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Technology Stocks : Global Crossing - GX (formerly GBLX) -- Ignore unavailable to you. Want to Upgrade?

To: Frank A. Coluccio who wrote (6197)	5/21/2000 7:11:00 PM
From: Teddy	Read Replies (1) \| Respond to of 15615

hi Frank, i've been quietly reading the 900+ page Telergy prospectus and had planned to post some of my findings/ questions on your thread later this week. While i'm not finished with that project, i would like to bring one section to your attention because i think it is at least somewhat related to your recent Global Crossing Ltd questions. (i bolded part because it is, ugh, "interesting." ) Enjoy: Page 77 of the Telergy Prospectus: RELATIONSHIPS WITH GLOBAL CROSSING INDEFEASIBLE RIGHTS-OF-USE. On September 9, 1999, Telergy Metro and US Crossing, Inc., a wholly-owned subsidiary of Global Crossing, entered into an agreement for Telergy Metro to provide US Crossing with an indefeasible rights-of-use in 96 strands of dark fiber in up to 100 miles in our New York City ring for a minimum of 20 years. The agreement provides that we must deliver an indefeasible rights-of-use in our Manhattan ring on or before December 31, 2000 and deliver an indefeasible rights-of-use in our planned New York City ring on or before December 31, 2002. In the event we fail to deliver the indefeasible rights-of-use on or before these dates, we will be liable for liquidated damages in the amount of $25,000 per day up to $2.5 million. In the event we fail to deliver an indefeasible rights-of-use in our Manhattan ring on or before March 1, 2001, liquidated damages will not be the sole remedy available to US Crossing. Telergy provided a guarantee of Telergy Metro's performance under this agreement. We have also agreed to construct additional building entrances that are within a certain distance from the New York City ring through available ConEd rights-of-ways and service entrance pipes. US Crossing is required to pay its pro rata share of all costs associated with constructing those building entrances. In exchange for the indefeasible rights-of-use, US Crossing has agreed to pay annual maintenance fees and to provide various forms of operational support. US Crossing will further explore its use of our facilities to: - terminate traffic on our networks in markets not served by the New York City ring; - provide back-up redundancy to US Crossing in areas we serve; and - terminate traffic in and throughout New York City which US Crossing can not transmit because of capacity overload, disruption or otherwise. US Crossing has also agreed to meet quarterly for the first year and bi-annually thereafter to discuss these uses and to assist in our development of new products and services, planning joint development and marketing of new products, providing Telergy access to US Crossing training and to advise Telergy of any US Crossing intellectual property that is available for licensing. US Crossing has agreed to provide Telergy colocation space in Telergy's operating areas in the United States where US Crossing has such space available. US Crossing has further agreed to provide capacity and services on its global network if available at discounts between 5% and 15% off of list prices that would otherwise apply. US Crossing has also agreed to participate in the preliminary design of a Long Island spur route and, subject to final agreement between the parties, joint construction and installation of that spur route. We have had conversations with representatives of Global Crossing regarding our build-out in the Empire City Subway rights-of-way in Manhattan. In one of those conversations, a representative of Global Crossing indicated that he believed that they may be entitled to 81 additional fiber as part of their agreement with us. We do not believe that our current contract requires us to deliver more fiber than described above. STOCK PURCHASE. On September 9, 1999, GC Dev, a subsidiary of Global Crossing, purchased for approximately $40.0 million, 404,576 shares of our Series A preferred stock and warrants to purchase up to 564,227 shares of our Class A common stock. See "Description of Capital Stock -- Warrants" and "Description of Capital Stock -- Series A Preferred Stock". We have also granted GC Dev demand and piggyback registration rights. See "Description of Capital Stock -- Registration Rights". In connection with GC Dev's purchase of our Series A preferred stock and warrants, we, Brian P. Kelly, Kevin J. Kelly and William M. Kelly, Jr. have agreed with GC Dev as follows: DESIGNATION TO OUR BOARD OF DIRECTORS. So long as Global Crossing and its affiliates own at least 5% of our fully diluted voting stock or warrants, options or other convertible securities which are exercisable for at least 5% of our fully diluted voting stock, Brian P. Kelly, Kevin J. Kelly, William M. Kelly, Jr. and we will cause one person designated by GC Dev to be elected to our board of directors. The designee must be an officer or director of Global Crossing and will be subject to the consent of Brian P. Kelly, Kevin J. Kelly and William M. Kelly, Jr. Until his resignation on April 25, 2000, Thomas J. Casey, Vice Chairman and Director of Global Crossing, served as the GC Dev designee to our board of directors. Global Crossing has not designated a replacement director at this time.