TASMAN 2 CABLE SYSTEM
INDEFEASIBLE RIGHT OF USE AGREEMENT
BETWEEN
WORLDXCHANGE (NEW ZEALAND) LIMITED
AND
WORLDXCHANGE PTY LIMITED
THIS AGREEMENT is made and entered into as of this 1st day of April,
1997, between and among WorldxChange (New Zealand) Limited, a company duly
incorporated under the laws of New Zealand and having its registered office at
Level 6, Tower II, Shortland Centre, 55 Shortland Street, Auckland City
(hereinafter called "WxC NZ" which expression shall include its successors and
assigns), and WorldxChange Pty Limited, a company incorporated under the laws of
Australia and having an office at 53 Walker Street, Level 1, North Sydney, NSW
2060 (hereinafter referred to as "Purchaser" which expression shall include its
successors and assigns).
WITNESSETH:
WHEREAS, WxC NZ (hereinafter referred to as "Grantor") has entered into
an agreement with other international telecommunications entities dated December
5, 1990, and as amended by the First Supplementary Agreement dated February 14,
1992, the Second Supplementary Agreement dated October 6, 1992, the Third
Supplementary Agreement dated October 20, 1993, the Fourth Supplementary
Agreement dated October 31, 1995, the Fifth Supplementary Agreement dated July
25, 1996 and the Sixth Supplementary Agreement dated December 3, 1996
(hereinafter collectively referred to as the "TASMAN 2 C&MA), which provides for
the construction, maintenance, and operation of a submarine cable system
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connecting Takaphuna, Auckland and Paddington, North Sydney known as Tasman 2
Cable System (hereinafter referred to as the "Cable System"); and
WHEREAS, pursuant to the TASMAN 2 C&MA, the Cable System consists of the
following Segments:
Segment A: A cable station at Takaphuna, Auckland.
Segment B: The whole of the Submarine cable provided between, and
including, the System Interfaces at the cable stations at Takaphuna, Auckland
and Paddington, North Sydney.
Segment C: A cable station at Paddington, North Sydney.
Segments A and C shall consist of:
(i) an appropriate share of land and buildings at the specified
locations for the cable landing and for the cable route between
the cable station and its respective Cable Landing Point, and an
appropriate share of common services and equipment at each of the
locations; and
(ii) multiplex equipment in each of the cable stations, as required,
associated solely and directly with assigned capacity in the
Tasman 2 Cable System.
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Segment B shall also include:
(i) all transmission, power feeding and special test equipment
directly associated with the submersible plant;
(ii) the power equipment provided wholly for use with the equipment
listed in (i) above;
(iii) the transmission cable equipped with appropriate repeaters and
joint housings between the cable stations; and
(iv) the sea earth cable and electrode systems and/or the land earth
system, or an appropriate share thereof, associated with the
terminal power feeding equipment.
WHEREAS, the Tasman 2 C&MA, including its subsequent amendments, defines
the Cable System capacity for the purposes of ownership allocations as follows:
Facility Designation: AVC/WXL - SYD/WXL 30NO01
MAOU Utilisation: 30 MAUO
Cable Allocation: AVC/T - SYD/P 630 N002/21 132-7-3
WHEREAS, the Tasman 2 C&MA defines Minimum Investment Unit (hereinafter
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"MIU") as a unit designated as the minimum unit of investment in the Tasman 2
Cable System, allowing the use of 2.048Mbits (30 MAUOs) and the additional
162,539.68 bits per second required for miltiplexing in each direction.
WHEREAS, Grantor has been assigned the whole-interest in certain MIU's in
the Cable System; and
WHEREAS, Purchaser desires to acquire from Grantor and Grantor is willing
to grant to Purchaser, on an indefeasible right of user ("IRU") basis, a
whole-interest in certain MIUs in the Cable System; and
WHEREAS, the parties desire to define the terms and conditions under
which said IRU interests in the Cable System will be granted to Purchaser;
NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants herein expressed, covenant and agree with each other as follows:
1. Effective as of April 1, 1997, Grantor grants to Purchaser for the
term of this Agreement the following:
(a) whole-interest, on an IRU basis, in one (1) MIU in the
Takaphuna-Paddington optical fiber path of Segment B of the Cable System, and
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(b) an interest, on an IRU basis, in Segments A and C to the
extent required by Purchaser to use its IRU interest in MIUs in the Cable
System, as acquired in subparagraph 1 (a) directly above.
2. For the IRU interest granted pursuant to this Agreement, Purchaser
shall pay Grantor the following:
(a) a lump sum amount equal to Six Hundred Eighty-Thousand
Three Hundred and Eleven Australian Dollars (AUS$ 680,311.00) allocable to the
whole-interest in MIUs granted to Purchaser hereunder. Purchaser shall pay such
lump sum amount to Grantor on or before June 1, 1997.
(b) an amount equal to one hundred five percent (105%) of the
cost of operating and maintaining Segments A, B, and C (as those costs are
defined in the Tasman 2 C&MA), associated with the Segment in which IRU is
granted hereunder, including additions thereto, multiplied by the number of MIUs
in which IRU is granted and divided by the applicable design capacity expressed
in MIUs. As WxC NZ incurs costs and receives bills for the maintenance and
operation of the Cable System, Grantor will render bills monthly to Purchaser
for its proportionate share of such costs. Purchaser shall pay such bills to
Grantor within one (1) calendar month after the end of the month in which the
bills are rendered.
(c) amounts equal to one hundred five percent (105%) of the
portion of the
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costs incurred for repairing the Cable System, allocable to the IRU interests in
MIUs granted to Purchaser hereunder on a pro rata basis. Bills for such amounts
shall be rendered by Grantor to Purchaser as soon as practicable after such
costs are charged to the accounts of Grantor. Such bills shall be payable by
Purchaser within one (1) calendar month after the end of the month in which the
bills are rendered.
3. Grantor shall bill Purchaser for the costs specified in
subparagraphs 2 (b) and (c) as those costs are incurred, commencing on the
effective date of this Agreement.
4. (a) Bills not paid when due shall accrue extended payment
charges from the day following the day on which payment was due until paid. For
purposes of this Agreement, extended payment charges shall be equal to one
percent (1%) of the lowest publicly announced prime rate or minimum commercial
lending rate of National Bank, Auckland, New Zealand, on the day following the
date payment of the bill was due. In the event that applicable law does not
allow the imposition of extended payment charges at the rate established in
accordance with this Paragraph, extended payment charges shall be at the highest
rate permitted by applicable law. For purposes of this Agreement, "paid" shall
mean that the funds are available for immediate use by Grantor.
(b) A bill shall be deemed to have been accepted by Purchaser
if Purchaser does not present a written objection before the date when payment
is due. If an objection is presented, the parties shall make every reasonable
effort to settle promptly the dispute
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concerning the bill in question. If the objection is sustained and Purchaser has
paid the disputed bill, the amount of overpayment shall be refunded to Purchaser
promptly, with interest at a rate determined in the manner described in
subparagraph 4 (a), from the date payment of the disputed amount was received
until the refund is transmitted to Purchaser. If the objection is not sustained
and Purchaser has not paid the disputed amount, Purchaser shall pay such amount
promptly with interest at a rate determined in the manner described in
subparagraph 4 (a), from the date on which payment of the bill was due until
paid. Nothing in this subparagraph shall relieve Purchaser from paying those
portions of a bill that are not in dispute.
5. If Purchaser fails to make any payment required by this Agreement
on the day it is due, or otherwise is in breach of this Agreement, and such
default continues for a period of at least thirty (30) days, Grantor may notify
Purchaser in writing of their intent to reclaim the whole-interest in the MIUs
assigned hereunder if full payment is not received or such breach is not
remedied within ten (10) calendar days of such notification. If at the end of
the 10-day period Purchaser has not paid in full the amounts due hereunder or
remedied such breach, Grantor may terminate this Agreement by giving Purchaser
written notice thereof and reclaim the IRU whole-interests in the MIUs assigned
to Purchaser pursuant to this Agreement, and Grantor shall be relieved of any
liability to Purchaser arising out of such reclamation and termination. The
rights and obligations of Purchaser under this Agreement shall terminate as of
the date of reclamation, except the reclamation shall not relieve Purchaser of
its obligation to make full payment of all amounts incurred under this Agreement
up to and including the day of termination.
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6. During the duration of this Agreement, Purchaser shall bear the
portion of the operating, maintenance and repair costs of the Cable System
allocable to the capacity granted under this Agreement.
7. (a) In the event that the total number of MIUs which each
Segment or Subsegment of the Cable System is capable of providing is reduced as
a result of physical deterioration, or for other reasons beyond the control of
the parties to the Tasman II C&MA during the term of this Agreement, the number
of whole-interests in MIUs in which IRU is granted hereunder shall be reduced in
the same proportion as the total number of whole-interests in MIUs in the given
Segment or Subsegment reduced, except that such reduction shall not create
fractions of whole interests in MIUs.
(b) During the term of this Agreement, if the design capacity
in a given Segment or Subsegment specified in this Agreement is increased,
Purchaser shall have the option, on payment of an agreed amount, to have the
number of whole-interest in MIUs granted hereunder increased in the same
proportion as the total number of interests in MIUs in the given Segment or
Subsegment increased, except that such increase shall not create fractions of
interests in MIUs. Such option shall be exercised in writing within three (3)
months after receipt by Purchaser of written notice from Grantor of a proposed
increase in the MIU capacity.
(c) If the above exceptions with respect to fractions of
interests in MIUs should become applicable, an appropriate adjustment will be
made in Purchaser's payment with
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respect to the maintenance, operating and repair costs of the given Segment or
Subsegment of the Cable System. In any event, whether or not the exception set
forth above with respect to fractions of interests in MIUs should become
applicable, all costs incurred in connection with maintaining, operating and
repairing the Cable System payable by Purchaser, from and after the date when
the total number of MIUs in the given Segment or Subsegment of the Cable System
shall have been changed, shall be adjusted so that Purchaser shall bear its
appropriate proportionate share of such costs.
8. Grantor shall render bills under this Agreement in such dollars as
rendered by the Cable owners from time to time, and such amounts shall be
payable in such dollars to the designated office of Grantor.
9. Grantor shall keep and maintain for a period of not less than two
(2) years such books, records, vouchers and accounts, as may be appropriate to
support their billings under this Agreement, and they shall at all reasonable
times make them available for the inspection of Purchaser at Purchaser's sole
costs.
10. The Cable System shall be maintained in accordance with the Tasman
2 C&MA; provided, however, that no party to the Tasman 2 C&MA shall be liable to
Purchaser for any loss or damage sustained by reason of any failure in or
breakdown of the Cable System or of the facilities associated with the Cable
System or for any interruption of service, whatsoever shall be the cause of such
failure, breakdown or interruption, and however long it shall last.
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11. (a) The operation by Purchaser of the interests in MIUs granted
to it hereunder and any equipment associated therewith shall be such as not to
interrupt, interfere with, or impair service over any of the facilities
comprising the Cable System, any MIUs or other capacity of Grantor or any MIUs
or other capacity of Grantor's associated, affiliated or connecting companies or
of any Cable System owner or purchaser; impair privacy of any communications
over such facilities, cause damage to plant, or create hazards to the employees
of any of the aforementioned companies or of any owner if the aforementioned
facilities or to the public. Purchaser shall bear the cost of any additional
protective apparatus reasonably required to be installed because of the use of
such facilities by Purchaser, any lessee of Purchaser, or any customer or
customers of Purchaser or of any such lessee.
(b) Grantor will use their best efforts to cause all other
purchasers of capacity in the Cable System to undertake obligations comparable
to those of Purchaser set forth in the foregoing subparagraph 11(a), and
Purchaser shall cause all permitted purchasers of the IRU interest granted
hereunder to undertake comparable obligations.
12. The interest in MIUs granted to Purchaser hereunder shall be made
available to WxC NZ, at such times agreeable to WxC NZ and Purchaser, to permit
WxC NZ or the parties to the Tasman 2 C&MA to make such tests and adjustments as
may be necessary for such capacity to be maintained in efficient working order.
13. The performance of this Agreement by the parties is contingent
upon the
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continued operation of the Cable System, and upon the obtaining and continuance
of such approvals, consents, governmental authorizations, licenses and permits
as may be required or deemed necessary by the parties and as may be satisfactory
to them. The parties shall use all reasonable efforts to obtain and continue,
and to have continued, such approvals, consents, licenses and permits.
14. No license under patents is granted by Grantor or shall be implied
or arise by estoppel in Purchaser's favor with respect to any apparatus, system
or method used by Purchaser in connection with the use of the interests in MIUs
granted to it hereunder.
15. No assignment of this Agreement, or of any rights thereunder, by
Purchaser, or any subsequent permitted assignee, shall be valid without the
written consent of Grantor, which may be granted or withheld in Grantor's sole
discretion. Nothing in this Paragraph 15, however, shall restrict the right of
any party to sell, assign, transfer or dispose of its rights or obligations
under this Agreement to a legal successor or a subsidiary of, or a corporation
or entity controlling or under the same control as such party, in which case due
written notice shall be given in a timely manner.
16. The relationship between and among the parties hereto shall not be
that of partners and nothing herein contained shall be deemed to constitute a
partnership between or among them. The common enterprise between and among the
parities hereto shall be limited to the express provisions of this Agreement.
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17. This Agreement and any of the provisions hereof may be altered or
added to only by an agreement in writing signed by a duly authorized person on
behalf of each party.
18. This Agreement shall be construed in accordance with and be
subject to the Tasman 2 C&MA.
19. (a) This Agreement shall become effective on the date set forth
above and shall continue in effect for the duration of the Tasman 2 C&MA.
Grantor shall give Purchaser prompt notice in writing of termination of the
Tasman 2 C&MA. Termination of the Tasman 2 C&MA in accordance with its
provisions shall not terminate subparagraph 20 (a) or 20 (b) of this Agreement
or prejudice the operation or effect thereof.
(b) Any notice of termination pursuant to subparagraph (a) of
this Paragraph 19 shall be signed by a duly authorized representative of WxC NZ
and shall be deemed to have been served at the expiration of thirty (30) days
from the date of dispatch of a certified or registered letter containing such
notice addressed to Purchaser in accordance with subparagraph 22 (a) of this
Agreement.
20. (a) In the event of the liquidation of the Cable System, or any
part thereof, by sale or other disposition, or termination of the Tasman 2 C&MA,
as provided in the Tasman 2 C&MA, Purchaser will share in any net proceeds or
costs of such sale or disposition in the same proportion in which Purchaser
operates capacity in the affected part of the Cable System. The
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proportion in which Purchaser operates in the affected part of the Cable System
shall be determined by treating the IRU interests granted hereunder as ownership
interests.
(b) Liquidation of the Cable System or termination of the
Tasman 2 C&MA shall not relieve Purchaser from any liability arising on account
of claims made by third parties in respect of the Cable System or any part
thereof and damages or compensation payable on account of such claims, or
obligations which may arise in relation to the Cable System due to any law,
order or regulation made by any government or supranational legal authority
pursuant to any international convention, treaty or agreement. Any such
liabilities or costs incurred or benefits accruing in satisfying such claims or
obligations shall be divided among the Grantor and Purchaser in the same
proportions in which the Grantor and Purchaser operate capacity in the Cable
System. The percentage of such claims or obligations to be borne by Purchaser
shall be the same percentage figure as that resulting from treating the IRU
interests granted hereunder as ownership interests.
21. If any of the provisions of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceablity shall not invalidate or render
unenforceable the entire Agreement, but rather the entire Agreement shall be
construed as if not containing the particular invalid or unenforceable provision
or provisions, and the rights and obligations of the parties shall be construed
and enforced accordingly.
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22. (a) For purposes of notices hereunder, the addresses of the
parties shall be as follows, unless otherwise designated in writing by the
respective parties:
WorldxChange (New Zealand) Limited WorldxChange Pty Limited
Level 6, Tower II 53 Walker Street, Level 1
55 Shortland Street North Sydney, NSW 2060
Auckland City Australia
New Zealand
Attention: Steven Stanford Attention: Richard Vincent
Any notice under this Agreement, including notice of termination pursuant to
Paragraph 20 hereof, shall be delivered by hand, first class mail with postage
prepaid, telex or facsimile and shall be deemed to have been given: (i) when
delivered if delivered by hand, telex (with answer back receive) or facsimile
(with receipt acknowledged) or (ii) at the expiration of ten (10) days (or
thirty (30) days, if a notice of termination of the Tasman 2 C&MA) from the date
of dispatch if delivered by mail.
(b) For purposes of billing and making payments hereunder, the
addresses of the parties shall be as follows, unless otherwise designated in
writing by the respective parties:
WorldxChange (New Zealand) Limited WorldxChange Pty Limited
Level 6, Tower II 53 Walker Street, Level 1
55 Shortland Street North Sydney, NSW 2060
Auckland City Australia
New Zealand
Attention: Steven Stanford Attention: Richard Vincent
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23. The provisions of this Agreement shall be binding upon the parties
and their successors and permitted assigns.
24. This Agreement shall be executed in two (2) counterparts in the
English language. Each counterpart when so executed and delivered shall be an
original, and such counterparts shall together (as well as separately)
constitute one and the same instrument. This Agreement shall be construed in
accordance with the laws of the Country of New Zealand.
IN WITNESS WHEREOF, the parties hereto have severally subscribed these
present or caused them to be subscribed in their name and behalf by their
respective officers thereunto duly authorized.
WorldxChange (New Zealand) Limited
By:
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Its:
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WorldxChange Pty Limited
By:
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Its:
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