Exhibit 10.5
DATED 3rd April 1998
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GEMINI SUBMARINE CABLE SYSTEM LIMITED
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TELEMONDE INTERNATIONAL BANDWIDTH (BERMUDA) LIMITED
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CAPACITY SALES AGREEMENT
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Xxxxxx Xxxxxxx Xxxxxxx
Carrnelite
00 Xxxxxxxx Xxxxxxxxxx
Xxxxxxxxxxx
Xxxxxx XX0XXXX
Ref: EPM/SIS
THIS AGREEMENT is made 3rd April 1998
BETWEEN
(1) GEMINI SUBMARINE CABLE SYSTEM LIMITED, a company existing under the laws
of Bermuda and having its principal office at Xxxxxxxxx Xxxxx, Xxxxxx
Xxxxxx, Xxxxxxxx, HMCX 12, Bermuda (hereinafter called "Gemini"), and
(2) TELEMONDE INTERNATIONAL BANDWIDTH (BERMUDA) LIMITED a company incorporated
in Bermuda with its principal place of business at Xxxxxxxx Xxxxx, 0 Xxxx
Xxxx, Xxxxxxxx, (hereinafter called "Carrier User").
INTRODUCTION
(A) Gemini has designed, and is in the process of constructing or arranging
for the construction of, a fibre optic submarine and terrestrial cable
network capable of providing telecommunications services from London,
England to New York, New York, which network will consist of the Backhaul
and the Gemini System, as hereafter defined (the "Gemini Network"). The
Gemini Network will be operated and managed by Gemini.
(B) Carrier User desires to purchase from Gemini, and Gemini is willing to
sell to Carrier User, an IRU (as hereinafter defined) in the amount of
capacity on all or a portion of the Gemini Network as described in
Schedule 1.
(C) Gemini and Carrier User (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 Capacity (as hereinafter defined) will be sold
to Carrier User.
AGREED TERMS
Now therefore, the Parties hereto, in consideration of the mutual covenants
herein expressed and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, covenant and agree with each other
as follows:
1. Definitions
Unless otherwise defined in this Agreement, the following capitalised
terms used in this Agreement shall have the applicable meaning set forth
below. Words and phrases defined in the text shall have the same meaning
wherever else found in this Agreement.
"Affiliate" means an entity that is, in respect of any one entity, any
other entity that controls, is controlled by, or is under common control
with that entity, control being defined as direct or indirect ownership of
more than fifty percent (50%) in value of the outstanding voting stock, or
other form of interest in the capital of, or of a partnership or other
interest in, an entity;
"Agreement" means this agreement together with the Schedules hereto;
"Associate" means an entity or person that is, with respect to any one
entity or person, any other entity or person that has a direct or indirect
interest of at least 25% in such entity;
"Backhaul" means, collectively, the US Backhaul and the UK Backhaul as
such terms are defined in the C&MA;
"Capacity" means the amount of the capacity purchased by Carrier User on
all or a portion of the Gemini Network as described in Schedule 1;
"Carrier User's Network Control Centre" means such place as Carrier User
may notify to Gemini from time to time;
"C&MA" means the Construction, Operation and Maintenance Arrangement for
the Gemini System of even date attached hereto as Schedule 3 as amended
from time to time in accordance with the provisions set out in the C&MA;
"DS-3" means a 44.736 Mbit/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;
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"E-1" means a 2.048 Mblt/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;
"Founding Parties" means MFS Cableco (Bermuda) Ltd., and Cable and
Wireless PLC;
"Gemini Market Price" means, as of the date of determination, the most
recent price at which Gemini has sold or is willing to sell a unit of
capacity on the Gemini Network equivalent to the Capacity to a person not
Affiliated with Gemini or the Founding Parties, on terms and conditions
consistent with this Agreement;
"Gemini System" has the meaning set forth in the C&MA;
"Granting Date" means the date upon which the grant by Gemini to Carrier
User of an IRU in the Capacity shall become effective in accordance with
Clause 2.2;
"IRU" means the "indefeasible right of use" of a unit of capacity on all
or a portion of the Gemini Network for the System Lifetime;
"LIBOR Rate" means the arithmetic mean of the offered rates of leading
banks for London Interbank deposits expressed as a rate per annum, for
deposits in US Dollars for three months as displayed on the LIBOR page of
the Reuters Monitor Money Rate Services at or about 11.00 am on the date
on which the LIBOR Rate is to be determined;
"Market Price Differential" means, as of the date of determination, the
amount by which the Purchase Price hereunder exceeds the Gemini Market
Price;
"Network Ready for Customer Service Date" or "RFCS Date" means 28 February
1998 being the date from which the first portion of the Gemini Network
(i.e., the southern submarine cable route linking Perthcurno, United
Kingdom to Manasquan, New Jersey, together with associated backhaul
systems linking Perthcurno and London, England and
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Manasquan, New Jersey and New York, New York in the United States) was
ready for the provision of commercial services from London, England to New
York, New York;
"Network Ready for Service Date" or "RFS Date" means the date on which the
complete Gemini Network (including all associated backhaul systems) is
ready for the provision of commercial service from London, England to New
York, New York, as certified by Gemini, which is projected to be the 31
October 1998.
"O&M Costs" means all and any costs and expenses reasonably incurred by or
on behalf of Gemini in connection with the operation, maintenance and
repair of the Gemini System as set forth in Schedule 1 and as described in
more detail in the C&MA;
"Purchase Price" means the price of the IRU for the Capacity, as defined
in Clause 3;
"Restoration Charges" means the charges payable by Carrier User to Gemini
in respect of the restoration of the Capacity on another cable system as
specified in Schedule 1;
"STM-1" means a 155.220 Mblt/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;
"System Interface Points" has the meaning set forth in the C&MA; and
"System Lifetime" means the lifetime of the Gemini Network from the RFCS
Date until the Gemini System is retired in accordance with the C&MA.
For the avoidance of doubt operative terms set out in Schedules to this
Agreement shall have the same force and effect as if they were set out in
the body hereof save that in the event of an inconsistency between a term
in the body hereof and a Schedule, that in the body hereof shall prevail.
2. Grant of IRU
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2.1.1 Gemini grants to Carrier User the right to call off Capacity up to a
maximum of STM16 subject to and in accordance with the terms of this
Agreement.
2.1.2 Gemini grants to Carrier User with effect from the Granting Date in
respect of each unit of STM1 and in consideration for the payment by
Carrier User to Gemini of the Purchase Price (or the relevant proportion
thereof) and the O&M Costs an IRU in the Capacity, subject to the terms
and conditions set forth in this Agreement.
2.2 Subject to Schedule 1 Carrier User may by 30 days written notice to Gemini
request the activation of the Capacity in respect of each unit of STM1 and
Gemini shall use all reasonable endeavours to make that Capacity available
to Carrier User with effect from the expiry of the notice. The Carrier
User shall call off the Capacity in accordance with Schedule 1. Providing
in all cases that Carrier User shall have made payment to Gemini of
amounts falling due on or prior to such date, the date of activation in
accordance with this Clause 2.2 shall be the Granting Date.
2.3 Gemini will notify the Carrier User as soon as reasonably practicable of
any changes in the scheduled RFS Date. Gemini does not warrant or gurantee
that the RFS Date will occur at all or on the scheduled date. Neither
Gemini nor the Founding Parties will be liable to Carrier User for any
costs or damages, if any, if and when the RFS Date does not occur or is
delayed for any reason. Notwithstanding the foregoing if the RFS Date does
not occur by 31 December 1998, Carrier User may elect to terminate this
Agreement. If Carrier User elects to terminate this Agreement, this
Agreement will be null and void, and neither Party shall have any
liability to the other hereunder except that Gemini shall return to
Carrier User any portion of the Purchase Price paid by Carrier User to
Gemini.
2.4 The Capacity called off shall be made available to Gemini (or to its
subsidiaries or agents), at such times as shall be mutually agreed by
Carrier User and Gemini, to permit Gemini to conduct such necessary tests,
adjustments and work as may be required for such Capacity to be maintained
in efficient working order.
2.5 In the event that Gemini shall require access to the Capacity for the
purpose of conducting tests, adjustments or work in accordance with Clause
2.4, it shall, so far as reasonably
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practicable, deliver to Carrier User not less than 5 business days'
written notice of such tests, adjustments or work (the "Scheduled Work").
In the event that the delivery by Gemini to Carrier User of such notice is
not reasonably practicable, Gemini shall contact Carrier User's Network
Control Centre (and/or such other places as Carrier User may designate
from time to time) by telephone immediately prior to the commencement of
any such tests, adjustments or work. All such tests, adjustments and work
shall be performed at such times and in such manner as shall minimise any
interruption in or interference with the Capacity. Gemini shall use all
reasonable endeavours to ensure that such restoration facilities shall be
available to Gemini as shall minimise any interruption to the Capacity
during the conduct of any such tests, adjustments or work.
2.6 The communications capability of any of the Capacity may be optimised by
Carrier User by the use of equipment which will more efficiently use such
Capacity, provided that the use and operation of such equipment by Carrier
User or any person or entity claiming through or under Carrier User shall
not be such as to (i) cause any interruption of, or interference to, the
use of any other capacity on the Gemini Network, (ii) prevent 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 Associates of Gemini, Carrier User, or any other
user, owner or operator of the Gemini Network or the public; and provided,
further, that Carrier User shall indemnify Gemini and the Founding Parties
in connection with the use of any such equipment by Carrier User or any
person or entity claiming through or under Carrier User in accordance with
the provisions of Clause 7. Such equipment, if used, shall not constitute
a part of the Gemini Network. In addition, Carrier User shall bear the
reasonable cost of any additional protective apparatus properly required
to be installed because of the use of such facilities by Carrier User, any
lessees of Carrier User, or any customer or customers of Carrier User or
of any such lessee.
2.7 Carrier User 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 Clause 2.6.
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2.8 Gemini shall in all agreements between Gemini and any purchaser from
Gemini of capacity on the Gemini Network include in such agreements
provisions substantially in the form of those contained in Clause 2.6.
3. Payment for IRU; Payment Procedures
3.1 In consideration for the grant to Carrier User of an IRU of the Capacity,
Carrier User shall pay to Gemini the amounts stated in Schedule 1
(collectively, the "Purchase Price") on the respective dates set forth in
such Schedule. Payment shall be made by Carrier User in an amount that is
equal to the full amount stated in Schedule 1 without reduction for any
deduction or withholding for or on account of any tax, duty or other
charge of whatever nature imposed by any taxing authority.
Notwithstanding the foregoing, if at any time during the period commencing
on the date hereof and expiring on 28th of February 1999, the Purchase
Price payable hereunder shall exceed the Gemini Market Price for
equivalent Capacity, Gemini shall promptly notify Carrier User of such
event, and the Purchase Price shall be reduced automatically to the Gemini
Market Price for equivalent Capacity. The Market Price Differential shall
be credited first against any then unpaid balance of the Purchase Price,
then Gemini shall pay to Carrier User the amount of such excess within
thirty (30) days. Gemini shall promptly refund to Carrier User the amount
by which the Purchase Price (to the extent paid to Gemini hereunder)
exceeds the Gemini Market Price for equivalent Capacity.
3.2 The Purchase Price specified in Clause 3.1 shall be due and payable
according to the terms set out in this Clause 3 and Schedule 1, and any
O&M Costs payable by Carrier User to Gemini hereunder shall be paid within
30 days following the date on which Gemini has delivered an invoice to
Carrier User or otherwise in accordance with Clause 4 below for such
amounts as shall be due hereunder. All payments made by Carrier User under
this Clause 3 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 Carrier
User is required by law to make any deduction or withholding from any
payment due hereunder to Gemini then, notwithstanding anything to the
contrary contained in this Agreement, the gross amount payable by Carrier
User to
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Gemini will be increased so that, after any such deduction or withholding
for Taxes, the net amount received by Gemini will not be less than Gemini
would have received had no such deduction or withholding been required.
3.3 Gemini shall render any invoices under this Agreement in U.S. dollars, and
Carrier User shall pay the amounts due in U.S. dollars. Carrier User shall
make said payments to Gemini in immediately available funds. For the
avoidance of doubt, Gemini shall not be obliged to activate any Capacity
unless or until all payments in respect thereof have been made.
3.4 Except in respect of invoices in respect of part of the Purchase Price
(which shall be payable in accordance with Schedule 1) invoices shall be
deemed to have been accepted by Carrier User if Carrier User does not
present a written objection to Gemini on or before the date when payment
is due, otherwise any objection shall be made within 14 days of receipt of
the invoice. If such objection is made, Carrier User shall pay the
undisputed portion of such invoice in accordance with Clause 3.2 and the
Parties shall make all reasonable efforts to resolve such dispute
promptly.
3.5 In the event that the Parties shall fail, within 30 days of service of a
written objection in accordance with Clause 3.4, to resolve any dispute,
either Party shall be entitled to refer the matter to an independent
expert for resolution. The identity of any independent expert appointed
in accordance with this Cause 3.5 shall be agreed between the Parties or,
in the event of a failure to agree, shall be appointed by the President of
the International Accounting Standards Bureau. Any person appointed in
accordance with this Clause 3.5 shall act as expert and not as arbitrator.
3.6 The Parties shall, within 10 days of the appointment of an expert in
accordance with Clause 3.6, deliver to the expert such documents, data and
other information as he may require to enable him to reach a decision.
3.7 The expert shall be required to deliver a reasoned decision within 60 days
of his appointment in accordance with Clause 3.5. In the absence of
manifest error such decision shall be final and binding upon the Parties.
The costs of, and expenses occasioned by, any
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expert appointed in accordance with this Cause 3 shall be borne in the
proportions determined by such expert.
3.8 Amounts invoiced and not paid when due shall (unless the subject of a
written objection notified by Carrier User to Gemini in accordance with
Clause 3.4) include extended payment charges from the day following the
day on which payment was due and until paid. Overpaid amounts, refunded to
Carrier User pursuant to this Agreement, shall incur extended payment
charges from the day following the day when the overpayment was made until
the day when the refund is made. In the event any sums are withheld in
accordance with Clause 3.4, following resolution of the relevant dispute
either in accordance with Clauses 3.4 or 3.5 (as the case may be), the sum
then payable shall include extended payment charges from the day following
the day on which payment was due in accordance with the relevant invoice
and until paid. For the purposes of this Agreement, such extended payment
charges shall be computed in accordance with the following:
(a) any invoice rendered under this Agreement which is not paid when due
shall accrue interest at the annual rate of three (3) percentage
points greater than the applicable LIBOR Rate in effect on the first
business day of the month in which the payment is due, from the day
following the date payment of any such invoice was due or the
overpayment was made, until such invoice is paid in full.
(b) in the event that applicable law does not allow the imposition of
such financial charges at the rate established in accordance with
this Clause, financial charges shall be at the highest rate
permitted by applicable law, which in no event shall be higher than
the rate computed in accordance with this Clause.
(c) any overpayment shall accrue interest at the rate of three (3)
percentage points greater than the applicable LIBOR Rate in effect
on the first business day of the month in which the overpayment was
made.
3.9 In the case of invoices containing costs invoiced on a preliminary billing
basis, appropriate adjustments will be made in subsequent invoices
promptly after the actual costs involved are determined or, in the event
that no subsequent invoices are to be rendered against
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which credits or deductions may be applied, Gemini shall pay to Carrier
User or Carrier User shall pay to Gemini, as applicable, the amount of any
such credit.
4. Obligation to Pay O&M Costs
4.1 Gemini will furnish to Carrier User and maintain (or cause to be furnished
to Carrier User and maintained) the Capacity in accordance with Schedule 1
and in accordance with the terms of the C&MA.
4.2 Gemini shall ensure that restoration arrangements are put in place with
other cable systems in accordance with the terms of the C&MA. Subject to
Clause 4.3, in the event that the Capacity and any in-system restoration
shall become unavailable during the System Lifetime, Gemini shall as soon
as practicable take all reasonable steps to arrange restoration of the
Capacity or so much of it as it is practicable and reasonable so to do on
another cable system and Carrier User shall pay the Restoration Charges
therefor.
4.3 In the event that Carrier User shall by 30 days written notice to Gemini
confirm to Gemini that in the circumstances specified in Clause 4.2 it
shall not require restoration of the Capacity, Gemini shall not be obliged
to restore the Capacity and Carrier User shall not be liable for payment
of any Restoration Charges accruing from the date of expiry of the notice
aforesaid.
4.4 Subject to Clause 3.4, Carrier User shall pay to Gemini the O&M Costs as
set out in Schedule 1 in accordance with Schedule 1 and Clause 3 hereof.
4.5 Gemini shall keep and maintain for a period of five years from the date
thereof such records and accounts of Gemini's costs and expenses included
in the O&M Costs as may be appropriate to support the billing of any such
costs by Gemini to Carrier User. Carrier User shall have the right to
review during normal business hours, upon reasonable prior written notice
of not less than ten (10) business days, any such books, records,
vouchers, accounts and costs, subject to Gemini's right to recover from
Carrier User the reasonable costs incurred in complying with such review.
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5. Warranties
5.1 Carrier User Warranties
Carrier User hereby warrants to Gemini as follows:
(a) Carrier User is a limited liability company, duly organised and
validly existing under the laws of its state or jurisdiction of
organisation, is qualified to do business in all jurisdictions
(domestic and foreign) in which such qualification is required by
applicable law, 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 Carrier
User, enforceable against Carrier User in accordance with its terms;
(c) there are no pending, or, to Carrier User's knowledge, any
threatened claims, actions, suits, audits, investigations or
proceedings by or against Carrier User which could have a material
adverse effect on Carrier User's ability to perform its obligations
under this Agreement;
(d) Carrier User has obtained and shall use commercially reasonable
efforts to maintain in good standing, all such consents, approvals,
licenses, permits and other approvals, both governmental and
private, as may be necessary to permit Carrier User to perform its
obligations under this Agreement and to acquire and use the
Capacity;
(e) Carrier User shall perform its obligations under this Agreement and
use the Capacity in a manner consistent with applicable law, and
shall not use, or knowingly permit the use of the Capacity, for any
illegal purpose or in any other unlawful manner;
(f) Carrier User shall not create or permit to exist, any liens,
encumbrances or charges to be placed upon the Capacity or Carrier
User's rights under this Agreement other
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than liens, encumbrances or charges of financial institutions or
others against Carrier User's assets generally in connection with
financing arrangements by Carrier User; and
(g) Carrier User shall use the Capacity and shall cause all other
persons using the Capacity to use such 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.
(h) (i) Carrier User represents and warrants that no employee of any
Cable & Wireless PLC group company or any WorldCom Inc. group
company is directly or indirectly interested in any Carrier User
group company;
(ii) Carrier User further represents and warrants that the ultimate
shareholders of the group of companies of which Carrier User is a
member are as detailed in the attached schedule and that the persons
ultimately and beneficially interested in such shareholders are also
as detailed in the attached schedule;
(iii) In consideration of Gemini completing this Agreement, Carrier
User undertakes to Gemini (as trustee for itself and Cable &
Wireless PLC and WorldCom Inc.) that it will not knowingly permit
any employee of any Cable & Wireless PLC group company or WorldCom
Inc. group company (whilst they remain an employee thereof) to be
directly or indirectly interested in any Carrier User group company;
and
(iv) Without prejudice to the generality of the preceding paragraph,
Carrier User further undertakes that if and until such time as Xx
Xxxxx Xxxxxxx shall cease to be an employee of any WorldCom Inc.
group company, that he shall not be directly or indirectly
interested in any Carrier User group company.
For the purposes hereof:
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"Cable & Wireless group company" means Cable & Wireless PLC, its
subsidiaries and subsidiary undertakings;
"WorldCom Inc. group company" means WorldCom, its subsidiaries and
subsidiary undertakings;
"Carrier User group company" means Carrier User, its subsidiaries
and subsidiary undertakings and any holding company of Carrier User
and all other subsidiaries and subsidiary undertakings of such
holding company;
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"subsidiary" and "subsidiary undertaking" shall have the meanings
given to such terms by the Companies Xxx 0000 (as amended).
5.2 Gemini Warranties
Gemini hereby warrants to Carrier User as follows:
(a) Gemini is a company duly organised and validly existing under the
laws of Bermuda, is qualified to do business in all jurisdictions
where such qualification is required by applicable law, and Gemini
has the requisite authority to execute this Agreement and to perform
its obligations hereunder;
(b) this Agreement constitutes a valid and binding obligation of Gemini,
enforceable against Gemini in accordance with its terms;
(c) there are no pending, or, to Gemini's knowledge, threatened claims,
actions, suits, audits, investigations or proceedings by or against
Gemini which could have a material adverse affect on Gemini's
ability to perform its obligations under this Agreement.
(d) Gemini has obtained or procured and shall use commercially
reasonable efforts to maintain or procure are maintained in good
standing, all necessary consents, approvals, licences, permits and
other approvals, both governmental and private, as are necessary to
permit Gemini to perform its obligations under this Agreement and to
provide and maintain the Gemini Network;
(e) Gemini shall perform its obligations under this Agreement and
provide the Capacity in accordance with Schedule 1;
(f) Gemini shall perform or ensure that the construction, maintenance
and operation services as set out in this Agreement and the C&MA are
performed:
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(i) with all reasonable skill and care and in accordance with
recognised standards of a competent provider of maintenance
services in a manner consistent with applicable law; and
(ii) are carried out at all times by appropriately qualified
personnel.
Gemini shall not use, or if and to the extent that Gemini has an
enforceable contractual right against any other carrier user,
knowingly permit the Gemini Network to be used by any other carrier
user for any illegal purpose or in any unlawful manner; and
(g) Gemini shall indemnify and hold harmless Carrier User in respect of
all and any losses and damages costs and expenses (including
reasonable legal costs and expenses) arising out of any claims or
proceedings (whether successful or not) against Carrier User,
regarding patents, copyright or any other intellectual property
rights owned by any third party, resulting from Carrier User's use
of the Capacity in accordance with the terms of this Agreement,
providing that Gemini shall have sole conduct of such claims or
proceedings. In the event that the use by Carrier User of the
Capacity in accordance with the terms of this Agreement shall
infringe the patents, copyrights or other intellectual rights of any
third party, Gemini shall obtain or procure by whatever means it
shall deem appropriate at its own cost and expense the right for
Carrier User to use the Capacity in accordance with the terms of
this Agreement.
6. Default
6.1.1 Carrier User Default
Upon the occurrence of any of the following events, and subject to Clause
6.1.2 Gemini shall be entitled: (i) upon ten (10) business days (being any
day which is not a Saturday or a Sunday or a public holiday in the country
where the notice is to be served) written notice to Carrier User to
terminate this Agreement and to reclaim the IRU granted hereunder, and
save as set out below shall be relieved of any liability arising to
Carrier User out of such termination and reclamation; and (ii) shall be
entitled to pursue any and all rights and legal
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and equitable remedies (including its rights and remedies to enforce
Carrier User's obligations under this Agreement):
(a) subject to the provisions of Schedule 1, if Carrier User fails to
make any payment when due under this Agreement, fails to perform any
of its material obligations under this Agreement, or is otherwise in
breach of and material representation, warranty, covenant or other
obligation under this Agreement, which event remains uncured for a
period of sixty (60) days following receipt by Carrier User of
written notice of any such breach or failure (which notice Gemini
agrees to send also to the sub IRU holder to whom Carrier User has
granted rights in respect of the Capacity and whose details Carrier
User has previously provided to Gemini); or
(b) in the event that: (i) an effective resolution or petition is passed
or presented for the dissolution or winding up Carrier User, except
for the purposes of bona fide amalgamation, merger or restructuring;
(ii) a receiver or administrative receiver is appointed over the
whole or any part of the undertaking property or assets of Carrier
User; and/or (iii) Carrier User becomes insolvent or makes any
special arrangements, composition or any special assignment for the
benefit of its creditors.
Without prejudice to the rights of Gemini pursuant to this Clause,
following the issue of a notice of termination by Gemini, in
accordance with this Clause Gemini agrees:
(a) to provide to such banks or financial institutions as notified
to Gemini by Carrier User from time to time and prior to
termination of this Agreement (the "Banks") a copy of the said
notice at the time it is served; and
(b) insofar as is reasonably practicable, to consult with the
Banks in relation to the proposed termination.
6.1.2 In the event that Gemini shall become entitled to terminate this Agreement
in accordance with Clause 6.1.1 (save in relation to a breach by Carrier
User of its obligations arising under paragraph 1.2 of Schedule 1 (as
qualified by paragraph 1.4 of Schedule 1)) on the occurrence of the first
breach or default giving rise to a right of termination, Gemini's right to
terminate this Agreement will be limited to the one or more STM1 units to
which such breach or default relates. Subject as aforesaid, this
Agreement will continue in full force and effect provided that Carrier
User shall cease to be entitled to draw down any further STM1 Units in
accordance with Schedule 1 and the Purchase Price in relation to these
remaining STM1 Units then held by Carrier User shall be retrospectively
adjusted upwards in accordance with Gemini's pricing tariff then in force
in relation to the Capacity for which Carrier User then holds on IRU, to
take account of the fact that the Purchase Price was based upon volume
discounts based upon an STM16. On the occurrence of a second breach or
default giving rise to a right to terminate, the preceding paragraph will
apply in all respects. On the occurrence of a third breach or default
giving rise a right to terminate, Gemini shall be entitled to terminate
this Agreement in its entirety.
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6.2.1 Gemini Default
Upon the occurrence of any of the following events, Carrier User (i) shall
be entitled, upon ten (10) business days (as defined in Clause 6.1)
written notice to Gemini to terminate this Agreement and shall be relieved
of any liability arising to Gemini out of such termination; and (ii) shall
be entitled to pursue any and all rights and legal aid equitable remedies
(including its rights and remedies to enforce Gemini's obligations under
this Agreement). In the event that Carrier User shall terminate this
Agreement, Gemini shall be entitled forthwith to reclaim the IRU granted
hereunder and Gemini shall make payment to Carrier User of a proportion of
the Purchase Price pro rated over the System Lifetime.
(a) If Gemini falls to perform any of its material obligations under
this Agreement, or 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 Gemini of written notice of any such
breach or failure; or
(b) in the event that: (i) an effective resolution or petition is passed
or presented for the dissolution or winding up of Gemini, except for
the purposes of bona fide amalgamation, merger or restructuring;
(ii) a receiver or administrative receiver is
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appointed over the whole or any part of the undertaking property or
assets of Gemini; and/or (iii) Gemini becomes insolvent or makes any
special arrangements, composition or any special assignment for the
benefit of its creditors.
6.3 In the event that any regulatory or governmental authority directs or
threatens to direct either Party to terminate this licence or in the
opinion of experienced regulatory counsel in the relevant jurisdiction any
necessary licence is likely to be revoked or expire and not immediately be
replaced the parties shall (with time being of the essence) forthwith
negotiate in good faith any necessary amendments to the Agreement or as to
what other action is necessary to avoid the direction or revocation or
have it or its threat reversed. If the continued operation of the Gemini
Network is solely as a result of the act or omission of Carrier User
jeopardised, then it shall be deemed to be an event giving rise to Gemini
having the right to terminate pursuant to clause 6.1.1 above.
7. Limitation of Liability
7.1 Neither Party's liability:
(a) for death or personal injury resulting from the negligence of either
Party; or
(b) in relation to any other liability which may not by applicable law
be excluded or limited;
is excluded or limited.
7.2 Gemini shall not be liable to the Carrier User for any loss or damage
caused by or arising out of any temporary or permanent failure or
disruption of the Gemini Network or any facilities associated therewith or
for any interruption of service (without prejudice, in each ease, to any
respective rights or liabilities of the parties under any other agreements
relating to the Gemini Network), except as expressly provided in this
Agreement save for loss or damage arising from the negligence or
recklessness of Gemini or otherwise its breach of the terms hereof.
7.3 In no event shall either Party or their respective Affiliates be liable to
the other, or any person or entity claiming through either Party, nor
shall either Party or any of its Affiliates be liable to the other, the
Founding Parties or their respective Affiliates in contract, tort
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(including negligence) or otherwise arising under or in connection with
this Agreement for any indirect or consequential loss or damage howsoever
arising, which term shall include, but not be limited to, loss of
business, anticipated savings or profits.
7.4 Subject to Clauses 7.3 and 7.5, each Party (the "First Party") shall
indemnify and hold harmless and defend the other Party and each of their
respective officers, directors, employees, representatives and agents from
and against all claims, demands, actions, suits, proceedings, writs,
judgements, orders and decrees brought, made or rendered against them or
any of them and all damages, losses and expenses suffered or incurred by
them or any of them howsoever arising out of or related to the breach by
the First Party of any of the terms of this Agreement.
7.5 The First Party shall notify the other Party forthwith of any claim,
demand, action, suit, proceeding, writ, judgement, order or decree falling
within the scope of Clause 7.3 and shall permit the other Party sole
conduct of the same and shall provide reasonable assistance in relation
thereto, subject to the payment by the other Party of the First Party's
reasonable costs and expenses.
8. Force Majeure
Neither Party (the "affected party"), the Founding Parties nor their
respective Affiliates, shall be liable to the other Party for the failure
to perform any obligation hereunder, or any loss or damage which may be
suffered by the other Party or any person or entity claiming through or
under the other Party for, due to any cause beyond the affected Party's
reasonable control, including without limitation, any acts of God,
inclement weather, failure or shortage of power supplies, unavailability
of materials, flood, drought, lightening or fire, strike (not affecting
the affected party's employees), lockout, trade dispute or labour
disturbance, the act or omission of government, highways, authorities,
other telecommunications operators, administrations or other competent
authority, military operations, riot.
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9. Assignment
9.1 Neither Party shall assign any or all of us rights or obligations arising
under this Agreement or otherwise with respect to the Gemini Network
without the prior written consent of the other in each instance.
Notwithstanding the foregoing:
(a) Carrier User may assign its rights and obligations arising under
this Agreement or otherwise with respect to the Gemini Network to an
Affiliate or Associate of Carrier User, or to a successor to all, or
a substantial part of the business of Carrier User, provided that,
should such Affiliate or Associate cease to be an Affiliate or
Associate of Carrier User, Carrier User will procure that its rights
and obligations, arising under this Agreement are reassigned to
Carrier User or an Affiliate or Associate thereof.
(b) Carrier User may grant rights in some or all of the Capacity to such
licensed or otherwise legally qualified entities as Carrier User
deems appropriate provided that notwithstanding any such grant
pursuant to this Clause (b), Carrier User shall remain fully and
completely liable for the performance of all of the obligations of
the Carrier User and any grantee of Carrier User hereunder, and
Gemini shall have no obligation to recognise or in any manner deal
with any grantee of Carrier User. For the avoidance of doubt,
notwithstanding any grant permitted hereunder, any and all notices,
invoices, bills and correspondence to be delivered by Gemini
hereunder shall be delivered only to Carrier User and Carrier User
shall ensure and, be responsible for, the grantee's compliance with
all of the obligations, representations and warranties of Carrier
User under this Agreement. Any attempted assignments by Carrier User
not in accordance with this Clause 9 shall be void.
9.2 Upon the assignment by either Party of its rights and obligations under
this Agreement in accordance with this Clause 9, the assignor shall
forthwith:
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(a) notify the other Party; and
(b) procure that the assignee shall enter into an agreement with the
remaining Party on the terms of this Agreement.
9.3 Notwithstanding clause 9.1(b) above, in the event Carrier User grants
rights in all or a portion of the Capacity pursuant to Clause 9.1, for
purposes of administering the network operation centre of the Gemini
Network (the NOC), Carrier User may notify Gemini of grants of whole or
half circuits of Capacity at the STM-1 level. Subject to the provisions of
Clause 9.1, upon Gemini's confirmation of such granting of Capacity by the
Carrier User at the STM-1 level, Gemini will recognise the grantee
described in such notice as the holder of certain stated capacity on the
Gemini Network solely for purposes of administering the NOC. Gemini will
use its reasonable efforts to deliver such confirmation to Carrier User
with thirty (30) days of Gemini's receipt of Carrier User's notice.
Carrier User's notification shall include the following information: (a)
the name and address of the assignee; (b) the interest in the Capacity
transferred; (c) the name, address, telephone number, facsimile number and
e-mail address of the person (including appropriate escalation parties and
procedures) authorised on behalf of the assignee to interact with the NOC;
(d) a certification by Carrier User that, notwithstanding such grant,
Carrier User shall be fully liable for the performance of all of the
obligations of Carrier User under this Agreement; and (e) such other
information as Gemini may reasonably request.
10. Relationship of Parties
The relationship of the Parties hereto shall not be that of partners or
joint venturers 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.
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11. Severability
If any of the provisions of this Agreement is found by an appropriate
arbitral, 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 and will be
valid and enforceable to the full extent permitted by law.
12. Headings; References
Headings are inserted for convenience only and shall not affect the
interpretation of this Agreement. References to recitals, clauses and
attachments are to recitals and clauses of 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.
13. Entire Agreement
This Agreement, including the Schedules hereto and for the avoidance of
doubt the C&MA and any other documents of even date which the parties
agree shall be included, constitutes the entire agreement between the
Parties with respect to the grant of and payment for the IRU, and
supersedes all prior agreements, understandings or proposals, whether oral
or written, with respect to the grant of and payment for the IRU.
14. Arbitration
In the event that any dispute or difference whatsoever shall arise from
the performance or as to the meaning of this Agreement or as to any matter
or item of whatsoever nature howsoever arising out of or in connection
with this Agreement, such dispute or difference shall be submitted to
arbitration in accordance with the terms and conditions set out in
Schedule 2 attached hereto save that nothing in this Clause 14 shall be
deemed to preclude or limit the right of either Party to seek injunctive
or other equitable relief.
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15. Increase or Decrease in Design Capacity
15.1 In consideration of the entry into this Agreement by the Carrier User,
Gemini agrees to grant to the Carrier User a right of first refusal to
purchase additional capacity on the Gemini Network before such additional
capacity of STM16 ceases to be available for sale to Carrier User in the
following terms: Gemini will provide the Carrier User with written notice
prior to the date on which the last or final STM16 on the Gemini Network
(the "Notice") becomes available for first sale. The Carrier User shall be
entitled to request such additional capacity by giving 30 days written
notice to Gemini within 30 days of receiving the Notice. Gemini shall give
notice to Carrier User as soon as it is aware that the necessary capacity
in the Gemini system may cease to be available.
In the event that the Carrier User should fail to exercise its rights to
purchase additional capacity then Gemini shall have no remedy for failure
by the Carrier User to do so. In the absence of mutual agreement to the
contrary the terms for the purchase of the further capacity as an IRU
shall be the terms of this Agreement suitably amended (except in relation
to the Purchase Price in relation to which the provisions of Clause 15.2
shall apply).
15.2 For the avoidance of doubt, if Carrier User purchases an IRU in a further
STM1 unit or units and agrees that the purchase shall otherwise be
pursuant to the terms of this Agreement the additional purchase price for
each additional STM1 of Capacity shall be the Gemini Market Price for the
marginal units of capacity (which shall mean for the avoidance of doubt,
that account will be taken of the aggregate number of STM1 Units
previously acquired by Carrier User pursuant to this Agreement).
Notwithstanding the foregoing, this Clause 15.2 will not apply in the
event that Gemini exercises all or any of its rights in accordance with
Clause 6.1.2.
15.3 Gemini shall have authority to increase, at its own cost and expense, the
initial design capacity of the Gemini Network. Gemini may afford Carrier
User the opportunity to acquire such additional capacity in accordance
with terms and conditions as may be proposed by Gemini from time to time.
- 23 -
15.4 Subject to clause 15.5, in the event that 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 Carrier Users by reason of a failure
in whole or in part of the "wave division multiplex" technology or other
technology upon which the capacity of the Gemini Network is predicated,
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 (as defined in the C&MA). In
case of such capacity reduction, Gemini will recompute the pro rata
allocation of and make appropriate adjustments to the O&M Costs payable by
each Carrier User.
15.5 Gemini shall not sell or offer for sale such capacity in the Gemini
Network as may reasonably be anticipated to result directly (and not
wholly or partially as a result of system degradation or other external
factors) in a reduction in the Capacity.
16. Export Control
The Parties acknowledge that to the extent any products, software or
technical information provided under this Agreement are, or may be subject
to any applicable export laws and regulations, the Parties agree that they
will not use, distribute, transfer or transmit the products, software or
technical information (even if incorporated into other products) except in
compliance with such export laws and regulations (or licenses or orders
issued pursuant thereto). If requested by either Party, the other Party
agrees to sign all necessary export-related documents as may be required
to comply therewith.
17. Continuation of Obligations
17.1 Each Party's further rights and obligations under this agreement shall
cease immediately on termination of this agreement but termination shall
not affect:
(a) a Party's rights and obligations accrued as at termination; and
(b) any provision of this agreement expressed to survive its termination
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18. Governing Law
This Agreement shall be construed and governed in accordance with English
law.
19. Waiver of Immunity
The Parties acknowledge that this Agreement is commercial in nature, and
the Parties expressly and irrevocably waive any claim or right which they
may have to immunity (whether sovereign immunity or otherwise) for
themselves or with respect to any of their assets in connection with an
arbitration, arbitral award or together proceeding to enforce this
Agreement, including, without limitation, immunity, from service of
process, immunity of any of their assets from pre or post judgement
attachment or execution and immunity from the jurisdiction of any court or
arbitral tribunal.
20. Successors and Assigns
This Agreement and all the provisions hereof shall be binding upon and
inure to the benefit of the Parties hereto and their respective successors
and assigns.
21. 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.
22. 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.
23. Notices
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 facsimile transmission to the address of the
Party as shown below:
If to Carrier User:
Registered office of Telemonde International Bandwidth (Bermuda)
Limited
Xxxxxxxx Xxxxx
0 Xxxx Xxxx
Xxxxxxxx
Xxxxxxx
with a copy to
Telemonde Limited
0xx Xxxxx
00 Xxxxxxxxx Xxxxxx
Xxxxxx X0X OEU
Attention: Xxx Xxxxxx
If to Gemini:
Gemini Submarine Cable System Limited
Xxxxxxxxx Xxxxx
Xxxxxx Xxxxxx
Xxxxxxxx, XX 00
Xxxxxxx
Xxxxxxxxx: Managing Director with a copy to:
Gemini Submarine Cable System (UK) Limited
00 Xxxxx Xxxxx
Xxxxxx XX0X 0XX
Attention: Managing Director
Fax: + 00 000 000 0000
or such other address as such Party may notify in writing to the other.
Any such notice, demand or other communication shall be deemed to have
been received, if delivered by
- 26 -
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 receipt is followed by postal
notice.
24. Amendments
This Agreement and any of its provisions may be altered or added to only
by another agreement in writing signed by a duly authorised person on
behalf of each of the Parties.
25. Performance of Agreement
No license under patents is granted by Gemini or shall be implied or arise
by estoppel in Carrier User's favour with respect to any apparatus, system
or method used by Carrier User in connection with the use of the Capacity.
26. Registration
If there is a provision of this Agreement, which causes or would cause
this Agreement to be subject to registration under the Restrictive Trade
Practices Act 1976 (as amended), then that provision shall not take
effect until the date after particulars of this Agreement have been
furnished to the Director General of Fair Trading pursuant to section 24
of the Restrictive Trade Practices Act 1976 (as amended).
27. Confidentiality
The terms and provisions of this Agreement are confidential in nature and
shall not be disclosed by Carrier User, or furnished by Carrier User, to
any other person or entity without Gemini's prior written consent in each
instance except:
(a) to any officer or employee or contract staff who may reasonably need
to know it provided that such information is disclosed on the basis
that it is confidential; and
- 27 -
(b) as required to be disclosed by law or regulation or to professional
advisers of the Party concerned.
In addition, Gemini may disclose to Carrier User the amount of capacity acquired
and activated by other purchasers of capacity in the Gemini Network and Carrier
User shall keep such information confidential in accordance with the provisions
of this Clause and shall limit its dissemination to only those of its employees
with a need to know the information in connection with the verification of O&M
Costs charges to Carrier User.
IN WITNESS whereof, the duly authorised signatories of the Parties have signed
this Agreement on the date first set herein.
ACKNOWLEDGED and ACCEPTED )
by GEMINI SUBMARINE CABLE )
SYSTEM LIMITED for and on behalf of ) /s/ [ILLEGIBLE]
-------------------------------
[Director][Officer duly authorised to sign]
Dated 3rd April 1998
-------------------------------------
ACKNOWLEDGED and ACCEPTED )
by TELEMONDE INTERNATIONAL )
BANDWIDTH (BERMUDA) LIMITED )
for and on behalf of ) /s/ X. Xxxxxxxx
-------------------------------
[Director][Officer duly authorised to sign]
Dated 3rd April 1998
-------------------------------------
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