Document:

Exhibit 10.8

 

CANTAT-3

 

 

SUBMARINE CABLE SYSTEM

 

 

CONSTRUCTION AND MAINTENANCE AGREEMENT

 

 

TABLE OF CONTENTS

 

	
  PARAGRAPH

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Cable System Segments

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Provision and Ownership of Segments and
  Additional Property

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Establishment of the CANTAT-3 Management
  Committee

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Procurement
  Group

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Supply of Segment F

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Definition of Costs of Segment F

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Costs of Segment F, Allocation and Billing

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Obligation to Provide Transiting and Other
  Facilities to Extend Cable System Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Obligation to Connect the Cable System with
  Inland Systems

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Assignment and Use of Notional Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Increase of Notional Capacity and Use of
  Common Reserve Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Increase or Decrease of Design Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Duties and Rights as to Operation and
  Maintenance of Segments

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Allocation and Billing of the Operating and
  Maintenance Costs of Segment F

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Currency and Place of Payment

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Use
  of Segments A, B, C, D and E

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Keeping and Inspection of Books for
  Segments A through F

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Ratification of Prior Decisions and Actions

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  Duration of Agreement and Realization of
  Assets

  	
   

  
	
   

  	
   

  	
   

  
	
  21.

  	
  Obtaining of Approvals

  	
   

  
	
   

  	
   

  	
   

  
	
  22.

  	
  Relationship Between and Among the Parties

  	
   

  

 

 

	
  23.

  	
  Assignment of Rights and Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  24.

  	
  Default

  	
   

  
	
   

  	
   

  	
   

  
	
  25.

  	
  Admission of Additional Parties

  	
   

  
	
   

  	
   

  	
   

  
	
  26.

  	
  Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  27.

  	
  Sharing of Contractual Obligations and
  Liability

  	
   

  
	
   

  	
   

  	
   

  
	
  28.

  	
  Settlement of Disputes

  	
   

  
	
   

  	
   

  	
   

  
	
  29.

  	
  Paragraph Headings

  	
   

  
	
   

  	
   

  	
   

  
	
  30.

  	
  Execution of Agreement and Amendments

  	
   

  
	
   

  	
   

  	
   

  
	
  31.

  	
  Successors
  Bound

  	
   

  
	
   

  	
   

  	
   

  
	
  32.

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  33.

  	
  Treatment of the Intra-Europe Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  34.

  	
  Treatment of the Faroe Islands

  	
   

  
	
   

  	
   

  	
   

  
	
  35.

  	
  Entire
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  36.

  	
  Testimonium

  	
   

  

 

ii

 

	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1

  	
  –

  	
  Initial Parties to the CANTAT-3 Construction and Maintenance Agreement

  
	
   

  	
   

  	
   

  
	
  Schedule 2

  	
  –

  	
  Voting and Ownership Interests and Allocation and Capital Costs in
  the CANTAT-3 Cable System

  
	
   

  	
   

  	
   

  
	
  Schedule 3

  	
  –

  	
  Allocation of Operating and Maintenance Costs of Segment F

  
	
   

  	
   

  	
   

  
	
  Schedule 4

  	
  –

  	
  Allocation of Capital, Operating and Maintenance Costs of Segments A,
  B, C, D and E

  
	
   

  	
   

  	
   

  
	
  Schedule 5

  	
  –

  	
  Assignments of MIUs in the CANTAT-3 Cable System

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ANNEXES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex I

  	
  –

  	
  Subcommittees Mandate and Terms of Reference

  
	
   

  	
   

  	
   

  
	
  Annex II

  	
  –

  	
  Mandate and Terms of Reference for the Procurement Group

  
	
   

  	
   

  	
   

  
	
  Annex III

  	
  –

  	
  Terms of Reference for the Central Billing Party for Supply Contract
  and Non-Supply Costs of the Cable System

  
	
   

  	
   

  	
   

  
	
  Annex IV

  	
  –

  	
  Cable System Configuration

  

 

iii

 

CANTAT-3
SUBMARINE CABLE SYSTEM

 

CONSTRUCTION
AND MAINTENANCE AGREEMENT

 

This Agreement made and entered into, between
and among the Parties signatory hereto, hereinafter collectively called the
“Parties” individually called the “Party”, which Parties are more fully
identified in Schedule 1 attached hereto,

 

W I T N E S S
E T H:

 

WHEREAS, digital telecommunication services
are being provided between the North American continent, in the west, and the
continent of Europe, in the east, by means of transatlantic submarine cable and
satellite facilities; and

 

WHEREAS, a Memorandum of Understanding,
herein after called the “MOU”, to plan for the construction of the CANTAT-3
Fiber Optic Submarine Telecommunications Cable System was signed on April 2,
1992 and the Supplemental MOU, hereinafter called the “Supplemental MOU”,
signed on July 3, 1992 between and among the Initial Parties to supplement such
facilities by providing an optical fiber submarine cable system linking North
America and Northern Europe, hereinafter called the “Cable System”, which will
be used to provide telecommunications services between points in or reached via
Canada in the west, and points in or reached via Iceland, the United Kingdom,
Denmark and Germany in the east; and

 

WHEREAS, it is the intention of the Parties
to provide and construct the Cable System by August 30, 1994, and thereafter to
maintain it and operate it jointly, in the most cost effective manner; and

 

WHEREAS, it is the intention of the Parties
to provide capacity for restoration of other cable systems in the Atlantic and
connecting regions; and

 

WHEREAS, it is the intention of the Parties
to acquire an investment share in the Cable System corresponding to the
quantity of MIUs to meet their needs through at least the year 2005; and

 

WHEREAS, the Parties intend to invite
correspondents and other Carrier Users to become Parties to this Agreement; and

 

WHEREAS, the MOU states that the MOU shall
continue in effect until the CANTAT-3 Construction and Maintenance Agreement,
herein after called the “Agreement”, is executed; and

 

WHEREAS, the Parties now desire to define the
terms and conditions upon which the Cable System will be provided, constructed,
maintained and operated.

 

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

 

 

1.             Definitions

 

The following definitions shall apply throughout this Agreement:

 

1.1           Basic System Module:  The Basic System Module of the Cable System
shall consist of a Virtual Container 4 (VC-4) Higher Order Path, operating at
155,520 Kilobits per second (kbit/s), (STM-l) or alternatively a 139,264 kbit/s
digital line section, with interface in accordance with CCITT Recommendations
G703 and G707 to G709;

 

1.2           Bit Sequence Independence:  The property of a binary transmission
channel, telecommunication circuit or connection that permits all sequences of
binary signal elements to be conveyed over it at its specified bit rate,
without change to the value of any signal elements in accordance with the appropriate
CCITT Recommendations;

 

1.3           Branching Unit or BU:  A Branching Unit, required at each junction
point of the Cable System, shall consist of a housing and any associated
equipment;

 

1.4           Cable Landing Point:  Cable Landing Point shall be the beach joint
at each cable landing location or mean low water mark of ordinary spring tides
if there is no beach joint;

 

1.5           Carrier User:  Any entity, not a Party to this Agreement,
authorized or permitted, under the laws of its respective country, to acquire
and use facilities for the provision of telecommunications services;

 

1.6           Common Reserve Capacity:  The Common Reserve Capacity is the
unassigned capacity in excess of the Notional Capacity and being the difference
between the Design Capacity and the Notional Capacity;

 

1.7           Country:  The word “country” as used in this Agreement shall mean a
country, territory or place as appropriate;

 

1.8           Design Capacity:  The total capacity within the Cable System
shall be equal to 3024 MIUs of which 1008 MIUs are available for restoration,
except for Subsegment F2 which shall have a capacity of 2016 NIUs of which zero
(0) MIU are available for restoration and Subsegment F5 which shall have a
capacity of 4032 MIUs of which 1008 MIUs are available for restoration;

 

1.9           Initial Parties:  Initial Parties shall mean all those Parties
as more fully described in Schedule 1;

 

1.10         Initial Intra-Europe Parties:  Shall mean DBPT, BT and TD;

 

2

 

1.11         Intra-Europe Capacity:  Shall mean the capacity defined in Schedule
5.13 between System Interfaces in the United Kingdom, Denmark and Germany;

 

1.12         Intra-Europe Parties:  Shall mean those Parties acquiring
Intra-Europe Capacity as identified in Schedule 5.13;

 

1.13         Minimum Investment Unit or MIU:  A unit designated as the minimum unit of
investment between System Interfaces of the Cable System shall consist of a
Virtual Container 12 (VC-12), allowing the use of 2,048,000 bits per second
(nominal 2 Mbit/s) digital stream jointly assigned between two Parties or
wholly assigned to a Party, which will be used for purposes of ownership
allocation.  There are 63 MIUs in each
Basic System Module;

 

1.14         Notional Capacity:  The total assigned capacity, which includes
any Underwritten Capacity between System Interface locations as indicated in
Schedules 5.11 and 5.12, which is intended to satisfy requirements of the
Parties through at least the year 2005;

 

1.15         Paid: 
When referring to a payment hereunder, shall mean that the funds are
available for immediate use by the recipient;

 

1.16         Ready For Commercial Service or (RFCS) Date:  The date on which the Cable System will be
available for commercial service, planned for September 30, 1994;

 

1.17         Ready For Provisional Acceptance or (RFPA)
Date:  The date on which a
Certificate of Provisional Acceptance is issued pursuant to the terms and
conditions set forth in the Supply Contract, planned for August 30, 1994;

 

1.18         Schedules:  Schedules shall be the initial schedules attached hereto and made
a part hereof and any written amendments thereto or any schedule substituted
therefor in accordance with the provisions of this Agreement;

 

1.19         Supply Contract:  Supply Contract refers to the contract to be
placed with the supplier for Segment F;

 

1.20         System Interface:  The System Interface shall be the
input/output ports on a distribution frame (excluding the distribution frame
itself) which shall terminate either electrical or optical cables from the
Cable System.  These terminations shall
be in accordance with CCITT recommendations G703, G708, G709 and G957 and shall
be of STM-l and or 139,264 kbit/s capacity. 
The distribution frame shall be regarded as a System Interface Location
where the Cable System connects with other transmission facilities or
equipment;

 

1.21         Terminal Parties:  The Terminal Parties are TELEGLOBE, IPT, BT,
TD, and DBPT;

 

3

 

1.22         Underwritten Capacity:  Underwritten Capacity is that part of the
wholly owned assigned capacity held by the Terminal Parties over and above
their requirement, as indicated in Schedule 5.

 

 

2.             Cable System Segments

 

In accordance with the arrangements contained
in this Agreement, the Cable System shall be engineered, provided, constructed,
maintained and operated between and among, a terminal in Canada, a terminal in
Iceland, a terminal in the United Kingdom, a terminal in Denmark and a terminal
in Germany, which for purposes of this Agreement, shall be regarded as
consisting of the following Segments:

 

2.1           Segment A:           A cable station at Mill Village, Nova
Scotia, Canada.

 

Segment B:            A
cable station at Vestmannaeyjar, Iceland.

 

Segment C:            A
cable station at Redcar, United Kingdom.

 

Segment D:            A
cable station at Blaabjerg, Denmark.

 

Segment E:            A
cable station at Sylt, Germany.

 

Segments A, B, C, D and E shall each consist of an appropriate share of
land, civil work, equipment and buildings at the specified locations for the
cable landing and for the cable right-of-way and ducts between a cable station
and its respective Cable Landing Point, and an appropriate share of common
services and equipment other than services and equipment associated solely with
the Cable System, at each of those locations together with equipment in each of
those cable stations solely associated with the Cable System, but which is not
a part of Segment F.

 

2.2           Segment F: 
The whole of the submarine cable provided between and among, and
including the System Interfaces at the cable stations defined in Subparagraph
2.1, consisting of Subsegments Fl, F2, F3, F4, F5, F6 and F7 as shown in Annex
IV:

 

Subsegment F1:  That part of
Segment F between and including the System Interface at the cable station in
Canada, Segment A, and BU1, including a three-eight (3/8)
portion of BU1;

 

Subsegment F2:  That part of
Segment F between BU1 and the System Interface at the cable station in Iceland,
Segment B, including a one-quarter (1/4) portion of BU1;

 

Subsegment F3:  That part of
Segment F between BU1 and BU2 including a three-eight (3/8)
portion of BU1 and a three-tenths (3/10) portion of BU2;

 

4

 

Subsegment F4:  That part of
Segment F between BU2 and the System Interface of the cable station in the
United Kingdom, Segment C, including a three-tenths (3/10)
portion of BU2;

 

Subsegment F5:  That part of
Segment F between BU2 and BU3 including a two-fifths (2/5)
portion of BU2 and a two-fifths (2/5) portion of BU3;

 

Subsegment F6:  That part of
Segment F between BU3 and the System Interface of the cable station in Denmark,
Segment D, including a three-tenths (3/10)  portion of BU3;

 

Subsegment F7:  That part of
Segment F between BU3 and the System Interface of the cable station in Germany,
Segment E, including a three-tenths (3/10) portion of
BU3.

 

Segment F shall also include:

 

2.2.1        all transmission equipment, power feeding
equipment and special test equipment directly associated with the submersible
plant;

 

2.2.2        the transmission cable equipped with
appropriate repeaters and joint housings between the cable stations and the
branching units and between the branching units themselves; and

 

2.2.3        the sea earth cable and electrode system and/or
the land earth system, or an appropriate share thereof, associated with the
Cable System power feeding equipment.

 

 

3.             Provision and Ownership of Segments
and Additional Property

 

3.1           Segment A of the Cable System shall be
provided and owned by TELEGLOBE.

 

3.2           Segment B of the Cable System shall be
provided and owned by IPT.

 

3.3           Segment C of the Cable System shall be
provided and owned by BT.

 

3.4           Segment D of the Cable System shall be
provided and owned by TD.

 

3.5           Segment E of the Cable System shall be
provided and owned by DBPT.

 

3.6           Segment F shall be provided in accordance
with Paragraphs 4, 5, 7, 8 and 18 of this Agreement and shall be owned by the
Parties in common undivided shares, in the proportions set forth in Schedule 2.

 

5

 

3.7           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
Parties.  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,
or a proportionate share thereof.

 

3.8           The configuration of the Cable System shall
be as shown in Annex IV and shall not be changed without the agreement of the
Terminal Parties.

 

3.9           The planning and development of the Cable
System shall be based on the use of proven Synchronous Digital Hierarchy (SDH)
technology judged suitable for implementation at the projected RFPA Date,
employing the transmission rate necessary to meet the capacity requirements of
the Parties, which shall be nominal 2.5 Gbit/s or higher per fiber pair.

 

 

4.             Establishment of the CANTAT-3
Management Committee

 

4.1           For the purpose of directing the progress of
the engineering, provision, installation, bringing into service and continued
operation of the Cable System, the Parties shall form a CANTAT-3 Cable System
Management Committee herein called the “Management Committee”, consisting of
one representative of each of the Parties to this Agreement.  Except as otherwise provided in this
Agreement, which exception shall include decisions made by the Procurement
Group in accordance with their Mandate and Terms of Reference, the Management
Committee shall make all decisions necessary on behalf of the Parties to effect
the purposes of this Agreement.

 

4.2           TELEGLOBE shall provide the Coordinator of
the Management Committee.  The
Management Committee shall meet on the call of the Coordinator or whenever
requested by one or more Parties representing at least five percent (5%) of the
total voting interests specified in Schedule 2.  Two or more 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 4.5 of this Agreement.  The Coordinator shall give at least thirty
(30) days’ advance notice of each meeting, together with a copy of the draft
agenda.  In case of emergency, such
notice period may be reduced where at least seventy-five percent (75%) of the
total ownership interest is in agreement. 
Discussion documents for the meeting should be made available to members
fourteen (14) days before the meeting, but the Management Committee may agree
to discuss papers distributed on less than fourteen (14) days’ notice.  For the conduct of its meetings, the
Management Committee shall elect a Chairperson for each meeting.

 

6

 

4.3           All decisions made by the Management
Committee shall be subject, in the first place, to consultation among the
Parties who 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 vote of at least two Parties, including at least one Party accessing
the Cable System through a European Terminal Party’s cable station and one
Party accessing the Cable System through the North American Terminal Party’s
cable station, representing a two-third (2/3) majority of
the total voting interests in Segment F as specified in Schedule 2.  Votes of the members of the Management
Committee shall be weighted in proportion to the relative voting interests of
the Parties they represent, as specified in Schedule 2.  A member of the Management Committee
representing more than one Party shall separately cast the votes to which each
such Party is entitled.

 

4.4           No decisions of the Management Committee, or
its Subcommittees or the Procurement Group shall override any provisions of
this Agreement and in any way diminish the right or prejudice the interests
granted to any Party or Parties under this Agreement.

 

4.5           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 I and any
other areas of interest designated by the Management Committee:

 

4.5.1        Technical and Operational Subcommittee,
hereinafter called the “T & O Subcommittee”.

 

4.5.2        Financial and Commercial Subcommittee,
hereinafter called the “F & C Subcommittee”.

 

4.6           Subcommittees shall meet as required.  Meetings of a subcommittee may be called to
consider specific questions at the discretion of its Chairperson or whenever
requested by one or more Parties representing at least five percent (5%) of the
voting interests specified in Schedule 2. 
The respective Chairperson of each such Subcommittee, or its designated
representative, shall attend the Management Committee.  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, then the
responsibilities assigned to a Subcommittee whose existence has been terminated
under this Subparagraph 4.6 shall revert to the Management Committee.

 

4.7           The Chairperson of the Procurement Group
shall report to the Management Committee in respect of all the activities of
the Procurement Group in accordance with the requirements of the Management
Committee.  The Chairperson of the

 

7

 

Procurement Group shall not be a member of
the Management Committee but shall normally attend its meetings.

 

4.8           The Management Committee authorizes the
Central Billing Party to assume the functions of centralized billing.  The Central Billing Party shall have terms
of reference as set forth in Annex III.

 

4.9           The Management Committee may establish such
other subcommittees or groups as it shall determine at its discretion to
provide assistance in the performance of its responsibilities.

 

 

5.             Procurement Group

 

5.1           The Procurement Group consisting of
representatives from the Terminal Parties as established under the terms of the
MOU, shall remain in function and shall continue under the direction of the
Management Committee.  The members of
the Procurement Group shall act as trustees for the Parties to this Agreement
and be solely responsible for all actions as may be required to execute the
Supply Contract, on a joint, but not joint and several, basis with the
supplier, to provide Segment F of the Cable System.

 

5.2           The Procurement Group’s Mandate and Terms of
Reference are contained in Annex II.

 

5.3           In the event that Segment F, or any part
thereof, fails to meet the specifications stated in the Supply Contract for its
provision or is not engineered, provided, installed and ready in sufficient
time to permit Segment F to be provisionally accepted on or before the planned
RFPA Date, the Procurement Group shall take such action as may be necessary to
exercise the rights and remedies available under the Supply Contract.  Such actions by the Procurement Group shall
be subject to any directive deemed necessary by the Management Committee.

 

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

 

5.5           The Procurement Group shall ensure that the
Supply Contract specifies an RFPA Date for or before August 30, 1994 for the
Cable System.

 

5.6           The Procurement Group shall continue to
function until the RFPA Date or until otherwise determined by the Management
Committee.

 

5.7           The Procurement Group shall continue with
the responsibilities and activities established under the MOU and shall
undertake the on-going tasks of

 

8

 

coordinating and managing the overall project
during construction of the Cable System.

 

5.8           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 the members
of the Procurement Group who shall make every reasonable effort to reach
agreement with respect to matters to be decided.  However, in the event agreement cannot be reached, each decision
and/or recommendation shall be made on the basis of a vote of at least three
Parties, representing a two-third (2/3) majority of the
total voting, interests of the Procurement Group Parties.  For such purposes, the voting percentages of
the Procurement Group Parties shall be determined by mathematically factoring their
aggregate amount from Schedule 2 to one hundred percent (100%).  A member of the Procurement Group
representing more than one Party shall separately cast the votes to which each
Party he represents is entitled.

 

 

6.             Supply of Segment F

 

6.1           The supply of Segment F shall be through a
Supply Contract, to be placed by the Procurement Group with a supplier to be
designated by the Procurement Group, pursuant to Paragraph 5 of this
Agreement.  The placing of the Supply
Contract by the Procurement Group shall be subject to authorization by the
Management Committee established pursuant to Paragraph 4 of this Agreement.

 

6.2           The members of the Procurement Group shall
not be liable to any other Party or Parties 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 the Cable System not being
ready for the RFPA Date on or before the date specified in the Supply Contract,
or if the Cable System does not perform in accordance with the technical
specifications and other requirements of the Supply Contract, or the Cable
System is not integrated or placed into operation.  The Parties recognize that the Procurement Group does not
guarantee or warrant:

 

6.2.1        The performance of the Supply Contract by the
supplier;

 

6.2.2        The performance or reliability of Segment F of
the Cable System;

 

6.2.3        That the Cable System will be integrated or
placed into operation;

 

6.2.4        The Parties hereby agree that nothing in this
Agreement shall be construed as such a guarantee or warranty.

 

6.3           The Procurement Group shall ensure that the
Supply Contract specifies that Segment F of the Cable System provided pursuant
to the Supply Contract shall be available for the RFPA Date on or before August
30, 1994.

 

9

 

6.4           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 Cable System
submarine cable equipment, materials, supplies and observe manufacturing,
assembly and installation activities.

 

 

7.             Definition
of Costs of Segment F

 

7.1           The costs incurred by the Terminal Parties
under the MOU as per a budget authorized and any supplements thereto, as well
as the Instruction to Proceed dated July 31, 1992, shall be included as part of
the costs, or capital costs, of Segment F.

 

7.2           Costs, or capital costs, as used herein,
shall include such amounts as shall be provided in the Supply Contract for the
supplier to engineer, provide and install Segment F, or to cause it to be
engineered, provided and installed.  The
costs, or capital costs, of Segment F shall also include other costs incurred
under the direction of the Procurement Group, and those costs, or capital
costs, directly incurred by the Terminal 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 Segment F, 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 upon the net income of a Party,
appropriate financial charges attributable to other Parties’ shares of costs
incurred at the rate at which such Party generally incurred such 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, the Terminal Party
has insured against which insurance is usual or recognized or would have been
reasonable.

 

7.3           Such costs shall include those costs and
expenses incurred by the Central Billing Party and by the Procurement Group in
fulfilling their responsibilities as set forth in Annex III and Paragraph 5
respectively and approved by the Management Committee.

 

7.4           Such costs shall exclude costs incurred by
the Parties hereto in the holding of Management Committee meetings and meetings
of the F & C and T & O Subcommittees established pursuant to
Subparagraph 4.5 of this Agreement or the attendance by the Parties’
representatives at such meetings.

 

10

 

7.5           Capital costs shall also include the costs
of any additional work or property incorporated in Segment F subsequent to the
RFPA Date by agreements of the Parties.

 

7.6           Each Terminal Party shall use all reasonable
efforts to minimize payment of local taxes, such as VAT, sales taxes, custom
duties and other applicable levies or duties from being charged to Cable System
on plant, equipment, spare parts, etc. imported within their country’s taxing
jurisdiction.  In addition, each
Terminal Party shall ensure that the optimum importation procedures are in
place so that all refundable taxes and/or requests for exemptions from local
taxes and duties are possible.

 

7.7           Any such taxes or duties relating to Segment
F of the Cable System paid and which are not refundable, shall be cleared for
reimbursement through the Central Billing Party.

 

 

8.             Costs of Segment F, Allocation and Billing

 

8.1           The costs, or capital costs, of engineering,
constructing, laying, burying, installing and bringing into operation of
Segment F, including any additional work or property incorporated in Segment F
subsequent to the RFCS Date by agreement of the Parties, shall be borne by the
Parties in the proportions set forth in Schedule 2.

 

8.2           Unless the Management Committee shall otherwise
authorize, the Central Billing Party shall promptly render bills to each of the
Parties for such a Party’s pro rata share of the costs due and included in the
Supply Contract in accordance with Schedule 2 and also any of the costs
incurred by the Terminal Parties in accordance with Paragraph 7 for non-supply
contract activities, including financial charges attributable to other Parties’
shares of such costs, but not more frequently than once a month and in
accordance with Schedule 2.  All bills
rendered shall contain sufficient details to substantiate the bills as well as
financial charges up to the payable date as a separate item.  On the basis of such bills, each Party shall
pay to the Central Billing Party or the billing Party in accordance with billing
and payment procedures as determined by the Central Billing Party.

 

8.3           As soon as practicable, the Central Billing
Party shall make such adjustments and render such bills or arrange for such
credits as appropriate due to changes in the cost of fixed price items subject
to raw material adjustment included in the Supply Contract.

 

8.4           As soon as practicable after the RFPA Date,
the amount of each Party’s share of the costs of Segment F shall be computed by
the Central Billing Party, as appropriate, and it shall make appropriate
adjustments and render any necessary

 

11

 

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 8.

 

8.5           For purposes of this Agreement, financial
charges shall be computed, as applicable, at a rate equal to the lowest
publicly announced prime rate or minimum commercial lending rate, however
described, for ninety (90) day loans in the currencies of Canada, Iceland,
United Kingdom, Denmark and Germany of the following banks or bank associations
on the fifteenth (15th) day of each month during which the said financial
charges apply, computed on a daily basis from the date the object of the said
payment was disbursed by the billing Party and until payable by the billed
Party.  If the fifteenth (15th) day of
the month does not fall on a business day then the applicable rate shall be
that of the next business day.

 

8.5.1        Bills rendered by TELEGLOBE:

 

National Bank of Canada

 

8.5.2        Bills rendered by IPT:

 

The official London Interbank Offer Rate (LIBOR)

 

8.5.3        Bills rendered by BT:

 

The official London Interbank Offer Rate (LIBOR)

 

8.5.4        Bills rendered by TD:

 

Unibank

 

8.5.5        Bills rendered by DBPT:

 

The official Frankfurt Interbank Offered Rate (FIBOR)

 

In the event that applicable law does not allow the imposition of such
financial charges at the rate established in accordance with this Subparagraph
8.5, 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 Subparagraph 8.5.

 

8.6           Amounts billed and not paid when due shall
incur extended payment charges from the day following the day on which payment
was payable and until paid.  For
purposes of this Agreement, such extended payment charges shall be computed in
accordance with the following:

 

12

 

8.6.1        Bills rendered by TELEGLOBE:

 

125% of the lowest publicly announced (a) prime rate or (b) minimum
commercial lending rate of the bank referenced in Subparagraph 8.5.1 on the day
following the date payment of the bill was due.

 

8.6.2        Bills rendered by IPT:

 

125% of the  rate specified in
Subparagraph 8.5.2 on the day following the date payment of the bill was due.

 

8.6.3        Bills rendered by BT:

 

125% of the rate specified in Subparagraph 8.5.3 on the day following
the date payment of the bill was due.

 

8.6.4        Bills rendered by TD:

 

will accrue at a rate equal to the official discount rate of the Danish
National Bank plus an amount in accordance with the Act of the Danish
Parliament number 583 dated of January 1986, as amended from time to time, from
the day following the date payment was due to the payment is made.

 

8.6.5        Bills rendered by DBPT:

 

Will accrue at a rate equal to the official discount rate of the
Deutsche Bundesbank plus an amount of 6% on the day following the date payment
of the bill was due.

 

In the event that the applicable law does not allow the imposition of
such extended payment charges at the rate established in accordance with this
Subparagraph, 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 Subparagraph 8.6.

 

8.7           Credits   for
refunds of, or bills for financial or extended 
payment charges shall not be rendered or imposed on by the Central
Billing Party if the amount of charges involved is less than one hundred U.S.
dollars (US$100) or its equivalent in another billing currency.

 

8.8           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 Central Billing Party shall make
every reasonable effort to settle promptly the dispute concerning the bill in

 

13

 

question.  If the objection is
sustained and the billed Party has paid the disputed bill, the agreed upon
overpayment shall be refunded to the objecting Party by the Central Billing
Party promptly together with any financial charges calculated thereon at the
rate determined in accordance with Subparagraph 8.5.  If the objection is not substained by the Central Billing Party
and the objecting Party has not paid the disputed bill, the billed Party will
be charged financial and extended payment charges on the disputed amounts at
the rates determined in accordance with Subparagraph 8.5 and 8.6.  Nothing in this Subparagraph shall relieve a
Party from paying those parts of a bill that are not in dispute.

 

8.9           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.

 

 

9.             Obligation to Provide Transiting
and Other Facilities to Extend Cable System Capacity

 

9.1           Except as provided in this Subparagraph 9.1,
each of the Parties shall in accordance with CCITT recommendations, use all
reasonable efforts to furnish and maintain, or cause to be furnished and
maintained, in efficient working order for the other Parties or Carrier Users,
not from that Party’s country, which may acquire capacity on an Indefeasible Right
of Use, herein called “IRU”, basis or other equivalent basis, in the Cable
System, for the duration of this Agreement, such facilities in its respective
country, as may be reasonably required for extending capacity in the Cable
System assigned to such Parties or Carrier Users for the purpose of handling
communications transiting its respective country.

 

9.2           The provision of such facilities shall be
the subject of separate agreement acceptable to the affected parties.  No Party shall be required under this
Agreement to furnish such facilities in its country to other Parties or Carrier
Users from its respective country.

 

9.3           The facilities provided pursuant to
Subparagraph 9.1 shall be suitable for extending capacity in the Cable System
and shall be furnished and maintained on terms and conditions other than price
which shall be no less favourable than those granted to other Parties or
Carrier Users for transmission facilities of similar type and quantity
transiting the location concerned.  Such
terms and conditions shall not be inconsistent with applicable governmental
regulations in the location in which the facilities are located.

 

9.4           The obligations to provide facilities under
this Paragraph 9 shall not necessarily require a Party to make available Synchronous
Digital Hierarchy (SDH) structured facilities within its country.

 

14

 

10.           Obligation to Connect the Cable
System with Inland Systems

 

Each of the Parties to this Agreement, at its
own expense, on or before the RFPA Date, shall do, or cause to be done, all
such acts and things as may be necessary to provide suitable connection of the
Cable System with its appropriate inland communication facilities in its
operating country.

 

 

11.           Assignment and Use of Notional
Capacity

 

11.1         The Notional Capacity in the Cable System
shall be jointly or wholly assigned between System Interface locations to the
Parties in accordance with Schedules 5.1 to 5.7.  Such assignments represent the intended capacity requirements of
the Parties in the Cable System through at least the year 2005.

 

11.2         Capacity in the Cable System jointly assigned
to two Parties shall be considered as consisting of two half-interests in a
MIU, with each half-interest assigned to one of the two Parties involved.  Such capacity is assigned to the Parties for
provision of telecommunications services between such Parties or Carrier Users.

 

11.3         Capacity in the Cable System wholly assigned
to one Party shall be considered as consisting of two half-interests.  If not acquired as Underwritten Capacity,
such Party may prefinance such half-interests in a MIU, with both
half-interests for provision of telecommunications services either for that
Party’s own use, between such a Party and other Carrier Users or between two
Carrier Users.

 

11.4         A Party may at any time before the RFPA Date
make available to other Parties whole or half-interests in wholly assigned
MIUs, but not in fractions of wholly assigned MIUs, on an ownership basis.

 

11.5         At anytime after the RFPA Date a Party may
make available to other Parties or to Carrier Users half-interests in wholly
assigned MIUs in such a quantity at least equal to its interests in one (1)
MIU, on such a basis, other than transfer of ownership interests, as such Party
and other Parties or Carrier Users concerned may agree.

 

11.6         Notwithstanding Subparagraphs 11.4, 11.5 and
11.8:

 

11.6.1      Terminal Parties at any time may dispose of all
available Underwritten Capacity in the relevant Cable System held by them over
and above their requirement.  Any Party
acquiring capacity from the Underwritten Capacity of a Terminal Party shall be
entitled to acquire such capacity on an ownership basis.  Carrier Users shall be entitled to acquire
such capacity on such terms and conditions as mutually agreed upon by the
affected parties.

 

15

 

11.6.2      After disposition has been made by the Terminal
Parties of all available Underwritten Capacity held by them over and above
their requirements, no Party may make its interests in any of the MIUs jointly
assigned to it available to other Parties or to Carrier Users that are located
within a different country from that in which the Party seeking to make
available its interests in such MIUs is located until the Notional Capacity of
the Cable System has been expanded to the Design Capacity.  However, a Party may make its interests in
such MIUs as it may acquire by expansion of the Notional Capacity, available to
Carrier Users on such basis, other than by transfer of ownership interests in
the Cable System, as such a Party and the Carrier User may agree.

 

11.6.3      After the Notional Capacity of the Cable System
has been expanded to its Design Capacity, any Party may make any of its
interests in MIUs available to other Parties or Carrier Users, in such quantity
at least equal to its interest in one (1) MIU, other than by transfer of
ownership interest(s), as such a Party and other Parties or Carrier Users may
agree.

 

11.6.4      The expansion of the capacity of the Cable System
to its Design Capacity as mentioned in Subparagraphs 11.6.2 and 11.6.3 shall
exclude the use of 1008 MIUs which is reserved for restoration and of the
Intra-Europe Capacity.

 

11.7         Where capacity is jointly assigned in
accordance with Subparagraph 11.2, neither Party may make interests in such
capacity available to other Parties or Carrier User without the consent of the
other Party to whom the capacity is jointly assigned.

 

11.8         The Parties agree to a first review of the
assignment of capacity set forth in Schedule 5 at a time established by the
Management Committee and to reassign the capacity as may be agreed by the
Parties affected by such reassignment. 
Subsequent reassignment of capacity, if required, shall beat the
discretion of the Management Committee.

 

11.9         Schedules 2, 3, 4 and 5 shall be appropriately
modified to reflect any reassignment of capacity on an ownership basis pursuant
to this Paragraph 11.

 

11.10       One or more MIUs assigned between any two
Parties shall be arranged in agreement with the T & O Subcommittee such
that the higher order VC-4 paths are utilised in an effective manner.  Higher order VC-4 paths shall be able to
transport up to 63 MIUs arranged in accordance with CCITT Recommendations
G.707–709.  Any two Parties or groups of
Parties having assignments between them which are in aggregate equal to or
greater than higher order Virtual Containers (VC) may request that their
assigned capacity is made available at the higher order VC level.

 

16

 

11.11       Subsequent to the initial arrangement of
capacity as provided in Subparagraph 11.10, any two Parties or groups of
Parties having assignments between them which are in aggregate equal to or
greater than higher order Virtual Container (VC) may request that their
assigned capacity is made available at the higher order VC level, provided
that:

 

11.11.1           the agreement of the
relevant cable station owner of the Cable System is obtained;

 

11.11.2            the agreement of other Parties with
assigned capacity that would be affected by the proposed rearrangement is
obtained; and

 

11.11.3           all costs arising from
the proposed rearrangement are first paid by the Parties requesting it.

 

11.12       The communications capability of any capacity
assigned in Schedule 5 may be optimised by the Party or Parties to whom such
capacity is assigned by the use of equipment which will more efficiently use
such capacity; provided that the use of such equipment does not cause any
interruption of, or interference to, the use of any other capacity in the Cable
System or prevent the use of similar equipment by other Parties.  A Party to whom capacity is assigned shall
permit the use of such equipment by a Carrier User 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 11.12.  Such equipment, if
used, shall not constitute a part of the Cable System.

 

 

12.           Increase of Notional Capacity and
Use of Common Reserve Capacity

 

12.1         The Management Committee, in accordance with
Subparagraph 4.3 of this Agreement, may increase the Notional Capacity of the
Cable System at the request of any Party. 
However, no increase of the Notional Capacity shall be made prior to the
disposition of available Underwritten Capacity in the Cable System held by the
Terminal Parties over and above their requirements in the Cable System
capacity.  The terms and conditions
related to the expansion of the Notional Capacity shall be determined by the
Management Committee.

 

12.2         In the event of an increase in the Notional
Capacity in accordance with Subparagraph 12.1, payments will be made between
and among the Parties as necessary to adjust the contribution to the capital
costs of the Cable System theretofore made by each Party to reflect any Party’s
revised assignment of capacity in Segment F. 
Such payments will be based on terms and conditions to be determined by
the Management Committee.  In addition,
appropriate adjustments will be made in each Party’s share of the capital costs
and of the operating and maintenance costs relating to Segment F thereafter
incurred to

 

17

 

reflect that Party’s revised assignment of capacity in the Cable System.  In each such case, the relevant Schedules
shall be appropriately modified.

 

12.3         The Common Reserve Capacity of the Cable
System between System Interface locations shall be held by the Parties in
common and undivided shares in the same proportion as their capacity assignment
in the Cable System as per Schedules 5.1 through 5.7.

 

12.4         Subject to the prior approval by the
Management Committee, a proportionate share of the Common Reserve Capacity up
to the equivalent capacity limit represented by their respective percentage
interests pursuant to Subparagraph 12.3 may be temporarily allocated to
individual Parties for utilization without charge for purposes of restoration
of telecommunications services provided by those Parties.  The utilization of the Common Reserve
Capacity for purposes of restoration, other than as specifically provided for
in this Subparagraph 12.4, shall require the concurrence specified in
Subparagraph 12.5.  This Subparagraph
12.4 shall not be construed as assuring the availability of Common Reserve
Capacity for restoration nor shall it be construed as requiring the provision
of any additional facilities.  Any
additional costs for the facilities shall be borne by the Parties using the
Common Reserve Capacity for restoration pursuant to this Subparagraph
12.4.  This Subparagraph 12.4 shall not
be construed as precluding the Parties from agreeing to the establishment of
broad-based restoration arrangements using the Common Reserve Capacity.

 

12.5         The Management Committee may authorize the
temporary use of the Common Reserve Capacity for temporary or occasional
purposes, including restoration, if the concurrence of at least seventy-five
percent (75%) of the total voting interests of the Parties is obtained which
must include the concurrence of the relevant Terminal Parties.  With such concurrence, the Management
Committee may establish technical, operational and financial procedures for
temporary use of the Common Reserve Capacity.

 

12.6         The Management Committee shall give priority
to increases in Notional Capacity pursuant to Subparagraph 12.1 over any
utilization of the Common Reserve Capacity pursuant to Subparagraph 12.5.

 

 

13.           Increase or Decrease of Design
Capacity

 

13.1         If, subsequent to the RFPA Date, the Design
Capacity of the Cable System is increased or decreased pursuant to agreement of
the Parties to this Agreement, or otherwise, the additional or reduced Design
Capacity will be added to or subtracted from the Common Reserve Capacity.  The Management Committee shall have authority
to increase the Design Capacity of the Cable System with the concurrence of at
least seventy-five percent (75%) of the voting interests of the Parties which
must include the concurrence of the Terminal Parties concerned, in

 

18

 

recognition of the potential technical,
financial and operational impact on cable station operations.

 

13.2         In the event that the capacity which the Cable
System is capable of providing upon the RFPA Date, or such other date as the
Parties may agree, is less than the Notional Capacity specified in Schedule
5.11, or in the event that the capacity which the Cable System is capable of
providing during the term of this Agreement is reduced below the Notional
Capacity specified in Schedule 5.11 as a result of physical deterioration, or
for other reasons beyond the control of the Parties, the capacity assigned to
the Parties in accordance with Schedule 5 shall be reduced in the proportion in
which the capacity provided was assigned to the Parties immediately preceding
such decrease in capacity.  The
assignment of fractional interests in capacity less than one (1) MIU resulting
from such reduction shall be determined by agreement of the Parties.

 

13.3         If the capacity of the Cable System is increased
beyond its Design Capacity pursuant to the agreement of the Management
Committee, the additional capacity which becomes available shall be assigned to
the Parties in the proportions in which capacity in the Cable System was
assigned to the Parties immediately preceeding such increase.  The assignment of any fractional interests
in additional capacity resulting from such increase shall be determined by
agreement of the Parties.

 

13.4         A Party may decline to accept all or any part
of its proportionate share of an increase in capacity pursuant to Subparagraph
13.3 provided that it has previously expressed such intentions during the
discussion of any proposal to expand the Design Capacity.  If the Party so notifies, it shall not be
liable for payments for capital costs attributable to any increase in capacity
in which it declined to participate. 
Schedule 5 will be appropriately modified to reflect the assignment of
capacity pursuant to this Subparagraph 13.4. 
Further, a Party not participating fully in the expansion shall receive
a proportionate share of the financial adjustments made pursuant to
Subparagraph 13.5 of this Agreement by the Parties electing to participate in
such expansion.

 

13.5         In the event of an increase or a decrease in
the capacity of the Cable System as provided for in Subparagraphs 13.1, 13.2
and 13.3 of this Agreement, financial adjustments will be made between and
among the Parties as necessary to adjust the contribution to the relevant
capital costs of Cable System theretofore made by each Party, to reflect any
Party’s revised assignment of capacity in the Cable System.  Such financial adjustments shall be
determined by the F & C Subcommittee subject to ratification by the
Management Committee.  In each such
case, Schedules 2, 3, 4 and 5 shall be appropriately modified to reflect the
Parties’ interests and share of costs thereafter.

 

19

 

14.           Duties and Rights as to Operation and
Maintenance of Segments

 

14.1         TELEGLOBE shall be solely responsible for the
operation and maintenance of Segment A of the Cable System and shall use all
reasonable efforts to operate and maintain or cause to be operated and
maintained economically such Segment in efficient working order.

 

14.2         IPT shall be solely responsible for the
operation and maintenance of Segment B of the Cable System and shall use all
reasonable efforts to operate and maintain or cause to be operated and
maintained economically such Segment in efficient working order.

 

14.3         BT shall be solely responsible for the
operation and maintenance of Segment C of the Cable System and shall use all
reasonable efforts to operate and maintain or cause to be operated and
maintained economically such Segment in efficient working order.

 

14.4         TD shall be solely responsible for the
operation and maintenance of Segment D of the Cable System and shall use all
reasonable efforts to operate and maintain or cause to be operated and
maintained economically such Segment in efficient working order.

 

14.5         DBPT shall be solely responsible for the
operation and maintenance of Segment E of the Cable System and shall use all
reasonable efforts to operate and maintain or cause to be operated and
maintained economically such Segment in efficient working order.

 

14.6         The responsibilities for the operation and
maintenance of Segment F shall be performed by the Maintenance Authorities in a
manner consistent with applicable international submarine cable maintenance
practices and reviewed by the T & O Subcommittee at its discretion.  For the purposes of this Subparagraph 14.6,
the Terminal Parties shall be the “Maintenance Authorities” which shall use all
reasonable efforts to maintain economically Segment F of the Cable System in
efficient working order and with the objective of achieving effective and
timely repairs when necessary.  Any of
the Maintenance Authorities shall have the right to deactivate Segment F, any
Subsegment or any part thereof, in order to perform the duties imposed upon
them in this Paragraph 14.  Prior to such
deactivation, reasonable notice shall be given and coordination shall be made
with the other Parties hereto.

 

14.7         To the extent possible, sixty (60) days prior
to initiating action, the Maintenance Authority 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 that will
have a significant impact on the operation or maintenance of the Cable
System.  Should one or more Parties
representing at least ten percent

 

20

 

(10%) of the total voting interest in the Cable System specified in
Schedule 2 wish to review such an operation or change prior to its occurrence,
the Maintenance Authority involved shall be notified in writing within thirty
(30) days of such advice.  Upon such
notification, the Maintenance Authority shall convene an ad hoc meeting of the
T & O Subcommittee for such review.

 

14.8         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 Cable System Subsegment(s) for which it is
responsible.  Each Maintenance Authority
shall have authority to file appropriate lawsuits or other proceedings, to
settle or compromise any claims and to execute releases and settlement
agreements on behalf of the Parties as necessary to effect a settlement or
compromise.  Appropriate notification
from the Maintenance Authority shall be provided to the Management Committee in
consideration of such action.  In
addition, the concurrence of the Management Committee shall be obtained prior
to settling or compromising any claim on behalf of the Parties.  Any money received by the claimant Party as
a result of an award by a competent tribunal or under a settlement approved by
all the Parties shall be shared among all the Parties in the proportions of
their respective contributions to the operation and maintenance costs of the
Cable System, in respect of the Subsegment of Segment F concerned, as set out
in Schedule 3.

 

14.9         Each Party that has designed or procured
equipment to be used in the Cable System shall provide all necessary
information relating to the operation and maintenance of such equipment to the
Maintenance Authority responsible for the maintenance of such equipment and to
the Parties using such equipment.  Each
Maintenance Authority shall have prompt access to all system maintenance information
appropriate to those parts of the Cable System not covered by its authority.

 

14.10       In no circumstances shall any Party be liable to
any of the other Parties for any loss, whether direct or indirect, or damage
sustained by reason of any delay in provision, failure in, damage to or
breakdown of the facilities constituting the Cable System or any interruption
of service, whatsoever may have been the cause of such delay in provision,
failure, damage, breakdown, or interruption and for however long it shall
last.  In the event of a failure or
breakdown of any of such facilities, if a Party responsible for maintaining and
operating the facilities involved as specified in Subparagraphs 14.1 through
14.6 of this Agreement 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, that
other Party 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 other Parties their proportionate shares of the cost reasonably incurred in
doing so.

 

21

 

14.11       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 Cable System and to obtain copies of the
maintenance records.  For this purpose
the Maintenance Authorities shall retain significant records, including
recorder charts, 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 f or the life of the Cable System.

 

 

15.           Allocation and Billing of the
Operating and Maintenance Costs of Segment F

 

15.1         The costs of operating and maintaining Segment
F shall be allocated in the proportions specified in Schedule 3.

 

15.2         The operating and maintenance costs to which
Subparagraph 15.1 of this Agreement refers are the costs reasonably incurred in
operating and maintaining the facilities involved, including, but not limited
to, the cost of attendance, testing, adjustments, storage of plant and
equipment, repairs, including repairs at sea, cable ships, maintenance and
repair devices that are or may hereafter become available, including standby
costs, re-burial and the replacement of plant, tools and test equipment,
customs duties, taxes, except income tax imposed upon the net income of a
Party, paid in respect of such facilities, appropriate financial charges
attributable to other Parties’ shares of costs incurred by a Maintenance
Authority at the rate at which the appropriate Maintenance Authority generally
incurred such 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 on account of such claims shall be shared by them in the
same proportions as they share the costs of operating and maintaining Segment F
under Subparagraph 15.1 of this Agreement.

 

15.3         The Management Committee may authorize the
purchase and use of special tools and test equipment for use on board cable
ships and which are required for the maintenance and repair of the Cable
System.  The related costs may include,
but not be limited to, the costs, or an appropriate share thereof, for the
purchase, storage and maintenance of this equipment.  The Management Committee will determine the manner in which these
costs will be billed to the Parties.

 

15.4         The Maintenance Authorities shall render bills
to the Parties on a quarterly basis for the following quarter on an estimated
basis in accordance with procedures to be established by the Management
Committee for the expenditures and receipts herein referred.  From time to time the Maintenance
Authorities shall also furnish such further details for such bills as the other
Parties may reasonably require.  On the
basis of such bills each Party shall pay such amounts as may be owed by the end
of the calendar month following the calendar month in which the bills are
rendered.

 

22

 

15.5         The billing procedures specified in
Subparagraphs 8.5, 8.6, 8.7, 8.8 and 8.9 of this Agreement shall be applicable
to all bills rendered pursuant to this Paragraph 15.

 

 

16.           Currency and Place of Payment

 

16.1         Bills rendered under this Agreement shall be
rendered in the currency of the country 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 US currency (US$)
regardless of the currency in which the bill is rendered at an exchange rate as
determined by the F & C Subcommittee. 
The Management Committee may vary these procedures at its
discretion.  Bills shall be payable to
the designated office or account of the billing Party.

 

16.2         Unless otherwise designated by the Party
concerned, bills rendered under this Agreement shall be addressed to the
respective Parties by airmail, copy of which shall be sent by facsimile giving
a summary of the payments due and expenses concerned.

 

16.3         Payments under this Agreement shall be made by
bank transfer to the designated bank account indicated in the bills rendered.

 

16.4         All amounts billed or payable under this
Agreement shall be paid in full, free and clear of any taxes, duties or other
withholdings.

 

 

17.           Use of Segments A, B, C, D and E

 

17.1         The Terminal Parties shall grant an IRU to
each Party to whom capacity in the Cable System is assigned or made available
pursuant to this Agreement in Segments A, B, C, D and E in which it has no
ownership interest, to the extent required for use of its capacity.  Such IRU shall commence on the RFPA Date or
the date a Party first places any of its capacity into operation, whichever
occurs first, and such IRU shall continue for the term of this Agreement.

 

17.2         In the event that an agreement for another
cable system utilizing any cable station of the Cable System is terminated
prior to the termination of this Agreement; the Terminal Party of Segment A, B,
C, D or E, with agreement of the Parties hereto, shall take all necessary
measures to ensure that the cable station in question will be available for the
Cable System for the duration of this Agreement on fair and equitable
terms.  If the cable station in question
is not available for the landing and terminating of the Cable System for any
reason, the relevant Terminal Party, with agreement of the Parties hereto,
shall take all necessary measures to ensure that another appropriate cable
station in the country of that Terminal Party will be

 

23

 

available for the Cable System for the duration of this Agreement on
terms and conditions similar to those contained in this Agreement.

 

17.3         For the IRU granted in each of the cable
stations involved, the Parties hereto shall pay that portion of the capital
costs and of the operating and maintenance costs of the cable station,
including additions thereto, allocable to the Cable System as set forth in
Schedule 4.

 

17.4         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 the Cable System and other communications systems
terminating at that cable station, the capital costs and the operating and
maintenance costs of such shared cable station or equipment, not solely
attributable to a particular communications system or systems, shall be
allocated among the systems involved in the proportions in which they use the
shared equipment or facilities.  For
such purpose, the use of a shared cable station or of shared cable station
equipment or facilities therein attributable to a particular system shall be
determined on the basis of the ratio of: (i) the installed cost of the cable
station equipment or facilities, excluding shared equipment or facilities,
associated with the particular cable system to (ii) the installed cost of the
cable station equipment or facilities, excluding shared equipment or
facilities, associated with all systems, including the Cable System, which make
use of the shared equipment or facilities.

 

17.5         Capital costs, as used in this Paragraph 17
with reference to the provision and construction of each of the cable stations,
including land, access roads, cable rights-of-way, ducts, equipment 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 of or salvage, testing associated with installation,
customs duties, taxes, except income tax imposed upon the net income of a
Party, appropriate financial charges attributable to the other Parties share of
costs incurred by the Terminal Party at the rate at which such Terminal Party
generally incurred such financial charges, supervision, 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.

 

17.6         Operating and maintenance expenses as used in
this Paragraph 17 with reference to the cable station in question are the costs
reasonably incurred in maintaining and operating the facilities involved,
including, but not limited to, the costs of attendance, testing, adjustments,
repairs and replacement, customs duties, taxes,

 

24

 

except income tax imposed upon the net income of a Party, paid in
respect of such facilities, 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
Terminal Party on account of such claims. 
Costs and expenses and damages or compensation payable to the Terminal
Party on account of such claims shall be shared by the Parties acquiring IRU in
the relevant cable station in the proportions as they share the costs of
operation and maintenance of the cable station.

 

17.7         A Party using Segment A, B, C, D or E of the
Cable System to enter the Cable System shall bear all capital, operating and
maintenance costs of that Segment allocable to both half-interests in the
capacity jointly assigned or made available to the Party and its correspondent
in the Subsegment to which that cable station is connected.

 

17.8         In the case of wholly assigned or made
available capacity, a Party shall bear all capital, operating and maintenance
costs of the entering and terminating Segment A, B, C, D or E in proportion to
its wholly assigned or made available capacity in the Subsegments to which
these cable stations are connected.

 

17.9         A Party whose traffic transits Segment A, B,
C, D or E from one Subsegment to another Subsegment of the Cable System shall
not bear any capital, operating and maintenance costs in that cable station to
both half interests in the capacity jointly assigned, wholly assigned or made
available to that Party and its correspondents.

 

17.10       Billing and payments due under this Paragraph 17
shall be made in accordance with the following principles or such other billing
and payment procedures as may be determined by the Management Committee from
time to time:

 

17.10.1    The Terminal Party shall
determine the amount of the initial payment of the net capital costs of the
applicable cable station, i.e. capital cost less accrued depreciation
determined in accordance with the accounting practices of the Terminal Party,
which will be due from the Parties hereto to the parties of other
communications systems terminating at that cable station entitled to a share of
such payments at the time the IRU commences pursuant to Subparagraph 17.1 of
this Agreement.

 

17.10.2    Sixty (60) days before the
RFPA Date, the Terminal Party shall render bills to the Parties hereto, on an
actual or preliminary billing basis, as appropriate, for their proportionate
shares of the applicable cable station amount referred to in Subparagraph
17.10.1 of this Agreement.  In the case
of preliminary bills, appropriate adjustments will be made as soon as
practicable after actual costs are determined.

 

25

 

17.10.3    Sixty (60) days before the
RFPA Date, the Terminal Party shall render bills to the Parties hereto, on an
actual or preliminary basis, as appropriate, for their proportionate shares of
the capital cost of the cable station equipment, excluding equipment shared
with other cable systems.  In the case
of preliminary bills, appropriate adjustments will be made as soon as possible
after the actual costs are determined.

 

17.10.4    The billed Parties shall pay
such bills to the Terminal Party on or before the date on which the IRU in the
applicable cable station granted to the Parties hereto under this Paragraph 17
becomes effective.  As soon as
practicable after receiving such payment, the Terminal Party shall distribute
said payments among the Parties to the other communications systems terminating
at the respective cable station in the proportions to which they are entitled.

 

17.10.5    The Parties hereto shall be
billed individually for, and shall pay their proportionate share of, the
portion of any capital costs of a cable station allocable to this Agreement
incurred after the grant to the Parties hereto of an IRU in such cable station
becomes effective, and of the portion of the operating and maintenance costs of
the cable station allocable to this Agreement commencing at the time such grant
becomes effective, in accordance with the applicable billing method specified
in Paragraphs 15 and 16 of this Agreement.

 

17.11       In the event of sale or other disposition of
Segments A, B, C, D and E or any part thereof, the Terminal Party shall share
with the other Parties hereto any net proceeds, or costs, of such sale or
disposition received, or expended, by the owner in the proportions in which
costs are allocated among the Parties in the subject of said sale or
disposition, as specified in Schedule 4, at the time of the sale or
disposition.  Notwithstanding the IRUs
or similar rights granted in Segments A, B, C, D and E pursuant to Paragraph
17.1, the title to the lands, buildings and equipments comprising said Segments
shall at all times remain vested in the respective Terminal Party.

 

 

18.           Keeping and Inspection of Books for
Segments A through F

 

18.1         The Central Billing Party shall 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 Segment F as specified in the
Supply Contract.

 

18.2         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 Segments A through
F and not included in the Supply Contract, as defined in Paragraph 8 of this
Agreement, which they incur directly for a period

 

26

 

of five (5) years from the RFPA Date or the
date the work is completed, whichever is the latest.

 

18.3         With respect to the operating and maintenance
costs of Segment F, 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 to the Parties
are rendered.

 

18.4         Any Party, including the Central Billing
Party, keeping and maintaining books, records, vouchers, and accounts of costs
pursuant to subparagraph 18.1 of this Agreement shall afford the Parties the
right to review or audit said books, records, vouchers, and accounts of
costs.  In affording the right to
review, any such Party shall be permitted to recover, from the Party or Parties
requesting the review, the reasonable costs incurred in complying with the
review or audit.  The Party or Parties
requesting the review shall bear the entire cost of the review or audit.  Such right shall only be exercisable through
the F & C Subcommittee in accordance with the F & C Subcommittee’s
audit procedures.

 

18.5         Any exercising of the right to review
specified in this Paragraph 18 shall be effected by periodic audits, as
requested by one or more Parties and as directed by the F & C
Subcommittee.  The Terminal Parties
expressly agree to such audits.

 

18.6         If requested by the Management Committee, a
final audit shall be conducted, and the costs of such audit shall be borne by
the Parties in proportion to their ownership interests shown in Schedule 2.

 

18.7         For those portions of Segment F 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 its respective billing of those items for a period of five (5)
years from the RFPA Date of Segment F, as specified in the Supply Contract.

 

18.8         The Procurement Group shall ensure that the
Supply Contract requires the supplier to obtain from its contractor(s) and
subcontractor(s) such supporting records, for other than the cost of fixed cost
items, as may be reasonably required and to keep and maintain such records for
a period of five (5) years from the RFPA Date of Segment F, as specified in the
Supply Contract.

 

18.9         The Procurement Group shall ensure that the
Supply Contract shall afford the Parties the right to review the books,
records, vouchers and accounts required to be kept, maintained and obtained
pursuant to Subparagraphs 18.1, 18.2 and 18.3.

 

27

 

19.           Ratification of Prior Decisions and
Actions

 

Each Party to this Agreement does hereby, and each Additional Party
admitted pursuant to Paragraph 25 shall thereby, unconditionally ratify and
accept as binding on itself, its successors, permitted assigns or trustees all
decisions and actions pursuant to this Agreement theretofore taken directly or
indirectly by any other Party or Parties or any committee or subcommittee or
group.

 

 

20.           Duration of Agreement and
Realization of Assets

 

20.1         This Agreement shall become effective on the
8th day of October, 1992 and shall continue in effect for at least an initial
period of twenty-seven (27) years ending on the 8th day of October, 2019.  It shall be terminable thereafter by
agreement of the Parties.  Any Party may
terminate its participation in this Agreement after the initial period by
giving notice in writing to the other Parties at least one (1) year prior to
the end of the initial period or at any time thereafter.  Upon the effective date of termination of
the participation of a Party, Schedules 1, 2, 3, 4 and 5 of this Agreement will
be appropriately modified and the remaining Parties to this Agreement shall
assume the capital, operating 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
Subparagraphs 20.3, 20.4 and 20.5 of this Agreement.  No credit of capital costs will be made to a Party that
terminates its participation in accordance with this Subparagraph 20.1 unless,
as a result of such action, all other Parties agree to terminate this
Agreement.  Termination of this
Agreement or termination of the participation of any Party shall not terminate
Subparagraphs 20.3, 20.4 and 20.5 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.

 

20.2         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 the Cable System during its
specified useful life, this subject matter will be referred to the Management
Committee for resolution in accordance with Subparagraph 4.3 but in this case
requiring a ninety percent (90%) majority of the total voting interests as
specified in Schedule 2.

 

20.3         The interests of the Parties or of any Party
in Segment F which come to an end by reason of the termination of this
Agreement or the termination of the participation of any Party therein shall be
deemed to continue for as long as is necessary for effectuating the purposes of
Subparagraphs 20.4 and 20.5 of this Agreement, and Segment F shall accordingly
thereafter be held as respects such interests upon the

 

28

 

appropriate trusts by the Parties who are the owners thereof.  Should the doctrine of trusts not be
recognized under the laws of the country where the property to which such
interests relate is located, then the Party or Parties who are the owners
thereof shall nevertheless be expressly bound to comply with the provisions of
Subparagraphs 20.4 and 20.5 of this Agreement.

 

20.4         Upon termination of this Agreement, the
Parties shall use all reasonable efforts to liquidate within one (1) year such
assets of Segment F as may then exist 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
to this Agreement who have interests in the subject thereof at the time this
Agreement is terminated.  In the event
agreement cannot be reached, the decision will be made in accordance with
Subparagraph 4.3 of this Agreement.  The
net proceeds, or costs of every sale or other disposition shall be divided
between or among the Parties to this Agreement in proportion to the percentages
shown on Schedule 2 immediately prior to the first time any Party terminates
its participation in this Agreement or if this Agreement is terminated pursuant
to Subparagraph 20.1, whichever occurs first. 
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.

 

20.5         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,
or a Party’s default, shall not relieve that Party or the Parties hereto from
any liabilities arising 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 any amounts due related to the Party’s pro rata
share of costs pursuant to Paragraphs 7, 8 and 15, or obligations which may
arise in relation to the Cable System 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’ ownership interests are specified in
Schedule 2 immediately prior to the first time any Party terminates its
participation in this Agreement or this Agreement is terminated, pursuant to
Subparagraph 20.1, whichever occurs first.

 

 

21.           Obtaining of Approvals

 

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.

 

29

 

21.2         Each Party in its respective country shall be
responsible for matters relating to the obtaining and continuance of
governmental approvals, consents, authorizations, licenses and permits for the
construction and utilization of the Cable System and the Parties shall use all
reasonable efforts to obtain and to have continued in effect such approvals,
consents, authorizations, licenses and permits for the construction and
utilization of the Cable System.

 

 

22.           Relationship Between and Among the
Parties

 

The relationship and common enterprise between and among the Parties
hereto shall not be that of partners and shall be limited to the express
provisions of this Agreement.  Nothing
herein contained shall be deemed to constitute a partnership or société de fait between and among them or
to merge their assets or their fiscal or other liabilities or undertakings, nor
shall it allow a Party to act as a mandatory or agent of any one Party or all
of them, except to the extent specifically permitted hereunder.

 

23.           Assignment of Rights and Obligations

 

Except as otherwise provided in Paragraphs 11, 12, 13, 17, 24 and 25 of
this Agreement, during the continuance of this Agreement no Party shall,
without the consent of the other Parties, sell, assign, transfer, or dispose of
its rights or obligations under this Agreement or of any interest in the Cable
System except to a successor, statutory assignee, 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.

 

24.           Default

 

24.1         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 date when payment is
due, the Central Billing Party or any other billing Party shall 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 four (4)
months of such notification to the billed Party.  If full payment is not received within such specified period, the
Central Billing Party or the billing Party concerned may notify the Management
Committee of the status of the matter and request that the Management Committee
reclaims the capacity in the Cable System assigned to the defaulting Party.

 

24.2         The Management Committee shall have the option
of reclaiming the capacity assigned to a Party that is in default of this
Agreement, if such 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 in determining whether or not to reclaim the capacity assigned to such
defaulting

 

30

 

Party.  If the Management
Committee reclaims any capacity in the Cable System assigned to such defaulting
Party pursuant to this Agreement, reclaimed capacity shall be reassigned by the
Management Committee to the remaining Parties hereto on terms mutually
acceptable to those Parties holding matching half interest with such defaulting
Parties and such remaining Parties; and the remaining Parties shall not be obligated
to make any payments to the defaulting Party for the reclaimed capacity.  Furthermore, all previous payments made by
the defaulting Party shall be forfeited to the benefit of all remaining Parties
if the reclaimed capacity is in Segment F and to the benefit of the Terminal
Party concerned if the reclaimed capacity is in a cable station.  Except as provided in Subparagraph 20.5, the
rights or obligations under this Agreement of a defaulting Party shall terminate
as of the time the Management Committee reclaims all of the capacity previously
assigned to the defaulting Party.  This
Agreement and its Schedules shall be appropriately amended to reflect the
default of a Party and the reassignment of the interest herein of such
defaulting Party to succeeding Parties.

 

 

25.           Admission of Additional Parties

 

25.1         Each of the Parties to this Agreement may
invite Carrier Users to become Parties hereto up to the RFPA Date provided that
the agreement of the Terminal Parties has been obtained and the following
conditions are met:

 

25.1.1      The additional Party agrees
to acquire an investment share corresponding to the quantity of MIUs to meet
its needs for the Cable System through at least the year 2005;

 

25.1.2      agreement is reached between
all of the Parties whose MIU assignments in Schedules 5 will be changed by
admitting an additional Party;

 

25.1.3      payment is made by the
additional Party of its proportionate share in consequence of the admission of
such additional Party, of costs or capital costs already incurred under this
Agreement;

 

25.1.4      that such additional Party
accept the terms and conditions of this Agreement and the decisions already
taken by the Parties, including all decisions by the Management Committee the
Subcommittees and the Procurement Group in relation to the Cable System.

 

25.2         All Parties to this Agreement shall have the
same rights and obligations regardless of the date of their signing this
Agreement, except as otherwise stated herein.

 

25.3         Additional Parties to this Agreement shall be
admitted by Supplementary Agreements hereto, together with appropriately
modified Schedules 1, 2, 3, 4 and 5. 
TELEGLOBE, IPT, BT, TD and DBPT shall sign such Supplementary

 

31

 

Agreements on behalf of the existing Parties provided that any Party
having its MIU assignments affected also sign such Supplementary
Agreements.  TELEGLOBE shall be
responsible for distributing certified copies of such Supplementary Agreements
to each Party hereto.

 

 

26.           Waiver

 

Silence, lateness to invoke or the waiver by
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 subsequent breach or default of a similar
nature, or as a waiver of any such provision, right, or privilege hereunder.

 

27.           Sharing of Contractual Obligations
and Liability

 

27.1         Each Party shall indemnify and shall keep
indemnified and hold harmless the other Parties and each of their employees,
servants and agents to the extent hereinafter agreed, from and against all
claims, demands, actions, suits, proceedings, writs, judgements, orders and
decrees brought, made or rendered against them or any of them and all damages,
losses and expenses suffered or incurred by them or any of them howsoever
arising out of or related to any respect of providing, constructing and
maintaining the Cable System.

 

27.2         If a Party assumes obligations, commits monies
in the name of or on behalf of the other Parties pursuant to this Agreement or
to an assignment under the provisions of this Agreement, or is obliged by final
judgement of a competent tribunal or under a settlement by the Management
Committee to discharge any claim in damages or other liability, including costs
or expenses associated therewith to any person or entity which is not a Party
to this Agreement and resulting from any aspect of providing, constructing,
laying or installing the Cable System or of its operation and maintenance, that
Party shall be entitled to reimbursement from the other Parties in the
proportions set forth in Schedule 2.

 

27.3         If a claim, demand, action, suit, proceeding,
writ, judgement, offer or decree as referred to Subparagraph 27.1 is brought,
made or rendered against a Party, or if any Party suffers or incurs any
damages, losses or expenses in respect thereof, that Party shall, as a
condition of reimbursement under Subparagraph 27.2, immediately notify all
other Parties and give them the opportunity to advise and recommend through the
Management Committee on the means to defend or to settle same and, to the
extent permitted by the relevant jurisdiction, to be joined in any proceedings
relating thereto.

 

27.4         Except as provided for in Subparagraph 14.8,
as a precondition of the initiation of any legal proceedings by any Party or
Parties on behalf of and for the benefit of any other Party or Parties, the
Party or Parties planning to initiate such

 

32

 

proceedings shall give notice, appropriate under the circumstances, to
all other Parties.

 

27.5         The costs and benefits of any proceedings
referred to in Subparagraph 27.4 shall be shared among the Parties in the
manner described in Subparagraph 27.2.

 

27.6         Notwithstanding the above, where a claim is
brought against a Terminal Party in respect of a sacrificed anchor and/or loss
of, or damage to, fishing gear, that Terminal Party may settle such a claim for
an amount no greater than two hundred thousand US dollars (US$ 200,000) or an equivalent
amount in another currency, or such other amount as agreed by the Management
Committee from time to time, and obtain reimbursement under Subparagraph 27.2.

 

 

28.           Settlement of Disputes

 

28.1         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 by which the matter should be resolved.

 

28.2         The performance of this Agreement by the
Parties shall continue during the resolution of any dispute.

 

 

29.           Paragraph Headings

 

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

 

 

30.           Execution of Agreement and Amendments

 

30.1         This Agreement shall be executed in the
English language, in twenty (20) originals, one for each Party.  Amendments to this Agreement and Supplementary
Agreements shall be executed in one (1) original and TELEGLOBE shall be the
custodian of such Amendments or Supplementary Agreements and shall provide a
true copy to any Party upon request.

 

30.2         This Agreement and any of the provisions
hereof may be altered or added to only by another agreement in writing signed
by all Parties.

 

30.3         Subparagraph 30.2 shall not apply to any
Schedule modified in accordance with any other provision of this Agreement and
any Schedule so modified shall be

 

33

 

deemed to be a part of this Agreement in substitution for the
immediately preceding version of that Schedule.

 

30.4         If any difference shall arise between or among
the Parties or any of them respecting the interpretation or effect of this
Agreement or any part or provision thereof or their rights and obligations
thereunder, and by reason 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 facts shall be regarded by
the Parties and in all courts and tribunals wherever situated as irrelevant to
the question aforesaid and to the decision thereof.

 

 

31.           Successors Bound

 

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

 

 

32.           Severability

 

If any of the provisions of this Agreement
shall be invalid or unenforceable, such invalidity or unenforceability shall not
invalidate or render unforceable 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.

 

 

33.           Treatment of the Intra-Europe
Capacity

 

33.1         The Intra-Europe Capacity, shall be assigned
to the Initial Intra-Europe Parties in accordance with Schedules 5.8, 5.9 and
5.10.  Such assigned capacity shall be
paid by the Initial Intra-Europe Parties to the Central Billing Party as a
fixed lump sum contribution of US$10,000,000. 
Such fixed lump sum shall be payable in three installments by the
Initial Intra-Europe Parties US$3,400,000, US$3,300,000 and US$3,300,000,
within 45 calendar days, 180 calendar days and 365 calendar days respectively
from the effective date of this Agreement.

 

33.2         The fixed lump sum contribution shall be
credited to the total cost of the Cable System and shall be used by the Central
Billing Party to reduce billing amounts to all Parties on a pro rata basis in
accordance with Schedule 2.

 

34

 

33.3         Notwithstanding Paragraph 11, the Initial
Intra-Europe Parties shall be solely responsible to use, administer, sell,
assign and dispose of such Intra-Europe Capacity in accordance with the
conditions of this Agreement, mutatis mutandis.

 

33.4         The Initial Intra-Europe Parties shall invite
other Parties or Carrier Users to invest in the Intra-Europe Capacity, either
on an ownership basis or IRU basis. 
Transfer of capacity on an ownership basis shall be before the RFPA date
and by means of a Supplementary Agreement. 
Only one such Supplementary Agreement shall be entered into for such
transfer of Intra-Europe Capacity.

 

33.5         Such transfer of capacity on an ownership
basis shall be at cost plus appropriate financial charges in accordance with
Paragraph 8 of this Agreement.

 

33.6         Operating and maintenance costs of the
Intra-Europe Capacity are included in Schedule 3.

 

33.7         In the event of any increase in cost for
Subsegments F4, F5, F6 and F7 from the budgeted costs, the increase in cost
shall be borne proportionately by the Parties and the Intra-Europe Parties on
the basis of capacity assignment in such Subsegments.

 

33.8         The Intra-Europe Capacity shall not be
increased in the event that the Notional Capacity or the Design Capacity of the
Cable System is increased.  However, in
the event that the Notional Capacity of the Cable System is reduced as a result
of physical deterioration or for other reasons beyond the control of the
Parties on those Subsegments on which the Intra-Europe Capacity is made
available, then the Intra-Europe Capacity shall be reduced in the same
proportion that the Notional Capacity of those Subsegments.

 

 

34.           Treatment of the Faroe Islands

 

34.1         The Parties agree to modify the Cable System
configuration in order to include a connection to the Faroe Islands as part of
the Cable System.

 

34.2         Said agreement is conditional to treating the
inclusion of the Faroe Islands in a manner such that the transatlantic MIU
capacity unit cost will not increase.

 

34.3         The inclusion of the Faroe Islands as part of
the Cable System shall be the subject of a Supplementary Agreement.

 

 

35.           Entire Agreement

 

This Agreement supersedes the MOU, the
Supplemental MOU and all prior oral or written understandings between the
Parties and constitutes the entire agreement between the Parties with

 

35

 

respect, to the subject matter of this
Agreement.  This Agreement includes the
following documents which are attached hereto and incorporated herein by
reference:

 

	
  Schedule 1

  	
   

  	
  –

  	
   

  	
  Initial Parties to the CANTAT-3 Construction and Maintenance
  Agreement

  
	
  Schedule 2

  	
   

  	
  –

  	
   

  	
  Voting and Ownership Interests and Allocation of Capital Costs in the
  CANTAT-3 Cable System

  
	
  Schedule 3

  	
   

  	
  –

  	
   

  	
  Allocation of Operating and Maintenance Costs of Segment F

  
	
  Schedule 4

  	
   

  	
  –

  	
   

  	
  Allocation of Capital, Operating and Maintenance Costs of Segments A,
  B, C, D and E

  
	
  Schedule 5

  	
   

  	
  –

  	
   

  	
  Assignments of MIUs in the CANTAT-3 Cable System

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Annex I

  	
   

  	
  –

  	
   

  	
  Subcommittees Mandate and Terms of Reference

  
	
  Annex II

  	
   

  	
  –

  	
   

  	
  Mandate and Terms of Reference for the Procurement Group

  
	
  Annex III

  	
   

  	
  –

  	
   

  	
  Terms of References for the Central Billing Party for Supply Contract
  and Non-Supply Costs of the Cable System

  
	
  Annex IV

  	
   

  	
  –

  	
   

  	
  Cable System Configuration

  

 

36

 

36.           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

ADMINISTRATION DES POSTES ET TÉLÉCOMMUNICATIONS DU GRAND-DUCHÉ

DE LUXEMBOURG

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  BELGACOM

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  BUNDESMINISTERIUM FUER OEFFENTLICHE WIRTSCHAFT UND VERKEHR,

  GENERALDIREKTION FUR DIE POST-UND TELEGRAPHENVERWALTUNG

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  BRITISH TELECOMMUNICATIONS plc

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  DACOM CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
					

 

37

 

	
  For and on behalf of

  	
   

  
	
  DEUTSCHE BUNDESPOST TELEKOM

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  ENTREPRISE DES POSTES, TÉLÉPHONES ET TÉLÉGRAPHES SUISSES

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  GENERAL DIRECTORATE OF POSTS AND TELECOMMUNICATIONS

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  ITALCABLE S.p.A

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  Korea Telecom

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  MCI INTERNATIONAL, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
				

 

38

 

	
  For and on behalf of

  	
   

  
	
  MERCURY COMMUNICATIONS LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  NORWEGIAN TELECOM

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  POSTS AND TELECOMMUNICATIONS OF FINLAND

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  RUSSIAN FEDERATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  SPRINT COMMUNICATIONS COMPANY. L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  TELECOM DENMARK Ltd.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
				

 

39

 

	
  For and on behalf of

  	
   

  
	
  TELEGLOBE CANADA INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  TELEKOMUNIKACJA POLSKA S.A.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For arid on behalf of

  	
   

  
	
  TRT/FTC COMMUNICATIONS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
				

 

40Exhibit 10.9

 

 

Asia Pacific Cable Network 2

 

 

PART 1

 

 

TERMS AND CONDITIONS OF CONTRACT

 

1

 

PART 1

TERMS AND CONDITIONS

OF CONTRACT

 

* *

 

TABLE OF CONTENTS

 

	
  RECITAL

  
	
  DEFINITIONS

  
	
  1.

  	
  OBJECT

  
	
  2.

  	
  APPLICABLE DOCUMENTS

  
	
  3.

  	
  RESPONSIBILITY OF THE CONTRACTOR

  
	
  4.

  	
  TECHNICAL REQUIREMENTS AND PLAN OF WORK

  
	
  5.

  	
  COMPLETION DATE

  
	
  6.

  	
  LETTER OF PERFORMANCE GUARANTEE

  
	
  7.

  	
  QUALITY ASSURANCE

  
	
  8.

  	
  DAMAGE TO THE NETWORK BEFORE NETWORK
  ACCEPTANCE

  
	
  9.

  	
  INJURY TO PERSONS AND DAMAGE TO PROPERTY

  
	
  10.

  	
  INSURANCE

  
	
  11.

  	
  SUSPENSION

  
	
  12.

  	
  VARIATIONS DURING EXECUTION

  
	
  13.

  	
  CONTRACT PRICE

  
	
  14.

  	
  ASSIGNMENT AND SUB-CONTRACTED WORK

  
	
  15.

  	
  TERMS OF PAYMENT

  
	
  16.

  	
  TRANSFER OF TITLE

  
	
  17.

  	
  ACCEPTANCE

  
	
  18.

  	
  WARRANTY

  
	
  19.

  	
  LONG TERM SUPPORT

  
	
  20.

  	
  DELAY IN COMPLETION

  
	
  21.

  	
  TERMINATION FOR CONVENIENCE

  
	
  22.

  	
  TERMINATION FOR DEFAULT

  
	
  23.

  	
  TERMINATION BECAUSE OF FORCE MAJEURE

  
	
  24.

  	
  INTELLECTUAL PROPERTY – INDEMNITY

  
	
  25.

  	
  SAFEGUARDING OF INFORMATION AND TECHNOLOGY

  
	
  26.

  	
  RESPONSIBILITY FOR OBTAINING PERMITS AND
  FOR CUSTOMS CLEARANCE AND OTHER FORMALITIES

  
	
  27.

  	
  NOTICES

  
	
  28.

  	
  CLAUSE HEADINGS

  
	
  29.

  	
  LIMITATION OF LIABILITY

  
	
  30.

  	
  SEVERABILITY

  
	
  31.

  	
  CONTRACTOR TO CONFORM TO REGULATIONS

  
	
  32.

  	
  SETTLEMENT OF DISPUTES

  
	
  33.

  	
  KEEPING OF RECORDS

  
	
  34.

  	
  ENTIRE AGREEMENT AND AMENDMENTS

  
	
  35.

  	
  RELATIONSHIP BETWEEN THE PARTIES

  

 

2

 

	
  36.

  	
  AGENTS AND REPRESENTATIVES OF THE
  PURCHASERS

  
	
  37.

  	
  SUCCESSORS BOUND

  
	
  38.

  	
  COMING INTO FORCE OF THE CONTRACT

  
	
  39.

  	
  PUBLICITY

  
	
  40.

  	
  SOFTWARE

  
	
  41.

  	
  INDEMNITIES TO SURVIVE TERMINATION

  
	
  42.

  	
  EXTENSION OF GENERAL PROVISIONS OF CONTRACT
  TO STEP 2 OF THE INITIAL NETWORK AND PHASED UPGRADE

  
	
  43.

  	
  SIGNATURE

  

 

	
  APPENDIX 1.1

  	
  -

  	
  FORM OF
  LETTER OF PERFORMANCE GUARANTEE

  
	
  APPENDIX 1.2

  	
  -

  	
  FORM OF
  LETTER OF GUARANTEE AGAINST PAYMENT FOR INITIAL NETWORK

  
	
  APPENDIX 2

  	
  -

  	
  ASIA PACIFIC
  CABLE NETWORK 2 CONFIGURATION

  
	
  APPENDIX 3

  	
  -

  	
  LIST OF
  MAJOR SUB-CONTRACTORS

  
	
  APPENDIX 4

  	
  -

  	
  FORM OF
  ESCROW AGREEMENT FOR SOURCE CODE

  

 

3

 

RECITAL

 

This Agreement (hereinafter
referred to as “the Contract”) is made and entered into the 19th day of April
2000.

 

BETWEEN:

 

•                                          Advantage
Telecommunications Ltd., having its registered office at 12th floor, Clover
Commercial Building, 67 Percival Street, Causeway Bay, Hong Kong (hereinafter
referred to as << Advantel >> which expression shall include its
successors).

 

•                                          China
Telecom, a corporation having its principal office at 33, Erlong Road, Xicheng
District, Beijing 100032 (hereinafter referred to as << China Telecom
>> which expression shall include its successors).

 

•                                          China
United Telecommunications Corporation Ltd., a corporation having its principal
office at 12/F, Office Tower 1, Henderson Center, No. 18, Jianguomen Nei
Avenue, Dong Cheng District Beijing 100005 (hereinafter referred to as <<
China Unicom >> which expression shall include its successors).

 

•                                          Chunghwa
Telecom Co., Ltd., having its principal office at 31, Ai-Kuo East Road, Taipei
(hereinafter referred to as << CHT >> which expression shall
include its successors).

 

•                                          Cable
and Wireless Global Network Limited, a company organised and existing under the
laws of Ireland and having its registered address at 2 Brookvale Plaza, East
Park, Shannon Free Zone, Co. Clare, Ireland (hereinafter referred to as
<< C&W >> which expression shall include its successors).

 

•                                          Cable
& Wireless HKT International Limited, having its principal office at 39th
Floor, Hongkong Telecom Tower, Taikoo Place, 979 King’s Road, Quarry Bay, Hong
Kong (hereinafter referred to as << CWHKTI >> which expression
shall include its successors).

 

•                                          Concert
Global Network Services Ltd., a corporation organized and existing under the
laws of Bermuda, and having an office at Swan Building, 2nd Floor,
26 Victoria Street, Hamilton, Bermuda HM12 (hereinafter referred to as <<
Concert >> which expression shall include its successors).

 

•                                          Global
One Communications Network, Inc., a company duly organized and existing under
the laws of Japan, having its principal office located at Roppongi, First
Building 7F, 9-9 Roppongi 1, Chome Minato-ku, Tokyo 106 (hereinafter referred
to as << Global One >> which expression shall include its
successors).

 

•                                          Japan
Telecom Co., Ltd., a corporation having its principal office at 7-1 Hatchobori
4-Chome, Chuo-ku, Tokyo (hereinafter referred to as << JT >> which
expression shall include its successors).

 

4

 

•                                          KDD
Corporation, a corporation having its principal office at 3-2 Nishi-Shinjuku
2-Chome, Shinjuku-ku, Tokyo 163-8003 (hereinafter referred to as << KDD
>> which expression shall include its successors).

 

•                                          Korea
Telecom, a corporation having its principal office at 206 Jungja-dong,
Pundang-gu, Sungnam city, Kyonggi-do 463-711, Korea (hereinafter referred to as
<< KT >> which expression shall include its successors).

 

•                                          KPN
Telecom B.V., a private limited liability company duly organised and existing
under the laws of The Netherlands and having its principal office at Maanplein
5, 2516 CK The Hague, The Netherlands (hereinafter referred to as << KPN
>> which expression shall include its successors).

 

•                                          Layer
2 Communications Group Ltd., a corporation organised and existing under the
state of the British Virgin Islands, and having its principal office is at PO
Box 3340, Road Town, Tortola, British Virgin Islands (hereinafter referred to
as << Layer 2 >> which expression shall include its successors).

 

•                                          MCI
International Telecommunications, Inc, a corporation organised and existing
under the laws of the State of Delaware, and having its registered office at 2
International Drive, Rye Brook, N.Y. 10573 U.S.A. (hereinafter referred to as
<< MCIITI >> which expression shall include its successors).

 

•                                          Metromedia
Fiber Network Services, Inc, a corporation organised and existing under the
laws of the State of Delaware, and having its principal office at 1 North
Lexington Avenue, White Plains, N.Y. 10573 U.S.A. (hereinafter referred to as
<< MFN >> which expression shall include its successors).

 

•                                          NTT
Communications Corporation, a corporation having an office at 1-1-6
Uchisaiwai-cho, Chiyoda-ku, Tokyo 100-8019 (hereinafter referred to as <<
NTT Com >> which expression shall include its successors).

 

•                                          Onelink
Cable Network Limited, having its principal office at 20th Floor,
Tung Hip Commercial Building, 248 Des Vouex Road Central, Hong Kong
(hereinafter referred to as << Onelink >>, which expression shall
include its successors).

 

•                                          Philippine
Long Distance Telephone Company, a corporation organised and existing under the
laws of the Republic of the Philippines, and having its principal office at the
Ramon Cojuangco Building, Makati Avenue, Makati City, Philippines (hereinafter
referred to as << PLDT >> which expression shall include its
successors).

 

•                                          Preparatory
Office of New Century InfoComm Ltd., a corporation having its principal office
at Room B, 12F, 296, Section 4, Jen-Ai Road, Taipei 106 (hereinafter referred
to as << NCIC >> which expression shall include its successors).

 

5

 

•                                          Singapore
Telecommunications Limited, a company incorporated under the laws of the
Republic of Singapore, and having its registered office at 31 Exeter Road,
Singapore 239732 (hereinafter referred to as << SingTel >> which
expression shall include its successors).

 

•                                          StarHub
Pte Limited, a company incorporated under the laws of the Republic of
Singapore, and having its registered office at 51 Cuppage Road, #07-00 StarHub
Centre, Singapore 229469 (hereinafter referred to as << StarHub >>,
which expression shall include its successors).

 

•                                          Taiwan
Fixed Network Co., Ltd., Preparatory Office, representing a company with its
principal office at 12/F, 169, Sec.4 Jen-Ai Road, Taipei 106 (hereinafter
referred to as << TFN >> which expression shall include its
successors).

 

•                                          Teleglobe
USA Inc., a corporation organized and existing under the laws of Delaware (USA)
and having an office at 11480 Commerce Park Drive, Reston, Virginia 20191
(hereinafter referred to as << Teleglobe >>, which expression shall
include its successors).

 

•                                          Telekom
Malaysia Berhad (128740-P), a company incorporated in Malaysia and existing
under the laws of Malaysia having its principal office at Tingkat 2 Ibu Pejabat
Telekom Malaysia, Jalan Pantai Baharu, 59200 Kuala Lumpur (hereinafter referred
to as << Telekom Malaysia or TM >> which expression shall
include its successors).

 

•                                          Telstra
Global Networks Limited, a corporation organized and existing under the laws of
Bermuda and having an office at Clarendon House, 2 Church Street, Hamilton HM
11, Berthuda (hereinafter referred to as << Telstra >>, which
expression shall include its successors).

 

•                                          Williams
Communications, Inc., a corporation organised and existing under the laws of
the state of Delaware and having its principal office at One Williams Center
41-3, Tulsa, Oklahoma, 74172, USA (hereinafter referred to as << Williams
>>, which expression shall include its successors).

 

hereinafter referred to as
<< the Purchasers >> on the one part,

 

6

 

AND

 

•                                          NEC
Corporation, a company organized and existing under the laws of Japan, having
its principal office at 7-1, Shiba 5-Chome, Minato-Ku, Tokyo 108-8001
(hereinafter called << NEC >>).

 

hereinafter referred to as
<< the Contractor >> on the other part.

 

Both the Purchasers and the Contractor shall be hereinafter
collectively referred to as “the Parties” and individually as “the Party” and
shall include its successors and permitted assigns.

 

The Parties hereto undertake to execute the present Contract under the
following terms and conditions:

 

DEFINITIONS

 

In these Terms and Conditions and in all other documents forming part
of the Contract the following definitions shall apply.

 

“Acceptance” means written acknowledgment by the Purchasers that the
Work, or part of it, has been completed in accordance with the Contract.  “Accept” and “Accepted” in the context of
“Acceptance” shall be construed accordingly.

 

“Acceptance Validation” means formal assurance, including testing, by
the Contractor that the Work satisfies the criteria for Acceptance in
accordance with the Contract to enable the Purchasers to determine whether or
not to accept the Work or any part thereof. 
“Acceptance Testing”, “Acceptance Tests” shall in this context be
construed accordingly.

 

“Billing Milestone” means a pre-determined point for billing to be
authorized subject to specific criteria being met.

 

“CIF” means cost, insurance and freight and is the FOB price plus all
necessary charges at the point of entry. 
CIF costs include FOB costs plus the following:

 

•                                          international
freight

•                                          insurance
as required

•                                          handling
charges and transportation in landing point countries/territories

•                                          clearance
charge

•                                          carriage
to and unloading at site.

 

“Contract” means these-terms and conditions of Contract together with
the documents listed in Clause 2 (Applicable Documents) and any appendices
hereof, and be deemed to include Contract variations, if any, pursuant to
Clause 12 (Variations During Execution).

 

7

 

“Contract Price” means the price (CIF) payable to the Contractor by the
Purchasers under this Contract stated in Clause 13 (Contract Price) and Part 2
(Price Schedule) for full and proper performance by the Contractor of all their
obligations under this Contract; and includes Contract variations, if any,
pursuant to Clause 12 (Variations During Execution).

 

“Central Billing Party” (CBP) means the body authorized to receive
invoices and make payments on behalf of the Purchasers.

 

“Equipment” means all materials, equipment and goods including Software
supplied or procured or to be supplied or procured by the Contract for
incorporation in the Network, and includes all spares.

 

“FOB” means free on board and
is the cost of the goods at the point of exit, via vessel or aircraft,
including all local charges.  FOB costs
include the following:

 

•                                          ex
factory costs

•                                          charges
to vessel or airport

•                                          billing
of lading or airway bill processing costs

•                                          loading
on board vessel

•                                          sales
tax (only in the country/territory of manufacturing).

 

“Force Majeure” means unexpected and unavoidable causes beyond the
reasonable control of a Party and without its fault or negligence, including
but not limited to acts of or failure to act of any governmental authority, war
or warlike operations, insurrections or riots, fires, floods, epidemics,
quarantine restrictions, freight embargoes.

 

“Final Acceptance” means written acknowledgment by the Purchasers that
the Work has been completed in accordance with the Contract, in this context
“Certificate of Final Acceptance” shall be construed accordingly.

 

“Information” means information whether written or oral, including but
not limited to -documentation, specifications, reports, data, notes, drawings,
models, patterns, samples, Software, computer outputs, designs, circuit
diagrams, inventions whether patentable or not and know-how.

 

“Initial Equipped Capacity” means the capacity level of the Network
provided at the Network Acceptance Date(s) and stated in the following steps:

 

a)                                      Step 1 first
80 Gbps (40 Gbps total equipped capacity or the capacity of protected rings)
shall be performed immediately after the Contract signature date

b)                                     Step 2: second
80Gbps (i.e. up to 160 Gbps or double the capacity of Step 1) shall only be
performed upon the receipt of confirmation from the Purchasers within ninety
(90) calendar days from the Contract signature date.

 

“Initial Network” means the whole of the Network provided at the
Network Acceptance Date(s) with the Initial Equipped Capacity.

 

8

 

“Network” means the whole of the Asia Pacific Cable Network 2 provided
between and including the Network Interfaces at each of the terminal stations
as per Appendix 2 (Asia Pacific Cable Network 2 Configuration).

 

“Network Acceptance” means the Purchasers grant a Certificate of
Network Acceptance for the Initial Network.

 

“Network Acceptance Date” means such date as stated in the Certificate
of Network Acceptance in accordance with the Contract and this includes a
thirty (30) day period for the Purchasers to consider the full test results.

 

“Network Interface” means the input (Ii) and output (Io) of a) STM-1
electrical and/or optical ports; b) STM-4, STM-16 and STM-64 optical ports, at
the Network Protection Equipment, Digital Distribution Frame and/or Optical
Distribution Frame (including the DDF/ODF itself) in each Terminal Station.

 

“Phased Upgrade” means the capacity upgrade of the Network to be
performed in total or in portion thereof as detailed in Appendix 9 of Part 2
(Price Schedule).

 

“Provisional Acceptance” means the Purchasers grant a Certificate of
Provisional Acceptance for a Segment(s) in accordance with the Contract.

 

“Provisional Acceptance Date” means such date as stated in the
Certificate of Provisional Acceptance for a Segment(s) in accordance with the
Contract and this includes a thirty (30) day period for the Purchasers to
consider the full test results.

 

“Quality Assurance” means all those planned and systematic actions
necessary to provide adequate confidence that a product or service will satisfy
the requirements of the Contract.

 

“Release Certificate” means a written statement issued by the
Contractor and certified by the Purchasers that any equipment, Segment(s) or
the Network being submitted to the Purchasers for Acceptance Validation has
been fully tested in accordance with the Contract requirements and conforms to
Contract.   In this context the term
“Release” shall be construed accordingly.

 

“Segment” means any of the following portions of the Network as shown
in Appendix 2:

 

Segment S1                        The
portion linking Katong and Kuantan;

 

Segment S2                        The
portion linking Kuantan and Lantau;

 

Segment S3                        The
portion linking Lantau and Chongming;

 

Segment S4                        The portion
linking Chongming, Kitaibaraki and Pusan;

(comprising Segments S4A, S4B, S4C, S4W and
S4E)

 

Segment S4A              The portion linking
Chongming to BU 1;

 

Segment S4B                The portion
linking BUI to BU2;

 

9

 

Segment S4C                The portion
linking BU2 to Kitaibaraki;

 

Segment S4W           The western spur
linking Pusan to BUI;

 

Segment S4E                 The eastern spur
linking Pusan to BU2;

 

Segment S5                        The
portion linking Kitaibaraki and Chikura;

 

Segment S6                        The
portion linking Chikura and Tanshui;

 

Segment S7                        The portion linking Tanshui and
Shantou;

 

Segment S8                        The portion linking Shantou,
Katong and Batangas;

(comprising
Segments S8A, S8B, S8C, S8N and S8S)

 

Segment S8A              The portion linking Shantou to BU3;

 

Segment S8B                The portion linking BU3 to BU4;

 

Segment S8C                The portion linking BU4 to Katong;

 

Segment S8N               The northern spur linking Batangas to
BU3;

 

Segment S8S                 The southern spur linking Batangas to
BU4;

 

Segment P                              The portion of NPE in all
stations.

 

“Sub-contractor” means any person, partnership or corporation with whom
the Contractor places a contract or an order for the supply of any equipment,
item, service or for any work, associated with this Contract.  In this context the term “Sub-contract”
shall be construed accordingly.

 

“Software” means all programs, data object code, documentation and
operating systems, whether in writing, in firmware, or in any other form, which
is necessary for the purposes of this Network; including documentation, any
support tools which are not commercially available, and data connected with the
development and support as well as any upgrade or enhancement thereto that may
be required under the warranty provisions hereof.

 

“Work” means the object of the Contract i.e. desk top studying, route
surveying, managing, coordination, planning, designing, manufacturing,
provision of supplies, transportation, assembling, cable laying, installation,
integration, testing, commissioning, training, and any other associated service
or activities whatsoever concerning the construction of the Network and the
performance of the Contract by the Contractor and/or its Sub-contractors.

 

10

 

CLAUSE 1                             OBJECT

 

In consideration of the Contract Price, as stated in Clause 13
(Contract Price), the Contractor agrees, under its sole responsibility, to
undertake and complete the Work and provide long term support, as further
specified in Part 4 (Technical Specification) and in all respects in accordance
with the requirements of this Contract, in order that the Segment(s)/Network is
delivered by the Provisional/Network Acceptance Date(s) as stated in Clause 5
(Completion Date).

 

CLAUSE 2                             APPLICABLE DOCUMENTS

 

The following documents and all
attachments, appendices and annexes listed and attached hereto shall be deemed
to form and be read and construed as part of this Contract:

 

	
  Part 1

  	
   

  	
  Terms and
  Conditions of Contract.

  
	
  Part 2

  	
   

  	
  Price
  Schedule.

  
	
  Part 3

  	
   

  	
  Billing
  Schedule.

  
	
  Part 4

  	
   

  	
  Technical
  Specification.

  
	
  Part 5

  	
   

  	
  Plan of
  Work.

  
	
  Part 6

  	
   

  	
  Contractor’s
  Network Description.

  

 

In the event of any conflict between these documents, the order of
precedence indicated above shall prevail.

 

CLAUSE 3                             RESPONSIBILITY
OF THE CONTRACTOR

 

3.1                                 The Contractor shall
be fully responsible to conduct the desk top study, survey the cable route,
design, develop, engineer, manufacture, supply, install, test the
Segment(s)/Network in accordance with all the terms and conditions contained in
the Contract including any integration of the Network and for ensuring that the
Network is fully compliant with Part 4 (Technical Specification) and the
Contractor shall not claim any additional payment nor be relieved from any
obligation imposed on it by this Contract on grounds of any information
supplied by the Purchasers on any matter whatsoever related to this Contract.

 

3.2                                 The Contractor shall
assure that the Work shall comply with the requirements of this Contract and
shall meet the Purchaser’s overall performance requirements notwithstanding
that Part 4 (Technical Specification) may not fully define every detail of such
requirements.

 

3.3                                 Purchaser’s acceptance
of the Contractor’s guidance or recommendations as to engineering standards and
designs specifications or the Purchasers’ suggestions or recommendations on any
aspect of the said design shall not relieve in any way the Contractor from its
total responsibility for the design and suitability of the Network.

 

3.4                                 The Contractor shall
be deemed to have reviewed the Work as a whole and in detail and to have fully
satisfied itself of the feasibility and practicability thereof.

 

11

 

3.5                                 The Contractor shall
provide the Network at the fixed price as set forth in Clause 13 (Contract
Price) and Part 2 (Price Schedule).  The
fixed price for the Network shall not be varied except as provided for in
Clause 12 (Variations During Execution).

 

3.6                                 In addition to the
requirements for the provision of technical information described in the
Contract, the Contractor shall, upon request, provide the Purchasers with such
additional technical information in connection with the Contract as the
Purchasers may reasonably require.

 

3.7                                 The Contractor shall
ensure that the works, tasks, materials and equipment included in the Work are
sufficient for the correct functioning of the Network.  If any necessary work, task, material or
equipment is omitted in Part 2 (Price Schedule), and consequently in Clause 13
(Contract Price) the Contractor shall carry out such work or task or supply
such material or equipment at its own cost without any claim being made against
the Purchasers.

 

3.8                                 The Contractor shall
conform with Part 5 (Plan of Work).

 

3.9                                 The Contractor shall
attend at its own expenses such meetings with the Purchasers’ representatives
at such times and in such locations as may be required by the Purchasers, to
discuss the general progress and any revision of Part 5 (Plan of Work) which
may become necessary.

 

3.10                           The Contractor shall commit
to the prices as given, in Appendix 9 of Part 2 (Price Schedule) as the maximum
prices for the Phased Upgrade.

 

3.11                           The Purchasers reserve the
right at their absolute discretion to award a contract for the supply and
installation of the Phased Upgrade and may consider to invite separate
tender(s) for such work.

 

3.12                           In the event that the supply
and installation of the Phased Upgrade is awarded in total or in portion
thereof to another successful contractor, the Contractor shall at a mutually
agreed cost, if any, co-operate with such contractor and provide, where
reasonably necessary, all technical information relating to this Contract for
any integration as required.

 

CLAUSE 4                             TECHNICAL REQUIREMENTS AND
PLAN OF WORK

 

The Work shall comply with the requirements of Part 4 (Technical
Specification) and Part 5 (Plan of Work) but the Purchasers and the Contractor
may mutually agree to make such alterations as may be considered necessary
during the implementation of the Contract and in accordance with Clause 12
(Variations During Execution).

 

CLAUSE 5                             COMPLETION DATE

 

The Segment(s) shall be completed in time to allow the Certificate(s)
of Provisional Acceptance to be issued on or before 30 June 2001 (hereinafter
called the “Provisional Acceptance Date”)

 

12

 

and the Contractor shall complete the supply and installation of the
Network by the following Network Acceptance Date(s):

 

a)                                      Step 1:            on or before 31 August
2001

 

b)                                     Step 2:            within fifteen (15)
months after the placement of order for the related network interfaces.

 

CLAUSE 6                             LETTER OF PERFORMANCE
GUARANTEE

 

6.1                                 In order to guarantee
the good and timely execution of all the contractual obligations, the
Contractor shall, at its own cost, provide within fourteen (14) calendar days
from the Contract signature date a Letter of Performance Guarantee for a value
equal to ten percent (10 %) of the Contract Price for the Initial Network in
favour of the Purchasers in the form of an irrevocable and unconditional Bank
Guarantee in the format as attached in Appendix 1.1.  The Letter of Performance Guarantee shall be issued by a bank
acceptable by the Purchasers.

 

6.2                                 The Letter of
Performance Guarantee will be reduced td a value equal to five percent (5%) of
the Contract Price for the Initial Network after the Network Acceptance.  Date and the Letter of Performance Guarantee
shall remain in force until the issuance of the Certificate of Final
Acceptance.

 

6.3                                 In the event of
default by the Contractor in carrying out its responsibilities under the
Contract, the Purchasers at their option shall have the right, from time to
time, to call in all or part of the amount represented by the Letter of
Performance Guarantee as they, in their sole discretion, deem necessary subject
only to the terms referred to in the Letter of Performance Guarantee.

 

6.4                                 The Purchasers shall
have the right to take such actions to enforce the remedies provided in the
Contract, including the right to recover such damages or losses as provided in
the Contract in addition to the amount recovered under the Letter of
Performance Guarantee. Purchasers exercising their right to call in all or part
of the Letter of Performance Guarantee does not reduce their right to seek the
maximum liquidated damages set forth in Clause 20 (Delay in Completion).

 

CLAUSE 7                             QUALITY ASSURANCE

 

7.1                                 The Contractor shall
permit the Purchasers or their designated representatives to carry out the
following Quality Assurance activities:

 

13

 

a)                                      to audit the
Contractor’s and its sub-contractor’s quality assurance system of APCN2 and its
application to the Work including, without limitation, manufacture,
development, installation, raw materials and components provision;

 

b)                                     to inspect all
parts of the Work and to carry out design control review to the extent
reasonably practicable ‘to ensure that their quality meets Part 4 (Technical
Specification).

 

7.2                                 At any time during
manufacture and installation, if any part of the Work does not, or will not,
comply with the Contract, the Purchasers may reject the same.  Upon rejection the Contractor shall
forthwith at its own expense rectify the non-compliance in accordance with Part
4 (Technical Specification) and no additional costs shall be made to the
Purchasers in respect thereof.  The Contractor
shall bear the direct cost, including the Purchasers’ participation, of
additional Quality Assurance activities caused by non-conformance of the
Contractor.

 

7.3                                 No part of the Network
shall be shipped until a Release Certificate has been issued in accordance with
Part 4 (Technical Specification) and certified by the Purchasers.

 

7.4                                 The factory release of
parts of the Network in accordance with Part 4 (Technical Specification) shall
not in any way prejudice any right or remedy which the Purchasers may have
against the Contractor, or relieve the Contractor of its liabilities, and in
particular it is without prejudice to its obligations relating to the
performance of the Network under Clause 3 (Responsibility of the Contractor).

 

7.5                                 Any certification
given by or on behalf of the Purchasers in respect of any aspect of the Work
carried out or proposed by the Contractor, or in respect of any part of the
Network, shall not relieve the Contractor of any responsibilities under the
Contract.

 

7.6                                 The Purchasers shall
at all reasonable times have full access to the Work, and the Contractor shall
provide appropriate facilities for such access and for the purpose of
inspection and testing.  The Purchasers
shall also have full access to all plants, offices and work sites of the
Contractor and any of its Sub-contractors, to enable the Purchasers to inspect
the Work and monitor progress.  All
information shall be accessible, including laboratory and test results, for any
components manufactured by the Contractor and used in the project.  The Contractor shall include in its
Sub-contracts such provisions as may be necessary to secure this right on
behalf of the Purchasers.  The
Purchasers shall have the right to establish resident representative(s) at the
Contractor’s and Sub-contractors plants and at all work sites, and the
Contractor shall, if required, make suitable office space, facilities and
shipboard accommodation available for such representative(s) at the
Contractor’s own expense.

 

7.7                                 The Contractor shall
not require the Purchasers’ Quality Assurance representative to execute any
non-disclosure or other agreement in order to obtain access to Contractor’s or
its Sub-contractor’s facilities.

 

14

 

CLAUSE 8                             DAMAGE TO THE NETWORK
BEFORE NETWORK ACCEPTANCE

 

8.1                                 This Clause applies to
all damages (which in this Clause includes destruction and loss) arising from
any cause whatever, including Force Majeure.

 

8.2                                 The Initial Network
shall stand at the risk of and be in the sole charge of the Contractor from the
commencement of the coming into force of the Contract up to the date of
issuance of the Certificate of Network Acceptance.  During this period, the Contractor shall, with all possible
speed, remedy to the Purchasers satisfaction any damage occurring to the Network.  Notwithstanding such damage, the Contractor
shall proceed with the execution and completion of the Work in accordance with
the Contract, subject to any extension of time for completion agreed under
Clause 20 (Delay in Completion) hereof, and apart from the granting of
extension of time to the Contractor, the Purchasers shall not be liable to the
Contractor in damages or otherwise arising thereof.  The Contractor will use reasonable efforts to protect the Work
from damage prior to the issuance of the appropriate acceptance certificates,
including, but not limited to, the monitoring of areas where damage has
occurred or is likely to occur.

 

8.3                                 The cost of remedying
such damage during this period shall be wholly borne by the Contractor, save
that the Purchasers shall pay the contractor for remedying the damage to the
extent that it is caused by the willful misconduct of servants, agents, or
contractors (other than the Contractor) of the Purchasers acting in the course
of their employment as such.

 

CLAUSE 9                             INJURY
TO PERSONS AND DAMAGE TO PROPERTY

 

9.1                                 This Clause applies to
all claims, losses, expenses and damages for:

 

a)                                      injuries to or
death of any persons;

 

b)                                     damage to
property, other than the Network; or

 

c)                                      the costs of
clean-up and other costs resulting from environmental damage;

 

which results
directly from the activities of the Contractor, its Sub-contractors, or agents
in the implementation of the Contract.

 

9.2                                 The Contractor shall
be liable for all claims, losses, expenses, and damages described in sub-clause
9 above, and shall indemnify and save the Purchasers harmless from all such
claims, losses, expenses and damages.

 

9.3                                 The Purchasers shall:

 

a)                                      provide, within a
reasonable time, written notice to the Contractor of all such claims and suits;

 

15

 

b)                                     at their own
discretion permit the Contractor to assume the sole defense of and to settle
such claims or suits, and shall, upon the Contractor’s request and at the
Contractor’s expense, furnish all information and reasonable assistance to
assist the Contractor in the defense or settlement of the same.

 

CLAUSE 10                                 INSURANCE

 

10.1                           Without limiting its
obligations and responsibilities, the Contractor shall, prior to the
commencement of any Work, insure to cover its liabilities throughout the
Contract at its own expense and in the joint name of the Purchasers and the
Contractor as the insured:

 

a)             (i)                  the Work and any
work in progress of every kind required for the execution, testing and
completion of the Work including, but not limited to, the completed item to the
full value of such Work and any work in progress executed from time to time
until the issuance of the Certificate of Network Acceptance,

 

(ii)               all
appliances, instruments or things of whatsoever nature required in or
pertaining to the execution, testing and completion of the Work, constructional
plant, the materials and other things brought on to the site by the Contractor
to the full value of such constructional plant, materials and other things,
against all losses or damages from whatever cause in respect of all risks
including, but not limited to marine cargo (Note 1), sea bed (Note 2) and war
risks (Note 3) arising for which it is responsible under the terms of the
Contract and in such manner that the Purchasers and the Contractor are covered
during the period of construction of the Work,

 

b)                                     against any
damage, loss or injury which may occur to any property (including that of the
Purchasers) or to any person (including any employee of the Purchasers) as a
result of the execution of the Work or temporary work until the issuance of the
Certificate of Network Acceptance,

 

c)                                      against damages
or compensation payable under statute or at law in respect or in consequence of
any accident or injury to any, person in the employment of the Contractor or
any Sub-contractor until the issuance of the Certificate of Network
Acceptance.  The Contractor shall
indemnify and keep indemnified the Purchasers against all such damages,
compensation, claims, demands, proceedings, costs, charges and expenses,
whatsoever in respect thereof at its own expenses.

 

d)                                     a general
liability policy, sufficient to cover its liability under the Contract until
the end of the warranty period or any extension thereto.

 

The total prices
contained in Part 2 (Price Schedule) shall include any premium amounts paid or
to be paid by the Contractor for the insurance coverage hereabove stated.

 

16

 

Note 1                       Marine cargo or equivalent
coverage is required to protect against all risks of physical loss or damage to
the cable, repeaters, branching units, terminal station equipment and other
equipment to be included in the Network (other than war risks) beginning with
the date when each such equipment is ready for shipping and ending when the
cable, repeaters and branching units are placed overside the cable laying
vessel and when the terminal station equipment is delivered to the terminal
stations.

 

Note 2                       Sea bed or equivalent coverage
is required to protect against all risks of physical loss or damage to the
equipment described in Note 1 above (other than war risks) from the time
coverage under Note 1 above ends until the issuance of the Certificate of
Network Acceptance.

 

Note 3                       War risks or equivalent coverage
is required to protect against damage to, seizure by and/or destruction of the
Network by means of war, piracy, takings at sea and other warlike operations
until the issuance of the Certificate of Network Acceptance.

 

10.2                           Upon the issuance of each
policy relative to such insurance and not later than thirty (30) days prior to
each renewal thereof, the Contractor shall furnish the Purchasers with evidence
acceptable to the Purchasers that the relevant premiums have been paid and that
the said policy is and will continue to be in full force.

 

10.3                           If the Contractor fails to
effect and/or keep in force any of the insurance specified in sub-clauses 10.1
and 10.2 hereof, the Purchasers may, without prejudice to any other rights they
may have under the Contract, effect and keep in force any such insurance and
pay the premium due or take out new insurance satisfactory to them, in which
event any sums so paid by the Purchasers shall become immediately due and
payable by the Contractor to the Purchasers.

 

Should the
Contractor fail to make the payment within thirty (30) days of receipt of
request for such payment, the Purchasers may then deduct the amount of the
requested payment from any monies that are, or may become due to the
Contractor; or recover the same as a debt due from the Contractor.

 

10.4                           The Contractor shall comply
with all terms and conditions and guarantees contained in all policies
affecting the foregoing insurance and shall ensure that its insurance brokers
and/or insurers give to the Purchasers such information in relation thereto
which may be relevant to such insurance as the Purchasers may reasonably
request.

 

10.5                           Generalities applicable to
insurance coverage are:

 

a)                                      The insurer
nominated by the Contractor shall be approved by the Purchasers.

 

b)                                     All deductibles
relative to the above insurance coverage are for the account of the Contractor.

 

17

 

c)                                      The insolvency,
liquidation, bankruptcy or failure of any insurer providing insurance for the
Contractor or its Sub-contractor, or failure of any such insurer to pay claims
accruing, shall not be considered a waiver of nor shall it excuse the
Contractor from complying with any of the provisions of this Contract.

 

d)                                     Following a loss
or damage, the Contractor shall remedy any such loss or damage with due
diligence and dispatch and shall not wait for any insurance proceeds to effect
the repairs.

 

e)                                      In the event any
cancellation or material change is initiated by the underwriters with regard to
the above insurance coverage, the Contractor shall notify the Purchasers
thereof in writing at least sixty (60) days prior to such cancellation or
material change.

 

f)                                        The Contractor
or the Purchasers, as the case may be, shall promptly give to the other party
notice in writing of any claim made or proceedings commenced for which the
Contractor or the Purchasers claims to be entitled to indemnification under
this Contract and shall confer with the other party concerning the defense of
any such claim or proceedings, shall permit such other party to be represented
by counsel in defense thereof and shall not effect settlement of or compromise
any such claim or proceedings without the other’s prior written agreement.

 

CLAUSE 11                       SUSPENSION

 

11.1                           The Purchasers may, at their
absolute discretion, order the Contractor to suspend all or part of the Work
for such period of time as the Purchasers determine to be appropriate.

 

11.2                           If, as a result of such
suspension of Work, the Contractor incurs additional costs, or suffers loss in
the discharge of its responsibilities under the Contract, then the Contractor
shall be allowed to recover an amount equal to the costs and/or losses from the
Purchasers, provided that:

 

a)                                      such costs or
losses could not have been reasonably prevented by the Contractor, and

 

b)                                     the Contractor
submits a detailed claim for such costs or losses, supported by sufficient
evidence to enable it to be validated within two (2) months of the date of
occurrence, and

 

c)                                      the suspension
was not caused by the default or negligence of the Contractor.

 

11.3                           The Contractor shall be
allowed an equitable extension in the time required for performance of any
suspended work, or such longer or shorter period as may be mutually agreed,
provided that the suspension was not caused by the default or negligence of the
Contractor.

 

18

 

11.4                           The Purchasers shall not be
liable to the Contractor in the event of such suspension for any loss of profit
or consequential damages whatsoever.

 

CLAUSE 12                       VARIATIONS DURING EXECUTION

 

12.1                           The Purchasers and the
Contractor may mutually agree to make any variations to the provisions of the
Contract as may be considered necessary during the execution of the Work.

 

12.2                           Notwithstanding the provisions
of the above, the Purchasers may instruct the Contractor to vary the Work,
provided that such variations:

 

a)                                      shall not in
total, excluding the execution of Step 2 of the Initial Network, increase or
diminish the Contract Price by more than ten percent (10%);

 

b)                                     are provided in
writing; and

 

c)                                      shall be
implemented within the time allowed in the Contract for the completion of the
Work, unless otherwise agreed in writing.

 

12.3                           The effect of such
variations on the Contract Price will be determined as follows:

 

a)                                      if the variations
concern only quantities of equipment or services for which a unit price or rate
is indicated in Part 2 (Price Schedule), the unit price or rate as the case may
be shall be applied to Clause 13 (Contract Price).

 

b)                                     if the subject of
the variations is not covered by a unit price or rate in Part 2 (Price
Schedule), the Contractor shall satisfy the Purchasers that the proposed
adjustment is fair and reasonable and shall provide such evidence as the
Purchasers may reasonably require to this end.

 

12.4                           Any changes in the Work
resulting from the agreed final route survey report shall be treated as a
Contract variation under sub-clause 12.1 and shall be priced using the unit
prices provided in Part 2 (Price Schedule).

 

12.5                           Any adjustment in time and
cost in respect of the above Contract variations shall only be recognized or
acceded to when the Contract variation has been agreed in writing by the
Purchasers and the Contractor prior to the implementation of the Contract
variation.

 

12.6                           No claims for variations
shall be made after the final payment is made.

 

19

 

CLAUSE 13                       CONTRACT PRICE

 

13.1                           Contract Price

 

The Contract
Price (CIF) at the time of the Contract signature is US$ 759,824,998 as agreed
to on entering into this Contract for the full and proper performance of the
Work. The Contract Price is fixed and shall not be varied except as provided
for in Clause 12 (Variations During Execution).

 

13.2                           Taxes, levies and duties

 

13.2.1                  The Contract Price shall include all
taxes, duties, levies and fees that may be imposed or levied in connection with
the Work, whether in the country/territory of the Contractor, the Purchasers’
countries/territories, or any other country/territory (including taxes incurred
by the Contractor in the countries/territories of the Purchasers in respect of
its personnel and Subcontractors such as business income tax, income tax,
payroll tax and other taxes, contributions and levies that may be levied on the
Contractor or the personnel, local agent or site office of the Contractor)
except customs duties, Goods and Services Tax (“GST”) on importation of goods,
import taxes, Value Added Tax (“VAT”) and Japan Consumption Tax (“JCT”)
relating to the Contract items as to the extent contained in Part 2 (Price
Schedule).  Unless a tax duty, levy or’
fee is specifically referenced in this sub-clause, such tax, duty, levy or fee
shall be considered part of the Contract Price.

 

13.2.2                  The Contractor is required to pay
appropriate customs duties, GST on importation of goods, import taxes, VAT and
JCT relating to the Contract items as contained in Part 2 (Price Schedule) to
the authorities in their countries/territories.  The Contractor will be reimbursed by the Purchasers in conjunction
with the settlement of the Contract Price on quarterly and actual basis.  The Contractor shall, if required, provide
the fiscal and billing documentation to allow the Purchasers to be compliant
with the international and local fiscal laws and regulations.

 

13.3                           Change of law

 

Change of any
law except those affecting the customs duties, GST on importation of goods,
import taxes, VAT and JCT, relating to the Contract Items, shall not affect
Clause 13 (Contract Price).

 

13.4                           The Contract Price shall include
any sums relating to special protection or special navigation aids with regard
to cable or pipeline crossings and any cable depot storage costs incurred prior
to the Network Acceptance Date.

 

13.5                           The Contractor shall be
responsible for any tax that might be incurred by the Contractor in the
Purchasers’ countries/territories as a result of incomes or revenue obtained by
the Contractor arising from and/or in connection with the present
Contract.  If withholding

 

20

 

taxes are
payable in the Purchasers’ countries/territories, the Purchasers shall withhold
such sums from the Contractor and pay to the relevant authorities in accordance
with the applicable laws.

 

CLAUSE 14                       ASSIGNMENT AND SUB-CONTRACTED
WORK

 

14.1                           The Contractor shall not,
without prior written consent of the Purchasers, assign the Contract or
sub-contract any significant part of the Work, or assign, mortgage, charge or
encumber any benefit whatsoever arising or which may arise under the Contract.  Such assignment or sub-contracting may only
be consented to by the Purchasers at their sole discretion in so far as the
laws and regulations applicable in the countries/territories of the Purchasers
so permit.  In any event, the Contractor
shall not be relieved of the responsibility under the Contract for such parts
of the Work as are sub-contracted and the Contractor shall be responsible and
liable for the acts or defaults of any Sub-contractor or their employees,
servants and agents, as fully as if they were the acts or defaults of the
Contractor or the Contractor’s employees, servants and agents.

 

14.2                           In the event of termination
under this Contract, the Contractor shall assign to the Purchasers, at the
Purchasers’ option, any agreement which the Contractor has with its
Sub-contractors in respect of the Work so contracted out by the Contractor to
these Sub-contractors.

 

14.3                           The Contractor shall ensure
that any Sub-contracts entered into by the Contractor shall contain such
provisions of this Contract as should be made applicable to such Sub-contracts.

 

14.4                           Any assignment, mortgage,
charge, encumbrance or sub-contract in contravention of this Clause shall, as
against the Purchasers, be void and of no effect, and may be ignored by the
Purchasers.

 

14.5                           The Contractor shall
protect, defend, indemnify and keep indemnified the Purchasers against all
claims, demands, actions, suits, proceedings, writs, judgment, orders, decrees,
damages, losses and expenses suffered or incurred by them arising out of or related
to such assignment, mortgage, charge, encumbrance or sub-contract.

 

14.6                           Any change of any
significant Sub-contractor during the execution of the Work shall need the
prior written consent of the Purchasers.

 

CLAUSE 15                       TERMS OF PAYMENT

 

15.1                           Responsibility for payment

 

15.1.1                  The liability of each of the
Purchasers to the Contractor for any matter under this Contract (including, but
not limited to, liability for payments to the Contractor for the Work to be
performed in accordance with the Contract) shall be limited to one twenty-sixth
of the total Contract Price.  No
individual Purchaser will be liable to

 

21

 

the Contractor
in any way whatsoever for liability defined as the responsibility of the other
Purchaser.

 

15.1.2                  No payment (final or otherwise) made
under or in connection with this Contract shall be the conclusive evidence of
the Contractor’s performance of the Work, or of this Contract, in whole or in
part, and no such payment shall be construed to constitute the acceptance of
defective, faulty or improper Work.

 

15.2                           Billing Schedule

 

The Billing
Schedule is given in Part 3.

 

15.3                           Billing procedures

 

15.3.1                  The Contractor shall render all
invoices together with supporting documents to the Central Billing Party with
copies to the Purchasers.  The address
of the CBP is as follows:

 

International
Cable Network

Central
Billing Party of APCN2

Beijing Design
Institute of MPT of P.R. China

126, Xizhimen
Nei Street

Beijing, China
1000035

 

Tel:                                                    86-10-66118496

Fax:                                                   86-10-66118495

E-Mail:                                  cbpchtel@public.bta.net.cn

 

15.3.2                  Invoices shall reach the CBP not more
than once each quarter and by the 10th calendar day of February, May, August
and November thereof, for acknowledgment of the invoices on the 10th of the month
or on the following working day if the 10th is not a working day in the CBP’s
country/territory.

 

15.3.3                  Invoices shall be submitted in the
format to be agreed.  The quarterly
invoices to the Purchasers shall show the total prices and the relevant Billing
Milestone(s) billed in accordance with Part 3 (Billing Schedule).  The amount due to the Contractor on each
such invoice from the Purchasers shall be computed in accordance with
sub-clause 15.1.

 

15.3.4                  No invoice shall be submitted
claiming payment earlier than that set out in Part 3 (Billing Schedule).

 

15.3.5                  An invoice shall be deemed to have
been accepted for payment if neither the CBP nor a Purchaser presents a written
objection on or before the date in which the payment would have been due.

 

22

 

15.3.6                  In the event that the CBP or a
Purchaser objects to an invoice as mentioned in sub-clause 15.3.5 above, the
Purchasers and the Contractor shall make every reasonable effort to settle
promptly the dispute concerning the invoice in question. Notwithstanding the
fact that in the meanwhile another invoice concerning a different milestone may
have been submitted and accepted by the Purchasers, upon settlement of said
dispute, the Contractor shall be entitled to resubmit the corrected invoice in
accordance with sub-clause 15.3.2 above.

 

15.3.7                  Timing of Billing

 

a)                                      The Contractor
shall bill according to Part 3 (Billing Schedule).

 

b)                                     Actual customs
duties, GST on importation of goods, import taxes, VAT and JCT, paid to the
authorities in the Purchasers’ countries/territories by the Contractor during
the billing quarter shall be billed in the same manner as and in conjunction
with the quarterly invoices for the Contract Price.

 

c)                                      Contract
variations agreed in accordance with Clause 12 (Variations During Execution)
above shall be billed as follows:

 

i)                                         the value of
Contract variations determining a net credit to the Purchasers shall be offset
in the invoice that the Contractor is due to issue subsequent to the relevant
Contract variation signature; and

 

ii)                                      the value of
Contract variations determining a net debit to the S Purchasers shall be
debited in the invoice that the Contractor is due to issue at Network
Acceptance Date.

 

15.4                           Letters of Guarantee Against
Payment

 

15.4.1                  The Contractor shall, at least thirty
(30) days before each payment is due, deposit a Letter of Guarantee Against
Payment for the amount of each such payment (excluding the actual customs
duties, GST on importation of goods, import taxes, VAT and JCT portion) to be
made by the Purchasers to the Contractor, and send the original Letter of
Guarantee Against Payment to the CBP and copies to each of the Purchasers.

 

15.4.2                  The Letter of Guarantee Against
Payment for the Initial Network to be issued in accordance with the format
given in Appendix 1.2 shall remain in force until the issuance of a Certificate
of Network Acceptance or the settlement of all claims arising from termination
of the Contract in accordance with its terms and conditions.

 

15.4.3                  In the event of default by the
Contractor in carrying out its responsibilities under the Contract, or of
frustration of the Contract by law for any reason, the Purchasers shall have
the right to call in the amount represented by the Letter of

 

23

 

Guarantee
Against Payment in accordance with the terms of such Letter of Guarantee
Against Payment.

 

15.4.4                  The invocation of the Letter of
Guarantee Against Payment shall not limit the rights of the Purchasers to take
such actions to enforce any remedies that are otherwise included in the
Contract.  Purchasers exercising their
right to call in all or part of the Letter of Guarantee Against Payment does
not reduce their right to seek the maximum liquidated damages set forth in
Clause 20 (Delay in Completion).

 

15.4.5                  No payment shall be due from the
Purchasers before the submission by the Contractor of such a Letter of
Guarantee Against Payment.

 

15.5                           Payment
procedures

 

15.5.1                  Full amount owed shall be paid within
sixty (60) days from the date of receipt of the respective invoice by the
Central Billing Party subject to the receipt of the relevant Letter of
Guarantee Against Payment and all supporting documents.

 

15.5.2                  In the case of delay in the payment
by the Purchasers to the Contractor, an interest rate of “LIBOR + 2%” shall be
applied.

 

15.5.3                  All payments to the Contractor shall
be made by the CBP on behalf of the Purchasers.

 

15.5.4                  All amounts due to the Contractor in
respect of this Contract shall be paid in US dollars to:

 

NEC
Corporation

Saving Account
No. 214408

The Sumitomo
Bank Ltd.

Tokyo Main
Office

3-2,
Marunouchi 1-chome, Chiyoda-ku, Tokyo, Japan

 

CLAUSE 16                       TRANSFER OF TITLE

 

16.1                           The title of the Segment(s)
shall be transferred to the Purchasers as and when the Certificate of
Provisional Acceptance is issued.  The
transfer of title shall not absolve or release the Contractor from its
obligations and its liabilities under the Contract.

 

16.2                           Upon transfer of title of
the Segment(s) to the Purchasers, the Contractor warrants that the Segment(s)
is free from valid liens, encumbrances and security interests arising by and
through the Contractor and/or under its government’s rules and regulations.

 

24

 

CLAUSE 17                       ACCEPTANCE

 

17.1                           General

 

Acceptance of
the Network shall be in three (3) stages which are as follows:

 

i)                                         Provisional
Acceptance of the Segment(s);

ii)                                      Network
Acceptance for Step 1; and

iii)                                   Final
Acceptance of the Network

 

Each Segment
shall be accepted as a whole in accordance with Part 4 (Technical
Specification) and the Billing Milestone criteria for Provisional Acceptance as
detailed in Part 3 (Billing Schedule).

 

The Network
shall be accepted as a whole in accordance with Part 4 (Technical Specification)
and the Billing Milestone criteria for Network Acceptance as detailed in Part 3
(Billing Schedule).

 

17.2                           Acceptance Tests Programme

 

At least four
(4) months before the planned date of the start of the Acceptance Testing of a
Segment and the Network respectively, the Contractor shall submit to the
Purchasers for approval a test programme and an Acceptance handbook for the
conduct of the Segment and Network Acceptance Tests, as detailed in Part 4
(Technical Specification).

 

17.3                           Network Acceptance Tests

 

In order to
determine the acceptability of the completed Network thereof, the Contractor
shall carry out tests in accordance with Part 4 (Technical Specification).

 

17.4                           Purchasers’
Tests

 

The Contractor
shall make the Segment(s)/Network thereof available to the Purchasers for
testing in accordance with Part 4 (Technical Specification).

 

17.5                           Notice of Acceptance or
Rejection

 

17.5.1                  Within thirty (30) days of receipt of
the Segment(s) Provisional Acceptance Tests results of the completed Segment(s)
the Purchasers, shall give notice to the Contractor that they:

 

a)                                      propose to issue
a Certificate of Provisional Acceptance in accordance with sub-clause 17.6
herebelow; or

 

b)                                     do not propose to
issue a Certificate of Provisional Acceptance, but are prepared to issue a
Certificate of Commercial Acceptance in accordance with sub-clause 17.7
herebelow; or

 

25

 

c)                                      do not accept the
Segment, nor propose to put it into Commercial Acceptance in its existing condition.

 

17.5.2                  On receipt of a notice pursuant to
sub-clause 17.5.1 hereabove, the Contractor may make representations to the
Purchasers in explanation of disputed results of the Segment(s) Provisional
Acceptance Tests and the Purchasers may, if satisfied as a result of that
explanation, issue a fresh notice pursuant to sub-clause 17.5.1 hereabove which
shall be deemed to have been issued on the date of the original, notice under
sub-clause 17.5.1.

 

17.5.3                  In case of rejection, and if the
explanation by the Contractor foreseen in sub-clause 17.5.2 hereabove is not
accepted by the Purchasers, the Contractor shall carry out the necessary
corrective actions and will effect a new series of tests on the rejected
equipment.  After receipt of the
results, the Purchasers will be granted a new period of thirty (30) days to
analyze the new results and the provisions of sub-clause 17.5.1 shall apply
from the date the Purchasers receive these latest results.

 

17.6                           Provisional Acceptance

 

17.6.1                  When the Purchasers are satisfied
that a Segment has been completed in accordance with Part 4 (Technical
Specification) and other requirements of the Contract, they shall issue a
Certificate of Provisional Acceptance and the Segment shall be deemed to be
provisionally accepted and shall vest in the Purchasers, on whichever is the
later of the following dates, the actual deemed date of issue of the notice
under sub-clause 17.5.1 or the Provisional Acceptance Date.

 

17.6.2                  The Certificate of Provisional
Acceptance may be unqualified or may have annexed to it a deficiency list of
items that do not affect the normal operation and maintenance of the Segment(s)
in compliance with the requirements of the Contract and the timetable for the
remedy of such outstanding items.

 

17.6.3                  The Contractor shall as soon as
practicable remedy the deficiencies indicated in all such listed items, in
accordance with the timetable annexed to the Certificate of Provisional
Acceptance, so as to ensure full conformance with the requirements of the
Contract.

 

17.6.4                  The Segment S4 including S4A, S4B,
S4C, S4W and S4E shall be provisionally accepted as a whole.

 

17.6.5                  The Segment S8 including S8A, S8B,
S8C, S8N and S8S shall be provisionally accepted as a whole.

 

26

 

17.7                           Commercial Acceptance

 

17.7.1                  If the Purchasers wish to put a part
of or all the Segment(s)/Network into Commercial Acceptance or if the
Purchasers are not satisfied that the results of the Provisional Acceptance
Tests or the Network Acceptance Tests justify the issuance of a Certificate of
Provisional Acceptance or a Certificate of Network Acceptance then, provided
the Contractor so agrees, the Purchasers may proceed with the issuance of a
Certificate of Commercial Acceptance.

 

17.7.2                  Upon the issuance of a Certificate of
Commercial Acceptance, the Segment(s)/Network shall be deemed to be accepted
for commercial use.  The Contractor
shall continue to carry the risk of the relevant Segment(s)/Network.

 

17.7.3                  The Certificate of Commercial
Acceptance shall have annexed to it an agreed list of all outstanding items and
deficiencies, to be made good by the Contractor and the timetable for the
remedy of such outstanding items and deficiencies.

 

17.7.4                  The Contractor shall as soon as
practicable remedy the deficiencies indicated in all such listed items, within
the timetable annexed to the Certificate of Commercial Acceptance, so as to
ensure full conformance with the requirements of the Contract and so long as
any such items are outstanding, the Contractor shall be responsible for their
maintenance of such items.

 

17.7.5                  As from the date determined in
accordance with sub-clause 17.7.2 hereabove, the Purchasers shall be
responsible for the maintenance of the relevant Segment(s)/Network except as
mentioned in sub-clause 17.7.4 above. 
For the time between the issuance of the Certificate of Commercial
Acceptance to the issuance of a Certificate of Network Acceptance, the
Contractor shall provide those warranty services set forth in Clause 18
(Warranty), at no charge to the Purchasers.

 

17.7.6                  When the deficiencies referred to in
sub-clause 17.7.4 hereabove have been remedied, the Purchasers, at their sole
discretion, may repeat part or all of the Provisional Acceptance Tests or the
Network Acceptance Tests and if results are to the Purchasers’ satisfaction,
then they will issue a Certificate of Provisional Acceptance in accordance with
sub-clause 17.6 or a Certificate of Network Acceptance in accordance with
sub-clause 17.8.

 

17.7.7                  The issuance of a Certificate of
Commercial Acceptance shall in no way relieve the Contractor from its
obligation to provide a Segment(s)/Network conforming with Part 4 (Technical
Specification) and other requirements of this Contract and, in particular, any
deterioration in the performance of the Segment(s)/Network resulting in a
deviation from Part 4 (Technical Specification) occurring between the date of
issuance of that Certificate and the date of issuance of a Certificate of
Provisional Acceptance or a Certificate of Network Acceptance shall be made
good at the expense of the Contractor.

 

27

 

17.8                           Network Acceptance

 

17.8.1                  Within thirty (30) days of receipt of
the Network Acceptance test results of the completed Network the Purchasers
shall give notice to the Contractor that they:

 

(a)                                  propose to issue a
Certificate of Network Acceptance in accordance with sub-clause 17.8.4; or

 

(b)                                 do not propose to
issue a Certificate of Network Acceptance, but are prepared to issue a
Certificate of Commercial Acceptance in accordance with sub-clause 17.7
hereabove; or

 

(c)                                  do not accept the
Network.

 

17.8.2                  On receipt of a notice pursuant to
sub-clause 17.8.1 the Contractor may make representations to the Purchasers in
explanation of disputed results of the Acceptance Tests and the Purchasers may,
if satisfied as a result of that explanation, issue a fresh notice pursuant to
sub-clause 17.8.1.

 

17.8.3                  In case of rejection, and if the
explanation by the Contractor submitted pursuant to sub-clause 17.8.2 is not
accepted by the Purchasers, the Contractor shall carry out the necessary
corrective actions and will effect a new series of tests on the rejected Work,
all at their sole expense.  After
receipt of the results, the Purchasers will be granted a new period of thirty
(30) days to analyze the new results and the provisions of sub-clause 17.8.1
shall apply from the date the Purchasers receive these latest results.

 

17.8.4                  When the Purchasers are satisfied
that the Network has been completed in accordance with Part 4 (Technical
Specification) and other requirements of the Contract and the results of the
Acceptance Testing and the Purchasers testing are to the Purchasers’
satisfaction, they shall issue a Certificate of Network Acceptance.

 

17.8.5                  The Certificate of Network Acceptance
may be unqualified or may have annexed to it a deficiency list of items that do
not affect the normal operation and maintenance of the Network in compliance
with the requirements of the Contract and the timetable for the remedy of such
outstanding items.

 

17.8.6                  The Contractor shall as soon as
practicable remedy the deficiencies indicated in all such listed items, in
accordance with the timetable annexed to the Certificate of Network Acceptance,
so as to ensure full conformance with the requirements of the Contract.

 

17.9                           Final Acceptance

 

17.9.1                  At the end of and no later than sixty
(60) days after the expiration of the five (5) year warranty period and if the
results of the Final Acceptance test of the Network, defined in Part 4
(Technical Specification), are to the satisfaction of the

 

28

 

Purchasers and
provided that the Contractor has fulfilled its commitments under the Contract,
the Purchasers shall issue, a Certificate of Final Acceptance.

 

17.9.2                  The issuance of this Certificate
shall not be unreasonably withheld or delayed, but in the event that a pattern
of failure or pattern of degradation develops as specified in sub-clause 18.4.1
that is likely to cause the Network to fail to meet the requirements of the
Contract or such other performance levels agreed upon by the Purchasers over
the twenty-five (25), years design life of the Network, Final Acceptance may be
withheld until it can be demonstrated to the satisfaction of the Purchasers
that no pattern of failure or pattern of degradation shall have developed that
is likely to cause the Network to fail to meet the requirements of Part 4
(Technical Specification) over the twenty-five (25) years design life.  In such event, the validity of the Letter of
Performance Guarantee provided for under sub-clause 6.1 shall be extended until
the Certificate of Final Acceptance is issued.

 

17.9.3                  The Certificate of Final Acceptance
will not apply to those parts which may have been replaced during the warranty
period or to those parts having been the subject of an extension of warranty
according to the provisions of sub-clause 18.3 hereof.

 

17.9.4                  At the discretion of the Purchasers,
the Final Acceptance tests programme may consist of a repetition of a part or
the whole of the tests of the Provisional Acceptance test programme.

 

The Purchasers
reserve the right to dispense with the Final Acceptance tests.

 

17.10                     Costs of acceptance

 

All expenses
incurred by the Contractor (including testing apparatus and technical staff) in
the execution of the Acceptance procedures defined in Part 4 (Technical
Specification) shall be borne by the Contractor.

 

CLAUSE 18                       WARRANTY

 

18.1                           The warranty period of the
Segment(s) shall commence on the Provisional Acceptance Date until five (5)
years from the Network Acceptance Date. 
During this period, the Contractor warrants that the Network, including
its spares, shall conform fully, over the twenty-five (25) years design life,
to the requirements of the Contract or such other performance levels agreed
upon in writing as acceptable by the Purchasers and that no pattern of failure
or pattern of degradation shall have developed that is likely to cause the
Network to fail to meet the requirements of Part 4 (Technical Specification)
over the twenty-five (25) years design life.

 

18.2       a)                    The Contractor
shall perform any repair required to restore the Network to the requirements of
the Contract or such other performance levels agreed upon by the Purchasers, if
the Network should fail to meet such requirements at any time during

 

29

 

the warranty
period or has developed a pattern of failure or pattern of degradation that is
likely to cause the Network to fail to meet such requirements.  However, the Purchasers may elect, at their
sole option, to make repairs by themselves, including at sea repairs which are
covered by the warranty.  Any equipment
discovered to be defective or faulty and recovered during a warranty repair shall
be returned to the Contractor at its request and at its expense.  The Contractor shall reimburse the
Purchasers for the cost of such repairs within sixty (60) days from receipt of
a relevant notice issued by the Purchasers. 
The Contractor shall be entitled to have a representative on board ship
to observe at sea repair.  Such repairs
by the Purchasers shall not in any way diminish the Contractor’s obligations
under the warranty.

 

b)             The
Contractor shall bear the total cost of each repair required during the
warranty period.  This cost shall
include but not limited to the cost of any vessels and/or any costs arising
from burial or reburial, the components, equipment or materials requiring
replacement, the cost of any additional equipment necessary to effect the
repair, the cost of making the repair, the cost of labor and engineering
assistance or development required to make the repair and all associated costs
such as but not limited to shipping and customs and services that may be
required to make the repair.

 

18.3                           The warranty period of items
not accepted, provided or requiring repair or replacement at the Network
Acceptance Date shall start from the date(s) such items are accepted by the
Purchasers.  Any defective part repaired
or replaced during the warranty period shall itself be subject to a further
warranty period of five (5) years.

 

18.4                           If during the warranty
period defects are found on repeated occasions in any part or parts of the
Network or if a pattern of failure or pattern of degradation is likely to cause
any part or parts to fail to meet the requirements of Part 4 (Technical
Specification) over the twenty-five (25) years design life, such part or parts
shall not be repaired but shall be replaced by new part(s) at the request of
the Purchasers, including all the appropriate spares.

 

18.4.1                  For
the purpose of this Clause, a pattern of failure or pattern of degradation
shall be deemed to exist if:

 

a)                                      the
Purchasers have notified the Contractor that in their reasonable opinion
failures of the same or similar mechanisms have occurred which show a
deterioration of Network performance that will render the Network outside its
specification during its design life, and

 

b)                                     the
Contractor, having carried out an investigation, cannot demonstrate to the reasonable
satisfaction of the Purchasers that:

 

(i)                                     the
failures/deteriorations are within the predictions of the reliability model or
Mean-Time-Between-Failures figures;

 

(ii)                                  the
failures/deteriorations are not due to a design defect in the component or its
application; or

 

30

 

(iii)                               the
failures/deteriorations only apply to a limited number of parts, for example,
as the result of a manufacturing (or batch related) inconsistency.

 

18.4.2                  The
investigation into the cause of any failures/deteriorations and any associated
remedial action shall be carried out by the Contractor within a reasonable
time-scale with regular progress reports as requested by the Purchasers.

 

18.5                           In addition, the Contractor
shall pay to the Purchasers all the expenses (if any) incurred by the
Purchasers in testing or examining any part of the Network for the purpose of
or in connection with this Clause or in connection with making good, replacing
or repairing any part of the Network.

 

18.6                           The Contractor shall make
every reasonable effort to minimize the period of time that the Network is out
of service for repair and testing.  For
failures or any situations which cause or risk to cause an outage of the
Network, the Contractor undertakes to initiate a corrective intervention
immediately but in any case no later than two (2) days after reception of a
notice from the Purchasers.  The
Purchasers reserve the right to determine the timing of rectification.

 

18.7                           The Contractor shall effect
all repairs of the Network through the use of repair materials supplied by
it.  However, the Contractor with the
agreement of the Purchasers, may use the materials needed to effect a repair
from the Purchasers’ available spare materials, components or equipment.  The Contractor shall replace, in kind, such
material supplied from the Purchasers’ spare stock or, at the option of the
Purchasers, reimburse the Purchasers for the original price to them of such
materials.  The replacement of, or
reimbursement for, such materials shall be made at a time mutually agreed upon
by the Purchasers and the Contractor, but in no event shall the replacement or
reimbursement be delayed beyond such time as the Purchasers’ actual spare stock
of such materials falls below fifty percent (50 %) of the Purchasers’
established stock level for such materials.

 

18.7.1                  All
materials supplied to replenish the Purchasers’ spare materials, in accordance
with sub-clause 18.7, and all materials used to repair the Network, which are
not supplied from the Purchasers’ spare materials, shall be warranted for a
period of five (5) years from the date of replacement.

 

18.8                           The repair or replacement of
any faulty unit or equipment includes the delivery to the Purchasers of a
descriptive report of the fault found and, when appropriate, of the repair
carried out on such faulty unit or equipment. 
The maximum period for repair of the units or equipment (including
shipping and customs clearance) is defined in Part 4 (Technical Specification)
as per Annex 6.1.

 

18.9                           For the purpose of Network
maintenance:

 

a)                                      The usage of
universal jointing and/or universal coupling equipment for, the maintenance or
repair of the Network during the warranty period shall not in any

 

31

 

way invalidate
the Network warranty and the Contractor shall accept the warranty
responsibility for the universal jointing and/or universal coupling equipment
used during a repair throughout the warranty period.

 

b)                                     If the Purchasers
decide to pool any spare plant supplied under this Contract with other spare
plant supplied for other cable systems for which they have maintenance
authorities and where technical compatibility exists, the usage of such other
spare plant supplied from another cable system for maintenance shall not
invalidate the Network warranty during the warranty period.

 

18.10                     The Contractor shall ensure that
all work, Software, products and equipment included in the Work shall be
designed in a way that no impact on the cooperation and maintenance of the
Network will be envisaged and shall comply with the following requirements:

 

a)                                      no value for date
before year 2000 will cause any interruption in operation;

 

b)                                     date-based
functionality must behave consistently for dates prior to, during and after
year 2000; and

 

c)                                      in all interfaces
and data storage, the century in any date must be specified either explicitly
(as ccyy) or by unambiguous rules.

 

CLAUSE 19                       LONG TERM SUPPORT

 

19.1                           For a period starting on the
Provisional Acceptance Date and continuing until twenty-five (25) years after
the Network Acceptance Date herein, the Contractor shall supply to the
Purchasers:

 

a)                                      technical support
and advice in respect of the design, maintenance and operation of the
Segment(s) and Network.

 

b)                                     supplies,
replacement equipment and repair service to the Network at a reasonable price
as indicated in sub-clauses 19.5 and 19.6.

 

19.2                           Where identical parts, or
components cannot be supplied the Contractor shall provide equivalent and
compatible parts, and shall be responsible for any adaptive engineering work
and all implementation documentation that may be necessary.

 

19.3                           Notwithstanding sub-clause
19.2, if for any reason the Contractor intends to cease manufacturing identical
or fully compatible spare, parts and replacement equipment, the Contractor
shall give a minimum of one (1) year’s prior written notice to the Purchasers
to allow the Purchasers to order from the Contractor any required spare parts
and replacement equipment and shall forthwith provide full details of the
arrangements to provide equivalents. 
However, the Contractor shall not cease to manufacture such parts and
equipment before the expiration of the warranty period, as described in Clause
18 (Warranty).

 

32

 

19.4                           In the event that the
Contractor fails to comply with sub-clauses 19.2 and 19.3, or if this Contract
is terminated for default, the Purchasers may require the Contractor to provide
to the Purchasers in accordance with Clause 25 (Safeguarding of Information and
Technology) the Software provided hereunder, and to provide to the Purchasers
any and all manufacturing drawings and related specifications as well as bills
of materials giving the description, in-house numbers and/or code numbers for
all such parts or equipment including Software, or in cases where the parts or
equipment were not manufactured by the Contractor, the manufacturers’ names,
description of the parts or equipment and code numbers, and giving tolerances
for matching or equivalent parts or equipment and finally, for matched parts or
equipment, giving lists of matched parameters and tolerances.  Legible copies and microfilms thereof shall
be considered as acceptable.

 

19.5                           The applicable prices for
the five (5) years after the Network Acceptance will be the prices included in
Part 2 (Price Schedule) duly revised through a formula in which forty percent
(40 %) of the price will be fixed and sixty percent (60 %) of the same (the
“Adjustable Price”) will be re-adjustable according to price indices of Labour
Wage Index and Wholesale Price Index submitted by the Contractor.  The Adjustable Price will not increase by
more than three percent (3 %) per year and the total price shall not be higher
than the prevailing market prices.

 

19.6                           For the following years
after the aforementioned five (5) years period and up to the completion of the
lifetime of the Network for long term support, the applicable prices shall not
be higher than the prevailing market prices and shall be agreed upon by the
Parties.  At least one (1) year prior to
the expiry of said period, the Contractor must inform the Purchasers of the
list of the items of equipment that it intends to stop manufacturing.

 

CLAUSE 20                       DELAY IN COMPLETION

 

20.1                           Subject to the provisions in
Clause 11 (Suspension), Clause 12 (Variations During Execution) and sub-clause
20.2, the Contractor shall complete the supply and installation of the
Segment(s) and Network by the Acceptance Dates as specified in Clause 5
(Completion Date).

 

20.2                           If the execution of the Work
shall, without the default or negligence on the part of the Contractor and/or
Purchasers, be delayed by reason of any event of Force Majeure and subject to
sub-clause 20.3 the Contractor may be granted such extension of time for
completion as shall be mutually agreed with the Purchasers, without any
financial claim from the Contractor to the Purchasers.

 

20.3                           In connection with
sub-clause 20.2 and provided that the Contractor proves that there is
insufficient contingency time in Part 5 (Plan of Work) to cover any delay, any
extension of time for completion will only be considered by the Purchasers if
the Contractor notifies the Purchasers of the cause of delay within fourteen
(14) calendar days of commencement of the Force Majeure event and provides to
the Purchasers satisfactory

 

33

 

evidence of
the effects of the Force Majeure event immediately thereafter.  If the Contractor fails to follow the
procedure set forth in this sub-clause 20.3, the Contractor shall be deemed to
have waived its right to request an extension of time because of a Force
Majeure event.

 

20.4            a)                             If
the Segment(s) is not completed in accordance with Clause 5 (Completion Date)
or by the end of the period of extension agreed upon under Clause 11
(Suspension), Clause 12 (Variations During Execution) or sub-clause 20.2, the
Contractor shall pay to the Purchasers by way of liquidated damages and not as
a penalty an amount riot exceeding four percent (4 %) of the Contract Price for
Step 1 of the Initial Network and calculated as follows:

 

Zero point one
five percent (0.15 %) per calendar day on the value of forty percent (40 %) of
the Contract Price for Step 1 of the Initial Network from the Provisional Acceptance
Date or from the end of any period of extension agreed upon under Clause 11
(Suspension), Clause 12 (Variations During Execution) or sub-clause 20.2 and
during which period the Certificate of Provisional Acceptance continues not to
have been granted.

 

b)                       If
Step 1 of the Initial Network is not completed in accordance with Clause 5
(Completion Date) or by the end of the period of extension agreed upon under
Clause 11 (Suspension), Clause 12 (Variations During Execution) or sub-clause
20.2, the Contractor shall pay to the Purchasers by way of liquidated damages
and not as a penalty an amount not exceeding ten percent (10 %) of the Contract
Price for Step 1 of the Initial Network and calculated as follows:

 

Zero point one
five percent (0.15 %) per calendar day on the value of sixty percent (60 %) of
the Contract Price for Step 1 of the Initial Network from the Network
Acceptance Date or from the end of any period of extension agreed upon under
Clause 11 (Suspension), Clause 12 (Variations During Execution) or sub-clause
20.2 and during which period the Certificate of Network Acceptance continues
not to have been granted.

 

c)                        The
total amount of liquidated damages applied in accordance with sub-clauses
20.4a), 20.4b) and 20.5 shall not exceed ten percent (10 %) of the Contract
Price for Step I of the Initial Network.

 

d)                       The
Purchasers will, if necessary, waive any liability of the Contractor to pay
liquidated damages to the Purchasers under this Contract that may be incurred
during the first 19 days after the Provisional Acceptance Date and Network
Acceptance Date respectively.  This
waiver is conditional upon the Contractor making its best effort to achieve the
Provisional Acceptance Date and Network Acceptance Date.

 

20.5                           In the event that a
Certificate of Commercial Acceptance is issued pursuant to sub-clause 17.7, the
Contractor shall, in lieu of sub-clause 20.4, pay to the Purchasers by way of
liquidated damages and not as a penalty an amount equal to zero point one five
percent

 

34

 

(0.15 %) per
calendar day on the value of the Work which cannot be put into service by
reason of the defects specified in the Certificate of Commercial Acceptance not
exceeding ten percent (10 %) of the Contract Price for Step 1 of the Initial
Network.

 

20.6                           Liquidated damages applied
in accordance with sub-clauses 20.4 and 20.5 shall be paid by the Contractor
within sixty (60) days from the date of notification by the Purchasers of the
application of such damages.

 

20.7                           Should the Contractor’s
default in the payment of liquidated damages be applied under the terms of this
Clause, the Purchasers shall have the right to obtain compensation by making
deductions from any payments due or to become due to the Contractor and/or by recovering
such sums as a debt or by forfeiture in part or in whole by means of the Letter
of Performance Guarantee.

 

20.8                           The Contractor acknowledged
that if it fails to achieve more than one of the dates specified in Clause 5
(Completion Date), it will be liable to pay liquidated damages in relation to
each of those dates.

 

CLAUSE 21                       TERMINATION FOR CONVENIENCE

 

21.1                           The performance of Work
under the Contract may be terminated by the Purchasers in whole, or from time
to time, in part, whenever they shall so determine.  The Purchasers shall deliver to the Contractor a written notice,
the “Notice of Termination”, specifying the-extent to which performance of Work
under the Contract is terminated and the date upon which such termination
becomes effective.

 

21.2                           On receipt of such a Notice
of Termination, unless otherwise directed by the Purchasers in the notice, the
Contractor shall:

 

a)                                      stop Work under
the Contract on the date and to the extent specified in the Notice of
Termination;

 

b)                                     place no further
orders or contracts for materials, services, or facilities except as may be
necessary for completion of any portion of the Work under the Contract which is
not terminated;

 

c)                                      use reasonable
efforts to terminate all orders and contracts to the extent that they relate to
the performance of Work terminated by the Notice of Termination;

 

d)                                     assign to the
Purchasers, in the manner, at the time and to the extent, directed by the
Purchasers, all of the Contractor’s rights, title and interest under the orders
and contracts so terminated;

 

e)                                      use reasonable
efforts to settle all outstanding liabilities and all claims arising out of
such termination of orders and contracts, with the Purchasers’ approval or

 

35

 

ratification to
the extent they may require, which approval or ratification shall be final for
all the purposes of this present Clause;

 

f)                                        transfer title
and deliver to the Purchasers in the manner, at the time, and to the extent (if
any) directed by them;

 

(i)                                     the fabricated or
unfabricated parts, work in progress, completed work, supplies, and other
material produced as part of, or acquired in connection with the performance of
the Work terminated by the Notice of Termination, and

 

(ii)                                  the completed or
partially completed plans, drawings, information and other property which, if
the Contract had been completed, would have been required to be furnished to
the Purchasers;

 

g)                                     use reasonable
efforts to sell, in the manner, at the time, to the extent and at the price or
prices directed or authorized by the Purchasers, any property of the types
referred to above, provided, however, that the Contractor;

 

(i)                                     shall not be
required to extend credit to any buyer; and

 

(ii)                                  may acquire any such
property under the conditions prescribed by and at a price approved by the
Purchasers; and provided further that the proceeds of any such transfer or
disposal shall be applied in reduction of any payments to be made by the
Purchasers to the Contractor under this Contract or paid in such other manner
as the Purchasers may direct;

 

h)                                     complete
performance of such part of the Work as may not have been terminated by the
Notice of Termination; and

 

(i)                                     take such action
as may be necessary, or which the Purchasers may direct, for the protection and
preservation of the property related to the Contract which is in the
Contractor’s possession and in which the Purchasers have or may acquire an
interest.

 

21.3                           After reception of a Notice
of Termination the Contractor shall submit to the Purchasers a written
termination claim.  Such claim shall be
submitted promptly, but in no event later than ninety (90) calendar days from
the effective date of termination.

 

21.4                           In the settlement of any
such partial or total termination claim, the Purchasers’ payment to the
Contractor shall be limited to the following:

 

a)                                      the price for
completed Work, based on Part 2 (Price Schedule);

 

b)                                     a fair and
reasonable sum in respect of partially completed work prorated where
practicable based on Part 2 (Price Schedule) hereto;

 

36

 

c)                                      the cost of
supplies and materials reasonably and necessarily purchased in respect of the
Contract, but not incorporated into completed or partially completed work;

 

d)                                     the cost of
settling and paying claims arising out of the termination of the work under
contracts and orders, as provided above, which are properly chargeable to the
terminated portion of the Contract;

 

e)                                      the reasonable
costs of settlement, including accounting, legal, clerical and other expenses
reasonably necessary for the preparation of settlement claims and supporting
data with respect to the terminated portion of the Contract and for the
termination and settlement of contracts thereunder, together with reasonable
storage, transportation, and other costs incurred in connection with the
protection or disposal of property allocable to the Contract.

 

Notwithstanding
the above, the total payment to the Contractor pursuant to this Clause, taken
together with any other payment, shall not exceed the Contract Price applicable
to the Work or to part therefore so terminated.

 

21.5                           In arriving at the amount
due to the Contractor under this Clause, there shall be deducted from all
monies paid or due to be paid to the Contractor, any liabilities which the
Contractor may have to the Purchasers and the agreed price for or the proceeds
of sale of any materials, supplies or other things acquired by the Contractor
or sold, pursuant to the provisions of this present Clause, and not otherwise
recovered by or credited to the Purchasers.

 

21.6                           If the termination, is
partial, before the settlement of the terminated portion of the Contract, the
Contractor may submit to the Purchasers a written request for any equitable
adjustment of the price or prices specified in the Contract relating to the
portion of the Contract not terminated by the Notice of Termination prorated
where practicable, based on Part 2 (Price Schedule) hereto and such equitable
adjustments as may be agreed shall be made.

 

21.7                           The Purchasers may, from
time to time, under such terms and conditions as they may prescribe, approve
partial payments and payments on account against costs incurred by the
Contractor in connection with the terminated portion of the Contract if in the
opinion of the Purchasers the total of such payments is within the amount to
which the Contractor will be entitled hereunder.  If the total of such payments is in excess of the amount finally
agreed or determined to be due under this Clause, such excess shall be payable
by the Contractor to the Purchasers on demand or recovered by the Purchasers
from the Letter of Performance Guarantee.

 

21.8                           For a period of one (1) year
after final settlement under the Contract, the Contractor shall preserve and
make available to the Purchasers at all reasonable times at the Contractor’s
premises, but without charge to the Purchasers, all books, records and
documents bearing on costs and expenses under the Contract relating to the work
terminated under this Clause.

 

37

 

CLAUSE 22                       TERMINATION FOR DEFAULT

 

22.1                           If the Contractor:

 

a)                                      fails to comply
with Part 5 (Plan of Work); or

 

b)                                     fails to make
progress so as to significantly endanger the performance of the Contract; or

 

c)                                      is in material
breach of any of the provisions of the Contract;

 

then the
Purchasers may give thirty (30) days’ notice in writing to the Contractor to
make good the neglect, failure or breach.

 

22.2                           If the Contractor fails to
comply with the notice referred to above within thirty (30) days from the date
the notice was given, then the Purchasers may, subject to the provisions of
this Clause 22, by written Notice of Termination for default to the Contractor,
terminate the whole or any part of the Contract.

 

22.3                           The Contractor shall not be
in default, if any failure to perform the Contract arises out of Force Majeure
or the acts or failure to act of the Purchasers.

 

22.4                           If this Contract is
terminated as provided in sub-clause 22.2 above, the Purchasers, in addition to
any other rights provided in this Clause 22, may require the Contractor to
transfer title and to deliver to the Purchasers in the manner and to the extent
directed by them, any completed equipment, material or supplies, and such
partially completed cable and materials, parts, tools, dies, jigs, fixtures,
plans, drawings, information, and Contract rights as the Contractor has had
specifically produced or specifically acquired for the performance of such part
of this Contract as may have been terminated and which if this Contract had
been completed, would have been required to have been furnished to the
Purchasers.  In addition, the Contractor
shall, upon the direction of the Purchasers, protect and preserve property in
its possession in which the Purchasers have an interest. The Contractor shall
be paid the prices specified in Part 2 (Price Schedule) for completed
equipment, material and supplies delivered and services performed, and the
amounts agreed upon by the Purchasers and the Contractor for the manufacturing
materials delivered to the Purchasers by the Contractor, and for the protection
and preservation of property in which the Purchasers have an interest.

 

22.5                           If this Contract is
terminated in accordance with sub-clause 22.2, the Purchasers may elect to take
over and to complete the Work.  In such
event, the Contractor shall, without prejudice to any other rights or remedies
of the Purchasers hereunder, be liable to the Purchasers for all costs so
incurred by them in excess of the Contract Price, taking into account any sums
due under this Contract to the Contractor for Work commenced, partly executed
or completed and accepted by the Purchasers or materials, plant, machinery,
tools and implements and other things purchased, used or to be used in
connection with the Work.

 

38

 

22.6                           If the Contract is
terminated in accordance with sub-clause 22.2, the Contractor shall not be
relieved from any liability for damages or other remedies which may have been
incurred by reason of any breach of the Contract.  This shall include, but is not limited to, the invocation of the
Letter of Performance Guarantee and the Letter of Guarantee Against Payment.

 

CLAUSE 23                       TERMINATION BECAUSE OF FORCE
MAJEURE

 

23.1                           In the event that the Contractor
is unable to implement the Contract for a period of more than six (6) calendar
months because of an event of Force Majeure, the Contractor may apply to the
Purchasers for termination of the Contract. 
If the Purchasers are in agreement with such application, then the
Contract may be so terminated.

 

23.2                           In the event that the
Contractor is delayed or prevented from performing any of its obligations under
the Contract by an event of Force Maeure, but not including events of Force
Majeure that preclude the Purchasers from fulfilling their responsibilities
under the Contract, and such cause shall continue to a delay or prevent
continuance of the Work for a continuous period of six (6) calendar months or
more, the Purchasers may terminate the Contract.

 

23.3                           Upon termination as provided
for in sub-clauses 23.1 and 23.2 above, the Purchasers may at their discretion
require the Contractor to transfer to the Purchasers title in any equipment or
materials held by the Contractor or its Sub-contractors under the Contract.

 

23.4                           In the event that payments
already made to the Contractor under this Contract exceed the value of those
items retained or obtained under the sub-clause above, then the Contractor
shall repay such excess to the Purchasers within sixty (60) days from the date
of notification and if not paid, such excess shall be a debt due to the
Purchasers.

 

CLAUSE 24                       INTELLECTUAL PROPERTY –
INDEMNITY

 

24.1                           The Contractor shall fully
indemnify and keep indemnified the Purchasers against all actions, claims, demands,
costs, charges and expenses arising from or incurred by reason of any
infringement or alleged infringement of any patents, copyright, or any similar
protection of intellectual property by the use, sale or transfer by the
Purchasers of any of the proprietary information or materials supplied by the
Contractor under the Contract, but such indemnity shall not cover any use of
the proprietary information or materials otherwise than for the purpose
indicated by or reasonably inferred from the Contract.

 

24.2                           In the event of any
infringement or alleged infringement or any claim being made or action brought
against the Purchasers arising out of the matters referred to in this Clause:

 

a)                                      The Contractor
shall, as soon as reasonably practicable, be notified and shall:

 

39

 

(i)                                     at its own expense
conduct all negotiations for the settlement of the same, and any litigation
that may arise therefrom;

 

(ii)                                  give to the
Purchasers such reasonable security as shall from time to time be required by
the Purchasers to cover the, amount ascertained or agreed or estimated, as the
case may be, of any compensation, damages, expenses and costs for which the
Purchasers may be liable;

 

b)                                     The Purchasers
shall, at the request of the Contractor, afford all reasonable assistance for
the purpose of contesting any such claim or action, and shall be repaid any
expenses incurred in so doing.  The
Purchasers shall not make admission prejudicial to the Contractor’s contesting
such claim or action insofar as they are legally able to avoid making any such
admission;

 

c)                                      In the event that
the Contractor fails to take over the conduct of the negotiations and
litigation within thirty (30) days of being notified of any claim or action, or
fails to provide the Purchasers with any security required by the Purchasers
under this sub-clause, the Purchasers may conduct negotiations and litigation
for the settlement of the same and shall be released from their obligations
under sub-clause 24.2 (b) and reimbursed by the Contractor for all such
expenses and payments.

 

24.3                           If the Network or any part
thereof is held to constitute infringement and is subject to an order
restraining its use or providing for its surrender or destruction, the
Contractor shall at its own expense immediately either:

 

a)                                      procure for the
Purchasers the right to retain and continue to use the Network;

 

b)                                     or modify the
Network, so that it becomes non infringing.

 

CLAUSE 25                       SAFEGUARDING OF INFORMATION AND
TECHNOLOGY

 

25.1                           Ownership of any information
provided by the Contractor to the Purchasers or by the Purchasers to the
Contractor shall remain with the party, providing the Information.

 

25.2                           Information furnished by one
Party to another shall be kept confidential by the Party receiving it, and
shall be used only for the construction, maintenance, operation or repair of
the Network, or the performance of the Contract, and may not be used for any
other purposes without the prior written consent of the Party owning the
information, unless:

 

a)                                      such information
was previously known to the receiving Party free of any obligation to keep it
confidential; or

 

b)                                     such information
has come into the public domain other than by a breach of confidentiality by
the receiving Party; or

 

40

 

c)                                      such information
is required to be disclosed pursuant to an order of the court or under any
written law.

 

25.3                           Notwithstanding the
foregoing exceptions, the Contractor shall not disclose any route survey
information obtained and produced as a result of the cable route survey without
the prior written consent of the Purchasers, except where such disclosure is
for the purposes of the Contract.

 

25.4                           The Purchasers do not intend
to, and will not knowingly, without the prior written consent of the
Contractor, disclose or transfer directly or indirectly:

 

a)                                      any intermediate
product (including processes, materials and services) produced directly by the
use of the information obtained by or through the Contractor; or

 

b)                                     any commodity
produced by such intermediate product if the intermediate product of the
information obtained by or through the Contractor is a plant capable of
producing a commodity or is a major component of such plant.

 

25.5                           This
Clause 25 shall survive termination or expiration of this Contract.

 

CLAUSE 26                       RESPONSIBILITY
FOR OBTAINING PERMITS AND FOR CUSTOMS CLEARANCE AND OTHER
FORMALITIES

 

26.1                           Responsibilities of the
Contractor

 

26.1.1                  The Contractor shall obtain the
necessary licenses, permits and authorizations from the appropriate authorities
including, but not limited to:

 

a)                                      those
for works and cable laying associated with the land portion;

 

b)                                     those
for cable laying operations, and other associated marine activities, including,
but not limited to environmental studies, surveys in the, Purchasers’
territories including the Purchasers’ territorial waters and exclusive economic
zones;

 

c)                                      those
for import and installation of equipment specified in the Contract and which is
necessary for the construction of the Network.

 

26.1.2                  The Contractor shall be responsible
for the customs clearance of all materials and equipment to be imported in each
of the Purchasers’ countries/territories. 
For the implementation of this Contract, the Contractor shall be liable
for any damages which the Purchasers may sustain should the Contractor be
unable to perform the Contract in accordance with the provisions hereof.

 

41

 

26.1.3                  Any involvement of the Purchasers in
the importation and customs clearance of the materials and equipment to be
imported shall not release the Contractor from any contractual liability.

 

26.1.4                  In the case of temporary importation
all operations and related activities shall be the exclusive responsibility of
the Contractor.  The Contractor shall be
responsible for the maintenance of the materials or equipment in question while
they remain in the Purchasers’ countries/territories as well as for their
reexportation.

 

26.1.5                  The Contractor shall provide at least
one (1) month’s notice of its intention to commence any activities within the
territory of any landing point country/territory.

 

26.1.6                  In addition, should the agreements of
third countries/territories be needed for cable laying operations and other associated
marine activities, the Contractor shall obtain, with the assistance of the
Purchasers if necessary, such agreements from the relevant government
authorities.

 

26.1.7                  The Contractor shall provide, to
Purchasers at least one (1) month’s notice of all the freight and shipment
arrangements (whether by land, sea or air) and of the invoice details for each
shipment or dispatch of materials and equipment.

 

26.1.8                  The Contractor shall send the
following documents by air mail under registered cover to the appropriate
Purchasers, as required:

 

(a)                                  original
bill of lading in the name of the relevant Purchaser or airway bill;

 

(b)                                 copies
of the invoice;

 

(c)                                  copies
of the packing list; and

 

(d)                                 certificate
of origin, or goods circulation certificate.

 

The format of
the invoices shall be agreed between the Contractor and the Purchasers.

 

26.1.9                  Pro forma invoices are to detail the
unit price of each item and its Price Schedule reference number.

 

26.2                           Responsibilities
of the Purchasers.

 

Only when
local laws and regulations so require, the Purchasers shall be responsible for
obtaining necessary permits and authorizations from the appropriate authorities
in the countries/territories where the Segment(s)/Network is to be laid.  The Contractor shall provide the necessary
information and assistance to the Purchasers within one (1) month upon the
Purchasers’ request.

 

42

 

CLAUSE 27                       NOTICES

 

27.1                           Any notice to be given to
either Party under the terms of the Contract shall, without prejudice to any
other way of serving it, be sufficiently given if sent by registered post to
the following nominated addresses, and at least two (2) working days advise
given by facsimile that notice is to be served.  Notices shall be deemed to have been given within ten (10)
calendar days of being posted.

 

27.2                           Address for notices to the
Purchasers

 

Advantage
Telecommunications Limited (Advantel)

Manager
Director

12/F., Clover
Commercial Building,

67 Percival
Street, Causeway Bay, H.K.

Tel:  +852-2877-8699

Fax:  +852-2877-8799

Email:  artboyd@atel-a.net

 

China Telecom
(China Telecom)

Director

International
Engineering Division

China Telecom

33, Erlong
Road, Xicheng District

Beijing 100032

Tel:                            86-10-66066661

Fax:                           86-10-66066660

Email:                 huangxp@public.bta.net.cn

 

China United
Telecommunications Corporation (China Unicom)

12/F Office
Tower l, Henderson Center,

No. 18
Jianguomen Nei Avenue,

Dong Cheng
District

Beijing 100005

Tel:                            86-10-65183405

Fax:  86-10-65181800-336

Email:  libincn@sparkice.com.cn

 

Chunghwa
Telecom Co., Ltd. (CHT)

Managing
Director

Supply
Department

International
Business Group

31, Ai-Kuo
East Road,

Taipei 106

Tel:                            886-2-2344-37l5

Fax:
886-2-2322-4068

Email:  ycwei@chti.com.tw

 

43

 

Cable and
Wireless Global Network Limited (C&W)

General
Manager SEPD

26 Red Lion
Square

London WC1R
4HQ

Tel:  44-207-315-4986

Fax:
44-207-315-6181

Email:  peter.neale@plc.cwplc.com

Email:  mikio.yoshioka@cwidc.com

 

Cable &
Wireless HKT International Limited (CWHKTI)

General
Manager

International
Network Engineering

3/F Telecom
House

3 Gloucester
Road, Wanchai

Hong Kong

Tel:  852-2888-6817

Fax:  852-2583-9103

Email:  wai-keung.yeung@cwhkt.com

Email:  joseph.mc.chan@cwhkt.com

 

Concert Global
Network Services Ltd. (Concert)

Director

Cable
Procurement & Project Management

340 Mt. Kemble
Ave

Morristown, NJ
07960 USA

Tel:                            1-973-326-3644

Fax:                           1-973-326-2601

Email:                 ericswag@att.com

 

Global One
Communications Network, Inc. (Global One)

Director,
Transmission Management

12490 Sunrise
Valley Drive

Reston,
Virginia 20196-0001 USA

Tel:                            1-703-689-7642

Fax:                           1-703-689-8207

Email:                 Bill.Daleus@GlobalOne.net

 

Japan Telecom
Co., Ltd. (JT)

Senior
Managing Director

International
Department

7-1,
Hatchobori 4-Chome,

Chuo-ku, Tokyo

Tel:  81-3-5540-8072

Fax:
81-3-5543-6774

Email:  ubayama@ntsjapan-telecom.co.jp

 

44

 

KDD
Corporation (KDD)

Director

Transmission
Systems Department (Undersea Cable Management)

3-2,
Nishishinjuku 2-Chome,

Shinjuku-ku,
Tokyo 163-8003, Japan

Tel:  81-3-3347-7430

Fax:  81-3-3347-5160

Email:  hi-wakabayashi@kdd.co.jp

 

Korea Telecom
(KT)

Director

Int’l Network
Planning & Management Team

Network
Planning & Coordination Group

206
Jungja-doug, Pundang-gu,

Sungnam city,
Kyonggi-do

463-71l, Korea

Tel:                            82-342-727-2560

Fax:                           82-342-727-2569

Email:                 chlee@kt.co.kr

 

KPN Telecom
B.V. (KPN)

International
Network Services

Sr. Medewerker
Development

s.a.p. Frelier

Telecomplein 5

2516 CK the
Hague

Netherlands

Tel:  +31-70-34S828l

Fax:  +31-70-3432756

Email:  s.a.p.frelierekpn.com

 

Layer 2
Communications Group Ltd. (Layer 2)

Chief
Executive Officer

PO Box 3340

Road Town,
Tortola, British Virgin Islands

Tel:  +61-404-85-95-95

Fax:  +61-8-9221-8720

Email:  h.edgar@layer2commuications.com

 

45

 

MCI
International Telecommunications, Inc. (MCIITI)

International
Network Development

2
International Drive

Rye Brook, NY
10573

Tel:  1-914-881-6174 & 1-914-881-6221

Fax:
1-914-881-6134 & 1-914-881-6336

Email:  Peter.McDonald@wcom.com

Email:  Thomas.Willoughby@wcom.com

 

Metromedia
Fiber Network Services, Inc. (MFN)

Department of
Asia Pacific

50 West San
Fernando Street

10th Floor

San Jose, CA
95113, USA

Tel:  +1-408-367-6699

Fax:  +1-408-367-6688

Email:  jchen@above.net

 

NTT
Communications Corporation (NTT Com)

Director, APCN
2

Kowa
Nishi-shinbashi Bldg. B Tower 9F

14-1,
Nishi-shinbashi 2-chome, Minato-ku,

Tokyo
105-0003, Japan

Tel:  81-3-3539-4555

Fax:                           81-3-3539-4665

Email:                 t.sodeyama@ntt.com

 

Onelink Cable
Network Limited (Onelink)

Director

20th Floor,
Tung Hip Commercial Building

248 Des Vouex
Road Central

Hong Kong

Tel:                            852-2851-1084

Fax:                           852-2474-1844

Email:                 onelink@netvigator.com

 

Philippine
Long Distance Telephone Company (PLDT)

Head -
International

10/F Makati
General Offices Building

Dela Rosa
corner Legaspi Streets

Makati City
1200, Philippines

Tel:                            632-816-8415

Fax:                           632-810-0844

Email:                 cahernandez@pldt.com.ph

Email:                 egyu@pldt.com.ph

 

46

 

Preparatory
Office of New Century InfoComm Ltd. (NCIC)

Carrier
services

Room B, 12F.,
NO.296, Sec. 4 Jen-Ai Rd.

Taipei,
106,Taiwan

Tel:                            +886-2-2703-1000
Ext. 1005

Fax:                           +886-2-2704-3063

Email:                 Chengyan@singtel.com

 

Singapore
Telecommunications Limited (SingTel)

Director

Submarine
Cable Systems

375 Tanjong
Katong Road # 01-00

Katong
Submarine Cable Station

Singapore
437132

Tel:  65-346-3700

Fax:  65-345-2258

Email:  donpang@singtel.com

 

StarHub Pte
Limited (StarHub)

Senior Vice
President

International
& Wholesale

51, Cuppage
Road

#07-00 StarHub
Centre

Singapore
229469

Tel:                            65-880-5708

Fax:                           65-721-5012

Email:                 johnp@starhub.com.sg

 

Taiwan Fixed
Network Co., Ltd., Preparatory Office (TFN)

l2F, 169, Sec.
4, Jen-Ai Rd.,

Taipei 106,
Taiwan, R.O.C.

Tel:                            +886-2-27747777

Fax:                           +886-2-27767178

Email:                 cliff_liu@profond.com.tw

 

Teleglobe USA
Inc. (Teleglobe)

Director of
Transmission Network Planning

11480 Commerce
Park Drive

Reston,
Virginia

Tel:                            +1-703-755-3587

Fax:                           +1-703-755-2691

Email:                 ron.seymour@teleglobe.com

 

47

 

Telekom
Malaysia Berhad (l28740-P) (TM)

General
Manager

International
Network Development

Tingkat 5,
Blok A, Wisma Semantan,

Jalan
Gelenggang, 50490 Kuala Lumpur, Malaysia

Tel:
60-3-208-8670

Fax:
60-3-254-2907

Email: manuar@telekom.com.my

 

Telstra Global
Networks Limited,

c/o Telstra
Corporation Limited (Telstra)

National
Manager

Global
Infrastructure Planning & Deployment

14/233
Castlereagh Street

Locked Bag
6680

Sydney NSW
1100

Australia

Tel:  61-2-8293-1444

Fax:  61-2-9261-4913

Email:  Paul.Mccann@team.telstra.com

 

Williams
Communications, Inc., (Williams)

c/o SBC-I

Director,
Finance

5850 W, Las
Positas Blvd.

Pleasanton, CA
94588

USA

Tel:  +1-925-468-5349

Fax:  +1-925-468-4792

Email:  vlcorpl@sbcld.com

 

Address for
notices to the Contractor

 

NEC
Corporation (NEC)

General
Manager

Submarine
Systems Sales Division

NEC Networks

7-1, Shiba
5-Chome, Minato-ku

Tokyo
108-8001, Japan

Tel:  81-3-3798-6749

Fax:
81-3-3798-9117

Email:  Koji_Takahashi@hq-iog23.ccgw.nec.co.jp

 

Either Party
shall give written notice to the other of any change to such nominated
addresses.

 

48

 

CLAUSE 28                       CLAUSE HEADINGS

 

The headings of Clauses are
provided for convenience only and shall not be used to interpret the Contract.

 

CLAUSE 29                       LIMITATION OF LIABILITY

 

29.1                           Except
as specifically provided for under the Contract, in no circumstances shall any
of the Purchasers, nor the Contractor, be liable to one and the other for
consequential, incidental or indirect damages.

 

29.2                           The
liability of the Contractor shall not exceed the Contract Price with the
exception of:

 

29.2.1 death or personal injury;

 

29.2.2 in the event of environmental damage resulting from the
Contractor’s work;

 

29.2.3 the willful failure of the Contractor to perform their
contractual obligations;

 

29.2.4 fraud or illegal or unlawful acts; or

 

29.2.5                  acts
or omissions of the Contractor which are contrary to the most elementary rules
of diligence which a conscientious contractor would have followed in similar
circumstances.

 

29.3                           The
liability of each of the Purchasers shall not exceed the amount set forth in
sub-clause 15.1.1.

 

29.4                           The
liability of the Purchasers shall not be joint but several.

 

CLAUSE 30                       SEVERABILITY

 

If any of the provisions of the Contract shall be invalid or
unenforceable, the entire Contract shall not thereby be rendered invalid or
unenforceable, but shall be construed as if it did not contain the particular
invalid unenforceable provisions.  The
rights and obligations of the Parties shall be construed and enforced
accordingly.

 

CLAUSE 31                       CONTRACTOR TO CONFORM TO
REGULATIONS

 

31.1                           The
Contractor shall comply with the requirements of all laws in the
countries/territories, states, provinces and territories in which any part of
the Work under this Contract is to be done and with all ordinances,
regulations, rules, by-laws, orders and proclamations made or issued under the
same and with any lawful requirements thereunder and with the

 

49

 

lawful
requirements of public, municipal and other authorities within those
countries/territories, states, provinces and territories in any way affecting
this Contract or applicable to any Work thereunder.

 

31.2                           The
Purchasers shall not be responsible for any acts, defaults, neglects or
omissions of the Contractor that violate the laws, statutes, orders, rules,
decrees, or regulations of any jurisdiction in which the Work is carried out.

 

31.3                           The
Contractor shall be deemed to have satisfied itself that it has obtained all
necessary information with respect to the Work and the Contract including but
not limited to the matters listed below:

 

(a)                                  Fees,
pilotage and any dues payable to port authorities;

 

(b)                                 Conditions
affecting labour including work permits;

 

(c)                                  Rules
and regulations of governments and/or port authorities;

 

(d)                                 Permits
or approvals to lay the Network in the territorial waters, exclusive economic
zones or other claimed waters through which it passes, and the land route
through which it passes;

 

(e)                                  Permits
related to the environmental impact of the cable laying and burial operations.

 

31.4                           The
Contractor shall be deemed to have fully examined and independently verified
the documents referred to in Clause 2 (Applicable Documents) hereof and all
drawings, specifications, schedules, terms and conditions of this Contract,
regulations and other information in relation to the Contract and to have fully
understood and satisfied itself as to all information which is relevant as to
the risks whether political or otherwise, contingencies and other circumstances
which could affect the Contract, and in particular the laying of the
cable.  The Purchasers, their servants
and agents and all of them shall have no liability in, law or equity or in
Contract or in tort or pertinent to any other cause of action with respect to
any such information, risks, contingencies or other circumstances.

 

CLAUSE 32                       SETTLEMENT OF DISPUTES

 

32.1                           The
Contractor and the Purchasers shall endeavour to settle any differences of opinion
which may arise during the implementation of the Contract in an amicable
manner.

 

32.2                           Any
difference of opinion which may arise in respect of the interpretation and
implementation of the Clauses of the Contract and any dispute which may subsist
shall be settled in accordance with the Rules of Arbitration and Conciliation
of the International Chamber of Commerce by one or several Arbitrators sitting
in Geneva designated in accordance with the said Rules.

 

50

 

32.3                           The
language to be used in the arbitration shall be the English language.

 

32.4                           The
applicable law to be used shall be the law of the respective Purchaser’s
country/region in case dispute involves one Purchaser only.  In case of dispute involving more than one
Purchaser, the applicable law shall be the Law of England and Wales.

 

CLAUSE 33                       KEEPING OF RECORDS

 

33.1                           For
all items specified in Part 2 (Price Schedule), the Contractor shall keep and
maintain such books, records, vouchers and accounts with respect to its billing
of those items to the Purchasers for seven (7) years from the Provisional
Acceptance Date.

 

33.2                           For
any item quoted on a cost incurred basis, the Contractor shall keep and
maintain such books, records, vouchers and accounts of all costs with respect
to the engineering, provision and installation of facilities of the Network for
seven (7) years from the Provisional Acceptance Date.

 

33.3                           The
Contractor shall obtain from its Sub-contractors such supporting records, for
other than the cost of fixed cost items subject to the conditions of sub-clause
33.2, as may be reasonably required and shall maintain such records for a
period of seven (7) years from the Provisional Acceptance Date.

 

33.4                           The
Contractor shall at all reasonable times afford the Purchasers the right to
review the said books, records, vouchers and accounts of all costs required to
be kept, maintained and obtained pursuant to this Clause.

 

CLAUSE 34                       ENTIRE AGREEMENT AND AMENDMENTS

 

34.1                           This
Contract supersedes all prior oral or written understandings between the
Purchasers and the Contractor concerning the subject matter of this
Contract.  This Contract and any of its
provisions may only be altered or added to by another agreement in writing
signed by a duly authorized person on behalf of each and every Party to this
Contract.

 

34.2                           The
Parties acknowledge and agree that they have not been induced to enter into
this Contract by any representation, warranty or other assurance not expressly
incorporated into it.

 

CLAUSE 35                       RELATIONSHIP BETWEEN THE PARTIES

 

35.1                           The
relationship between the Purchasers, each to each, is not and shall not be that
of partners and nothing herein contained shall be deemed to constitute a
partnership between them or any of them. 
The common enterprise between the Purchasers shall be and is limited to
the express provision of this Contract and shall exist in no other way.

 

51

 

35.2                           The
Parties agree that no contractual relation is created between the Purchasers
and, any of the Contractor’s Subcontractors, suppliers or agents.

 

35.3                           The
relationship between the Contractor and the Purchasers shall not be deemed to
be that of an agent and principal.

 

CLAUSE 36                       AGENTS AND REPRESENTATIVES OF
THE PURCHASERS

 

The Purchasers may nominate such agents or representatives, as they may
desire, to carry out any of their responsibilities or to exercise any of their
rights under this Contract.  The
Purchasers shall notify the Contractor in writing of any such nominations.

 

CLAUSE 37                       SUCCESSORS BOUND

 

This Contract shall be binding on the Contractor and on each individual
Purchaser and their respective successors and their permitted assigns.

 

CLAUSE 38                       COMING INTO FORCE OF THE
CONTRACT

 

38.1                           This
Contract agreed between the Purchasers and the Contractor will enter into force
after its signature and completion of the following conditions:

 

a)                                      the
Letter of Performance Guarantee referred to in Clause 6 (Letter of Performance
Guarantee) has been received by the Purchasers, and

 

b)                                     the
Purchasers have received all necessary authorizations from their own government
to commence construction of the Network.

 

38.2                           When
all conditions indicated above are complied with, then the Purchasers shall
immediately notify the Contractor, and the Contract shall come into force on
the date of receipt of such notice.

 

38.3                           If
the Contract has not come into force within ninety (90) days from the signing
of the Contract, the Purchasers shall advise the Contractor of the status of
their efforts to obtain the required governmental authorizations and the
Parties will attempt to reach an agreement in order to extend the said limit.

 

CLAUSE 39                       PUBLICITY

 

39.1                           No
publicity relating to this Contract shall be published by the Contractor in any
newspaper, magazine, journal or any other medium without the prior written
approval of the Purchasers.

 

52

 

39.2                           Without
prejudice to any prior obligations of confidentiality it may have, the
Contractor shall ensure that no publicity, relating to the Contract, shall take
place without the prior written agreement of the Purchasers.

 

39.3                           This
provision shall survive the expiry or termination of the Contract.

 

CLAUSE 40                       SOFTWARE

 

40.1                           The
Contractor hereby grants to the Purchasers an irrevocable non-exclusive
royalty-free license to use, copy and use as copied all Software including
related documentation provided under this Contract throughout the Network
design life.  This license shall be
limited to use of the Software for the purpose of operation and maintenance of
the Network, and shall commence from the date of delivery of each item of
Software or related documentation to the Purchasers.

 

40.2                           The
Contractor shall fully disclose and supply and keep supplied in confidence to
the Purchasers the latest version of all the Software including documentation,
with relevant information about their release status.

 

40.3                           The
Contractor shall take suitable precautions to protect the documentation and
relevant source code against loss of any kind. 
Up-to-date copies of the latest documentation and relevant source code
shall be stored by the Contractor in a safe and secure location remote from its
normal work premises for the period of the design life of the Network.

 

40.4                           In
addition to the above, the Contractor shall place into an escrow account with
an independent third party escrow agent, upon the terms and conditions of the
Escrow Agreement sets out, in the Appendix 4 (subject to the approval of the
independent third party escrow agent) hereto, one copy of the source code and
object code of the latest version of the Software, both in human readable
format, if required, and machine readable format, as well as details of host
machines and sufficient documentation including software tools to enable
modification of the Software and shall ensure that such source code, object
code and documentation provided hereunder are always complete and
up-to-date.  The Contractor shall
further grant the Purchasers an irrevocable, non-exclusive, non-transferable
(except that a Purchaser may assign such license in the event of its
amalgamation or reconstruction), royalty-free license, to use the source code
to modify, and use as modified, the Software, provided that such license is
limited to the circumstances where the Purchasers terminate the Contract due to
the Contractor’s default pursuant to Clause 22 (Termination for Default) hereof
or if the Contractor, following the expiration of the warranty period set out
in Clause 18 (Warranty), refuses or is not in position to satisfy the
Purchasers’ requests for a software modification at reasonable cost or within
such timescale as the Purchasers may require. 
Such refusal or inability shall be notified in writing by the Contractor
to the Purchasers.  For the avoidance of
doubt the Purchasers shall not be entitled, to sub-license the Software either
in its original form or as modified.

 

53

 

40.5                           For
the purpose of this Clause, the latest version shall mean the last maintained
release issued by the Contractor at the time of the end of the five (5) year
warranty period (or such extended warranty period selected by the Purchasers).

 

CLAUSE 41                       INDEMNITIES TO SURVIVE
TERMINATION

 

Each indemnity in this Contract is a continuing obligation, independent
from the other obligations of the Contractor and survives termination of this
Contract.

 

CLAUSE 42                       EXTENSION
OF GENERAL PROVISIONS OF CONTRACT TO STEP 2 OF THE INITIAL NETWORK AND PHASED
UPGRADE

 

In the event that the Contractor is awarded Step 2 of the Initial
Network and/or the Phased Upgrade contract(s), all general terms and conditions
of this Contract shall apply as appropriate with the necessary changes.

 

CLAUSE 43                       SIGNATURE

 

The Contract will be drawn up in two (2) originals.

 

54

 

IN WITNESS WHEREOF the Parties
have severally subscribed these presents or causes them to be subscribed in
their names and on behalf of their respective duly authorized officers.

 

THE PURCHASERS

 

SIGNED for and on behalf of

the Purchasers

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
    CHINA
  TELECOM

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
    CHUNGHWA
  TELECOM CO., LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
    CABLE
  & WIRELESS HKT INTERNATIONAL LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
    KDD
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
    KOREA
  TELECOM

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
    NTT
  COMMUNICATIONS CORPORATION

  

 

55

 

	
  By:

  	
   

  	
   

  
	
   

  	
    PHILIPPINE
  LONG DISTANCE TELEPHONE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
    SINGAPORE
  TELECOMMUNICATIONS LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
    TELEKOM
  MALAYSIA BERHAD (128740-P)

  

 

 

THE CONTRACTOR

 

SIGNED for and on behalf of

NEC CORPORATION

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  NEC
  CORPORATION

  

 

56

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