CONFIDENTIAL TREATMENT REQUESTED PLACES WHERE INFORMATION HAS BEEN REDACTED HAVE BEEN

EXECUTION COPY

 

Exhibit 10.2

 

 

CONFIDENTIAL TREATMENT REQUESTED

 

PLACES WHERE INFORMATION HAS BEEN REDACTED HAVE BEEN

 

MARKED WITH (*******)

SERVICES AGREEMENT

 

BY AND AMONG

 

SBC COMMUNICATIONS INC.

 

AT&T CORP.

 

and

 

TIME WARNER TELECOM HOLDINGS INC.

 

 

June 1, 2005

 

Restricted Proprietary Information

For use and disclosure only to authorized employees, agents or contractors of SBC, AT&T, TWTC

and their respective affiliates. Copies may not be made without the express consent of SBC, AT&T and TWTC.

 

TABLE OF CONTENTS

 

 

Restricted Proprietary Information

For use and disclosure only to authorized employees, agents or contractors of SBC, AT&T, TWTC

and their respective affiliates. Copies may not be made without the express consent of SBC, AT&T and TWTC.

 

Schedules

 

 

Exhibits

 

 

[remainder of page intentionally left blank]

 

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For use and disclosure only to authorized employees, agents or contractors of SBC, AT&T, TWTC

and their respective affiliates. Copies may not be made without the express consent of SBC, AT&T and TWTC.

 

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SERVICES AGREEMENT

 

This Services Agreement (this “ Agreement ”), dated as of June 1, 2005, and effective pursuant to Section 2.1 hereof, is made by and among SBC Communications Inc. a holding company formed under the laws of the State of Delaware (acting on behalf of its operating Affiliates, “ SBC ”), AT&T Corp., a New York corporation (including its Affiliates, “ AT&T ”), and Time Warner Telecom Holdings Inc., a Delaware corporation (including its Affiliates, “ TWTC ”). SBC, AT&T and TWTC may be individually referred to as a “ Party ” and collectively referred to as the “ Parties .”

 

WITNESSETH

 

WHEREAS , SBC, AT&T and Merger Sub (as defined in the Merger Agreement) have previously entered into that certain Agreement and Plan of Merger, dated as of January 30, 2005 (the “ Merger Agreement ”), pursuant to which Merger Sub will be merged with and into AT&T at the Effective Time; and

 

WHEREAS, AT&T and TWTC have previously entered into that certain Agreement between Time Warner Telecom and AT&T Corp., dated as of January 1, 2001, and as amended by that First Amendment to the Agreement, effective April 9, 2002, by that Second Amendment to the Agreement, effective January 1, 2003, by that Third Amendment to the Agreement, effective March 1, 2003, by that Fourth Amendment to the Agreement, effective March 19, 2003, by that Fifth Amendment to the Agreement, effective July 1, 2003, by that Sixth Amendment to the Agreement, effective January 1, 2004 (the “ Sixth Amendment ”), by that Seventh Amendment to the Agreement, effective August 1, 2004, by that Eighth Amendment to the Agreement, effective December 1, 2004, and by that Ninth Amendment, effective February 1, 2005 (the “ Ninth Amendment ,” and collectively, the “ AT&T/TWTC Agreement ”), pursuant to which TWTC agreed to provide to AT&T the Services described therein and pursuant to the terms thereof; and

 

WHEREAS, the AT&T/TWTC Agreement further requires that AT&T commit to pay TWTC the Total Cumulative Revenue Commitment, as described therein; and

 

WHEREAS , SBC Telecom, Inc., an Affiliate of SBC, (“ SBCT ”) and TWTC have previously entered into that certain Agreement, dated as of December 22, 2003, pursuant to which TWTC agreed to provide certain services to SBCT (together with any agreements for the provision by TWTC to SBCT of similar services, the “ SBCT/TWTC Agreements ”); and

 

WHEREAS , TWTC acknowledges that it is a strong competitor of, and supplier to, each of SBC and AT&T and, after the Effective Time, will remain a strong competitor of, and supplier to, the Combined Business; and

 

WHEREAS , each of SBC and AT&T acknowledges that TWTC is a strong competitor of, and supplier to, each of SBC and AT&T and, after the Effective Time, will remain a strong competitor of, and supplier to, the Combined Business; and

 

Restricted Proprietary Information

For use and disclosure only to authorized employees, agents or contractors of SBC, AT&T, TWTC

and their respective affiliates. Copies may not be made without the express consent of SBC, AT&T and

TWTC.

 

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WHEREAS, each of the Parties agrees that it is in their respective best interests to promote vigorous competition in the telecommunications industry among product and service providers and, pursuant to that end, for TWTC to remain a supplier of goods and services to industry participants;

 

WHEREAS, in order to further promote such competition, the Parties desire, among other things, to (i) extend the term and otherwise modify the AT&T/TWTC Agreement and (ii) include all revenue generated by the purchase of Eligible Services by SBC and certain revenue generated by the purchase of Eligible Services by Cingular in AT&T’s revenue commitments pursuant to the AT&T/TWTC Agreement;

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

The following definitions shall apply whenever the words appearing in bold are used in the Agreement:

 

“ Affiliate ” shall have the meaning ascribed to such term in Section 18.A.ii of the AT&T/TWTC Agreement. A list of current SBC Affiliates is set forth in Exhibit B attached hereto and incorporated by reference. Upon request, SBC shall provide reasonable notice to TWTC of each entity that becomes an “Affiliate” of SBC (other than AT&T and its Affiliates immediately prior to the Merger) subsequent to the execution of this Agreement. For purposes of this Agreement, Cingular, as defined below, will not be deemed to be an Affiliate of the Combined Business.

 

“ Agreement ” shall have the meaning ascribed to such term in the preamble to this Agreement.

 

“ Annual Revenue Commitment ” shall have the meaning ascribed to such term in the AT&T/TWTC Agreement.

 

“ AT&T ” shall have the meaning ascribed to such term in the preamble to this Agreement.

 

“ AT&T/TWTC Agreement ” shall have the meaning ascribed to such term in the recitals to this Agreement.

 

“ Change in Control ” shall mean in or as a result of a transaction described below with one of the companies set forth in Schedule I attached hereto, including any Affiliate thereof, and such companies’ successors (“ TWTC Acquirors ”):

 

(i) the consummation of the merger or consolidation of TWTC, directly or indirectly, with or into a TWTC Acquiror (except a merger or consolidation in which the holders of voting power of the TWTC immediately prior to such merger or consolidation continue to hold at least 50% of the voting power of

 

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and their respective affiliates. Copies may not be made without the express consent of SBC, AT&T and

TWTC.

 

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TWTC or the surviving or acquiring entity), (ii) the closing of the transfer (whether by merger or consolidation or otherwise), in one transaction or a series of related transactions, to a TWTC Acquiror, of TWTC’s securities if, after such closing, the TWTC Acquiror, directly or indirectly, would hold 50% or more of the outstanding voting power of TWTC or (iii) a sale of all or substantially all of the assets of TWTC.

 

“ Cingular ” means Cingular Wireless LLC, a Delaware limited liability company, and its Affiliates. For purposes of this Agreement, SBC, AT&T and the Combined Business will not be deemed to be Affiliates of Cingular.

 

“ Combined Business ” means the combined business of SBC and AT&T upon the effectiveness of the Merger. For the avoidance of doubt, the Parties acknowledge and agree that “Combined Business” shall not include Cingular.

 

“ Control ” means the possession, direct or indirect, of the power to direct or cause the direction of management and policies of a person or entity, whether through the ownership of voting securities, by contract, or otherwise.

 

“ Effective Time ” shall mean the date on which the New York Certificate of Merger has been filed by the Department of State of the State of New York or at such later time as may be agreed by the parties to the Merger Agreement in writing and specified in the New York Certificate of Merger.

 

“ Eligible Services ” shall have the meaning ascribed to such term in Section 30.B of the AT&T/TWTC Agreement.

 

“ Merger ” shall mean the merger of Tau Merger Sub Corporation, a New York corporation and a wholly-owned subsidiary of SBC Communications, Inc., with and into AT&T Corp.

 

“ Merger Agreement ” shall have the meaning ascribed to such term in the recitals to this Agreement.

 

“ New York Certificate of Merger ” shall mean that Certificate of Merger to be executed, acknowledged and delivered to the Department of State of the State of New York as provided in Section 904 of the New York Business Corporation Law, as amended.

 

“ Ninth Amendment ” shall have the meaning ascribed to such term in the recitals to this Agreement.

 

“ Party ” and “ Parties ” shall have the meanings ascribed to such terms in the preamble to this Agreement.

 

“ SBC ” shall have the meaning ascribed to such term in the preamble to this Agreement.

 

“ SBCT ” shall have the meaning ascribed to such term in the recitals to this Agreement.

 

“ SBC/TWTC Agreement ” shall have the meaning ascribed to such term in the recitals to this Agreement.

 

“ Securities Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.

 

Restricted Proprietary Information

For use and disclosure only to authorized employees, agents or contractors of SBC, AT&T, TWTC

and their respective affiliates. Copies may not be made without the express consent of SBC, AT&T and

TWTC.

 

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“ Services ” shall have the meaning ascribed to such term in the AT&T/TWTC Agreement.

 

“ Sixth Amendment ” shall have the meaning ascribed to such term in the recitals to this Agreement.

 

“ Total Cumulative Revenue Commitment ” shall have the meaning ascribed to such term in the AT&T/TWTC Agreement.

 

“ TWTC ” shall have the meaning ascribed to such term in the preamble to this Agreement.

 

ARTICLE II

 

EFFECTIVE DATE AND TERM

 

2.1	Effective Date and Term .

 

This Agreement shall become effective as of the Effective Time. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall this Agreement become effective unless and until the Merger shall become effective. TWTC has no pending filings and will submit no new filings with respect to the Merger review, however, nothing in this section will be construed to mean that TWTC will not comply with any government or state agency requests for information as such requests relate to the Merger review or continue its normal course regulatory activity as necessary. This Agreement will terminate pursuant to ARTICLE VI.

 

ARTICLE III

 

AT&T/TWTC AGREEMENT

 

3.1	Amendments .

 

Subject to Section 8.6 of this Agreement, the AT&T/TWTC Agreement is hereby amended as follows:

 

3.1.1

Extension of Term . Section 2.A of the AT&T/TWTC Agreement, as specifically amended pursuant to the Sixth Amendment, is hereby deleted and replaced with the following Section 2.A:

 

2.A This Agreement will be effective as of the Effective Date (i.e. January 1, 2001), and will remain in effect for a term of ten (10) years from the Effective Date (“ Term ”), unless terminated at an earlier date or unless renewed or extended, as provided in this Agreement.

 

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and their respective affiliates. Copies may not be made without the express consent of SBC, AT&T and

TWTC.

 

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3.1.2

Revenue Commitment .

 

3.1.2.1

Section 30.A.iii of the AT&T/TWTC Agreement, as specifically amended pursuant to the Sixth Amendment, is hereby amended by adding the following language to the end of Section 30.A.iii:

 

Notwithstanding the foregoing, Term years 9 and 10 shall be treated as a single Term year ending December 31, 2010 (the “ Extension Period ”) (or such later date as is required pursuant to the provisions of this Section 30.A.iii below), and any Annual Deficiency for the Extension Period shall only become payable in immediately available funds within thirty (30) days from the date of delivery of the notice of non-compliance for the Extension Period, which shall occur no earlier than the last business day of the calendar month following the