EXHIBIT 10.11
FORM OF CUSTOMERS AND SERVICE AGREEMENT
THIS CUSTOMERS AND SERVICE AGREEMENT (this "Agreement") is made as of the ____
day of ______________, 1997, between Citizens Utilities Company, a Delaware
corporation ("Citizens"), and Electric Lightwave Inc., a Delaware corporation
("XXX").
RECITALS
A. Citizens owns all of the issued and outstanding Class B Common stock
of XXX.
B. XXX is effecting an initial public offering (the "Offering") of shares
of its Class A Common Stock (the "Class A Common Stock").
C. In order to preserve and continue to maximize the business
opportunities available to both XXX and Citizens after the Offering,
XXX and Citizens desire to execute and deliver this Agreement.
AGREEMENTS
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and in consideration of their
mutual promises and obligations herein contained and intending to be legally
bound hereby, the parties do hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, in addition to the terms defined
in the Preamble and Recitals, the following terms will have the following
meanings, applicable to both the singular and plural forms of the terms
described.
"Affiliate" means any company, firm or person ("person") which directly or
indirectly controls, is controlled by, or is under common control with a person.
A person is regarded in control of another person if it owns, or directly or
indirectly controls, at least 50% of the voting stock or other ownership
interest of the other person, or if it directly or indirectly possesses the
power to direct or cause the direction of the management and policies of the
other person by any means whatsoever; provided, however, that for the purposes
of this Agreement, XXX and its subsidiaries shall not be Affiliates of Citizens,
and Citizens and its subsidiaries (other than persons which are subsidiaries of
XXX) shall not be Affiliates of XXX.
"Citizens" shall include Citizens Affiliates.
"Citizens Area" means a geographic area (designated by telephone exchange or
otherwise) in which Citizens is the Incumbent Local Exchange Carrier (as defined
by the Telecommunications Act of 1996).
"Citizens Retail Customer" means a retail customer of Citizens.
"Citizens Potential Retail Customer" means a potential Citizens Retail
Customer with a place of business or residence in a Citizens Area.
"Citizens Services" means telecommunications services offered or rendered by
Citizens.
Citizens Wholesale Customer" means a wholesale customer of Citizens.
"Effective Date" means the date on which the first purchase and sale of shares
of Class A Common Stock pursuant to the Offering occurs.
"XXX" shall include XXX Affiliates.
"XXX Retail Customer" means a retail customer of XXX.
"XXX Location" means a geographic location in which XXX is offering or
rendering telecommunications services and, if a franchise, certificate, permit
or other governmental authorization is required by law, regulation or order, the
same shall have been obtained.
"XXX Potential Retail Customer" means a potential XXX Retail Customer with a
place of business or residence in an XXX Location.
"XXX Services" means telecommunications services offered or rendered by XXX.
"XXX Wholesale Customer" means a wholesale customer of XXX.
"Less Dense Area" shall mean (a) a service territory that is not an XXX
Location or Citizens Area on the Effective Date and that is part of, or
includes, a Metropolitan Statistical Area ("MSA") or a portion of an MSA, which
MSA has a population of less than 300,000, and (b) a service territory which is
part of, or which includes, an MSA or a portion of an MSA, which MSA has a
population of 300,000 or more, which territory was acquired by Citizens in a
transaction ("Transaction") in which the consideration allocated to territories
which are part of, or include, MSAs with a population of 300,000 or more was 50%
or less of the total consideration paid in the Transaction.
"More Dense Area" shall mean a service territory that is not an XXX Location
or Citizens Area on the Effective Date and that is not a Less Dense Area.
1.2 INTERNAL REFERENCES. Unless the context indicates otherwise, references
to articles, sections and paragraphs shall refer to the corresponding articles,
sections and paragraphs in this Agreement, and references to the parties shall
mean the parties to this Agreement.
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ARTICLE 2
COMPETITION AND BUSINESS OPPORTUNITIES
2.1 SERVICES OF XXX. XXX agrees that, during the term of this Agreement, XXX
will not offer or sell XXX Services to a Citizens Retail Customer or Citizens
Potential Retail Customer in a location (a) that is within a Citizens Area that
existed on the Effective Date; or (b) that is within a Less Dense Area which
becomes a Citizens Area after the Effective Date and before it becomes an XXX
Location. XXX may continue to provide XXX Services to any XXX [Retail] Customer
existing on the Effective Date pursuant to existing contracts or other customer
agreements and any renewals or extensions thereof.
2. 2 SERVICES OF CITIZENS. Citizens agrees that, during the term of this
Agreement, Citizens will not offer or sell Citizens Services to an XXX Retail
Customer or XXX Potential Retail Customer in a location (a) that is within an
XXX Location that existed on the Effective Date; or (b) that is within a More
Dense Area which becomes an XXX Location after the Effective Date and before it
becomes a Citizens Area. Citizens may continue to provide Citizens Services to
any existing Citizens [Retail] Customer existing on Effective Date pursuant to
existing contracts or other customer agreements and any renewals or extensions
thereof.
2.3 OTHER AREAS. XXX may offer and sell XXX Services to a Citizens Retail
Customer or a Citizens Potential Retail Customer in any area not restricted by
Sections 2.1 or 2.5. Citizens may offer and sell Citizens Services to an XXX
Retail Customer or an XXX Potential Retail Customer in any area not restricted
by Sections 2.2 or 2.5.
2.4 WHOLESALE CUSTOMERS. (a) During the term of this Agreement, XXX may not
offer or sell to a Citizens Wholesale Customer XXX Services of the same nature
and serving the same geographic area as the services which the customer is then
currently receiving under contract from Citizens.
(b) During the term of this Agreement, Citizens may not offer or sell to an
XXX Wholesale Customer Citizens Services of the same nature and serving the same
geographic area as the services which the customer is then currently receiving
under contract from XXX.
2.5 LONG DISTANCE RETAIL CUSTOMERS. (a) During the term of this Agreement,
XXX will not offer or sell long distance XXX Services to a Citizens Retail
Customer or a Citizens Potential Retail Customer located in a Citizens Area,
except that XXX may offer and such services to a Citizens Retail Customer or a
Citizens Potential Retail Customer which is located in a service territory that
was or became an XXX Location before it became a Citizens Area.
(b) During the term of this Agreement, Citizens will not offer or sell long
distance Citizens Services to an XXX Retail Customer or an XXX Potential Retail
Customer
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located in a XXX Area, except that Citizens may offer and sell such services to
an XXX Retail Customer or an XXX Potential Retail Customer which is located in a
service territory that was or became an Citizens Area before it became an XXX
Location.
2.6 WAIVER. The foregoing limitations on ELI's and Citizen's offering or
selling telecommunications services apply only to the extent that both XXX and
Citizens are offering or selling the same telecommunications service to the same
customers or potential customers and shall not apply to the extent that both
Citizens and XXX agree in writing to waive such limitations in the case of
specific customers, services or geographic areas.
ARTICLE 3
TERM AND TERMINATION
3.1 TERM. The term of this Agreement shall commence on the Effective Date
and, unless terminated earlier pursuant to Section 3.2, shall continue until the
first to occur of (a) the date on which Citizens and its Affiliates own shares
representing less than a majority of the ordinary voting power of the
outstanding capital stock of XXX, or (b) the date on which the designees or
representatives of Citizens cease to constitute a majority of the board of
directors of XXX.
3.2 TERMINATION. Citizens shall have the right to terminate this Agreement
upon the occurrence of any material breach of this Agreement by XXX or any of
its Affiliates that is not cured within thirty (30) days after receipt of
written notice of such breach from Citizens.
ARTICLE 4
RESOLUTION OF DISPUTES
4.1 ARBITRATION. Any dispute, controversy or claim between Citizens and XXX
arising out of or relating to this Agreement or any agreements or instruments
relating hereto or delivered in connection herewith, will be resolved by
arbitration conducted in Stamford, Connecticut under the auspices and according
to the Commercial Arbitration Rules of the American Arbitration Association. The
arbitration shall be conducted in accordance with the United States Arbitration
Act (Title 9, U.S. Code), notwithstanding any choice of law provision in this
Agreement.
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ARTICLE 5
MISCELLANEOUS PROVISIONS
5.1 GOVERNING LAW. This Agreement shall be governed by and construed under
the laws of the State of New York without regard to principles of conflicts of
laws of any jurisdiction.
5.2 NOTICES. Any notice permitted or required by this Agreement shall be
deemed given when sent by personal service, by certified or registered mail
return receipt requested, postage prepaid, by facsimile transmission or by
overnight delivery by a nationally recognized courier and addressed as follows:
IF TO CITIZENS: Citizens Utilities Company
High Ridge Park
P. O. Xxx 0000
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxx X. XxXxxxxx
Fax No.: (000) 000-0000
IF TO XXX: Electric Lightwave Inc.
0000 X.X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn:
Fax No.: (000) 000-0000)
Actual receipt of notice or other communication shall overcome any deficiency in
manner of delivery thereof.
5.3 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when executed by both parties to this Agreement,
shall be deemed to be an original, and all of which counterparts together shall
constitute one and the same instrument.
5.4 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the
parties with respect to its subject matter, superseding all prior oral and
written communications, proposals, negotiations, representations,
understandings, courses of dealing, agreements, contracts, and the like between
the parties.
5.5 AMENDMENTS. This Agreement may be changed, amended, modified, or
rescinded only by an instrument in writing signed by the party against which
enforcement of such change, amendment, modification or rescission is sought.
5.6 WAIVERS. No waiver by any party of any condition, or breach of any
provision of this Agreement, in any one or more instances, shall be deemed to be
or
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construed as a waiver of any other condition or of the breach of any other
provision of this Agreement.
5.7 RELATIONSHIP. Nothing in this Agreement shall be deemed to create a
partnership, joint venture or agency relationship between the parties. Both
parties are independent contractors and neither party is to be considered the
agent or legal representative of the other for any purpose whatsoever under this
Agreement.
5.8 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the
benefit of the parties and their respective successors and assigns, except that
no obligation under this Agreement may be delegated, nor may any rights under
this Agreement be assigned by either party, without the prior written consent of
the other party, except by operation of law. Any such purported assignment of
this Agreement by either party without the prior written consent of the other
party shall be void and without effect. Except as expressly provided in this
Agreement, the parties hereto intend that this Agreement shall not benefit or
create any right or cause of action in or on behalf of any person other than the
parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
CITIZENS UTILITIES COMPANY
By: _____________________________
Name:
Title:
ELECTRIC LIGHTWAVE INC.
By ________________________________
Name:
Title:
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