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Exhibit 2.4
FORM OF ADDITIONAL AGREEMENT WITH CERTAIN SHAREHOLDERS
November 30, 1998
Mr. Ivar Formo Mr. Sean Bolger
Chairman of the Board 14 Idrone Close
NetSource Europe ASA Knocklyn
C/o Kistefos AS Dublin 16
Stranden I Ireland
N-0250 Oslo, Norway
Mr. Riulf Rustad AS Kistefos Traesliberi
President C/o Kistefos AS
Kistefos AS Stranden I
Stranden I N-0250 Oslo, Norway
N-0250 Oslo, Norway
Itelium AS
C/o Kistefos AS
Stranden I
N-0250 Oslo, Norway
Gentlemen,
This letter is to confirm the points agreed upon at our meetings on
November 24, 1998 regarding the acquisition of NetSource Europe ASA
("NetSource") by Global TeleSystems Group, Inc. ("GTS") as described in the
October 14, 1998 offer, including the October 16, 1998 supplement thereto (the
"Offer"), as well as certain additional points and clarifications which have
arisen in the interim. These points are listed below. This letter will be
supplemented and/or superseded by appropriate legal documents as determined
necessary by GTS provided that such agreements are consistent with this letter
agreement.
1) The $35M 1999 earnout set forth in the Offer will now be replaced by
the following earnout: $15M based on achievement of the same Q1 results
as specified in the Offer and $20M based on the achievement of the same
Q2 results as specified in the Offer, provided that 20% of the Q2
payment will be paid if 80% of the Q2 targets are achieved under the
terms set forth in the Offer (the "Revised Earnout"). The detailed
language describing the new earnout is attached.
2) Kistefos AS ("Kistefos") and Mr. Sean Bolger ("Bolger") shall ensure
that shareholders holding at least 67 per cent of NetSource's fully
diluted share capital shall accept and agree to the Revised Earnout by
signing a waiver in the form attached hereto within 10 Norwegian
business days from the date the initial consideration pursuant to the
Offer has been settled in full and Kistefos and Bolger shall indemnify
GTS and hold GTS harmless for any payments over and above the payments
due to those shareholders who have accepted the Revised Earnout which
GTS must make to NetSource shareholders under
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the original earnout structure. Further, Kistefos and Bolger agree to
exercise their best efforts to ensure that 100 per cent of NetSource's
shareholders shall accept and agree to the Revised Earnout. Kistefos
and Bolger agree that 40% of the GTS shares payable to each of
Kistefos, AS Kistefos Traesliberi, Itelium AS and Bolger as
consideration in accordance with the Offer shall be retained by GTS to
secure Kistefos' and Bolger's performance in accordance with this
letter agreement until such time as the 67 per cent acceptance
threshold is reached or all potential payment obligations of GTS under
the Offer have terminated.
3) The NetSource board will approve the new earnout structure prior to 4
p.m. Oslo time on Monday, November 30, 1998 and circulate notice
thereof to shareholders as soon as possible thereafter, but in no event
later than close of business on the following day along with a
recommendation in the form attached hereto that all shareholders waive
the old earnout provisions and approve the Revised Earnout.
4) Kistefos and Bolger shall assist in the conclusion of two indemnity and
escrow agreements with GTS, one concerning claims related to NTB which
will be signed by Henk Keilmann, and/or any relevant entity controlled
by him, and secured by a pledge to GTS of (i) $500,000 in cash and (ii)
85,000 of the GTS shares he or such relevant entity is to receive in
connection with the Offer, and a second concerning claims related to
Westcom which will be signed by Torsten Scholl and secured by a pledge
to GTS of 60,000 of the GTS shares he is to receive in connection with
the Offer.
5) Kistefos hereby waives, on behalf of itself and its affiliates, its
rights to any fee in connection with GTS' acquisition of NetSource,
including, without limitation, its rights under the agreement between
Kistefos and NetSource dated as of September 30, 1998 pursuant to which
Kistefos was entitled to a fee of NOK 40,000,000. NetSource shall
approve a one-time payment of $300,000 to Kistefos and Bolger as
consideration for their indemnifying GTS and NetSource and holding GTS
and NetSource harmless, and Kistefos and Bolger hereby so indemnify GTS
and NetSource and hold GTS and NetSource harmless, with respect to any
claim filed by Muir International/Mr. Kevin Paul and/or any entity
controlled by him in connection with any such fees, such payment and
indemnification to be shared equally between them.
6) GTS shall accept and allow in the calculation of the fully diluted
share capital of NetSource (i) the Offer acceptances submitted by
NetSource shareholders after the submission deadline (October 30, 1998)
received through the settlement date, (ii) shares distributed after the
same deadline resulting from the exercise of NetSource options by
NetSource employees, provided that GTS has been informed in writing of
all such options prior to November 27, 1998, and (iii) the NetSource
shares issued to Mr. Bill Norlander in connection with the purchase
from him of the remainder of NetSource PhoneSystem AB, provided,
however, (i) that GTS shall only be bound in relation to any
shareholder in any of the said categories provided that said
shareholder has accepted the Revised Earnout, and (ii) that GTS shall
only be bound to settle with any of the above categories of
shareholders as soon as reasonably practicable and not in accordance
with the timelines set forth in the Offer.
7) All legal formalities related to the purchase of ITL shall be completed
prior to close of business, Oslo time on Friday, November 27, 1998.
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8) All of the signatories of this letter agree that the number of fully
diluted NetSource shares to be used in the calculation of the
consideration due under the Offer is 28,634,143, taking into
consideration, in particular, recent management compensation actions.
Please indicate your understanding and acceptance of the above by
signing and returning an original of this letter to Svein Gerhard Simonnaes at
BA-HR as soon as possible.
Sincerely yours,
/s/ Grier Raclin
Grier Raclin
General Counsel
Accepted and agreed by:
NetSource Europe ASA
By: /s/ Ivan Formo
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Ivar Formo
Chairman of the Board,
Kistefos AS, AS Kistefos Traesliberi and
Itelium AS
By: /s/ Riulf Rustad
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Riulf Rustad,
and
Sean Bolger:
/s/ Sean Bolger
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