross income, premiums, sales and use, goods and services, harmonized sales,
employer health, ad valorem, transfer, gains, profits, windfall profits, excise,
franchise, real and personal property, gross receipts, capital stock,
production, business and occupation, employment, disability, payroll, licence,
stamp, customs duties, severance or withholding taxes, other taxes or similar
charges of any kind whatsoever imposed by any governmental entity and includes
any interest, fines and penalties on or additions to any such taxes or in
respect of a failure comply with any requirement relating to any tax return.
3.13 Title to Properties
The Company and each of its subsidiaries has sufficiently good and valid
title to, or an adequate leasehold interest in, its respective material
properties and assets (including real property) in order to allow it to conduct,
and continue to conduct, its business as currently conducted in all material
respects, other than any such failures which do not, individually or in the
aggregate, have a Company Material Adverse Effect.
3.14 Trademarks
The Company and its subsidiaries own or possess the right to use all
trademarks, service marks and trade names necessary for the continued provision
of services in a manner consistent with past practices, free and clear of any
claim, lien or encumbrance, except in circumstances that, in the aggregate, are
not reasonably likely to have a Company Material Adverse Effect. To the
knowledge of the Company, there is no violation by others of any right of the
Company or any of its subsidiaries with respect to any trademark or trade name
of the Company that is reasonably likely to have a Company Material Adverse
Effect. The Company is not infringing upon any trademark or trade name of any
third party in a manner that is reasonably likely to have a Company Material
Adverse Effect and no proceedings have been
<PAGE>
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instituted or are pending or threatened, and no claim has been received by the
Company, alleging any such violation that, in any such case, is reasonably
likely to have a Company Material Adverse Effect.
3.15 Fairness Opinion
The Company has received an opinion from Lehman Brothers that, as of the
date hereof, the consideration to be received in the Offer by the Shareholders
is fair, from a financial point of view, to the Shareholders.
ARTICLE 4
CONDUCT OF BUSINESS
4.1 Conduct of Business by the Company
The Company covenants and agrees that, prior to the earlier of the time
(the "Effective Time") of the appointment or election to the Board of Directors
of persons designated by BCE who represent a majority of the directors of the
Company and the termination of this Agreement, unless BCE or the Chairman of the
Board of Directors shall otherwise agree or as otherwise expressly contemplated
or permitted by this Agreement:
(a) the Company shall, and shall cause each of its subsidiaries to, conduct
its and their respective businesses only in, not take any action except
in, and maintain their respective facilities in, the usual, ordinary and
regular course of business;
(b) the Company shall not directly or indirectly do or permit to occur any of
the following: (i) issue, sell, pledge, lease, dispose of, encumber or
grant rights to use in or agree to issue, sell, pledge, lease, dispose of,
encumber or grant rights to use in: (A) any additional shares of, or any
options, warrants, calls, conversion privileges or rights of any kind to
acquire any shares of, any capital stock of the Company (other than
pursuant to the exercise of Options or other Convertible Securities
currently outstanding as contemplated by this Agreement); or (B) except in
the ordinary course of business, any assets of the Company or any of its
subsidiaries in excess of U.S.$100 million in the aggregate; (ii) amend or
propose to amend the articles, by-laws or other constating documents of
the Company or any of its subsidiaries; (iii) split, combine or reclassify
any outstanding Common Shares, or declare, set aside or pay any dividend
or other distribution payable in cash, stock, property or otherwise with
respect to the Common Shares, other than dividends paid in the ordinary
course and consistent with past practice; (iv) redeem, purchase or offer
to purchase (or permit any of its subsidiaries to redeem, purchase or
offer to purchase) any Common Shares or other securities of the Company;
(v) approve or adopt a shareholder rights plan; (vi) reorganize,
amalgamate or merge the Company or any of its subsidiaries
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with any other person, corporation, partnership or other business
organization whatsoever (other than an internal bona fide reorganization
of the Company or any of its subsidiaries (an "Internal Reorganization");
(vii) reduce the stated capital of the Company; (viii) acquire or agree to
acquire (by merger, amalgamation, acquisition of stock or assets or
otherwise) any person, corporation, partnership or other business
organization or division or make any investment either by purchase of
shares or securities, contributions of capital (other than to wholly-owned
subsidiaries), property transfer or purchase of, any property or assets of
any other person, corporation, partnership or other business organization
in excess of U.S.$100 million in the aggregate or other than in connection
with an Internal Reorganization; (ix) incur or commit to incur, in excess
of U.S.$100 million, any indebtedness for borrowed money or any other
material liability or obligation or issue any debt securities, except for
the borrowing of working capital in the ordinary course of business and
consistent with past practice, or guarantee, endorse or otherwise as an
accommodation become responsible for, the obligations of any other person,
corporation, partnership or other business organization, or make any loans
or advances, except in the ordinary course of business consistent with
past practice; (x) incur or commit to incur capital expenditures not
contemplated by the Company's existing business plan in excess of U.S.$100
million in the aggregate; (xi) adopt a plan of liquidation or resolutions
providing for the liquidation or dissolution of the Company or any of its
subsidiaries, other than in connection with an Internal Reorganization;
(xii) pay, discharge or satisfy any material claims, liabilities or
obligations other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice, of liabilities
reflected or reserved against in the Company's financial statements or
incurred in the ordinary course of business consistent with past practice;
or (xiii) authorize, recommend or propose any release or relinquishment of
any material contractual right;
(c) the Company shall not, and shall cause each of its subsidiaries not to,
(i) enter into or modify any employment, severance, or similar agreements
or arrangements with, or grant any bonuses, salary increases, severance or
termination pay to, any officers or directors other than pursuant to
agreements already entered into and disclosed in the Company Public
Documents; or (ii) in the case of employees who are not officers or
directors, take any action other than in the ordinary, regular and usual
course of business and consistent with past practice (none of which
actions shall be unreasonable or unusual) with respect to the grant of any
bonuses, salary increases, severance or termination pay or with respect to
any increase of benefits payable in effect on the date hereof;
(d) the Company shall not, and shall cause each of its subsidiaries not to,
adopt or amend any bonus, profit sharing, incentive, compensation, stock
option, pension, retirement, deferred compensation, employment or other
employee benefit plan, agreement, trust, fund or arrangement for the
benefit or welfare of any employee;
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(e) the Company shall use its reasonable commercial efforts to cause its
current insurance (or re-insurance) policies not to be cancelled or
terminated or any of the coverage thereunder to lapse, unless
simultaneously with such termination, cancellation or lapse, replacement
policies underwritten by insurance and re-insurance companies of
nationally recognized standing providing coverage equal to or greater than
the coverage under the cancelled, terminated or lapsed policies for
substantially similar premiums are in full force and effect;
(f) the Company shall promptly notify BCE or the Chairman of the Board orally
and in writing of any material adverse change in the normal course of its
or any of its subsidiaries' businesses or in the operation of its or any
of its subsidiaries' properties and of any material governmental or third
party complaints, investigations or hearings (or communications indicating
that the same may be contemplated);
(g) the Company and each of its subsidiaries shall: (i) duly and timely file
all tax returns required to be filed by it on or after the date hereof and
ensure that all such tax returns are true, complete and correct in all
material respects; (ii) timely pay all Taxes which are due and payable
(other than those which are being contested in good faith); (iii) not make
or rescind any material expressed or deemed election relating to Taxes;
(iv) not make a request for a tax ruling or enter into a closing agreement
with any taxing authorities; (v) not settle or compromise any material
claim, action, suit, litigation, proceeding, arbitration, investigation,
audit or controversy relating to Taxes; and (vi) not change in any
material respect any of its methods of reporting income, deductions or
accounting for income tax purposes from those employed in the preparation
of its income tax return for the taxation year ending December 31, 1998
except as may be required by applicable law;
(h) the Company shall not authorize or propose, or enter into or modify any
contract, agreement, commitment or arrangement, to do any of the matters
prohibited by the other paragraphs of this section 4.1.
<PAGE>
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ARTICLE 5
MISCELLANEOUS
5.1 Further Assurances
Subject to the conditions herein provided, each party hereto agrees, as
soon as reasonably practicable following the date hereof (i) to actively and
diligently pursue all regulatory and other approvals and consents (including, if
required in the case of BCE, exemptions from the requirements of any stock
exchange for shareholder approval for the issuance of BCE Shares hereunder)
necessary to consummate the Offer, (ii) to use reasonable commercial efforts to
make all necessary registrations and filings (including, but not limited to,
filings under applicable laws and submissions of information requested by
governmental authorities) to obtain same and (iii) to use all reasonable
commercial efforts to take, or cause to be taken, all other action and to do, or
cause to be done, all other things necessary, proper or advisable to consummate
and make effective as promptly as is practicable the transactions contemplated
by the Offer and this Agreement, including the execution and delivery of such
documents as the other parties hereto may reasonably require. Each of the
parties hereto, where appropriate, shall reasonably co-operate with the other
parties in taking such actions.
5.2 No Solicitations, Opportunity to Match, Etc.
(a) On and after the date hereof, the Company and its subsidiaries will
not, directly or indirectly, through any officer, director, employee, advisor,
representative, agent or otherwise, make, solicit, initiate or encourage
inquiries from or submission of proposals or offers from any other person,
corporation, partnership or other business organization whatsoever (including
any of its officers or employees) relating to any liquidation, dissolution,
recapitalization, merger, amalgamation or acquisition or purchase of all or a
material portion of the assets of, or any equity interest (including Common
Shares) in, the Company or any of its subsidiaries or other similar transaction
or business combination involving the Company or any of its subsidiaries (any of
such foregoing inquiries or proposals being referred to herein as an
"Acquisition Proposal"), or participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or
otherwise cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any other person to do or seek to do any of
the foregoing; provided, however, that the foregoing shall not prevent the Board
of Directors or the Company from responding to any bona fide written Acquisition
Proposal which is or could reasonably be expected to lead to a Superior Proposal
made by a third party after February 15, 2000 that was not solicited after such
date and providing information to such a third party.
(b) The Company shall immediately cease and cause to be terminated any
existing discussions or negotiations with any parties (other than BCE) with
respect to any potential Acquisition Proposal. The Company agrees not to release
any third party from any confidentiality or standstill agreement to which the
Company and such third party is a party. The Company shall immediately request
the return or destruction of all information provided to any third parties who
have entered into a confidentiality agreement with the
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Company relating to any potential Acquisition Proposal and shall use all
reasonable efforts to ensure that such requests are honoured.
(c) The Company shall immediately provide notice to the Offeror of any
future bona fide Acquisition Proposal or any request for non-public information
relating to the Company or any of its subsidiaries in connection with such a
bona fide Acquisition Proposal or for access to the properties, books or records
of the Company or any subsidiary by any person or entity that informs any member
of the Board of Directors or such subsidiary that it is considering making, or
has made, an Acquisition Proposal. Such notice to the Offeror shall be made,
from time to time, first immediately orally and then promptly in writing and
shall indicate the identity of the person making such proposal, inquiry or
contact, all material terms thereof and such other details of the proposal,
inquiry or contact known to the Company as the Offeror may reasonably request.
(d) If the Board of Directors receives a request for material non-public
information from a party who proposes to the Company a bona fide Acquisition
Proposal and the Board of Directors determines, in the manner contemplated by
clause (i) of the second paragraph of section 1.2 of this Agreement, that such
Acquisition Proposal could reasonably be expected to, if consummated in
accordance with its terms, result in a Superior Proposal, then, and only in such
case, the Company may provide such party with access to information regarding
the Company, subject to the execution of a confidentiality agreement which is
customary in such situations and which, in any event, is no less favourable to
the Company than the confidentiality and standstill agreement dated January 21,
2000 between BCE and the Company, except for the standstill provisions.
(e) The Company covenants that it will not enter into any agreement
regarding any other Acquisition Proposal (a "Proposed Agreement") without
providing BCE and the Offeror with an opportunity to amend this Agreement and
the Offer to provide for at least equivalent financial terms to those included
in the Proposed Agreement as determined by the Board of Directors of the
Company, acting in good faith and in accordance with its fiduciary duties. In
particular, the Company covenants to provide BCE with a copy of any Proposed
Agreement as executed by the party making such Acquisition Proposal not less
than 48 hours prior to its proposed execution by the Company. In the event that
BCE and the Offeror agree to amend this Agreement and/or the Offer as provided
above, the Company covenants not to enter into the Proposed Agreement.
(f) The Company shall ensure that the directors, officers and employees of
the Company and its subsidiaries and any investment bankers or other advisors or
representatives retained by the Company are aware of the provisions of this
section, and the Company shall be responsible for any breach of this section 5.2
by such directors, officers, employees, bankers, advisors or representatives.
5.3 Fees and Expenses
If at any time after the execution of this Agreement:
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(a) the Board of Directors has withdrawn or changed any of its recommendations
or determinations referred to in section 1.2 in a manner adverse to the
Offeror for any reason (other than (i) the failure by the Offeror to
comply in any material respect with its representations, warranties and
covenants contained in this Agreement or (ii) the occurrence of a material
adverse change in the business, operations (including results of
operations), assets, properties or condition (financial or otherwise) of
BCE) or shall have resolved to do so prior to the expiry of this
Agreement; or
(b) the Board of Directors shall have failed to reaffirm its recommendation of
the Offer by press statement within 48 hours after the public announcement
of any Acquisition Proposal (or, in the event that the Offer shall be
scheduled to expire within such 48-hour period, prior to the scheduled
expiry of the Offer); or
(c) (i) a Superior Proposal is publicly announced, proposed, offered or made
to the Shareholders or to the Company and the period during which Common
Shares may be deposited under the Offer expires and insufficient Common
Shares have been tendered to the Offer to enable BCE and its affiliates to
own 50.1% of the outstanding common shares of the Company (an
"Insufficient Tender"), or (ii) the period during which Common Shares may
be deposited under the Offer expires, an Insufficient Tender exists and
another person has acquired sufficient securities of the Company such that
the Common Shares held by such person represent de facto control of the
Company;
then the Company shall forthwith pay to BCE the sum of Cdn.$300 million;
provided, however, that no such fee shall be payable if an event has occurred
which would permit the Company to terminate this Agreement pursuant to
subsection 6.1(g) prior to the occurrence of an event described in paragraphs
(a), (b) or (c) above.
5.4 Notification of Certain Matters
Each party shall give prompt notice to the others of: (a) the occurrence or
failure to occur of any event, which occurrence or failure would cause or may
cause any representation or warranty on its part contained in this Agreement to
be untrue or inaccurate in any material respect at any time from the date hereof
to the Effective Time; and (b) any failure of such party, or any officer,
director, employee or agent thereof, to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
it hereunder.
5.5 Investigation
Any investigation by a party hereto and its advisors shall not mitigate,
diminish or affect the representations and warranties of the other party or
parties, as applicable, contained in this Agreement or any document or
certificate given pursuant hereto.
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5.6 Shareholder Claims
The Company shall not settle or compromise any claim brought by any
present, former or purported holder of any securities of the Company in
connection with the transactions contemplated by this Agreement prior to the
Effective Time without the prior written consent of BCE, which shall not be
unreasonably withheld or delayed.
5.7 Officers' and Directors' Insurance
BCE agrees that for the period from the Effective Time until six years
after the Effective Time, BCE will cause the Company or any successor to the
Company to maintain the Company's current directors' and officers' insurance
policy or an equivalent policy subject in either case to terms and conditions no
less advantageous to the directors and officers of the Company than those
contained in the policy in effect on the date hereof, for all present and former
directors and officers of the Company, covering claims made prior to or within
six years after the Effective Time, provided that such insurance remains
available to the Company or such successor on commercially reasonable terms. BCE
also agrees that after the expiration of such six-year period it will use
reasonable commercial efforts to cause such directors and officers to be covered
under its then existing directors and officers insurance policy, if any. BCE
shall, and shall cause the Company (or its successor) to, indemnify the
directors and officers of the Company to the fullest extent to which BCE and the
Company are permitted to indemnify such officers and directors under their
respective charter, by-laws, applicable law and contracts of indemnity.
5.8 Change in Nature of Transaction
(a) The parties have determined that it is necessary and desirable to
proceed with alternative forms of transactions (the "Alternative Transactions")
whereby the Offeror (or an affiliate of the Offeror) is effectively to acquire
Common Shares on economic terms which, in relation to the holders of Common
Shares, are at least equivalent to the Offer (including from a tax perspective).
The description of the steps of the Alternative Transactions and related matters
are set out in Schedule C attached hereto. The Boards of Directors of the
Company and BCE have approved the Alternative Transactions and have resolved to
recommend that Shareholders either vote in favour of it, or tender their Common
Shares to, the Alternative Transactions.
(b) In the event of any Alternative Transaction, the references in this
agreement to the Offer shall be deemed to refer to such Alternative Transaction
and all terms, covenants, representations and warranties of this Agreement shall
be and shall be deemed to have been made in the context of such Alternative
Transaction, mutatis mutandis.
(c) If any Alternative Transaction involves a meeting or meetings of
securityholders of the Company, the Company shall (i) convene a meeting at a
time and date determined by the Company in consultation with BCE but no later
than December 31, 2000, subject to extension as contemplated in the
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proviso to subsection 1.1(c) hereof and (ii) prepare a proxy circular, in form
and substance acceptable to the Offeror, acting reasonably, seeking approval of
any such Alternative Transaction and mail such circular to such securityholders
not earlier than ten business days after the completion of the Nortel
Transaction but not later than November 30, 2000, subject to extension as
contemplated in the proviso to subsection 1.1(c) hereof.
ARTICLE 6
TERMINATION, AMENDMENT AND WAIVER
6.1 Termination
This Agreement may be terminated:
(a) at any time prior to the Effective Time, by mutual consent of BCE and the
Company;
(b) (A) by BCE at any time on or prior to July 31, 2000 if any condition to
making the Offer is not satisfied or waived by such date other than as a
result of BCE's default hereunder, or (B) on or after July 31, 2000, by
either BCE or the Company at any time if the other party is in default of
any covenant or obligation under this Agreement in any material respect or
if any representation or warranty of the other party under this Agreement
is untrue or incorrect (or, if any such representation or warranty is not
qualified by a materiality concept, untrue or incorrect in any material
respect) as at the date made;
(c) by either BCE or the Company after the 120th day following the Mailing
Date, if the Offeror has not taken up and paid for Common Shares deposited
under the Offer, otherwise than as a result of the breach by such party of
any material covenant or obligation under this Agreement or as a result of
any representation or warranty of such party in this Agreement being
untrue or incorrect in any material respect; provided, however, that if
the Offeror's take up and payment for Common Shares deposited under the
Offer is delayed by (i) an injunction or order made by a court or
regulatory authority of competent jurisdiction or (ii) the Offeror not
having obtained any regulatory waiver, consent or approval which is
necessary to permit the Offeror to take up and pay for Common Shares
deposited under the Offer, then, provided that such injunction or order is
being contested or appealed or such regulatory waiver, consent or approval
is being actively sought, as applicable, this Agreement shall not be
terminated by the Company pursuant to this subsection 6.1(c) until the
fifth business day following the date on which such injunction or order
ceases to be in effect or such waiver, consent or approval is obtained, as
applicable;
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(d) by BCE if any condition of the Offer shall not be satisfied or waived at
the Expiry Time of the Offer and the Offeror shall not elect to waive such
condition or extend the Offer;
(e) by either the Company or BCE if, prior to the termination of the Offer,
the Board of Directors withdraws, modifies or changes its recommendation
regarding the Offer in accordance with section 1.2; or
(f) by the Company, if BCE does not mail the Offer within the time
contemplated by section 1.1; or
(g) by the Company, if there shall have occurred any change that has a BCE
Material Adverse Effect which results, directly or indirectly, from any
act or action taken or not taken by BCE at or prior to the entering into
of the Support Agreement.
6.2 Amendment
This Agreement may not be amended except by an instrument signed by each
of the parties hereto.
6.3 Waiver
At any time prior to the Effective Time, any party hereto may: (a) extend
the time for the performance of any of the obligations or other acts of any
other party thereto; or (b) waive compliance with any of the agreements of any
other party or with any conditions to its own obligations, in each case only to
the extent such obligations, agreements and conditions are intended for its
benefit.
6.4 Effect of Termination
If this Agreement is terminated as provided in section 6.1, there shall be
no liability or further obligation on the part of any party hereto or any of
their respective shareholders, officers or directors, except for liability
arising from a wilful breach of any representations, warranties or covenants in
this Agreement or common law fraud (and any action with respect thereto must be
commenced within two years of the date hereof) and except for the obligation of
the Company to pay any amounts payable by it in accordance with section 5.3 of
this Agreement.
ARTICLE 7
GENERAL PROVISIONS
7.1 Brokers
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The Offeror and the Company represent and warrant to each other that,
except for CIBC World Markets and Morgan Stanley Dean Witter, in the case of
BCE, and Lehman Brothers and RBC Dominion Securities Inc., in the case of the
Company, no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission, or to the reimbursement of any of its
expenses, in connection with the Offer, an Alternative Transaction or any
similar transaction. The Company has a correct and complete copy of all
agreements between the Company or any subsidiary or affiliate thereof and Lehman
Brothers relating to the payment of fees and expenses to it.
7.2 Public Statements
Except as required by applicable law, neither BCE nor the Company shall
make any public announcement or statement with respect to the Offer, the Lock-up
Agreements or this Agreement without the approval of the Company or BCE,
respectively, such approval not to be unreasonably withheld or delayed, except
to the extent necessary to comply with law. Moreover, in any event, each party
agrees to give prior notice to the other of any public announcement relating to
the Offer, the Lock-up Agreements or the affairs of the Company, and agrees to
consult with each other prior to issuing each such public announcement.
7.3 Notices
All notices, requests, demands and other communications hereunder shall be
deemed to have been duly given and made if in writing and if served by personal
delivery upon the party for whom it is intended or delivered, or if sent by
facsimile transmission, upon receipt of confirmation that such transmission has
been received, to the person at the address set forth below, or such other
address as may be designated in writing hereafter, in the same manner, by such
person. The date of receipt of any such notice or other communication if
delivered personally shall be deemed to be the date of delivery thereof, or if
sent by facsimile transmission the date of such transmission if sent during
normal business hours on a business day, failing which it shall be deemed to
have been received on the next business day.
If to BCE the Offeror:
BCE Inc.
Bureau 3700
1000, rue de la Gauchetiere Ouest
Montreal, Quebec
H3B 4Y7
Phone: (514) 870-4637
Fax: (514) 870-4877
Attention: Martine Turcotte,
Chief Legal Officer
<PAGE>
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with a copy to:
Davies, Ward & Beck
44th Floor
1 First Canadian Place
Toronto, ON M5X 1B1
Phone: (416) 863-0900
Fax: (416) 863-0871
Attention: J-P. Bisnaire
If to the Company:
Teleglobe Inc.
23rd Floor
1000, rue de la Gauchetiere Ouest
Montreal, Quebec
H3B 4X5
Phone: (514) 868-7722
Fax: (514) 868-7438
Attention: Andre Bourbonnais, Vice President,
Chief Legal Officer and Corporate Secretary
With a copy to:
Stikeman Elliott
40th Floor
1155 Rene-Levesque Boulevard West
Montreal, Quebec
H3B 3V2
Attention: Pierre Raymond and Robert Hogan
Phone: (514) 397-3061
Fax: (514) 397-3222
Any party may at any time change its address for service from time to time
by giving notice to the other parties in accordance with this section 7.3.
<PAGE>
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7.4 Currency
Unless otherwise indicated, all dollar amounts referred to in this
Agreement are expressed in Canadian dollars.
7.5 Interpretation
The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
References to sections and Articles refer to sections and articles of this
Agreement unless otherwise stated. Unless the context otherwise requires, words
used herein importing the singular include the plural and vice versa.
7.6 Severability
If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated and the parties shall negotiate in good faith to modify the
agreement to preserve each party's anticipated benefits under the agreement.
7.7 Entire Agreement, Assignment and Governing Law
This Agreement and the confidentiality and standstill agreement previously
entered into between the parties, as the same has been or may be waived or
amended, together with all other documents and instruments referred to herein,
constitute the entire agreement and supersede all other prior agreements and
undertakings, both written and oral, among the parties with respect to the
subject matter hereof.
This Agreement: (a) is not intended to confer upon any other person any
rights or remedies hereunder; (b) shall not be assigned by operation of law or
otherwise, except that BCE may assign all or any portion of its rights under
this Agreement to any wholly-owned subsidiary of BCE, but no such assignment
shall relieve BCE of its obligations hereunder; and (c) shall be governed in all
respects, including validity, interpretation and effect, by the laws of the
Province of Quebec and the laws of Canada applicable therein, without giving
effect to the principles of conflict of laws thereof and all actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined exclusively in the courts of the Province of Quebec.
7.8 Counterparts
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This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be original and all of which taken together shall be deemed
to constitute one and the same instrument, and it shall not be necessary in
making proof of this Agreement to produce more than one counterpart.
<PAGE>
7.9 English Language
The parties hereto have expressly requested that this Agreement and the
schedules thereto be drafted in the English language. Les parties a la presente
ont expressement demande que cette entente ainsi que les cedules s'y rattachant
soient redigees dans la langue anglaise.
IN WITNESS WHEREOF, the parties have executed this Agreement.
BCE INC.
by _______________________________
TELEGLOBE INC.
by _______________________________
<PAGE>
SCHEDULE A
CONDITIONS OF THE OFFER
Notwithstanding any other provision of the agreement to which this schedule
is attached, the Offeror shall have the right to withdraw the Offer and not take
up and pay for any Common Shares deposited under the Offer unless all of the
following conditions are satisfied or waived by the Offeror at or prior to the
Expiry Time:
(a) all requisite regulatory approvals, reviews or decisions (including,
without limitation, those of any stock exchanges or securities or other
regulatory authorities) to the consummation of the Offer shall have been
obtained or concluded on terms satisfactory to the Offeror, acting
reasonably;
(b) (i) no act, action, suit or proceeding shall have been threatened or taken
before or by any domestic or foreign court or tribunal or governmental
agency or other regulatory authority or administrative agency or
commission or by any elected or appointed public official or private
person (including, without limitation, any individual, corporation, firm,
group or other entity) in Canada or elsewhere, whether or not having the
force of law, and (ii) no law, regulation or policy shall have been
proposed, enacted, promulgated or applied:
(A) to cease trade, enjoin, prohibit or impose material limitations or
conditions on the purchase by or the sale to the Offeror of the Common
Shares or any of them or the right of the Offeror to own or exercise
full rights of ownership of the Common Shares or any of them; or
(B) which, if the Offer were consummated, (x) would require the Company or
any of its subsidiaries to dispose of a material asset, impose
material limitations or conditions on the business or operations of
the Company and its subsidiaries, or impose material fines or
penalties on the Company or any of its subsidiaries and (y) such
disposition, limitations, fines or penalties would reasonably be
expected to have a Company Material Adverse Effect or a BCE Material
Adverse Effect;
(c) either (i) the Commissioner under the Competition Act (Canada) shall have
issued an advance ruling certificate ("ARC") under section 102 of the
Competition Act in respect of the Offer and shall not have subsequently
withdrawn or purported to have withdrawn such ARC prior to the Offeror's
acquisition of Common Shares pursuant to the Offer or have stated or
otherwise indicated that he has obtained new information as a result of
which he is no longer satisfied that he would not have sufficient grounds
on which to apply to the Competition Tribunal under section 92 of the
Competition Act with respect to the Offer; or (ii) the applicable waiting
period under section 123 of the Competition Act shall have
<PAGE>
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expired, and the Competition Commissioner or his authorized representative
shall have advised the Offeror (on terms and in a form satisfactory to the
Offeror) that the Commissioner does not intend to make an application
under section 92 of the Competition Act in respect of the Offer and
neither the Commissioner nor any of his representatives shall have
rescinded or amended such advice;
(d) any applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, and under any other applicable foreign
competition laws, shall have expired;
(e) there shall not exist any prohibition at law against the Offeror making
the Offer or taking up and paying for any Common Shares deposited under
the Offer;
(f) there shall not exist and shall not have occurred (or, if there does exist
or shall have previously occurred, there shall not have been disclosed,
generally or to the Offeror in writing) any change that has a Company
Material Adverse Effect which results, directly or indirectly, from:
(i) any act or action taken or not taken by the Company at or prior to
the entering into of the Support Agreement; or
(ii) any act or action taken or not taken by the Company which has been
approved by the Board of Directors in circumstances where the BCE
nominees to the Board of Directors have voted against;
(g) the Offeror shall not have become aware of any untrue statement of a
material fact in the Company Public Documents, or an omission to state a
material fact that is required to be stated or that is necessary to make a
statement not misleading therein the light of the circumstances in which
it was made, in either case that is adverse to the Company; and
(h) (i) the Company shall not have breached in any material respect any of its
covenants contained in the Support Agreement (other than a breach
resulting from any act or action (or act or action not taken) that has
been approved by the Chairman of the Board) and (ii) the representations
and/or warranties of the Company contained in the Support Agreement shall
have been, as at the date made, true and correct or, if not already
qualified by a materiality concept, true and correct in all material
respects.
The foregoing conditions are for the exclusive benefit of the Offeror and
may be asserted by the Offeror at any time, regardless of the circumstances
giving rise to such assertion, including any action or inaction by the Offeror.
The Offeror may waive any of the foregoing conditions in whole or in part at any
time and from time to time, both before and after the Expiry Time, without
prejudice to any other rights
<PAGE>
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which the Offeror may have. The failure by the Offeror at any time to exercise
any of the foregoing rights will not be deemed a waiver of any such right and
each such right will be deemed an ongoing right which may be asserted at any
time and from time to time. Any determination by the Offeror concerning the
events described in the conditions to the Offer will be final and binding upon
all parties.
<PAGE>
SCHEDULE B
PROVISIONS TO BE INCLUDED IN
HOLDCO AGREEMENT, WITHOUT LIMITATION
1. Representations and Warranties of Holdco and the Holdco Shareholders
Holdco and each of the Holdco Shareholders hereby jointly and severally
represent and warrant to the Offeror as follows and hereby acknowledge and
confirm that the Offeror is relying on such representations and warranties in
connection with the purchase by the Offeror of the Holdco Shares:
(a) the Common Shares which are being tendered to the Offer have been held
directly since [date to be inserted] by Holdco;
(b) the execution and delivery of this Holdco Agreement by the Holdco
Shareholders and Holdco and the completion by the Holdco Shareholders and Holdco
of the transactions contemplated hereby:
(i) will not conflict with, result in the breach of or constitute a
default under the articles, by-laws or resolutions of Holdco or
any agreement, indenture, contract, lease, deed of trust,
licence, option, instrument or other commitment, whether written
or oral (a "Contract") to which the Holdco Shareholders or
Holdco is a party; and
(ii) do not and will not violate any provision of law or
administrative regulation or any judicial or administrative
award, judgment or decree binding upon the Holdco Shareholders
or Holdco;
(c) each of the Holdco Shareholders and Holdco is a resident of Canada for
the purposes of the Canadian Income Tax Act or if any Holdco Shareholder is not
a resident of Canada for such purposes, either: (i) such Holdco Shareholder has
provided a certificate pursuant to section 116 of the Canadian Income Tax Act in
respect of the sale by such Holdco Shareholder of the Holdco Shares being
tendered to the Offer by such Holdco Shareholder with a certificate limit that
is not less than the value of the consideration payable by the Offeror to such
Holdco Shareholder pursuant to the Offer; or (ii) such Holdco Shareholder
acknowledges that the Offeror shall be permitted to withhold from the amount
payable to such Holdco Shareholder pursuant to the Offer any amount required to
be remitted by the Offeror pursuant to section 116 of the Canadian Income Tax
Act or pursuant to applicable tax laws of any other jurisdiction;
(d) this Holdco Agreement has been duly executed and delivered by each of
the Holdco Shareholders and Holdco and is a valid and binding obligation of each
of the Holdco Shareholders and Holdco enforceable against each of the Holdco
Shareholders and Holdco in accordance with its terms, subject to applicable
bankruptcy, insolvency and other laws affecting the enforcement of creditors'
rights
<PAGE>
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generally and provided that equitable remedies will only be awarded in the
discretion of a court of competent jurisdiction;
(e) all of the Holdco Shares are registered in the name of, and
beneficially owned by, not more than five Holdco Shareholders free and clear of
all liens, charges, encumbrances, claims and equities (collectively, "Liens");
(f) no person has any Contract, warrant or option or any right capable of
becoming a Contract, warrant or option for the purchase from any of the Holdco
Shareholders of any of the Holdco Shares or from Holdco of any shares or other
securities of Holdco or of any of the Common Shares held by Holdco;
(g) the Holdco Shares are validly issued and outstanding as fully paid and
non-assessable shares in the capital of Holdco and are the only issued and
outstanding shares in the capital of Holdco;
(h) Holdco is a corporation duly incorporated on or after February 1, 2000
and duly organized and validly existing under the laws of Canada;
(i) Holdco is the beneficial and registered holder of Common Shares (the
"Subject Shares") all of which are held by Holdco free and clear of all Liens;
(j) Holdco owns or holds no property or assets or any interests therein of
any nature or kind whatsoever other than the Subject Shares and Holdco carries
on no active business;
(k) Holdco has no obligations, liabilities (whether actual or contingent)
or indebtedness to any person, including without limitation any liabilities in
respect of federal or provincial income, corporate, goods and services,
harmonized sales, sales, excise, employer health or any other taxes, duties or
imposts of any nature or kind whatsoever, or in respect of any judgments,
orders, fines, interest, penalties, awards or decrees of any court, tribunal or
governmental, administrative or regulatory department, commission, board,
bureau, agency or instrumentality, domestic or foreign;
(l) Holdco has no subsidiaries and is not bound by any Contract to acquire
or lease in any manner any shares or assets of any nature or kind whatsoever;
(m) Holdco does not have, and has never had, any employees and its
directors and officers receive no remuneration or compensation from Holdco;
(n) Holdco is not a party to any Contract of any nature or kind whatsoever
except for the Contract with the Seller pursuant to which Holdco acquired the
Subject Shares (a true and complete copy of which has been provided to the
Offeror);
<PAGE>
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(o) there are no claims, investigations, actions, suits or proceedings
pending or threatened against or affecting Holdco or the Holdco Shareholders,
whether at law or in equity or before or by any federal, provincial, municipal
or other governmental or administrative or regulatory department, commission,
board, tribunal, bureau, agency or instrumentality, domestic or foreign, that
would adversely affect in any manner the ability of Holdco and the Holdco
Shareholders to enter into this Holdco Agreement and perform their obligations
hereunder;
(p) there are no claims, investigations, actions, suits or proceedings
pending or threatened against or affecting Holdco, whether at law or in equity
or before or by any federal, provincial, municipal or other governmental or
administrative or regulatory department, commission, board, tribunal, bureau,
agency or instrumentality, domestic or foreign;
(q) Holdco is in full compliance with all laws, rules or regulations to
which Holdco or the Subject Shares may be subject;
(r) the books and records of Holdco fairly and correctly set out and
disclose in all respects, in accordance with generally accepted accounting
principles in Canada consistently applied, the financial position of Holdco as
of the date hereof and all financial transactions of Holdco have been accurately
recorded in such books and records;
(s) the corporate records and minute books of Holdco contain complete and
accurate minutes of all meetings of the directors and shareholders of Holdco
held since its incorporation and all such meetings were duly called and held and
the share certificate books, register of shareholders, register of transfers and
register of directors and officers of Holdco are complete and accurate;
(t) the Holdco Shareholders acknowledge that where there is more than one
Holdco Shareholder, no Holdco Shareholder shall be entitled to withdraw any
Holdco Shares tendered to the Offer unless the notice of withdrawal is duly
executed by all of the Holdco Shareholders in respect of all outstanding Holdco
Shares and such Holdco Shares are otherwise withdrawn in compliance with all
provisions of the Offer relating to withdrawals.
2. Covenants
Holdco Documents. The Holdco Shareholders and Holdco shall forthwith make
available to the Offeror and its authorized representatives all minute books,
share certificate books, share registers, books of account, accounting records,
corporate documents and all other books or records, documents, information or
data relating to Holdco (collectively the "Holdco Documents"). At the time of
closing, all of the Holdco Documents shall be delivered to the Offeror by the
Seller and Holdco.
<PAGE>
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3. Indemnification
(a) Obligations to Indemnify. Each of the Seller, the Holdco Shareholders
and Holdco agrees to indemnify and save harmless the Offeror and, unless BCE is
the Offeror, BCE from all claims, demands, proceedings, losses, damages,
liabilities, deficiencies, costs and expenses (including, without limitation,
reasonable legal and other professional fees and disbursements, interest,
penalties and amounts paid in settlement) (collectively "Losses") suffered or
incurred by the Offeror as a result of or arising directly or indirectly out of
or in connection with any breach by the Seller, the Holdco Shareholders or
Holdco of any representation, warranty, obligation or covenant of the Seller,
the Holdco Shareholders or Holdco contained in this Holdco Agreement. The
Offeror agrees to indemnify and save harmless the Seller from all Losses
suffered or incurred by the Seller as a result of or arising directly or
indirectly out of or in connection with any breach by the Offeror of any
representation, warranty, obligation or covenant of the Offeror contained in
this Holdco Agreement.
(b) Notice of Claim. In the event that a party (the "Indemnified Party")
shall become aware of any claim, proceeding or other matter (a "Claim") in
respect of which another party (the "Indemnifying Party") agreed to indemnify
the Indemnified Party pursuant to this Holdco Agreement, the Indemnified Party
shall promptly give written notice thereof to the Indemnifying Party. Such
notice shall specify whether the Claim arises as a result of a claim by a person
against the Indemnified Party (a "Third Party Claim") or whether the Claim does
not so arise (a "Direct Claim"), and shall also specify with reasonable
particularity (to the extent that the information is available) the factual
basis for the Claim and the amount of the Claim, if known. If, through the fault
of the Indemnified Party, the Indemnifying Party does not receive notice of any
Claim in time to contest effectively the determination of any liability
susceptible of being contested, the Indemnifying Party shall be entitled to set
off against the amount claimed by the Indemnified Party the amount of any Losses
incurred by the Indemnifying Party resulting directly from the Indemnified
Party's failure to give such notice on a timely basis.
(c) Direct Claims. With respect to any Direct Claim, following receipt of
notice from the Indemnified Party of the Claim, the Indemnifying Party shall
have 60 days to make such investigation of the Claim as is considered necessary
or desirable. For the purpose of such investigation, the Indemnified Party shall
make available to the Indemnifying Party the information relied upon by the
Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request. If both parties
agree at or prior to the expiration of such 60-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such Claim, the
Indemnifying Party shall immediately pay to the Indemnified Party the full
agreed upon amount of the Claim.
(d) Third Party Claims. With respect to any Third Party Claim, the
Indemnified Party shall have the exclusive right, at the expense of the
Indemnifying Party, to contest, settle or pay the amount claimed and to retain
counsel and other experts or advisers selected by the Indemnified Party in its
sole discretion in connection therewith; provided, however, that the Indemnified
Party shall not settle any Third
<PAGE>
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Party Claim without the written consent of the Indemnifying Party, which consent
shall not be unreasonably withheld or delayed. If the Indemnified Party elects
to assume such control, the Indemnifying Party shall have the right, at its sole
expense, to participate in the negotiation, settlement or defence of such Third
Party Claim. If any Third Party Claim is of a nature such that the Indemnified
Party is required by applicable law to make a payment to any person (a "Third
Party") with respect to the Third Party Claim before the completion of
settlement negotiations or related legal proceedings, the Indemnified Party may
make such payment and the Indemnifying Party shall, forthwith after demand by
the Indemnified Party, reimburse the Indemnified Party for such payment. If the
amount of any liability of the Indemnified Party under the Third Party Claim in
respect of which such payment was made, as finally determined, is less than the
amount that was paid by the Indemnifying Party to the Indemnified Party, the
Indemnified Party shall, forthwith after receipt of the difference from the
Third Party, pay the amount of such difference to the Indemnifying Party.
(e) Payment and Cooperation. The Indemnifying Party shall pay to the
Indemnified Party all amounts for which the Indemnifying Party is liable
pursuant to this section promptly after the Indemnified Party incurs the Loss in
respect of which such liability arises. The Indemnified Party and the
Indemnifying Party shall co-operate fully with each other with respect to Third
Party Claims, and shall keep each other fully advised with respect thereto
(including supplying copies of all relevant documentation promptly as it becomes
available).
(f) Tax Effect. If any payment received by an Indemnified Party hereunder
(an "Indemnity Payment") would constitute income for tax purposes to such
Indemnified Party, the Indemnifying Party shall pay a Tax Gross Up to the
Indemnified Party at the same time and on the same terms, as to interest and
otherwise, as the Indemnity Payment. The amount of any Loss for which
indemnification is provided shall be adjusted to take into account any tax
benefit realized by the Indemnified Party or any of its affiliates by reason of
the Loss for which indemnification is so provided or the circumstances giving
rise to such Loss. For purposes of this paragraph (f), any tax benefit shall be
taken into account at such time as it is received by the Indemnified Party or
its affiliate. Notwithstanding the foregoing provisions of this paragraph (f),
if an Indemnity Payment is included in the Indemnified Party's income pursuant
to paragraph 12(1)(x) of the Canadian Income Tax Act (or an equivalent provision
of any relevant provincial legislation), the Indemnified Party covenants and
agrees to make an election pursuant to subsection 12(2.2) of the Canadian Income
Tax Act (and the equivalent provision of any applicable provincial legislation)
with respect to the Indemnity Payment to the maximum extent possible such that
the amount of the Indemnity Payment included in the Indemnified Party's income
for tax purposes is minimized or eliminated. For purposes of this paragraph (f),
"Tax Gross Up" shall mean, with respect to any Indemnity Payment, such
additional amount (calculated in accordance with the Calculation Method) as is
necessary to place the Indemnified Party in the same after tax position as it
would have been in had such Indemnity Payment been received tax free; and
"Calculation Method" with respect to the calculation of any Tax Gross Up on any
Indemnity Payments, shall mean that such Tax Gross Up shall be calculated by
using the combined federal and provincial income tax rate applicable to the
Indemnified Party and, except as provided in this paragraph (f), without regard
to any
<PAGE>
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losses, credits, refunds or deductions that the Indemnified Party may have which
could affect the amount of tax payable on any such Indemnity Payment.
<PAGE>
SCHEDULE C
ALTERNATIVE TRANSACTIONS
Plan of Arrangement
The parties acknowledge and agree that it is the intention of the parties
that the acquisition of Common Shares by the Offeror (the "Acquisition") be
effected in a manner that permits both Canadian and United States Shareholders
to dispose of their Common Shares on a tax-deferred rollover basis (a "Tax
Deferred Basis"). In order to achieve the foregoing objective, it is proposed
that the Acquisition be effected pursuant to a Plan of Arrangement (the "Plan of
Arrangement") under section 192 of the Canada Business Corporations Act ("CBCA")
in a manner to permit Shareholders to obtain a rollover for Canadian income tax
purposes under section 85.1, or, where the Shareholder elects, under section 85,
of the Canadian Income Tax Act and any applicable provincial tax legislation
(collectively, "Canadian Income Tax Legislation") and to permit Shareholders to
obtain a tax-free rollover for United States tax purposes pursuant to section
368(a)(1)(B) of the United States Internal Revenue Code (a "B Reorganization").
The parties agree to cooperate to consummate the Plan of Arrangement pursuant to
a B Reorganization for United States tax purposes.
Proposed Steps
Pursuant to the Plan of Arrangement, the following steps would be
undertaken:
1. The common shares of the Company would be reorganized whereby Bell Canada
would exchange a portion of its common shares for a new class of fully
participating subordinate voting shares ("Subordinate Voting Shares")
representing a 3.5% equity interest carrying a one-tenth vote per share so
that Bell Canada and all other affiliates of BCE, together with the Third
Series Preferred Shares, hold less than 20% of the voting power attaching
to shares of the Company.
2. The Third Series Preferred Shares would be amended to add a one-tenth vote
per share.
3. All outstanding Common Shares (other than common shares and Subordinate
Voting Shares owned by Bell Canada) would be exchanged for BCE Shares at
the Share Exchange Ratio.
4. The Holdco Election would only be available to Canadian Shareholders of the
Company if the making of the Holdco Election by any such Shareholders would
not adversely impact the tax consequences to United States Shareholders or
to the Offeror (other than in respect of the effect on the Offeror of the
difference in tax treatment in respect of section 85 or section 85.1 of the
Canadian Income Tax Act and other Canadian Income Tax Legislation) under
the Plan of Arrangement.
<PAGE>
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5. The BCE Shares will be issued to United States Shareholders pursuant to the
provisions of section 3(a)(10) of the United States Securities Act of 1933,
as amended.
Shareholder Votes
1. A special meeting (the "Special Meeting") of the holders of common shares
and Third Series Preferred Shares would be held to vote on the Plan of
Arrangement. Subject to the terms and conditions of this agreement, each
Seller agrees (i) to vote in favour of the Plan of Arrangement, (ii)
deliver to the Offeror no later than ten days prior to the date of the
meeting a duly executed proxy, which proxy shall be irrevocable, in favour
of the Offeror voting in favour of the Alternative Transaction, and (iii)
not to exercise any rights of dissent provided under section 190 of the
CBCA in connection with the Plan of Arrangement.
2. The Interim Order obtained from the Court would provide that in order for
the Plan of Arrangement to proceed, the Plan of Arrangement must (i) be
approved by two-thirds of the votes cast by the holders of common shares
present or represented by proxy at the Special Meeting, including Common
Shares held by BCE and its affiliates, and (ii) receive minority approval
as required by relevant Canadian securities rules or policies, which would
exclude, among others, votes cast by BCE and its affiliates.
3. The Interim Order would provide only that a vote of the Third Series
Preferred Shares be held at the Special Meeting, not that the Plan of
Arrangement must be approved by the Third Series Preferred Shares.
Court Approval
o The Plan of Arrangement would be implemented following the grant by
the Court of a Final Order under section 192 of the CBCA.
o Assuming the Plan of Arrangement is approved by the requisite votes of
the common shares (including minority approval), but the Plan of
Arrangement does not receive a favourable vote of the holders of the
Third Series Preferred Shares, the Court would be asked in the Final
Order to approve all steps of the Plan of Arrangement in any event.
Alternative Offer
(a) In the event that (i) either party determines, acting in good faith and
based on third party tax advice, that the Plan of Arrangement may not be
effected on a Tax Deferred Basis for Canadian or United States income tax
purposes or (ii) the Plan of Arrangement is not approved by the requisite votes
of the common shares or the Court does not grant the Final Order, the
Acquisition would then be made
<PAGE>
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by way of an offer (the"Alternative Offer") made by BCE and/or a direct or
indirect wholly-owned subsidiary of BCE (collectively, the "Offeror") to the
holders of any and all of the outstanding Common Shares to acquire all of the
outstanding Common Shares on the basis of, for each Common Share, that portion
(the "Alternative Share Exchange Ratio") determined as follows:
(i) in the event the closing of the Nortel Transaction occurs prior
to the First Take-Up Date, Cdn.$0.25 plus that portion of a BCE
Share (expressed to three decimal places with amounts less than
0.0005 being rounded down and amounts equal to or greater than
0.0005 being rounded up, in each case to the nearest
one-thousandth of a BCE Share) as is equal to the ratio obtained
by dividing (A) Cdn.$48.16 (being Cdn.$48.41 less Cdn.$0.25) by
(B) the BCE Weighted Average Trading Price; and
(ii) in the event the closing of the Nortel Transaction has not been
completed or is terminated prior to the First Take-Up Date,
Cdn.$0.25 plus 0.299 of a BCE Share per Common Share.
(b) The Alternative Share Exchange Ratio specified in paragraph (a)(i)
above shall be subject to a minimum of 0.85 of a BCE Share per Common Share and
a maximum of 0.97 of a BCE Share per Common Share.
(c) Shareholders may elect to receive cash in lieu of BCE Shares for up to
20% of their consideration for all or part of their Common Shares based upon the
BCE Weighted Average Trading Price.
(d) The Offeror agrees to execute and jointly file with each Shareholder
who so requests an election pursuant to section 85 of the Canadian Income Tax
Act and Canadian Income Tax Legislation in which election such Shareholder will
be entitled to elect the amount which shall be such Shareholder's proceeds of
disposition and the Offeror's cost of the Common Shares exchanged for BCE
Shares, provided such amount is within the limits prescribed by Canadian Income
Tax Legislation and provided that such Shareholder shall be responsible for
preparing the appropriate tax election form and providing the Offeror with a
letter representing to the Offeror that such Shareholder either (i) is a
resident of Canada for purposes of the Canadian Income Tax Legislation and is
not exempt from tax or (ii) is a non-resident of Canada, the Common Shares are
taxable Canadian property to such Shareholder and the Shareholder is not exempt
from Canadian tax on any gain such Shareholder would realize on a disposition of
the Common Shares. Such Shareholder shall provide the Offeror with the completed
election form no later than January 15, 2001. The Offeror will execute any
completed election form received and return such form by mail to the Shareholder
within 30 days of receipt thereof. The Shareholder shall be solely responsible
for filing the form with the appropriate tax authority.
<PAGE>
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(e) The Alternative Offer would be made within 15 days following the
earliest of (i) the date of the Special Meeting, if the holders of common shares
fail to approve the Plan of Arrangement, (ii) the date of the court hearing on
the Final Order, if the Final Order approving the Plan of Arrangement is not
obtained or (iii) a determination referred to in paragraph (a) being made by the
Sellers.
(f) The Alternative Offer would not be subject to a minimum tender
condition.
(g) The Alternative Offer would contain the conditions contemplated by
Schedule B and otherwise be in conformity, mutatis mutandis, with the provisions
of this agreement.
(h) For certainty, Shareholders would be entitled to make the Holdco
Election under the Alternative Offer and the Offeror agrees to execute and file
the tax election contemplated by paragraph (d) above in respect of any such
Holdco Election.
EXHIBIT 2B-1
BCE INC.
Bureau 3700
1000, rue de la Gauchetiere Ouest
Montreal, Quebec
H3B 4Y7
February 15, 2000
TELEGLOBE INC.
TO: THE PERSONS LISTED ON SCHEDULE A HERETO
Dear Sirs/Mesdames:
This letter sets out the terms and conditions upon which BCE Inc. ("BCE" or
the "Offeror") has agreed to make a public offer as described below to acquire
all the common shares in the capital of Teleglobe Inc. (the "Company") not
already owned by it or its affiliates (the "Common Shares").
This letter also sets out the terms and conditions of the agreements of
each member of the Troutt Group (as such term is defined in Schedule A)
(collectively, the "Sellers") (i) to support the Offer as described below, (ii)
to exercise all options (collectively, "Options") which such Seller may have to
acquire Common Shares and which are listed on Schedule A beside such Seller's
name and that are vested and in-the-money at the Expiry Time (as defined herein)
("In-the-Money Options"), (iii) to deposit under the Offer or cause to be
deposited under the Offer all the Common Shares listed on Schedule A beside such
Seller's name and all Common Shares issuable on the exercise of all In-the-Money
Options, and (iv) to surrender all Options that are not In-the-Money Options in
exchange for options to purchase BCE Shares which vest on the same terms as the
surrendered options and with the number of BCE Shares into which such options
are exercisable being based on the Share Exchange Ratio. The Common Shares
listed on Schedule A and the Common Shares issuable pursuant to In-the-Money
Options listed on Schedule A are hereinafter collectively referred to as the
"Subject Shares". The Troutt Group acknowledges that the Offeror has entered
into a similar agreement with Charles Sirois and related parties (the "Sirois
Group"), a copy of which has been provided to Kenny A. Troutt on behalf of the
Troutt Group.
BCE has also entered into a support agreement (the "Support Agreement")
with the Company which, among other things, sets forth the terms and conditions
upon which the Company has agreed to support the Offer. A copy of the Support
Agreement has been provided to Kenny A. Troutt on behalf of the Troutt Group.
<PAGE>
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1. Offer for Securities of the Company
(a) The Offeror agrees to make, subject to the terms and conditions hereof,
a public offer for all of the outstanding Common Shares (the "Offer"). The Offer
will be made to the holders of all the issued and outstanding Common Shares on
the basis of (the "Consideration"), for each Common Share, that portion (the
"Share Exchange Ratio") of a common share in the capital of BCE (a "BCE Share")
determined as follows:
(i) in the event the closing of the Nortel Transaction (as
hereinafter defined) occurs prior to the First Take-Up Date (as
hereinafter defined), the ratio (expressed to three decimal
places with amounts less than 0.0005 being rounded down and
amounts equal to or greater than 0.0005 being rounded up, in each
case to the nearest one-thousandth of a BCE Share) obtained by
dividing (A) Cdn.$48.41 by (B) the weighted average trading price
of the BCE Shares on The Toronto Stock Exchange (the "TSE") for
the ten trading days ending on the fifth business day immediately
preceding the day on which BCE first takes up Common Shares under
the Offer (the "First Take-Up Date"), such weighted average
trading price being referred to as the "BCE Weighted Average
Trading Price"; and
(ii) in the event the closing of the Nortel Transaction (as
hereinafter defined) has not been completed or is terminated
prior to the First Take-Up Date, 0.30 of a BCE Share per Common
Share.
(b) The Share Exchange Ratio specified in paragraph (a)(i) above shall be
subject to a minimum of 0.85 of a BCE Share per Common Share and a maximum of
0.97 of a BCE Share per Common Share. The Offer shall be subject only to the
conditions set forth on Schedule B hereto.
(c) The Offer will be made in accordance with applicable securities
legislation in Canada, the United States and other jurisdictions where
registered shareholders ("Shareholders") of the Company are located and shall be
open for acceptance until a time that is not earlier than 12:01 a.m. (local
time) on the 21st business day after the day (the "Mailing Date") that the Offer
is mailed to Shareholders or such later time and date as may be required by
applicable law, subject to the right of the Offeror in its sole discretion to
extend the period during which Common Shares may be deposited under the Offer
(the time at which the Offer, as it may be extended, expires being referred to
as the "Expiry Time"). Subject to subsection 7(b), the Offeror shall take up and
pay for the Subject Shares within 120 days of the Mailing Date.
(d) BCE will announce (the "Public Announcement") its intention to acquire
the Common Shares promptly following approval of this agreement by its Board of
Directors and approval of the Support Agreement by its Board of Directors and
the Company's Board of Directors, and will mail the Offer and accompanying
take-over bid circular as soon as reasonably practicable following the
distribution
<PAGE>
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to BCE's shareholders of most of its interest in Nortel Networks Corporation, as
announced on January 26, 2000 (the "Nortel Transaction") but, in any event, by
5:00 p.m. (Montreal time) on July 31, 2000, (such time on such date being
referred to herein as the "Latest Mailing Time"); provided, however, that if the
mailing of the Offer is delayed by (x) an injunction or order made by a court or
regulatory authority of competent jurisdiction or (y) the Offeror not having
obtained any regulatory waiver, consent or approval which is necessary to permit
the Offeror to mail the Offer or to take-up and pay for any Common Shares
tendered under the Offer, then, provided that such injunction or order is being
contested or appealed or such regulatory waiver, consent or approval is being
actively sought, as applicable, the Latest Mailing Time shall be extended for a
period ending on the earlier of November 30, 2000 and the fifth business day
following the date on which such injunction or order ceases to be in effect or
such waiver, consent or approval is obtained, as applicable. For greater
certainty, subject to subsection 3(a), the mailing of the Offer is not
conditional upon completion of the Nortel Transaction.
(e) Each Seller acknowledges and agrees that the Offeror may, in its sole
discretion, modify or waive any term or condition of the Offer; provided,
however, that the Offeror will not, without the prior consent of Kenny A. Troutt
on behalf of the Troutt Group, decrease the consideration per Common Share,
change the form of consideration payable under the Offer (other than to add
additional consideration), decrease the number of Common Shares sought under the
Offer, impose additional conditions to the Offer, or otherwise vary the Offer in
a manner which is adverse to the Shareholders, it being understood that any
modification or variation which adversely affects the tax consequences which
would apply to a Seller in respect of the Offer shall be deemed to adversely
affect Shareholders.
2. Agreement to Tender
This agreement when signed and delivered by each Seller to the Offeror will
constitute the agreement of each Seller, among other things, (i) to irrevocably
accept the Offer, (ii) validly to tender and cause to be tendered and to cause
all acts and things to be done to tender the Subject Shares (including
exercising all In-the-Money Options) beneficially owned by such Seller under the
Offer on the terms and conditions set out herein; and (iii) to surrender all
Options that are not In-the-Money Options in exchange for options to purchase
BCE Shares based on the Share Exchange Ratio and to enter into such agreements
as the Offeror may reasonably request to evidence same.
Each Seller agrees that if the Offeror makes the Offer on or prior to the
Termination Date (as defined in subsection 7(a)) containing no material
conditions other than the conditions set out in Schedule B, such Seller shall
forthwith thereafter and in any event not later than the close of business on
the fifth business day following the Mailing Date, deposit or cause to be
deposited all of the Subject Shares in accordance with the terms of the Offer,
and deposit or cause to be deposited any Common Shares acquired upon exercise of
options after the date hereof and prior to the Expiry Time of the Offer, and
thereafter such Seller shall not withdraw or permit such shares to be withdrawn
from the Offer. The Offeror will take up and pay for the Subject Shares
deposited under the Offer in accordance with the terms
<PAGE>
- 4 -
of the Offer within the periods required by law and upon the conditions of the
Offer having been satisfied or waived. Subject to subsection 7(b), if the
Subject Shares have not been taken up and paid for by the Offeror prior to the
close of business on the 120th day following the Mailing Date, then each Seller
may withdraw from the Offer the Subject Shares held by such Seller and, if such
Subject Shares are then withdrawn from the Offer, this agreement shall be
terminated in respect of such Seller and shall be of no further force or effect
in respect of such Seller, but this agreement shall continue in full force and
effect with respect to all the Sellers who do not withdraw their Subject Shares.
To the extent that any Seller shall not have complied with the preceding
two paragraphs (or, if applicable, the provisions of the following paragraph)
with respect to any Subject Shares, the Offeror shall have, in addition to any
other remedies it may have, the option to acquire all of such Subject Shares for
the Consideration for each Subject Share for which such option is exercised.
Such option may be exercised by the Offeror for a period of 90 days following
the Expiry Time.
For greater certainty, for the purposes of this agreement, the term
"Subject Shares" shall refer to all the Common Shares which the Sellers are
required to tender under the Offer pursuant to the terms of this agreement, as
well as all shares or other securities which the Subject Shares may be converted
into, exchanged for or otherwise changed into pursuant to any transaction
involving the Company prior to the acquisition of the Subject Shares by the
Offeror, and shall also include any and all distributions of cash, securities or
other property made on such shares on or after the date hereof, excluding
quarterly dividends paid by the Company in the ordinary course and consistent
with past practice.
3. Other Conditions to Making the Offer
The Offeror shall not be required to make the Offer unless:
(a) the Offeror shall have determined prior to March 14, 2000, acting
reasonably, that the Offer would not have an impact on the grant
of a favourable tax ruling with respect to the Nortel
Transaction;
(b) (i) the Company shall have entered into an agreement with the
Offeror on terms and conditions satisfactory to the Offeror
providing for the support of the Offer by the Company and its
Board of Directors, a prohibition on the solicitation of
competing proposals and the payment of customary break-up fees in
specified circumstances (the "Support Agreement") and (ii) the
Support Agreement shall not have been terminated;
(c) no circumstance, fact, change, event or occurrence caused by a
person other than BCE or any of its affiliates shall have
occurred that would render it impossible for one or more
conditions set out on Schedule B hereto to be satisfied; and
<PAGE>
- 5 -
(d) no cease trade order, injunction or other prohibition at law
shall exist against the Offeror making the Offer or taking up or
paying for any Common Shares to be deposited under the Offer.
The foregoing conditions are for the sole benefit of the Offeror and may be
waived by it in whole or in part in its sole discretion.
4. Covenants of the Sellers
(a) Each Seller agrees that, during the period commencing on the date
hereof and continuing until the earlier of (i) the Termination Date and (ii) the
Expiry Time:
(i) except to the extent permitted hereunder, it will not take
any act, directly or indirectly, which may in any way
adversely affect the success of the Offer or the purchase of
any Common Shares under the Offer, but, subject to section 9
or unless such a vote would be contrary to other provisions
of this agreement, otherwise may continue to vote its
Subject Shares as it sees fit;
(ii) it will immediately cease and cause to be terminated any
existing discussions with any parties (other than BCE) with
respect to any Acquisition Proposal (as defined below); and
(iii) it will not directly or indirectly, make, solicit, initiate
or encourage inquiries from or submission of proposals or
offers from any other person, corporation, partnership or
other business organization whatsoever (including any of its
officers or employees) relating to any liquidation,
dissolution, recapitalization, merger, amalgamation or
acquisition or purchase of all or a material portion of the
assets of, or any equity interest (including Common Shares)
in, the Company or any of its subsidiaries or other similar
transaction or business combination involving the Company or
any of its subsidiaries (any such proposal or offer, an
"Acquisition Proposal"), or participate in any discussions
or negotiations regarding, or furnish to any other person
any information with respect to, or otherwise cooperate in
any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any other person to do
or seek to do any of the foregoing;
provided, however, that the foregoing shall not prevent a Seller who is a member
of the Board of Directors of the Company (the "Board of Directors") from
responding in his capacity as a director to any bona fide written Acquisition
Proposal made by a third party to the Company or the Board of Directors after
the date hereof, providing information to such third party or taking any action
referred to in (i) above in his capacity as a director of the Company if, acting
in good faith and upon the advice of the legal and financial advisors
<PAGE>
- 6 -
of the Board of Directors where appropriate, the failure to do so would be
inconsistent with such Seller's fiduciary duties as a member of the Board of
Directors. For greater certainty, each such Seller acknowledges that the proviso
to this subsection 4(a) shall not affect such Seller's obligation to tender (and
not withdraw) the Subject Shares to the Offer pursuant to the terms and
conditions of this agreement.
If any Seller receives any Acquisition Proposal or any inquiry concerning
an Acquisition Proposal (including an offer or invitation to enter into
discussions), such Seller will promptly notify the Offeror in writing and
provide to the Offeror all relevant details relating thereto, including, without
limitation, the price proposed to be paid in connection with such Acquisition
Proposal and the form of consideration to be paid; provided, however, that no
Seller shall be required to disclose to the Offeror any such Acquisition
Proposal or any matter relating thereto if such Acquisition Proposal was made to
the Company or its Board of Directors and such Seller was informed of such
Acquisition Proposal in his or her capacity as a member of the Board of
Directors and, acting in good faith and upon the advice of the legal and
financial advisors of the Board of Directors where appropriate, disclosure
thereof by such Seller to the Offeror would be inconsistent with such Seller's
fiduciary duties as a member of the Board of Directors.
(b) Each Seller agrees that during the period commencing on the date hereof
and continuing until the earlier of (i) the Termination Date and (ii) the Expiry
Time:
(i) it will use its reasonable best efforts in its capacity as a
shareholder, and, if applicable, as a director subject to
his fiduciary duties, to ensure that the business and
affairs of the Company and its subsidiaries are operated in
the ordinary course in substantially the same manner as
conducted prior to the date hereof; and
(ii) it shall not sell, transfer or encumber in any way any
Subject Shares or Options owned by it or relinquish or
modify its right to vote any Subject Shares or any other
securities of the Company.
(c) Each Seller agrees that, except as required by applicable law, such
Seller will not prior to the public announcement by the Offeror of the terms of
the Offer, directly or indirectly, disclose to any person, firm or corporation
the existence of the terms and conditions of this agreement, or the possibility
of the Offer being made or any terms or conditions or other information
concerning any possible offer to be made for the Common Shares.
(d) Each Seller covenants and agrees to use their reasonable best efforts
to cause Jean C. Monty to be appointed as Chairman of the Board of Directors and
to have Paolo Guidi and Christina Gold appointed as co-Chief Executive Officers
of the Company upon Charles Sirois' resignation.
(e) Kenny A. Troutt agrees that from and after the date hereof to and
including February 15, 2002, he shall be available to participate in a minimum
of 20 presentations per year regarding the
<PAGE>
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Company's business with management of Teleglobe or its subsidiaries, to
potential and existing external independent representatives, which services
shall be provided in accordance with the consulting agreement (the "Troutt
Consulting Agreement") dated September 14, 1999 between Kenny A. Troutt and the
Company and certain of its subsidiaries. The Offeror hereby acknowledges and
agrees that it is the intention of the parties that the Troutt Consulting
Agreement shall continue in full force and effect after the date hereof.
(f) Upon the purchase by the Offeror of the Subject Shares, the Troutt
Group acknowledges that BCE shall be entitled to designate all members of the
Board of Directors currently designated as Excel Directors (as defined in the
articles of the Company), and any committees thereof and the Troutt Group shall,
upon request by BCE, but subject to applicable law, promptly use their best
efforts to (i) expand the Board of Directors, (ii) secure the resignations of
such number of directors, (iii) cause the Excel Directors to nominate as
directors of the Company and/or (iv) take all other action (including voting as
directors of the Company), in each case as is necessary to enable BCE's
designees to be elected or appointed to the Board of Directors and to cause
BCE's designees to be so elected or appointed.
(g) (i) Each Seller agrees to execute and jointly file with the Offeror, an
election pursuant to section 85 of the Income Tax Act (Canada) (the "Canadian
Income Tax Act") in which election such Seller will elect the cost amount of the
Subject Shares which shall be such Seller's proceeds of disposition and the
Offeror's cost of the Common Shares exchanged for BCE Shares, provided such
amount is within the limits prescribed by section 85 of the Canadian Income Tax
Act. Such Seller shall provide the Offeror with the completed election form no
later than January 15, 2001. The Offeror will execute any completed election
form received and file the form with the appropriate tax authority.
(ii) BCE agrees to indemnify and save harmless the Troutt Group from any
losses, damages, liabilities, costs, expenses, taxes, interest and penalties
(including, without limitation, reasonable legal and other professional fees and
disbursements) ("Losses") resulting from the Troutt Group's agreement to file an
election under section 85 of the Tax Act pursuant to this subsection 4(g).
(iii) In the event that any member of the Troutt Group (an "Indemnified
Party") shall become aware of any claim, proceeding or other matter (a "Claim")
in respect of which BCE agreed to indemnify the Indemnified Party pursuant to
this agreement, the Indemnified Party shall promptly give written notice thereof
to BCE. Such notice shall specify with reasonable particularity (to the extent
that the information is available) the factual basis for the Claim and the
amount of the Claim, if known. If, through the fault of the Indemnified Party,
BCE does not receive notice of any Claim in time to contest effectively the
determination of any liability susceptible of being contested, BCE shall be
entitled to set off against the amount claimed by the Indemnified Party the
amount of any Losses incurred by BCE resulting directly from the Indemnified
Party's failure to give such notice on a timely basis.
<PAGE>
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(iv) Following receipt of notice from the Indemnified Party of the
Claim, BCE shall have 60 days to make such investigation of the Claim as is
considered necessary or desirable. For the purpose of such investigation, the
Indemnified Party shall make available to BCE the information relied upon by the
Indemnified Party to substantiate the Claim, together with all such other
information as BCE may reasonably request. If both parties agree at or prior to
the expiration of such 60-day period (or any mutually agreed upon extension
thereof) to the validity and amount of such Claim, BCE shall immediately pay to
the Indemnified Party the full agreed upon amount of the Claim.
(v) BCE shall pay to the Indemnified Party all amounts for which BCE is
liable pursuant to this subsection 4(g) promptly after the Indemnified Party
incurs the Loss in respect of which such liability arises.
5. Representations and Warranties of Each Seller
Each Seller by its acceptance hereof represents and warrants as follows and
acknowledges that the Offeror is relying upon such representations and
warranties in connection with entering into this agreement and the purchase by
the Offeror of the Subject Shares:
(a) such Seller is the beneficial owner of the Subject Shares and Options
listed on Schedule A thereto beside such Seller's name and such Seller
is the registered owner of such Subject Shares and Options (or the
nominee of such Seller identified in Schedule A) or will become the
registered owner of such Subject Shares not later than the time at
which they are tendered to the Offer;
(b) except as disclosed in writing to BCE, (i) such Seller has the sole
right to sell and vote (to the extent permitted by the attributes of
such shares or pursuant to applicable law, regulation or policy) all
the Subject Shares held by such Seller and (ii) all the Subject Shares
and Options held by such Seller are now, and at the time at which the
Offeror takes up and pays for the Subject Shares will be, beneficially
owned by such Seller with a good and marketable title thereto, free
and clear of any and all mortgages, liens, charges, restrictions,
security interests, adverse claims, pledges, encumbrances and demands
of any nature or kind whatsoever (collectively, "Encumbrances") and
are and will be issued and outstanding as fully paid and
non-assessable shares in the capital of the Company. To the extent
that any Subject Shares are subject to Encumbrances, the Seller is not
in breach of any covenant, term or condition of any agreement or
instrument pursuant to which such Encumbrance was created or granted;
(c) except as disclosed in writing to BCE, no person, firm or corporation
has any agreement or option, or any right or privilege (whether by
law, pre-emptive or contractual) capable of becoming an agreement or
option, for the purchase, acquisition or transfer from such
<PAGE>
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Seller of any of the Subject Shares or Options owned by such Seller or
any interest therein or right thereto, except the Offeror pursuant
hereto;
(d) except as disclosed in writing to BCE, none of the execution and
delivery by such Seller of this agreement or the completion of the
transactions contemplated hereby or the compliance by such Seller with
such Seller's obligations hereunder will result in a breach of: (i) if
such Seller is a corporation, the constating documents of such Seller;
or (ii) any agreement or instrument to which such Seller is a party or
by which such Seller or any of such Seller's property or assets are
bound;
(e) if a corporation, such Seller is a validly subsisting corporation and
has all necessary corporate power and authority to execute and deliver
the agreement resulting from its acceptance hereof and to perform its
obligations hereunder;
(f) this agreement has been duly executed and delivered by such Seller and
constitutes a valid and binding obligation of such Seller enforceable
against such Seller in accordance with its terms, except as may be
limited by bankruptcy, insolvency and other laws affecting the
enforcement of creditors' rights generally and subject to the
qualification that equitable remedies may only be granted in the
discretion of a court of competent jurisdiction;
(g) (i) the only securities of the Company beneficially owned, directly or
indirectly, by such Seller are the Subject Shares and Options listed
on Schedule A hereto beside such Seller's name, (ii) except for the
Options listed on Schedule A hereto, such Seller has no agreement or
option, or right or privilege (whether by law, pre-emptive or
contractual) capable of becoming an agreement or option, for the
purchase or acquisition by such Seller or transfer to such Seller of
additional securities of the Company and (iii) such Seller will not
purchase other than as permitted hereunder or obtain any agreement or
right to purchase any additional securities of the Company from and
including the date hereof up to and including the time at which the
Offeror takes up and pays for the Subject Shares;
(h) such Seller has no claim against the Company or any of its
subsidiaries at the date of this agreement and will not have any claim
against the Company or any of its subsidiaries by reason of the
entering into of this agreement, the completion of the Offer or the
completion of the Alternative Transactions; provided however that the
foregoing shall not prejudice the rights of such Seller under this
agreement, the Offer, the Alternative Transactions, the Troutt
Consulting Agreement or the termination agreement and general release
dated as of September 14, 1999 between Kenny A. Troutt and the Company
and certain of its subsidiaries, and true and complete copies of the
Troutt Consulting Agreement have been provided to BCE prior to the
date hereof;
<PAGE>
- 10 -
(i) (i) such Seller has full knowledge of and access to information
concerning the Company and its securities such that the underlying
value of the Company was a material factor considered by such Seller
in entering into this agreement, (ii) in agreeing to the price to be
paid pursuant to the Offer, there are no non-financial factors or
factors peculiar to such Seller which have been considered relevant to
such Seller in assessing such price or that had the effect of reducing
the price that would otherwise have been considered acceptable to such
Seller and (iii) such Seller had no knowledge of any material
non-public information in respect of the Company or the Common Shares
which was not disclosed generally and that, if disclosed, could
reasonably have been expected to affect the consideration payable
under this agreement; and
(j) except for Lehman Brothers and RBC Dominion Securities Inc., no
broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission, or to the reimbursement of any of
its expenses, in connection with the Offer or any similar transaction
based upon arrangements made by or on behalf of the Seller.
6. Representations, Warranties and Covenants of BCE
(a) BCE represents and warrants as follows and acknowledges that each
Seller is relying upon such representations and warranties in connection with
the sale to the Offeror of the Subject Shares:
(i) BCE is a validly subsisting corporation incorporated under the laws of
Canada and, subject to approval of this agreement and the Offer by its
Board of Directors, has all necessary corporate power and authority to
execute and deliver this agreement and to purchase the Subject Shares
and to perform its obligations hereunder;
(ii) this agreement has been duly executed and delivered by and on behalf
of BCE and constitutes a valid and binding obligation of BCE
enforceable against BCE in accordance with its terms, except as may be
limited by bankruptcy, insolvency and other laws affecting the
enforcement of creditors' rights generally and subject to the
qualification that equitable remedies may only be granted in the
discretion of a court of competent jurisdiction;
(iii) documents or information filed by BCE under applicable securities
laws since and including January 1, 1999 to and including the date
hereof, including the annual report to shareholders and annual
information form of BCE, in each case, for the fiscal year ended
December 31, 1998, (collectively, the "BCE Public Documents"), did
not, as of their respective dates, contain any untrue statement of a
material fact relating to BCE and its subsidiaries and their
respective businesses
<PAGE>
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or omit to state a material fact required to be stated therein or
necessary to make the statements relating to BCE and its subsidiaries
and their respective businesses therein, in light of the circumstances
under which they were made, not misleading; and
(iv) except as disclosed in the BCE Public Documents, since January 1, 1999
to and including the date hereof: (a) BCE and its subsidiaries have
conducted their respective businesses only in the usual, ordinary and
regular course and consistent with past practice; (b) no liability or
obligation of any nature (whether absolute, accrued, contingent or
otherwise) which has had or is reasonably likely to have a material
adverse effect on the business, operations (including results of
operations), assets, properties or condition (financial or otherwise)
of BCE and its subsidiaries taken as a whole (a "BCE Material Adverse
Effect"), has been incurred; and (c) there has not been any event
which has had or is reasonably likely to have a BCE Material Adverse
Effect.
(b) BCE covenants and agrees that it will, as soon as reasonably
practicable following the entering into of the Support Agreement with the
Company, actively and diligently pursue all regulatory and other approvals and
consents necessary to consummate the Offer and, in conjunction with the Company,
to use reasonable commercial efforts to make as soon as reasonably practicable
following the date hereof all necessary registrations and filings to obtain
same.
7. Termination Date; Extensions
(a) Subject to Section 9 hereof, if the Offer has not been made by the
Offeror on or before the date contemplated by section 1(d) hereof (the
"Termination Date"), this agreement shall terminate without further obligation
of the parties hereunder; provided, however, that any such termination shall not
prejudice the rights of a party as a result of a breach by any other party of
its obligations hereunder.
(b) Notwithstanding any other provision of this agreement, if any action to
be taken hereunder (including the taking up of Common Shares under the Offer) is
delayed by reason of (i) an injunction or order made by a court or regulatory
authority of competent jurisdiction or (ii) any regulatory waiver, consent or
approval which is necessary to the taking of such action not having been
obtained, then provided that such injunction or order is being contested or
appealed or such regulatory waiver, consent or approval is being actively
sought, as applicable, the time stipulated herein for the taking of such action
shall be automatically extended for a period ending on the earlier of (i) May
31, 2001 and (ii) the fifth business day following the date on which such
injunction or order ceases to be in effect or such waiver, consent or approval
is obtained, as applicable.
<PAGE>
- 12 -
8. Further Assurances
Subject to the terms and conditions herein, each of the Sellers and BCE
agrees to use commercially reasonable efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations, to consummate the transactions
contemplated by this agreement and the Offer, including using commercially
reasonable efforts (i) to obtain all necessary consents, approvals and
authorizations as are required to be obtained under any federal, provincial or
foreign law or regulations with respect to this agreement or the Offer; (ii) to
lift or rescind any injunction or restraining order or other order adversely
affecting the parties' ability to consummate the transactions contemplated
hereby or by the Offer; and (iii) to fulfill all conditions and satisfy all
provisions of this agreement and the Offer.
9. Change in Nature of Transaction
(a) The Offeror and the Sellers have determined that it is necessary and
desirable to proceed with alternative forms of transactions (the "Alternative
Transactions") whereby the Offeror (or an affiliate of the Offeror) is
effectively to acquire Common Shares on economic terms which, in relation to the
holders of Common Shares, are at least equivalent to the Offer (including from a
tax perspective). The description of the steps of the Alternative Transactions
and related matters are set out in Schedule C attached hereto. Each Seller
agrees to support the completion of the Alternative Transactions as specified in
Schedule C.
(b) In the event of any proposed Alternative Transaction, the references in
this agreement to the Offer shall be deemed to refer to such Alternative
Transaction and all terms, covenants, representations and warranties of this
agreement shall be and shall be deemed to have been made in the context of such
Alternative Transaction, mutatis mutandis.
10. General
(a) The Offeror acknowledges and agrees that the covenants, representations
and warranties of each Seller made in this agreement are made by such Seller
solely in such Seller's capacity as a holder of Subject Shares and Options, and
not, to the extent applicable, in such Seller's capacity as an officer, director
or employee of the Company unless otherwise expressly provided for.
(b) Each Seller hereby agrees that it shall be jointly and severally liable
to the Offeror for the non-performance or breach by the other Sellers of the
covenants, representations and warranties of the other Sellers provided
hereunder. For greater certainty, the failure of any Seller to comply with such
Seller's obligations hereunder, or the inaccuracy of any representation or
warranty made by any Seller, shall not in any way relieve any other Seller who
is in compliance with such Seller's obligations hereunder.
<PAGE>
- 13 -
(c) The agreement contemplated by acceptance of this letter shall become
effective in respect of each Seller upon its execution and delivery by such
Seller.
(d) All notices, requests, demands and other communications hereunder shall
be in writing and shall be delivered in person or transmitted by telecopy or
similar means of recorded electronic communication to, in the case of any
Seller, the address and/or facsimile of the Seller as shown on Schedule A, and,
in the case of the Offeror, Bureau 3700, 1000, rue de la Gauchetiere Ouest,
Montreal, Quebec H3B 4Y7, Attention: Chief Legal Officer, Facsimile: (514)
870-4877 (with a facsimile copy to Davies, Ward & Beck, Attention: J-P.
Bisnaire, Facsimile: (416) 863-0871) or such other address as may be designated
in writing hereafter, in the same manner, by such person. Any such notice or
other communication shall be deemed to have been given and received on the day
on which it was delivered or transmitted (or, if such day is not a business day,
on the next following business day) provided that it is delivered or transmitted
during normal business hours, failing which it shall be deemed to have been
given and received on the next business day.
(e) This agreement sets forth the entire agreement and understanding of the
parties hereto in respect of the transactions contemplated hereby. There are no
warranties, representations, terms, conditions or collateral agreements,
expressed, implied or statutory, between the Sellers and the Offeror other than
as expressly set forth in this agreement. This agreement and the rights
hereunder are not transferable or assignable by any Seller or the Offeror
without the prior written consent of the other except that the Offeror may
assign its rights and obligations under this agreement to any of its affiliates,
but no such assignment shall relieve the Offeror of its obligations hereunder.
(f) The representations and warranties set forth in this agreement shall
survive the purchase of the Subject Shares and, notwithstanding such purchase,
shall continue in full force and effect for the benefit of the party to whom
such representations and warranties are given.
(g) If any provision of this agreement is determined to be void or
unenforceable, in whole or in part, it shall be severable from all other
provisions hereof and shall be deemed not to affect or impair the validity of
any other provision hereof and each such provision is deemed to be separate and
distinct.
(h) This agreement and the rights and obligations of the parties hereto
shall be governed by and construed in accordance with the laws of the Province
of Quebec and the parties irrevocably attorn to the exclusive jurisdiction of
the courts of the Province of Quebec.
(i) Time shall be of the essence of this agreement.
(j) This agreement may be executed by facsimile and in counterparts, each
of which shall be deemed to be an original but all of which together shall
constitute one and the same agreement.
<PAGE>
- 14 -
(k) Each party hereto shall pay the fees, costs and expenses of their
respective financial, legal, auditing and other professional and other advisors
incurred in connection with the preparation, execution and delivery of this
agreement and all documents and instruments executed or prepared pursuant hereto
and any other costs and expenses whatsoever and howsoever incurred and shall
indemnify the other parties from and against any and all claims for "finders" or
"agency" fees relating to the transactions contemplated hereby.
(l) The parties hereto have expressly requested that this agreement and the
schedules thereto be drafted in the English language. Les parties a la presente
ont expressement demande que cette entente ainsi que les cedules s'y rattachant
soient redigees dans la langue anglaise.
----------
If the foregoing accurately reflects the terms and conditions of our
agreement, would you kindly indicate your acceptance hereof by signing, dating
and returning to BCE the enclosed duplicate original of this agreement by
facsimile or otherwise by no later than 5:00 p.m. (Montreal time) on February
15, 2000, failing which this offer shall be null and void.
BCE INC.
by_____________________________
Irrevocably accepted and agreed to this 15th day of February, 2000.
WITNESS: )
)
)
) ------------------------------------
) KENNY A. TROUTT
)
)
) ------------------------------------
) TROUTT FAMILY TRUST,
) by its sole trustee, Kenny A. Troutt
)
)
<PAGE>
) ------------------------------------
) LISA E. TROUTT CHILDREN'S TRUST,
) KENNY A. TROUTT CHILDREN'S
) TRUST and KAT CHILDREN'S TRUST II,
) by their sole trustee, Steven Troutt
)
)
KENNY TROUTT INVESTMENT
PARTNERSHIP, LTD., by its general
partner TROUTT ENTERPRISES LLC
by __________________________________
Name:
Title:
<PAGE>
SCHEDULE A
Name of Seller Number of Number of Common
- -------------- Common Shares Shares under Option
------------- -------------------
1. Kenny A. Troutt, 13,559,693 175,000
in his personal capacity
2. Troutt Family Trust 21,802,531 Nil
- Separate Trust Estate of
Kenny A. Troutt
3. Troutt Family Trust 6,154,448 Nil
- Community Property
4. Kenny Troutt Investment 3,500,000 Nil
Partnership, Ltd.
5. Lisa E. Troutt Children's 72,421 Nil
Trust
6. Kenny A. Troutt 72,421 Nil
Children's Trust
7. KAT Children's Trust II 640,283 Nil
All at the following address:
10595 Strait Lane
Dallas, Texas
75229
The persons identified above are collectively referred to as the "Troutt Group".
<PAGE>
SCHEDULE B
CONDITIONS OF THE OFFER
Notwithstanding any other provision of the agreement to which this schedule
is attached, the Offeror shall have the right to withdraw the Offer and not take
up and pay for any Common Shares deposited under the Offer unless all of the
following conditions are satisfied or waived by the Offeror at or prior to the
Expiry Time:
(a) all requisite regulatory approvals, reviews or decisions (including,
without limitation, those of any stock exchanges or securities or
other regulatory authorities) to the consummation of the Offer shall
have been obtained or concluded on terms satisfactory to the Offeror,
acting reasonably;
(b) (i) no act, action, suit or proceeding shall have been threatened or
taken before or by any domestic or foreign court or tribunal or
governmental agency or other regulatory authority or administrative
agency or commission or by any elected or appointed public official or
private person (including, without limitation, any individual,
corporation, firm, group or other entity) in Canada or elsewhere,
whether or not having the force of law, and (ii) no law, regulation or
policy shall have been proposed, enacted, promulgated or applied:
(A) to cease trade, enjoin, prohibit or impose material limitations
or conditions on the purchase by or the sale to the Offeror of
the Common Shares or any of them or the right of the Offeror to
own or exercise full rights of ownership of the Common Shares or
any of them; or
(B) which, if the Offer were consummated, (x) would require the
Company or any of its subsidiaries to dispose of a material
asset, impose material limitations or conditions on the business
or operations of the Company and its subsidiaries, or impose
material fines or penalties on the Company or any of its
subsidiaries and (y) such disposition, limitations, fines or
penalties would reasonably be expected to have a Company Material
Adverse Effect or a BCE Material Adverse Effect;
(c) either (i) the Commissioner under the Competition Act (Canada) shall
have issued an advance ruling certificate ("ARC") under section 102 of
the Competition Act in respect of the Offer and shall not have
subsequently withdrawn or purported to have withdrawn such ARC prior
to the Offeror's acquisition of Common Shares pursuant to the Offer or
have stated or otherwise indicated that he has obtained new
information as a result of which he is no longer satisfied that he
would not have sufficient grounds on which to apply to the Competition
Tribunal under section 92 of the Competition Act with respect to the
Offers; or (ii) the applicable waiting period under section 123 of the
Competition Act shall have expired, and the Competition Commissioner
or his authorized representative shall have
<PAGE>
- 2 -
advised the Offeror (on terms and in a form satisfactory to the
Offeror) that the Commissioner does not intend to make an application
under section 92 of the Competition Act in respect of the Offer and
neither the Commissioner nor any of his representatives shall have
rescinded or amended such advice;
(d) any applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, and under any other applicable foreign
competition laws, shall have expired;
(e) there shall not exist any prohibition at law against the Offeror
making the Offer or taking up and paying for any Common Shares
deposited under the Offer;
(f) there shall not exist and shall not have occurred (or, if there does
exist or shall have previously occurred, there shall not have been
disclosed, generally or to the Offeror in writing) any change that has
a Company Material Adverse Effect (as such term is defined in the
Support Agreement) which results, directly or indirectly, from:
(i) any act or action taken or not taken by the Company at or prior
to the entering into of the Support Agreement; or
(ii) any act or action taken or not taken by the Company which has
been approved by the Board of Directors in circumstances where
the BCE nominees to the Board of Directors have voted against;
(g) the Offeror shall not have become aware of any untrue statement of a
material fact in the Company Public Documents (as such term is defined
in the Support Agreement), or an omission to state a material fact
that is required to be stated or that is necessary to make a statement
not misleading therein the light of the circumstances in which it was
made, in either case that is adverse to the Company; and
(h) (i) the Company shall not have breached in any material respect any of
its covenants contained in the Support Agreement (other than a breach
resulting from any act or action (or act or action not taken) that has
been approved by the Chairman of the Board) and (ii) the
representations and/or warranties of the Company contained in the
Support Agreement shall have been, as at the date made, true and
correct or, if not already qualified by a materiality concept, true
and correct in all material respects.
The foregoing conditions are for the exclusive benefit of the Offeror and
may be asserted by the Offeror at any time, regardless of the circumstances
giving rise to such assertion, including any action or inaction by the Offeror.
The Offeror may waive any of the foregoing conditions in whole or in part at any
time and from time to time, both before and after the Expiry Time, without
prejudice to any other rights which the Offeror may have. The failure by the
Offeror at any time to exercise any of the foregoing rights
<PAGE>
- 3 -
will not be deemed a waiver of any such right and each such right will be deemed
an ongoing right which may be asserted at any time and from time to time. Any
determination by the Offeror concerning the events described in the conditions
to the Offer will be final and binding upon all parties.
<PAGE>
SCHEDULE C
ALTERNATIVE TRANSACTION/ALTERNATIVE OFFER
Plan of Arrangement
The Offeror acknowledges and agrees that it is the intention of the parties
that the acquisition of Common Shares by the Offeror (the "Acquisition") be
effected in a manner that permits both Canadian and United States Shareholders
to dispose of their Common Shares on a tax-deferred rollover basis (a "Tax
Deferred Basis"). In order to achieve the foregoing objective, it is proposed
that the Acquisition be effected pursuant to a Plan of Arrangement (the "Plan of
Arrangement") under section 192 of the Canada Business Corporations Act ("CBCA")
in a manner to permit Shareholders to obtain a rollover for Canadian income tax
purposes under section 85.1, or, where the Shareholder elects, under section 85,
of the Canadian Income Tax Act and any applicable provincial tax legislation
(collectively, "Canadian Income Tax Legislation") and to permit Shareholders to
obtain a tax-free rollover for United States tax purposes pursuant to section
368(a)(1)(B) of the United States Internal Revenue Code (a "B Reorganization").
The Offeror and the Troutt Group agree to cooperate to consummate the Plan of
Arrangement pursuant to a B Reorganization for United States tax purposes.
Proposed Steps
Pursuant to the Plan of Arrangement, the following steps would be
undertaken:
1. The common shares of the Company would be reorganized whereby Bell Canada
would exchange a portion of its common shares for a new class of fully
participating subordinate voting shares ("Subordinate Voting Shares")
representing a 3.5% equity interest carrying a one-tenth vote per share so
that Bell Canada and all other affiliates of BCE, together with the Third
Series Preferred Shares, hold less than 20% of the voting power attaching
to shares of the Company.
2. The Third Series Preferred Shares would be amended to add a one-tenth vote
per share.
3. All outstanding Common Shares (other than common shares and Subordinate
Voting Shares owned by Bell Canada) would be exchanged for BCE Shares at
the Share Exchange Ratio.
4. The Holdco Election would only be available to Canadian Shareholders of the
Company if the making of the Holdco Election by any such Shareholders would
not adversely impact the tax consequences to United States Shareholders or
to the Offeror (other than in respect of the effect on the Offeror of the
difference in tax treatment in respect of section 85 or section 85.1 of the
Canadian Income Tax Act and other Canadian Income Tax Legislation) under
the Plan of Arrangement.
<PAGE>
- 2 -
5. The BCE Shares will be issued to United States Shareholders pursuant to the
provisions of section 3(a)(10) of the United States Securities Act of 1933,
as amended.
Shareholder Votes
1. A special meeting (the "Special Meeting") of the holders of common shares
and Third Series Preferred Shares would be held to vote on the Plan of
Arrangement. Subject to the terms and conditions of this agreement, each
Seller agrees (i) to vote in favour of the Plan of Arrangement, (ii)
deliver to the Offeror no later than ten days prior to the date of the
meeting a duly executed proxy, which proxy shall be irrevocable, in favour
of the Offeror voting in favour of the Alternative Transaction, and (iii)
not to exercise any rights of dissent provided under section 190 of the
CBCA in connection with the Plan of Arrangement.
2. The Interim Order obtained from the Court would provide that in order for
the Plan of Arrangement to proceed, the Plan of Arrangement must (i) be
approved by two-thirds of the votes cast by the holders of common shares
present or represented by proxy at the Special Meeting, including Common
Shares held by BCE and its affiliates, and (ii) receive minority approval
as required by relevant Canadian securities rules or policies, which would
exclude, among others, votes cast by BCE and its affiliates.
3. The Interim Order would provide only that a vote of the Third Series
Preferred Shares be held at the Special Meeting, not that the Plan of
Arrangement must be approved by the Third Series Preferred Shares.
Court Approval
o The Plan of Arrangement would be implemented following the grant
by the Court of a Final Order under section 192 of the CBCA.
o Assuming the Plan of Arrangement is approved by the requisite votes of
the common shares (including minority approval), but the Plan of
Arrangement does not receive a favourable vote of the holders of the
Third Series Preferred Shares, the Court would be asked in the Final
Order to approve all steps of the Plan of Arrangement in any event.
Alternative Offer
(a) In the event that (i) the Troutt Group determines, acting in good faith
and based on third party tax advice, that the Plan of Arrangement may not be
effected on a Tax Deferred Basis for United States income tax purposes, (ii) the
Sirois Group determines, acting in good faith and based on third party tax
advice, that the Plan of Arrangement may not be effected on a Tax Deferred Basis
for Canadian income tax purposes, or (iii) the Plan of Arrangement is not
approved by the requisite votes of the common shares
<PAGE>
- 3 -
or the Court does not grant the Final Order, the Acquisition would then be made
by way of an offer (the"Alternative Offer") made by BCE and/or a direct or
indirect wholly-owned subsidiary of BCE (collectively, the "Offeror") to the
holders of any and all of the outstanding Common Shares to acquire all of the
outstanding Common Shares on the basis of, for each Common Share, that portion
(the "Alternative Share Exchange Ratio") determined as follows:
(i) in the event the closing of the Nortel Transaction occurs prior to the
First Take-Up Date, Cdn.$0.25 plus that portion of a BCE Share
(expressed to three decimal places with amounts less than 0.0005 being
rounded down and amounts equal to or greater than 0.0005 being rounded
up, in each case to the nearest one-thousandth of a BCE Share) as is
equal to the ratio obtained by dividing (A) Cdn.$48.16 (being
Cdn.$48.41 less Cdn.$0.25) by (B) the BCE Weighted Average Trading
Price; and
(ii) in the event the closing of the Nortel Transaction has not been
completed or is terminated prior to the First Take-Up Date, Cdn.$0.25
plus 0.299 of a BCE Share per Common Share.
(b) The Alternative Share Exchange Ratio specified in paragraph (a)(i)
above shall be subject to a minimum of 0.85 of a BCE Share per Common Share and
a maximum of 0.97 of a BCE Share per Common Share.
(c) Shareholders may elect to receive cash in lieu of BCE Shares for up to
20% of their consideration for all or part of their Common Shares based upon the
BCE Weighted Average Trading Price.
(d) The Offeror agrees to execute and jointly file with each Shareholder
who so requests an election pursuant to section 85 of the Canadian Income Tax
Act and Canadian Income Tax Legislation in which election such Shareholder will
be entitled to elect the amount which shall be such Shareholder's proceeds of
disposition and the Offeror's cost of the Common Shares exchanged for BCE
Shares, provided such amount is within the limits prescribed by Canadian Income
Tax Legislation and provided that such Shareholder shall be responsible for
preparing the appropriate tax election form and providing the Offeror with a
letter representing to the Offeror that such Shareholder either (i) is a
resident of Canada for purposes of the Canadian Income Tax Legislation and is
not exempt from tax or (ii) is a non-resident of Canada, the Common Shares are
taxable Canadian property to such Shareholder and the Shareholder is not exempt
from Canadian tax on any gain such Shareholder would realize on a disposition of
the Common Shares. Such Shareholder shall provide the Offeror with the completed
election form no later than January 15, 2001. The Offeror will execute any
completed election form received and return such form by mail to the Shareholder
within 30 days of receipt thereof. The Shareholder shall be solely responsible
for filing the form with the appropriate tax authority.
<PAGE>
- 4 -
(e) The Alternative Offer would be made within 15 days following the
earliest of (i) the date of the Special Meeting, if the holders of common shares
fail to approve the Plan of Arrangement, (ii) the date of the court hearing on
the Final Order, if the Final Order approving the Plan of Arrangement is not
obtained or (iii) a determination referred to in paragraph (a) being made by the
Sellers.
(f) The Alternative Offer would not be subject to a minimum tender
condition.
(g) The Alternative Offer would contain the conditions contemplated by
Schedule B and otherwise be in conformity, mutatis mutandis, with the provisions
of this agreement.
(h) For certainty, Shareholders would be entitled to make the Holdco
Election under the Alternative Offer and the Offeror agrees to execute and file
the tax election contemplated by paragraph (d) above in respect of any such
Holdco Election.
EXHIBIT 2B-2
BCE INC.
Bureau 3700
1000, rue de la Gauchetiere Ouest
Montreal, Quebec
H3B 4Y7
February 15, 2000
TELEGLOBE INC.
TO: THE PERSONS LISTED ON SCHEDULE A HERETO
Dear Sirs/Mesdames:
This letter sets out the terms and conditions upon which BCE Inc. ("BCE"
or the "Offeror") has agreed to make a public offer as described below to
acquire all the common shares in the capital of Teleglobe Inc. (the "Company")
not already owned by it or its affiliates (the "Common Shares").
This letter also sets out the terms and conditions of the agreements of
each member of the Sirois Group (as such term is defined in Schedule A)
(collectively, the "Sellers") (i) to support the Offer as described below, (ii)
to exercise all options (collectively, "Options") which such Seller may have to
acquire Common Shares and which are listed on Schedule A beside such Seller's
name and that are vested and in-the-money at the Expiry Time (as defined
herein) ("In-the-Money Options"), (iii) to deposit under the Offer or cause to
be deposited under the Offer all the Common Shares listed on Schedule A beside
such Seller's name and all Common Shares issuable on the exercise of all
In-the-Money Options, and (iv) to surrender all Options that are not
In-the-Money Options in exchange for options to purchase BCE Shares which vest
on the same terms as the surrendered options and with the number of BCE Shares
into which such options are exercisable being based on the Share Exchange
Ratio. The Common Shares listed on Schedule A and the Common Shares issuable
pursuant to In-the-Money Options listed on Schedule A are hereinafter
collectively referred to as the "Subject Shares". The Sirois Group acknowledges
that the Offeror has also entered into a similar agreement with Kenny A. Troutt
and related parties (the "Troutt Group") and other agreements with the Troutt
Group concerning matters related to the acquisition by the Company of Excel
Communications in November 1998, copies of which have been provided to Charles
Sirois on behalf of the Sirois Group.
BCE has also entered into a support agreement (the "Support Agreement")
with the Company which, among other things, sets forth the terms and conditions
upon which the Company has agreed to support the Offer. A copy of the Support
Agreement has been provided to Charles Sirois on behalf of the Sirois Group.
<PAGE>
- 2 -
1. Offer for Securities of the Company
(a) The Offeror agrees to make, subject to the terms and conditions
hereof, a public offer for all of the outstanding Common Shares (the "Offer").
The Offer will be made to the holders of all the issued and outstanding Common
Shares on the basis of (the "Consideration"), for each Common Share, that
portion (the "Share Exchange Ratio") of a common share in the capital of BCE (a
"BCE Share") determined as follows:
(i) in the event the closing of the Nortel Transaction (as hereinafter
defined) occurs prior to the First Take-Up Date (as hereinafter
defined), the ratio (expressed to three decimal places with amounts
less than 0.0005 being rounded down and amounts equal to or greater
than 0.0005 being rounded up, in each case to the nearest
one-thousandth of a BCE Share) obtained by dividing (A) Cdn.$48.41 by
(B) the weighted average trading price of the BCE Shares on The
Toronto Stock Exchange (the "TSE") for the ten trading days ending on
the fifth business day immediately preceding the day on which BCE
first takes up Common Shares under the Offer (the "First Take-Up
Date"), such weighted average trading price being referred to as the
"BCE Weighted Average Trading Price"; and
(ii) in the event the closing of the Nortel Transaction (as hereinafter
defined) has not been completed or is terminated prior to the First
Take-Up Date, 0.30 of a BCE Share per Common Share.
(b) The Share Exchange Ratio specified in paragraph (a)(i) above shall be
subject to a minimum of 0.85 of a BCE Share per Common Share and a maximum of
0.97 of a BCE Share per Common Share. The Offer shall be subject only to the
conditions set forth on Schedule B hereto.
(c) The Offer will be made in accordance with applicable securities
legislation in Canada, the United States and other jurisdictions where
registered shareholders ("Shareholders") of the Company are located and shall
be open for acceptance until a time that is not earlier than 12:01 a.m. (local
time) on the 21st business day after the day (the "Mailing Date") that the
Offer is mailed to Shareholders or such later time and date as may be required
by applicable law, subject to the right of the Offeror in its sole discretion
to extend the period during which Common Shares may be deposited under the
Offer (the time at which the Offer, as it may be extended, expires being
referred to as the "Expiry Time"). Subject to subsection 7(b), the Offeror
shall take up and pay for the Subject Shares within 120 days of the Mailing
Date.
(d) BCE will announce (the "Public Announcement") its intention to acquire
the Common Shares promptly following approval of this agreement by its Board of
Directors and approval of the Support Agreement by its Board of Directors and
the Company's Board of Directors, and will mail the
<PAGE>
- 3 -
Offer and accompanying take-over bid circular as soon as reasonably practicable
following the distribution to BCE's shareholders of most of its interest in
Nortel Networks Corporation, as announced on January 26, 2000 (the "Nortel
Transaction") but, in any event, by 5:00 p.m. (Montreal time) on July 31, 2000,
(such time on such date being referred to herein as the "Latest Mailing Time");
provided, however, that if the mailing of the Offer is delayed by (x) an
injunction or order made by a court or regulatory authority of competent
jurisdiction or (y) the Offeror not having obtained any regulatory waiver,
consent or approval which is necessary to permit the Offeror to mail the Offer
or to take-up and pay for any Common Shares tendered under the Offer, then,
provided that such injunction or order is being contested or appealed or such
regulatory waiver, consent or approval is being actively sought, as applicable,
the Latest Mailing Time shall be extended for a period ending on the earlier of
November 30, 2000 and the fifth business day following the date on which such
injunction or order ceases to be in effect or such waiver, consent or approval
is obtained, as applicable. For greater certainty, subject to subsection 3(a),
the mailing of the Offer is not conditional upon completion of the Nortel
Transaction.
(e) Each Seller acknowledges and agrees that the Offeror may, in its sole
discretion, modify or waive any term or condition of the Offer; provided,
however, that the Offeror will not, without the prior consent of Charles Sirois
on behalf of the Sirois Group, decrease the consideration per Common Share,
change the form of consideration payable under the Offer (other than to add
additional consideration), decrease the number of Common Shares sought under
the Offer, impose additional conditions to the Offer, or otherwise vary the
Offer in a manner which is adverse to the Shareholders, it being understood
that any modification or variation which adversely affects the tax consequences
which would apply to a Seller in respect of the Offer shall be deemed to
adversely affect Shareholders.
(f) If required by the Sellers or any of them, the Offer will provide that
where a corporation ("Holdco"), incorporated under the laws of Canada on or
after February 1, 2000 and having no assets other than Common Shares and no
liabilities whatsoever, is the beneficial owner and holder of record of Common
Shares, all the shareholders of Holdco (the "Holdco Shareholders") shall be
entitled to jointly elect (the "Holdco Election") to accept the Offer by
selling to the Offeror all of the outstanding shares (the "Holdco Shares") of
Holdco for an aggregate consideration identical to that which Holdco would have
been entitled to receive had such Common Shares been deposited under the Offer,
provided that such Holdco Shareholders and such Holdco shall have notified the
Offeror at least seven business days prior to the Expiry Time of the Holdco
Shareholders' intention to tender in such fashion and each Holdco Shareholder
and such Holdco shall have entered into a share purchase agreement (a "Holdco
Agreement") with the Offeror at or prior to the Expiry Time containing such
representations and warranties, terms and conditions and indemnities as the
Offeror may reasonably request in connection therewith including, without
limitation, the representations and warranties, terms and conditions and
indemnities set out in Schedule C hereto, and containing the requirement for
counsel to Holdco or the Holdco Shareholders to provide opinions to the Offeror
in form satisfactory to the Offeror, acting reasonably, in connection with the
closing of the purchase and sale of such Holdco Shares. In the event that any
Seller elects to sell Subject Shares pursuant to the
<PAGE>
- 4 -
Holdco Election, the definition of "Subject Shares" and "Seller" shall, unless
the context otherwise requires, include Holdco Shares and the Holdco
Shareholders, respectively.
(g) Notwithstanding the provisions of the foregoing paragraph, in the
event that the Offeror proposes an Alternative Transaction (as hereinafter
defined) which would be more favourable to U.S. Shareholders of the Company
from a tax perspective, the Holdco Election shall be available to the Sellers
in connection with such Alternative Transaction only if the Offeror shall be
satisfied that the Holdco Election will not adversely affect (i) the ability of
the Offeror to proceed with such Alternative Transaction and (ii) the intended
tax benefits to be conferred on such Shareholders by such Alternative
Transaction.
2. Agreement to Tender
This agreement when signed and delivered by each Seller to the Offeror
will constitute the agreement of each Seller, among other things, (i) to
irrevocably accept the Offer, (ii) validly to tender and cause to be tendered
and to cause all acts and things to be done to tender the Subject Shares
(including exercising all In-the-Money Options) beneficially owned by such
Seller under the Offer on the terms and conditions set out herein; and (iii) to
surrender all Options that are not In-the-Money Options in exchange for
options to purchase BCE Shares based on the Share Exchange Ratio and to enter
into such agreements as the Offeror may reasonably request to evidence same.
Each Seller agrees that if the Offeror makes the Offer on or prior to the
Termination Date (as defined in subsection 7(a)) containing no material
conditions other than the conditions set out in Schedule B, such Seller shall
forthwith thereafter and in any event not later than the close of business on
the fifth business day following the Mailing Date, deposit or cause to be
deposited all of the Subject Shares in accordance with the terms of the Offer,
and deposit or cause to be deposited any Common Shares acquired upon exercise
of options after the date hereof and prior to the Expiry Time of the Offer, and
thereafter such Seller shall not withdraw or permit such shares to be withdrawn
from the Offer. The Offeror will take up and pay for the Subject Shares
deposited under the Offer in accordance with the terms of the Offer within the
periods required by law and upon the conditions of the Offer having been
satisfied or waived. Subject to subsection 7(b), if the Subject Shares have not
been taken up and paid for by the Offeror prior to the close of business on the
120th day following the Mailing Date, then each Seller may withdraw from the
Offer the Subject Shares held by such Seller and, if such Subject Shares are
then withdrawn from the Offer, this agreement shall be terminated in respect of
such Seller and shall be of no further force or effect in respect of such
Seller, but this agreement shall continue in full force and effect with respect
to all the Sellers who do not withdraw their Subject Shares.
To the extent that any Seller shall not have complied with the preceding
two paragraphs (or, if applicable, the provisions of the following paragraph)
with respect to any Subject Shares, the Offeror shall have, in addition to any
other remedies it may have, the option to acquire all of such Subject Shares
<PAGE>
- 5 -
for the Consideration for each Subject Share for which such option is
exercised. Such option may be exercised by the Offeror for a period of 90 days
following the Expiry Time.
For greater certainty, for the purposes of this agreement, the term
"Subject Shares" shall refer to all the Common Shares which the Sellers are
required to tender under the Offer pursuant to the terms of this agreement, as
well as all shares or other securities which the Subject Shares may be
converted into, exchanged for or otherwise changed into pursuant to any
transaction involving the Company prior to the acquisition of the Subject
Shares by the Offeror, and shall also include any and all distributions of
cash, securities or other property made on such shares on or after the date
hereof, excluding quarterly dividends paid by the Company in the ordinary
course and consistent with past practice. If any Seller is entitled to and
chooses to make the Holdco Election, compliance with the requirements of the
Holdco Election, including the entering into of a Holdco Agreement, shall be
deemed to satisfy such Seller's obligation to tender the Subject Shares held by
such Seller under the Offer as herein provided for.
3. Other Conditions to Making the Offer
The Offeror shall not be required to make the Offer unless:
(a) the Offeror shall have determined prior to March 14, 2000, acting
reasonably, that the Offer would not have an impact on the grant of a
favourable tax ruling with respect to the Nortel Transaction;
(b) (i) the Company shall have entered into an agreement with the Offeror
on terms and conditions satisfactory to the Offeror providing for the
support of the Offer by the Company and its Board of Directors, a
prohibition on the solicitation of competing proposals and the
payment of customary break-up fees in specified circumstances (the
"Support Agreement") and (ii) the Support Agreement shall not have
been terminated;
(c) no circumstance, fact, change, event or occurrence caused by a person
other than BCE or any of its affiliates shall have occurred that
would render it impossible for one or more conditions set out on
Schedule B hereto to be satisfied; and
(d) no cease trade order, injunction or other prohibition at law shall
exist against the Offeror making the Offer or taking up or paying for
any Common Shares to be deposited under the Offer.
The foregoing conditions are for the sole benefit of the Offeror and may
be waived by it in whole or in part in its sole discretion.
<PAGE>
- 6 -
4. Covenants of the Sellers
(a) Each Seller agrees that, during the period commencing on the date
hereof and continuing until the earlier of (i) the Termination Date and (ii)
the Expiry Time:
(i) except to the extent permitted hereunder, it will not take any
act, directly or indirectly, which may in any way adversely
affect the success of the Offer or the purchase of any Common
Shares under the Offer, but, subject to section 9 or unless such
a vote would be contrary to other provisions of this agreement,
otherwise may continue to vote its Subject Shares as it sees
fit;
(ii) it will immediately cease and cause to be terminated any
existing discussions with any parties (other than BCE) with
respect to any Acquisition Proposal (as defined below); and
(iii) it will not directly or indirectly, make, solicit, initiate or
encourage inquiries from or submission of proposals or offers
from any other person, corporation, partnership or other
business organization whatsoever (including any of its officers
or employees) relating to any liquidation, dissolution,
recapitalization, merger, amalgamation or acquisition or
purchase of all or a material portion of the assets of, or any
equity interest (including Common Shares) in, the Company or any
of its subsidiaries or other similar transaction or business
combination involving the Company or any of its subsidiaries
(any such proposal or offer, an "Acquisition Proposal"), or
participate in any discussions or negotiations regarding, or
furnish to any other person any information with respect to, or
otherwise cooperate in any way with, or assist or participate
in, facilitate or encourage, any effort or attempt by any other
person to do or seek to do any of the foregoing;
provided, however, that the foregoing shall not prevent a Seller who is a
member of the Board of Directors of the Company (the "Board of Directors") from
responding in his capacity as a director to any bona fide written Acquisition
Proposal made by a third party to the Company or the Board of Directors after
the date hereof, providing information to such third party or taking any action
referred to in (i) above in his capacity as a director of the Company if,
acting in good faith and upon the advice of the legal and financial advisors of
the Board of Directors where appropriate, the failure to do so would be
inconsistent with such Seller's fiduciary duties as a member of the Board of
Directors. For greater certainty, each such Seller acknowledges that the
proviso to this subsection 4(a) shall not affect such Seller's obligation to
tender (and not withdraw) the Subject Shares to the Offer pursuant to the terms
and conditions of this agreement.
If any Seller receives any Acquisition Proposal or any inquiry concerning
an Acquisition Proposal (including an offer or invitation to enter into
discussions), such Seller will promptly notify the
<PAGE>
- 7 -
Offeror in writing and provide to the Offeror all relevant details relating
thereto, including, without limitation, the price proposed to be paid in
connection with such Acquisition Proposal and the form of consideration to be
paid; provided, however, that no Seller shall be required to disclose to the
Offeror any such Acquisition Proposal or any matter relating thereto if such
Acquisition Proposal was made to the Company or its Board of Directors and such
Seller was informed of such Acquisition Proposal in his or her capacity as a
member of the Board of Directors and, acting in good faith and upon the advice
of the legal and financial advisors of the Board of Directors where
appropriate, disclosure thereof by such Seller to the Offeror would be
inconsistent with such Seller's fiduciary duties as a member of the Board of
Directors.
(b) Each Seller agrees that during the period commencing on the date
hereof and continuing until the earlier of (i) the Termination Date and (ii)
the Expiry Time:
(i) it will use its reasonable best efforts in its capacity as a
shareholder, and, if applicable, as a director subject to his
fiduciary duties, to ensure that the business and affairs of the
Company and its subsidiaries are operated in the ordinary course
in substantially the same manner as conducted prior to the date
hereof; and
(ii) it shall not sell, transfer or encumber in any way any Subject
Shares or Options owned by it or relinquish or modify its right
to vote any Subject Shares or any other securities of the
Company.
(c) Each Seller agrees that, except as required by applicable law, such
Seller will not prior to the public announcement by the Offeror of the terms of
the Offer, directly or indirectly, disclose to any person, firm or corporation
the existence of the terms and conditions of this agreement, or the possibility
of the Offer being made or any terms or conditions or other information
concerning any possible offer to be made for the Common Shares.
(d) Charles Sirois agrees that, immediately prior to the Public
Announcement, he shall resign as Chief Executive Officer of the Company and
shall cause the agreement (the "Sirois Agreement") dated March 18, 1992 between
the Company and Gestion Charles Sirois Inc. to be terminated. Each Seller
covenants and agrees to use their reasonable best efforts to cause Jean C.
Monty to be appointed as Chairman of the Board of Directors and to have Paolo
Guidi and Christina Gold appointed as co-Chief Executive Officers of the
Company upon Charles Sirois' resignation.
(e) The Sirois Group covenants and agrees to take, or cause to be taken,
all action and to do, or cause to be done, all things necessary to obtain the
discharge of any and all Encumbrances (as such term is defined below)
(including those disclosed to BCE) so that the Subject Shares will be free and
clear of any and all Encumbrances upon the acquisition thereof by the Offeror.
<PAGE>
- 8 -
(f) Upon the purchase by the Offeror of the Subject Shares, the Sirois
Group acknowledges that BCE shall be entitled to designate all members of the
Board of Directors currently designated as Teleglobe Directors (as defined in
the articles of the Company), and any committees thereof and each Seller shall,
upon request by BCE, but subject to applicable law, promptly use its best
efforts to (i) expand the Board of Directors, (ii) secure the resignations of
such number of directors, (iii) cause the Teleglobe Directors to nominate as
directors of the Company and/or (iv) take all other action (including voting as
directors of the Company), in each case as is necessary to enable BCE's
designees to be elected or appointed to the Board of Directors and to cause
BCE's designees to be so elected or appointed.
5. Representations and Warranties of Each Seller
Each Seller by its acceptance hereof represents and warrants as follows
and acknowledges that the Offeror is relying upon such representations and
warranties in connection with entering into this agreement and the purchase by
the Offeror of the Subject Shares:
(a) such Seller is the beneficial owner of the Subject Shares and Options
listed on Schedule A thereto beside such Seller's name and such
Seller is the registered owner of such Subject Shares and Options (or
the nominee of such Seller identified in Schedule A) or will become
the registered owner of such Subject Shares not later than the time
at which they are tendered to the Offer;
(b) except as disclosed in writing to BCE, (i) such Seller has the sole
right to sell and vote (to the extent permitted by the attributes of
such shares or pursuant to applicable law, regulation or policy) all
the Subject Shares held by such Seller and (ii) all the Subject
Shares and Options held by such Seller are now, and at the time at
which the Offeror takes up and pays for the Subject Shares will be,
beneficially owned by such Seller with a good and marketable title
thereto, free and clear of any and all mortgages, liens, charges,
restrictions, security interests, adverse claims, pledges,
encumbrances and demands of any nature or kind whatsoever
(collectively, "Encumbrances") and are and will be issued and
outstanding as fully paid and non-assessable shares in the capital of
the Company. To the extent that any Subject Shares are subject to
Encumbrances, the Seller is not in breach of any covenant, term or
condition of any agreement or instrument pursuant to which such
Encumbrance was created or granted;
(c) except as disclosed in writing to BCE, no person, firm or corporation
has any agreement or option, or any right or privilege (whether by
law, pre-emptive or contractual) capable of becoming an agreement or
option, for the purchase, acquisition or transfer from such Seller of
any of the Subject Shares or Options owned by such Seller or any
interest therein or right thereto, except the Offeror pursuant
hereto;
<PAGE>
- 9 -
(d) except as disclosed in writing to BCE, none of the execution and
delivery by such Seller of this agreement or the completion of the
transactions contemplated hereby or the compliance by such Seller
with such Seller's obligations hereunder will result in a breach of:
(i) if such Seller is a corporation, the constating documents of such
Seller; or (ii) any agreement or instrument to which such Seller is a
party or by which such Seller or any of such Seller's property or
assets are bound;
(e) if a corporation, such Seller is a validly subsisting corporation and
has all necessary corporate power and authority to execute and
deliver the agreement resulting from its acceptance hereof and to
perform its obligations hereunder;
(f) this agreement has been duly executed and delivered by such Seller
and constitutes a valid and binding obligation of such Seller
enforceable against such Seller in accordance with its terms, except
as may be limited by bankruptcy, insolvency and other laws affecting
the enforcement of creditors' rights generally and subject to the
qualification that equitable remedies may only be granted in the
discretion of a court of competent jurisdiction;
(g) (i) the only securities of the Company beneficially owned, directly
or indirectly, by such Seller are the Subject Shares and Options
listed on Schedule A hereto beside such Seller's name and, in the
case of Telesystem Telecom Ltd., the 3,063,072 common shares of the
Company pledged to secure the obligations of Telesystem Telecom Ltd.
under exchangeable debentures issued November 18, 1992 to Ontario
Teachers' Pension Plan Board, (ii) except for the Options listed on
Schedule A hereto, such Seller has no agreement or option, or right
or privilege (whether by law, pre-emptive or contractual) capable of
becoming an agreement or option, for the purchase or acquisition by
such Seller or transfer to such Seller of additional securities of
the Company and (iii) such Seller will not purchase other than as
permitted hereunder or obtain any agreement or right to purchase any
additional securities of the Company from and including the date
hereof up to and including the time at which the Offeror takes up and
pays for the Subject Shares;
(h) such Seller has no claim against the Company or any of its
subsidiaries at the date of this agreement and will not have any
claim against the Company or any of its subsidiaries by reason of the
entering into of this agreement, the completion of the Offer or the
completion of the Alternative Transactions; provided however that the
foregoing shall not prejudice the rights of such Seller under this
agreement, the Offer, the Alternative Transactions or the service
agreement dated March 18, 1992 between the Company and Gestion
Charles Sirois Inc. (except that Charles Sirois has waived his right
to receive options on 400,000 common shares of the Company) and true
and complete copies of the Sirois Agreement have been provided to BCE
prior to the date hereof;
<PAGE>
- 10 -
(i) (i) such Seller has full knowledge of and access to information
concerning the Company and its securities such that the underlying
value of the Company was a material factor considered by such Seller
in entering into this agreement, (ii) in agreeing to the price to be
paid pursuant to the Offer, there are no non-financial factors or
factors peculiar to such Seller which have been considered relevant
to such Seller in assessing such price or that had the effect of
reducing the price that would otherwise have been considered
acceptable to such Seller and (iii) such Seller had no knowledge of
any material non-public information in respect of the Company or the
Common Shares which was not disclosed generally and that, if
disclosed, could reasonably have been expected to affect the
consideration payable under this agreement; and
(j) except for Lehman Brothers and RBC Dominion Securities Inc., no
broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission, or to the reimbursement of any
of its expenses, in connection with the Offer or any similar
transaction based upon arrangements made by or on behalf of the
Seller.
6. Representations, Warranties and Covenants of BCE
(a) BCE represents and warrants as follows and acknowledges that each
Seller is relying upon such representations and warranties in connection with
the sale to the Offeror of the Subject Shares:
(i) BCE is a validly subsisting corporation incorporated under the
laws of Canada and, subject to approval of this agreement and
the Offer by its Board of Directors, has all necessary corporate
power and authority to execute and deliver this agreement and to
purchase the Subject Shares and to perform its obligations
hereunder;
(ii) this agreement has been duly executed and delivered by and on
behalf of BCE and constitutes a valid and binding obligation of
BCE enforceable against BCE in accordance with its terms, except
as may be limited by bankruptcy, insolvency and other laws
affecting the enforcement of creditors' rights generally and
subject to the qualification that equitable remedies may only be
granted in the discretion of a court of competent jurisdiction;
(iii) documents or information filed by BCE under applicable
securities laws since and including January 1, 1999 to and
including the date hereof, including the annual report to
shareholders and annual information form of BCE, in each case,
for the fiscal year ended December 31, 1998, (collectively, the
"BCE Public Documents"), did not, as of their respective dates,
contain any untrue statement of a material fact relating to BCE
and its subsidiaries and their respective businesses
<PAGE>
- 11 -
or omit to state a material fact required to be stated therein
or necessary to make the statements relating to BCE and its
subsidiaries and their respective businesses therein, in light
of the circumstances under which they were made, not misleading;
and
(iv) except as disclosed in the BCE Public Documents, since January
1, 1999 to and including the date hereof: (a) BCE and its
subsidiaries have conducted their respective businesses only in
the usual, ordinary and regular course and consistent with past
practice; (b) no liability or obligation of any nature (whether
absolute, accrued, contingent or otherwise) which has had or is
reasonably likely to have a material adverse effect on the
business, operations (including results of operations), assets,
properties or condition (financial or otherwise) of BCE and its
subsidiaries taken as a whole (a "BCE Material Adverse Effect"),
has been incurred; and (c) there has not been any event which
has had or is reasonably likely to have a BCE Material Adverse
Effect.
(b) BCE covenants and agrees that it will, as soon as reasonably
practicable following the entering into of the Support Agreement with the
Company, actively and diligently pursue all regulatory and other approvals and
consents necessary to consummate the Offer and, in conjunction with the
Company, to use reasonable commercial efforts to make as soon as reasonably
practicable following the date hereof all necessary registrations and filings
to obtain same.
7. Termination Date; Extensions
(a) Subject to Section 9 hereof, if the Offer has not been made by the
Offeror on or before the date contemplated by section 1(d) hereof (the
"Termination Date"), this agreement shall terminate without further obligation
of the parties hereunder; provided, however, that any such termination shall
not prejudice the rights of a party as a result of a breach by any other party
of its obligations hereunder.
(b) Notwithstanding any other provision of this agreement, if any action
to be taken hereunder (including the taking up of Common Shares under the
Offer) is delayed by reason of (i) an injunction or order made by a court or
regulatory authority of competent jurisdiction or (ii) any regulatory waiver,
consent or approval which is necessary to the taking of such action not having
been obtained, then provided that such injunction or order is being contested
or appealed or such regulatory waiver, consent or approval is being actively
sought, as applicable, the time stipulated herein for the taking of such action
shall be automatically extended for a period ending on the earlier of (i) May
31, 2001 and (ii) the fifth business day following the date on which such
injunction or order ceases to be in effect or such waiver, consent or approval
is obtained, as applicable.
<PAGE>
- 12 -
8. Further Assurances
Subject to the terms and conditions herein, each of the Sellers and BCE
agrees to use commercially reasonable efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations, to consummate the transactions
contemplated by this agreement and the Offer, including using commercially
reasonable efforts (i) to obtain all necessary consents, approvals and
authorizations as are required to be obtained under any federal, provincial or
foreign law or regulations with respect to this agreement or the Offer; (ii) to
lift or rescind any injunction or restraining order or other order adversely
affecting the parties' ability to consummate the transactions contemplated
hereby or by the Offer; and (iii) to fulfill all conditions and satisfy all
provisions of this agreement and the Offer.
9. Change in Nature of Transaction
(a) The Offeror and the Sellers have determined that it is necessary and
desirable to proceed with alternative forms of transactions (the "Alternative
Transactions") whereby the Offeror (or an affiliate of the Offeror) is
effectively to acquire Common Shares on economic terms which, in relation to
the holders of Common Shares, are at least equivalent to the Offer (including
from a tax perspective). The description of the steps of the Alternative
Transactions and related matters are set out in Schedule D attached hereto.
Each Seller agrees to support the completion of the Alternative Transactions as
specified in Schedule D.
(b) In the event of any proposed Alternative Transaction, the references
in this agreement to the Offer shall be deemed to refer to such Alternative
Transaction and all terms, covenants, representations and warranties of this
agreement shall be and shall be deemed to have been made in the context of such
Alternative Transaction, mutatis mutandis.
10. General
(a) The Offeror acknowledges and agrees that the covenants,
representations and warranties of each Seller made in this agreement are made
by such Seller solely in such Seller's capacity as a holder of Subject Shares
and Options, and not, to the extent applicable, in such Seller's capacity as an
officer, director or employee of the Company unless otherwise expressly
provided for.
(b) Each Seller hereby agrees that it shall be jointly and severally
liable to the Offeror for the non-performance or breach by the other Sellers of
the covenants, representations and warranties of the other Sellers provided
hereunder. For greater certainty, the failure of any Seller to comply with such
Seller's obligations hereunder, or the inaccuracy of any representation or
warranty made by any Seller, shall not in any way relieve any other Seller who
is in compliance with such Seller's obligations hereunder.
<PAGE>
- 13 -
(c) The agreement contemplated by acceptance of this letter shall become
effective in respect of each Seller upon its execution and delivery by such
Seller.
(d) All notices, requests, demands and other communications hereunder
shall be in writing and shall be delivered in person or transmitted by telecopy
or similar means of recorded electronic communication to, in the case of any
Seller, the address and/or facsimile of the Seller as shown on Schedule A, and,
in the case of the Offeror, Bureau 3700, 1000, rue de la Gauchetiere Ouest,
Montreal, Quebec H3B 4Y7, Attention: Chief Legal Officer, Facsimile: (514)
870-4877 (with a facsimile copy to Davies, Ward & Beck, Attention: J-P.
Bisnaire, Facsimile: (416) 863-0871) or such other address as may be designated
in writing hereafter, in the same manner, by such person. Any such notice or
other communication shall be deemed to have been given and received on the day
on which it was delivered or transmitted (or, if such day is not a business
day, on the next following business day) provided that it is delivered or
transmitted during normal business hours, failing which it shall be deemed to
have been given and received on the next business day.
(e) This agreement sets forth the entire agreement and understanding of
the parties hereto in respect of the transactions contemplated hereby. There
are no warranties, representations, terms, conditions or collateral agreements,
expressed, implied or statutory, between the Sellers and the Offeror other than
as expressly set forth in this agreement. This agreement and the rights
hereunder are not transferable or assignable by any Seller or the Offeror
without the prior written consent of the other except that the Offeror may
assign its rights and obligations under this agreement to any of its
affiliates, but no such assignment shall relieve the Offeror of its obligations
hereunder.
(f) The representations and warranties set forth in this agreement shall
survive the purchase of the Subject Shares and, notwithstanding such purchase,
shall continue in full force and effect for the benefit of the party to whom
such representations and warranties are given.
(g) If any provision of this agreement is determined to be void or
unenforceable, in whole or in part, it shall be severable from all other
provisions hereof and shall be deemed not to affect or impair the validity of
any other provision hereof and each such provision is deemed to be separate and
distinct.
(h) This agreement and the rights and obligations of the parties hereto
shall be governed by and construed in accordance with the laws of the Province
of Quebec and the parties irrevocably attorn to the exclusive jurisdiction of
the courts of the Province of Quebec.
(i) Time shall be of the essence of this agreement.
(j) This agreement may be executed by facsimile and in counterparts, each
of which shall be deemed to be an original but all of which together shall
constitute one and the same agreement.
<PAGE>
- 14 -
(k) Each party hereto shall pay the fees, costs and expenses of their
respective financial, legal, auditing and other professional and other advisors
incurred in connection with the preparation, execution and delivery of this
agreement and all documents and instruments executed or prepared pursuant
hereto and any other costs and expenses whatsoever and howsoever incurred and
shall indemnify the other parties from and against any and all claims for
"finders" or "agency" fees relating to the transactions contemplated hereby.
(l) The parties hereto have expressly requested that this agreement and
the schedules thereto be drafted in the English language. Les parties a la
presente ont expressement demande que cette entente ainsi que les cedules s'y
rattachant soient redigees dans la langue anglaise.
---------
If the foregoing accurately reflects the terms and conditions of our
agreement, would you kindly indicate your acceptance hereof by signing, dating
and returning to BCE the enclosed duplicate original of this agreement by
facsimile or otherwise by no later than 5:00 p.m. (Montreal time) on February
15, 2000, failing which this offer shall be null and void.
BCE INC.
by
--------------------------------
Irrevocably accepted and agreed to this 15th day of February, 2000.
WITNESS: )
)
)
) ----------------------------------
) CHARLES SIROIS
TELESYSTEM TELECOM LTD.
By
--------------------------------
Charles Sirois
<PAGE>
SCHEDULE A
Number of Number of Common
Name of Seller Common Shares Shares under Option
- -------------- ------------- -------------------
1. Telesystem Telecom Ltd. 19,566,894 Nil
Suite 2500
1000, rue de la
Gauchetiere Ouest,
Montreal, Quebec
H3B 4W5
2. Charles Sirois Nil 575,172
Suite 2500
1000, rue de la
Gauchetiere Ouest,
Montreal, Quebec
H3B 4W5
The persons identified above are collectively referred to as the "Sirois Group".
<PAGE>
SCHEDULE B
CONDITIONS OF THE OFFER
Notwithstanding any other provision of the agreement to which this
schedule is attached, the Offeror shall have the right to withdraw the Offer
and not take up and pay for any Common Shares deposited under the Offer unless
all of the following conditions are satisfied or waived by the Offeror at or
prior to the Expiry Time:
(a) all requisite regulatory approvals, reviews or decisions (including,
without limitation, those of any stock exchanges or securities or
other regulatory authorities) to the consummation of the Offer shall
have been obtained or concluded on terms satisfactory to the Offeror,
acting reasonably;
(b) (i) no act, action, suit or proceeding shall have been threatened or
taken before or by any domestic or foreign court or tribunal or
governmental agency or other regulatory authority or administrative
agency or commission or by any elected or appointed public official
or private person (including, without limitation, any individual,
corporation, firm, group or other entity) in Canada or elsewhere,
whether or not having the force of law, and (ii) no law, regulation
or policy shall have been proposed, enacted, promulgated or applied:
(A) to cease trade, enjoin, prohibit or impose material limitations
or conditions on the purchase by or the sale to the Offeror of
the Common Shares or any of them or the right of the Offeror to
own or exercise full rights of ownership of the Common Shares or
any of them; or
(B) which, if the Offer were consummated, (x) would require the
Company or any of its subsidiaries to dispose of a material
asset, impose material limitations or conditions on the business
or operations of the Company and its subsidiaries, or impose
material fines or penalties on the Company or any of its
subsidiaries and (y) such disposition, limitations, fines or
penalties would reasonably be expected to have a Company
Material Adverse Effect or a BCE Material Adverse Effect;
(c) either (i) the Commissioner under the Competition Act (Canada) shall
have issued an advance ruling certificate ("ARC") under section 102
of the Competition Act in respect of the Offer and shall not have
subsequently withdrawn or purported to have withdrawn such ARC prior
to the Offeror's acquisition of Common Shares pursuant to the Offer
or have stated or otherwise indicated that he has obtained new
information as a result of which he is no longer satisfied that he
would not have sufficient grounds on which to apply to the
Competition Tribunal under section 92 of the Competition Act with
respect to the Offers; or (ii) the applicable waiting period under
section 123 of the Competition Act shall have
<PAGE>
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expired, and the Competition Commissioner or his authorized
representative shall have advised the Offeror (on terms and in a form
satisfactory to the Offeror) that the Commissioner does not intend to
make an application under section 92 of the Competition Act in
respect of the Offer and neither the Commissioner nor any of his
representatives shall have rescinded or amended such advice;
(d) any applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, and under any other applicable foreign
competition laws, shall have expired;
(e) there shall not exist any prohibition at law against the Offeror
making the Offer or taking up and paying for any Common Shares
deposited under the Offer;
(f) there shall not exist and shall not have occurred (or, if there does
exist or shall have previously occurred, there shall not have been
disclosed, generally or to the Offeror in writing) any change that
has a Company Material Adverse Effect (as such term is defined in the
Support Agreement) which results, directly or indirectly, from:
(i) any act or action taken or not taken by the Company at or prior
to the entering into of the Support Agreement; or
(ii) any act or action taken or not taken by the Company which has
been approved by the Board of Directors in circumstances where
the BCE nominees to the Board of Directors have voted against;
(g) the Offeror shall not have become aware of any untrue statement of a
material fact in the Company Public Documents (as such term is
defined in the Support Agreement), or an omission to state a material
fact that is required to be stated or that is necessary to make a
statement not misleading therein the light of the circumstances in
which it was made, in either case that is adverse to the Company; and
(h) (i) the Company shall not have breached in any material respect any
of its covenants contained in the Support Agreement (other than a
breach resulting from any act or action (or act or action not taken)
that has been approved by the Chairman of the Board) and (ii) the
representations and/or warranties of the Company contained in the
Support Agreement shall have been, as at the date made, true and
correct or, if not already qualified by a materiality concept, true
and correct in all material respects.
The foregoing conditions are for the exclusive benefit of the Offeror and
may be asserted by the Offeror at any time, regardless of the circumstances
giving rise to such assertion, including any action or inaction by the Offeror.
The Offeror may waive any of the foregoing conditions in whole or in part at
any time and from time to time, both before and after the Expiry Time, without
prejudice to any other rights
<PAGE>
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which the Offeror may have. The failure by the Offeror at any time to exercise
any of the foregoing rights will not be deemed a waiver of any such right and
each such right will be deemed an ongoing right which may be asserted at any
time and from time to time. Any determination by the Offeror concerning the
events described in the conditions to the Offer will be final and binding upon
all parties.
<PAGE>
SCHEDULE C
PROVISIONS TO BE INCLUDED IN
HOLDCO AGREEMENT, WITHOUT LIMITATION
1. Representations and Warranties of Holdco and the Holdco Shareholders
Holdco and each of the Holdco Shareholders hereby jointly and severally
represent and warrant to the Offeror as follows and hereby acknowledge and
confirm that the Offeror is relying on such representations and warranties in
connection with the purchase by the Offeror of the Holdco Shares:
(a) the Common Shares which are being tendered to the Offer have been held
directly since [date to be inserted] by Holdco;
(b) the execution and delivery of this Holdco Agreement by the Holdco
Shareholders and Holdco and the completion by the Holdco Shareholders and
Holdco of the transactions contemplated hereby:
(i) will not conflict with, result in the breach of or constitute a
default under the articles, by-laws or resolutions of Holdco or any
agreement, indenture, contract, lease, deed of trust, licence,
option, instrument or other commitment, whether written or oral (a
"Contract") to which the Holdco Shareholders or Holdco is a party;
and
(ii) do not and will not violate any provision of law or administrative
regulation or any judicial or administrative award, judgment or
decree binding upon the Holdco Shareholders or Holdco;
(c) each of the Holdco Shareholders and Holdco is a resident of Canada for
the purposes of the Canadian Tax Act or if any Holdco Shareholder is not a
resident of Canada for such purposes, either: (i) such Holdco Shareholder has
provided a certificate pursuant to section 116 of the Canadian Tax Act in
respect of the sale by such Holdco Shareholder of the Holdco Shares being
tendered to the Offer by such Holdco Shareholder with a certificate limit that
is not less than the value of the consideration payable by the Offeror to such
Holdco Shareholder pursuant to the Offer; or (ii) such Holdco Shareholder
acknowledges that the Offeror shall be permitted to withhold from the amount
payable to such Holdco Shareholder pursuant to the Offer any amount required to
be remitted by the Offeror pursuant to section 116 of the Canadian Tax Act or
pursuant to applicable tax laws of any other jurisdiction;
(d) this Holdco Agreement has been duly executed and delivered by each of
the Holdco Shareholders and Holdco and is a valid and binding obligation of
each of the Holdco Shareholders and Holdco enforceable against each of the
Holdco Shareholders and Holdco in accordance with its terms, subject to
applicable bankruptcy, insolvency and other laws affecting the enforcement of
creditors' rights
<PAGE>
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generally and provided that equitable remedies will only be awarded in the
discretion of a court of competent jurisdiction;
(e) all of the Holdco Shares are registered in the name of, and
beneficially owned by, not more than five Holdco Shareholders free and clear of
all liens, charges, encumbrances, claims and equities (collectively, "Liens");
(f) no person has any Contract, warrant or option or any right capable of
becoming a Contract, warrant or option for the purchase from any of the Holdco
Shareholders of any of the Holdco Shares or from Holdco of any shares or other
securities of Holdco or of any of the Common Shares held by Holdco;
(g) the Holdco Shares are validly issued and outstanding as fully paid and
non-assessable shares in the capital of Holdco and are the only issued and
outstanding shares in the capital of Holdco;
(h) Holdco is a corporation duly incorporated on or after February 1, 2000
and duly organized and validly existing under the laws of Canada;
(i) Holdco is the beneficial and registered holder of Common Shares (the
"Subject Shares") all of which are held by Holdco free and clear of all Liens;
(j) Holdco owns or holds no property or assets or any interests therein of
any nature or kind whatsoever other than the Subject Shares and Holdco carries
on no active business;
(k) Holdco has no obligations, liabilities (whether actual or contingent)
or indebtedness to any person, including without limitation any liabilities in
respect of federal or provincial income, corporate, goods and services,
harmonized sales, sales, excise, employer health or any other taxes, duties or
imposts of any nature or kind whatsoever, or in respect of any judgments,
orders, fines, interest, penalties, awards or decrees of any court, tribunal or
governmental, administrative or regulatory department, commission, board,
bureau, agency or instrumentality, domestic or foreign;
(l) Holdco has no subsidiaries and is not bound by any Contract to acquire
or lease in any manner any shares or assets of any nature or kind whatsoever;
(m) Holdco does not have, and has never had, any employees and its
directors and officers receive no remuneration or compensation from Holdco;
(n) Holdco is not a party to any Contract of any nature or kind whatsoever
except for the Contract with the Seller pursuant to which Holdco acquired the
Subject Shares (a true and complete copy of which has been provided to the
Offeror);
<PAGE>
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(o) there are no claims, investigations, actions, suits or proceedings
pending or threatened against or affecting Holdco or the Holdco Shareholders,
whether at law or in equity or before or by any federal, provincial, municipal
or other governmental or administrative or regulatory department, commission,
board, tribunal, bureau, agency or instrumentality, domestic or foreign, that
would adversely affect in any manner the ability of Holdco and the Holdco
Shareholders to enter into this Holdco Agreement and perform their obligations
hereunder;
(p) there are no claims, investigations, actions, suits or proceedings
pending or threatened against or affecting Holdco, whether at law or in equity
or before or by any federal, provincial, municipal or other governmental or
administrative or regulatory department, commission, board, tribunal, bureau,
agency or instrumentality, domestic or foreign;
(q) Holdco is in full compliance with all laws, rules or regulations to
which Holdco or the Subject Shares may be subject;
(r) the books and records of Holdco fairly and correctly set out and
disclose in all respects, in accordance with generally accepted accounting
principles in Canada consistently applied, the financial position of Holdco as
of the date hereof and all financial transactions of Holdco have been
accurately recorded in such books and records;
(s) the corporate records and minute books of Holdco contain complete and
accurate minutes of all meetings of the directors and shareholders of Holdco
held since its incorporation and all such meetings were duly called and held
and the share certificate books, register of shareholders, register of
transfers and register of directors and officers of Holdco are complete and
accurate;
(t) the Holdco Shareholders acknowledge that where there is more than one
Holdco Shareholder, no Holdco Shareholder shall be entitled to withdraw any
Holdco Shares tendered to the Offer unless the notice of withdrawal is duly
executed by all of the Holdco Shareholders in respect of all outstanding Holdco
Shares and such Holdco Shares are otherwise withdrawn in compliance with all
provisions of the Offer relating to withdrawals.
2. Covenants
Holdco Documents. The Holdco Shareholders and Holdco shall forthwith make
available to the Offeror and its authorized representatives all minute books,
share certificate books, share registers, books of account, accounting records,
corporate documents and all other books or records, documents, information or
data relating to Holdco (collectively the "Holdco Documents"). At the time of
closing, all of the Holdco Documents shall be delivered to the Offeror by the
Seller and Holdco.
<PAGE>
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3. Indemnification
(a) Obligations to Indemnify. Each of the Seller, the Holdco Shareholders
and Holdco agrees to indemnify and save harmless the Offeror and, unless BCE is
the Offeror, BCE from all claims, demands, proceedings, losses, damages,
liabilities, deficiencies, costs and expenses (including, without limitation,
reasonable legal and other professional fees and disbursements, interest,
penalties and amounts paid in settlement) (collectively "Losses") suffered or
incurred by the Offeror as a result of or arising directly or indirectly out of
or in connection with any breach by the Seller, the Holdco Shareholders or
Holdco of any representation, warranty, obligation or covenant of the Seller,
the Holdco Shareholders or Holdco contained in this Holdco Agreement. The
Offeror agrees to indemnify and save harmless the Seller from all Losses
suffered or incurred by the Seller as a result of or arising directly or
indirectly out of or in connection with any breach by the Offeror of any
representation, warranty, obligation or covenant of the Offeror contained in
this Holdco Agreement.
(b) Notice of Claim. In the event that a party (the "Indemnified Party")
shall become aware of any claim, proceeding or other matter (a "Claim") in
respect of which another party (the "Indemnifying Party") agreed to indemnify
the Indemnified Party pursuant to this Holdco Agreement, the Indemnified Party
shall promptly give written notice thereof to the Indemnifying Party. Such
notice shall specify whether the Claim arises as a result of a claim by a
person against the Indemnified Party (a "Third Party Claim") or whether the
Claim does not so arise (a "Direct Claim"), and shall also specify with
reasonable particularity (to the extent that the information is available) the
factual basis for the Claim and the amount of the Claim, if known. If, through
the fault of the Indemnified Party, the Indemnifying Party does not receive
notice of any Claim in time to contest effectively the determination of any
liability susceptible of being contested, the Indemnifying Party shall be
entitled to set off against the amount claimed by the Indemnified Party the
amount of any Losses incurred by the Indemnifying Party resulting directly from
the Indemnified Party's failure to give such notice on a timely basis.
(c) Direct Claims. With respect to any Direct Claim, following receipt of
notice from the Indemnified Party of the Claim, the Indemnifying Party shall
have 60 days to make such investigation of the Claim as is considered necessary
or desirable. For the purpose of such investigation, the Indemnified Party
shall make available to the Indemnifying Party the information relied upon by
the Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request. If both parties
agree at or prior to the expiration of such 60-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such Claim, the
Indemnifying Party shall immediately pay to the Indemnified Party the full
agreed upon amount of the Claim.
(d) Third Party Claims. With respect to any Third Party Claim, the
Indemnified Party shall have the exclusive right, at the expense of the
Indemnifying Party, to contest, settle or pay the amount claimed and to retain
counsel and other experts or advisers selected by the Indemnified Party in its
sole discretion in connection therewith; provided, however, that the
Indemnified Party shall not settle any Third Party Claim without the written
consent of the Indemnifying Party, which consent shall not be unreasonably
<PAGE>
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withheld or delayed. If the Indemnified Party elects to assume such control,
the Indemnifying Party shall have the right, at its sole expense, to
participate in the negotiation, settlement or defence of such Third Party
Claim. If any Third Party Claim is of a nature such that the Indemnified Party
is required by applicable law to make a payment to any person (a "Third Party")
with respect to the Third Party Claim before the completion of settlement
negotiations or related legal proceedings, the Indemnified Party may make such
payment and the Indemnifying Party shall, forthwith after demand by the
Indemnified Party, reimburse the Indemnified Party for such payment. If the
amount of any liability of the Indemnified Party under the Third Party Claim in
respect of which such payment was made, as finally determined, is less than the
amount that was paid by the Indemnifying Party to the Indemnified Party, the
Indemnified Party shall, forthwith after receipt of the difference from the
Third Party, pay the amount of such difference to the Indemnifying Party.
(e) Payment and Cooperation. The Indemnifying Party shall pay to the
Indemnified Party all amounts for which the Indemnifying Party is liable
pursuant to this section promptly after the Indemnified Party incurs the Loss
in respect of which such liability arises. The Indemnified Party and the
Indemnifying Party shall co-operate fully with each other with respect to Third
Party Claims, and shall keep each other fully advised with respect thereto
(including supplying copies of all relevant documentation promptly as it
becomes available).
(f) Tax Effect. If any payment received by an Indemnified Party hereunder
(an "Indemnity Payment") would constitute income for tax purposes to such
Indemnified Party, the Indemnifying Party shall pay a Tax Gross Up to the
Indemnified Party at the same time and on the same terms, as to interest and
otherwise, as the Indemnity Payment. The amount of any Loss for which
indemnification is provided shall be adjusted to take into account any tax
benefit realized by the Indemnified Party or any of its affiliates by reason of
the Loss for which indemnification is so provided or the circumstances giving
rise to such Loss. For purposes of this paragraph (f), any tax benefit shall be
taken into account at such time as it is received by the Indemnified Party or
its affiliate. Notwithstanding the foregoing provisions of this paragraph (f),
if an Indemnity Payment is included in the Indemnified Party's income pursuant
to paragraph 12(1)(x) of the Canadian Tax Act (or an equivalent provision of
any relevant provincial legislation), the Indemnified Party covenants and
agrees to make an election pursuant to subsection 12(2.2) of the Canadian Tax
Act (and the equivalent provision of any applicable provincial legislation)
with respect to the Indemnity Payment to the maximum extent possible such that
the amount of the Indemnity Payment included in the Indemnified Party's income
for tax purposes is minimized or eliminated. For purposes of this paragraph
(f), "Tax Gross Up" shall mean, with respect to any Indemnity Payment, such
additional amount (calculated in accordance with the Calculation Method) as is
necessary to place the Indemnified Party in the same after tax position as it
would have been in had such Indemnity Payment been received tax free; and
"Calculation Method" with respect to the calculation of any Tax Gross Up on any
Indemnity Payments, shall mean that such Tax Gross Up shall be calculated by
using the combined federal and provincial income tax rate applicable to the
Indemnified Party and, except as provided in this paragraph (f), without regard
to any losses, credits, refunds or deductions that the Indemnified Party may
have which could affect the amount of tax payable on any such Indemnity
Payment.
<PAGE>
SCHEDULE D
ALTERNATIVE TRANSACTION/ALTERNATIVE OFFER
Plan of Arrangement
The Offeror acknowledges and agrees that it is the intention of the
parties that the acquisition of Common Shares by the Offeror (the
"Acquisition") be effected in a manner that permits both Canadian and United
States Shareholders to dispose of their Common Shares on a tax-deferred
rollover basis (a "Tax Deferred Basis"). In order to achieve the foregoing
objective, it is proposed that the Acquisition be effected pursuant to a Plan
of Arrangement (the "Plan of Arrangement") under section 192 of the Canada
Business Corporations Act ("CBCA") in a manner to permit Shareholders to obtain
a rollover for Canadian income tax purposes under section 85.1, or, where the
Shareholder elects, under section 85, of the Income Tax Act (Canada) (the
"Canadian Income Tax Act") and any applicable provincial tax legislation
(collectively, "Canadian Income Tax Legislation") and to permit Shareholders to
obtain a tax-free rollover for United States tax purposes pursuant to section
368(a)(1)(B) of the United States Internal Revenue Code. The Offeror and the
Sirois Group agree to cooperate to consummate the Plan of Arrangement on a Tax
Deferred Basis for Canadian tax purposes.
Proposed Steps
Pursuant to the Plan of Arrangement, the following steps would be
undertaken:
1. The common shares of the Company would be reorganized whereby Bell Canada
would exchange a portion of its common shares for a new class of fully
participating subordinate voting shares ("Subordinate Voting Shares")
representing a 3.5% equity interest carrying a one-tenth vote per share
so that Bell Canada and all other affiliates of BCE, together with the
Third Series Preferred Shares, hold less than 20% of the voting power
attaching to shares of the Company.
2. The Third Series Preferred Shares would be amended to add a one-tenth vote
per share.
3. All outstanding Common Shares (other than common shares and Subordinate
Voting Shares owned by Bell Canada) would be exchanged for BCE Shares at
the Share Exchange Ratio.
4. The Holdco Election would only be available to Canadian Shareholders of
the Company if the making of the Holdco Election by any such Shareholders
would not adversely impact the tax consequences to United States
Shareholders or to the Offeror (other than in respect of the effect on the
Offeror of the difference in tax treatment in respect of section 85 or
section 85.1 of the Canadian Income Tax Act and other Canadian Income Tax
Legislation) under the Plan of Arrangement.
<PAGE>
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5. The BCE Shares will be issued to United States Shareholders pursuant to
the provisions of section 3(a)(10) of the United States Securities Act of
1933, as amended.
Shareholder Votes
1. A special meeting (the "Special Meeting") of the holders of common shares
and Third Series Preferred Shares would be held to vote on the Plan of
Arrangement. Subject to the terms and conditions of this agreement, each
Seller agrees (i) to vote in favour of the Plan of Arrangement, (ii)
deliver to the Offeror no later than ten days prior to the date of the
meeting a duly executed proxy, which proxy shall be irrevocable, in favour
of the Offeror voting in favour of the Alternative Transaction, and (iii)
not to exercise any rights of dissent provided under section 190 of the
CBCA in connection with the Plan of Arrangement.
2. The Interim Order obtained from the Court would provide that in order for
the Plan of Arrangement to proceed, the Plan of Arrangement must (i) be
approved by two-thirds of the votes cast by the holders of common shares
present or represented by proxy at the Special Meeting, including Common
Shares held by BCE and its affiliates, and (ii) receive minority approval
as required by relevant Canadian securities rules or policies, which would
exclude, among others, votes cast by BCE and its affiliates.
3. The Interim Order would provide only that a vote of the Third Series
Preferred Shares be held at the Special Meeting, not that the Plan of
Arrangement must be approved by the Third Series Preferred Shares.
Court Approval
o The Plan of Arrangement would be implemented following the grant by the
Court of a Final Order under section 192 of the CBCA.
o Assuming the Plan of Arrangement is approved by the requisite votes of the
common shares (including minority approval), but the Plan of Arrangement
does not receive a favourable vote of the holders of the Third Series
Preferred Shares, the Court would be asked in the Final Order to approve
all steps of the Plan of Arrangement in any event.
Alternative Offer
(a) In the event that (i) the Troutt Group determines, acting in good
faith and based on third party tax advice, that the Plan of Arrangement may not
be effected on a Tax Deferred Basis for United States income tax purposes, (ii)
the Sirois Group determines, acting in good faith and based on third party tax
advice, that the Plan of Arrangement may not be effected on a Tax Deferred
Basis for Canadian income tax purposes, or (iii) the Plan of Arrangement is not
approved by the requisite votes of the common shares
<PAGE>
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or the Court does not grant the Final Order, the Acquisition would then be made
by way of an offer (the "Alternative Offer") made by BCE and/or a direct or
indirect wholly-owned subsidiary of BCE (collectively, the "Offeror") to the
holders of any and all of the outstanding Common Shares to acquire all of the
outstanding Common Shares on the basis of, for each Common Share, that portion
(the "Alternative Share Exchange Ratio") determined as follows:
(i) in the event the closing of the Nortel Transaction occurs prior to
the First Take-Up Date, Cdn.$0.25 plus that portion of a BCE Share
(expressed to three decimal places with amounts less than 0.0005
being rounded down and amounts equal to or greater than 0.0005 being
rounded up, in each case to the nearest one-thousandth of a BCE
Share) as is equal to the ratio obtained by dividing (A) Cdn.$48.16
(being Cdn.$48.41 less Cdn.$0.25) by (B) the BCE Weighted Average
Trading Price; and
(ii) in the event the closing of the Nortel Transaction has not been
completed or is terminated prior to the First Take-Up Date, Cdn.$0.25
plus 0.299 of a BCE Share per Common Share.
(b) The Alternative Share Exchange Ratio specified in paragraph (a)(i)
above shall be subject to a minimum of 0.85 of a BCE Share per Common Share and
a maximum of 0.97 of a BCE Share per Common Share.
(c) Shareholders may elect to receive cash in lieu of BCE Shares for up to
20% of their consideration for all or part of their Common Shares based upon
the BCE Weighted Average Trading Price.
(d) The Offeror agrees to execute and jointly file with each Shareholder
who so requests an election pursuant to section 85 of the Canadian Income Tax
Act and other Canadian Income Tax Legislation in which election such
Shareholder will be entitled to elect the amount which shall be such
Shareholder's proceeds of disposition and the Offeror's cost of the Common
Shares exchanged for BCE Shares, provided such amount is within the limits
prescribed by Canadian Income Tax Legislation and provided that such
Shareholder shall be responsible for preparing the appropriate tax election
form and providing the Offeror with a letter representing to the Offeror that
such Shareholder either (i) is a resident of Canada for purposes of the
Canadian Income Tax Legislation and is not exempt from tax or (ii) is a
non-resident of Canada, the Common Shares are taxable Canadian property to such
Shareholder and the Shareholder is not exempt from Canadian tax on any gain
such Shareholder would realize on a disposition of the Common Shares. Such
Shareholder shall provide the Offeror with the completed election form no later
than January 15, 2001. The Offeror will execute any completed election form
received and return such form by mail to the Shareholder within 30 days of
receipt thereof. The Shareholder shall be solely responsible for filing the
form with the appropriate tax authority.
<PAGE>
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(e) The Alternative Offer would be made within 15 days following the
earliest of (i) the date of the Special Meeting, if the holders of common
shares fail to approve the Plan of Arrangement, (ii) the date of the court
hearing on the Final Order, if the Final Order approving the Plan of
Arrangement is not obtained or (iii) a determination referred to in paragraph
(a) being made by the Sellers.
(f) The Alternative Offer would not be subject to a minimum tender
condition.
(g) The Alternative Offer would contain the conditions contemplated by
Schedule B and otherwise be in conformity, mutatis mutandis, with the
provisions of this agreement.
(h) For certainty, Shareholders would be entitled to make the Holdco
Election under the Alternative Offer and the Offeror agrees to execute and file
the tax election contemplated by paragraph (d) above in respect of any such
Holdco Election.
EXHIBIT 2C
News Release
- --------------------------------------------------------------------------------
For immediate release (See Media call details at the end of the release)
BCE TO ACQUIRE REMAINDER OF TELEGLOBE FOR C$9.65 BILLION
o Creates global Canadian full service communications company
o Provides BCE with international network for e-commerce and data
services
o BCE to support global broadband expansion of Teleglobe
o Jean Monty becomes Chairman of Teleglobe
Montreal (Quebec), (February 15, 2000) - BCE Inc. (BCE: TSE, NYSE) today
announced a definitive agreement to acquire all of the outstanding common shares
it currently does not own of Teleglobe Inc. (TGO: TSE, NYSE), for approximately
C$9.65 billion (US$6.66 billion) in BCE shares. BCE currently owns approximately
23% of Teleglobe through Bell Canada. BCE also announced that Mr. Kenny Troutt,
who owns 18% of Teleglobe's common shares outstanding and Mr. Charles Sirois,
who owns 8% of Teleglobe's common shares outstanding, have accepted BCE's offer.
Teleglobe's Board of Directors will recommend the same offer to all remaining
common shareholders.
"The acquisition of Teleglobe will propel BCE into the global arena and greatly
expand our opportunities for growth," said Jean C. Monty, President and CEO of
BCE. "Teleglobe will bring an international perspective to our strategic focus
on communications services, providing us with an extensive data/Internet network
that has direct connections with businesses in 100 countries. It will open the
world to our growth-oriented Internet and e-commerce companies as they pursue
expansion beyond Canada."
<PAGE>
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BCE's offer to Teleglobe's shareholders will be made in BCE common shares based
on BCE's share price following the distribution of Nortel common shares to BCE's
shareholders. For the purposes of this transaction all parties have agreed on an
assumed value of BCE shares following the Nortel distribution at C$53.50
(US$36.90) subject to a fixed "collar" (i.e. a high and low range) exchange
ratio. Teleglobe shareholders will receive C$48.41 (US$33.41) for each Teleglobe
common share they own, if the 10-day average price for BCE is between C$50 and
C$57 (US$34 and US$39), five days prior to the closing of the transaction. This
represents a purchase price of C$9.65 billion (US$6.66 billion) for the 199.4
million common shares outstanding which the BCE group does not own. If BCE 's
trading price is below C$50 (US$34) per common share, the exchange ratio will be
fixed at .97 of a BCE share for every Teleglobe share. If BCE's trading price is
above C$57 (US$39) per common share the exchange ratio will be fixed at .85 of a
BCE share for every Teleglobe share.
The Board of Directors of Teleglobe has appointed Jean C. Monty as Chairman of
the Board of Teleglobe effective immediately. The Board has also appointed Paolo
Guidi, President and CEO of Teleglobe Communications Corporation, and Christina
Gold, President and CEO of Excel, as co-CEO's of Teleglobe in addition to their
current responsibilities. Mr. Charles Sirois will serve as special advisor to
Jean Monty in his capacity as Chairman of Teleglobe.
Acknowledging Teleglobe's recent financial performance, Mr. Monty said, "The
disappointing results reflect the highly competitive international telecom
market following deregulation and liberalization and the transition from a
traditional voice business to data and Internet. These changes have been a
challenge for all established players including Teleglobe. Additionally,
Teleglobe's performance has been affected by the ongoing difficulties at Excel."
He added, "As part of the BCE group of communications companies, Teleglobe's
position will be strengthened and it will be better placed to realize its goal
of becoming a global data/Internet company. Teleglobe is already well under way
with a C$6.5 billion (US$4.5 billion), five-year Internet infrastructure
program, GlobeSystem, which BCE will continue to support. Through the talent of
individuals like Paolo Guidi and Christina Gold, work is well advanced on a
business plan to improve Teleglobe's profitability and enable it to reach its
full growth potential."
The transaction will be subject to customary legal, regulatory and shareholder
(Teleglobe) approvals in both Canada and the United States. BCE expects that the
transaction will close as soon as possible after regulatory approvals. BCE's
financial advisors on this transaction were Morgan Stanley Dean Witter and CIBC
World Markets.
BCE is Canada's largest communications company. Through its operations in
communications services, BCE provides residence and business customers in Canada
with wireline and
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-3-
wireless communications products and applications, satellite communications and
direct-to-home television services, systems integration expertise, electronic
commerce solutions, Internet access and high-speed data services, and
directories. Abroad, through Bell Canada International's investee companies, BCE
provides communications services to more than 4.2 million customers in Asia and
Latin America. BCE also has an extensive international presence through its
ownership in Nortel Networks, a global leader in the design and building of
communications networks, as well as through Teleglobe, an international
telecommunications carrier. BCE shares are listed in Canada, the United States
and Europe.
--30--
Note to Editors: BCE will Webcast a news conference from 4:30 p.m. to 5:15 p.m.
during which BCE's Jean C. Monty, President and Chief Executive Officer will
discuss the transaction.
To take part in the Webcast, please visit www.bce.ca. To participate in audio
teleconference, please call: North America only 1-888-368-4536 or
internationally 1-212-231-6016 (there are a limited number of ports available).
You will need to reference the verbal password "globe".
What you need to "attend" the Webcast:
- A Pentium P133 or faster
- Sound card with speakers or headphones
- 28.8 Kbps modem or higher
- RealPlayer G2 required, available at www.real.com
A replay of the audioconference will be available at 6 pm EST at 1-416-626-4100
passcode 14453223# "pound sign" until 6 p.m., February 18, 2000.
The news conference will also be available via satellite feed: 4:30 p.m. to 5:15
p.m.
Canadian Satellite
Anik E2C/8a
Down-link frequency: 4 gHz Horz.
Channel: 15
American Satellite
Telstar 5/C23
Down-link frequency: 4.160 gHz Vert.
Channel: 23
The audio sub-carriers are:
English (simultaneous translation to English) 6.8 kHz
French (simultaneous translation to French) 6.2 kHz
Integral (floor) 5.4 kHz
The signal has been made available at the Montreal and Toronto TOC for PEGAD.
Note:
Certain statements made in this press release, which describe BCE's intentions,
expectations or predictions, are forward-looking and are subject to important
risks and uncertainties. The
<PAGE>
-4-
results or events predicted in these statements may differ materially from
actual results or events. Factors which could cause results or events to differ
from current expectations include, among other things: the impact of rapid
technological and market change; general industry and market conditions and
growth rates; international growth and global economic conditions, particularly
in emerging markets and including interest rates and currency exchange rate
fluctuations; unanticipated impact of Year 2000 issues; and the impact of
consolidations in the telecommunications industry. For additional information
with respect to certain of these and other factors, see the reports on Forms 6-K
and 40-F filed by BCE with the United States Securities and Exchange Commission.
BCE disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
For further information:
Don Doucette Frank Miscio
Corporate Communications Investor Relations
(514) 786-3924 (514) 870-2488
Web site: www.bce.ca
Attachments:
Profiles BCE, Teleglobe
Pricing schedule
EXHIBIT 2D
Indemnification Letter
February 15, 2000
Kenny A. Troutt
10595 Strait Lane
Dallas, Texas
75229
Dear Mr. Troutt:
We understand that, in connection with the merger (the "Excel Merger") of
North Merger Sub Corporation, a wholly owned subsidiary of Teleglobe Inc.
("Teleglobe"), and Excel Communications, Inc. ("Excel") in November of 1998, you
and certain other shareholders listed in the attached Schedule A (the "Troutt
Group") executed certain agreements with the Internal Revenue Service to
recognize gain with respect to the shares of Excel common stock exchanged by the
Troutt Group (the "Exchanged Excel Shares") for shares of Teleglobe common stock
(as reported on such agreements and to the extent, if any, reduced under U.S.
Treasury regulations Section 1.368(a)-8) in connection with the Excel Merger,
copies of which are attached as Schedule B (the "Gain Recognition Agreements").
We also understand the Troutt Group may be required to execute a new gain
recognition agreement (which is also included in the definition of "Gain
Recognition Agreements") as a result of the acquisition by BCE of the remaining
common shares of Teleglobe not owned by BCE and its affiliates (the "Acquisition
Transaction"). We also understand that the Gain Recognition Agreements would
require the Troutt Group to recognize gain and pay the resulting tax as if the
gain had occurred at the date of the Excel Merger in certain circumstances which
are within (i) the control of Teleglobe, and (ii) if BCE Inc. ("BCE") completes
the Acquisition Transaction as announced today, the control of BCE upon
completion of the Acquisition Transaction.
We also understand that the Troutt Group obtained significant
representation, as contemplated by Teleglobe's certificate of articles of
amendment ("Articles") dated November 10, 1998, on the Board of Directors of
Teleglobe in order to, among other things, have influence over Teleglobe so
that, among other things, the Troutt Group could ensure that no event occurred
within Teleglobe's control to trigger gain under the Gain Recognition
Agreements. In addition, the number of nominees of the Troutt Group on the Board
of Directors of Teleglobe gives the Troutt Group a veto over the sale of certain
subsidiaries or any merger, amalgamation, or similar transaction of any such
subsidiary of Teleglobe as any such transaction requires under the Articles a
supermajority vote of 66-2/3% of the entire Board of Directors of Teleglobe.
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- 2 -
In consideration for amending the Articles of Teleglobe to remove the right
of the Excel Directors to elect until December 31, 2003 at least 34% of the
board members of Teleglobe and to enable, if desired, the sale of certain
subsidiaries of Teleglobe (in particular, Excel), BCE agrees that, effective
upon completion of the Acquisition Transaction, in order to provide partial
protection to the Troutt Group, BCE will cause Teleglobe to provide to the
Troutt Group the indemnities and afford the opportunity to acquire Excel as
described below.
1. Change of Control of Excel
In the event that there is a Disposition (as hereafter defined) which
constitutes a Change of Control of Excel (as hereafter defined), BCE shall cause
Teleglobe to provide to you Proper Notice (as hereafter defined) of the
intention to enter into the transaction and the closing of such transaction if
it occurs (the "Change of Control Transaction").
If the Change of Control Transaction is completed during the period from
the date of completion of the Acquisition Transaction to December 31, 2003, BCE
agrees to cause Teleglobe to indemnify the Troutt Group in respect of interest
(but not penalties) payable by the Troutt Group to the Internal Revenue Service
for a period of the shorter of (i) the two years from the effective time of the
Excel Merger and (ii) the period from such effective time to and including the
date of the closing of the Change of Control Transaction on any U.S. federal,
state or local taxes payable by the Troutt Group by reason of the Change of
Control Transaction.
If Proper Notice has not been given prior to closing of a Change of Control
Transaction, BCE shall also cause Teleglobe to be liable to indemnify the Troutt
Group for penalties on such taxes and for interest accruing after the closing of
the Change of Control Transaction to and including the date notice is received
by the Troutt Group of the Change of Control Transaction.
2. Non-Change of Control Events
If there is a transaction or event which may constitute a Disposition with
respect to Excel or Teleglobe which may be taken after the date of completion of
the Acquisition Transaction and within five years of the effective time of the
Excel Merger which event is not a Change of Control of Excel or Teleglobe but
which event is within the control of BCE or Teleglobe, BCE shall cause Teleglobe
to provide Proper Notice to you of the intention to enter into the transaction
and the closing of such transaction if it occurs (the "Internal Transaction").
If the Internal Transaction is completed, BCE agrees to cause Teleglobe to
indemnify the Troutt Group in respect of interest (but not penalties) payable by
the Troutt Group to the Internal Revenue Service for a period from the effective
time of the Excel Merger to and including the date of the completion of the
Internal Transaction on any U.S. federal, state or local taxes payable by the
Troutt Group to the Internal Revenue Service by reason of the Internal
Transaction.
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- 3 -
If Proper Notice has not been given prior to implementation of the Internal
Transaction, Teleglobe shall also be liable to indemnify the Troutt Group for
penalties on such taxes and for interest accruing after the date of completion
or implementation of the Internal Transaction to and including the date notice
is received by the Troutt Group.
3. Entire Agreement
In the event the Acquisition Transaction is consummated, this letter shall
constitute the entire agreement, and supersedes any and all other prior
agreements and undertakings (including, without limitation, the Agreement and
Plan of Merger dated as of June 14, 1998 among Teleglobe, North Merger Sub
Corporation and Excel), in each case among two or more of BCE, Teleglobe,
Teleglobe Holding (U.S.) Corporation, Kenny A. Troutt and any other member of
the Troutt Group in connection with the gain on the Exchanged Excel Shares
pursuant to the Gain Recognition Agreements. As part of this letter, in the
event that the Acquisition Transaction is consummated, each of BCE and the
Troutt Group shall surrender any rights or obligations, or alleged rights or
obligations, it may have in connection with such gain that is not set forth in
this letter.
4. Troutt Purchase of Excel
Notwithstanding anything in this letter to the contrary, neither a Change
of Control of Excel nor an Internal Transaction shall include any transaction to
which Kenny A. Troutt or any other member of the Troutt Group participates as an
acquiror.
5. Late Payments
Except as otherwise provided, any amounts referred to in this letter which
are not paid when due and payable under this letter shall bear interest from the
date due to the date paid at the prime rate of Citibank, N.A., as in effect from
time to time during such period.
6. Registration Rights
In the event that there is a Change of Control Transaction or Internal
Transaction which would trigger gain under the Gain Recognition Agreements, BCE
agrees that in order to assist the Troutt Group in selling any BCE common
shares (the "BCE Shares") acquired by the Troutt Group in exchange for common
shares of Teleglobe, the Troutt Group is entitled to demand registration, if
necessary, of the BCE Shares under the Securities Act of 1933 (or qualify the
BCE Shares for distribution under the Canadian securities laws of the provinces
of Canada) and BCE agrees to promptly effect such registration or qualification
provided that (a) each demand covers at least US $50 million of securities
(based on the NYSE closing price on the demand date), (b) the Troutt Group may
not make any such demand registration within 60 days of the effective date of
any registration statement of BCE filed prior to the date of the initial demand
request by the Troutt Group, and (c) there may no be more than five (5) such
demand
<PAGE>
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registrations. Upon registration, BCE agrees that such registered securities are
listed for trading on the same exchange as similar securities of BCE trade at
such time. BCE shall be responsible for all expenses of such registration other
than legal fees of the Troutt Group, transfer taxes and all discounts,
commissions or fees of underwriters, selling brokers and dealers.
7. Gain Recognition Agreement Resulting from the Acquisition Transaction
Notwithstanding anything herein to the contrary in the event the Troutt
Group (or any member thereof) is required to file a new gain recognition
agreement as a result of the Acquisition Transaction, BCE shall provide or cause
Teleglobe to provide Proper Notice to you of the intention to enter into any
Disposition with respect to all or a portion of the stock of Teleglobe.
8. First Opportunity on Sale of Excel
BCE understands that if the Troutt Group acquires at least the same
percentage of Excel that the Troutt Group owned prior to the effective time of
the Excel Merger, the Troutt Group may not realize any gain under the Gain
Recognition Agreements as a result of such transaction if it qualifies as a tax
deferred transaction for U.S. tax purposes. Accordingly, BCE agrees as follows:
(A) BCE undertakes for a period of three years from the closing date of
the Acquisition Transaction (which shall be deemed to have closed when
the common shares of the Troutt Group have been acquired) to use its
reasonable best efforts to ensure that if Teleglobe decides to pursue
the sale of its interest in the multilevel marketing business of,
and/or the United States domestic telecommunications network of, Excel
Communications Inc. (the "Excel Business"), BCE or Teleglobe shall
give notice to you in writing (a "Sale Notice") whereby you will have
the first opportunity, for a period of 90 days following the Sale
Notice, to purchase the Excel Business. BCE undertakes that it will
use its reasonable best efforts so that you shall be afforded
reasonable access to information concerning the Excel Business to
enable you and your advisors to conduct due diligence on the Excel
Business.
(B) The parties agree to use their reasonable good faith efforts to
negotiate a definitive purchase agreement with respect to the Excel
Business during such 90 day period, such agreement to contain
customary representations and warranties typical of transactions of
this kind. You shall propose a purchase price and related terms for
the acquisition of the Excel Business. Any offer submitted by you
shall be irrevocable subject to the conditions set out in the offer
and shall be for the Excel Business.
(C) In the event that no definitive agreement of purchase and sale
relating to the sale of the Excel Business is negotiated and executed
within 90 days following the Sale Notice, BCE, Teleglobe or their
respective affiliates may sell the Excel Business to any person (a
"Third Party") (i) at any price if you do not submit an offer within
90 days of the Sale Notice or
<PAGE>
- 5 -
(ii) at a price and on such terms not less than the price and terms
set forth in your offer if you made an offer within 90 days of the
Sale Notice. If you made an offer within 90 days of the Sale Notice
which is rejected by BCE or Teleglobe and if no sale of the Excel
Business is completed by BCE or Teleglobe within 12 months following
you making your offer, BCE or Teleglobe shall be required, before
transferring the Excel Business, to give notice in the manner provided
in section 8(a) and such process shall be repeated so often as BCE or
Teleglobe desires to transfer the Excel Business for a period of three
years following the completion of the Transaction.
(D) This right of first opportunity is personal and non-assignable by you
other than to an entity you control; however, it is recognized that
you may form a group to exercise your rights in the event of a Sale
Notice.
9. Governing Law/Attornment
This letter shall be governed by the laws of the State of New York, without
regard to its rules concerning conflicts of laws. The parties hereby irrevocably
agree to attorn to the jurisdiction of the courts of the State of New York in
respect of any matters relating to the letter agreement.
10. Assignability
The rights and obligations in this letter shall be binding upon and enure
to the benefit of the parties hereto and their respective successors, assigns
and transferees (including, without limitation, any estate or any beneficiary of
an estate of an individual). The obligations of BCE may not be delegated or
assigned, and any attempted delegation or assignment shall be null and void and
without effect.
11. Counterparts
This letter may be signed and agreed to and acknowledged in counterparts,
and each such counterpart, when signed, shall constitute one and the same
instrument.
12. Definitions
For purposes of this letter:
(A) "Change of Control of Excel" shall mean:
(i) the acquisition by any person or entity unrelated to Teleglobe or
BCE, or any such persons or entities acting jointly or in
concert, whether directly or indirectly, of voting securities of
Excel which, together with all other voting securities of Excel
held by such persons or
<PAGE>
- 6 -
entities, constitute, in the aggregate more than 50% of all
outstanding voting securities of Excel; or
(ii) a merger, amalgamation, or other form of business combination of
Excel with another entity unrelated to Teleglobe or BCE which
results in the holders of voting securities of that other entity
holding, in the aggregate more than 50% of all outstanding voting
securities of the entity resulting from the merger, amalgamation
or business combination.
(B) "Proper Notice" shall mean at least five business days written notice
to the Troutt Group (which for such purpose may be made to Kenny A.
Troutt, 10595 Strait Lane, Dallas, Texas, 75229) and which may be
given by facsimile to (214) 368-4367.
(C) "Disposition" shall have the same meaning as such term has for
purposes of U.S. Treasury Regulation Section 1.367-8(e).
If you agree to the foregoing, please so acknowledge by signing this letter
below.
Yours truly,
BCE INC.
by
--------------------------------
Acknowledged and agreed to this 15th day of February, 2000.
-----------------------------
Kenny A. Troutt
<PAGE>
SCHEDULE A
Kenny A. Troutt
Troutt Family Trust - Separate Trust Estate of Kenny A. Troutt
Troutt Family Trust - Community Property
Kenny Troutt Investment Partnership, Ltd.
Kenny A. Troutt Children's Trust
Lisa E. Troutt Children's Trust
KAT Children's Trust II
