VOTING TRUST AGREEMENT
FOR STOCK OF
COMMUNICATION TELESYSTEMS INTERNATIONAL
1. INTRODUCTION AND PARTIES
This voting trust agreement (the "Agreement") is made as of March 1, 1998
between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "Shareholder"; also the "Certificate Holder"), who
is an owner of shares of common stock of Communication TeleSystems International
(the "Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "Trustee").
2. EXCHANGE OF SHARES FOR VOTING TRUST CERTIFICATES
Simultaneously with the execution of this Agreement, the Shareholder shall
deliver to the Trustee properly endorsed certificates for the number of shares
of common stock of the Company shown opposite his name below (the "Shares"). The
Trustee shall cause the Shares to be transferred to him on the Company's books
and shall issue and deliver to the Shareholder a voting trust certificate, in
the form of Exhibit A to this Agreement, for the number of Shares transferred to
the Trustee. The Trustee shall hold the Shares transferred to him in trust,
subject to the terms of this Agreement.
3. TRUSTEE'S POWERS AND DUTIES
(a) VOTING OF SHARES
During the existence of this trust, the Trustee shall have the exclusive
right to vote the Shares transferred to him in person or by proxy at all
shareholder meetings and in all proceedings in which the vote or consent of
shareholders may be required or authorized, and shall have all the rights,
privileges, and powers of a shareholder except as otherwise provided in this
Agreement.
(b) NUMBER OF TRUSTEES
The number of Trustees under this Agreement shall be one.
(c) OTHER TRUSTEE ACTIVITIES
The Trustee may serve the Company as an officer or director or in any other
capacity, and may receive compensation from the Company for such services.
(d) NO SALE OF SHARES
The Trustee shall have no authority to sell or otherwise dispose of any
Shares transferred to him under this Agreement.
(e) COMPENSATION
The Trustee shall receive no compensation for his services except for
reimbursement, by the Certificate Holder, of expenses incurred in the admini-
stration of his duties.
(f) TRUSTEE'S LIABILITY
The Trustee shall not be liable for any error of judgment or mistake of
fact or law, or for any act or omission made in good faith in connection with
his powers and duties under this Agreement, except for the Trustee's own willful
misconduct or gross negligence. The Trustee shall not be liable in acting on
any notice, consent, certificate, instruction, or other paper or document or
signature believed by him to be genuine and to have been signed by the proper
party or parties. The Trustee may consult with legal counsel, and any of his
acts or omissions made in good faith in accordance with the opinion of legal
counsel shall be binding and conclusive on the parties to this Agreement.
4. TERMINATION
This Agreement shall terminate three (3) years after the date of this
Agreement or on any later date to which the term is extended, as provided below,
without notice by or to, or action on the part of, the Trustee or the
Certificate Holder.
This Agreement shall be terminated at an earlier date upon the occurrence
of any of the following events:
(a) Upon the sale by ▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of 50% or more of their
common stock in the Company (held individually or as community property) which
they own as of March 1,1998.
(b) The merger of the Company pursuant to which shareholders of the
Company hold less than 50% of the voting equity of the surviving corporation.
(c) The sale of all or substantially all of the assets of the Company.
(d) The death of the Trustee.
(e) The agreement, in writing, by the Certificate Holder and the Trustee.
As soon as practicable after termination of this Agreement, the Trustee
shall re-deliver share certificates representing the Shares, properly endorsed
for transfer, to the Certificate Holder of record, and the Certificate Holder
shall surrender to the Trustee his voting trust certificate properly endorsed,
together with payment of sums sufficient to cover any taxes and other expenses
relating to the transfer or delivery of the share certificate.
If the Certificate Holder refuses to surrender this voting trust
certificate in exchange for the Shares, or cannot be located, the Trustee may
deliver the share certificates due the Certificate Holder to any bank or trust
company in California for the benefit of the person or persons entitled thereto,
and thereupon shall be fully discharged with respect to those share
certificates.
5. EXTENSION OF AGREEMENT
The term of this Agreement, as prescribed in Paragraph 4, may be extended
from the original termination date of this Agreement or from the termination
date as last extended in accordance with this paragraph, provided that within
two (2) years before the date as originally fixed or as last extended, the
Certificate Holder, by written agreement, and with the Trustee's written
consent, extends the term of this Agreement with respect to his Shares for an
additional term not to exceed three (3) years from the expiration date then in
effect.
In the event of extension, duplicate copies of this Agreement and of the
extension agreement shall be filed with the Secretary of the Corporation and
shall be open for inspection on the same conditions as the Company's record of
shareholders.
6. NOTICES, DIVIDENDS, AND DISTRIBUTION
The Trustee shall promptly forward copies of all notices, reports,
statements, and other communications received from the Company to the
Certificate Holder, indicating the date of receipt.
The Trustee shall promptly distribute all dividends and other distributions
received from the Company to the Certificate Holder. If any dividend or stock
split consists of additional shares having voting rights, the Trustee shall hold
these shares in trust subject to the terms of this Agreement, and shall issue
new voting trust certificate, representing the additional shares, to the
Certificate Holder.
7. ENTIRE AGREEMENT
This Agreement is the entire agreement among the parties hereto with
respect to the subject matter hereof and shall not be amended, altered or
modified in any manner whatsoever, except by a written instrument executed by
the parties hereto. This Agreement supersedes all prior understandings, either
written or oral, among the parties hereto with respect to the subject matter
hereof.
8. GOVERNING LAW
This Agreement shall be governed by and interpreted and enforced in
accordance with the laws of the State of California, without regard to the rules
regarding conflicts of law thereof.
9. SEVERABILITY
If any one or more of the provisions of this Agreement, as applied to any
party or any circumstances, shall, for any reason, be held to be invalid,
illegal, or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal, or unenforceable
provision had never been contained herein. If any one or more of the provisions
of this Agreement shall, for any reason, be held to be unenforceable as to
duration, scope, activity, or subject, such provisions shall be construed by
limiting and reducing it so as to make such provision enforceable to the extent
compatible with the then existing applicable law.
10. REMEDIES
The parties acknowledge that it would be impossible to fix money damages
for violations of this Agreement and that such violations will cause irreparable
injury for which adequate remedy at law is not available and, therefore, this
Agreement must be enforced by specific performance or injunctive relief. The
parties hereby agree that any party hereto may, in its sole discretion, apply to
any court of competent jurisdiction located in San Diego, California for
specific performance or injunctive or such other relief as such court may deem
just and proper in order to enforce this Agreement or prevent any violation
thereof and, to the extent permitted by applicable law, each party waives any
objection or defense to the imposition of such relief. Nothing herein shall be
construed to prohibit any party from bringing any action for damages in addition
to an action for specific performance or an injunction for a breach of this
Agreement.
11. SUCCESSORS AND ASSIGNS
All of the covenants and agreements contained in this Agreement shall be
binding upon, and inure to the benefit of, the respective parties and their
successors, assigns, heirs, executors, administrators and other legal
representatives.
12. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
when so executed and delivered, shall be deemed to be an original and all of
which, when taken together, shall constitute but one and the same Agreement.
Dated: March 1, 1998
TRUSTEE:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
CERTIFICATE HOLDER:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Number of Shares Deposited: 1,000,000
LIST OF OMITTED EXHIBITS
The following Exhibits to the Voting Trust Agreement have been omitted
from this Exhibit and shall be furnished supplementally to the Commission upon
request:
Exhibit A - Voting Trust Certificate
Exhibit B - Stock Certificate