Document:

Exhibit 10.10

 

ASIA PACIFIC CABLE NETWORK 2

 

 

CONSTRUCTION AND MAINTENANCE

 

AGREEMENT

 

 

Singapore

 

April 18th, 2000

 

 

TABLE OF CONTENTS

 

	
  PARAGRAPH

  	
   

  
	
   

  	
   

  
	
  1

  	
  Definitions and Interpretations

  	
   

  
	
   

  	
   

  	
   

  
	
  2

  	
  APCN 2 Configuration

  	
   

  
	
   

  	
   

  	
   

  
	
  3

  	
  Establishment of the APCN 2 Management
  Committee

  	
   

  
	
   

  	
   

  	
   

  
	
  4

  	
  Provision, Construction and Ownership of
  Segments

  	
   

  
	
   

  	
   

  	
   

  
	
  5

  	
  Definition of APCN 2 Capital Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  6

  	
  Definition of Operation and Maintenance
  Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  7

  	
  Allocation and Billing of APCN 2 Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  8

  	
  Currency of Payment

  	
   

  
	
   

  	
   

  	
   

  
	
  9

  	
  Keeping and Inspection of Books for Segment
  S and T

  	
   

  
	
   

  	
   

  	
   

  
	
  10

  	
  Duties and Rights as to Operation and
  Maintenance of Segments

  	
   

  
	
   

  	
   

  	
   

  
	
  11

  	
  Use
  of Segment T

  	
   

  
	
   

  	
   

  	
   

  
	
  12

  	
  Acquisition and Use of Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  13

  	
  Expansion of Equipped Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  14

  	
  Increase or Decrease of Design Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  15

  	
  Obligation to Provide Transiting Facilities
  to Extend APCN2 Capacity

  	
   

  
	
   

  	
   

  	
   

  
	
  16

  	
  Obligation to Connect the APCN 2 with
  Inland Systems

  	
   

  
	
   

  	
   

  	
   

  
	
  17

  	
  Direct Access to Network Interface and
  Equal Access to Terminal Station

  	
   

  
	
   

  	
   

  	
   

  
	
  18

  	
  Duration of Agreement and Realization of
  Assets

  	
   

  
	
   

  	
   

  	
   

  
	
  19

  	
  Obtaining of Approvals

  	
   

  
	
   

  	
   

  	
   

  
	
  20

  	
  Privileges for Documents or Communications

  	
   

  
	
   

  	
   

  	
   

  
	
  21

  	
  Relationship of Parties

  	
   

  
	
   

  	
   

  	
   

  
	
  22

  	
  Assignment of Rights and Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  23

  	
  Default

  	
   

  

 

1

 

	
  24

  	
  Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  25

  	
  Compliance with Law

  	
   

  
	
   

  	
   

  	
   

  
	
  26

  	
  Ratification of Decisions and Actions

  	
   

  
	
   

  	
   

  	
   

  
	
  27

  	
  Resolution of Disputes

  	
   

  
	
   

  	
   

  	
   

  
	
  28

  	
  Supplements and Amendments to this
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  29

  	
  Execution of Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  30

  	
  Successors
  Bound

  	
   

  
	
   

  	
   

  	
   

  
	
  31

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  32

  	
  Settlement of Claims by Parties

  	
   

  
	
   

  	
   

  	
   

  
	
  33

  	
  Force
  Majeure

  	
   

  
	
   

  	
   

  	
   

  
	
  34

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  35

  	
  Entire Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Testamonium

  	
   

  

 

2

 

	
  SCHEDULES

  
	
   

  
	
  Schedule A

  	
  Parties to the Agreement

  
	
   

  	
   

  
	
  Schedule B

  	
  Investment Shares, Ownership Interest, Voting Interests, and
  Allocation of Capital Cost and O&M Costs

  
	
   

  	
   

  
	
  Schedule C

  	
  Capacity Allocation and Interest in Unallocated Capacity

  
	
   

  	
   

  
	
  Schedule D

  	
  Sales of IRU Capacity

  
	
   

  	
   

  
	
   

  	
   

  
	
  ANNEXES

  	
   

  
	
   

  	
   

  
	
  Annex 1

  	
  Terms of Reference for the Procurement Group

  
	
   

  	
   

  
	
  Annex 2

  	
  Terms of Reference for the AR&RSC, O&MSC, F&ASC and
  I&ASC

  
	
   

  	
   

  
	
  Annex 3

  	
  Terms of Reference for the Network Administrator

  
	
   

  	
   

  
	
  Annex 4

  	
  Terms of Reference for the Central Billing Party

  
	
   

  	
   

  
	
  Annex 5

  	
  Configuration of APCN 2

  
	
   

  	
   

  
	
  Annex 6

  	
  Billing Currency and Source of Rate for Financial Charges

  
	
   

  	
   

  
	
  Annex 7

  	
  Rules on Use of Capacity

  
	
   

  	
   

  
	
  Annex 8

  	
  Segment T Facilities and Functions

  

 

3

 

ASIA PACIFIC CABLE NETWORK 2

CONSTRUCTION & MAINTENANCE AGREEMENT

 

THIS AGREEMENT, made and entered into this 18th day of April 2000,
between and among the Parties signatory hereto (hereinafter collectively called
“Parties” and individually called “Party”), which Parties are identified in
Schedule A,

 

WITNESSETH:

 

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

 

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

 

WHEREAS, it is now
apparent that this rapid growth in traffic demand will lead to a greater demand
for facilities in the Asia Pacific Region necessitating the construction of
additional Asia Pacific fiber optic submarine cable facilities (hereinafter
referred to as the “Asia Pacific Cable Network 2” or “APCN 2”); and

 

WHEREAS, the
reliability of telecommunications services and its usefulness to customers
requires the availability of the appropriate facilities and technology,
including the APCN 2 for diverse routing and instantaneous restoration of
services; and

 

WHEREAS, China
Telecom, CWHKTI, Chunghwa Telecom, Korea Telecom, Japan Telecom, NTT Com, KDD
Corp., Telekom Malaysia, SingTel, and Telstra, (the “MOU” Parties”) signed a
Memorandum of Understanding to plan the APCN 2 effective from 16th June 1999
(hereinafter referred to as the “MOU”) to permit activities, as defined in the
MOU; and

 

WHEREAS, the First
Supplemental MOU, the Second Supplemental MOU, the Third Supplemental MOU and
the Fourth Supplemental MOU were effective from October 5, 1999, October 6,
1999, February 29, 2000 and April 4, 2000 respectively; and

 

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

 

WHEREAS, the MOU
states that it shall continue in force until the signing, by the Parties, of
the APCN 2 Construction and Maintenance Agreement; and

 

WHEREAS, the Parties
now desire to construct the APCN 2 as a fully integrated Asia Pacific network
comprised of 4 fully restorable fiber optic pairs; and

 

WHEREAS, the Parties
now desire to define the terms and conditions upon which the APCN 2 will be
provided, constructed, operated and maintained.

 

4

 

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

 

1.             DEFINITIONS AND INTERPRETATIONS

 

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

 

(a)           Affiliate:  A company is the Affiliate of another if
either company owns directly or indirectly less than 50% but no less than 10%
of its equity.

 

(b)           Branching
Unit (BU):  Equipment that
permits interconnection between 3 cable Segments and provides the optical fiber
and power conductor between 3 cable Segments.

 

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

 

(d)           Capacity
Types shall be categorized as follows:

 

	
  Allocated Capacity

  	
  -

  	
  capacity allocated in the APCN 2 to a Party in return for its financial
  investment.

  
	
   

  	
   

  	
   

  
	
  Design Capacity

  	
  -

  	
  the maximum capacity that the APCN 2 is designed to provide which
  shall be no 

  
	
  less than
  2.5 Tbit/s.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Equipped Capacity

  	
  -

  	
  the amount of capacity physically provided in the APCN 2 at any one
  time.

  
	
   

  	
   

  	
   

  
	
  Initial Equipped Capacity

  	
  -

  	
  Initial Equipped Capacity of the APCN 2 shall be at least 80Gbit/s.

  
	
   

  	
   

  	
   

  
	
  IRU Capacity

  	
  -

  	
  capacity acquired after execution of this Agreement on an IRU basis
  from the 

  
	
  Unallocated Capacity.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Unallocated Capacity

  	
  -

  	
  the difference in capacity between the Equipped Capacity and the
  Allocated 

  
	
  Capacity.

  	
   

  	
   

  

 

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

 

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

 

5

 

(g)           Direct
Access:  The direct
connection to the Network Interface of Segment S without going through any
other party’s equipment.

 

(h)           Initial
Parties:  The Initial Parties
are Advantel, C&W, China Telecom, China Unicom, Concert Ltd, Chunghwa
Telecom, CWHKTI, Global One, JT, KDD, KPN, KT, Layer 2, MCIITI, MFN, NCIC, NTT
Com, Onelink, PLDT, SingTel, StarHub, Teleglobe, Telstra, TFN, TM and Williams.

 

(i)            IRU:  Indefeasible Right of Use which does not
convey ownership and voting rights in the management of the APCN 2.

 

(j)            Minimum
Investment Unit:  A unit
designated as the minimum unit of investment in the APCN 2, which is equivalent
to one whole STM-1 ring, allowing the use of two (2) half STM-1 ring circuits
on any Path within the APCN 2.  The
Minimum Investment Unit is hereinafter termed as a “MIU”.

 

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

 

(l)            Parent
Company:  A company that owns
directly or indirectly no less than 50% of equity of a company.

 

(m)          Path:  The connectivity in the APCN 2 between any
two Network Interfaces which is independent of the actual physical links used
to connect these Network Interfaces.

 

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

 

(o)           Ready For
Provisional Acceptance Date: 
The date on which the entire Wet Segment of the APCN 2 is provisionally
accepted by the Procurement Group on behalf of the Parties.  The Ready for Provisional Acceptance Date
(hereinafter referred to as the “RFPA Date”) shall be 31st August
2001, or such other date as may be agreed by the Management Committee.

 

(p)           Ready for
Service Date:  The date on
which commercial service can be placed on the entire APCN 2.  For the purposes of this Agreement, the
Ready For Service Date (hereinafter referred to as the “RFS Date”) shall be
30th September 2001, or such other date as may be agreed by the Management
Committee.

 

(q)           Subsidiary:  A company that is directly or indirectly
owned by a Parent Company holding no less than 50% of its equity.

 

6

 

(r)            Supply
Contract:  The contracts
placed by the Procurement Group on behalf of the Parties for the supply of the
Wet Segment of the APCN 2.

 

(s)           Terminal
Parties:  The Terminal
Parties are China Telecom, CWHKTI, Chunghwa Telecom, KDD, Korea Telecom, NTT
Com, PLDT, SingTel, and Telekom Malaysia.

 

(t)            Wet
Segment:  For the purposes of
this Agreement, Segments S1, S2, S3, S4, S5, S6, S7, and S8 as defined below
are collectively called the Wet Segment.

 

1.2           Schedules and Annexes

 

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

 

1.3           Paragraph headings

 

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

 

1.4           Interpretation

 

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

 

2.             APCN 2 CONFIGURATION

 

2.1           The configuration of APCN 2 shall be as
shown in Annex 5, which shall be regarded as consisting of a terrestrial
section (hereinafter called “Segment T”) and a submarine section (herein called
“Segment S” or the “Wet Segment”).

 

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

 

Segment T1:          A Terminal Station at
Katong

 

Segment T2:          A
Terminal Station at Kuantan

 

Segment T3:          A
Terminal Station at Lantau

 

Segment T4:          A
Terminal Station at Chongming

 

7

 

Segment T5:          A
Terminal Station at Pusan

 

Segment T6:          A
Terminal Station at Kitaibaraki

 

Segment T7:          A
Terminal Station at Chikura

 

Segment T8:          A
Terminal Station at Tanshui

 

Segment T9:          A
Terminal Station at Shantou

 

Segment T10:        A
Terminal Station at Batangas

 

2.3           Segments T1, T2, T3, T4, T5, T6, T7, T8, T9
and T10 shall each consist of:

 

(i)            an appropriate share of land and buildings
at the specified locations for the cable landing, Terminal Station and for the
cable route including cable rights-of-way and ducts or conduits between the
Terminal Station and its respective Cable Landing Point, and an appropriate
share of common services and equipment at each of those locations together with
equipment in each of those Terminal Stations and at a remote location as
necessary which is solely associated with the APCN 2, but not part of the Wet
Segment; and

 

(ii)           An appropriate share of the test equipment.

 

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

 

Segment S1:          The whole of the submarine cable containing
four (4) optical fiber pairs provided between and including the Network
Interface at the Terminal Station at Katong; and the Network Interface at the
Terminal Station at Kuantan.

 

Segment S2:          The whole of the submarine cable containing
four (4) optical fiber pairs provided between and including the Network
Interface at the Terminal Station at Kuantan; and the Network Interface at the
Terminal Station at Lantau.

 

Segment S3:          The whole of the submarine cable containing
four (4) optical fiber pairs provided between and including the Network
Interface at the Terminal Station at Lantau; and the Network Interface at the
Terminal Station at Chongming.

 

Segment S4:          The whole of the submarine cable containing
four (4) optical fiber pairs provided between and including the Network
Interface at the Terminal Station at Chongming; and the Network Interface at
the Terminal Station at Pusan; and the Network Interface at the Terminal
Station at Kitaibaraki.

 

8

 

	
  Segment S4A:

  	
   

  	
  The whole of the submarine cable containing four (4) optical fiber
  pairs, provided between and including the Network Interface at the Terminal
  Station at Chongming and BU1.

  
	
   

  	
   

  	
   

  
	
  Segment S4B:

  	
   

  	
  The whole of the submarine cable containing two (2) optical fiber
  pairs provided between BU1 and BU2.

  
	
   

  	
   

  	
   

  
	
  Segment S4C:

  	
   

  	
  The whole of the submarine cable containing four (4) optical fiber
  pairs, provided between and including the Network Interface at the Terminal
  Station at Kitaibaraki and BU2.

  
	
   

  	
   

  	
   

  
	
  Segment S4W:

  	
   

  	
  The whole of the submarine cable containing two (2) optical fiber
  pairs, provided between and including the Network Interface at the Terminal
  Station at Pusan and BU1.

  
	
   

  	
   

  	
   

  
	
  Segment S4E:

  	
   

  	
  The whole of the submarine cable containing two (2) optical fiber
  pairs, provided between and including the Network Interface at the Terminal
  Station at Pusan and BU2.

  

 

Segment S5:          The whole of the submarine cable containing
four (4) optical fiber pairs provided between and including the Network
Interface at the Terminal Station at Kitaibaraki; and the Network Interface at
the Terminal Station at Chikura.

 

Segment S6:          The whole of the submarine cable containing
four (4) optical fiber pairs provided between and including the Network
Interface at the Terminal Station at Chikura; and the Network Interface at the
Terminal Station at Tanshui.

 

Segment S7:          The whole of the submarine cable containing
four (4) optical fiber pairs provided between and including the Network
Interface at the Terminal Station at Tanshui; and the Network Interface at the
Terminal Station at Shantou.

 

Segment S8:          The whole of the submarine cable containing
four (4) optical fiber pairs provided between and including the Network
Interface at the Terminal Station at Shantou; and the Network Interface at the
Terminal Station at Batangas; and the Network Interface at the Terminal Station
at Katong.

 

9

 

	
  Segment S8A:

  	
   

  	
  The whole of the submarine cable containing four (4) optical fiber
  pairs, provided between and including the Network Interface at the Terminal
  Station at Shantou and BU3.

  
	
   

  	
   

  	
   

  
	
  Segment S8B:

  	
   

  	
  The whole of the submarine cable containing two (2) optical fiber
  pairs provided between BU3 and BU4.

  
	
   

  	
   

  	
   

  
	
  Segment S8C:

  	
   

  	
  The whole of the submarine cable containing four (4) optical fiber
  pairs, provided between and including the Network Interface at the Terminal
  Station at Katong and BU4.

  
	
   

  	
   

  	
   

  
	
  Segment S8N:

  	
   

  	
  The whole of the submarine cable containing two (2) optical fiber
  pairs, provided between and including the Network Interface at the Terminal
  Station at Batangas and BU3.

  
	
   

  	
   

  	
   

  
	
  Segment S8S:

  	
   

  	
  The whole of the submarine cable containing two (2) optical fiber
  pairs, provided between and including the Network Interface at the Terminal
  Station at Batangas and BU4.

  

 

2.5           Segment S shall include:

 

(i)            all transmission, power feeding, system
management, Network Protection Equipment and test equipment directly associated
with, and required to operate and maintain the submersible plant including,
where applicable, a remote control and supervisory equipment;

 

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

 

(iii)          the transmission cable equipped with
appropriate optical amplifiers, BUs, and joint housings between the applicable
Terminal Stations:

 

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

 

(v)           terminal equipment, including Network
Interface for STM-1, STM-4, STM-16 and STM-64 levels, in each of the Terminal
Stations.

 

2.6           In this Agreement, references to any
Segment, however expressed, shall be deemed to include, unless the context
otherwise requires, additional property incorporated therein by agreement of
the Management Committee.  Each Segment
shall be regarded as including 

 

10

 

its related
spare and standby units and components, including, but not limited to, optical
amplifiers, BUs, cable lengths, and terminal equipment.

 

11

 

3.             ESTABLISHMENT OF THE APCN 2
MANAGEMENT COMMITTEE

 

3.1           The Parties shall form an APCN 2 Management
Committee (hereinafter referred to as the “Management Committee”), for the
purpose of directing the progress of engineering, provision, installation,
bringing into service and continued operation of the APCN 2, consisting of one
representative of each of the Parties to this Agreement.  The Management Committee shall make all
major decisions necessary to effectuate the purposes of this Agreement.

 

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

 

3.3           Each of the Initial Parties shall, on a
rotational basis, provide the Chairman of the Management Committee which will
meet on the call of a Chairman or whenever requested by one or more Parties
together representing at least five per cent (5%) of the total voting interests
specified in Schedule B.  The Chairman
shall give at least thirty (30) days’ advance notice of each meeting, together
with a copy of the draft agenda.  In
cases of emergency, such notice period may be reduced where at least
seventy-five (75) percent of the total voting interests are in agreement.  Documents for the meeting should be made
available to members at least fourteen (14) days before the meeting, but the
Management Committee may agree to discuss papers distributed on less than
fourteen (14) days’ notice.

 

3.4           The Management Committee shall make every
reasonable effort to reach agreement with respect to matters to be
decided.  Unless otherwise provided for
in this Agreement, in the event an agreement cannot be reached, the decision
will be carried on the basis of simple majority of the total voting interests
specified in Schedule B, which must include a simple majority of the voting
interests of the Terminal Parties and a simple majority of the voting interests
of the non-Terminal Parties.  A member
of the Management Committee representing more than one Party shall separately
cast the votes to which each Party he represents is entitled.

 

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

 

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

 

3.7           To aid the Management Committee in the
performance of its duties, the following Subcommittees shall be formed, and
said Subcommittees, under the direction of the 

 

12

 

Management
Committee, shall be responsible for their respective areas of interest listed
in Annex 2 and any other areas of interest designated by the Management
Committee:

 

(i)            Investment and Agreement Subcommittee
(hereinafter referred to as “I&ASC”)

 

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

 

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

 

(iv)          Assignments, Routing, and Restoration
Subcommittee (hereinafter referred to as “AR&RSC”)

 

3.8           The Management Committee shall form a
Procurement Group (hereinafter referred to as “PG”), consisting of
representatives from each of the Initial Parties.  This group shall act on behalf of the Parties to this Agreement
for the purpose of arranging for the construction, implementation, and
installation of the Wet Segment of APCN 2 and be solely responsible for all
actions as may be required to contract with the Suppliers to provide the Wet
Segment of the APCN 2.  The Terms of
Reference of the PG are contained in Annex 1.

 

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

 

3.10         The respective Co-Chairmen of each
Subcommittee, or a designated representative of each Subcommittee, shall attend
the Management Committee meetings and meetings of each other Subcommittee in an
advisory capacity as necessary.  On or
about two (2) years after the RFS Date, the Management Committee shall
determine whether any of its Subcommittees should remain in existence.  If the Management Committee determines that
one or more of its Subcommittees shall not remain in existence, the
responsibilities assigned to a Subcommittee whose existence has been terminated
under this Subparagraph 3.10 shall revert to the Management Committee unless
otherwise provided for in this Agreement.

 

3.11         The Terms of Reference for the Network
Administrator (hereinafter referred to as “NA”) are as set forth in Annex 3 of
this Agreement.

 

3.12         The Terms of Reference for the Central Billing
Party (hereinafter referred to as “CBP”) are as set forth in Annex 4 of this
Agreement.  At or after the RFS Date the
CBP shall be reappointed or a new CBP appointed from the Parties by an open
tendering process.

 

3.13         The Terms of Reference of all Subcommittees,
the NA, the CBP and the PG established pursuant to this Paragraph 3 shall be
amended by the Management Committee as and when as it is necessary.

 

13

 

4.             PROVISION, CONSTRUCTION AND OWNERSHIP
OF SEGMENTS

 

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

 

	
  SEGMENT

  	
   

  	
  TERMINAL
  PARTY

  
	
   

  	
   

  	
   

  
	
  T1

  	
   

  	
  SingTel

  
	
  T2

  	
   

  	
  TM

  
	
  T3

  	
   

  	
  CWHKTI

  
	
  T4

  	
   

  	
  China Telecom

  
	
  T5

  	
   

  	
  KT

  
	
  T6

  	
   

  	
  NTT Com

  
	
  T7

  	
   

  	
  KDD

  
	
  T8

  	
   

  	
  Chunghwa Telecom

  
	
  T9

  	
   

  	
  China Telecom

  
	
  T10

  	
   

  	
  PLDT

  

 

4.2           The Terminal Parties shall make available to
the other Parties hereto any reasonable information requested by the Parties
relating to the engineering, provision, construction, or installation of
Segment T in a timely manner.  The
various Segment T shall be provided in sufficient time to permit APCN 2 to be
placed into operation by the RFS Date.

 

4.3           Ownership of the Wet Segment shall be as
shown in Schedule B to this Agreement. 
The Wet Segment of APCN 2 shall be owned by the Parties in common and
undivided shares.

 

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

 

4.5           Each of the Parties shall be entitled, on
request and at its own expense, to receive from the PG 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.

4.6           The PG shall ensure that the Supply Contract
specifies that the Wet Segment is to be provided by the RFPA Date.

 

4.7           The PG shall ensure that the Supply Contract
shall afford them or their designated representatives reasonable rights of
access to examine, test, and inspect the APCN 2 cable equipment, material,
supplies and installation activities.

 

4.8           In the event that the Wet Segment fails to
meet the specifications referred to in the Supply Contract for its provision,
fails to provide the specified capacity, or is not engineered, provided,
installed and ready in sufficient time to meet the RFPA Date as specified in
the Supply Contract, or if the Suppliers are otherwise in material breach of
the Supply Contract, the PG may, pursuant to this Paragraph 4 and in accordance
with the Supply Contract, take such actions as may be necessary to exercise the
rights and 

 

14

 

remedies
available under the terms and conditions of the Supply Contract.  Such actions by the PG shall be subject to
any direction deemed necessary by the Management Committee.

 

4.9           The members of the PG shall not be liable to
any other Party or to each other 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 APCN 2 not meeting the RFPA Date as
specified in the Supply Contract, or if APCN 2 does not perform in accordance
with the technical specifications and other requirements of the Supply
Contract, or APCN 2 is not integrated or placed into operation.  The Parties recognize and agree that the PG
does not make any representations or warranties, including, but not limited to,
any representation or warranty regarding:

 

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

 

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

 

(iii)          that APCN 2 shall be integrated or placed
into operation and the Parties hereby agree that nothing in this Agreement
shall be construed as such a warranty or guarantee.

 

5.             DEFINITION OF APCN 2 CAPITAL COSTS

 

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

 

(a)           appropriate costs, including appropriate
financial charges, incurred under the MOU in respect of specific activities
such as desk top surveys and meeting expenses that are reasonably related to
the construction of the APCN 2;

 

(b)           those costs payable to the Supplier(s) under
the Supply Contract attributable to the Wet Segment;

 

(c)           the fixed costs and the additional Capital
Costs to be reimbursed to the Terminal Parties for the provision of the
Terminal Stations in accordance with the costs schedule and scope of work given
in Annex 8;

 

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

 

15

 

expenses,
testing associated with laying or installation, customs duties, taxes (except
income tax imposed upon the net income of a Party), appropriate financial
charges, supervision, billing activities, overheads and insurance of or a
reasonable allowance in lieu of insurance if such Party elects to carry a risk
itself, being a risk which is similar to one against which a supplier has
insured or against which insurance is usual or recognized or would have been
reasonable;

 

(e)           those fees payable to the NA, up to the RFS
Date, in fulfilling its responsibilities as set forth in Annex 3;

 

(1)           those fees payable to the CBP, up to the RFS
Date, in fulfilling its responsibilities as set forth in Annex 4;

 

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

 

(h)           those costs reasonably incurred (as approved
by the Management Committee) by the Parties, up to the RFS Date, hereto in the
holding of’ the meetings of the PG and I&ASC;

 

(i)            those costs reasonably incurred (as
approved by the Management Committee) by the Parties, up to the RFS Date,
hereto in the hosting of the meetings of the Management Committee and its
Subcommittees; and

 

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

 

5.2           For purposes of this Agreement, the cost of
the repair or replacement of any part of the APCN 2 in the event of damage or
loss arising during construction, laying, burying installing and the bringing
into operation of the APCN 2, which is attributable under the Supply Contract
to the Parties, shall be regarded as part of the Capital Costs.

 

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

 

16

 

6.             DEFINITION OF OPERATION AND
MAINTENANCE COSTS

 

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

 

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

 

(b)           those costs incurred by the Terminal
Parties, including additions thereto, with respect to the operation and
maintenance of their respective Terminal Stations, allocable to the APCN
2.  Where the use of a Terminal Station
or of certain equipment situated therein, such as power supply or testing and
maintenance equipment, is shared, by agreement of the Parties, by the APCN 2
and other communications systems terminating at that Terminal Station, the
costs of operation and maintenance of such shared Terminal Station or equipment
(not solely attributable to a particular communication system or systems) will
be allocated among the systems involved in the proportions in which they use
the shared equipment or facility.  For
such purposes, the Management Committee shall approve the method for
determining the portion of a shared Terminal Station allocable to the APCN 2.  Costs as used in this Paragraph 6 with
reference to each of the Terminal Stations shall include costs reasonably
incurred in operation and maintenance of the facilities involved, including,
but not limited to, the cost of attendance, testing, adjustments, repairs and
replacements, customs duties, taxes (except income tax imposed upon the net
income of a Party) paid in respect of such facilities, billing activities,
administrative costs, financial charges, and costs and expenses reasonably
incurred on account of claims made by or against other persons in respect of
such facilities or any part thereof and damages or compensation payable by the
Terminal Station owner on account of such claims;

 

(c)           those fees payable to the NA, after the RFS
Date, in fulfilling its responsibilities as set forth in Annex 3;

 

(d)           those fees payable to the CBP after the RFS
Date, in fulfilling its responsibilities as set forth in Annex 4;

 

17

 

(e)           those costs reasonably incurred (as approved
by the Management Committee) by the Parties, after the RFS Date, hereto in the
holding of the meetings of the PG and the I&ASC; and

 

(f)            those costs reasonably incurred (as
approved by the Management Committee) by the Parties, after the RFS Date,
hereto in the hosting of the meetings of the Management Committee and its
Subcommittees.

 

7.             ALLOCATION AND BILLING OF APCN 2 COSTS

 

7.1           The APCN2 Capital Costs as defined in
Paragraph 5 shall be borne by the Parties in the proportions set forth in
Schedule B.

 

7.2           The O&M Costs as defined in Paragraph 6
shall be borne by the Parties in the proportions set forth in Schedule B.

 

7.3           The Terminal Parties shall each render
invoices to the CBP for any O&M Costs incurred as outlined in Paragraph 6
not more frequently than quarterly and by the tenth (10th) day of the
appropriate month in accordance with procedures to be established by the
F&ASC and approved by the Management Committee.  The Party rendering an invoice shall furnish such further details
of such invoice as the other Parties may reasonably require.  On the basis of such invoices, the CBP shall
pay such amounts as may be owed sixty (60) days from the 10th calendar day of
the month in which the invoice was rendered or on the following working day if
day sixty (60) is not a working day in the CBP’s Country.

 

7.4           The Terminal Parties shall each render
invoices to the CBP for any Capital Costs incurred as outlined in Paragraph 5
(except Terminal Station cost) not more frequently than quarterly and by the
tenth (10th) day of the appropriate month in accordance with procedures to be
established by the F&ASC and approved by the Management Committee.  The Party rendering an invoice shall furnish
such further details of such invoice as the other Parties may reasonably
require.  On the basis of such invoices,
the CBP shall pay such amounts as may be owed sixty (60) days from the 10th
calendar day of the month in which the invoice was rendered or on the following
working day if day sixty (60) is not a working day in the CBP’s Country.

 

7.5           Unless the Management Committee authorizes
changes to the procedure for the rendering of bills associated with the Capital
Costs or O&M Costs, the CBP shall promptly render bills, in accordance with
this Paragraph 7 and the billing and payment procedures established by the
F&ASC and approved by the Management Committee, to each of the Parties for
such Parties’ pro rata shares of these costs. 
Such bills shall be rendered by the CBP not more frequently than
quarterly and shall contain a reasonable amount of detail to substantiate
them.  On the basis of such bills, each
Party shall pay the CBP, such amounts as may be owed by the end of the calendar
month following the calendar month in which the bill was rendered, on the date
specified by the CBP.

 

18

 

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

 

7.7           As soon as practicable after the RFS Date,
the amount of each Party’s share of the Capital Costs shall be computed by the
CBP who shall make appropriate adjustments and render any necessary bills or
arrange for any necessary refunds by way of final settlement in order that each
Party may bear its proper share of the costs as provided in this
Paragraph 7.

 

7.8           For purposes of this Agreement, financial
charges shall be computed as applicable on a daily basis from the date payment
is incurred until the date payment is due, at a rate equal to the lowest
publicly announced prime rate or minimum commercial lending rate, however
described, for 90 day loans in the currencies of the Initial Parties or the
currency of billing, as applicable, charged by established commercial banks in
the countries concerned on the fifteenth day of the month in which the costs
were incurred by the invoicing Parties. 
If such a day is not a business day, the rate prevailing on the next
business day shall be used.  The source
of the rate of such financial charges shall be as shown at Annex 6.  The application of financial charges
relating to costs incurred for the APCN 2 Capital Costs and O&M Costs shall
be limited to a maximum of 120 days, unless otherwise approved by the
Management Committee.

 

7.9           Amounts billed and not paid when due shall
accrue extended payment charges from the day following the date on which
payment was due until paid.  If the due
date is not a business day, the due date shall be postponed to the next
business day.  For the purpose of this
Agreement, extended payment charges shall be computed at three hundred percent
(300%) of the rate described in Subparagraph 7.8 on the day following the date
payment on the bill was due.  In the
event that applicable law does not allow the imposition of extended payment
charges at the rate established in accordance with this Subparagraph 7.9, extended
payment charges shall be at the highest rate permitted by applicable law, which
in no event shall be higher than the rate computed in accordance with this
Subparagraph 7.9.  For purposes of this
Agreement, “paid” shall mean that the funds are immediately available for use
by the recipient.

 

7.10         Credits for refunds of financial charges and
bills for extended payment charges shall not be rendered if the amount of
charges involved is less than the equivalent of one hundred ($100) US dollars
or its equivalent in the billing currency.

 

7.11         A bill shall be deemed to have been accepted
by the Party to whom it is rendered if that Party does not present a written
objection on or before the date when payment is due.  If such objection is made, the Parties concerned shall make every
reasonable effort to settle promptly the dispute concerning the bill in
question.  If the objection is sustained
and the billed Party has paid the disputed bill, the agreed upon overpayment shall
be promptly refunded to the objecting Party by the invoicing Party together
with any financial charges 

 

19

 

calculated
thereon at a rate determined in accordance with Subparagraph 7.8 of this
Agreement from the date of payment of the bill to the date on which the refund
is transmitted to the objecting Party. 
If the objection is not sustained and the billed Party has not paid the
disputed bill, said Party will pay such bill promptly together with any extended
payment charges calculated thereon at a rate determined in accordance with
Subparagraph 7.9 of this Agreement from the day following the day on which
payment was due until paid.  Nothing in
this Subparagraph 7.11 shall relieve a Party from paying those parts of a bill
that are not in dispute.

 

7.12         Upon the signing of this Agreement, the CBP
shall render bills to the Parties for approximately five percent (5%) of their
financial commitment in APCN2 as determined by Schedule B.  The exact amount of the bills and the
billing procedure shall be determined by the Management Committee.  The funds received by the CBP from these
bills shall be kept in an interest bearing account for the benefit of the
Parties to be maintained by the CBP and the used solely and in their entirety
to pay the first invoices received by the CBP.

 

8.             CURRENCY OF PAYMENT

 

All invoices rendered to the CBP shall be in the currency of the United
States, or in the currency of the invoicing Party which is specified in Annex 6
or the currency in which the cost was incurred in the case of O&M
Costs.  Such invoices shall be paid in
the currency in which the invoices are rendered.  The CBP shall render bills to the Parties in the currency of the
United States and be paid in the same currency.  In conjunction with the CBP, the F&ASC shall develop
procedures to deal with the differences between the exchange rates in the
circumstances when the currency of invoices rendered to the CBP is not the
currency of the United States.

 

9.             KEEPING AND INSPECTION OF BOOKS FOR
SEGMENT S AND T

 

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

 

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

 

9.3           The PG shall ensure that the Supply Contract
requires the Supplier to obtain from their contractors and subcontractors such
supporting records, for other than the cost of fixed cost items, as may be
reasonably required by Subparagraph 9.1 and to keep and maintain such records
for a period of five (5) years from the RFPA Date of the Wet Segment, as
specified in the Supply Contract.

 

20

 

9.4           The PG shall ensure that the Supply Contract
shall afford the Parties to this Agreement the right to review the books,
records, vouchers, and accounts required to be kept, maintained, and obtained
pursuant to Subparagraphs 9.1, 9.2 and 9.3.

 

9.5           With respect to costs incurred for the
provision of the Wet Segment by a Party, comparable records to those specified
in Subparagraphs 9.l, 9.2 and 9.3 as appropriate, shall be maintained by the
Party for a period of five (5) years from the date that such costs were
incurred.

 

9.6           The PG and the Terminal Parties shall each
keep and maintain such books, records, vouchers, and accounts of all costs that
are incurred in the engineering, provision and installation of the Wet Segment
and Segment T and not included in the Supply Contract, which they incur directly,
for a period of five (5) years from the RFS Date or the date the work is
completed, whichever is later.  The CBP
shall keep and maintain such books, records, vouchers and accounts with respect
to its billing of costs incurred by the Terminal Parties and any other Party
having incurred costs for implementation of APCN 2 as authorized by the
Management Committee, and costs billable under the Supply Contract for a period
of five (5) years from the System RFS Date or the date on which the work is
completed, whichever is later.

 

9.7           With respect to the operation and
maintenance costs of Segments T and the Wet Segment, such books, records,
vouchers, and accounts of costs, as are relevant, shall be kept and maintained
by the Terminal Parties for a period of five (5) years from the date on which
the corresponding bills are rendered to the Parties.  If a Terminal Party does not retain these records beyond this
period, a summary of important items should be retained for the life of APCN 2.

 

9.8           Any Party shall have the right to review or
audit the relevant books, records, vouchers, and accounts of costs pursuant to
this Paragraph 9.  In affording the
right to review or audit, any such Party whose records are being reviewed or audited
shall be permitted to recover, from the Party or Parties requesting the review
or audit, the entire costs reasonably incurred in complying with the review or
audit.  In the case of an audit
initiated by the Management Committee and exercised by the F&ASC, the
audited Party or Parties shall be permitted to recover the entire costs of the
review or audit from the Parties in the proportions specified in Schedule B.

 

9.9           Any rights of review and audit pursuant to
this Paragraph 9 shall only be exercisable through the F&ASC in accordance
with the F&ASC’s audit procedures.

 

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

 

10.1         Each Terminal Party shall be solely
responsible for the operation and maintenance of their respective Segment T as
identified in Paragraph 4 and that portion of Segment S between the Network
Interface at the Terminal Station and their respective Cable 

 

21

 

Landing
Point.  Such Terminal Party shall use
all reasonable efforts to maintain or cause to be maintained economically their
respective Segment T and such portion of Segment S, in efficient working
order.

 

10.2         The Terminal Parties (for the purposes of this
Paragraph 10, collectively called the “Maintenance Authorities” and each
individual called a “Maintenance Authority” or “MA”), shall be jointly
responsible for the operation and maintenance of the Wet Segment and shall use
all reasonable efforts to maintain economically the Wet Segment in efficient
working order and with an objective of achieving effective and timely repairs
when necessary.

 

10.3         Prior to the RFS Date the MAs shall submit for
review by the O&MSC and approval by the Management Committee appropriate
practices and procedures for the continued operation and maintenance of the Wet
Segment.  The MAs shall each provide
information to the O&MSC regarding the practices and procedures for the
continued operation and maintenance of their respective Segments.  The MAs shall also furnish such budgetary
estimates of the cost of such operation and maintenance of the APCN 2 as the
Management Committee may reasonably request. 
Following the RFS Date, the MAs shall provide the O&MSC and the
Management Committee with such reports as it may reasonably require on the operation
of the APCN 2 including any proposals for planned repair or improvement work,
together with appropriately revised budgetary estimates relating to the
operation and maintenance of the APCN 2. 
The O&MSC may review and amend the practices and procedures for the
operation and maintenance of the Wet Segment, subject to the approval of the
Management Committee.  To facilitate in
the maintenance of the APCN 2, the MAs may revise the allocation of
responsibilities amongst themselves for the Wet Segment between the Cable
Landing Points and any such decision shall be subject to the approval of the
Management Committee.

 

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

 

10.5         Notwithstanding Paragraph 32, each MA 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 APCN 2 and may file appropriate lawsuits or
other proceedings on behalf of the Parties. 
The MA shall immediately inform the Management Committee and comply with
any direction 

 

22

 

therefrom.  Subject to obtaining the prior concurrence
of the Management Committee, a MA may settle or compromise any such claims and
execute releases and settlement agreements on behalf of the Parties as
necessary to effect a settlement or compromise.

 

10.6         Each Party that has designed or procured
equipment used in the APCN 2 shall give necessary information relating to the
operation and maintenance of such equipment to the MA responsible for operating
and maintaining such equipment, as reflected in this Paragraph 10.  Each Maintenance Authority shall have prompt
access necessary for the performance of its

 

10.7         [Missing]

 

interruption.  if the MA
responsible, as specified in this Paragraph 10, fails to restore those facilities
to efficient working order and operation within a reasonable time after having
been called upon to do so by any other Party to whom capacity is assigned by
this Agreement, the Management Committee may, to the extent that it is
practical to do so, place, or cause to be placed, such facilities in efficient
working order and operation and charge the Parties their proportionate shares
of the costs reasonably incurred in doing so.

 

10.8         Each Party to this Agreement, at its own
expense, shall have the right to inspect from time to time the operation and
maintenance of any portion of the APCN 2 and to obtain copies of the
maintenance records.  For this purpose,
the Maintenance Authority shall retain significant records, for a period of not
less than five (5) years from the date of the record.  If these records are destroyed at the end of this period, a
summary of important items should be retained for the life of the APCN 2.

 

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

 

11.          USE OF SEGMENT T

 

11.1         The Terminal Parties hereby grant to the
Parties accessing APCN 2 at their respective terminal station, the right of use
in the relevant Segment T (hereinafter referred to as “Terminal Station Right
of Use”) on the terms and conditions stated in this Paragraph 11, to the extent
required for the use of its Allocated Capacity, for the purpose of using APCN 2
and carrying on the related activities at that location in accordance with this
Agreement.  This Terminal Station Right
of Use shall commence on the RFS Date and shall continue for the duration of
this Agreement.

 

11.2         In the event that an agreement for another
cable system utilizing any Terminal Station of the APCN 2 is terminated prior
to the termination of this Agreement, the owner of the respective Segment T,
with the agreement of the Parties hereto, shall take all necessary 

 

23

 

measures to
ensure that the Terminal Station in question will be available for the APCN 2
for the duration of this Agreement on fair and equitable terms.  If the Terminal Station in question is not
available for the landing and terminating of the APCN 2 for any reason, the
owner of the Terminal Station shall provide reasonable advance notice to all
Parties and such owner, in agreement with the Parties hereto, shall take all
necessary measures to ensure that another appropriate Terminal Station will be
available for the APCN 2 for the duration of this Agreement on terms and
conditions similar to those contained in this Agreement.  Applicable costs to the Parties will be
determined by the Management Committee.

 

11.3         For each Terminal Station Right of Use, the
Parties hereto shall not be required to pay any additional charges over and above
the Capital Costs and O&M costs.

 

11.4         Notwithstanding Subparagraph 11.1 of this
Agreement, a Party thereby granted a Terminal Station Right of Use interest in
Segment T may, prior to the commencement of that Terminal Station Right of Use
interest, elect to renounce its Terminal Station Right of Use entitlement and
to instead have use of any Segment T for the duration of this Agreement on such
terms and conditions as are agreed between that Party and the relevant Terminal
Party, and in such event the provisions of Subparagraphs 11.1 of this Agreement
shall apply in relation to such use except insofar as they may be modified by
such agreements.  This Subparagraph 11.4
shall not operate to confer on a Party any financial or other benefit of
substance to which that Party would not otherwise be entitled under this
Agreement.

 

11.5         The Terminal Parties agree to grant a Terminal
Station Right of Use to APCN 2 IRU purchasers.

 

11.6         In the event of a sale or other disposition of
Segment T1, T2,T3, T4, T5, T6, T7, T8, T9 and T10, or part thereof prior to the
termination of this Agreement, the owner shall share with the other Parties
hereto any net proceeds, or costs, of such sale or disposition received, or
expended, by the owner, to the extent allocable to the Capital Costs, in the
proportions set forth in Schedule B.

 

12.          ACQUISITION AND USE OF CAPACITY

 

12.1         Capacity
of APCN 2 can only be used by a carrier.

 

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

 

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

 

24

 

ASSIGNMENT OF CAPACITY

 

12.4         For each MIU of its Allocated Capacity, a
Party is allowed to assign two (2) half STM-l circuits on any Path within the
APCN 2.  All such circuits are
ring-protected.  Additional
ring-protected half STM-1 circuits may be granted proportionately to a Party’s
Allocated Capacity as shown in Schedule C at the discretion of the Management
Committee according to the recommendation of the AR&RSC and the NA.

 

12.5         The Parties may designate a portion of their
Allocated Capacity in specific Paths of the APCN 2 as:

 

(i)            Jointly Assigned Circuit (hereinafter
referred to as “JAC”) which shall be considered as consisting of two half STM-I
circuits, with one half STM-1 circuit assigned to a Party, which together with
the corresponding half STM-1 circuit, shall be used for the provision of
international telecommunications services between such a Party and another
Carrier that has received the right of use pursuant to this Paragraph 12 or an
APCN 2 IRU purchaser.  Any alteration to
the JAC is subject to bilateral agreement between both Carriers.

 

(ii)           Wholly Assigned Circuit (hereinafter
referred to as “WAC”) which shall be considered as consisting of two half STM-1
circuits assigned to one Party.

 

USE OF WHOLLY ASSIGNED CIRCUIT

 

12.6         A Party is allowed to use its WAC for the
provision of international telecommunications services with itself, its
Subsidiary, its Parent Company and/or the Subsidiary of the Party’s Parent
Company provided that the correspondent parties are also Carriers.

 

12.7         A Party is also allowed to use its WAC to
interconnect with other communication systems for the provision of
international telecommunications services terminating outside the APCN 2
landing Countries.  If such WAC is
originated from any APCN 2 landing Country, such Party must be a Carrier of
that Country.

 

12.8         A Party is also allowed to use its WAC for the
provision of international telecommunications services with its Affiliate
and/or the Affiliate of the Party’s Parent Company provided that this Affiliate
is a Carrier and a cash contribution is made by the Party to a special fund
dedicated solely to fund future upgrades to increase the Equipped
Capacity.  The amount of the
contribution is described in Annex 7.

 

PORTABILITY OF CAPACITY

 

12.9         A Party is allowed to de-assign its JAC and/or
WAC to its Allocated Capacity provided that bilateral agreement is given by the
concerned Camera and according to the guidelines to be developed by the
AR&RSC and the NA.

 

12.10       Re-assignment of Allocated Capacity which
resulted from the de-assignment of the JAC and/or WAC shall give priority to
the assignment of Allocated Capacity which has not 

 

25

 

been de-assigned before, in the event that
there is any conflicting requirement for use of capacity on the APCN 2.

 

12.11       Under no circumstances shall a Party’s JAC
and/or WAC be de-activated due to the assignment of other Parties’ Allocated
Capacity.

 

TRANSFER OF CAPACITY

 

12.12       For the purpose of this Agreement, Transfer of
capacity (hereinafter called “Transfer”) is the making available of all the
right of use of the capacity being made available that is accorded to a Party
by this Agreement to a third party without transferring the Party’s other
obligations and rights including the right of Transfer.

 

12.13       Transfer of a Party’s Allocated Capacity to its
Subsidiary or its Parent Company or the Subsidiary of the Party’s Parent
Company is allowed provided that the capacity transferred is in multiples of
the MIU and that the recipient of the transferred capacity is a Carrier.

 

12.14       Transfer of a Party’s Allocated Capacity to its
Affiliate and/or the Affiliate of the Party’s Parent Company is also allowed
provided that the capacity transferred is in multiples of the MIU and that the
recipient of the transferred capacity is a Carrier.  For the Transfer to an Affiliate, the transferring party shall
make a cash contribution to a special fund dedicated solely to fund future
upgrades to increase the Equipped Capacity. 
The amount of the contribution is described in Annex 7.

 

12.15       The conditions applicable to the use and
Transfer of capacity as specified in Annex 7 shall be relaxed after the
Equipped Capacity is expanded to four (4) times of Initial Equipped Capacity or
two (2) years after the RFS date whichever comes first unless an earlier date
is approved by the Management Committee. 
Any relaxations on these conditions shall be approved by a vote of the
members of the Management Committee representing at least seventy-five percent
(75%) of the total voting interests as specified in Schedule B.

 

12.16       The Unallocated Capacity in the APCN 2 shall be
owned by the Parties in common and undivided shares in accordance with the
percentages in Schedule C.

 

12.17       IRU Capacity will be sold at the MJU level.  Such IRU Capacity will be sold from the
Unallocated Capacity.  Proceeds from the
sale of such IRU Capacity shall be used to fund the Expansion of the APCN 2
Equipped Capacity.

 

12.18       A Party or IRU purchaser may use its MIU with
itself, another Party, or IRU purchaser to form matched circuits.

 

12.19       The distribution of capacity from the initial
Unallocated Capacity shall be made no later than three (3) years from the RFS
date on a pro rata basis, in MIUs, in accordance with the percentages in
Schedule C.  The exact time to implement
such distribution of capacity 

 

26

 

shall be
decided by a vote of members of the Management Committee representing at least
two-thirds (66.67%) of the total voting interests as specified in Schedule B.

 

12.20       Once the Equipped Capacity is expanded to six
(6) times of Initial Equipped Capacity or three (3) years after the RFS date
whichever comes first unless an earlier date is approved by the Management Committee,
any Party is entitled to sell IRU to other Carriers from its Allocated Capacity
on a private basis without any restrictions except that the IRU shall be for
the life of APCN 2.  The terms and
conditions including pricing of such private IRU sales are bilateral matters
between granting Party and purchaser.

 

12.21       When Unallocated Capacity is depleted, and
during the period until the availability of additional Unallocated Capacity, a
Party may be allowed to sell IRU to other Carriers from its Allocated Capacity
privately subject to the Management Committee’s approval on a case by case
basis.  The terms and conditions
including pricing of such private IRU sales are bilateral matters between
granting Party and purchaser.

 

12.22       Notwithstanding any other provisions in this
Paragraph 12, when the Equipped Capacity is expanded to six (6) times of
Initial Equipped Capacity or three (3) years after the RFS date whichever comes
first, any Party is entitled to make available any of its Allocated Capacity
for use by other Carriers on any commercial basis without any restrictions.

 

12.23       Guidelines for use of the IRU Capacity and Terms
and Conditions of the IRU agreement shall be developed by the I&ASC and
approved by a vote of members of the Management Committee representing at least
two-thirds (66.67%) of the total voting interests as specified in Schedule
B.  The NA shall be authorized to
execute IRU agreements for one or more whole MIUs with APCN 2 IRU Capacity
purchasers on behalf of the Parties to this Agreement.  No provisions of the IRU agreement shall
override the provisions of this Agreement.

 

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

 

12.25       The Management Committee may authorize use of
the Unallocated Capacity for restoration of telecommunications services and
other purposes.  The terms and
conditions of such use shall be determined by the Management Committee based,
in part, on terms to be agreed to by the relevant Terminal Parties of the APCN
2, in recognition of the technical and operational impact on the Terminal
Station operations.  Parties will
receive revenues in accordance with Schedule C.

 

12.26       The communications capability of any capacity
may be optimized by the Parties to whom such capacity is allocated by the use
of equipment which will more efficiently use such capacity provided that the
use of such equipment does not cause an interruption of, or interference, impairment,
or degradation to, the use of any other capacity in the APCN 2 or prevent the
use of similar equipment by other Parties. 
A Party to whom capacity is allocated shall permit the use of such
equipment by a Carrier to which such Party has 

 

27

 

made available
the use of any such capacity, provided that such Carrier agrees that its use of
the equipment will satisfy the conditions set forth in this Subparagraph 12.26.

 

12.27       A Party may sell capacity in fascicles smaller
than a STM-1 in the APCN 2 at any time on any basis other than by transfer of
ownership.  The APCN 2 shall not be
responsible for aggregating such capacity to the STM-1 level.

 

13.          EXPANSION OF EQUIPPED CAPACITY

 

13.1         Any upgrade of Equipped Capacity of APCN 2,
including any costs, financial adjustments and allocation of capacity
associated with such upgrade, shall be approved by vote of members of the
Management Committee representing at least two-thirds (66.67%) of the total
voting interests as specified in Schedule B.

 

13.2         All Parties shall have the might to a pro-rata
share of the upgrade capacity in accordance with Schedule C. However, no Party
shall be forced to participate in such an upgrade. Parties not

 

14.          INCREASE
OR DECREASE OF DESIGN CAPACITY

 

14.1         In the event that the Initial Parties consider
that it is beneficial to increase the Design Capacity of APCN 2, a Design
Capacity expansion, including any costs, financial adjustments and allocation
of capacity associated with such upgrade, shall be decided by the Management
Committee representing at least two-thirds (66.67%) of the total voting
interests as specified in Schedule B. 
However, no Party shall be forced to participate in such an upgrade, in
the event that incremental funding is required to execute such an upgrade.  Schedules B and C shall be appropriately
modified to reflect the revisions associated with such increase of Design
Capacity.

 

14.2         In the event that the capacity which APCN 2 or
any Segment thereof is capable of providing is reduced below the capacity
required to support the Allocated Capacity on its existing or planned routings
as a result of physical deterioration, or for other reasons beyond the control
of the Parties, the Management Committee shall initiate a review of the
capacity routings, in order to support the rerouting of such Allocated
Capacity.

 

14.3         In the event that the capacity which APCN 2 or
any Segment thereof is capable of providing is lower than the capacity needed
to support the routing of circuits assigned in APCN 2, the Allocated Capacity
of the Parties may be reduced or changed as necessary and agreed by the Parties
affected, and financial adjustments shall be made among the Parties, as
necessary, on the terms and conditions to be agreed by the Management
Committee.  The Schedules shall be
modified, as appropriate, to reflect the revised Allocated Capacity associated
with such decrease of the Design Capacity.

 

28

 

15.          OBLIGATION TO PROVIDE TRANSITING
FACILITIES TO EXTEND APCN2 CAPACITY TO EXTEND APCN 2 CAPACITY

 

15.1         The Terminal Parties shall use all reasonable
efforts to provide and maintain or cause to be provided and maintained in
working order for the duration of this Agreement, the necessary transit
facilities within their respective Countries as may be reasonably required for
extending capacity in the APCN 2 so as to provide connections to the other
international cables’ transmission facilities.

 

15.2         The facilities provided pursuant to Subparagraph
15.1 shall be suitable for extending capacity in the APCN 2 of all payload
types as defined in Subparagraph 15.3 and shall be furnished and maintained on
terms and conditions which shall be no less favorable than those granted to
another Carrier for transmission facilities of similar type and quantity
transiting the location involved.  Such
terms and conditions shall not be inconsistent with applicable governmental
regulations in the Countries in which the facilities are located.

 

15.3         As required the Terminal Parties shall support
payloads of STM-l, STM-4, STM-l6 and STM-64.

 

16.          OBLIGATION TO CONNECT THE APCN 2 WITH
INLAND SYSTEMS

 

16.1         The Parties shall, at their own expense, on or
before the RFS Date, do or cause to be done, all such acts and things as may be
necessary within its operating Country to provide and maintain throughout the
period of this Agreement suitable connection of capacity from APCN 2 with
appropriate inland communications facilities in its operating Country.

 

16.2         The Terminal Parties will provide connection
to APCN 2 to other Carriers within their Countries on terms and conditions
negotiated and agreed by the parties concerned.

 

17.          DIRECT ACCESS TO NETWORK INTERFACE
AND EQUAL ACCESS TO TERMINAL STATION

 

17.1         The Terminal Parties agree to confer the right
of Direct Access at the Network Interface to each Party and all other Carriers
that have received the Right of Use pursuant to Paragraph 12.  The connection to the Network Interface at specific
Terminal Stations shall be provided at a reasonable cost in accordance with the
physical, engineering and any locally applicable arrangements between the
Carriers accessing the Network Interface and the respective Terminal Parties at
the Terminal Station.

 

17.2         Upon request by the Parties or the other
Carriers, the Terminal Party shall enter into negotiation in good faith with
these parties to agree the above arrangements in a timely manner.  Any arrangements agreed upon shall be
reasonable and non-discriminatory.

 

29

 

17.3         The physical and engineering arrangements to
be negotiated shall include all reasonable arrangements such as mid-span
interconnection, equipment co-location (whether physical or virtual), or the
sharing of Direct Access facilities by one or more Carriers in accordance with
applicable commercial arrangements to be negotiated between the Terminal Party
and the Carriers concerned.

 

17.4         The Terminal Parties shall not and hereby
pledge not to impede or cause to impede any qualified Carriers in exercising
their right of Direct Access hereby conferred, including but not limited to the
negotiation between the non-Terminal Parties and Carriers for their own
facilities to access their Allocated Capacity including for purpose of providing
backhaul and transiting facilities.

 

18.          DURATION OF AGREEMENT AND
REALIZATION OF ASSETS

 

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

 

18.2         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 APCN 2 during its specified
useful life, this subject matter shall be referred to the Management Committee
for resolution in accordance with paragraph 3 but in this case a ninety percent
(90%) majority of the total voting interests as specified in Schedule B is
required.

 

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

 

18.4         If a Terminal Party terminates its
participation in this Agreement pursuant to Subparagraph 18.1 of this Agreement
after the Initial Period of twenty-five (25) years, the remaining Parties and
the said Terminal Party will negotiate a reasonable agreement in order to
ensure the continuous operation of the said Terminal Party’s Terminal Station
after the Initial Period.

 

18.5         Upon the effective date of termination of
participation of a Party, Schedules of this Agreement shall be appropriately
modified.  The remaining Parties to this
Agreement shall assume the obligations, capital, operation, and maintenance
interests of the Party terminating its participation in proportion to their
interests assigned immediately preceding such effective date of termination,
except for the continuing rights and obligations of the terminating Party as
specified in Subparagraph 18.7 of this Agreement.

 

30

 

No credit for capital costs will be made to a
Party that terminates its participation in accordance with Subparagraph 18.1.

 

18.6         Upon decommissioning of the APCN 2, the
Parties shall use all reasonable efforts to liquidate Segment S1, S2, S3, S4,
S5, S6, S7, and S8 of the APCN 2, within one (1) year, by sale or other
disposition between the Parties or any of them or by sale to other entities or
persons; but no sale or disposition shall be effected except by agreement
between or among the Parties to this Agreement at the time of decommissioning.  In the event agreement cannot be reached,
the decision will be carried on the basis of a simple majority vote of the
total voting interests as specified in Schedule B.  The net proceeds, or costs of decommissioning, removal, every
sale or other disposition shall be divided between or among the Parties to this
Agreement who have or were deemed to have interests in the subject thereof, in
the proportions in which such Parties, interests are specified in Schedule B
immediately preceding the time any Party terminates its participation in this
Agreement.  The Parties shall execute
such documents and take such action as may be necessary to effectuate any sale
or other disposition made pursuant to this Paragraph 18.

 

18.7         Unless the Management Committee shall
otherwise determine, a Party’s termination of its participation in this
Agreement or the termination of this Agreement, pursuant to Subparagraph 18.1,
shall not relieve that Party or the Parties hereto from any liabilities arising
from events occurring before a Party’s termination on account of claims made by
third parties in respect of such facilities or any part thereof and damages or
compensation payable on account of such claims, or obligations which may arise
in relation to the APCN 2 due to any law, order or regulation made by any
government or supranational legal authority pursuant to any international
convention, treaty or agreement.  Any
such liabilities or costs incurred or benefits accruing in satisfying such
obligations shall be divided among the Parties hereto in the proportions in
which such Parties, interests are specified in Schedule B immediately preceding
the time a Party terminates its participation in this Agreement or this
Agreement is terminated pursuant to Subparagraph 18.1, whichever occurs first.

 

19.          OBTAINING OF APPROVALS

 

19.1         The performance of this Agreement by the
Terminal 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 Terminal Parties and as may be
satisfactory to them, and the Terminal Parties shall use all reasonable efforts
to obtain and to have continued in effect such approvals, consents,
authorizations, licenses, and permits.

 

19.2         The Terminal Parties shall make all reasonable
efforts to handle matters relating to the obtaining and continuance of such
governmental approvals, consents, authorizations, licenses, and permits for the
Landing, construction and operation of APCN 2 in their respective Countries.

 

31

 

19.3         In the event that any Terminal Party fails, or
is likely to fail, to obtain such approvals, consents, authorizations, licenses
or permits, that Terminal Party shall give immediate notice to the Management
Committee for it to take appropriate action pursuant to this Agreement.

 

20.          PRIVILEGES FOR DOCUMENTS OR
COMMUNICATIONS

 

In the event that the Management Committee decides to go to arbitration
in accordance with Paragraph 27, each Party specifically reserves, and is
granted by each of the other Parties, in any action, arbitration or other
proceeding between or among the Parties or any of them in a country other than
that Party’s own country, the right of privileges, in accordance with the laws
of the country in which the arbitration or litigation takes place with respect
to any documents or communications which are material and pertinent to the
subject matter of the action, arbitration or proceeding in which privilege could
be claimed or asserted by that Party in accordance with those laws.

 

21.          RELATIONSHIP OF PARTIES

 

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

 

21.2         Each Patty agrees to indemnify each of the
other Parties in respect of all costs, expenses, damages and demands, arising
out of or in connection with any claim against, or liability of, the latter as
an owner of APCN 2 where such claim is made by, or the liability is to, any
third party not being a Party hereto and arises out of or in connection with
APCN 2 provided that no indemnifying Party shall be obligated to contribute
more than its share of liability as per Schedule B.  Subject to there being no conflict of interest, each Party so
indemnifying shall have the right, at its sole cost and expense, to observe but
not directly participate in any discussions, meetings or conferences held prior
to or during any settlement or legal proceedings resulting from any such claim
or liability.

 

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

 

(i)            any delay in the provision of the APCN 2;

(ii)           any damage to, breakdown in or failure of
the APCN 2; and

(iii)          any interruption of service,

 

32

 

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

 

22.          ASSIGNMENT OF RIGHTS AND OBLIGATIONS

 

22.1         Except as otherwise provided in Paragraph 12
and Subparagraphs 22.2, 22.3, 22.4 and 22.5, during the term of this Agreement,
no Party may assign, sell, transfer or dispose of the whole or any parts of its
rights or obligations under this Agreement

 

22.2         A Party may at any time, with the prior
written consent of the Management Committee, assign, sell or transfer the whole
of its rights and obligations under this Agreement.  The Management Committee must not unreasonably withhold or delay
its approval.

 

22.3         A Party may at any time assign, sell or
transfer the whole of’ its rights and obligations under this Agreement to:

 

(a)           a
successor of that Party;

(b)           a
Parent Company of that Party;

(e)           a
Subsidiary or Affiliate of that Party; and

(d)           another
Subsidiary or Affiliate of that Party’s Parent Company.

 

22.4         A Party (hereafter “Assignor”) may assign,
sell or transfer a portion of its rights under this Agreement to a Parent
Company, its Subsidiary, and/or the Subsidiary of the Party’s Parent Company
(hereafter “Assignee”).  Such partial
assignment shall be allowed only once to any such Assignee, and shall not
negate any of the obligations of the Assignor. 
If the Assignor is an Initial Party, then the Initial Party status of
the Assignor shall be maintained and the Assignor’s voting rights shall be
shared with such Assignee.  The relevant
Schedules to this Agreement shall be revised to reflect each such partial
assignment permitted hereunder, showing the Assignee as a Party.  No subsequent assignment shall be effected
by the Assignee except as provided in Subparagraph 22.3(a).

 

22.5         Without limiting the applicability of
Subparagraph 22.4, a Party may assign its rights, title and interests in any
portion of APCN 2 within the territorial limits of any Country (both under the
current and any future configuration) to a Subsidiary, Parent Company or a
Subsidiary of a Parent Company of that Party only if:

 

a)             the Assignee shall own and be responsible
for the capital, operations and maintenance costs listed against the Party for
that portion of APCN 2 within the territorial limits of any Country (both under
the current and future configuration); the Party shall own and be responsible
for the capital, operating and maintenance costs listed against the Party for
the remainder of APCN 2; and

 

b)            the Assignee will have no tights and
obligations independent from the rights and obligations of the Party in respect
of the assigned portion of the APCN 2

 

33

 

The aforementioned provision shall not be used to circumvent the
provisions under Paragraph 12.

 

22.6         A Party exercising its rights under
Subparagraphs 22.2, 22.3, 22.4 or 22.5 must give notice in writing to all other
Parties in a timely manner.

 

23.          DEFAULT

 

23.1         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 one (1) month after the payment due date,
the CBP shall notify the billed Party and also the Management Committee in
writing of the status of the matter and will request the reclamation of
capacity, as provided for in this Paragraph 23, if full payment is not received
within two (2) months of such notification. 
If full payment is not received within such specified period, the
Management Committee may reclaim the Capacity in the APCN 2 allocated to the
billed Party.

 

23.2         The Management Committee shall consider any
extenuating circumstances not within the specific control of the billed Party
in determining whether or not to reclaim the capacity assigned to such billed
Party.  If the Management Committee
nevertheless reclaims any capacity in the APCN 2 assigned to such defaulting
Party, the defaulting Party shall not be entitled to any payment or credit for
the reclaimed capacity.  The Management
Committee shall determine arrangements for disposition of any reclaimed
capacity.  All rights of a defaulting
Party under this Agreement shall terminate as of the time all its capacity in
the APCN 2 is reclaimed by the Management Committee; and concurrent with such
reclamation of capacity, the defaulting Party will no longer be deemed to be a
Party to this Agreement.  Such
reclamation shall not relieve the defaulting Party from its obligations under
this Agreement, including but not limited to the payment of its unpaid
accounts, which have been incurred prior to the actual reclamation.  The defaulting Party is not entitled to any
reimbursement of any amounts it had paid under this Agreement.  In such circumstances, the Schedules shall
be revised to reflect the default of a Party and the reallocation of interests
pursuant to the arrangements determined by the Management Committee.

 

23.3         Notwithstanding Subparagraph 23.2, reclamation
of a Terminal Party’s capacity will not release the Terminal Party from providing,
operating and maintaining its respective Terminal Station until a reasonable
agreement is negotiated in order to ensure the continuous operation of the said
Terminal Party’s Terminal Station after reclamation of its capacity.

 

24.          WAIVER

 

The failure of any Party, on one or more occasions, to enforce any of
the provisions of this Agreement or to exercise any right or privilege
hereunder shall not thereafter be 

 

34

 

construed as a
waiver of any breach or default, or as a waiver of any such provision, right,
or privilege hereunder.

 

25.          COMPLIANCE WITH LAW

 

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

 

26.           RATIFICATION
OF DECISIONS AND ACTIONS

 

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

 

27.           RESOLUTION OF
DISPUTES

 

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

 

27.2         If any difference shall arise between or among
the Parties or any of them in respect of the interpretation or effect of this
Agreement or any part or provision thereof or their rights and obligations
thereunder, and by reasons thereof there shall arise the need to decide the
question by what municipal or national law this Agreement or any 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.

 

28.           SUPPLEMENTS
AND AMENDMENTS TO THIS AGREEMENT

 

28.1         This Agreement shall not be amended,
supplemented, or modified unless the Parties representing at least ninety
percent (90%) of the voting interests specified in Schedule B 

 

35

 

have indicated
their approval in writing.  The Chairman
of the Management Committee must provide advance written notice, of at least
thirty (30) days, to all Parties of the proposed amendment, supplement or
modification and shall notify all Parties in writing once the required level of
approval has been obtained and at least ten (10) days prior to execution of the
amendatory or supplementary agreement

 

28.2         Each Party except SingTel and PLDT authorizes
the Chairman of the Management Committee to execute on its behalf any
amendatory or supplementary agreement implementing an amendment, supplement or
modification approved under Subparagraph 28.1. 
SingTel and PLDT shall provide the Power of Attorney to the Chairman of
the Management Committee to execute on its behalf any amendatory or supplementary
agreement implementing an amendment, supplement or modification approved under
Subparagraph 28.1 in a timely manner.

 

28.3         Subparagraphs 28.1 and 28.2 shall not apply to
any Schedule or Annex modified in accordance with other provisions of this
Agreement, and any Schedule or Annex so modified shall be deemed to be part of
this Agreement in substitution for the immediately preceding version of that
Schedule or Annex.

 

29.           EXECUTION OF
AGREEMENT

 

29.1         This Agreement and any Supplements and
Amendments hereto shall be executed in one (1) original in the English
language.  Identical counterparts may be
executed and when so executed shall be considered as an original.  Such counterparts shall together, as well as
separately constitute one and the same instrument.

 

29.2         The NA shall be the custodian of the original
and will provide certified copies to Parties to this Agreement.

 

30.           SUCCESSORS BOUND

 

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

 

31.           CONFIDENTIALITY

 

31.1         All data and information that is acquired or
received by any Party in connection with the APCN 2 in anticipation of or under
this Agreement shall be held confidential and shall not be divulged in any way
to any third party, without the prior approval of the Management Committee.

 

31.2         Notwithstanding Subparagraph 31.1, any Party
may, without such approval, disclose such data and information to:

 

36

 

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

 

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

 

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

 

31.3         Any Party may disclose such data and
information to such persons as may be necessary in connection with the conduct
of the operations of the APCN 2 upon obtaining a similar undertaking of
confidentiality from such persons to whom such information may be disclosed.

 

31.4         Each Party shall remain bound by the
provisions of this Paragraph 31 during the period of this Agreement and for the
period of five (5) years following termination of this Agreement.

 

32.           SETTLEMENT
OF CLAIMS BY PARTIES

 

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

 

32.2         If any claim is brought against a Party in
connection with the APCN 2, the Party shall, as a condition of reimbursement
under Subparagraph 32.1, give written notice thereof to the Management
Committee as soon as practicable and shall not admit liability nor settle,
adjust or compromise the claim without the approval of the Management
Committee.

 

32.3         Before any Party brings a claim against any
third party in respect of loss or damage to any part of the APCN 2, it shall
first consult with the Management Committee and shall not settle, adjust, or
compromise such a claim without the approval of the Management Committee.

 

32.4         Notwithstanding Subparagraphs 32.2 and 32.3,
if the Management Committee issues any directions to a Party relating to the
conduct of any such claim, then that Party must comply with those directions.

 

32.5         Costs, expenses, damages, or compensation
payable to the Parties on account of claims made against third parties shall be
shared by the Parties in the proportions as set out in Schedule B.

 

37

 

32.6         Upon termination of this Agreement pursuant to
Paragraph l8, the Parties shall not be relieved from any liabilities, costs,
damages or obligations which may arise in connection with claims made by third
parties with respect to the APCN 2, or any part thereof, or which may arise in
relation to the APCN 2 due to any law, order or regulation made by any
government or international convention, treaty or agreement.  Any such liabilities, costs, damages or
obligations shall be divided among the Parties in the proportions as set out in
Schedule B.

 

33.          FORCE
MAJEURE

 

If any Party cannot fulfill its obligations in this Agreement due to an
event beyond its reasonable control, including, but not limited to lighting,
flood, exceptionally severe weather, fire or explosion, civil disorder, war or
military operations, national or local emergency,

 

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

 

38

 

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

  Advantage Telecommunications Ltd.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Cable & Wireless Global Network Limited

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Cable & Wireless HKT international Limited

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  China Telecom

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  

 

39

 

	
  For and on behalf of

  China United Telecommunications Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Chunghwa Telecom Co., Ltd.,

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Concert Global Network Services, Ltd.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Global One Communications Network, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Japan Telecom Co., Ltd.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  

 

40

 

	
  For and on behalf of

  KDD Corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Korea Telecom

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  KPN Telecom B.V.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Layer 2 Communications Group Ltd.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  MCI International Telecommunications. 
  Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  

 

41

 

	
  For and on behalf of

  Metromedia Fiber Network Services, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  New Century InfoComm Ltd., Preparatory Office

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  NTT Communications Corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Onelink Cable Network Limited

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and .on behalf of

  Philippine Long Distance Telephone Company

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  

 

42

 

	
  For and on behalf of

  Singapore Telecommunications Limited

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  StarHub Pte Ltd

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Taiwan Fixed Network Co., Ltd. 
  Preparatory Office

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Teleglobe USA Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Telekom Malaysia Berhad (128740-P)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  

 

43

 

	
  For and on behalf of

  Telstra Global Networks Limited

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Williams Communications, Inc.,

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  APT Satellite Telecommunications Limited

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Bayan Telecommunications, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  

 

44

 

	
  For and on behalf of

  China Netcom Corporation Ltd.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  The Communications Authority of Thailand

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  CTI International Limited

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Dacom Corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  edge2net Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  

 

45

 

	
  For and on behalf of

  Eastern Telecommunications Philippines, Incorporated

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Global Access Ltd.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Globe Telecom, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  GNG Networks. Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  GTE Intelligent Network Service Incorporated

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  

 

46

 

	
  For and on behalf of

  PT Indosat (Persero) Tbk

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Maxis International Sdn.  Bhd

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  New World Telephone Limited

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  NTT Com Asia Ltd.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  Onse Telecom Corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  

 

47

 

	
  For and on behalf of

  Telia AB (publ)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  TT dotCom Sdn Bhd

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  

 

48Exhibit 10.11

 

NOVATION AGREEMENT

 

THIS
NOVATION AGREEMENT (this “Agreement”) is entered into
as of July 18, 2001,

 

BY
AND AMONG:

 

The
International Telecommunications Satellite Organization (“INTELSAT”),
an international organization established by the Agreement Relating to the
International Telecommunication Satellite Organization (the “INTELSAT
Agreement”) and the Operating Agreement relating thereto, done at Washington,
D.C., on 20 August 1971, with offices located in Washington, D.C., U.S.A.,

 

and

 

Intelsat
U.K., Ltd., a company incorporated under the laws of
England and Wales (the “Company”),

 

and

 

Teleglobe
Inc. (the “Customer”), incorporated in Montréal, and
having an office and place of business at

 

1000 rue de La
Gauchetière ouest, Montréal, Québec, Canada

 

(collectively,
sometimes hereinafter referred to as the “Contracting Parties”).

 

WHEREAS:

 

1.                                       The INTELSAT
Assembly of Parties under the INTELSAT Agreement, Meeting of Signatories and
Board of Governors have taken certain decisions in order to provide for the
restructuring of INTELSAT by means of the transfer of substantially all of the
assets and liabilities of INTELSAT to Intelsat, Ltd. or its subsidiaries (the
“Privatization”) upon satisfaction of certain conditions precedent which are
set forth in the Restructuring Agreement (as defined herein).

 

2.                                       In accordance
with the Restructuring Agreement, the Contracting Parties desire to release and
discharge INTELSAT from its contractual obligations to the Customer and novate
such obligations from INTELSAT to the Company.

 

3.                                       The Company and
INTELSAT desire that the Customer continue its current service commitments made
to INTELSAT, and to transfer such commitments to the Company as part of the
Privatization, without renegotiating the terms and conditions of such
commitments individually prior to the Closing Date.

 

 

4.                                       In order to
facilitate the timely closing of the Privatization, the Customer is willing to
continue such commitments and to transfer them to the Company without
renegotiation of each individual commitment subject to the terms and conditions
of this Agreement.

 

NOW,
THEREFORE, in consideration of the mutual covenants
and undertakings contained herein, and subject to and on the terms and
conditions herein set forth, the Contracting Parties hereto enter into the
following AGREEMENT:

 

1.                                      Definitions

 

1.1.                              In
this Agreement, unless the context otherwise requires:

 

Closing
shall have the meaning ascribed to it in the Restructuring Agreement and shall
refer to the date of Privatization of INTELSAT.

 

Closing Date shall
have the meaning ascribed to it in the Restructuring Agreement.

 

Contract
shall mean each service agreement or arrangement described in Attachment 1
hereto, as supplemented pursuant to the provisions of Section 3 hereof.

 

LCO Service Contract
shall have the meaning ascribed to it in
Attachment 3 hereto.

 

Lifeline
Connectivity Obligation (LCO) shall have the
meaning ascribed to it in Attachment 3 hereto.

 

Effective Date shall
have the meaning ascribed to it in the Restructuring Agreement.

 

Novated Contract shall
mean a Contract which has been novated pursuant to the terms of this Agreement.

 

Restructuring
Agreement shall mean the agreement among, inter
alia, INTELSAT, its Signatories and Investing Entities which are a party
thereto defining the conditions precedent to and transactions necessary for the
restructuring of INTELSAT and which will be effective as of the “Effective
Date” which is described therein.

 

Satellite
shall mean an object located or intended to be located beyond the earth’s
atmosphere that is used for radio communications.

 

Satellite Capacity shall
mean capacity provided by the Company on any Satellite in connection with the
provision of services.

 

2

 

Space Segment shall
mean the Satellites in orbit, and all other related infrastructure owned,
leased or operated by or on behalf of the Company to support the operation of
the Satellites.

 

Terms and Conditions
shall mean the terms and conditions for all
Novated Contracts as set forth in Attachment 2 hereto.

 

1.2.                              All
other defined words and terms shall have the same meanings as those ascribed to
them in the Restructuring Agreement.

 

2.                                      Novation

 

2.1.                              The
effective date of this Agreement will be the Effective Date.

 

2.2.                              For
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Contracting Parties hereby agree that with automatic
effect from Closing in respect of each Contract, without any further action by
or consent of any Contracting Party hereto:

 

(a)                                  INTELSAT
shall cease to be a party to each Contract and the Company shall become a party
to each such Contract in place of INTELSAT;

 

(b)                                 the
Company undertakes to the Customer to accept, observe, perform and discharge
all liabilities and obligations of INTELSAT, howsoever arising under each
Contract, in substitution for and to the same extent as INTELSAT, whether
arising on, before or after the date of this Agreement as if the Company had at
all times been a party to each Contract;

 

(c)                                  the
Customer accepts the substitution of the Company in place of INTELSAT and
agrees that the Company may exercise and enjoy all of the rights of INTELSAT
arising under each Contract, in substitution for and to the same extent as
INTELSAT, whether arising on, before or after the date of this Agreement as if
the Company had at all times been a party to each Contract;

 

(d)                                 the
Customer absolutely and irrevocably hereby releases and discharges INTELSAT
from all claims and demands, and from each of its liabilities and obligations,
howsoever arising under each Contract;

 

(e)                                  the
Customer and the Company each represents and warrants to the other, as of the
Closing Date that: (1) the execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action on its
part; (2) this Agreement constitutes its legal, valid and binding obligations;
(3) it has obtained all applicable clearances, licenses, consents and approvals
required to be obtained by it that are necessary to perform its obligations
under this Agreement; (4) to its knowledge, it is in compliance with, and the
performance of its obligations hereunder will not 

 

3

 

violate or
conflict with, any applicable law or regulation of any jurisdiction to which it
is subject; and

 

(f)                                    the
Customer recognizes that any equipment or other property currently provided to
the Customer by INTELSAT shall become the property of Intelsat, Ltd. or it
subsidiaries upon Closing and the Customer’s rights in respect of such property
shall be the same as prior to Closing.

 

3.                                      Amendment
of Service Agreements

 

The
Contracting Parties hereby acknowledge and agree that the services provided by
INTELSAT, and to be provided by the Company from and after the Closing, to the
Customer are the Contracts set forth in Attachment 1 hereto.

 

Attachment 1
may be supplemented by electronic or other means of delivery (i.e., via e-mail,
fax, etc.) by the Company, within 30 days after the Closing, of a supplement to
Attachment 1 to Customer to list any amendments, additions or deletions to the
Contracts set forth in such Attachment agreed to between the date of execution
of this Agreement and the Closing Date. Such supplement to Attachment 1 shall
be deemed to be attached hereto and shall supplement Attachment 1 as of the
Closing Date. If the Customer does not believe that such supplement is
accurate, it shall notify the Company within 30 days of the Customer’s receipt
of such supplement and such supplement shall be modified as agreed between the
Company and the Customer, effective as of the Closing Date.

 

The Customer
hereby appoints the Company as its agent solely for the purpose of so
supplementing such Attachment in accordance with the preceding paragraph.

 

The
Contracting Parties hereby acknowledge and agree that from and after the
Closing, without any further action by or consent of any of the Contracting
Parties hereto, such Novated Contracts will be provided according to the Terms
and Conditions. As of the Closing, this Agreement, including the Terms and
Conditions, shall amend and supercede in their entirety all other previous
agreements, arrangements and understandings between the Contracting Parties,
whether written or oral, relating to the provision of such services to the
Customer.

 

4.                                      Migration
to New Service Orders

 

4.1.                              A
Customer shall have the right to request the Company to renegotiate in order to
amend, modify or supplement any of the Terms and Conditions applicable to some
or all of its Novated Contracts. Any such amendment, modification or supplement
(other than an amendment or modification which, pursuant to Part I —
Section 9.2 of the Terms and Conditions, will not result in the loss of the
protection provided to the Customer (the “MFC Protection”) pursuant to Part I —
Section 9 “Most Favored Customer (MFC)” of the Terms and Conditions) shall be
referred to herein as “migrating” such Novated Contracts.

 

4.2.                              If
a Customer notifies the Company that it wishes to migrate some or all of its
Novated Contracts, then the Company and the Customer agree to engage in good 

 

4

 

faith
negotiations regarding such new terms and conditions to apply to such Novated
Contracts.

 

4.3.                              All
terms and conditions for such Novated Contracts that are migrated to new terms
and conditions require the mutual written agreement of the Company and the
Customer (and any other applicable customer participating in such Novated
Contracts) before the new terms and conditions can be effective.

 

5.                                      Further
Assurance

 

Each of the
Contracting Parties agrees to cooperate at all times from and after the date
hereof and to perform (or procure the performance of) all further acts and
things, and execute and deliver (or procure the execution and delivery of) such
further agreements, releases, notifications and other documents, as may be
required by law or as may be necessary or reasonably desirable to implement
and/or give effect to the transactions contemplated by this Agreement.

 

6.                                      Counterparts

 

This Agreement
may be executed in any number of counterparts and by the Contracting Parties to
it on separate counterparts, each of which is an original but all of which
together constitute one and the same instrument.

 

7.                                      Binding
Effect; Assigns

 

This Agreement
shall be binding upon, and shall inure to the benefit of, the Contracting
Parties hereto and their respective successors and permitted assigns. Any
breach of any of the Terms and Conditions with respect to any Novated Contract
will not invalidate or otherwise affect the novation of the Contracts pursuant
to this Agreement.

 

8.                                      Entire
Agreement

 

This Agreement
constitutes the entire agreement and understanding of the Contracting Parties
hereto with respect to the subject matter hereof and supersedes all other
agreements and understandings of the Contracting Parties hereto or thereto,
whether written or oral.

 

9.                                      Governing
Law

 

This Agreement
and the relationship between the Contracting Parties shall be governed by and
construed in accordance with the laws of the District of Columbia, U.S.A. and
the Contracting Parties hereby submit to the exclusive jurisdiction of the
District of Columbia courts or any United States Federal Court sitting in the
District of Columbia.

 

10.                               Service
of Process

 

INTELSAT and
the Company each hereby appoints CT Corporation, 1025 Vermont Avenue, N.W.,
Washington, D.C. 20005, and the Customer agrees to appoint an agent for service
of process within 30 days of execution of this Agreement and shall notify
INTELSAT and the Company promptly of the name and address of such agent, in
each case as its authorized agent 

 

5

 

upon which
process may be served in any action arising out of or relating to this
Agreement which may be instituted in any District of Columbia court by
INTELSAT, the Company or the Customer, as applicable.

 

11.                               Waiver

 

Each of
INTELSAT, the Company and the Customer hereby agrees that it shall not,
directly or indirectly, in any way challenge or question the validity or
enforceability of this Agreement or any of the transactions contemplated
hereby, including without limitation asserting any claim whatsoever that this
Agreement or any provision hereof or transactions contemplated hereby conflicts
with or constitutes a breach of the INTELSAT Agreement or the Operating
Agreement or any claim questioning or challenging rapid implementation or
provisional application of any amendment to the INTELSAT Agreement or the
Operating Agreement.

 

12.                               Miscellaneous

 

12.1.                        Amendment:  Except as provided in Section 3, with
respect to Attachment 1, this Agreement may only be amended (a) to correct any
errors or inconsistencies herein, (b) to incorporate any amendments which are
also made to each other novation agreement relating to services provided by
INTELSAT that are effective as of the Closing Date, (c) to migrate services, as
contemplated by Section 4 hereof, or (d) to make any modification to the Terms
and Conditions which, pursuant to Part I — Section 9.2 of the Terms and Conditions,
will not result in the loss of the MFC Protection, and in each case only if
such amendment is in writing and signed by the Contracting Parties hereto;
provided that an amendment to the Terms and Conditions will not require the
consent of INTELSAT.

 

12.2.                        Notices:  Any notice served under this Agreement shall
be in writing and shall be given by any two (2) of the following methods: hand,
fax, international courier (such as TNT, DHL or Federal Express) or certified
or registered mail to the fax number or address specified in Schedule 1 hereto
for each Contracting Party, or such other address or fax number as may be
notified by any Contracting Party in writing to the other Contracting Parties.
A notice will be deemed to have been received on the calendar day following the
transmission of the notice by fax, the day that it is delivered to the
applicable address by hand or international courier or fifteen (15) calendar
days after it has been dispatched by certified or registered mail.

 

6

 

IN
WITNESS WHEREOF, the Contracting Parties hereto have
executed or caused to be executed this Agreement as of the date first written
above.

 

	
  THE INTERNATIONAL TELECOMMUNICATIONS

  SATELLITE ORGANIZATION (“INTELSAT”)

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
  Printed Name:

  	
   Conny L. Kullman

  	
   

  
	
   

  	
   Director General and CEO

  	
   

  
	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  INTELSAT U.K., LTD.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
  Printed Name:

  	
  Andrew Stimson

  	
   

  
	
   

  	
  Director, Global Sales M

  	
   

  
	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
   

  
	
  TELEGLOBE INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
  Printed Name:

  	
  Michael T. Boychuk

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Executive Vice President, Finance &

  	
   

  
	
   

  	
  Chief Financial Officer

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
  Printed Name:

  	
  Michael Lalande

  	
   

  
	
   

  
	
  Title:

  	
  Assistant Corporate Secretary

  	
   

  
									

 

7

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