EXHIBIT 10.27
Dated as of 30 September 2002
(1) INFONET SERVICES CORPORATION
(2) AUCS COMMUNICATIONS SERVICES N.V. AND OTHERS
(3) TELIA AB
(4) KPN TELECOM B.V
(5) SWISSCOM AG
(6) OTHERS
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TERMINATION AND TRANSITION AGREEMENT
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CONTENTS
CLAUSE
1. INTERPRETATION ................................................................................. 2
2. TERMINATION .................................................................................... 5
3. COMPLETION AND AGREEMENTS POST COMPLETION ...................................................... 5
4. COMPLETION-RELATED PAYMENTS .................................................................... 6
5. CLOSING DATE FINANCIAL STATEMENTS .............................................................. 7
6. TRANSITION ..................................................................................... 9
7. CONFIDENTIALITY ................................................................................13
8. MISCELLANEOUS ..................................................................................14
SCHEDULES
Schedule 1 ISC Affiliates (clause 1.1)
Schedule 2 Form of resolution releasing directors and form of resignation letter (clause 3.2)
Schedule 3 Transition Sites (clause 6.5)
Schedule 4 Support services Service Level Agreements (clause 5.2)
Schedule 5 Restructuring costs (clause 6.10)
Schedule 6 Forms of revised invoicing policy letter agreements (clause 3.2)
Schedule 7 Forms of sales representative sign-up agreements (clause 3.2)
THIS AGREEMENT made as of 30 September 2002 BETWEEN:
(1) INFONET SERVICES CORPORATION, a Delaware Corporation ("ISC" and, together
with the ISC Affiliates, "Infonet");
(2) AUCS COMMUNICATIONS SERVICES N.V., a company organised under the laws of
The Netherlands ("AUCS" together with all of its Affiliates, including AUCS
Communications Services v.o.f. ("AUCS vof"), the "AUCS Entities" and each
an "AUCS Entity");
(3) TELIA AB, a company organised under the laws of Sweden ("Telia");
(4) KPN TELECOM B.V., a company organised under the laws of The Netherlands
("KPN");
(5) SWISSCOM AG, a company organised under the laws of Switzerland ("Swisscom"
and, together with Telia and KPN, the "Indirect AUCS Stockholders"); and
(6) TELIA TELECOMMUNICATIONS INTERNATIONAL B.V., a company organised under the
laws of The Netherlands and a wholly-owned subsidiary of Telia, TELKI
HOLDING COMPANY B.V., a company organised under the laws of The Netherlands
and a wholly-owned subsidiary of KPN, and SWISSCOM NETHERLANDS B.V., a
company organised under the laws of The Netherlands and a wholly-owned
subsidiary of Swisscom (such parties hereinafter referred to as the "Direct
Partners");
(each of the above, a "Party" and collectively, the "Parties").
WHEREAS, pursuant to a Management Agreement dated 30 September 1999 and
subsequent amendments thereto (the "Management Agreement") and a Services
Agreement dated 30 September 1999 (the "Services Agreement") made between the
Parties (other than the Direct Partners) and Unisource N.V., the AUCS Entities
wished to have ISC assume the sole and exclusive management of all operations of
the AUCS Entities in order to ensure continuity of service and, in keeping with
the commitments of the AUCS Entities under specified agreements, while reducing
their operating costs and other expenses as quickly as possible;
WHEREAS, Unisource N.V. has since been demerged and its interest in AUCS has
thereby devolved to the Direct Partners;
WHEREAS, the Parties wish to:
(A) memorialise the termination of the Management Agreement, the Services
Agreement and certain other agreements entered into between them,
(B) make certain transition and other arrangements in connection with
activities related to such agreements, on the terms of this Agreement, and
(C) provide for the terms of payment of certain fees and costs related to the
termination and transition arrangements referred to above.
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NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Capitalised terms used in this Agreement shall have the meanings as defined
in the body of the Agreement or as defined below:
"Affiliate" means in relation to each Party other than ISC
each current or future corporation or entity owned
or under the Control of that Party;
"Arbitration Rules" means the rules of the Netherlands
Arbitration Institute (Nederlands Arbitrage
Instituut) ("NAI") in accordance with which any
NAI arbitration will be conducted, or such amended
rules as the NAI may have adopted hereafter to
take effect before the commencement of the
arbitration;
"Closing Date means the financial statements as at 30 September
Financial Statements" 2002, as defined in the Management Agreement, and
as further described in this Agreement;
"Completion" means 30 September 2002;
"Control" means in relation to a body corporate, the power
of a person to secure that its affairs are
conducted in accordance with the wishes of that
person:
(a) by means of the holding of shares or the
possession of voting power in or in relation
to that or any other body corporate; or
(b) by virtue of any powers conferred by the
articles of association or any other document
regulating that or any other body corporate,
and, in relation to a partnership, means the
right to a share of more than one half the
assets, or of more than one half of the
income, of the partnership; or
(c) by, in the case of AUCS, the control or
authority of AUCS over AUCS Communications
Services v.o.f. under the AUCS v.o.f.
Partnership Agreement, as amended from time
to time, and related governance
documentation;
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"Direct Costs" means the costs of AUCS which are reflected
in the `Direct Cost' item in the financial
statements of AUCS in accordance with the practice
and accounting policies of AUCS in 2000, 2001 and
2002 and in the monthly AUCS management reports;
"Excluded Obligations" means the obligations of the Parties in Article
1.1.(Certain Definitions), Article 7.2 (Orderly
Handover), Article 8.1 (Confidential Information),
Article IX (Indemnification) and Article 10.2
(Governing law and Arbitration) of the Management
Agreement;
"Fully Loaded" means, when used in connection with costs,
the out-of-pocket expenses plus 2% in the case of
Direct Costs and plus 8% in the case of all costs
other than Direct Costs;
"Incentive Payments" have the meanings given to them in the
Management Agreement;
"ISC Affiliate" means (i) ISC, (ii) each current or future
corporation or entity owned or under the Control
of ISC, (iii) any of ISC's current or future
subsidiaries, (iv) any current or future corporate
entity (or subsidiary thereof) whose primary
business is to conduct data communications or
other related activities, and such entity has
entered into a legal relationship with ISC or any
of its Affiliates whereby such corporation has the
right to conduct business under the trademark and
tradename of "Infonet" and which entities as of
the date of this agreement are listed in Schedule
1, as it may be amended from time to time by ISC
upon notice to each of the Indirect AUCS
Stockholders;
"Management Fee" has the meaning given to it in the Management
Agreement;
"Network Provider means the agreements for the provision of
Agreements" national network and local loop connection
services between ISC and each of the Indirect
AUCS Stockholders (in the case of Telia, this
meaning Skanova; and in the case of Swisscom,
this meaning Swisscom ES);
"Parent Network means the Service Agreement dated 1 July 1996 made
Service Agreements" between Swisscom and AUCS vof; the Service
Agreement dated 1 July 1996 made between KPN and
AUCS vof and the Service Agreement dated 1 July
1996 made between Telia and AUCS vof;
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"Parent Distributor means the Parent Distributor Agreement dated 1
Agreements" July 1996 made between Swisscom and AUCS vof; the
Parent Distributor Agreement dated 1 July 1996
made between KPN and AUCS vof and the Parent
Distributor Agreement dated 1 July 1996 made
between Telia and AUCS vof, all of which have been
assigned by AUCS vof to ISC with effect from 30
September 1999;
"Terminated Agreements" means:
(a) the Management Agreement, the Services
Agreement, and the Call Option Deed, all
dated 30 September 1999 and made between ISC,
Unisource N.V., AUCS and others and all side
letters and other ancillary documents and
agreements entered into in accordance
therewith;
(b) the Parent Distributor Agreements;
(c) the Parent Network Service Agreements; and
(d) all agreements entered into between AUCS and
any ISC Affiliate prior to 29 September 2002
under which it is provided that AUCS has
performance obligations after 1 October 2002;
but excluding, for the avoidance of doubt (but
without limitation):
(i) the Network Provider Agreements;
(ii) the letter agreements between each Indirect
AUCS Stockholder and ISC and AUCS regarding a
revised invoicing policy (providing for a
period of 6 months in which to dispute
invoices);
(iii) the Assignment Agreement dated 30 September
1999 between, among others, the parties to
this Agreement; and
(iv) the Personnel Cross-Charging Agreement dated
1 October 1999 between ISC and AUCS providing
for ordering and agreeing resources services
provided by ISC to AUCS and by AUCS to ISC,
and the charges therefore.
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1.2 In this Agreement, unless otherwise specified:
(a) headings to the clauses and Schedules are for convenience only and do
not affect the interpretation of this Agreement;
(b) the Schedules and any attachments form part of this Agreement and
shall have the same force and effect as if expressly set out in the
body of this Agreement, and any references to this Agreement shall
include the Schedules.
2. TERMINATION
2.1 Save with respect to the Excluded Obligations (each of which shall be
deemed to be set forth in full in this Agreement), each of the Parties, by
mutual consent, hereby terminates the Terminated Agreements with effect
from Completion.
2.2 In the case of the Services Agreement, notice of termination has already
been issued by certain parties thereto and accordingly this Agreement
serves to confirm such termination and further to provide for consequences
of termination with effect from Completion and other transitional
arrangements.
2.3 If any agreement between AUCS and an ISC Affiliate is purported to be
terminated pursuant to clause 2.1, but is still in material terms operative
following Completion, the parties to such agreement shall in good faith
agree to arrangements in connection with the activities to which that
agreement applies. Similarly, if, after Completion, the Parties find that
an agreement between AUCS and an ISC Affiliate which was terminated
pursuant to clause 2.1, is in fact still required to be operative, the
parties to such agreement shall in good faith agree to arrangements in
connection with the activities to which that agreement is intended to
apply.
3. COMPLETION AND AGREEMENTS POST COMPLETION
3.1 After Completion, Infonet shall no longer be responsible for managing AUCS
or any AUCS Entity.
3.2 For the avoidance of doubt, the Parties recognise and agree as follows:
(a) The indemnities in Article IX of the Management Agreement, interpreted
in accordance with Section 10.2 of the Management Agreement, shall
continue to apply to liabilities arising after Completion in respect
of any events, acts or omissions occurring before Completion. In the
case of directors who were appointed to the Boards of Directors of
AUCS Entities during the period of the Management Agreement and who
are now tendering their resignation as a consequence of the
termination of the Management Agreement, AUCS and the Indirect AUCS
Stockholders undertake to ensure that resolutions reflected in
documented Board minutes of the relevant AUCS Entities are passed
accepting such resignations and confirming that the relevant AUCS
Entity has no claims against and in respect of any actions taken by
the such directors in their capacity as a director of the relevant
AUCS Entity (such release and waiver being without prejudice to the
AUCS Entities, the Direct Partners and the Indirect AUCS Stockholders'
rights against Infonet under this Agreement).
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The form of such resolution as well as the form of resignation of the
directors covered by this paragraph, namely Xxxx Xxxxxxxx, Xxxxxxx
Xxxxxx and/or Xxxxx Xxxxxx, as the case may be, are attached in
Schedule 2.
(b) (i) Subject to clause 3.2 (b)(ii), the termination of the
Terminated Agreements pursuant to clause 2.1 does not
constitute a waiver by the Indirect AUCS Stockholders, the
Direct Partners or any of the AUCS Entities of any rights
and/or claims which they may have against Infonet, past
present or future, whether statutory, contractual or
otherwise, and whether actual or contingent, in respect of
any liabilities, damages, costs and expenses ("Losses")
incurred by them as a direct result of any wilful misconduct
or negligence on the part of ISC.
(ii) Infonet shall not be liable under clause 3.2 (b)(i) if and
to the extent that the Losses are incurred pursuant to acts
performed by ISC under the Management Agreement at the
specific request or with the express approval of the
Indirect AUCS Stockholders.
(c) Disputes (including, for the avoidance of doubt, enforcement of rights
and/or claims referred to in clause 3.2 (a) and (b)) under any of the
Terminated Agreements, shall be resolved in accordance with the
governing law and dispute resolution provisions of the relevant
Terminated Agreement. The Parties agree to use their best efforts to
resolve any such disputes by 1 March 2003.
3.3 Following Completion:
(a) KPN, ISC and AUCS shall use reasonable efforts to execute, or procure
execution of, the revised invoicing policy letter agreements,
substantially in the forms attached hereto as Schedule 6, by 31
October 2002.
(b) KPN and ISC shall use reasonable efforts to execute, or procure
execution of, the sales representative sign-up agreements (covering
the continuation of support, and related matters, relating to services
for the ex-AUCS customers held by KPN and KPN Belgium N.V., and
marketing of Infonet services in the Benelux), substantially in the
forms attached hereto as Schedule 7, by 31 October 2002.
3.4 ISC intends to lease approximately 2000 m2 (two thousand square meters) of
office space in the office building at Xxxxxxxxx 0 - 00, Xxxxxxxxx (the
"Spicalaan Office"), directly from the landlord on terms similar to the
Spicalaan Office lease agreement in force as at Completion. ISC will use
reasonable efforts to conclude such lease agreement by 11 October 2002 with
effect from 1 October 2002.
4. Completion-related PAYMENTS
The Parties agree that payments pursuant to clause 5 will be made pursuant
to the provisions of this Agreement and to bank accounts as notified in
writing.
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5. CLOSING DATE FINANCIAL STATEMENTS
5.1 AUCS has procured the financial statements consistent with existing AUCS
accounting principles and practices and applying the provisions of the
Management Agreement ("August Accounts") in respect of the period ended on
31 July 2002 on the basis of a `hard close' (i.e. treated as if annual
accounts).
5.2 The AUCS management shall, by means of outsourcing to ISC in accordance
with the Finance Service Level Agreement attached as Schedule 4, prepare
hard close financial statements for AUCS as at the close of business on the
day of Completion on or before 27 October 2002, on the basis of which ISC
shall propose before 31 October 2002 financial statements of AUCS as at the
close of business on the date of Completion (the "Closing Date Financial
Statements"). The Closing Date Financial Statements shall be prepared
consistent with existing AUCS accounting principles and practices and
applying the provisions of the Management Agreement, including those
accounting and other provisions relating to the Incentive Payment.
5.3 The Indirect AUCS Stockholders shall review the Closing Date Financial
Statements proposed by ISC and shall conclude provisionally on the amount
of the Incentive Payment (the "provisional Incentive Payment") based on
these accounts and notify ISC thereof, and pay to ISC the Interim Incentive
Payment (as defined in clause 5.4) on or before 15 December 2002.
5.4 The Interim Incentive Payment shall be a partial payment of the Incentive
Payment under the Management Agreement and shall equal 80% of the
provisional Incentive Payment, provided that the Interim Incentive Payment
will not exceed the provisional Incentive Payment less (euro)10,000,000
(ten million euro).
5.5 The Indirect AUCS Stockholders and ISC shall agree on the final Closing
Date Financial Statements and then derive the agreed Incentive Payment (the
"agreed Incentive Payment") from the agreed final Closing Date Financial
Statements before 15 March 2003. The agreed Incentive Payment is subject to
adjustment in accordance with clause 5.6. If the parties cannot reach
agreement by 15 March 2003, the matter will be referred to dispute
resolution in accordance with clause 5.9 below but subject to first
complying with clause 8.7 (b). An amount (the "Incentive Payment Balance"),
being the agreed Incentive Payment, less the Interim Incentive Payment
already paid pursuant to clause 5.3, will be paid by the Indirect AUCS
Stockholder to ISC within 2 weeks after the amount is agreed between them
or after resolved in accordance with the dispute resolution procedure under
clause 8.7 (b) and, if applicable, clause 5.9, and further subject to the
withholding of the Retention Amount referred to in clause 5.6.
5.6 An amount (the "Retention Amount") will be withheld from the Incentive
Payment Balance by the Indirect AUCS Stockholders and placed in escrow with
ABN AMRO Bank N.V. until 31 March 2004. The Retention Amount shall be equal
to (euro)5,000,000 (five million euro), or, if less, then equal to the
Incentive Payment Balance. The Retention Amount shall be dealt with as
follows:
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(a) Interest actually received on the Retention Amount on account with ABN
AMRO Bank N.V. shall be for the benefit of ISC and payable direct to
ISC or its nominee.
(b) The agreed Incentive Payment will be reviewed with a view to full and
final settlement, by comparing actuals, accruals, provisions or
estimates in the Closing Date Financial Statements with the actual
results verified in the period after Completion, and the agreed
Incentive Payment shall be adjusted taking into account the difference
in the actual results (such resultant adjustment to the agreed
Incentive Payment referred to as the "Post Closing Adjustment").
(c) AUCS will provide to ISC and the Indirect AUCS Stockholder before 15
February 2004 the audited financial statements of AUCS for 2003
followed by an analysis, to be provided before 1 March 2004, of the
impact of actual results in line items which may result in a Post
Closing Adjustment, together with related backup materials, and
including a proposed Post Closing Adjustment, if any.
(d) ISC shall have 14 days after receipt of the analysis and backup
referred to in clause 5.6 (c) in which to review AUCS' accounting
records and to respond to AUCS. If ISC and the Indirect AUCS
Stockholders cannot reach agreement on the Post Closing Adjustment by
31 March 2004, any Party may refer the matter to expert resolution in
accordance with clause 5.9 below, but subject to first complying with
clause 8.7(b).
(e) The Post Closing Adjustment shall be paid as follows:
(i) In the event that the Post Closing Adjustment leads to a
reduction in the agreed Incentive Payment, the Post Closing
Adjustment shall be paid by ISC to the Indirect AUCS
Stockholders and shall not exceed (euro)5,000,000 (five
million euro). The Post Closing Adjustment shall be paid out
of the Retention Amount held in escrow, or directly by ISC
if and to the extent that the amount held in escrow is not
sufficient.
(ii) In the event that the Post Closing Adjustment leads to an
increase in the agreed Incentive Payment, the Post Closing
Adjustment shall be paid by the Indirect AUCS Stockholders
to ISC and shall not exceed (euro)5,000,000 (five million
euro).
(iii) The Post Closing Adjustment shall be paid by ISC or by the
Indirect AUCS Stockholders, as the case may be, within 30
days after agreement thereon or resolution pursuant to
clause 8.7 (b) or clause 5.9, as the case may be.
(f) In the event that AUCS is no longer existing, the Indirect AUCS
Stockholders shall appoint a single point of contact to undertake the
obligations of AUCS hereunder.
5.7 AUCS and ISC must supply each other with all information, and give each
other access to all documentation and personnel, as the other party
reasonably requires to
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prepare or review the Closing Date Financial Statements or to deal with the
referral to an Independent Accountant referred to in clause 5.9 below.
5.8 AUCS and ISC will each pay the charges of their own accountants.
5.9 The provisions of this clause shall be applicable by means of any Party or
Parties giving written notice to the other Parties pursuant to a provision
of this Agreement that expressly provides that a dispute shall be resolved
in accordance with this clause. Upon receipt of a notice invoking this
clause, AUCS (if AUCS no longer exists, then the single point of contact of
the Indirect AUCS Stockholders) and ISC will submit the issues in dispute
to such independent "Big 4" accountant as ISC and AUCS agree and, failing
such agreement, such independent "Big 4" accountant as shall be appointed
for this purpose on the application of either of the parties by the
President of the Dutch Institute for Registered Accountants (Nederlands
Instituut voor Register Accountants (NIVRA)) (the "Independent
Accountant"), for resolution and
(a) the item or items to be resolved by the Independent Accountant shall
be declared to the Independent Accountant in writing by either or both
of the parties immediately following the Independent Accountant's
appointment;
(b) the Independent Accountant's terms of reference shall be to determine
the item or items in dispute and therefore the calculation of the
amounts of any adjustment to be made by a party;
(c) the Independent Accountant shall decide the procedure to be followed
in the determination, but shall allow the parties to make written
representations. The Independent Accountant shall render its decision
within 20 business days of being notified of the items in dispute; and
(d) if issues in dispute are submitted to the Independent Accountant for
resolution, (i) each Party to this Agreement will furnish to the
Independent Accountant such work papers and other documents and
information relating to the AUCS Entities and the disputed issues as
the Independent Accountant may request and are available to that Party
or its subsidiaries (or its independent public accountants), and the
Parties will be afforded the opportunity to present to the Independent
Accountant any material relating to the determination and to discuss
the determination with the Independent Accountant; (ii) the
determination by the Independent Accountant, as set forth in a notice
delivered to the Parties by the Independent Accountant and the audited
Closing Date Financial Statements prepared by the Independent
Accountant, will be binding and conclusive on the Parties; and (iii)
the fees of the Independent Accountant shall be borne equally as
between the Indirect AUCS Stockholders on the one hand and ISC on the
other.
6. TRANSITION
6.1 Invoices relating to the period after Completion issued to AUCS under
contracts with third parties, which contracts have, by agreement between
AUCS and Infonet, been assigned to Infonet, shall be dealt with as follows:
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(a) AUCS shall pay (subject to validation in accordance with clause
6.3(b)) the third parties under the invoices and shall recharge such
invoices to Infonet without xxxx-up by sending one or more collective
invoices in accordance with (b) hereof by e-mail or fax to Infonet at
regular intervals;
(b) based on one or more collective invoices with back-up sufficient to
validate the underlying invoices and debtors, Infonet shall reimburse
AUCS without xxxx-up in accordance with normal processes, but at the
latest within 40 days after the date of the fax or e-mail attaching
the collective invoice.
6.2 From and after Completion, ISC hereby agrees to provide, or cause to be
provided, to AUCS the transitional support services of the finance, human
resources and legal departments as further set out in Schedule 4 or, if not
set out in Schedule 4, then in accordance with the Personnel Cross-Charging
Agreement (as referred to in (iv) under the definition of Terminated
Agreements in clause 1.1), (a) for the period of time, and (b) at the
prices or as charged in accordance with the principles listed on Schedule 4
or agreed pursuant to the Personnel Cross-Charging Agreement. Such
arrangements shall be reviewed between the parties during the first two
weeks of April 2003 to determine whether and on what conditions the parties
should continue such arrangements.
6.3 Transitional administrative and support arrangements shall include the
following:
(a) Directors of AUCS Entities appointed pursuant to Infonet's management
of the AUCS Entities will be replaced by the Direct Partners and by
AUCS on or as soon as possible after Completion. Bank and other
mandates will similarly be replaced on or as soon as possible after
Completion. To the extent that such replacements cannot be done, or
are delayed, the resigning directors have expressed willingness to
co-operate to act as directors on the instructions of AUCS and on the
terms and discharge to them as individuals as mentioned in their
respective letters of resignation, and the shareholders resolutions of
each such entity, in the forms respectively attached hereto as
Schedule 2.
(b) The persons listed below shall be made available by ISC in October
2002, to assist in the inventory and the allocation of invoices
received by AUCS according to whether payable by AUCS or chargeable to
ISC in accordance with this Agreement:
o Xxxxx Xxxxxx; and/or appropriate delegates;
o Xxxx Xxxxxxx and/or appropriate delegates;
o Xxxx Xxxxx and/or appropriate delegates; and
o Jeroen Bijl and/or appropriate delegates.
Upon receipt by AUCS of an invoice which AUCS considers ought to be
paid by Infonet, AUCS shall send a copy to Thierry Tasiaux of Infonet,
or his delegate, for validation within 20 days.
(c) Infonet shall prepare, by no later than 31 October 2002, an inventory
of AUCS' outstanding commitments of contracts as at Completion which
result in Direct
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Costs, but which have not been assigned, nor are to be assigned, to
Infonet ("Direct Cost Inventory").
(i) The Direct Costs set out in the Direct Cost Inventory shall
be allocated to one of the following two categories:
(aa) the commitment resulting in the Direct Cost may be
cancelled by AUCS as soon as it desires; and
(bb) the commitment resulting in the Direct Cost shall
continue for the time being or as specified by Infonet.
Direct Cost commitments as at Completion and not
included in the Direct Cost Inventory will be for ISC's
account until Infonet has notified AUCS of the
existence of such commitment and specifying whether
such commitment is within category referred to as (aa)
or (bb).
(ii) Direct Cost set out in, or as subsequent additions to, the
Direct Cost Inventory category (aa) shall be for the account
of AUCS from Completion or, in the case of subsequent
addition to the Direct Cost Inventory, from the date on
which Infonet gives notice of its addition to this category.
(iii) Direct Cost set out in, or as subsequent additions to, the
Direct Cost Inventory category (bb) shall for the account of
ISC only for the period for which Infonet requires such
commitment to be kept in place. Thereafter, the cost shall
be for AUCS, except:
(1) to the extent that the earliest possible date for
termination of such commitment was extended as compared
to the situation as of Completion as a result of
Infonet electing to include such commitment as category
(bb); or
(2) if Infonet fails to cancel the contract or other
arrangement relating to Direct Costs at the earliest
possible date after the period for which Infonet
requires such commitment to be kept in place.
In case of the exceptions, Infonet shall be responsible
for the additional Direct Cost arising from the delay
in the earliest possible date for termination of the
commitment as compared to the Direct Cost had the
commitment been terminated:
o in the case of exception (1), by notice issued
prior to 31 October 2003 or by notice issued prior
to the subsequent addition of such commitment to
the Direct Cost Inventory, as applicable; and
o in the case of exception (2), by notice prior to
the end of the period for which Infonet requires
such commitment to be kept in place.
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6.4 For the avoidance of doubt, AUCS and the Indirect AUCS Stockholders remain
responsible for restructuring and termination (of contract) liabilities as
set out in the Management Agreement.
6.5 The Parties recognise and agree that certain technical sites or facilities,
as listed in Schedule 3 ("Transition Sites") and third party contracts
directly and indirectly related thereto, have intentionally not been
decommissioned or terminated as at Completion. The Parties further agree
that such Transition Sites and related third party contracts shall be dealt
with as follows (for the avoidance of doubt, this clause 6.5 specifies how
Direct Costs as described in clause 6.3 (c) shall be treated in the case of
the Transition Sites):
(a) Invoicing from AUCS to ISC, validation of the Direct Cost elements in
the invoices and payments will be treated similarly to clause 6.1 (a)
and (b) except that a xxxx-up will apply in accordance with the
definition of "Fully Loaded".
(b) Infonet shall pay the Fully Loaded costs related to each Transition
Site, such as, without limitation, electricity, security,
fire-protection, insurance and cleaning, until the end of the calendar
month following the end date specified for that Transition Site in
Schedule 3 hereto. Any obligation to reimburse costs beyond the
aforementioned dates are contained in clause 6.5 (d) below.
(c) AUCS and Infonet shall each appoint single points of contact to manage
the arrangements regarding the Transition Sites and their eventual
decommissioning, including arranging changes to site plans,
consultation on actions related to Transition Sites and cancellation
of site-related activities to the extent any risk to customers'
services exist.
(d) The costs of termination of a site (being the costs of reinstatement
and early termination penalties and the Restructuring Costs under the
Management Agreement) shall be payable by AUCS.
(e) The Parties shall co-operate to expedite the reduction of costs
related to the Transition Sites as early as possible.
6.6 In addition to the provisions of clause 6.1 and clause 6.4 (c), AUCS and
Infonet anticipate that either may be requested to provide services to the
other for temporary purposes in support of activities. The procedures and
charges for providing such services, shall be the same as those contained
in the Personnel Cross-Charging Agreement.
6.7 The Parties agree to the following arrangements in connection with the
files and information relating to AUCS' activities as these activities are
currently in existence:
(a) The AUCS files held by AUCS, the Indirect AUCS Stockholders, and/or
Infonet, shall be kept in existence for at least 5 years after
Completion.
(b) The Parties shall undertake reasonable efforts to store and maintain
in an accessible format information relating to AUCS currently in
their possession.
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(c) No Party shall without the prior consent of the other Parties,
willingly destroy any information which could reasonably be deemed
important to the other Party.
(d) Any Party shall have the right, on reasonable notice and at reasonable
times, to have access to AUCS information existing as at, or
originating prior to, Completion which is held by another Party and
shall be entitled to make photocopies for business purposes.
6.8 The Parties agree that the transactions hereunder, or in connection
herewith, and/or the provision of services pursuant to this Agreement will
not constitute the transfer of a business or a going concern.
6.9 The Parties agree that the costs listed in Schedule 5 shall be treated as
Restructuring Costs as defined in the Management Agreement.
7. CONFIDENTIALITY
7.1 Subject to the provisions of clause 7.2, the Parties agree that they shall
not (and shall procure that their respective advisors, officers and members
of their respective boards of managing directors and supervisory directors
shall not) at any time divulge, furnish or make accessible to anyone, and
treat as strictly confidential, any confidential or secret knowledge or
information with respect to any information received or obtained as a
result of entering into or performing this Agreement and any related
agreements, which relates to the provisions of and the negotiations
relating to such agreements or which relates to the other Parties.
7.2 The restrictions in clause 7.1 shall not apply:
(a) to information which is in the public domain as of the date of this
Agreement;
(b) in case any of the Parties is required by law to divulge, furnish or
make such information accessible or as required for their proper
defence of the US class action related to the Infonet IPO; or
(c) in the framework of compliance with requirements of any relevant stock
exchange or regulatory or government body.
7.3 Any Party disclosing information pursuant to clause 7.2 (b) or (c) shall,
to the extent reasonably possible, notify the other Parties prior to such
disclosure.
7.4 The Parties hereby agree to amend Section 8.1(a) of the Management
Agreement by addition of the words "or as required for their proper defence
of the US class action related to the Infonet IPO" so as to read as
follows: "to the extent necessary to comply with applicable law or the
valid order of a governmental agency or court of competent jurisdiction or
as required for their proper defence of the US class action related to the
Infonet IPO; provided, however, that the Party making such disclosure shall
seek confidential treatment of said information from such third parties";
13
8. MISCELLANEOUS
8.1 This Agreement represents the entire understanding and agreement between
the Parties with respect to the termination of the Terminated Agreements
and the transitional arrangements and supersedes and replaces in their
totality all previous agreements, both in writing and oral, including
correspondence, between the Parties with respect to the termination of the
Terminated Agreements and the transitional arrangements.
8.2 Any notice or other communication in connection with this Agreement shall
be sufficiently given if in writing and personally delivered or sent by
registered mail or by courier or by telefax, with confirmation of receipt
in case of a telefax, addressed as follows or to such other address as the
Parties shall have given notice of pursuant hereto:
to ISC at:
0000 Xxxx Xxxxx Xxx
Xx Xxxxxxx XX 00000
XXX
Fax: x0 000 000 0000
Attention: General Counsel
Copy (which shall not constitute notice)
Infonet Services Europe B.V.
Xxxxxxxxx 0 - 00
0000 XX Xxxxxxxxx
Xxx Xxxxxxxxxxx
Fax: x00 00 000 0000
Attention: General Counsel Europe
to any AUCS Entity at:
Xxxxxxxxx 0-00
0000 XX Xxxxxxxxx
Xxx Xxxxxxxxxxx
Fax: x00 00 000 0000
Attention: Managing Director / Xxxx van't Zelfde
to Telia at:
Xxxxxxxxxxxxx 00
Xxxxxxxxx
Xxxxxx
14
Fax: x00 00 00 000
Attention: Director of Legal Affairs
to KPN at:
Xxxxxxxxxxxx 0
0000 XX, Xxx Xxxxx
Xxx Xxxxxxxxxxx
Fax: + 00 00 000 0000
Attention: KPN International Participations (att: E.M.J.W. de Jong)
to Swisscom at:
Xxxx Xxxxxxxxxxxxxxx 0
0000 Xxxx, Xxxxxxxxxxx
Fax: x00 00 000 00 00
Attention: General Counsel
8.3 Each Party shall bear its own costs and expenses in relation to the entry
into, execution and performance of this Agreement, including all
negotiations, preparations and investigations.
8.4 This Agreement may not be amended, supplemented or changed, nor may any
provision hereof be waived, except by a written instrument making specific
reference to this Agreement signed by each of the Parties.
8.5 If any provision of this Agreement shall be determined by any court of
competent jurisdiction to be illegal, void or unenforceable, such provision
shall be of no force and effect, but the illegality or unenforceability of
such provision shall have no effect upon and shall not impair the
enforceability of the other provisions of this Agreement. In the event of
any such determination, the Parties agree to negotiate in good faith to
modify this Agreement to fulfil as closely as possible the original intents
and purposes hereof.
8.6 None of the rights or obligations under this Agreement may be assigned or
transferred by a Party without the prior written consent of all the other
Parties, which cannot unreasonably be withheld.
8.7 Governing law and dispute resolution
(a) This Agreement shall be governed by and construed in accordance with
the laws of The Netherlands.
(b) Disputes under this Agreement between Infonet on the one hand and any
other Party on the other shall first be referred by any Party to
Xxxxxxx Xxxxxx on behalf of Infonet and Xxxx van't Zelfde on behalf of
AUCS and the Indirect AUCS Stockholders by means of written notice
expressly referring to this clause 8.7. If not resolved within 3 weeks
from such referral, any Party may
15
refer such matter to the CEO of Infonet and a senior designated
representative of the Indirect AUCS Stockholders designated by AUCS in
writing. If not resolved within 4 weeks from such referral, then (c)
of this clause 8.7 shall apply.
(c) In the event that disputes cannot be resolved in accordance with (b):
(i) Disputes in connection with the Closing Date Financial
Statements, or other disputes on matters specifically
referring to clause 5.9 shall be referred to dispute
resolution in accordance with clause 5.9.
(ii) All other disputes will be referred to arbitration in
accordance with the Arbitration Rules. The arbitral tribunal
shall be composed of one arbitrator. The place of
arbitration shall be Amsterdam. The arbitral procedure shall
be conducted in the English language. The arbitral tribunal
shall decide in accordance with the rules of law and his
decision shall be binding on the Parties.
8.8 This Agreement may be executed, whether by way of facsimile or otherwise,
in counterparts, each of which shall be deemed an original; and any person
may become a party hereto by executing a counterpart hereof, but all of
such counterparts together shall be deemed to be one and the same
instrument. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other
counterparts.
8.9 Each Party shall from time to time execute such further instruments, and
take such other actions, as any other Party hereto shall reasonably request
in order to fulfil its obligations under this Agreement and to effectuate
the purposes of this Agreement. Each Party shall promptly notify the other
Parties of any event or circumstance known to such Party that could prevent
or delay the consummation of the transactions contemplated by this
Agreement, or which would indicate a breach or non-fulfilment by any of the
Parties to this Agreement.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as
follows:
For and on behalf of
INFONET SERVICES CORPORATION
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Title: -------------------------------------
Date: -------------------------------------
16
For and on behalf of AUCS and AUCS vof, herein represented by AUCS
COMMUNICATIONS SERVICES N.V.
By: /s/ Xxxx Van't Zelfde
------------------------------------
Title:
------------------------------------
Date:
------------------------------------
For and on behalf of Telia
TELIA AB
By: /s/ Xxxxx Xxxxx
------------------------------------
Title: Senior Investment Manager
------------------------------------
Date: October 4, 2002
------------------------------------
For and on behalf of KPN
KPN TELECOM B.V.
By: /s/ X.X. Xxxxxxxxxxxx
------------------------------------
Title: Chairman of the Board Royal KPN N.V.
------------------------------------
Date:
------------------------------------
For and on behalf of Swisscom
SWISSCOM AG
----------------------------------------
By: /s/ Xxxx Xxxxxxx
Title: Senior Counsel
------------------------------------
Date: October 4, 2002
------------------------------------
----------------------------------------
By: /s/ Xxxx Xxxxxxx
Title: Chief Strategy Officer
------------------------------------
17
Date: October 4, 2002
-----------------------------------
For and on behalf of Telia Telecommunications International B.V.
By: /s/ Xxxxx Xxxxx
-----------------------------------
Title: Chairman of the Board
-----------------------------------
Date: October 4, 2002
-----------------------------------
For and on behalf of Telki Holding Company B.V.
By: /s/ A. J. Sheepbouwer
------------------------------------
Title: Chairman of the Board Royal KPN N.V.
------------------------------------
Date:
------------------------------------
For and on behalf of Swisscom Netherlands B.V.
-----------------------------------------
By: /s/ Xxxx Xxxxxxx
Title:
------------------------------------
Date: October 4, 2002
------------------------------------
-----------------------------------------
By: /s/ Xxxx Xxxxxxx
Title:
------------------------------------
Date:
------------------------------------
18
SCHEDULE 1
ISC AFFILIATES
19
SCHEDULE 2
FORM OF RESOLUTIONS RELEASING DIRECTORS AND FORM OF RESIGNATION LETTER
20
SCHEDULE 3
TRANSITION SITES
21
SCHEDULE 4
SUPPORT SERVICES SERVICE LEVEL AGREEMENTS
22
SCHEDULE 5
RESTRUCTURING COSTS
23
SCHEDULE 6
FORMS OF REVISED INVOICING POLICY LETTER AGREEMENTS
24
SCHEDULE 7
FORMS OF SALES REPRESENTATIVE SIGN-UP AGREEMENTS
25
