CANTAT-3 CABLE SYSTEM
INDEFEASIBLE RIGHT OF USE AGREEMENT
AND FINANCING AGREEMENT
BETWEEN
TELEGLOBE CANTAT-3 INC.
AND
INTERNATIONAL TELECOMMUNICATIONS COLORATION
THIS AGREEMENT, made and entered into as of March 12, 1996 (the "Effective
date").
BY AND BETWEEN: TELEGLOBE CANTAT-3 INC., a corporation
incorporated under the laws of Barbados,
having its principal office at 0xx
Xxxxx, Xxxxxxxx 0, Xxxxxxxx Xxxx, (P.O.
Box 1210, Bridgetown), Xxxxxxxxx Rock,
St. Xxxxxxx, BARBADOS, hereinafter
referred to as "TC-3";
AND: INTERNATIONAL TELECOMMUNICATIONS
CORPORATION, a corporation incorporated
under the laws of Delaware, having its
principal office at EAB Xxxxx Xxxx
Xxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxx Xxxx,
XXXXXX XXXXXX OF AMERICA 11556-0169,
hereinafter referred to as the "Grantee".
WHEREAS TC-3 owns capacity on the CANTAT-3 cable system (the "CANTAT-3 System");
WHERE AS TC-3 is entitled to transfer capacity on the CANTAT-3 System on an
indefeasible right of use ("IRU") basis;
WHEREAS the Grantee desires to acquire from TC-3, on an IRU basis, capacity on
the CANTAT-3 System;
NOW, THEREFORE, the Parties agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions. This Section l.l lists all defined terms used in this
Agreement. Capitalized terms used in any provision of this Agreement and not
otherwise defined therein shall have the following meanings, respectively,
unless the context otherwise requires.
(a) "Agreement" shall mean this Agreement and the schedules attached
hereto, as amended from time to time;
(b) "Banking Day" shall mean a day on which banks are open for business in
Montreal, Canada;
(c) "Branching Unit" or "BU" shall mean a junction and switching point for
the CANTAT-3 System, and includes a housing and any associated plant
and equipment (including any spare plant and equipment);
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(d) "Business Day" shall mean any day except a Saturday, Sunday or other
day on which commercial banks in Bridgetown (Barbados) and Uniondale,
NY (USA) are authorized by Law to close;
(e) "CANTAT-3 C&MA" shall mean that certain construction and maintenance
agreement dated October 8, 1992, the purpose of which was to define
the terms and conditions upon which the CANTAT-3 System will be
provided, constructed, and thereafter maintained and operated, as the
same may be amended from time to time; TC-3 shall at any time submit
to the Grantee, upon request, a list of all parties to the CANTAT-3
C&MA;
(f) "Dollar" and "dollars" and the symbol "$" shall mean lawful money of
the United States of America;
(g) "Effective Date" shall mean March 12, 1996. This Agreement shall be
deemed to have taken effect as of the Effective Date, notwithstanding
the formal date of its execution by the Parties;
(h) "Grantee's Share" shall mean the ratio of the Grantee's Capacity to
TC-3's capacity in the CANTAT-3 System;
(i) "Interest Rate" shall mean the prime rate in effect at National Bank
of Canada, in Montreal Canada, as announced from time to time;
(j) "Maintenance Authority" shall mean the terminal parties who are
responsible for the operation and maintenance of Segment F of the
CANTAT-3 System;
(k) "MIU" shall mean a unit designated as the minimum unit of investment
between System Interfaces of the CANTAT-3 System and shall consist of
a Virtual Container 12 (VC-12), allowing the use of 2,048,000 bits per
second (nominal 2 Mbit/s) digital stream. MIU may be expressed in
terms of whole or half-MIUs.
(1) "Notional Capacity" shall mean the total assigned Capacity in the
CANTAT-3 System which is equivalent to 9,016 half-MIUs;
(m) "Operating and Maintenance Charges" or "O&M Charges" shall mean the
costs reasonably incurred in operating and maintaining Segment F,
including, but not limited to, the cost of attendance, testing,
adjustments, storage of plant and equipment, repairs (including
repairs at sea), cable ships, maintenance and repair devices that are
or may hereafter become available, including standby costs, reburial
and the replacement of plant, tools and test equipment, customs
duties, taxes (except income tax imposed upon the net income) paid in
respect of such facilities, appropriate financial charges attributable
to other parties' share of costs incurred by the Maintenance Authority
at the rate at which the appropriate Maintenance Authority generally
incurred such financial charges, supervision, overheads as well as
costs and expenses reasonably incurred on
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account of claims made by or against other persons in respect of such
facilities or any part thereof and damages or compensation payable by
the parties to the CANTAT-3 C&MA on account of such claims shall be
shared by them in the same proportions as they share the costs of
operating and Remaining Segment F, and including but not limited to
the costs, or an appropriate share thereof, for the purchase, storage
and maintenance of special tools and test equipment for use on board
cable ships and which are required for maintenance and repair of the
CANTAT-3 System;
(n) "Parties" shall mean all of the parties hereto collectively; and
"Party" shall mean any one of them;
(o) "Person" shall mean an individual corporation, company, cooperative,
partnership, trust or unincorporated association and pronouns have a
similarly extended meaning;
(p) "Station Costs" shall mean the costs charged by the terminal parties
for the construction, provision, operation and maintenance of Segment
A and paid by TC-3;
(q) "System Interface" shall be the input/output ports on a distribution
frame (excluding the distribution frame itself) which shall terminate
either electrical or optical connections from the CANTAT-3 System
These terminations shall be in accordance with ITU-T recommendations
X.000, X.000, X.000 and G.957 and shall be of STM-1 and or 139,264,000
bit/s capacity. The distribution frame shall be regarded as a system
interface location where the CANTAT-3 System corrects with other
transmission facilities or equipment.
The following terms are defined in the Sections Indicated below:
TERM SECTION
"CANTAT-3 System" Preamble
"Capacity" 2.1
"Dispute" 15.1
"Grantee" Preamble
"Granting Price" 3.1
"IRU" Preamble
"Losses" 14.1
"Proprietary Information" 17.5
"Representatives" 17.5
"Segment A" Schedule A
"Segment A Price" 3.2
"Segment F" Schedule A
"TC-3" Preamble
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"Teleglobe Canada" 3 3
"Transit Agreement" 3.3
1.2 Gender. Any reference in this Agreement to any gender shall include all
genders and words used herein importing the singular number only shall include
the plural and vice versa.
1.3 Headings. The division of this Agreement into Articles, Sections,
Subsections and other Subdivisions and the insertion of headings are for
convenience of reference only and shall not affect or be utilized in the
construction or interpretation hereof.
1.4 Severability. Any Article, Section, Subsection or other Subdivision of this
Agreement or any other provision of this Agreement which is proven to be
illegal, invalid or unenforceable shall be severed herefrom and shall be
ineffective to the extent of such illegality, invalidity or unenforceability and
stall not affect or impair the remaking provisions hereof, which provisions
shall be severed from any illegal invalid or unenforceable Article, Section,
Subsection or other subdivision of this Agreement or any other provision of this
Agreement and shall otherwise remain in full force and effect.
1.5 Entire Agreement. This Agreement constitutes the entire agreement by and
between the Parties pertaining to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties. Except as provided for herein, this Agreement may be
amended only by an instrument in writing signed by both Parties.
1.6 Governing Law. This Agent shall be interpreted and construed in accordance
with the laws of Barbados, without giving effect to the laws of such state
governing conflicts of laws.
1.7 Ownership. Nothing in this Agreement shall vary rights of ownership in those
segments of the CANTAT-3 System in which IRUs have been granted to the Grantee.
Ownership of all segments of the CANTAT-3 System shall remain with TC-3 and the
other signatories to the CANTAT-3 C&MA.
ARTICLE 2
GRANTING OF IRU
2.1 Granting. As and from the Effective Date, TC-3 grants to the Grantee, on an
IRU basis, an interest in one half (1/2) MIU in Segment F of the CANTAT-3 System
as well as an IRU in Segment A of the CANTAT-3 System to the extent required for
the use of its capacity in the CANTAT-3 System (the "Capacity") (exclusive of
any interconnection between cable systems, leases, Droits-de-Passage or other
rearward facilities arrangement for which the Grantee shall be solely
responsible), for providing telecommunications services between points reached
via Denmark on the one hand, and points reached via Canada on the other hand.
The Capacity shall be used in conjunction with the matching half-interest in the
MIUs hereby granted.
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To the extent permitted by law, the IRU granted herein does not include the
right to use the Capacity for traffic terminating in Canada.
ARTICLE 3
GRANTING PRICE AND PRICE FOR SEGMENT A
3.1 Granting Price for the Capacity. The aggregate granting price for the
Capacity and the option referred to in Section 10.3(b), exclusive of the right
granted in Segment A, shall be two hundred and twenty thousand dollars
($220,000) (the "Granting Price"), namely two hundred thousand dollars
($200,000) per half-MIU of Capacity and twenty thousand dollars ($20,000) per
half-MIU for the option.
3.2 Price for Segment A. For the right to use that portion of Segment A of the
CANTAT-3 System granted to the Grantee, the Grantee shall pay to TC-3 a lump sum
of two thousand one hundred and thirty-three dollars ($2,133) (the "Segment A
Price").
3.3 Payment of the Granting and Segment A Prices. The Granting Price and the
Segment A Price shall be payable as follows:
(a) the Granting Price shall bear interest at annual rate of six percent
(6%), compounded monthly, and shall be payable to Teleglobe Canada
Inc. ("Teleglobe Canada"), acting in the name and on behalf of TC-3,
over the next two (2) years, through minimum traffic volume
commitments over Teleglobe Canada's facilities as provided for in the
Agreement for transit services entered into between the Grantee and
Teleglobe Canada as of the Effective Date (the "Transit Agreement");
more particularly, the Grantee shall be required to pay to Teleglobe
Canada, on a monthly basis as provided in the Transit Agreement as
payment on the Granting Price and interest charges thereon, the higher
of (i) five thousand four hundred and thirty-two dollars ($5,432), and
(ii) the amount represented by the surcharge on a per minute basis
stipulated in the Transit Agreement with respect to the Capacity
multiplied by the total minutes of traffic routed through Teleglobe
Canada's facilities during the month covered by the appropriate
invoice submitted under the Transit Agreement;
notwithstanding the foregoing, the Grantee shall be required to pay
the Granting Price, and all interest charges thereon, to the extent of
one hundred nineteen thousand five hundred and six dollars ($119,506)
for each of the next two (2) years following the Effective Date; where
the aggregate of all monthly payments made by the Grantee to Teleglobe
Canada in conformity with the preceding paragraph is less than one
hundred nineteen thousand five hundred and six dollars ($119,506), the
Grantee covenants to pay to Teleglobe Canada the difference between
such amounts no later than thirty (30) days of the date of invoice to
that effect;
in the event that the Transit Agreement is terminated, for any reason
whatsoever, prior to the full payment of the Granting Price and any
interest charges thereon, the Grantee
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shall forth pay within thirty (30) days of the termination date the
outstanding balance of the Granting Price, in principal, at the date
of termination, as well as all interests thereon until, but excluding,
the payment date;
(b) the Segment A Price shall be paid to TC-3 concurrently to the
execution by the Grantee of this Agreement.
3.4 Authorization. TC-3 hereby authorizes Teleglobe Canada to receive and
acknowledge receipt, on its behalf, of the Granting Price from the Grantee, as
well as all interest charges thereon, as provided under this Agreement.
Teleglobe Canada agrees to promptly remit to TC-3, upon receipt thereof, of all
sums received from the Grantee as payment on the Granting Price, together with
all interest charges thereon. Teleglobe Canada shall not incur any liability
whatsoever towards the Grantee as a result of or in connection with its
intervention to this Agreement.
Nothing in this Section 3.4 shall preclude TC-3 from exercising any and all
rights and recourses against the Grantee in case of default by the Grantee of
payment of the Granting Price to Teleglobe Canada, acting on behalf and in the
name of TC-3.
3.5 No Set Off. Notwithstanding any provision to the contrary stipulated herein
or in the Transit Agreement, the Grantee shall not have the right to set off any
claim from TC-3 or Teleglobe Canada or withhold any amount owed to TC-3 or
Teleglobe Canada against any claim against TC-3 or Teleglobe Canada or against
any amount owed by TC-3 or Teleglobe Canada, save with TC-3's consent or in
compliance with an arbitration award.
ARTICLE 4
PAYMENT OF CHARGES AND EXPENSES
4.1 O&M Charges. The Grantee shall pay the Grantee's Share of O&M Charges,
Station Costs and restoration cost in the manner provided hereafter.
4.2 Restoration Costs. Charges for restoration of the Capacity via other cable
systems or satellite space segments shall be based on cost and be allocatable on
a case by case basis.
4.3 Invoicing and Payments. From and after the Effective date, TC-3 shall
submit, or cause to be submitted, to the Grantee an invoice for costs provided
hereinabove. Invoices for costs referred to in Section 4.1 shall be submitted on
a quarterly basis in advance. All payments shall be made no later than the last
day of the month immediately following the date of the invoice in order that the
funds are available for use by TC-3 by the end of said month. Invoices rendered
shall contain details to support the amounts contained therein and shall
identify O&M Charges, Station Costs as well as restoration costs allocatable to
the Capacity and payable by the Grantee. Invoices shall be paid in the currency
in which the invoice is rendered.
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All payments made by the Grantee under this Agreement shall be made by certified
cheque, bank draft or wire transfer and be free and clear of all bank charges,
commissions or other charges.
In the event of non-payment of any sum under this Agreement by the due date, an
interest charge shall be paid on overdue amounts calculated on the day-to-day
balance from such date but excluding the actual payment thereof. The rate of
interest shall be the higher of (i) sixteen percent (16%) and (ii) eight (8)
percentage points above the Interest Rate as announced on the date the xxxx is
due to be paid or, if such is not a Banking Day, the next Banking Day. The
interest charge shall be calculated daily and compounded monthly in arrears on
the first day of each month.
TC-3 may designate, at its sole discretion, any Person for the purpose of
invoicing or receiving payment of all costs charged to the Grantee hereunder
(including the Granting Price and the Segment A Price). TC-3 shall notify in
writing the Grantee of the identity of such Person. Notwithstanding such
designation, TC-3 only shall be liable towards the Grantee for any and all
obligations of TC-3 as provided hereunder.
4.4 Disputes. Should any xxxx or part thereof submitted pursuant to this Article
4 be under dispute as to its correctness, then interest shall not accrue on the
amount of such xxxx provided always that:
(a) before the payment date, TC-3 (or its designee, as the case may be) is
advised by letter or fax by the Grantee of the amount in dispute and
the nature of that dispute; and
(b) TC-3 (or its designee, as the case may be) shall if requested by the
Grantee within thirty (30) days of receipt of the xxxx in dispute,
submit a replacement xxxx omitting the amount in dispute, and such
replacement xxxx shall become due for payment on the date the disputed
xxxx was due. The amount in dispute shall be investigated by the
Parties in good faith within a thirty (30)-day period and if the
amount in dispute or part of it is found to be correct, any necessary
xxxx with respect to such amount or part of it shall be raised and
paid. Notwithstanding the foregoing, if on investigation of the amount
in dispute or part thereof such amount is found to be correct, then
the Grantee shall pay interest at the rate determined hereabove on the
unpaid amount or part of it which is found to be correct from the day
after the due date for payment of the original xxxx in dispute up to
and including the date the outstanding payment is received by TC-3 (or
its designee, as the case may be).
4.5 Adjustment. In the case of invoices containing any costs billed on
preliminary billing basis, appropriate adjustments will be made in subsequent
invoices promptly after actual costs involved are determined to insure that the
Grantee bears a proper share of the costs as provided under this Agreement.
4.6 Interference and Protective Measures. The Grantee shall ensure that all the
Capacity shall be utilized in such a way as to avoid degrading the overall
performance of the CANTAT-3 System or causing interruption of, interference
with, impairment or degradation of the use of any other capacity in the CANTAT-3
System. The responsibility to ensure that the Capacity does not cause
interruption of, interference with, impairment or degradation of the use of any
other capacity in the
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CANTAT-3 System remains with the Grantee. If, after notification by TC-3, the
Grantee does not take immediate and effective action to comply with its
obligations, TC-3 may take reasonable action required to protect the other
capacity in the CANTAT-3 System up to and including the interruption of the
Capacity responsible for the interruption, interference, impairment or
degradation. The Grantee shall bear the total cost of any protective measures
reasonably required by TC-3 to be installed on the CANTAT-3 System resulting
from the use of the CANTAT-3 System by the Grantee or any subgrantee, lessee or
assignee of the Grantee or any customer of either the Grantee or any subgrantee,
lessee or assignee of the Grantee.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE GRANTEE
5.1 Representations and Warranties. The Grantee represents and warrants to TC-3
that:
(a) the Grantee is a corporation duly incorporated under the laws of
Delaware;
(b) the Grantee has all necessary corporate power and capacity to enter
into this Agreement and to perform its obligations under this
Agreement;
(c) the execution and delivery of this Agreement and any and all documents
required by this Agreement by the Grantee and the consummation of the
transactions contemplated under it have been duly authorized by all
necessary corporate action on the part of the Grantee;
(d) this Agreement constitutes a valid and binding obligation of the
Grantee enforceable against it in accordance with its terms, subject,
however, to limitations with respect to enforcement imposed by law in
connection with bankruptcy, insolvency or similar proceedings relating
to creditors' rights generally and to the extent that equitable
remedies such as specific performance and injunctive relief are at the
discretion of a court of competent jurisdiction;
(e) the Grantee is not a party to, bound or affected by or subject to any
indenture, mortgage, lease, agreement, instrument, charter or by-law
provision, statute, rule, regulation, judgment, order, writ, decree or
law which, with or without the giving of notice or the lapse of time,
or both, would be violated, contravened, breached or under which
default would occur as a result of the execution, delivery and
performance of this Agreement or the consummation of any of the
transactions provided for in it;
(f) the Grantee has obtained all government exemptions, approvals,
consents, authorizations, licenses and permits as well as any
necessary exemptions, approvals, consents, authorizations, licenses
and permits from any Person for the acquisition of the Capacity, the
execution and delivery of and the performance of its obligations under
this Agreement and shall use all reasonable efforts to have continued
in effect such
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exemptions, approvals, consents, authorizations, licenses and permits
as long as it shall have obligations under this Agreement.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF TC-3
6.1 Representations and Warranties. TC-3 represents and warrants to the Grantee
that:
(a) it is a corporation duly incorporated under the laws of Barbados;
(b) it has all necessary corporate power and capacity to enter into this
Agreement and to perform its obligations under the Agreement;
(c) the execution and delivery of this Agreement and the consummation of
the transaction contemplated under it have been duly authorized by all
necessary corporate action on its part;
(d) it has good and valid title to the Capacity on Segment A and Segment
F.
6.21 No representation on the Capacity. TC-3 has not made or shall not be deemed
to have made any representations or warranties whatsoever with respect to the
Capacity. Except as specifically provided herein, TC-3 expressly disclaims with
respect to the Grantee and the Grantee hereby expressly waives, releases and
renounces, all warranties, obligations and liabilities of TC-3 and all rights,
claims and remedies against TC-3, express or implied, arising by law or
otherwise, with respect to any failure, delay in installation, cancellation of,
non-conformance, temporary or permanent failure of or defect in the CANTAT-3
System or the Capacity, as the case may be, whatsoever shall have been the cause
and however long it shall have lasted (whether or not TC-3 has been advised of
the possibility of such loss or damage arising). Without limiting the generality
of the foregoing, the Grantee acknowledges and agrees that the Capacity is being
assigned on an "as is, where is" basis.
ARTICLE 7
COVENANTS OF THE GRANTEE
7.1 Covenants of the Grantee. During the term of this Agreement, the Grantee
shall:
(a) pay to TC-3 (or its designee, as the case may be) when they become due
all amounts payable under this Agreement and otherwise comply with all
other provisions of this Agreement;
(b) maintain, at its own expense, all appropriate insurance policy against
all risks associated with the Capacity as reasonably deemed necessary
by the Grantee;
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(c) keep the Capacity free of liens, charges and other encumbrances and
shall reimburse TC-3 (or its designee, as the case may be) immediately
for all payment in respect of such liens, charges and other
encumbrances;
(d) not use the Capacity for any illegal, unlawful, fraudulent or
unauthorized purposes and, without limiting the generality of the
foregoing, use the Capacity, at all time, in a manner consistent with
the applicable authorization, licences and permits for the landing,
construction and operation of the CANTAT-3 System;
(e) use the Capacity in such a way as to avoid degrading the overall
performance of the CANTAT-3 System or causing interruptions of, or
interference with, impairment or degradation of the use of any other
capacity in the CANTAT-3 System;
(f) upon at least a 24-hour prior notice or, at any time, if the situation
or circumstance so justify, make available to TC-3 the Capacity for
such test and adjustment as may be necessary for the Capacity to be
maintained in efficient working order.
ARTICLE 8
COVENANTS OF TC-3
8.1 Books and Records. TC-3 shall keep and maintain such books, records,
vouchers and accounts of all costs with respect to the maintenance, operation
and restoration of the CANTAT-3 System as may be appropriate to support the
billing of any O&M Charges, Station Costs or restoration costs by TC-3 and such
books that relates to the running charges and restoration costs shall at all
reasonable times be made available for inspection by the Grantee for a period of
two (2) years from the date of billing.
8.2 Sharing of Liquidation Proceeds and Costs. In the event of liquidation of
Segment A or any part thereof and/or Segment F or any part thereof by sale or
other disposition, TC-3 shall share with the Grantee any proceeds or costs of
such liquidation, sale or disposition of Segment A and/or Segment F received or
incurred by TC-3 including, without limitation, any costs related to the removal
of such Segment A and/or Segment F. Such proceeds or costs shall benefit or be
incurred by the Grantee in accordance with the Grantee's Share of such proceeds
or costs.
8.3 Maintenance of the Capacity. TC-3 shall use all reasonable efforts to cause
the CANTAT-3 System to be maintained in efficient working order.
8.4 Provision of Transit Facilities. TC-3 shall use all reasonable efforts to
provide suitable digital transit facilities as and when required for use in
connection with circuits in the CANTAT-3 System so as to provide through
circuits between points reached via Segment A.
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ARTICLE 9
INTELLECTUAL PROPERTY RIGHTS
9.1 No License. No license under patents is granted by TC-3 or shall be implied
or arise by estoppel in favour of the Grantee with respect to any apparatus,
system or method used by the Grantee in connection with the use of the MIUs
granted to the Grantee under this Agreement.
9.2 Specific Indemnification. With respect to claims of patent infringement made
by third Persons, the Grantee will save TC-3 and the other signatories to the
CANTAT-3 C&MA harmless against claims arising out of or based on the use by the
Grantee, in combination or in connection with the Capacity, any apparatus,
system or method provided by the Grantee, any subgrantee or lessee of the
Grantee or any customer or customers of the Grantee, of such subgrantee or of
such lessee.
ARTICLE 10
RECONFIGURATION OF CAPACITY
10.1 Reduction in the Capacity. In the event that the total number of MIUs on
Segment F is reduced below the Notional Capacity, as a result of physical
deterioration, or for any other reason, during the term of this Agreement, TC-3
shall give the Grantee written notice of said decrease and the MIUs in which the
Grantee has been granted an IRU hereunder shall be reduced in the same
proportion as the total number of MIUs assigned to TC-3 in Segment F is reduced,
except that such reductions shall not extend to fractions of half-MIUs.
10.2 Adjustment in O&M and Other Charges. If the number of MIUs on Segment F is
decreased as provided in Section 10.1 and that operating and maintenance charges
related thereto are reduced proportionally, the Grantee's payments with respect
to operating and maintenance charges for the IRU granted under this Agreement
shall be adjusted proportionally to such reduction.
10.3 Increase in Communication Capability.
(a) The communication capability of the Capacity used by the Grantee in
Segment F may be increased subject to prior notice to TC-3, by the use
of equipment which will make more efficient use of such MIUs, provided
that such use of the Capacity does not cause an interruption of or
interference in the CANTAT-3 System or other systems interconnecting
with the CANTAT-3 System.
(b) Subject to Article 16, the Grantee shall not be entitled to share in
any increase in capacity or be entitled to credits or reduction in the
sums paid for the Capacity in the event that the Notional Capacity is
increased beyond 2,016 half-MIUs. The Parties acknowledge that an
option to acquire, on an IRU basis, an additional interest in one half
(1/2) MIU in Segment F, as well as an IRU in Segment A to the extent
required for the use of such additional capacity, in the event of
increase in the Notional Capacity, is granted to the Grantee for the
sum referred to in Section 3.1.
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ARTICLE 11
TERM
11.1 Term. This Agreement shall continue in effect for the initial term up to
the end of the expected useful life of the CANTAT-3 System at 23:59 Universal
Time Coordinated, on October 8th, 2019 unless the CANTAT-3 System is taken out
of service earlier, in which case this Agreement will terminate on the same date
as that of the CANTAT-3 System. TC-3 shall give the Grantee prompt notice of the
taking out of service of the CANTAT-3 System. In the event that the CANTAT-3
System is extended tacitly beyond its initial term as stated above, this
Agreement will continue in effect tacitly during such extension under the same
terms and conditions.
Notwithstanding the termination of this Agreement, all payment obligations of
the Grantee for amounts still due or payable under this Agreement for the period
ending at the date of termination shall survive until payment and the Grantee
shall be liable for any costs and shall benefit from any proceeds under Section
8.2 hereof incurred or received, as the case may be, in the case of liquidation,
sale or disposition occurring within two (2) years after the termination date.
ARTICLE 12
EVENT OF DEFAULT
12.1 Event of Default. The occurrence of any one or more of the following events
shall constitute an Event of Default under this Agreement:
(a) If the Grantee fails to make the payment of any amount due to TC-3
under the provisions of this Agreement, when the same becomes due and
payable as herein provided and such default has not been cured within
ten (10) days after receipt by the Grantee of a notice to that
effect;
(b) If the Grantee fails to duly observe, perform and discharge the
covenants, conditions and obligations on its part to be observed,
performed or discharged hereunder (other than the default of payment
of amounts under any provisions of this Agreement which is subject to
Subsection 12.l(a)) and such default has not been cured within twenty
(20) days after receipt by the Grantee of a notice from TC-3;
(c) If any representation or warranty made herein shall prove at any time
to be materially incorrect; and
(d) If the Grantee becomes insolvent or bankrupt or ceases paying its
debts generally as they mature or has a receiver, administrative
receiver or manager appointed over the whole or any part of its assets
or goes into liquidation (whether compulsorily or voluntarily),
otherwise than for the purpose of an amalgamation or reconstruction,
or makes any arrangements with its creditors or has any form of
execution or distress levied upon its assets or ceases to carry on its
business.
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ARTICLE 13
TERMINATION
13.1 Termination Upon Default. Upon the occurrence of an Event of Default, TC-3
shall have the right to terminate this Agreement immediately and, in addition to
any other remedies available hereunder, at law or in equity, shall be entitled
to possession of the Capacity without any other action, with or without legal
process. Without limiting the generality of the foregoing, in the Event of
Default by the Grantee, TC-3 may temporarily discontinue use of the Capacity
without incurring any liability to the Grantee, its subgrantees, lessees or its
customers.
13.2 Termination After Initial Term. In the event that this Agreement is
continued beyond the expected useful life of the CANTAT-3 System in conformity
with Section 11.1, any Party may thereafter terminate this Agreement by giving
the other Party not less than one (1) year notice.
13.3 Other Remedies. Termination of this Agreement by the Party not in default
in accordance with the terms hereof shall be without prejudice to any other
rights or remedies such Party shall have hereunder, by law or in equity.
ARTICLE 14
GENERAL INDEMNIFICATION
14.1 General Indemnification. The Grantee shall indemnify and save TC-3 and
Teleglobe Canada harmless from and against any direct or consequential claims,
demands, actions, causes of action, damages, losses (which shall include any
reduction in value), liabilities, costs or expenses (including, without
limitation, interest, penalties and reasonable attorneys' fees and
disbursements) (collectively, the "Losses") which may be made against TC-3 or
Teleglobe Canada or which TC-3 or Teleglobe Canada may suffer or incur as a
result of, arising out of or relating to:
(a) any non-performance of or non-compliance with any covenant, agreement
or obligation of the Grantee under or pursuant to this Agreement;
(b) any incorrectness in, or breach of, any representation or warranty
made by the Grantee; and
(c) any action, suit, claim, trial, demand, investigation, arbitration or
other proceeding by any Person containing allegations which, if true,
would constitute an event described in Subsection 14.1(a) or 14.1(b).
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ARTICLE 15
DISPUTE RESOLUTION
15.1 Arbitration. Any difference, controversy or claim arising out of or
relating to this Agreement, its interpretation or performance, shall be
considered a "Dispute". Any Dispute shall be subject to binding arbitration as
provided hereafter.
(a) The aggrieved Party shall diligently notify the other Party of the
occurrence of a Dispute. The notification shall be deemed diligently
made if communicated to the other Party within five (5) Business Days
of the knowledge of the occurrence of the Dispute.
(b) Within ten (10) Business Days following such notification, each Party
shall prepare and disclose to the other Party a brief on its position
and within fifteen (15) days thereafter the parties shall prepare a
common brief which shall contain all points of Agreement and all
points of disagreement in relation to the Dispute.
(c) Notwithstanding Subsection 15.1(b) above, if no resolution of the
Dispute has occurred thirty (30) days after the date on which a Party
has submitted the Dispute to its Chief Executive Officer or a Person
appointed by him, then the Dispute shall be submitted for resolution
by binding arbitration under the Rules of Conciliation and Arbitration
of the International Chamber of Commerce in effect on the date the
arbitration is submitted to the tribunal of arbitration. In such
event:
(i) a sole arbitrator shall be appointed, unless the parties agree
in a particular case within thirty (30) days of the submission
of the Dispute to arbitration that the tribunal should consist
of more than one arbitrator. Such arbitrator(s) shall be
knowledgeable in the field of law involved;
(ii) the place of arbitration shall be set in the United States, at
such location agreed to by the Parties, and the arbitration
shall be conducted in English;
(iii) responsibility for paying the costs of the arbitration,
including the costs incurred by the parties themselves in
preparing and presenting their cases, shall be apportioned by
the tribunal of arbitration;
(iv) the award shall be rendered in the English language and shall
state the reasons upon which it is based;
(v) the award of the tribunal of arbitration may be entered and
enforced as a judgment against a Party in any court of
competent jurisdiction or application may be made to such
court for a judicial acceptance of the award and an order of
enforcement, as the case may be.
(d) Nothing in the foregoing shall prevent a Party from initiating such
protective measure proceedings as are necessary to protect any arm's
length third Party rights.
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(e) The fact that a dispute is brought to arbitration does not relieve
either Party from its obligation to fulfil its other covenants or
agreements as provided by this Agreement which are not affected by the
Dispute.
ARTICLE 16
OPTION TO INCREASE THE CAPACITY
16.1 Option. TC-3 hereby grants to the Grantee an option to acquire, on an IRU
basis, an additional interest in one half (1/2) MIU in Segment F, as well as an
MU in Segment A to the extent required for the use of such additional capacity,
in the event that the Notional Capacity in the CANTAT-3 System is increased
beyond 2,016 half-MIUs.
16.2 Procedure. TC-3 shall notify the Grantee of any increase in the Notional
Capacity. The Grantee shall then be able to exercise its option by sending a
written notice to TC-3 notifying the latter of its intention to increase the
Capacity. Such notice shall be submitted to TC-3 within thirty (30) days from
receipt of the notice from TC-3. The option shall be deemed to have been
exercised on the date of receipt by TC-3 of the notice from the Grantee. The
notice shall contain the number of MIUs for which the option is exercised and be
accompanied with a certified cheque representing the aggregate option price as
stipulated in Section 16.3.
16.3 Option Price. The exercise price of the option hereby granted shall be
$75,000 per half-MIU.
ARTICLE 17
MISCELLANEOUS
17.1 Assignment. Neither this Agreement nor any rights, remedies, liabilities or
obligations arising under it or by reason of it shall be assignable by the
Grantee without the prior written consent of TC-3, which consent shall not be
unreasonably withheld. Subject thereto, this Agreement shall inure to the
benefit of and be binding on the Parties and their respective successors and
permitted assigns.
17.2 Further Assurances. The Parties shall, with reasonable diligence, do all
things and provide all reasonable assurances as may be required to consummate
the transactions contemplated by this Agreement, and each Party shall provide
further documents or instruments required by any other Party as may be
reasonably necessary or desirable to effect the purpose of this Agreement.
17.3 Notices. Any notice, consent, request, authorization, permission, direction
or other communication required or permitted to be given hereunder shall be in
writing and shall be delivered either by personal delivery or by telecopier or
similar telecommunications device, return receipt requested, and addressed as
follows:
(a) in the case of TC-3:
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TELEGLOBE CANTAT-3 INC.
0xx Xxxxx, Xxxxxxxx 0, Xxxxxxxx Xxxx
(P.O. Box 1210, Bridgetown)
Xxxxxxxxx Rock, St. Xxxxxxx, BARBADOS
Attention: Xx. X. Xxxx Xxxxxxxx, Vice President and General Manager
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) in the case of the Grantee:
INTERNATIONAL TELECOMMUNICATIONS CORPORATION
EAB Xxxxx-Xxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxx Xxxx 11556-0169
UNITED STATES OF AMERICA
Attention: Xx. Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Any notice, consent, request, authorization, permission, direction or other
communication delivered as aforesaid shall be deemed to have been effectively
received, if sent by telex, telecopier or similar telecommunication device, on
the Business Day next following transmission thereof, or, if personally
delivered, to have been received on the date of such delivery, provided,
however, that if such date is not a Business Day then it shall be deemed to have
been received on the Business Day next following such delivery. An address may
be modified by written notice delivered as aforesaid.
17.4 No Partnership. The relationship between TC-3 and the Grantee under this
Agreement shall not be that of partners or joint venturers and nothing herein
contained shall be deemed to constitute a partnership or joint venture between
them and the rights and obligations of the Parties shall be limited to the
express provisions of this Agreement.
17.5 Confidentiality and Public Announcement. It is expected that the Parties
may disclose to each other proprietary or confidential technical financial and
business information ("Proprietary Information"). Except as necessary to perform
its obligations under this Agreement, the receiving Party shall not make any use
of Proprietary Information for its own benefit or for the benefit of any other
Person, and, except with the prior written consent of the disclosing Party or as
otherwise specifically provided herein, the receiving Party will not, during and
for a period of three (3) years after the termination of this Agreement,
duplicate, use or disclose any Proprietary Information to any Person.
The receiving Party shall not disclose all or any part of the disclosing Party's
Proprietary Information to any affiliates, agents, officers, directors,
employees or representatives (collectively, "Representatives") of the receiving
Party, except on a need to know basis. Such Representatives shall be informed of
the confidential and proprietary nature of the Proprietary Information. Each
Party shall maintain the other Party's Proprietary Information with at least the
same degree of care each Party uses to maintain its own proprietary information.
The receiving Party shall immediately
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advise the disclosing Party in writing of any misappropriation or misuse by any
Person of the disclosing Parties Proprietary Information of which the receiving
Party is aware.
All Proprietary Information in whatever form shall be promptly returned by the
receiving Party to the disclosing Party upon written request by the disclosing
Party for any reason or upon termination of this Agreement.
Each receiving Party acknowledges that the Proprietary Information of the
disclosing Party is central to the disclosing Party's business and was developed
by or for the disclosing Party at a significant cost. Each receiving Party
further acknowledges that damages would not be an adequate remedy for any breach
of this Agreement by the receiving Party or its Representatives and that the
disclosing Party may obtain injunctive or other equitable relief to remedy or
prevent any breach or threatened breach of this Agreement by the receiving Party
or any of its Representatives. Such remedy shall not be deemed to be the
exclusive remedy for any such breach of this Section 17.5, but shall be in
addition to all other remedies available at law or in equity to the disclosing
Party.
None of the Parties shall disclose or make any public announcement of the
existence of this Agreement, the transaction contemplated hereby or the contents
hereof without in each case the prior written consent of the other, unless such
disclosure is required by law and then only after prior notice to the other
Parties.
17.6 Waiver. No waiver of any right under this Agreement shall be deemed
effective unless contained in writing signed by the Party charged with such
waiver, and no waiver of any right arising from any breach or failure to perform
shall be deemed to be a waiver of any future such right or any other right
arising under this Agreement.
17.7 Force Majeure. Neither Party shall be responsible for failures to perform
or delays in performing its obligations due to causes beyond its reasonable
control and without its fault or negligence.
IN WITNESS WHEREOF the parties have signed this Agreement as of the date first
above written.
TELEGLOBE CANTAT-3 INC. INTERNATIONAL TELE-
COMMUNICATIONS CORPORATION
Per: /s/ [Illegible] Per: /s/ Xxxxxx X. Xxxxxx
-------------------------------------- ---------------------------------
Name: X. X. Xxxxxxxx Name: Xxxxxx X. Xxxxxx
----------------------------------- --------------------------------
Title: Vice President and General Manager Title: Director, Business Development
---------------------------------- -------------------------------
Place: St. Xxxxxxx, Barbados Place: Uniondale, NY, USA
---------------------------------- ------------------------------
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INTERVENTION
Teleglobe Canada Inc. hereby declares to have taken cognizance of this
Agreement and to be satisfied therewith; it agrees to comply with the provisions
of this Agreement which apply to it.
TELEGLOBE CANADA INC.
Per: [ILLEGIBLE]
-----------------------------------
Name: XXXXXX XXXXX
----------------------------------
Title: U.S. CARRIER RELATIONS
---------------------------------
Place: Montreal, Canada
Date: April 3, 1996
----------------------------------
SCHEDULE A
DESCRIPTION OF THE CANTAT-3 SYSTEM
Segment F: shall mean the whole of the submarine cable provided between
and among, and including the System Interface at the following
cable stations:
Segment A: A cable station at Xxxxxxx Xxxxx, Xxxx Xxxxxx,
Xxxxxx;
Segment B: A cable station at Vestmannaeyjar, Iceland;
Segment B1: A cable station at Tjornuvik, Faroe Island;
Segment C: A cable station at Redcar, United Kingdom;
Segment D: A cable station at Blaabjerg, Denmark
Segment E: A cable station at Sylt, Germany;
Segments A, B, B1, C, D and E shall each consist of an
appropriate share of land, civil work, equipment and buildings
at the specified locations for the cable landing and for the
cable right-of-way and ducts between a 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 CANTAT-3 System, at each of those
locations together with equipment in each of those cable
stations solely associated with the CANTAT-3 System, but which
is not a part of Segment F, consisting of Subsegments X0, X0,
X0X, X0X, X0X, X0, X0, F6 and F7.
Subsegment F1: That part of Segment F between and including the System
Interface at the cable station in Canada, Segment A, and BU1,
including a three-eight (3/8) portion of BU1;
Subsegment F2: That part of Segment F between BU1 and the System Interface
at the cable station in Iceland, Segment B, including a
one-quarter (1/4) portion of BU1;
Subsegment F3A: That part of Segment F between BU1 and BU1A including a
three-eight (3/8) portion of BU1;
Subsegment F3B: That part of Segment F between BU1A and System Interface at
the cable station in the Faroe Islands B1, including the
whole of BU1A.
Subsegment F3C: That part of Segment F between BU1A and BU2 including a
three-tenths (3/10) portion of BU2.
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Subsegment F4: That part of Segment F between BU2 and the System Interface
of the cable station in the United Kingdom, Segment C,
including a three-tenths (3/10) portion of BU2;
Subsegment F5: That part of Segment F between BU2 and BU3 including a
two-fifths (2/5) portion of BU2 and a two-fifths (2/5)
portion of BU3;
Subsegment F6: That part of Segment F between BU3 and the System Interface
of the cable station in Denmark, Segment D, including a
three-tenths (3/10) portion of BU3;
Subsegment F7: That part of Segment F between BU3 and the System Interface
of the cable station in Germany, Segment E, including a
three-tenths (3/10) portion of BU3.
Segment F shall also include:
- all transmission equipment, power feeding equipment and
special test equipment directly associated with the
submersible plant;
- the transmission cable equipped with appropriate repeaters
and joint housings between the cable stations and the
Branching Units and between the Branching Units themselves;
and
- the sea earth cable and electrode system and/or the land
earth system, or an appropriate share thereof, associated
with the CANTAT-3 System power feeding equipment.
