EXHIBIT 10.33

 

[LETTERHEAD OF BT GROUP PLC]

 

August 19, 2004

 

Jose Collazo

Chairman of the Board, President and

Chief Executive Officer

Infonet Services Corporation

2160 East Grand Avenue

El Segundo, California 90245-1022

USA

 

Dear Sirs,

 

BT Group plc (BT) and Infonet Services Corporation (Infonet) have been engaged
in discussions concerning a possible business combination or other similar
transaction involving BT and Infonet (the Transaction). As used in this letter
agreement, the term Representatives means, as to any person, such person’s
affiliates and its and their respective directors, officers, employees, agents,
advisors (including, without limitation, financial advisors, counsel and
accountants) and controlling persons. As used in this letter agreement, the term
person shall include, without limitation, any corporation, company, partnership,
limited liability company, other entity, group or individual.

 

Infonet agrees that from the date hereof until the earlier of (x) the execution
of a definitive agreement by BT and Infonet providing for a Transaction and (y)
5:00 p.m., California time, October 29, 2004 (the Exclusivity Period) it will
negotiate exclusively with BT with respect to the Transaction and will not, and
will cause its Representatives not to, directly or indirectly:

 

  (1)   disclose to any person that discussions or negotiations are taking place
concerning a possible Transaction, except to the extent it has been determined
in good faith, after consultation with BT and with legal counsel, that
disclosure is required by law, provided that such disclosure is not required as
a result of action taken or proposed to be taken by Infonet (Infonet
acknowledges that BT reserves the right to end all discussions concerning a
Transaction if following any such consultation Infonet decides to make such
disclosure);

 

  (2)   solicit, initiate or encourage the submission of any proposal or inquiry
from any third party, or enter into or continue any discussions with any third
party, regarding: a potential business combination or merger with, sale of,
acquisition of securities of, investment in, or any similar transaction with,
Infonet or any of its subsidiaries; a sale of all or any substantial part of
Infonet’s (including its subsidiaries’) stock or assets, as the case may be; a
restructuring or recapitalisation of Infonet or any of its subsidiaries; a
license of all or a substantial part of Infonet’s intellectual property outside
of the ordinary course of business; or an acquisition by Infonet or any of its
subsidiaries of a material amount of stock or assets of any third party
(collectively, a Business Combination Proposal);

 

  (3)   provide any non-public information regarding Infonet to any third party
in connection with any Business Combination Proposal;

 

  (4)   recommend, propose, or enter into any agreement with respect to, a
Business Combination Proposal with any third party; or

 

  (5)   pay any dividends on any class of capital stock of Infonet.

 

Infonet represents and warrants to BT that it has terminated all prior
discussions it has had with any third party concerning a Business Combination
Proposal and that it is not currently engaged in any discussions or negotiations
with any third party concerning a Business Combination Proposal. Infonet further
agrees to promptly (within 24 hours) notify BT orally and in writing of any
contacts regarding any Business Combination

--------------------------------------------------------------------------------

Proposal with a third party on or after the date hereof, including the identity
of the third party and the material terms of any such Business Combination
Proposal (including type and amount of consideration), and will provide BT with
a copy of any written document (including e-mail) received from a third party
relating to a Business Combination Proposal. After termination of this
agreement, Infonet shall be free to resume discussions with any person or
entity.

 

Infonet hereby further agrees to use its best efforts during the Exclusivity
Period to facilitate BT’s due diligence investigation as reasonably requested by
BT.

 

In the event of any breach of the exclusivity provisions of this letter
agreement, or of the obligation set forth in the preceding paragraph, BT shall
be entitled to receive from Infonet on demand an expense reimbursement and
opportunity fee (the “Opportunity Fee”) of $7 million.

 

BT shall also be entitled to receive on demand the Opportunity Fee in the event
that, prior to 5:00 p.m., California time, October 29, 2004, (i) BT offers to
enter into a definitive agreement for a Transaction with a per share price,
payable in cash, of at least $2.06 for each class of shares (subject to suitable
adjustment in the event of any change to the issued share capital after the date
of this letter agreement) on terms that are customary for a U.S. public to
public merger transaction of this nature) (a “BT Qualified Offer”) and (ii)(x)
Infonet fails to enter into and announce publicly such definitive agreement or
(y) any non-KDDI Class A stockholder of Infonet (or, after KDDI becomes an
Agreeing Party, KDDI) fails to enter into an irrevocable undertaking with BT, on
terms customary for a U.S. public to public merger transaction of this nature,
to vote in favour of the proposed transaction; provided, however, that in no
event shall the aggregate Opportunity Fee payable pursuant to this paragraph and
the immediately preceding paragraph exceed $7 million. KDDI will become an
“Agreeing Party” if it gives written notification to Infonet, with a copy to BT,
that KDDI considers itself to be an Agreeing Party for the purpose of this
letter agreement.

 

Each of the parties hereto agrees that the Opportunity Fee payable pursuant to
the provisions of this letter constitutes liquidated damages, the amount of
which is the best estimate by the parties of the damages BT would suffer from a
breach of this letter agreement, it being agreed that it is extremely difficult,
if not impossible and impracticable, to fix the exact amount of damages that
would be incurred by BT as a result of such breach. Such liquidated damages
shall be BT’s sole and exclusive monetary recourse for any breach of this letter
agreement. In addition to such monetary recourse, Infonet agrees that BT and its
affiliates would be irreparably harmed by a material breach of the exclusivity
and best efforts provisions of this letter agreement by Infonet or any of its
Representatives, that monetary remedies would be inadequate to protect BT
against any actual or threatened material breach of the exclusivity and best
efforts provisions of this letter agreement and, without prejudice to any other
rights and remedies otherwise available to BT, Infonet agrees to the granting of
equitable relief, including injunctive relief, in favour of BT with respect to
the exclusivity and best efforts provisions of this letter agreement without
proof of actual damages or the posting of any security bond. It is further
understood and agreed that no failure or delay by BT in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder.

 

If any provision of this letter agreement shall, for any reason, be adjudged by
any court of competent jurisdiction to be invalid or unenforceable, such
judgment shall not affect, impair or invalidate the remainder of this letter
agreement but shall be confined in its operation to the provision of this
agreement directly involved in the controversy in which such judgment shall have
been rendered.

 

This letter agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the principles of conflicts of
law to the extent that such principles would result in the application of the
law of another jurisdiction. Each party hereby irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York located in the
City of New York in connection with disputes arising under this letter agreement
and agrees that it will not attempt to deny or defeat such jurisdiction by
motion or other request for leave from any such court. Each party hereby waives
the right to plead or claim, and agrees not to plead or claim, that any action,
suit or proceeding arising under this letter agreement that is brought in any
such court has been brought in an inconvenient forum. Each party hereby
irrevocably waives, and agrees not to assert, any right to a trial by jury in
connection with disputes arising under this letter agreement.

--------------------------------------------------------------------------------

This letter agreement constitutes the entire agreement between the parties
concerning the exclusivity arrangement for negotiations between the parties, and
supersedes all prior and contemporaneous agreements, understandings and
agreements, written or oral, between the parties with respect to the subject
matter hereof, other than the Confidentiality Agreement dated 27 February 2004.
For the avoidance of doubt, Infonet’s Class A stockholders shall not be deemed
Infonet’s Representatives for purposes of this letter agreement, unless they are
acting under the direction, or at the instigation or encouragement, of Infonet.
Notwithstanding anything in this letter agreement to the contrary (but without
limiting Infonet’s obligation to pay the Opportunity Fee under the circumstances
set forth above), neither party shall be legally bound in any way to enter into
a Transaction unless and until each party formally executes and delivers to the
other party a definitive agreement with respect thereto. No modification of this
letter agreement or waiver of the terms or conditions hereof shall be binding
upon any party unless approved in writing by the other party.

 

This letter agreement shall inure to the benefit of the parties hereto and their
successors and permitted assigns. Any assignment of this letter agreement by any
party without the prior written consent of the other parties shall be void. This
letter agreement may be executed in counterparts, each of which shall be deemed
to be an original and shall constitute the same agreement.

 

This agreement shall be effective with respect to each of the parties as of the
date first written above and shall terminate upon the earlier of (i) 5:00 p.m.,
California time, on October 29, 2004 (unless BT shall have submitted prior to
the date a valid BT Qualified Offer, in which case the termination date shall be
extended for a reasonable period of time to allow BT and Infonet to finalize
negotiations on the form of the BT Qualified Offer and for the Class A
stockholders to sign their respective undertaking) and (ii) the date as of which
KDDI or BT informs Infonet that it has ceased negotiations with BT or KDDI, as
the case may be, concerning matters related to the Proposed Transaction
(provided that this clause (ii) shall become void as of the time at which KDDI
becomes an Agreeing Party and, as of that time, this agreement shall no longer
be terminable pursuant to this clause (ii)). Infonet shall have the right to
terminate this letter agreement, without incurring an obligation to pay the
Opportunity Fee (unless such obligations shall have otherwise accrued prior to
such termination), if (I) BT informs Infonet in writing that it no longer
intends to pursue a Transaction or (II) (a) Infonet gives written notice to BT
that it proposes to terminate this letter agreement on the grounds that BT has
ceased active work on a potential Transaction, (b) Infonet is in compliance with
its obligation to use its best efforts during the Exclusivity Period to
facilitate BT’s due diligence, and (c) BT fails to demonstrate, to Infonet’s
reasonable satisfaction, within three business days of receipt of written notice
from Infonet, that BT is in fact continuing to work actively on the Transaction
(which work could include due diligence, analysis of due diligence, analysis of
possible Transaction structures, negotiation or discussions with one or more
Class A stockholders, preparation of drafts of definitive documentation and the
like).

 

Infonet acknowledges that BT’s willingness to continue discussions and expend
resources to complete its due diligence investigation constitutes sufficient
consideration for Infonet’s obligations under this agreement.

 

If you are in agreement with the foregoing, please indicate your acceptance by
signing below and returning an executed copy of this letter.

 

Very truly yours,

 

PETER CROSS

Director, Corporate Finance

BT Group

 

Accepted and agreed

as of the date first above written:

 

INFONET SERVICES CORPORATION By:  

/s/ J.A. COLLAZO

Name:

 

J.A. Collazo

Title:

 

Chairman & President