INDEFEASIBLE RIGHT OF USE AGREEMENT AND FINANCING AGREEMENT
BETWEEN
TELEGLOBE USA INC.
WORLDXCHANGE COMMUNICATIONS
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THIS AGREEMENT, made and entered into as of October 5, 1998 (the "EFFECTIVE
DATE").
BY AND BETWEEN: TELEGLOBE USA INC. a Delaware corporation
having its principal office at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ hereinafter
referred to as "TELEGLOBE";
AND: WORLDXCHANGE COMMUNICATIONS, a corporation
incorporated under the laws of California, having
its principal office at ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
hereinafter referred to as "WORLDXCHANGE".
WHEREAS, Teleglobe has acquired certain rights to trans-atlantic fiber optic
capacity on the AC-1 Submarine Cable System and to associated backhaul
capacity which will connect such trans-atlantic capacity to inland termination
points as described in the Atlantic Crossing/AC-1 Submarine Cable System
Capacity Purchase Agreement dated January 21, 1998 (the "Teleglobe Cable
System"); and
WHEREAS, WorldxChange desires to take and pay for the right to use certain
capacity in the Teleglobe Cable System as more fully set forth herein.
NOW, THEREFORE, the Parties agree as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS. This Section 1.1 lists defined terms used in this
Agreement. Capitalized terms used in any provision of this Agreement and not
otherwise defined therein shall have the following meanings, respectively,
unless the context otherwise requires.
(A) "AGREEMENT" shall mean this Agreement and the schedule attached
hereto, as amended from time to time;
(B) "DOLLAR" and "DOLLARS" and the symbol "$" shall mean lawful money of
the United States of America;
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(C) "EFFECTIVE DATE" shall mean the date that the obligations arising
under this Agreement shall be deemed to be in full force and effect
notwithstanding the formal date of its execution by the Parties;
(D) "MIU" shall mean a unit designated as the minimum unit of
investment in the Teleglobe Cable System and shall consist of a
Virtual Container 12 (VC-12), allowing the use of 2,048,000 bits
per second (nominal 2 Mbit/s) digital stream. A MIU may be
expressed in terms of whole or half-MIUs.
(E) "OPERATION AND MAINTENANCE" or "O&M" shall mean the operation and
maintenance of the submarine trans-atlantic cable capacity
contained in the Teleglobe Cable System between the United States
and the United Kingdom. Such operation and maintenance activities
may include testing, adjustment, and storage of plant and
equipment, repairs, maintenance, and reburial and replacement of
plant;
(F) "PARTIES" shall mean all of the parties hereto collectively; and
"PARTY" shall mean any one of them;
(G) "PERSON" shall mean an individual, corporation, company,
cooperative, partnership, trust or unincorporated association and
pronouns have a similarly extended meaning;
(H) "RELEVANT C&MA" shall refer collectively the following agreements
which are attached hereto and are incorporated herein by reference
as the same may be amended from time to time:
(1) That certain Capacity Purchase Agreement ("Capacity
Purchase Agreement") (including attachments and annexes)
dated January 21, 1998 between Global Telesystems, Ltd.
and Teleglobe.
(2) That certain Indefeasible Right of Use Agreement in Inland
Capacity dated March 6, 1998 between GT Landing Corp. and
Teleglobe.
(3) That certain Broadbend Services Agreement dated March 20,
1998 between Racal Telecommunications Limited and Teleglobe.
(I) "SERVICE DATE" shall mean the date of completion of installation,
acceptance testing, and implementation of the Capacity and the
Backhaul Capacity to provide a full circuit from ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ to Telehouse, London, England, the completion of
which shall be confirmed in writing by Teleglobe to the
WorldxChange. Subject to the compliance of both Parties of their
respective obligations hereunder, it is anticipated that the
Service Date will occur on or about July 31, 1998. Should the
Service Date not occur prior to October 30, 1998, WorldxChange
shall have the right, upon written notice to Teleglobe, to cancel
this Agreement without any liability and Teleglobe shall promptly
return any payments made by WorldxChange pursuant to this Agreement.
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(J) "TELEGLOBE CABLE SYSTEM" shall mean the Teleglobe's interest in that
certain Atlantic Crossing/AC-1 Submarine Cable System trans-atlantic
capacity between Brookhaven, New York and White Sands, United
Kingdom, plus backhaul capacity between Brookhaven, New York and
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, and between White Sands, UK and
Telehouse, London, England, as more fully described in the relevant
C&MA.
1.2 GENDER. Any reference in this Agreement to any gender shall include all
genders and words used herein importing the singular number only shall include
the plural and vice versa.
1.3 HEADINGS. The division of this Agreement into Articles, Sections,
Subsections and other Subdivisions and the insertion of headings are for
convenience of reference only and shall not affect or be utilized in the
construction or interpretation hereof.
1.4 SEVERABILITY. Any Article, Section, Subsection or other Subdivision of
this Agreement or any other provision of this Agreement which is proven to be
illegal, invalid or unenforceable shall be severed herefrom and shall be
ineffective to the extent of such illegality, invalidity or unenforceability
and shall not affect or impair the remaining provisions hereof, which
provisions shall be severed from any illegal, invalid or unenforceable
Article, Section, Subsection or other subdivision of this Agreement or any
other provision of this Agreement and shall otherwise remain in full force
and effect.
1.5 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement by and
between the Parties pertaining to the subject matter hereof and supersedes
all prior agreements, understandings, negotiations and discussions, whether
oral or written, of the Parties. Except as provided for herein, this
Agreement may be amended only by an instrument in writing signed by both
Parties.
1.6 GOVERNING LAW. This Agreement shall be interpreted and construed in
accordance with the laws of Virginia, without giving effect to the laws of
such state governing conflicts of laws.
1.7 OWNERSHIP. EXCEPT FOR THE RIGHTS SPECIFICALLY GRANTED TO WORLDXCHANGE
UNDER THIS AGREEMENT, nothing in this Agreement shall vary the existing
rights of ownership in those segments of the Teleglobe Cable System in which
IRUs have been granted to WorldxChange. Ownership of all segments of the
Teleglobe Cable System shall remain with Teleglobe and the other signatories
to the Relevant C&MA as applicable.
ARTICLE 2
GRANTING OF IRU AND BACKHAUL CAPACITY
2.1 GRANTING. Subject to WorldxChange making all payments to Teleglobe when
due hereunder, as of and from the Service Date, Teleglobe grants to
WorldxChange, on an IRU basis, an interest in one (1) STM-1 (155.52 Mbps) of
capacity (the "Capacity") on the Teleglobe Cable System, with termination
points at the beachhead cable station of the Teleglobe Cable System in
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Brookhaven, New York on the west end, and at the beachhead cable station of
the Teleglobe Cable System in White Sands, United Kingdom on the east end.
2.2 BACKHAUL CAPACITY. In addition to the grant of Capacity hereunder,
subject to WorldxChange making all payments to Teleglobe when due hereunder,
Teleglobe shall provide WorldxChange as of and from the Service Date with
access to and use of one (1) STM-1 (15552 Mbps) of backhaul capacity (the
"Backhaul Capacity") between the beachhead cable station of the Teleglobe
Cable System in the United States and Teleglobe's point of presence at ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇, and between the beachhead cable station of the
Teleglobe Cable Station in the United Kingdom and Teleglobe's point of
presence at Telehouse, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ India Docks,
London, England, all of which shall be provided per the terms of this
Agreement and for a term consistent with the IRU in the Capacity granted
hereunder. The Backhaul Capacity is provided by Teleglobe as a service, and
not on an IRU basis and is provided upon the same terms and conditions upon
which Teleglobe has acquired it under its Atlantic Crossing/AC-1 Submarine
Cable System Indefeasible Right of Use Agreement in Inland Capacity (United
States) and Racal Telecommunications Limited Broadband Services Agreement
(UK), which are attached hereto.
2.3 O&M. Subject to WorldxChange making the required payments set forth in
Articles 3 and 4 hereof, Teleglobe shall use reasonable efforts to ensure
that the trans-atlantic submarine fiber optic cable capacity contained in the
Teleglobe Cable System and the Backhaul Capacity is maintained in accordance
with the Relevant C&MA between Teleglobe or its affiliate(s) and the owners
of such capacity. Any charges incurred by Teleglobe relating to the
operation and maintenance of the Backhaul Capacity, if any, shall be fully
reimbursed by WorldxChange upon demand by Teleglobe, provided however, such
charges shall not exceed the pro-rata amount of the total charges incurred by
Teleglobe with respect to all equivalent capacity controlled by Teleglobe
(including the Backhaul Capacity); and provided further that WorldxChange
shall be permitted to take advantage of any periodic payment terms that
Teleglobe receives.
2.4 SUBMARINE CABLE RESTORATION. Restoration will not be available on the
trans-atlantic capacity contained in the Teleglobe Cable System until a
complete loop is constructed between the US and UK beachhead cable stations,
which is estimated to be complete by March 31, 1999. When such restoration
becomes available to Teleglobe, Teleglobe agrees to provide such restoration
to WorldxChange on a non-discriminatory basis with the capacity in the
Atlantic Crossing/AC-1 Submarine Cable System retained by Teleglobe for its
own use. Additionally, until such time as restoration on the trans-Atlantic
capacity becomes available, Teleglobe agrees to permit WorldxChange to
participate in any interim restoration arrangements available to Teleglobe
pursuant to paragraph 2(j) of the Atlantic Crossing/AC-1 Submarine Cable
System Capacity Purchase Agreement, at the same price and on the same terms
as such interim restoration arrangements are obtained by Teleglobe.
ARTICLE 3
IRU GRANTING PRICE AND PRICE FOR BACKHAUL CAPACITY
3.1 IRU FEE AND BACKHAUL FEE. In consideration of the grant of the Capacity
by Teleglobe to WorldxChange, WorldxChange agrees to pay to Teleglobe an IRU
fee of Eight Million Two Hundred Fifty Thousand
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Dollars (US$8,250,000) (the "IRU and Backhaul Fee") which Teleglobe shall
finance over five (5) years at 12% per annum on a declining balance basis.
3.2 PAYMENT OF IRU FEE AND BACKHAUL FEE. WorldxChange hereby agrees and
covenants to pay the IRU and Backhaul Fee over a five (5) year term on a
monthly basis by pay the sum of One Hundred Eighty Three Thousand Five
Hundred Seventeen Dollars ($183,517) by wire transfer, certified cheque,
commencing on the first day of the month immediately after the Effective Date
of this Agreement and continuing on the first day of each successive month
until fully paid.
3.3 TAXES. All prices and charges due hereunder are exclusive of all
applicable taxes, including value added tax, sales taxes, and duties or
levies imposed by any authority, government or government agency (except
income tax or other corporate taxes attributable to Teleglobe), all of which
shall be paid promptly when due by WorldxChange.
ARTICLE 4
PAYMENT OF CHARGES AND EXPENSES
4.1 ANNUAL O&M CHARGE. In consideration of Teleglobe's provision of O&M in
connection with the IRU granted for the Capacity and Backhaul Capacity,
WorldxChange shall pay to Teleglobe annually in advance the sum of Two
Hundred Eighty Five Thousand ($285,000) (the "Annual O&M Charge"), which
Annual O&M Charge shall increase by three percent (3%) each year, compounded
annually but shall not exceed Three Hundred Thirty Thousand ($330,000) during
the term of this Agreement.
4.2 INVOICING AND PAYMENTS. On the Service Date and on each anniversary
thereof, Teleglobe shall submit to WorldxChange an invoice for the O&M Charge
provided for in this Article 4 and for any applicable non-recurring cost.
WorldxChange shall make full payment on all such invoices within thirty (30)
days of such invoice. Invoices shall be paid in US Dollars in the manner set
forth in Article 3.3.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF WORLDXCHANGE
REPRESENTATIONS AND WARRANTIES. WorldxChange represents and warrants to
Teleglobe that WorldxChange has obtained, or will obtain prior to the Service
Date, all relevant telecommunications licenses necessary for the acquisition
of the Capacity, the execution and delivery of, and the performance of, its
obligations under this Agreement and shall use all reasonable efforts to have
continued in effect such exemptions, approvals, consents, authorizations,
licenses and permits as long as it shall have obligations under this
Agreement.
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ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF TELEGLOBE
6.1 REPRESENTATIONS AND WARRANTIES. Teleglobe represents and warrants to
WorldxChange that:
(A) it is authorized to sell and lease interests in the Capacity as
contemplated hereunder;
(B) the execution of this Agreement by Teleglobe will not constitute a
breach of any other agreement to which Teleglobe is a party or
bound; and,
(C) as of the Service Date, Teleglobe had fully performed all
obligations required on its part to be performed pursuant to the
Relevant CM&A.
6.2 NO REPRESENTATION ON THE CAPACITY. Except as expressly set forth in this
Agreement, Teleglobe has not made or shall not be deemed to have made any
representations or warranties whatsoever with respect to the Capacity or the
Backhaul Capacity. Teleglobe expressly disclaims with respect to WorldxChange
and WorldxChange hereby expressly waives, releases and renounces, all
warranties, obligations and liabilities of Teleglobe and all rights, claims
and remedies against Teleglobe, express or implied, arising by law or
otherwise, with respect to any failure, delay in installation, cancellation
of, non-conformance, temporary or permanent failure of or defect in the
Teleglobe Cable System or the Capacity or the Backhaul Capacity, as the case
my be, whatsoever shall have been the cause and however long it shall have
lasted (whether or not Teleglobe has been advised of the possibility of such
loss or damage arising). Without limiting the generality of the foregoing,
WorldxChange acknowledges and agrees that the Capacity and the Backhaul
Capacity is being sold and leased on an "as is, where is" basis.
Notwithstanding anything to the contrary contained herein, this provision
shall not release Teleglobe from any liability for breach of any of the
representations or warranties set for in Article 6.1, or the failure of
Teleglobe to perform any obligations set forth in Article 7.2 hereof, or
willful misconduct on the part of Teleglobe.
ARTICLE 7
COVENANTS OF WORLDXCHANGE AND TELEGLOBE
7.1 During the term of this Agreement, WorldxChange shall:
(A) pay to Teleglobe (or its designee, as may be notified in writing to
WorldxChange, as the case may be) when they become due all amounts
payable under this Agreement and otherwise comply with all other
provisions of this Agreement;
(B) maintain, at its own expense, an appropriate insurance policy with
terms and coverage thresholds equal to or greater than the industry
standard for major global telecommunications carriers for protection
against all risks associated with the Capacity and Backhaul Capacity
as reasonably deemed necessary by WorldxChange acting reasonably;
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(C) until all payment have been paid pursuant to Article 3.1, to
undertake to keep the Capacity and Backhaul Capacity free of
liens, charges and other encumbrances (including any inchoate
liens or floating charges) and shall reimburse Teleglobe (or its
designee, as the case may be), and in the event of accidental
breach, to take all steps required to discharge such liens,
charges and other encumbrances;
(D) not use the Capacity or Backhaul Capacity for any illegal,
unlawful, fraudulent or unauthorized purposes and, without
limiting the generality of the foregoing, use the Capacity and
Backhaul Capacity, at all times, in a manner consistent with the
applicable authorization, licenses and permits for the landing,
construction and operation of the Teleglobe Cable System;
(E) use the Capacity and Backhaul Capacity in such a way as to avoid
degrading the overall performance of the Teleglobe Cable System or
causing interruptions of, or interference with, impairment or
degradation of the use of any other capacity in the Teleglobe Cable
System, or impair privacy of any communications over such facilities.
If, after notification by Teleglobe, WorldxChange does not take
immediate and effective action to comply with its obligations,
Teleglobe may take reasonable action required to protect the other
capacity in the Teleglobe Cable System up to and including the
interruption of the Capacity and Backhaul Capacity responsible for
the interruption, interference, impairment or degradation.
WorldxChange shall bear the total cost of any protective measures
reasonably required by Teleglobe to be installed on the Teleglobe
Cable System resulting from the use of the Teleglobe Cable System
by WorldxChange or any lessee, assignee, or customer of WorldxChange.
WorldxChange shall cause all other purchasers of capacity on the
Teleglobe Cable System to undertake obligations comparable to those
of WorldxChange set forth in this Article;
(F) upon reasonable prior notice or, at any time, if the situation or
circumstance so justify, make available to Teleglobe the Capacity
and Backhaul Capacity for such test and adjustment as may be
necessary for the Capacity and Backhaul Capacity to be maintained
in efficient working order.
7.2 During the term of this Agreement, Teleglobe shall:
(A) Maintain and continue in effect such exemptions, approvals,
consents, authorizations, licenses and permits required to perform
its obligations under this Agreement; and,
(B) perform all of its obligations under the Relevant CM&A.
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ARTICLE 8
ADDITIONAL TERMS
RELEVANT C&MA. WorldxChange understands that the Teleglobe Cable System is
subject to the terms and conditions of a Relevant C&MA, in which case,
provided that such Relevant C&MA terms are applicable to Teleglobe and/or the
Teleglobe Cable System, such Relevant C&MA terms shall similarly apply to the
grant of Capacity or Backhaul Capacity by Teleglobe hereunder.
ARTICLE 9
INTELLECTUAL PROPERTY RIGHTS
9.1 NO LICENSE. No license under patents is granted by Teleglobe or shall be
implied or arise by estoppel in favor of WorldxChange with respect to any
apparatus, system or method used by WorldxChange in connection with the use
of the Capacity and Backhaul Capacity granted to WorldxChange under this
Agreement.
9.2 SPECIFIC INDEMNIFICATION. With respect to claims of patent infringement
made by third Persons, WorldxChange will save Teleglobe and the other
signatories to the Relevant C&MA harmless against claims arising out of or
based on the use by WorldxChange, in combination or in connection with the
Capacity and the Backhaul Capacity, any apparatus, system or method provided
by WorldxChange, or any lessee, assignee, or customer of WorldxChange.
ARTICLE 10
LATE PAYMENTS AND PERFORMANCES
10.1 In the event that WorldxChange shall fail to make any payment under this
Agreement when due, such amounts shall accrue interest, from the date such
payment is due until paid, including accrued interest at an annual rate equal
to one hundred fifty percent (150%) of the prime rate of interest published
by the Wall Street Journal as the base rate on corporate loans posted by a
percentage of the nation's largest banks on the date any such payment is due,
or if lower, the highest percentage allowed by law.
ARTICLE 11
TERM
11.1 The term of this Agreement shall begin on the Effective Date and subject
to the provisions of Section 11.2, shall continue until the twenty-fifth
anniversary of the ready for service date of the System as described in
Article 9(a) of the Relevant Capacity Purchase Agreement;
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11.2 Upon the expiration of the Term hereof all of WorldxChange's rights
to the use of Capacity and Backhaul Capacity subject to this Agreement shall
revert to Teleglobe without reimbursement of any fees or other payments
previously made with respect thereto, and from and after such time
WorldxChange shall have no further rights or obligations with respect thereto.
11.3 Notwithstanding the termination of this Agreement, all payment
obligations of WorldxChange for amounts still due or payable under this
Agreement for the period ending at the date of termination shall survive
until full payment.
ARTICLE 12
EVENT OF DEFAULT
The occurrence of any one or more of the following events shall constitute an
Event of Default under this Agreement:
(A) If WorldxChange fails to make full payment of the IRU Fee or the
Backhaul Fee as contemplated in Section 3 of this Agreement or
any other payments required to be made hereunder, including
without limitation the Annual O&M Charge and any applicable
non-recurring charges, when the same becomes due and payable as
herein provided and such default has not been cured within
fifteen (15) days after receipt by WorldxChange of a notice to
that effect;
(B) If WorldxChange fails to duly observe, perform and discharge the
covenants, conditions and obligations on its part to be observed,
performed or discharged hereunder (other than the default of
payment of amounts under any provisions of this Agreement) and
such default has not been cured within THIRTY (30) days after
receipt by WorldxChange of a notice from Teleglobe;
(C) If WorldxChange has defaulted on its payment obligations to
Teleglobe or any of its affiliates under any telecommunications
service agreements during such time as WorldXChange continues to be
obligated to make payments pursuant to the provision of Article
3.1, herein, or if WorldxChange files for bankruptcy, or a
petition for involuntary bankruptcy is filed which has not been
dismissed within forty-five (45) days from the date of filing, or
is adjudged bankrupt or has a receiver, administrative
receiver, or manager appointed over the whole or substantially all
of its assets, (or the IRU granted herein), or goes into
liquidation (compulsory or voluntary), otherwise than for the
purpose of an amalgamation or reconstruction (but always subject
to the provisions of Article 16.1 herein or makes any arrangements
with its creditors or has any form of execution or distress levied
upon its assets or ceases to carry on its business.
(D) If Teleglobe fails to observe, perform, discharge the covenants,
conditions, an obligations on its part to be observed, performed,
or discharged hereunder when
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such default has not been cured within thirty (30) days after
receipt by Teleglobe of a notice from WorldxChange. Upon the
occurrence of an event of default by Teleglobe, WorldxChange will
have the right to terminate this Agreement and pursue all remedies
available at law or in equity.
ARTICLE 13
TERMINATION
13.1 TERMINATION UPON DEFAULT. Upon the occurrence of an Event of
Default, Teleglobe shall have the right to terminate this Agreement
immediately, and, in addition to any other remedies available hereunder, at
law or in equity, shall be entitled to repossess the Capacity and cease
providing the Backhaul Capacity without any other notice or action, with or
without legal process. In addition, upon occurrence of an Event of Default,
or in the event that any representation or warranty made by WorldxChange in
article 5 hereof shall prove at any time to be materially untrue, Teleglobe
may temporarily discontinue use of the Capacity and/or Backhaul Capacity
without incurring any liability to WorldxChange, its assignees, its lessees
or its customers, until the default, or breach of representation or warranty,
is duly cured by WorldxChange to the reasonable satisfaction of Teleglobe.
13.2 OTHER REMEDIES. Termination of this Agreement by the Party not in
default in accordance with the terms hereof shall be without prejudice to any
other rights or remedies such Party shall have hereunder, at law or in equity.
ARTICLE 14
GENERAL INDEMNIFICATION
WorldxChange shall indemnify and save Teleglobe harmless from and against any
direct or consequential claims, demands, actions, causes or action, damages,
losses (which shall include any reduction in value), liabilities, costs or
expenses (including, without limitation, interest, penalties and reasonable
attorneys' fees and disbursements) (collectively, the "LOSSES") which may be
made against Teleglobe or which Teleglobe may suffer or incur as a result of,
arising out of or relating to:
(A) any non-performance of or non-compliance with any covenant,
agreement or obligation of WorldxChange under or pursuant to
this Agreement;
(B) any incorrectness in, or breach of, any representation or
warranty made by WorldxChange;
(C) any action, suit, claim, trial, demand, investigation,
arbitration or other proceeding by any Person containing
allegations which, if true, would constitute an event described
in this Section 14.
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ARTICLE 15
DISPUTE RESOLUTION
ARBITRATION. Any difference, controversy or claim arising out of or relating
to this Agreement, its interpretation or performance, shall be considered a
"DISPUTE". Any Dispute may, by the written mutual agreement of the Parties,
be referred to binding arbitration under the Rules of Conciliation and
Arbitration of the International Chamber of Commerce in effect on the date
the arbitration is submitted to the tribunal of arbitration. Any arbitration
proceedings shall be conducted in Washington, D.C. in the English language.
ARTICLE 16
MISCELLANEOUS
16.1 ASSIGNMENT. Neither this Agreement nor any rights, remedies,
liabilities or obligations arising under it or by reason of it shall be
assignable by WorldxChange to a non-affiliated party (an affiliated shall be
a party in which WorldXChange owns or controls [either directly or indirectly]
more that fifty percent (50%) of the voting equity) without the prior written
consent of Teleglobe which consent shall not be unreasonably be withheld.
WorldXChange may upon prior written notice to Teleglobe assign it rights (but
not its obligations) under this Agreement to an affiliated party. Teleglobe
may assign this Agreement and its rights, remedies, liabilities and
obligations hereunder without the consent of WorldxChange; provided, however
that Teleglobe shall give WorldxChange written notice of the assignment of
Teleglobe's interest hereunder to any Person that is not an affiliate of
Teleglobe, and provided further that Teleglobe shall remain liable to
WorldxChange for any breach or nonperformance of this Agreement by it's
assignee or any successive assignee. Subject to the foregoing, this Agreement
shall inure to the benefit of and be binding on the Parties and their
respective successors and permitted assigns. Notwithstanding anything to the
contrary contained in this Article 16.1, the Parties further understand and
agree that WorldXChange may lease the Capacity or grant IRUs in the capacity
to third parties, but always subject to the provisions of this Agreement,
including without limitation, Article 8 herein.
16.2 FURTHER ASSURANCES. The Parties shall, with reasonable diligence,
do all things and provide all reasonable assurances as may be required to
consummate the transactions contemplated by this Agreement, and each Party
shall provide further documents or instruments required by the other Party as
may be reasonably necessary or desirable to effect the purpose of this
Agreement.
16.3 NOTICES. Any notice, consent, request, authorization, permission,
direction or other communication required or permitted to be given hereunder
shall be in writing and shall be delivered either by personal delivery or by
TELEX, telecopier or similar telecommunications device, return receipt
requested, and addressed as follows:
(A) in the case of Teleglobe:
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TELEGLOBE USA INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President & General Manager
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(B) in the case of WorldxChange:
WORLDXCHANGE COMMUNICATIONS
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇, SENIOR VICE PRESIDENT AND
GENERAL COUNSEL
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice, consent, request, authorization, permission, direction or other
communication delivered as aforesaid shall be deemed to have been effectively
received, if sent by TELEX, telecopier or similar telecommunication device, on
the Business Day next following transmission thereof, or, if personally
delivered, on the date of such delivery, provided, however, that if such date
is not a Business Day then it shall be deemed to have been received on the
Business Day next following such delivery, provided that on the next Business
Day such Party sends such notice, consent, request, authorization, permission
or other communication by registered mail. An address may be modified by
written notice delivered as aforesaid.
16.4 NO PARTNERSHIP. The relationship between Teleglobe and WorldxChange
under this Agreement shall not be that of partners or joint venturers and
nothing herein contained shall be deemed to constitute a partnership or joint
venture between them and the rights and obligations of the Parties shall be
limited to the express provisions of this Agreement.
16.5 CONFIDENTIALITY AND PUBLIC ANNOUNCEMENT. It is expected that the
Parties may disclose to each other proprietary or confidential technical,
financial and business information ("PROPRIETARY INFORMATION"). Except as
necessary to perform its obligations under this Agreement, the receiving
Party shall not make any use of Proprietary Information for its own benefit
or for the benefit of any other Person, and, except with the prior written
consent of the disclosing Party or as otherwise specifically provided herein,
the receiving Party will not, during and for a period of three (3) years
after the termination of this Agreement, duplicate, use or disclose any
Proprietary Information to any Person.
The receiving Party shall not disclose all or any part of the disclosing
Party's Proprietary Information to any affiliates, agents, officers,
directors, employees or representatives (collectively, "REPRESENTATIVES") of
the receiving Party, except on a need to know basis. Such Representatives
shall be informed of the confidential and proprietary nature of the
Proprietary Information. Each Party shall maintain the other Party's
Proprietary Information with at least the
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same degree of care each Party uses to maintain its own proprietary
information. The receiving Party shall immediately advise the disclosing
Party in writing of any misappropriation or misuse by any Person of the
disclosing Party's Proprietary Information of which the receiving Party is
aware.
All Proprietary Information in whatever form shall be promptly returned by the
receiving Party to the disclosing Party upon written request by the
disclosing Party for any reason or upon termination of this Agreement.
Each receiving Party acknowledges that the Proprietary Information of the
disclosing Party is central to the disclosing Party's business and was
developed by or for the disclosing Party at a significant cost. Each
receiving Party further acknowledges that damages would not be an adequate
remedy for any breach of this Agreement by the receiving Party or its
Representatives and that the disclosing Party may obtain injunctive or other
equitable relief to remedy or prevent any breach or threatened breach of this
Agreement by the receiving Party or any of its Representatives. Such remedy
shall not be deemed to be the exclusive remedy for any such breach of this
Section 16.5, but shall be in addition to all other remedies available at law
or in equity to the disclosing Party.
None of the Parties shall disclose or make any public announcement of the
existence of this Agreement, the transaction contemplated hereby or the
contents hereof without in each case the prior written consent of the other,
unless such disclosure is required by law and then only after prior notice to
the other Party.
16.6 GRANT OF SECURITY INTEREST. WorldxChange hereby grants to
Teleglobe, as security for the payment of all amounts due from WorldxChange
and the performance of all other obligations of WorldxChange hereunder until
such time as all payments have been made as set forth in Article 3.1 herein,
a first-priority security interest in and continuing lien upon all of
WorldxChange's right (including any right WorldxChange may have to convey
title thereto), title and interest in (i) the Capacity, (ii) all rights of
WorldxChange under this Agreement, and (iii) any and all proceeds of the
foregoing, all payments thereon, and any and all additions thereto.
Simultaneously with the execution of this Agreement, and at any subsequent
time during the Term of this Agreement upon request of Teleglobe,
WorldxChange will execute and deliver to Teleglobe such financing statements
and continuation statements as Teleglobe may require for purposes of
perfecting and continuing the perfection of each security interest and
continuing lien.
16.7 WAIVER. No waiver of any right under this Agreement shall be deemed
effective unless contained in writing signed by the Party charged with such
waiver, and no waiver of any right arising from any breach or failure to
perform shall be deemed to be a waiver of any future such right or any other
right arising under this Agreement.
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16.8 FORCE MAJEURE. Neither Party shall be responsible for failures to
perform or delays in performing its obligations, (except for any payment
obligations hereunder) due to causes beyond its reasonable control and
without its fault or negligence.
IN WITNESS WHEREOF the Parties have signed this Agreement as of the date
first above written.
TELEGLOBE USA INC. WORLDXCHANGE
COMMUNICATIONS
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and General Manager Title: President
Date: 10/5/98 Date: 10/5/98
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