Document:

exv10w18

 

Exhibit 10.18

“English Translation”

EQUIPMENT RENTAL AGREEMENT

	 	 	 
	BETWEEN:	 	
LES SERVICES DE LOCATION HEARING CARE OF AMERICA (SLHCA) INC., a
duly incorporated corporation established for a private interest,
having its head office at 2770 Chemin du Lac, Longueuil, Quebec,
J4N 1B8, herein represented by Mr. Steve Forget, duly authorized
as he so declares,
	 
	 	 	
(Hereinafter referred to as the “Lessor”);
	 
	AND:	 	
COUSINEAU, DOUCET, PARENT, FORGET, AUDIOPROTHÉSISTES, s.e.n.c., a
general partnership, having its head office at 44 Côte du Palais,
Quebec City, Province of Quebec, G1R 4H8, herein represented by
Mr. Martin Cousineau, duly authorized as he so declares,
	 
	 	 	
(Hereinafter referred to as the “Lessee”);

THE PARTIES AGREE AS FOLLOWS:

	1.	 	The Lessor leases to the Lessee, and the Lessee agrees to lease from the
Lessor, all the equipment and property in replacement therefor needed for
the practice of the profession of hearing aid acoustician and meeting the
standards required by applicable laws (hereinafter referred to as the
“Equipment”), for the duration and at the rates referred to in Schedule
“B” hereto.
	 
	2.	 	All applicable taxes including, but not limited to, the goods and
services tax and the Quebec sales tax shall be added to the sums due by
the Lessee to the Lessor hereunder.
	 
	3.	 	Any amount due hereunder not paid by the Lessee to the Lessor on the due
date shall bear interest at the prime rate of the Lessor’s banker plus
five percent (5%) per annum.
	 
	4.	 	The Lessor shall cause the Equipment to be used only by competent and
duly qualified employees in a proper manner according to the
manufacturer’s instructions. The Equipment hereby leased shall be used
solely for professional purposes.
	 
	5.	 	The Lessee acknowledges that the Lessor has made no representations or
given any warranties, either express or implied, as to the condition of
the Equipment and the Lessee accepts the Equipment in its current
condition.

 

 

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	6.	 	The Lessee shall ensure that the Equipment is not encumbered by any
charge of any kind whatsoever and shall pay any and all taxes, permits,
assessments and/or fines that may be collected or levied on or in relation
to the Equipment or the use thereof.
	 
	7.	 	The terms and conditions appearing in Schedule “A” hereto shall form an
integral part of this Agreement and have been initialled by the parties.
	 
	8.	 	This Agreement may be renewed by agreement between the parties.

IN WITNESS WHEREOF, THE PARTIES HAVE SIGNED AT Montreal, ON DECEMBER 1, 2000

THE LESSOR:

LES SERVICES DE LOCATION HEARING CARE OF AMERICA INC.

	 	 	 
	By:	 	 
	 	 	

Steve Forget

THE LESSEE:

COUSINEAU, DOUCET, PARENT, FORGET, AUDIOPROTHÉSISTES, s.e.n.c.

	 	 	 
	By:	 	 
	 	 	

Martin Cousineau

 

 

SCHEDULE “A”

	1.	 	The word “Equipment” as used herein includes all accessories and spare
parts and any change, addition, improvement and/or partial or complete
replacement thereof or thereto, the whole subject to the terms and
conditions set forth herein.
	 
	2.	 	The Lessor shall, at its own expense, take out general liability
insurance and maintain such insurance in effect for the duration of this
contract.
	 
	3.	 	The Equipment shall be and remain movable property at all times for the
duration of this lease.
	 
	4.	 	The Lessee agrees to indemnify and hold harmless the Lessor from and in
respect of any and all claims, actions, suits, proceedings, costs,
expenses, losses and liabilities, including the fees of its legal counsel,
resulting from or relating to the Equipment, but not limited thereto.
	 
	5.	 	The Lessor shall, at its own expense, maintain the Equipment in good
working order and repair at all times and shall supply each and every
part, piece and device needed to maintain the Equipment in good working
order and repair.
	 
	6.	 	The Lessee shall not make any change, addition or improvement to the said
Equipment without the Lessor’s prior written consent. Any such change,
addition or improvement so made shall be and remain the Lessor’s property.
	 
	7.	 	The Lessor and its specifically designated employees or agents shall have
reasonable access to the said Equipment at all times for the purpose of
inspecting, maintaining or repairing same.
	 
	8.	 	The Lessee may not transfer, surrender or sublease the Equipment, nor may
this lease be assigned by the Lessee without the Lessor’s written
permission, which permission may be withheld by the Lessor in its sole
discretion for any reason. If permission is granted by the Lessor, such
permission shall not relieve the Lessee of any of its obligations
hereunder.
	 
	9.	 	Each of the following events shall constitute an event of default:

	 	a)	 	if the Lessee makes an assignment for the benefit of its
creditors;
	 
	 	b)	 	if a receiver, trustee or other similar official is appointed
to administer the property of the Lessee;
	 
	 	c)	 	if a petition in bankruptcy or a petition for reorganization
is made by or against the Lessee;
	 
	 	d)	 	if the Lessee commits any other act of bankruptcy or if a
winding-up order is issued by a competent court;
	 
	 	e)	 	if a serious threat exists that all or any part of the
Equipment could be confiscated, sequestered or seized by judicial
authority;
	 
	 	f)	 	if the Equipment or a part thereof is in danger of being
lost, damaged or destroyed by any cause or for any reason;

 

 

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	 	g)	 	if the Lessee becomes insolvent;
	 
	 	h)	 	if the Lessee fails to abide by or perform any term,
undertaking or condition of this lease or any other lease or
agreement that is or may be entered into by and between the Lessor
and the Lessee;
	 
	 	i)	 	if the Lessee fails to make its rental payments on time or to
pay the Lessor, on request, any other sum owed as specified herein.

	10.	 	Upon the occurrence of any event of default, the Lessor may terminate
this lease with or without notice to the Lessee, whereupon the Lessee
shall be required to return the Equipment to the Lessor and surrender
possession of the premises and shall also be liable to the Lessor for full
payment of the rental, which shall become immediately due and payable. In
addition, the Lessee shall be liable for any loss that the Lessor may
sustain owing to the Lessee’s breach of contract.
	 
	11.	 	All rights and/or remedies conferred on the Lessor hereunder may be
exercised in the Lessor’s sole discretion and are cumulative, not
alternative, and may be exercised by the Lessor separately or together, in
any order, sequence or combination.
	 
	12.	 	The Lessor shall have no obligation to allow the Lessee to cure a
default. Should the Lessor, in its sole discretion, allow the Lessee to
cure a default, such action by the Lessor shall not be deemed to
constitute express or tacit acceptance of any events of default that occur
thereafter.
	 
	13.	 	The Lessee acknowledges that the Lessor may from time to time change the
rates applicable in accordance with the provisions of this Agreement and
the schedules hereto, so as to take into consideration any change that the
Lessor is called upon to make for any reason, such as, but not limited to,
any change of premises and/or any renewal or replacement of the said
Equipment. The rates charged hereunder shall be those set forth in
Schedule “C” hereto.
	 
	14.	 	Upon the expiry of the term contemplated in Schedule “A” hereto or the
expiry of any renewal period, the Lessee shall, at its own expense, return
the Equipment, which it shall have first packaged for shipping according
to the Lessor’s instructions, to the Lessor at the location designated by
the Lessor or a carrier operating in the municipalities where the
Equipment is located. If the Lessee fails to proceed in this manner within
ten (10) days following the expiry of the term of this Agreement, the
Lessor shall be entitled to repossess the Equipment in the premises where
same is located, at the Lessee’s expense, with or without judicial
process, the Lessee waiving in advance any claim for damages which it
might otherwise assert by reason of the action of the Lessor or its
authorized agents. The decision of the Lessor not to request or demand the
immediate return of the Equipment upon the expiry of this Agreement shall
not be deemed to constitute a renewal of this Agreement, in whole or in
part, by the Lessor in favour of the Lessee. Notwithstanding the
foregoing, if the Lessee, for any reason, should remain in possession of
the Equipment after the expiry of the term, the Lessee shall pay the
additional rental for the period for which its possession of the Equipment
is extended, at the same rate as the rental stipulated herein.
	 
	15.	 	All notices hereunder must be given in writing.
	 
	16.	 	Any notice shall be validly given if delivered in person, sent by
registered mail or faxed to the intended recipient at the address first
stated above.

 

 

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	17.	 	Any notice given in the manner aforesaid shall be deemed to have been
received at the time of delivery if delivered in person, on the third
business day following the mailing date if mailed, or on the business day
following the transmission date if faxed.
	 
	18.	 	Each party may notify the other, in the manner aforesaid, of any change
of address for purposes of the giving of notices.
	 
	19.	 	The parties acknowledge that title to and ownership of the Equipment
vests and shall at all times vest in the Lessor. The Lessee shall have no
ownership rights therein other than the right to use the Equipment.
	 
	20.	 	Subject to the provisions hereof, this Agreement shall be binding on the
successors and assigns and on the administrators of the Lessee.
	 
	21.	 	The parties hereto elect domicile in the judicial district of Quebec for
all legal purposes and jurisdiction of the courts.

 

 

SCHEDULE “B”

The charges payable under this Agreement are set for each clinic where the
Lessee renders professional services to the public. The charges payable for
each clinic are determined from time to time and contain the details applicable
to the Equipment.

The charges may vary from year to year so as to take into consideration the
increase in the Lessor’s fixed base costs which include, but are not limited
to, the rent for the premises, the applicable taxes, the insurance cost, the
cost related to the maintenance of the Equipment, and other similar expenses.
The charges shall also be subject to the increases generated by the renewal or
replacement of the Equipment. All the said fixed base costs shall be charged
back to the Lessee over and above the Lessor’s management fee.

The charges for the year starting on December 1, 2000 and ending on November
30, 2001 are more fully detailed in Schedule “C” hereto.

 

 

SCHEDULE “C”

	 	 	 	 	 	 	 	 	 
	Monthly Charges
	

	List of Quebec Clinics	 	Suffix	 	Monthly Rental
	
	 	
	 	

	Anjou
	 	 	502	 	 	$	3,157	 
	Longueuil
	 	 	503	 	 	$	2,194	 
	St-Georges de Beauce
	 	 	504	 	 	$	4,823	 
	Ste-Marie de Beauce
	 	 	505	 	 	$	620	 
	Beauort
	 	 	506	 	 	$	517	 
	Côte-Du-Palais
	 	 	507	 	 	$	1,263	 
	Fleury
	 	 	508	 	 	$	980	 
	Mailloux
	 	 	509	 	 	$	2,765	 
	Queen Mary
	 	 	510	 	 	$	1,467	 
	Rimouski
	 	 	511	 	 	$	2,605	 
	Gaspésie
	 	 	512	 	 	$	201	 
	Ste-Foy
	 	 	513	 	 	$	1,711	 
	Sherbrooke Street
	 	 	515	 	 	$	751	 
	D.V.A
	 	 	516	 	 	$	0	 
	Pointe-Claire
	 	 	518	 	 	$	2,114	 
	Valleyfield
	 	 	519	 	 	$	63	 
	Greenfield Park
	 	 	520	 	 	$	1,526	 
	St-Hyacinthe
	 	 	521	 	 	$	3,634	 
	Bélanger
	 	 	522	 	 	$	1,008	 
	Repentigny
	 	 	523	 	 	$	0	 
	Gatineau
	 	 	524	 	 	$	5,490	 
	Hull
	 	 	525	 	 	$	142	 
	Aylmer
	 	 	527	 	 	$	307	 
	 
	 	 	 	 	 	$	37,336exv10w7

 

EXHIBIT 10.7

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT, by and between AT&T Chile Long Distance S.A., RUT
number 96631610-1, located at 2939 Vitacura Avenue, 8th floor, in the city of
Santiago, Chile. (the “Company”), and Carlos Fernandez , RUT number 5213938-4
(the “Executive”), dated as of the 28th day of August 2000.

     WHEREAS, the Company desires the Executive serve as its General Manager,
and the Executive desires to so serve, in each case upon the terms and
conditions set forth herein.

     NOW THEREFORE, in consideration of the mutual covenants herein contained,
the Company and the Executive hereby agree as follows:

     1.     Employment Period.

     (a)  Agreement to Employ. The Company hereby agrees to employ the
Executive, and the Executive hereby agrees to be employed by the Company,
pursuant to the terms and conditions set forth in this Agreement. The
Executive represents that (i) he is entering into this Agreement voluntarily
and that his employment hereunder and compliance with the terms and conditions
hereof will not conflict with or result in the breach by his of any agreement
to which he is a party or by which he may be bound, (ii) he has not, and in
connection with his employment with the Company will not, violate any
non-solicitation or other similar covenant or agreement by which he is or may
be bound and (iii) in connection with his employment with the Company he will
not use any confidential or proprietary information he may have obtained in
connection with employment with any prior employer.

     (b)  Term of Employment. Unless the Executive’s employment shall sooner
terminate pursuant to Section 4, the Company shall employ the Executive for a
term commencing on the “Closing Date” (as defined in the Agreement and Plan of
Merger dated as of November 1, 1999, among AT&T Corp., a New York corporation,
the Company, Frantis, Inc, a Delaware corporation and Firstcom Corporation, a
Texas corporation (the “Merger Agreement”) (hereinafter this date is referred
to as the “Commencement Date”) and ending on the first anniversary thereof
(the “Initial Term”). Effective upon the expiration of the Initial Term and of
each Additional Term (as defined below) ending prior to the date that is
nearest Executive’s sixty-fifth birthday, the Executive’s employment hereunder
shall be deemed to be automatically extended, upon the same terms and
conditions, for an additional period of one year (each, an “Additional Term”),
in each such case, commencing upon the expiration of the Initial Term or the
then current Additional Term, as the case may be, unless, at least 90 days
prior to the expiration of the Initial Term or such Additional Term, either the
Company or the

 

 

Executive shall give written notice to the other of its intention not to
extend the Employment Period (as defined below). The period during which the
Executive is employed pursuant to this Agreement shall be referred to as the
“Employment Period”.

     2.     Position and Duties.

     (a)  During the Employment Period, the Executive shall be employed as
General Manager of the Company and shall have such duties and responsibilities
as are customarily assigned to individuals serving in such positions and such
other duties consistent with Executive’s titles and positions as the Board of
Directors of the Company (the “Board”) or the Chief Executive Officer of AT&T
Latin America Corporation. specifies from time to time. The Executive, in
carrying out his duties under this Agreement, shall report and be subject to
the Chief Executive Officer of AT&T Latin America Corporation. During the
Employment Period, and excluding any periods of vacation, holiday, personal
leave and sick leave to which the Executive is entitled, the Executive shall
devote the Executive’s full business time, attention and ability to the
business and affairs of the Company and shall use the Executive’s reasonable
best efforts to carry out the Executive’s responsibilities faithfully and
efficiently in a professional manner. It shall not be considered a violation
of the foregoing for the Executive to (i) serve on corporate or civic boards
reasonably approved by the Company or on charitable boards or committees, (ii)
deliver lectures or fulfill speaking engagements and (iii) manage his or his
family’s personal investments, in each case so long as such activities do not
substantially interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with this
Agreement, do not violate the Company’s rules and policies (or present a
material conflict of interest with the Company) and do not otherwise constitute
a violation of Section 6 of this Agreement. The Executive shall comply with
the rules and policies of the Company that are generally applicable to the
Company’s senior executives.

     (b)  It is understood that Executive’s position will require substantial
travel.

     3.     Compensation.

     (a)  Base Salary. During the Employment Period, the Executive shall
receive an annual base salary of $238,000 payable pursuant to the Company’s
normal payroll practices, but no less frequently than monthly (“Annual Base
Salary”). Commencing in 2001, the Annual Base Salary then in effect shall be
reviewed by the Company by no later than April 15th of each year and may be
increased (but not decreased) by such amount as the Company in its sole
discretion shall determine.

     (b) Annual Bonus. The Executive shall be entitled to participate in an
annual bonus plan. . Executive’s target annual bonus will be 50% of his Annual
Base Salary as in effect for such year. Executive’s actual annual bonus will
be determined based on specified target performance goals with respect to which
such target and maximum bonus, etc., will be determined as established by the
Chief Executive Officer of AT&T Latin America Corporation.

2

 

     (c)  Stock Option Grant. Effective as of the Commencement Date, the
Company shall grant the Executive (i) options to purchase 100,000 shares of the
Company’s common stock, par value $0.001 per share (the “Options”). The
Options shall vest and become exercisable with respect to one half (50%) of the
shares subject to the Options on the second anniversary of the Commencement
Date, twenty-five percent (25%) upon the third anniversary of the Commencement
Date, and the final twenty-five percent (25%) on the fourth anniversary of the
Commencement Date. The Options shall have an exercise price per share equal to
the fair market value of a share of the Company’s common stock on the date of
grant. The Options shall be subject to such other restrictions as determined
by the Company and as set forth in the related stock option agreement to be
entered into between the Executive and the Company.

     (d)  Benefit Plans and Perquisites. The Executive shall be entitled to
participate in all benefit, pension, savings, welfare, perquisite and other
plans or arrangements that the Company may establish from time to time for its
senior executive officers, subject to the terms and conditions of such plans or
arrangements.

     (e)  Expenses. During the Employment Period, the Executive shall be
entitled to receive reimbursement for all reasonable business expenses incurred
by the Executive in carrying out the Executive’s duties under this Agreement in
accordance with the policies of the Company, provided that the Executive
complies with the policies, practices and procedures of the Company for
submission of expense reports, receipts, or similar documentation of such
expenses.

     4.     Termination of Employment.

     (a)  Death or Disability. The Executive’s employment shall terminate
automatically upon the Executive’s death or upon a determination by the Board
to terminate the Executive’s employment as a result of his Disability during
the Employment Period. For purposes of this Agreement, “Disability” shall mean
a physical or mental disability that prevents or is reasonably expected to
prevent the performance by the Executive of his duties hereunder for a
continuous period of 90 days or longer or for 180 days or more in any 12-month
period. The determination of Executive’s Disability shall (i) be made by an
independent physician who is reasonably acceptable to the Company and Executive
(or his representative), (ii) be final and binding on the parties hereto and
(iii) be made taking into account such competent medical evidence as shall be
presented to such independent physician by Executive and/or the Company or by
any physician or group of physicians or other competent medical experts
employed by Executive and/or the Company to advise such independent physician.

     (b)  By the Company. The Company may terminate the Executive’s employment
during the Employment Period for Cause or without Cause. For purposes of this
Agreement, “Cause” shall mean the Executive’s (i) engaging in fraudulent or
dishonest conduct (as determined by a finding, order, judgement or decree in
any court or administrative agency of competent jurisdiction, in any action or
proceeding, whether civil, criminal, administrative or investigative) that the
Board reasonably determines has or would have a material adverse impact on the
Company, its affiliates or their respective

3

 

businesses; (ii) conviction of, or entering a plea of nolo contendere to,
a felony criminal offense or comparable crime in any jurisdiction that uses a
different nomenclature; (iii) willful refusal to perform his material
employment-related duties or responsibilities or intentionally and knowingly
engaging in any activity that is in material conflict with or is materially
adverse to the business interests of the Company, its affiliates or their
respective businesses; (iv) gross negligence in the performance of his material
employment-related duties or responsibilities; or (v) breach of any material
provision of the employment agreement (in the case of (iii), (iv) and (v), that
is not cured by the Executive within 30 days of receipt of prior written notice
from the Company setting forth in reasonable detail the circumstances giving
rise to such Cause). A termination for Cause shall include a determination by
the Board no later than six months following the termination of the Employment
Period that circumstances existed during the Employment Period that would have
justified a termination by the Company for Cause. A termination of the
Executive by the Company shall not be a termination for Cause for purposes of
this Agreement unless the determination to so terminate the Executive’s
employment is made by a resolution adopted by the Board (excluding the
Executive) following a meeting convened upon no less than 10 days prior written
notice to the Executive and at which the Executive and his legal counsel shall
have had the reasonable opportunity to be heard by the Board.

     (c)  By the Executive. The Executive may terminate employment with or
without Good Reason. For purposes of this Agreement, “Good Reason” means,
without the Executive’s written consent: (i) a material diminution of the
Executive’s duties or responsibilities or the assignment of responsibilities
that are inconsistent with his position and responsibilities hereunder; (ii) a
reduction in the Executive’s base salary, annual bonus or long-term incentive
compensation opportunity (it being understood that a reduction in the dollar
amount of Executive’s annual bonus from year to year solely as the result of
achievement or failure to achieve the target performance objectives provided in
the annual bonus plan shall not constitute a reduction in Executive’s annual
bonus opportunity) or the benefits to be made available pursuant to Section
3(d); or (iii) a material breach by of any other provision of the Agreement, in
each case that is not cured by the Company within 30 days of receipt of prior
written notice from the Executive setting forth in reasonable detail the
circumstances giving rise to such Good Reason.

     (d)  Termination Procedures. Any termination of the Executive’s employment
by the Company or by the Executive shall be communicated by Notice of
Termination to the other party hereto given in accordance with this Agreement.
For purposes of this Agreement, a “Notice of Termination” means a written
notice which (i) indicates the specific termination provision in this Agreement
relied upon, (ii) to the extent applicable, sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated and (iii) if the Date
of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date. For purposes of this Agreement, “Date
of Termination” means (i) if the Executive’s employment is terminated by the
Company or by the Executive (other than for death or Disability), 90 days
following the date of receipt of the Notice of Termination and (ii) if the
Executive’s employment is terminated by

4

 

reason of death or Disability, the Date of Termination shall be the date
of death of the Executive or, in the case of Disability, the date of the
determination of the Executive’s Disability, provided that the Company may pay
the Executive (at the rate of his Annual Base Salary as then in effect) in lieu
of part or all of such notice period.

     (e)  Effect of Termination. Effective as of any Date of Termination, or, if
earlier, as of any date specified by the Company at or following the delivery
of a Notice of Termination, the Executive shall resign, in writing, from all
Board memberships and other positions then held by his with the Company and its
Affiliates.

     (f)  Notwithstanding the foregoing, the parties agree that any disputes,
interpretation or claim about the matters included in this contract will be
governed according to the legal actions and procedures established in the
Chilean Law. In case of any contradiction between the words, statements or
clauses included in this contract, Chilean Law will prevail.

     5.     Obligations of the Company upon Termination.

     (a)  General. If, during the Employment Period, the Executive’s employment
terminates for any reason, the Executive (or his estate, beneficiary or legal
representative) shall be entitled to receive (i) any earned or accrued but
unpaid Annual Base Salary through the Date of Termination (including with
respect to unused vacation time), (ii) in the case of any termination of
employment other than for Cause, any earned but unpaid annual bonus with
respect to any fiscal year of the Company ending prior to the Date of
Termination and (iii) all amounts payable and benefits accrued under any
otherwise applicable plan, policy, program or practice of the Company in which
Executive was a participant during his employment with Company in accordance
with the terms thereof (provided that Executive shall not be entitled to
receive any amounts pursuant to any plan, policy program or practice that are
in the nature of severance, it being understood that this Agreement is intended
to set out Executive’s right if any to severance, and in the event that any
plan, policy, program or practice require the payment of severance to
Executive, amounts payable pursuant to Section 5(b) shall be reduced thereby in
order to prevent a duplication of benefits).

     (b)  Other Than for Cause, Death or Disability; Good Reason. If, during
the Employment Period, the Company terminates the Executive’s employment, other
than for Cause, death or Disability, or the Executive terminates employment for
Good Reason, the Company shall, subject to Section 12, in addition to the
amounts provided in paragraph (a) above, pay to the Executive (or his estate,
beneficiary or legal representative):

		
	 	     (i) in twelve (12) equal monthly installments commencing on the first
day of the month following the Date of Termination, the sum of (A) the
Executive’s Annual Base Salary (as then in effect) and (B) the greater of
the Executive’s target bonus for the year in which the Date of Termination
occurs or the average of the Executive’s actual annual bonus paid with
respect to the two years preceding the year in the which Date of
Termination occurs, such sum then divided by twelve (12); and

		
	 	     (ii) at the time annual bonuses for the fiscal year in which the Date
of Termination occurs are paid, a pro rata annual bonus based upon actual
performance

5

 

		
	 	under the annual bonus plan for such fiscal year (as determined by the
Board or the Compensation Committee in its reasonable discretion), to the
extent not otherwise paid.

In addition, the Executive and the Executive’s eligible spouse, dependents and
beneficiaries will continue to be eligible to participate in the Company’s
medical, dental, disability, life and other welfare insurance plans (subject to
the Executive continuing to make any required contributions to such plans) for
a period of twelve (12) months following the Date of Termination (or the
Company shall provide equivalent benefits for such period); provided that such
continued benefits shall cease upon the Executive becoming eligible for
comparable benefits from a subsequent employer.

     6.     Covenant Not to Compete. The Executive acknowledges and agrees that
the Company has a legitimate interest in being protected from the Executive’s
being employed in a position of management by an entity that competes with the
Company. The Executive and the Company have considered carefully how best to
protect the legitimate interests of the Company without unreasonably
restricting the economic interests of the Executive, and hereby agree to the
following restrictions, in addition to those contained in Section 7, as the
most reasonable and equitable under the circumstances. During the Employment
Period and for a period of twelve (12) months after the Executive’s termination
of employment with the Company for any reason, including expiration of the
Employment Period (the “Restriction Period”), the Executive will not, directly
or indirectly (whether as sole proprietor, partner or venturer, stockholder,
director, officer, employee or consultant or in any other capacity as principal
or agent or through any person, subsidiary or employee acting as nominee or
agent):

     (a)  Conduct or engage in or be interested in or associated with any
person, firm, association, partnership, corporation or other entity that,
within the “Territory” (as defined in the Regional Vehicle Agreement referred
to in the Merger Agreement), directly competes with any service or product that
the Company actually provides to its customers, or that the Company has taken
substantial steps to commence providing that is a significant part of the
Company’s business or intended to be a significant part of the Company’s
business in the Company’s business plan, in each case determined as of the Date
of Termination (the “Business”), provided that the foregoing shall not apply if
the Executive’s interest or association with such competitor is unrelated to
the Business; provided, further, that the foregoing the “Business” shall not be
deemed to include cable television services or programming, broadcast
television, internet access or content or consumer wireless communications or
services unless such products or services are a significant part of the
Company’s business or intended to be a significant part of the Company’s
business in the Company’s business plan, in each case determined as of the Date
of Termination.

     (b)  Take any action, directly or indirectly, to finance, guarantee or
provide any other material assistance to any person, firm association,
partnership, corporation or other entity which conducts or engages in the
Business in the Territory with respect to any activity that competes with the
Business;

6

 

     (c)  Influence or attempt to influence any person, firm, association,
partnership, corporation or other entity who is a contracting party with the
Company at any time during the Restriction Period to terminate any written
agreement with the Company except to the extent the Executive is acting on
behalf of the Company in good faith; or

     (d)  Hire or attempt to hire for employment any person who is employed by
the Company at the time of hiring or attempted hiring or whose active
employment with the Company ceased less than six months prior to such time, or
attempt to influence any such person to terminate employment with the Company,
except to the extent the Executive is acting on behalf of the Company in good
faith; provided, however, that nothing herein shall prohibit the Executive from
general advertising for personnel not specifically targeting any employee or
other personnel of the Company.

           The restrictive provisions of this Agreement shall not prohibit the
Executive from having as an investment an equity interest in the securities of
any corporation engaged in the Business, which securities are listed on a
recognized securities exchange or traded in the over-the-counter market to the
extent that such interest does not exceed 2% of the value or voting power of
such corporation and does not constitute control of such corporation. For
purposes of this Section 6 and Sections 7, 8, 9 and 10 of this Agreement, the
term “Company” shall include the Company and each of its affiliates.

     7.  Confidential Information. The Executive acknowledges and agrees that
all material information that is not publicly available or generally known in
the industry concerning the Company’s business including, without limitation,
information relating to its products, customer lists, pricing, trade secrets,
patents, business methods, and cost data, business plans and strategies
(collectively, the “Confidential Information”) is and shall remain the property
of the Company. The Executive recognizes and agrees that all of the material
Confidential Information, whether developed by the Executive or made available
to the Executive, other than information that is not material to the Company or
generally known to the public or generally known in the industry, is a unique
asset of the business of the company, the disclosure of which would be damaging
to the Company. Accordingly, the Executive agrees to hold such material
Confidential Information in a fiduciary capacity for the benefit of the
Company. The Executive agrees that he will not at any time during or within 10
years after the Executive’s employment with the Company for any reason,
directly or indirectly, disclose to any Person any material Confidential
Information the disclosure of which could harm the Company, other than
information that is already known to the public or generally know in the
industry, except as may be required in the ordinary course of business of the
Company or as may be required by law. Promptly upon the termination of this
Agreement for any reason, the Executive agrees to return to the Company any and
all documents, memoranda, drawings, notes and other papers and items (including
all copies thereof, whether electronic or otherwise) embodying any Confidential
Information of the Company which are in the possession or control of the
Executive. Information concerning the Company’s business that becomes public
as a result of the Executive’s breach of this Section 7 shall be treated as
Confidential Information this Section 7. The Executive shall not be deemed to
have breached this Section 7 unless the disclosure of such Confidential
Information actually causes harm to the Company or any of its affiliates.

7

 

     8.     Breach of Certain Provisions. The Executive acknowledges that a
violation on the Executive’s part of any of the covenants contained in Sections
6 or 7 of this Agreement would cause immeasurable and irreparable damage to the
Company. The Executive represents that his economic means and circumstances
are such that the provisions of this Agreement, including the non-competition,
non-solicitation of employees, confidentiality and Company property provisions,
will not prevent him from providing for himself and his family on a basis
satisfactory to him and them. Accordingly, the Executive agrees that the
Company shall be entitled to injunctive relief in any court of competent
jurisdiction for any actual or threatened violation of any such covenant in
addition to any other remedies it may have. The Executive agrees that in the
event that any arbitrator or court of competent jurisdiction shall finally hold
that any provision of Sections 6 or 7 hereof is void or constitutes an
unreasonable restriction against the Executive, the provisions of such Section
shall not be rendered void but shall apply to such extent as such arbitrator or
court may determine constitutes a reasonable restriction under the
circumstances. Any breach by the Executive of the provisions of Sections 6 or
7 of this Agreement shall relieve the Company of all obligations to any further
payments to the Executive pursuant to this Agreement (including under all
Company equity award grants pursuant to Section 3) or otherwise under any
incentive or equity awards made by the Company and, in the case of a breach of
Section 6 of this Agreement, shall entitle the Company to repayment from the
Executive, upon demand, of all amounts previously paid to the Executive
following or in the six months preceding such breach with respect to previously
granted equity awards (i.e., in the case of any stock options, the net gain
realized by the Executive with respect thereto during such period). These
remedies are in addition to any other remedies the Company may have with
respect to any such breach.

     9.     Property of the Company. The Executive acknowledges that from time to
time in the course of providing services pursuant to this Employment Agreement,
he shall have the opportunity to inspect and use certain property, both
tangible and intangible, of the Company, including Confidential Information.
The Executive hereby agrees that such property shall remain the exclusive
property of the Company and shall be returned to the Company upon the
Executive’s termination of employment.

     10.     Intangible Assets. The Executive shall not at any time have or claim
any right, title or interest in any trade name, trademark, copyright, or other
similar rights belonging to or used by the Company and shall not have or claim
any rights, title or interest in any material or matter of any sort prepared
for or used in connection with the business of the Company or promotion of the
Company, whether produced, prepared or published in whole or in part by the
Executive.

     11.     Litigation; Cooperation. If this Agreement is terminated by the
Company other than for Cause or by the Executive for Good Reason, in
consideration of the payments to be made to the Executive by the Company
pursuant to Section 5(b) of this Agreement, the Executive agrees, during the
period that the Company is actually making such payments to the Executive and
providing benefits to the extent required pursuant to Section 5(b), to provide
to the Company and its affiliates truthful and complete cooperation including,
but not limited to, the Executive’s appearance at interviews and

8

 

depositions at reasonable times (taking into account the Executive’s then
employment and place of residence) in all regulatory and litigation matters
relating to the Company and the Executive’s employment by the Company, whether
or not such matters have been commenced at the time of such termination, and to
provide to counsel to the Company and its affiliates, upon request, all
documents in the Executive’s possession or under his control relating to such
regulatory and litigation matters, all at no additional compensation to the
Executive; provided, however, that the Company will reimburse the Executive for
(a) all reasonable expenses, including travel, lodging, meals and attorneys’
fees and (b) any salary forfeited by the Executive or vacation time consumed by
his during time spent by the Executive, in connection with the foregoing.

     12.     Release. In consideration of the payments to be made to the Executive
pursuant to Section 5(b) of this Agreement and as a condition to the payment
thereof, the Executive acknowledges that all such payments, if made in
accordance with the terms of this Agreement, shall constitute complete
satisfaction of all obligations owed by the Company to the Executive hereunder
and shall further constitute the Executive’s sole remedy against the Company
regarding the Executive’s employment hereunder. The parties hereby agree that
if this Section 12 becomes applicable they will execute a mutually acceptable
general release to reflect the provisions of this Section..

     13.     Successors

     a) This Agreement is personal to the Executive and, without the prior
written consent of the Company, shall not be assignable by the Executive except
by will or the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by the Executive’s legal representatives.

     (a)  This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns, provided that the Company may not
assign this Agreement except in connection with the assignment or disposition
of all or substantially all of the assets or stock of the Company. Except as
specifically provided in this Agreement, “Company” shall mean both the Company
as defined above and any such successor, by operation of law or otherwise.

     14.     Miscellaneous.

     (a)  This Agreement shall be governed by, and construed in accordance with
Chilean laws.

     All notices and other communications under this Agreement shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

     (c) In accordance with and solely for the purpose of the article number
four of the Chilean law, the Company recognizes the period that the employee
worked in any FirstCom Company in Chile or any legal predecessor of it.

9

 

	 	If to the Executive.

	 	Carlos Fernandez

Camino del Sol 3130

Lo Barnechea

Santiago, Chile

	 	If to the Company

     to its General Counsel
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph. Notices and communications shall be effective
when actually received by the addressee.

     (c)  The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.

     (d)  Notwithstanding any other provision of this Agreement, the Company may
withhold from amounts payable under this Agreement, and shall pay over to the
appropriate authorities in a manner consistent with all applicable
requirements, all federal, state, local and foreign taxes that are required to
be withheld by applicable laws or regulations.

     (e)  The Executive’s or the Company’s failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement. This Agreement may not be amended
or modified except by a written agreement executed by the parties hereto or
their respective successors and legal representatives.

10

 

IN WITNESS HEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization of its Board of Directors, the Company has caused
this Agreement to be executed in its name on its behalf, all as of the day and
year first above written.

	 	 
	AT&T Chile Long Distance S.A,	 
	 	 
	/s/  PATRICIO NORTHLAND

Patricio Northland

Chief Executive Officer	 
	 
	Executive:	 
	 
	/s/ CARLOS FERNANDEZ

Carlos Fernandez

General Manager	 

11

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