EXH 10.80
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PTAT-1 SUBMARINE SYSTEM
INDEFEASIBLE RIGHT OF USE
AGREEMENT
BETWEEN
PRIVATE TRANSATLANTIC
TELECOMMUNICATIONS SYSTEM, INC.
AND
INTERNATIONAL TELECOMMUNICATIONS
CORPORATION
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FIRST AMENDMENT TO
PTAT-1 SUBMARINE SYSTEM
INDEFEASIBLE RIGHT OF USE AGREEMENT
THIS AMENDMENT, dated as of the 12th day of May, 1994, is made by and between
PRIVATE TRANSATLANTIC TELECOMMUNICATIONS SYSTEM INC., a corporation
incorporated in the state of Delaware and having its principal office at ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇. (hereinafter referred to as
"PSI"), and INTERNATIONAL TELECOMMUNICATIONS CORPORATION, a corporation
incorporated in Delaware and having its principal office at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as "Purchaser").
WITNESSETH:
WHEREAS, the parties have entered into a PTAT-1 Submarine System
Indefeasible Right of Use Agreement dated May 12, 1994 (the "Agreement")
pursuant to which PSI granted to Purchaser, on an IRU basis, an interest in
certain capacity in the PTAT-1 Submarine System;
WHEREAS, PSI is jointly responsible with Cable and Wireless Network
Services Limited ("CWNS") for the maintenance of Segment E of the PTAT-1
Submarine System and CWNS and PSI together with the other parties to the CMA
have agreed that the PTAT-1 Submarine System shall be maintained under the
Atlantic Cable Maintenance and Repair Agreement ("ACMA") as amended from time to
time and under associated agreements;
WHEREAS, the parties hereto desire to modify the arrangements for sharing
PTAT-1 Submarine System operations, maintenance and repair costs in order to be
consistent with standard ACMA cost sharing arrangements;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, the parties hereto hereby agree as follows:
1. The purchase price for the IRUs referred to in Section 5(a)(i) of the
Agreement shall be payable in quarterly installments as shown in Schedule 1
hereto, for a total payment, including interest, equal to US$669,144. An
initial payment of US$55,762 shall be due and payable within thirty (30)
days of the Effective Date; thereafter quarterly installment payments in
the amounts shown on Schedule 1 shall be due and payable within thirty (30)
days following the date of Sprint's invoice for each installment.
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2. Exhibits B. C, D and E of the Agreement are hereby deleted in their
entirety, and Exhibit B is replaced with the revised Exhibit B as set forth
in Annex 1 hereto, which is hereby incorporated herein.
3. Section 5(a) of the Agreement is hereby amended by deleting clauses (ii),
(iii), (iv) and (v) thereof and replacing them with the following:
"(ii) Purchaser's pro rata share of the annual recurring costs of
operating and maintaining the PTAT-1 Submarine System, pursuant to the
provisions of Exhibit B which is attached hereto and incorporated
herein, payable by Purchaser in quarterly installments of the
estimated annual cost for each Budget Year as defined in Exhibit B,
which shall be due on the last day of the first month of each
quarterly period during each Budget Year, subject to reconciliation
following the end of each Budget Year to reGect the actual operating
and maintenance costs incurred by PSI during such Budget Year; and
(iii) Purchaser's pro rata share of the costs for repair replacements
and additions to the PTAT-1 Submarine System, as determined pursuant
to Exhibit B hereto, which shall be billed to and payable by Purchaser
as soon as practicable after such costs have been incurred or charged
to the account of PSI;
provided, however, Purchaser shall have the right at its own
reasonable expense to request that PSI's auditors issue their own
determination as to the accuracy of any of the foregoing charges
specified in clause (ii) or (iii) above, provided to Purchaser by
PSI."
4. As of May 12, 1994, (i) each reference in the Agreement to "this
Agreement", "hereunder", "hereof", "herein", or words of like import shall
mean and be a reference to the Agreement as amended hereby, and (ii) each
term used as a defined term herein shall have the meaning assigned to that
term in the Agreement as amended hereby.
5. Except as specifically amended or varied in the preceding paragraphs
hereof, the Agreement shall remain in full force and effect and is hereby
ratified and confirmed.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment
Agreement to be executed and delivered on its behalf by its duly authorized
representative as of the date first above written.
INTERNATIONAL PRIVATE TRANSATLANTIC
TELECOMMUNICATIONS TELECOMMUNICATIONS SYSTEM,
CORPORATION INC.
/s/ ▇.▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Signature Signature
▇. ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Printed Name Printed Name
President Deputy General Manager
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Title Title
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ANNEX 1
REVISED EXHIBIT B
to the PTAT-1 Submarine System
Indefeasible Right of Use Agreement
1. Description of Repair and Maintenance
PSI and CWNS have entered into arrangements for the PTAT-1 Submarine Cable to
receive, commencing April 1, 1994, repair and maintenance services under the
Atlantic Cable Maintenance and Repair Agreement dated April 1, 1989, or as
amended from time to time ("ACMA"). PSI and CWNS will act as the Maintenance
Authorities for the PTAT-1 Submarine Cable. In connection with ACMA, PSI and
CWNS have entered into a number of associated agreements to provide necessary
related services. These agreements include, but are not limited to: SCARAB,
Bermuda Depot, UK Depot, Universal Jointing, Protective Grounding Units,
Technical and Managerial Support.
PSI and CWNS will each bear 50 percent of all repair and maintenance costs
incurred for the PTAT-1 Submarine Cable. PSI will then charge the Purchaser for
its appropriate share of these costs are detailed below.
With regard to ACMA, maintenance responsibilities have been divided between PSI
and CWNS, with PSI responsible for ACMA Western Zone, with the exception of the
Bermuda Spur while CWNS is responsible for ACMA Eastern Zone and the Bermuda
Spur.
With regard to this Agreement, repair and maintenance costs are divided into two
distinct categories: Operations and Maintenance Costs; and Repair, Replacement
and Addition Costs. These two categories of costs are defined below.
While all reasonably foreseeable repair and maintenance requirements for the
PTAT-1 Submarine Cable will be provided under ACMA, circumstances may arise from
time to time requiring the use of additional or different equipment, facilities,
or services in connection with repair or maintenance operations, and in such
circumstances, PSI and CWNS will endeavor to arrange provision of additional
equipment, facilities, or services as they deem necessary to carry out such
particular repair or maintenance operation. Additional costs related to the
provision of such equipment, facilities or services shall be included as PSI's
Repair, Replacement, and Addition Costs.
For the duration of this Agreement, additional equipment and facilities (in
terms of cable ships, depots, and other equipment and facilities) may be added
at any time only if necessary to maintain compliance with regulatory
requirements or to fulfill the obligations of PSI and CWNS to provide efficient
and cost-effective repair and maintenance of the PTAT-1 Cable. In addition, PSI
and CWNS reserve the right to enter into other maintenance and repair
arrangements for the PTAT-1 Submarine System in addition to or
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in lieu of the ACMA arrangements described above. Capital and other charges
related to the provision of such additional equipment and facilities or the
procurement of other maintenance and repair services shall be included as PSI's
Repair, Replacement, and Addition Costs.
2. Definition of Operation and Maintenance Costs
For purpose hereof, "Operations and Maintenance Costs" ("O&M") shall mean with
respect to the PTAT-1 Submarine System, the costs reasonably incurred in
operating and maintaining the facilities involoved, including but not limited
to:
a) Standby and operating charges in respect to cable ships under ACMA (or
otherwise) with regard to the PTAT-1 Submarine Cable;
b) Storage charges of plant and equipment in respect to the PTAT-1 Submarine
System;
c) Standby charges in respect to submersible devices deemed necessary to be
available for the retrieval or burial of the PTAT-1 Submarine Cable;
d) Recurring labor, facilities and equipment cost related to the operation and
maintenance of Subsegment A1;
e) All other costs incurred by PSI from any operation or maintenance providers
for or in respect of the operation and maintenance of PTAT-1 Submarine
System;
f) PTAT-1 System technical advisors' charges for continuing technical support;
g) Costs incurred by PSI as a result of foreign currency fluctuation affecting
payments made by PSI of any invoices rendered to PSI in any currency other
than US dollars in respect of the operation and maintenance of the PTAT-1
Submarine System;
h) Costs and expenses reasonably incurred on account of claims made by or
against third parties in the operation and maintenance of the PTAT-1
Submarine System and damages or compensation payable by PSI on account of
such claims;
i) All governmental, regulatory and statutory charges, customs duties,
royalties and taxes (other than taxes imposed on net income of PSI)
incurred by PSI in the operation and maintenance of the PTAT-1 Submarine
System;
j) Administration and accounting charges of procuring, recording, collecting
and allocating the operation and maintenance costs and repair, replacement
and addition costs of PTAT-1 Submarine System.
3. Definition of Repair, Replacement and Addition Costs
For purpose hereof, "Repair, Replacement and Addition Costs" shall mean, with
respect to the PTAT-1 Submarine System, any additional costs incurred outside
the recurring O&M charges stated above, in connection with the PTAT-1 Submarine
System, including but not limited to:
a) The mobilization/demobilization of the necessary equipment, facilities and
services to effect a repair, replacement or addition;
b) The daily operating charges of the necessary equipment, facilities and
services required for the repair, replacement or addition;
c) The costs of any additional equipment, facilities and services necessary to
effect a repair, replacement or addition;
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d) The costs of any consumable items used to effect the repair, replacement or
addition;
e) The costs of replacing spares used to effect the repair, replacement or
addition;
f) Cable relocation costs;
g) Any other costs associated with modifications or enhancements to the PTAT-1
Submarine System that are deemed necessary to ensure maintaining the
required level of system performance.
4. Recurring O&M Costs for the PTAT-1 Submarine System
Prior to the beginning of each Budget Year, PSI will prepare a budget of the
recurring O&M costs for the PTAT-1 Submarine System which PSI expects to incur
during the Budget Year. For purposes hereof, a "Budget Year" shall mean the
annual period commencing on January 1st of each year, except that the Budget
Year occuring in 1994 shall commence on April 1, 1994 and end on December 31,
1994.
Purchaser's pro rata share of PSI's O&M Budget for each Budget Year
("Purchaser's Estimated O&M Charges") will be allocated to Purchaser on the
basis of Purchaser's pro rata share of the Notional Capacity in each Route of
the PTAT-1 Submarine Cable, using the following formula:
PSE\RX = [(LR\RX = NC\RX / (SUM)\R1-R6 (LR = NC)] = BA = PC
--------------------------------------------------
NC\RX
Where:
PSE = Purchaser's pro rata share, in dollars, of PSI's O&M Budget
for each separate Route, as defined below, for the relevant
Budget Year, or Purchaser's Actual O&M Charges, whichever is
applicable.
RX = R1, R2, R3, R4, R5 or R6, as defined below.
BA = The amount of PSI's O&M Budget for the relent Budget Year,
or PSI's actual O&M costs for the relevant Budget Year,
whichever is applicable.
LR = Deemed length (in kilometers) of each Route, R1 through R6,
in the PTAT-1 Submarine Cable.
PC = Purchaser's Capacity pursuant to this Agreement in the
relevant Route expressed in DS-0s.
NC = "Notional Capacity" of each Route R1 through R6, expressed
in DS-0s. Notional Capacity means the average of the total
capacity of the relevant Route which has been assigned for use
at the beginning of the relevant Budget Year and the total
capacity of the relevant Route which is expected to be
assigned for use by the end of the relevant Budget Year.
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For purposes hereof, the "Routes" in the PTAT-1 Submarine Cable consist of the
following six circuit routings within Segment E:
▇▇ - ▇▇▇-▇▇
▇▇ - ▇▇▇-▇▇▇▇▇▇▇
▇▇ - ▇▇▇-▇▇▇▇▇▇▇
▇▇ - ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇
▇▇ - ▇▇▇▇▇▇▇-▇▇
▇▇ - ▇▇▇▇▇▇▇-▇▇
PSI will invoice Purchaser for Purchaser's Estimated O&M Charges in quarterly
installments, other than the quarter in which this Agreement is executed, one
(1) month in advance of the commencement of each quarterly period of the
relevant Budget Year.
Following the end of each Budget Year when adequate information is available,
PSI will calculate the actual annual O&M cost for the PTAT-1 Submarine System
for such Budget Year. PSI will then calculate Purchaser's pro rata share of the
actual O&M charges ("Purchaser's Actual O&M Charges") on the basis of the same
formula set forth above used in allocating the Purchaser's Estimated O&M
Charges, except that the "NC" factor shall reflect the actual amounts of
capacity which have been assigned for use during such Budget Year.
If for any Budget Year the sum = of Purchaser's quarterly payments with respect
to Purchaser's Estimated O&M Charges exceeds Purchaser's Actual O&M Charges, the
amount of such overpayment shall be credited to Purchaser's payment obligation
for Purchaser's Estimated O&M Charges in the subsequent Budget Year, provided
that if the Budget Year for which such overpayment was made was the final Budget
Year of the Agreement, the amount of such overpayment shall be reimbursed to
Purchaser with 180 days following the termination of this Agreement.
If for any Budget Year the sum of Purchaser's quarterly payments with respect to
Purchaser's Estimated O&M Charges is less than Purchaser's Actual O&M Charges,
the amount of such deficiency shall be added to the next installment of
Purchaser's Estimated O&M Charges, provided that if Purchaser is no longer
obligated to make such quarterly payments, the Purchaser shall remit the amount
of such deficiency within 30 days follows receipt of PSI's invoice therefor.
If additional information becomes available at a later date that materially
affects Purchaser's Actual O&M Charges for a particular Budget Year, an
additional adjustment to such charges to Purchaser for that particular Budget
Year will be made in the manner described above.
5. Repair, Replacement and Addition Costs of the PTAT-1 Submarine System
The Purchaser shall be liable to PSI for its pro rata share of PSI's Repair,
Replacement and Addition Costs incurred with respect to:
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a) Any repair to, or replacement of, any part of the PTAT-1 Submarine System
resulting from an actual fault;
b) Repairs, replacements and additions to the PTAT-1 Submarine Cable System to
prevent the recurrence of an actual fault or occurence of new faults;
e) Any system enhancement or addition deemed necessary to maintain or improve
the required level of system performance;
d) Additional equipment requirements as a result of altering maintenance
arrangements.
Purchaser's pro rata share of PSI's Repair, Replacement and Addition Costs shall
be allocated to Purchaser using the same formula set forth in Section 4 above
for allocating PSI O&M charges to Purchaser, except that in applying such
formula the "BA" factor shall reflect the amount of PSI's Repair Replacement and
Addition Costs and the "NC" factor shall reflect the total Notional Capacity
actually assigned for use at the time such Repair Replacement and Addition Costs
are incurred. Purchaser's pro rata share of such costs shall be billed to
Purchaser as soon as practicable after such costs are incurred by or charged to
the account of PSI.
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THREE YEAR FINANCING TERM SCHEDULE 1
FINANCING SCHEDULE: PTAT US/UK Half DS-2
Effective Date 12 May '94
IRU Price $540,000 INTEREST 14.50%
Upfront Payment (1) $55,762 QUARTERLY
MONTHLY BALANCE INVOICED
PERIOD (2) PRINCIPAL INTEREST PAYMENT REMAINING AMOUNT
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0 $12,062 $6,525 $18,587 $527,938
0 $12,208 $6,379 $18,587 $515,730
0 $12,356 $6,232 $18,587 $503,374
Q1, M1 $12,505 $6,082 $18,587 $490,869
Q1, M2 $12,656 $5,931 $18,587 $478,213 $86,341
Q1, M3 $12,809 $5,778 $18,587 $465,404
Q2, M4 $12,964 $5,624 $18,587 $452,440
Q2, M5 $13,120 $5,467 $18,587 $439,320 $55,762
Q2, M6 $13,279 $5,308 $18,587 $426,041
Q3, M7 $13,439 $5,148 $18,587 $412,602
Q3, M8 $13,602 $4,986 $18,587 $399,000 $55,762
Q3, M9 $13,766 $4,821 $18,587 $385,234
Q4, M10 $13,932 $4,655 $18,587 $371,302
Q4, M11 $14,101 $4,487 $18,587 $357,201 $55,762
Q4, M12 $14,271 $4,316 $18,587 $342,930
Q5, M13 $14,444 $4,144 $18,587 $328,486
Q5, M14 $14,618 $3,969 $18,587 $313,868 $55,762
Q5, M15 $14,795 $3,793 $18,587 $299,073
Q6, M16 $14,974 $3,614 $18,587 $284,100
Q6, M17 $15,154 $3,433 $18,587 $268,945 $55,762
O6, M18 $15,338 $3,250 $18,587 $253,608
Q7, M19 $15,523 $3,064 $18,587 $238,085
Q7, M20 $15,710 $2,877 $18,587 $222,374 $55,762
Q7, M21 $15,900 $2,687 $18,587 $206,474
Q8, M22 $16,092 $2,495 $18,587 $190,382
Q8, M23 $16,287 $2,300 $18,587 $174,095 $55,762
Q8, M24 $16,484 $2,104 $18,587 $157,611
Q9, M25 $16,683 $1,904 $18,587 $140,928
Q9, M26 $16,884 $1,703 $18,587 $124,044 $55,762
Q9, M27 $17,088 $1,499 $18,587 $106,955
Q10, M28 $17,295 $1,292 $18,587 $89,660
Q10, M29 $17,504 $1,083 $18,587 $72,156 $55,762
Q10, M30 $17,715 $872 $18,587 $54,441
Q11, M31 $17,929 $658 $18,587 $36,512
Q11, M32 $18,146 $441 $18,587 $18,365 $55,762
Q11, M33 $18,365 $222 $18,587 $0 $25,183
-------- -------- -------- --------
Total: $540,000 $129,144 $669,144 $669,144
Notes:
(1) Will be included in the first quarterly invoice.
(2) Q signifies quarter, M signifies month.
PTAT-1 SUBMARINE SYSTEM
INDEFEASIBLE RIGHT OF USE AGREEMENT
THIS AGRBEMENT, made and entered into as of the 12th day of May, 1994 by and
between PRIVATE TRANSATLANTIC TELECOMMUNICATIONS SYSTEM, INC., its successors
and permitted assigns, a corporation organized and existing under the laws of
the State of Delaware and an indirectly wholly-owned subsidiary of Sprint
Corporation, having its principal office at 12490 Sunrise Valley Drive,
VARESF0217, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as "PSI"), and
INTERNATIONAL TELECOMMUNICATIONS CORPORATION, its successors and permitted
assigns, a corporation organized and existing under the laws of Delaware, having
its principal office at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as "Purchaser"); and,
WHEREAS, pursuant to the Ownership, Construction, Operation and Maintenance
Agreement, dated August 24, 1984, and as amended December 22, 1986, and as
further restated and amended as of August 15, 1989 (the "CMA"), PSI and other
telecommunications entities have agreed to provide, construct, operate, and
maintain the PTAT-1 System (as hereinafter defined), as a submarine cable system
between the United States of America (hereinafter referred to as "U.S.A."), on
the west, and the United Kingdom of Great Britain and Northern Ireland
(hereinafter referred to as "U.K."), on the east, with cable system spurs to the
Island of Bermuda (hereinafter referred to as "Bermuda") and the Republic of
Ireland (hereinafter referred to as "Ireland"); and,
WHEREAS, the PTAT-1 Submarine System consists, for the purposes of this
Agreement, of a transmission portion having two (2) fiber pairs extending
between the PTAT-1 Submarine System Interface Points (as hereinafter defined) in
the U.S.A. and the U.K. with each such fiber pair operating at 420 megabits per
second ("Mbit/s") and having a capacity equivalent to 9 DS-3s (as hereinafter
defined), and one (1) fiber pair extending between the PTAT-1 Submarine System
Interface Points in the U.S.A., U.K., Bermuda and Ireland, with such fiber pair
operating at 420 Mbit/s and having a capacity equivalent to 9 DS-3s; and,
WHEREAS, pursuant to the CMA, PSI has been assigned all those western Half Basic
Units (as hereinafter defined) in the PTAT-1 Submarine System, which consists of
the PTAT-1 Submarine Cable and Subsegments Al, B1, C1, and D1 (as these terms
are hereinafter defined); and,
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WHEREAS, Purchaser desires to acquire from PSI, and PSI is willing to grant to
Purchaser, on an Indefeasible Right of Use (hereinafter referred to as "IRU")
basis, an interest in certain of the aforementioned Half Basic Units; and,
WHEREAS, PSI and Purchaser (hereinafter referred to as the "Parties") desire to
define the terms and conditions under which the IRU interest in the
aforementioned Half Basic Units will be granted to Purchaser;
WHEREAS, Purchaser desires to acquire from PSI, and PSI is willing to grant to
Purchaser, on an Indefeasible Right of Use (hereinafter referred to as "IRU")
basis, an interest in certain of the aforementioned Half Basic Units; and,
WHEREAS, PSI and Purchaser (hereinafter referred to as the "Parties") desire to
define the terms and conditions under which the IRU interest in the
aforementioned Half Basic Units will be granted to Purchaser;
NOW, THEREFORE, the Parties hereto, in consideration of the mutual covenants
herein expressed, covenant, and agree with each other an follows:
1. The following definitions shall apply to terms used in this Agreement and the
Annex and Exhibits attached hereto:
(i) "Constructing Parties" are PSI and Cable and Wireless Network Services
Limited (hereinafter referred to as "CWNS", a corporation incorporated in
Bermuda and having its Registered Office at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇-▇▇,
▇▇▇▇▇▇▇);
(ii) "Beach Joint" is the physical connection between the submarine portion
of the PTAT-1 System and the land-based portion of the PTAT-1 System. In the
specific case of the U.K. where no such physical connection exists, the Beach
Joint shall be deemed to be at the transition joint in the outer cable chamber
at the building housing the U.K. PTAT-1 Submarine System Interface Point (as
hereinafter defined);
(iii) "PTAT-1 Submarine Cable" comprises all submersible plant and
equipment between and including the Beach Joints;
(iv) "PTAT-1 Interface Point" is the point where the Backhaul (as
hereinafter defined) connects with other transmission facilities or equipment
for onward transmission and shall be located on the nominal 44.736 Mbit/s
distribution frame in the city terminal connected to the Backhaul;
(v) "PTAT-1 System" comprises all plant, equipment, and facilities between
and including the PTAT-1 Interface Points in the
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U.S.A., U.K., Bermuda, and Ireland. It consists of the PTAT-1 Submarine System
and the Backhauls in the U.S.A., U.K., Bermuda, and Ireland;
(vi) "PTAT-1 Submarine System Interface Point" is located on the nominal
140 Mbit/s digital input/output ports on the digital distribution frame
associated with the PTAT-1 submarine terminal equipment which shall be regarded
as the interface location where a Basic System Module (as hereinafter defined)
connects with Backhaul transmission facilities or equipment for onward
connection to a PTAT-1 Interface Point;
(vii) "PTAT-1 Submarine System" comprises all plant and equipment between
and including the PTAT-1 Submarine System Interface Points. It consists of a
transatlantic fiber optic system linking the U.S.A. and U.K. PTAT-1 Submarine
System Interface Points containing four (4) fiber optic pairs operating in a
three-plus-one configuration and associated regenerators and supervisory
circuits, and spurs to Bermuda and to Ireland each containing two (2) fiber
optic pairs;
(viii) "Basic System Module" is a 139,264,000 bits per second digital line
section with interface in accordance with CCITT Recommendation G.703 (Red Book
Volume III - FASCICLE 111.3 October 1984) (as hereinafter defined). Each fiber
pair in the PTAT-1 Submarine System shall be capable of carrying three (3) Basic
System Modules;
(ix) "Backhaul" comprises all that plant, equipment, and all those
facilities required to connect a PTAT-1 Interface Point (including such PTAT-1
Interface Point) to its respective PTAT-1 Submarine System Interface Point;
(x) "U.S.A. Backhaul" provides connectivity at multiples of the 44.736
Mbit/s transmission rate and comprises all plant, equipment, and facilities
necessary to provide redundant, protected, two-way digital communications
between and from the U.S.A. PTAT-1 Submarine System Interface Point at
Manasquan, New Jersey to and including the PTAT-1 Interface Points in New York
City, New York and Pennsauken, New Jersey. It includes, but is not limited to,
all necessary land and buildings, power supply, terrestrial cable, repeaters,
cross connect equipment, multiplex equipment, and any other terminating
equipment, test equipment, and all rights of way;
(xi) "U.K. Backhaul", comprises all plant, equipment, and facilities
necessary to provide redundant, protected, two-way digital communications
between and from the U.K. PTAT-1 Submarine System Interface Point at Brean, U.K.
to and including the PTAT-1 Interface Point in Bracknell, U.K. It includes, but
is not limited to, all necessary land and buildings, power supply, terrestrial
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cable, repeaters, cross connect equipment, multiplex and any other terminating
equipment, test equipment, and all rights of way;
(xii) "Bermuda Backhaul" comprises all plant, equipment, and facilities
necessary to provide redundant, protected, two-way digital communications
between and from the Bermuda PTAT-1 Submarine System Interface Point at
Devonshire, Bermuda to and including the PTAT-1 Interface Point in Devonshire,
Bermuda. It includes, but is not limited to, all necessary land and buildings,
power supply, terrestrial cable, cross connect equipment, multiplex and any
other terminating equipment, test equipment, and all rights of way;
(xiii) "Irish Backhaul" comprises all plant, equipment, and facilities
necessary to provide redundant, protected, two-way digital communications
between and from the Irish PTAT-1 Submarine System Interface Point at
Ballinspittle, Ireland to and including the PTAT-1 Interface Point in Dublin,
Ireland. It includes, but is not limited to, all necessary land and buildings,
power supply, terrestrial cable, repeaters, microwave links, cross connect
equipment, multiplex and any other terminating equipment, test equipment, and
all rights of way;
(xiv) "Bermuda Spur" comprises all PTAT-1 Submarine System plant and
equipment between and including both Branching Unit 1 (as hereinafter defined)
and the PTAT-1 Submarine System Interface Point in Bermuda;
(xv) "Ireland Spur" comprises all PTAT-1 Submarine System plant and
equipment between and including both Branching Unit 2 (as hereinafter defined)
and the PTAT-1 Submarine System Interface Point in Ireland;
(xvi) "Branching Units" are the two undersea joints which provide
transmission and power feed connectivity between the four (4) fiber optic pair
cable connecting the U.S.A. and the U.K. PTAT-1 Submarine Interface Points (the
"Transatlantic Cable") and the Ireland and Bermuda Spurs. Branching Unit 1
connects the Bermuda Spur and the Transatlantic Cable, and Branching Unit 2
connects the Ireland Spur and the Transatlantic Cable;
(xvii) "Basic Unit" (also known as a "DS-0") is a 64,000 bits per second
both-way digital line link with interface in accordance with CCITT
Recommendation G.703 (Red Book Volume III-FASCICLE 111.3 October 1984). Each
Basic Unit shall consist of two half circuits (hereinafter referred to as "Half
Basic Units"), a western Half Basic Unit as assigned to PSI and a corresponding
eastern Half Basic Unit as assigned to CWNS;
(xviii) "DS-3" is a 44,736,000 bits per second both-way digital line link
with interface in accordance with CCITT Recommendation G.703 (Red Book Volume
III - FASCICLE 111.3 October
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Page 4
1984). For the purposes of defining Purchaser's pro rata share of capacity in
the PTAT-1 Submarine Cable and Subsegment A1, a DS-3 shall be deemed to be the
equivalent of six hundred and thirty (630) Basic Units;
(xix) "DS-2" is a 6,312,000 bits per second both-way digital line link with
interface in accordance with CCITT Recommendation G.703 (Red Book Volume III -
FASCICLE 111.3 October 1984). For the purposes of defining Purchaser's pro rata
share of capacity in the PTAT-1 Submarine Cable and Subsegment A1, a DS-2 shall
be deemed to be the equivalent of ninety (90) Basic Units;
(xx) "E-1" is a 2,048,000 bits per second both-way digital line link with
interface in accordance with CCITT Recommendation G.703 (Red Book Volume III -
FASCICLE 111.3 October 1984). For the purposes of defining Purchaser's pro rata
share of capacity in the PTAT-1 Submarine Cable and Subsegment A1, an E-1 shall
be deemed to be the equivalent of thirty (30) Basic Units;
(xxi) "DS-1" or "T-1" is a 1,544,000 bits per second both-way digital line
link with interface in accordance with CCITT Recommendation G.703 (Red Book
Volume III - FASCICLE 111.3 October 1984). For the purposes of defining
Purchaser's pro rata share of capacity in the PTAT-1 Submarine Cable and
Subsegment A1, a DS-1 or T-1 shall be deemed to be the equivalent of twenty-four
(24) Basic Units:
(xxii) "CCITT" means the International Consultative Committee on Telegraph
and Telephone, an Organization of the International Telecommunications Union;
and
(xxiii) "CCITT Recommendation" means a CCITT recommendation contained in
the Red Book published in codification of the CCITT's VIII Plenary Assembly
Malaga Torremolinos 8-12 October 1984 published by the International
Telecommunications Union, Geneva 1985.
2. For the purposes of this Agreement, the PTAT-1 System consists of five (5)
segments, as illustrated in Exhibit A which is attached hereto and incorporated
herein, and more fully described as follows:
(i) "Segment A" comprises all plant, equipment, and facilities between and
from the U.S.A. Beach Joint to and including the U.S.A. PTAT-1 Submarine System
Interface Point and to and including the U.S.A. PTAT-1 Interface Points in New
York City, New York and Pennsauken, New Jersey. It consists of three (3)
subsegments, defined as follows:
"Subsegment A1" comprises all plant, equipment, and facilities (excluding
such common facilities included in Subsegment
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Page 5
A3) between and from the U.S.A. Beach Joint to and including the U.S.A. PTAT-1
Submarine System Interface Point which are necessary for, and only to the extent
used for, the operation of the PTAT-1 Submarine System. It includes, but is not
limited to, all necessary cable, civil works, cable terminating equipment,
supervisory equipment, power feed equipment, repeater monitoring equipment,
engineering service equipment, and test equipment specific to the PTAT-1
Submarine System;
"Subsegment A2" comprises all plant, equipment, and facilities (excluding
such common facilities included in Subsegment A3) which are necessary for, and
only to the extent used for, providing redundant, protected, two-way digital
communications between and from the U.S.A. PTAT-1 Submarine System Interface
Point to and including the PTAT-1 Interface Points in New York City, New York
and Pennsauken, New Jersey. It includes, but is not limited to, all necessary
land and buildings, power supply, terrestrial cable, repeaters, cross connect
equipment, multiplex and any other terminating equipment, test equipment
(specific to the U.S.A. Backhaul), and all rights of way; and
"Subsegment A3" comprises those common facilities at Manasquan, New Jersey
necessary to the operation of Subsegments A1 and A2, including, but not limited
to, such land, buildings, civil works, rights of way, power supply, and other
utilities and facilities.
(ii) "Segment B" comprises all plant, equipment, and facilities between and
from the U.K. Beach Joint to and including the U.K. PTAT-1 Submarine System
Interface Point and to and including the U.K. PTAT-1 Interface Point in
Bracknell, U.K. It consists of three (3) subsegments, defined as follows:
"Subsegment B1" comprises all plant, equipment, and facilities (excluding
such common facilities included in Subsegment B3) between and from the U.K.
Beach Joint to and including the U.K. PTAT-1 Submarine System Interface Point
which are necessary for, and only to the extent used for, the operation of the
PTAT-1 Submarine System. It includes, but is not limited to, all necessary
cable, civil works, cable terminating equipment, supervisory equipment, power
feed equipment, repeater monitoring equipment, engineering service equipment,
and test equipment specific to the PTAT-1 Submarine System;
"Subsegment B2" comprises all plant, equipment, and facilities (excluding
such common facilities included in Subsegment B3) which are necessary for, and
only to the extent used for, providing redundant, protected, two-way digital
communications between and from the U.K. PTAT-1 Submarine System Interface Point
to and including the PTAT-1 Interface Point in Bracknell, U.K. It includes, but
in not limited to, all necessary land and buildings,
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Page 6
power supply, terrestrial cable, repeaters, cross connect equipment, multiplex
and any other terminating equipment, test equipment (specific to the U.K.
Backhaul), and all rights of way; and
"Subsegment B3" comprises those common facilities at Brean, U.K. necessary
to the operation of Subsegments B1 and B2, including, but not limited to, such
land, buildings, civil works, rights of way, power supply, and other utilities
and facilities.
"Segment C" comprises all plant, equipment, and facilities between and from
the Bermuda Beach Joint to and including the Bermuda PTAT-1 Submarine System
Interface Point and to and including the Bermuda PTAT-1 Interface Point in
Devonshire, Bermuda. It consists of three (3) subsegments, defined as follows:
"Subsegment C1" comprises all plant, equipment, and facilities (excluding
such common facilities included in Subsegment C3) between and from the Bermuda
Beach Joint to and including the Bermuda PTAT-1 Submarine System Interface Point
which are necessary for, and only to the extent used for, the operation of the
PTAT-1 Submarine System. It includes, but is not limited to, all necessary
cable, civil works, cable terminating equipment, supervisory equipment, power
feed equipment, repeater monitoring equipment, engineering service equipment,
and test equipment specific to the PTAT-1 Submarine System;
"Subsegment C2" comprises all plant, equipment, and facilities (excluding
such common facilities included in Subsegment C3) which are necessary for, and
only to the extent used for, providing redundant, protected, two-way digital
communications between and from the Bermuda PTAT-1 Submarine System Interface
Point to and including the PTAT-1 Interface Point in Devonshire, Bermuda. It
includes, but is not limited to, all necessary land and buildings, power supply,
terrestrial cable, cross connect equipment, multiplex and any other terminating
equipment, test equipment (specific to the Bermuda Backhaul), and all rights of
way; and
"Subsegment C3" comprises those common facilities at the submarine
interface point at Devonshire, Bermuda necessary to the operation of Subsegments
C1 and C2, including, but not limited to, such land, buildings, civil works,
rights of way, power supply, and other utilities and facilities.
(iv) "Segment D" comprises all plant, equipment, and facilities between and
from the Ireland Beach Joint to and including the Ireland PTAT-1 Submarine
System Interface Point and to and including the Ireland PTAT-1 Interface Point
in Dublin, Ireland. It consists of three (3) subsegments, defined as follows:
"Subsegment D1" comprises all plant, equipment, and facilities (excluding
such common facilities included in Subsegment
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Page 7
D3) between and from the Ireland Beach Joint to and including the Ireland PTAT-1
Submarine System Interface Point which are necessary for, and only to the extent
used for, the operation of the PTAT-1 Submarine System. It includes, but is not
limited to, all necessary cable, civil works, cable terminating equipment,
supervisory equipment, power feed equipment, repeater monitoring equipment,
engineering service equipment, and test equipment specific to the PTAT-1
Submarine System;
"Subsegment D2" comprises all plant, equipment, and facilities (excluding
such common facilities included in Subsegment D3) which are necessary for, and
only to the extent used for, providing redundant, protected, two-way digital
communications between and from the Ireland PTAT-1 Submarine System Interface
Point to and including the PTAT-1 Interface Point in Dublin, Ireland. It
includes, but is not limited to, all necessary land and buildings, power supply,
terrestrial cable, repeaters, microwave links, cross connect equipment,
multiplex and any other terminating equipment, test equipment (specific to the
Ireland Backhaul), and all rights of way; and
"Subsegment D3" comprises those common facilities at Ballinspittle, Ireland
necessary to the operation of Subsegments D1 and D2, including, but not limited
to, such land, buildings, civil works, rights of way, power supply, and other
utilities and facilities.
(v) "Segment E" comprises all submersible cable, plant, equipment, and
facilities between and including the Beach Joints in the U.S.A., U.K., Bermuda
and Ireland. Segment E shall consist of the following subsegments:
"Subsegment E1" comprises all submersible cable, plant, equipment, and
facilities between and including the U.S.A. Beach Joint to Branching Unit 1;
"Subsegment E2" comprises all submersible cable, plant, equipment, and
facilities between and including both the Bermuda Beach Joint and Branching Unit
1;
"Subsegment E2a" comprises the fiber optic pair and all other elements of
and one-half (1/2) of the Bermuda Beach Joint) necessary to provide a direct
transmission path westbound from Ireland to the U.K.; and
"Subsegment E2b" comprises the fiber optic pair and all other elements of
Subsegment E2 (including one-half (1/2) of Branching Unit 1 and one-half (1/2)
of the Bermuda Beach Joint) necessary to provide a direct transmission path
eastbound from Bermuda to Ireland and the U.K.
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Page 8
"Subsegment E3" comprises all submersible cable, plant, equipment, and
facilities between and including both Branching Unit 2;
"Subsegment E4" comprises all submersible cable, plant, equipment, and
facilities between and including both Branching Unit 2 and the Irish Beach
Joint;
"Subsegment E4a" comprises the fiber optic pair and all other elements of
Subsegment E4 (including one-half (1/2) of Branching Unit 2 and one-half (1/2)
of the Irish Beach Joint) necessary to provide a direct transmission path
westbound from Ireland to Bermuda and the U.S.A.;
"Subsegment E4b" comprises the fiber optic pair and all other elements of
Subsegment E4 (including one-half (1/2) of Branching Unit 2 and one-half (1/2)
of the Irish Beach Joint) necessary to provide a direct transmission path
eastbound from Ireland to the U.K.; and
"Subsegment E5" comprises all submersible cable, plant, equipment, and
facilities between and including the U.K. Beach Joint to Branching Unit 2.
3. Effective as of May 12, 1994 (the "Effective Date"), PSI hereby grants to
Purchaser, for the term of this Agreement, an IRU in one (1) western half DS-2
of capacity in Subsegments Al, E1, E2a, ▇▇▇, ▇▇, ▇▇▇, ▇▇▇, ▇▇ and B1
(hereinafter collectively referred to as the "IRUs").
4. The IRUs granted hereunder will be maintained in good working order, or
caused to be maintained in good working order, as follows:
(i) Segment A: By Private Trans-Atlantic Telecommunications System (N.J.)
Inc. (hereinafter referred to as "PSI(NJ)", a corporation incorporated in the
State of New Jersey and a wholly owned subsidiary of PSI and an indirect wholly
owned subsidiary of US Sprint Communications Company Limited Partnership, and
having its principal office at 12490 Sunrise Valley Drive VARESB324C, Reston,
Virginia 22096);
(ii) Segment B: By Mercury Communications Limited;
(iii) Segment C: By Cable & Wireless plc (Bermuda Branch);
(iv) Segment D: By Board Telecom Eireann; and
(v) Segment E: Jointly by PSI and CWNS.
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Page 9
in excess of Purchaser's quarterly payments during Such Budget Year with respect
to estimated annual recurring costs of operating and maintaining the PTAT-1
Submarine Cable shall be paid by Purchaser to PSI within ninety (90) days of
termination of this Agreement; (ii) estimated annual recurring costs of
operating and maintaining Subsegment A1 and estimated annual administrative and
other costs incurred by PSI or PSI(NJ) in respect of the provision or
procurement by PSI or PSI(NJ) of operation, maintenance, repair, replacement,
and addition services with respect to the PTAT-1 Submarine Cable and Subsegment
A1 for the entire quarter during which this Agreement is terminated, provided,
however, that (A) Purchaser's quarterly payments during the final Budget Year of
this Agreement, regardless of whether the Termination Date shall be any date
other than the last day of the Budget Year, with respect to the estimated annual
recurring costs of operating and maintaining Subsegment A1 and the estimated
annual administrative and other costs in excess of Purchaser's pro rata share of
actual annual recurring costs of operating and maintaining Subsegment A1 and
actual administrative and other costs incurred during such Budget Year shall be
reimbursed to Purchaser within one hundred eighty (180) days of termination of
this Agreement, and (B) Purchaser's pro rata share of actual annual recurring
costs of operating and maintaining Subsegment A1 and actual administrative and
other costs incurred during the final Budget Year of this Agreement, regardless
of whether the Termination Date shall be any date other than the last day of
such Budget Year, in excess of Purchaser's quarterly payments during such Budget
Year in respect of estimated annual recurring costs of operating and maintaining
Subsegment A1 and estimated annual administrative and other costs shall be paid
by Purchaser to PSI within ninety (90) days of termination of this Agreement;
and (iii) costs for repair and replacement of an actual fault in the PTAT-1
Submarine Cable or Subsegment A1, costs for repairs, replacements, and additions
to the PTAT-1 Submarine Cable or Subsegment A1 to prevent a recurrence of an
actual fault, costs for repairs, replacements, and additions to the PTAT-1
Submarine Cable or Subsegment A1 to prevent the occurrence of new faults, and
costs of cable working exercises for the cable ships, which are incurred during
the term of this Agreement.
6.(a) Except for payment of the consideration Set forth in subparagraph 5(a)(i)
or disputes pursuant to subparagraph 7(b), all bills rendered for the annual
recurring costs of operating and maintaining the PTAT-1 Submarine Cable (as set
forth in Exhibit B), for the annual recurring costs of operating and maintaining
Subsegment A1 and for administrative and other costs (as set forth in Exhibit
B), for repair, replacement, and addition costs (as set forth in Exhibit B),and
for all other liabilities or costs pursuant to this Agreement shall be payable
by Purchaser by the end of the calendar month following the month in which the
bills are rendered.
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Page 12
6.(b) PSI shall render bills under this Agreement in U.S.A. dollars, and such
amounts shall be payable in U.S.A. dollars to the designated office of PSI.
7.(a) All amounts due hereunder that are not paid when due shall accrue extended
payment interest, to the extent permitted by applicable laws, at a fixed rate
equal to one hundred twenty-five percent (125%) of the publicly announced prime
rate for 90-day commercial loans in New York City of Citibank N.A. in effect on
the day following the date payment of the ▇▇▇▇ was due. Such extended payment
interest shall accrue from the day following the day on which payment is due to
and including the day such payment is received by PSI, and such amount will be
included in a subsequent ▇▇▇▇ issued to Purchaser.
7.(b) Should any ▇▇▇▇ or part thereof be under dispute as to its correctness,
then interest shall not accrue on the amount of such ▇▇▇▇ pursuant to
Subparagraph 7(a) provided always that:
(i) Before the due date for payment, PSI shall be advised by telex,
facsimile, or like means of communication of the amount in dispute and the
nature of that dispute; and,
(ii) In this respect, PSI shall, if requested by Purchaser within thirty
(30) days of receipt of the ▇▇▇▇ in dispute, issue a replacement ▇▇▇▇ omitting
the amount in dispute, and such replacement ▇▇▇▇ shall become due for payment on
the date the disputed ▇▇▇▇ was due in accordance with subparagraph 6(a). The
amount in dispute shall be investigated by PSI to Purchaser's reasonable
satisfaction and, if any necessary ▇▇▇▇ with respect to such amount in dispute
shall be issued, and it shall be paid in accordance with subparagraph 6(a).
Notwithstanding the foregoing, in the event that on investigation the ▇▇▇▇ in
dispute or part thereof is found to be correct, then Purchaser shall pay
interest on the unpaid part which is found to be correct from and including the
day after the due date for payment of the original ▇▇▇▇ in dispute to and
including the date such payment is received by PSI in accordance with
subparagraph 7(a).
7.(c) A request by Purchaser for an audit of any charges hereunder pursuant to
subparagraph 5(a) of this Agreement shall not constitute a dispute with respect
to such charges for purposes of subparagraph 7(b) or affect the obligation of
Purchaser to pay such charges in full as they become due hereunder.
8.(a) In the event that the total number of Basic Units which the PTAT-1
Submarine System is capable of providing is reduced as a result of physical
deterioration, or for other reasons beyond the control of PSI during the term of
this Agreement, the number of IRU interests in Half Basic Units in the PTAT-1
Submarine- System granted to Purchaser pursuant to this Agreement shall be
reduced
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Page 13
upon written notice to Purchaser in the same proportion as the number of Basic
Units is reduced, except that such reduction shall not extend to fractions of
interests in Half Basic Units. If the above exception with respect to fractions
of interests in Half Basic Units should become applicable, an appropriate
adjustment pursuant to Exhibit B hereof will be made in Purchaser's payments
with respect to: (i) the operations and maintenance costs of the PTAT-1
Submarine Cable, (ii) the operations and maintenance costs of Subsegment A1 and
the administrative and other costs incurred by PSI or PSI (NJ) in respect of the
provision or procurement by PSI or PSI(NJ) of operation, maintenance, repair,
replacement, and addition services with respect to the PTAT-1 Submarine Cable
and Subsegment A1, and (iii) the repair, replacement, and addition costs of the
PTAT-1 Submarine Cable and Subsegment A1.
8.(b) In the event that the total number of Basic Units which the PTAT-1
Submarine System is capable of providing is increased during the term of this
Agreement, Purchaser shall have the option of increasing the number of IRU
interests in Half Basic Units in this PTAT-1 Submarine System granted to
Purchaser pursuant to this Agreement in the same proportion as the number of
Basic Units is increased, except that such increase shall not extend to
fractions of interests in Half Basic Units. PSI shall give to Purchaser as much
advance notice in writing as is practicable of: (i) the technology employed to
increase the total number of Basic Units, (ii) the number of increased Basic
Units, (iii) the proportionate number of increased Half Basic Units to which
Purchaser is entitled hereunder, (iv) the total cost, if any, of such increase,
and (v) the proportionate amount of any such total cost which would be
applicable to the increased Half Basic Units to which Purchaser is entitled
hereunder. In the event that Purchaser elects to exercise its option hereunder,
it shall notify PSI in writing within sixty days after receipt of the
aforementioned advance notice by PSI of Purchaser's election to exercise its
option and shall specify the number of Half Basic Units it elects to acquire,
and promptly thereafter, but in any event no later than the date the increased
Half Basic Units are declared activated by PSI, the parties shall amend this
Agreement to reflect the increase in the Half Basic Units acquired by Purchaser
and Purchaser's payment obligations, if any, in accordance with the immediately
preceding sentence. In the event the entire PTAT-1 Submarine Cable is replaced,
Purchaser shall have the option to participate or not to participate in such
replacement costs.
8.(c) In any event, whether or not Purchaser elects to acquire any increased
Half Basic Units or the exception set forth above with respect to fractions of
interests in Half Basic Units should become applicable, (i) the operations and
maintenance costs of the PTAT-1 Submarine Cable, (ii) the operations and
maintenance costs of Subsegment A1 and the administrative and other costs
incurred by PSI or PSI (NJ) in respect of the provision or procurement by PSI or
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Page 14
PSI(NJ) of operation, maintenance, repair, replacement, and addition services
with respect to the PTAT-1 Submarine Cable and Subsegment A1, and (iii) the
repair, replacement, and addition costs of the PTAT-1 Submarine Cable and
Subsegment A1, as of the date when the total number of Basic Units in the PTAT-1
Submarine System shall have been so reduced or increased pursuant to this
paragraph 8, shall be adjusted pursuant to Exhibit B hereof so that Purchaser
shall bear its appropriate proportionate share of such applicable costs.
9. PSI shall keep and maintain for a period of not less than five (5) years such
books, records, vouchers, and accounts as may be necessary to support its
▇▇▇▇▇▇▇▇ under this Agreement; and except as specifically provided herein, it
shall at all reasonable times make such books, records, vouchers, and accounts
available at the office of PSI where such books, records, vouchers, and accounts
are located for the inspection of PSI's auditors.
10. The Purchaser shall not be liable to PSI nor any other party to the CMA, and
neither PSI nor any other party to the CMA shall be liable to Purchaser, for any
loss or damage (direct or consequential) sustained by reason of any failure in
or breakdown of the PTAT-1 System, or of the associated facilities, or for any
interruption or degradation of service, whatsoever shall be the cause of such
failure, breakdown, interruption, or degradation, and however long it shall
last.
11.(a) No use by Purchaser of the IRUs granted to it hereunder and any equipment
associated therewith shall be such as to interrupt, interfere with, or impair
service over any of the facilities comprising the PTAT-1 Submarine System, any
Half Basic Units or other circuits of PSI, or any Half Basic Units or other
circuits of PSI's associated, affiliated, or connected entities or of any owner
of the PTAT-1 Submarine System, or IRU grantor or IRU grantee, impair privacy of
any communications over such facilities, cause damage to plant, or create
hazards to the employees or agents of any of the aforementioned entities or of
any owner of the aforementioned facilities or to the public. Purchaser shall
bear the cost of any additional protective apparatus reasonably required by PSI
to be installed resulting from the use of such facilities by Purchaser, any
permitted grantee, lessee, or assignee of Purchaser, or any customer or
customers of Purchaser or of any such grantee, lessee, or assignee.
ll.(b) PSI will use its best efforts to cause all other grantees of IRUs in
facilities in the PTAT-1 Submarine System to undertake obligations comparable to
those of Purchaser set forth in the foregoing subparagraph ll(a), and Purchaser
shall cause all permitted grantees, lessees, or assignees, and all customers of
Purchaser or of any such grantee, lessee, or assignee to undertake comparable
obligations.
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Page 15
12. The IRUs granted to Purchaser hereunder shall be made available to PSI, at
such times agreeable to PSI and Purchaser, to permit PSI or any duly authorized
agent to make such tests and adjustments as may be necessary for such circuits
to be maintained in efficient working order.
13. The performance of this Agreement by the Parties is contingent upon the
provision and continued operation of the PTAT-1 System, and upon the obtaining
and continuance of such approvals, consents, governmental authorizations,
licenses, and permits as may be required or deemed necessary by PSI and as may
be satisfactory to it. The Parties shall use all reasonable efforts to obtain
and continue, and to have continued, such approvals, consents, licenses, and
permits.
14. No license under patents is granted by PSI, nor shall any be implied or
arise by estoppel, or otherwise, in Purchaser's favor with respect to any
apparatus, system or method used by Purchaser in connection with the use of the
IRUs granted to it hereunder.
15. No assignment, grant, lease, or transfer of this Agreement, or of any rights
thereunder, or of any IRU in the Half Basic Units granted to Purchaser pursuant
to this Agreement, shall be valid without the prior written consent of the other
Party, which consent shall not be unreasonably withheld or delayed, and the
prior written consent of the IRU grantees of the corresponding eastern Half
Basic Units, provided that PSI shall have the right to assign or otherwise
delegate all or any of its rights and obligations hereunder to any legal entity
which is a subsidiary or affiliate of Sprint Corporation upon giving notice in
writing to Purchaser.
16. This Agreement shall not create any relationship between and among the
Parties hereto of partners, joint ventures, or other legal entity, expressed,
implied, or otherwise, and nothing herein contained shall be deemed to
constitute a joint venture, partnership, or other legal relationship except as
expressly specified herein between or among them.
17. This Agreement and any of the provisions hereof may be altered or added to
only by an agreement in writing signed by a duly authorized person on behalf of
each Party, except as contemplated by a decrease or increase of Basic Units in
the PTAT-1 Submarine System pursuant to paragraph 8.
18.(a) This Agreement shall become effective as of the Effective Date, and
unless earlier terminated pursuant to paragraph 19, shall continue in effect for
the duration of the CMA. PSI shall give Purchaser prompt notice in writing which
in no circumstances shall be less than one (1) year of the retirement date of
the PTAT-1 Submarine System and of the corresponding Termination Date of this
Agreement. Termination of this Agreement shall not relieve Purchaser
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Page 16
of Half Basic Units owned by Purchaser and the total number of Half Basic Units
in the PTAT-1 Submarine System in which PSI is entitled to grant an IRU.
18.(d) Liquidation of the PTAT-1 Submarine System or any part thereof or the
retirement of the PTAT-1 Submarine System during the term of this Agreement as
set forth in subparagraph 18(a) shall not relieve Purchaser from any liability
arising on account of claims made by third parties in respect of the PTAT-1
Submarine System or any part thereof and damages or compensation payable on
account of such claims, or obligations which may arise in relation to the PTAT-1
Submarine System or any part thereof 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 shall
be payable by Purchaser in proportion to the number of Half Basic Units owned by
Purchaser and the total number of Half Basic Units in the PTAT-1 Submarine
System in which PSI is entitled to grant an IRU.
19. If Purchaser fails to make any payment required by this Agreement on the day
it is due, or otherwise is in breach of this Agreement, and such default
continues for a period of at least thirty (30) calendar days, PSI may notify
Purchaser in writing via Certified Letter of its intent to reclaim the IRUs
assigned hereunder if full payment is not received or if such breach is not
remedied within thirty (30) calendar days of such notification. If at the end of
such 30-day notification period, Purchaser has not paid in full the amounts due
hereunder or remedied such breach, PSI may proceed to terminate this Agreement
by giving Purchaser written notice via Certified Letter thereof and reclaim the
IRUs assigned to Purchaser pursuant to this Agreement, effective upon the date
of mailing or such alternate date as may be specified in the notice. PSI shall
be relieved of any liability to Purchaser arising out of such reclamation and
termination. The rights and obligations of Purchaser under this Agreement shall
terminate as of the date of reclamation, except the reclamation shall not
relieve Purchaser of its obligation to make full payment of all amounts or
liabilities incurred under this Agreement up to and including the date of
termination or the obligation of the Parties with regard to adjustments of
liabilities incurred under this Agreement up to and including the date of
termination.
20. If any of the provisions of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceability shall not invalidate or
render unenforceable the entire Agreement, but rather the entire Agreement shall
be construed as if not containing the particular invalid or unenforceable
provision or provisions, and the rights and obligations of the Parties shall be
construed and enforced accordingly, provided that the material intent of the
Parties remains unchanged.
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Page 18
21. This Agreement shall be deemed to be made in, and in all respects shall be
interpreted, construed, and governed by and in accordance with the laws of the
Commonwealth of Virginia (except for the conflicts laws of such jurisdiction).
22. The Parties irrevocably agree that any suit, action or proceeding with
respect hereto (a "Suit") may be brought in the courts of the Commonwealth of
Virginia or of the United States of America for the Eastern District of
Virginia, or in such other courts of competent jurisdiction agreed and
stipulated to by the Parties. By the execution and delivery hereof, each Party
irrevocably waives, to the fullest extent permitted by law, any objection it may
now have or hereafter acquire relating to venue or inconvenient forum with
respect any such jurisdiction. Each Party hereby irrevocably accepts and submits
itself to the jurisdiction of the courts referred to in this paragraph 22 in any
such Suit and agrees that final judgment in any such Suit brought in any such
court shall be conclusive and binding upon it and may be enforced in any
competent court located in the U.S.A. by a Suit upon judgment or other means of
collection, provided that service of process is effected in one of the manners
permissible under applicable law.
23. This Agreement shall be executed in any number of counterparts by an
authorized representative of each Party, each such counterpart shall together,
as well as separately, constitute one and the same instrument.
IN WITNESS WHEREOF the Parties hereto have severally subscribed these
presents or caused them to be subscribed in their name and behalf by their
respective officers thereunto duly authorized.
PRIVATE TRANSALANTIC
TELECOMMUNICATION SYSTEM, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Deputy General Manager
INTERNATIONAL COMMUNICATIONS CORPORATION
By: /s/ ▇.▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇
Title: President
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Page 19
================================================================================
EXHIBITS
================================================================================
EXHIBIT A
================================================================================
SEGMENTATION OF THE PTAT-1 SYSTEM
FOR OPERATIONS & MAINTENANCE COST ALLOCATION
[Schematic]
================================================================================
EXHIBIT B
OPERATIONS AND MAINTENANCE, AND REPAIR,
REPLACEMENT, AND ADDITION SERVICES
1. Provisions for Operations and Maintenance
Operations and maintenance costs shall be defined as all costs reasonably
incurred in operating and maintaining the PTAT-1 Submarine Cable and Subsegment
A1, including, but not limited to, the cost of attendance, testing, adjustments,
rights of way, and the cost of providing cable ships (including standby costs),
remotely controlled submersible vehicles, cable depots, and maintenance and
repair devices which are or may hereafter become available (including the
standby costs of such facilities).
The Constructing Parties have made provision for the PTAT-1 Submarine Cable
to receive from Cable and Wireless (Marine) Ltd. (hereinafter referred to as
"CAM") the repair and maintenance services as set forth below from the first
(1st) day of August, 1989, to the Termination Date.
The repair and maintenance of the PTAT-1 Submarine Cable is currently being
carried out on a non-exclusive basis by two (2) comprehensively equipped cable
ships, each normally equipped with a remotely controlled submersible vehicle
(hereinafter individually referred to as the "RCSV" and collectively referred to
as the "RCSVs"), or other vessels as deemed appropriate by the Constructing
Parties. One such RCSV is currently the CIRRUS System, a remotely controlled
submersible vehicle system currently owned by CWM (hereinafter referred to as
the "CIRRUS Systems").
While on standby for repair and maintenance work, one of the two cable
ships is currently based on the eastern side of the Atlantic Ocean, and the
other is currently based on the western side of the Atlantic Ocean. In the event
of a PTAT-1 Submarine Cable fault, the required cable ship will normally put to
sea within twenty-four (24) hours for the purposes of repair.
The two cable ships will be kept in good repair and operating efficiency.
The duration of any cable ship unavailability due to necessary shipyard activity
will be kept to a minimum and consistent with reasonable industry standards.
Planned work on each cable ship will be performed at different times to ensure
maximum continuity of service availability.
The two cable ships and other repair equipment and facilities which the
Constructing Parties have made provision to receive from CWM are intended to
handle the reasonably foreseeable repair and maintenance of the PTAT-1 Submarine
Cable. Circumstances may arise
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Page 1
from time to time requiring the use of additional or different equipment,
facilities, or services in connection with a particular repair or maintenance
operation, and in such circumstances, the Constructing Parties will endeavor to
arrange provision of additional equipment, facilities, or services as they deem
necessary to carry out such particular repair or maintenance operation.
Additional costs related to the provision of such equipment, facilities, or
services shall be included as PSI's Repair, Replacement, and Addition Costs (as
defined herein) as described below.
For the duration of this Agreement, additional equipment and facilities (in
terms of cable ships, RCSVS, depots, and other equipment and facilities) may be
added at any time only if necessary to maintain compliance with regulatory
requirements or to fulfill the obligations of the Constructing Parties to
provide efficient and cost-effective repair and maintenance of the PTAT-1 Cable.
Capital charges related to the provision of such additional equipment and
facilities will be added to the PTAT-1 O&M Charges (as defined herein) as
described below.
2. Recurring Operations and Maintenance Charges for the PTAT-1 Submarine Cable
The period from the first (1st) day of April, 1993 to the thirty-first
(31st) day of March, 1994 is referred to herein as the "First Budget Year", and
the First Budget Year and each period from the first (1st) day of April to the
following thirty-first (31st) day of March in each subsequent year is
individually referred to herein as a "Budget Year".
PSI will receive from CWM for each Budget Year a budget in U.S.A. dollars
and pounds sterling of fifty percent (50%) of the annual recurring costs of
operating and maintaining the PTAT-1 Submarine Cable ("PSI's PTAT-1 O&M
Budget"). PSI's PTAT-1 O&M Budget shall include, but shall not necessarily be
limited to:
(i) Annual capital charges in respect of provision of the cable ships,
the depot facilities, and the other repair equipment and facilities;
(ii) Annual capital additions to the two cable ships, and replacement
vessels as deemed necessary by the Constructing Parties over the course of
this Agreement, the depot facilities, and the other repair equipment and
facilities necessary to maintain compliance with regulatory requirements or
to maintain the capability to maintain and repair the PTAT-1 Submarine
Cable;
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Page 2
(iii) Annual operating charges in respect of provision of the cable
ships, the depot facilities, and the other repair equipment and facilities,
including the costs of ▇▇▇▇▇▇▇, provisioning, and operating the two cable
ships, the depot facilities, and the other equipment and facilities, fully
crewed and ready to be mobilized on twenty-four (24) hour notice;
(iv) Annual maintenance charges in respect of the cable ships, the
depot facilities, and the other repair equipment and facilities;
(v) Annual charges in respect of the RCSVS, including the CIRRUS
System;
(vi) Costs incurred by PSI or PSI (NJ) as a result of foreign currency
fluctuations affecting payments by PSI or PSI(NJ) of any invoices rendered
to PSI or PSI(NJ) in any currency other than U.S.A. dollars; PSI shall
provide Purchaser with adequate documentation of such currency
fluctuations: and
(vii) All other costs incurred by PSI from any operation and
maintenance providers or in the operation and maintenance of the PTAT-1
Submarine Cable.
PSI's PTAT-1 O&M Budget for the First Budget Year is $1,975,395 and
(pound)6,857,221. PSI's PTAT-1 O&M Budget for each subsequent Budget Year will
be determined by CWM prior to such Budget Year by increasing each of the U.S.A.
dollar and pounds sterling elements of PSI's PTAT-1 O&M Budget (excluding the
annual capital charges in respect of provision of the cable ships and the depot
facilities) for the previous Budget Year (as adjusted as provided below to
account for capital additions and other annual recurring costs pursuant to
subparagraphs (ii) and (v) above) by the Actual Percentage Increase (as defined
herein) applicable to such Budget Year. The annual capital charges elements of
PSI's PTAT-1 O&M Budget in respect of provision of the cable ships and depot
facilities for the First Budget Year are equal to the sum of (i)
(pound)1,836,819 (the "First Capital Charge") and (ii) (pound)334,552 (the
"Second Capital Charge"). The annual capital charges elements of PSI's PTAT-1
O&M Budget in respect of provision of the cable ships and depot facilities for
each subsequent Budget Year will be determined by CAM prior to such Budget Year
by increasing the First Capital Charge for the previous Budget Year by five
percent (5%), and by increasing the Second Capital Charge for the previous
Budget Year by six percent (6%). The "Actual Percentage Increase" in the U.K.
RPI for the Second Budget Year and for each subsequent Budget Year shall be the
average of each month-to-month percentage change in the U.K. RPI expressed as an
annualized percentage change (i.e., raised to the twelfth power) for the twelve
consecutive month period ending with October 31 in the prior Budget Year. The
index used in
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Page 3
this calculation will be the "All Items" RPI as defined by the U.K. Department
of Trade and Industry. The Actual Percentage Increase from the previous to the
current Budget Year is 3.701. For the avoidance of doubt, the calculation of the
Actual Percentage Increase for the Current Budget Year is illustrated on Exhibit
E.
In the event of a capital addition that results in additional capital
charges pursuant to subparagraph (ii) above or other annual recurring costs are
incurred by PSI pursuant to subparagraph (vii) above, PSI's PTAT-1 O&M Budget
for the Budget Year during which such capital addition is made or such costs are
incurred shall be adjusted accordingly effective as of the date of such capital
addition or costs, and PSI's PTAT-1 O&M Budget as no adjusted shall be the
PTAT-1 O&M Budget for purposes of determining the PTAT-1 O&M Charges (as defined
herein) for the remainder of such Budget Year and the PTAT-1 O&M Budget for each
subsequent Budget Year.
Purchaser's pro rata share of PSI's PTAT-1 O&M Budget for the First Budget
Year (hereinafter referred to as "Purchaser's PTAT-1 O&M Charges for the First
Budget Year") will be allocated to Purchaser on the basis of Purchaser's pro
rata share of the Available Capacity (as defined herein) of the PTAT-1 Submarine
Cable as specified in this Agreement, using the following formula:
PSFBY = (FAp/365) x [sum] ((Ls/Lt) x (PC/NCs) x UFs}
s = E1 to E5
Where:
PSFBY = Purchaser's pro rata share of PSI's PTAT-1 O&M
Budget for the First Budget Year.
FAp = "First Budget Year Activation Period" in days.
First
Budget
Year
Activation
Period = The total number of days from and including the
Effective Date to and including the thirty-first
(31st) day of March, 1992.
Ls = Length (in kilometers) of each of Subsegments E1
through E5 in the PTAT-1 Submarine Cable.
Lt = Length of the PTAT-1 Submarine Cable in kilometers.
PC = Purchaser's Capacity" pursuant to this Agreement
expressed in DS-Os.
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Page 4
NCs = "Nominal Capacity" of each of Subsegments E1 through
E5, expressed in DS-OS.
UFs = Use Factor" for each of Subsegments E1 through E5.
Nominal
Capacity = Owing to imbalances in projected telecommunications
between the U.S.A., the U.K., Bermuda, and Ireland,
the Constructing Parties have declared a Nominal
Capacity for each of Subsegments ▇▇▇, ▇▇, ▇▇▇, ▇▇▇,
and E5 which is lower than the Total Capacity of
these subsegments. The Nominal Capacity values for
Subsegments ▇▇▇, ▇▇, ▇▇▇, ▇▇▇, and E5 are thus
determined according to the following formula:
NCs = TCs - UCs
Where:
TCs = "Total Capacity" of each subsegment (17,010 DS-Os for each of
Subsegments E3 and E5, and 5,670 DS-Os for each of Subsegments ▇▇▇, ▇▇▇,
and E4b).
UCs = "Unused Capacity" of each subsegment, which the Constructing Parties
have initially determined to be 1,260 DS-Os.
The current values of NCS for Segment E are illustrated in Exhibit D, which
is attached hereto and incorporated herein.
Use
Factor = All U.S.A.-U.K. IRUs on the PTAT-1 Submarine Cable will be billed
equally for Purchaser's PTAT-1 O&M Charges (as hereinafter
defined), whether the route purchased is in the two (2) fiber
pairs extending between the PTAT-1 Submarine Interface Points in
the U.S.A. and the U.K., or in the single fiber pair extending
between the PTAT-1 Submarine Interface Points in the U.S.A.,
Bermuda, Ireland, and the U.K. The Use Factor for each of
Subsegments ▇▇, ▇▇, and E5 in all U.S.A. U.K. IRUs will have a
value equal to one (1). The Use Factor for each of Subsegments
E2a, ▇▇▇, ▇▇▇, and E4b in all U.S.A.-U.K. IRUs will be determined
according to the following formula:
UFs = ACs/(TCd + ACs)
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Page 5
Where:
ACs = "Available Capacity" of the subsegment which is available for
sale as of August 1, 1989, which is equal to TCS minus 3,150
DS-Os allocated by the Constructing Parties before August, 1989.
TCd = Total Capacity of the two (2) direct fiber pairs extending
between the PTAT-1 Submarine System Interface Points in the
U.S.A. and the U.K. (11,340 DS-Os).
The current values of UFs for Segment E are illustrated in Exhibit D, which is
attached hereto and incorporated herein.
Purchaser's pro rata share of PSI's PTAT-1 O&M Budget for each subsequent Budget
Year (hereinafter referred to as "Purchaser's PTAT-1 O&M Charges") will be
allocated to Purchaser on the basis of Purchaser's pro rata share of the
Available Capacity of the PTAT-1 Submarine Cable as specified in this Agreement,
using the following formula:
PSE = [sum] {((Ls/Lt) x (PC/NCs) x UFs}
s = E1 to E5
Where:
PSE = Purchaser's pro rata share of PSI's PTAT-1 O&M Budget for each
subsequent Budget Year.
For the purposes of the allocation outlined above, Subsegments E2a and E2b will
be considered to have a length equal to fifty per cent (50%) of the total length
of Subsegment E2 (the Bermuda Spur). Similarly, Subsegments E4a and E4b will be
considered to have a length equal to fifty per cent (50%) of the total length of
Subsegment E4 (the Ireland Spur).
If the Nominal Capacity of any subsegment in Segment E is changed due to a
change in the Total Capacity of the subsegment pursuant to paragraph 8, the
value of the associated NCB factor used in the determination of Purchaser's
PTAT-1 O&M Charges for the First Budget Year and Purchaser's PTAT-1 O&M Charges
for any subsequent Budget Year will be changed by a like amount as of the date
on which such change in the Total Capacity of the subsegment occurs. If the
Nominal Capacity of any Subsegment in Segment E is increased due to a reduction
in Unused Capacity of the subsegment, the value of the associated NCS factor
used in the determination of Purchaser's PTAT-1 O&M Charges for the First Budget
Year and Purchaser's PTAT-1 O&M Charges for any subsequent Budget Year will be
changed by a like amount as of the date on which such reduction in the Unused
Capacity occurs.
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Page 6
If Purchaser's Capacity of any subsegment is changed pursuant to paragraph 8,
the value of the associated PC factor used in the determination of Purchaser's
PTAT-1 O&M Charges for the First Budget Year and Purchaser's PTAT-1 O&M Charges
for any subsequent Budget Year will be changed by a like amount as of the date
on which such change in Purchaser's Capacity occurs.
If the Total Capacity of the subsegments in the single fiber pair extending
between the PTAT-1 Submarine System Interface Points in the U.S.A., Bermuda,
Ireland, and the U.K. is changed pursuant to paragraph 8, the ACs factor used in
the determination of the Use Factor (UFs) for each of Subsegments E2a, ▇▇▇, ▇▇▇,
and E4b on the U.S.A. U.K. routes will be changed by a like amount as of the
date on which such change in the Total Capacity of the subsegments occurs.
If the Total Capacity of the two (2) direct fiber pairs extending between the
PTAT-1 Submarine System Interface Points in the U.S.A. and U.K. is changed
pursuant to paragraph 8, the TCd factor used in the determination of the Use
Factor (UFs) for each of Subsegments E2a, ▇▇▇, ▇▇▇, and E4b on the U.S.A. U.K.
routes will be changed by a like amount as of the date on which such change in
the Total Capacity of the subsegments occurs.
In the event the total number of Basic Units in the PTAT-1 Submarine System is
changed pursuant to paragraph 8, the invoice for the next quarterly installment
shall reflect the appropriate adjustment to Purchaser's PTAT-1 O&M Charges as of
the date on which such change occurred.
Purchaser's PTAT-1 O&M Charges for the First Budget Year will be issued to
Purchaser upon execution by Purchaser of this Agreement, and Purchaser's PTAT-1
O&M Charges for each subsequent Budget Year will be issued to Purchaser no later
than the first (1st) day of March prior to the commencement of such Budget Year.
Purchaser's PTAT-1 O&M Charges for the First Budget Year will be payable by
Purchaser in quarterly installments commencing with the quarter during which
this Agreement is executed. The first payment, for the period from and including
the Effective Date through the quarter in which this Agreement is executed, will
be due on the date of execution of this Agreement, and all subsequent payments
will be due on the last day of each April, July, October, or January in such
Budget Year. Purchaser's PTAT-1 O&M Charges for each subsequent Budget Year will
be payable by Purchaser and will be due on the last day of each April, July,
October, or January in such Budget Year.
PSI will invoice Purchaser for each of these quarterly installments, other than
the quarter in which this Agreement is executed, one (1) month in advance of the
month in which the scheduled payment is due. Where the Termination Date shall be
any date other than the last day
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Page 7
of a quarter, Purchaser shall be liable to pay to PSI Purchaser's PTAT-1 O&M
Charges for the entire quarter during which this Agreement is terminated.
PSI will be responsible for collecting the published RPI data in each Budget
Year, verifying CWM's computation of the Actual Percentage Increase, and
computing Purchaser's PTAT-1 O&M Charges. The monthly RPI data used in CWM's
calculation will be provided to Purchaser as soon as practicable after such data
have been published.
Exhibit C. which is attached hereto and incorporated herein, illustrates the
sequence of invoices and payments for a typical Budget Year.
3. Recurring Operations and Maintenance Charges for Subsegment A1 and
Administrative and Other Charges
For the First Budget Year and for all Subsequent Budget Years, PSI will prepare
a budget of: (i) estimated annual recurring costs of operating and maintaining
Subsegment A1 for such Budget Year, and (ii) estimated annual administrative and
other costs incurred by PSI or PSI(NJ) in respect of the provision or
procurement by PSI or PSI(NJ) of operation, maintenance, repair, replacement,
and addition services with respect to the PTAT-1 Submarine Cable and Subsegment
A1 for such Budget Year (hereinafter collectively referred to as the "Estimated
Subsegment A1 O&M and Administrative and Other Costs Budget"). The Estimated
Subsegment A1 O&M and Administrative and Other Costs Budget for each Budget Year
shall include, but shall not necessarily be limited to, the following annual
recurring costs of operating and maintaining Subsegment A1 for such Budget Year
and the following annual administrative and other costs incurred by PSI or
PSI(NJ) during such Budget Year in respect of the provision or procurement by
PSI or PSI(NJ) of operation, maintenance, repair, replacement, and addition
services with respect to the PTAT-1 Submarine Cable and Subsegment A1:
(i) Recurring annual labor, facilities, and use of equipment costs
related to the operation and maintenance of Subsegment A1;
(ii) All other costs incurred by PSI or PSI(NJ) from any operation and
maintenance providers or in the operation and maintenance of Subsegment A1;
(iii) Administration and accounting charges of recording, collecting,
and allocating operations and maintenance charges with respect to the
PTAT-1 Submarine Cable and Subsegment A1, and of allocating the appropriate
pro rata share of these charges to Purchaser;
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Page 8
(iv) Administration and accounting charges of recording, collecting
and allocating repair, replacement, and addition charges with respect to
the PTAT-1 Submarine Cable and Subsegment A1, and of allocating the
appropriate pro rata share of these charges to Purchaser;
(v) All governmental, regulatory, or statutory charges, custom duties,
royalties, and taxes (other than taxes imposed on the net income of PSI and
PSI (NJ)) incurred by PSI or PSI(NJ) in the operation and maintenance of
the PTAT-1 Submarine Cable and Subsegment A1;
(vi) Costs and expenses reasonably incurred on account of claims made
by or against other persons in the operation and maintenance of the PTAT-1
Submarine Cable and Subsegment A1 and damages or compensation payable by
PSI or PSI(NJ) on account of such claims;
(vii) Costs incurred by PSI or PSI(NJ) as a result of foreign currency
fluctuations affecting payments by PSI or PSI(NJ) of any invoices rendered
to PSI or PSI(NJ) in any currency other than U.S.A. dollars; PSI shall
provide Purchaser with adequate documentation of such currency
fluctuations; and
(viii) All other administrative or accounting costs incurred by PSI or
PSI(NJ) with respect to this Agreement.
Purchaser's pro rata share of the Estimated Subsegment A1 O&M and Administrative
and Other Costs Budget for the First Budget Year (hereinafter referred to as
"Purchaser's Estimated Subsegment A1 O&M and Administrative and other Charges
for the First Budget Year") will be allocated to Purchaser on the basis of
Purchaser's pro rata share of the Total Capacity (as defined herein) of
Subsegment A1 as specified in this Agreement, using the following formula:
PS\A1\FBY = (FAp/365) x PC/TC\A1\
Where:
PS\A1\FBY = Purchaser's pro rata share of the Estimated Subsegment A1 O&M and
Administrative and Other Costs Budget for the First Budget Year.
PC = "Purchaser's Capacity" pursuant to this Agreement expressed in
DS-OS.
TC\A1\ = "Total Capacity" of Subsegment A1 (17,010 DS-Os).
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Page 9
Purchaser's pro rata share of the Estimated Subsegment A1 O&M and Administrative
and Other Costs Budget for the Second Budget Year and each subsequent Budget
Year (hereinafter referred to as "Purchaser's Estimated Subsegment A1 O&M and
Administrative and Other Charges") will be allocated to Purchaser on the basis
of Purchaser's pro rata share of the Total Capacity of Subsegment A1 as
specified in this Agreement, using the following formula:
PS\A1\ = PC/TC\A1\
Where:
PS\A1\ = Purchaser's pro rata share of the Estimated Subsegment A1 O&M and
Administrative and Other Costs Budget for each subsequent Budget
Year.
If the Total Capacity of Subsegment A1 is changed pursuant to paragraph 8, the
value of the associated TCA1 factor used in the determination of Purchaser's
Estimated Subsegment A1 O&M and Administrative and Other Charges for the First
Budget Year and Purchaser's Estimated Subsegment A1 O&M and Administrative and
Other Charges for any subsequent Budget Year will be changed by a like amount as
of the date on which such change in the Total Capacity of Subsegment A1 occurs.
If Purchaser's Capacity is changed pursuant to paragraph 8, the value of the
associated PC factor used in the determination of Purchaser's Estimated
Subsegment A1 O&M and Administrative and Other Charges for the First Budget Year
and Purchaser's Estimated Subsegment A1 O&M and Administrative and Other Charges
for any subsequent Budget Year will be changed by a like amount as of the date
on which such change in Purchaser's Capacity occurs.
In the event the total number of Basic Units in the PTAT-1 Submarine System is
changed pursuant to paragraph 8, the invoice for the next quarterly installment
shall reflect the appropriate adjustment to Purchaser's Estimated Subsegment A1
O&M and Administrative and Other Charges as of the date on which such change
occurred.
Purchaser's Estimated Subsegment A1 O&M and Administrative and Other Charges for
the First Budget Year will be issued to Purchaser upon execution by Purchaser of
this Agreement, and Purchaser's Estimated Subsegment A1 O&M and Administrative
and Other Charges for each subsequent Budget Year will be issued to Purchaser no
later than the first (1st) day of March prior to the commencement of such Budget
Year.
Purchaser's Estimated Subsegment A1 O&M and Administrative and Other Charges for
the First Budget Year will be payable by Purchaser in quarterly installments
commencing with the quarter during which this Agreement is executed. The first
payment, for the period from and
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Page 10
including the Effective Date through the quarter in which this Agreement is
executed, will be due on the date of execution of this Agreement, and all
subsequent payments will be due on the last day of each April, July, October, or
January in such Budget Year.
Purchaser's Estimated Subsegment A1 O&M and Administrative and Other Charges for
each subsequent Budget Year will be due on the last day of each April, July,
October, or January in such Budget Year.
PSI will invoice Purchaser for each of these quarterly installments, other than
the quarter in which this Agreement is executed, one (1) month in advance of the
month in which the scheduled payment is due. Where the Termination Date shall be
any date other than the last day of a quarter, Purchaser shall be liable to pay
to PSI Purchaser's charges for the entire quarter during which this Agreement is
terminated.
Following the end of the First Budget Year and each subsequent Budget Year, PSI
will calculate: (i) the actual annual recurring costs incurred by PSI for
operating and maintaining Subsegment A1 for such Budget Year, and (ii) the
actual administrative and other costs incurred by PSI or PSI(NJ) in respect of
the provision Or procurement by PSI or PSI(NJ) of operation, maintenance,
repair, replacement, and addition services with respect to the PTAT-1 Submarine
Cable and Subsegment A1 for such Budget Year (hereinafter collectively referred
to as the "Actual Subsegment A1 O&M and Administrative and Other Charges").
Purchaser's pro rata share of the Actual Subsegment A1 O&M and Administrative
and Other Charges for the First Budget Year and each subsequent Budget Year
(hereinafter referred to as "Purchaser's Actual Subsegment A1 O&M and
Administrative and Other Charges") will be allocated to Purchaser on the basis
of Purchaser's pro rata share of the Total Capacity of Subsegment A1 as
specified in this Agreement, using the same formulas used in the determination
of Purchaser's Estimated Subsegment A1 O&M and Administrative and Other Charges
for the First Budget Year and Purchaser's Estimated Subsegment A1 O&M and
Administrative and Other Charges for the Second Budget Year and each subsequent
Budget Year, respectively.
On the first (1st) day of July following each Budget Year, PSI will advise
Purchaser of Purchaser's Actual Subsegment A1 O&M and Administrative and Other
Charges for such Budget Year.
Purchaser's quarterly payments during the First Budget Year and the Second
Budget Year with respect to Purchaser's Estimated Subsegment A] O&M and
Administrative and Other Charges in excess of Purchaser's Actual Subsegment A1
O&M and Administrative and Other Charges incurred during the First Budget Year
and Second Budget Year respectively will be credited to Purchaser's October,
1991 installment of Purchaser's Estimated Subsegment A1 O&M and
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Page 11
Administrative and Other Charges. Purchaser's quarterly payments
during each subsequent Budget Year with respect to Purchaser's
Estimated Subsegment A1 O&M and Administrative and Other Charges for
such Budget Year in excess of Purchaser's Actual Subsegment A1 O&M and
Administrative and Other Charges incurred during such Budget Year will
be credited to Purchaser's next October installment of Purchaser's
Estimated Subsegment A1 O&M and Administrative and Other Charges;
provided, however, that Purchaser's quarterly payments during the
final Budget Year of this Agreement, regardless of whether the
Termination Date shall be a date other than the last day of the Budget
Year, with respect to Purchaser's Estimated Subsegment A1 O&M and
Administrative and Other Charges in excess of Purchaser's Actual
Subsegment A1 O&M and Administrative and other Charges incurred during
such Budget Year shall be reimbursed to Purchaser within one hundred
eighty (180) days of termination of this Agreement.
Purchaser's Actual Subsegment A1 O&M and Administrative and Other
Charges incurred during the First Budget Year and the Second Budget
Year in excess of Purchaser's quarterly payments with respect to
Purchaser's Estimated Subsegment A1 O&M and Administrative and Other
Charges during the First Budget Year and Second Budget Year
respectively will be added to Purchaser's October, 1991 installment of
Purchaser's Estimated Subsegment A1 O&M and Administrative and Other
Charges. Purchaser's Actual Subsegment A1 O&M and Administrative and
Other Charges incurred during each subsequent Budget Year in excess of
Purchaser's quarterly payments with respect to Purchaser's Estimated
Subsegment A1 O&M and Administrative and Other Charges during such
Budget Year will be added to Purchaser's next October installment of
Purchaser's Estimated Subsegment A1 O&M and Administrative and Other
Charges; provided, however, that Purchaser's Actual Subsegment A1 O&M
and Administrative and Other Charges incurred during the final Budget
Year of this Agreement! regardless of whether the Termination Date
shall be a date other than the last day of the Budget Year, in excess
of Purchaser's quarterly payments during such Budget Year with respect
to Purchaser's Estimated Subsegment A1 O&M and Administrative and
Other Charges shall be remitted to PSI within ninety (90) days of
termination of this Agreement.
Exhibit C. which is attached hereto and incorporated herein,
illustrates the sequence of invoices and payments for a typical Budget
Year.
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Page 12
4. Repair, Replacement, and Addition Charges
PSI will receive from CWM invoices in respect of PSI's fifty percent (50%) share
of: (A) costs for repair and replacement of an actual fault in the PTAT-1
Submarine Cable or Subsegment A1; (B) costs for repairs, replacements, and
additions to the PTAT-1 Submarine Cable or Subsegment A1 to prevent a recurrence
of an actual fault; (C) costs for repairs, replacements, and additions to the
PTAT-1 Submarine Cable or Subsegment A1 to prevent the occurrence of new faults;
and (D) costs of cable working exercises for the cable ships (collectively,
"PSI's Repair, Replacement, and Addition Costs"), which are incurred during the
term of this Agreement, as promptly as practicable after such costs become
known. Purchaser's pro rata share in respect of PSI's Repair, Replacement, and
Addition Costs shall be payable in addition to Purchaser's PTAT-1 O&M Charges
and Purchaser's Estimated Subsegment A1 - O&M and Administrative and other
Charges. PSI'S Repair, Replacement, and Addition Costs shall include, but shall
not necessarily be limited to:
(i) The mobilization/demobilization charges for the cable ships, RCSVs,
depot, and other repair equipment and facilities used to effect a repair,
replacement, or addition;
(ii) The fixed daily operating charges for each day or part of a day that the
cable ship or RCSV is engaged in a repair, replacement, or addition;
(iii) The costs in respect of the cable ship working exercises which shall be
carried out in order to maintain the level of skill of the crew and to
assess the fitness of the facilities to maintain and repair the PTAT-1
Submarine Cable;
(iv) The costs of any additional equipment, facilities, and services necessary
to effect a repair, replacement, or addition;
(v) The costs of any consumable items used to effect a repair, replacement,
or addition;
(vi) The cost of replacing spares used to effect a repair, replacement, or
addition;
(vii) Cable relocation costs;
(viii) Costs incurred by PSI or PSI(NJ) as- a result of foreign currency
fluctuations affecting payments by PSI or PSI(NJ) of any invoices
rendered to PSI or PSI(NJ) in any currency other than U.S.A. dollars, PSI
shall provide Purchaser with adequate documentation of such currency
fluctuations; and
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Page 13
(ix) All other costs incurred by PSI or PSI(NJ) from any operation or
maintenance providers or in the repair or replacement of or additions to,
the PTAT-1 Submarine Cable and Subsegment A1.
Purchaser's pro rata share of PSI's Repair, Replacement, and Addition Costs
(hereinafter referred to as "Purchaser's Repair, Replacement, and Addition
Charges") with respect to the PTAT-1 Submarine Cable shall be allocated to
Purchaser on the basis of Purchaser's pro rata share of the Nominal Capacity of
the subsegment in which the IRUs are granted and to which the repair,
replacement, or addition has been effected, using the following formula:
PSR\e\ = PC/NC\s\
S = subsegment to which repair, replacement, or addition
has been effected (subsegment E1 through E5)
Where:
PSR\e\ = Purchaser's pro rata share of PSI's Repair, Replacement, and
Addition Costs for the PTAT-1 Submarine Cable.
If a repair or replacement of, or addition to, the PTAT-1 Submarine Cable has
been effected to more than one (1) subsegment of the PTAT-1 Submarine Cable,
Purchaser shall be liable to pay to PSI the sum of Purchaser's pro rata share of
the PSI's Repair, Replacement, and Addition Costs for all subsegments to which
such repair, replacement, or addition has been effected.
PSI's Repair, Replacement, and Addition Costs related to Branching Unit 1 shall
be billed to Purchaser on the basis of Purchaser's pro rata share of the Nominal
Capacity of Subsegment E2 based on the Nominal Capacity of Subsegment E2. PSI'S
Repair, Replacement, and Addition Costs related to Branching Unit 2 shall be
billed to Purchaser on the basis of Purchaser's pro rata share of the Nominal
Capacity of Subsegment E4 based on the Nominal Capacity of Subsegment E4.
If the Nominal Capacity of any subsegment in Segment E is changed due to a
change in Total Capacity of the subsegment pursuant to paragraph 8, the value of
the associated NCS factor used in the determination of Purchaser's Repair,
Replacement, and Addition Charges with respect to the PTAT-1 Submarine Cable
will be changed by a like amount as of the date on which such change in the
Total Capacity occurs. ~
If Purchaser's Capacity of any subsegment is changed pursuant to paragraph 8,
the value of the associated PC factor used in the determination of Purchaser's
Repair, Replacement, and Addition
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Page 14
Charges with respect to the PTAT-1 Submarine Cable will be changed by a like
amount as of the date on which such change in Purchaser's Capacity occurs.
Purchaser's Repair, Replacement, and Addition Charges with respect to Subsegment
A1 shall be allocated to Purchaser on the basis of Purchaser's pro rata share of
the Total Capacity of Subsegment A1, using the following formula:
PSRA1 = PC/TCA1
Where:
PSRA1 Purchaser's pro rata share of PSI'S Repair, Replacement, and
Addition Costs for Subsegment A1.
If the Total Capacity of Subsegment A1 is changed pursuant to paragraph 8, the
value of the TCA1 factor used in the determination of Purchaser's Repair,
Replacement, and Addition Charges with respect to Subsegment A1 will be changed
by a like amount as of the date on which such change occurs. If Purchaser's
Capacity of Subsegment A1 is changed pursuant to paragraph 8, the value of the
PC factor used in the determination of Purchaser's Repair, Replacement, and
Addition Charges with respect to Subsegment A1 will be changed by a like amount
in the quarter of the Budget Year in which such change occurs.
Purchaser's Repair, Replacement, and Addition Charges shall be billed to
Purchaser as soon as practicable after such costs are incurred by or charged to
the accounts of PSI or PSI(NJ).
Exhibit C. which is attached hereto and incorporated herein; illustrates the
sequence of invoices and payments for a typical Budget Year.
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Page 15
EXHIBIT C
Page 1 of 2
PTAT-1 SUBMARINE CABLE OPERATIONS AND MAINTENANCE BUDGET
SCHEDULE
(Sample Timetable Or April 1, 19X1 to March 31, 19X2 Budget Year)
=====================================================================================================
Billing Amount Payable Date Received Date Payable
Item by Purchaser by Purchaser by Purchaser
-----------------------------------------------------------------------------------------------------
Annual Budget Not Applicable March 1, 19X1 Not Applicable
or l9X1/19X2
First Purchaser's share of March 1, 19X1 April 30, 19X1
Quarterly 1/4 th Annual Budget
Payment for 19X1/19X2
Second Purchaser's share of June 1, 19X1 July 31, 19X1
Quarterly 1/4 th Annual Budget
Payment for 19X1/19X2
Third Purchaser's share of September 1, 19X1 October 31, 19X1
Quarterly 1/4 th Annual Budget
Payment for 19X1/19X2
Fourth Purchaser's share of December 1, 19X1 January 31, 19X1
Quarterly 1/4 th Annual Budget
Payment for 19X1/19X2
Repair & Purchaser's share As soon as End of the calendar
Replacement of cable segments practible following month after
Charges repaired receipt of invoices ▇▇▇▇ received
by PSI
=====================================================================================================
EXHIBIT C
Page 2 of 2
SUBSEGMENT A1 OPERATIONS AND MAINTENANCE BUDGET
SCHEDULE
(Sample Timetable for April 1, l9X1 to March 31, l9X2 Budget Year)
=====================================================================================================
Billing Amount Payable Date Received Date Payable
Item by Purchaser by Purchaser by Purchaser
-----------------------------------------------------------------------------------------------------
Annual Budget Not Applicable March 1, 19X1 Not Applicable
for l9X1/19X2
First Purchaser's share of March 1, 19X1 April 30, 19X1
Quarterly 1/4 th Annual Budget
Payment for 19X1/19X2
Second Purchaser's share of June 1, 19X1 July 31, 19X1
Quarterly 1/4 th Annual Budget
Payment for 19X1/19X2
Third Purchaser's share of September 1, 19X1 October 31, 19X1
Quarterly 1/4 th Annual Budget
Payment for 19X1/19X2
Fourth Purchaser's share of December 1, 19X1 January 31, 19X1
Quarterly 1/4 th Annual Budget
Payment for 19X1/19X2
Determination of Not Applicable July 1, 19X2 Not Applicable
Actual O&M Costs
Incurred during
19X1/19X2
Reconciliation of Purchaser's share of September 1, 19X2 October 31, 19X2
Actual vs Budgeted overage/underage
O&M Charges
for 19X1/19X2
Repair & Purchaser's share As soon as End of the calendar
Replacement of cable segments practicable following month after
Charges repaired receipt of invoices ▇▇▇▇ received
by PSI
=====================================================================================================
EXHIBIT D
USE FACTORS FOR DETERMINATION OF PRO RATA SHARES OF
RECURRING PTAT-1 OPERATIONS AND MAINTENANCE CHARGES
==========================================================================================
Segment Length Nominal Use Factor per Route
(km) Capacity ------------------------------------------------------
(64 Kbit/s) US-Bda US-Ire US-UK Bda-Ire Bda-UK Ire-UK
==========================================================================================
E1 212.0 17,010 1 1 1
E2a 590.5 5,670 1 1 0.1818
E2b 590.5 4,410 1 0.1818 1 1
E3 5,660.5 15,750 1 1 1 1
E4a 49.75 4,410 1 0.1818 1 1
E4b 49.75 4,410 0.1818 1 1
E5 356.5 15,750 1 1 1
Total 7,509.5
==========================================================================================
EXHIBIT E
ILLUSTRATION OF "ACTUAL PERCENTAGE INCREASE" CALCULATION
By way of illustration of the annual calculation of the Actual Percentage
Increase by CWM for each Budget Year, the precise calculation of the Actual
Percentage Increase as applicable for the current Budget Year is set out as
follows:
Simple 1 Annualized 2
UK RPI* Month-to-Month Month-to-Month
Month (al1 items index) Percentage Change Percentage Change
----- ----------------- ----------------- -----------------
OCT 1991 135.1
NOV 1991 135.6 0.370 4.531
DEC 1991 135.7 0.074 0.892
JAN 1992 135.6 -0.074 -0.884
FEB 1992 136.3 0.516 6.371
MAR 1992 136.7 0.293 3.573
APR 1992 138.8 1.536 20.072
MAY 1992 139.3 0.360 4.407
JUN 1992 139.3 0.000 0.000
JUL 1992 138.8 -0.359 -4.224
AUG 1992 138.9 0.072 0.867
SEP 1992 139.4 0.360 4.407
OCT 1992 139.9 -0.359 4.394
Actual Percentage Increase (= 12 Month Average) = 3.701%
----------
* Source: Her Majesty's Stationery Office - Central Statistical Office
Monthly Digest of Statistics, December 1992, Table 18.1
1. Simple Month-to-Month Percentage Change (RPIm/RPIm-1 x 100)
2. Annualized Month-to-Month Percentage Change (RPIm/RPIm-1)12-1 x 100
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