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Redacted portions have been marked with asterisks (****). Confidential treatment
has been requested for the redacted portions. The confidential redacted portions
have been filed separately with the Securities and Exchange Commission.
EXHIBIT 10.2
final Proprietary and Confidential
ALLIANCE AGREEMENT
BETWEEN
TELEFONOS DE MEXICO, S.A. DE C.V.
AND
XXXXXXXX COMMUNICATIONS, INC.
THIS ALLIANCE AGREEMENT (this "Agreement") between Xxxxxxxx
Communications, Inc., a Delaware corporation, and its Controlled
subsidiaries (collectively, "Xxxxxxxx") and Telefonos de Mexico, S.A.
de C.V., a Mexican corporation, and its Controlled subsidiaries
(collectively, "Telmex"), is effective May __, 1999 ("Effective Date").
Xxxxxxxx and Telmex are individually referred to as a "Party" and
collectively referred to as the "Parties." "Control or Controlled"
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies by one person or
entity or a group of related persons or entities acting in concert;
provided, however, that the legal or beneficial ownership, directly or
indirectly by one person or entity or a group of related persons or
entities acting in concert, of more than fifty percent (50%) of the
voting stock for the election of directors of a party shall always be
deemed Control. Exhibit A lists subsidiaries of each Party that shall
not be classified as Controlled subsidiaries, even though they may meet
the definition thereof. Exhibit A may be amended by either Party to add
or delete a listed subsidiary with the written consent of the other
Party, which consent shall not be unreasonably withheld
RECITALS
WHEREAS, Telmex provides telecommunications, exchange access, information
access, network management, networking services and network analysis in Mexico
and other parts of the world, including the United States;
WHEREAS, Telmex has investments in global telecommunications systems and has
established direct operating agreements and interconnection to foreign
carriers;
WHEREAS, Telmex is a provider of business communications equipment and
integration services for data, voice, video and advanced applications;
WHEREAS, Telmex together with Xxxxxxxx desires to offer its customers global
solutions for their voice, data, video and advanced application communications
needs,
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and to implement a plan to enhance its competitive position in Mexico and the
United States;
WHEREAS, SBC Communications, Inc. owns equity in and has representation on the
board of directors of Telmex and intends to purchase equity in Xxxxxxxx;
WHEREAS, Xxxxxxxx is a nationwide, single source provider of business
communications equipment and integration services for data, voice, video and
advanced applications on a retail basis and a provider of facilities-based
network services for delivery of voice and data on a wholesale basis;
WHEREAS, Xxxxxxxx wishes to achieve additional geographic reach and economies
of scale that will enable Xxxxxxxx to lower its costs, increase its ability to
compete with established networks, and accelerate its construction program in
the wholesale market for voice and data network services in the United States
(the "United States" or the "U.S.") and use its domestic facilities to
interconnect with Telmex's Mexican network thereby providing seamless wholesale
services to its customers;
WHEREAS, the Parties are negotiating an alliance agreement with each other and
with SBC Communications Inc. (the "SBC/Telmex/WCI Alliance Agreement");
WHEREAS, the relationship contemplated by this Alliance will serve to broaden
the base of potential competitive opportunities for network services and other
applications for all market segments and to respond to the market's desire for
seamless product and service offerings throughout the United States and Mexico;
NOW THEREFORE, in consideration of the mutual covenants herein contained, and
subject to Telmex's and Xxxxxxxx' respective affiliates' contractual
obligations with third parties and to any applicable federal or state laws or
regulations, in both cases, either present or future, Telmex and Xxxxxxxx agree
as follows:
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1. PURPOSE OF THE ALLIANCE
The purpose of this Agreement is to define a strategic, non-exclusive alliance
between the Parties in order to offer products and services through the
cooperative deployment of facilities and interconnection of networks that will
be designed to carry voice and data on a seamless nationwide and international
basis (the "Alliance").
The Parties acknowledge that the activities and relationships addressed by the
Alliance are subject to statutes and regulations of Mexico and the United
States. Notwithstanding anything to the contrary contained in any agreement
between the Parties including the prospective SBC/Telmex/WCI Alliance Agreement
and this Agreement, the Parties will not take any action and will not be bound
to act in connection with the Alliance which would constitute a violation of
applicable law or take an action which requires governmental or any third party
approval without first obtaining such approval.
2. RELATIONSHIP OF THE PARTIES
2.1. Preferred Provider
If either Telmex or Xxxxxxxx is designated in this Agreement as the
supplying party (the "Supplying Party") for a product or service as
agreed in writing by each of the Parties ("Alliance Product or
Service"), then whenever the other Party needs such Alliance Product or
Service, such supplied party (the "Supplied Party") will first seek to
obtain the needed Alliance Product or Service from the Supplying Party,
and therefore, the Supplying Party shall be the provider to the
Supplied Party of the Alliance Products or Services, provided, however,
that the Supplied Party shall not be obligated to use the other Party
as the Supplying Party and will be entitled to use the facilities of
any other provider or, if specified by contract or governmental
regulation, a specific third party provider in the following cases:
(i) if any customer of either Telmex or Xxxxxxxx
specifically requests the use of another provider;
(ii) if pursuant to existing contracts with third parties
as described in Exhibit B the Supplied Party is
required to obtain the product or service from any
other source;
(iii) if pursuant to governmental or regulatory
restrictions the Supplied Party is required to obtain
the product or service from any other source;
(iv) if an exception is provided for in any agreements
between the Parties including the proposed
SBC/Telmex/WCI Alliance Agreement; or
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(v) if the Supplying Party is not offering Market Terms
and Conditions (as defined in the last paragraph of
this Section 2.1.), and technical performance or
quality comparable to competitive products and
services in accordance with the process in Section
3.3.
For purposes hereof, "Alliance Products and Services" specifically
shall include international switched voice traffic, international
private line, and international frame relay, as more fully described in
Section 1.1 and 1.2 of Schedule A which also includes current Alliance
pricing for them (including pricing for ancillary services) and the
identification of which Party is the Supplying Party. As contemplated
in Schedule A, the Parties agree to add to the Alliance Products and
Services any products that are developed and offered by either Party
during the term of this Agreement which products and services will be
made available to the other Party in accordance with the Preferred
Provider obligation. The Parties agree to exercise their best
reasonable efforts to develop and include new products, provided that,
no such product will be added without the prior agreement in writing by
both Parties. The product's description, pricing and performance
standards will be provided to the Supplied Party for review and
acceptance, in writing by both Parties, prior to such product being
added to the Alliance Products and Services. The term "Market Terms and
Conditions" shall mean the ****.
3. INTERNATIONAL WHOLESALE MARKET - MEXICAN ORIGINATED TRAFFIC BY TELMEX AND
U.S. ORIGINATED TRAFFIC BY XXXXXXXX
3.1. Origin Country
This Section addresses the pricing and other terms and conditions
offered by each Party, as the Supplying Party, to the other for
Alliance Products and Services offered in connection with traffic
originated by a Party in its Origin Country for termination in the
other Party's Origin Country. Telmex's Origin Country is Mexico and
Xxxxxxxx' Origin Country is the United States. Unless otherwise
mutually agreed, traffic shall be designated as originating in the
country where the customer's principal place of business is located,
regardless of the city where the communications traffic is originated.
3.2. Most Favored Customer Treatment
The net settlements rate, inter-carrier pricing, revenue sharing
agreement, commission structure and other terms and conditions offered
by one Party to the other, for the Alliance Products and Services,
shall **** ("Most Favored Customer Treatment"), provided, however, that
such obligation will not be applicable in any of the following cases:
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(i) if more favorable terms and conditions are required
to be offered pursuant to existing contracts with
third parties as described in Exhibit B and/or in
accordance with governmental or regulatory
restrictions;
(ii) if an exception is provided for in any agreements
between the Parties including the proposed ****
Agreement or prohibited by any law or regulations;
or,
(iii) if the Supplied Party is not requesting technical
performance or quality comparable to competitive
products and services.
In the case of the Most Favored Customer Treatment offered to Xxxxxxxx
by Telmex, the term "like entity in the market" shall mean ****.
In the case of the Most Favored Customer Treatment offered to Telmex by
Xxxxxxxx, the term "like entity in the market" shall mean **** Xxxxxxxx
also recognizes that the value of the relationship is likely to
increase with the passage of time and regulatory liberalization.
Accordingly, Xxxxxxxx agrees annually to revisit the Most Favored
Customer Treatment accorded to Telmex in order to reflect growth of the
strategic and economic value to Xxxxxxxx.
3.3. Competitor's Pricing and Terms
If the Supplied Party receives a competing offer from another provider
offering to sell a product or service substantially similar to an
Alliance Product or Service upon terms and conditions that are better
than the Most Favored Customer Treatment offered by the Supplying
Party, the Supplied Party will, to the extent allowed by contract or
law, discuss with the Supplying Party the terms and conditions of
products and services offered by the competing provider and **** then
the Supplied Party shall be free to use the competing provider's
product or services in accordance with the terms and conditions of the
competing offer which had been presented to the Supplying Party.
3.4. Cooperative Effort
If either Party is pursuing an strategic opportunity using an Alliance
Product or Service and the Party pursuing the opportunity indicates to
the Supplying Party that capturing the business opportunity with the
customer requires different pricing or other terms, the Supplying Party
agrees to exercise its best reasonable efforts to modify the pricing or
other terms of the Alliance Product or Service in order for the Parties
to provide the most competitive solution for the customer presenting
the strategic opportunity. ****
3.5. Withdrawal of the Most Favored Customer Treatment
****
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4. WHOLESALE MARKET - TELMEX BRANDED SWITCHED VOICE TRAFFIC U.S. ORIGIN
With respect to Telmex Branded Wholesale U.S. Switched Voice Traffic
originating within the U.S., based upon Xxxxxxxx' voice services as described
in Section 1.2 of Schedule A, as further qualified in this paragraph (the
"Exempt Wholesale Service"), the parties agree to jointly develop this product.
Telmex may offer this Telmex branded service by means of a distribution channel
or similar business structure that is established or maintained in the United
States for the purpose of offering this Exempt Wholesale Service and/or other
products to customers whose principal place of business is in the United States
who seek to terminate traffic on the Telmex network in the Mexican and the
Latin American markets, provided that this exception from Section 3.5 for the
Exempt Wholesale Service may be withdrawn by Xxxxxxxx, as the Supplying Party,
if any of the following occurs:****. If either of provisos (a) or (b) should
occur, Xxxxxxxx shall, at its own discretion, (i) no longer be bound to offer
Exempt Wholesale Service Pricing (as defined in the following paragraph) with
respect to the Exempt Wholesale Service, and/or (ii) shall terminate offering
the Alliance Products and Services used by Telmex in offering the Exempt
Wholesale Service. Xxxxxxxx must exercise its rights in clauses (i) and (ii) set
forth directly above within sixty (60) days of when it learns or is otherwise
informed of the occurance of an event identified in provisos (a) or (b). No
failure to exercise or no delay in exercising the rights in clauses (i) or (ii)
shall operate as a waiver of such right in the future if a different situation
arises again permitting the exercise of such right.
Pricing for the Alliance Products and Services offered by Xxxxxxxx, as the
Supplying Party, which are used to jointly develop the Exempt Wholesale Service
shall be established through the mutual agreement of the Parties. Such pricing
will be set on an individual case basis with the goal of aggressively
addressing the target market. In this regard, Xxxxxxxx will exercise its best
reasonable efforts to offer pricing to Telmex that captures the opportunity and
yields acceptable returns to both Parties ("Exempt Wholesale Service Pricing").
In order to achieve the acceptable return anticipated by both Parties, ****
Telmex recognizes that Xxxxxxxx obligation under this Section is subject to the
exceptions listed in Section 2.1 above and Xxxxxxxx will be allowed to offer
other wholesale products into Mexico for customers under that provision.
****The term "Incremental Domestic Business" shall mean additional traffic
originating in the United States and terminating on the Xxxxxxxx network in the
U.S. from customers not previously utilizing the Xxxxxxxx network, which
additional traffic is secured in connection with such customer use of the Telmex
Branded Switched Voice Traffic U.S. Origin.
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5. RETAIL MARKET - TELMEX U. S. ORIGIN VOICE TRAFFIC
Xxxxxxxx agrees to develop with Telmex the Alliance Products and Services
identified in Section 1.2 of Schedule A so that Telmex can provide retail
service to customers originating traffic in the United States ("U. S. Retail
Voice Products"). The Parties will exercise their best reasonable efforts to
develop and deploy these U. S. Retail Voice Products in the market as soon as
possible.
****
6. USE OF FACILITIES
Nothing in any agreement between the Parties including the proposed
SBC/Telmex/WCI Alliance Agreement shall be construed to prohibit either Party
from using its own facilities or services owned or leased by itself or its
Controlled subsidiaries as of the Effective Date. Also the Supplying Party may
use its assets to provide services or products to any third parties.
7. OTHER ALLIANCE AGREEMENTS
In addition to this Agreement, the Parties will use their respective reasonable
best efforts to promptly negotiate and execute (i) an Interconnection
Agreement, (ii) a Sales and Marketing Agreement (including revenue sharing or
profit participation procedures as contemplated herein), and (iii) an
International Transport Services Agreement. The Parties intend to exercise
reasonable best efforts to complete these other "Alliance agreements" within
thirty (30) days after the "Closing" as that term is defined in the Securities
Purchase Agreement referenced in Section 8 of this Agreement. Further, the
Parties agree to discuss the benefits of negotiating a CPE Installation and
Maintenance Agreement and a Managed Services Agreement. With respect to the
Interconnection Agreement, ****. If the Parties can not agree on the settlement
pricing in any year, the last agreed upon price shall continue to apply until a
new settlement price is agreed upon (the "Interim Period"). Once the new
settlement price is agreed upon, the Parties shall apply the new settlement
price retroactively to the date of the Annual Settlement Price Adjustment and
shall issue any necessary credits for any overpayments made by a Party during
the Interim Period. The Parties also agree to exercise their reasonable best
efforts to renew and/or extend the term of the Interconnection Agreement so long
as this Agreement remains in force and effect.
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8. EQUITY INVESTMENT
Contemporaneously with this Agreement, Telmex and the parent company of
Xxxxxxxx are entering into a Securities Purchase Agreement of even date
herewith (the "Securities Purchase Agreement") whereby Telmex will purchase
equity (i.e., Class A common stock) in Xxxxxxxx Communications Group, Inc.
("WCG"), the parent company of Xxxxxxxx, in connection with the Initial Public
Offering of Xxxxxxxx Communications Group, Inc. stock ("IPO"). In recognition
of the strategic relationship set forth in this Agreement, if following the
IPO, Telmex owns Class A common stock and WCG plans to issue new or additional
common equity securities in a public offering solely for the purpose of raising
additional capital; WCG will negotiate with Telmex a right to purchase, with
respect to the issuance by the WCG of new or additional common equity
securities for cash, a portion of such new or additional equity securities in
order to reflect the development and the strength of the strategic relationship
formed by this Alliance. If the Parties agree that the strategic relationship
formed by this Alliance has been of increasing benefit to both Parties and that
additional equity is warranted by this increase in Alliance value, WCG shall
offer Telmex the right to purchase an agreed upon amount of such equity
securities, in a private transaction, at the price offered to the public in
connection with such issuance less any discounts or commissions per share from
the price offered to the public available to the underwriters.
9. GOVERNANCE
9.1. Alliance Governance
The Alliance shall be managed by an Alliance Council, Committees and
Alliance Managers.
9.2. Alliance Council
The "Alliance Council" shall consist of 3 members appointed by Telmex
and 3 members appointed by Xxxxxxxx. The Alliance shall be managed
under the direction of the Alliance Council, and the Alliance Council
shall have the authority to appoint, oversee, reorganize and direct the
activities of Committees (as defined below) provided that any binding
obligation will result only from the execution of a definitive
agreement by the Parties, if such an agreement is entered into. The
Alliance Council will also endeavor to resolve any disagreements
arising within a Committee. The Alliance Council shall meet every other
month for the first twelve months, and quarterly thereafter unless
otherwise agreed by the Parties. The initial chair of the Alliance
Council shall be appointed by Telmex for a one year term, and
thereafter the Party selecting the chair shall alternate between the
Parties each year.
9.3. Committees
The Alliance Council will form such other Alliance committees as to
which they may agree from time to time (the "Committees"). However, it
is anticipated that
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the Alliance Council will form Committees to address the design,
planning and implementation of network, operational support systems and
local access architectures and infrastructure associated with the
telecommunications facilities and associated services contemplated by
this Alliance. It is also expected that a Committee will be formed to
discuss common interfaces, methods and procedures, design, planning and
implementation of processes for service activation, service assurance,
capacity planning, billing and other operational functions.
The Alliance Council will establish Committee meeting times, Committee
objectives, initial "Projects" to be developed and other Committee
governance procedures when the Alliance Council creates a Committee. A
"Project" is a task pertaining to the telecommunications facilities and
services contemplated by the Alliance that is identified by the
Alliance Council or a Committee. The Project will be defined and
described in individual scope of work documents which shall be
developed by the Committee.
9.4. Regulatory Requirements
All activities of the Alliance Council and Committees shall be
conducted to ensure that both Parties are in full compliance with all
legal and regulatory requirements imposed upon either Party.
9.5. Timing and Notice
The Chairman of the Alliance Council shall determine the time and place
for meetings between the appointed representatives from each Party
("Meetings"). Meetings may also be called upon the agreement of any two
members provided that such two members were not appointed by the same
Party. Except in the event of an emergency, the Chairman or members
calling a Meeting shall provide each Committee or Alliance Council
member with at least fourteen (14) days advance written notice of the
time, place and agenda for such Meeting. No matter shall be finally
determined at any Meeting unless the matter was included in the agenda
distributed with the notice for that Meeting and described with
sufficient particularity to reasonably disclose the nature and
importance of the matter.
9.6. Quorum
At least one member appointed by each Party shall be required to be in
attendance in person or by phone in order to constitute a quorum for
any Meeting.
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9.7. Participation
Members may participate in a Meeting by teleconference or designate an
alternate member to participate in a Meeting on their behalf upon prior
written notice to the Chairman or members who called the Meeting.
9.8. Unanimous Vote
The Alliance Council and Committees shall act only by the unanimous
vote of all members participating in a Meeting upon a resolution
submitted in writing. Prior to the vote, the members will consult with
their respective Alliance Managers.
9.9. No Arbitration
The failure of a Committee or the Alliance Council to achieve a
unanimous vote with respect to a Project shall not be classified as a
Dispute subject to the arbitration procedures set forth in Section 11.4
and, if an unanimous vote cannot be attained, the Parties shall follow
the procedure set forth in Section 11.1 through 11.3 below and if a
unanimous vote still cannot be obtained, a Party's exclusive
alternative will be the ability to pursue the Project outside of the
Alliance pursuant to Section 9.10.
9.10. Further Cooperation
If a proposed Project and/or the scope of work associated with such
Project is not agreed to by both Parties, each Party will be free to
pursue such Project on its own or with third parties, subject only to
applicable restrictions on Confidential Information and use of
intellectual property. However, to the extent that the implementation
of the Project requires the cooperation of the other Party, each Party
will reasonably cooperate with the other in order to integrate the
Project into the Parties' networks.
10. ALLIANCE MANAGERS AND DEDICATED EMPLOYEES
10.1. Alliance Managers
The "Alliance Manager" is an individual appointed by each Party and
dedicated to managing the Alliance relationship. Telmex and Xxxxxxxx
will each designate one Alliance Manager from within their respective
organizations. It shall be the responsibility of the Alliance Manager
to:
10.1.1. Serve as the principal contact person for each Party to the other
concerning Alliance matters;
10.1.2. Expedite the accomplishment of accepted Projects;
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10.1.3. Coordinate the activities of the Parties in furtherance of the
goals of the Alliance;
10.1.4. Supervise dedicated employees that are employed by the Alliance
Manager's employer;
10.1.5. Consult with the members of the Alliance Council and keep them
informed of matters affecting the Alliance;
10.1.6. As agreed by the Parties, serve as spokespersons for the Alliance
in dealings with external constituencies; and
10.1.7. Seek any necessary internal approvals that may be necessary and
desirable to conduct the business of the Alliance.
10.1.8. Each Party will pay all the costs and expenses associated with
its Alliance Manager and dedicated employees, unless otherwise
specifically agreed.
11. DISPUTE RESOLUTION
11.1. Disputes.
The Parties shall attempt in good faith to resolve any controversy,
dispute or claim arising out of or relating to this Agreement or the
breach, termination, enforceability or validity thereof (collectively,
a "Dispute") promptly by negotiation between the Alliance Managers.
Either Party may give the other a written notice (a "Dispute Notice")
setting forth with reasonable specificity the nature of the Dispute and
the identity of any representative in addition to the Alliance Manager
who will attend and participate in the meetings at which the Parties
will attempt to settle the Dispute. Following the receipt of a Dispute
Notice, the representatives of both Parties shall meet as soon as is
practicable, but no later than in seven (7) days at a mutually
acceptable time and place to negotiate in good faith a settlement of
the Dispute, and shall meet thereafter as they reasonably deem
necessary.
11.2. Referral to CEO
If the Dispute has not been resolved within seven (7) days after
receipt of the Dispute Notice, then the Dispute shall be referred to
the Alliance Council to negotiate. If the Dispute can not be resolved
by the Alliance Council within seven (7) days after the referral, then
the Dispute shall be referred to the chief executive officer of the
ultimate parent corporation of each Party to the Dispute (the "CEO").
The CEOs shall promptly undertake good faith negotiations to settle
the Dispute, including meetings in person or by teleconference as the
CEOs may reasonably agree.
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11.3. Confidentiality of Negotiations
All negotiations pursuant to Sections 11.1 and 11.2 shall be
confidential and shall be treated as compromise and settlement
negotiations. Nothing said or disclosed, nor any document produced, in
the course of such negotiations which is not otherwise independently
discoverable shall be offered or received as evidence or used for
impeachment or for any other purpose in any current or future
arbitration or litigation.
11.4. Arbitration
If the Dispute is not resolved within sixty (60) days of the Dispute
Notice, the Parties agree that any controversies, disputes or claims
arising under or in connection with the scope of this Agreement, or
due to non-performance or breach hereof, shall be settled by
arbitration in accordance with the Rules of Arbitration of UNCITRAL
(United Nations Commission of International Trade Law).
Arbitration shall take place in the City of Toronto, Canada and three
arbitrators shall be designated as follows: One by Xxxxxxxx, another
by Telmex and a third arbitrator shall be appointed by the other two.
The arbitration award shall be issued no later than sixty (60) days
after the date arbitration was initiated and the resolution or award
shall be final and shall be in full force and effect.
The compensation and expenses of the arbitrators shall be borne
equally by the two Parties. Each Party to the dispute shall bear all
other expenses incurred by it, including its own attorney and witness
fees.
11.5. Waiver of Jury Trial
The Parties hereto hereby knowingly, voluntarily and intentionally
waive all right to trial by jury in any action, suit or proceeding
brought to resolve any Dispute whether sounding in contract, tort, or
otherwise, between the Parties here to arising out of, connected with,
related to, or incidental to this Agreement or the transactions
related hereto or any course or conduct, course of dealing, statements
(whether verbal or written) or actions of either Party. This provision
is a material inducement for the Parties hereto entering into this
Agreement.
11.6. Expenses
Except as otherwise expressly provided in this Agreement, each Party
hereto shall pay its own expenses incidental to the preparation of
this Agreement, the carrying out of the provisions hereof and the
consummation of the transactions contemplated hereby.
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11.7. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the state of New York in the United States, without giving
effect to the conflict of law rules thereof.
12. CONFIDENTIAL INFORMATION
12.1. Telmex and Xxxxxxxx recognize and understand that it may be desirable
to exchange information deemed to be proprietary by either Xxxxxxxx or
Telmex ("Confidential Information"). The disclosing Party shall xxxx
the Confidential Information in a manner to indicate that it is
considered proprietary, confidential, trade secret or otherwise subject
to limited distribution as provided herein. When Confidential
Information is provided orally, the disclosing Party shall, at the time
of disclosure, clearly identify the information as being proprietary or
confidential or otherwise subject to limited distribution as provided
herein. Such Confidential Information will be protected by the
receiving Party in the same manner as the receiving Party protects its
own Confidential Information. The receiving Party shall use any such
Confidential Information only in connection with this Agreement.
Upon the written request of the disclosing Party, the receiving Party
will return to the disclosing Party all writings and copies thereof
containing the Confidential Information of the disclosing Party or
destroy such information.
12.2. Notwithstanding any other provisions of this Agreement, the
obligations specified in Section 12.1 will not apply to any
information that:
12.2.1. Is already in the possession of the receiving Party, its parent,
subsidiaries or affiliates, without any corresponding non-disclosure
obligation,
12.2.2. Is independently developed by the receiving Party, its parent,
subsidiaries or affiliates,
12.2.3. Is or becomes publicly available without breach of this Agreement
12.2.4. Is rightfully received by the receiving Party from a third Party;
12.2.5. Is released for disclosure by the disclosing Party with its prior
written consent; or
12.2.6. Is disclosed in response to a valid order of a court or other
governmental body of Mexico or the United States or any political
subdivisions thereof; provided, however, that the receiving Party shall
first have given notice to the disclosing Party and made a reasonable
effort to
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obtain a protective order requiring that the information and/or
documents so disclosed be used only for the purposes for which the
order was issued.
13. TERM AND TERMINATION
13.1. Term
This Agreement shall remain in force and effect for twenty (20)
years, unless earlier terminated pursuant to the provisions of this
Agreement.
13.2. Termination Events Requiring Prior Notice
This Agreement may be terminated by the Notifying Party (as
hereinafter defined) by providing twenty (20) days prior written
notice to the other Party, if:
(i) ****;
(ii) the Parties can not execute the Interconnection
Agreement, the Sales and Marketing Agreement and the
International Transport Services Agreement within
thirty (30) days after the "Closing" as such term is
defined in the Securities Purchase Agreement or such
later time as the Parties may agree;
(iii) there is a "Change of Control" (as hereinafter
defined in Section 13.4) of either of the Parties;
(iv) if any change in law or regulation materially and
adversely affects the terms and conditions of the
Alliance;
(v) in the event that for any reason:
(a) the other Party fails to perform in any material
respect any of the terms of this Agreement or any of
the Alliance agreements, including, without
limitation, if such defaulting Party fails to make
any payment as agreed for any reason, including, but
not limited to, governmental monetary controls or
laws, regulations, decrees or restrictions of any
kind, and such default or breach shall continue
uncured for a period of thirty (30) days after the
non-defaulting Party gives the other written notice
of such default or breach;
(b) the other Party discontinues (after commencing)
the distribution of commercial quantities of any of
the Alliance Products or Services included in the
Alliance for any reason for a period of more than
thirty (30) days without the prior written consent of
the other Party, which consent shall not be
unreasonably withheld; or
(c) any part of this Agreement is not considered to
be, or ceases to be, in conformity with the laws,
regulations, consistent jurisprudence or court or
administrative decisions (relevant to this
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Agreement) of the territory of this Alliance and, as
a result thereof, any provision material to this
Agreement cannot be legally performed or enforced; or
(vi) In the event that Telmex is unable to terminate the
**** Agreements (as defined in Exhibit B) by the time
of "Closing" as that term is defined in the
Securities Purchase Agreement referenced in Section 8
of this Alliance Agreement, then either Xxxxxxxx or
Telmex shall have the right immediately to terminate
this Alliance Agreement.
Failure of any Party to terminate this Agreement shall not be deemed
a waiver of the right subsequently to do so under the same or any
other such reason. The Notifying Party shall exercise its termination
right within a reasonable period of time, but in no event more than
sixty (60) days from actual notice of the event or circumstances
permitting termination by such Party.
The "Notifying Party" shall be defined to mean either Party with
respect to the events set forth in Section 13.2 (ii), (iii), (iv),
(v) (c) and (vi). With respect to events in Section 13.2 (v) (a) or
(v) (b), the Notifying Party shall be the Party who has neither
defaulted nor failed to perform. With respect to Section 13.2 (i),
the Notifying Party shall be Xxxxxxxx.
13.3. Automatic Termination
This Agreement shall expire and terminate automatically and without
notice in the event that:
(i) any Party hereto commences a voluntary case or other
proceeding seeking liquidation, reorganization,
suspension of payments or other relief with respect
to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee,
receiver, liquidator, sindico, custodian or other
similar official of it or any substantial part of its
property, or consents to any such relief or to the
appointment of or taking possession by any such
official in an involuntary case or other proceeding
commenced against it, or makes a general assignment
for the benefit of creditors, or fails to pay a
substantial portion of its debts as they become due,
or takes any corporate action to authorize any of the
foregoing, or
(ii) any Party hereto or its business is nationalized, in
whole or part, or the shares of such Party or control
over such Party or over any substantial portion of
its assets or over its management is seized by any
government or any of its branches, departments or
agencies, including, but not limited to, the
military.
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13.4. Change of Control
A Change of Control means any transaction where one Party is acquired,
merged into or consolidated with or reorganized into another
corporation or legal entity and as a result of such transaction less
than a majority of the combined voting power of the then outstanding
securities of the Party immediately after the transaction are held in
the aggregate by the persons holding such securities immediately prior
to the transaction. A Change of Control shall not include any
transaction where the other party to the transaction is a wholly owned
subsidiary of the ultimate parent corporation of the Party.
13.5 Termination - Equity Investment
If this Agreement is terminated for any reason prior to the closing of
the IPO, then either Party shall have the option to terminate the
Securities Purchase Agreement.
13.6 Regulatory Frustration
In the event of any action or failure to act by any regulatory
authority that has the effect of materially frustrating or hindering
the purpose of one or more of the Alliance agreements or the ability
of the Parties to compete successfully by means of the Alliance, the
Parties will meet:
(i) to reevaluate the benefits of the Alliance,
(ii) to determine whether, and to what extent, the
Alliance may be continued, and
(iii) to negotiate in good faith regarding reasonable terms
and conditions for any termination of any of the
Alliance agreements or revisions to the Alliance
relationship.
If the Parties cannot reach agreement on the terms and conditions under
which the Alliance should continue, either Party shall have the right
to terminate the Alliance agreement which was the subject of such
action or failure to act by such regulatory authority upon twenty (20)
days prior written notice.
14. REPRESENTATIONS AND WARRANTIES OF TELMEX
Telmex hereby represents and warrants to Xxxxxxxx as follows:
14.1. Organization, Standing and Authority.
Telmex is a corporation duly organized, validly existing and in good
standing under the laws of Mexico. Telmex has all requisite corporate
power and authority
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to enter into this Agreement hereby and to consummate the transactions
contemplated herein. All corporate acts and other proceedings required
to be taken by Telmex to authorize the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and properly taken. This Agreement
has been duly executed and delivered by Telmex and constitutes the
legal, valid and binding obligation of Telmex, enforceable against
Telmex in accordance with its terms.
14.2. No Violation
The execution and delivery by Telmex of this Agreement and the
consummation of the transactions contemplated hereby and compliance
with the terms thereof will not, (i) conflict with or result in any
violation of any provision of the articles of incorporation or
by-laws, or the comparable organizational documents, (ii) conflict
with, result in a violation or breach of, or constitute a default, or
give rise to any right of termination, revocation, cancellation, or
acceleration, under, any material contract, concession or permit
issued to Telmex, except for any such conflict, violation, breach,
default or right which is not reasonably likely to have a material
adverse effect on the ability of Telmex to consummate the material
transactions contemplated by this Agreement or (iii) conflict with or
result in a violation of any judgment, order, decree, writ,
injunction, statute, law, ordinance, concession, permit, rule or
regulation applicable to Telmex or to the property or assets of
Telmex, except for any such conflict or violation which is not
reasonably likely to have such a material adverse effect.
14.3. Consents and Approvals
No consent, approval, license, permit, order or authorization of,
registration, declaration or filing with, or notice to, any domestic
or foreign court, administrative or regulatory agency or commission or
other governmental authority or instrumentality (each, a "Governmental
Entity") is required to be obtained or made by or with respect to
Telmex in connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
15. REPRESENTATIONS AND WARRANTIES OF XXXXXXXX
Xxxxxxxx hereby represents and warrants to Telmex as follows:
15.1. Organization, Standing and Authority
Xxxxxxxx is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Xxxxxxxx has all
requisite corporate power and authority to enter into this Agreement
and to consummate the transactions
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contemplated hereby. All corporate acts and other proceedings required
to be taken by Xxxxxxxx to authorize the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated thereby have been duly and properly taken. This Agreement
has been duly executed and delivered by Xxxxxxxx and constitutes the
legal, valid and binding obligation of Xxxxxxxx, enforceable against it
in accordance with its terms.
15.2. No Violation
The execution and delivery by Xxxxxxxx of this Agreement does not, and
the consummation of the transactions contemplated thereby and
compliance with the thereof will not (i) conflict with or result in
any violation of any provision of the certificate of incorporation or
by-laws of Xxxxxxxx, (ii) conflict with, result in a violation or
breach of, or constitute a default, or give rise to any right of
termination, revocation, cancellation, or acceleration, under, any
material contract, concession or permit issued to Xxxxxxxx, except for
any such conflict, violation, breach, default or right which is not
reasonably likely to have a material adverse effect on the ability of
Xxxxxxxx to consummate the material transactions contemplated by this
Agreement or (iii) conflict with or result in a violation of any
judgment, order, decree, writ, injunction, statute, law, ordinance,
concession, permit, rule or regulation applicable to Xxxxxxxx or to
the property or assets of Xxxxxxxx, except for any such conflict or
violation which is not reasonably likely to have such a material
adverse effect.
15.3. Consents and Approvals
No consent, approval, license, permit, order or authorization of,
registration, declaration or filing with, or notice to, any
Governmental Entity is required to be obtained or made by or with
respect to Xxxxxxxx in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated
hereby.
16. GENERAL PROVISIONS
16.1. Assignment
Neither Party may assign nor delegate any of its rights or obligations
under this Agreement without the consent of the other Party.
16.2. Costs and Expenses
Except as otherwise specifically agreed to by the Parties in writing,
each Party will be responsible for its own expenses arising under this
Agreement.
16.3. Amendment
No amendment of this Agreement shall be valid or binding on the
Parties unless such amendment shall be in writing and duly executed by
an authorized representative of each Party.
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16.4. Headings
Headings contained herein shall in no way limit the subject matter
they introduce and shall not be used in construing this Agreement.
16.5. Publicity
Neither Party shall make a public announcement about this Agreement or
the Parties' discussions related to any aspect of it without the
written consent of the other Party on the exact wording of such public
announcement. Either of the Parties may at anytime make announcements
which are required by applicable law, regulatory bodies, or stock
exchange or stock association rules, so long as the Party so required
to make the announcement, promptly upon learning of such requirement,
notifies the other Party of such requirement and discusses with the
other Party in good faith that exact wording of any such announcement.
16.6. Execution
This Agreement shall be executed in two duplicate copies, one for each
Party, each of which copies shall be deemed an original.
16.7. Limitation of Liability
Except to the extent expressly set forth in one of the Alliance
agreements, neither Party, nor its officers, employees, agents,
partners, affiliates or subcontractors shall be liable to the other
Party, its officers, employees, agents, partners, affiliates or
subcontractors for claims for incidental, indirect, consequential,
exemplary, punitive, or other special damages, including, but not
limited to, damages for a loss of profits or opportunity costs,
connected with or resulting from any performance or lack of
performance under any Alliance agreement regardless of whether a claim
is based on contract, warranty, tort (including negligence), theory of
strict liability, or any other legal or equitable principle.
16.8. Force Majeure
Neither Party shall be liable to the other for any failure to perform
or delay in performance due to causes beyond its reasonable control,
provided however, that the Party whose performance is impeded or
delayed agrees to take reasonable steps to overcome the same and to
promptly notify the other Party of the condition causing such failure
or delay and of the reasonable steps being taken.
16.9. Relationship of Parties
This Agreement and the Alliance agreements individually or in the
aggregate shall not be construed to create a partnership, joint
venture, or any other form of legal entity.
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16.10. Notices
Any notice, request, instruction or other document to be given
hereunder by any Party to any other Party under any section of this
Agreement shall be in writing and shall be deemed given upon receipt
if delivered personally or by telex or facsimile, the next day if by
express mail or five (5) days after being sent by registered or
certified mail, return receipt requested, postage prepaid to the
following addresses (or at such other address for a Party as shall be
specified by like notice provided that such notice shall be effective
only after receipt thereof):
If to Telmex: Telefonos de Mexico, S.A. de C.V.
Parque Xxx Xx. 000, xxxx 00
Xxx. Xxxxxxxxxx
Xxxxxx, 00000, D.F.
ATTN: General Counsel
Fax (000) 0000000
Telephone: (000) 000-00-00
If to Xxxxxxxx: Xxxxxxxx Communications, Inc.
Xxx Xxxxxxxx Xxxxxx, Xxxxx 00-X
Xxxxx, XX 00000
Attn: Contract Administration
Fax: 000-000-0000
Telephone: 000-000-0000
with a copy Xxxxxxxx Communications, Inc.
(which shall One Xxxxxxxx Center, Suite 4100
not constitute Xxxxx, XX 00000
notice) to: Attn: General Counsel
Fax: 000-000-0000
Telephone: 000-000-0000
16.11. Severability
In case any one or more of the provisions contained in this Agreement
shall for any reason be held to be invalid, illegal or unenforceable
in any respect by a court or other authority of competent
jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision hereof and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had
never been contained herein and, in lieu of each such illegal, invalid
or unenforceable provision, there shall be added automatically as a
part of this Agreement a provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable, it being the intent of the Parties to
maintain the benefit of the bargain for both Parties.
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16.12. Rules of Construction
Words used in this Agreement, regardless of the gender and number
specifically used, shall be deemed and construed to include any other
gender and any other number, as the context requires. As used in this
Agreement, the word "including" is not limiting, and the word "or" is
not exclusive. Except as specifically otherwise provided in this
Agreement in a particular instance, a reference to a Section, Schedule
or Exhibit is a reference to a Section of this Agreement or a Schedule
or Exhibit hereto, and the terms "this Agreement," "hereof," "herein,"
and other like terms refer to this Agreement as a whole, including the
Schedules to this Agreement, and not solely to any particular part of
this Agreement. The descriptive headings in this Agreement are
inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
The Parties to this Agreement do not intend that any other Person
shall obtain any rights as third party beneficiaries of this
Agreement.
This Agreement is executed in two counterparts this ____ of May 1999.
TELEFONOS DE MEXICO S.A. de X.X. XXXXXXXX COMMUNICATIONS, INC.
--------------------------------------- --------------------------------------
Signature of Authorized Representative Signature of Authorized Representative
--------------------------------------- --------------------------------------
Printed Name Printed Name
--------------------------------------- --------------------------------------
Title Title
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EXHIBIT A - EXCLUDED SUBSIDIARIES
TELMEX
****
XXXXXXXX
****
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EXHIBIT B - EXISTING CONTRACTS
XXXXXXXX COMMUNICATIONS:
****
TELMEX:
****
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SCHEDULE A--ALLIANCE PRODUCTS AND SERVICES
1. CURRENT ALLIANCE PRODUCTS AND SERVICES
1.1 Mutually Offered Services: Telmex and Xxxxxxxx will be the Supplying
Party to the other party for the following products and services.
1.1.1 Description of Private Line Service. Circuits which are
specifically dedicated to the use of Telmex or its customers and
Xxxxxxxx or its customers between a point on the Telmex network and a
point on the Xxxxxxxx network. Services are offered in XX-0, XX-0, and
optical SONET (OC-N) bandwidths in the US and X0, X0 and SDH (STM - X)
bandwidths in Mexico, with the required network interface being
applied at the network interconnection point to reconcile the
disparate national standards.
1.1.2 Description of Frame Relay Service. Frame Relay Service is a
multi-service technology that allows commercial end-users to use a
network of shared private lines to send and receive data from
geographically distant locations. Frame Relay can be defined as
packet-switched, multiplexed data networking technology supporting
connectivity between user equipment, such as routers, and a carrier's
frame relay network equipment. Description of International Frame
Relay Service. International Frame Relay Service is Frame Relay
Service offered between locations connected to the Telmex network and
locations connected to Xxxxxxxx network.
1.1.3 Description of International Switched Voice Service.
International Switched Voice Service is voice telecommunications
traffic which is transported over a public switched telephone network
in one country to a public switched telephone network in another
country. International Switched Voice Services include:
- International Direct Dial
- Home Country Direct
- International calling card calling
- International sent paid operator assisted calling
- International Toll-Free Service
1.2 Further Description of the Section 1.1.3 International Switched Voice
Service. The following are general descriptions of the individual
International switched voice services in Section 1.2.3 above. Detailed
product/service description will be defined in the International
Transport Services Agreement.
1.2.1. 1+ Voice Service - 1+ Voice Service provides On-Net
interexchange Service via Feature Group D in selected exchanges or
dedicated access lines for origination and transmission on the
Xxxxxxxx Network and termination of communications. Dedicated access
may be provided by Telmex, Xxxxxxxx or a
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Local Access Provider. Feature Group D access is provided by the Local
Exchange Carrier and allows Telmex to use its own CIC to route traffic
to Xxxxxxxx' facilities.
Except where Local Access Service is provided via dedicated access
facilities, Xxxxxxxx' 1+ Voice Service is available only in Feature
Group D local exchanges where the End User's telephone line(s) can be
programmed by the Local Exchange Carrier to automatically route "1+"
interLATA toll calls to the Xxxxxxxx Network.
Assuming CIP is provided by the originating office and each Telmex
Corporation Affiliate provides a separate CIC, PIC verification
(0-000-000-0000) will correctly brand the Services of Telmex and its
Affiliates, and such additional brands as Telmex or its Affiliates may
employ. The parties agree to explore and implement, if mutually
agreeable, a technical solution for such branding where alternative
solutions may be required.
Xxxxxxxx shall have principal responsibility for obtaining Local
Access facilities in the US for traffic originating on the Telmex US
or Mexico systems. Telmex shall have the principal responsibility for
obtaining Local Access facilities for traffic originating on the
Xxxxxxxx systems needing termination in Mexico.
1.2.2 Toll Free Service - offers Customers a toll free number (e.g.,
800, 888 or 877) and allows callers to reach the subscriber without
toll charges. The subscriber pays for all incoming calls made on its
assigned toll free number. Toll Free Service consists of a basic
service (assignment of a toll free telephone number and a toll free
calling area selected by the Customer) and additional features that
Customers can select.
1.2.3 Switched Toll Free Service - is an inbound long distance
service. This service terminates calls over the local telephone line
of Customer or its End Users, and calls are toll-free to the calling
party.
1.2.4 Dedicated Toll Free Service - is an inbound long distance
service. This service terminates calls over dedicated access lines
from Company's POP to the service location(s) of Customer or its End
Users, and calls are toll-free to the calling party.
1.2.5 Directory Assistance Service - offers Customers the ability to
provide their End Users with phone numbers, addresses and NPA/Country
codes and automatic call completion. A per-call charge is assessed
against the Customer for each call made by the Customer's
persubscribed End-Users. This charge applies whether or not the
Directory Assistance operator furnishes the requested telephone
number(s), e.g., the requested number is unlisted, non-published or no
record can be found. Requests for information other than telephone
numbers will be charged for as requests for telephone numbers.
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1.2.6 Directory Assistance Service - gives the option of completing a
call to the called station telephone number received from the
Directory Assistance operator without hanging up and originating a new
call. A call completion charge applies in addition to the Directory
Assistance per-call charge if the caller accepts the offer. The call
completion charge will not apply if the call cannot be completed.
1.2.7 Calling Card Service - is an inbound long distance service. This
service allows customer or its End Users to place long distance call
from locations other than their primary service location through the
use of 800 number network access and an authorization code.
1.2.8 Prepaid Calling Card Service - allows Telmex's End Users to
originate outbound, Direct Dial long distance call on a prepaid basis
via an 800 access number. All calls are rated on a flat-rate basis,
and are rounded for billing purposes to the next higher full minute.
Calls may only be charged against an account that has a sufficient
available balance. Customer shall be given notice two (2) minutes
before the available account balance is depleted, based upon the
applicable rates for the call in progress. When the available balance
is depleted, the call shall be terminated. A prepaid calling account
shall expire on the date specified on the card, unless replenished by
a charge to a commercial credit card as authorized by the Customer
beforehand. The End-User will use the access number on the Pre-Paid
Calling Card to access Xxxxxxxx Network. A flat per-minute rate will
be deducted on a real-time basis as the card is used until the full
amount of the card is exhausted.
1.2.9 Operator Service - consists of all call completion functions
performed either by a live operator or by automated systems. Such
functions include collect calling, third party billing and calling
card services. Access to Xxxxxxxx Operator Services can be obtained by
the following dialing methods: (A) "00" from a telephone subscribed to
Xxxxxxxx Network in a Feature Group D (FGD) area; (B) "0+
(NPA-NXX-XXXX)" from a telephone subscribed to Xxxxxxxx Network in a
FGD area; (C) "101XXXX+0: from any non-pay telephone in FGD area; and
(D) "1-800-XXXX" from an location.
2. PRODUCTS AND SERVICES TO BE CONSIDERED BY TELMEX AND XXXXXXXX. The following
products and services are available to Telmex by Xxxxxxxx as the Supplying
Party. Telmex is not positioned to offer these products as a Supplying Party to
Xxxxxxxx at this point but has committed to submit these products and services
to Xxxxxxxx as Alliance Products and Services in accordance with the terms of
this Agreement as they are developed and offered within the Telmex markets.
2.1 Description of On-Net ATM Service. Asynchronous Transfer Mode Service
(the "ATM Service") is multi-service technology on the Xxxxxxxx Network
that provides
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integration of disparate networks onto a single communications
infrastructure and meets the Technical Specifications for ATM Service
set forth in Schedule B. ATM technology encapsulates user data into
53-byte cells and transmits them over an ATM network. Xxxxxxxx' On-Net
ATM Service is designed for two (2) primary applications. These
applications include ATM transport and backbone connectivity. ATM
transport provides multimedia aggregation and video transmission.
Multimedia transmission is suited for transporting voice, data and
video while video transmission is best designed for point-to-point
video services. Backbone connectivity provides for the interconnection
of local area networks ("LAN(s)") as well as interconnection of
existing network access points ("NAP(s)") or private peering backbones.
2.2 Description of Internet Services.
2.2.1 IP Transport - IP Transport service provides the user with the
capability to interconnect an ISP to a point on the provider's
network. This may include connectivity to another ISP for peering, to
a data center, telehousing facility, Network Access Point or Internet
exchange point facility. Typical capacity is in the DS3 to OCN levels.
2.2.2 IP Transit - Dedicated access connectivity at the IP layer to
provide full Internet access to the customer service provider. IP
packets exchanged between the customer network and external networks
traverse the provider network, using Border Gateway Protocol (BGP) or
a similar routing protocol to establish the appropriate routing.
Dedicated Internet access provides connectivity at speeds ranging from
DS1 to OC3. Connectivity is provided into the most available Xxxxxxxx
POP.
2.2.3 Dedicated Access - Dedicated Access connectivity at the IP layer
to connect one or more associated customer end user sites. Dedicated
access provides full Internet connectivity at speeds ranging from DS1
to OC3.
2.2.4 Remote Access - Remote access connectivity to provide
traditional analog and ISDN connectivity to the Xxxxxxxx IP Network.
This service will be available at speeds up to 56kb in most major MSAs
where Xxxxxxxx has a Xxxxxxxx POP.
2.3 Description of Collocation Service. Collocation Service is a service
pursuant to which Telmex and its customers may place equipment in a
facility owned, leased or licensed and operated by Xxxxxxxx for the
purpose of interconnecting that equipment, including switches and
associated equipment, with the Xxxxxxxx network, the network of Telmex
or any Controlled subsidiary, or other third party network ("Collocation
Service"), Telmex shall complete a mutually agreed upon Collocation
Service Order.
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3. ANCILLARY SERVICES. Ancillary Services are those services incidental to
Xxxxxxxx' provision of the Product or Service, as the Supplying Party, as such
Services are identified in Schedule A (e.g. reconfiguration), or services
incidental to service provided by a Third Party for which such party imposes a
fee as established by that party.
4. PRICING FOR ALLIANCE SERVICES AND PRODUCTS. See Exhibits I and II,
respectively, for the Xxxxxxxx and Telmex pricing for the Alliance Products and
Services.
DEFINITIONS
"CIC" means carrier identification code.
"CIP" means carrier identification parameter.
"End User" means a natural person or legal entity which either; (1) orders
service through Telmex or Xxxxxxxx or (2) uses Xxxxxxxx' Casual Calling service
directly as a customer through dialing Xxxxxxxx' designated access code or
other access number.
"Feature Group D" or "FGD" means such feature as defined in the tariff of the
National Exchange Carrier Association.
"InterLATA Service" means long distance telecommunications service between
local access transport areas in the United States.
"ISP" means Internet Service Provider.
"Local Access" means the intraLATA telecommunications facilities connecting an
End User, including a Buyer-designated termination point, to an interexchange
carrier's POP within the same LATA, including, but not limited to Seller's POP.
"Local Exchange Carrier" or "LEC" means the local telephone company that
provides exchange telephone services.
"NAP" means network access point
"Off-Net" means a circuit that is not On-Net.
"On-Net" means a circuit traversing the Seller's network both end points of
which originate or terminate at a Seller designated Seller POP.
"PIC" means primary interexchange carrier.
"POP" or "Point of Presence" means a point of presence as commonly understood in
the industry.
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EXHIBIT I TO SCHEDULE A
XXXXXXXX'X NETWORK PRICING SCHEDULE
This Pricing Schedule is made as of this _____ day of ________________, 1999,
and is part of Schedule A to the Alliance Agreement by and between Xxxxxxxx'x
Network, a division of Xxxxxxxx'x Communications, Inc., a Delaware corporation
("Xxxxxxxx"), and Telefonos de Mexico, S.A. de C.V., a Mexican corporation
("Telmex"). The prices stated herein and any other term or condition of this
Schedule are applicable only to On-Net Services. Third-Party Services are
provided only on an individual case basis.
X. XXXXXXXX ON-NET ATM SERVICES
1. Recurring Rates & Charges: ATM service has three basic rate elements;
Local Access, Port Connections, and Bandwidth.
a. Local Access. Pricing for Local Access is determined in
accordance with the terms and conditions set forth in
applicable Alliance Agreements.
b. UNI Port Connections. Pricing for User Network Interface (UNI)
Port Connections is determined on the port speed connections
selected by Telmex. UNI Port Connections are currently
available at DS3, OC3 and OC12 speeds. Monthly recurring
charges for Port Connections are set forth in Table A.1 below.
Table A.1 Monthly Recurring Port Charges
****
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(i) There are two types of Bandwidth which can be selected,
the Virtual Channel Connection (VCC) or the Virtual Path
Connection (VPC). The type of bandwidth selected by the
Telmex does not determine the price.
(ii) Pricing for Bandwidth is determined based on the Class
of Service (CoS). Two Classes of Service are offered by
Xxxxxxxx: Constant Bit Rate (CBR) and Variable Bit Ratenon
real time (VBRnrt). CoS charges are stated in Committed
Information Rates (CIR) which are stated in Megabit per
second (Mbps) increments for one-way (Simplex) VCCs or VPCs.
CIR increments are available in 1Mbps increments up to 40Mbps
for DS3 ports, 5 Mbps increments up to 150 Mpbs for OC3 ports
and 25 Mbps increments up to 600 Mbps for OC12 ports. Monthly
recurring charges for Bandwidth are set forth in Table A.2
below.
Table A.2 Monthly Recurring Bandwidth Charges
***
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2. Non-Recurring Charges:
Non-recurring charges include installation, configuration
changes, order cancellations, and order changes that may be
incurred for the Port, VCC or VPC. Such non-recurring charges
are set forth in Table A.3 below.
Table A.3
****
Configuration change charges are applied when the bandwidth
sizes of a VCC or VPC are changed.
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Order Cancellation Charges apply when a PVC, VP or Port has
been ordered and needs to be canceled prior to the PVC, VP,
or Port having been installed and accepted.
Port Order Change Charges apply when Telmex requests to
change the port size ordered. If the Port has been installed
and accepted, Telmex will be charged for a new port
installation.
X. XXXXXXXX' ON-NET PRIVATE LINE SERVICES
1. Xxxxxxxx On-Net Private Line Service has three basic rate elements;
Interexchange charges, Local Access Charges and non-recurring charges.
a. Interexchange rates are determined in accordance with Table
B.3 below. Pricing for any Service not listed in such Table
is determined on an individual case basis and will be set
forth on Telmex's Service Order.
The minimum monthly charge for any Interexchange Circuit
ordered by Telmex shall be as follows:
Table B.1
****
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b. Non-Recurring Charges:
Table B.2
---------------------------------------------- -------------- ------------- -------------- ------------- --------------
Non-Recurring Charges DS-1 DS-3 OC-3 OC-12 OC-48
---------------------------------------------- -------------- ------------- -------------- ------------- --------------
****
---------------------------------------------- ------------------------------------ -----------------------------------
Installation charges shall apply to the normal installation
of equipment necessary to provide the requested Circuit to
the point of demarcation at the Telmex's premises. Additional
installation charges shall apply when Xxxxxxxx is required to
install equipment other than that normally required to
provide the Circuit or when Telmex requests special
equipment.
Non-recurring charges not described above will be considered
special requests and will be handled on an individual case
basis. All of the charges stated above are subject to change
with thirty (30) days' notice.
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Table B.3
-------------------------------------------------------------------------------
Private Line Rates
-------------------------------------------------------------------------------
****
X. XXXXXXXX' ON-NET FRAME RELAY SERVICES
1. Rates & Charges: Xxxxxxxx'x Network On-Net Frame Relay Service has
four principal rate elements: Local Access, Port Connections,
Permanent Virtual Circuits (PVCs), and Trunking charges.
Port Connections and PVCs can be categorized as being either a
User-to-Network Interface (UNI) type or Network-to-Network Interface
(NNI) type. An NNI port is defined as one end of a connection between
Xxxxxxxx'x frame relay network and another carrier's network. The
connecting carrier could be either a customer or Off-Net service
provider. Similarly, an NNI PVC is defined as one which has each end
of the PVC residing in two different carrier's frame relay networks,
rather than the originating and terminating points being in the same
carrier's network.
2. Conventional Frame Relay Services:
a. Local Access: Pricing for Local Access is determined in accordance
with the Terms and Conditions set forth in the applicable Alliance
Agreement.
b. Port Connections: Both UNI and NNI port charges are based solely on
the speed of the port selected by the Telmex. Available port speeds
range from 64 Kilobits per second (Kbps) to 1.536 Megabits per second
(Mbps). Available speeds are set forth in Table C.1 below. Monthly
recurring charges and installation charges for frame relay ports are
set forth in Table C.1 below. Other non-recurring charges are set
forth in Table C.3 below.
c. Permanent Virtual Circuit (PVC) bandwidth charges: UNI and NNI PVC
charges are both based solely on the bandwidth selected by Telmex.
Bandwidth charges are stated in Committed Information Rates (CIR)
which are stated in Kbps increments for one-way (Simplex) PVCs.
Available PVC-CIR speeds range from 4 Kbps to 1.024 Mbps. Available
speeds are set forth in Table C.1 below. Monthly recurring charges and
installation charges for Frame Relay PVCs are set forth in Table C.1
below. Other non-recurring charges are set forth in Table C.3 below.
d. Trunking Charges: The trunking charge is for the communication line
between the Xxxxxxxx'x Network switch and Telmex's switch. The
trunking charge is added to the rates set forth in Table C.1 below.
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Table C.1 Monthly Recurring Charges (MRC) and Installation Charges
--------------------------------------------------- ---------------- ---------------- ----------------
FRAME RELAY SERVICE SPEED/CIR 16.13. MRC 16.14.
COMPONENTS (KBPS) Install
--------------------------------------------------- ---------------- ---------------- ----------------
****
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------------------------------------------- ---------------- ---------------- ----------------
FRAME RELAY SERVICE SPEED/CIR 16.13. MRC 16.14.
COMPONENTS (KBPS) Install
------------------------------------------- ---------------- ---------------- ----------------
****
3. Enhanced On-Net Frame Relay Services:
a. Frame Relay/ATM Service Interworking:
Frame Relay/ATM Service Interworking ("FRASI") gives Telmex the
ability to communicate seamlessly between ATM and Frame Relay
locations. There is no additional charge for locations requiring ATM
beyond the standard ATM charges set forth in Section A of this Pricing
Schedule. Only Frame Relay PVCs can be
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used for FRASI service, as the smaller Frame Relay ports are unable to
handle the higher bandwidth ATM PVCs.
b. Flex-CIR Services: Xxxxxxxx'x Flex-CIR Service is designed to help
end-users in two ways:
1. Telmex can reserve the exact amount of bandwidth needed by
the end-user during the hours it is most critical.
2. Telmex can minimize network costs by `turning off' excess
bandwidth during the hours when it is least required.
Specifically, Telmex will be able to plan adjustments to PVC speeds
(or CIR) at quarter-hour increments (e.g. 8:00, 8:15, 8:30, 8:45,
etc.). Once Telmex has made a speed change, Telmex will not be able to
make another change for at least two (2) hours. Telmex shall have the
option of establishing different speed schedules for the same PVC
depending on the day of the week (e.g. turning a Flex-CIR PVC down
from its `weekday speed' of 000 Xxxx XXX to 64 Kbps CIR on the
weekend). Telmex and any end users will experience a momentary network
`hiccup' of one second or less at those predefined times when the
network adjusts the Telmex's CIR, per the Telmex's predefined
schedule, for a PVC which uses a Flex-CIR schedule. The configuration
charges for this Enhanced Frame Relay Service are provided in Table
C.2 below.
Table C.2
-------------------------------------------------------------------------------------
TIME-OF-DAY/DAY-OF-WEEK FLEX-CIR
PVC CHARGES
-------------------------------------------------------------------------------------
DESCRIPTION NRC (PER PVC) MRC (PER PVC)
-------------------------------------------------------------------------------------
****
Example:
Pricing Step 1: Telmex establishes the necessary CIR and times for the
XXX Flex-CIR Service as follows:
8 a.m. to 5 p.m.:1.024Mbps
5 p.m. to 8 a.m.: 64 Kbps
Once the times and CIR are known, Xxxxxxxx and Telmex may then prorate
the charges, based on the percent of time each CIR speed is scheduled
for use. In this example, assuming the standard Monthly Recurring
Charges are $600 for a 1.024Mbps CIR and $40 for a 64Kbps CIR, the
prorated charge would be calculated as follows:
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Business Hours: 9/24 hours * $600 (0.000Xxxx XXX) = $225
Nonbusiness Hours: 15/24 hours * $40 (00Xxxx XXX) = $25
Total Prorated Flex-CIR Charge: = $250.00 per month
Pricing Step 2: Next, Xxxxxxxx adds the speed change configuration
charges. There is a $30 fee every time the CIR is changed during a
Time-of-Day (XXX) schedule. In this example, the CIR speed changes two
times each day (i.e. 8 a.m. to 5 p.m. and 5 p.m. to 8 a.m.). The XXX
configuration charges would be calculated as follows:
XXX Configuration Charge = $30/daily speed change * 2 Changes
= $60 per month
Pricing Step 3: In order to determine the total monthly Flex-CIR cost
for this PVC, the Xxxxxxxx adds the "Prorated Charge" calculated in
Step 1 with the "XXX Configuration Charge" calculated in Step 2.
Monthly Recurring Flex-CIR PVC Cost: $250 + $60 = $310 per
month
Pricing Step 4: In order to determine the non-recurring charges for
this example, you first determine the installation charges. The
Installation charges for PVC's are $25 (you would add to this the
installation charge for the ports chosen by Telmex as well. Since
ports were not part of this example, the Port installation charges and
MRC have not been included). Since there are 2 PVC's (64 & 1.024 Mbps)
the total installation charge for the PVC's is $50. In addition,
Telmex would pay a one time non-recurring charge of $40 for the XXX
configuration. Therefore, in this example, Telmex's non-recurring
charges for the PVC's only would be $90.
4. Additional Non-recurring Charges: In addition to the non-recurring
installation charges set forth in Tables C.1 & C.2 above, Telmex may
incur additional non-recurring charges as set forth in Table C.3
below.
Table C.3
---------------------------------------------------------------------------------
Additional Non-Recurring Charges
---------------------------------------------------------------------------------
Description of Charge Charge
----------------------------------------- ---------------------------------------
****
Configuration charges are applied when the CIR of PVCs for Basic Frame
Relay Service are changed or when Telmex desires a change to the CIR
of PVCs in an
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already established Flex CIR Schedule (i.e. Telmex will not be charged
the $50 fee for changes to the CIR when establishing its initial
Flex-CIR schedule).
Order Cancellation Charges apply when a Telmex cancels an order prior
to its installation.
PVC Order Change Charges apply after design, but prior to installation
on a per PVC basis, when Telmex makes a change to the PVC size
ordered. If the PVC has been installed and accepted, Telmex will be
charged for a new PVC installation.
Port Order Change Charges apply after design, but prior to
installation on a per port basis, when Telmex requests to change the
port size ordered. If the Port has been installed and accepted, Telmex
will be charged for a new port installation.
D. VOICE SERVICES
Xxxxxxxx Network voice services will remain consistent with the
interconnect agreement until such time that the regulatory constraints
allow for a flexible international switched voice interconnect
settlement fee.
E. PRICING GENERAL CONDITIONS
1. All pricing set forth in Sections A, B and C above is Xxxxxxxx'x
current pricing. Such pricing and discounts are subject to change upon
thirty (30) days written notice by Xxxxxxxx to Telmex. Price changes
shall only be effective on a going-forward basis and shall not apply
to Service Orders previously placed by Telmex and accepted by
Xxxxxxxx. All pricing is subject to Preferred Provider and other
applicable provisions, including but not limited to Sections 2 through
5 of this Alliance Agreement.
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EXHIBIT II TO SCHEDULE A (TELMEX PRICING)
PRIVATE LINE PRICING
----------------------------------------------------------------------------------------------------
TARIFFS: "LADA ENLACES" 2 MBPS (E1) INTERNATIONAL CIRCUIT
MONTHLY
INSTALLATION RECURRING
CHARGE: CHARGE: DISTANCE (KM) FIXED CHARGE CHARGE/KM
----------------------------------------------------------------------------------------------------
****
-----------------------------------------------------------------------------------------------------
TARIFFS: "LADA ENLACES" N X 64 KPBS INTERNATIONAL CIRCUIT
MONTHLY
INSTALLATION RECURRING
CHARGE: CHARGE: DISTANCE (IN KM) FIXED CHARGE CHARGE/KM
-----------------------------------------------------------------------------------------------------
****
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-----------------------------------------------------------------------------------------------------
TARIFFS: "LADA ENLACES" N X 64 KPBS INTERNATIONAL CIRCUIT
MONTHLY
INSTALLATION RECURRING
CHARGE: CHARGE: DISTANCE (IN KM) FIXED CHARGE CHARGE/KM
-----------------------------------------------------------------------------------------------------
****
PRIVATE LINE PRICING:
o Private Line pricing is composed of three separate charges:
o Non-Recurring Installation Charge
o Monthly Recurring Fixed Charge
o Additional charge per kilometer based on distance from Telmex POP to
nearest border crossing point
o Additional local access is required from Telmex POP to customer site
o Additional fees, terms and conditions are provided in the product
commercial policies document
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-------------------------------------------------------------------------------
FRAME RELAY PRICING
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
FRAME RELAY MONTHLY PVC RECURRING CHARGE
****
FRAME RELAY PRICING:
o Frame Relay pricing is composed of three separate charges:
o Non-Recurring Installation Charge
o Port Monthly Recurring Fixed Charge
o Monthly PVC Recurring Charge per kilometer based on distance from
Telmex POP to nearest border crossing point
o Additional local access is required from Telmex POP to customer site
o Additional fees, terms and conditions are provided in the product
commercial policies document
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