EXHIBIT 10.2
CONFORMED COPY
TERMINATION AGREEMENT
TERMINATION AGREEMENT dated as of July 18, 1999 between GLOBAL CROSSING
LTD., a company formed under the laws of Bermuda ("Global"), and U S WEST, Inc.,
a Delaware corporation ("USW").
W I T N E S S E T H
In consideration of the mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, the parties hereto agree as set forth below:
SECTION 1. Termination. Pursuant to Section 9.1(a) of the Agreement and
Plan of Merger dated as of May 16, 1999 between USW and Global (the "Merger
Agreement"), Global and USW hereby agree to terminate the Merger Agreement.
SECTION 2. Payments to Global. (a) On the business day immediately
subsequent to the execution of this Termination Agreement, USW shall:
(i) pay to Global (without reduction for or on account of any
taxes, including withholding taxes, if any) $140,000,000 in immediately
available funds to the account designated by Global on Schedule A
hereto; and
(ii) deliver to Global (without reduction for or on account of
any taxes, including withholding taxes, if any) 2,231,076 shares of
common stock of Global (subject to any adjustment for reclassification,
recapitalization, split-up, combination, or exchange of Global shares
after the date hereof).
(b) The parties agree that the payments provided in Section 2(a) above
and the entering into of the agreement of Qwest Communications International
Inc. ("Qwest") in Section 4.02(a) of the Agreement dated as of the date hereof
between Qwest and Global are in full satisfaction and discharge of the
obligations of USW under the Merger Agreement in respect of the termination fees
thereunder as well as all other Claims by Global against USW in respect only of
the Merger Agreement (and not, for purposes of clarification, in respect of the
other agreements listed in Section 4 hereof or any other agreements between the
parties hereto).
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SECTION 3. Release. (a) USW, on behalf of itself and its successors and
assigns, and Global, on behalf of itself and its successors and assigns, each
mutually release and forever discharge the other, and all persons acting in
concert with the other, from all liabilities, rights, duties, claims, causes of
action, actions, suits, debts, sums of money, accounts, judgments, damages or
demands of any nature whatsoever, legal, equitable or otherwise, known or
unknown, contingent or fixed, in whole or in part (hereinafter collectively
referred to as the "Claims"), and agree not to sue or to bring any claim,
whether in tort, contract or otherwise, in each case directly or indirectly
arising from the conduct prior to the date hereof of USW, Global or their
respective directors, officers, employees or agents in connection with the
Merger Agreement (and not, for purposes of clarification, the other agreements
listed in Section 4 hereof), the offer made by Qwest to acquire USW on June 13,
1999, which offer was subsequently revised on June 23, 1999, and the proposed
combination of Qwest and USW.
(b) Each of USW and Global represents and warrants that it has not
sold, assigned, transferred, conveyed or otherwise disposed of any claim, demand
or cause of action or any part thereof relating to any matter covered by this
Section 2.
(c) Each of USW and Global represents and warrants that it is duly
authorized to execute the release contained in Section 2(a) above on behalf of
its affiliates, directors, officers, employees and agents.
SECTION 4. Survival of Other Agreements. The other agreements to which
Global and USW are parties, including the Tender Offer and Purchase Agreement,
the Tender and Voting Agreement, the Voting Agreement and the Standstill
Agreement each dated May 16, 1999, and the confidentiality letter dated May 3,
1999, shall each survive termination of the Merger Agreement pursuant hereto.
SECTION 5. Indemnity. (a) Subject to the provisions of this Section 5,
Global hereby agrees to indemnify USW with respect to any liability for United
States federal income taxes on Global enforced by withholding (including any
interest or penalties and costs and expenses (including reasonable attorney fees
with respect thereto) with respect to the payment and stock transfer by USW to
Global described in Section 2(a) of this Agreement ("Possible Withholding
Taxes").
(b) If USW is notified, in writing, as part of an audit or other
administrative proceeding related to taxes (a "Contest"), that the applicable
taxing authority is asserting a claim for Possible Withholding Taxes, then (i)
USW shall promptly notify Global of such claim, (ii) USW shall, subject to
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Section 5(c) below, permit Global, at Global's own cost and expense, to control
that portion of the Contest related to Possible Withholding Taxes, including the
execution of any powers-of-attorney or similar documents necessary for Global to
control such portion of the Contest; provided that in executing such
powers-of-attorney or similar documents, USW and Global agree that such powers
shall be limited to such portion of the Contest, and (iii) USW shall not settle
or otherwise compromise such portion of the Contest related to Possible
Withholding Taxes without the prior written consent of Global. Further, without
the prior written consent of Global, USW shall not take any position on any tax
return or similar filing that Possible Withholding Taxes may be due and owing,
unless such position is required by law pursuant to a final determination. USW's
indemnification rights pursuant to Section 5(a) are subject to the provisions of
this Section 5(b).
(c) Upon acknowledgment in writing by Global (i) that it intends to
assume responsibility for defense of a Contest related to Possible Withholding
Taxes, and (ii) that it intends to indemnify USW pursuant to this Agreement,
Global will thereafter be entitled to appoint lead defense counsel (reasonably
acceptable to USW) with respect to such claim and USW will thereafter be
responsible for all costs and expenses of its own counsel.
SECTION 6. Effectiveness. This Agreement shall be deemed effective as
of the date first set forth above.
SECTION 7. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed entirely within that
State without regard to the conflicts of laws provisions thereof.
SECTION 8. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original, but all of which shall
constitute one and the same agreement.
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IN WITNESS WHEREOF, USW and Global have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
GLOBAL CROSSING LTD.
By: /s/ Robert Annunziata
Name: Robert Annunziata
Title: Chief Executive Officer
U S WEST, INC.
By: /s/ Solomon D. Trujillo
Name: Solomon D. Trujillo
Title: Chairman, President and
Chief Executive Officer
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