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CONSTRUCTION AND MAINTENANCE AGREEMENT
REVISION NO 1
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5 DECEMBER 1990
CANBERRA
TASMAN 2 CABLE SYSTEM
CONSTRUCTION AND MAINTENANCE AGREEMENT
REVISION NO. 1
Certified as a true and
accurate copy of the TASMAN 2 Cable System
Construction and Maintenance Agreement
Revision No. 1
/s/ J E Spencer
J E Spencer
Secretary
OTC Limited
17 December 1990
TASMAN 2 CABLE SYSTEM
CONSTRUCTION AND MAINTENANCE AGREEMENT
REVISION NO. 1
TABLE OF CONTENTS
PARAGRAPH NO. HEADING PAGE NO.
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1. DEFINITIONS 3
2. CABLE SYSTEM SEGMENTS 5
3. PROVISION AND CONSTRUCTION OF SEGMENT B 6
4. PROVISION AND CONSTRUCTION OF SEGMENTS A AND C 8
5. OWNERSHIP OF SEGMENTS AND ADDITIONAL PROPERTY 8
6. MANAGEMENT COMMITTEE 9
7. OWNERS PROJECT TEAM 11
8. DEFINITION OF SEGMENT B CAPITAL COSTS 12
9. ALLOCATION AND BILLING OF SEGMENT B CAPITAL COSTS 13
10. USE OF SEGMENTS A AND C 16
11. OBLIGATION TO CONNECT THE CABLE SYSTEM WITH 20
INLAND SYSTEMS
12. OBLIGATION TO PROVIDE TRANSITING FACILITIES 20
TO EXTEND CABLE SYSTEM CAPACITY
13. ALLOCATION AND USE OF CAPACITY 21
14. EXPANSION OF NOTIONAL CAPACITY 26
PARAGRAPH NO. HEADING PAGE NO.
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15. DECREASE OR INCREASE OF DESIGN CAPACITY 27
16. DUTIES AND RIGHTS AS TO OPERATION AND MAINTENANCE 28
OF SEGMENTS
17. OPERATING AND MAINTENANCE COSTS OF SEGMENT B - 31
ALLOCATION AND BILLING
18. SHARING OF CONTRACTUAL OBLIGATIONS AND LIABILITY 32
19. KEEPING AND INSPECTION OF BOOKS FOR SEGMENT B 34
20. GOVERNMENTAL APPROVALS 35
21. ASSIGNMENT OF RIGHTS AND OBLIGATIONS 35
22. DEFAULT 36
23. ADMISSION OF ADDITIONAL PARTIES 37
24. REPLACEMENT OF AGREEMENT AND RATIFICATION OF
PRIOR DECISIONS AND ACTIONS 38
25. RESOLUTION OF DISPUTES 39
26. RELATIONSHIP OF PARTIES TO EACH OTHER 40
27. PRIVILEGES FOR DOCUMENTS OR COMMUNICATIONS 40
28. PERIOD OF AGREEMENT AND REALISATION OF ASSETS 40
29. BILLS, PAYMENTS AND NOTICES 43
30. WAIVER 43
31. EXECUTION OF AGREEMENT AND AMENDMENTS 44
PARAGRAPH NO. HEADING PAGE NO.
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32. INTERPRETATION OF AGREEMENT 44
33. SUCCESSORS BOUND 45
TESTIMONIUM 45
SCHEDULES
Schedule A - Parties to this Agreement
Schedule B - Voting Interests in the Cable System
Schedule C - Ownership Interests and Allocation of Capital, Operating and
Maintenance Costs of Segment B; and Proportions of Capital,
Operating and Maintenance Costs for Use of Segments A and C.
Schedule D - Assignment of Capacity in Segment B in Half Interests in MAUOs.
ANNEXES
Annex 1 - Terms of Reference of Subcommittees
Annex 2 - Owners Project Team Responsibilities
TASMAN 2 CABLE SYSTEM
CONSTRUCTION AND MAINTENANCE AGREEMENT
REVISION NO.1
THIS AGREEMENT, made and entered into as of this 5th day of December 1990,
between and among the parties signatory hereto (hereinafter collectively
called "Parties" and individually called "Party"), which Parties are
identified in Schedule A attached hereto and made a part hereof, as it may be
amended from time to time in accordance with this Agreement.
WITNESSETH:
WHEREAS
A. Telecommunication services are being provided within the Pacific region
and beyond by means of submarine cable, satellite and other facilities; and
B. The Parties propose to supplement such facilities by providing a high
capacity optical fibre submarine cable system linking Australia and New
Zealand to be known as the TASMAN 2 Cable System (hereinafter called the
"Cable System") which will be used to provide telecommunication services
between and among points in or reached via Australia and New Zealand; and
C. It is the intention of the Parties to each acquire an investment share
in the Cable System corresponding to at least the quantity of MAUOs required
to meet their respective needs for the use of the Cable System through the
year 2005; and
D. It is the intention of the Parties that the Cable System provide service
protection for other cable facilities in the Pacific region in which the
Parties have an interest; and
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E. OTC and Telecom Corporation of New Zealand Limited (hereinafter called
"TCNZ") have heretofore entered into an agreement entitled "TASMAN 2 Cable
System Construction and Maintenance Agreement" with effect from 25 November,
1988, (hereinafter called "TASMAN 2 C&MA") which set out terms and conditions
upon which the Cable System would be provided, constructed, maintained and
operated; and
F. In advance of signing the TASMAN 2 C&MA, OTC and TCNZ executed a
Memorandum of Understanding (hereinafter called "the MOU") on 17 December
1987 relating to the execution by them of a contract with Tasman Cable
Company Pty Limited (hereinafter called "the Supplier") for the provision,
laying and installation of Segment B of the Cable System (hereinafter called
"the Supply Contract") and simultaneously executed the Supply Contract with
the Supplier; and
G. The Supply Contract became effective on 15 December 1988 and was amended
by a supplemental agreement made 13 June 1990 (the term "Supply Contract"
hereinafter to mean the Supply Contract as so amended); and
H. By an agreement dated 10 November 1989, TCNZ assigned to Telecom
Networks and International Ltd. (TNI) all of the benefits and obligations of,
inter alia, the TASMAN 2 C&MA effective from 1 April 1989; and
I. OTC and TNI and the other Parties desire that the TASMAN 2 C&MA be
replaced in its entirety with this Agreement (the expression "this Agreement"
wherever used herein meaning the first revision of the TASMAN 2 C&MA set out
in this document) and that the other Parties shall become owners in the Cable
System by execution of this Agreement; and
J. Simultaneously with this Agreement, the Supply Contract will be amended
to substitute TNI as a party to the Supply Contract in place of TCNZ; and
K. OTC and TCNZ or TNI as the case may be, as parties to the TASMAN 2 C&MA,
have made and entered into commitments and agreements relating to the
realisation of the object of the TASMAN 2 C&MA and OTC and TNI and the other
Parties desire, unconditionally, that the said commitments and agreements
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shall continue in full force and effect, which desire shall be evidenced by
their becoming Parties to this Agreement.
NOW, THEREFORE, the Parties, in consideration of the mutual covenants herein
expressed, covenant and agree with each other as follows:
1. DEFINITIONS
The following definitions shall apply to certain terms used in this
Agreement:
Annexes: Annexes shall be the annexes attached hereto
and made a part hereof.
Basic System Module: A Basic System Module of the Cable System shall
consist of a 139,264,000 bits per second digital
line section with interface in accordance with
CCITT Recommendation G.703 (Blue Book).
Cable Landing Point: Cable Landing Point shall be the beach joint
or, if there is no beach joint, the mean high
water mark of ordinary spring tides.
Carrier Parties: Carrier Parties shall mean all of the Parties
other than Transpacific.
Common Reserve Capacity in excess of the Notional Capacity and
Capacity: being the difference between the Notional
Capacity and the Design Capacity.
Country: The word "country" as used in this Agreement
shall mean a country, territory or place, as
appropriate.
Date of The Date of Provisional Acceptance shall be the
Provisional date specified in the Certificate of Provisional
Acceptance: Acceptance issued in accordance with the Supply
Contract.
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Design Capacity: The Design Capacity of the Cable System shall be
two (2) fibre pairs, each pair providing four
(4) Basic System Modules, providing 15,120
MAUOs, or any increase or decrease pursuant
to Subparagraph 15(a).
Initial Parties: OTC and TNI.
Management Management Committee refers to the TASMAN 2
Committee: Cable System Management Committee to be
established under Paragraph 6.
Minimum Assignable A unit designated as the minimum practical
Unit of Ownership: unit of ownership, allowing the use of
(MAUO) 73,684.656 bits per second in each direction
between System Interface locations. The
Minimum Assignable Unit of Ownership (MAUO) in
the Cable System shall consist of 64,000
usable bits per second and the additional
9,684.656 bits per second required for
multiplexing each of the 1890 such MAUOs which
constitute a Basic System Module and is used
for purposes of ownership allocation. Such
ownership allocation shall be in terms of half
interests in MAUOs allocated to Parties in
accordance with Paragraph 13 and Schedule D.
Notional The capacity assigned to the Parties as shown
Capacity: in Schedule D.
Ready for Service: Ready for Service (RFS) refers to the date when
(RFS) the Parties agree to place the Cable System into
operation. For purposes of this Agreement, RFS
shall be on or before 1 December 1991 or such
other date as may be agreed upon by the
Management Committee.
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Schedule: Schedules shall be the initial schedules
attached hereto and made a part hereof and any
written amendments thereto or any schedules
substituted therefor in accordance with the
provisions of this Agreement.
Supply Contract: Supply Contract means the contract referred to
in Subparagraph 3(a) and recitals F,G and J.
System Interface: The nominal 140 Megabits per second digital
input/output ports on the digital distribution
frame (excluding the digital distribution frame
itself) where the Basic System Module connects
with other transmission facilities or equipment.
2. CABLE SYSTEM SEGMENTS
In accordance with the arrangements contained in this Agreement, the Cable
System shall be provided, constructed, maintained and operated between
Australia and New Zealand and, for the purposes of this Agreement, shall
be regarded as consisting of the following segments:
SEGMENT A: A cable station at Sydney, Australia.
SEGMENT B: The whole of the submarine cable system provided between
and including the System Interfaces at the cable stations in Australia and
New Zealand, and 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;
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(iii) the transmission cable equipped with appropriate repeaters
and joint housings between the cable stations; and
(iv) the sea earth cable and/or the land earth system and the
earth electrode system, or an appropriate share thereof,
associated with the Cable System power feeding equipment.
Segment C: A cable station at Whenuapai, New Zealand.
Segments A and C shall each consist of:
(i) an appropriate share of the 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 those
locations together with equipment in each of those cable stations
solely associated with the Cable System, but which is not a part of
Segment B; and
(ii) multiplex equipment down to the primary level of 2 Mbit/s associated
solely and directly with assigned capacity in the Cable System,
wherever such multiplex equipment is located.
In the event such multiplex equipment is located away from the
cable station, the cable station provider shall be solely
responsible for the entire cost of the provision and maintenance
of adequate connecting facilities between the cable station and
the location of the multiplex equipment.
3. PROVISION AND CONSTRUCTION OF SEGMENT B
(a) The provision and construction of Segment B shall be through the
Supply Contract between OTC and TNI with Tasman Cable Company Pty
Limited.
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(b) Each of the Initial Parties shall hold in trust for the Parties in
the separate percentages set forth in Schedule C all the rights,
benefits, privileges, claims, entitlements, commitments, covenants,
warranties, guarantees, indemnities, conditions, promises,
agreements or undertakings created by or arising out of or in
connection with the Supply Contract or made or given by the
Supplier to the Initial Parties pursuant to the Supply Contract and
any monies paid to the Initial Parties pursuant to or arising out of
or in connection with the Supply Contract.
(c) Each of the Parties shall be entitled on request to receive a copy
of the Supply Contract, subject to the acceptance by each such
Party of any reasonable conditions of confidentiality imposed by
the Supply Contract.
(d) In the event that Segment B fails to meet the specifications
referenced in the Supply Contract for its provision, fails to
provide the specified capacity, or is not engineered, provided,
installed and ready in sufficient time to meet the Date of
Provisional Acceptance, or if the Supplier is otherwise in material
breach of the Supply Contract, the Initial Parties shall take such
actions as may be necessary to exercise the rights and remedies
available under the terms and conditions of the Supply Contract.
Such actions by the Initial Parties shall be subject to any
direction deemed necessary by the Management Committee.
(e) The Initial Parties shall not be liable to any other Party for any
loss or damage sustained by reason of the Supplier's failure to
perform in accordance with the terms and conditions of the Supply
Contract, or as a result of the Cable System not being ready for
provisional acceptance on or before the date specified in the
Supply Contract, or if the Cable System does not perform in accordance
with the technical specifications and other requirements of the Supply
Contract, or if the Cable System is not placed into operation. The
Parties recognise that the Initial Parties do not guarantee or warrant
(i) the performance of the Supply Contract by the Supplier, (ii) the
performance or
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reliability of Segment B of the Cable System, or (iii) that the
Cable System will be placed into operation; and the Parties hereby
agree that nothing in this Agreement shall be construed as such a
warranty or guarantee.
4. PROVISION AND CONSTRUCTION OF SEGMENTS A AND C
(a) Segment A of the Cable System shall consist of the appropriate
share of the existing cable station at Sydney and shall be provided
and made available by OTC for use in accordance with Paragraph 10.
(b) Segment C of the Cable System shall consist of an appropriate share
of a new cable station at Whenuapai to be designed, provided,
constructed and installed, or caused to be designed, provided,
constructed and installed, by TNI and shall be made available by
TNI for use in accordance with Paragraph 10.
(c) OTC in respect of Segment A and TNI in respect of Segment C shall
each make available to the other Parties any reasonable information
required by the Parties relating to the provision, construction or
installation of those Segments, subject to any reasonable
conditions of confidentiality imposed by the respective owners of
those Segments.
5. OWNERSHIP OF SEGMENTS AND ADDITIONAL PROPERTY
(a) Segment A of the Cable System shall be owned by OTC.
(b) Segment B of the Cable System shall be owned by the Parties in
common and undivided shares, in the proportions set forth in
Schedule C. Ownership of Segment B shall vest in the Parties upon
ownership vesting in the Initial Parties in accordance with the
Supply Contract.
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(c) Segment C of the Cable System shall be owned by TNI.
(d) In this Agreement, references to any segment of the Cable System,
however expressed, shall be deemed to include, unless the context
otherwise requires, additional property incorporated therein by
agreement of the Parties. Each segment shall be regarded as
including its related spare and standby units and components
including, but not limited to, submersible repeaters, cable lengths
and terminal equipment.
6. MANAGEMENT COMMITTEE
(a) The Parties shall form a TASMAN 2 Cable System Management Committee
(herein referred to as the "Management Committee") as the successor
to the management committee established pursuant to the TASMAN 2 C&MA.
The Management Committee shall consist of one representative of
each of the Parties to this Agreement. Except as otherwise provided
in this Agreement, the Management Committee shall make all decisions
necessary on behalf of the Parties to effect the purposes of this
Agreement. The Management Committee shall elect a Chairman from
among its members.
(b) Decisions may be made by the Management Committee by resolution at
meetings or by correspondence and shall be subject, in the first
place, to consultation among the designated representatives of the
Parties who shall make every reasonable effort to reach agreement
with respect to matters to be decided. However, in the event
agreement cannot be reached, with the exception of those matters to
be determined pursuant to Subparagraphs 13(q), 15(a) and 23(b), the
decision will be carried on the basis of a vote of at least three
(3) Parties representing a simple majority of the total voting
interests of the Parties as specified in Schedule B. A member of
the Management Committee representing more than one Party shall
separately cast the votes to which each Party it represents is
entitled.
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(c) Two or more Parties may designate the same person to serve as their
representative at specific meetings of the Management Committee and
its subcommittees established pursuant to Subparagraph 6(e). The
Management Committee will meet at the request of the Chairman or
one or more Parties representing at least 5% of the total voting
interests specified in Schedule B. The Chairman shall cause at
least 30 days advance notice of all meetings to be given in writing
to each of the Parties, which notice shall include a draft agenda.
In cases of emergency, such period of notice may be reduced if
Parties representing at least 75% of the total voting interests so
agree. Discussion documents for each meeting should be made
available to members 14 days before the meeting but the Management
Committee may agree to discuss papers distributed less than 14 days
before a meeting.
(d) No decision of the Management Committee or its subcommittees or any
other group established by the Management Committee shall override
any provisions of this Agreement.
(e) The Operations and Maintenance Subcommittee (hereinafter called
"O&M Subcommittee") and the Financial and Administrative
Subcommittee (hereinafter called "F&A Subcommittee") and all other
subcommittees or other groups established pursuant to
Subparagraph 6(e) of the TASMAN 2 C&MA to assist the management
committee in the performance of the duties and responsibilities
assigned to it under the TASMAN 2 C&MA are hereby confirmed and
shall continue to act for the purposes for which they were so
established. The O&M Subcommittee and the F&A Subcommittee, under
the direction of the Management Committee, shall be responsible for
their respective areas of interest listed in Annex 1 and any other
areas of interest designated by the Management Committee. Likewise,
the Management Committee may establish other subcommittees or other
groups as it considers necessary to assist in the performance of
its responsibilities.
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Subcommittees shall meet at least once annually and more frequently
if necessary, until two years following the RFS date and thereafter
as may be appropriate. Meetings of a subcommittee may be called to
consider specific questions at the discretion of its Chairman or
whenever requested by one or more Parties representing at least 5%
of the voting interests specified in Schedule B. The respective
Chairman of each subcommittee, or a designated representative of
each subcommittee, shall attend Management Committee meetings and
meetings of each other subcommittee in an advisory capacity as
necessary. On or about two years after RFS, the Management
Committee shall determine whether any of its subcommittees should
remain in existence. If the Management Committee determines that
one or more of its subcommittees shall not remain in existence, the
responsibilities assigned to a subcommittee whose existence has
been terminated under this Subparagraph 6(e) shall revert to the
Management Committee.
7. OWNERS PROJECT TEAM
(a) The Owners Project Team established under the TASMAN 2 C&MA to
undertake the on-going tasks of coordinating and managing the
overall construction of the Cable System is hereby confirmed and
shall continue to act for the purposes for which it was so
established. The Owners Project Team shall consist of representatives
from the Initial Parties. A Project Controller shall be appointed
by OTC and a Deputy Project Controller shall be appointed by TNI,
provided that any persons so appointed under or pursuant to the
TASMAN 2 C&MA shall be deemed to have been appointed pursuant to
this Agreement. The Owners Project Team shall be chaired by the
Project Controller who shall also act as its coordinator and
spokesman.
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(b) The responsibilities of the Owners Project Team are contained in
Annex 2. Upon termination of existence of the Owners Project Team,
the Management Committee shall determine the need for any assignment
of residual responsibilities to another group under this Agreement.
(c) No decision of the Owners Project Team shall override any provisions
of this Agreement.
8. DEFINITION OF SEGMENT B CAPITAL COSTS
(a) Capital costs, as used in this Agreement, refers to costs incurred
in engineering, providing and constructing Segment B, or causing it
to be engineered, provided and constructed, or to laying or causing
to be laid cables, repeaters and joint housing, or to installing or
causing to be installed cable system equipment, and shall include:
(i) appropriate costs, including financial charges attributable
to other Parties' shares of such costs, incurred by OTC and
TCNZ or TNI as the case may be in respect of specific
activities such as desk top surveys, marine surveys and cable
system development activities required to be undertaken prior
to entry into force of the TASMAN 2 C&MA;
(ii) those costs payable to the Supplier under the Supply Contract;
(iii) those costs directly incurred by OTC and TCNZ or TNI as the
case may be which shall be fair and reasonable in amount and
not included in the Supply Contract, and which have been
directly and reasonably incurred for the purpose of, or to be
properly chargeable in respect of, such engineering,
provision, construction, installation and
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laying of Segment B, including, but not limited to,
the costs of engineering, design, materials, manufacturing,
procurement and inspection, installation, removing
(with appropriate reduction for salvage), cable ship
and other ship costs, route survey, burying, testing
associated with laying or installation, customs duties,
taxes (except income tax imposed upon the income of a
Party), financial charges attributable to other Parties'
shares of costs incurred, supervision, billing activities,
overheads and insurance or a reasonable allowance in lieu
of insurance if such Party elects to carry a risk itself,
being a risk which is similar to one against which the
Supplier has insured or against which insurance is usual or
recognised or would have been reasonable; and
(iv) interest during construction.
(b) Such costs shall exclude all costs incurred by the Parties in holding
Management Committee meetings and meetings of the subcommittees
established pursuant to Subparagraph 6(e) or the attendance by the
Parties' representatives at such meetings.
9. ALLOCATION AND BILLING OF SEGMENT B CAPITAL COSTS
(a) The total capital costs of Segment B, including any additional work
or property incorporated in Segment B subsequent to RFS by agreement
of the Parties, shall be borne by the Parties in the proportions set
forth in Schedule C.
(b) OTC and TNI shall promptly render bills for the capital costs of
Segment B to each Party for payment by such Party of its pro rata
share of such costs in accordance with Schedule C. Such bills shall
not be rendered more frequently than once a month and shall contain
a reasonable amount of detail to substantiate them. On
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receipt of such bills, each Party shall pay to OTC and TNI the
amounts specified in the bills by the last day of the calendar
month which follows the calendar month in which the bill was
rendered. In the case of bills containing costs billed on an
estimated basis, appropriate adjustments will be made in subsequent
bills promptly after the actual costs involved are determined.
(c) As soon as practicable after RFS, the amount of each Party's share
of the costs of Segment B shall be computed by OTC and/or TNI, as
appropriate, each of which shall make appropriate adjustments and
render any necessary bills or arrange for any necessary refunds by
way of final settlement in order that each Party may bear its proper
share of the costs as provided in this Paragraph 9.
(d) If, subsequent to RFS, additional property or equipment is
incorporated in the Cable System by agreement of the Management
Committee, the costs thereof shall be borne by the Parties in the
proportions as set forth in Schedule C.
(e) For purposes of this Agreement, financial charges shall be computed
at a rate equal to the lowest publicly announced prime overdraft rate
in the currencies of Australia and New Zealand, as applicable,
charged by the following banks on the fifteenth day of the month in
which the costs were incurred by the billing Parties:
(i) BILLS RENDERED BY OTC:
Westpac Banking Corporation, Sydney.
(ii) BILLS RENDERED BY TNI
Bank of New Zealand, Wellington.
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(f) Amounts billed and not paid when due shall accrue extended
payment charges from and including the day following the day on
which payment was due until paid. For purposes of this Agreement,
paid shall mean that the funds are available for immediate use by
the recipient. For purposes of this Agreement, extended payment
charges shall be computed at rates equal to 125% of the relevant
rates for financial charges as defined in Subparagraph 9(e) on the
day following the day on which payment was due.
(g) In the event that applicable law does not allow the imposition of
financial charges or extended payment charges at the rates
established in accordance with Subparagraphs 9(e) or 9(f)
respectively, financial charges and extended payment charges shall
be at the highest rates permitted by applicable law, which in no
event shall be higher than the rates computed in accordance with
Subparagraphs 9(e) or 9(f), as appropriate.
(h) A bill shall be deemed to have been accepted by the Party to whom
it is rendered if that Party does not present a written objection
before the date when payment is due. If such objection is filed,
all Parties concerned shall make every reasonable effort to settle
promptly the dispute concerning the bill in question. If the
objection is sustained and the objecting Party has paid the disputed
bill, the amount of overpayment agreed upon shall be refunded
promptly to the objecting Party by the Party by or for whom the bill
was rendered, together with any financial charges calculated thereon
at the relevant rate determined in accordance with Subparagraph 9(e)
from and including the date of payment of the bill to the date on
which the refund is transmitted to the objecting Party. If the
objection is not sustained and the objecting Party has not paid the
disputed bill, said Party shall pay such bill promptly together
with any extended payment charges calculated thereon at the
relevant rate determined in accordance with Subparagraph 9(f) from
and including the day following the day on which payment of the
bill was due until paid. Nothing in this Subparagraph 9(h) shall
relieve a Party from paying those parts of a bill that are not in
dispute.
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(i) Credits for refunds of appropriate financial charges and bills for
extended payment charges will not be rendered if the amount of
charges involved is less than one hundred dollars Australian for
credits or bills rendered by OTC or one hundred dollars New Zealand
for credits or bills rendered by TNI.
10. USE OF SEGMENTS A AND C
(a) Each Party which has no ownership interest in Segments A and C
shall be permitted to use Segments A and C, including any additions
thereto, to the extent required for the purpose of using the Cable
System and carrying on the related activities at those locations in
accordance with this Agreement. Such use will be deemed to commence
from RFS or from the date a Party first places any of its capacity
into operation, whichever occurs first, and shall continue for the
duration of this Agreement.
(b) For the use of Segments A and C, the Parties shall pay OTC and TNI
respectively an amount calculated by reference to the capital costs
reasonably incurred in providing Segments A and C and periodic
charges based upon the costs of maintenance, supervision and
operation, in the proportions specified in Schedule C. Where the use
of Segments A and C or of certain equipment situated therein, such as
power supply or testing and maintenance equipment, is shared by the
Cable System and other communications systems terminating at Segments
A and C, the capital, operating, maintenance and supervision costs of
such shared cable stations or equipment (not solely attributable to a
particular communications system or systems) will be allocated among
the systems involved in the proportions in which they use the shared
equipment or facility. For such purposes, use of a shared cable
station or of shared cable station equipment therein attributable to
a particular system shall be determined on the basis of the ratio
of: (1) the installed cost of the cable station equipment (excluding
shared equipment) associated with the particular cable
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system to (11) the installed cost of the cable station equipment
(excluding shared equipment) associated with all systems, including
the Cable System, which make use of the shared facility.
(c) Capital costs, as used in this Paragraph 10 with reference to the
provision of Segments A and C, including land, access roads, cable
rights-of-way, ducts and buildings located at Segments A and C, or
causing them to be provided and constructed, or to installing or
causing to be installed Segments A and C equipment, shall include all
expenditures incurred which shall be fair and reasonable in amount
and either to have been directly and reasonably incurred for the
purpose of, or to be properly chargeable in respect of, such
provision, construction and installation, including, but not limited
to, the purchase costs of land, building costs, amounts incurred for
development, engineering, design, materials, manufacturing,
procurement and inspection, installation, removing (with appropriate
reduction for salvage), testing associated with installation,
customs duties, taxes (except income tax imposed upon the income of
a Party), financial charges attributable to other Parties' shares
of costs, supervision, billing activities, overheads and insurance
or a reasonable allowance in lieu thereof. Losses against which
insurance was not provided, or for which an allowance in lieu
thereof was not provided, or for which an allowance in lieu thereof
was not taken, shall constitute capital costs. Operating and
maintenance costs for Segments A and C, as used in this Paragraph
10, shall include costs reasonably incurred in operating and
maintaining the facilities involved, including, but not limited to,
the cost of attendance, testing, adjustments, repairs and
replacements, customs duties, taxes (except income tax imposed upon
the income of a Party) paid in respect of such facilities, billing
activities, administrative costs, financial charges attributable to
other Parties' shares of costs, and costs and expenses reasonably
incurred on account of claims made by or against other persons in
respect of such facilities or any part thereof and damages or
compensation payable
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by OTC and TNI on account of such claims. Costs, expenses, damages,
or compensation payable to OTC and TNI on account of claims made
against other persons shall be shared by the Parties in the same
proportions as they share the costs of operating and maintaining
Segments A and C.
(d) In the event that the cable station located at Segment A or the
cable station located at Segment C is not available for the landing
and termination of the Cable System for any reason, OTC or TNI as
appropriate, with the agreement of the other Parties, shall take all
necessary measures to ensure that another suitable cable station will
be available for the Cable System for the duration of this Agreement
on fair and equitable terms.
(e) In the event of a sale or other disposition of Segment A or Segment
C or part thereof prior to the termination of this Agreement, OTC
or TNI as appropriate shall share with the other Parties any net
proceeds, or costs, of such sale or disposition received, or
expended, by OTC or TNI, to the extent allocable to the Cable
System, in the proportions specified in Schedule C at the time of
the sale or disposition.
(f) Subject to Subparagraph 10(e), nothing contained in this Agreement
shall be deemed to vest in any Parties other than OTC and TNI, any
salvage rights in Segments A and C or any cable stations substituted
therefor.
(g) OTC and TNI shall keep and maintain such books, records, vouchers,
and accounts of all costs that are incurred in the design,
engineering, provision, construction and installation, as
appropriate, of Segments A and C for a period of three (3) years
from RFS or the date the work is completed, whichever is later.
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(h) With respect to operating and maintenance costs of Segments A and C,
such books, records, vouchers and accounts of costs, as are relevant, shall
be kept and maintained by OTC and TNI for a period of three (3) years from
the date on which the corresponding bills to the Parties are rendered.
(i) In keeping and maintaining books, records, vouchers, and accounts of
costs pursuant to Subparagraphs 10(g) and 10(h), OTC and TNI shall
afford the other Parties the right to review or audit said books,
records, vouchers, and accounts of costs. In affording the right to
review or audit, OTC and TNI shall be permitted to recover, from
the Party or Parties requesting the review or audit, the entire
cost reasonably incurred in complying with the review or audit.
Such right of review and audit pursuant to this Subparagraph 10(1)
shall only be exercisable through the F&A Subcommittee in
accordance with the F&A Subcommittee's audit procedures.
(j) After RFS the Management Committee shall arrange for a final audit to be
conducted by the F&A Subcommittee. The costs of such audit shall be borne
by the Parties in the proportions specified in Schedule C.
(k) In respect of bills rendered pursuant to this Paragraph 10,
each Party shall pay OTC or TNI as appropriate, in the currency in
which the bill is rendered, the amount owed by the end of the
calendar month following the calendar month in which the bill was
rendered. In the case of bills containing costs billed on a
preliminary basis, appropriate adjustments will be made in
subsequent bills promptly after the actual costs involved are
determined.
(l) Amounts billed pursuant to this Paragraph 10 and not paid when
due shall accrue extended payment charges from and including the
day following the day on which payment was due until paid, said
charges to be computed and applied in accordance with Subparagraphs
9(f) and 9(g).
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(m) The billing procedures specified in Subparagraphs 9(h) and 9(i) shall
be applicable to all bills rendered pursuant to this Paragraph 10.
11. OBLIGATION TO CONNECT THE CABLE SYSTEM WITH INLAND SYSTEMS
Each of the Parties, at its own expense, on or before RFS shall do, or
cause to be done, all such acts and things as may be necessary within its
operating territory to provide and maintain throughout the period of this
Agreement suitable connection of capacity in, or of capacity connected with
capacity in, the Cable System with appropriate inland communications
facilities in its operating territory.
12. OBLIGATION TO PROVIDE TRANSITING FACILITIES TO EXTEND CABLE SYSTEM
CAPACITY
Each of the parties shall use its best endeavours to furnish and
maintain, or cause to be furnished and maintained, in efficient
working order, for Carrier Parties not from that Party's country,
and for telecommunications entities not from that Party's country
that are not Parties but which are permitted to use capacity in the
Cable System, for the duration of this Agreement, such facilities
in its respective country as may be suitable and reasonably
required by such other Parties and telecommunications entities for
the purpose of handling communications transiting its respective
country subject to the following conditions:
(i) such facilities shall be suitable for the intended use;
(ii) the use of the facilities shall not cause interference to other
users of the facilities; and
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(iii) the facilities shall be furnished and maintained on terms and
conditions which are no less favourable than those granted to
other telecommunications entities for transmission facilities of
similar type, routing and quantity transiting the location
involved. Such terms and conditions shall not be inconsistent
with applicable governmental regulations in the location in which
the facilities are located.
No Party shall be required under this Agreement to furnish such facilities in
its country to other Carrier Parties or telecommunications entities not Parties
from its respective country. The provision of facilities pursuant to this
Paragraph 12 shall be the subject of separate agreements acceptable to the
affected parties.
13. ALLOCATION AND USE OF CAPACITY
ASSIGNMENT OF NOTIONAL CAPACITY
(a) The Notional Capacity in Segment B shall be assigned to the Parties in
accordance with Schedule D. Such assignments represent the intended
capacity requirements of the Parties through at least the year 2005.
(b) Capacity jointly assigned to two Parties shall be considered as
consisting of two half interests in a MAUO, with each half
interest assigned to one of the two Parties involved. Such
capacity is assigned to the Parties for the provision of
telecommunications services between such Parties.
(c) Capacity wholly assigned to one Party shall be considered as
consisting of two half interests in a MAUO, with both half
interests assigned to one Party. Such capacity is assigned to the
Party for provision of telecommunications services between such
Party and other identified telecommunications entity(ies) not
Party(ies) or between two identified telecommunications entities
not Parties.
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ARRANGEMENT OF NOTIONAL CAPACITY
(d) Capacity of 30 or more MAUOs jointly assigned between any two
Parties or wholly assigned to a Party shall, if required by the
Party or Parties concerned, be initially arranged so as to ensure
complete fascicles of 30, 90, 630 or 1890 MAUOs in the smallest
number of fascicles possible. In addition, one or more Parties
assigned in the aggregate 30, or more than 30, MAUOs in the Cable
System may, by agreement with the Parties to whom such capacity is
jointly assigned, combine their MAUOs to avail themselves of the
right afforded in this Subparagraph 13(d) with respect to the
initial arrangement of capacity.
(e) Capacity of 90 MAUOs, or multiples of 90 MAUOs, jointly assigned
between any two Parties or wholly assigned to a Party, or in
combination with one or more Parties as provided in Subparagraph
13(d), may be operated, by agreement with such Parties, at a rate
of 6,312,000 bits per second with up to four component modules
operating at 1,544,000 bits per second each containing up to
twenty-four 64,000 usable bits per second channels. The resulting
higher number of 64,000 usable bits per second channels shall not
constitute an increase in the Cable System capacity for purposes of
ownership and cost allocation.
(f) When, on a partially used channel operating at 6,312,000 bits per
second, the placement of 1,544,000 bits per second component
modules conflicts with the placement of 2,048,000 bits per second
component modules, the latter shall take precedence.
(g) Subsequent to the initial arrangement of capacity as provided in
Subparagraph 13(d), capacity in the aggregate of 30, or more than
30, MAUOs assigned to one or more Parties may be rearranged, if so
requested by such Parties, so far as reasonably possible, to ensure
complete fascicles of 30, 90, 630 or 1890 MAUOs in the smallest
number of such fascicles possible, provided:
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(i) the agreement of the relevant cable station owner is obtained
which agreement shall not be unreasonably withheld;
(ii) the agreement of other Parties with assigned capacity that
would be affected by the proposed rearrangement is obtained
which agreement shall not be unreasonably withheld; and
(iii) all costs arising from the proposed rearrangement are first
paid by the Parties requesting it.
DISPOSITION OF NOTIONAL CAPACITY
(h) Prior to RFS, a Party to whom capacity is wholly assigned, in
accordance with Subparagraph 13(c), may make half interests in such
capacity available to additional Parties in such quantity at least
equal to a half interest in one MAUO on a transfer of ownership
basis provided that the additional Party(ies) is(are) the
identified telecommunications entity(ies) pursuant to Subparagraph
13(c). At any time, a Party may make half interests in such wholly
assigned capacity available to the identified telecommunications
entities pursuant to Subparagraph 13(c) in such quantity at least
equal to a half interest in one MAUO on such basis, other than by
transfer of ownership interest, as they may agree.
(i) A Party may make interests in any of the capacity jointly assigned
to it pursuant to Subparagraph 13(b) available to other Parties or
telecommunications entities not Parties (hereinafter referred to as
"non-Parties") that are located within the same country as such
Party, in such quantity at least equal to a half interest in one
MAUO and on such basis as that Party and the other Party or
non-Party concerned may agree other than, in the case of any
non-Party, by transfer of ownership interest.
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(j) A Party whose initial joint assignment of capacity with another
Party does not exceed 30 MAUOs may make its interests in any of the
capacity jointly assigned with the other Party available to
non-Parties for service with the other Party, in such quantity at
least equal to a half interest in one MAUO and on such basis, other
than by transfer of ownership interest, as that Party and the
non-Parties concerned may agree.
(k) Except as provided in Subparagraphs 13(h), 13(i) and 13(j), no
Party may make any interests in any of the capacity assigned to it
available on any basis to other Parties or to non-Parties until
the Notional Capacity has been expanded to the Design Capacity,
except with the agreement of all the Parties. After the Notional
Capacity has been expanded to the Design Capacity, any Party may
make interests in any of the capacity assigned to it available to
other Parties or to non-Parties, in such quantity at least equal
to a half interest in one MAUO and on such basis as that Party and
the other Party or non-Party concerned may agree other than, in the
case of any non-Party, by transfer of ownership interest and, in
the case of transfer of ownership interest to another Party,
subject to the approval of the Management Committee.
(l) Where capacity is jointly assigned in accordance with Subparagraph
13(b), neither Party may make interests in such capacity available
to other Parties or to non-Parties without the consent of the other
Party to whom the capacity is jointly assigned, which consent will
not be unreasonably withheld.
(m) In the event of any transfers of ownership between Parties pursuant
to this Paragraph 13, payments will be made as may be agreed
between the affected Parties and Schedules B, C and D shall be
modified as appropriate.
OPTIMISATION OF NOTIONAL CAPACITY ASSIGNMENTS
(n) The communications capability of any capacity assigned in Schedule
D may be optimised by the Party or Parties to whom such capacity
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is assigned by the use of equipment which will more efficiently use
such capacity, provided that the use of such equipment does not
cause an interruption of, or interference to, the use of any other
capacity in the Cable System or prevent the use of similar
equipment by other Parties. A Party to whom capacity is assigned
shall permit the use of such equipment by a telecommunications
entity to which such Party has made available the use of any such
capacity, provided that such entity agrees that its use of the
equipment will satisfy the conditions set forth in this
Subparagraph 13(n). Such equipment, if used, shall not constitute a
part of the Cable System.
ALLOCATION AND UTILISATION OF COMMON RESERVE CAPACITY
(o) The Common Reserve Capacity shall be held by the Parties in common
and undivided shares in the same proportion as their percentage
interests are set forth in Schedule C.
(p) A proportionate share of the Common Reserve Capacity up to the
equivalent capacity limit represented by its respective percentage
interests pursuant to Subparagraph 13(o) may be temporarily
allocated to a Party for utilization without charge for purposes of
restoration of telecommunications services provided by that Party.
The utilization of Common Reserve Capacity for purposes of
restoration, other than as specifically provided for in this
Subparagraph 13(p), shall require the concurrence specified in
Subparagraph 13(q). This Subparagraph 13(p) shall not be construed
as assuring the availability for Common Reserve Capacity for
restoration nor shall it be construed as requiring the provision of
any additional facilities. Any additional costs shall be borne by
Party(ies) using the Common Reserve Capacity for restoration
pursuant to this Subparagraph 13(p). This Subparagraph 13(p) shall
also not be construed as precluding the Parties from agreeing to
the establishment of broad-based restoration arrangements using
Common Reserve Capacity.
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(q) The Management Committee may authorize the temporary use of Common
Reserve Capacity for temporary or occasional purposes, including
restoration, if the concurrence of at least 75% of the total voting
interests of the Parties is obtained which must include the
concurrence of the owners of Segments A and C, in recognition of
the potential technical, financial and operational impact on cable
station operations. With such concurrence, the Management Committee
may establish procedures, and the terms and conditions applicable,
including payment of any reasonable additional costs incurred by
the owners of Segments A and C in connection with such use of
Common Reserve Capacity. Any procedures determined by the
Management Committee pursuant to this Subparagraph 13(q) may also
include arrangements for the administration of the utilization of
the Common Reserve Capacity.
(r) The Management Committee shall accord priority to increases in
Notional Capacity pursuant to Paragraph 14 over any utilisation of
Common Reserve Capacity pursuant to Subparagraphs 13(p) and 13(q).
14. EXPANSION OF NOTIONAL CAPACITY
Subject to the approval of the Management Committee, the Notional
Capacity of the Cable System may be increased at the request of any
Party or for the admission of additional Parties pursuant to Paragraph 23.
In the event of an increase in the Notional Capacity, financial
adjustments will be made between and among the Parties as necessary to
adjust their contributions to the costs of the Cable System based on an
expanded Notional Capacity and Schedules B, C and D shall be
appropriately modified. The terms and conditions, including pricing
arrangements, for increasing the Notional Capacity shall be determined
by the Management Committee.
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15. DECREASE OR INCREASE OF DESIGN CAPACITY
(a) If, subsequent to RFS, the Design Capacity of Segment B is
increased or decreased pursuant to agreement of the Parties, or
otherwise, the additional or reduced Design Capacity will be added to
or subtracted from the Common Reserve Capacity. The Management
Committee shall have authority to increase the Design Capacity of the
Cable System with the concurrence of at least 75% of the total voting
interests of the Parties which must include the concurrence of the
owners of Segments A and C, in recognition of the potential
technical, financial and operational impact on cable station
operations.
(b) In the event that the capacity which Segment B is capable of
providing upon RFS, or such other date as the Parties may agree, is
less than the Notional Capacity, or in the event that the capacity
which Segment B is capable of providing during the term of this
Agreement is reduced below the Notional Capacity as a result of
physical deterioration or for other reasons beyond the control of
the Parties, the capacity assigned to the Parties in accordance
with Schedule D shall be reduced in the proportions in which the
capacity provided was assigned to the Parties immediately preceding
such decrease in capacity. The assignment of fractional interests
in capacity less than a half interest in one MAUO resulting from
such reductions shall be determined by agreement of the Parties.
(c) In the event of such a decrease of Design Capacity as provided for
in Subparagraph 15(b), payments will be made between and among the
Parties as necessary to adjust the contribution to the capital
costs of the Cable System theretofore made by each Party to reflect
any Party's revised assignment of capacity. Such payments will be
based on terms and conditions to be determined by the Management
Committee. In addition, appropriate adjustments will be made in
each Party's share of the capital costs and of the
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operating and maintenance costs relating to Segment B thereafter
incurred to reflect that Party's revised assignment of capacity in
the Cable System. In each such case, Schedules B, C and D shall be
appropriately modified.16.
16. DUTIES AND RIGHTS AS TO OPERATION AND MAINTENANCE OF SEGMENTS
(a) OTC shall be responsible for the operation and maintenance of
Segment A and that portion of Segment B between the System Interface
at the cable station at Sydney and its respective Cable Landing Point.
OTC shall use all reasonable efforts to maintain Segment A and said
portion of Segment B, or to cause Segment A and said portion of
Segment B to be maintained, economically and in efficient working
order.
(b) TNI shall be responsible for the operation and maintenance of
Segment C and that portion of Segment B between the System Interface
at the cable station at Whenuapai and its respective Cable Landing
Point. TNI shall use all reasonable efforts to maintain Segment C and
said portion of Segment B, or to cause Segment C and said portion of
Segment B to be maintained, economically and in efficient working
order.
(c) OTC and TNI shall be jointly responsible for the operation and
maintenance of Segment B except those portions of Segment B between
the appropriate System Interfaces at the cable stations at Sydney
and Whenuapai and their respective Cable Landing Points. Such
joint responsibility shall be apportioned between OTC and TNI as
those Parties may mutually agree. OTC and TNI, for the purposes of
Paragraphs 16 and 17 called the "Maintenance Authorities", shall
perform their responsibilities in a manner consistent with
applicable international cable maintenance agreements and shall use
all reasonable efforts to maintain or to cause to be maintained
economically said portion of Segment B in
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efficient working order and with an objective of achieving
effective and timely repairs when necessary. The Maintenance
Authorities shall have the right to deactivate Segment B, or any
part thereof, in order to perform their duties. Prior to such
deactivation, reasonable notice shall be given to, and coordination
shall be made with, the other Parties. To the extent possible,
sixty days prior to initiating action, the Maintenance Authority
involved shall advise the other Parties in writing of the timing,
scope and costs of significant planned maintenance operations or
arrangements; of significant changes to existing operation and
maintenance methods; and of contractual arrangements for cable
ships or other maintenance facilities or devices that will have a
significant impact on operation or maintenance costs. Should one or
more Parties representing at least 5% of the total voting interests
specified in Schedule B wish to review such a contractual
arrangement, operation or change prior to its occurrence, such
Party or Parties shall notify the appropriate Maintenance Authority
and the Chairman of the O&M Subcommittee in writing within thirty
(30) days of such advice. Upon such notification, the O&M
Subcommittee shall initiate action to convene an ad hoc meeting for
such review.
(d) The responsibilities for the operation and maintenance of Segment B
shall be reviewed, and recommendations shall be made as
appropriate, by the O&M Subcommittee at its discretion.
(e) Each Party concerned shall give necessary information, relating to
the operation and maintenance of the equipment which that Party may
have designed or procured and which is used in the Cable System, to
the Maintenance Authority by whom that equipment, by reason of the
provisions of this Paragraph 16, is to be operated and maintained.
Each Maintenance Authority with responsibility for the maintenance
of any segment of the Cable System, in accordance with
Subparagraphs 16(a), (b), (c) and (d), shall have prompt access,
necessary to the performance of its duties, to all system
maintenance information appropriate to those parts of the Cable
System not covered by its authority.
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(f) Each Maintenance Authority shall be authorized to pursue claims in
its own name, on behalf of the Parties, in the event of any damage
or loss to the Cable System and may file appropriate lawsuits or
other proceedings on behalf of the Parties. Subject to obtaining
the prior concurrence of the Management Committee, a Maintenance
Authority may settle or compromise any claims and execute releases
and settlement agreements on behalf of the Parties as necessary to
effect a settlement or compromise.
(g) None of the Parties shall be liable to any other Party for any loss
or damage sustained by reason of any failure in, or breakdown of,
the facilities constituting the Cable System or any interruption of
service, whatsoever shall be the cause of such failure, breakdown
or interruption and however long it shall last, but in the event of
a failure or breakdown of any such facilities, if the Maintenance
Authority responsible for maintaining and operating the facilities
involved as specified in Subparagraphs 16(a), (b), (c) and (d)
fails to restore those facilities to efficient working order and
operation within a reasonable time after having been called upon to
do so by any other Party to whom capacity is assigned by this
Agreement, the Management Committee may, to the extent that it is
practical to do so, place, or cause to be placed, such facilities
in efficient working order and operation and charge the Parties
their proportionate shares of the costs reasonably incurred in
doing so.
(h) Each Party, at its own expense, shall have the right to inspect from
time to time the operation and maintenance of any portion of the
Cable System and to obtain copies of the maintenance records. For
this purpose, each Maintenance Authority responsible for
maintaining any segment of the Cable System, as specified in
Subparagraphs 16(a), (b), (c) and (d), shall retain significant
records, including recorder charts, for a period of not less than
five (5) years from the date of the record. If these records are
destroyed at the end of this period, a summary of important items
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should be retained for the life of the Cable System. Such right of
inspection pursuant to this Subparagraph 16(h) shall be subject to
reasonable conditions of confidentiality.
17. OPERATING AND MAINTENANCE COSTS OF SEGMENT B - ALLOCATION AND BILLING
(a) The costs of operating and maintaining Segment B shall be shared
by the Parties in the relevant proportions specified in Schedule C.
(b) The operating and maintenance costs to which Subparagraph 17(a)
refers are the costs reasonably incurred in operating and
maintaining the facilities involved, including, but not limited to,
the cost of attendance, testing, adjustments, storage of plant and
equipment, repairs (including repairs at sea) and replacements,
cable ships (including an appropriate share of standby costs) and
maintenance and repair devices that are or may hereafter become
available (including an appropriate share of standby costs), cable
depots, reburial and the replacement of plant, tools and test
equipment, customs duties, taxes (except income tax imposed upon
the income of a Party) paid in respect of such facilities, billing
activities, financial charges attributable to other Parties' shares
of costs incurred by a Maintenance Authority, supervision,
overheads and costs and expenses reasonably incurred on 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 concerned on account of such claims. Cost,
expenses, damages, or compensation payable to the Parties on
account of claims made against other persons, shall be shared by
the Parties in the proportions specified in Schedule C.
(c) Subject to Paragraph 16, the Maintenance Authorities may authorize
the purchase and use of special tools and test equipment for use on
board cable ships which are required for the maintenance and
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repair of the Cable System and also any spare terminal equipment
considered necessary to ensure that the facilities constituting the
Cable System are returned to efficient working order and operation
as soon as possible following the failure, breakdown or interruption
of such facilities. The related costs may include, but not be
limited to, the costs, or an appropriate share thereof, for the
purchase, storage and maintenance of this equipment.
(d) Each Maintenance Authority shall render to the other Parties bills
for the expenditures and receipts herein referred to not more
frequently than monthly in accordance with procedures to be
established by the Management Committee. The Maintenance
Authorities shall also from time to time furnish such further
details of such bills as the other Parties may reasonably require.
On the basis of such bills, each Party shall pay, in the currency
in which the bill is rendered, such amounts as may be owed by the
end of the calendar month following the calendar month in which the
bills are rendered.
(e) Amounts billed and not paid when due shall accrue extended payment
charges from and including the day following the day on which payment
was due until paid, said charges to be computed and applied in
accordance with Subparagraphs 9(f) and 9(g).
(f) The billing procedures specified in Subparagraphs 9(h) and 9(i) shall
be applicable to all bills rendered pursuant to this Paragraph 17.
18. SHARING OF CONTRACTUAL OBLIGATIONS AND LIABILITY
(a) Each Party shall indemnify and shall keep indemnified and hold
harmless the other Parties and each of their employees, servants
and agents to the extent hereinafter agreed, from and against all
claims, demands, actions, suits, proceedings, writs, judgements,
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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 any
aspect of providing, constructing, laying or installing the Cable
System or of its operation and maintenance. This indemnity shall
not, however, relieve the Initial Parties of their obligations
undertaken pursuant to Paragraph 3 nor shall any Party be
indemnified for intentional miscounduct or reckless acts or
omissions.
(b) If a Party assumes obligations, commits monies in the name or on
behalf of the other Parties pursuant to this Agreement or to an
assignment under the provisions of this Agreement or is obliged by
final judgement of a competent tribunal or under a settlement
approved by the Management Committee to discharge any claim in
damages or other liability, including costs or expenses associated
therewith, to any person or entity which is not a Party to this
Agreement and resulting from any aspect of providing, constructing,
laying or installing the Cable System or of its operation and
maintenance, that Party shall be entitled to reimbursement from the
other Parties in the proportions set forth in Schedule C (unless
any such claim for reimbursement arises from the intentional
misconduct or reckless act or omission of the Party seeking
reimbursement).
(c) If a claim, demand, action, suit, proceeding, writ, judgement,
order or decree as referred to in Subparagraph 18(a) is brought,
made or rendered against a Party or any Party suffers or incurs any
damages, losses or expenses in respect thereof, that Party shall,
as a condition of reimbursement under Subparagraph 18(b),
immediately notify all the other Parties and give them the
opportunity to advise and recommend through the Management
Committee on the means to defend or to settle same and, to the
extent permitted by the relevant jurisdiction, to be joined in any
proceedings relating thereto.
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(d) Except as provided in Subparagraph 16(f), as a precondition to the
initiation of any legal proceedings by any Party or Parties for
the benefit of any other Party or Parties, the Party or Parties
planning to initiate such proceedings shall give notice,
appropriate under the circumstances, to all other Parties.
(e) The costs and benefits of any proceedings referred to in
Subparagraph 18(d) shall be shared between the Parties in the
manner described in Subparagraph 18(b).
19. KEEPING AND INSPECTION OF BOOKS FOR SEGMENT B
(a) OTC and TNI shall each keep and maintain such books, records,
vouchers and accounts of all capital costs that are incurred in
the engineering, provision and installation of Segment B and not
included in the Supply Contract, as defined in Subparagraph
8(a) (iii), which they incur directly, for a period of three (3)
years from RFS or the date the work is completed, whichever is
later.
(b) With respect to operating and maintenance costs of Segment B, such
books, records, vouchers and accounts of costs, as are relevant,
shall be kept and maintained by OTC and TNI for a period of three
(3) years from the date on which the corresponding bills to the
Parties are rendered.
(c) Any Party keeping and maintaining books, records, vouchers and
accounts of costs pursuant to Subparagraphs 19(a) and 19(b) shall
afford the Parties the right to review or audit said books,
records, vouchers and accounts of costs. In affording the right
to review or audit, any such Party shall be permitted to recover,
from the Party or Parties requesting the review or audit, the
entire cost reasonably incurred in complying with the review or
audit. Such right of review and audit pursuant to this
-35-
Subparagraph 19(c) shall only be exercisable through the F&A
Subcommittee in accordance with the F&A Subcommittee's audit
procedures.
(d) After RFS the Management Committee shall arrange for a final audit
to be conducted by the F&A Subcommittee. The costs of such audit
shall be borne by the Parties in proportion to their ownership
interests shown in Schedule C.
(e) The Parties' right to review the books, records, vouchers and
accounts required to be kept under the Supply Contract shall only
be exercisable through the F&A Subcommittee in accordance with the
F&A Subcommittee's audit procedures.
20. GOVERNMENTAL APPROVALS
The performance of this Agreement by the Parties is contingent upon the
obtaining and continuance of such governmental approvals, consents,
authorisations, licenses and permits as may be required or be deemed
necessary by the Parties and as may be satisfactory to them and the
Parties shall use all reasonable efforts to obtain and have continued in
effect such approvals, consents, authorisations, licenses and permits.
21. ASSIGNMENT OF RIGHTS AND OBLIGATIONS
Except as otherwise provided in Paragraphs 13, 14, 15, 22 and 23, during
the continuance of this Agreement no Party shall without the consent of
the other Parties sell, assign, transfer or dispose of its rights or
obligations under this Agreement or of any interest in the Cable System
except to a successor or subsidiary of such Party or a corporation
controlling, or under the same control as, such Party, in which case
written notice shall be given to the other Parties in a timely manner by
the Party making said sale, assignment, transfer or disposition, and
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provided that in the case of any assignments of capacity in the Cable
System to a subsidiary pursuant to this Paragraph 21, the consent of the
other Party or Parties to whom the capacity is jointly assigned shall be
obtained pursuant to Subparagraph 13(l), which consent shall not be
unreasonably withheld.
22. DEFAULT
(a) If any Party fails to make any payment required by this Agreement
on the date when it is due and such default continues for a period
of at least two months after the date when payment is due, the
billing Party may notify the billed Party in writing of its intent
to notify the Management Committee of the status of the matter and
to request the reclamation of capacity, as provided for in this
Paragraph 22, if full payment is not received within four months
of such notification to the billed Party. If full payment is not
received within such specified period, the billing Party may
notify the Management Committee of the status of the matter and
request that the Management Committee reclaim the capacity in the
Cable System assigned to the billed Party.
(b) The Management Committee shall have the option of reclaiming the
capacity assigned to a Party that is in default of this Agreement
pursuant to Subparagraph 22(a), if such default has existed for a
period of six (6) months. The Management Committee shall consider
any extenuating circumstances not within the specific control of
the defaulting Party and the interests of any Party or Parties
that have jointly assigned capacity with the defaulting Party in
determining whether or not to reclaim any or all of the capacity
assigned to such defaulting Party. The Management Committee shall
determine arrangements for disposition of any reclaimed capacity
taking into account the interests of the Party or Parties holding
jointly assigned capacity with the defaulting Party. Such of the
remaining Parties as shall agree to take the reclaimed capacity of
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a defaulting Party which is to be reassigned shall make
appropriate payments which shall then be distributed to those
remaining Parties entitled to the proceeds. The remaining
Parties shall not be obligated to make any payments or credits
for capital costs to the defaulting Party for the reclaimed
capacity. All rights of a defaulting Party under this Agreement
shall terminate as of the time the Management Committee reclaims
all of the capacity previously assigned to the defaulting Party; and
concurrent with such reclamation of capacity, the defaulting
Party shall cease to be a Party to this Agreement. This Agreement
shall be appropriately amended to reflect the default of a Party
and the reallocation of interests pursuant to arrangements
determined by the Management Committee.
23. ADMISSION OF ADDITIONAL PARTIES
(a) The Management Committee is hereby empowered on one or more
occasions prior to RFS to admit telecommunications entities not
signatory hereto as additional Parties. In being so admitted,
an additional Party shall acquire the same rights and obligations
as the other Parties subject to the following:
(i) the admission of additional Parties shall be on terms and
conditions to be determined by the Management Committee;
(ii) the additional Party accepts responsibility to pay its
proportionate share of any costs incurred under this
Agreement prior to its becoming a Party; and
(iii) the additional Party accepts and abides by the terms and
conditions of this Agreement and all decisions properly
taken under this Agreement prior to its becoming a Party.
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(b) The Management Committee with the concurrence of at least 75%
of the total voting interests of the Parties may agree to admit
telecommunications entities not signatory hereto as additional
Parties after RFS subject to terms and conditions to be
decided.
(c) Additional Parties shall be admitted by Supplementary Agreements
to this Agreement. The Initial Parties are hereby authorised to
act jointly as representatives and agents of all Parties to
execute such Supplementary Agreements for the admission of
additional Parties. Schedules A, B, C and D shall be appropriately
modified.
24. REPLACEMENT OF AGREEMENT AND RATIFICATION OF PRIOR DECISIONS AND ACTIONS
(a) This Agreement replaces in its entirety the TASMAN 2 C&MA with
effect from the date of this Agreement and all the rights,
interests, shares, benefits, privileges, claims, entitlements,
commitments, covenants, warranties, guarantees, indemnities,
conditions, promises, agreements, undertakings, duties and
obligations of all or any of the Parties relating to any matter
or thing herein referred to shall henceforth be determined and
governed by this Agreement to the exclusion of the TASMAN 2 C&MA,
EXCEPT THAT:
(i) nothing in this Agreement shall prejudice or affect the
rights, interests, shares, benefits, privileges, claims,
entitlements, commitments, covenants, warranties,
guarantees, indemnities, conditions, promises, agreements,
undertakings, duties, obligations or acts (save as may be
hereby expressly released or otherwise provided herein) of
or made, done, given or granted to or by OTC and TCNZ or
TNI as the case may be or any of them by, in or pursuant
to or in accordance with the TASMAN 2 C&MA or in any way
arising out of anything done, caused or omitted to be done
- 39 -
pursuant to or in accordance with or in default or in breach
of the TASMAN 2 C&MA or purported to have been so done and, in
any such case or event, up to the date of this Agreement; and
(ii) any claim or cause or right of action which has accrued to OTC
and TCNZ or TNI as the case may be or any of them by reason of
any breach or non-compliance with or default in observing and
performing any part of the TASMAN 2 C&MA or the Supply
Contract herein described up to the date of this Agreement
shall not be affected or prejudiced by this Agreement.
The expression "TASMAN 2 C&MA" when used in this Subparagraph 24(a)
shall, unless the context otherwise requires, include the MOU.
(b) Each Party to this Agreement does hereby, and each additional Party
admitted pursuant to Paragraph 23 shall thereby unconditionally
ratify and accept as binding (in the same manner and to the same
extent as if made or done under this Agreement) on it, its
successors, permitted assigns or trustees, all decisions and
actions theretofore taken directly or indirectly by any other Party
or Parties or TCNZ or any committee or subcommittee or group pursuant
to this Agreement, the TASMAN 2 C&MA or the MOU.
25. RESOLUTION OF DISPUTES
(a) If a dispute should arise under this Agreement between or among the
Parties they shall make every reasonable effort to resolve such
dispute. However, in the event that they are unable to resolve such
dispute, the matter shall be referred to the Management Committee
which shall either resolve the matter or determine the method by
which the matter should be resolved. This procedure shall be the
sole and exclusive remedy for any dispute which may arise under this
Agreement between or among the Parties.
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(b) The performance of this Agreement by the Parties shall continue
during the resolution of any dispute.
26. RELATIONSHIP OF PARTIES TO EACH OTHER
The relationship between or among the Parties shall not be that of
partners and nothing herein contained shall be deemed to constitute a
partnership between or among them, and the common enterprise among the
Parties shall be limited to the express provisions of this Agreement.
27. PRIVILEGES FOR DOCUMENTS OR COMMUNICATIONS
Each Party specifically reserves, and is granted by each of the other
Parties, in any action, arbitration or other proceeding between or among
the Parties or any of them in a country other than that Party's own
country, the right of privilege, in accordance with the laws of that
Party's own country, with respect to any documents or communications
which are material and pertinent to the subject matter of the action,
arbitration or proceeding as respects which privilege could be claimed or
asserted by that Party in accordance with those laws, and such privilege,
whatever may be its nature and whenever it be claimed or asserted, shall be
allowed to that Party as it would be allowed if the action, arbitration or
other proceeding had been brought in a court of, or before an arbitrator
in, the Party's own country.
28. PERIOD OF AGREEMENT AND REALISATION OF ASSETS
(a) This Agreement shall become effective on the day and year first
above written and shall continue in operation for at least an initial
period of twenty five (25) years following RFS and shall be terminable
thereafter by agreement of the Parties. However any Party may
terminate its participation in this Agreement at the end
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of the initial period or any time thereafter by giving not less than
one (1) year's prior notice thereof, in writing, to the other Parties.
Upon the effective date of termination of participation of a Party,
Schedules A, B, C and D shall be appropriately modified. The remaining
Parties shall assume the capital, operating and maintenance interests
of the Party terminating its participation in proportion to their
interests assigned immediately preceding such effective date of
termination, except for the continuing rights and obligations of the
terminating Party as specified in Subparagraphs 28(c) and 28(d). No
credit for capital costs will be made to a Party that terminates its
participation in accordance with this Subparagraph 28(a).
(b) The interests of a Party or Parties in Segment B of the Cable System
which come to an end by reason of the termination of its or their
participation in this Agreement or the termination of this Agreement
shall be deemed to continue for as long as is necessary for effecting
the purposes of Subparagraphs 28(c) and 28(d) and in the case of
interests which come to an end by reason of a Party or Parties
terminating its or their participation in this Agreement, Segment B
shall accordingly thereafter be held as respects such interests as at
the time any Party terminates its participation in this Agreement, upon
the appropriate trusts by the Parties who are the owners thereof.
Should the doctrine of trusts not be recognised under the laws of the
country, territory or place where the property to which such interests
relate is located, then the Party or Parties who are the owners thereof
shall nevertheless be expressly bound to comply with the provisions of
Subparagraphs 28(c) and 28(d).
(c) Upon termination of this Agreement the Parties shall use their best
efforts to liquidate Segment B of the Cable System within a reasonable
time by sale or other disposition, but no sale or disposition shall be
effected except by agreement between or among the Parties who have
interests in the subject thereof at the time
-42-
this Agreement is terminated. In the event agreement cannot be
reached, the decision will be carried on the basis of a simple majority
of the total voting interests as specified in Schedule B. The costs or
net proceeds of every sale or other disposition shall be divided
between or among the Parties who have or were deemed to have interests
in the subject thereof in the proportions in which such Parties'
ownership interests are specified in Schedule C immediately preceding
the first time any Party terminates its participation in this Agreement
or this Agreement is terminated pursuant to Subparagraph 28(a),
whichever occurs first. The Parties shall execute such documents and
take such action as may be necessary to effect any sale or other
disposition made pursuant to this Paragraph 28.
(d) A Party's termination of its participation in this Agreement or the
termination of this Agreement pursuant to Subparagraph 28(a) shall not
relieve that Party or Parties from any liabilities, costs, damages or
obligations which may arise in connection with claims made by third
parties with respect to the Cable System, the facilities that comprise
the Cable System or any part or portion thereof, or 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,
costs, damages or obligations incurred or benefits accruing in
satisfying such obligations shall be divided among the Parties in the
proportions in which such Parties' ownership interests are specified in
Schedule C immediately preceding the first time any Party terminates
its participation in this Agreement or this Agreement is terminated
pursuant to Subparagraph 28(a), whichever occurs first.
-43-
29. BILLS, PAYMENTS AND NOTICES
(a) OTC shall render bills due under this Agreement in
Australian dollars, and such bills shall be payable
in Australian dollars to the designated office of OTC.
TNI shall render bills due under this Agreement in New
Zealand dollars, and such bills shall be payable in
New Zealand dollars to the designated office of TNI.
OTC and TNI may also render bills in the currencies
specified in the Supply Contract for payment to the
Supplier, and such bills shall be payable in the
currency(ies) in which they are rendered.
(b) Unless otherwise designated by the Party concerned,
bills rendered, payments made and notices issued under
this Agreement shall be addressed to the respective
Parties by registered airmail, dispatch of which shall
be advised by a telex or facsimile giving a summary of
the payments due, expenses concerned or notices issued.
(c) All amounts billed or payable under this Agreement shall be
paid in full without deduction of any taxes, duties or other
withholdings.
30. WAIVER
The waiver by any Party of a breach of, or a default under, any of
the provisions of this Agreement, or the failure of any Party, on
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 of any such provision, right or
privilege hereunder.
-44-
31. EXECUTION OF AGREEMENT AND AMENDMENTS
(a) This Agreement, any amendment thereof and any Supplementary
Agreement pursuant to Subparagraph 23(c) shall each be executed
as one original in the English language.
(b) OTC shall be the custodian of this Agreement and any such
amendment or Supplementary Agreement and shall accord access to
them to a Party upon reasonable notice. Each Party shall be
provided with a certified photocopy of this Agreement and any
such amendment or Supplementary Agreement and any revised
Schedules. A notarised copy of this Agreement and any such
amendment or Supplementary Agreement shall be provided to a Party
upon request, and at the requesting Party's expense.
(c) Subject to Subparagraphs 23(c) and 31(d), this Agreement and any
of the provisions hereof may be altered or added to only by
another agreement in writing signed by a duly authorized
person on behalf of each and every Party to this Agreement.
(d) Subparagraph 31(c) shall not apply to any Schedule modified in
accordance with any other provision of this Agreement and any
Schedule so modified shall be deemed to be a part of this
Agreement in substitution for the immediately preceding version
of that Schedule.
32. INTERPRETATION OF AGREEMENT
(a) If any difference shall arise between or among the Parties or any
of them respecting the interpretation or effect of this Agreement or
any part or provision thereof or their rights and obligations
thereunder, and by reason thereof there shall arise the need to
decide the question by what municipal or national law this Agreement
or such part or provision thereof is governed, the following facts
shall be excluded from consideration, namely, that
-45-
this Agreement was made in a particular country and that it may
appear by reason of its form, style, language or otherwise to have
been drawn preponderantly with reference to a particular system of
municipal or national law; the intention of the Parties being that
such facts shall be regarded by the Parties and in all courts and
tribunals wherever situated as irrelevant to the question aforesaid
and to the decision thereof.
(b) Unless the context otherwise requires, words importing the singular
number include the plural number and words importing the plural
number include the singular number and words importing the
masculine gender include female.
(c) The paragraph headings do not form part of this Agreement and shall
not have any effect on the interpretation thereof.
33. SUCCESSORS BOUND
This Agreement shall be binding on the Parties, their successors and
permitted assigns.
TESTIMONIUM
IN WITNESS WHEREOF the Parties hereto have severally subscribed these
presents or caused them to be subscribed in their names and on their
behalf by their respective officers thereunto duly authorised.
-46-
AMERICAN TELEPHONE AND TELEGRAPH COMPANY
BY: /s/ [ILLEGIBLE]
BORD, TELECOM EIREANN
BY: /s/ [ILLEGIBLE]
BRITISH TELECOMMUNICATIONS PLC
BY: /s/ [ILLEGIBLE]
BUNDESMINISTERIUM FUR OFFENTLICHE WIRTSCHAFT UND VERKEHR.
GENERALDIREKTION FUR DIE POST - UND TELEGRAPHENVERWALTUNG
BY: /s/ [ILLEGIBLE]
THE COMMUNICATIONS AUTHORITY OF THAILAND
BY: /s/ [ILLEGIBLE]
DEUTSCHE BUNDESPOST TELEKOM
BY: /s/ [ILLEGIBLE]
ENTREPRISE DES POSTES, TELEPHONES ET TELEGRAPHES SUISSES
BY: /s/ [ILLEGIBLE]
-47-
FRANCE TELECOM
BY: /s/ [ILLEGIBLE]
GTE HAWAIIAN TELEPHONE COMPANY INCORPORATED
BY: /s/ [ILLEGIBLE]
HONG KONG TELECOM INTERNATIONAL LIMITED
BY: /s/ [ILLEGIBLE]
INTERNATIONAL DIGITAL COMMUNICATIONS INC.
BY: /s/ [ILLEGIBLE]
INTERNATIONAL TELECOM JAPAN INC.
BY: /s/ [ILLEGIBLE]
INTERNATIONAL TELECOMMUNICATION DEVELOPMENT CORPORATION
BY: /s/ [ILLEGIBLE]
ITALCABLE S.P.A.
BY: /s/ [ILLEGIBLE]
-48-
KOKUSAI DENSHIN DENWA CO., LTD.
BY: /s/ [ILLEGIBLE]
KOREA TELECOMMUNICATION AUTHORITY
BY: /s/ [ILLEGIBLE]
MCI INTERNATIONAL, INC.
BY: /s/ [ILLEGIBLE]
MERCURY COMMUNICATIONS LIMITED
BY: /s/ [ILLEGIBLE]
OTC LIMITED
BY: /s/ [ILLEGIBLE]
OVERSEAS TELECOMMUNICATIONS, INC.
BY: /s/ [ILLEGIBLE]
PHILIPPINE GLOBAL COMMUNICATIONS, INC.
BY: /s/ [ILLEGIBLE]
- 49 -
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
BY: /s/ [Illegible]
PTT TELECOM BV
BY: /s/ [Illegible]
REGIE DES TELEGRAPHES ET DES TELEPHONES DE BELGIQUE
BY: /s/ [Illegible]
SWEDISH TELECOM
BY: /s/ [Illegible]
SYARIKAT TELEKOM MALAYSIA BERHAD
BY: /s/ [Illegible]
TELECOM NETWORKS AND INTERNATIONAL LTD.
BY: /s/ [Illegible]
TELECOMMUNICATION AUTHORITY OF SINGAPORE
BY: /s/ [Illegible]
- 50 -
TELEGLOBE CANADA INC.
BY: /s/ [Illegible]
TRANSPACIFIC COMMUNICATIONS, INCORPORATED
BY: /s/ [Illegible]
TRT/FTC COMMUNICATIONS, INC.
BY: /s/ [Illegible]
US SPRINT COMMUNICATIONS COMPANY LIMITED PARTNERSHIP
BY: /s/ [Illegible]
WORLD COMMUNICATIONS INC.
BY: /s/ [Illegible]
List of Omitted Schedules and Annexes
The following Schedules and Annexes to the Tasman 2 Construction and
Maintenance Agreement Revision No. 1 have been omitted from this Exhibit and
shall be furnished supplementally to the Commission upon request:
Schedule A - Parties to this Agreement
Schedule B - Voting Interests in the Cable System
Schedule C - Ownership Interests and Allocation of Capital, Operating
and Maintenance Costs of Segment B; and Proportions of
Capital, Operating and Maintenance Costs for Use of
Segments A and C
Schedule D - Assignment of Capacity in Segment B in Half Interests in
MAUOs
Annex 1 - Terms of Reference of Subcommittees
Annex 2 - Owners Project Team Responsibilities