Document:

Exhibit 10.6

 

 

CHINA-US CABLE NETWORK

 

 

CONSTRUCTION AND MAINTENANCE

 

AGREEMENT

 

 

TABLE OF CONTENTS

 

	
  PARAGRAPH

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions and Interpretations

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  China-US CN Configuration

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Management Committee and Subcommittees

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Procurement Group

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  China-US CN Segments

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Provision, Construction and Ownership of
  Segment T and the Wet Segment

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Use of Segment T

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Definition of Wet Segment Capital Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Allocation and Billing of the Wet Segment
  Capital Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Duties and Rights as to Operation and
  Maintenance of Segments

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Allocation and Billing of Operation and
  Maintenance Costs of the Wet Segment

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Keeping and Inspection of Books

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Assignment and Use of Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Expansion of Notional Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Capacity Routing

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Increase or Decrease of Design Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  17

  	
  Obligation to Provide Transiting Facilities
  to Extend China-US CN Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Obligation to Connect China-US CN With
  Inland Systems

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Obtaining of Approval

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  Assignment of Rights and Obligations

  	
   

  

 

i

 

	
  PARAGRAPH

  	
   

  
	
   

  	
   

  
	
  21.

  	
  Default

  	
   

  
	
   

  	
   

  	
   

  
	
  22.

  	
  Settlement of Claims by Parties

  	
   

  
	
   

  	
   

  	
   

  
	
  23.

  	
  Relationship and Liability of the Parties

  	
   

  
	
   

  	
   

  	
   

  
	
  24.

  	
  Privileges for Documents or Communications

  	
   

  
	
   

  	
   

  	
   

  
	
  25.

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  26.

  	
  Duration of Agreement and Realization of
  Assets

  	
   

  
	
   

  	
   

  	
   

  
	
  27.

  	
  Currency and Place of Payment

  	
   

  
	
   

  	
   

  	
   

  
	
  28.

  	
  Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  29.

  	
  Force Majeure

  	
   

  
	
   

  	
   

  	
   

  
	
  30.

  	
  Settlement of Disputes and Interpretation
  of Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  31.

  	
  Execution of Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  32.

  	
  Alterations and Additions

  	
   

  
	
   

  	
   

  	
   

  
	
  33.

  	
  Successors Bound

  	
   

  
	
   

  	
   

  	
   

  
	
  34.

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  35.

  	
  Compliance with Law

  	
   

  
	
   

  	
   

  	
   

  
	
  36.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Testimonium

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Annexes

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Schedules

  	
   

  

 

ii

 

ANNEXES
AND SCHEDULES

 

ANNEXES

 

	
  Annex 1

  	
  China-US CN
  Configuration

  
	
   

  	
   

  
	
  Annex 2

  	
  Terms of
  Reference for Procurement Group, Subcommittees, Network Administrator and the
  Central Billing Party

  
	
   

  	
   

  
	
  Annex 3

  	
  Source of
  Financial Charges

  
	
   

  	
   

  
	
  Annex 4

  	
  Capacity vs.
  MIU*Points

  
	
   

  	
   

  
	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  Schedule A

  	
  Parties to
  the Agreement

  
	
   

  	
   

  
	
  Schedule B

  	
  Voting
  Interests in the China-US CN

  
	
   

  	
   

  
	
  Schedule C

  	
  Ownership
  and Allocation of Capital Cost of the Wet Segment

  
	
   

  	
   

  
	
  Schedule D

  	
  Allocation
  of Operation and Maintenance Cost of the Wet Segment

  
	
   

  	
   

  
	
  Schedule E

  	
  Interests in
  the Common Reserve Capacity

  
	
   

  	
   

  
	
  Schedule F

  	
  Allocation
  of Capital, Operation and Maintenance Costs of Segment T

  
	
   

  	
   

  
	
  Schedule G

  	
  Summary of
  Parties’ MIU*Point Assignment

  
	
   

  	
   

  
	
  Schedule H

  	
  Party’s
  Assignment Capacity in MIUs.

  
	
   

  	
   

  
	
  Schedule I

  	
  Interest in
  the Pool Capacity

  
	
   

  	
   

  
	
  Schedule J

  	
  China-US CN
  IRU Purchaser’s Capacity in MIUs

  

 

iii

 

CHINA-US CN

CONSTRUCTION AND MAINTENANCE AGREEMENT

 

This Agreement, made and
entered into this 11th day of December 1997, between and among the Parties
signatory hereto (hereinafter collectively called “Parties” and individually
called “Party”), which Parties are identified in Schedule A,

 

WITNESSETH:

 

WHEREAS,
digital telecommunications services are being provided in the Pacific Ocean
Region by means of submarine cable and satellite facilities; and

 

WHEREAS, other
digital lightwave submarine cable systems, presently in service in the Pacific
Ocean Region, have facilitated a rapid growth of new telecommunications
requirements designed to take advantage of abundant, reliable, secure and
economically priced services based on available digital technology; and

 

WHEREAS, it is
now apparent that this rapid growth in traffic demand will lead to a greater
demand for facilities in the Pacific Ocean Region necessitating the
construction of additional Trans-Pacific fiber optic submarine cable facilities
(hereinafter referred to as the “China-US CN”); and

 

WHEREAS, the reliability
of telecommunications services and its usefulness to customers depend on the
availability of the appropriate facilities, including the China-US CN, for
diverse routing and service restoration; and

 

WHEREAS, a
Memorandum of Understanding to plan the China-US CN was signed by AT&T,
China Telecom, HKTI, KDD, KT, MCII, NTTWN, SBCI, Sprint, and SingTel on
March 30, 1997 (hereinafter referred to as the “MOU”) to permit certain
pre-construction activities, as defined in the MOU; and

 

WHEREAS, by
the China-US CN Supplementary Memorandum of Understanding No. 1 signed on May
13, 1997, admitting Indosat, ITDC, Telstra, and TM, and the China-US CN
Supplementary Memorandum of Understanding No. 2 signed on August 18, 1997,
admitting Teleglobe; and

 

WHEREAS, the
MOU and the Supplementary MOUs are hereinafter collectively called the “MOU”;
and

 

WHEREAS, the
MOU states that it shall continue in force until the signing, by the Parties,
of the China-US CN Construction and Maintenance Agreement; and

 

WHEREAS, the
Parties now desire to construct the China-US CN as a fully integrated
Trans-Pacific network comprised of four fully restorable fiber optic pairs; and

 

1

 

WHEREAS, the
Parties now desire to define the terms and conditions upon which the China-US
CN will be provided, constructed, operated and maintained;

 

NOW,
THEREFORE, the Parties hereto, in consideration of the mutual covenants herein
expressed, covenant and agree with each other as follows:

 

1.             DEFINITIONS AND INTERPRETATIONS

 

1.1           The following
definitions shall apply to certain terms used in this Agreement:

 

Agreement:

This China-US CN Construction and Maintenance Agreement.

 

Basic System Payload Module:

A Virtual Container 4 (VC4) in accordance with ITU-T Recommendation G707.

 

Branching Unit:

A Branching Unit, required at each junction point of the China-US CN, shall
consist of housing and any associated equipment.

 

Cable Landing Point:

The beach joint or the mean low water mark of ordinary sprint tides if there is
no beach joint.

 

Cable Network Interface:

The nomina1 STM-1 digital optical or electrical input/output ports on the
digital/optical distribution flame (including the digital/optical or electrical
distribution frame itself) where the Basic System Payload Module connects with
other transmission facilities or equipment.

 

Capacity:

Capacity shall be categorized as follows:

 

(i)            Notional
Capacity

Capacity in MIU*Points which is allocated to a Party in return for its
financial investment, and which comprises the Assigned Capacity, Reserved
Capacity, and Pool Capacity.

 

(ii)           Assigned
Capacity

Capacity which is assigned to a Party in specific Paths of the China-US CN.

 

(iii)          Common
Reserve Capacity

Capacity in excess of the Notional Capacity, and which is not allocated to any
specific Party.

 

2

 

(iv)          Design
Capacity

Capacity of each fiber pair in the China-US CN shall be twenty (20)Gbps as
provided under the Supply Contract.

 

(v)           Pool
Capacity

Capacity contributed by the Initial Parties for transfer to other Initial
Parties.

 

(vi)          Reserved
Capacity

Capacity acquired by a Party for its intended future assignments.

 

(vii)         China-US
CN IRU

Capacity purchased in China-US CN on an Indefeasible Right of Use (IRU) basis.

 

Carriers:

All of the Parties to this Agreement and international telecommunications
entities not Parties hereto authorized or permitted under the laws of its
respective country, territory, or place who operate and maintain their own
telecommunication facilities to provide switched voice services and other
services within their respective countries, territories, or places, to acquire
and use capacity on an IRU basis pursuant to Paragraph 13.

 

Parent Company:

A company that owns directly or indirectly 100% of the equity of a company

 

Final Acceptance:

The issuance of a Certificate of Final Acceptance pursuant to the terms and
conditions set forth in the Supply Contract as defined in Paragraph 6 hereof.

 

Initial Parties:

The Initial Parties are AT&T, China Telecom, HKTI, ITDC, KDD, KT, MCII,
SBCI, Sprint, NTTWN, SingTel, Teleglobe, Telstra, and TM.

 

MIU:       A
unit designated as the minimum unit of investment in the China-US CN, which
shall consist of two (2) half interests, allowing the use of 2.048Mbps and the additional
420,57l.43bps required for multiplexing in each direction.  The Minimum Investment Unit is hereinafter
called “MIU.”

 

MIU*Point:

Refers to a unit of value assigned to the capacity which is allocated to the
Parties in the China-US CN, which will be converted to the Assigned Capacity in
the path of the China-US CN pursuant to the required number of MIU*Points in
each path, as indicated in Annex 4.

 

Paid:       That
the funds referred to are available for immediate use by the recipient, or the
Central Billing Party as appropriate.

 

3

 

Path:       The
connectivity in China-US CN between any two Cable Network Interfaces,
independent of the actual links used to connect these Cable Network
Interfaces.  The Paths are as follows:

 

Trans-Pacific

(i)            Pusan
– Bandon / San Luis Obispo

(ii)           Chikura
– Bandon / San Luis Obispo

(iii)          Chongming
/ Shantou – Bandon / San Luis Obispo

(iv)          Okinawa
– Bandon / San Luis Obispo

(v)           Tanguisson
– Bandon / San Luis Obispo

(vi)          Fangshan
– Bandon / San Luis Obispo

 

Intra-Asia / Asia – Guam

(vii)         Pusan
– Chongming / Shantou

(viii)        Pusan
– Okinawa

(ix)           Pusan
– Chikura

(x)            Pusan
– Fangshan

(xi)           Pusan
– Tanguisson

(xii)          Chikura
– Tanguisson

(xiii)         Chikura
– Chongming / Shantou

(xiv)        Chikura
– Fangshan

(xv)         Okinawa
– Fangshan

(xvi)        Okinawa
– Tanguisson

(xvii)       Chongming
/ Shantou – Okinawa

(xviii)      Chongming
/ Shantou – Tanguisson

(xix)         Chongming
/ Shantou – Fangshan

(xx)          Fangshari
– Tanguisson

 

Path Assignment:

An allocation of capacity to a Carrier on a Path in China-US CN.

 

Ready For Service Date:

The Ready For Service Date (hereinafter referred to as the “RFS Date”) shall be
considered as the date at which the Parties agree to place the China-US CN into
operation for customer service, which shall be on or before 31 December 1999,
or such other date as may be agreed upon by the Management Committee.

 

Ready, For Provisional Acceptance:

The date on which the Wet Segment of China-US CN is accepted by the Procurement
Group on behalf of the Parties.  The Ready
for Provisional Acceptance Date (hereinafter called “RFPA Date”) shall be on or
before 30 September 1999 or such other dates as may be agreed upon by the
Management Committee.

 

4

 

Supply Contract:

The contracts placed by the Procurement Group on behalf of the Parties for the
supply of the Wet Segment of the China-US CN.

 

Terminal Parties:

AT&T, China Telecom, ITDC, KDD, KT, NTTWN, and TOCI.

 

Wet Segment

For the purpose of this Agreement, Segments E, N, S, and W as defined in
Paragraph 5 are called the “Wet Segment.”

 

1.2           Schedules and Annexes

 

The Schedules and Annexes to
this Agreement, and any written amendments thereto or any Schedules or Annexes
substituted therefore shall form part of the Agreement and any clause which
contains a reference to a Schedule or Annex shall be read as if the Schedule or
Annex was set out at length in the body of the clause itself.  In the event that there is a conflict
between the terms and conditions of this Agreement and the Schedules and
Annexes to this Agreement, the terms and conditions of this Agreement shall
prevail.

 

1.3           Paragraph Headings

 

The headings of the paragraphs
are inserted for convenience and do not form part of this Agreement and shall
not have any effect on the interpretation thereof.

 

1.4           Entire Agreement

 

This Agreement represents the
entire understanding and agreement between the Parties in relation to the
matters dealt with herein, and supersedes all previous understandings and
agreements, whether oral or written, relating thereto.

 

1.5           Interpretation

 

Where the sense requires, words
denoting the singular only shall also include the plural and vice versa.  References to persons shall include firms
and companies and vice versa.  Reference
to the male shall include the female.

 

2.             CHINA-US CN CONFIGURATION

 

2.1           The configuration of
China-US CN shall be as shown in Annex 1.

 

2.2           The planning and
development of China-US CN shall be suitable for implementation of China-US CN
at the RFS Date, using the appropriate ITU recommended transmission rate in the
synchronous digital hierarchy to meet the capacity requirements of the Parties.

 

5

 

3.             MANAGEMENT COMMITTEE AND SUBCOMM1TEES

 

3.1           The China-US CN
Management Committee (hereinafter referred to as the “Management Committee”)
shall be formed for the purpose of directing the progress of engineering,
provision, installation, bringing into service, and continued operation of the
China-US CN, consisting of one representative of each of the Initial
Parties.  Except as otherwise stated in
this Agreement, which exception shall include decisions as to procurement which
shall be made by the Procurement Group, the Management Committee shall have
exclusive voting power to make all decisions necessary on behalf of the Parties
to effectuate the purposes of this Agreement.

 

3.2           Two or more Initial
Parties may designate the same person to serve as their representative at
specific meetings of the Management Committee and its Subcommittees established
pursuant to Subparagraph 3.7 of this Agreement.

 

3.3           Each of the Initial
Parties shall, on a rotational basis, provide the Chairman of the Management
Committee which will meet on the call of a Chairman or whenever requested by a
member of the Management Committee.  The
Chairman shall give at least thirty (30) days advance notice of each meeting,
together with a copy of the draft agenda. 
In cases of emergency, such notice period may be reduced where at least
seventy-five (75) percent of the total voting interests are in agreement.  Documents for the meeting should be made
available to members at least fourteen (14) days before the meeting, but the
Management Committee may agree to discuss papers distributed on less than
fourteen (14) days’ notice.

 

3.4           The Management
Committee shall make every reasonable effort to reach agreement with respect to
matters to be decided.  However, in the
event agreement cannot be reached, the decision will be carried on the basis of
a simple majority of the total voting interests as specified in Schedule B
unless otherwise stated in this Agreement. 
A member of the Management Committee representing more than one Initial
Party shall separately cast the votes to which each Initial Party he represents
is entitled.

 

3.5           Any Initial Party not
represented at a Management Committee meeting, but entitled to vote, may vote
on any matter on the agenda of such a meeting by either appointing a proxy in
writing, or giving notice of such vote to the Chairman prior to the submission
of such matters for vote at such meetings.

 

3.6           No decisions of the
Management Committee, its Subcommittees or any other groups established by the
Management Committee shall override any provisions of this Agreement or in any
way diminish the rights or prejudice the interests granted to any Party under
this Agreement.

 

3.7           To aid the Management
Committee in the performance of its duties, the following Subcommittees shall
be formed, and said Subcommittees, under the direction of the Management
Committee, shall be responsible for their respective areas of interest listed
in Annex 2 and any other areas of interest designated by the Management
Committee:

 

6

 

(i)            Construction
and Maintenance Agreement Subcommittee (hereinafter referred to as
“C&MASC”)

 

(ii)           Investment
and Capacity Pricing Subcommittee (hereinafter referred to as “I&CPSC”)

 

(iii)          Financial
and Administrative Subcommittee (hereinafter referred to as “F&ASC”)

 

(iv)          Operations
and Maintenance Subcommittee (hereinafter referred to as “O&MSC”)

 

(v)           Assignments
and Restoration Subcommittee (hereinafter referred to as “A&RSC”)

 

3.8           The Management
Committee may establish such other subcommittees or working groups as it shall
determine within its discretion to provide assistance in the performance of its
responsibilities.  Subcommittees shall
meet at least once annually after the execution date of this Agreement and more
frequently if necessary, until two years following the RFS Date and thereafter
as may be appropriate.  Meetings of a
Subcommittee may be called to consider specific questions at the discretion of
its Co-Chairmen whenever requested by one or more Initial Parties.

 

3.9           The respective
Co-Chairmen of each Subcommittee, or a designated representative of each
Subcommittee, shall attend the Management Committee meetings and meetings of
each other Subcommittee in an advisory capacity as necessary.  On or about two (2) years after the RFS
Date, the Management Committee shall determine whether any of its Subcommittees
should remain in existence.  If the
Management Committee determines that one or more of its Subcommittees shall not
remain in existence, the responsibilities assigned to a Subcommittee whose existence
has been terminated under this Subparagraph 3.7 shall revert to the Management
Committee.

 

4.             PROCUREMENT GROUP

 

4.1           A Procurement Group
shall be formed, consisting of representatives from each of the Initial
Parties.  This group shall act as agents
for the Parties to this Agreement for the purpose of arranging for the
construction, implementation, and installation of the Wet Segment of the cable
system and be solely responsible for all actions as may be required to contract
with the Suppliers to provide the Wet Segment of the China-US CN.

 

4.2           The Procurement Group’s
responsibilities are contained in Annex 2.

 

4.3           The Procurement Group
shall take over the responsibilities and continue the activities of the Interim
Procurement Group established under the MOU in respect of the Interim Procurement
Group’s work related to the China-US CN and shall undertake the on-going tasks
of coordinating and managing the overall project during construction of the
China-US CN.

 

7

 

4.4           AT&T and China
Telecom shall be the Co-Chairmen of the Procurement Group and shall act as its
coordinators and spokesmen.  The
Co-Chairmen shall from time to time report to the Management Committee in
respect of all the activities of the Procurement Group in accordance with the
requirements of the Management Committee.

 

4.5           All decisions and
recommendations to the Management Committee made by the Procurement Group in
accordance with this Agreement shall be subject, in the first place, to
consultation among its members who shall make every effort to reach agreement
with respect to matters to be decided. 
However, in the event agreement cannot be reached, the decision and/or
recommendation shall be made on the basis of a vote of simple majority of the
total voting interests as specified in Schedule B unless otherwise decided by
the Management Committee.  A member of
the Procurement Group representing more than one Initial Party shall separately
cast the votes to which each Initial Party he represents is entitled.

 

4.6           No decisions of the
Procurement Group shall override any provisions of this Agreement or in any way
diminish the rights or prejudice the interests granted to any Party under this
Agreement.

 

4.7           The Procurement Group,
including the Co-Chairmen, shall continue to function until Final Acceptance or
until such time as otherwise determined by the Management Committee.

 

5.             CHINA-US CN SEGMENTS

 

5.1           In accordance with the
arrangements contained in this Agreement, the China-US CN shall be engineered,
provided, constructed, maintained, and operated between terminals in Chongming,
Shantou, Pusan, Chikura, Okinawa, Tanguisson, Fangshan, Bandon, and San Luis
Obispo, which for purposes of this Agreement, shall be regarded as consisting
of the following segments:

 

Segment E:            The
whole of submarine cable provided between and among, and including, the Cable
Network Interfaces at Bandon and San Luis Obispo.

 

Segment N:            The
whole of submarine cable provided between and among, and including, the Cable
Network Interfaces at Chongming, Pusan, Chikura, and Bandon.

 

Segment S:            The
whole of submarine cable provided between and among, and including, the Cable
Network Interfaces at Shantou, Okinawa, Tanguisson, and San Luis Obispo.

 

Segment T:            Segment
T shall comprise the following Segments.

 

Segment T1:          A
cable station at Chongming

Segment T2:          A
cable station at Pusan

 

8

 

Segment T3:          A
cable station at Chikura

Segment T4:          A
cable station at Bandon

Segment T5:          A
cable station at San Luis Obispo

Segment T6:          A
cable station at Tanguisson

Segment T7:          A
cable station at Okinawa

Segment T8:          A
cable station at Shantou

Segment T9:          A
cable station at Fangshan

 

Segment W:          The
whole of submarine cable provided between and among, and including, the Cable
Network Interfaces at Chongming, Shantou, and Fangshan.

 

5.2           Segment N shall be
regarded as consisting of the following Subsegments:

 

Subsegment N1:

That part of Segment N between the Cable Network Interface at the cable station
at Chongming and Branching Unit NBU 1, including a four-eighth portion of NBU
1, and containing four optical fiber pairs.

 

Subsegment N2:

That part of Segment N between the Cable Network Interface at the cable station
at Pusan and Branching Unit NBU 1, including an one-eighth portion of NBU I, and
containing one optical fiber pair.

 

Subsegment N3:

That part of Segment N between Branching Unit NBU 1 and Branching Unit NBU 2,
including a three-eighth portion of NBU 1 and a three-eighth portion of NBU 2,
and containing three optical fiber pairs.

 

Subsegment N4:

That part of Segment N between the Cable Network Interface at the cable station
at Pusan and Branching Unit NBU 2, including an one-eighth portion of NBU 2,
and containing one optical fiber pair.

 

Subsegment N5:

That part of Segment N between Branching Unit NBU 2 and Branching Unit NBU 3,
including a four-eighth portion of NBU 2 and a four-eighth portion of NBU 3,
and containing four optical fiber pairs.

 

Subsegment N6:

That part of Segment N between the Cable Network Interface at the cable station
at Chikura and Branching Unit NBU 3, including an one-eighth portion of NBU 3,
and containing one optical fiber pair.

 

Subsegment N7:

That part of Segment N between Branching Unit NBU 3 and Branching Unit

 

9

 

NBU 4,
including a three-eighth portion of NBU 3 and a three-eighth portion of NBU 4,
and containing three optical fiber pairs.

 

Subsegment N8:

That part of Segment N between the Cable Network Interface at the cable station
at Chikura and Branching Unit NBU 4, including an one-eighth portion of NBU 4,
and containing one optical fiber pair.

 

Subsegment N9:

That part of Segment N between the Cable Network Interface at the cable station
at Bandon and Branching Unit NBU 4, including a four-eighth portion of NBU 4,
and containing four optical fiber pairs.

 

5.3           Segment S shall be
regarded as consisting of the following Subsegments:

 

Subsegment S1:

That part of Segment S between the Cable Network Interface at the cable station
at Shantou and Branching Unit SBU I, including a four-eighth portion of SBU 1,
and containing four optical fiber pairs.

 

Subsegment S2:

That part of Segment S between the Cable Network Interface at the cable station
at Okinawa and Branching Unit SBU 1, including an one-eighth portion of SBU 1,
and containing one optical fiber pair.

 

Subsegment S3:

That part of Segment S between Branching Unit SBU I and Branching Unit SBU 2,
including a three-eighth portion of SBU 1 and a three-eighth portion of SBU 2,
and containing three optical fiber pairs.

 

Subsegment S4:

That part of Segment S between the Cable Network Interface at the cable station
at Okinawa and Branching Unit SBU 2, including an one-eighth portion of SBU 2,
and containing one optical fiber pair.

 

Subsegment S5:

That part of Segment S between Branching Unit SBU 2 and Branching Unit SBU 3,
including a four-eighth portion of SBU 2 and a four-tenth portion of SBU 3, and
containing four optical fiber pairs.

 

Subsegment S6:

That part of Segment S between the Cable Network Interface at the cable station
at Tanguisson and Branching Unit SBU 3, including a two-tenth portion of SBU 3,
and containing two optical fiber pairs.

 

Subsegment S7:

That part of Segment S between the Cable Network Interface at the cable station

 

10

 

at San Luis
Obispo and Branching Unit SBU 3, including a four-tenth portion of SBU 3, and
containing four optical fiber pairs.

 

5.4           Segment W shall be
regarded as consisting of the following Subsegments:

 

Subsegment W1:

That part of Segment W between the Cable Network Interface at the cable station
at Chongming and Branching Unit WBU, including a four-tenth portion of WBU, and
containing four optical fiber pairs.

 

Subsegment W2:

That part of Segment W between the Cable Network Interface at the cable station
at Fangshan and Branching Unit WBU, including a two-tenth portion of WBU, and
containing two optical fiber pairs.

 

Subsegment W3:

That part of Segment W between the Cable Network Interface at the cable station
at Shantou and Branching Unit WBU, including a four-tenth portion of WBU, and
containing four optical fiber pairs.

 

5.5           Segments T1, T2, T3,
T4, T5, T6, T7, T8, and T9 shall each consist of:

 

(i)            an
appropriate share of land and buildings at the specified locations for the
cable landing and for the cable route including cable rights-of-way and ducts
or conduits between the cable station and its respective Cable Landing Point,
and an appropriate share of common services and equipment at each of the
locations together with equipment in each of those cable stations which is
solely associated with the China-US CN, but not a part of Wet Segment; and

 

(ii)           multiplex
equipment including Digital Cross Connect Systems (DCS) equipment and all other
equipment necessary in each of the cable stations required to operate and
interface at the STM-1 (155.52Mbps), VC-3 (48.960Mbps), C-3 (44.736Mbps), VC-12
(2.240Mbps), and C-12 (2.048Mbps) operating points associated solely with the
China-US CN.  Any Non-Terminal Parties
shall be permitted direct access to the Segment T interfaces described above
associated with that Party’s Assigned Capacity.

 

5.6           Segments E, N, S and W
(the Wet Segment) shall include:

 

(i)            all
transmission, power feeding, system management (including Network Protection
Equipment) and test equipment directly associated with the submersible plant,
located in their respective cable stations, and including the Cable Network
Interface.

 

(ii)           the
power equipment provided wholly for use with the equipment in 5.6(1) above, and

 

11

 

(iii)          the
transmission cable equipped with appropriate optical amplifiers branching units
between the cable stations, and

 

(iv)          the
sea earth cable and electrode system and/or appropriate share thereof, associated
with terminal power feed equipment.

 

(v)           multiplex
equipment, or an appropriate share thereof, down to the STM-l level in each of
the cable stations.

 

5.7           In this Agreement,
references to any Segment, however expressed, shall be deemed to include, unless
the context otherwise requires, additional property incorporated therein by
agreement of the Management Committee. 
Each Segment shall be regarded as including its related spare and
standby units and components, including, but not limited to, submersible
repeaters, cable lengths, and terminal equipment.

 

6.             PROVISION, CONSTRUCTION AND OWNERSHIP
OF SEGMENT T AND THE WET SEGMENT

 

6.1           The following Parties
shall own, provide and agree to act as the Terminal Parties for the following
Segments:

 

	
  SEGMENT

  	
   

  	
  PARTY

  
	
  T1 and T8

  	
   

  	
  China Telecom

  
	
  T2

  	
   

  	
  KT

  
	
  T3

  	
   

  	
  KDD

  
	
  T4 and T5

  	
   

  	
  AT&T

  
	
  T6

  	
   

  	
  TOCI

  
	
  T7

  	
   

  	
  NTTWN

  
	
  T9

  	
   

  	
  ITDC

  

 

6.2           The Terminal Parties
shall make available to the other Parties hereto any reasonable information
requested by the Parties relating to the engineering, provision, construction,
or installation of Segment T.  The
various Segments of Segment T shall be provided in sufficient time to permit
China-US CN to be placed into operation by the RPS Date.

 

6.3           Ownership of the Wet
Segment shall be as shown in Schedule C to this Agreement.  The Wet Segment of China-US CN shall be
owned by the Parties in common and undivided shares.

 

6.4           The provision of the
Wet Segment shall be through a Supply Contract to be placed by the Procurement
Group with Suppliers subject to approval by the Management Committee.

 

6.5           Each of the Parties
shall be entitled, on request and at its own expense, to receive from the
Procurement Group a copy of the Supply Contract subject to the acceptance by
each 

 

12

 

such Party of
any reasonable conditions of confidentiality imposed by the Supply Contract.

 

6.6           The Procurement Group
shall ensure that the Supply Contract specifies that the Wet Segment is to be
provided by the RFPA Date.

 

6.7           The Procurement Group
shall ensure that the Supply Contract shall afford them or their designated
representatives reasonable rights of access to examine, test, and inspect the
China-US CN cable equipment, material, supplies and installation activities.

 

6.8           In the event that the
Wet Segment fails to meet the specifications referred to in the Supply Contract
for its provision, fails to provide the specified capacity, or is not
engineered, provided, installed and ready in sufficient time to meet the RFPA
Date as specified in the Supply Contract, or if the Suppliers are otherwise in
material breach of the Supply Contract, the Procurement Group, as an agent of
the Parties to this Agreement, may, pursuant to this Paragraph 6 and in
accordance with the Supply Contract, take such actions as may be necessary to
exercise the rights and remedies available under the terms and conditions of
the Supply Contract.  Such actions by
the Procurement Group shall be subject to any direction deemed necessary by the
Management Committee.

 

6.9           The members of the
Procurement Group shall not be liable to any other Party for any loss or damage
sustained by reason of a Supplier’s failure to perform in accordance with the
terms and conditions of its Supply Contract, or as a result of China-US CN not meeting
the RFPA Date as specified in the Supply Contract, or if China-US CN does not
perform in accordance with the technical specifications and other requirements
of the Supply Contract, or China-US CN is not integrated or placed into
operation.  The Parties recognize and
agree that the Procurement Group does not make any representations or
warranties, including, but not limited to, any representation or warranty
regarding:

 

(i)            the
performance of the Supply Contract by the Supplier

 

(ii)           the
performance or reliability of the Wet Segment, or

 

(iii)          that
China-US CN shall be integrated or placed into operation and the Parties hereby
agree that nothing in this Agreement shall be construed as such a warranty or
guarantee.

 

7.             USE OF SEGMENT T

 

7.1           The Terminal Parties
hereby grant to the Parties accessing China-US CN at their respective terminal
station, the right to use the relevant Segment T (hereinafter referred to as
“Terminal Station Right of Use”) on the terms and conditions stated in this
Paragraph 7, to the extent required for the use of its Assigned Capacity, for
the purpose of using China-US CN and carrying on the related activities at that
location in accordance with

 

13

 

this
Agreement.  This Terminal Station Right
of Use shall commence on the RFS Date and shall continue for the duration of
this Agreement.

 

7.2           For the Terminal
Station Right of Use granted in each of the terminal stations involved, the
Parties shall pay the Terminal Party of those terminal stations an appropriate
share of the capital cost reasonably incurred and a recurring charge to cover
the operating and maintenance costs, as described in Subparagraphs 7.3 and
7.4.  The cost of the Terminal Station
Right of Use described in Subparagraphs 7.3 and 7.4 shall be approved by the
Management Committee.  Parties accessing
China-US CN at each terminal station and their relevant percentage of Terminal
Station Right of Use charges are identified in Schedule F.

 

7.3           To determine the
capital costs of the Terminal Station Right of Use, the Terminal Parties will
take into account the reasonable cost of the provision and construction of each
of the terminal stations, or causing them to be provided and constructed, or
installing or causing to be installed terminal station equipment, in accordance
with the accounting practices of each Terminal Party, which meets international
standards where applicable or requirements laid down by applicable laws and
professional organizations appropriate to a Party.  This includes all such expenditure reasonably incurred and
includes but is not limited to, the purchase costs of land, building costs,
access road, cable rights of way, amounts incurred for development,
engineering, design, materials, manufacturing, procurement and inspection,
installation, removing (with appropriate reduction for salvage), testing
associated with installation, customs duties, taxes (except income tax imposed
upon the net income of a Party), appropriate financial charges, supervision,
overheads and insurance or a reasonable allowance in lieu thereof, or losses
against which insurance was not provided, or for which an allowance in lieu
thereof was not provided.

 

7.4           To determine the
operation and maintenance cost of the Terminal Station Right of Use, the
Terminal Parties will take into account costs reasonably incurred in operating
and maintaining the facilities involved, which meets international standards
where applicable or requirements laid down by applicable laws and professional
organizations appropriate to a Party, including, but not limited to, the cost
of attendance, testing, adjustments, repairs and replacements, customs duties,
taxes (except income tax as imposed upon the net income of a Party) paid in
respect of such facilities, billing activities, administrative costs,
appropriate financial charges.

 

7.5           Where the use of a
terminal station or of certain equipment situated therein, such as power supply
or testing and maintenance equipment, is shared, by China-US CN and other
communications systems terminating at that terminal station, the Terminal
Station Right of Use capital and operating and maintenance charge shall reflect
such sharing arrangements to be developed by F&ASC.

 

7.6           In the event that an
agreement for another cable system utilizing any terminal station of China-US
CN is terminated prior to the termination of this Agreement, the owner of the
terminal station in question shall ensure that the terminal station shall be
available for

 

14

 

China-US CN
for the duration of this Agreement on fair and equitable terms.  If the terminal station in question is not
available for the landing and terminating of China-US CN for any reason, the
relevant owner, with the agreement of the Parties hereto, shall take all
necessary measures to ensure that another appropriate terminal station in the
country of that owner shall be available for China-US CN for the duration of
this Agreement on terms and conditions similar to those contained in this Agreement.

 

7.7           The F&ASC shall
establish, for approval by the Management Committee, the billing and payment
procedures for payments due in accordance with this Paragraph 7.  Such procedures shall specifically establish
the billing and payment procedures to reflect changes to Parties’
categorization of capacity and any associated modification to Schedule G.

 

7.8           Payments due under this
Paragraph 7 shall be made in accordance with the following principles;

 

(i)            On
the RFS Date, or as soon after as practicable, the Terminal Parties bill the
Parties, for the capital cost of the Terminal Station Right of Use.

 

(ii)           The
Parties shall be billed individually by the Terminal Parties, as appropriate,
for the Terminal Station Right of Use operation and maintenance costs.

 

(iii)          The
billed Party shall pay such bills to the Terminal Party within forty-five (45)
days from the date on which the bills were rendered.  Bills shall be payable in the currency in which the bill is
rendered.

 

7.9           For any part of Segment
T, nothing contained in this Agreement shall vest or be deemed to vest in any
Party, other than the relevant Terminal Party, any salvage rights in that
Segment, in the respective terminal station or any terminal station substituted
thereof.  Any and all costs associated
with these salvage rights shall be borne by that relevant Terminal Party in
their entirety.

 

7.10         In the event of sale or
other disposition of Segment T, or any part thereof, the relevant Terminal
Party shall share with the other Parties any net proceeds, or costs, of such
sale or disposition received, or expended, by the relevant Terminal Party in
the proportion in which costs are allocated among the Parties in the Segment T
of sale or disposition, as specified in Schedule F at the time of the sale or disposition.  Upon termination of this Agreement, each
Terminal Party shall share the proceeds with the other Parties the net book
value of the Segment T, which it provided, in the proportions in which costs
are allocated among the Parties in the Segment T, as specified in Schedule F at
the time this Agreement is terminated.

 

7.11         Notwithstanding
Subparagraph 7.1 of this Agreement, a Party thereby granted a Terminal Station
Right of Use interest in Segment T may, prior to the commencement of that
Terminal Station Right of Use interest, elect to renounce its Terminal Station
Right of Use entitlement and to instead have use of any Segment T for the
duration of this 

 

15

 

Agreement on
such terms and conditions as are agreed between that Party and the relevant
Terminal Party, and in such event the provisions of Subparagraphs 7.1-7.10 of
this Agreement shall apply in relation to such use except insofar as they may
be modified by such agreements.  This
Subparagraph 7.11 shall not operate to confer on a Party any financial or other
benefit of substance to which that Party would not otherwise be entitled under
this Agreement.

 

7.12         The Terminal Parties
agree to grant a Terminal Station Right of Use to China-US CN IRU purchasers.

 

8.             DEFINITION OF WET SEGMENT CAPITAL COSTS

 

8.1           The Wet Segment capital
costs (hereinafter referred to as the “Wet Segment Capital Costs”) are the
costs incurred in connection with the engineering, provision, construction, and
installation of the Wet Segment, or causing it to be engineered, provided,
constructed, and installed, and shall include:

 

(i)            appropriate
costs, including appropriate financial charges, incurred under the MOU in
respect of specific activities such as desk top surveys and marine surveys;

 

(ii)           those
costs payable to the Suppliers under the Supply Contract attributable to the
Wet Segment;

 

(iii)          those
costs directly incurred by the Initial Parties which shall be fair and
reasonable in amount and not included in the Supply Contract, and which have
been directly and reasonably incurred for the purpose of, or to be properly
chargeable in respect of, such engineering, provision, construction,
installation and laying of the Wet Segment, including, but not limited to, the
costs of engineering, design, materials, manufacturing, procurement and
inspection, installation, removing (with appropriate reduction for salvage),
cable ship and other ship costs, route survey, burying, testing associated with
laying or installation, customs duties, taxes (except income tax imposed on the
net income of a Party), appropriate financial charges, supervision, billing
activities, overheads and insurance or a reasonable allowance in lieu of
insurance if such Party elects to carry a risk itself, being a risk which is
similar to one against which a supplier has insured or against which insurance
is usual or recognized or would have been reasonable;

 

(iv)          those
costs and expenses incurred by the Central Billing Party to be appointed
pursuant to Subparagraph 9.2, up to the RFS Date, in fulfilling its
responsibilities as set forth in Annex 2;

 

(v)           those
costs and expenses incurred by the Network Administrator up to the RFS Date in
fulfilling its responsibilities as set forth in Annex 2.

 

16

 

(vi)          those
costs and expenses incurred by the custodians of the original or supplementary
agreements for distributing the certified photocopies to the Parties to this
Agreement.

 

8.2           The Wet Segment Capital
Costs shall exclude costs incurred by the Parties hereto in the holding of
Management Committee meetings, and meetings of its Subcommittees or groups
established pursuant to Subparagraphs 3.7.

 

8.3           For the purpose of this
Agreement, the cost of the repair or replacement of any part of China-US CN in
the event of damage or loss arising during construction, laying, burying,
installing and the bringing into operation of China-US CN, which is
attributable under the China-US CN Supply Contract to the Parties, shall be
regarded as properly chargeable as part of the Wet Segment Capital Costs.  Any of the Parties may at its own expense
insure against such risks so far as its own share of such costs is
concerned.  Should the Parties agree
jointly to insure such risks, the costs of such insurance shall form part of
the Wet Segment Capital Costs.

 

9.             ALLOCATION AND BILLING OF THE WET
SEGMENT CAPITAL COSTS

 

9.1           The Wet Segment Capital
Costs as defined in Paragraph 8, including any additional work or property
incorporated into the Wet Segment subsequent to the RFPA Date by agreement of
the Management Committee, shall be borne by the Parties in the proportions set
forth in Schedule C.

 

9.2           The Management
Committee shall appoint a Central Billing Party (hereinafter referred to as the
“CBP”) from among the Initial Parties. 
The terms of reference for the CBP are as set forth in Annex 2.

 

9.3           Unless the Management
Committee shall authorize changes to the procedures for the rendering of bills
for the Wet Segment Capital Costs, the CBP shall promptly render bills to each
of the Parties for their pro rata share of the costs due and included in the
Supply Contract in accordance with Schedule C and the billing and payment
procedures established by the F&ASC and approved by the Management
Committee.  The Initial Parties shall
each render bills to the CBP for other Party’s shares of costs incurred by the
Initial Parties in accordance with Paragraph 8, for non supply contract
activities (including appropriate financial charges), but not more frequently
than once a quarter.  All bills shall
contain a reasonable amount of detail to substantiate the bills.  On the basis of such bills, the Parties
concerned shall make payments to the CBP or to such entities as the CBP may
designate, in accordance with billing and payment procedures approved by the
Management Committee.  Each Party shall
pay to the CBP the amount it owes within forty-five (45) days from the date on
which the bills were rendered by the CBP. 
Bills shall be payable in the currency in which the bill is rendered.

 

9.4           As soon as practicable
after the RFS Date, the amount of each Party’s share of the Wet Segment Capital
Costs shall be computed by the CBP as appropriate and it shall make

 

17

 

appropriate adjustments
and render any necessary bills or arrange any necessary refunds by way of final
settlement in order that each Party may bear its proper share of costs.

 

9.5           For purposes of this
Agreement, financial charges shall be computed as applicable on a daily basis
from the date payment is incurred until the date payment is due, at a rate
equal to the lowest publicly announced prime rate or minimum commercial lending
rate, however described, for 90 day loans in the currencies of the Initial
Parties or the currency of billing, as applicable, charged by established
commercial banks in the countries concerned on the fifteenth day of the month
in which the costs were incurred by the billing parties.  If such a day is not a business day, the
rate prevailing on the next business day shall be used.  The source of the rate of such financial
charges shall be as shown at Annex 3. 
The application of financial charges relating to costs incurred for the
Wet Segment shall be limited to a maximum of 120 days, unless otherwise
approved by the Management Committee.

 

9.6           Amounts billed and not
paid when due shall accrue extended payment charges from the day following the
date on which payment was due until paid. 
If the due date is not a business day, the due date shall be postponed
to the next business day.  For the
purpose of this Agreement, extended payment charges shall be computed at 125%
of the rate described in Subparagraph 9.5 on the day following the date payment
on the bill was due.

 

9.7           In the event that
applicable law only allows the imposition of financial charges and extended
payment charges at the rate below that established in accordance with this
Paragraph 9, financial charges and extended payment charges shall be at the
highest rate permitted by applicable law.

 

9.8           No refund of financial
charges and no extended payment charges shall be made or imposed by the CBP or
the billing Parties if the amount of charges involved is less than one hundred
(100) US Dollars or its equivalent in the billing currency.

 

9.9           In the case of bills
containing costs billed on a preliminary billing basis, appropriate adjustments
shall be made in subsequent bills after the actual costs involved are
determined.

 

9.10         A bill shall be deemed to
have been accepted by the Party to whom it is rendered if that Party does not
present written objection on or before the date when payment is due.  If such objection is made, the CBP shall
make every reasonable effort to settle promptly the dispute concerning the bill
in question.  If the objection is
sustained and the billed Party has paid the disputed bill, the agreed
overpayment shall be refunded to the billed Party by the CBP or the billing
Party, as appropriate, promptly together with any financial charges calculated
thereon at a rate determined in accordance with Subparagraph 9.5 of this
Agreement from the date of payment of the bill to the date on which the refund
is transmitted to the billed Party.  If
the objection is not sustained and the billed Party has not paid the disputed
bill, the said Party shall pay such bill promptly together with any extended
payment charges calculated thereon at a rate determined in accordance with
Subparagraph 9.6 of this Agreement from the day following the date on which
payment

 

18

 

was due until
Paid.  Nothing in this Subparagraph 9.10
shall relieve a Party from paying those parts of a bill that are not in
dispute, and, in the event of failure by a Party to do so, that Party shall pay
thereon extended payment charges in accordance with Subparagraph 9.6.

 

10.          DUTIES AND RIGHTS AS TO OPERATION AND
MAINTENANCE OF SEGMENTS

 

10.1         Each Terminal Party shall
be solely responsible for the operation and maintenance of the Segment T
identified in Subparagraph 6.1 and that portion of the Wet Segment between the
Cable Network Interface at the terminal station and its respective Cable
Landing Point.  Each Terminal Party
shall use all reasonable efforts to operate and maintain or cause to be
operated and maintained Segment T and the said portion of the Wet Segment,
economically and in efficient working order.

 

10.2         The Terminal Parties (for
the purpose of this Paragraph 10, collectively called the “Maintenance
Authorities” and each individually called a “Maintenance Authority”), collectively
as appropriate shall use all reasonable efforts to maintain economically the
Wet Segment in efficient working order and with an objective of achieving
effective and timely repairs when necessary.

 

10.3         Prior to the RFS Date the
Maintenance Authorities shall submit for review by the O&MSC and approval
by the Management Committee appropriate practices and procedures for the
continued operation and maintenance of the Wet Segment.  The Maintenance Authorities shall each
provide information to the O&MSC regarding the practices and procedures for
the continued operation and maintenance of their respective Segments.  The Maintenance Authorities shall also
furnish such budgetary estimates of the cost of such operation and maintenance
of China-US CN as the Management Committee may reasonably request.  Following the RFS Date, the Maintenance
Authorities shall provide the O&MSC and the Management Committee with such
reports as it may reasonably require on the operation of China-US CN including
any proposals for planned repair or improvement work, together with
appropriately revised budgetary estimates relating to the operation and
maintenance of China-US CN.  The
O&MSC may review and amend the practices and procedures for the operation
and maintenance of the Wet Segment, subject to the approval of the Management
Committee.  The Management Committee may
revise the allocation of responsibility for the operation and maintenance of
the Wet Segment.

 

10.4         The Maintenance
Authorities shall have the right to deactivate the Wet Segment, or any part
thereof, in order to perform their duties. 
Prior to such deactivation, reasonable notice shall be given, and
co-ordination shall be made with the other Parties.  To the extent possible, sixty (60) days prior to initiating such
action, the Maintenance Authorities involved shall advise the other Parties in
writing of the timing, scope, and costs of significant planned maintenance
operations, of significant changes to existing operations and maintenance
methods and of contractual arrangements for cable ships or other

 

19

 

maintenance
facilities or devices that shall have a significant impact on operation or
maintenance costs.  Should Initial
Parties representing at least ten (10) percent of the total voting interests in
China-US CN specified in Schedule B wish to review such operation or change
prior to its occurrence, such Initial Party or Initial Parties shall notify the
appropriate Maintenance Authorities and the O&MSC Co-Chairmen in writing
within thirty (30) days of such advice. 
Upon such notification, the O&MSC shall initiate action to convene
an ad hoc meeting for such a review.

 

10.5         Each Party that has
designed or procured equipment used in China-US CN shall give necessary information
relating to the operation and maintenance of the equipment to the Maintenance
Authority responsible for the operation and maintenance of such equipment.  Each Maintenance Authority with
responsibility for the maintenance of any segment of China-US CN shall grant to
each other Maintenance Authority prompt access to information necessary to the
performance of duties.

 

10.6         Each Maintenance
Authority with respect to China-US CN shall be authorized to pursue claims in
its own name, on behalf of the Parties, in the event of any damage or loss to
China-US CN or any part thereto and may file appropriate lawsuits or other
proceedings on behalf of the Parties in accordance with Subparagraph 22.3.

 

10.7         Under no circumstances
shall any Party be liable to any other Party for any loss or damage sustained
by reason of any failure in, or breakdown of, the facilities constituting
China-US CN or any interruption of service, whatsoever shall be the cause of
such failure, breakdown, or interruption, and however long it shall last.  If the Maintenance Authority responsible for
operating and maintaining such facilities involved as specified in this
Paragraph 10 fails to restore those facilities to efficient working order and
operation within a reasonable time after having been called upon to do so by
any other Party to whom capacity is assigned by this Agreement, the Management
Committee may, to the extent that it is practical to do so, place or cause to
be placed such facilities in efficient working order and operation and charge
the Parties their proportionate shares of the costs reasonably incurred in
doing so.

 

10.8         Each Party to this
Agreement, at its own expense, shall have the right to inspect from time to
time the operation and maintenance of any portion of China-US CN and to obtain
copies of the maintenance records.  For
this purpose, each Maintenance Authority responsible for maintaining any
Segment of China-US CN, shall retain significant records, in accordance with
Subparagraph 12.7.

 

10.9         The Maintenance Authorities
shall be entitled to establish the necessary agreements in respect of the
crossings by the Wet Segment of other undersea plant, including but not limited
to pipelines, and may sign these agreements on behalf of the Parties after
approval by the Management Committee and shall provide the Parties with
appropriate copies of these agreements on request.

 

20

 

11.          ALLOCATION AND BILLING OF OPERATION AND
MAINTENANCE COSTS OF THE WET SEGMENT

 

11.1         The costs of operating
and maintaining the Wet Segment of China-US CN shall be shared by the Parties
in the relevant proportions specified in Schedule D.

 

11.2         The F&ASC shall
establish billing procedures for the operation and maintenance costs of the Wet
Segment for approval by the Management Committee.

 

11.3         The operation and
maintenance costs to which Subparagraph 11.1 refers shall be the costs
reasonably incurred in operating and maintaining the facilities involved after
the RFPA Date, including, but not limited to, the cost of attendance, testing,
adjustments, storage of plant and equipment, repairs (including repairs at sea)
and replacements, cable ships (including an appropriate share of standby costs)
cable depots, reburial and the replacement of plan, tools and test equipment,
system restoration costs customs duties, taxes (except income tax imposed upon
the net income of a Party) paid in respect of such facilities, billing
activities, the Network Administrator’s and CBP’s costs incurred after the RFS
Date (on the basis of a budget approved by the Management Committee),
appropriate financial charges, supervision, overheads and costs and expenses
reasonably incurred on account of claims made by or against other persons in
respect of such facilities or any part thereof and damages or compensation
payable by the Parties concerned on account of such claims.  Costs, expenses, damages, or compensation
payable to the Parties on account of claims made against other persons, shall be
shared by the Parties in the proportions specified in Schedule D.

 

11.4         Each Maintenance
Authority shall render bills to the CBP for the expenditures herein referred to
not more frequently than quarterly in accordance with the procedures
established by the F&ASC.  The
Maintenance Authorities shall also furnish such further details of such bills
as the other Parties may reasonably require. 
On the basis of such bills, each Party shall pay within forty-five (45)
days from the date on which the bills are rendered by the CBP.  Bills shall be payable in the currency in
which the bill is rendered.

 

11.5         Amounts billed and not
Paid when due shall accrue extended payment charges from the day following the
date on which payment was due until Paid, and such charges are to be computed
and applied in accordance with Subparagraph 9.6 of this Agreement.  If the due date is not a business day, the
payment shall be postponed to the next business day.

 

12.          KEEPING AND INSPECTION OF BOOKS

 

12.1         For those portions of the
Wet Segment, if any, specified in the Supply Contract as cost incurred items,
the Procurement Group shall ensure that the Supply Contract requires the
Supplier to keep and maintain such books, records, vouchers and accounts of all
such costs with respect to the engineering, provision and installation of those
items for a period of five (5) years from the RFPA Date of the Wet Segment, as
specified in the Supply Contract.

 

21

 

12.2         For those portions of the
Wet Segment specified in the Supply Contract as fixed cost items, the
Procurement Group shall ensure that the Supply Contract requires the Supplier
to keep and maintain records with respect to their respective billing of those
items for a period of five (5) years from the RFPA Date of the Wet Segment, as
specified in the Supply Contract

 

12.3         The Procurement Group
shall ensure that the Supply Contract requires the Supplier to obtain from
their contractors and subcontractors such supporting records, for other than
the cost of fixed cost items, as may be reasonably required by Subparagraph
12.1 and to keep and maintain such records for a period of five (5) years from
the RFPA Date of the Wet Segment, as specified in the Supply Contract.

 

12.4         The Procurement Group
shall ensure that the Supply Contract shall afford the Parties to this
Agreement the right to review the books, records, vouchers, and accounts
required to be kept, maintained, and obtained pursuant to Subparagraphs
12.1,12.2 and 12.3.

 

12.5         With respect to costs
incurred for the provision of the Wet Segment by a Party, comparable records to
those specified in Subparagraphs 12.1, 12.2 and 12.3 as appropriate, shall be
maintained by the Party for a period of five (5) years from the date that such
costs were incurred.

 

12.6         The Procurement Group and
the Terminal Parties shall each keep and maintain such books, records,
vouchers, and accounts of all costs that are incurred in the engineering,
provision and installation of the Wet Segment and Segment T and not included in
the Supply Contract, which they incur directly, for a period of five (5) years
from the RFS Date or the date the work is completed, whichever is later.  The CBP shall keep and maintain such books,
records, vouchers and accounts with respect to its billing of costs incurred by
the Terminal Parties and any other Party having incurred costs for
implementation of China-US CN as authorized by the Management Committee, and
costs billable under the Supply Contract for a period of five (5) years from
the System RFS Date or the date on which the work is completed, whichever is
later.

 

12.7         With respect to the
operation and maintenance costs of Segments T and the Wet Segment, such books,
records, vouchers, and accounts of costs, as are relevant, shall be kept and
maintained by the Terminal Parties for a period of five (5) years from the date
on which the corresponding bills are rendered to the Parties.  If a Terminal Party does not retain these
records beyond this period, a summary of important items should be retained for
the life of China-US CN.

 

12.8         Any Party shall have the
right to review or audit the relevant books, records, vouchers, and accounts of
costs pursuant to this Paragraph 12.  In
affording the right to review or audit, any such Party whose records are being
reviewed or audited shall be permitted to recover, from the Party or Parties
requesting the review or audit, the entire costs reasonably incurred in
complying with the review or audit.  In
the case of an audit initiated by the Management Committee and exercised by the
F&ASC, the audited Party 

 

22

 

or Parties
shall be permitted to recover the entire costs of the review or audit from the
Parties in the proportions specified in Schedule D.

 

12.9         Any rights of review and
audit pursuant to this Paragraph 12 shall only be exercisable through the
F&ASC in accordance with the F&ASC’s audit procedures.

 

13.          ASSIGNMENT AND USE OF CAPACITY

 

13.1         Parties shall obtain
Notional Capacity in MIU* Points in return for their financial investment in
the China-US CN as shown in Schedule G. 
The Notional Capacity shall be comprised of Assigned Capacity, Reserved
Capacity, and, in the case of Initial Parties, Pool Capacity.

 

13.2         The Parties may designate
a portion of their Notional Capacity as Assigned Capacity which shall be
assigned in specific Paths of the China-US CN in accordance with Schedule
H.  Assigned Capacity shall be utilised
to establish Path Assignments as follows:

 

(i)            jointly-assigned
MIUs in a Path Assignment shall be considered as consisting of two
half-interest in a MIU, with one half-interest assigned to a Party, which
together with the corresponding half interest, shall be used for the provision
of international telecommunications services between such a Party and another
Party or a China-US CN IRU purchaser.

 

(ii)           wholly-assigned
MIUs in a Path Assignment shall be considered as consisting of two
half-interests in a MIU assigned to one Party.

 

13.3         Upon designation of its
Assigned Capacity pursuant to Subparagraph 13.2, each Initial Party shall
designate its remaining Notional Capacity to Reserved Capacity or Pool
Capacity.  The sum of each Initial
Party’s Assigned Capacity and Reserved Capacity shall be maintained not less
than 2,646 MIU*Points.  Any other Party
shall designate its remaining Notional Capacity to Reserved Capacity.  Any Party having Reserved Capacity may,
based on procedures approved by the Management Committee, have such capacity,
or a portion thereof redesignated to its Assigned Capacity.

 

13.4         Any Party having Reserved
Capacity may utilise such capacity for provision of temporary or occasional
telecommunication services (hereinafter referred to as “OTS”) in accordance
with the guidelines developed by I&CPSC in consultation with A&RSC and
Network Administrator.

 

13.5         An Initial Party may
transfer between Pool Capacity and Reserved Capacity as follows:

 

(i)            six
(6) months before RFS Date, an Initial Party may convert all or a portion of
its Reserved Capacity to Pool Capacity, in accordance with procedures developed
by the Network Administrator and approved by Management Committee.

 

23

 

(ii)           every
six (6) months, starting from two (2) months before RFS Date, an Initial Party
may convert all or a portion of its Pool Capacity to Reserved Capacity, in
accordance with procedures developed by the Network Administrator and approved
by Management Committee.

 

(iii)          notwithstanding
Subparagraph 13.5 (ii), any Initial Party may transfer all or a portion of its
Pool Capacity to Reserved Capacity on other occasions, subject to the approval
of the Management Committee.

 

13.6         An Initial Party may
purchase capacity from Pool Capacity at the cost determined by the Management
Committee.  This transfer shall be
accompanied by the transfer of the ownership of the Common Reserve Capacity but
not voting interest.  Capacity for this
transfer shall be taken from each Initial Parties’ Pool Capacity in proportion
to its contribution to the Pool Capacity. 
Funds from such transfer shall be reimbursed to the Initial Parties
concerned in proportion to their contribution to the Pool Capacity as defined
in Schedule I.  Capacity purchased from
the Pool Capacity shall only be designated to Assigned and/or Reserved
Capacity.

 

13.7         Except with the approval
of the Management Committee, no Carrier may reassign any of the Path Assignment
of its Assigned Capacity.

 

13.8         No Carrier may make
available any of its Assigned Capacity on any basis whatsoever, to another
Carrier, except with the approval of the Management Committee.  Nothing in this Paragraph 13, however, shall
be construed as precluding a Party from providing international
telecommunication service using its Assigned Capacity to its customers.

 

13.9         No Party may make
available any of its Reserved Capacity on any basis whatsoever, to another
Carrier, except with the approval of the Management Committee.

 

13.10       Notwithstanding Paragraph
13.7, 13.8, and 13.9, the following shall apply:

 

(i)            A
Party’s wholly assigned MIUs in the China-US CN can only be used by itself, its
wholly owned subsidiaries, Parent Company of the Party, and/or the wholly owned
subsidiaries of a common Parent Company of the party in question and all such
wholly owned subsidiaries must also be a Carrier.

 

(ii)           A
Party’s capacity in the China-US CN can only be used by itself, its wholly
owned subsidiaries, Parent Company of the Party, and/or the wholly owned
subsidiaries of a common Parent Company of the party in question and all such
wholly owned subsidiaries must also be a Carrier.

 

(iii)          A
Carrier will be allowed to use its wholly assigned MIUs with its far end
correspondents that have wholly assigned MIUs to form matched pairs of MIUs
(i.e. wholly assigned MIUs must be activated and/or terminated in pairs)

 

24

 

(iv)          A
Carrier will be allowed to convert its whole MIUs to two (2) half-MIUs its near
end to match with half-MIUs from other China-US CN capacity owner or IRU owner
to form matched pairs of half MIUs.

 

13.11       Notwithstanding Paragraph
13.10, where in a particular jurisdiction, the laws or regulations restrict
foreign ownership in establishing a Carrier to a specific level and a Party or
its Parent Company or its wholly owned subsidiary or a wholly owned subsidiary
of a common Parent Company owns or invests directly at such specified level,
then that Party shall be allowed to transfer capacity to such Carrier based on
the following mechanism:

 

(i)            A
Party can allow its capacity to be used by such Carrier up to the same
percentage of such Carrier’s capacity requirement as the foreign ownership
restriction on a bi-directional basis provided the Parties’ investment in their
respective subsidiaries meet the respective foreign ownership limit of the
jurisdiction in which their subsidiaries operate.

 

(ii)           The
remainder of such Carrier’s capacity requirement will be satisfied through IRU
sales from the Common Reserved Capacity at a price set by the Management
Committee.

 

13.12       Except as provided for in
Subparagraph 13.10 and Subparagraph 13.11 and not earlier than 2 years after
the RFS Date of the China-US CN, unless approved by the Management Committee, a
Party will not be allowed to transfer for the purpose of self correspondence,
wholly assigned capacity to a subsidiary outside of its home country/place, if
in its home country/place, the laws or regulations restrict foreign ownership
in establishing a Carrier to below 100%. 
Such Management Committee approval will require a two-thirds favorable
vote, and will be granted on a bi-directional basis between the relevant
countries/place.

 

13.13       Schedules C, D, E, F, G, H,
I, and J shall be modified, as appropriate according to Subparagraphs 13.3,
13.5-13.12 and 13.14.

 

13.14       Except as provided in
Subparagraph 13.6, 13.10, and Paragraph 14, any capacity acquired after the
signing of this Agreement shall be on an IRU basis from the Common Reserve
Capacity.  IRU capacity shall be
acquired in specific Paths of the China-US CN in accordance with Schedule J.  IRU capacity shall be utilized to establish
Path Assignments as follows:

 

(i)            jointly-assigned
MIUs in a Path Assignment shall be considered as consisting of two
half-interests in a MIU, with one half-interest assigned to a China-US IRU
purchaser, which together with the corresponding half interest, shall be used
for the provision of international telecommunications services between such a
China-US CN IRU purchaser and a Party or another China-US CN IRU purchaser.

 

25

 

(ii)           wholly-assigned
MIUs in a Path Assignment shall be considered as consisting of two
half-interests in a MIU assigned to one Party.

 

13.15       Capacity for the IRU sales
shall be taken from the Common Reserve Capacity.  The sales of the IRU capacity shall be in accordance with the
terms and conditions to be approved by the Management Committee.  The decision of the IRU sale to a specific
Carrier shall be subject to the approval of the Management Committee.  The Network Administrator shall be
authorized to execute IRU agreement with China-Us CN IRU purchasers on behalf
of Parties to this Agreement.  No
provisions of the IRU agreement shall override the provisions of this
Agreement.

 

13.16       The revenue generated from
the Common Reserve Capacity shall be reimbursed to all the Parties in
accordance with Schedule E.

 

13.17       The funds from operation
and maintenance charges of the Wet Segment as specified in Paragraph 11, which
are payable by the China-US CN IRU purchasers shall be distributed to the
Parties in accordance with Schedule D.

 

13.18       The funds from Terminal
Station Right of Use charges as specified in Paragraph 7, which are payable by
the China-US CN IRU purchasers, shall be distributed to the Parties in
proportion to the Parties allocation of the specific Segment T costs in
accordance with Schedule F.

 

13.19       The Common Reserve Capacity
of the China-US CN shall be held by the Parties in common and undivided shares
in the proportions set forth in Schedule E.

 

13.20       The Management Committee
may authorize the utilization of the Common Reserve Capacity for restoration
for other cable systems on terms and conditions determined by the Management
Committee.

 

13.21       The communications capacity
of any Notional Capacity may be optimized by the Parties to whom such capacity
is assigned by the use of equipment which shall more efficiently use such
capacity, provided that the use of such equipment does not cause an
interruption of, or interference, impairment, or degradation to, the use of any
other capacity in the China-US CN, or prevent the use of similar equipment by
other Parties.  Such equipment, if used,
shall not constitute a part of the China-US CN.

 

13.22       The China-US CN shall be
capable of supporting payload paths of VC12, VC3 and VC4.  Parties have the right to access such
payload paths which shall require 1,21, and 63 MIUs respectively.

 

14.          EXPANSION OF NOTIONAL CAPACITY

 

14.1         After the Pool Capacity
is fully disposed of, Notional Capacity Expansion shall be carried out
automatically.  The whole or a part of
the Common Reserved Capacity shall be additionally allocated to the Parties in
the proportions set forth in Schedule E, so as to 

 

26

 

constitute the
expanded Notional Capacity (herein referred to as the “Notional Capacity
Expansion”), pursuant to the terms and conditions provided in this Paragraph
14.

 

14.2         The minimum quantum of
Notional Capacity Expansion shall be determined by the Management
Committee.  Each Party shall be granted
additional capacity in accordance to the respective percentage referred in
Schedule E.

 

14.3         The quantum of Notional
Capacity Expansion can be increased in following three cases:

 

(i)            If
the Management Committee decides on an expansion amount of more than the
minimum quantum of Notional Capacity Expansion, which decision shall require a
two third of the total voting interests specified in Schedule B.

 

(ii)           If
the cost of the Capacity to be transferred from Pool Capacity pursuant to
Subparagraph 13.6 has become zero or less, in which case the Initial Parties
holding the Pool Capacity shall redesignate all of their Pool Capacity to
Reserved Capacity, all remaining Common Reserve Capacity shall be additionally
allocated to the Parties.

 

(iii)          If
the amount of the remaining Common Reserve Capacity, after the Notional
Capacity Expansion is carried out, is less than the minimum quantum for the
next Notional Capacity Expansion, all the remaining Common Reserve Capacity
shall be additionally allocated to the Parties.

 

14.4         Following such an
expansion, each Party shall obtain its pro-rata share of the increase of
Notional Capacity in accordance with Schedule E.  Initial Parties shall specify the portion of their expanded
Notional Capacity that they wish to categorize as Assigned Capacity, Reserved
Capacity, Pool Capacity or a portion to each category.  Any other Party shall specify the portion of
their expanded Notional Capacity that they wish to categorize as Assigned
Capacity and/or Reserved Capacity.

 

14.5         An Initial Party may
transfer between Pool Capacity and Reserved Capacity after the Notional
Capacity Expansion as follows:

 

(i)            two
(2) months after the Notional Capacity Expansion, an Initial Party which has
Reserved Capacity may convert all or a portion of such capacity to Pool
Capacity, in accordance with procedures developed by the Network Administrator
and approved by Management Committee.

 

(ii)           an
Initial Party may convert all, or a portion of its Pool Capacity to Reserved
Capacity, in accordance with Subparagraph 13.5 (ii).

 

(iii)          notwithstanding
Subparagraph 14.5 (ii), any Initial Party may transfer capacity its Pool
Capacity to Reserved Capacity on other occasions, subject to the approval of
the Management Committee.

 

27

 

14.6         After the total Notional
Capacity reaches the usable Design Capacity, a Party may sell its Capacity to
another Carrier on an IRU basis. 
Additionally, a capacity pool for the IRU capacity sales to Carriers
following the dissolution of the Common Reserve Capacity (herein referred to as
the “IRU Sales Pool”) may be established, if necessary, pursuant to the terms
and conditions provided in this Subparagraph 14.6.  Each Party may at its discretion and without restriction
allocate, some or all Reserved Capacity, including but not limited to the IRU
Sales Pool, or Assigned Capacity.  The
capacity provided to the IRU Sales Pool shall be jointly sold to the Carriers
pursuant to the rules and procedures, including IRU pricing, which shall be
decided by the Parties involved.  The
revenue of such IRU capacity sales shall be distributed among the Parties
involved in proportions to the capacities provided by them to the IRU sales.

 

15.          CAPACITY
ROUTING

 

15.1         Trans-Pacific MIUs will
be assigned on the most direct path (using the least number of segments).  If no capacity is available on the most
direct path, the next most direct path will be used, and so on.  If only indirect paths are available, use of
Intra-Asia / Asia-Guam connectivity will be minimized by use of Segment E.

 

15.2         Intra-Asia / Asia-Guam
MIUs will be assigned on the most direct path. 
In no case will an Intra-Asia / Asia-Guam MIU be assigned via the US
Mainland.

 

15.3         The Management Committee,
at times to be determined thereby, shall review and approve capacity routing
principles, as recommended by the I&CPSC and/or A&RSC, as necessary to
allocate the capacity in China-US CN to achieve the most efficient utilization
of the entire China-US CN.

 

15.4         The Network Administrator
shall in addition administer the routing of capacity based on the principles
established by the Management Committee.

 

16.          INCREASE OR DECREASE OF DESIGN CAPACITY

 

16.1         In the event that the
Initial Parties consider that it is beneficial to increase the Design Capacity
of China-US CN, a Design Capacity expansion shall be decided by the Management
Committee on the basis of seventy-five percent (75%) majority of the total
voting interests specified in Schedule B. 
A Party may decline to accept its proportionate share of any increase in
capacity, provided it previously expressed its intentions and voted against the
increase in Design Capacity to which it objects (hereinafter referred to as the
“Declining Party”).  In that event, a
Declining Party shall not be liable for capital or operational costs attributable
to its proportionate share of the increase in capacity nor share in the
revenues derived from the increased capacity. 
A Declining Party’s decision not to participate in the increase in
Design Capacity shall not affect in any manner its Notional Capacity or its
rights to share in the revenues derived from the Common Reserve Capacity as it
existed prior to the decision of the Management Committee to increase the
Design Capacity.  Schedules B, C, D, E,
F,G, H, I and J will be modified

 

28

 

appropriately
to reflect the decision of the Declining Party or Parties not to participate in
the increase in system capacity.

 

16.2         In the event that the
Management Committee decides to increase the Design Capacity of China-US CN,
the Management Committee may request Parties other than Initial Parties’
intention of participation.

 

16.3         If subsequent to the RFS
Date, the Design Capacity of China-US CN or any Segment thereof is increased or
decreased pursuant to the agreement of the Parties or otherwise, and such increase
or decrease of the Design Capacity affects neither the routing of circuits
assigned in China-US CN nor the Notional Capacity of China-US CN, the
additional or reduced Design Capacity shall be added to or subtracted from the
Common Reserve Capacity, as appropriate, with no change to the Schedules of
this Agreement.

 

16.4         In the event that the
capacity which China-US CN or any Segment thereof is capable of providing is
reduced below the capacity required to support the Assigned Capacity on their
existing or planned routings as a result of physical deterioration, or for
other reasons beyond the control of the Parties, the Management Committee shall
initiate a review of the capacity routings in accordance with Paragraph 15, in
order to support the rerouting of such Assigned Capacity.

 

16.5         In the event that the
capacity which China-US CN or any Segment thereof is capable of providing is
lower than the capacity needed to support the routing of circuits assigned in
China-US CN, the Path Assignments of the Parties in Schedule H may be reduced
or changed as necessary and agreed by the Parties affected and financial
adjustments shall be made among the Parties, as necessary, on the terms and
conditions to be agreed by the Management Committee.  The Schedules shall be modified, as appropriate, to reflect the
revised Path Assignments associated with such decrease of the Design Capacity.

 

17.          OBLIGATION TO PROVIDE TRANSITING
FACILITIES TO EXTEND CHINA-US CN CAPACITY

 

17.1         The Terminal Parties
shall make all reasonable effort to provide and maintain suitable digital
transit facilities within their respective countries or places when required
for use in connection with capacity in the China-US CN so as to provide
connections to the other international cable’s transmission facilities.

 

17.2         The facilities provided
pursuant to Subparagraph 17.1 shall be suitable for extending capacity in
China-US CN of all payload types as defined in Subparagraph 17.4 and shall be
furnished and maintained on terms and conditions which shall be no less
favorable than those granted to other international telecommunications entities
for transmission facilities of similar type and quantity transiting the
location involved.

 

17.3         The provision of
facilities pursuant to Subparagraph 17.1 shall be the subject of separate
agreements acceptable to the affected Parties.

 

29

 

17.4         Where required the
Terminal Parties shall support payload paths of VC12 (2.240 Mbps), VC3 (48.960
Mbps), and STM-1 (155.52 Mbps) and shall make all reasonable efforts to provide
mapping to C-12 (2.048 Mbps), C-3 (44.736 Mbps), and so far as possible, to
provide mapping to C-3 (34.368 Mbps) and C-4 (134.264 Mbps) in accordance with 

ITU-T Recommendation G707.

 

17.5         Upon request, AT&T
shall provide to the other United States Parties hereto suitable space and
connection with the China-US CN at the cable stations at Bandon, San Luis
Obispo, and Tanguisson for operating and technical control purposes relating to
the capacity assigned, or to be assigned to them in the China-US CN.  AT&T may provide such space in a
building separate from its cable stations but adjacent to its cable stations
and located on the land which forms part of Segments T4, T5, and T6.  Such United States Parties shall have the
right to provide their own personnel and the equipment in such space.  Such United States Parties shall be
reimburse AT&T for the reasonable costs incurred by AT&T in providing
such space and connection pursuant to this Subparagraph 17.5, including but not
limited to the costs of any additional building that may be reasonably
required.

 

18.          OBLIGATION TO CONNECT CHINA-US CN WITH
INLAND SYSTEMS

 

The Parties shall, at their own
expense, on or before the RFS Date, do or cause to be done, all such acts and
things as may be necessary within its operating country or place to provide and
maintain throughout the period of this Agreement suitable connection of
capacity from China-US CN with appropriate inland communications facilities in
its operating country or place.

 

19.          OBTAINING OF APPROVAL

 

19.1         The performance of this
Agreement by the Parties is conditional upon the obtaining and continuance of
such approvals, consents, governmental authorizations, licenses, and permits as
may be required or be deemed necessary by the Parties and as may be
satisfactory to them.  The Parties shall
use all reasonable efforts to obtain and to have continued in effect such
approvals, consents, authorizations, licenses, and permits.

 

19.2         The Terminal Parties
shall make all reasonable efforts to handle matters relating to the obtaining
and continuance of such approvals, consents, governmental authorizations,
licenses, and permits for the landing, construction and operation of China-US
CN in their respective countries, territories, or places.

 

20.          ASSIGNMENT OF RIGHTS AND OBLIGATIONS

 

Except as otherwise provided
for in Paragraph 13, during the continuance of this Agreement, no Party shall,
without the consent of the Management Committee sell, assign transfer, or
dispose of its rights or obligations under this Agreement or of any

 

30

 

interest in
China-US CN except to a successor, or subsidiary of such Party or a corporation
controlling, or under the same control as, such Party, in which case written
notice shall be given in a timely manner by the Party making said sale,
assignment, transfer, or disposition, and in the case of any assignment of
capacity in China-US CN pursuant to this Paragraph, the consent of any other
Party or Parties to whom the capacity is jointly assigned is obtained.  In each case, such consent shall not be
unreasonably delayed or withheld.

 

21.          DEFAULT

 

21.1         If any Party fails to
make any payment required by this Agreement (in Default) including without
limitation maintenance on the date when it is due and such Default continues
for a period of at least two months after the date when payment is due, the CBP
or the billing Party as appropriate, may notify the defaulting Party in writing
of its intent to notify the Management Committee of the status of the matter
and to request the reclamation of capacity, as provided form this Paragraph, if
full payment is not received within four months of such notification to the
defaulting Party.  If full payment is
not received within such specified period, the CBP or the billing Party as
appropriate, may notify the Management Committee of the status of the matter
and request that the Management Committee reclaim the capacity in China-US CN
assigned to the defaulting Party.

 

21.2         The Management Committee
shall have the option of reclaiming the capacity assigned to a Party that is in
Default under the Subparagraph 21.1 of this Agreement, if such payment Default
has existed for a period of six (6) months. 
The Management Committee shall consider any extenuating circumstances
not within the specific control of the defaulting Party and the interests of
any Party or Parties that have jointly assigned capacity with the defaulting
Party in determining whether or not to reclaim any or all of the capacity
allocated to such defaulting Party.  The
Management Committee shall determine arrangements for disposition of any
reclaimed capacity taking into account the interests of the Party or Parties
holding jointly assigned capacity with the defaulting Party.  The remaining Parties shall not be obliged
to make any payments or credits for capital costs to the defaulting Party for
the reclaimed capacity.  All rights of a
defaulting Party under this Agreement shall terminate as of the time the
Management Committee reclaims all of the capacity previously allocated to the
defaulting Party; and concurrent with such reclamation of capacity, the
defaulting Party shall cease to be a Party to this Agreement.  In such circumstances this Agreement shall
be appropriately amended to reflect the default of a Party and the reallocation
of interests pursuant to arrangements determined by the Management Committee.

 

21.3         Unless otherwise agreed
the Party in Default shall remain liable and obligated for its share of all
costs and liabilities that in any way relate to the abandonment of the China-US
CN.  For the avoidance of doubt, upon
any reclamation of capacity, acquisition or assignment of the interest of the
Party in Default the liabilities and obligations of the Party in Default for
abandonment including, without limitation making all payments,

 

31

 

shall continue
in full force and effect and be assessed on the interest of the Party in
Default at the date of such reclamation, acquisition or assignment.

 

22.          SETTLEMENT OF CLAIMS BY PARTIES

 

22.1         If any Party is obliged
by a final judgment of a competent tribunal or under a settlement approved by
the Management Committee, to discharge any claim, including all costs and
expenses associated therewith, resulting from the implementation of this
Agreement, the Party which has discharged the claim shall be entitled to
receive from the other Parties reimbursement in the proportions as set out in
Schedule C.

 

22.2         If any claim is brought
against a Party it shall, as a condition of reimbursement under Subparagraph
22.1, give written notice thereof to the Management Committee as soon as
practicable and shall not admit liability nor settle, adjust or compromise the
claim without the approval of the Management Committee.

 

22.3         Before any Party brings a
claim against any person in respect of loss or damage to any part of China-US
CN, it shall first consult with the Management Committee and shall not settle,
adjust, or compromise such a claim without the approval of the Management
Committee.

 

22.4         Upon termination of this
Agreement pursuant to Paragraph 26, the Parties’ responsibility shall not be
relieved from any liabilities, costs, damages or obligations which may arise in
connection with claims made by persons with respect to China-US CN, or any part
thereof, or which may arise in relation to the China-US CN due to any law,
order or regulation made by any government or international convention, treaty
or agreement. Any such liabilities, costs, damages or obligations shall be
divided among the Parties in the proportions as set out in Schedule C.

 

22.5         In the event that no
agreement can be reached, any dispute among the Parties shall be settled in
accordance with Paragraph 30.

 

23.          RELATIONSHIP AND LIABILITY OF THE
PARTIES

 

23.1         The relationship between
or among the Parties shall not be that of partners and nothing therein
contained shall be deemed to constitute a partnership between or among them, or
to merge their assets or other liabilities or undertakings.  The common enterprises among the Parties
shall be limited to the express provisions of this Agreement.  The liability of the Parties shall be several
and not joint or collective.

 

23.2         Each Party agrees to
indemnify each of the other Parties in the proportions as set out in Schedule C
in respect of all costs, expenses, damages and demands, arising out of or in
connection with any claim against, or liability of, the latter as an owner of
China-US CN where such claim is made by, or the liability is to, any third
party not being a Party hereto and arises out of or in connection with China-US
CN.  Subject to there being no conflict

 

32

 

of interest,
each Party so indemnifying shall have the right, at its sole cost and expense,
to observe but not directly participate in any discussions, meetings or
conferences held prior to or during any settlement or legal proceedings
resulting from any such claim or liability. 
Notwithstanding the provisions of the previous sentence, the Party to be
indemnified shall consult in good faith with the indemnifying Parties before
accepting any settlement or reaching any other decision affecting the liability
of the indemnifying Parties.

 

23.3         Under no circumstances
shall any Party be liable to any other Party in contract, tort, (including
negligence or breach of statutory duty) or otherwise for loss (whether direct
or indirect) of profits, property, traffic, business or anticipated savings, or
for any indirect or consequential loss or damage in connection with the
operation of this Agreement howsoever caused. 
Such causes shall include (but not be limited to):

 

(i)            any delay in the
provision of China-US CN;

 

(ii)           any damage to,
breakdown in or failure of China-US CN;

 

(iii)          any interruption of
service,

 

whatever may
be the reason or duration for such loss, damage or delay and for however long
it shall continue.

 

24.          PRIVILEGES FOR DOCUMENTS OR
COMMUNICATIONS

 

In the event that the
Management Committee decides to go to arbitration in accordance with Paragraph
30, each Party specifically reserves, and is granted by each of the other
Parties, in any action, arbitration or other proceeding between or among the
Parties or any of them in a country other than that Party’s own country, the
right of privileges, in accordance with the laws of the country in which the
arbitration or litigation takes place with respect to any documents or
communications which are material and pertinent to the subject matter of the
action, arbitration or proceeding in which privilege could be claimed or
asserted by that Party in accordance with those laws.

 

25.          CONFIDENTIALITY

 

25.1         All data and information
that is acquired or received by any Party in connection with China-US CN in
anticipation of or under this Agreement shall be held confidential and shall
not be divulged in any way to any third party, without the prior approval of
the Management Committee.

 

25.2         Notwithstanding
Subparagraph 25.1, any Party may, without such approval, disclose such data and
information to:

 

33

 

(i)            the
extent required by any applicable laws, or the requirements of any recognized
stock exchange in compliance with its rules and regulations or in the case of a
Party wholly owned by a sovereign government, by the rules of governance of the
Party; or

 

(ii)           any
government agency lawfully requesting such information; or

 

(iii)          any Court of competent
jurisdiction acting in pursuance of its powers

 

25.3         Any Party may disclose
such data and information to such persons as may be necessary in connection
with the conduct of the operations of China-US CN upon obtaining a similar
undertaking of confidentiality from such persons to whom such information may
be disclosed.

 

25.4         Each Party shall remain
bound by the provisions of this Paragraph during the period of this Agreement
and for the period of five years following termination of this Agreement.

 

26.          DURATION OF AGREEMENT AND REALIZATION
OF ASSETS

 

26.1         This Agreement shall become
effective on the date and year first above written and shall continue in
operation for at least an initial period of twenty-five (25) years following
the RFS Date (hereinafter referred to as “Initial Period”) and shall be
terminable thereafter by agreement of the Parties.  However, any Party may terminate its participation in this
Agreement at the end of the Initial Period or any time thereafter by giving not
less than one (1) year’s prior notice thereof, in writing, to the other
Parties.

 

26.2         This Agreement may be
terminated at any time during the Initial Period by agreement in writing of all
the Parties.  If unanimous agreement
cannot be reached between all the Parties for the retirement of China-US CN
during its specified useful life, this subject matter shall be referred to the
Management Committee for resolution in accordance with Paragraph 30 but in this
case a ninety percent (90%) majority of the total voting interests as specified
in Schedule B is required.

 

26.3         If a Terminal Party
terminates its participation in this Agreement pursuant to Subparagraph 26.1 of
this Agreement, after the Initial Period, the remaining Parties and said
Terminal party shall negotiate a reasonable agreement in order to ensure the
continuous operation of said Terminal Party’s terminal station after the
Initial Period.

 

26.4         Upon the effective date
of termination of participation of a Party, the Schedules of this Agreement
shall be appropriately modified.  The
remaining Parties shall assume the capital, operating and maintenance interests
of the Party terminating its participation in proportion to their allocation of
costs as specified in Schedule C, immediately preceding such effective date of
termination, except for the continuing rights and obligations of the terminating
Party as specified in Subparagraphs 26.6 and 26.7.  No credit for capital costs shall be made to a Party that
terminates its participation in accordance with Subparagraph 26.1.  Termination of this Agreement or termination
of the participation of any Party

 

34

 

therein shall
not terminate Subparagraphs 26.6 and 26.7 of this Agreement or prejudice the
operation or effect thereof or affect or diminish any other right or obligation
of any Party hereto accrued or incurred prior to such termination.

 

26.5         The interests of a Party
or Parties in the Wet Segment of China-US CN which come to an end by reason of
the termination of its or their participation in this Agreement or the
termination of this Agreement shall be deemed to continue for as long as is
necessary for effecting the purposes of Subparagraphs 26.6, 26.7 and 26.8 and
in the case of interests which come to an end by reason of a Party or Parties
terminating its or their participation in this Agreement, the Wet Segment shall
accordingly thereafter be held with respect to such interests at the first time
any Party terminates its participation in this Agreement, upon the appropriate
trusts by the Parties who are the owners thereof.

 

26.6         Upon termination of this
Agreement, the Parties shall use all reasonable efforts to liquidate the Wet
Segment of China-US CN within a reasonable time (one year) by sale or other
disposition between the Parties or any of them or by sale to other entities or
persons, but no sale or disposition shall be effected except by agreement
between or among the Parties who have interests in the subject thereof at the
time this Agreement is terminated.  In
the event agreement cannot be reached, the decision shall be made on the basis
of a majority of the total voting interests as specified in Schedule B.  The costs or net proceeds of interests of
every sale or other disposition shall be divided between or among the Parties
who have or were deemed to have interests in the subject thereof, at the time
this Agreement is terminated, in the proportions specified in Schedule C
immediately preceding the first time any Party terminates its participation in
this Agreement or this Agreement is terminated pursuant to Subparagraph 26.1,
whichever occurs first.  The Parties
shall execute such documents and take such action as may be necessary to effect
any sale or other disposition made pursuant to this Paragraph 26.

 

26.7         A Party’s termination of
its participation in this Agreement or the termination of this Agreement
pursuant to Subparagraph 26.1 shall not relieve that Party or Parties from any
liabilities, costs, damages or obligations which may arise in connection with
claims made by third Parties with respect to China-US CN, the facilities that
comprise China-US CN or any part or portion thereof, or which may arise in
relation to China-US CN due to any law, order or regulation made by any
government or supranational legal authority pursuant to any international
convention, treaty or agreement.  Any such
liabilities, costs, damages, or obligations shall be divided among the Parties
in the proportions in which such Parties allocation of costs is specified in
Schedule C immediately preceding the first time any Party terminates its
participation in this Agreement or this Agreement is terminated pursuant to
Subparagraph 26.1, whichever occurs first.

 

26.8         Except to the extent
otherwise provided in this Agreement, abandonment costs as included in the
abandonment program and budget or as varied by the agreement of the Management
Committee shall be shared by the Parties in accordance with Schedule C, as it
existed immediately prior to the first time any Party terminated its
participation or when this agreement was terminated whichever occurs first.

 

35

 

27.          CURRENCY AND PLACE OF PAYMENT

 

Bills rendered under this
Agreement shall be rendered in the currency of the billing Party, or the
currency in which the cost was incurred provided that such currency is a
currency of a Terminal Party or as specified in the Supply Contract.  Bills shall be payable in the currency in
which the bill is rendered, or as designated by the Management Committee, to
the designated office or account of the payee.

 

28.          WAIVER

 

No delay, neglect or
forbearance on the part of any Party in enforcing any term or condition of this
Agreement shall be deemed to be a waiver or in any way prejudice the rights of
other Parties under this Agreement.

 

29.          FORCE
MAJEURE

 

If any Party cannot fulfill its
obligations in this Agreement due to an event beyond its reasonable control,
including, but not limited to lightning, flood, exceptionally severe weather,
fire or explosion, civil disorder, war or military operations, national or
local emergency, anything done by government or other competent authority, it
shall not be liable to the other Parties for such delay in performance or
failure to perform and shall give notice to the other Parties as soon as
reasonably practical after the event has occurred.

 

30.          SETTLEMENT OF DISPUTES AND
INTERPRETATION OF AGREEMENT

 

30.1         If a dispute should arise
under this Agreement between or among the Parties, they shall make every
reasonable effort to resolve such dispute. 
However, in the event that they are unable to resolve such dispute the
matter shall be referred to the Management Committee which shall either resolve
the matter or determine the method, such as arbitration for the material of
dispute, by which the matter should be resolved.  This procedure shall be the sole and exclusive remedy for any
dispute which may arise under this Agreement between or among the Parties.  The performance of this Agreement by the
Parties shall continue during the resolution of any dispute.

 

30.2         If any difference shall
arise between or among the Parties or any of them in respect of the
interpretation or effect of this Agreement or any part or provision thereof or
their rights and obligations thereunder, and by reasons thereof there shall
arise the need to decide the question by what municipal or national law this
Agreement or such part or provision thereof is governed, the following facts
shall be excluded from consideration, namely that this Agreement was made in a
particular country and that it may appear by reason of its form style language
or otherwise to have been drawn preponderantly with reference to a particular
system of municipal or national law; the intention of the Parties being that
such

 

36

 

facts shall be
regarded by the Parties and in all courts and tribunals wherever situation as
irrelevant to the question aforesaid and to the decision thereof.

 

31.          EXECUTION OF AGREEMENT

 

This Agreement and any
Supplementary Agreements hereto shall be executed in six (6) originals in the
English language.  Identical
counterparts may be executed and when so executed shall be considered as an
original.  Such counterparts shall
together, as well as separately, constitute one and the same instrument.  Terminal Parties, except TOCI, shall be the
custodians of the originals, and China Telecom shall provide certified
photocopies to Parties to the Agreement.

 

32.          ALTERATIONS AND ADDITIONS

 

32.1         Subject
to Subparagraph 32.4, this Agreement and any of the provisions hereof may be
altered or added to only by another agreement in writing signed by a duly
authorized person on behalf of each and every Party to this Agreement.  Six (6) originals of such supplemental
agreements shall be executed.

 

32.2         China Telecom shall be
responsible for the prompt distribution of certified photocopies of any
amendment or supplementary agreements hereto to all other Parties, and Terminal
Parties, except TOCI, shall retain such signed original amendments or
supplementary agreements.  Such Party
shall accord access to such documents to a requesting Party upon reasonable
notice.

 

32.3         In the case of a Party
changing the categorization of its capacity the modified Schedules shall be
certified by the Network Administrator on behalf of the Parties.  The Network Administrator shall require in
such instances written instructions by Parties wishing to reassign capacity and
shall obtain the Management Committee’s approval, which can be by
correspondence.  The Network
Administrator shall be responsible for issuing such modified Schedules.

 

32.4         Subparagraph 32.1 shall
not apply to any Schedule modified in accordance with any other provision of
this agreement and any Schedule so modified shall be deemed to be a part of
this Agreement in substitution for the immediately preceding version of that
Schedule.

 

33.          SUCCESSORS
BOUND

 

This Agreement shall be binding
on the Parties, their successors, and permitted assigns.

 

37

 

34           SEVERABILITY

 

If any of the provisions of
this Agreement shall be invalid or unenforceable, such invalidity or
unenforceability shall not invalidate or render unenforceable the entire
Agreement, but rather the entire Agreement shall be construed as if not
containing the particular invalid or unenforceable provision(s) and the rights
and obligations of the Parties shall be construed and enforced accordingly.

 

35.          COMPLIANCE WITH LAW

 

The Parties shall comply with
all applicable laws of all nations having jurisdiction over the activities
performed under or contemplated by this Agreement.

 

36.          NOTICES

 

Any notice or other
communication given or made under this Agreement shall be in writing and shall
be delivered by hand or sent by express mail or by facsimile as appropriate.

 

TESTIMONIUM

 

IN WITNESS
WHEREOF, the Parties hereto have signed.

 

38Exhibit 10.7

 

JAPAN - U.S. CABLE NETWORK

 

 

CONSTRUCTION AND MAINTENANCE

 

AGREEMENT

 

 

TABLE OF CONTENTS

 

	
  PARAGRAPH

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions and Interpretations

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Cable Network Configuration

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Provision,
  Construction and Ownership of Segments

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Procurement
  Group

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Supply of Segment S

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Obligation to Provide Transiting Facilities to Extend Japan - U.S. CN
  Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Obligation to Connect the Japan - U.S. CN with Inland Systems

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Establishment of the Japan - U.S. CN Management Committee

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Definition of Network Capital Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Definition
  of Network Operation and Maintenance Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Allocation and Billing of Network Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Acquisition and Use of Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Expansion of Equipped Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Upgrade of Equipped Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Duties and Rights as to Operation and
  Maintenance of Segments

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Keeping and Inspection of Books for Segments S and T

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Use
  of Segment T

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Commercial Integration with Another Cable
  System

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Currency and Place of Payment

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  Duration of Agreement and Realization of Assets

  	
   

  
	
   

  	
   

  	
   

  
	
  21.

  	
  Obtaining of Licenses

  	
   

  
	
   

  	
   

  	
   

  
	
  22.

  	
  Privileges for Documents or Communications

  	
   

  
	
   

  	
   

  	
   

  
	
  23.

  	
  Relationship of Parties

  	
   

  

 

2

 

	
  24.

  	
  Assignment of Rights and Default

  	
   

  
	
   

  	
   

  	
   

  
	
  25.

  	
  Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  26.

  	
  Compliance with Law

  	
   

  
	
   

  	
   

  	
   

  
	
  27.

  	
  Governing
  Law

  	
   

  
	
   

  	
   

  	
   

  
	
  28.

  	
  Ratification of Prior Decisions and Actions

  	
   

  
	
   

  	
   

  	
   

  
	
  29.

  	
  Resolution of Disputes

  	
   

  
	
   

  	
   

  	
   

  
	
  30.

  	
  Supplements and Amendments to this
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  31.

  	
  Execution of Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  32.

  	
  Successors
  Bound

  	
   

  
	
   

  	
   

  	
   

  
	
  33.

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  34.

  	
  Settlement of Claims By Parties

  	
   

  
	
   

  	
   

  	
   

  
	
  35.

  	
  Force
  Majeure

  	
   

  
	
   

  	
   

  	
   

  
	
  36.

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  37.

  	
  Entire
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Testimonium

  	
   

  

 

3

 

	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  Schedule A

  	
  Parties to the Agreement

  
	
   

  	
   

  
	
  Schedule B

  	
  Investment Shares and Allocation of Network Capital Costs

  
	
   

  	
   

  
	
  Schedule C

  	
  Capacity Allocation, Ownership Interests in Segment S and Voting
  Interests

  
	
   

  	
   

  
	
  Schedule D

  	
  Network IRU Sales

  
	
   

  	
   

  
	
  Schedule E

  	
  Allocation of Network Operation and Maintenance Costs

  
	
   

  	
   

  
	
  Schedule F

  	
  Schedule of Co-Chairmen or Responsible Parties for the Procurement
  Group, AR&RSC, O&MSC, F&ASC, CASC, Network Administrator and CBP

  
	
   

  	
   

  
	
   

  	
   

  
	
  ANNEXES

  	
   

  
	
   

  	
   

  
	
  Annex 1

  	
  Terms of Reference for the Procurement Group

  
	
   

  	
   

  
	
  Annex 2

  	
  Terms of Reference for the Assignments, Routing and Restoration
  Subcommittee; Operations and Maintenance Subcommittee; Financial &
  Administrative Subcommittee and Commercial Activities Subcommittee

  
	
   

  	
   

  
	
  Annex 3

  	
  Terms of Reference for the Network Administrator

  
	
   

  	
   

  
	
  Annex 4

  	
  Terms of Reference for the Central Billing Party

  
	
   

  	
   

  
	
  Annex 5

  	
  Configuration of the Japan - U.S. CN

  

 

4

 

JAPAN - U.S. CABLE NETWORK

CONSTRUCTION & MAINTENANCE AGREEMENT

 

THIS AGREEMENT,
made and entered into this 31st day of July 1998, between and among the Parties
signatory hereto (hereinafter collectively called “Parties” and individually
called “Party”), which Parties are identified in Schedule A.

 

WITNESSETH:

 

WHEREAS,
digital telecommunications services are being provided among the U.S. Mainland,
Hawaii, Japan and the Pacific Ocean Region by means of fiber optic submarine
cable and satellite facilities; and

 

WHEREAS,
other digital light-wave submarine cable systems, presently in service in the
Pacific Ocean Region, have facilitated a rapid growth of new telecommunications
requirements designed to take advantage of reliable, secure and economically
priced services based on state of the art and available digital technology; and

 

WHEREAS,
it is now apparent that this rapid growth in traffic demand and the
interconnection of the Japan - U.S. Cable Network with other digital light-wave
submarine cable systems in the Pacific Ocean Region, such as APCN, FLAG and
SEA-ME-WE-3, will lead to greater demand for facilities among the U.S.
Mainland, Hawaii, Japan and points beyond and necessitates the construction of
additional transpacific fiber optic submarine cable facilities linking such
points (hereinafter referred to as the “Japan - U.S. CN” or the “Network”); and

 

WHEREAS,
the reliability of telecommunications services and its usefulness to customers
requires the availability of the appropriate facilities and technology,
including the Japan - U.S. CN for diverse routing and instantaneous restoration
of services; and

 

WHEREAS,
AT&T, BT, C&W, GST, GTE, JT, KDD, LEVEL 3, MCII, NTTWN, PGE, QWEST,
SBCI, SPRINT and WORLDCOM (the “MOU Parties”) signed a Memorandum of
Understanding to plan the Japan - U.S. Cable Network effective from 21st April
1998 (hereinafter referred to as the “MOU”) to permit activities, as defined in
the MOU; and

 

WHEREAS,
the MOU Parties signed the First Amendment to the MOU effective from 21st April
1998; and

 

WHEREAS,
the MOU Parties signed the Second Amendment to the MOU effective from 1st May,
1998; and

 

WHEREAS,
the MOU Parties and PSINet signed a First Supplement to the MOU effective from
15th June 1998, to admit PSINet as an additional Party to the MOU; and

 

WHEREAS,
the MOU, the First Amendment, the Second Amendment and the First Supplement are
hereinafter collectively called the “MOU”; and

 

 

WHEREAS,
the MOU states that it shall continue in force until the signing, by the
Parties, of the Japan - U.S. Cable Network Construction and Maintenance
Agreement; and

 

WHEREAS,
the Parties now desire to construct the Network as a fully integrated
transpacific network comprised of nine (9) mutually restorable fiber optic
cable segments; and

 

WHEREAS,
the Parties now desire to define the terms and conditions upon which the
Network will be provided, constructed, operated and maintained;

 

NOW,
THEREFORE, the Patties hereto, in consideration of the
mutual covenants herein expressed, covenant and agree with each other as
follows:

 

1.             DEFINITIONS
AND INTERPRETATIONS

 

1.1           The following definitions
and interpretations shall apply to certain terms used in this Agreement:

 

(a)           Affiliate:  A company is the Affiliate of another
company if either company owns, directly or indirectly, at least 10% (or the
highest percentage allowed by local law, if lower) of the other’s issued share
capital, or at least 10% (or the highest percentage allowed by local law, if
lower) of each company’s issued share capital is owned ultimately by the same
third company.

 

(b)           Basic
System Payload Module:  A
Basic System Payload Module of the Network shall consist of a complete digital
loop of 155,520,000 bits per second digital line section in each direction with
an interface in accordance with ITU-T Recommendations G.707 “Network Node
Interface for the Synchronous Digital Hierarchy” Issue 1996 (STM–1).

 

(c)           Branching
Unit (BU):  equipment that
permits interconnection between 3 cable Subsegments and provides the optical
fiber and power conductor between 3 cable Subsegments.

 

(d)           Cable
Landing Point:  Cable Landing
Point shall be the beach joint or the mean low watermark of ordinary spring
tides if there is no beach joint.

 

(e)           Capacity
Types:  Capacity shall be
categorized as follows:

 

	
  Allocated Capacity

  	
  -

  	
  capacity allocated in the Network to a Party in return for its financial
  investment.

  
	
   

  	
   

  	
   

  
	
  Design Capacity

  	
  -

  	
  the maximum capacity that the Network is designed to provide which
  shall be no less than 640Gbit/s.

  
	
   

  	
   

  	
   

  
	
  Equipped Capacity

  	
  -

  	
  the amount of capacity physically provided in the Network at any one
  time.

  

 

6

 

	
  Initial Equipped Capacity

  	
  -

  	
  Initial Equipped Capacity of the Network shall be at least 80Gbit/s.

  
	
   

  	
   

  	
   

  
	
  Interim Equipped Capacity

  	
  -

  	
  Interim Equipped Capacity of the Network shall be 400Gbit/s.

  
	
   

  	
   

  	
   

  
	
  IRU Capacity

  	
  -

  	
  capacity acquired after execution of this Agreement shall be on an
  IRU basis from the Unsold Capacity.

  
	
   

  	
   

  	
   

  
	
  Sellable Capacity

  	
  -

  	
  capacity available for sale on the Network as determined by the
  Management Committee.

  
	
   

  	
   

  	
   

  
	
  Unsold Capacity

  	
  -

  	
  the difference in capacity between the Sellable Capacity and the
  Allocated Capacity.

  

 

(f)            Country:  The word Country as used in this Agreement
shall mean a country, territory or place, as appropriate.

 

(g)           Final
Acceptance Date:  The date of
the issuance of a certificate of final acceptance pursuant to the terms and
conditions set forth in the Supply Contract as defined in Paragraph 5
hereof.  The Final Acceptance Date shall
be 31st August 2000, or such other date as may be agreed by the Management
Committee.

 

(h)           Initial
Parties:  The Initial Parties
are AT&T, BT, C&W, JT, KDD, LEVEL 3, NTTWN, PGE, QWEST, SBCI, SPRINT
and WORLDCOM.

 

(i)            IRU:  Indefeasible Right of Use which does not
convey ownership and voting rights in the management of the Network.

 

(j)            International
Telecommunications Entity (ITE): 
Any entity authorized or permitted under the laws of its respective
Country, or another Country in which it operates, to acquire and use
international transmission facilities for the provision of international telecommunications
services and which is in possession of any necessary operating license to
enable it to do so.

 

(k)           Japan
Carrier Party:  A Party, or
its Affiliate or Subsidiary, who has a facility based license to provide
international telecommunication services from Japan.

 

(1)           Minimum
Investment Unit:  a unit
designated as the minimum unit of investment in the Japan - U.S. CN, allowing
the use of one (1) Basic System Payload Module (whole STM-l ring).  The Minimum Investment Unit is hereinafter
termed as a “MIU”.

 

(m)          Network
Interface:  the nominal STM-l
digital/optical input/output ports, and/or STM-4, STM-16 and STM-64 on the
digital/optical distribution frame (including

 

7

 

the digital/optical distribution frame
itself) where the Basic System Payload Module connects/aggregates with other
transmission facilities or equipment.

 

(n)           Network
RFS Date:  The daze on which
commercial service can be placed on the entire Network.  For the purposes of this Agreement the
Network RFS Date shall be 30th June 2000, or such other date as may be agreed
by the Management Committee.

 

(o)           Network
RFPA Date:  The date on which
the entire Wet Segment of the Network is provisionally accepted by the
Procurement Group on behalf of the Parties. 
The Network RFPA Date shall be 31st May 2000, or such other date as may
be agreed by the Management Committee.

 

(p)           Provisional
Acceptance:  The issuance of
a certificate of Provisional Acceptance shall be that of Segment S pursuant to
the terms and conditions set forth in the Supply Contract.

 

(q)           RFPA Date:  The date on which Subsegments S1, S2, S3, S4
and S5 of the Network are provisionally accepted by the Procurement Group on
behalf of the Parties.  The RFPA Date
shall be 15th March 2000, or such other date as may be agreed by the Management
Committee.

 

(r)            RFS Date:  The date on which commercial service can be
placed on Subsegments S1, S2, S3, S4, S5, and Subsegments TI, T2, T3, T4 and T5
of the Network.  The RFS Date shall be
15th May 2000, or such other date as may be agreed by the Management Committee.

 

(s)           Subsidiary:  A company having at least the majority of
its issued share capital owned legally or beneficially, directly or indirectly
by its parent company.

 

(t)            Supply
Contract:  Supply Contract refers
to the contract(s) to be placed with the supplier(s) pursuant to Subparagraph
5.1.

 

(u)           Terminal
Parties:  the Terminal
Parties are AT&T, GTEHTI, JT, KDD, NTTWN and WORLDCOM.

 

(v)           United
States Carrier Party:  A
Party, or its Affiliate or Subsidiary, who has a facility based license case to
provide international telecommunication services from the United States.

 

(w)          Wet Segment:  for the purposes of this Agreement,
Subsegments S1, S2, S3, S4, S5, S6, S7, S8 and S9 as defined below are
collectively called the Wet Segment.

 

1.2           Schedules and Annexes

 

The Schedules and Annexes to this Agreement,
and any written amendments thereto or any Schedules or Annexes substituted
therefore, shall form part of this Agreement, and any Paragraph which contains
a reference to a Schedule or Annex shall be read as if the

 

8

 

Schedule or Annex was set out at length in
the body of the Paragraph itself.  In
the event that there is any conflict between the terms and conditions of this
Agreement and the Schedules and Annexes to this Agreement, the terms and
conditions of this Agreement shall prevail.

 

1.3           Paragraph headings

 

The headings of the paragraphs do not form
part of this Agreement and shall not have any effect on the interpretation
thereof.

 

1.4           Interpretation

 

Where the sense requires, words denoting the
singular only shall also include the plural and vice versa.  References to persons shall include firms
and companies and vice versa.  Reference
to the male shall include the female.

 

2.             CABLE
NETWORK CONFIGURATION

 

2.1           The configuration of
the Network shall be as shown in Annex 5, which shall be regarded as consisting
of a terrestrial section (hereinafter called “Segment T”) and a submarine
section (herein called “Segment S” or the “Wet Segment”)

 

2.2           Segment T shall be
regarded as comprising of the following Subsegments:

 

Subsegment T1:  A cable station at San Luis Obispo, California, U.S.A.

 

Subsegment T2:  A cable station at Kahe Point, Hawaii, U.S.A.

 

Subsegment T3:  A cable station at Shima, Japan

 

Subsegment T4:  A cable station at Maruyama, Japan

 

Subsegment T5:  A cable station at Kitaibaraki, Japan

 

Subsegment T6:  A cable station at Point Arena, California, U.S.A.

 

2.3           Subsegments T1, T2, T3,
T4, T5 and T6 shall each consist of:

 

(i)            an appropriate share of land and buildings
at the specified locations for the cable landing, cable stations and for the
cable route including cable rights-of-way and ducts or conduits between the
cable station and its respective Cable Landing Point, and an appropriate share
of common services and equipment at each of those locations, or a remote
location which is solely associated with as necessary for the Japan - U.S. CN
but not part of the Wet Segment; and

 

(ii)           interface equipment in each of the cable
stations associated solely and directly with the Network, to operate and
interface at the STM-1, STM-4, STM-16 and STM-64 operating points associated
solely with the Network.  Any
non-Terminal

 

9

 

Party shall be permitted direct access to the
Segment T interfaces described above associated with the Party’s Allocated
Capacity.

 

(iii)          An appropriate share of the test equipment
(not solely associated with the Network).

 

2.4           Segment S shall be regarded
as comprising of the following Subsegments:

 

Subsegment S1:    The whole of the submarine
cable containing four (4) optical fiber pairs provided between and including
the Network Interface at the cable station at San Luis Obispo; and the Network
Interface at the cable station at Kahe Point.

 

Subsegment S2:    The whole of the submarine
cable containing four (4) optical fiber pairs provided between and including
the Network Interface at the cable station at Kahe Point; and the Network
Interface at the cable station at Shima.

 

Subsegment S3:    The whole of the submarine
cable containing four (4) optical fiber pairs, provided between and including
the Network Interface at the cable station at Shima and BU1.

 

Subsegment S4:    The whole of the submarine
cable containing two (2) optical fiber pairs provided between and including the
Network Interface at the cable station at Maruyama; and BU1.

 

Subsegment S5:    The whole of the submarine
cable containing two (2) optical fiber pairs provided between BU1 and the
Network Interface at the cable station at Kitaibaraki.

 

Subsegment S6:    The whole of the submarine
cable containing two (2) optical fiber pairs provided between the Network
Interface at the cable station at Maruyama and BU2.

 

Subsegment S7:    The whole of the submarine
cable containing two (2) optical fiber pairs provided between and including the
Network Interface at the cable station at Kitaibaraki; and BU2.

 

Subsegment S8:    The whole of the submarine
cable containing four (4) optical fiber pairs provided between and including
BU2; and the Network Interface at the cable station at Point Arena.

 

Subsegment S9:    The whole of the submarine
cable containing four (4) optical fiber pairs provide between and including the
Network Interface at the cable station at Point Arena; and the Network
Interface at the cable station at San Luis Obispo.

 

2.5           Subsegments S1, S2, S3,
S4, S5, S6, S7, S8 and S9 shall include:

 

10

 

(i)            all transmission, power feeding, system
management, Network Protection Equipment and test equipment directly associated
with, and required to operate and maintain the submersible plant located in the
respective cable stations;

 

(ii)           the power equipment provided wholly for use
with the equipment listed in (i) above;

 

(iii)          the transmission cable equipped with
appropriate optical amplifiers and, Branching Units and joint housings between
the applicable cable stations;

 

(iv)          the sea earth cable and electrode system
and/or the land earth system, or an appropriate share thereof, associated with
the terminal power feeding equipment in the respective cable stations;

 

(v)           terminal equipment, including STM-1, STM-4,
STM-16 and STM-64 levels, in each of the cable stations;

 

(vi)          the Network Interface; and

 

(vii)         A Network Operation Center (NOC) equipment
which may or may not be located at one of the cable stations.

 

2.6           In this Agreement,
references to any Segment or Subsegment, however expressed, shall be deemed to
include, unless the context otherwise requires, additional property
incorporated therein by agreement of the Management Committee.  Each Segment shall be regarded as including
its related spare and standby units and components, including, but not limited
to, optical amplifiers, branching units, cable lengths, and terminal equipment.

 

3.             PROVISION, CONSTRUCTION AND OWNERSHIP OF SEGMENTS

 

3.1           The following Parties
shall own, provide and agree to act as the Terminal Parties for the following
Segments;

 

	
  SUBSEGMENT

  	
   

  	
  TERMINATED
  PARTY

  
	
  T1

  	
   

  	
  WORLDCOM

  
	
  T2

  	
   

  	
  GTE HTI

  
	
  T3

  	
   

  	
  KDD

  
	
  T4

  	
   

  	
  JT

  
	
  T5

  	
   

  	
  NTTWN

  
	
  T6

  	
   

  	
  AT&T

  

 

3.2           Subsegments T1, T2, T3,
T4, T5 and T6 of the Network shall be engineered, provided and installed, or
caused to be engineered, provided and installed, in accordance with the terms
set forth in this Paragraph 3.

 

11

 

3.3           The Terminal Parties
shall each make available to the other Parties hereto reasonable information
requested by the Parties relating to the provision, construction, or
installation of their respective Subsegment of Segment T.

 

3.4           Subsegments T1, T2, T3,
T4 and T5 shall be provided in sufficient time to permit Subsegments S1, S2,
S3, S4, S5, S6 and S7 to be placed into operation by the RFS Date and
Subsegment T6 shall be provided in sufficient time to permit the entire Network
to be placed into operation by the Network RFS Date.

 

3.5           Subsegments S1, S2, S6,
S7, S8 and S9 of the Network shall be owned by the Parties in common and
undivided shares, in the proportions set forth in Schedule C.

 

3.6           Subsegments S3, S4 and
S5 shall be owned individually by KDD, JT and NTTWN respectively.

 

3.7           KDD, JT and NTTWN
hereby grant the Parties, for the duration of this Agreement, IRU interests in
Subsegments S3, S4 and S5 respectively (including any additions to these
Subsegments in which they have no ownership interest) at no additional charge
beyond the Network Capital Costs and Network O&M Costs as defined in
Paragraphs 9 and 10 respectively.

 

3.8           This Paragraph 3 in no
way diminishes or affects any rights or obligations provided for in this
Agreement.

 

3.9           Notwithstanding
Subparagraph 3.7 of this Agreement, a Party thereby granted an IRU interest in
Subsegment S3, S4 and S5 may, prior to the commencement of that IRU interest,
elect to renounce its IRU interest entitlement and to instead have use of
Subsegments S3, S4 and S5 for the duration of this Agreement on such terms and
conditions as are agreed upon between that Party and the owners of these
Subsegments respectively, and in such event the provisions of Subparagraph 3.7
shall apply in relation to such use except insofar as they may be modified by
such agreements.  This Subparagraph 3.9
shall not operate to confer on a Party any financial or other benefit of
substance to which the Party would not otherwise be entitled under this
Agreement.

 

4.             PROCUREMENT GROUP

 

4.1           A Procurement Group
shall be formed, consisting of representatives from each of the Initial
Parties.  The Procurement Group shall
act on behalf of the Parties to this Agreement for the purpose of arranging for
the construction, implementation and installation of the Wet Segment of the
Network and in conjunction with the Management Committee as set forth in this
Paragraph 4, be responsible for all actions as may be required to contract with
the supplier(s) to provide the Wet Segment of the Network.

 

4.2           The Co-Chairmen of the
Procurement Group are identified in Schedule F.  The Co-Chairmen of the Procurement Group shall act as its
coordinators and spokesmen and shall from time to time, report to the
Management Committee in respect of all the activities of the Procurement Group
in accordance with the requirements of the Management Committee.

 

12

 

4.3           The Terms of Reference
for the Procurement Group are as set forth in Annex I of this Agreement.

 

4.4           The Procurement Group
shall assume the responsibilities and continue the activities of the Interim
Procurement Group established under the MOU in respect of the Interim
Procurement Group’s work related to the Network and shall undertake the ongoing
tasks of coordinating and managing the overall project during the engineering,
provision and construction of the Network.

 

4.5           In the event that any
Subsegment of the Network fails to meet the specifications referred to in the
Supply Contract for its provision, fails to provide the specified capacity, or
is not engineered, provided, installed and ready in sufficient time to meet the
RFPA Date and Network RFPA Date on or before the dates specified in the Supply
Contract or, if the supplier(s) are otherwise in material breach of the Supply
Contract, the Procurement Group, on behalf of the Parties to this Agreement,
shall pursuant to this Paragraph 4 and in accordance with the Supply Contract,
take such action as may be necessary to exercise the rights and remedies under
the terms and conditions of the Supply Contract.  Such actions by the Procurement Group shall be subject to any
direction deemed necessary by the Management Committee.

 

4.6           All decisions and
recommendations to the Management Committee made by the Procurement Group in
accordance with this Agreement shall be subject, in the first place, to
consultation among its members who shall make every effort to reach agreement
with respect to matters to be decided. 
However, in the event agreement cannot be reached, the decision and/or
recommendation shall be made on the basis of a vote of simple majority of the
total voting interests as specified in Schedule C unless otherwise decided by
the Management Committee.  A member of
the Procurement Group representing more than one Initial Party shall separately
cast the votes to which each Initial Party he represents is entitled.

 

4.7           No decisions of the
Procurement Group shall override any provisions of this Agreement or decisions
of the Management Committee or in any way diminish the rights or prejudice the
interests granted to any Party under this Agreement.

 

4.8           The Procurement Group,
including the Co-Chairmen, shall continue to function until the Final
Acceptance Date or until such time as otherwise determined by the Management
Committee.

 

5.             SUPPLY OF SEGMENT
S

 

5.1           The supply of Segment S
shall be through the Supply Contract to be placed by the Procurement Group with
the supplier(s) as directed by the Management Committee

 

5.2           Each of the Parties
hereto shall be entitled on request, to receive a copy of the Supply Contract
subject to the acceptance by each such Party of any reasonable conditions of
confidentiality imposed by the Supply Contract.

 

13

 

6.             OBLIGATION TO
PROVIDE TRANSITING FACILITIES
TO EXTEND JAPAN - U.S. CN CAPACITY

 

6.1           The Terminal Parties
shall use all reasonable efforts to provide and maintain or cause to be
provided and maintained in working order for the duration of this Agreement,
the necessary digital transit facilities within their respective countries as
may be reasonably required for extending capacity in the Network.  Any other Party to this Agreement may at
their option provide such facilities.

 

6.2           The facilities provided
pursuant to Subparagraph 6.1 shall be suitable for extending capacity in the
Network of all payload types as defined in Subparagraph 6.3 and shall be
furnished and maintained on terms and conditions which shall be no less
favorable than those granted to another ITE for transmission facilities of
similar type and quantity transiting the location involved.  Such terms and conditions shall not be
inconsistent with applicable governmental regulations in the locations in which
the facilities are located.

 

6.3           Where required the
Terminal Parties shall support payloads of STM-l (155.52 Mbps), STM-4 (622.08
Mbps), STM-16 (2488.32 Mbps) and STM-64 (9953.28 Mbps) in accordance with ITU-T
Recommendations G.707.

 

7.             OBLIGATION TO
CONNECT THE JAPAN - U.S. CN
WITH INLAND SYSTEMS

 

7.1           Except where prohibited
by the laws of the Party’s country, each of the Parties to this Agreement, at
its own expense, on or before the RFS Date, shall do or cause to be done, all
such acts and things as may be necessary within its operating country to
provide suitable connection of the Network with its appropriate inland
communication systems in its operating country.

 

7.2           Upon request, AT&T,
GTE HTI and WORLDCOM shall provide to any United States Carrier Party hereto
suitable space and connection with the Network at the cable stations at Point
Arena, Kahe Point and San Luis Obispo, respectively, for operating and
technical control purposes relating to capacity allocated, or to be allocated,
to them in the Network. AT&T, GTE HTI and WORLDCOM may provide such space
in a building separate from its cable stations but adjacent to its cable
stations and located on the land which forms part of Subsegments T6, T2, and
T1, respectively.  Such United States
Carrier Party shall have the right to provide their own personnel and equipment
in such space.  Such United States
Carrier Party shall reimburse AT&T, GTE HTI and WORLDCOM for the reasonable
costs incurred by AT&T, GTE HTI and WORLDCOM in providing such space and
connection pursuant to this Subparagraph 7.2, including, but not limited to,
the costs of any additional building that may be reasonably required.

 

7.3           Upon request, JT, KDD
and NTTWN shall provide to any Japan Carrier Party hereto suitable space, if
available, and connection with the Network at the cable stations at Maruyama,
Shima and Kitaibaraki, respectively, for operating and technical control
purposes relating to capacity allocated, or to be allocated, to them in the
Network.  Such Japan Carrier Party shall
have the right to provide their own personnel and equipment in such space under
the respective terms and conditions agreed between such Japan Carrier

 

14

 

Party and the
respective Terminal Party.  Such Japan
Carrier Party shall reimburse JT, KDD and NTTWN for the reasonable costs
incurred by JT, KDD and NTTWN in providing such space and connection pursuant
to this Subparagraph 7.3.

 

8.             ESTABLISHMENT
OF THE JAPAN - U.S. CN
MANAGEMENT COMMITTEE

 

8.1           The Parties shall form
a Japan - U.S. CN Management Committee (hereinafter referred to as the
“Management Committee”), for the purpose of directing the progress of
engineering, provision, installation, bringing into service and continued
operation of the Network, consisting of one representative of each of the
Parties to this Agreement.  The
Management Committee shall make all major decisions necessary to effectuate the
purposes of this Agreement.

 

8.2           Two or more Parties may
designate the same Party to serve as their representative at specific meetings
of the Management Committee and/or its Subcommittees established pursuant to
Subparagraph 8.7 of this Agreement.

 

83            Meetings of the
Management Committee shall be considered to have a quorum if the sum of the
votes of the Parties in attendance hold or represent, is equal to at least
two-thirds (66.67%) of the total voting interests, as specified in Schedule C.

 

8.4           Unless otherwise
decided by the Management Committee, each of the Initial Parties shall, on a
rotational basis, provide the Co-Chairmen of the Management Committee which
shall meet on the call of a Co-Chairman, or whenever requested by a member of
the Management Committee.  Rotational
Co-Chair authority will be transferred at beginning of the Management Committee
meeting.  The Co-Chairman shall give at
least thirty (30) days advance notice of each meeting, together with a copy of
the draft agenda.  In cases of
emergency, such notice period may be reduced where at least seventy-five
percent (75%) of the total voting interests, as specified in Schedule C, are in
agreement to reduce this interval. 
Documents for the meeting should be made available to members at least
fourteen (14) days before the meeting, but the Management Committee may agree
to discuss papers distributed on less than fourteen (14) days notice provided
written notice of such papers is given to all Parties.

 

8.5           The Management
Committee shall make every reasonable effort to reach agreement with respect to
matters to be decided.  However, in the
event agreement cannot be reached, except as otherwise provided for in this
Agreement, the decision will be carried on the basis of a simple majority vote
determined by the total voting interests cast. 
The voting interests of the members of the Management Committee shall be
as specified in Schedule C.  A member of
the Management Committee representing more than one Party shall separately cast
the votes to which each Party he represents is entitled.

 

8.6           Any Management
Committee Member not represented at a Management Committee meeting, but
entitled to vote, may vote on any matter on the agenda of such meeting by
either appointing a proxy in writing, or giving notice of such vote to a
Co-Chairman prior to the submission of such matters for vote at such meetings.

 

15

 

8.7           To aid the Management
Committee in the performance of its duties, the following Subcommittees shall
be formed, and said Subcommittees, under the direction of the Management
Committee, shall be responsible for their respective areas of interest listed
in Annex 2 and any other areas of interest designated by the Management
Committee:

 

(a)           Commercial Activities Subcommittee
(hereinafter called the “CASC”)

 

(b)           Assignments, Routing and Restoration
Subcommittee (hereinafter called the “AR&RSC”)

 

(c)           Operations and Maintenance Subcommittee
(hereinafter called the “O&MSC”)

 

(d)           Financial and Administrative Subcommittee
(hereinafter called the “F&ASC”)

 

8.8           No decisions of the
Management Committee, its Subcommittees or any other groups established by the
Management Committee that override any provisions of this Agreement or in any
way diminish the rights or prejudice the interests granted to any Party under
this Agreement.

 

8.9           The Management
Committee may establish other Subcommittees or working groups as it shall
determine within its discretion to provide assistance in the performance of its
responsibilities.  Subcommittees shall
meet at least once a year after the date of this Agreement and more frequently
if necessary, until three (3) years following the Network RFS Date and
thereafter as may be appropriate. 
Meetings of a Subcommittee may be called to consider specific matters at
the discretion of its Chairman or whenever requested by one or more Parties
representing at least a simple majority of the total voting interests specified
in Schedule C.

 

8.10         The respective Chairman
of each Subcommittee, or a designated representative of each Subcommittee,
shall attend the Management Committee meetings and meetings of each of the
other Subcommittees in an advisory capacity as necessary.  On or about three (3) years after the
Network RFS Date, the Management Committee shall determine whether any of its
Subcommittees should remain in existence. 
Except as provided for in Subparagraph 8.7 of this Agreement, if the
Management Committee determines that one or more of its Subcommittees are not
required to remain in existence, the responsibilities assigned to a
Subcommittee whose existence has been terminated under this subparagraph 8.10
shall be assumed by the Management Committee.

 

8.11         The Network Administrator
shall be appointed, by the Management Committee, from among the Terminal
Parties, as identified in Schedule F. 
The Terms of Reference for the Network Administrator are as set forth in
Annex 3 of this Agreement.  The Network
Administrator shall also assume the responsibilities of the AR&RSC upon
termination of that Subcommittee by the Management Committee.

 

9.             DEFINITION OF
NETWORK CAPITAL COSTS

 

9.1           The Network capital
costs (herein referred to as the “Network Capital Costs”) are the costs
incurred in connection with the engineering, provision, construction and
installation

 

16

 

of Segment S and Segment T, or causing them
to be engineered, provided, constructed and installed and shall include:

 

(a)           appropriate costs, including appropriate
finance charges, incurred under the MOU in respect of specific activities such
as desk top surveys, marine surveys and meeting expenses that are reasonably
related to the construction of the Network;

 

(b)           those costs payable to the supplier(s) under
the Supply Contract, both before and after the Network RFS Date, attributable
to the Wet Segment;

 

(c)           those costs incurred by the Terminal
Parties, including additions thereto, with respect to the provision of their
respective cable stations, allocable to the Network.  Where the use of a cable station or of certain equipment situated
therein, such as power supply or testing and maintenance equipment, is shared,
by agreement of the Parties, by the Network and other communications systems
terminating at that cable station, the capital costs of such shared cable
station or equipment (not solely attributable to a particular communication
system or systems) will be allocated among the systems involved in the
proportions in which they use the shared equipment or facility.  For such purposes, the Management Committee
shall approve the method or determining the portion of a shared cable station
allocable to the Network Costs, as used in this Subparagraph 9.1(c) with
reference to the provision of each cable station (including land, access roads,
cable rights-of-way, ducts, conduits and buildings at such station), or causing
them to be provided and constructed, or to installing or causing to be
installed cable station equipment, shall include all expenditures incurred
which shall be fair and reasonable in amount and either to have been directly
and reasonably incurred for the purpose of, or to be properly chargeable in
respect of, such provision, construction, and installation, including, but not
limited to, the purchase costs of land, building costs, amounts incurred for
development, engineering, design, materials, manufacturing, procurement and
inspection, installation, removing (with appropriate reduction for salvage),
testing associated with installation, customs duties, taxes (except income tax
imposed upon the net income of a Party), financial charges, supervision,
billing activities, overheads and insurance or a reasonable allowance in lieu
thereof.  Losses against which insurance
was not provided, or for which an allowance in lieu thereof was not taken,
shall constitute capital costs;

 

(d)           those costs directly incurred by the Initial
Parties which shall be fair and reasonable in amount and not included in the
Supply Contract and which have been directly and reasonably incurred solely for
the purpose of, or to be properly chargeable in respect of, such engineering,
provision, construction, installation and laying of the Wet Segment, including
but not limited to, the costs of engineering, design, materials, manufacturing,
procurement and inspection, installation, removing (with appropriate reduction
for salvage), cable ship and other ship costs, burying, fisherman’s
compensation including reasonable related expenses, testing associated with
laying or installation, customs duties, taxes (except income tax imposed upon
the net income of a Party), appropriate financial

 

17

 

charges, supervision, billing activities,
overheads and insurance of or a reasonable allowance in lieu of insurance if
such Party elects to carry a risk itself, being a risk which is similar to one
against which a supplier has insured or against which insurance is usual or
recognized or would have been reasonable;

 

(e)           those fees charged by the Network
Administrator, up to the Network RFS Date, in fulfilling its responsibilities
as set forth in Annex 3;

 

(f)            those fees charged by the Central Billing
Party, up to the Network RFS Date, in fulfilling its responsibilities as set
forth in Annex 4;

 

(g)           those costs incurred, up to the Network RFS
Date, by the custodians of the original, amendments and supplements to this
Agreement, for distributing certified photocopies of this Agreement and/or
amendments or supplements to the Parties to this Agreement;

 

(h)           those costs reasonably incurred (as approved
by the Management Committee) by the Parties, up to the Network RFS Date, hereto
in the holding of the meetings of the Procurement Group and the CASC
established pursuant to Subparagraphs 4.1 and 8.7(a) respectively;

 

(i)            those costs reasonably incurred (as
approved by the Management Committee) by the Parties, up to the Network RFS
Date, hereto in the hosting of the meetings of the Management Committee and its
Subcommittees established pursuant to Subparagraphs 8.7(b), 8.7(c), 8.7(d) and
8.9; and

 

(j)            the costs associated with any additional
work or property incorporated into the Segment S or Segment T subsequent to the
Network RFS Date by agreement of the Management Committee.

 

9.2           For purposes of this
Agreement, the cost of the repair or replacement of any part of the Network in
the event of damage or loss arising during construction, laying, burying,
installing and the bringing into operation of the Network, which is
attributable under the Supply Contract to the Parties, shall be regarded as
properly chargeable to the supplier(s) as part of Supply Contract.

 

9.3           Any of the Parties may
at its own expense insure against risks so far as its own share of such costs
is concerned.  Should the Parties
jointly agree to insure against risks, the costs of such insurance shall form
part of the Network Capital Costs, as approved by the Management Committee.

 

10.          DEFINITION OF NETWORK OPERATION AND MAINTENANCE COSTS

 

10.1         The costs associated with
the operation and maintenance duties (herein called the “Network O&M
Costs”) are the costs reasonably incurred in the operation and maintenance of
Segment S and Segment T, including, but not limited to:

 

18

 

(a)           the cost of meeting attendance, testing,
adjustments, repairs and replacements, cable ships, (including standby costs),
cable depots, maintenance and repair devices that are or may hereafter become
available, customs duties, taxes, (except income tax imposed on the net income
of a Party) paid in respect of such facilities, billing activities, financial
charges attributable to other Parties, shares of costs incurred by a
Maintenance Authority, supervision, overheads and costs and expenses reasonably
incurred on account of claims made by or against other persons in respect of
such facilities or any part thereof and damages or compensation payable by the
Parties concerned on account of such claims;

 

(b)           those costs incurred by the Terminal
Parties, including additions thereto, with respect to the operation and
maintenance of their respective cable stations, allocable to the Network.  Where the use of a cable station or of
certain equipment situated therein, such as power supply or testing and
maintenance equipment, is shared, by agreement of the Parties, by the Network
and other communications systems terminating at that cable station, the costs
of operation and maintenance of such shared cable station or equipment (not
solely attributable to a particular communication system or systems) will be
allocated among the systems involved in the proportions in which they use the
shared equipment or facility.  For such
purposes, the Management Committee shall approve the method for determining the
portion of a shared cable station allocable to the Network.  Costs as used in this Paragraph 10 with
reference to each of the cable stations shall include costs reasonably incurred
in operation and maintenance of the facilities involved, including, but not
limited to, the cost of attendance, testing, adjustments, repairs and
replacements, customs duties, taxes (except income tax imposed upon the net
income of a Party) paid in respect of such facilities, billing activities,
administrative costs, financial charges, and costs and expenses reasonably
incurred on account of claims made by or against other persons in respect of
such facilities or any part thereof and damages or compensation payable by the
cable station owner on account of such claims;

 

(c)           those fees charged by the Network
Administrator, after the Network RFS Date, in fulfilling its responsibilities
as set forth in Annex 3;

 

(d)           those fees charged by the Central Billing
Party, after the Network RFS Date, in fulfilling its responsibilities as set
forth in Annex 4;

 

(e)           those costs incurred, after the Network RFS
Date, by the custodians of the original, amendments and supplements to this
Agreement, for distributing certified photocopies of this Agreement and/or amendments
or supplements to the Parties to this Agreement;

 

(f)            those costs reasonably incurred (as
approved by the Management Committee) by the Parties, after the Network RFS
Date, hereto in the holding of the meetings of the Procurement Group;

 

19

 

(g)           those costs reasonably incurred (as approved
by the Management Committee) by the Parties, after the Network RFS Date, hereto
in the hosting of the meetings of the Management Committee, its Subcommittees
established pursuant to Paragraph 8; and

 

(h)           Costs, expenses, damages, or compensation
payable to the Parties on account of claims made against other persons shall be
shared by the Parties in the same proportion as they share the Network O&M
Costs under Paragraph 11 of this Agreement.

 

11.          ALLOCATION AND
BILLING OF NETWORK COSTS

 

11.1         The Network Capital Costs
as defined in Paragraph 9 shall be borne by the Parties in the proportions set
forth in Schedule B.

 

11.2         The Network O&M Costs
as defined in Paragraph 10 shall be borne by the Parties in the proportions set
forth in Schedule E.

 

11.3         The Management Committee
shall appoint a Central Billing Party (herein referred to as the “CBP”), as
identified in Schedule F.  The Terms of
Reference for the CBP are as set forth in Annex 4.

 

11.4         The Terminal Parties
shall each render bills to the CBP for any Network O&M Costs incurred as
outlined in Paragraph 10 not more frequently than quarterly in accordance with
procedures to be established by the F&ASC and approved by the Management
Committee.  The Party rendering a bill
shall furnish such further details of such bill as the other Parties may
reasonably require.  On the basis of
such bills, the CBP shall pay such amounts as may be owed by the end of the
calendar month in which the bill was rendered, provided the bill is received by
the CBP by the tenth (10th) day of the month.

 

11.5         Starting from 31st March
1999, and not more frequently than every three (3) months thereafter, the
Terminal Parties shall each render bills to the CBP for any Network Capital
Costs incurred as outlined in Paragraph 9. 
The Terminal Parties shall have rendered bills for all such Network
Capital Costs by the Network RFS Date, or as soon after as practicable, but no
later than sixty (60) days.  In the
event a Terminal Party incurs additional capital costs related to the Japan -
U.S. CN after the Network RFS Date, these invoices shall also be submitted to
the CBP as soon as practicable.

 

11.6         Unless the Management
Committee authorizes changes to the procedure for the rendering of bills
associated with the Network Capital Costs or Network O&M Costs, the CBP
shall promptly render bills, in accordance with this Paragraph 11 and the
billing and payment procedures established by the F&ASC and approved by the
Management Committee, to each of the Parties for such Parties’ pro rata shares of these costs.  Such bills shall be rendered by the CBP not
more frequently than monthly and shall contain a reasonable amount of detail to
substantiate them.  On the basis of such
bills, each Party shall pay the CBP, such amounts as may be owed by the end of
the calendar month following the calendar month in which the bill was rendered,
on the date specified by the CBP.

 

20

 

11.7         All bills rendered to the
CBP shall be in the currency of the billing party which shall either be the
currency of the United States or the currency of Japan.  The CBP shall render bills to the Parties
and be paid in the currency of the original bill.

 

11.8         In the case of bills
containing costs billed on a preliminary billing basis, appropriate adjustments
will be made in subsequent bills promptly after the actual costs involved are
determined.  As soon as practicable, the
CBP shall make such adjustments and render such bills or arrange for such
credits as appropriate due to changes in the cost actually incurred.

 

11.9         As soon as practicable
after the Network RFS Date, the amount of each Party’s share of the Network
Capital Costs shall be computed by the CBP who shall make appropriate
adjustments and render any necessary bills or arrange for any necessary refunds
by way of final settlement in order that each Party may bear its proper share
of the costs as provided in this Paragraph 11.

 

11.10       For purposes of this
Agreement, financial charges shall be computed at a rate equal to the lowest
publicly announced prime rate or commercial lending rate, however described,
for 90-day loans in the currencies of the United States and Japan by the
following banks on the fifteenth day of the month in which the costs were
incurred by the billing Party.  If such
a day is not a business day, the rate prevailing on the next business day shall
be used.  The application of financial
charges relating to Network Capital Costs or Network O&M Costs shall be
limited to a total of one hundred and twenty (120) days unless otherwise
approved by the Management Committee.

 

(a)           Bills rendered by Terminal Parties in US
Dollars

 

Citibank, N.A., New York City; and

Chase Manhattan Bank N.A., New York City.

 

(b)           Bills rendered by Terminal Parties in
Japanese Yen

 

The Industrial Bank of Japan, Limited, Tokyo;

The Dai-Ichi Kangyo Bank Limited, Tokyo; and

The Bank of Tokyo-Mitsubishi, Limited, Tokyo.

 

In the event
that applicable law does not allow the imposition of financial charges at the
rate established in accordance with this Paragraph 11, financial charges shall
be at the highest rate permitted by applicable law, which in no event shall be
higher than the rate computed in accordance with this Paragraph 11.

 

11.11       Bills not paid to the CBP
when due shall accrue extended payment charges from the day following the day
on which payment was due until paid. 
For purposes of this Agreement, extended payment charges shall be three
hundred percent (300%) of the lowest publicly announced prime rate or
commercial lending rate, however described, for 90-day loans in the currency of
the United States, by the banks referenced in Subparagraph 11.10(a) on the day
following the date payment of the bill was due.  In the event that applicable law does not allow the imposition of
extended payment charges at the rate established in 

 

21

 

accordance
with this Subparagraph 11.11, extended payment charges shall be at the highest
rate permitted by applicable law, which in no event shall be higher than the
rate computed in accordance with this Subparagraph 11.11.  For purposes of this Agreement, “paid” shall
mean that the funds are immediately available for use by the recipient.

 

11.12       Credits for refunds of
financial charges and bills for extended payment charges shall not be rendered
if the amount of charges involved is less than the equivalent of one hundred
(100) US dollars or ten thousand (10,000) Japanese Yen in the currency of the
credits or bills.

 

11.13       A bill shall be deemed to
have been accepted by the Party to whom it is rendered if that Party does not
present a written objection on or before the date when payment is due.  If such objection is made, the Parties concerned
shall make every reasonable effort to settle promptly the dispute concerning
the bill in question.  If the objection
is sustained and the billed Party has paid the disputed bill, the agreed upon
overpayment shall be promptly refunded to the objecting Party by the billing
Party together with any financial charges calculated thereon at a rate
determined in accordance with Subparagraph 11.10 of this Agreement from the
date of payment of the bill to the date on which the refund is transmitted to
the objecting Party.  If the objection
is not sustained and the billed Party has not paid the disputed bill, said
Party will pay such bill promptly together with any extended payment charges
calculated thereon at a rate determined in accordance with Subparagraph 11.11
of this Agreement from the day following the day on which payment was due until
paid.  Nothing in this Subparagraph
11.13 shall relieve a Party from paying those parts of a bill that are not in
dispute.

 

12.          ACQUISITION AND
USE OF CAPACITY

 

12.1         Parties shall obtain
Allocated Capacity in the form of a MIU on an ownership basis as shown in
Schedule C, in return for their financial investment as identified in Schedule
B of this Agreement.

 

12.2         Procedures for Parties
activation of their Allocated Capacity will be developed by the AR&RSC and
Network Administrator for Management Committee approval.

 

12.3         A Party may allow the use
of its Allocated Capacity by its Affiliate or Subsidiary at any time.

 

12.4         A Party may sell its
Allocated Capacity to its Affiliate or Subsidiary at any time.

 

12.5         A Party may sell capacity
in fascicles smaller than a MIU in the Network at any time on such basis other
than by transfer of ownership.  The
Network shall not be responsible for aggregating such capacity to the MIU level.

 

12.6         A Party may transfer
ownership of Allocated Capacity only in multiples of MIUs to any other Party at
any time, unless otherwise agreed by the Management Committee.

 

12.7         The Unsold Capacity in
the Network shall be owned by the Parties in common and undivided shares in
accordance with Schedule C.

 

22

 

12.8         IRU Capacity will be sold
at the MIU level, or higher.  Such IRU
Capacity will be sold from the Unsold Capacity until the Network is fully
funded, as determined by the Management Committee, to provide the Interim
Equipped Capacity.  Proceeds from the
sale of such IRU Capacity shall be applied to such funding of the Network.

 

12.9         A Party or IRU purchaser
may use its MIU with another Party, or IRU purchaser to form matched half MIUs
which must be activated or terminated in pairs.  The AR&RSC and Network Administrator shall not be responsible
for tracking or aggregating such half MIUs.

 

12.10       When the Network is fully
funded, as determined by the Management Committee, the Unsold Capacity shall be
distributed on a pro rata basis, in MIUs, in accordance with Schedule C.

 

12.11       Once the Network is fully
funded, as determined by the Management Committee to provide the Interim
Equipped Capacity, any Party may sell its Allocated Capacity on such basis
other than by transfer of ownership (defined on terms and conditions as those
parties may agree).

 

12.12       The Network Administrator
shall be authorized to execute IRU agreements for one or more whole MIUs with
Network IRU Capacity purchasers on behalf of the Parties to this
Agreement.  No provisions of the IRU
agreement shall override the provisions of this Agreement.  Terms and Conditions of the IRU agreement
shall be determined by the Management Committee.

 

12.13       Schedules B, C, D and E
shall be modified by the Network Administrator, as appropriate to reflect any
revised ownership of capacity or sales of IRU Capacity pursuant to this
Paragraph 12.

 

12.14       The Management Committee
may authorize use of the Unsold Capacity for restoration of telecommunications
services.  The terms and conditions of
such use shall be determined by the Management Committee based, in part, on
terms to be agreed to by the relevant Terminal Parties of the Network, in
recognition of the technical and operational impact on the cable station
operations.  Parties will receive
revenues in accordance with Schedule C.

 

12.15       The communications
capability of any capacity may be optimized by the Parties to whom such
capacity is allocated by the use of equipment which will more efficiently use
such capacity provided that the use of such equipment does not cause an
interruption of, or interference, impairment, or degradation to, the use of any
other capacity in the Network or prevent the use of similar equipment by other
Parties.  A Party to whom capacity is
allocated shall permit the use of such equipment by a telecommunications entity
to which such Party has made available the use of any such capacity, provided
that such entity agrees that its use of the equipment will satisfy the
conditions set forth in this Subparagraph 12.15.

 

23

 

13.          EXPANSION OF
EQUIPPED CAPACITY

 

13.1         The Management Committee
will decide, as it deems necessary, the periodicity and the incremental stages
in order to expand the Network from the Initial Equipped Capacity to the
Interim Equipped Capacity.  The Network
shall be expanded to provide the Interim Equipped Capacity by 30th June 2001,
or such other date as may be agreed by the Management Committee.

 

13.2         The expansion of the
Network from the Initial Equipped Capacity to the Interim Equipped Capacity or
any of the incremental stages in Subparagraph 13.1 shall be at no additional
costs to the Parties beyond the Network Capital Costs and Network O&M
Costs.

 

13.3         Schedules B, C and E
shall be appropriately modified to reflect the revisions associated with such
increase of Equipped Capacity.

 

14.          UPGRADE OF
EQUIPPED CAPACITY

 

14.1         Any upgrade of the
Network to provide more than the Interim Equipped Capacity shall be approved
only with the affirmative vote of members of the Management Committee
representing at least two-thirds (66.67%) of the total voting interests as
specified in Schedule C.

 

14.2         Any costs, financial
adjustments and allocation of capacity associated with such upgrade shall be
based on terms and conditions to be determined by the Management Committee but
no Party shall be forced to participate in such an upgrade, in the event that
incremental funding is required to execute such an upgrade.

 

14.3         Schedules B, C and E
shall be appropriately modified to reflect the revisions associated with such
increase of Equipped Capacity.

 

15.          DUTIES
AND RIGHTS AS TO OPERATION
AND MAINTENANCE OF SEGMENTS

 

15.1         Each Terminal Party shall
be solely responsible for the operation and maintenance of their respective
Subsegment of Segment T as identified in Paragraph 3 and that portion of
Segment S between the Network Interface at the cable station and their
respective Cable Landing Point.  Such Terminal
Party shall use all reasonable efforts to maintain or cause to be maintained
economically their respective Subsegment of Segment T and such portion of
Segment S, in efficient working order.

 

15.2         The Terminal Parties (for
the purposes of this Paragraph 15, collectively called the “Maintenance
Authorities” and each individually called a “Maintenance Authority”), shall
perform their joint responsibilities specified in Subparagraph 15.3 in a manner
consistent with applicable international cable maintenance agreements with an
objective of achieving effective and timely repairs when necessary.

 

24

 

15.3         The Maintenance
Authorities shall be jointly responsible for the operation and maintenance of
Subsegments S1, S2, S3, S4, S5, S6, S7, S8 and S9 and Subsegments T1,
T2, T3, T4, T5 and T6 referred to in Subparagraph 15.1.  Such joint responsibility shall be
apportioned amongst those Parties as they may mutually agree.

 

15.4         Prior to the RFS Date the
Maintenance Authorities shall submit for review by the O&MSC and approval
by the Management Committee appropriate practices and procedures for the
continued operation and maintenance of the Wet Segment.  The Maintenance Authorities shall each
provide information to the O&MSC regarding the practices and procedures for
the continued operation and maintenance of their respective Subsegments.  The Maintenance Authorities shall also
furnish such budgetary estimates of the cost of such operation and maintenance
of the Network as the Management Committee may reasonably request.  Following the RFS Date, the Maintenance
Authorities shall provide the O&MSC and the Management Committee with such
reports as it may reasonably require on the operation of the Network including
any proposals for planned repair or improvement work, together with
appropriately revised budgetary estimates relating to the operation and
maintenance of the Network.  The
O&MSC may review and amend the practices and procedures for the operation
and maintenance of the Wet Segment, subject to the approval of the Management
Committee.  The Management Committee may
revise the allocation of responsibility for the operation and maintenance of
the Wet Segment.

 

15.5         The Maintenance
Authorities shall have the right to deactivate the Wet Segment or any part
thereof, in order to perform their duties. 
Prior to such deactivation, reasonable notice shall be given to, and
coordination shall be made with, the other Parties hereto.  To the extent possible, sixty (60) days prior
to initiating action, the Maintenance Authority involved shall advise the other
Parties hereto in writing of the timing, scope, and costs of significant
planned maintenance operations, of significant changes to existing operations
and maintenance methods and of contractual arrangements for cable ships that
will have a significant impact on operation or maintenance costs.  Should one or more Parties representing at
least two-thirds (66.67%) of the total voting interests in accordance with
Schedule C, wish to review such an operation or change prior to its occurrence,
such Party or Parties shall notify the appropriate Maintenance Authority and a
O&MSC Co-Chairman in writing within thirty (30) days of such advice.  Upon such notification, the O&MSC shall
initiate action to convene an ad hoc meeting for such review.

 

15.6         Each Maintenance
Authority shall be authorized to pursue claims in its own name, on behalf of
the Parties, in the event of any damage or loss to the Network and may file
appropriate lawsuits or other proceedings on behalf of the Parties.  Subject to obtaining the prior concurrence
of the Management Committee, a Maintenance Authority may settle or compromise
any such claims and execute releases and settlement agreements on behalf of the
Parties as necessary to effect a settlement or compromise.

 

15.7         Each Party that has
designed or procured equipment used in the Network shall give necessary
information relating to the operation and maintenance of such equipment to the
Maintenance Authority responsible for operating and maintaining such equipment,
as reflected in this Paragraph 15.  Each
Maintenance Authority shall have prompt access

 

25

 

necessary for
the performance of its duties to all system maintenance information appropriate
to those parts of the Network not covered by its authority.

 

15.8         No Party hereto shall be
liable to any other Party for any loss or damage sustained by reason of any
failure in or breakdown of, the facilities constituting the Network or any
interruption of service, regardless of the duration or cause of such failure,
breakdown or interruption.  If the
Maintenance Authority responsible, as specified in this Paragraph 15, fails to
restore those facilities to efficient working order and operation within a
reasonable time after having been called upon to do so by any other Party to
whom capacity is assigned by this Agreement, the Management Committee may, to
the extent that it is practical to do so, place, or cause to be placed, such
facilities in efficient working order and operation and charge the Parties
their proportionate shares of the costs reasonably incurred in doing so.

 

15.9         Each Party to this
Agreement, at its own expense, shall have the right to inspect from time to time
the operation and maintenance of any portion of the Network and to obtain
copies of the maintenance records.  For
this purpose, the Maintenance Authority shall retain significant records, for a
period of not less than five (5) years from the date of the record.  If these records are destroyed at the end of
this period, a summary of important items should be retained for the life of
the Network.

 

15.10       The Maintenance Authorities
shall be entitled to establish the necessary agreements in respect of the crossings
by the Wet Segment of other undersea plant, including but not limited to
pipelines, and may sign these agreements on behalf of the Parties after
approval by the Management Committee and shall provide the Parties with
appropriate copies of these agreements on request.

 

16.          KEEPING AND
INSPECTION OF BOOKS FOR
SEGMENTS S AND T

 

16.1         For those portions of
Subsegments S1, S2, S3, S4, S5, S6, S7, S8 and S9 specified in the Supply
Contract as cost incurred items, the Procurement Group shall ensure that the
Supply Contract requires the supplier(s) to keep and maintain such books,
records, vouchers and accounts of all such costs with respect to the
engineering, provision and installation of those items for a period of five (5)
years from the dates of Provisional Acceptance as specified in the Supply
Contract.

 

16.2         For those portions of
Subsegments S1, S2, S3, S4, S5, S6, S7, S8 and S9 specified in the Supply
Contract as cost incurred items, the Procurement Group shall ensure that the
supply Contracts require the suppliers(s) to keep and maintain records with
respect to their billing of those items for a period of five (5) years from the
dates of Provisional Acceptance as specified in the Supply Contract.

 

16.3         The Procurement Group
shall ensure that the Supply Contract requires the supplier(s) to obtain from
their contractors, subcontractors, and suppliers, such supporting records, for
other than the cost of cost incurred items, as may be reasonably required by
this Paragraph 16 and to maintain such records for a period of five (5) years
from the dates of Provisional Acceptance as specified in the Supply Contract.

 

26

 

16.4         The Procurement Group
shall ensure that the Supply Contract shall afford the Parties to this
Agreement the right to review the books, records, vouchers, and accounts
required to be kept, maintained, and obtained pursuant to this Paragraphs
16.  Such right shall only be
exercisable by the F&ASC in accordance with the F&ASC audit procedures.

 

16.5         With respect to additions
to Subsegments S1, S2, S3, S4, S5, S6, S7, S8 and S9 comparable records to
those specified in this Paragraphs 16, shall be maintained by the Party
providing such addition for a period of five (5) years from the installation
date of such addition.

 

16.6         The Co-Chairmen of the
Procurement Group shall each keep and maintain such books, records, vouchers,
and accounts of all costs, as defined in Paragraph 9, that they incur directly
in the engineering, provision, and installation of Subsegments S1, S2, S3, S4,
S5, S6, S7, S8 and S9 which are not included in the Supply Contract, for a
period of five (5) years from the date the work is completed.

 

16.7         With respect to the
operation and maintenance costs of Subsegments S1, S2, S3, S4, S5, S6, S7, S8
and S9 the Maintenance Authorities shall each keep and maintain such books,
records, vouchers, and accounts of costs, as are relevant, for a period of five
(5) years from the date on which the corresponding bills are rendered to the
Parties to this Agreement.

 

16.8         Parties to this Agreement
shall be afforded the reasonable right to review books, records, vouchers, and
accounts of costs maintained pursuant to Subparagraphs 16.6 and 16.7 of this
Agreement.  Such right shall only be
exercisable through the F&ASC in accordance with F&ASC audit
procedures.

 

16.9         With respect to capital
costs and operation and maintenance costs of Subsegments T1, T2, T3, T4, T5 and
T6, such books, records, vouchers and accounts of costs, as are relevant, shall
be kept and maintained by the Terminal Parties for a period of five (5) years
from the date on which the corresponding bills are rendered to the CBP.  The Terminal Parties shall afford the
Parties to this Agreement the right to review said books, records, vouchers,
and accounts of costs.  Such right shall
only be exercisable through the F&ASC in accordance with F&ASC audit
procedures.

 

17.          USE OF SEGMENT T

 

17.1         The Terminal Parties
hereby grant to the Parties accessing the Japan - U.S. CN at their respective
cable station, an IRU interest in the relevant Subsegment of Segment T
(hereinafter referred to as “Cable Station IRU Interest”) including any
additions thereto, for the purpose of landing and terminating the Japan - U.S.
CN, and carrying on the related activities at the respective terminal locations
in accordance with this Agreement.

 

17.2         In the event that an
agreement for another cable system utilizing any cable station of the Network
is terminated prior to the termination of this Agreement, the owner of the
respective Subsegment of Segment T, with the agreement of the Parties hereto,
shall take all necessary measures to ensure that the cable station in question
will be available for the Network for the duration of this Agreement on fair
and equitable terms.  If the cable

 

27

 

station in
question is not available for the landing and terminating of the Network for
any reason, the owner of the cable station shall provide reasonable advance
notice to all Parties and such owner, in agreement with the Parties hereto,
shall take all necessary measures to ensure that another appropriate cable
station will be available for the Network for the duration of this Agreement on
terms and conditions similar to those contained in this Agreement.  Applicable costs to the Parties will be
determined by the Management Committee.

 

17.3         For each Cable Station
IRU Interest, the Parties hereto shall not be required to pay any additional
charges over and above the Network Capital Costs and Network O&M Costs.

 

17.4         Notwithstanding
Subparagraph 17.1 of this Agreement, a Party thereby granted a Cable Station
IRU Interest in any Subsegment of Segment T may, prior to the commencement of
that Cable Station RU Interest, elect to renounce its Cable Station IRU
Interest entitlement and to instead have use of Subsegments T1, T2, T3,
T4, T5 and T6 for the duration of this Agreement on such terms and conditions
as are agreed upon between that Party and the owners of these Subsegments
respectively, and in such event the provisions of Subparagraph 17.1 shall
apply in relation to such use except insofar as they may be modified by such
agreements.  This Subparagraph 17.4
shall not operate to confer on a Party any financial or other benefit of
substance to which the Party would not otherwise be entitled under this
Agreement.

 

17.5         In the event of a sale or
other disposition of Subsegments T1, T2, T3, T4, T5 and T6, or part
thereof prior to the termination of this Agreement, the owner shall share with
the other Parties hereto any net proceeds, or costs, of such sale or
disposition received, or expended, by the owner, to the extent allocable to the
Network, in the proportions set forth in           
Schedule B.

 

18.          COMMERCIAL
INTEGRATION WITH ANOTHER
CABLE SYSTEM

 

18.1         If at a future time it is
desirable to integrate the Japan - U.S. CN with another cable system or an
extension of the Japan - U.S. CN (hereinafter called the “Integrating System”),
the terms and conditions of such integration shall be decided by the Management
Committee requiring agreement of at least eighty percent (80%) of the voting
interests specified in Schedule C. 
Furthermore, for issues that specifically affect the Terminal Parties in
a particular Country, agreement is required of two of the three Terminal
Parties of that Country.

 

18.2         A party not already a
Party to this Agreement, can be admitted as an additional Party to this
Agreement provided they are already a party of the Integrating System.  The rights and obligations of the additional
Parties shall be determined by the Management Committee at the time of
integration.

 

18.3         The conditions of this
Paragraph 18 shall only be applicable if the Management Committee approves
integration of the Japan - U.S. CN with the Integrating System.

 

28

 

19.          CURRENCY AND
PLACE OF PAYMENT

 

19.1         Bills rendered under this
Agreement shall be rendered in the currency of the billing Party, or the
currency in which the cost was incurred provided that such currency is a currency
of the Terminal Party or as specified in the Supply Contract.  Bills shall be payable in the currency in
which the bill is rendered or as designated by the Management Committee to the
designated office or account of the payee.

 

20.          DURATION OF
AGREEMENT AND REALIZATION OF
ASSETS

 

20.1         This Agreement shall
become effective on the day and year first above written and shall continue for
an initial period of twenty-five (25) years, and thereafter until the Network
is decommissioned and disposed of in accordance with such regulations as may be
in force at the time of decommissioning. 
However, any Party may terminate its participation in this Agreement at
the end of the initial period or any time thereafter, by giving at least one
year’s prior notice, in writing, to the other Parties.

 

20.2         During the initial period
of twenty-five (25) years, decommissioning can be implemented by agreement of a
number of Parties representing at least eighty percent (80%) of the voting
interests specified in Schedule C.  Furthermore,
for issues that specifically affect the Terminal Parties in a particular
Country, agreement is required of two of the three Terminal Parties of that
Country.

 

20.3         After the initial period
of twenty-five (25) years, decommissioning can be implemented by agreement of a
number of Parties representing at least two-thirds (66.67%) of the voting
interests specified in Schedule C.

 

20.4         If a Terminal Party
terminates its participation in this Agreement pursuant to Subparagraph 20.1 of
this Agreement after the initial period of twenty-five (25) years, the
remaining Parties and the said Terminal Party will negotiate a reasonable
agreement in order to ensure the continuous operation of the said Terminal
Party’s cable station after the initial period.

 

20.5         Upon the effective date
of termination of participation of a Party, Schedules A, B, C and E of this
Agreement shall be appropriately modified. 
The remaining Parties to this Agreement shall assume the obligations, capital,
operation and maintenance interests of the Party terminating its participation
in proportion to their interests assigned immediately preceding such effective
date of termination, except for the continuing rights and obligations of the
terminating Party as specified in Subparagraph 20.7 of this Agreement.

 

No credit for capital costs will be made to a Party that terminates its
participation in accordance with Subparagraph 20.1.

 

20.6         Upon decommissioning of
the Network, the Parties shall use all reasonable efforts to liquidate
Subsegments S1, S2, S3, S4, S5, S6, S7, S8 and S9 of the Network, within one
(1) year, by sale or other disposition between the Parties or any of them or by
sale to other entities or persons; but no sale or disposition shall be effected
except by agreement

 

29

 

between or
among the Parties to this Agreement at the time of decommissioning.  In the event agreement cannot be reached,
the decision will be carried on the basis of a simple majority vote of the
total voting interests as specified in Schedule C.  The net proceeds, or costs of decommissioning, removal, every
sale or other disposition shall be divided between or among the Parties to this
Agreement who have or were deemed to have interests in the subject thereof, in
the proportions in which such Parties, interests are specified in Schedule C
immediately preceding the time any Party terminates its participation in this
Agreement.  The Parties shall execute
such documents and take such action as may be necessary to effectuate any sale
or other disposition made pursuant to this Paragraph 20.

 

20.7         Unless the Management
Committee shall otherwise determine, a Party’s termination of its participation
in this Agreement or the termination of this Agreement, pursuant to Subparagraph
20.1, shall not relieve that Party or the Parties hereto from any liabilities
arising from events occurring before a Party’s termination on account of claims
made by third parties in respect of such facilities or any part thereof and
damages or compensation payable on account of such claims, or obligations which
may arise in relation to the Network due to any law, order or regulation made
by any government or supranational legal authority pursuant to any
international convention, treaty or agreement. 
Any such liabilities or costs incurred or benefits accruing in
satisfying such obligations shall be divided among the Parties hereto in the
proportions in which such Parties interests are specified in Schedule C, immediately
preceding the time a Party terminates its participation in this Agreement, or
this Agreement is terminated pursuant to Subparagraph 20.1, whichever occurs
first.

 

21.          OBTAINING OF
LICENSES

 

21.1         The performance of this
Agreement by the Parties is contingent upon the obtaining and continuance of
such governmental approvals, consents, authorizations, licenses and permits as
may be required or be deemed necessary by the Parties and as may be
satisfactory to them, and the Parties shall use all reasonable efforts to
obtain and to have continued in effect such approvals, consents,
authorizations, licenses and permits.

 

21.2         The Japanese Parties
shall handle matters relating to the obtaining and continuance of governmental
approvals, consents, authorizations, licenses and permits for the landing,
construction and operation of the Network in Japan.  The United States Parties shall handle matters relating to the
obtaining and continuance of governmental approvals, consents, authorizations,
licenses and permits for the landing, construction and operation of the Network
in the United States.

 

22.          PRIVILEGES
FOR DOCUMENTS OR COMMUNICATIONS

 

22.1         Each Party, hereto
specifically reserves, and is granted by each of the other Parties, in any
action, arbitration or other proceeding between or among, the right of
privilege, in accordance with the law of the State of New York with respect to
any documents or communications which are material and pertinent to the subject
matter of the action, arbitration or proceeding.

 

30

 

23.          RELATIONSHIP
OF PARTIES

 

23.1         The relationship among
the Parties shall not be that of partners, and nothing herein contained shall
be deemed to constitute a partnership among them.  The common enterprise between and among the Parties shall be
limited to the express provisions of this Agreement.

 

23.2         Each Party agrees to
indemnify each of the other Parties in respect of all costs, expenses, damages
and demands, arising out of or in connection with any claim against, or
liability of, the latter as an owner of Japan - U.S. CN where such claim is
made by, or the liability is to, any third party not being a Party hereto and
arises out of or in connection with Japan - U.S. CN provided that no
indemnifying Party shall be obligated to contribute more than its share of
liability as per Schedule C.  Subject to
there being no conflict of interest, each Party so indemnifying shall have the
right, at its sole cost and expense, to observe but not directly participate in
any discussion, meetings or conferences held prior to or during any settlement
or legal proceedings resulting from any such claim or liability.

 

23.3         Under no circumstances
shall any Party be liable to any other Party in contract, tort, (including
negligence or breach of statutory duty) or otherwise for loss (whether direct
or indirect) of profits, property, traffic, business or anticipated savings, or
for any indirect or consequential loss or damage in connection with the
operation of this Agreement howsoever caused. 
Such causes shall include (but not be limited to):

 

(i)            any
delay in the provision of the Network;

(ii)           any
damage to, breakdown in or failure of the Network; and

(iii)          any
interruption of service,

 

whatever may be the reason or duration for such loss, damage or delay
and for however long it shall continue.

 

24.          ASSIGNMENT
OF RIGHTS AND DEFAULT

 

24.1         Subject to the provisions
of Subparagraphs 24.2, 24.3 and Paragraph 12 of this Agreement, during the
continuance of this Agreement no Party shall, without the prior consent of the
Management Committee, sell, assign, transfer, or dispose of its rights or
obligations under this Agreement or of any interest in the Network except to a
successor or Subsidiary of such Party or a corporation controlling, or under
the same effective control as, such Party, in which case advance written notice
of sixty (60) days shall be given by the Party making said sale, assignment,
transfer, or disposition.

 

24.2         A Party may assign the
whole of its rights under this Agreement to a successor by law, Subsidiary or
Affiliate of such Party, or a corporation or an entity jointly controlling or
under the same common control as such Party, provided that the assigning Party
shall remain jointly and severally liable for the performance of this Agreement
for the duration of the Agreement.

 

31

 

24.3         If any Party fails to
make any payment required by this Agreement on the date when it is due and such
default continues for a period of at least two (2) months after the payment due
date, the CBP may notify the billed Party in writing of its intent to notify
the Management Committee of the status of the matter and to request the
reclamation of capacity, as provided for in this Paragraph 24, if full payment
is not received within two (2) months after receipt of such notification to the
billed Party.  If full payment is not
received within such specified period, the CBP may notify the Management
Committee of the status of the matter and request that the Management Committee
reclaim the capacity in the Network assigned to the billed Party.

 

24.4         The Management Committee
shall consider any extenuating circumstances not within the specific control of
the billed Party in determining whether or not to reclaim the capacity assigned
to such billed Party.  If the Management
Committee nevertheless reclaims any capacity in the Network assigned to such
defaulting Party, the defaulting Party shall not be entitled to any payment or
credit for capital costs for the reclaimed capacity.  The Management Committee shall determine arrangements for
disposition of any reclaimed capacity. 
Such of the remaining Parties hereto as shall agree to take the
reclaimed capacity of a defaulting Party which is to be reallocated shall make
appropriate payments to the Management Committee which shall then distribute
the payments to those Parties to this Agreement entitled to the proceeds.  All rights of a defaulting Party under this
Agreement shall terminate as of the time all its capacity in the Network is
reclaimed by the Management Committee; and concurrent with such reclamation of
capacity, the defaulting Party will no longer be deemed to be a Party to this
Agreement.  This Agreement shall be
appropriately amended to reflect the default of a Party and the reassignment of
the interest herein of such defaulting Party.

 

24.5         Notwithstanding
Subparagraph 24.4, reclamation of a Terminal Party’s capacity will not release
the Terminal Party from providing, operating and maintaining its respective
cable station until a reasonable agreement is negotiated in order to ensure the
continuous operation of the said Terminal Party’s cable station after
reclamation of its capacity.

 

25.          WAIVER

 

25.1         The failure of any Party,
on one or more occasions, to enforce any of the provisions of this Agreement or
to exercise any right or privilege hereunder shall not thereafter be construed
as a waiver of any breach or default, or as a waiver of any such provision,
right, or privilege hereunder.

 

26.          COMPLIANCE WITH
LAW

 

26.1         In the performance of
their obligations hereunder, the Parties agree to comply with all applicable
laws of all Countries having jurisdiction over the activities performed under
or stipulated by this Agreement.

 

27.          GOVERNING LAW

 

27.1         This Agreement shall be
governed by the law of the State of New York.

 

32

 

28.          RATIFICATION
OF PRIOR DECISIONS AND ACTIONS

 

28.1         Each Party to this
Agreement does hereby unconditionally ratify and accept as binding on it, its
successors, permitted assigns or trustees all decisions and actions theretofore
taken directly or indirectly by any other Party or Parties or any committee or
Subcommittee or group pursuant to and in accordance with this Agreement.

 

29.          RESOLUTION OF
DISPUTES

 

29.1         If a dispute should arise
under this Agreement between or among the Parties they shall make every
reasonable effort to resolve such dispute. 
However, in the event that they are unable to resolve such dispute, the
matter shall be referred to the Management Committee which shall thereafter
attempt to mediate the dispute.  In the
event the dispute is not resolved via such mediation, any Party may refer the
dispute to arbitration, in accordance with the United Nations Commission on
International Trade Law (UNCITRAL) Arbitration Rules as at present in effect
with the following conditions:

 

(a)           The administering authority shall be the
American Arbitration Association;

 

(b)           The place of arbitration shall be agreed by
the Parties in dispute, however if they are unable to agree the place of
arbitration shall be New York City, New York, USA; and

 

(c)           The language to be used in the arbitration
proceedings shall be English.

 

29.2         The tribunal shall
consist of three arbitrators, who shall be selected by agreement of the Parties
in dispute.  Should the relevant Parties
be unable after a period of thirty (30) days to agree as to one or more of the
arbitrators, the American Arbitration Association shall appoint any outstanding
arbitrators.

 

29.3         The award rendered by
arbitration shall be final and binding upon the Parties in dispute.

 

29.4         All costs related to
arbitration under this Paragraph 29 shall be borne by the Parties in dispute
unless otherwise determined by the Management Committee.

 

30.          SUPPLEMENTS
AND AMENDMENTS TO THIS AGREEMENT

 

30.1         This Agreement shall not
be amended, supplemented, or modified except by written agreement of a number
of Parties representing at least eighty percent (80%) of the voting interests
specified in Schedule C.  Furthermore,
for issues that specifically affect the Terminal Parties in a particular
Country, agreement is required of two of the three Terminal Parties of that
Country.

 

31.          EXECUTION OF
AGREEMENT

 

31.1         This Agreement and any
Supplements and Amendments hereto shall be executed in six (6) identical
counterparts in the English language. 
Each such counterpart shall, together,

 

33

 

when so
executed be considered as an original. 
Such counterparts shall together, as well as separately, constitute one
and the same instrument.

 

31.2         The Network Administrator
shall be the custodian of one original of each of the documents referenced in
Subparagraph 31.1 and will provide the other Parties with certified copies.

 

32.          SUCCESSORS BOUND

 

32.1         This Agreement shall be
binding on the Parties, their successors and permitted assigns.

 

33.          CONFIDENTIALITY

 

33.1         All data and information
that is acquired or received by any Party in connection with the Network in
anticipation of or under this Agreement shall be held confidential and shall
not be divulged in any way to any third party, without the prior approval of
the Management Committee.

 

33.2         Notwithstanding
Subparagraph 33.1, any Party may, without such approval, disclose such data and
information to:

 

(i)            the extent required by any applicable laws,
or the requirements of any recognized stock exchange in compliance with its
rules and regulations or in the case of a Party wholly owned by a sovereign
government, by the rules of governance of the Party; or

 

(ii)           any government agency lawfully requesting
such information; or

 

(iii)          any Court of competent jurisdiction acting in
pursuance of its powers

 

33.3         Any Party may disclose
such data and information to such persons as may be necessary in connection
with the conduct of the operations of the Network upon obtaining a similar
undertaking of confidentiality from such persons to whom such information may
be disclosed.

 

33.4         Each Party shall remain
bound by the provisions of this Paragraph 33 during the period of this
Agreement and for the period of five (5) years following termination of this
Agreement.

 

34.          SETTLEMENT
OF CLAIMS BY PARTIES

 

34.1         If any Party is obliged
by a final judgment of a competent tribunal or under a settlement approved by
the Management Committee, to discharge any claim, including all costs and
expenses associated therewith, resulting from the implementation of this
Agreement, the Party which has discharged the claim shall be entitled to
receive from the other Parties reimbursement in the proportions as set out in
Schedule B.

 

34

 

34.2         If any claim is brought
against a Party it shall, as a condition of reimbursement under Subparagraph
34.1, give written notice thereof to the Management Committee as soon as
practicable and shall not admit liability nor settle, adjust or compromise the
claim without the approval of the Management Committee.

 

34.3         Before any Party brings a
claim against any person in respect of loss or damage to any part of the
Network, it shall first consult with the Management Committee and shall not
settle, adjust, or compromise such a claim without the approval of the
Management Committee.

 

34.4         Upon termination of this
Agreement pursuant to Paragraph 20, the Parties shall not be relieved from any
liabilities, costs, damages or obligations which may arise in connection with
claims made by persons with respect to the Network, or any part thereof, or
which may arise in relation to the Network due to any law, order or regulation
made by any government or international convention, treaty or agreement.  Any such liabilities, costs, damages or
obligations shall be divided among the Parties in the proportions as set out in
Schedule B.

 

34.5         In the event that no
agreement can be reached, any dispute among the Parties shall be settled in
accordance with Paragraph 29.

 

35.          FORCE MAJEURE

 

35.1         If any Party cannot
fulfill its obligations in this Agreement due to an event beyond its reasonable
control, including, but not limited to lightning, flood, exceptionally severe
weather, fire or explosion, civil disorder, war or military operations,
national or local emergency, anything done by government or other competent
authority, it shall not be liable to the other Parties for such delay in
performance or failure to perform and shall give notice to the other Parties as
soon as reasonably practical after the event has occurred.

 

36.          SEVERABILITY

 

If any of the provisions of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceability shall not invalidate or
render unenforceable the entire Agreement, but rather the entire Agreement
shall be construed as if not containing the particular invalid or unenforceable
provision or provisions, and the rights and obligations of the Parties shall be
construed and enforced accordingly.

 

37.          ENTIRE AGREEMENT

 

37.1         This Agreement supersedes
all prior or written understandings between or among the Parties and
constitutes the entire agreement among the Parties with respect to the subject
matter of this Agreement.

 

37.2         This Agreement supersedes
the MOU.  Any liabilities which any
Party has incurred arising out of or by virtue of the MOU shall be dealt with
in accordance with the provisions of this Agreement.

 

35

 

TESTIMONIUM

 

IN WITNESS WHEREOF, the Parties hereto have severally subscribed these
presents or caused them to be subscribed in their names and on their behalf by
their respective officers thereunto duly authorized.

 

 

	
  For and on behalf of

  AT&T CORP.

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  
	
  BRITISH TELECOMMUNICATIONS PLC

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  CABLE AND WIRELESS GLOBAL NETWORK ORGANISATION LIMITED

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  CHUNGHWA TELECOM CO., LTD.

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  COM TECH INTERNATIONAL CORPORATION.

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  

 

36

 

	
  For and on behalf of

  DDI CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  FRONTIER COMMUNICATIONS SERVICES INC

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  GLOBAL ONE COMMUNICATIONS, PTY., LIMITED

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  GTE HAWAIIAN TEL INTERNATIONAL INCORPORATED

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  GTE INTELLIGENT NETWORK SERVICES INCORPORATED

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  INTERNATIONAL D1GITAL COMMUNICATIONS INC.

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  

 

37

 

	
  For and on behalf of

  INTERNATIONAL EXCHANGE NETWORKS LTD.

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  JAPAN TELECOM CO., LTD.

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  KOKUSAI DENSHIN DENWA CO., LTD.

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  KPN TELECOM B.V.

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  LEVEL 3 INTERNATIONAL INC.

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  MFS CABLECO (BERMUDA) LTD.

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  

 

38

 

	
  For and on behalf of

  NTT WORLDWIDE NETWORK CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  PCI COMMUNICATIONS, INC.

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  PACIFIC GATEWAY EXCHANGE (BERMUDA) LIMITED

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  PRIMUS TELECOMMUNICATIONS, INC.

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  PSINET INC.

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  QWEST COMMUNICATIONS CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  

 

39

 

	
  For and on behalf of

  RSL COMMUNICATIONS LIMITED

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  SBCI – PACIFIC NETWORKS, INC.

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  SINGAPORE TELECOMMUNICATIONS LIMITED

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  SPRINT COMMUNICATIONS COMPANY, LIMITED PARTNERSHIP

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  TELEGLOBE USA INC.

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  TELEGROUP, INC.

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  

 

40

 

	
  For and on behalf of

  TELEKOM MALAYSIA BERHAD

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  TELSTRA CORPORATION LIMITED CAN

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  TRANSOCEANIC COMMUNICATIONS, INCORPORATED

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  VIATEL INC.

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  
	
   

  
	
   

  
	
  For and on behalf of

  VIDESH SANCHAR NIGAM LIMITED

  
	
   

  
	
   

  
	
  By:

  	
   /s/

  	
   

  

 

41

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