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