Document:

Exhibit 10.1

 

Portions hereof have been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment in accordance with Rule 406 of the Securities Act of 1933, as
amended.

 

THIS MASTER WHOLESALE PRICING AND SERVICES
COORDINATING AGREEMENT IS MADE AS OF
January 1, 2001

 

	
  BETWEEN:

  	
  TELEGLOBE INC. a
  Canadian corporation having an office at 1000 rue de la Gauchetiere,
  Montreal, Canada (“Teleglobe”);

  
	
   

  	
   

  
	
   

  	
  OF THE FIRST PART

  
	
   

  	
   

  
	
  AND:

  	
  BELL CANADA, a
  Canadian corporation having an office at 483 Bay Street, Floor 6N, Toronto,
  Canada (“Bell Canada”);

  
	
   

  	
   

  
	
   

  	
  OF THE SECOND PART

  
	
   

  	
   

  
	
  AND:

  	
  BCE NEXXIA INC., a
  Canadian corporation having an office at 483 Bay Street, Floor 6N, Toronto,
  Canada (“Nexxia”)

  
	
   

  	
   

  
	
   

  	
  OF THE THIRD PART

  

 

RECITALS:

 

WHEREAS the Parties
hereto have agreed to acquire from each other telecommunications services with
the intent to leverage their respective abilities and strengths in order to
jointly, effectively and efficiently address the telecommunications
requirements of their respective customers;

 

WHEREAS the Parties
have developed, and supply certain telecommunications services as more
particularly defined in the Specific Service Agreements, and have agreed to
make such telecommunications services available to each other on the terms and
conditions set forth herein;

 

WHEREAS Teleglobe
agrees to purchase from Bell Canada or Nexxia, as the case may be, on an
exclusive basis, the telecommunications services of Bell Canada and Nexxia for
its requirements in the Territory, subject to the terms and conditions set
forth herein;

 

WHEREAS each of Bell
Canada and Nexxia wish to use certain telecommunications services of Teleglobe,
on an exclusive basis, for their respective requirements outside of the
Territory, subject to the terms and conditions set forth herein;

 

NOW THEREFORE THIS AGREEMENT WITNESSETH THAT
in consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the Parties agree as follows:

 

1

 

CONFIDENTIAL

 

1.                                      DEFINITIONS
AND INTERPRETATION

 

1.1.                            In
this Agreement, unless there is something in the subject matter or context
inconsistent therewith, the following terms shall have the following meanings:

 

(a)                                  “Act of Insolvency” with respect to a
Person, means that such Person:

 

(i)                                     admits
in writing its inability to pay its debts generally as they become due, or not
pay its debts generally as they become due; or

 

(ii)                                  files
an assignment or a petition in bankruptcy, as the case may be, or a petition to
take advantage of any insolvency statute of any relevant jurisdiction; or

 

(iii)                               makes
an assignment for the benefit of its creditors; or

 

(iv)                              consents
to the appointment of a receiver, administrator, custodian or liquidator of
itself, or of the whole, or any substantial part of its property; or

 

(v)                                 enters
into an arrangement or composition with, or for the benefit of creditors,
generally occurring in circumstances in which it is unable to meet its
obligations as they become due; or

 

(vi)                              files
a petition or answer seeking reorganization, administration, compromise,
adjustment or composition under applicable bankruptcy laws, insolvency laws or
any other similar law or stature; or

 

(vii)                           has
been adjudged by a court having jurisdiction in the premises as bankrupt or
insolvent, or a decree or order of a court having jurisdiction in the premises
shall have been entered for the appointment of a receiver or liquidator or
trustee or assignee in bankruptcy of it or for the winding up or liquidation of
its affairs and such decree or order shall remain in force undischarged or
unstayed for a period of sixty (60) days;

 

(b)                                 “Affiliate” means, with respect to any
Person, any other Person which controls, is controlled by, or is under common
control with that Person.  For the
purposes of this definition, a Person shall control the other if the first
Person: (i) owns beneficially, or of record, more than 50% of the voting securities
of the other Person; and (ii) has the ability to elect a majority of the board
of directors or other similar management body thereof; for greater certainty
BCE Emergis Inc. shall not be considered as an “Affiliate” under this
Agreement.

 

2

 

(c)                                  “Agreement” means this Agreement including
all Schedules attached hereto, unless the context otherwise requires;

 

(d)                                 “Bell Services” means, collectively, the
wholesale services listed in Schedule 2, provided by Bell Canada or
Nexxia, in the Territory, to Teleglobe pursuant to the Specific Service
Agreements and such other services as introduced by Bell Canada or Nexxia from
time to time as contemplated by this Agreement and added, by amendment executed
in writing by the Parties, to the list of Bell Services in Schedule 2, and
a reference to a “Bell Service”
means any one of them as the context may require;

 

(e)                                  “Business Day” means any day other than a
Saturday, Sunday or statutory holiday observed in the city of Toronto (Ontario)
or Reston (Virginia);

 

(f)                                    “Change of Control” means an event where a
Person, not a Party or any of its Affiliates, acquires 50% or more of the
issued and outstanding Voting Shares of the share capital of a Party;

 

(g)                                 “Commencement Date” means January 1,
2001;

 

(h)                                 “Competing Services” means any
telecommunications products or services, provided by a service provider, that
is the same or substantially similar to either a Teleglobe Exclusive Service or
Bell Service, or is otherwise competitive with either a Bell Service or
Teleglobe Exclusive Service or a Service to be provided by Teleglobe further to
the ROFR process set out in Article 5 hereof;

 

(i)                                     “Commodity Taxes” means all commodity
taxes, including but not limited to, sales, retail, use, goods and services,
harmonized, value added, excise, and similar taxes imposed, levied or assessed
by any federal, provincial, state or local government authority, other than
taxes in the nature of a tax on income or capital;

 

(j)                                     “Confidential Information” of a Party
includes all information relating to Customers, Customer account information,
Customer lists; information regarding such Party’s administrative, financial or
marketing activities; any research, development or business activities, the
existence and terms of this Agreement, information disclosed at any meetings
and demonstrations between the Parties at any time before or after the
Commencement Date, products, schedules, procedures, documentation, policies,
business methods and practices; pricing, market analysis, equipment,
statistics, technology, sales, projections and corporate/business or financial
information, technical information, actual and potential accounts, ideas,
concepts, techniques, processes, devices, compilations of data or information,
information relating to actual or prospective products, activities, commercial
relationships, know-how or research and

 

3

 

development; manufacturing, purchasing, data
processing, engineering, marketing, drawings, models, sketches, all written
material including programs and subroutines (whether in source or object code
form) and updates and modifications thereto, card decks, computer software and
software related documentation, tapes, diskettes, listings, and other
programming and system documentation, manuals and copies thereof containing
such information.  Confidential
Information also includes any and all trade secrets, confidential, private, or
secret information of such Party marked confidential, restricted or proprietary
or which is otherwise disclosed with notice of confidentiality and includes
without limitation information or data of any third party to whom such party
owes a duty of confidentiality;

 

(k)                                  “Cross-Border Facilities” means any Network
Facilities being part of or an extension to the telecommunications network of
any one Party, where such network requires the crossing of the US-Canada
border;

 

(l)                                     “Customers” means both Wholesale Customers
and Retail Customers;

 

(m)                               “Informant” has the meaning ascribed
thereto in Article 10.1;

 

(n)                                 “Intellectual Property Right” shall mean
any right that is or may be granted or recognised under any Canadian or foreign
legislation regarding patents, copyrights, neighbouring rights, moral rights,
trade-marks, trade names, service marks, industrial designs, mask work,
integrated circuit topography, privacy, publicity, celebrity and personality
rights or under any other statutory provision or common or civil law principle
regarding intellectual and industrial property, whether registered or
unregistered, and includes rights in any application for any of the foregoing;

 

(o)                                 “Network Facilities” shall include, without
limitation and as a way of example fibre and broadband circuits (e.g. DS1 to
OC192), including managed wave length services, all the foregoing for
“backbone” requirements and not for either Retail or Wholesale Customer
specific requirements;

 

(p)                                 “Party” means Bell Canada and Nexxia
(individually or collectively as the context requires) or Teleglobe, as the
case may be, and “Parties” means
collectively each Party to this Agreement;

 

(q)                                 “Person” means and includes an individual,
firm, partnership, syndicate, joint venture, trust, association, body
corporate, trustee, executor, administrator or legal representations and every
other legal or business entity whatsoever;

 

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(r)                                    “Prime”, “Primeship”,
“to prime” a Customer means to
have account management control for that Customer;

 

(s)                                  “Retail Customer” means a Customer of either
Bell Canada, Nexxia or Teleglobe, or any of such Party’s Affiliates, purchasing
Services for its use and not for distribution or resale;

 

(t)                                    “Right of First Refusal” or “ROFR” has the meaning set forth in
Article 5 hereof;

 

(u)                                 “Senior Executive Level” means a Person with
a minimum Vice-President level of authority at Teleglobe or Bell Canada or
Nexxia, as the case may be;

 

(v)                                 “Services”, means the Bell Services or
Teleglobe Services as the case may be, delivered pursuant to the Specific
Services Agreements;

 

(w)                               “Service Provider” means either Bell Canada
or Nexxia, in the case of the provision of the Bell Services to Teleglobe
pursuant to a Specific Services Agreement, or Teleglobe, in the case of the
provision of the Teleglobe Services to Bell Canada or Nexxia pursuant to a
Specific Services Agreement;

 

(x)                                   “Service Purchaser” means either Bell Canada
or Nexxia, where Bell Canada or Nexxia are the recipient of the Teleglobe
Services pursuant to a Specific Services Agreement, or Teleglobe, where
Teleglobe is the recipient of the Bell Services pursuant to a Specific Services
Agreement;

 

(y)                                 “Specific Service Agreements” means any and
all agreements entered into, inter alia,
by and between the Parties prior to or after the Commencement Date, and which
set forth the specific terms and conditions associated with the provision of
the Bell Services or Teleglobe Services, as applicable;

 

(z)                                   “Teleglobe” means Teleglobe Inc. and all its
Affiliates;

 

(aa)                            “Teleglobe Exclusive Services” means IP
Transit, International Private Line and international voice services (i.e.
IDDD, ISDN, OH, Canada Direct and ITFS/UIFN) or any other telecommunications
services for which a ROFR has been accepted pursuant to Section 5 hereof;

 

(bb)                          “Teleglobe Services” means, collectively,
the wholesale services listed in Schedule 1 provided by Teleglobe to Bell
Canada or Nexxia, as the case may be, pursuant to the Specific Services
Agreements and such other services as introduced by Teleglobe from time to time
as contemplated by this Agreement and added, by amendment executed in writing
by the

 

5

 

Parties, to the list in
Schedule 1, and a reference to a “Teleglobe
Service” means any one of them as the context may require;

 

(cc)                            “Territory” means Canada;

 

(dd)                          “Voting Shares” means shares of any class
of shares in the share capital of a body corporate to which are attached voting
rights exercisable in all circumstances;

 

(ee)                            “Wholesale Customer” means a business whose
primary purpose is the sale of telecommunications services to Persons who
purchase services for distribution to end users with or without adding value
and includes, without limitation, businesses described in the industry as IXCs,
resellers, rebillers, CLECs, DLECs, ISPs, aggregators, share groups, and
wireless service providers.

 

1.2.                            Entire Agreement. Subject to each
Specific Service Agreement, this Agreement and all Schedules attached hereto
constitute the entire agreement between the Parties pertaining to the
provisioning, marketing and distribution of the Services and supersede all
prior and contemporaneous agreements, understandings, negotiations and
discussions, whether oral or written, pertaining to the subject matter hereof.
Subject to the qualifications contained in the immediately preceding sentence,
there are no conditions, covenants, agreements, representations, warranties or
other provisions, express or implied, collateral, statutory or otherwise,
pertaining to the subject matter hereof except as herein provided.

 

1.3.                            Extended Meanings. Wherever in
this Agreement the context so requires, the singular number shall include the
plural number and vice versa and any gender herein used shall be deemed to
include the feminine, masculine and neuter genders. The terms “provision” and
“provisions” refer to terms, conditions, provisions, covenants, obligations,
undertakings, representations and warranties in, or Schedules to, this
Agreement. The term “includes” or “including” shall be construed as meaning “includes
without limitation” and “including without limitation”, as the case may be.

 

1.4.                            Sections and Headings. The
division of this Agreement into Articles and the insertion of headings are for
the convenience of reference only and shall not affect the interpretation of
this Agreement. The terms “this Agreement”, “hereof’, “herein” and “hereunder”
and similar expressions refer to this Agreement (including the Schedules
hereto) and not to any particular Article or other portion hereof and
include any agreement or instrument supplementary or ancillary hereto. Unless
otherwise indicated, any reference in this Agreement to an Article,
Section or Schedule refers to the unspecified Section,
Section of or Schedule to this Agreement.

 

6

 

1.5.                            Exclusion of International Convention.
The Parties hereby agree that the application to this Agreement of the United
Nations Convention on Contract for the International Sale of Goods, as well as
the application of any domestic legislation which has or purports to have
adopted the Convention into law for the jurisdiction concerned are hereby
excluded. The Parties make such exclusions pursuant to the appropriate
provisions in the legislation which adopted the Convention into law in the
jurisdiction concerned.

 

1.6.                            Financial Responsibility.
Financial responsibility relating to a particular function contemplated by this
Agreement shall rest with the Party who has the responsibility of performing
that function pursuant hereto unless otherwise indicated herein.

 

1.7.                            Languages. The Parties have
requested that this Agreement and all documents, instruments and written
communications relating thereto be expressed in the English language. Les
Parties ont exigé que la présente convention, les conventions auxiliares ainsi
qua tous documents, instruments, et communications écrites s’y rattachant
soient rédigés dans la langue anglaise.

 

1.8.                            Severability. If any provision of
this Agreement is determined by a court of competent jurisdiction to be invalid,
illegal or unenforceable in any respect, such determination shall not impair or
affect the validity, legality or enforceability of the remaining provisions of
this Agreement, and each provision is hereby declared to be separate, severable
and distinct.

 

1.9.                            Currency. All references in this
Agreement or any Schedule hereto, to sums of money shall be, unless the
contrary is expressly indicated, to lawful money of the United States.

 

1.10.                     Business Day. If any act is
required hereunder to be done, any notices required hereunder to be given, or
any period of time is to expire hereunder on any day that is not a Business
Day, unless otherwise specifically provided for herein, such act shall be
required to be done or notices shall be required to be given or time shall
expire on the next succeeding Business Day and, in the case of any payment of
any monetary amount, the extension of time shall be included for the purpose of
computation of interest thereon.

 

1.11.                     Controlling Law. Choice of Forum;
Service of Process. This Agreement shall be governed by and construed and
interpreted exclusively in accordance with the laws of the Province of Ontario,
applicable therein other than the laws thereof that would require reference to
the laws of any other jurisdiction. For purposes for which resort to a court
may be had, the Parties irrevocably consent to the exclusive jurisdiction and
venue of the courts located in the Province of Ontario.

 

1.12.                     Schedules. The following Schedules
form a part of this Agreement:

 

Schedule 1                                      Teleglobe
Services

 

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Schedule 2                                      Bell
Services

 

Schedule 3                                      Most
Favoured Service Purchaser (MFSP) Assumptions

 

2.                                      TERM
AND TERMINATION

 

2.1.                            This
Agreement shall commence on the Commencement Date and shall continue for a
period of five (5) years (the “Initial Term”). 
Thereafter, this Agreement shall automatically renew for successive one
(1) year terms (each one of them a “Renewal Term”) unless either Party provides
a six (6) months prior written notice to the other Party of its intent to
terminate this Agreement either prior to the end of the Initial Term or any
Renewal Term.

 

2.2.                            Notwithstanding
Article 2.1 above, Bell Canada and/or Nexxia may terminate (at their
respective option) this Agreement at any time:

 

(a)                                  where
Teleglobe is in default of a material obligation under this Agreement, and such
default continues for a period of thirty (30) days following receipt by
Teleglobe of a written notice of non-compliance (“Notice of Non-Compliance”),
or such extended period of time after receipt of the Notice of Non-Compliance
that is necessary to cure the default if Teleglobe reasonably demonstrates that
such default is not capable of being cured within thirty (30) days, provided
that the curing of the default is promptly commenced after receipt of the
Notice of Non-Compliance and is thereafter continuously prosecuted with due
diligence to completion within a reasonable period of time, and provided that
Teleglobe keeps Bell Canada or Nexxia, as the case may be, fully advised on a
current basis at all times of its progress in curing the default; or

 

(b)                                 in
the event Teleglobe commits an Act of Insolvency; or

 

(c)                                  in
the event of a Change of Control of Teleglobe on twelve (12) months written
notice.

 

2.3.                            As
between Teleglobe and either Bell Canada or Nexxia, as the case may be,
notwithstanding Article 2.1 above, Teleglobe may terminate (at its option)
this Agreement:

 

(a)                                  with
respect to Bell Canada, where Bell Canada is in default of a material
obligation under this Agreement, or with respect to Nexxia, where Nexxia is in
default of a material obligation under this Agreement (the “Defaulting Party”),
and such default continues for a period of thirty (30) days following receipt
by the Party of a written notice of non-compliance (“Notice of
Non-Compliance”), or such extended period of time after receipt of the Notice
of Non-Compliance that is necessary to cure the

 

8

 

default if the Defaulting Party
reasonably demonstrates that such default is not capable of being cured within
thirty (30) days, provided that the curing of the default is promptly commenced
after receipt of the Notice of Non-Compliance and is thereafter continuously
prosecuted with due diligence to completion within a reasonable period of time,
and provided that the Defaulting Party keeps the other Party fully advised on a
current basis at all times of its progress in curing the default: or

 

(b)                                 in
the event Bell Canada or Nexxia, as the case may be, commits an Act of
Insolvency, provided that Teleglobe shall only be entitled to terminate this
Agreement as against the Party which has committed the Act of Insolvency; or

 

(c)                                  in
the event of a Change of Control of Bell Canada or Nexxia, as the case may be,
upon twelve (12) months notice, provided that Teleglobe shall only be entitled
to terminate this Agreement as against the Party which has been the subject to
a Change of Control.

 

2.4.                            Except
as otherwise expressly contemplated herein, each Party’s rights and obligations
shall cease immediately on termination of this Agreement, but termination shall
not affect:

 

(a)                                  a
Party’s rights and obligations accrued as at termination; and

 

(b)                                 any
provision of this Agreement expressed to survive its termination.

 

3.                                      OBLIGATIONS
OF THE PARTIES

 

3.1.                            Subject
to the terms and conditions of this Agreement:

 

(a)                                  each
of Bell Canada and Nexxia, as the case may be, shall provide the Bell Services
to Teleglobe; and

 

(b)                                 Teleglobe
shall provide the Teleglobe Services to each of Bell Canada and Nexxia, as the
case may be;

 

all upon and subject to the conditions
specified in this Agreement and any Specific Service Agreement including,
without limitation, any service level agreement set out in such Specific
Service Agreement.

 

3.2.                            For
greater certainty, unless expressly contemplated herein, this Agreement does
not supersede, terminate and otherwise render null and void any and all
Specific Service Agreements, or any part thereof, except with respect to the
matters herein expressly set forth, and nothing herein contained shall be
construed as intended to relieve or release either Party under any Specific
Service Agreement.

 

9

 

3.3.                            Effective
from July 1, 2001, Teleglobe shall not directly or indirectly promote,
market and sell any and all telecommunications services to Customers in the
Territory, either on a retail or wholesale basis, other than to Bell Canada or
Nexxia, and shall thereafter fulfill, satisfy and discharge all of its
requirements for the delivery of telecommunications services in the Territory
exclusively with Bell Canada or Nexxia through the delivery by Bell Canada or
Nexxia, as the case may be, of the Bell Services, unless Bell Canada or Nexxia
decline in writing to provide the said Bell Services, and further provided that
Teleglobe shall be entitled, in the Territory, to provide, but not promote,
market and sell, Internet Data Centers Services. For greater certainly,
Teleglobe agrees that it shall not create or participate directly or
indirectly, or through the use of an Affiliate, in any initiative aimed at
providing Competing Services at either a wholesale or retail level to any
Person in the Territory. In addition, Teleglobe agrees that it shall not
promote, market and sell United States originating traffic termination services
terminating in Canada (i.e. IDDD Northbound traffic) without the prior consent
of Bell Canada or Nexxia.

 

3.4.                            Subject
to Articles 3.5 and 3.6 hereof, effective July 1, 2001, Bell Canada and
Nexxia shall fulfill, satisfy and discharge all of their requirements for the
delivery, outside of the Territory of Teleglobe Exclusive Services through
Teleglobe. Notwithstanding the foregoing and for greater certainty Bell Canada,
Nexxia, or any of their respective Affiliates, shall not be obligated to obtain
telecommunications services for their respective Wholesale and Retail Customers
having requirements outside of the Territory, other than for the Teleglobe
Exclusive Services, from Teleglobe provided that they shall provide Teleglobe
with a ROFR pursuant to Article 5 hereof in respect of such other
telecommunications services. Except as otherwise set forth in this Agreement,
Bell Canada and Nexxia agree that they shall not create or participate directly
or indirectly, or through the use of an Affiliate, in any initiative aimed at
provisioning Competing Services to any Person outside of the Territory. For
greater certainty, and unless the Parties agree otherwise, nothing herein shall
be construed as restricting or limiting Bell Canada and Nexxia, or their
respective Affiliates, to promote, market and sell directly or indirectly
telecommunications services inside or outside the Territory.

 

3.5.                            Notwithstanding
Article 3.4 hereof, Bell Canada or Nexxia shall not be required to
fulfill, satisfy and discharge its requirements for telecommunications
facilities from Teleglobe, in order to provide such telecommunications
facilities to their respective Retail and Wholesale Customers located in the
United States, where either Bell Canada or Nexxia or any of their respective
Affiliates as of the Commencement Date have existing facilities available in
the United States, provided that once such existing facilities are at full
capacity then any additional facilities related thereto shall be purchased in
accordance with Article 8 hereof.

 

3.6.                            Notwithstanding
Articles 3.3 and 3.4 hereof, a Party shall be entitled to obtain Competing
Services if:

 

10

 

(a)                                  the
Service Provider is unable to supply the Service Purchaser with a Service in
accordance with the terms of this Agreement or any Specific Service Agreement;
or

 

(b)                                 the
standards associated with a Service of the Service Provider fall materially
below any agreed service standards set out in any Specific Service Agreements,
provided that the Service Provider shall be given a commercially reasonable
period of time to remedy the default, further provided that the Service
Provider acknowledges that in all instances time shall be of the essence; or

 

(c)                                  requested
by a Customer and conferred at Senior Executive Level of both of the Parties;
or

 

(d)                                 where,
notwithstanding Article 7 hereof, the Service Purchaser is left
disadvantaged on a Service by Service basis or Customer by Customer basis, on
mutual agreement at Senior Executive Level.

 

Provided that, once the Service Provider is
able to provide the Service in compliance with this Agreement, or any Specific
Service Agreement, as the case may be, the Service Purchaser shall, subject to
ongoing compliance with this Agreement and any Specific Service Agreement,
thereafter obtain such Service from the Service Provider, rather than a
Competing Service. For greater certainty, nothing herein is intended to require
the Service Purchaser to terminate or amend any bona fide commercial arrangements made with an alternative
supplier or vendor.

 

3.7.                            The
Parties acknowledge that each of them may be subject to binding commercial
agreements with third parties made prior to the date of execution of this
Agreement. Notwithstanding anything else contained herein, nothing in this
Agreement shall be construed to require any Party hereto to act in a manner
which would result in a default of its respective obligations under such
agreements; provided that should any such agreement conflict with the
obligations of, or impede the performance of, a Party under this Agreement,
that Party agrees, where possible, to use commercially reasonable efforts to
remove or minimize such conflict or impediment.

 

3.8.                            The
Parties agree that they shall be entitled exclusively to manage their
respective Services, provided that such management and provisioning of the
Services shall be in accordance with the terms and conditions of this Agreement
and all Specific Service Agreements. For greater certainty, subject to any
Specific Services Agreement, the Service Provider reserves the right to change
or discontinue any Service provided that such change or discontinuance shall
not materially affect any Customers subscribing to the Services at the time of
such change or discontinuance.

 

11

 

3.9.                            Each
Party shall maintain and enhance the reputation, and acceptance of its
respective Services.

 

3.10.                     The
Parties acknowledge and agree that their respective Affiliates are not parties
to this Agreement. Each of Bell Canada and Nexxia agree to use commercially
reasonable efforts to cause their respective Affiliates to be included within
the obligations which are referred to in the Articles 3.3, 3.4 and 3.5, as
applicable.

 

4.                                      REPRESENTATIONS
AND WARRANTIES

 

4.1.                            Each
of Bell Canada and Nexxia, severally, represent and warrant to Teleglobe the
following:

 

(a)                                  it
has full power and authority to enter into and perform its obligations under
this Agreement;

 

(b)                                 this
Agreement has been duly authorized, executed and delivered by Bell Canada and
Nexxia and constitutes a valid, binding and legally enforceable agreement of
Bell Canada and Nexxia;

 

(c)                                  the
execution and delivery of this Agreement, and the performance of the covenants
and agreements herein contained are not restricted by and do not conflict with
its Articles of Incorporation or bylaws or any resolutions of its directors or
shareholders, or any contract, agreement or instrument to which either Bell
Canada or Nexxia is either bound or subject; and

 

(d)                                 no
consent or approval of any Person is required in connection with the execution
and delivery of this Agreement by it, or the observance and performance by it
of its obligations hereunder.

 

4.2.                            Teleglobe
represents and warrants to Bell Canada and Nexxia the following:

 

(a)                                  Teleglobe
has full power and authority to enter into and perform its obligations under
this Agreement and to enforce the terms and conditions set out herein with its
Affiliates;

 

(b)                                 this
Agreement has been duly authorized, executed and delivered by Teleglobe and
constitutes a valid, binding and legally enforceable agreement of Teleglobe;

 

(c)                                  the
execution and delivery of this Agreement, and the performance of the covenants
and agreements herein contained are not restricted by and do not conflict with
its Articles of Incorporation or bylaws or any resolutions of its directors or
shareholders, or any contract, agreement or instrument to which Teleglobe is
either bound or subject; and

 

12

 

(d)                                 no
consent or approval of any Person is required by Teleglobe in connection with
the execution and delivery of this Agreement by it, or the observance and
performance by it of its obligations hereunder.

 

4.3.                            Each
Party represents and warrants to, and covenants and agrees with, the other
Party that:

 

(a)                                  it
is capable of delivering its respective Service in compliance with the terms
and conditions of this Agreement and any Specific Service Agreement;

 

(b)                                 each
employee, agent or sub-contractor provided by it hereunder shall be competent
and qualified to perform those functions assigned to each such employee, agent
or subcontractor:

 

(c)                                  it
shall fulfill its obligations hereunder honestly and in good faith, and in a
timely manner, exercising reasonable skill, care and diligence, in accordance
with recognized professional and industry standards;

 

(d)                                 it
possesses the knowledge, skill and experience necessary for the provision and
completion of its obligations in accordance with the requirements of this
Agreement;

 

(e)                                  it
has secured and paid for, and is in good standing with respect to, all material
permits, licenses and regulatory approvals applicable to or necessary for the
performance of its obligations as contemplated hereunder;

 

(f)                                    in
providing telecommunications services to Customer(s) related to Services
acquired under this Agreement and Specific Services Agreements it shall, and
shall cause its employees, agents or sub-contractors to, comply in all material
respects with all rules and regulations established by such Customer regarding
the conduct of personnel, including without limitation rules and regulations
relating to environmental protection, occupational health and safety, human rights
and security; and

 

(g)                                 neither
infringe any third party Intellectual Property Right, nor incorporate or
utilize any third party Intellectual Property without a valid license, or other
right to do so.

 

5.                                      RIGHT
OF FIRST REFUSAL FOR NEW SERVICES

 

5.1.                            Where
either Bell Canada or Nexxia have requirements for the delivery of any and all
telecommunications services to their respective Customers outside the
Territory, other than for the Teleglobe Exclusive Services, or for Digital
Video Services in the United States, each of Bell Canada or Nexxia shall grant
to Teleglobe a right of first refusal (“ROFR”) with respect to the supply of
such

 

13

 

services (the “New Services”) pursuant to
Article 5.2 hereof. For greater certainty, the ROFR shall only be
applicable on a service by service basis. As of the date of execution of this
Agreement the Parties hereby acknowledge and agree that Teleglobe’s ROFR has
been exercised, and no exclusivity rights have been granted by either Bell
Canada or Nexxia, with respect to ATM and Frame services.

 

5.2.                            Further
to Article 5.1, where either Bell Canada or Nexxia (the “Initiating
Party”) has a requirement for the delivery of New Services, the Initialing
Party shall provide written notice (the “ROFR Notice”) to Teleglobe as it
relates to such requirements. The ROFR Notice shall contain the Initiating
Party’s requirements with sufficient detail to enable the formulation of an
informed decision by Teleglobe. Within thirty (30) days after receipt of the
ROFR Notice, Teleglobe shall notify the Initiating Party, in writing, of its
interest in entering into a commercial arrangement with respect to the New
Services identified in the ROFR Notice.

 

5.3.                            If
Teleglobe either does not notify the Initiating Party of its interest within
thirty (30) days or advises the Initiating Party that it is not interested in
pursuing a commercial arrangement for New Services, the Initiating Party may
make alternative arrangements regarding such New Services with a third party;
provided that, if there is any material change in the Initiating Party’s
requirements or a material change in the terms the Initiating Party is prepared
to consider or accept with any such third party, the Initiating Party shall
deliver a new ROFR Notice (before concluding arrangements with any third party)
and the process described in this Article shall be repeated accordingly.

 

5.4.                            If
Teleglobe advises the Initiating Party that it is interested in pursuing a
Specific Service Agreement for New Services, then those Parties shall enter
into negotiations, in good faith, with respect to the appropriate terms and
conditions of the arrangement, including without limitation, price, service
standard, ordering and delivery, terms of sale, reporting, billing format,
marketing and promotional materials, advertising, service specifications,
product development, service design and performance, training and support. For
greater certainty, for any New Service where the Parties have agreed to enter
into a Specific Service Agreement, such New Services in addition to being
provided pursuant to the said Specific Service Agreement shall be deemed to be
incorporated into, and be subject to, this Agreement and the applicable
Schedule.

 

5.5.                            Notwithstanding
Article 5.4 hereof, where Teleglobe fails to meet any material conditions
of the ROFR and provided that Teleglobe has been given due notice and the
reasons for its failure to meet such ROFR conditions along with a reasonable
opportunity to cure such failure, the Initiating Party shall have the right, at
any time, to terminate any negotiation at its sole discretion and to pursue
alternative arrangements for the New Services covered by the ROFR Notice with a
third party; provided that the Initiating Party notify Teleglobe of such
intention

 

14

 

and does not enter into such third party
arrangement for a period of ten (10) Business Days following such notice; and
further provided that, if there is any material change in the Initiating
Party’s requirements or a material change in the terms the Initiating Party is
prepared to consider or accept with any such third party, the Initiating Party
shall deliver a new ROFR Notice to Teleglobe (before concluding arrangements
with any third party) and the process described in this Article shall be
repeated accordingly.

 

5.6.                            In
the event Teleglobe declines to offer a particular New Service then Bell Canada
or Nexxia shall thereafter not be required to submit to Teleglobe additional ROFRs
with respect to such New Service until such time as Teleglobe notifies Bell
Canada or Nexxia as applicable, that it is able to provide such New Service at
which point Bell Canada or Nexxia shall thereupon consider Teleglobe, on a
forward going basis, as a potential Service Provider of such New Service and
shall use reasonable commercial efforts within its business discretion to move
such New Service to Teleglobe at the most opportune time as business and
technical considerations allow and further provide that Teleglobe meets all
requirements originally set forth in the ROFR for such applicable New Service.

 

6.                                      TAXES

 

6.1.                            The
Parties hereby agree that Charges for the Services do not include applicable
Commodity Taxes and further agreed to be bound by all tax legislation
applicable to the provision of the Services in and outside of the Territory as
per the terms and conditions of the Specific Services Agreements.

 

7.                                      MOST
FAVOURED SERVICE PURCHASER

 

7.1.                            Notwithstanding
any Specific Service Agreement, commencing on July 1, 2001, and based on
the Most Favoured Service Purchaser Assumptions set forth in Schedule 3
attached hereto, the Service Provider’s charges (the “Charges”) applicable for
the purchase by the Service Purchaser of such Services, shall be at least as
favorable as the charges provided by the Service Provider to any other service
purchaser receiving similar services. Subject to this Article 7, if the
Service Provider provides services similar to the Services at a price more
favorable than the Charges to another service purchaser, the Service Provider
shall extend such more favorable pricing to the Service Purchaser in accordance
with the terms of this Agreement.

 

7.2.                            Either
Nexxia and Bell Canada on the one hand, or Teleglobe on the other hand, shall
be entitled to request from the other Party the delivery by such other Party,
at Senior Executive Level, of a duly sworn and executed certificate confirming
that such other Party is delivering its Services, or any one of them, in
compliance with the obligations set out in Section 7.1 above.

 

15

 

7.3.                            The
Parties hereby agree to establish, acting in good faith, a price adjustment
mechanism to be instituted in the event that a Party hereunder fails to comply
with any pricing provision of this Agreement.

 

8.                                      NETWORK
PROVISIONING COLLABORATION

 

8.1.                            Subject
to the rest of this Article 8, it is the general intent of the Parties to
work together in order to reduce costs and increase efficiencies in provisioning
Network Facilities for the purposes contemplated in this Section, with the
intent to purchase such Network Facilities from each other.

 

8.2.                            The
Parties hereby agree to collaborate on the provisioning of Network Facilities
as follows:

 

(a)                                  In
the cases of:

 

i)                                         Bell Canada’s
or Nexxia’s (the “Requesting Party”), requirements in the United States; or

 

ii)                                      Teleglobe’s (the
“Requesting Party”), requirements in the Territory

 

the Requesting Party shall fulfill its
requirements for Network Facilities from the other Party (the “Supplying
Party”) in accordance with Article 7 but subject to Article 8.2(c)
hereof; or

 

(b)                                 in
the case of Cross-Border Facilities, where the Requesting Party has
requirements for such Cross-Border Facilities, the Parties hereby agree to
collaborate with one another as follows: subject to Articles 8.2(c) and 8.4 the
Requesting Party shall fulfill its requirements for Cross-Border Facilities
from the Supplying Party on a cost recovery basis, provided that such
Cross-Border Facilities are available from the Supplying Party.  As an underlying principle, the Requesting
Party’s use of Cross Border Facilities supplied on a cost recovery basis shall
not at any time undermine the existing cross-border revenue base of the
Supplying Party.  To facilitate this
principle, commercial pricing of cross-border bandwidth opportunities shall be
managed jointly between the Parties.  A
quarterly review of market conditions, win/loss ratios, and other pertinent
information on cross-border bandwidth opportunities, shall be held between the
Parties at a Senior Executive Level, to ensure mutual success through market
viable pricing and ongoing customer focus.

 

(c)                                  notwithstanding
Articles 8.2(a) and 8.2(b)(i) the Requesting Party shall not be obligated to
fulfill its requirements for Network Facilities or Cross-Border Facilities from
the other Party where the Requesting Party will be

 

16

 

left materially disadvantaged
provided that where the Requesting Party decides for itself to fulfill its
requirements from a third party supplier it shall obtain the consent of the
other Party at Senior Executive Level prior to entering into any supply
arrangement with a third party supplier, which consent cannot be withheld
unreasonably.

 

8.3.                            Notwithstanding
the foregoing, Bell Canada or Nexxia shall not be required to comply with
Article 8.2(a) hereof where Bell Canada’s or Nexxia’s facility
requirements in the United States relate to local access facilities from a Bell
Canada or Nexxia PoP (Point of Presence), or such Parties’ Affiliates’ PoP (to
be existing as of the Commencement Date), or extended access facilities where
such extended access facilities can be considered predominantly off-net of
Teleglobe’s network.

 

8.4.                            Notwithstanding
the foregoing, Bell Canada or Nexxia shall not be required to comply with
Article 8.2(b) hereof where Bell Canada’s or Nexxia’s Cross-Border
Facilities requirements are for the purpose of cross-border switched minute
terminations.

 

8.5.                            Further
to Article 8.1 and subject to Article 8.2 above, during the term of
this Agreement, the Parties agree to carry out bona
fide and good faith discussion with regard to the matters related to
network planning and any outstanding matters related thereto and that may need
to be addressed in further definitive agreements. In this regard, the parties
agree to make available competent and qualified employees, agents and/or
advisors to further the intent of this Article 8.4 and hereby agrees that
they have reached the following preliminary understandings, recognizing that
the same are broadly stated and acknowledge that incorporation of such
preliminary understandings, among other things, into the definitive agreements
may require more specific and detailed terms and conditions:

 

(a)                                  the
Parties will bear their own costs and expenses in connection with all matters
relating to network planning contemplated herein, and the delivery of any
definitive agreements, including without limitation, fees for their respective
legal counsel, brokers, accountants and other professional advisors. No Party
shall be authorized nor empowered to obligate the other or to incur any costs
or expenses on behalf of the other;

 

(b)                                 any
actions taken by the other Party in reliance on the preliminary principles set
out herein shall be at that Party’s sole risk. No Party shall have any
liability to the other based upon failure to enter into any agreement as
contemplated herein; and

 

(c)                                  notwithstanding
anything in this Article 8 the network planning as contemplated herein
shall not imply or confirm any intention on the part of either Party to enter
into any business relationship or any form of commitment by such Party with
respect to the network planning. It is further acknowledged and agreed that, unless
and until definitive

 

17

 

agreements between the Parties
concerning the network planning are executed and delivered, neither party shall
have any legal obligation of any kind whatsoever with respect to the network
planning contemplated herein, except, in the case of this Agreement, for the
matters specifically agreed to herein. For purposes of this paragraph, the term
“definitive agreement” does not include an executed memorandum of
understanding, letter of intent or other preliminary written agreement.

 

9.                                      INDEMNITY
AND LIMITATION OF LIABILITY

 

9.1.                            Without
limiting any indemnity and limitation of liability otherwise expressly provided
for herein or in any Specific Service Agreement, each Party (the “Indemnifying
Party”) agrees to indemnify, defend and hold harmless the other Party hereto
including its officers, directors, employees and authorized agents
(collectively the “Indemnified Party”) from all claims, demands and causes of
action arising out of any claim or action threatened or brought for personal
injury or physical property damages caused by the acts or omissions of the
Indemnifying Party, or its officers, directors, employees, authorized agents in
connection with its obligations under this Agreement, save and except for those
claims, demands or causes of action arising out of the negligence or wilful
misconduct of, or breach of this Agreement by the Indemnified Party, or its
officers, directors, employees, and authorized agents.

 

9.2.                            Notwithstanding
anything in this Agreement, under no circumstances will a Party be liable to
any other Party for any indirect, special, consequential, incidental, economic
or punitive damages, including, without limitation, loss of data, loss of
income, loss of profit or failure to realize expected savings arising directly
or indirectly from the breach of contract (including fundamental breach or
otherwise), negligence, any act or omission of that Party or its
representatives, or under any theory of law or equity, even if the Party had
been advised of, had knowledge of, or reasonably could have foreseen, the
possibility of such damages. Notwithstanding anything to the contrary, in no
event shall a Party be liable to any other Party for any direct damages arising
however in excess of the aggregate of $2,000,000.

 

10.                               CONFIDENTIAL
INFORMATION

 

10.1.                     For
the purposes of this Article 10, “Informant” shall mean a Party to this
Agreement providing any Confidential Information to the other Party to this
Agreement and “Recipient” shall mean a Party to this Agreement receiving any
Confidential Information from the Informant.

 

10.2.                     Each
Recipient shall use Informant’s Confidential Information solely for the
purposes of fulfilling their obligations or exercising their rights under this

 

18

 

Agreement. Each Recipient shall disclose
Informant’s Confidential Information only as expressly provided by this
Agreement.

 

10.3.                     Immediately
upon receipt of an Informant’s request, the Recipient shall return to the
Informant, or certify as destroyed, any and all tangible material concerning
Confidential Information, together with all copies, whether such material was
made or compiled by the Recipient or furnished by the Informant.

 

10.4.                     Each
Recipient will take all reasonable precautions, which in no event shall be less
than the precautions used by Recipient to maintain the confidentiality of its
own confidential information, to maintain the secrecy of all Confidential
Information disclosed to it by the Informant.

 

10.5.                     Unless
it has received the prior written consent of the Informant, the Recipient will
disclose Confidential Information of the Informant only to those directors,
officers, employees, agents, subcontractors and professional advisors of the
Recipient with a necessary and direct need to know the Confidential Information
for the purposes of this Agreement, and warrants that all persons to whom
Confidential Information is disclosed in accordance with this Article 10
will maintain the secrecy of such Confidential Information under obligations of
non-disclosure no less stringent than those contained herein.

 

10.6.                     The
obligations set out in this Article 10 shall not apply to any Confidential
Information that:

 

(a)                                  at
the time of disclosure is in the public domain;

 

(b)                                 shall
become generally known through no act of the Recipient (but only after it is
published or becomes part of the public domain);

 

(c)                                  was
disclosed in good faith to the Recipient by a third party having legitimate
possession and the right to make such disclosure and who did not require the
Recipient to hold it in confidence;

 

(d)                                 was
in legitimate possession of the Recipient prior to its disclosure by the
Informant and was not acquired by the Recipient under an obligation of
confidence;

 

(e)                                  is
independently developed by the Recipient without use of the Confidential
Information; or

 

(f)                                    the
Recipient is required by a judicial, administrative or governmental body to
disclose, provided that prior to disclosing any Confidential Information,
Recipient promptly notifies Informant and shall co-operate with Informant to
seek appropriate protective orders with respect to such

 

19

 

portion of Confidential
Information as is the subject of any such required disclosure.

 

10.7.                     Subject
to the terms of this Agreement, each Party acknowledges that, notwithstanding
the execution of this Agreement, the Informant maintains the sole and absolute
discretion to determine what, if any, of the Confidential Information it will
release to a Recipient.

 

10.8.                     Informant
represents and warrants that it has, or will at the relevant time have, the
right to make the disclosures required pursuant to the terms of this Agreement.

 

10.9.                     Ownership
of and all rights, title and interest to any and all Confidential Information,
copies and other material shall at all times vest exclusively in the Informant.
The disclosure of Confidential Information shall not be construed as granting
to the Recipient any rights, by license or otherwise under any copyrights,
copyright applications, trade secrets, trademarks or other intellectual
property rights in any country relating to any of the Confidential Information
which the Informant or an associated corporation may now or hereafter own or to
which it may hold licensing rights.

 

10.10.              In
the event of a breach or threatened breach of this Article 12, the Parties
agree that the harm suffered by the injured Party would not be compensable by
monetary damages alone and, accordingly, that the injured Party shall, in
addition to other available legal or equitable remedies, be entitled to apply
for an injunction or other such equitable remedy as against such breach or
threatened breach without the other Parties consent.

 

11.                               LIMITATION
OF WARRANTY

 

11.1.                     EXCEPT
AS SPECIFICALLY SET FORTH HEREIN OR IN THE SPECIFIC SERVICE AGREEMENT, NEITHER
PARTY MAKES REPRESENTATIONS, WARRANTIES OF ANY KIND OR NATURE WHATSOEVER,
EXPRESS OR IMPLIED WITH RESPECT TO THE SERVICES HEREUNDER OR OTHERWISE IN RELATION
TO THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED REPRESENTATIONS,
WARRANTIES OR CONDITIONS OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, OR THOSE ARISING STATUTORILY, FROM A COURSE OF CONDUCT, PERFORMANCE OR
DEALING, TRADE USAGE OR OTHERWISE, AND ALL SUCH REPRESENTATIONS, WARRANTIES AND
CONDITIONS ARE HEREBY EXCLUDED.

 

20

 

12.                               DISPUTE
RESOLUTION

 

12.1.                     As
between any two Parties, each of such Parties shall attempt to amicably resolve
any disagreement or dispute which may arise between them regarding the
interpretation, the performance of or the failure to perform under this
Agreement.

 

12.2.                     In
the event that any disagreement or dispute between such Parties continues for a
period greater than thirty (30) days, the following procedures shall be
followed by either of such Party (the “Initiating Party”) by providing to the
other of such Party (the “Receiving Party”) a full written description of the
Initiating Party’s position and the grounds for its disagreement or dispute
(the “Dispute Documentation”) following which:

 

(a)                                  such
Parties shall meet within five (5) Business Days of the Receiving Party
receiving the Dispute Documentation to review the information contained
therein;

 

(b)                                 the
Receiving Party shall, within ten (10) Business Days of receipt of the Dispute
Documentation provided by the Initiating Party, provide a written response to
the Initiating Party fully describing the Receiving Party’s position; and

 

(c)                                  in
the event that the matter remains unresolved for a further ten (10) Business
Days after receipt by the Initiating Party of the information provided by the
Receiving Party pursuant to this Article 12.2, such Parties shall, within
a further ten (10) Business Days, arrange for their respective officers
responsible for this Agreement to meet to attempt to resolve the dispute.

 

12.3.                     In
the event that the process in Article 12.2 is followed and the dispute
remains unresolved for a further ten (10) Business Days following the meeting
of such Parties’ respective officers as described in Article 12.2(c), the
following procedures shall apply:

 

(a)                                  the
dispute, shall be settled by arbitration in Ottawa in accordance with the Arbitration Act, S.O. 1991, c.17
(Ontario), or such other place and in accordance with such other arbitration
legislation as the Parties shall agree;

 

(b)                                 such
arbitration shall be heard by a panel of three (3) arbitrators;

 

(c)                                  each
of such Parties to the dispute shall nominate one (1) arbitrator, and the two
arbitrators so nominated shall agree on the appointment of a third arbitrator
as chairman within ten (10) days of the confirmation of the appointment of the
second arbitrator;

 

21

 

(d)                                 in
the event that the arbitrators nominated by such Parties fail to agree on a
chairman within the period stated, either Party may apply to the Ontario Court
(General Division) pursuant to Article 9 of the Arbitration Act, S.O. 1991, c.17 (Ontario) or such other
appropriate court pursuant to the agreed arbitration legislation, as the case
may be, for the purpose of appointing a third arbitrator as chairman;

 

(e)                                  all
arbitrators shall be qualified in law and shall have expertise in commercial
law and the telecommunications industry in Canada;

 

(f)                                    any
monetary award by the arbitration panel shall include interest calculated from
the date of initial written description pursuant to Article 12.2 using the
current Bank of Canada prime rate plus two percent (2%);

 

(g)                                 the
decision of the arbitration panel shall be final and binding upon such Parties,
and in any event, shall be rendered within one hundred and twenty (120) days of
the issuance by the Initiating Party of its Dispute Documentation under
Article 12.2; and

 

(h)                                 notwithstanding
anything herein, each of the Parties may at any time seek interim judicial
relief against the other Party from any authority having jurisdiction with
respect to the subject matter of this Agreement.

 

13.                               GENERAL

 

13.1.                     Force Majeure. No party will be
liable for delay or failure to perform its obligations herein (other than any
payment obligations of the Service Purchaser to the Service Provider) for
causes beyond its reasonable control and without the fault or negligence of
such party provided that such party will use due diligence in attempting to
remove the cause. Such causes will include, but not be limited to, strikes and
labour disputes, acts of God or government, acts of wars, riot or epidemic. In
the event that any such cause should continue for a period of three (3) months,
any Party which is not subject to the force majeure shall have the right to
terminate this Agreement.

 

13.2.                     Amendments. This Agreement may be
amended or supplemented only in writing and signed on behalf of the Parties by
authorised signatories.

 

13.3.                     Waiver. No failure or delay of
either Party in exercising any right or remedy under this Agreement (and no
course of dealing between the Parties) shall operate as a waiver of any such
right or remedy.

 

13.4.                     Relationship of Parties. There is
no relationship of agency, partnership, joint venture, employment between the
Parties. Neither Party has the authority to bind any other Party or to incur
any obligation or liability on any other Party’s behalf.

 

22

 

13.5.                     Notices. All notices, requests,
demands or communications required or permitted hereunder shall be in writing,
and delivered either personally or by facsimile or electronic transmission by
e-mail, or certified or registered mail to the respective addresses as set
forth below (or at such other addresses as shall be given in writing by either
Party to the other). All notices, requests, demands or communications shall be
deemed to have been given upon personal delivery or on the Business Day
following the date of the facsimile or electronic transmission by e-mail, or
when received if sent by certified or registered mail.

 

	
  If to Bell Canada and Nexxia:

  	
  If to Teleglobe:

  
	
   

  	
   

  
	
  Pam Went 

  	
  J.P. Gratton

  
	
  Senior Vice-President

  	
  Vice-President-Carrier Services

  
	
  Floor 8, 483 Bay Street

  	
  185 The Westmall, Suite 620

  
	
  Toronto, Ontario 

  	
  Toronto, Ontario

  
	
  M5G 2C9

  	
  M9C 5L5

  
	
   

  	
   

  
	
  Phone:  416-353-6670

  	
  Phone:  416-287-5499

  
	
  Facsimile: 
  416-977-9366

  	
  Facsimile: 
  416-287-5476

  
	
   

  	
   

  
	
  Copy to:

  	
  Copy to:

  
	
   

  	
   

  
	
  Tim McGee

  	
  Teleglobe USA Inc.

  
	
  Chief Legal Officer

  	
  11480 Commerce Park Drive

  
	
  Floor 6N, 483 Bay Street

  	
  Reston, Virginia, USA

  
	
  Toronto, Ontario

  	
  20191

  
	
  M5G 2C9

  	
  Attention: 
  General Counsel

  
	
   

  	
   

  
	
  Facsimile: 
  416-593-6882

  	
  Facsimile: 
  703-755-2694

  

 

13.6.                     Third Party Beneficiaries. The
provisions of this Agreement are solely for the benefit of the Parties. No
other person, including invitees, members of the general public and other third
Parties are intended to have nor shall have any rights whatsoever under this
Agreement, whether for injury, lose or damage to persons or property, or for
economic loss, damage or injury.

 

13.7.                     Equitable Relief. Either Party may
seek injunctive or other equitable relief to remedy any actual or threatened
dispute.

 

13.8.                     Entire Agreement. This Agreement,
including any supplements hereto, represent the entire agreement between the
Parties relating to the subject matter of this Agreement and supersedes any
prior representations, discussions, negotiations and agreements, whether
written or oral.

 

13.9.                     Order of Precedence. In the event
of any conflict or inconsistency among or between this Agreement, and any
Specific Service Agreement the terms and conditions of this Agreement shall
prevail.

 

23

 

13.10.              Survival. The Parties hereby agree
that the following Articles 9, 10, 12 and 13.10 as well as other provisions
which survive at law, shall survive termination and/or expiration of this
Agreement.

 

13.11.              Independent Counsel.  This Agreement has been negotiated at arms
length and jointly prepared by the Parties and their respective counsel of
choice.

 

13.12.              Assignment.  Any Party to this Agreement shall not assign
any of its rights or obligations hereunder without the prior written consent of
the other Parties.  Notwithstanding the
foregoing, any of such Parties shall have the right to assign all or part of
this Agreement to an Affiliate.

 

13.13.              Compliance with Law.  The Parties will, at their own expense,
operate in full compliance with all laws, rules and regulations applicable to,
and maintain in force all licenses and permits required for, their performance
under this Agreement.

 

 

	
  Signed for and on behalf of

  	
  Signed on behalf of BELL CANADA

  
	
  TELEGLOBE INC.

  	
  and BCE NEXXIA INC.

  
	
   

  	
   

  
	
  /s/ Marc Bouchard

  	
   

  	
  /s/ R.J. Reynolds

  	
   

  
	
  Name MARC BOUCHARD

  	
  Name

  
	
   

  	
   

  
	
  Vice President

  	
   

  	
  President & CEO, Bell Nexxia

  	
   

  
	
  Title

  	
  Title

  
	
   

  	
   

  
	
   

  	
   

  	
  Dec. 20/2001

  	
   

  
	
  Date

  	
  Date

  

 

24

 

FIRST AMENDMENT TO

MASTER WHOLESALE PRICING AND SERVICES COORDINATING AGREEMENT

 

THIS FIRST AMENDMENT TO THE MASTER WHOLESALE PRICING
AND SERVICES COORDINATING AGREEMENT (this “First Amendment”)
dated June 12, 2003, with effect as to certain agreements contained herein
as of the first day of April, 2003 (the “Effective Date”) is made

 

BETWEEN:

 

TELEGLOBE CANADA ULC, an amalgamated unlimited
liability company amalgamated under the laws of the Province of Nova Scotia,
having an office at 1000 rue de la Gauchetiere, Montreal, Quebec, Canada (“Teleglobe”);

 

AND:

 

BELL CANADA, a Canadian corporation
incorporated under the laws of Canada having an office at 483 Bay Street, Floor
6N, Toronto, Ontario, Canada (“Bell Canada”);

 

RECITALS:

 

WHEREAS Teleglobe Inc., Bell Canada
and BCE Nexxia Inc. (“Nexxia”) were parties to a Master Wholesale Pricing and
Services Coordinating Agreement made as of January 1, 2001 (the “Master
Agreement”); and

 

WHEREAS on May 15, 2002 Teleglobe
Inc., together with certain of its affiliates, filed for and obtained
protection from their creditors (the “Canadian Insolvency Proceedings”) under
the Companies’ Creditors Arrangement Act R.S.C, 1985, c. C-36 (the “CCAA”)
pursuant to an order of the Ontario Superior Court of Justice (the “CCAA
Court”); and

 

WHEREAS in the course of the
Canadian Insolvency Proceedings, and pursuant to a purchase agreement made and
entered into as of September 18, 2002 between TLGB Acquisition LLC as
purchaser (the “Purchaser”), Teleglobe Inc. and Teleglobe USA Inc., together
with such other parties enumerated therein, as amended, (the “Purchase
Agreement”), Teleglobe Inc. agreed to assign the Master Agreement to the
Purchaser (or an affiliate thereof, as contemplated by the Purchase Agreement);
and

 

WHEREAS pursuant to the Canadian
Insolvency Proceedings, on October 2, 2002, Teleglobe Inc. obtained an
order from the CCAA Court approving and authorizing, inter alia, the Purchase Agreement and the transactions
contemplated thereby, on the terms and conditions contained in such order; and

 

WHEREAS pursuant to the Canadian
Insolvency Proceedings, on October 23, 2002, Teleglobe Inc. obtained the
Bell Order, which, subject to and conditional upon Closing, authorized and
entitled Teleglobe Inc. to assign, transfer and deliver to the Purchaser (or an
affiliate thereof, as contemplated by the Purchase Agreement), all of Teleglobe
Inc.’s rights, title and interest in the Master Agreement (among other
agreements), on the terms and subject to the conditions contained in the Bell
Order including, without limitation, that the Purchaser (or an affiliate thereof,
as contemplated by the Purchase Agreement) assume all covenants, obligations,
conditions, liabilities, provisos and other commitments of Teleglobe Inc. under
the Master Agreement (among other agreements), and that the Purchaser be
otherwise subject to all the requirements of Teleglobe Inc. therein arising, as
if the Purchaser were an original signatory thereto; and

 

WHEREAS Nexxia amalgamated with
Bell Canada on March 31, 2003 and continued as Bell Canada; and

 

1

 

WHEREAS the Purchaser designated
its affiliate (as contemplated by the Purchase Agreement), Teleglobe Canada II
ULC, as the entity to which contracts, assets and the business of Teleglobe
Inc. would be transferred, pursuant to the terms of the Purchase Agreement; and

 

WHEREAS the transaction as approved
by the CCAA Court pursuant to the orders described, and described in the
Purchase Agreement was closed on May 30, 2003, resulting in, inter alia, the assignment of, inter alia, the Master Agreement by
Teleglobe Inc. to Teleglobe; and

 

WHEREAS immediately following
completion of the Closing on May 30, 2003, Teleglobe Canada II ULC amalgamated
with Teleglobe Canada ULC, to form Teleglobe, an amalgamated unlimited
liability company amalgamated pursuant to the laws of the Province of Nova
Scotia; and

 

WHEREAS as a consequence thereof,
the Master Agreement is presently an agreement pursuant to which Teleglobe is
responsible for the covenants, obligations, conditions, liabilities, provisos
and other commitments of Teleglobe Inc. and Teleglobe is otherwise subject to
all the requirements of Teleglobe Inc. therein arising as if Teleglobe were an
original signatory thereto; and

 

WHEREAS the Parties desire to amend
the Master Agreement in accordance with the terms and conditions set forth
herein.

 

NOW THEREFORE, THIS FIRST AMENDMENT WITNESSETH that in
consideration of the covenants and agreements hereinafter contained, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by each of the Parties hereto, the Parties hereto covenant
and agree as follows:

 

INTERPRETATION AND DEFINITIONS

 

Terms having initial capital letters and capitalized terms used, but
not otherwise defined in this First Amendment, including its recitals, shall
have the respective meanings set out in the Master Agreement.  Certain terms having initial capital letters
and capitalized terms used in this First Amendment are defined in the context
in which they appear and shall have the respective meanings there indicated.

 

In this First Amendment, including its recitals, unless otherwise
defined or unless the context otherwise requires, the following terms shall
have the following meanings:

 

“Allocation” means the
allocated dollar amount of either Right to Match Right or Flex Right of the
Parties determined pursuant to Sections 5.1.1(a) and 5.2.1(b) hereof;

 

“ASR” means Answer Seizure
Ratio as defined by the International Telecommunication Union;

 

“Bell Order” means the
CCAA Court Order dated October 23, 2002;

 

“Buyer” means either Bell
Canada or Teleglobe, as the case may be, as purchaser or intended purchaser of
the Teleglobe Services, the Bell Services or Competing Services, as the case
may be;

 

“Closing” has the meaning
set out in the Purchase Agreement;

 

“Competing Provider” means
a provider of a Competing Service;

 

“Competing Service” means
any telecommunications product or service, that is the same as or substantially
similar to either a Teleglobe Service or Bell Service, or is otherwise competitive
with either a Teleglobe Service or Bell Service, in circumstances where and to
the extent that any

 

2

 

such Teleglobe Service or Bell Service is subject to any exclusivity
requirements, Right to Match, Flex, or a minimum volume commitment, as
contemplated in the Master Agreement as amended pursuant hereto;

 

“Content Provider” means a
Person that creates information, educational or entertainment content for the
Internet;

 

***

 

***

 

“Flex” means the right of
either Bell Canada or Teleglobe, as the case may be, as Buyer, to obtain
Competing Services on terms and subject to conditions determined in its sole
discretion to be acceptable to it and in respect of which, notwithstanding any
provision of the Master Agreement to the contrary, no obligation to purchase
from Supplier or Right to Match shall apply;

 

“Home Country Direct Service”
means the access service provided by Bell Canada to Teleglobe in order for
Teleglobe to offer to foreign carriers the underlying services associated with
the provisioning by such foreign carriers of services similar in functionality
to the Canada Direct Service;

 

“IDDD Outbound Services”
has the meaning set out in Section 5.2.1(b) hereof;

 

“IP Transit Monthly Volume Commitment”
has the meaning set out in Section 5.2.1(a) hereof;

 

“Off-Net Delay” means the
time interval required for IP Transit traffic to travel from Bell Canada’s
directly connected serial interface with the Teleglobe network to Teleglobe’s
directly connected serial interface with a Tier-I Peer;

 

“On-Net Traffic” has the
meaning set out in Section 5.2.1(a)(ii)(1) hereof;

 

“Parties” means Bell
Canada and Teleglobe;

 

“Party” means either Bell
Canada, or Teleglobe as the context requires;

 

“Pre-determined Connection Points”
means the following connection points: 
Chicago, Montreal, New York, Newark, Seattle, Toronto or Vancouver;

 

“Required Information”
means the information to be provided, in writing, by the Buyer to the Supplier
pursuant to the exercise of a Right to Match of Supplier, comprising:

 

(i)             in the case of
the services set out in Sections 5.1.1(b) and 5.2.1 (c) hereof:

 

(a)          technical description (e.g.
locations A-end/ Z-end and Customer premise equipment required);

(b)         SLAs/SLOs;

(c)          price;

(d)         term/termination;

(e)          delivery interval(s);

 

***
Portions hereof have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 406.

 

3

 

(f)            any penalty provisions for
failure to meet requirements for the service described herein; and

(g)         the maximum allowed response
time for RFQs.

 

(ii)          in the case of
Switch Minute Terminations in Canada and IDDD Outbound Services:

 

(a)          traffic volumes, which for
the avoidance of doubt, shall be an estimated amount of traffic for a fixed
period of time;

(b)         destination definition
(i.e., the numbering ranges and destination codes that comprise a destination);

(c)          price;

(d)         required notice period for
rate changes;

(e)          term commitments;

(f)            delivery (an adjustment
shall be required to reflect any delivery points other than via Pre-determined
Connection Points);

(g)         quality (target ASR,
allowable variances, and conditions under which Buyer will determine that the
quality requirements have not been achieved);

(h)         traffic grooming (i.e.,
routing specifications other than a representative distribution of traffic
available to be sent to all carriers);

(i)             any traffic restrictions or
limitations within a destination;

(j)             details of any return
traffic arrangements, where the applicable rates are contingent upon return
traffic, and how such return traffic has been reflected in the “price”; and

(k)          type of route (i.e. Full,
Partial, Bilateral or Partial-Bilateral);

 

“Right to Match” or “Right
to Match Right” means the right of either Bell Canada or Teleglobe,
as Supplier, to choose whether or not to contract on the terms of an offer
presented to Supplier by Buyer in accordance with, and subject to the terms of,
Sections 5.1.1(a), 5.1.1(b), 5.2.1(b), 5.2.1(c) and Section 7 hereof;

 

“Rights” means,
collectively, the Right to Match and Flex;

 

“Supplier” means either
Bell Canada or Teleglobe, as the case may be, as supplier or, prospective
supplier, respectively of the Bell Services or Teleglobe Services;

 

“Teleglobe Potential IDDD Customers”
has the meaning set out in Section 5.1.2(b) hereof;

 

“Teleglobe Potential IP Customers”
has the meaning set out in Section 5.1.2(a) hereof;

 

***

 

“2003 Excluded Traffic”
means the Bell Canada IDDD Outbound Services generated traffic in
January and February 2003 as a result of special traffic promotions,
***;

 

“2002 Excluded Traffic”
means the Bell Canada IDDD Outbound Services generated traffic in
November and December 2002 as a result of special traffic promotions,
***; and

 

“Wholesale Traffic” means
the IDDD Outbound Services traffic originating from Bell Canada’s Wholesale
Customers connected directly to a Teleglobe switch under a contract between
Bell Canada and such Wholesale Customers, unless otherwise agreed by the
Parties in writing.

 

***
Portions hereof have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 406.

 

4

 

2.                                      RETROACTIVE EFFECT OF THE FIRST AMENDMENT

 

Retroactivity.  The Parties agree that notwithstanding that the Closing occurred
on May 30, 2003, the amendments to the Master Agreement contemplated by this
First Amendment shall have effect, to the extent contemplated herein, as at and
from the Effective Date.

 

3.                                      MASTER AGREEMENT/COURT ORDERS

 

Master Agreement; Court Orders.  For the avoidance of doubt the Master
Agreement, the Bell Order and all collateral and related orders remain in full
force and effect.  The Master Agreement
is only modified in so far as this First Amendment specifically provides,
including without limitation, extensions of Initial Term, Flex, Rights to
Match, non-exclusivity and pricing principles. 
Except as amended herein, all of the terms and conditions of the Master
Agreement shall remain in full force and effect.

 

4.                                      TERM AND TERMINATION

 

4.1                               Term and
Termination. 
Article 2.1 of the Master Agreement is hereby amended to extend the
Initial Term of the Master Agreement until December 31, 2007 (at which
time the Master Agreement and the First Amendment shall terminate) with respect
to:

 

(a)                                  Switch Minute
Terminations in Canada;

(b)                                 IP Transit
Services;

(c)                                  Canada Direct
Services;

(d)                                 Operator
Handled (OH) services;

(e)                                  ITFS/UIFN
services;

(f)                                    IDDD; and

(g)                                 Home Country
Direct.

 

4.2                               Idem.  For IPL Services, ISDN Services, and all
other Services except those specifically referenced in Section 4.1 above,
the Master Agreement and this First Amendment shall terminate on
December 31, 2005.

 

4.3                               Idem.  Article 2.1 of the Master Agreement is
hereby further amended by deleting the second sentence thereof.

 

5.                                      OBLIGATIONS OF THE PARTIES

 

5.1                               Amendment
of Article 3.3 of Master Agreement.  Article 3.3 of the Master Agreement is hereby amended by
deleting the first sentence, and replacing it with Sections 5.1.1 and 5.1.2
below:

 

5.1.1                     Teleglobe Flex; Bell Right to Match.  Subject to Article 3.6 of the Master Agreement, Teleglobe
shall fulfill, satisfy and discharge all of its requirements for the delivery
of telecommunications services in the Territory exclusively with and from Bell
Canada through the delivery by Bell Canada of the Bell Services, unless Bell
Canada declines in writing to supply any of such Bell Services; provided that,
Teleglobe shall no longer be bound or restricted by any exclusivity obligation
contained in the Master Agreement (as amended by the First Amendment) only to
the extent it is granted Flex Rights and Right to Match Rights as contemplated
by the terms set out below.

 

(a)                                  Teleglobe Allocations.  Teleglobe shall be subject to the followings rights and
obligations with respect to Switch Minute Terminations in Canada:

 

5

 

(i)             in 2003, Teleglobe may
obtain up to *** of its required volume of Switch Minute Terminations in Canada
by way of exercising its Flex Right, and up to *** of its required volume of
Switch Minute Terminations in Canada shall be subject to a Bell Canada Right to
Match, pursuant to the calculation set forth below in this
Section 5.1.1(a);

 

(ii)          in 2004, Teleglobe may
obtain up to *** of its required volume of Switch Minute Terminations in Canada
by way of exercising its Flex Right, and up to *** of its required volume of
Switch Minute Terminations in Canada shall be subject to a Bell Canada Right to
Match, pursuant to the calculation set forth below in this
Section 5.1.1(a);

 

(iii)       in 2005, Teleglobe may
obtain up to *** of its required volume of Switch Minute Terminations in Canada
by way of exercising its Flex Right, and up to *** of its required volume of
Switch Minute Terminations in Canada shall be subject to a Bell Canada Right to
Match, pursuant to the calculation set forth below in this
Section 5.1.1(a);

 

(iv)      in 2006, Teleglobe shall
route a minimum of *** of its required volume of Switch Minute Terminations in
Canada to Bell Canada, and *** of its required volume of Switch Minute
Terminations in Canada shall be subject to a Bell Canada Right to Match,
pursuant to the calculation set forth below in this Section 5.1.1(a); and

 

(v)         in 2007, Teleglobe shall
route a minimum of *** of its required volume of Switch Minute Terminations in
Canada to Bell Canada, and *** of its required volume of Switch Minute
Terminations in Canada shall be subject to a Bell Canada Right to Match,
pursuant to the calculation set forth below in this Section 5.1.1(a).

 

Determination of Allocations.  The Flex Right and Right to Match
Allocations contemplated in this Section 5.1.1(a) shall be determined as
follows.  The required volume of Switch
Minute Terminations in Canada for 2003 shall be an amount expressed in dollars,
equal to the aggregate sum of the products of the total volume of Switch Minute
Terminations in Canada for each route purchased by Teleglobe from Bell Canada
in 2002, multiplied by the applicable rates established and in effect on
January 1, 2003 on a route by route basis.  The required volume of Switch Minute Terminations in Canada for
subsequent years (for the purpose of determining the Flex Right and Right to
Match Right Allocations for such subsequent years) shall be an amount,
expressed in dollars, established, on an annual basis, on the first day of each
such subsequent calendar year (in this Section 5.1.1(a) “Adjustment Date”)
and be equal to the aggregate sum of the products of the total volume of the
Switch Minute Terminations in Canada for each route during the last calendar
year preceding the Adjustment Date (in this Section 5.1.1(a) “Base Year”)
multiplied by the average rates applicable during the months of
November and December of the Base Year.  For avoidance of doubt, the Parties agree that the required
volume of Switch Minute Terminations in Canada for the purposes of each Base
Year, shall include only the traffic routed to Bell Canada and Bell West Inc.,
together with the traffic routed by Teleglobe to Competing Providers on a Flex
Right or Right to Match Right basis.

 

***
Portions hereof have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 406.

 

6

 

Rights: 
Excesses and Shortfalls.  Subject to the terms and conditions set forth in this paragraph,
Teleglobe agrees it shall not exceed its Allocation in each year.  Commencing on January 1, 2004, in any
given month thereafter, Teleglobe shall not exercise more than (i) *** of its
average monthly Right to Match Right and Flex Right Allocation, calculated on
an aggregated basis, nor (ii) more than *** of each of its average monthly
Allocations, such average monthly Rights to be calculated based on the annual
Flex Right and Right to Match Right Allocations (in aggregate with respect to
(i) and separately with respect to (ii)) set forth above, divided by twelve
months.  For greater certainty, however,
the Parties agree that the foregoing restrictions related to Teleglobe
exceeding its Allocation shall not apply to its exercise of the Rights during
2003.  Where Teleglobe exercises any of
the Rights, in any calendar year, in excess of the Teleglobe Allocation or
fails, on the other hand, to use the Rights up to the Teleglobe Allocation,
such excess or shortfall, may be carried forward as follows:  (i) in the case of a shortfall in the
exercise of the Rights, a maximum of *** for each of the Right to Match Right
Allocation and Flex Right Allocation in a given year shall be added to the
Right to Match Allocation or the Flex Right Allocation, as the case may be, in
the calendar year following the calendar year where such shortfall occurred;
and (ii) in the case of any excess in the exercise of the Rights, a maximum of
*** for each of the Right to Match Right Allocation and Flex Right Allocation
in a given year shall be debited on a dollar for dollar basis from the
respective Rights in the calendar year following the calendar year where such
excess use occurred, provided that Teleglobe shall have used commercially
reasonable efforts to exercise the Rights at the Teleglobe Allocation in each
calendar year.  In addition, the Parties
further agree that should Teleglobe exercise any of the Rights, in any calendar
year, in excess of *** (“Excess Amount”) of each of the Right to Match Right
and Flex Right Allocation, respectively, in a given year, such excess shall be
debited from Teleglobe’s Right to Match Right and/or Flex Right Allocation, as
the case may be, for the following year in an amount equal to twice the Excess
Amount.

 

Debiting of Allocations.  The respective Flex and Right to Match
Allocations shall be debited by deducting amounts expressed in dollars equal to
the product of the volume of Switch Minute Terminations in Canada utilized by
Teleglobe on a Flex and Right to Match basis multiplied by the rates used in
the determination of the Flex Right or Right to Match Right Allocation as set
forth in Section 5.1.1(a) above (i.e., rates in effect on
January 1,2003 and the average applicable rates in effect during the
months of November and December of each Base Year for subsequent years),
on a route by route basis.

 

(b)                                  Right to Match on Other Services.  Teleglobe shall, from the Effective Date, be entitled to obtain
Competing Services, as the same relate to private line services, such as
network circuit and local loop facilities in the Territory (including for
example, BandWidth Select, Megalink) as well as for Cross Border Facilities and
Network Facilities, subject to Bell Canada’s Right to Match, in all instances,
for such Teleglobe requirements; provided that with respect to Cross Border
Facilities and Network Facilities, the pricing principles set out in the Master
Agreement shall continue to apply.  For
greater certainty, Bell Canada’s Right to Match pursuant to this
Section 5.1.1(b) shall not result in debiting of Bell Canada’s Right to
Match Allocation.

 

5.1.2                     Teleglobe Access to Canadian Market.  Teleglobe shall not directly or indirectly promote, market or
sell any telecommunications services to Customers in the Territory, either on a
retail or wholesale basis, other than to Bell Canada; provided that Teleglobe
shall no longer be bound, from May 15, 2003 and thereafter, by such
restriction, but only to the extent set forth below.

 

***
Portions hereof have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 406.

 

7

 

(a)                                  IP Transit Potential Customers.  With respect to IP Transit Services, Teleglobe shall be entitled
to promote, market and sell, on a non-exclusive basis, in the Territory,
Teleglobe’s IP Transit Services solely to the entities listed below (the
“Teleglobe Potential IP Customers”), on the following terms and conditions:

 

(i)                                     *** and *** and
to that end Bell Canada consents to Teleglobe executing, after the date of
execution of the First Amendment, with *** and ***, IP Transit Services
agreements with *** and ***, provided that Teleglobe shall not, during the term
of any IP transit related agreements, in force and effect at the Effective
Date, between Bell Canada and *** and ***, respectively, (the “Bell
Agreements”), induce either *** or *** to terminate their respective Bell
Agreement early or breach their respective Bell Agreement, or conduct itself in
a manner which would interfere with Bell Canada’s rights thereunder, or the
management of the Bell Agreements, including without limitation, a reduction in
the monthly volume commitment of IP traffic routed by *** and *** to Teleglobe
under the Bell Agreement with Bell Canada as of the Effective Date from *** and
***.  Teleglobe may support Bell Canada
in its management of the Bell Agreements where requested by *** and/or *** by
directly interfacing with *** and/or *** for certain functions, subject to Bell
Canada’s consent, (which consent shall not be unreasonably withheld) and
further provided that any action taken by Teleglobe in supporting Bell Canada
shall not impair revenue recognition by Bell Canada under Canadian GAAP, in
respect of such Bell Agreements.

 

In addition, Teleglobe hereby agrees, from the Effective Date:

 

(1)                                  until
March 1, 2004, to charge Bell Canada a rate of *** per Mbps for all *** IP
transit related traffic sent to Teleglobe under the Bell Agreement with ***;
and

 

(2)                                  until
October 31, 2003, to charge Bell Canada a rate of *** per Mbps for all ***
IP transit related traffic sent to Teleglobe under the Bell Agreement with ***.

 

For avoidance of doubt, from March 1, 2004 with respect to *** and
from October 31, 2003 with respect to ***, and thereafter, Teleglobe shall
no longer have any obligations to Bell Canada or restrictions with respect to
*** and *** as such obligations or restrictions relate to IP Transit Services.

 

(ii)                                  the following
additional Canadian cable companies: 
*** and ***;

 

(iii)                               the following
Canadian carriers:  ***, and ***; and

 

(iv)                              the following
Content Providers:***, and to that end Bell Canada agrees to use reasonable
commercial efforts, to assign to Teleglobe any and all IP transit related
agreements Bell Canada may have entered into, solely as it relates to Teleglobe
IP Transit Services, with any of the foregoing Content Providers, provided that
Bell Canada shall be entitled to recognize all revenue under Canadian GAAP in
respect of such agreements described in this Section 5.1.2(a)(iv), as it
relates to their respective IP transit generated business, until the expiry of
the then current terms of such IP transit related agreements.  Teleglobe

 

***
Portions hereof have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 406.

 

8

 

shall be entitled to promote, market and sell
IP Transit Services to three (3) additional Content Providers for each of 2004
and 2005, and only two (2) additional Content Providers in each of 2006 and
2007, all of which are subject to Bell Canada’s prior written approval, which
approval shall not be unreasonably withheld.

 

(b)                                  IDDD Potential Customers.  Teleglobe shall be entitled to promote, market and sell, in the
Territory, on a non-exclusive basis, Teleglobe’s IDDD Services, solely to ***
and *** (collectively the “Teleglobe Potential IDDD Customers”).

 

(c)                                  Canada Direct Services.  Teleglobe shall be entitled to promote, market and sell Canada
Direct Services to ***

 

5.1.3                     Second Amendment of Article 3.3 of Master Agreement.  The second sentence of Article 3.3 of
the Master Agreement is hereby deleted and replaced with the following:  “Subject to the foregoing
(Section 5.1.2 of the First Amendment), and for greater certainty,
Teleglobe agrees that it shall not create or participate directly or
indirectly, or through the use of an Affiliate, in any initiative aimed at
providing Competing Services at either the wholesale or retail level to any
Person in the Territory”.

 

5.2                               Amendment
of Article 3.4 of Master Agreement.  Article 3.4 of the Master Agreement is hereby amended by
deleting the first sentence, and replacing it with Section 5.2.1 below:

 

5.2.1                     Bell Canada Flex; Teleglobe Right to Match.  Subject to Articles 3.5 and 3.6 of the
Master Agreement as amended, Bell Canada shall fulfill, satisfy and discharge
all of its requirements for the delivery, outside of the Territory of the
Teleglobe Exclusive Services through Teleglobe; provided that from the
Effective Date, Bell Canada shall no longer be bound or restricted by any
exclusivity obligations contained in the Master Agreement (as amended by the
First Amendment) only to the extent it is granted Flex Rights and Right to
Match Rights as contemplated by the terms set out below.

 

(a)                                  IP Transit Commitment.  ***

 

(i)                  For the avoidance of doubt,
subject to this Section 5.2.1(a) and Section 5.4, Bell Canada shall
pay Teleglobe for the greater of:  (1)
the Bell Canada actual IP Transit traffic routed through Teleglobe, in a given
month; and (2) the IP Transit Monthly Volume Commitment.

 

(ii)               For greater certainty, and
for the purpose of determining the IP Transit Monthly Volume Commitment, the
Parties agree as follows:

 

(1)                                 the IP Transit
Monthly Volume Commitment shall be composed solely of traffic routed directly
(connected) to Teleglobe IP ports from Bell Canada routers (“On-Net Traffic”);

 

(2)                                 the IP Transit
Monthly Volume Commitment for each of 2003, 2004 and 2005 shall be adjusted
downward (on a per Gb, or any portion thereof, basis) where Bell Canada is able
to demonstrate to Teleglobe (acting reasonably), within sixty (60) days from
the receipt of a Signing Notice (hereinafter defined) that it has lost any On-Net
Traffic as a result of Teleglobe having signed or entered into agreements with
any of the

 

***
Portions hereof have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment in accordance
with Rule 406.

 

9

 

Teleglobe Potential IP Customers (other than
*** and ***), which were under contract with and connected directly to Bell
Canada, as of the Effective Date, for the purpose of Bell Canada supplying IP
Transit Services to such Teleglobe IP Potential Customers (which shall include,
for greater certainty, any agreement assigned by Bell Canada to Teleglobe
pursuant to Section 5.1.2 (a) (iv) hereof).  Teleglobe shall provide Bell Canada with written notice of any
agreements Teleglobe enters into with any of the Teleglobe IP Potential
Customers (the “Signing Notice”) within thirty (30) days of such agreements
having been entered into.  For greater
certainty, the aforementioned lost On-Net Traffic to be applied against the IP
Transit Monthly Volume Commitment shall be at a maximum, the amount of
Teleglobe On-Net Traffic lost by Bell Canada to Teleglobe and not the IP
Transit traffic actually sent by such Teleglobe IP Potential Customers to Teleglobe
or previously sent to Bell Canada; and

 

(3)                                 any traffic
sent to *** and/or *** by Bell Canada via a Teleglobe port shall not be
computed as part of the IP Transit Monthly Volume Commitment.

 

(iii)                               ***

 

(iv)                              ***

 

(b)                                  Bell Canada Allocation.  Bell Canada shall be subject to the following rights and
obligations with respect to IDDD services obtained by Bell Canada and
terminating outside of the Territory (“IDDD Outbound Services”) :

 

(i)                                     in 2003, Bell
Canada may obtain up to *** of its required volume of IDDD Outbound Services by
way of exercising its Flex Right, and up to *** of its required volume of IDDD
Outbound Services shall be subject to a Teleglobe Right to Match, pursuant to
the calculation set forth below in this Section 5.2.1(b);

 

(ii)                                  in 2004, Bell
Canada may obtain up to *** of its required volume of IDDD Outbound Services by
way of exercising its Flex Right, and up to *** of its required volume of IDDD
Outbound Services shall be subject to a Teleglobe Right to Match, pursuant to
the calculation set forth below in this Section 5.2.1(b);

 

(iii)                               in 2005, Bell
Canada may obtain up to *** of its required volume of IDDD Outbound Services by
way of exercising its Flex Right and up to *** of its required volume of IDDD
Outbound Services shall be subject to a Teleglobe Right to Match, pursuant to
the calculation set forth below in this Section 5.2.1(b);

 

(iv)                              in 2006, Bell
Canada shall route a minimum of *** of its required volume of IDDD Outbound
Services to Teleglobe and *** of its required volume of IDDD Outbound Services
shall be subject to a Teleglobe Right to Match, pursuant to the calculation set
forth below in this Section 5.2.1(b); and

 

(v)                                 in 2007, Bell
Canada shall route a minimum of *** of its required volume of IDDD Outbound
Services to Teleglobe and *** of its required

 

***
Portions hereof have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 406.

 

10

 

volume of IDDD Outbound Services shall be
subject to a Teleglobe Right to Match, pursuant to the calculation set forth
below in this Section 5.2.1(b).

 

Determination of Allocations.  The Flex Right and Right to Match Right
Allocations contemplated in this Section 5.2.1(b) shall be determined as
follows.  The required volume of IDDD
Outbound Services, shall be an amount, expressed in dollars, which, for 2003
shall be equal to the aggregate sum of the products of the total volume of IDDD
Outbound Services for each route purchased by Bell Canada from Teleglobe in
2002 (excluding the 2002 Excluded Traffic, provided that such 2002 Excluded
Traffic shall be replaced with the average Bell Canada IDDD Outbound Services
traffic recorded for mobile and Cuba terminating traffic in the months of
September and October of 2002) multiplied by the applicable rate
established and in effect on January 1, 2003 on a route by route
basis.  The required volume of IDDD
Outbound Services for subsequent years (for the purpose of determining the Flex
Rights and Right to Match Right Allocations for such subsequent years) shall be
an amount, expressed in dollars, established on an annual basis, on the first
day of each such subsequent calendar year (in this Section 5.2.1(b) the
“Adjustment Date”) equal to the aggregate sum of the products of the total
volume of IDDD Outbound Services for each route during the last calendar year
preceding the Adjustment Date (in this Section 5.2.1(b) the “Base Year”)
multiplied by the average rate applicable during the months of
November and December of the Base Year.  Provided that in 2004, IDDD Outbound Services purchased by Bell
Canada shall exclude the 2003 Excluded Traffic replacing such 2003 Excluded
Traffic with the average Bell Canada IDDD Outbound Services traffic recorded
for Cuba terminating traffic in the months of March and
April 2003.  For avoidance of
doubt, the Parties agree that the IDDD Outbound Services required volume for
the purposes of each Base Year shall include only the traffic routed to
Teleglobe together with the traffic routed to Competing Providers on a Flex
Right or Right to Match Right basis.

 

Rights: 
Excesses and Shortfalls.  Subject to the terms and conditions set forth in this paragraph,
Bell Canada agrees it shall not exceed its annual Allocation in each year.  Commencing on January 1, 2004, in any
given month thereafter, Bell Canada shall not exercise more than (i) *** of its
average monthly Right to Match Right and Flex Right Allocation, on an
aggregated monthly basis, nor (ii) more than *** of each of its average monthly
Allocations, such average monthly Rights to be calculated based on the
aggregate yearly Flex and Right to Match Right Allocations (in aggregate with
respect to (i) and separately with respect to (ii) herein this sentence)
determined as set forth above divided by twelve months.  For greater certainty, however, the Parties
agree that the foregoing restrictions related to Bell Canada exceeding its
Allocation shall not apply to its exercise of the Rights during 2003.  Where Bell Canada exercises any of the
Rights, in any calendar year, in excess of the Bell Canada Allocation or fails,
on the other hand, to use the Rights up to the Bell Canada Allocation, as contemplated
above, such excess or shortfall, may be carried forward as follows:  (i) in the case of a shortfall in the
exercise of the Rights, a maximum of *** for each of the Right to Match Right
Allocation and Flex Right Allocation in a given year shall be added to the
Right to Match Right Allocation or the Flex Right Allocation, as the case may
be, in the calendar year following the calendar year where such shortfall
occurred; and (ii) in the case of any excess in the exercise of the Rights, a
maximum of *** for each of the Right to

 

***
Portions hereof have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 406.

 

11

 

Match Right Allocation and Flex Right Allocation in a given year shall
be debited on a dollar for dollar basis from the respective Rights in the
calendar year following the calendar year where such excess use occurred,
provided that Bell Canada shall have used commercially reasonable efforts to
exercise the Rights at the Bell Canada Allocation, as contemplated above, in
each calendar year.  In addition, the
Parties further agree that should Bell Canada exercise any of the Rights, in
any calendar year, in excess of *** (“Excess Amount”) of each of the Right to
Match Right and Flex Right Allocation, respectively, in a given year, such
excess shall be debited from Bell Canada’s Right to Match Right and/or Flex
Right Allocation for the following year in an amount equal to twice the Excess
Amount.

 

Debiting of Allocations.  The respective Flex Right and Right to Match
Right Allocations shall be debited by deducting amounts expressed in dollars
equal to the product of the volume of IDDD Outbound Services utilized by Bell
Canada on a Flex Right and Right to Match Right basis multiplied by the rates
used in the determination of the applicable Flex Right or Right to Match Right
Allocation as set forth in Section 5.2.1 (b) (for greater certainty, rates
in effect on January 1, 2003 and the average applicable rates in effect in
the months of November and December of each Base Year for subsequent
years), on a route by route basis.

 

For greater certainty, and except as otherwise contemplated in this
Section 5.2.1(b), Bell Canada shall fulfill, satisfy and discharge all of
its other requirements for IDDD Outbound Services from Teleglobe; provided
that, with respect to Teleglobe IDDD Potential Customers, Bell Canada shall be
entitled to obtain IDDD services from Competing Providers for the sole purpose
of reselling such IDDD services to such Teleglobe IDDD Potential Customers,
without negatively impacting or reducing the computation of the IDDD Outbound
Services Flex Right or Right to Match Right, as described in Sections 5.2.1(b)
(i) through (v), above, during any calendar year where Bell Canada has obtained
IDDD services from Competing Providers for Teleglobe IDDD Potential
Customers.  For greater certainty,
however, the IDDD service traffic procured by Bell Canada from Competing
Providers, for those Teleglobe IDDD Potential Customers, during any given
calendar year, shall not be taken into account when calculating the Flex Right
or Right to Match Right Allocations for the subsequent calendar years.

 

(c)                                  Right to Match on Other Services.  Bell Canada shall be entitled to procure Competing Services for
IPL Services, Cross Border Facilities and Network Facilities, as well as
network, circuit and local loop, facilities in the United States, all of which
shall be subject to Teleglobe’s Right to Match Right, in all instances, for
such Bell Canada requirements, provided that with respect to Cross Border
Facilities and Network Facilities the pricing principles set out in the Master
Agreement shall continue to apply.  For
greater certainty, Teleglobe’s Right to Match pursuant to this
Section 5.2.1(b) shall not result in debiting of Teleglobe’s Right to
Match Allocation.

 

5.3                               Canada
Direct Services Promotions.  The Parties agree to cooperate on a commercially reasonable basis
to optimize marketing and communications strategies for Canada Direct
Service.  For each calendar year,
commencing in 2003, each Party hereby agrees to spend, *** on advertising and
promoting the Canada Direct Service, and both Parties shall work cooperatively to
develop a promotional plan.

 

5.4                               Teleglobe
Off-Net Delay Obligations.  With respect to IP Transit Services, Teleglobe agrees to
guarantee an Off-Net Delay of 35 ms for all Tier-1 Peers with whom Teleglobe
directly connects.

 

***
Portions hereof have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 406.

 

12

 

Pursuant to Teleglobe’s standard Service
Level Agreement (“SLA”), Teleglobe will work with Bell Canada to correct
service deficiencies with respect to Off-Net Delays, provided that Bell Canada
informs Teleglobe of such deficiencies by opening a trouble ticket with
Teleglobe’s Global Customer Service Center (“GCSC”).  The Parties agree that, (i) if Teleglobe is unable to resolve a
particular Customer’s documented service deficiency (i.e., Off-Net Delay) for a
period of at least three (3) months, and (ii) Bell Canada is able to
demonstrate that the deficiency has resulted in Bell Canada breaching its
agreement with its Customer, and (iii) Customer terminates its agreement with
Bell Canada as a direct result of such breach, Bell Canada’s IP Transit Monthly
Volume Commitment shall be automatically adjusted by an amount equal to the
volume of traffic that Teleglobe had been receiving from that Customer, through
Bell Canada, such volume to be determined based on the average of the three (3)
months immediately preceding the date on which Bell Canada opened the first
trouble ticket for the deficiency which gave rise to the termination.  The aforementioned volume of traffic to be
reduced from Bell Canada’s IP Transit Monthly Volume Commitment shall be
identified by Bell Canada and confirmed by Teleglobe, which confirmation shall
not be unreasonably withheld.

 

6.                                      RIGHT OF FIRST REFUSAL FOR NEW SERVICES

 

6.1                               Right of
First Refusal for New Services.  Article 5.1 of the Master Agreement is hereby amended by
adding the following clause at the beginning of the first sentence:  “Until December 31, 2005....” and by
substituting a “w” for the “W” at the beginning of such sentence.

 

7.                                      RIGHT TO MATCH

 

7.1                               Right to
Match.  In this
First Amendment, including its recitals, unless otherwise defined or unless the
context otherwise requires, the following terms shall have the following
meanings:

 

“Bilateral Basis” means
the reciprocal exchange of originating and terminating Category 2 Services
between a Buyer and a Carrier;

 

“Bilateral Parties” means
a Buyer or a Carrier engaged on a Bilateral Basis;

 

“Bilateral Route” means a
route where a Buyer fulfills some or all of its requirements for Category 2
Services on a Bilateral Basis;

 

“Carrier” means either a
Competing Provider, Teleglobe or Bell Canada, as the case may be;

 

“Category 1 Services”
means the services set out in Sections 5.1.1(b) and 5.2.1(c) of this First
Amendment;

 

“Category 2 Services”
means IDDD Outbound Services and Switch Minute Terminations in Canada Services;

 

“Destinations” means a set
of numbering ranges that correspond exactly to numbering ranges and destination
names as defined by Teleglobe for IDDD Outbound Services and as defined by Bell
Canada for Switch Minute Terminations in Canada as set out from time to time in
each Party’s respective rate updates.

 

“Exceptional Market Events”
means conditions leading to a fundamental structural change in traffic
termination costs, which may include natural disasters, political instability,
military action, regulatory action, or other events of such nature.  For avoidance of doubt, such exceptional
market events do not include circumstances where a Competing Provider raises
its rates to reflect an increase in rates by an underlying carrier where such
rate increases is not related to any of the foregoing circumstances;

 

13

 

“Expression of Intent Period”
has the meaning set out in Section 7.2(a)(iii) hereof;

 

“Full Route” means a route
where a Buyer fulfills all of its requirements for the delivery of all of its
Category 2 Services traffic for that route with one Carrier;

 

“Initial Response” has the
meaning set out in Section 7.2(a)(iii) hereof;

 

“Issuing Party” means a
Buyer issuing an RFQ or a Right to Match Opportunity, as the case may be;

 

“match”, “matched” or “matching” means, with respect to Category 2 Services, the
agreement of the Responding Party to provide Category 2 Services, on identical
terms and conditions (subject to Section 7.2(b)(ix) hereof) as those
offered by a Competing Provider pursuant to a Competing Provider offer
containing the Required Information, and further to which the Issuing Party is
to purchase the Category 2 Services, from the Responding Party in accordance
with the terms and condition of the Master Agreement as amended by this First
Amendment; and with respect to Category 1 Services, means the agreement of the
Responding Party to provide Category I Services, on identical terms and
conditions as set forth in the RFQ, and further to which the Issuing Party is
to purchase the Category 1 Services from the Responding Party in accordance
with the terms and conditions of the Master Agreement as amended by the First
Amendment including Sections 7.2(a)(i) and 7.2.(a)(vi) hereof;

 

“Partial Bilateral Route”
means a route where a Buyer fulfills its requirements for Category 2 Services,
but only with respect to all Category 2 Services traffic in excess of its
commitment to Bilateral Partner;

 

“Partial Route” means a
route where a Buyer wishes to fulfill its requirements for Category 2 Services
from at least two Carriers on a non-Bilateral Basis;

 

“Responding Party” means
Supplier responding to the RFQ or Right to Match Opportunity, as the case may
be;

 

“RFQ” means a request for
quotation;

 

“Right to Match Opportunity”
means the opportunity granted by the Issuing Party to the Supplier to match a
Competing Provider(s)’ offers;

 

“Right to Match Response”
means the response by the Responding Party to the Issuing Party’s Right to
Match Opportunity; and

 

“Right to Match Service Term”
means the term applicable to Category 2 Services subject to a Right to Match Opportunity.

 

7.2                               ***

 

7.3                               Rights;
Certification.  For the
purposes of calculating and controlling either Party’s Right to Match and Flex
Allocations, each Party agrees to prepare written reports, certified by an
officer, and send such certified reports to the other Party, as follows:

 

(a)                                  On a quarterly basis, for
Category 1 Services:

 

***
Portions hereof have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 406.

 

14

 

(i)             a list identifying each
circuit procured by the Issuing Party during the quarter with the following
information for each circuit:

(1)          price paid;

(2)          term/termination;

(3)          confirmation that actual
SLAs/SLOs applicable to any listed circuit match exactly those offered in the
RFQ;

(4)          confirmation that actual
final configuration matches exactly the configuration offered in the RFQ; and

(5)          actual delivery interval (to
be identified in the quarter in which the circuit is delivered).

 

(b)                                  On a quarterly basis, for
Category 2 Services:

 

(i)             the total actual traffic
(with separate amounts routed under Flex and Right to Match), on a route by
route basis, routed by a Party as a result of such Party having exercised its
Rights, expressed in dollars, being the product of such total actual traffic
multiplied by the the rates used in the determination of Allocations pursuant
to Sections 5.1.1(a) and 5.2.1(b), as the case may be; and

(ii)          on a route by route basis,
the actual traffic, actual measured quality, ,actual rate paid and actual
return traffic received (if applicable) for each Right to Match Opportunity not
accepted by the Supplier.

 

7.4                               Dispute.  In the event that any disagreement or
dispute between Responding Party and the Issuing Party arises with respect to a
response from a Competing Provider, the Responding Party and the Issuing Party
shall jointly nominate a commercial arbitrator having recognized knowledge in
the international telecommunications industry that shall render, within ten
(10) Business Days, a final and binding opinion on the suitability and
completeness of the Competing Provider’s response pursuant to this
Section 7.

 

8.                                      PRICING PRINCIPLES

 

8.1                               ***

 

8.2                               IDDD
Outbound Services Price Reduction.  With respect to IDDD Outbound Services, the Parties agree as
follows:

 

(a)                                  The Teleglobe
wholesale price list for IDDD Outbound Services attached hereto as
Schedule 1 shall apply from the Effective Date to Teleglobe IDDD Outbound
Services provided to the Wholesale Customers of Bell Canada, provided that such
Wholesale Customers are either directly connected to Teleglobe switches or
connected to Teleglobe through designated wholesale trunks, where each
Wholesale Customer has been preidentified by Bell Canada and agreed to by
Teleglobe, provided that each Party acts in a commercially reasonable
manner.  (For greater certainty, such
wholesale price list set out in Schedule 1 shall also include the rate
reduction contemplated in Section 8.2(c) hereof).

 

(b)                                  The Teleglobe
retail price list for IDDD Outbound Services attached hereto as Schedule 2
shall be applied to all traffic, other than traffic generated by Bell Canada
Wholesale Customers, received directly from a Bell Canada switch from the Effective
Date.

 

***
Portions hereof have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 406.

 

15

 

(c)                                  Teleglobe shall
grant Bell Canada a rate reduction, such that the application of rates set out
in Schedule 1, to the Bell Canada Wholesale Traffic in January 2003,
(which shall include promos and mobile, but shall exclude Cuba traffic) shall
result in a saving of *** from the rates applied by Teleglobe in
January 2003 to such Bell Canada Wholesale Traffic.

 

(d)                                  The Parties
shall continue to cooperate on a commercially reasonable basis, from time to
time, acting reasonably, to develop wholesale special events pricing (e.g.  promos etc.) on a case-by-case basis.

 

(e)                                  Retroactive to
January 1, 2003 and from and after the Effective Date, Teleglobe shall no
longer charge Bell Canada for *** and, to that end, Teleglobe agrees to credit
or reimburse Bell Canada for any charges applicable for ***, incurred by Bell
Canada from and after January 1, 2003.

 

(f)                                    Teleglobe
agrees to use commercially reasonable efforts to assist Bell Canada in reducing
rates arising out of the contractual obligations of Bell Canada pursuant to the
Convergia Agreement.

 

(g)                                 In no event
shall the Teleglobe rates for IDDD Outbound Services (retail and wholesale
traffic) offered to Bell Canada, in the aggregate, exceed retail rates
applicable as of the Effective Date.

 

(h)                                 For avoidance
of doubt and without limiting the foregoing, nothing herein shall be construed
as to result in termination of the obligations of Teleglobe to continue to
provide the Teleglobe IDDD Services in accordance with Article 7 of the
Master Agreement.

 

(i)                                    For avoidance
of doubt, the prices for Category 2 Services provided by the Responding Party
in response to a particular Right to Match Opportunity shall not be considered
the Most Favored Service Purchaser price under Article 7 of the Master
Agreement unless the Responding Party provides any Category 2 Services to any
third party at the rates set out in a Right to Match Opportunity.

 

8.3                               *** ISDN. 
The Parties agree to *** as of January 1, 2004 for ISDN Services
and to develop, jointly, effective from the Effective Date, for 2003 and
subsequent calendar years, a rate table applicable to the traffic volume in
excess of the ISDN traffic volume generated in 2002 (“ISDN Base Traffic”).  For avoidance of doubt, and without limiting
the foregoing, nothing herein shall be construed as to result in termination of
the obligations of Teleglobe to continue to provide the ISDN Services in
accordance with Article 7 of the Master Agreement.

 

8.4                               Canada
Direct Service Rate ***.  With respect to Canada Direct Service,
Teleglobe shall ***

 

8.5                               Home
Country Direct ***.  With respect to Home Country Direct, Bell
Canada shall ***

 

***
Portions hereof have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 406.

 

16

 

9.                                      MISCELLANEOUS

 

9.1                               Notice.  For the purposes of Article 13.5 of the
Master Agreement and this First Amendment the following are the Parties’
respective addresses for the purpose of notice:

 

If to Teleglobe:

 

Teleglobe Canada ULC

1000 de 1a Gauchetiere Street West,

Montreal, Quebec,

H3B 4X5

Attention:  Liam Strong, Chief Executive
Officer

Facsimile:  (514) 868-7715

 

Copy to:

 

Teleglobe Canada ULC

185 The Westmall, Suite 629

Toronto, Ontario

M9C 5L5

Attention:  J.P. Gratton, Vice
President, Americas

Facsimile:  (416) 287-5488

 

If to Bell Canada:

 

President – Network Operations

Floor 6N, 483 Bay Street

Toronto, Ontario

M5G 2C9

 

Facsimile:  (416) 597-3300

 

Copy to:

 

General Counsel

Legal Department

Floor 5N, 483 Bay Street

Toronto, Ontario

M5G 2C9

 

Facsimile:  (416) 260-1674

 

9.2                               Order of
Precedence.  In the
event of any conflict or inconsistency among or between the terms of this First
Amendment, the Master Agreement, and any Specific Services Agreement, the
following shall control, in descending order of precedence:  (1) this First Amendment; (2) the applicable
Specific Services Agreement; and (3) the Master Agreement.  The Parties agree that the terms and
provisions of the Bell Order continue in full force and effect, and that
nothing contained in this First Amendment is intended to, or shall, effect the
application of the terms of the Bell Order to the Parties.

 

17

 

9.3                               Counterparts.  This First Amendment may be executed in as
many counterparts as may be required, each of which when delivered is an
original but all of which taken together constitute one and the same
instrument.

 

Representations, Warranties and Effect of Assignment. As to this First Amendment, each represents and warrants to the other
that such Party is the Party entitled to the rights, and benefits, and is
subject to the obligations and liabilities, of the Master Agreement, and as
such, each has the right, on a valid and enforceable basis, to enter into this
First Amendment, and to agree with the other Party as set out in this First
Amendment.  Each of the Parties hereto
represents to the other that this First Amendment is valid and binding,
enforceable against it in accordance with its terms, and that this First
Amendment shall, from and after the date hereof, be read together with the
Master Agreement, such that this First Amendment shall fully amend, supplement,
the Master Agreement, to the extent provided hereunder.  Teleglobe hereby represents and warrants in
favour of Bell Canada that the Closing has occurred, and that Teleglobe has, as
a consequence of the terms of the Purchase Agreement, the completion of the
Closing, and the Bell Order has had assigned to it and assumed the Master
Agreement pursuant to Paragraph 2(b) of the Bell Order and has assumed all
covenants, obligations, conditions, liabilities, provisos and other commitments
of Teleglobe Inc.  under the Master
Agreement, and shall be otherwise subject to all the requirements of Teleglobe
therein arising as if Teleglobe were an original signatory to the Master
Agreement.

 

IN WITNESS WHEREOF,
each of the Parties has executed and delivered this First Amendment.

 

	
  TELEGLOBE CANADA ULC

  	
  BELL CANADA

  
	
   

  	
   

  
	
   

  	
   

  
	
  Per:

  	
  /s/ Liam Gerald Strong

  	
   

  	
  Per:

  	
  /s/ David A Southwell

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Liam Gerald Strong

  	
   

  	
  Name:

  	
  David A. Southwell

  
	
   

  	
  C.E.O.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President Network Operations

  
								

 

18

 

SECOND AMENDMENT TO

MASTER WHOLESALE PRICING AND SERVICES COORDINATING AGREEMENT

 

THIS SECOND AMENDMENT TO THE MASTER WHOLESALE
PRICING AND SERVICES COORDINATING AGREEMENT (this
“Second Amendment”) dated January 9th, 2004, with effect as to
certain agreements contained herein as of January 1st 2004 (the
“Effective Date”) is made

 

	
  BETWEEN:

  	
   

  
	
   

  	
  TELEGLOBE CANADA ULC,
  an amalgamated unlimited liability company amalgamated under the laws of the
  Province of Nova Scotia, having an office at 1000 rue de la Gauchetiere,
  Montreal, Quebec, Canada (“Teleglobe”);

  
	
   

  	
   

  
	
  AND:

  	
   

  
	
   

  	
  BELL CANADA, a
  Canadian corporation incorporated under the laws of Canada having an office
  at 483 Bay Street, Floor 6N, Toronto, Ontario, Canada (“Bell Canada”);

  

 

RECITALS:

 

WHEREAS Teleglobe
and Bell Canada have entered into a Master Wholesale Pricing and Services
Coordinating Agreement (the “Master Agreement”)
dated January 1st 2001, as amended effective April 1st,
2003 (the “First Amendment”); and

 

WHEREAS IDDD
Outbound Services, Canadian Switched Minute Terminations and US Switched Minute
Terminations are to be provided between the Parties under the terms of the
Master Agreement as amended by the First Amendment and provided for herein; and

 

WHEREAS Teleglobe
and Bell Canada wish to modify certain terms and conditions as the same relate
to the rates that Bell Canada and Teleglobe are required to pay for certain
IDDD Outbound Services, Canadian Switched Minute Terminations and US Switched
Minute Terminations;

 

NOW THEREFORE, THIS SECOND AMENDMENT
WITNESSETH that in consideration of the covenants and
agreements hereinafter contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each of the Parties hereto, the Parties hereto covenant and agree as follows:

 

1.                                      DEFINITIONS

 

Terms having initial capital letters and
capitalized terms used, but not otherwise defined in this Second Amendment,
including its recitals, shall have the respective meanings set out in the
Master Agreement or the First Amendment, Certain terms having Initial capital letters
and

 

 

capitalized terms used in this Second
Amendment are defined in the context in which they appear and shall have the
respective meanings there indicated.

 

In this Second Amendment, including its
recitals, unless otherwise defined or unless the context otherwise requires,
the following terms shall have the following meanings:

 

“Base Rate” has the
meaning set forth in Section 2.3.1.2 hereof.

 

“Bilateral Quality”
shall mean the standard of quality reasonably expected from any
telecommunications carrier that has a network managed by a Network Operations
Center twenty four (24) hours per day and seven (7) days per week, has the
ability to re-route and fall-back traffic in the event of congestion or
failure, has redundancy in terminating locations and offers acceptable levels
of quality relative to Tier 1 carriers standards, which includes without
limitation ASR levels.

 

“Conversation Minute”
shall mean a minute of communication resulting from a completed connection
between the calling number and the called number.  The duration of each Conversation Minute shall be measured in
actual seconds of Conversation Time.

 

“Conversation Time”
shall mean the interval that elapses between (a) the moment when the reply
condition (answer signal in the backward direction) is detected at the point
where the recording of the call duration takes place, and (b) the moment when
the clear forward condition (clear forward signal) is detected at the same
point, rounded to the nearest second.

 

“Designated Routes”
means the designated routes set out in Appendix 2 attached hereto.

 

“High Cost Serving Areas”
means the Non-Regional Bell Operating Companies (Non-RBOC) and USA NPA/NXXs
listed as part of the Local Exchange Routing Guide (“LERG”) database, which is
the official North American database managed by the North American Numbering
Plan Administrator.

 

“High Cost Serving Areas Threshold”
has the meaning set out in Section 2.3.1.4 hereof.

 

“Parties” means Bell
Canada and Teleglobe.

 

“Party” means either
Bell Canada, or Teleglobe as the context requires.

 

“Shortfall Charge”
has the meaning set forth in Section 2.3.1.2 hereof.

 

“Term” means
commencing on January 1st, 2004 and terminating on
December 31st, 2004.

 

“US Switched Minute Terminations”
has the meaning set forth in Section 2.3.1.2 hereof.

 

“Valid U.S. Traffic”
shall consist only of direct dialed (1+) calls terminating in U.S. NPAs
(excluding U.S. Virgin Islands, Puerto Rico, Guam, Hawaii and Alaska).  For greater certainty, (i) calls to NXXs 555
and 976, (ii) calls to NPAs 900, 800, 877, 866 and other toll-free numbers,
(iii) ISDN traffic, and (iv) billed calling card calls, reverse billed collect
calls, reverse billed calls, billed to third party calls and operator handled
calls are not Valid U.S. Traffic, and any such calls shall be routed to vacant
numbers and shall receive an overflow (fast busy) tone.

 

 

“Volume Commitment”
shall have the meaning set out in Section 2.3.1.2 hereof.

 

2.                                      SERVICES

 

2.1                                 Teleglobe and Bell
Canada shall provide the IDDD Outbound Services, Canadian Switched Minute
Terminations and US Switched Minute Terminations under the terms and conditions
as set out in the Master Agreement and the First Amendment, as applicable,
except as modified as follows:

 

2.2.1                        Switched Minute Terminations in Canada.  During the Term the Parties agree as follows:

 

2.2.1.1 Article A of Schedule 3(e)
of the Master Agreement, dated November 20th, 2002, is hereby
deleted in its entirety and replaced with Article A as set out in Appendix
1, attached hereto.

 

2.2.1.2               Notwithstanding the
terms of the First Amendment applicable to the Right To Match Right and the
Flex Right, *** pursuant to the
terms and conditions set out in Appendix 1 attached hereto.

 

2.3.1                        Switched Minute Terminations in the US.  During the Term the Parties agree as
follows:

 

2.3.1.1                           Article B
of Schedule 3(e) of the Master Agreement, dated November 20th, 2002,
is hereby deleted in Its entirety.

 

2.3.1.2                           ***

 

2.3.1.3                           For
greater certainty, and without limiting anything set out in
Section 2.3.1.2 above, the Parties agree that per call rating will be done
using an initial six- (6-) second minimum time followed by one- (1-) second
increments of conversation time, rounded up to the nearest one- (1-) second
increment.

 

2.3.1.4                           ***

 

2.3.1.5                           Notwithstanding
any other provision of this Second Amendment, Bell Canada shall have the right
to adjust the Base Rate, from time to time, upon providing twenty (20) Business
Days written notice to Teleglobe (“Adjustment Notice”).  In the event that Teleglobe is not satisfied
with the Adjustment Notice, Teleglobe shall be relieved of its obligation to
meet the Volume Commitment without incurring any Shortfall Charges, by
providing written notice to Bell Canada within ten (10) Business Days from the
date of Teleglobe’s receipt of the Adjustment Notice.  If Teleglobe does not provide any such notice to Bell Canada
within ten (10) Business Days from the date of Teleglobe’s receipt of the
Adjustment Notice, Teleglobe is deemed to have accepted any adjustment to the
Base Rate as specified in the Adjustment Notice.

 

***Portions
hereof have been omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment in accordance with
Rule 406.

 

 

2.3.1.6                           ***  In addition to the foregoing, Bell Canada
shall use reasonable efforts to provide Calling Line Identification (“CLI”) for
such traffic, however, Bell Canada shall not guarantee that such features shall
apply to all Valid U.S. Traffic.

 

2.3.1.7                           Bell
Canada may, at its discretion, net the payment from Teleglobe for US Switched
Minute Terminations against Bell’s payables to Teleglobe for services pursuant
to a Specific Services Agreement or the Master Agreement.

 

2.4.1                        IDDD Outbound Service.  During the Term, and notwithstanding the terms
and conditions set forth in the Master Agreement and the First Amendment, the
Parties hereby agree:

 

2.4.1.1                           With
respect to IDDD Outbound Services for the Designated Routes, Teleglobe shall
not charge Bell Canada, during the Term, rates in excess of the rates set out
in Appendix 2 attached hereto.  For
greater certainty, the parties agree that Section 7 of the Master
Agreement shall continue to apply with respect to the rates applicable for the
Designated Routes.

 

2.4.1.2                           All
IDDD Outbound Services traffic sent by Bell Canada to Teleglobe on the
Designated Routes shall continue to be routed by Teleglobe at Bilateral
Quality.

 

2.4.1.3                           For
greater certainty IDDD Outbound Services traffic sent by Bell Canada to the
Designated Routes at the rates identified in Appendix 2, shall not be debited
from Bell’s Flex Right Allocation or Right To Match Right Allocation.

 

3.                                      GENERAL

 

3.1                                 In
the event of any conflict or inconsistency among or between the terms of this
Second Amendment, the First Amendment, the Master Agreement, and any Specific
Services Agreement, the following shall control, in descending order of
precedence:  (1) this Second Amendment;
(2) the First Amendment; (3) the applicable Specific Services Agreement; and
(4) the Master Agreement.

 

3.2                                 No
course of dealing or failure of either party to enforce any provision of this
Agreement shall be construed as a waiver of such provisions or any other rights
under this Agreement.  If any of the
provisions of this Agreement shall be invalid or unenforceable, such invalidity
or unenforceability shall not invalidate or render unenforceable the entire
Agreement but rather the entire Agreement shall be construed as if not
containing the particular invalid or unenforceable provision or provisions and
the rights and obligations of the parties shall be construed and enforced
accordingly.

 

3.3                                 This
Second Amendment may be executed in as many counterparts as may be required,
each of which when delivered is an original but all of which taken together
constitute one and the same instrument.

 

***Portions
hereof have been omitted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment in accordance with
Rule 406.

 

 

IN
WITNESS WHEREOF, each of the Parties has executed and
delivered this Second Amendment.

 

 

	
  TELEGLOBE CANADA ULC

  	
  BELL CANADA

  
	
   

  	
   

  
	
   

  	
   

  
	
  Per:

  	
  /s/Denis Archamault

  	
   

  	
  Per:

  	
  /s/ Mark Hanlon

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  DENIS ARCHAMBAULT

  	
   

  	
  Name:

  	
  MARK HANLON

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  VP GTM

  	
   

  	
  Title:

  	
  VP CSG  February 27, 2004Schedule 10.3

 

FORM
OF TELEGLOBE INTERNATIONAL HOLDINGS LTD 2004

EQUITY INCENTIVE PLAN

 

1.             Purpose.  The purpose of the Teleglobe International
Holdings Ltd 2004 Equity Incentive Plan is to motivate and retain certain
individuals who are responsible for the attainment of the primary long-term
performance goals of Teleglobe International Holdings Ltd.

 

2.             Definitions.  When used herein, the following terms shall
have the following meanings.

 

“Administrator”
means the Board, or a committee of the Board, duly appointed to administer the
Plan, shall be composed to meet the requirements of Section 162(m) of the Code,
the Companies Act 1981 of Bermuda and/or the requirements established by the
securities exchange or system on which the Shares are traded or listed if such
requirements are applicable.

 

“Award” means,
individually or collectively, a grant under this Plan of Nonqualified Stock
Options, Incentive Stock Options, Restricted Stock or Restricted Share Units.

 

“Award
Agreement” means an agreement entered into by the Company and each Participant
setting forth the terms and provisions applicable to an Award.

 

“Board” means
the Board of Directors of the Company.

 

“Cause” means,
with respect to a Participant, as determined by the Board in its reasonable
judgment, (a) the Participant’s continued failure to substantially perform the
Participant’s duties, (b) the Participant’s repeated acts of insubordination,
or failure to execute Company plans and/or strategies, (c) the Participant’s
acts of dishonesty resulting or intending to result in personal gain or
enrichment at the expense of the Company, (d) the Participant’s commission of a
felony, (e) reasonable evidence presented in writing to the Participant that
the Participant engaged in a criminal act, misconduct or dishonesty, (f)
violation of any written policy of the Company including, but not limited to,
the Company’s employment manuals, rules and regulations after one (1) written
notice from the Company regarding such violation, or (g) the Participant
engaging in any act that is intended, or may reasonably be expected to harm the
reputation, business, prospects or operations of the Company, its officers,
directors, stockholders or employees; provided  that, in the event
a Participant is subject to an employment agreement or other agreement with the
Company that contains a definition of “Cause,” Cause under the Plan shall have
the meaning in such agreement.

 

“Code” means
the Internal Revenue Code of 1986, as amended, or any successor statute
thereto.

 

“Common Stock”
means the common shares in the share capital of the Company.

 

“Company”
means Teleglobe International Holdings Ltd, a Bermuda company and its
successors.

 

 

“Disability”
means, with respect to a Participant, a determination by the Administrator that
such Participant is unable to perform his or her job as a result of a physical
or mental impairment sufficient to prevent the Participant from performing the
essential functions of his position, even after a reasonable accommodation.

 

“Effective
Date” means the date set forth in Section 21 hereof.

 

“Fair Market
Value” means, on any day, with respect to Common Stock which is (a) listed on a
United States securities exchange, the last sales price of such Stock on such
day on the largest United States securities exchange on which such Stock shall
have traded on such day, or if such day is not a day on which a United States
securities exchange is open for trading, on the immediately preceding day on
which such securities exchange was open, (b) not listed on a United States
securities exchange but is included in The NASDAQ Stock Market System
(including The NASDAQ National Market), the last sales price on such system of
such Stock on such day, or if such day is not a trading day, on the immediately
preceding trading day, or (c) neither listed on a United States securities
exchange nor included in The NASDAQ Stock Market System, the fair market value
of such Stock as determined from time to time by the Administrator in good
faith in its sole discretion.

 

“Grant Date”
means the date on which an Option under the Plan is granted to a Participant.

 

“Incentive
Stock Option” means an Option that is designated by the Administrator as an
incentive stock option and qualifies as such within the meaning of Section 422
of the Code and is granted by the Administrator to a Participant.

 

“Key Employee”
means an employee who owns more than 10% of the total combined voting power of
all classes of Stock of the Company, determined at the time an Option is
proposed to be granted.

 

“Liquidity Event”
means (1) any Person who is not an affiliate of the Company becomes the
beneficial owner, directly or indirectly, of fifty percent (50%) or more of the
combined voting power of the then issued and outstanding securities of the
Company, (2) the sale, transfer or other disposition of all or substantially
all of the business and assets of the Company, whether by sale of assets,
merger or otherwise, or (3) the dissolution and liquidation of the Company.

 

“Nonqualified
Stock Option” means an Option, which is not an Incentive Stock Option, granted
by the Administrator to a Participant.

 

“Option” means
a right granted under the Plan to a Participant to purchase a stated number of
Shares as an Incentive Stock Option or Nonqualified Stock Option.

 

“Option Period”
means the period within which an Option may be exercised pursuant to the Plan.

 

“Participant”
means any employee, director or consultant of the Company or any of its
subsidiaries who is selected to participate in the Plan in accordance with
Section 4 hereof.

 

2

 

“Period of
Restriction” means the period, if any, specified in an Award Agreement during
which the transfer of Shares of Restricted Stock or Restricted Share Units is
limited in some way (based on the passage of time, the achievement of a
performance target, if applicable, or upon the occurrence of other events as
determined by the Administrator, at its discretion), and the Common Stock is
subject to a substantial risk of forfeiture, as provided in Section 7 or
Section 8 herein.

 

“Person” means
any individual, partnership, firm, trust, corporation, limited liability
company or other similar entity.  When
two or more Persons act as a partnership, limited partnership, syndicate or
other group for the purpose of acquiring, holding or disposing of Shares of the
Company, such partnership, limited partnership, syndicate or group shall be
deemed a “Person.”

 

“Plan” means
the Teleglobe International Holdings Ltd 2004 Equity Incentive Plan, as amended
from time to time.

 

“Plan Year”
means the fiscal year of the Company.

 

“Restricted
Share Unit” means an Award for Shares granted to a Participant pursuant to
Section 8 herein.

 

“Restricted
Stock” means an Award of Shares granted to a Participant pursuant to Section 7
herein.

 

“Shares” means
the Common Shares of the Company, par value $.01 per Share.

 

“Stock” means
shares of the share capital of the Company.

 

3.             Administration.  The Plan shall be administered by the
Administrator.  Subject to the
provisions of the Plan, the Administrator shall have the authority to:

 

(a)                                  select
the Participants;

 

(b)                                 determine
the number of Shares covered by any Award granted to a Participant; provided,
however, that no Award shall be granted after the expiration of the
period of ten (10) years from the Effective Date;

 

(c)                                  determine
whether each Award shall be a grant of an Incentive Stock Option, a
Nonqualified Stock Option, Restricted Stock or Restricted Share Unit; and

 

(d)                                 establish
from time to time regulations for the administration of the Plan, interpret the
Plan, delegate in writing administrative matters to committees of the Board or
to other persons, and make such other determinations and take such other
action, as it deems necessary or advisable for the administration of the Plan.

 

3

 

All decisions,
actions and interpretations of the Administrator shall be final, conclusive and
binding upon all parties.  With respect
to Awards granted or to be granted to a Participant who is a nonemployee
director, the Plan shall be administered by the full Board and any references
to the Administrator shall be deemed to be references to the Board.

 

4.             Participation.  Participants in the Plan shall be limited to
those employees, directors and consultants of the Company or any subsidiary
thereof who have been notified in writing by the Administrator that they have
been selected to participate in the Plan.

 

5.             Shares Subject to the Plan.  Awards may be granted by the Administrator
to Participants from time to time.  The
Shares issued with respect to Awards granted under the Plan may be authorized
and unissued Shares, or, if applicable and done pursuant to applicable law or
regulation, Shares purchased on the open market by the Company (at such time or
times and in such manner as it may determine). 
The Company shall be under no obligation to acquire Common Stock for
distribution to optionholders before payment in Shares is due.  If any Award granted under the Plan shall be
canceled or shall expire without the Shares covered by such Award being
purchased by the applicable Award holder thereunder, new Awards may thereafter
be granted covering such Shares.

 

The maximum
aggregate number of Shares available to be granted under the Plan is equal to
two million three hundred thirty-four thousand one hundred twenty-five
(2,334,125) Shares and such Shares shall be reserved from the Company’s
authorized and unissued share capital for Awards granted under the Plan
(subject to adjustment as provided in Section 10).

 

6.             Terms and Conditions of Options.  Each Option granted under the Plan shall be
evidenced by an Award Agreement, in a form approved by the Administrator, which
shall be subject to the following express terms and conditions and to such
other terms and conditions as the Administrator may deem appropriate:

 

(a)                                  Option
Period.  Each Option agreement shall
specify that the Option thereunder is granted for a period of ten (10) years,
or such shorter period as the Administrator may determine, from the date of
grant and shall provide that the Option shall expire on such ten (10) year
anniversary, or shorter period, as the case may be (unless earlier exercised or
terminated pursuant to its terms); provided, however, that any
Incentive Stock Option granted to a Key Employee shall specify that the
Incentive Stock Option is granted for a period of five (5) years from the date
of grant and shall expire on such five (5) year anniversary.

 

(b)                                 Option
Price.  The Option price per Share
shall be the Fair Market Value at the time the Option is granted or, with
respect to a Nonqualified Stock Option, such other price as the Administrator
shall determine; provided, however, that the Option price per
Share for any Incentive Stock Option granted to a Key Employee shall equal 110%
of the Fair Market Value at the time the Incentive Stock Option is granted.

 

4

 

(c)                                  Vesting.  The Administrator, in its sole discretion
shall determine the vesting provisions applicable to the Options under the Plan
and such vesting provisions shall be set forth under the Award Agreement.  The Administrator reserves the right, in its
sole discretion, to waive or reduce the vesting requirements applicable to any
Options at any time.

 

(d)                                 Limitation
on Amount of Incentive Stock Options Granted.  Options shall be treated as Incentive Stock Options only to the
extent that the aggregate Fair Market Value of Stock with respect to which
Incentive Stock Options are exercisable for the first time by any optionholder
during any calendar year (whether under the terms of the Plan or any other
stock option plan of the Company or of its parent or any subsidiary
corporation) is $100,000 or less.  To
the extent that such aggregate Fair Market Value exceeds $100,000, the Options
shall be treated as Nonqualified Stock Options.  Fair Market Value shall be determined as of the time the Option
with respect to such Stock is granted.

 

(e)                                  Limitations
on Granting of Options.  The
Administrator shall have the authority and discretion to grant to an eligible
employee either Incentive Stock Options or Nonqualified Stock Options or both,
but shall clearly designate the nature of each Option at the time of grant in
the stock option agreement. 
Participants who are consultants or non-employee directors on the date
an Option is granted may only receive Nonqualified Stock Options.

 

(f)                                    Payment
of Option Price Upon Exercise.  The
option price of the Shares as to which an Option shall be exercised shall be
paid to the Company at the time of exercise in cash or such other method
approved by the Administrator.

 

(g)                                 Termination
of Employment or Relationship. 
Unless otherwise determined by the Administrator, in its sole discretion
or as otherwise set forth in an Award Agreement:

 

(i)                                     In
the event of a Participant’s termination of employment or relationship for
Cause, all unexercised Options granted to a Participant will terminate as of
the date of such termination of employment or relationship.

 

(ii)                                  In
the event of a Participant’s termination of employment or relationship by the
Company other than for Cause or the Participant resigns from employment or
relationship for any reason, including, but not limited to, on account of
retirement (other than on account of death or Disability), (i) any unvested
portion of the Participant’s Option shall terminate and (ii) any portion of the
Participant’s Option that was vested and exercisable on the date of his or her
termination of employment or relationship

 

5

 

shall remain
exercisable for a period of 3 months after the date of termination, and any
portion of such Option not exercised within such 3 month period shall be
forfeited; provided, however, that in no event may such Option be exercised
after the expiration of the Option Period.

 

(iii)                               In
the event a Participant’s employment or relationship shall terminate on account
of death or Disability, (i) any unvested portion of the Participant’s Option
shall terminate and (ii) the Participant (or his or her personal
representative) may exercise all vested and exercisable Options within the
earlier of (x) one year from the date of such death or Disability or (y) the
expiration of the Option Period.

 

(h)                                 Transferability
of Options.  No Option granted under
the Plan and no right arising under such Option shall be transferable other
than by will or by the laws of descent and distribution as provided by the
Companies Act 1981 of Bermuda.  During
the lifetime of the Participant an Option shall be exercisable only by such
Participant.  Any Option exercisable at
the date of the Participant’s death and transferred by will or by the laws of
descent and distribution as provided by the Companies Act 1981 of Bermuda shall
be exercisable in accordance with the terms of such Option by the executor or
administrator, as the case may be, of the Participant’s estate (each a
“Designated Beneficiary”) for a period provided in paragraph (g)(iii) above or
such longer period as the Administrator may determine, and shall then
terminate.

 

(i)                                     Investment
Representation.  Each Award
Agreement may contain an undertaking that, upon demand by the Administrator for
such a representation, the Participant or his Designated Beneficiary, as the
case may be, shall deliver to the Administrator at the time of any exercise of
an Option a written representation that the Shares to be acquired upon such
exercise are to be acquired for such Participant’s or Designated Beneficiary’s
own account and not with a view to, or for resale in connection with, any distribution.  Upon such demand, delivery of such
representation prior to the delivery of any Shares issued upon exercise of an
Option shall be a condition precedent to the right of the Participant or his
Designated Beneficiary to purchase any Shares.

 

(j)                                     Optionholders
to Have No Rights as Stockholders. 
No optionholder shall have any rights as a stockholder with respect to
any Shares subject to such optionholder’s Option prior to the date on which
such optionholder is recorded as the holder of such Shares on the Register of
Members of the Company.

 

(k)                                  Other
Option Provisions.  The form of
Award Agreement applicable to Options authorized by the Plan may contain such
other provisions,

 

6

 

consistent
with this Plan, as the Administrator may, from time to time, determine.

 

(l)                                     Notification
of Sales of Common Stock.  Any
optionholder who disposes of Shares acquired upon the exercise of an Incentive
Stock Option either (a) within two (2) years from the date of the grant of the
Incentive Stock Option under which the Common Stock was acquired or (b) within
one (1) year after the transfer of such Shares to the optionholder, shall
notify the Company of such disposition and of the amount realized upon such
disposition.

 

(m)                               Maximum
Number of Options.  The maximum
aggregate number of Shares that may be granted in the form of Options in any
one Plan Year to any one single Participant shall be 100% of the maximum number
of Shares provided under Section 5.

 

7.             Restricted Stock.

 

(a)                                  Grant of Restricted Stock. 
Subject to the terms and provisions of the Plan, the Administrator, at
any time and from time to time, may grant Awards of Restricted Stock to
Participants in such amounts as the Administrator shall determine.

 

(b)                                 Restricted Stock Agreement. 
Each Award applicable to Restricted Stock shall be evidenced by an Award
Agreement that shall specify the restrictions, including restrictions creating
a substantial risk of forfeiture, the Period(s) of Restriction, the number of
Shares of Restricted Stock granted, and such other provisions as the
Administrator shall determine. 
Restrictions on Restricted Stock shall lapse at such time(s) and in such
manner and subject to such conditions as the Administrator shall in each
instance determine, which need not be the same for each Award or for each
Participant.

 

(c)                                  Transferability. 
Except as provided in this Section 7, the Shares of Restricted Stock
granted herein may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the end of the applicable Period of Restriction
established by the Administrator and specified in the applicable Award
Agreement, or upon earlier satisfaction of any other conditions, as specified
by the Administrator in its sole discretion and set forth in the Award
Agreement.  All rights with respect to
the Restricted Stock granted to a Participant under the Plan shall be available
during his or her lifetime only to such Participant, or in the event of the
Participant’s legal incapacity, to the Participant’s legal guardian or
representative.

 

(d)                                 Other Restrictions. 
The Administrator shall impose such other conditions and/or restrictions
on any Shares of Restricted Stock granted pursuant to

 

7

 

the Plan as it
may deem advisable and as set forth in an Award Agreement including, without
limitation, a requirement that Participants pay a stipulated purchase price for
each Share of Restricted Stock, time-based restrictions on vesting following
the attainment of a performance target, if applicable, and/or restrictions
under applicable Federal, state or Bermuda securities laws.

 

(e)                                  Certificates.  The Company or its designee shall retain the
certificates representing Shares of Restricted Stock in the Company’s
possession until such time as all conditions and/or restrictions applicable to
such Shares have been satisfied and the Participant has been recorded as the
holder of such Shares in the Register of Members of the Company.

 

(f)                                    Last
Day of Period of Restriction. 
Except as otherwise provided in this Section 7, Shares of Restricted
Stock covered by each Restricted Stock grant made under the Plan shall become
freely transferable by the Participant after the last day of the applicable
Period of Restriction.

 

(g)                                 Voting Rights. 
During the Period of Restriction, Participants holding Shares of
Restricted Stock granted hereunder may exercise full voting rights with respect
to those Shares.

 

(h)                                 Dividends and Other Distributions.  During
the Period of Restriction, Participants holding Shares of Restricted Stock
granted hereunder may be credited with regular cash dividends, if any, paid
with respect to the underlying Shares while they are so held.  The Administrator may apply any restrictions
to the dividends that the Administrator deems appropriate.

 

(i)                                     Termination of Employment with the Company.  Each Award Agreement shall set forth the extent to which the
Participant shall have the right to receive unvested Restricted Shares
following termination of the Participant’s employment with the Company.  Such provisions shall be determined in the
sole discretion of the Administrator, shall be included in the Award Agreement
entered into with each Participant, need not be uniform among all Shares of
Restricted Stock issued pursuant to the Plan, and may reflect distinctions
based on the reasons for termination of employment with the Company.

 

(j)                                     Maximum
Number of Shares of Restricted Stock 
The maximum aggregate number of Shares that may be granted in the form
of Restricted Stock in any one Plan Year to any one single Participant shall be
100% of the maximum number of Shares provided under Section 5.

 

8.             Restricted Share Units.

 

(a)                                  Grant of Restricted Share Units. 
Subject to the terms and provisions of the Plan, the Administrator, at
any time and from time to time, may grant

 

8

 

Awards of
Restricted Share Units to Participants in such amounts as the Administrator
shall determine.

 

(b)                                 Restricted Share Unit Agreement.  Each Award applicable to Restricted Share Units shall be evidenced
by an Award Agreement that shall specify the restrictions, including
restrictions creating a substantial risk of forfeiture, the Period(s) of Restriction,
the number of Restricted Share Units, and such other provisions as the
Administrator shall determine. 
Restrictions on Restricted Share Units shall lapse or the Restricted
Share Units shall vest at such time(s) and in such manner and subject to such
conditions as the Administrator shall in each instance determine, which need
not be the same for each Award or for each Participant.

 

(c)                                  Transferability. 
Except as provided in this Section 8, the Restricted Share Units granted
herein may not be sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated until the end of the applicable Period of Restriction
established by the Administrator and specified in the applicable Award
Agreement, or upon earlier satisfaction of any other conditions, as specified
by the Administrator in its sole discretion and set forth in the Award
Agreement.  All rights with respect to
the Restricted Share Units granted to a Participant under the Plan shall be
available during his or her lifetime only to such Participant, or in the event
of the Participant’s legal incapacity, to the Participant’s legal guardian or
representative.

 

(d)                                 Other Restrictions. 
The Administrator shall impose such other conditions and/or restrictions
on any Restricted Share Units granted pursuant to the Plan as it may deem advisable
and as set forth in an Award Agreement including, without limitation, a
requirement that Participants pay a stipulated purchase price for each
Restricted Share Unit, time-based restrictions on vesting following the
attainment of a performance target, if applicable, and/or restrictions under
applicable Federal, state or Bermuda securities laws.

 

(e)                                  Rights
as a Shareholder.  Until the
Restricted Share Units have vested (the Period of Restriction has lapsed) and
the Participant’s name is recorded in the Company’s Register of Members, the
Participant shall have no rights as a shareholder of the Company (including,
but not limited to, voting or dividend rights).

 

(f)                                    Last
Day of Period of Restriction. 
Except as otherwise provided in this Section 8, Restricted Share Units
covered by each Restricted Share Unit grant made under the Plan shall become
freely transferable by the Participant after the last day of the applicable
Period of Restriction.

 

(g)                                 Termination of Employment with the Company.  Each Award Agreement shall set forth the extent to which the
Participant shall have the right to

 

9

 

receive
unvested Restricted Share Units following termination of the Participant’s
employment with the Company.  Such provisions
shall be determined in the sole discretion of the Administrator, shall be
included in the Award Agreement entered into with each Participant, need not be
uniform among all Restricted Share Units issued pursuant to the Plan, and may
reflect distinctions based on the reasons for termination of employment with
the Company.

 

(h)                                 Maximum
Number of Restricted Share Units 
The maximum aggregate number of Shares that may be granted in the form
of Restricted Share Units in any one Plan Year to any one single Participant
shall be 100% of the maximum number of Shares provided under Section 5.

 

(i)                                     Settlement
in Cash.  At the sole discretion of
the Administrator, in lieu of issuing Shares to Participants for vested
Restricted Share Units, the Participant may receive a cash payment or a
combination of Shares and cash for Restricted Share Units.

 

9.             Effect
of Liquidity Event.  Notwithstanding
any provision of the Plan to the contrary, unless otherwise determined by the
Administrator, in its sole discretion or as otherwise set forth in an Award
Agreement, if there should be a Liquidity Event, the Company shall give each
Participant written notice of such Liquidity Event as promptly as practicable
prior to the effective date thereof and (i) any unvested Awards as of the date
of the Liquidity Event shall become immediately exercisable as of the effective
date of such Liquidity Event and (ii) the Administrator may determine, in its
sole discretion, the treatment of any Awards which are exercisable or vested at
the time of the Liquidity Event or become exercisable or vested pursuant to
this Section 9.

 

10.           Adjustments in Event of Change in
Common Stock.  In the event of any
change in the Common Stock by reason of any Stock dividend, recapitalization,
reorganization, merger, consolidation, split-up, combination or exchange of
Shares, or of any similar change affecting the Common Stock, the number and
kind of Shares which thereafter may be optioned and sold under the Plan and the
number and kind of Shares subject to Award in outstanding Award Agreements and
the purchase price per share thereof, if any, may be appropriately adjusted
consistent with such change in such manner as the Board may deem equitable to
prevent substantial dilution or enlargement of the rights granted to, or
available for, Participants in the Plan. 
Without limiting the generality of the foregoing, if the Common Stock is
recapitalized into multiple classes of Common Stock, the kind of Shares subject
to Award shall be those common Shares intended for broad general ownership
rather than any class of special super-voting or other control Stock.

 

11.           Plan and Awards Not to Confer
Rights with Respect to Continuance of Employment or Relationship.  Neither the Plan nor any action taken
thereunder shall be construed as giving any Participant any right to continue
such Participant’s relationship with the Company or a subsidiary thereof, nor
shall it give any employee the right to be retained in the employ of the
Company, or interfere in any way with the right of the Company to terminate any
Participant’s employment or relationship, as the case may be, at any time with
or without Cause.

 

10

 

12.           No Claim or Right Under the Plan.  No employee, director or consultant of the
Company or any of its subsidiaries shall at any time have the right to be
selected as a Participant in the Plan nor, having been selected as a
Participant and granted an Award, to be granted any additional Award.

 

13.           Listing and Qualification of Shares.  The Plan, the grant and exercise of Awards
thereunder, and the obligation of the Company to sell and deliver Shares under
such Awards, shall be subject to all applicable Federal, state and Bermuda
laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required. 
The Company, in its discretion, may postpone the issuance or delivery of
Shares upon any exercise of an Award until completion of any stock exchange
listing, or other qualification of such Shares under any Bermuda, state or
Federal law, rule or regulation as the Company may consider appropriate, and
may require any Award holder to make such representations and furnish such
information as it may consider appropriate in connection with the issuance or delivery
of the Shares in compliance with applicable laws, rules and regulations.  Certificates representing Shares acquired by
the exercise of an Award may bear such legend as the Company may consider
appropriate under the circumstances.

 

14.           Taxes.  The Company may make such provisions and
take such steps as it may deem necessary or appropriate for the withholding of
all federal, state, local and other taxes required by law to be withheld with
respect to Awards under the Plan including, but not limited to (a) reducing the
number of Shares otherwise deliverable, based upon their Fair Market Value on
the date of exercise, to permit deduction of the amount of any such withholding
taxes from the amount otherwise payable under the Plan, (b) deducting the
amount of any such withholding taxes from any other amount then or
thereafter payable to a Participant, or (c) requiring a Participant,
beneficiary or legal representative to pay to the Company the amount required
to be withheld or to execute such documents as the Company deems necessary or
desirable to enable it to satisfy its withholding obligations as a condition of
releasing the Share.

 

15.           No Liability of Administrator.  No member of the Administrator shall be
personally liable by reason of any contract or other instrument executed by
such member or on his behalf in his capacity as a member of the Administrator
nor for any mistake of judgment made in good faith, and the Company shall
indemnify and hold harmless each employee, officer or director of the Company to
whom any duty or power relating to the administration or interpretation of the
Plan may be allocated or delegated, against any cost or expense (including
counsel fees) or liability (including any sum paid in settlement of a claim
with the approval of the Board arising out of any act or omission to act in
connection with the Plan unless such act arises out of the member’s own fraud
or bad faith.

 

16.           Amendment or Termination.  The Administrator may, with prospective or
retroactive effect, amend, suspend or terminate the Plan or any portion thereof
at any time and for any reason; provided, however, that no amendment or other
action that requires stockholder approval in order for the Plan to continue to
comply with applicable law, rule or regulation shall be effective unless such
amendment or other action shall be approved by the requisite vote of
stockholders of the Company entitled to vote thereon and no repricing of Awards
under the Plan shall occur without stockholder approval.

 

11

 

17.           Compliance with Section 162(m) of
the Code.  At all times when Section
162(m) of the Code is applicable, all Awards granted under the Plan shall
comply with the requirements of Section 162(m) of the Code; provided, however,
that in the event the Administrator determines that such compliance is not
desired with respect to any Award of Restricted Stock or Restricted Share
Units, compliance with Section 162(m) of the Code will not be required.  In addition, in the event that changes are
made to Section 162(m) of the Code to permit greater flexibility with respect
to any Award or Awards available under the Plan, the Administrator may, subject
to Section 16, make any adjustments it deems appropriate.

 

18.           Captions.  The captions preceding the sections of the
Plan have been inserted solely as a matter of convenience and shall not in any
manner define or limit the scope or intent of any provision of the Plan.

 

19.           Governing Law.  The Plan and all rights thereunder shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.

 

20.           Severability.  In the event that any provision of the Plan
shall be held illegal or invalid for any reason, such illegality or invalidity
shall not affect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not been
included.

 

21.           Effective Date.  The Plan shall become effective as of
                  ,
2004.

 

12

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