EXHIBIT 10.19
AGREEMENT FOR THE RECIPROCAL PURCHASE OF CAPACITY ON THE
SYSTEMS OF EACH OF PRIMUS TELECOMMUNICATIONS GROUP
INCORPORATED AND GLOBAL CROSSING HOLDINGS LTD. EFFECTIVE AS OF
THE 24TH DAY OF MAY, 1999 (THE "EFFECTIVE DATE").
Primus Telecommunication Group Incorporated ("Primus") and Global Crossing
Holdings Ltd. ("Global Crossing") desire to make a reciprocal purchase
commitment of facilities owned and/or operated by the other, on the terms and
conditions contained herein. As used herein, (i) the Global Crossing System
shall mean POP to POP (including backhaul) fiber connectivity on the Global
Crossing Network as depicted on the Global Crossing System Network Map attached
hereto as Annex A, and (ii) the PRIMUS Satellite System shall mean the earth
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station to earth station satellite network of PRIMUS as depicted on the PRIMUS
Satellite Network Map attached hereto as Annex B. The Ready for Service dates
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(the "RFS Dates") of each component of the Global Crossing System Network Map
and the PRIMUS Satellite Network Map are depicted on Annex A and Annex B,
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respectively.
1. PURCHASE AGREEMENT
(a) PRIMUS will endeavor to purchase MCUs on the Global Crossing System
in an aggregate amount of up to US $50,000,000 (the "Minimum Capacity
Commitment") during the period commencing on the Effective Date and ending
forty-eight (48) months later (the "Minimum Capacity Purchase Period"). In
order to fulfill the Minimum Capacity Commitment, PRIMUS shall endeavor to
purchase MCUs on the Global Crossing System in the average amount of $12,500,000
during each annual period (which shall mean, for the first such period, the
period beginning on the Effective Date and ending on December 31, 1999, and
thereafter each successive twelve (12) month period occurring during the term of
this Agreement). Such average amount shall be determined on a rolling two year
basis. For example, if during the first annual period PRIMUS purchases
$18,000,000 of capacity, then during the second annual period it need only
purchase $7,000,000 of capacity; however, if during the first annual period
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PRIMUS purchases only $7,000,000 of capacity, then during the second annual
period PRIMUS must purchase at least $18,000,000 of capacity. Notwithstanding
the foregoing and subject to capacity availability and Section 1(b) hereof,
PRIMUS hereby agrees to purchase:(i) a minimum of $9,375,000 of capacity in the
first eighteen (18) months after the Effective Date, $6,250,000 of capacity in
each of the following two years and $3,125,000 in the remaining six (6) months
of the Minimum Capacity Purchase Period; (ii) a minimum aggregate of $25,000,000
of capacity over the Minimum Capacity Purchase Period, and an OC-3 from New York
to Los Angeles at a purchase price of $6,332,000, together with a maintenance
fee of $9,842 per month, on or before May 31, 1999. PRIMUS may resell any
capacity purchased hereunder to other third parties, except that PRIMUS will not
be permitted to resell pure capacity at the STM-1 level except to its affiliates
or if such capacity is part of a bundled service offering, for example, Internet
or data services. Notwithstanding the foregoing, however, PRIMUS will be
permitted to resell capacity at the STM-1 level three (3) years after payment
for such capacity.
(b) The above commitment shall be subject to the following terms and
conditions:--
(i) if Global Crossing's RFS Dates (as depicted on Annex A) are
delayed by more than ninety (90) days and PRIMUS must acquire
fiver optic capacity during or after said ninety (90) days, the
Minimum Capacity Commitment will be reduced by the amount of
PRIMUS' capacity purchase. If this event should occur, and Global
Crossing shall have notified PRIMUS within one hundred and twenty
(120) days of the anticipated RFS date, Global Crossing will have
the right to obtain interim fiber optic capacity of equal
specifications on PRIMUS' behalf on a system acceptable to PRIMUS
in its sole but reasonable commercial discretion PRIMUS and
convert to Global Crossing's capacity on the RFS Date of the
Global Crossing System at no additional cost to PRIMUS and with
no interruption to PRIMUS' business; and
(ii) For PRIMUS' fiber optic capacity needs during the earlier of the
term of this Agreement or when the Primus Minimum Capacity
Commitment has been met, Global Crossing shall
have the right to match any other offer received by PRIMUS. Until such
time as the Minimum Capacity Commitment is met, PRIMUS agrees to accept
Global Crossing's offer if such offer is equal to or below the price of
the competitive offer and Global Crossing makes its offer within five (5)
business days' after receiving written notice from PRIMUS of a competing
offer. In the event Global Crossing declines to provide a best and final
offer or provides an offer which is not equal to or below the price of
the competing offer, the Minimum Capacity Commitment will be reduced by
the amount of the capacity purchased by PRIMUS on the competing system.
Global Crossing shall provide all quotations for capacity on a city POP
to city POP basis, and shall offer PRIMUS lease financing on all capacity
purchases on substantially the same terms and conditions as contained in
that certain Atlantic Crossing/AC-1 Submarine Cable System Capacity
Purchase Agreement between PRIMUS and Atlantic Crossing Ltd. dated
December 17, 1998 (the "Original AC-1 Agreement"), except that the
interest rate shall be adjusted to reflect then current market rates.
(c) Global Crossing's pricing of MCUs of fiber optic capacity purchased by
PRIMUS under this Agreement shall be at the lower of (i) the best "Tier 3"
Published Prices available as at the date of this Agreement, (ii) the best
available "Tier 3" Published Prices thirty (30) days prior to activation of
the specific fiber optic cable, (iii) the best available "Tier 3" Published
Prices as of the date of purchase by PRIMUS, or (iv) the price of a
competitive offer pursuant to Section 1(b)(ii) above if Global Crossing
chooses to match such competitive offer. In the event Global Crossing
adopts a measure of pricing which is more preferential than the "Tier 3"
pricing stated above, such other measure shall be offered to PRIMUS
pursuant to this Section 1(c), but always subject to the capacity
commitment made by PRIMUS at that time. For the purposes of this Section
1(c), Published Prices shall mean the prices set forth on Annex C, as it
may be supplemented from time to time to include new Systems and to reflect
any price reductions.
(d) Global Crossing shall notify PRIMUS in writing when approximately one-half
of the capacity then available on any particular cable system is sold so
that PRIMUS will have the ability to purchase capacity prior to any
shortages.
(e) Purchases of capacity on any cable system pursuant to this Agreement shall
be effected by PRIMUS executing, delivering and complying with a Capacity
Purchase Agreement ("CPA") with the particular System Company, in a form
substantially similar to the Original AC-1 Agreement.
(f) Global Crossing will endeavor to purchase satellite capacity in the PRIMUS
Satellite System in an aggregate amount of up to US $25,000,000 (the
"Minimum Satellite Capacity Commitment") during the period commencing on
the Effective Date and ending forty-eight (48) months later ("Minimum
Satellite Capacity Purchase Period"). In order to fulfill the Minimum
Satellite Capacity Commitment, Global Crossing shall endeavor to purchase
satellite capacity in the average amount of $6,250,000 during each annual
period. Such average amount shall be determined on a rolling two-year basis
using the same formula as specified in Section 1(a) above. Notwithstanding
the foregoing and subject to capacity availability and the other terms and
conditions contained herein, Global Crossing hereby agrees to purchase (i)
a minimum of $2,500,000 of satellite capacity in each year, and (ii) a
minimum aggregate of $10,000,000 of satellite capacity over the Minimum
Satellite Capacity Purchase Period. Global Crossing may resell any
satellite capacity purchased hereunder to other third parties.
(g) The above commitment shall be subject to the following terms and
conditions:
(i) if PRIMUS' RFS Dates (as depicted in Annex B) are delayed by more than
ninety (90) days and Global Crossing must acquire satellite capacity
during or after said ninety (90) days, the Minimum Satellite Capacity
Commitment will be reduced by the amount of Global Crossing's satellite
capacity purchase. If this event should occur, and PRIMUS shall have
notified Global Crossing within one hundred and twenty (120) days of
the anticipated RFS Date, PRIMUS will have the right to obtain interim
satellite capacity on Global Crossing's behalf on a system acceptable
to Global Crossing in its sole but reasonable commercial discretion and
convert to PRIMUS' capacity at the RFS Date at no additional cost to
Global Crossing and with no interruption to Global Crossing's business;
and
(ii) For Global Crossing's satellite capacity needs during the earlier
of the term of this Agreement or when the Global Crossing Minimum
Satellite Capacity Commitment has been met, PRIMUS shall have the
right to match any other offer received by Global Crossing. Until
such time as the Minimum Satellite Capacity Commitment has been
met, Global Crossing agrees to accept PRIMUS' offer if such offer
is equal to or below the price of the competitive offer and PRIMUS
makes its offer within five (5) business days' after receiving
written notice from Global Crossing of a competing offer. In the
event PRIMUS declines to provide a best and final offer or
provides an offer which is not equal to or below the price of the
competing offer, the Minimum Satellite Capacity Commitment will be
reduced by the amount of the capacity purchased by Global Crossing
on the competing system.
2. Representations
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(a) Global Crossing hereby represents and warrants to PRIMUS that (i) Global
Crossing is a company duly organized and validly existing under the laws
of Bermuda; (ii) the execution, delivery and performance of this
Agreement by Global Crossing has been duly authorized by all necessary
corporate action on the part of Global Crossing and this Agreement is a
valid, binding and enforceable obligation of Global Crossing enforceable
with its terms and (iii) the execution, delivery and performance of this
Agreement by Global Crossing does not violate, conflict with or
constitute a breach of, the organizational documents or any order,
decree or judgment of any court, tribunal or governmental authority
binding on Global Crossing.
(b) PRIMUS hereby represents and warrants Global Crossing that (i) PRIMUS is
a corporation duly organized and validly existing under the laws of the
State of Delaware; (ii) the execution, delivery and performance of this
Agreement by PRIMUS has been duly authorized by all necessary corporate
action on the part of PRIMUS and this Agreement is a valid, binding and
enforceable obligation of PRIMUS enforceable in accordance with its
terms; and (iii) the execution, delivery and performance of this
Agreement by PRIMUS does not violate, conflict with or constitute a
breach of, the organizational documents or any order, decree or judgment
of any court, tribunal or governmental authority binding on PRIMUS.
3. SETTLEMENT OF DISPUTES
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(a) The Parties shall endeavor to settle amicably by mutual discussions any
disputes, differences, or claims whatsoever related to this Agreement.
(b) Failing such amicable settlement, any controversy, claim or dispute
arising under or relating to this Agreement, including the existence,
validity, interpretation, performance, termination or breach thereof,
shall finally be settled by arbitration in accordance with the
International Arbitration Rules of the American Arbitration Association
("AAA"). There shall be three (3) arbitrators (the "Arbitration
Tribunal"), the first of which shall be appointed by the claimant in its
notice of arbitration, the second of which shall be appointed by the
respondent within thirty (30) days of the appointment of the first
arbitrator and the third of which shall be jointly appointed by the
party-appointed arbitrators within thirty (30) days thereafter. The
language of the arbitration shall be English. The Arbitration Tribunal
shall issue a written opinion and will not have authority to award
punitive damages to either party. Each party shall bear its own
expenses, but the parties shall share equally the expenses of the
Arbitration Tribunal and the AAA. This Agreement shall be enforceable,
and any arbitration award shall be final, and judgment thereon may be
entered in any court of competent jurisdiction. The arbitration shall be
held in Washington, D.C., USA.
4. GOVERNING LAW
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This Agreement shall be governed by and construed in accordance with the laws
of the State of New York, United States of America.
5. WAIVER OF IMMUNITY
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The parties acknowledge that this Agreement is commercial in nature, and
each party hereto expressly and irrevocably waives any claim or right which
it may have to immunity (whether sovereign immunity, act of state or
otherwise) for itself or with respect to any of its assets in connection
with an arbitration, arbitral award or other proceeding to enforce this
Agreement, including, without limitation, immunity from service of process,
immunity of any of its assets from pre- or post-judgment attachment or
execution and immunity from the jurisdiction of any court or arbitral
tribunal.
6. NO THIRD PARTY BENEFICIARIES.
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This Agreement does not provide and is not intended to provide third
parties (including, but not limited to, customers of PRIMUS or Global
Crossing) with any remedy, claim, liability, reimbursement, cause of
action, or any other right.
7. ASSIGNMENT.
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(a) This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
(b) Global Crossing shall solely be responsible for complying with all of
the terms binding on "Global Crossing" hereunder and shall not be
permitted to assign, transfer or otherwise dispose of any or all of
its right, title or interest hereunder or delegate any or all of its
obligations hereunder to any person or entity except that Global
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Crossing shall be permitted to (i) effect a collateral assignment of
its rights hereunder to one or more lenders to Global Crossing or its
affiliates and (ii) assign, transfer or otherwise dispose of any or
all of its rights hereunder and delegate any or all of its obligations
hereunder to any present or future entity controlled by, under the
same control as, or controlling, Global Crossing. Global Crossing
shall give PRIMUS notice of any such assignment, transfer or other
disposition or any such delegation.
(c) PRIMUS shall solely be responsible for complying with all of the terms
binding on "PRIMUS" hereunder and shall not be permitted to assign,
transfer or otherwise dispose of any or all of its right, title or
interest hereunder or delegate any or all of its obligations hereunder
to any person or entity; except that PRIMUS shall be permitted to (i)
effect a collateral assignment of its rights hereunder to one or more
lenders to PRIMUS or its affiliates and (ii) assign, transfer or
otherwise dispose of any or all of its rights hereunder and delegate
any or all of its obligations hereunder to any present or future
entity controlled by, under the same control as, or controlling,
PRIMUS. PRIMUS shall give Global Crossing notice of any such
assignment, transfer or other disposition or any such delegation.
(d) Any assignment, transfer or other disposition by either party which is
in violation of this Section 7 shall be void and of no force and
effect.
8. NOTICES.
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Each notice, demand, certification or other communication given or made
under this Agreement shall be in writing and shall be delivered by hand or
sent by registered mail or by facsimile transmission to the address of the
respective party as shown below (or such other address as may be designated
in writing to the other party hereto in accordance with the terms of this
Section 8):
If to the PRIMUS: PRIMUS Telecommunications Group, Incorporated
0000 Xxx Xxxxxx Xxxx
XxXxxx, Xxxxxxxx 00000, XXX
Att: Xxxx X. Xxxxxx, Executive VP.
Fax No.: 000-000-0000
If to the Global Crossing: Global Crossing Holdings Ltd.
Wessex House
00 Xxxx Xxxxxx
0
Xxxxxxxx XX00, Xxxxxxx
Attn: President
Fax No.: 000-000-0000
Any change to the name, address and facsimile numbers may be made at any
time by giving prior written notice in accordance with this Section 8. Any
such notice, demand or other communication shall be deemed to have been
received, if delivered by hand, at the time of delivery or, if posted, at
the expiration of seven (7) days after the envelope containing the same
shall have been deposited in the post maintained for such purpose, postage
prepaid, or, if sent by facsimile at the date of transmission if confirmed
receipt is followed by postal notice.
9. SEVERABILITY.
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If any provision of this Agreement is found by an arbitral, judicial or
regulatory authority having jurisdiction to be void or unenforceable, such
provision shall be deemed to be deleted from this Agreement and the
remaining provisions shall continue in full force and effect.
10. HEADINGS.
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The Section headings of the Agreement are for convenience of reference only
and are not intended to restrict, affect or influence the interpretation or
construction of provisions of such Section.
11. COUNTERPARTS.
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This Agreement may be executed in counterparts, each of which when executed
and delivered shall be deemed an original. Such counterparts shall together
(as well as separately) constitute one and the same instrument.
12. ENTIRE AGREEMENT.
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This Agreement supersedes all prior or written understandings between the
parties hereto and constitutes the entire agreement with respect to the
subject matter herein. This Agreement shall not be modified or amended
except by a writing signed by authorized representatives of the parties
hereto.
13. PUBLICITY AND CONFIDENTIALITY.
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(a) The provisions of this Agreement and any non-public information, written
or oral, with respect to this Agreement ("Confidential Information")
will be kept confidential and shall not be disclosed, in whole or in
part, to any person other than affiliates, officers, directors,
employees, agents or representatives of a party (collectively,
"Representatives") who need to know such Confidential Information for
the purpose of negotiating, executing and implementing this Agreement.
Each party agrees to inform each of its Representatives of the non-
public nature of the Confidential Information and to direct such persons
to treat such Confidential Information in accordance with the terms of
this Section. Nothing herein shall prevent a party from disclosing
Confidential Information (i) upon the order of any court or
administrative agency, (ii) upon the request or demand of, or pursuant
to any regulation of, any regulatory agency or authority, (iii) to the
extent reasonably required in connection with the exercise of any remedy
hereunder, (iv) to a party's legal counsel or independent auditors, (v)
to prospective lenders to the parties, and (vi) to any actual or
proposed assignee, transferee or lessee of all or part of its rights
hereunder provided that such actual or proposed assignee agrees in
writing to be bound by the provisions of this Agreement.
(b) The foregoing shall not restrict either party from publicity announcing
that it has entered into this Agreement, but without including any
details contained in this Agreement.
14. LIMITATION OF LIABILITY.
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In no event shall PRIMUS or Global Crossing be liable to the other for
consequential, incidental, indirect or special damages, including, but
not limited to, loss of revenue, loss of business opportunity, or the
costs associated therewith.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by a duly authorized officer as of the Effective Date.
GLOBAL CROSSING HOLDINGS LTD.
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title:Secretary and Senior Counsel
Jurisdiction: Bermuda
PRIMUS TELECOMMUNICATIONS GROUP
INCORPORATED
By: /s/ K. Xxxx Xxxxx
Name: K. Xxxx Xxxxx
Title: CEO
Jurisdiction: U.S.A.
