EXHIBIT 2.5
================================================================================
REGIONAL VEHICLE AGREEMENT
dated as of
________________ ___, 1999
between
AT&T CORP.
and
KIRI INC.
================================================================================
TABLE OF CONTENTS
ARTICLE I
SCOPE
Page
----
1.1. RV Business......................................................... 2
ARTICLE II
RV SERVICES
2.1. RV Exclusive Services............................................. 2
2.2. RV Non-Exclusive Services......................................... 2
2.3. Preferred Supplier to Parent ......................................3
ARTICLE III
EXCLUDED ACTIVITIES
3.1. Excluded Activities ...............................................3
ARTICLE IV
GLOBAL VENTURE
4.1. Regional Vehicle's Provision of RV Services to the Global Venture..3
4.2. Regional Vehicle's Distribution of Services of and Purchase of
Services from the Global Venture ..................................3
4.3. Services Reserved to the Global Venture ...........................4
4.4. Managed Network Services ..........................................4
ARTICLE V AT&T
GLOBAL NETWORK
5.1. AT&T Global Network Services ......................................5
5.2. Regional Vehicle's Provision of Services to the AT&T Global
Network ...........................................................5
5.3. AT&T Global Network Distribution Arrangements .....................5
ARTICLE VI
PARENT ACQUISITIONS, ETC.
6.1. Territory Acquisitions ............................................5
i
6.2. FMV Determination .................................................7
6.3. Easymail Chile ....................................................8
ARTICLE VII
TERM 8
7.1. Term ..............................................................8
ARTICLE VIII
ARBITRATION
8.1. Arbitration .......................................................9
8.2. Number of Arbitrators/Selection ...................................9
8.3. Certain Procedures ................................................9
8.4. Arbitral Award ....................................................9
8.5. Confidentiality of Proceedings ...................................10
8.6. Judgment .........................................................10
ARTICLE IX
MISCELLANEOUS
9.1. Amendment ........................................................10
9.2. Waiver ...........................................................10
9.3. Notices ..........................................................10
9.4. Assignment; Binding Effect .......................................11
9.5. Entire Agreement .................................................12
9.6. Governing Law ....................................................12
9.7. Further Assurances ...............................................12
9.8. Headings .........................................................12
9.9. Interpretation ...................................................12
9.10. Severability .....................................................12
9.11. Enforcement ......................................................12
9.12. Counterparts .....................................................13
EXHIBITS
Exhibit A. Definitions
SCHEDULES
Schedule A-1 RV Exclusive Services
Schedule A-2 Parent Group Activities
Schedule B. RV Non-Exclusive Services
Schedule C. Excluded Activities
ii
REGIONAL VEHICLE AGREEMENT, dated as of ______ __, 1999, between AT&T
Corp., a New York corporation ("AT&T") and Kiri Inc., a Delaware corporation
("Regional Vehicle"). Certain capitalized terms used herein without definition
shall have the meanings specified in Exhibit A.
RECITALS
A. Parent, Regional Vehicle, a Delaware Corporation, FirstCom
Corporation, a Texas Corporation (the "COMPANY"), and a subsidiary of Regional
Vehicle ("MERGER SUB") have entered into an Agreement and Plan of Merger, dated
November 1, 1999 (the "MERGER AGREEMENT"), pursuant to which the Company will
merge with and into Merger Sub (the "MERGER"). Immediately following the Merger,
it is intended that, on a fully-diluted basis, (I) the former shareholders of
the Company will own, collectively, approximately 34% of the shares of common
stock of Regional Vehicle, (II) Parent will own, directly or indirectly,
approximately 60% of the shares of common stock of Regional Vehicle, and (III)
Promon Tecnologia S.A., or an Affiliate thereof, will own approximately 6% of
the shares of common stock of the Regional Vehicle.
B. Parent and Regional Vehicle anticipate that the establishment of
Regional Vehicle and the commercial arrangements contemplated hereby will enable
the delivery of competitive, comprehensive packages of end-to-end integrated
broadband services to customers in the Territory.
C. Regional Vehicle will benefit from its relationship with Parent as a
result of certain contractual arrangements of Parent, including the Framework
Agreement, dated as of October 23, 1998, among Parent, VLT Corporation, British
Telecommunications PLC, BT (Netherlands) Holdings B.V. and Thistle B.V. (as
amended from time to time, the "FRAMEWORK AGREEMENT"). Regional Vehicle is also
expected to have increased demand for its services as a result of the commercial
arrangements contemplated hereby. Parent will grant concurrently with the Merger
a non-exclusive license to Regional Vehicle to use certain Brands (the "LICENSED
BRANDS") pursuant to the Brand License Agreement.
D. Regional Vehicle shall serve as Parent's strategic vehicle for
in-country investments in the Territory for the provision of broadband
high-speed connectivity to business customers in the Territory and for the
provision of certain other telecommunications services in the Territory, in each
case to the extent set forth in this Agreement.
E. In consideration of the mutual undertakings of the parties contained
herein and as an inducement to the parties to enter into the Merger Agreement,
Regional Vehicle and Parent
desire to define the scope of Regional Vehicle's business and its relationship
with Parent and certain Affiliates and joint ventures of Parent as set forth in
this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the sufficiency of which is hereby
acknowledged, intending to be legally bound, the parties hereby agree as
follows:
ARTICLE I
SCOPE
1.1. RV BUSINESS. (a) Regional Vehicle has been established primarily
to provide broadband, high-speed connectivity to business customers in the
Territory and, in connection therewith, to provide, offer, distribute, market
and sell primarily to business customers RV Exclusive Services and RV
Non-Exclusive Services, own facilities and other assets related thereto and
engage in incidental activities related thereto, in each case in the Territory,
in accordance with the terms of this Agreement. Regional Vehicle may conduct its
business through its Subsidiaries in the Territory, PROVIDED that Regional
Vehicle shall cause such Subsidiaries to comply with all of the provisions of
this Agreement applicable to Regional Vehicle as if they were signatories
hereof.
(b) Regional Vehicle shall provide, offer, distribute, market and sell
all of its RV Exclusive Services and RV Non-Exclusive Services under (I) the
Licensed Brands, (II) Brands specified by the Global Venture, subject to the
prior written consent of the Global Venture, in the case of services relating to
the Global Venture or (III) subject to the approval of Parent as provided in the
Brand License Agreement, Brands created by Regional Vehicle and owned by Parent
or Regional Vehicle.
ARTICLE II
RV SERVICES
2.1. RV EXCLUSIVE SERVICES. The services listed in the Schedule of RV
Exclusive Services attached hereto as Schedule A-1 are referred to herein as the
"RV EXCLUSIVE SERVICES." Except as identified in the Schedule of Parent Group
Activities attached hereto as Schedule A-2 hereof or as provided in Article V,
Parent will not, and will cause the other members of the Parent Group not to,
provide, offer, distribute, market or sell RV Exclusive Services in the
Territory unless Regional Vehicle supplies such services to Parent or such
member of the Parent Group.
2
2.2. RV NON-EXCLUSIVE SERVICES. The services listed in the Schedule of
RV Non-Exclusive Services attached hereto as Schedule B may, subject to the
terms of this Agreement, be provided, offered, distributed, marketed or sold by
any Person and such services are referred to herein as the "RV NON-EXCLUSIVE
SERVICES," and, together with the RV Exclusive Services, as the "RV SERVICES."
2.3. PREFERRED SUPPLIER TO PARENT. The Regional Vehicle shall be a
Preferred Supplier of RV Exclusive Services in the Territory to Parent and its
wholly-owned Subsidiaries, except to the extent Parent and its wholly-owned
Subsidiaries are obligated to purchase such services from the Global Venture.
ARTICLE III
EXCLUDED ACTIVITIES
3.1. EXCLUDED ACTIVITIES. Regional Vehicle shall not provide, offer,
distribute, market or sell any service listed in the schedule of Excluded
Activities attached hereto as Schedule C or take any other action that
contravenes Section 4.3 relating to the Global Venture (collectively, the
"EXCLUDED ACTIVITIES").
ARTICLE IV
GLOBAL VENTURE
4.1. REGIONAL VEHICLE'S PROVISION OF RV SERVICES TO THE GLOBAL VENTURE.
The Regional Vehicle shall be a Preferred Supplier of RV Services in the
Territory to the Global Venture in accordance with and subject to the Framework
Agreement on commercially reasonable terms as agreed between Regional Vehicle
and the Global Venture.
4.2. REGIONAL VEHICLE'S DISTRIBUTION OF SERVICES OF AND PURCHASE OF
SERVICES FROM THE GLOBAL VENTURE. (a) Parent shall request that the Global
Venture grant to Regional Vehicle distribution rights with respect to Global
Business Communications Services of the Global Venture in the Territory on
commercially reasonable terms in accordance with and subject to the terms of the
Framework Agreement.
(b) Regional Vehicle shall purchase all of its requirements for Global
Communications Services from the Global Venture pursuant to commercially
reasonable terms to be set forth in (I) an agreement between the Regional
Vehicle and the Global Venture or (II) if applicable, an agreement between
Parent and the Global Venture governing the purchase of Global Communications
Services by Parent and its Subsidiaries.
3
(c) Regional Vehicle shall purchase all of its requirements for
International Traffic Termination Services from the Global Venture, PROVIDED
that such services are provided by the Global Venture to Regional Vehicle on
commercially reasonable terms.
4.3. SERVICES RESERVED TO THE GLOBAL VENTURE. Unless Regional Vehicle
is a Limited Cross Border Network Services Provider or as otherwise agreed by
Parent and the Global Venture and any other party whose consent may be required
under the Framework Agreement, Regional Vehicle shall not:
(a) offer, sell or distribute Global Business Communications Services
or any services competitive with the Global Business Communications Services
provided through the Global Venture except as permitted pursuant to Section 4.2;
(b) offer, sell or distribute any Communications Services, except
through the Global Venture, to any Person that is a Qualifying MNC Customer (as
such term is defined in the Framework Agreement)(each such Person, a "QUALIFYING
MNC"), a list of which Parent has previously delivered to Regional Vehicle, and
which Parent will update periodically;
(c) own, operate, lease or manage Global Network Facilities; or
(d) provide any International Carrier Services.
Regional Vehicle shall be deemed a "LIMITED CROSS BORDER NETWORK SERVICES
PROVIDER" for so long as Regional Vehicle and any Person in which it has a
direct or indirect equity interest do not derive aggregate annual revenues
("CROSS BORDER REVENUES") that exceed $150 million, directly or indirectly,
whether acting alone or in association with, or through one or more Persons,
from Global Business Communications Services and other services provided over a
cross border network owned by Regional Vehicle or its Subsidiaries or provided
by any cross border network, alliance or consortium in which Regional Vehicle
has any direct or indirect equity interest. For purposes of calculating such
aggregate annual revenues, the actual pro rata share of revenues of any Persons
in which Regional Vehicle owns a direct or indirect equity interest shall be
included with respect to any investments in a Person that is not wholly-owned by
the Regional Vehicle. Within 90 days of the end of each Regional Vehicle fiscal
year, Regional Vehicle shall provide Parent with a certificate executed by the
chief executive officer and chief financial officer of Regional Vehicle
certifying the amount of Cross Border Revenues for such fiscal year and setting
forth the breakdown and calculation thereof in reasonable detail.
4.4. MANAGED NETWORK SERVICES. Regional Vehicle shall not provide
Managed Network Services to any Qualifying MNC except as contracted through the
Global Venture.
4
ARTICLE V
AT&T GLOBAL NETWORK
5.1. AT&T GLOBAL NETWORK SERVICES. Any current or future services
provided by any member of the Parent Group using any assets owned or controlled
now or in the future by the AT&T Global Network are referred to herein as the
"AT&T GLOBAL NETWORK SERVICES". Notwithstanding Section 2.1, Parent or any
member of the Parent Group may provide, offer, market, distribute or sell to any
Person, and, subject to 5.3, may appoint any Person as a distributor of, AT&T
Global Network Services in the Territory.
5.2. REGIONAL VEHICLE'S PROVISION OF SERVICES TO THE AT&T GLOBAL
NETWORK. Regional Vehicle shall be a Preferred Supplier of RV Services to the
AT&T Global Network on commercially reasonable terms as agreed between Regional
Vehicle and Parent.
5.3. AT&T GLOBAL NETWORK DISTRIBUTION ARRANGEMENTS. Promptly after the
execution of this Agreement, Parent will cause the appropriate AT&T Global
Network Person to discuss with Regional Vehicle possible arrangements for the
distribution of AT&T Global Network Services by Regional Vehicle in the
Territory. While the parties have not reached any understanding as to the
outcome of such discussions, they have agreed that Regional Vehicle shall be an
exclusive distributor of AT&T Global Network Services in one or more countries
in the Territory on commercially reasonable terms as may be agreed between
Regional Vehicle and Parent, PROVIDED that such exclusive distributorship shall
(I) be subject to Regional Vehicle's ability to meet performance and service
level requirements established by AT&T Global Network; (II) not limit the rights
of any Person under the Master Services Agreement, dated December 7, 1998 by and
between International Business Machines Corporation and AT&T Solutions, Inc.,
the Master Asset Purchase Agreement, dated December 7, 1998, between
International Business Machines Corporation and AT&T or any related agreements,
or the ability of any such Person to comply with its obligations thereunder; and
(III) not limit the rights of any member of the Parent Group or any AT&T Global
Network Person to (X) distribute AT&T Global Network Services directly to
customers in the Territory, (Y) have its employees market or sell such services
to customers in the Territory or (Z) appoint remarketers or global value added
resellers (VARs) of AT&T Global Network Services.
ARTICLE VI
PARENT ACQUISITIONS, ETC.
6.1. TERRITORY ACQUISITIONS. (a) If (I) a member of the Parent Group
acquires (including as a result of a merger or any other business combination
transaction) an interest in
5
any Person that derived (including through any consolidated Subsidiaries of such
Person) revenues in the immediately preceding fiscal year from assets or
customers in the Territory (such revenues, the "TERRITORY REVENUES") (such
Person, an " ACQUIRED PERSON," and together with its Subsidiaries, if any, an "
ACQUIRED GROUP"), (II) more than 50% of such Territory Revenues were derived
from the provision of RV Exclusive Services and (III) such acquisition would
otherwise result in any member of the Acquired Group becoming a member of the
Parent Group (such case, a "COVERED ACQUISITION"), Parent shall comply with the
provisions of Section 6.1(b).
(b) In the case of a Covered Acquisition, within (I) eighteen months,
if the Territory Revenues of such Acquired Group were greater than 33a% of such
Acquired Group's consolidated gross revenues for its immediately preceding
fiscal year, or (II) thirty months, if the Territory Revenues of such Acquired
Group were less than 33a% of such Acquired Group's consolidated gross revenues
for its immediately preceding fiscal year, after the acquisition of such
Acquired Person, Parent shall either (X) cause the members of such Acquired
Group to cease in all material respects providing RV Exclusive Services in the
Territory or (Y) offer, or cause the relevant member of the Parent Group to
offer, in writing (an "OFFER") to sell to the Regional Vehicle for cash that
portion of the Acquired Group's business that primarily relates to the provision
of such RV Exclusive Services in the Territory (the "OFFERED ASSETS") at their
Fair Market Value, PROVIDED that this Section 6.1(b) shall not apply if selling
such Offered Assets (X) would conflict with or contravene applicable law or a
pre-existing contractual obligation of any member of the Acquired Group or that
is binding on any material assets of such a member and such obligation is not
waived or amended, (Y) would result in a tax obligation for members of the
Parent Group that is material in relation to the consideration paid for the
Offered Assets by the relevant member of the Parent Group or (Z) in the case of
a business that is not owned by a direct or indirect substantially wholly-owned
Subsidiary of Parent, would, in the good faith determination of the Board of
Directors of any relevant member of a Parent Group, having received advice of
outside counsel with respect to fiduciary duties to minority shareholders,
violate any such fiduciary duties (each of subsection (x), (y) and (z), an
"OFFER EXCEPTION"), PROVIDED further that Offered Assets shall not include any
assets held by a Person that is not controlled by Parent. Such Offer may be
accepted by Regional Vehicle by written notice to Parent until the later of (A)
the one hundred twentieth day after the date of the Offer and (B) 25 days after
the date of determination of the Fair Market Value of such Offered Assets
pursuant to Section 6.3 (such period being referred to herein as, the "OFFER
RESPONSE PERIOD").
(c) No member of an Acquired Group shall be included in the Parent
Group except as provided below in the case of a Covered Acquisition. In the case
of a Covered Acquisition, no member of an Acquired Group shall be included as a
member of the Parent Group until the later of (I) the day after the expiration
of the Offer Response Period, (II) two years after such member's acquisition and
(III) the date of the actual transfer of the Offered Assets to Regional Vehicle
if Regional Vehicle accepts the Offer, PROVIDED that, if (X) Regional Vehicle
shall not
6
accept an Offer within the Offer Response Period or (Y) a member of a
Acquired Group is subject to an Offer Exception, such member shall not be
included as a member of the Parent Group at any time.
6.2. FMV DETERMINATION. (a) Parent shall set forth in any Offer its
determination of the Fair Market Value of the Offered Assets that are the
subject of such Offer. If Regional Vehicle does not agree that the Fair Market
Value set forth in the Offer represents the value Parent could obtain in an
arm's length sale of the Offered Assets to an unaffiliated third party, Regional
Vehicle shall deliver a written notice (an "FMV NOTICE") to Parent requesting
that a determination of Fair Market Value be made pursuant to this Section 6.2.
If Regional Vehicle does not deliver such FMV Notice within 45 days after the
date of the Offer, the Fair Market Value of the Offered Assets shall be the
amount set forth in the Offer.
(b) If Regional Vehicle delivers an FMV Notice, each of Parent and
Regional Vehicle shall retain within 15 days of such delivery, and provide
relevant information to, an internationally recognized investment banking firm
(each, an "APPRAISER", together the "INITIAL APPRAISERS") to determine the Fair
Market Value of the Offered Assets. Within 30 days following the provision of
relevant information by Parent and Regional Vehicle to the Initial Appraisers,
which information shall be provided within 30 days after retention of the
Initial Appraisers, the Initial Appraisers shall submit their determinations of
the Fair Market Value of the Offered Assets to Parent and Regional Vehicle. If
the difference between the determinations submitted by the Initial Appraisers is
less than 20 percent of the lowest of such determinations, then the average of
the determinations submitted by the appraisers shall be deemed to be the Fair
Market Value for the Offered Assets.
(c) If the difference between the determinations submitted by each
appraiser equals or exceeds 20 percent of the lowest of such determinations, the
Initial Appraisers will within 15 days select a third internationally recognized
investment banking firm to make such determination, PROVIDED if the Initial
Appraisers cannot agree to a third internationally recognized investment banking
firm, such firm shall be chosen by the CPR Institute for Dispute Resolution.
Regional Vehicle and Parent shall provide information to the third appraiser
within ten days after such appraiser is appointed. The third appraiser shall
submit its determination of the Fair Market Value for the Offered Assets to
Regional Vehicle within 30 days following the provision of relevant information
by Regional Vehicle and Parent. The average of the determination provided by
such third appraiser and the determination submitted by the Initial Appraisers
that is closer to the determination provided by such third appraiser shall be
deemed to be the Fair Market Value of the Offered Assets, PROVIDED, however,
that to the extent such average is greater than the higher price submitted by
the Initial Appraisers (the "HIGH PRICE"), the Fair Market Value of the Offered
Assets shall be the High Price or, to the extent such average is less than the
lower price submitted by the Initial Appraisers (the "LOW PRICE"), the Fair
Market Value of the Offered Assets shall be the Low Price. The fees and expenses
of the Initial Appraisers shall be borne by
7
the respective parties that appointed them. The fees and expenses of any third
appraiser shall be split equally between Regional Vehicle and Parent.
6.3. EASYMAIL CHILE. Prior to any sale or transfer of any interest in
Easymail Chile S.A. (an "EASYMAIL INTEREST") held by Parent or any Subsidiaries
of Parent (such holder, a "SELLING PERSON") to a Person other than Parent or
another Affiliate of Parent, Parent shall, or cause such Selling Person to,
offer in writing (an "EASYMAIL OFFER") to sell to Regional Vehicle for cash such
Easymail Interest at its Fair Market Value, PROVIDED that this Section 6.3 shall
not apply if selling such Easymail Interest would conflict with or contravene
applicable law or a pre-existing contractual obligation of Parent or such
Selling Person. The Selling Person shall set forth in any Easymail Offer its
determination of the Fair Market Value of such Easymail Interest. If Regional
Vehicle does not agree that the Fair Market Value set forth in the Easymail
Offer represents the value such Selling Person could obtain in an arm's length
sale of such Easymail Interest to an unaffiliated third party, Regional Vehicle
shall deliver a written notice (an "EASYMAIL FMV NOTICE") to Parent requesting
that a determination of Fair Market Value be made in accordance with the
procedures set forth in Sections 6.2(b) and 6.2(c). If Regional Vehicle does not
deliver such Easymail FMV Notice within 45 days after the date of the Easymail
Offer, the Fair Market Value of the Easymail Interest shall be the amount set
forth in the Easymail Offer. Otherwise the Fair Market Value shall be that value
determined in accordance with the procedures set forth in Sections 6.2(b) and
6.2(c), PROVIDED that in the case of any Selling Person other than Parent, a
reference to Parent in such Section shall be deemed to be a reference to such
Selling Person and a reference to Offered Assets shall be deemed to be a
reference to such Easymail Interest. Such Easymail Offer may be accepted by
Regional Vehicle by written notice to Parent until the later of (A) the one
hundred twentieth day after the date of the Easymail Offer and (B) 25 days after
the date of determination of the Fair Market Value of such Easymail Interest in
accordance with the procedures set forth in Sections 6.2(b) and 6.2(c) (such
period being referred to herein as, the "EASYMAIL OFFER RESPONSE PERIOD"). If
Regional Vehicle does not accept such Easymail Offer within the Easymail Offer
Response Period, such Selling Person may sell its Easymail Interest at any time
to any Person.
ARTICLE VII
TERM
7.1. TERM. The term of this Agreement shall begin on the date hereof
and shall terminate upon mutual agreement of the parties hereto; PROVIDED that
Parent may in its sole discretion terminate this Agreement at any time after the
termination of the Brand License Agreement.
8
ARTICLE VIII
ARBITRATION
8.1. ARBITRATION. Any dispute, controversy or claim arising out of,
relating to, or in connection with, this Agreement, or the breach, termination
or validity thereof, whether based on contract, tort, statute, fraud,
misrepresentation or any other legal or equitable theory (each a "CLAIM"), shall
be finally settled by binding arbitration. The arbitration shall be conducted in
accordance with the CPR Rules for Non-Administered Arbitration in effect at the
time of the arbitration, except as they may be modified herein or by mutual
agreement of the parties. The seat of the arbitration shall be New York City,
New York, and it shall be conducted in the English language. Notwithstanding
Section 9.6 hereof, the arbitration and this clause shall be governed by Title 9
(Arbitration) of the United States Code. Any request for interim measures
pursuant to Section 9.11 hereof or otherwise shall not be deemed incompatible
with, or a waiver of, this agreement to arbitrate.
8.2. NUMBER OF ARBITRATORS/SELECTION. The arbitration shall be
conducted by three arbitrators. The party initiating arbitration (the
"CLAIMANT") shall appoint an arbitrator in its request for arbitration (the
"REQUEST"). The other party (the "RESPONDENT") shall appoint an arbitrator
within 30 days of receipt of the Request and shall notify the Claimant of such
appointment in writing. If within 30 days of receipt of the Request by the
Respondent, either party has not appointed an arbitrator, then that arbitrator
shall be appointed by CPR Institute for Dispute Resolution. The first two
arbitrators appointed in accord with this provision shall appoint a third
arbitrator within 30 days after the Respondent has notified Claimant of the
appointment of the Respondent's arbitrator or, in the event of a failure by a
party to appoint, within 30 days after the CPR Institute for Dispute Resolution
has notified the parties and any arbitrator already appointed of its appointment
of an arbitrator on behalf of the party failing to appoint. When the third
arbitrator has accepted the appointment, the two arbitrators making the
appointment shall promptly notify the parties of the appointment. If the first
two arbitrators appointed fail to appoint a third arbitrator or so to notify the
parties within the time period prescribed above, then the CPR Institute for
Dispute Resolution shall appoint the third arbitrator and shall promptly notify
the parties of the appointment. The third arbitrator shall act as Chair of the
tribunal.
8.3. CERTAIN PROCEDURES. The arbitration panel shall strictly limit
discovery to the production of documents directly relevant to the facts alleged
by the Claimant and the Respondent, and if depositions are required, each party
shall be limited to five depositions. Each party shall bear its own expenses,
but those related to the compensation of the arbitrators shall be borne equally.
9
8.4. ARBITRAL AWARD. The arbitral award shall be in writing, state only
the damages and injunctive relief granted and be final and binding on the
parties. The parties hereto expressly waive and forgo any right to punitive,
exemplary or similar damages as a result of any Claim. The arbitrators shall
orally state the reasoning on which the arbitral award rests but shall not state
such reasoning in any writing. The arbitration panel shall endeavor to issue the
arbitral award within six months of the Request, but failure to do so shall not
effect the validity of the arbitral award. The parties agree that the existence
and contents of the entire arbitration, including the award, shall be deemed a
compromise of a dispute under Rule 408 of the Federal Rules of Evidence, shall
not be discoverable in any proceeding, shall not be admissible in any court
(except for the enforcement thereof) or arbitration and shall not bind or
collaterally estop either party with respect to any claim or defense made by any
third party.
8.5. CONFIDENTIALITY OF PROCEEDINGS. All proceedings in connection with
any arbitration, including its existence, the content of the proceedings and any
decision, shall be kept confidential to the maximum extent possible consistent
with the law. The arbitrator shall issue an order preventing the parties, CPR
Institute for Dispute Resolution and any other participants to the arbitration
from disclosing to any third party any information obtained via the arbitration,
including discovery of documents, evidence, testimony and the award except as
may be required by law.
8.6. JUDGMENT. Judgment upon the decision may be entered by any court
having jurisdiction thereof or having jurisdiction over the relevant party or
its assets, PROVIDED that the party entering the award shall request that the
court prevent the award from becoming publicly available except as may be
required by law.
ARTICLE IX
MISCELLANEOUS
9.1. AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed on behalf of the parties.
9.2. WAIVER. No waivers of or consents to departures from the
provisions hereof shall be effective, unless set forth in a writing signed by
Parent and Regional Vehicle. No failure or delay of any party in exercising any
power or right under this Agreement will operate as a waiver thereof, nor will
any single or partial exercise of any right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other or
further exercise thereof or the exercise of any other right or power.
10
9.3. NOTICES. Any notice required to be given hereunder shall be
sufficient if in writing, and sent by facsimile transmission (with a
confirmatory copy sent by overnight courier), by courier service (with proof of
service), hand delivery or certified or registered mail (return receipt
requested and first-class postage prepaid), addressed as follows:
If to Regional Vehicle: If to Parent:
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇. AT&T Corp.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇-▇▇▇-▇▇▇-▇▇▇▇ Facsimile: ▇-▇▇▇-▇▇▇-▇▇▇▇
Attention: Chief Executive Officer Attention: ▇▇▇▇ ▇▇▇▇▇
Vice President --
Strategy and Development
With a copy (which copy shall not With a copy (which copy shall not
constitute notice) to: constitute notice) to:
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇. AT&T Corp.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇-▇▇▇-▇▇▇-▇▇▇▇ Facsimile: ▇-▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President -- Law and
Corporate Secretary
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
9.4. ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to
11
confer on any person other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations or liabilities under or
by reason of this Agreement.
9.5. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings among the parties with respect thereto.
9.6. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to its rules
of conflict of laws. Subject to Article VIII hereof, each of Regional Vehicle
and Parent hereby irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of New York and of the United
States of America located in the State of New York (the "NEW YORK COURTS") for
any litigation arising out of or relating to this agreement and the transactions
contemplated hereby (and agrees not to commence any litigation in a court
relating thereto except in such courts), waives any objection to the laying of
venue of any such litigation in the New York Courts and agrees not to plead or
claim in any New York Court that such litigation brought therein has been
brought in an inconvenient forum.
9.7. FURTHER ASSURANCES. Each party hereto shall, and shall cause each
of its Subsidiaries (which, in the case of Parent shall not include Regional
Vehicle or its Subsidiaries) to, from time to time, execute and deliver such
additional instruments, documents, conveyances or assurances and take such other
actions as shall be necessary, or otherwise may reasonably be requested by the
other party hereto, to confirm and assure the rights and obligations provided
for in this Agreement, or otherwise to carry out the intent and purposes of this
Agreement.
9.8. HEADINGS. Headings of the Articles and Sections of this Agreement
are for the convenience of the parties only, and shall be given no substantive
or interpretive effect whatsoever.
9.9. INTERPRETATION. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders. Whenever the
words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation."
9.10. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
12
9.11. ENFORCEMENT. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or was otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any New York Court, this being in addition to
any other remedy to which they are entitled at law or in equity.
9.12. COUNTERPARTS. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all, of the parties
hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.]
13
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first written
above.
AT&T Corp.
-----------------------
By:
Title:
KIRI INC.
----------------------
By:
Title:
14
Exhibit A
to Regional Vehicle Agreement
DEFINITIONS
1. DEFINED TERMS. The following capitalized terms, when used in this
Agreement, shall have the following respective meanings (each such definition to
be equally applicable to the plural and singular forms of the respective terms
so defined):
"AFFILIATE" means, with respect to any Person, a Person that directly
or indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, the first Person, including but not limited to a
Subsidiary of the first Person, a Person of which the first Person is a
Subsidiary, or another Subsidiary of a Person of which the first Person is also
a Subsidiary.
"AGREEMENT" means this Regional Vehicle Agreement, as the same may be
amended or modified from time to time in accordance with its terms.
"AT&T GLOBAL NETWORK" means AT&T Global Network Services Group LLC or
AT&T Global Network Services LLC, any other Person in which such Persons own any
direct or indirect equity interest or any of their respective successors or
assigns. Each of such Persons is sometimes referred to herein as an "AT&T GLOBAL
NETWORK PERSON."
"BRAND LICENSE AGREEMENT" means that certain Service ▇▇▇▇ License
Agreement between Regional Vehicle and Parent (the form of which was attached as
an Exhibit to the Merger Agreement), as amended from time to time.
"BRANDS" means any name, ▇▇▇▇▇, ▇▇▇▇, trademark, service ▇▇▇▇, trade
dress, trade name, business name or other indicia of origin.
"CARRIER SERVICES" means the provision of carriage, including hubbing,
routing, transit, reorigination and least cost routing on Global Network
Facilities primarily between two or more countries to other International
Carriers.
"COMMUNICATIONS SERVICES" shall mean any services and applications,
including enhanced services and applications, that involve the transmission of
voice, data, sound, music, still and moving image or video and other elements by
fixed media (such as wire, cable or fiber), or radio or other wave signal, and
any similar or substitute service available or offered from time to time, and
the business of developing, designing or offering content-based applications.
"CONTROL" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management policies of a Person, whether
through the ownership of voting securities, by contract or credit arrangement,
as trustee or executor, or otherwise.
Def.-1
"GLOBAL", when used with respect to Communications Services, shall mean
Communications Services between or among two or more countries.
"GLOBAL BUSINESS COMMUNICATIONS SERVICES" shall mean global
Communications Services provided or targeted to businesses and to their
employees in their capacity as employees.
"GLOBAL COMMUNICATIONS SERVICES" shall mean current or future (A)
global end-to-end managed and (B) all other global Communications Services of a
type intended for use by end user customers and resellers, but excluding
Satellite & Radio Services, basic switched voice and basic telex.
"GLOBAL NETWORK FACILITIES" shall mean all facilities that support
bandwidth, transmission, signaling, routing, network service intelligence,
network control intelligence, switching and Operational Systems Support
(including any related software support) in connection with the transmission of
voice, data, sound, music, still and moving image, or video and other elements
by fixed media (such as wire, cable or fiber), or radio or other wave signal,
exclusively or predominantly between or among two or more countries (it being
understood that facilities that are predominantly designed to support such
transmission between or among two or more countries may also support, as a
non-predominant use, transmission within one or more of such countries). Global
Network Facilities shall not include any system or systems that provide
Communications Services exclusively within a given country.
"GLOBAL VENTURE" means each of those certain Persons formed for the
provision of certain telecommunications and related services pursuant to the
Framework Agreement. Each of such Persons is sometimes referred to herein as a
"GLOBAL VENTURE PERSON."
"INTERNATIONAL CARRIER" shall mean a Person which (A) is licensed or
authorized, or is otherwise permitted to provide, or operates where no license
or authorization is required, crossborder Communications Services to the public,
or (B) owns or operates, or is licensed to own or operate, the underlying
facilities used to provide crossborder Communications Services to the public.
"INTERNATIONAL CARRIER SERVICES" shall mean Carrier Services and
International Traffic Termination Services.
"INTERNATIONAL SETTLEMENT PROCESS" means the system of accounting and
settlement rates for the exchange of international traffic of a type referred to
in Section 64.1001 of the regulations of the FCC and any subsequent regime for
arranging and managing inbound/outbound traffic termination terms and conditions
with an International Carrier.
Def.-2
"INTERNATIONAL TRAFFIC TERMINATION SERVICES" shall mean the
arrangement, management and delivery of inbound/outbound traffic termination of
all the communications traffic, including voice and Internet Protocol traffic,
of the Parent Group, including through the International Settlement Process and
least cost routing alternatives, but excluding all Global Business
Communications Services.
"LIBERTY MEDIA" means Liberty Media Corporation and any Person in which
Liberty Media Corporation owns any direct or indirect equity interests.
"MANAGED NETWORK SERVICES" shall mean the provision of (A) service to a
customer consisting solely of the provisioning and maintenance of the logical
and physical elements of the customer's wide area communications network, and,
to the extent relating to a customer's wide area communications network,
directly related planning, design, installation, maintenance and ongoing life
cycle support functions, and (B) equipment on the customer's premises at the
interface between a wide area communications network and the remainder of the
customer's networking environment insofar as the equipment so provided
facilitates (I) the maintenance of the customer's wide area communication
services, (II) the recording of performance data with respect to the customer's
wide area communications services, (III) the provisioning of new wide area
communications services to the customer or changes in the parameters of the wide
area communications services provided to the customer, or (IV) the integration
of multiple wide area communications services, but excluding in the case of
clause (a) or (b) any such service or equipment that materially extends services
beyond the interface described above further into the customer's non-wide area
communications network.
"MEDIA ONE" means Mediaone Group, Inc., Meteor Acquisition Inc., any
successors thereto and any Person in which Mediaone Group, Inc., Meteor
Acquisition Inc. or any successors or assigns thereof own any direct or indirect
equity interests.
"OPERATIONAL SUPPORT SYSTEMS" means the computer systems on which a
Person depends for providing management support of all of its operations,
including service delivery and provision, network usage and control, billing of
customers, network planning, fraud identification, resource planning and
facility management.
"OUTSOURCING PROFESSIONAL SERVICES" shall mean the provision of
professional services relating to network architecture validation,
implementation, operations and life cycle management, including business process
consulting, migration planning and implementation, but excluding Managed Network
Services, and may include the ownership and acquisition of assets from and on
behalf of customers related to the provision of Outsourcing Professional
Services.
"OUTSOURCING SERVICES" shall mean Outsourcing Professional Services and
Managed Network Services.
Def.-3
"PARENT" means AT&T, PROVIDED that Parent shall not include Liberty
Media and Media One.
"PARENT GROUP" means Parent and any Subsidiary of Parent except Liberty
Media and Media One, PROVIDED that (A) neither Regional Vehicle and its
Subsidiaries, any Global Venture Person nor any AT&T Global Network Person or
any Subsidiaries thereof shall be included in the Parent Group and (B) no member
of a Territory Acquired Group excluded from Parent Group as provided in Section
6.1(b) shall be included in the Parent Group.
"PERSON" means any natural person, firm, partnership, association,
corporation, company, limited liability company, trust, business trust or other
entity.
"PREFERRED SUPPLIER" to a Person (the "PURCHASER") means that, to the
extent that the designated Preferred Supplier is able to provide certain
services, products or facilities to the Purchaser on terms and conditions and
standards at least as favorable regarding price, quality and service as the
Purchaser would be able to obtain in an arm's length transaction with a Person
that is not an Affiliate of the Purchaser, such Purchaser shall not, and shall
cause each of its wholly-owned Subsidiaries not to, purchase such services,
products or facilities from any Person other than the designated Preferred
Supplier unless such Person is also a Preferred Supplier to such Purchaser.
"SATELLITE & RADIO SERVICES" shall mean Communications Services (other
than VSAT services) delivered through satellites using existing and future
satellite constellations and associated ground networks and equipment through
any satellite business and terrestrial radio solutions targeted at maritime and
aeronautical applications using existing and future long, medium and short-range
radio systems.
"SUBSIDIARIES" means each corporation or other Person in which a Person
owns or controls, directly or indirectly, capital stock or other equity
interests representing more than 50% of the outstanding voting stock or other
equity interests.
"SYSTEMS INTEGRATION" shall mean advising clients on how best to use
information technology to achieve their ends, to reengineer business processes
to make organizations work more effectively, specifying, designing or building
or specifying, designing and building integrated business systems for or on
behalf of clients managing the change to such systems for or on behalf of
clients, supporting, maintaining, enhancing, operating or further developing
such systems for or on behalf of clients, providing program or project
management and integration of customer defined individual customer solutions and
providing other related services required or requested by clients in connection
with any of the foregoing. Systems Integration does not include (A) the
underlying capability to provide Communications Services or (B) Outsourcing
Services.
Def.-4
"TERRITORY" means Antigua and Barbuda, Argentina, Bahamas, Barbados,
Bolivia, Brazil, Chile, Colombia, Dominica, Dominican Republic, Ecuador,
Grenada, Guyana, Haiti, Jamaica, Panama, Paraguay, Peru, Saint Lucia, Saint
▇▇▇▇▇▇▇ and the Grenadines, Suriname, St. Kitts and Nevis, Trinidad and Tobago
and Uruguay.
2. OTHER DEFINED TERMS. All references to "DOLLAR", "US$" or "$" shall
be deemed to be references to the lawful currency of the United States of
America. The following capitalized terms, when used in this Agreement without
definition, shall have the meanings set forth in the Sections of this Agreement
indicated below:
DEFINED TERM SECTION REFERENCE
------------ -----------------
appraiser Section 6.2(b)
Acquired Group Section 6.1(a)
Acquired Person Section 6.1(a)
AT&T First Paragraph
AT&T Global Network Services Section 5.1
Claim Section 8.1
Claimant Section 8.2
Company Recital A
Cross Border Revenues Section 4.3
Covered Acquisition Section 6.1(a)
Excluded Activities Section 3.1
FMV Notice Section 6.2(a)
Framework Agreement Recital B
Global Venture Person Definition of Global Venture
High Price Section 6.2(c)
Initial Appraiser Section 6.2(b)
Licensed Brands Recital B
Limited Cross Border Network
Service Provider Section 4.3
Low Price Section 6.2(c)
Merger Recital A
Merger Agreement Recital A
Merger Sub Recital A
New York Courts Section 9.6
Offer Section 6.1(b)
Offered Assets Section 6.1(b)
Offer Exception Section 6.1(b)
Offer Response Period Section 6.1(b)
Def.-5
DEFINED TERM SECTION REFERENCE
------------ -----------------
Purchaser Definition of Preferred Supplier
Qualifying MNC Section 4.3(b)
Regional Vehicle First Paragraph
Request Section 8.2
Respondent Section 8.2
RV Exclusive Services Section 2.1
RV Non-Exclusive Services Section 2.2
RV Services Section 2.2
Territory Revenues Section 6.1(a)
Def.-6
Schedule A-1
to Regional Vehicle Agreement
RV EXCLUSIVE SERVICES
Local voice delivered through fixed-line connectivity
Domestic long distance
International long distance
Point-to-point dedicated line
Asynchronous Transfer Mode (ATM)
Frame relay
Internet access
1-800/toll free
Packet X.25 (data)
Virtual network services (data)
Switched digital (data)
A-1-1
Schedule A-2
to Regional Vehicle Agreement
PARENT GROUP ACTIVITIES
Any services provided by Parent Group using assets that any member of Parent
Group is obligated under the Framework Agreement, as in effect on the date
hereof, to contribute to the Global Venture.
Service provided to customers in connection with the provision of, or pursuant
to contracts for, Outsourcing Services.
A-2-1
Schedule B
to Regional Vehicle Agreement
RV NON-EXCLUSIVE SERVICES
AT&T card services
AT&T Direct(R) services
E-commerce
Web-hosting
Fixed wireless for connectivity
Voice over Internet Protocol
Managed Network Services
B-1
Schedule C
to Regional Vehicle Agreement
EXCLUDED ACTIVITIES
International Carrier Services
Mobile wireless/PCS
Cable and cable telephony
Solution services, including Outsourcing Professional Services, other than
Managed Network Services
Systems Integration
Messaging Services in Chile, to the extent providing such services would cause a
breach of obligations of Parent or any of its Affiliates under the Shareholders
Agreement, dated as of December 9, 1993, among Easymail Chile S.A., AT&T
International, Inc., Inversiones Rapel, S.A. et al or any related agreements.
C-1