Exhibit 10.10
Contract No. 125H/96
OPERATIONS CONTRACT
FOR THE
FLAG NETWORK OPERATIONS CENTER
THIS AGREEMENT is entered into the 30th day of June, 1997 between FLAG Limited,
a company organized and existing under the laws of Bermuda and having its
principal place of business at Richmond House, Fifth Floor, ▇▇ ▇▇▇-▇▇-▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇") and Emirates Telecommunications
Corporation, a company organized and existing under the laws of the United Arab
Emirates ("UAE") and having its principal place of business at the intersection
of Sheikh Zayed II Street and Sheikh Rashid bin Saeed Al Maktoum Road, Abu
Dhabi, UAE ("ETISALAT").
WHEREAS, FLAG and ETISALAT wish to cooperate in the operation of FLAG's proposed
network operations center (the "FNOC") in Fujairah, UAE.
NOW, THEREFORE, in consideration of the premises and the covenants herein
contained, FLAG and ETISALAT hereby agree as follows:
1. LOCATION OF FNOC
1.1 The FNOC shall be located on the fourth floor (the "Permanent
Location") of a new building owned by ETISALAT, located in Fujairah,
UAE (the "Building"), which will also be the location of the landing
station at which the FLAG Cable will land in the UAE (the "Landing
Station"), provided that until a date after the Ready for Provisional
Acceptance Date (the "RFPA Date") under the FLAG Construction and
Maintenance Agreement dated December 14, 1994 (the "C&MA") designated
by FLAG (which designated date may not be after the later of December
31, 1997 and the date the Building is ready for occupancy) the FNOC
will be located in a temporary location acceptable to FLAG provided by
ETISALAT at ETISALAT's cost (the "Temporary Location"; the Permanent
Location and the Temporary Location, as the case may be, the
"Premises"). If the Temporary Location is not the Landing Station,
ETISALAT shall provide a two megabit lease line (with diverse routing)
from the FNOC to the Landing Station, at no cost to FLAG, until such
time as the FNOC can be moved to the Permanent Location. FLAG shall
arrange, at its cost and responsibility, for the shifting of the FNOC
from the Temporary Location to the Permanent Location.
1.2 ELTISALAT shall provide as much space in the Premises for the FNOC
equipment and the Personnel (as hereinafter defined) as FLAG and
ETISALAT shall mutually agree is adequate for the successful operation
of the FNOC, which shall be limited to maximum of the entire space
available on the 4th floor of the building. ETISALAT shall establish a
security system so that access to the FNOC will be controlled and
restricted to authorized personnel.
1.3 ETISALAT shall furnish all services to the Permanent Location as are
similar in standard to ETISALAT's headquarters in Abu Dhabi, including
24 hour air conditioning and emergency power.
2. PERSONNEL
2.1 FLAG and ETISALAT will jointly recruit and approve approximately 12
(twelve) qualified personnel (such number may change depending on FNOC
operational experience with the approval of both FLAG and ETISALAT) to
staff the FNOC. In addition to such personnel jointly recruited by FLAG
and ETISALAT, FLAG will nominate, subject to ETISALAT's approval, a
qualified person to serve as the director of the FNOC (the "Director"),
(such jointly recruited personnel and the Director are collectively
called the "Personnel"). All Personnel shall be deemed to be employees
of ETISALAT. The Personnel shall be administratively under the
responsibility of ETISALAT and technically/operationally under the
supervision and responsibility of FLAG and will take instructions from
the Director or personnel authorized by the Director.
2.2 The Personnel shall have the skills to perform all operations and
maintenance functions of the FNOC including but not limited to the
following:
(a) Surveillance of all elements of the FLAG System.
(b) Assistance to and direction of the landing parties with regard
to trouble resolution.
(c) Provisioning of 2 Mb/s and higher circuits.
(d) Scheduling and monitoring of performance and growth upgrades
including periodic preventative maintenance activities, growth
in ADMS and DACS, and software upgrades in all equipment.
(e) Performance analysis studies to include periodic error
performance analysis of the transmission network load analysis
and the data transmission network.
(f) Notification to FLAG of any major outage.
(g) Coordination of restoration and recovery of facilities due to
cable failure.
(h) Coordination between landing parties and ships during repair
operations.
(i) Tracking of inventory and repair and return.
(j) Operation of restoration reroutes.
(k) Preparation of periodic reports to FLAG.
2.3 ET1SALAT will compensate the Personnel nominated by FLAG as agreed
between ETISALAT and FLAG. FLAG may provide any additional compensation
to such Personnel or any other Personnel as FLAG in its own discretion
determines.
2.4 Subject to ETISALAT's employment regulations, FLAG and ETISALAT shall
agree on
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the initial salary levels and other compensation of each of the
Personnel not nominated by FLAG. Thereafter such Personnel shall be
eligible to receive bonuses, raises, end of service awards and other
compensation in accordance with ETISALAT's system, without the prior
approval of FLAG.
2.5 FLAG will provide training for all Personnel, including a senior
engineer to be nominated by ETISALAT (the "Senior Engineer"). The cost
of training all Personnel will be borne by FLAG, except for the cost of
training the Senior Engineer, which will be borne by ETISALAT.
2.6 Upon at least (30) days notice (except where the circumstances would
justify a shorter notice) to ETISALAT, FLAG shall be entitled to
require ETISALAT to promptly replace any Personnel.
2.7 In the event ETISALAT incurs any severance, retirement or similar
payment obligation in connection with the discharge, resignation or
retirement of any Personnel, FLAG shall bear a percentage of such
compensation equal to the number of months such Personnel was employed
on the FNOC over the total number of months such Personnel was employed
by ETISALAT.
3. ADDITIONAL SUPPORT SERVICES
ETISALAT shall, upon request of FLAG, provide any reasonable additional
support services to FNOC relating to the purpose of this Agreement.
4. COMPENSATION AND PAYMENT
4.1 FLAG will reimburse ETISALAT at cost plus 25% for the compensation
paid by ETISALAT for all Personnel.
For the purpose of Article 4.1 hereto, cost shall be computed by
including salary, housing, furnishing, transport, yearly passage,
medical, utilities, education, gratuity (i.e. end of service award),
bonus, insurance, passage on recruitment/ repatriation, cost of
recruitment and any other benefit directly payable to the Personnel as
per the rules and regulations of ETISALAT and/or UAE labour law in
force now or in future.
4.2 FLAG shall compensate ETISALAT for the Permanent Location at the rate
of US$ 200,000 (US Dollar two hundred thousand only) per year, payable
quarterly in advance from the date the FNCC is located in the Permanent
Location. Such amount shall cover all furniture, fittings and
furnishings, maintenance of facilities and all utility expenses, which
shall include electricity, water and cleaning except telecommunication
expenses.
The rent shall be subject to an annual increase of 5% for the first
three years starting one
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year after moving to the Permanent Location. Thereafter such
compensation shall be subject to review and revision thereafter.
4.3 FLAG shall reimburse ETISALAT for all additional support services as
set forth in sub-Article 3. Services associated with the Personnel
overhead, are not considered additional support services for the
purpose of this clause.
4.4 ETISALAT shall render invoices to FLAG monthly in arrears for amounts
chargeable to FLAG under sub-Articles 4.1 and 4.3. FLAG shall pay each
invoice within 30 days from the date of the receipt of such invoice.
Invoices for sub-article 4.2 shall be submitted by ETISALAT to FLAG 30
days prior to the commencement of the respective quarter. If FLAG
reasonably disputes all or any portion of an invoice, FLAG shall pay
the amounts not in dispute, and upon resolution of the disputed amount,
FLAG shall immediately pay the amount so resolved.
4.5 Invoices shall be submitted by ETISALAT to:
FLAG Limited
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇.: Chief Financial Officer
with a copy to:
FLAG Limited
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇
Attn.: Executive Vice President
and shall include all appropriate documentation necessary to
demonstrate the nature of the costs covered thereby and compliance with
the terms of this Agreement. One original and one copy of each invoice
shall be sent by mail, plus one additional copy sent by facsimile on
the date of the issue.
4.6 ETISALAT shall keep and maintain, for a period of not less than five
years from the date of the document or record, all books, records,
vouchers and accounts pertaining to this Agreement, provided that, in
the case of documents and records relating to Personnel, ETISALAT shall
keep and maintain such documents and records during the period of
employment and for five years thereafter. ETISALAT shall give FLAG
access (during normal working hours) to all documents and records
required to be kept and maintained pursuant hereto. Access to the
documents and records will be at ETISALAT's place of
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business where the documents and records are filed.
5. TERM
The term of this Agreement (the "Term") shall commence as of the date
hereof and end on the date 25 years after the RFPA Date, which is
currently scheduled for September 6, 1997 under the C&MA, unless this
Agreement is terminated at an earlier date as provided herein.
6. TERMINATION
6.1 Both Parties shall have the right to terminate this Agreement upon 12
months notice to the other. In case of termination of this Agreement,
FLAG shall at the option of ETISALAT either close down the FNOC or
relocate it within UAE. If the FNOC is relocated within the UAE, it
shall be subject to ETISALAT's Rules and Regulations, and ETISALAT
shall provide, at published ETISALAT's rates, 2 megabits leased line
(if available and practical) between the FNOC and the Landing Station.
However, notwithstanding this Article FLAG shall always have the
right to relocate the FNOC outside the UAE upon the termination of
this Agreement.
6.2 Should FLAG wish, upon termination of this Agreement, to have any
Personnel continue to work at the FNOC, if permitted by ETISALAT to
be relocated within UAE FLAG shall have the right to offer direct
employment to such Personnel, subject to ETISALAT's approval.
6.3 If at any time, FLAG fails to pay any invoice after the lapse of 90
days from the due date thereof , ETISALAT shall have the right to
terminate this Agreement, not withstanding the provisions of Article
6.1 above. Also FLAG shall be liable to pay interest at the rate equal
to 2 percentage points greater than the London Interbank Offer Rate
(LIBOR) for 90 day loans until full and final settlement of such
invoice amounts.
6.4 Upon receipt of the notice of termination by either party, unless
otherwise agreed by the parties, FLAG shall, within the notice period,
remove all of its properties related to the FNOC at its own cost.
6.5 Upon termination of this Agreement ETISALAT shall promptly deliver to
FLAG all documents, information and data of whatever nature prepared by
the Personnel and/or FLAG or their respective directors, officers,
employees, agents, subcontractors or consultants in connection with
this Agreement and all other documents, information and data relating
to the FNOC in the control of ETISALAT or the Personnel, and ETISALAT
shall waive any rights, claim or lien of whatever nature in respect
to such documents, information and data.
7. FLAG ACTIVITIES IN THE UAE
FLAG confirms and hereby undertakes that, in any case, that it will not
(i) become a
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telecommunications common carrier in the UAE, (ii) apply for any
license to provide any service directly to the public in the UAE, or
(iii) sell or lease capacity on the FLAG Cable System directly to the
public in the UAE.
8. INSURANCE
8.1 If requested by FLAG, ETISALAT will endeavor to provide insurance for
the equipment in the FNOC under its umbrella policy. FLAG will
reimburse ETISALAT for the cost incurred for such insurance. ETISALAT
shall deliver a certificate of insurance with reference to the above
upon request of FLAG. Such insurance, however, can be cancelled or
modified upon 10 days notice to FLAG.
8.2 ETISALAT shall secure and maintain at its own expense during the term
of this Agreement workmen's compensation insurance for statutory
requirements extended to cover Personnel for liabilities in accordance
with ETISALAT's employment rules and regulations and the requirements
of UAE labor law.
9. MAINTENANCE OF THE FNOC EQUIPMENT
The Personnel will provide for the maintenance of the equipment in the
FNOC in accordance with the instructions of FLAG. FLAG shall reimburse
ETISALAT for any costs incurred by ETISALAT in connection with such
maintenance.
10. INDEMNIFICATION
Subject to Article 11, each party shall indemnify and hold the other
party harmless against any losses, damages, liabilities, claims or
demands, including all costs, expenses and reasonable attorneys' fees
on account thereof or in connection with any investigation or
preparation related thereto or the enforcement of this indemnification
provision, that may be made or incurred as a result of the negligent or
willful acts or omissions of the indemnifying party or its employees.
However, ETISALAT shall not be responsible in any way, and FLAG shall
indemnify ETISALAT, for losses, damages, claims or demands that may be
made or incurred as a result of the acts or omissions of Personnel
employed by ETISALAT pursuant to this Agreement to the extent they act
pursuant to the instructions of FLAG or in the discharge of their
official duties as the FNOC Personnel. The indemnified party agrees
to notify the indemnifying party promptly of any written claims or
demands against the indemnified party for which the indemnifying
party would be responsible hereunder. The indemnified party shall
not settle or compromise any such claims or demands without the
prior written consent of the indemnifying party.
11. LIABILITY
Neither party shall be liable to the other for any special, incidental
or consequential
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damages, including lost profits, in any claim arising from this
Agreement whether in contract, tort or otherwise.
12. RELATIONSHIP OF THE PARTIES
12.1 Both FLAG and ETISALAT recognize that ETISALAT is acting as an
independent contractor and that the relationship between them is not
that of partners or joint ventures and nothing contained in this
Agreement shall constitute or imply any sort of partnership or joint
venture whatsoever between them. Neither FLAG nor ETISALAT shall have
the authority or power to act unilaterally for the other or to bind the
other except as expressly permitted in this Agreement. The Personnel
shall remain employees of ETISALAT and shall not be deemed employees of
FLAG.
12.2 Each party shall designate a representative for purposes of this
Agreement. ETISALAT agrees to provide the FLAG representative
complete cooperation and access to all information relating to the
FNOC operations throughout the Term.
13. DISPUTE RESOLUTION
Unless settled by mutual agreement, any dispute or difference
whatsoever that might arise from the performance or as to the meaning
of this Agreement or as to any matter or items of whatsoever nature
howsoever arising out of or in connection with this Agreement shall be
submitted to arbitration in accordance with and subject to the Rules of
Conciliation and Arbitration of the International Chamber of Commerce
and finally settled by three arbitrators appointed in accordance with
such rules, unless the parties to the arbitration agree upon a single
arbitrator under such rules. The place of arbitration shall be The
Hague, The Netherlands, and the language of the arbitration shall be
English. Any decision or award of the arbitral tribunal shall be final
and binding upon the parties to the arbitration proceeding. The costs
of such arbitration shall be borne in equal proportions by the parties
to the arbitration, provided that each party shall bear the cost of its
own legal counsel.
14. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the UAE.
15. NOTICES
Any notice, consent, approval, or other communication pursuant to this
Agreement shall be in writing and shall be deemed to have been duly
given or served, if sent by hand or by
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facsimile (with confirmation by the receiving party), or by reputable
courier service addressed to the receiving party at its business
address or at any other address indicated in writing from time to time
hereunder and:
(a) if sent by hand or reputable courier, shall be deemed to have
been received on the day of delivery, provided receipt for
delivery is obtained; and
(b) if sent by facsimile shall be deemed to have been received on
confirmation by the receiving party.
Unless otherwise notified in writing, the addresses and facsimile
numbers of the parties are:
For ETISALAT:
ETISALAT
Attn.: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇-▇-▇▇▇▇▇▇
For FLAG:
FLAG Limited
Attn.: General Counsel
Richmond House - ▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇-▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
FLAG Limited
Attn.: Regional Manager
Amman Regional ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇-▇▇▇-▇▇▇
All communications between the parties shall be in the English
language.
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16. ENTIRE AGREEMENT
16.1 This Agreement contains the entire understanding of the parties in
respect of the subject matter hereof and supersedes all prior
negotiations and understandings between the parties with respect to the
subject matter. This Agreement may be amended only in writing and with
the consent of both parties hereto.
16.2 The Parties agree that ETISALAT shall have the option to undertake
the running and operation of the FNOC within a maximum period of
two years following the date of this Agreement upon sub-contracting
or management basis. For this purpose FLAG and ETISALAT shall conduct
an annual review of the operations with a view to prepare for and
facilitate the utilization of the option by ETISALAT. If within one
month of the second annual review the Parties are unable to agree
upon the terms and conditions of such utilization ETISALAT shall be
entitled to terminate this Agreement with immediate effect
notwithstanding the provisions of Article 6.1 above.
17. ASSIGNMENT AND SUBCONTRACTING
17.1 ETISALAT shall have the right to assign its rights under this Agreement
or any part of this Agreement to any of its affiliates, subsidiaries ,
or otherwise, in each case with the prior written consent of FLAG,
which consent shall not be unreasonably withheld.
17.2 FLAG shall have the right to assign its rights under this Agreement or
any part of this Agreement to any of its affiliates, subsidiaries or
lenders, in each case with the prior written consent of ETISALAT, which
consent shall not be unreasonably withheld.
17.3 Any attempted assignment, charge or other transfer or encumbrance in
violation of this Article shall be void and of no effect.
18. SEVERABILITY
If one or more of the provisions contained in this Agreement shall be
invalid, illegal or unenforceable in any respect under any applicable
law, the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or impaired.
19. DOCUMENTS, INFORMATION AND CONFIDENTIALITY
19.1 Any drawings, diagrams and specifications or other information supplied
to ETISALAT by or on behalf of FLAG hereunder or learned or otherwise
obtained by ETISALAT in the performance of its obligations under this
Agreement shall be used solely in assisting ETISALAT in the performance
of its obligations under this Agreement and shall not be disclosed by
ETISALAT, its directors, officers, employees, agents, subcontractors or
consultants or any of their respective directors, officers, employees,
agents, subcontractors or consultants to any third party without the
prior written consent of FLAG except: (i) as is necessary for the
performance of its obligations under this
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Agreement (and then only under conditions of confidentiality as set
forth herein), (ii) as required by law or pursuant to court order,
(iii) if it is or becomes generally available to the public by
publication or otherwise, other than by disclosure in violation of this
Article 19, (iv) if it was within ETISALAT's possession prior to being
furnished to ETISALAT by or on behalf of FLAG, (v) if it becomes
available to ETISALAT on a non-confidential basis, or (vi) if it was
independently developed by ETISALAT without reference to the
information provided by FLAG. ETISALAT shall give notice to FLAG
reasonably in advance of any disclosure pursuant to sub-Article
19.1(ii) above.
19.2 Without the written consent of the other, neither party shall make
public statement regarding this Agreement or it's operation herein.
Prior to any publicity, advertisement and disclosure of information,
the contents shall be mutually agreed by the Parties.
20. CONSENT NOT TO BE UNREASONABLY WITHHELD
Neither party shall unreasonably withhold any consent or approval on
any matter that requires its consent or approval hereunder from the
other party and each party shall promptly respond when such consent or
approval is requested.
IN WITNESS WHEREOF, FLAG and ETISALAT have caused this Agreement to be executed
by their duly authorized representatives on the date first written above.
FLAG LIMITED
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇
Title: Executive Vice President
EMIRATES TELECOMMUNICATIONS
CORPORATION
By: /s/ ▇▇▇ ▇▇▇▇▇ AL OWAIS
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Name: ▇▇▇ ▇▇▇▇▇ Al Owais
Title: General Manager
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