Exhibit 10.51
CAPACITY SALES AGREEMENT
This Agreement is made and entered into this 23rd day of February,
1999 between MFS CABLECO (BERMUDA) LIMITED, a Bermuda company and
affiliate of WorldCom Technologies, Inc., having its registered office at
Xxxxxxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxxxxx, HMCX 12, Bermuda ("Cableco"),
and EXODUS COMMUNICATIONS, INC., a Delaware corporation located at 0000
Xxxxxxx Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 ("Customer").
R E C I T A L S:
A. Cableco has an ownership interest in capacity on the
transatlantic fiber optic submarine and terrestrial cable network owned
and operated by Gemini Submarine Cable System Limited ("Gemini") which
runs between London, England and New York, New York, and which consists of
the Backhaul and the Gemini System (as such terms are hereinafter defined)
(the "Gemini Network").
B. Customer desires to purchase from Cableco, and Cableco is
willing to grant to Customer, an indefeasible right of use ("IRU") in a
unit of capacity equal to STM-1 (the "Capacity") on all or a segment of
the Gemini Network for the System Lifetime (as hereafter defined).
C. Cableco and Customer (hereinafter referred to as the
"Parties", and each as a "Party") desire to enter into this Agreement
to set forth the terms and conditions under which the IRU in the Capacity
will be granted to Customer.
NOW, THEREFORE, in consideration of the mutual covenants expressed
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties covenant and
agree with each other as follows:
1. Definitions. Unless otherwise defined in this Agreement, the
following capitalized terms used in this Agreement shall have the
applicable meaning set forth below and in Schedule 1 attached hereto and
incorporated by reference herein. To the extent that any definition set
forth in this Agreement for any capitalized term is different from the
definition for such term set forth in the C&MA, the definition set forth
in this Agreement shall apply.
1.1 "Agreement" means this agreement together with the
Schedule(s) specifically referenced herein and attached hereto.
1.2 "Backhaul" means, the indefeasible right of use granted by a
Backhaul Provider to Gemini for capacity in all that plant and equipment
and all those facilities required to connect a US or UK System Interface
Point (excluding such System Interface Point) to its respective Backhaul
Interface Point (including such Backhaul Interface Point). The US and UK
Backhauls shall comprise the following:
1.2.1 US BACKHAUL
"US Backhaul" means the indefeasible right of use granted by
the US Backhaul Provider to Gemini for capacity in all that plant and
equipment and all those facilities necessary to provide redundant,
protected two-way digital communications between and from the US System
Interface Points (excluding such System Interface Points) to the US
Backhaul Interface Points (and shall include such US Backhaul Interface
Points).
1.2.2 UK BACKHAUL
"UK Backhaul" means the indefeasible right of use granted by
the UK Backhaul Provider to Gemini for capacity in all that plant and
equipment and all those facilities necessary to provide redundant,
protected two-way digital communications between and from the UK System
Interface Points (excluding such System Interface Points) to the UK
Backhaul Interface Points (including such Backhaul Interface Points).
1.3 BACKHAUL INTERFACE POINT
"Backhaul Interface Point" means a point at which a Carrier
User may interconnect with the Backhaul to access the Gemini Network.
1.4 BACKHAUL PROVIDER
"Backhaul Provider" means collectively, the US Backhaul
Provider and the UK Backhaul Provider.
1.5 "IC&MA" means the Construction, Operation and Maintenance
Agreement dated October 8, 1998, herewith and attached hereto as Schedule
1, as may be amended from time to time in accordance with its terms.
1.6 "FCC" means the United States Federal Communications
Commission.
1.7 "Gemini System" means all plant and equipment between and
including the System Interface Points consisting of two transatlantic
fiber optic systems between the US and UK (each consisting of two optical
fiber pairs), interconnected at each end by an lntedink between the Cable
Station at such end, all of which will be operated in a redundant loop
configuration. Gemini System will constitute a part of the Gemini Network
(as defined on Schedule 1).
1.8 "Granting Date" means the date upon which Customer shall
have both
received notice from Cableco of Capacity availability in accordance with
Subsection 2.3; and (ii) paid Cableco the Granting Price (as hereafter
defined) in full.
1.9 "Hand-off Points" means the points between which the
Capacity shall be provided. More particularly these are the STM-1
electrical interfaces on the Gemini add drop mulitplexer forming part of
the Gemini digital distribution frame located at 00 Xxxxxx Xxxxxx, Xxx
Xxxx Xxxx, XX, XX and at Xxxxxxxxx Xxxxxx, Xxxxxx, XX.
1.10 "IRU" means the "indefeasible right of use" of a unit of
capacity on the Gemini Network (or portion thereof for the System
lifetime.
1.11 "Network Ready for Customer Service Date" or "RFCS Date"
means the date on which the first portion of the Gemini Network (i.e., the
southern submarine cable route linking Porthcurno, United Kingdom to
Manasquan, New Jersey, together with associated Backhaul system linking
Porthcurno and London in the UK and Manasquan, New Jersey and New York,
New York in the US) is ready for the provision of commercial services from
London, England to New York, New York, as certified by Gemini, being 28
February 1998.
1.12 "Network Ready for Service Date" of "RFS Date" means the
date on which the complete Gemini Network (including all associated
Backhaul systems) is ready for the provision of commercial services from
London, England to New York, New York, as certified by Gemini.
1.13 "Restoration Charges" means the charges payable by Customer
to Cableco to restore the Capacity on another cable system.
1.14 "STM-1" means a l55.22OMbps/sec both way digital line
section passing between two System Interface Points, together with the
interconnection interfaces pertaining thereto, in accordance with ITU-TS
recommendations.
1.15 "System Interface Points" means a point at which the Gemini
System may be interconnected with the Backhaul or the networks of a
Carrier User or other backhaul provider and shall be located at digital
distribution frame, or equivalent equipment, associated with the Gemini
System at a Cable Station.
1.16 "System Lifetime" means the lifetime of the Gemini Network
from the RFCS Date until the Gemini Network is retired in accordance with
this C&MA.
2. Grant of IRU.
2.1 In consideration for the payment by Customer to Cableco of the
Granting Price and the O&M Costs, Cableco grants to Customer effective as
of the Granting Date an IRU in the Capacity, subject to the terms and
conditions set forth in this Agreement.
2.2 The Capacity shall be provided between the Hand-off Points,
and shall be presented to Customer via WorldCom leased access circuits as
set forth below. The provision of the aforementioned leased circuits from
the Hand-off Points to Customer's premises by Cableco shall be subject to
WorldCom Technologies, Inc.'s standard terms and conditions as set forth
in the WorldCom Capacity Access Service Agreement, copy of which is
attached hereto as Schedule 2.
2.3 Cableco shall use commercially reasonable efforts to make the
Capacity available to Customer by March 31, 1999 (the "Capacity Request
Date"). Cableco shall, upon its making the Capacity available to
Customer in accordance with this Subsection 2.3, demonstrate to the
reasonable satisfaction of Customer the performance of such Capacity
against testing criteria (to be determined in Cableco's sole discretion)
to be provided by Cableco. In the event Customer makes use of the
Capacity prior to the Capacity Request Date, it shall be deemed to have
acknowledged that availability of such Capacity and to have delivered a
notice to Cableco on such date.
2.4 Customer acknowledges that Gemini may from time to time
require use of the Capacity for the purpose of conducting tests,
adjustments and work and Customer shall make the Capacity available to
Gemini (or to its subsidiaries or agents) for such purpose, at such times
as may be necessary for such Capacity to be maintained in efficient
working order. In the event Gemini shall require access to the Capacity
as described in this Subsection 2.4, Cableco shall provide written notice
(the "Test Notice") to Customer as soon as commercially reasonable, but
in no event will the notice be less than 5 business days. In the event
that delivery of the Test Notice is not commercially reasonable, Cableco
shall contact Customer by telephone at such location as Customer may from
time to time notify Cableco in writing immediately prior to the
commencement of any such tests, adjustments or work. All such tests,
adjustments or work shall be performed at such times and in such manner as
shall minimize or prevent any interruption in or interference with the
Capacity.
2.5 The communications capability and efficiency of any Capacity
may be optimized by Customer by the use of equipment, provided that the
use and operation of such equipment by Customer or any person or entity
claiming through or under Customer shall not (i) cause any interruption
of, or interference to, the use of any other capacity on the Gemini
Network, (ii) prevent the use of similar equipment by other owners or
operators of the Gemini Network, (iii) impair privacy of any
communications over such facilities, (iv) cause damage to any plant or
equipment, or (v) create hazards to employees, affiliates or connecting
companies of Cableco, Customer, or any other user, owner or operator of
the Gemini Network or the public; and provided, further, that Customer
shall indemnify Cableco in connection with the use of any such equipment
by Customer or any person or entity claiming through or under Customer in
accordance with the provisions of Subsection 2.5. Such equipment, if used,
shall not constitute a part of the Gemini Network. In addition, Customer
shall bear the cost of any additional protective apparatus reasonably
required to be installed because of the use of such facilities by
Customer, any lessees of Customer, or any customer or customers of
Customer or of any such lessee. Customer shall, in any agreements with
third parties for the sale of any interests in the Capacity, include in
such agreements provisions substantially in the form of those contained in
this Subsection 2.5.
3. Payment for IRU.
3.1 In consideration for the grant to Customer of an IRU in the
Capacity,
Customer shall pay to Cableco US$7,300,000 (the "Granting Price"). The
Granting Price shall be payable as follows:
(i) Fifty percent (50%) payable within thirty (30) days
following execution of this Agreement;
(ii) With the remaining fifty percent (50%) payable within
thirty (30) days following the date on which Cableco notifies Customer
that the Capacity is available to Customer.
3.2 In addition to the Granting Price described in Subsection 3.1
above, Customer shall be liable for those costs reasonably incurred by or
on behalf or Gemini in connection with the operation, maintenance and
repair of the Gemini Network as described in more detail in the C&MA (the
"O&M Costs"). The O&M costs consist of ***.
3.3 All payments made by Customer under this Agreement shall be
made without any deduction or withholding for or on account of any tax,
duty or other charges of whatever nature imposed by any taxing or
governmental authority (collectively, "Taxes"). If Customer is required
by law to make any deduction or withholding from any payment due hereunder
to Cableco then, notwithstanding anything to the contrary contained in
this Agreement, the gross amount payable by Customer to Cableco will be
increased so that, after any such deduction or withholding for Taxes, the
net amount received by Cableco will not be less than Cableco would have
received had no such deduction or withholding been required. Customer
acknowledges and understands that Cableco computes all charges herein
exclusive of any applicable foreign, VAT, federal, state or local use,
excise, gross receipts, sales and privilege taxes, duties, fees or similar
liabilities (other than general income or property taxes), whether charged
to or against Cableco or Customer because of the Service furnished to
Customer ("Additional Charges"). Customer shall pay such Additional
Charges in addition to all other charges provided for herein.
3.4 If payment is not received by Cableco on or before the
applicable due date, Customer shall, on five (5) business days' notice
from Cableco, also pay a late fee in the amount of the lesser of one and
one-half percent (1 1/2%) of the unpaid balance of the applicable charge,
or, the maximum lawful rate under applicable state law.
3.5 Cableco shall render invoices under this Agreement in U.S.
dollars, and Customer shall pay the amounts due in U.S. dollars. Customer
shall make said payments to Cableco in immediately available funds.
3.6 Invoices shall be deemed to have been accepted by Customer if
it does not present a written objection to Cableco on or before the date
when payment is due. If such objection is made, Customer shall pay the
undisputed portion of such invoice and the Parties shall make all
reasonable efforts to resolve such dispute promptly.
4. Operation and Maintenance.
4.1 Cableco shall furnish the Capacity to Customer and maintain
the Capacity in accordance with the terms of the C&MA.
4.2 In the event that the Capacity and any in-system restoration
shall become unavailable during the System Lifetime and restoration
facilities are available to Gemini on another cable system, Gemini shall
arrange restoration of the Capacity and Customer shall pay the Restoration
Charges therefor. In the event Customer notifies Cableco in writing that
it shall not require restoration of the Capacity, Cableco shall not be
obliged to procure the restoration of the Capacity and Customer shall not
be liable for payment of the Restoration Charges therefor.
***Confidential treatment has been requested for certain portions of this
document. Such portions have been filed separately with the Securities
and Exchange Commission.
5. Representations, Warranties and Covenants.
5.1 Customer hereby represents to, warrants and covenants with
Cableco as follows:
(a) Customer is a Delaware corporation, duly organized and
validly existing under the laws of its state or jurisdiction of
organization and has the requisite authority to execute this Agreement and
to perform its obligations hereunder.
(b) This Agreement constitutes a valid and binding
obligation of Customer, enforceable against Customer in accordance with
its terms.
(c) There are not pending, or, to Customer's knowledge, any
threatened claims, actions, suits, audits, investigations or proceedings
by or against Customer which could have a material adverse effect on
Customer's ability to perform its obligations under this Agreement.
(d) To the best of Customer's present knowledge, Customer
has obtained and shall maintain in good standing, all such consents,
approvals, licenses, permits and other approvals, both governmental and
private, as may be required, at the time of performance, to permit
Customer to perform its obligations under this Agreement and to acquire
and use the Capacity. In the event Customer learns of any such consents,
approvals, licenses, permits or other approvals, governmental or private,
as may be required, Customer shall obtain and thereafter shall maintain in
good standing, all such consents, approvals, licenses, permits and other
approvals, both governmental and private, as may be required, at the time
of performance, to permit Customer to perform its obligations under this
Agreement and to acquire and use the Capacity.
(e) Customer is a "Carrier User" within the meaning of
that term as it is used in the C&MA.
(f) Customer shall perform its obligations under this
Agreement and use the Capacity in a manner consistent with applicable law,
and shall not use, or permit the Capacity to be used, for any illegal
purpose or in any other unlawful manner.
(g) Customer shall not create or permit to exist, any liens,
encumbrances or charges to be placed upon the Capacity or Customer's
rights under this Agreement other than liens, encumbrances or charges of
financial institutions or others against Customer's assets generally in
connection with financing arrangements by Customer.
(h) Customer shall use the Capacity and shall cause all
other persons using the Capacity to use the Capacity in such a manner so
as not to cause any interruption of, or interference to, the Gemini
Network, or the use of any other capacity on the Gemini Network.
5.2 Cableco hereby represents to, warrants and covenants with
Customer as follows:
(a) Cableco is a Bermuda company, duly organized and validly
existing under the laws of Bermuda and has the requisite authority to
execute this Agreement and to perform its obligations hereunder.
(b) This Agreement constitutes a valid and binding
obligation of Cableco, enforceable against Cableco in accordance with its
terms.
(c) There are no pending, or, to Cableco's knowledge,
threatened claims, actions, suits, audits, investigations or proceedings
by or against Cableco which could have a material adverse affect on
Cableco's ability to perform its obligations under this Agreement.
(d) Cableco has obtained or shall obtain and shall maintain
in good standing, all necessary consents, approvals, licenses, permits and
other approvals, both governmental and private, as are necessary to permit
Cableco to perform its obligations under this Agreement.
(e) Cableco shall not create or permit to exist, any liens,
encumbrances or charges to be placed upon the Capacity or Cableco's rights
under this Agreement other than liens, encumbrances or charges of
financial institutions or others against Cableco's assets generally in
connection with financing arrangements by Cableco.
(f) Cableco shall perform its obligations under this
Agreement in a manner consistent with applicable law.
6. Default.
6.1 In the event Customer (i) fails to make any payment under this
Agreement when due, (ii) fails to perform any of its material obligations
under this Agreement, or (iii) is otherwise in breach of any material
representation, warranty, covenant or other obligation under this
Agreement, which event remains uncured for a period of thirty (30) days
following receipt by Customer of written notice of any such breach or
failure, Cableco shall be entitled upon ten (10) business days' written
notice to Customer to terminate this Agreement and to reclaim the IRU
granted hereunder, and shall be relieved of any liability to Customer due
to such termination and reclamation.
6.2 In the event Cableco (i) fails to perform any of its material
obligations under this Agreement, or (ii) is otherwise in breach of any
material representation, warranty, covenant or other obligation under this
Agreement, which event remains uncured for a period of thirty (30) days
following receipt by Cableco or written notice of any such breach or
failure, Customer shall be entitled, upon ten (10) business days' written
notice to Cableco to terminate this Agreement and shall be relieved of any
liability to Cableco due to such termination. In the event Customer
terminates this Agreement in accordance with this Subsection 6.2, Cableco
shall be entitled to reclaim the IRU granted hereunder and, if Cableco so
reclaims the IRU granted hereunder, Cableco shall make payment to Customer
of a proportion of the Granting Price appropriately pro rated according to
the following schedule:
Termination Date Portion of Granting Price to Be Reimbursed
0-1 year after Granting Date $6,300,000
1-2 years after Granting Date $5,000,000
2-3 years after Granting Date $3,700,000
3-4 years after Granting Date $2,400,000
4-5 years after Granting Date $1,100,000
5+ years after Granting Date $0
In addition, in the event Cableco reclaims the IRU in accordance
with this Subsection 6.2, Cableco shall refund Customer an amount equal to
the product of the O&M Costs paid by Customer at the beginning of the year
of such termination, multiplied by the number of months remaining in the
contract year (measured from the anniversary of the Granting Date),
divided by twelve (12).
6.3 Either Party shall be entitled to terminate this Agreement by
written notice to the other Party in the event that the other Party shall
be dissolved or go into liquidation (other than for the purposes of
reconstruction or amalgamation), bankruptcy or insolvency, including (i)
the filing of a voluntary or involuntary petition seeking liquidation,
reorganization, arrangement or a readjustment in any form, of its debts
under any federal or state bankruptcy insolvency or similar law with
involuntary petitions not canceled or withdrawn with forty-five (45) days'
of filing thereof; of (ii) the making of any assignment for the benefit of
its creditors.
6.4 This Agreement shall terminate in the event of: (i) any final
action by the FCC or other applicable regulatory or governmental authority
directing either Party or Gemini to terminate this Agreement or declaring
that this Agreement is in any way inconsistent with FCC rules or other
applicable laws, rules and regulations, or (ii) upon the expiration or
earlier revocation of any license granted to either Party by a regulatory
or governmental authority and required by such Party to authorize its use
of the Gemini Network in accordance with the terms of this Agreement. In
the event of termination under this Subsection 6.4, unless the FCC or
other applicable regulatory or governmental authority directs otherwise,
Cableco shall be entitled to reclaim the IRU granted hereunder and, if
Cableco so reclaims the IRU granted hereunder, Cableco shall make payment
to Customer of a proportion of the Granting Price appropriately pro rated
according to the following schedule:
Termination Date Portion of Granting Price to Be Reimbursed
0-1 year after Granting Date $6,300,000
1-2 years after Granting Date $5,000,000
2-3 years after Granting Date $3,700,000
3-4 years after Granting Date $2,400,000
4-5 years after Granting Date $1,100,000
5+ years after Granting Date $0
In addition, in the event Cableco reclaims the IRU in accordance
with this Subsection 6.4, Cableco shall refund Customer an amount equal to
the product of the O&M Costs paid by Customer at the beginning of the year
of such termination, multiplied by the number of months remaining in the
contract year (measured from the anniversary of the Granting Date),
divided by twelve (12). Notwithstanding anything to the contrary herein,
Customer shall not be entitled to any compensation under this Subsection
6.4 if (i) termination under this Subsection 6.4 arises out of Customer's
breach of any material representation, warranty, covenant or other
obligation under this Agreement, or (ii) Customer receives payment from
Cableco in accordance with Subsection 6.2 above.
6.5 The exercise by either Party of its rights under this Section
6 shall be without prejudice to any and all rights and legal and equitable
remedies which such Party may have under this Agreement or otherwise
(including its rights and remedies to enforce the other Party's
obligations under this Agreement).
7. Limited Liability; General Indemnity; Reimbursement.
7.1 IN NO EVENT SHALL EITHER PARTY HERETO OR ITS AFFILIATES BE
LIABLE TO THE OTHER PARTY (OR ANY PERSON OR ENTITY CLAIMING THROUGH OR
UNDER SUCH PARTY, DIRECTLY OR INDIRECTLY) FOR ANY INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL LOSSES OR DAMAGES, INCLUDING WITHOUT
LIMITATION, LOSS OF REVENUE, LOSS OF CUSTOMERS OR CLIENTS, LOSS OF
GOODWILL OR LOSS OF PROFITS ARISING IN ANY MANNER FROM THIS AGREEMENT AND
THE PERFORMANCE OR NONPERFORMANCE OF OBLIGATIONS HEREUNDER, INCLUDING
WITHOUT LIMITATION, ANY DAMAGE SUSTAINED BY REASON OF ANY DELAY IN
COMMENCING, OR ANY FAILURE IN OR BREAKDOWN OF THE GEMINI NETWORK OR ANY
FACILITIES ASSOCIATED WITH THE GEMINI NETWORK, OR FOR ANY INTERRUPTION OF
SERVICE WHATSOEVER, EVEN IF SUCH PARTY OR ITS AGENTS WERE AWARE OF THE
POSSIBILITY OF SUCH LOSSES.
7.2 In the event parties other than Customer (e.g., Customer's
affiliates and/or Customer's end users) shall have use of the Service
through Customer, then Customer agrees to forever indemnify and hold
Cableco and its affiliated companies harmless from and against any and all
claims, demands, suits, actions, losses, damages, assessments or payments
which those parties may assert arising out of or relating to any defect in
the Service.
7.3 The Parties agree to reimburse the other Party for all
reasonable costs and expenses incurred by the other party due to such
Party's direct participation (either as a party or witness) in any
administrative, regulatory or criminal proceeding concerning the other
party if such Party's involvement in said proceeding is based solely on
any issue or provision of Services arising out of this Agreement.
8. Force Majeure. Except as otherwise specifically provided for in
this Agreement, Cableco's performance shall be excused and it shall not be
liable to Customer or any other person, firm or entity for any failure of
performance hereunder if such failure is due to any cause or causes beyond
the reasonable control of Cableco. Such causes shall include, without
limitation, acts of God, fire, explosion, vandalism, cable cut, storm or
other similar occurrence, any law, order, regulation, direction, action or
request of the United States government or of any other government or of
any civil or military authority, national emergencies, insurrections,
dots, wars, strikes, lockouts or work stoppages or other labor
difficulties, supplier failures, shortages, breaches or delays.
9. Relationship of Parties. The relationship of the Parties hereto
shall not be that of partners and shall be limited to the express
provisions of this Agreement. Nothing herein contained shall be deemed to
constitute a partnership between them or to merge their assets or their
fiscal or other liabilities or undertakings, nor shall it allow a Party to
act as an agent of the other party.
10. Severability. It any provision of this Agreement is found by an
appropriate judicial or regulatory authority 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.
11. Headings; References. Headings are inserted for convenience only
and shall
not affect the interpretation of this Agreement. References to Sections,
Subsections and Schedules are to references to Sections, Subsections and
Schedules to this Agreement. Unless the context otherwise requires, words
importing the singular number shall include the plural and vice versa.
Unless the context otherwise requires, references to a person include an
individual, firm, body, corporation, unincorporated association and
government or governmental, semi-governmental or local authority or
agency.
12. Assignment. Customer shall not assign or transfer its rights or
obligations under this Agreement without the prior written consent of
Cableco. Any assignment or transfer without such consent shall be void.
13. Increase or Decrease in Design Capacity.
13.1 Customer acknowledges that Gemini may increase, at its own
cost and expense, the initial design capacity of the Gemini Network.
13.2 Customer acknowledges that in the event the capacity that the
Gemini Network is capable of providing at the RFS Date is less than the
aggregate amount of capacity purchased by all purchasers of capacity on
the Gemini Network, or in the event the capacity that the Gemini Network
is capable of providing is reduced below the aggregate level of capacity
purchased by all carrier users at any time during the System Lifetime for
any cause outside Gemini's reasonable control, the available capacity
shall be assigned to all purchasers of capacity on the Gemini Network in
proportion to their respective shares of the purchased capacity. In case
of such capacity reduction the O&M Costs payable by each Customer shall be
recomputed. In such event, Customer shall have the right to terminate
this Agreement on not less than one hundred eighty (180) days notice to
Cableco, unless Cableco is able to restore full Capacity to Customer
within that one hundred eighty day (180) period.
14. Continuation of Obligations.
14.1 Upon any termination of this Agreement in accordance with
Section 6, the rights and obligations of Customer in the IRU granted to it
hereunder shall terminate in accordance with the terms of this Agreement.
14.2 Termination of this Agreement shall not operate as a waiver by
either Party of any breach of the provisions hereof and shall be without
prejudice to the rights or remedies of either Party which may arise as a
consequ6nce of such breach or which may have accrued hereunder up to the
date of such termination.
15. Governing Law and Arbitration. This Agreement shall be construed
under the laws of the State of New York without regard to choice of law
principles,
Any dispute relating to this Agreement or its subject matter -
including disputes as to validity, performance, breach, or termination --
which cannot be settled by negotiation, shall be submitted to binding
arbitration in accordance with the Arbitration Rules of the United Nations
Commission on International Trade Law ("UNCITRAL Rules") as in force on
the date of commencement of arbitration, and as modified by this
Arbitration Clause. Claims alleging violations of the telecommunications
laws of the United States of America, however, shall be brought solely
before the United States Federal Communications Commission.
ADR Associates shall serve as both the appointing authority and the
administering body under the UNCITRAL Rules. ADR Associates shall appoint
a single arbitrator of a nationality other than the nationalities of the
parties. All arbitration proceedings shall be conducted in English. The
place of arbitration shall be Bermuda. Neither the parties, nor the
arbitrator, nor ADR Associates shall disclose the existence, content, or
results of any arbitration except with the prior written consent of both
parties. The law governing the arbitration proceedings shall be the
Bermuda International Conciliation and Arbitration Xxx 0000.
The arbitrator shall abide by the rules of Ethics for International
Arbitrators established by the International Bar Association. The
arbitrators authority to grant relief is subject to the terms of this
Arbitration Clause, the terms of the Agreement, and the law governing the
Agreement. The arbitrator shall have no authority to award exemplary,
punitive, or treble damages.
Each party shall pay one half the costs of the arbitration (as
defined in Article 38, UNCITRAL Rules), except that each party shall pay
the expenses it incurs for its own legal representation and assistance.
Judgment on the award may be entered in any court of competent
jurisdiction. The post-award proceedings shall be governed by the
Convention on Recognition and Enforcement of Foreign Arbitral Awards of
1958 (the "New York Convention"). The validity and construction of this
Arbitration Clause shall be governed by the law of the State of New York,
U.S.A., without regard to its conflict of laws rules.
16. Successors and Assigns. This Agreement and all the provisions
hereof shall be binding upon and insure to the benefit of the Parties
hereto and their respective successors and permitted assigns.
17. Waiver. The waiver by any Party, in whole or in part, of a breach
of or a default under any of the provisions of the Agreement, or the
failure, in whole or in part, of any Party, upon one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right
or privilege hereunder shall not thereafter be construed as a waiver of
any subsequent breach or default of a similar nature or as a waiver or any
such provision, right or privilege hereunder.
18. Counterparts. 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.
19. Notices. Notices under this Agreement shall be in writing and
delivered to the person identified below at the offices of the parties as
they appear below or as otherwise provided for by proper notice hereunder.
Notices under this Agreement shall be transmitted via facsimile, overnight
courier, hand delivery or certified or registered mail, postage prepaid
and return receipt requested. Customer shall notify Cableco in writing if
Customers billing address is different than the address shown below. The
effective date for any notice under this Agreement shall be the date of
actual receipt of such notice by the appropriate party, notwithstanding
the date of mailing.
If to Cableco: MCI WorldCom
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxx 0, 0xx Xxxxx
Xxxxxxx, XX 00000
Fax: 000-000-0000
Attn: Marketing, Contract Administration
If to Customer: Exodus Communications, Inc.
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: 000-000-0000
Attn: VP Engineering
With Copy to: Exodus Communications, Inc.
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
20. Partial Invalidity; Government Action.
20.1 If any part of any provision of this Agreement or any other
agreement, document or writing given pursuant to or in connection with
this Agreement shall be invalid or unenforceable under applicable law,
rule or regulation, that part shall be ineffective to the extent of such
invalidity only, without in any way affecting the remaining parts of that
provision or the remaining provisions of this Agreement. In such event,
Customer and Cableco will negotiate in good faith with respect to any such
invalid or unenforceable part to the extent necessary to render such part
valid, enforceable, and capable of accomplishing the lawful objectives and
intent of the parties.
20.2 Upon thirty (30) days prior notice, either party shall have
the right, without liability to the other, to cancel an affected portion
of the Service if any material rate or term contained herein and relevant
to the affected Service is substantially changed (to the material
detriment of the terminating party) or found to be unlawful or the
relationship between the parties hereunder is found to be unlawful by
order of the highest court of competent jurisdiction to which the matter
is appealed, the FCC, or other local, state or federal government
authority of competent jurisdiction.
21. Exclusive Remedies. Except as otherwise specifically provided for
herein, the remedies set forth in this Agreement comprise the exclusive
remedies available to either party at law or in equity.
22. Use of Service.
22.1 Under the terms and conditions of this Agreement, Cableco will
provide the Capacity specified therein to Customer upon condition that the
Capacity shall not be used for any unlawful purpose. The provision of
Capacity will not create a partnership or joint venture between the
parties or result in a joint communications service offering to any third
parties, and Cableco and Customer agree that this Agreement, to the extent
it is subject to FCC regulation, is an inter-carrier agreement which is
not subject to the filing requirements of Section 21 1 (a) of the
Communications Act of 1934 (47 U.S.C. 21 1 (a)) as implemented in 47
C.F.R. 43.51.
22.2 In consideration of the charges offered to Customer hereunder,
Customer agrees not to resell the Capacity provided hereunder to any third
party, and that any such resale shall be considered a breach of this
Agreement.
23. Rule of Construction. No rule of construction requiring
interpretation against the drafting party hereof shall apply in the
interpretation of this Agreement.
24. Confidential Information.
24.1 The Parties understand and agree that the terms and conditions
of this Agreement, all documents referenced herein (including invoices to
Customer for Service provided hereunder), communications between the
Parties regarding this Agreement or the Service to be provided hereunder
(including but not limited to price quotes to Customer for any Service
proposed to be provided or actually provided hereunder, technical
information, business or marketing plans, and customer data), as well as
such information relevant to any other agreement between the Parties
(collectively, "Confidential Information"), are confidential as between
Customer and Cableco. However, this Agreement imposes no obligation upon
the receiving party with respect to information that (i) was in the
receiving party's possession before receipt for the disclosing party; (ii)
is or becomes a matter of public knowledge through no fault of the
receiving party; (iii) is rightfully received by the receiving party from
a third party without a duty of confidentiality; or (iv) is independently
developed by the receiving party.
24.2 A party shall not disclose Confidential Information unless
subject to discovery or disclosure pursuant to legal process, nor to any
other party other than the directors, officers, and employees of a party
or a party's agents including their respective brokers, lenders, insurance
carriers or bona fide prospective purchasers who have specifically agreed
in writing to nondisclosure of the terms and conditions hereof. Any
disclosure hereof required by legal process shall only be made after
providing the non-disclosing party with notice thereof in advance so as to
permit the non-disclosing party the opportunity to seek an appropriate
protective order or exemption. Violation by a party or its agents of the
foregoing provisions shall entitle the non-disclosing party, at its
option, to obtain immediate injunctive relief without a showing of
irreparable harm or injury and without the necessity of bond.
24.3 The provisions of this Section 24 will be effective as of the
date of this Agreement and remain in full force and effect for a period
which will be the longer of (i) one (1) year following the date of this
Agreement, or (ii) one (1) year from the termination of all Service
hereunder.
25. Press Releases. The parties agree that any press release,
advertisement or publication generated by a Party regarding this
Agreement, the Service provided hereunder or in which a Party desires to
mention the name of the other Party or the other Party's parent or
affiliated company(ies), will be submitted to the non-publishing Party for
its written approval at least five (5) days prior to publication unless a
shorter period be mutually agreed and evidenced in writing. No press
release shall be issued regarding this Agreement without the other party's
written approval.
26. Entire Agreement. This Agreement constitutes the complete and
exclusive statement of the understandings between the parties and
supersedes all proposals and prior agreements (oral or written) between
the parties relating to the subject matter of this Agreement. No
subsequent agreement between the Parties concerning the Service shall be
effective or binding unless it is made in writing and subscribed to by
authorized representatives of Customer and Cableco.
IN WITNESS WHEREOF, the parties have executed this Capacity Sales
Agreement on the date written below.
MFS CABLECO (BERMUDA) LTD. EXODUS COMMUNICATIONS, INC,
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxx X. XxXxxxxxx
Print Name: Xxxxx Xxxxxx Print Name: Xxxxx X. XxXxxxxxx
Title: V.P. Marketing Title: EVP, Engineering
Date: Date: February 17, 1999
Schedule I
GEMINI NETWORK
CONSTRUCTION, OPERATION AND MAINTENANCE ARRANGEMENT
(C&MA)
1. DEFINITIONS
Definitions shall be as set forth in the Capacity Sales Agreement
with the following additions:
1.1 BASIC SYSTEM MODULE
"Basic System Module" of the Gemini Network means an STM-1 digital
line section with interfaced provide in accordance with the
appropriate ITU-TS Recommendations.
1.2 CABLE STATION
"Cable Station" means a building which houses Gemini System
terminal equipment at a Gemini System landing point.
1.3 CARRIER USER
"Carrier User" means any entity that is authorized or permitted,
under the laws of its respective country, to acquire and use
submarine cable telecommunications serves between or via the US and
the UK, and that acquires capacity of the Gemini Network for the
provision of international telecommunication services.
1.4 COUNTRY
"Country" means a country territory or place, as appropriates.
1.5 CSA
"CSA" means in relation to any Carrier User, the capacity sales
agreement for the grant by Gemini to such Carrier User of capacity
on the Gemini Network executed between Gemini and such Carrier User.
1.6 FOUNDING PARTY
'"Founding Party" means a shareholder of Gemini.
1.7 GEMINI
"Gemini" means the joint venture formed by the Founding Parties to
build, own (or obtain indefeasible rights of us in), operate, and
maintain the Gemini Network.. Gemini has been formed to build,
operate and maintain the Gemini Network.
1.8 GEMINI NETWORK
"Gemini Network" means the fiber optic submarine and terrestrial
cable network capable of providing telecommunications services from
London, England to New York, New York, which network consists of the
Backhaul and the Gemini System. Gemini Network is intended to
provide digital transmission services using fiber optic cable between
points in or reached via the US and point in or reached via the UK;
necessary permits, wayleaves and other authorizations in accordance
with English law are available Cable & Wireless communications
limited at UKL affiliate of Cable & Wireless PLC (hereinafter the
"UK Landing Party") to enable the Gemini Network to be installed
and operated in the UK, and necessary rights of way and permits,
licenses and other authorizations in accordance with applicable
United States federal and state law are available to MFS Cable co.
(US), Inc. A Delaware corporation, which is an US affiliate of MFS
Cable Co (Bermuda) Ltd. (hereinafter, the "US Landing Party" to
enable the Gemini Network to be installed and operated in the US;
1.9 INTERLINK
"Interlink" means the fiber optic capacity connecting the Cable
Stations at the UIS and UK ends of the Gemini Network (i.e.
subsegments S3 and S4), respectively.
1.10 ITU-TS
"ITU-TS" means the international Telecommunications Union
Telecommunications Standardization Sector (Previously referred to as
CCITT).
1.11 LANDING PARTY
"Landing Party" means an entity that contracts with Gemini to
provide the use of the permits, wayleaves, right of way and
authorizations necessary to enable the Gemini System to be installed
and operated in the US or the UK.
1.12 LANDING STATION SYSTEM MULTIPLEX EEQUIPMENT
"Landing Station System Multiplex Equipment" means any and all
equipment necessary in each of the Cable Stations required to
operate and interface at the System digital input-output ports.
1.13 O&M COSTS
"O&M Costs" means those operation, maintenance and repair costs
associated with, of the Gemini Network as described in Clause 8
hereof
1.14 O&M CONTRACT
"O&M contract" means an agreement providing for the provision of
material services, or equipment pertaining to the operation,
maintenance, or report of the Gemini Network.
1.15 TRANSIT CIRCUIT
"transit Circuit" means a circuit conveyed on the Gemini Network
but which does not terminate in one or both of the UK or US.
1.16 UK BACKHAUL PROVIDER
"UK Backhaul Provider" means Cable and Wireless Communications
Limited, a company organized under the Laws of England and Wales; or
such other person as may provide UK Backhaul services to Gemini,
from time to time.
1.17 USABLE CAPACITY
The "Usable Capacity" of the Gemini Network means the fully
restorable 128
Basic System Modules of capacity available for use when the complete
Gemini Network is available for service and operated as a fully
redundant, self-restoring 20 Gigabit system.
1.18 US BACKHAUL PROVIDER
"US Backhaul Provider" means MFS Cable Co (US), Inc., a Delaware
corporation or such other person as may provide US Backhaul services
to Gemini, from time to time.
2. GEMINI NETWORK SEGMENTS AND SUBSEGMENTS
The Gemini System, as shown in Diagram 2.2 hereto, shall be
provided constructed, maintained and operated among the Cable
Station in Manaquan, New Jersey, US; Porthcurno, UK; Charlestown,
Rhode island, US; and Oxwich Bay, UK. The Gemini System shall
consist of two fiber optic pairs configured to operate in a loop
configuration that will connect Charlestown and Manasquan in the US
with Porthcurno and Oxwich Bay in the UK.
2.1 SEGMENTS
Solely for the purposes of identifying capacity utilization,
Segments A, B, C, D shall each consist of an appropriate share of
land and building at the specified locations for the cable landing
and for the cable right-of-way and ducts between the Cable Station
and its respective landing point, and an appropriate share of
common services and equipment (other than services and equipment
associated solely with the Gemini System, and other than Landing
Station System Multiplex Equipment), or indefeasible rights of use
therein, at each of the locations.
2.1.1 Segment A
A Cable Station located in Charlestown, Rhode Island, US .
2.1.2 Segment B
A Cable Station located in Manasquan, New Jersey, US.
2.1.3 Segment C
A Cable Station locate din Oxwich Bay, UK
2.1.4 Segment D
A Cable Station located in Porthcurno, UK.
2.2 Segment S
Solely for purposes of identifying capacity utilization, Segment S
shall consist of the whole of the submarine cable and Interlinks,
which shall include all submersible cable, plant, equipment and
facilities, or indefeasible rights of use therein, between and
including the System Interface Points in the US and UK. It
includes, but is not limited to, all necessary submarine and
terrestrial cable, cable joints and joint housing, repeaters,
transmission equipment, power feeding equipment (and the associated
sea earth cable and electrode system and/or the land earth system,
or an appropriate share thereof), and special test equipment
directly associated with the submersible plant, and interconnection
facilitates, provided, and Including the System Interface Points at
the Cable Station at Charlestown, Rhode Island, US; Manasquan, New
Jersey, US, Oxwich Bay; UK and Porthcurno,
2.2.1
Segment A Segment C
(Charlestown) Segment S1 (Oxwich Bay)
Segment Segment
S3 S4
Segment B Segment S2 Segment D
(Manasquan) (Porthcurno)
3. OBLIGATIONS TO PROVIDE BACKHAUL AND INTERCONNECTION FACILITIES
Gemini shall use its commercially reasonable efforts to ensure for
the System Lifetime (a) the availability of such Backhaul facilities
as may be reasonably required to utilize efficiently the Gemini
System and with inland networks at the Backhaul Interface Points,
including all necessary facilities to connect the System Interface
points and Backhaul Interface Points; and (b) the availability of
suitable connection with the allocated capacity in the Gemini System
to allow interconnection to the Backhaul and other
telecommunications networks at the System Interface Points at the
STM-1 level.
4. REDUCTION IN CAPACITY
In the event that the capacity that the Gemini Network is capable
of providing at the RFS Date is less than the capacity purchased by
Carrier Users, or in the event that the capacity the Gemini Network
is capable of providing is reduced below the level purchased by
Carrier Users at any time during the System Lifetime, due to
physical deterioration or for any other reason, the available
capacity shall be assigned to Carrier Users in proportion to their
respective shares of the purchased capacity in an equitable manner
as determined by the Management committee. In case of such
capacity reduction, Gemini will recompute the pro rate allocation
of and make appropriate adjustments to the O&M Costs and associated
Fees payable by each Carrier User.
5. INTERCONNECTION
Carrier Users will be allowed to interconnect their networks with
the Gemini Network either
(i) at a Backhaul Interface Point at the STM-1 level; or
(ii) at a System Interface Point at the STM-1 level; or
(iii) Transit Circuit purposes only, at the Porthcurno, United
Kingdom System Interface Point, at the STM-1, DS-3 or E-1
levels.
The interface will be in accordance with the appropriate ITU-TS
recommendation
6. OPERATION AND MAINTENANCE - DUTIES AND RIGHTS
6-1 Subject to the regulatory compliance obligations of the Landing
parties, Gemini shall have responsibility to control, operate and
maintain the various Segments and Subsegments of the Gemini Network
in a manner consistent with applicable law and with international
cable operation and maintenance practices Gemini shall be the
maintenance authority for the Gemini Network and shall use a
reasonable efforts to maintain the Gemini System Network
economically in efficient working order and with the objective of
achieving effective and timely repairs when necessary.
6.2 Gemini shall have the right to deactivate on a temporary basis all
or any part of the Gemini network in order to perform the duties
imposed upon it in this Clause or at the instruction of a Landing
Party or Backhaul provider where specifically required for
regulatory compliance. Prior to such deactivation, reasonable
notice shall be given and coo-ordination shall be made with Carrier
users.
6.3 Gemini shall advise Carrier Users in writing of the timing and scope
of significant planned maintenance operations, of significant
changes to existing operations and maintenance methods, and of
significant impact on the operation or maintenance of the Gemini
Network.
7. OPERATING AND MAINTENANCE COSTS
7.1 O&M Costs shall be defined as all costs reasonably incurred by
Gemini in operating, maintaining and repairing-mg the Gemini
Network, including, but not limited to, the costs of attendance at
repair operations, testing, adjustments, repairs, placement and
additions, storage of plant and equipment, vendor charges, Backhaul
Interface Point charges, other Backhaul charges, Landing Partty Cable
Station charges, electricity, personnel expenses, providing cable ships,
remotely controlled submersible vessels, cable depots or any other
necessary maintenance or repair devices and facilities which are or may
become available (including the standby costs of such facilities),
reburial and the replacement of plant, tools and test equipment,
terrestrial repairs, restoration, customs duties, taxes (except income
taxes imposed on the net income of Gemini), insurance, rights of way,
supervision and overheads.
7.2 Gemini may authorize the purchase and use of special tools and test
equipment which may reasonably be required for the maintenance or
repair of the Gemini Network. The related costs may include, but
are not limited to, the costs, or an appropriate share thereof, for
the purchase, storage, and maintenance of this equipment, which will
be included as part of the O&M costs.
8. OTHER RESPONSIBILITIES OF GEMINI
WorldCom warrants that in its agreement with Gemini that Gemini
shall take responsibility for ensuring that.
(i) The technical design for the Gemini Network is in accordance
with good engineering practice, appropriate recommended
national and international technical standards.
(ii) The Gemini Network is technically in compliance with ITU-TS
recommendations pertaining to system interfaces at the System
Interface Points;
(iii) All necessary permits, licenses, regulatory approvals and other
authorizations to enable the Gemini Network to be landed,
installed, operated, maintained and repaired in the UK and US are
obtained, are in accordance with the respective UK and US law,
and continue in effect during the term of this Agreement; and
(iv) Reasonable restoration arrangements are made available as
appropriate with other cable system.
9. RETIREMENT AND EXTENSION OF GEMINI NETWORK
WorldCom warrants that in its agreement with Gemini that :
9.1 Gemini intends to operate and maintain the Gemini network for the
expected System Lifetime of 25 years from the RFCS Date, unless the
System Lifetime is extended or reduced in accordance with the
provision of this Clause 9.
9.2 Gemini may retire the Gemini Network in the event of a catastrophic
failure of all or a portion of the Gemini Network whether caused by
natural hazard or major technical fault, which makes it impossible
to maintain the business efficacy of the Gemini Network, or if any
governmental, municipal, institutional, or commercial authority,
license, permission authorization, right, or concession necessary
for the business efficacy of the Gemini Network is subject to
prohibitive condition or is terminated with no reasonable prospect
of retrieval within a period of twelve months following the date of
termination.
9.3 Upon the occurrence of any event falling within Clause 19.2, the
GUCC shall be entitled to require Gemini to confirm to the GUCC its
intentions in relation to either (a) the extension of the System
Lifetime of the Gemini Network beyond the expected System Lifetime
of twenty-five years or (b) the decommissioning of the Gemini
Network prior to the end of such expected System Lifetime and as
the terms and conditions upon which such extension or
decommissioning would be effected.
9.4 If, after receiving notification of the terms and conditions
governing extension, Carrier users holding a total of two-thirds of
the assigned capacity of the Gemini Network vote in favor of
requesting extension of the System Lifetime beyond twenty-five
years, and Gemini and the Founding Parties concur in this decision,
Gemini shall extend the System Lifetime for such additional terms as
Gemini believe in its sole discretion to be advisable.
9.5 If, after receiving notification for the terms and conditions
governing decommissioning, Carrier Users holding a total of to-
thirds, of the assigned capacity for the Gemini Network vote in
favor of requesting decommissioning, and the Gemini and the
Founding Parties concur in this decision, Gemini shall be
responsible for the orderly retirement of the Gemini Network and
shall proceed to retire from service the Gemini Network in
accordance with appropriate national and international regulations.
9.6 Upon retirement of the Gemini network, Gemini shall give to Carrier
users three (3) months' notice of any intended sale or removal
operations and make arrangement for minimizing the risks to other
seabed users of such an operation.
10. DURATION
The provisions of this C&MA shall continue in effect, as amended
from time to time by Gemini, for the system Lifetime, subject to the
earlier retirement of the Gemini Network in accordance with the
terms of the CSA and of this C&MA.
11. GOVERNMENTAL APPROVALS
This C&MA is subject to the obtaining and continuance of such
governmental approvals, consents, authorizations, licenses, and
permits as provided in this C&MA and in the CSA.
12. HEADINGS, REFERENCES
Headings are inserted for convenience only and shall not affect the
interpretation of this C&MA. References to recitals, clauses, and
attachments are to recitals and clauses of and attachments to this
C&MA. Unless the context otherwise requires, words importing the
singular number shall include the plural and vice versa, words
importing he masculine gender shall include the feminine and neuter
genders, and vice versa. Unless the context otherwise requires,
references to a person include an individual, firm, body,
corporation, unincorporated association, and government or
governmental or local authority or agency.
13. AMENDMENTS
This C&MA and any of its provision maybe amended or added to only in
writing signed by a duly authorized person on behalf of Gemini In
the event that Gemini shall propose material changes to the terms of
this C&MA, it shall notify GUCC and shall consult with the GUCC as
to the nature and terms of any proposed amendment. Notwithstanding
the foregoing, in no event shall such changes materially alter or
diminish Gemini's obligations under the CSA.
