{"id":42701,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/project-development-and-construction-contract-tyco-submarine2.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"project-development-and-construction-contract-tyco-submarine2","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/project-development-and-construction-contract-tyco-submarine2.html","title":{"rendered":"Project Development and Construction Contract &#8211; Tyco Submarine Systems Ltd. and Pan American Crossing Ltd."},"content":{"rendered":"<pre>                                                                  EXECUTION COPY\n\n\n\n                     _____________________________________\n\n                                      PAC\n\n                     _____________________________________\n                                        \n\n\n\n                              PROJECT DEVELOPMENT\n\n                                      AND\n\n                             CONSTRUCTION CONTRACT\n\n                                    BETWEEN\n\n                          TYCO SUBMARINE SYSTEMS LTD.\n\n                                      AND\n\n                           PAN AMERICAN CROSSING LTD.\n\n\n\n                     _____________________________________\n\n                           DATED AS OF JULY 21, 1998\n\n                     _____________________________________\n\n \n                               TABLE OF CONTENTS\n \n                         GENERAL TERMS AND CONDITIONS\n\n\n   \n\nArticle                                                                                     PAGE\n-------                                                                                     ----\n                                                                                       \n1                    Provision of System..................................................     1\n \n2                    Documents Forming the Entire Contract................................     2\n \n3                    Definitions..........................................................     2\n \n4                    Contract Price.......................................................    15\n \n5                    Terms of Payment by Purchaser........................................    18\n \n6                    Contract Variations..................................................    22\n \n6A.                  Optional Upgrades....................................................    23\n \n6B                   Optional System......................................................    29\n \n6C                   Optional Branching Unit..............................................    30\n \n6D                   Cook's Crossing......................................................    30\n \n6E                   Alternate Mexico Configuration; Alternate Mexico Configuration Option    31\n \n7                    Responsibilities for Permits.........................................    32\n \n8                    Route Survey.........................................................    34\n \n9                    Acceptance...........................................................    34\n \n10                   Warranty.............................................................    37\n \n11                   Contractor Support...................................................    41\n \n12                   Purchaser's Obligations..............................................    41\n \n13                   Termination for Default..............................................    42\n \n14                   Termination for Convenience..........................................    44\n \n15                   Suspension...........................................................    46\n \n\n                                       i\n\n \n\n   \n\nArticle                                                                                     PAGE\n-------                                                                                     ----\n                                                                                       \n \n16                   Title and Risk of Loss...............................................    47\n \n17                   Force Majeure........................................................    47\n \n18                   Intellectual Property................................................    48\n \n19                   Infringement.........................................................    53\n \n20                   Safeguarding of Information and Technology...........................    55\n \n21                   Export Control.......................................................    55\n \n22                   Liquidated Damages...................................................    56\n \n23                   Limitation of Liability\/Indemnification..............................    56\n \n24                   Counterparts.........................................................    58\n \n25                   Design and Performance Responsibility................................    58\n \n26                   Product Changes......................................................    58\n \n27                   Risk and Insurance...................................................    58\n \n28                   Plant and Work Rules.................................................    61\n \n29                   Right of Access......................................................    61\n \n30                   Quality Assurance....................................................    63\n \n31                   Documentation........................................................    63\n \n32                   Training.............................................................    63\n \n33                   Settlement of Disputes\/Arbitration\/Litigation........................    63\n \n34                   Applicable Law.......................................................    65\n \n35                   Notices..............................................................    65\n \n36                   Publicity and Confidentiality........................................    66\n \n37                   Assignment; Subcontractors...........................................    67\n \n38                   Relationship of the Parties..........................................    68\n \n39                   Successors Bound.....................................................    68\n \n\n                                      ii\n\n \n\n   \n\nArticle                                                                                     PAGE\n-------                                                                                     ----\n                                                                                       \n40                   Article Captions.....................................................    68\n \n41                   Severability.........................................................    68\n \n42                   *....................................................................    68\n \n43                   Survival of Obligations..............................................    69\n \n44                   Non-Waiver...........................................................    69\n \n45                   Language.............................................................    69\n \n46                   Entire Agreement.....................................................    69\n \n\n\n \n \n\nEXHIBITS\n--------\n\n                                                                       \n     Exhibit A.................................................................  *\n     Exhibit B...........................................................  Consent and Agreement\n     Exhibit C..............................................................  Opinion of Counsel\n     Exhibit D................................................................  Escrow Agreement\n     Exhibit E.........................................................  Approved Subcontractors\n     Exhibit F...........................................................  Intellectual Property\n \n\n* Material omitted and separately filed with the Commission under an application\n  for confidential treatment.\n\n                                      iii\n\n \n                            PROJECT DEVELOPMENT AND\n                             CONSTRUCTION CONTRACT\n                                    BETWEEN\n                        TYCO SUBMARINE SYSTEMS LTD. AND\n                          PAN AMERICAN CROSSING LTD.\n\n\n          This Project Development and Construction Contract (\"Contract\") is\nmade as of this 21st day of July 1998 between Tyco Submarine Systems Ltd., a\ncorporation organized and existing under the laws of the State of Delaware,\nUnited States, (\"TSSL\" or \"Contractor\") and Pan American Crossing Ltd., a\ncompany organized and existing under the laws of Bermuda (hereinafter referred\nto as \"Purchaser\").\n\n          WHEREAS, Purchaser desires to establish a fiber optic submarine cable\nsystem, to be known as the Pan American Crossing Submarine Cable System\n(hereinafter, and as more fully defined herein, the \"System\"), which will be\nused to provide service between the United States, Mexico and Panama; and\n\n          WHEREAS, subject to the provisions of Article 6B (Optional System),\nArticle 6C (Optional Branching Unit), Article 6D (Cook's Crossing), and Article\n6E (Alternate Mexico Configuration; Alternate Mexico Configuration Option), the\nSystem will consist of (a) one fiber pair providing a direct connection from\nGrover Beach, California, United States to Fort Amador, Panama and (b) one fiber\npair providing a connection linking (i) Grover Beach, California, United States,\n(ii) Puerto Vallarta, Mexico, (iii) Acapulco, Mexico and (iv) Fort Amador,\nPanama;\n\n          WHEREAS, Contractor is in the business of designing, constructing,\ninstalling, supplying, delivering and manufacturing fiber optic submarine cable\nsystems and is familiar with the general business of the fiber optic submarine\ncable system industry;\n\n          WHEREAS, Purchaser may elect to extend the System from Fort Amador,\nPanama, through Ambush Range, Panama, to St. Croix, United States Virgin\nIslands, by including Cook's Crossing (as hereinafter defined);\n\n          WHEREAS, Purchaser seeks to purchase and own the System and wishes to\nengage Contractor to perform the Work and Upgrade Work; and\n\n          WHEREAS, Contractor is willing to perform the Work and the Upgrade\nWork on a turn-key, fixed-price basis in accordance with and subject to the\nterms hereof.\n\n          NOW THEREFORE, IT HAS BEEN AGREED AS FOLLOWS\n\nARTICLE 1  PROVISION OF SYSTEM\n---------  -------------------\n\n          In consideration of the Contract Price and the Upgrade Prices, the\nContractor agrees to undertake the Work and the Upgrade Work and to provide the\nPurchaser with the \n\n \n                                                                               2\n\n\nSystem meeting the System Performance Requirements on or before the Scheduled\nSystem RFS Date and the System Upgrades meeting the requirements of Article 6A,\nall in accordance with the terms hereof.\n\nARTICLE 2  DOCUMENTS FORMING THE ENTIRE CONTRACT\n---------  -------------------------------------\n\n          This Contract consists of these commercial terms and conditions\n(\"Terms and Conditions\"), Exhibits E (Approved Subcontractors) and F\n(Intellectual Property) hereto, and the following documents (in the form of\nattachments, including appendices, attached hereto), which shall be read and\nconstrued as part of the Contract:\n \n   .      Provisioning Schedule, Appendix 1, Upgrade Provisioning Schedule, \n          Appendix 1A              \n   .      Billing Schedule, Appendix 2, Upgrade Billing Schedule, Appendix 2A\n   .      Plan of Work, Appendix 3, Upgrade Plan of Work, Appendix 3A\n   .      Invoice Format, Appendix 4, Form of Contractor's Certificate, \n          Appendix 4A\n   .      Progress Schedule, Appendix 5\n   .      Technical Volume (includes Route Information), Appendix 6\n   .      Cook's Crossing Appendix, Appendix 7\n\n          In the event of any inconsistency between the Terms and Conditions and\nthe above listed documents, the Terms and Conditions shall prevail. The\nAppendices listed above have no order of precedence.\n\nARTICLE 3  DEFINITIONS\n---------  -----------\n\n          Definitions are as described in the specific Articles. Except as\notherwise defined the following definitions shall apply throughout the Contract:\n\n          AAA has the meaning set forth in Sub-Article 33(B).\n\n          ACCEPTANCE TESTING means (i) with respect to a DLS or the System\n     (which shall include testing of the Point to Point Pairs), the tests\n     described in the Commissioning and Acceptance section of the Technical\n     Volume or developed pursuant to such section by mutual agreement of the\n     Parties (with 15 days prior notice to the Independent Engineer) and\n     reasonably designed to verify that such DLS or the System meets the\n     applicable Performance Requirements and (ii) with respect to any System\n     Upgrade, the tests described in the Commissioning and Acceptance section of\n     the Technical Volume or developed pursuant to such section by mutual\n     agreement of the Parties (with 15 days notice to the Independent Engineer)\n     and reasonably designed to verify that the System Upgrade meets the\n     applicable Performance Requirements.\n\n          ACCESS RIGHTS means all ownership, easement and\/or other property\n     rights, from both private and governmental entities, both on land and below\n     the surface of the water (including, without limitation, agreements to use\n     conduits, install manholes and to lease \n\n \n                                                                               3\n\n     space in cable stations) necessary to access, use and occupy cable stations\n     and the sites for cable stations (including, without limitation, to land\n     and install the submarine cable and related equipment and to bring such\n     cable from the ocean to the cable stations) in order for the Purchaser to\n     own, operate and maintain the System.\n\n          ACTUAL KNOWLEDGE means the actual knowledge of any executives with\n     management responsibility for the Contract.\n\n          ALTERNATE MEXICO CONFIGURATION means the Base System, reconfigured to\n     land a two fiber pair cable in each of Tijuana, Mexico and Mazatlan,\n     Mexico, instead of Puerto Vallarta, Mexico and Acapulco, Mexico,\n     respectively.\n\n          ALTERNATE MEXICO CONFIGURATION OPTION means the Alternate Mexico\n     Configuration, modified such that an additional fiber pair shall be added\n     to DLS 1 and DLS 2 making such DLSs upgradeable to 160 Gb\/s of capacity at\n     the Date of Provisional Acceptance.\n\n          ASSIGNMENT has the meaning set forth in Sub-Article 37(A).\n\n          BANKRUPTCY EVENT means an event specified in Sub-Article 13(A)(3) or\n     13(A)(4) with Contractor as the \"other Party\".\n\n          BASE SYSTEM means the two fiber pair submarine cable system, including\n     the cable stations, described in the second WHEREAS clause hereof,\n     consisting of DLS 1, 2, 3 and 4 (at a per fiber pair capacity of * at\n     the Date of Commercial Acceptance or the Date of Provisional Acceptance, as\n     the case may be, of the System, with each DLS having the capability of\n     being upgraded to * per fiber pair at the Date of Provisional\n     Acceptance), as more fully described in the System Description section of\n     the Technical Volume.\n\n          BILLING SCHEDULE means, with respect to the System, exclusive of\n     Cook's Crossing and related options, a billing schedule attached hereto as\n     Appendix 2 and, with respect to Cook's Crossing and related options, the\n     billing schedule attached hereto as Appendix 7-2.\n\n          CERTIFICATE OF COMMERCIAL ACCEPTANCE means a certificate issued by\n     Purchaser in accordance with Sub-Article 9(D) to Contractor certifying that\n     a DLS, the System or a System Upgrade is Ready for Commercial Acceptance.\n\n          CERTIFICATE OF FINAL ACCEPTANCE means a certificate issued by\n     Purchaser in accordance with Sub-Article 9(E) to Contractor certifying that\n     the System or a System Upgrade is Ready for Final Acceptance.\n\n\n*    Material omitted and separately filed with the Commission under an \n     application for confidential treatment.\n\n\n \n                                                                               4\n\n          CERTIFICATE OF PROVISIONAL ACCEPTANCE means a certificate issued by\n     Purchaser in accordance with Sub-Article 9(C) to Contractor certifying that\n     a DLS, the System or a System Upgrade is Ready for Provisional Acceptance.\n\n          CIF means cost, insurance and freight as defined in the International\n     Chamber of Commerce, Guide to Incoterms (1990).\n\n          COMMISSIONING REPORT has the meaning set forth in the Commissioning\n     and Acceptance section of the Technical Volume.\n\n          CONFIDENTIAL INFORMATION has the meaning set forth in Sub-Article\n     36(B).\n\n          CONSENT means a Consent and Agreement to be entered into among\n     Contractor, Purchaser and the financing parties described in Sub-Article\n     37(C) and substantially in the form of Exhibit B hereto, with such changes\n     therein as made pursuant to Sub-Article 37(C) hereto.\n\n          CONTRACT means this agreement, specifically consisting of the\n     documents described in Article 2, and shall be deemed to include any\n     amendments thereto or Contract Variations pursuant to Article 6 (Contract\n     Variations).\n\n          CONTRACTOR means the entity that has executed this Contract as\n     Contractor (TSSL) and that will be responsible for the performance of the\n     Work (and if applicable, Upgrade Work) under this Contract and shall\n     include its permitted successors and\/or assigns.\n\n          CONTRACT PRICE means the Initial Contract Price, plus any variations\n     pursuant to Article 6 (Contract Variations), Article 6B (Optional System),\n     Article 6C (Optional Branching Unit), Article 6D (Cook's Crossing), Taxes\n     as set forth in Sub-Article 4(B) and other adjustments to the Contract\n     Price provided for in this Contract.\n\n          CONTRACT TAXES has the meaning set forth in Sub-Article 4(B)(1).\n\n          CONTRACT VARIATION has the meaning set forth in Sub-Article 6(A).\n\n          COOK'S CROSSING shall mean two diverse one fiber pair cables linking\n     Fort Amador, Panama to a cable station in Ambush Range, Panama then linked\n     by a two fiber pair submarine cable to St. Croix (at a per fiber pair\n     capacity of 10 Gb\/s at the Date of Commercial Acceptance or the Date of\n     Provisional Acceptance, as the case may be, of the System, having the\n     capability of being upgraded to 160 Gb\/s per fiber pair at the Date of\n     Provisional Acceptance), as more specifically described in Appendix 7\n     (wherein Cook's Crossing is referred to as the \"Optional Extension\") and\n     the Technical Volume.\n\n          COOK'S CROSSING-OPTION has the meaning set forth in Article 6D.\n\n          COOK'S CROSSING OPTION PRICE has the meaning set forth in Article 6D.\n\n \n                                                                               5\n\n          COOK'S CROSSING BRANCHING UNIT shall mean a branching unit with a\n     cable stub attached to Cook's Crossing off the coast of South America or an\n     island in the Caribbean Sea, which would allow the System to be connected\n     to an additional cable station to be located in South America or an island\n     in the Caribbean Sea, as more specifically described in Appendix 7 and the\n     Technical Volume.\n\n          COOK'S CROSSING BRANCHING UNIT PRICE has the meaning set forth in\n     Article 6D.\n\n          COOK'S CROSSING DLS means the STM-1 to STM-1 connectivity between Fort\n     Amador, Panama and St. Croix.\n\n          COOK'S CROSSING PRICE has the meaning set forth in Article 6D.\n\n          DATE OF COMMERCIAL ACCEPTANCE, PROVISIONAL ACCEPTANCE OR FINAL\n     ACCEPTANCE means the date that Purchaser receives a Commissioning Report or\n     an Upgrade Commissioning Report, as the case may be, demonstrating that a\n     DLS or the System or a System Upgrade, as the case may be, is Ready for\n     Commercial Acceptance, Ready for Provisional Acceptance or Ready for Final\n     Acceptance in accordance with Article 9 (Acceptance).\n\n          DDP means delivered duty paid as defined in the International Chamber\n     of Commerce, Guide to Incoterms (1990).\n\n          DEFAULT means an Event of Default or any event, condition or\n     occurrence which with the giving of notice or passage of time or both would\n     be an Event of Default.\n\n          DELIVERABLE SOFTWARE has the meaning set forth in Sub-Article 18(C).\n\n          DELIVERABLE TECHNICAL MATERIAL has the meaning set forth in Sub-\n     Article 18(B).\n\n          DISPUTE ACCOUNT means the Dispute Account to be created under the\n     Escrow Agreement.\n\n          DLS means a Digital Line Section and includes DLS 1, DLS 2, DLS 3, DLS\n     4 or the Cook's Crossing DLS, as the case may be.\n\n          DLS 1 means the STM-1 to STM-1 connectivity of the System between\n     Grover Beach, California, United States and Puerto Vallarta, Mexico, as\n     such DLS may be modified by Article 6E (Alternate Mexico Configuration;\n     Alternate Mexico Configuration Option).\n\n          DLS 2 means the STM-1 to STM-1 connectivity of the System between\n     Puerto Vallarta, Mexico to Acapulco, Mexico, as such DLS may be modified by\n     Article 6E (Alternate Mexico Configuration; Alternate Mexico Configuration\n     Option).\n\n \n                                                                               6\n\n          DLS 3 means the STM-1 to STM-1 connectivity of the System between\n     Acapulco, Mexico to Fort Amador, Panama, as such DLS may be modified by\n     Article 6E (Alternate Mexico Configuration; Alternate Mexico Configuration\n     Option).\n\n          DLS 4 means the STM-1 to STM-1 connectivity of the System between Fort\n     Amador, Panama, to Grover Beach, California, United States.\n\n          ESCROW AGENT means The Chase Manhattan Bank, N.A., in its capacity as\n     escrow agent under the Escrow Agreement, and its successors in such\n     capacity.\n\n          ESCROW AGREEMENT means that Escrow Agreement to be entered into, in\n     the event of a dispute as described in Sub-Article 5(C)(5), by and among\n     the Contractor, the Purchaser and the Escrow Agent, substantially in the\n     form of Exhibit D hereto, with such changes therein as are reasonably\n     requested by the Escrow Agent, as amended modified or supplemented from\n     time to time.\n\n          EVENT OF DEFAULT has the meaning set forth in Sub-Article 13(A).\n\n          EXCLUDED TAX means (i) any franchise, excess profits, net worth,\n     capital or capital gains Tax, as well as any Tax on doing business or\n     imposed on net or gross income or receipts (including minimum and\n     alternative minimum Taxes measured by any items of Tax preference), but in\n     each case excluding Taxes that are or are in the nature of sales, use,\n     excise, license, stamp, rental, ad valorem, value added or property Taxes;\n     (ii) any Taxes imposed by a jurisdiction other than one in which (a) the\n     Contractor is or is treated as engaged in activities contemplated by or in\n     fulfillment of the Contract or (b) the Purchaser or its affiliates has a\n     nexus to such jurisdiction and the Tax imposed is attributable to that\n     nexus, (iii) Taxes imposed on the Contractor as a result of Contractor's\n     gross negligence or willful misconduct and (iv) any import duty, other\n     import related charges, sales or use tax, VAT or property tax imposed by\n     the United States or any political subdivision thereof or Taxing authority\n     therein in respect of Supplies brought into the United States for testing,\n     modification or other similar purposes prior to being installed or used\n     outside the United States.\n\n          EXPEDITED UPGRADE has the meaning set forth in Sub-Article 6A(L).\n\n          FINAL COMMISSIONING REPORT has the meaning set forth in Section 7,\n     Commissioning and Acceptance section of the Technical Volume.\n\n          FINAL SURVEY REPORT means the final survey report described in Section\n     5 of the Marine Installation section of the Technical Volume.\n\n          FOB means free on board as defined in the International Chamber of\n     Commerce, Guide to Incoterms (1990).\n\n          FORCE MAJEURE has the meaning set forth in Sub-Article 17(A).\n\n \n                                                                               7\n\n          *\n\n          *\n\n          INDEPENDENT ENGINEER means Conexart Technologies, Inc. or a similarly\n     qualified successor in the capacity as the engineer to the financing\n     sources specified in Sub-Article 37(C) who has agreed to be bound by the\n     confidentiality provisions of this Contract and who is not affiliated with\n     a competitor of Contractor.\n\n          INFORMATION has the meaning set forth in Sub-Article 20(A).\n\n          INITIAL CONTRACT PRICE has the meaning set forth in Sub-Article\n     4(A)(1).\n\n          INITIAL UPGRADE PRICE has the meaning set forth in Sub-Article\n     4(A)(2).\n\n          INTELLECTUAL PROPERTY has the meaning set forth in Sub-Article 18(A).\n\n          LANDING LICENSES means, in the United States (including St. Croix), a\n     License to land and operate a Submarine Cable System pursuant to the\n     Submarine Cable Landing Act, 47 U.S.C. 34-39 and, in Mexico and Panama, the\n     comparable license which is required under Mexican and Panamanian law,\n     respectively.\n\n          LAWS means any laws, ordinances, regulations, rules, orders,\n     proclamations, requirements of governmental authorities or treaties.\n\n          MANUFACTURING MATERIALS has the meaning set forth in Sub-Article\n     13(B).\n\n          MILESTONES means, with respect to the System, exclusive of Cook's\n     Crossing and related options, the milestones set forth in the Progress\n     Schedule attached as Appendix 5 hereto and, with respect to Cook's Crossing\n     and related options, the milestones set forth in the Progress Schedule\n     attached as Appendix 7-4 hereto.\n\n          NEXUS TAX means any Tax imposed by way of withholding in respect of or\n     in lieu of an Excluded Tax, but only to the extent such Tax would not have\n     been imposed but for the nexus (other than as a consequence of the\n     activities of the Contractor) of the Purchaser or its affiliate to the\n     jurisdiction imposing the Tax.\n\n          NON-SHIP COSTS has the meaning set forth in Sub-Article 10(A)(2).\n\n          NOTICE OF TERMINATION has the meaning set forth in Sub-Article 14(A).\n\n          OPTIONAL BRANCHING UNIT shall mean a branching unit with a cable stub\n     attached to the System off the coast of Central America, which would allow\n     the System to be \n\n\n*    Material omitted and separately filed with the Commission under an\n     application for confidential treatment.\n\n \n                                                                               8\n\n     connected to a cable station to be located in Central America or the\n     northwest coast of South America, as more specifically described in Section\n     1.8 of the Technical Volume.\n\n          OPTIONAL BRANCHING UNIT PRICE has the meaning set forth in Article 6C.\n\n          OPTIONAL SYSTEM means the * additional fiber pairs placed in the\n     same cables as the initial fiber pairs of the Base System; provided, that\n                                                                --------      \n     there will be no additional terminal station equipment for the additional\n     * fiber pairs (which will not initially be equipped with terminal station\n     equipment) all of which is more particularly described in Section 1.8 of\n     the Technical Volume.\n\n          OPTIONAL SYSTEM PRICE has the meaning set forth in Sub-Article 6B.\n\n          PARTY(IES) means either of the Purchaser and\/or the Contractor, as\n     appropriate.\n\n          PERFORMANCE REQUIREMENTS means (i) with respect to a DLS or the\n     System, the applicable System Performance Requirements set forth or to be\n     developed by mutual agreement pursuant to the System Performance and\n     Availability section of the Technical Volume, (ii) with respect to any\n     System Upgrade, the applicable System Performance Requirements set forth in\n     or to be developed by mutual agreement pursuant to the Technical Volume or\n     (iii) in each case, such other DLS, System or System Upgrade performance\n     levels as mutually agreed by the Parties.\n\n          PERMITS means all Access Rights, permits, pipeline and cable crossing\n     agreements, approvals, \"no objections\", permissions-in-principle,\n     authorizations, consents, customs clearances, registrations, certificates,\n     rights-of-way, certificates of occupancy, licenses, including without\n     limitation, landing licenses, orders, vessel and crew authorizations\/visas,\n     permission for the operation of navigational aids and radio systems and\n     similar authorizations necessary to complete the Work and operate and\n     maintain the System (other than any of the foregoing (i) relating to the\n     ownership, operation and maintenance of the System and not necessary until\n     after the System is Ready for Final Acceptance, (ii) which is or would be\n     needed by Purchaser to engage in any business outside the business of\n     developing, owning and operating a submarine cable system, (iii) which is\n     or would be needed at any time by any purchaser or lessee of capacity on\n     the System, or (iv) the Landing Licenses provided for in Sub-Article 7(C)).\n\n          POINT TO POINT PAIRS means the STM-1 to STM-1 connectivity between any\n     one cable station to any other cable station in the System.\n\n          PROVISIONING SCHEDULE means, with respect to the System, exclusive of\n     Cook's Crossing and related options, the price schedule attached hereto in\n     Appendix 1 and, with respect to Cook's Crossing and related options, the\n     price schedule attached hereto in Appendix 7-1.\n\n\n*    Material omitted and separately filed with the Commission under an\n     application for confidential treatment.\n\n\n \n                                                                               9\n\n          PURCHASER means Pan American Crossing Ltd. and shall include its\n     permitted successors and assigns.\n\n          READY FOR COMMERCIAL ACCEPTANCE means\n\n               (i)  for any DLS, that\n\n                    (a) if the System is not at the same time also Ready for\n               Commercial Acceptance, the Purchaser has consented, in its sole\n               discretion, to accept such DLS as Ready for Commercial\n               Acceptance,\n\n                    (b) such DLS has the ability to carry commercial traffic\n               between the two landing points of such DLS meeting performance\n               criteria equal to twice that of ITU-T G.826 as defined in the\n               System Performance section of the Technical Volume and has line\n               monitoring and protection switching capability,\n\n                    (c) Contractor has tested and provided for STM-1\n               interconnectivity capability (or such other interconnectivity\n               capability as may be mutually agreed) to the DLS terminal\n               equipment according to ITU-T G.826,\n\n                    (d) Contractor has substantially performed its obligations\n               under Article 18 (Intellectual Property) then required to be\n               performed by it, and\n\n                    (e) all Permits are obtained for such DLS, and\n\n               (ii)  for the System,\n\n                    (a) that the System has the ability to carry commercial\n               traffic throughout the System, and for each Point to Point Pair,\n               (operating at 10 Gb\/s per fiber pair) meeting performance\n               criteria equal to twice that of ITU-T G.826 as defined in the\n               System Performance section of the Technical Volume with self\n               healing ring protection capability and per DLS protection\n               capability, has line monitoring and per DLS protection switching\n               capability and has network management capability (all as\n               described in the System Description section of the Technical\n               Volume and in Appendix 7),\n\n                    (b) Contractor has tested and provided for STM-1\n               interconnectivity capability (or such other interconnectivity\n               capability as may be mutually agreed) to the System terminal\n               equipment according to ITU-T G.826,\n\n \n                                                                              10\n\n                    (c) Contractor has substantially performed its obligations\n               under Article 18 (Intellectual Property) then required to be\n               performed by it and\n\n                    (d) all Permits are obtained for the System and\n\n               (iii)  for any System Upgrade, the System is Ready for Commercial\n          Acceptance at the capacity specified for such System Upgrade.\n\n          READY FOR FINAL ACCEPTANCE means\n\n               (i)  for the System, that\n\n                    (a)  (I)  the System has successfully and continuously\n               (other than by reason of Force Majeure in which case the test\n               period shall be extended for a time period equal to the time\n               period of such Force Majeure) functioned in compliance with the\n               System Performance Requirements during the period of ninety (90)\n               consecutive days after the Date of Provisional Acceptance or\n\n                         (II) if the System shall have failed to meet the System\n               Performance Requirements at any time during such period (other\n               than by reason of Force Majeure), the Contractor has corrected\n               such failure and the System has successfully and continuously\n               (other than by reason of Force Majeure in which case the test\n               period shall be extended for a time period equal to the time\n               period of such Force Majeure) functioned in compliance with the\n               System Performance Requirements for such additional period of\n               time not to exceed ninety (90) days (and not to end prior to the\n               date 90 days after the Date of Provisional Acceptance) as\n               reasonably determined by the Independent Engineer as being\n               sufficient to confirm that such failure has been corrected and\n               that no other failures are likely to appear and\n\n                    (b) all deficiencies noted in the Certificate of Provisional\n               Acceptance have been corrected (other than minor deficiencies\n               which will not affect the operation of the System, in respect of\n               which an equitable adjustment to the Contract Price will be made)\n               and\n\n                    (c) Contractor has complied in all material respects with\n               Article 18 (Intellectual Property) and\n\n               (ii)  for any System Upgrade, that\n\n                    (a)  (I)  the System Upgrade has successfully functioned in\n               compliance with the System Performance Requirements during the\n               period of ninety (90) days after the Date of Provisional\n               Acceptance of the System \n\n \n                                                                              11\n\n               Upgrade or (II) if the System Upgrade shall have failed to meet\n               the System Performance Requirements during such period, the\n               Contractor has corrected such failure and the System Upgrade has\n               successfully functioned in compliance with the System Performance\n               Requirements for such additional period of time not to exceed\n               ninety (90) days as reasonably determined by the Independent\n               Engineer as sufficient to confirm that such failure has been\n               corrected and\n\n                    (b) all deficiencies noted in the Certificate of Provisional\n               Acceptance have been corrected (other than minor deficiencies\n               which will not affect the operation of the System, in respect of\n               which an equitable adjustment of the Contract Price will be made)\n               and\n\n                    (c) Contractor has complied in all material respects with\n               Article 18 (Intellectual Property).\n\n          READY FOR PROVISIONAL ACCEPTANCE means\n\n               (i)  with respect to any DLS,\n\n                    (a) in the case of all DLSs, if the System is not, at the\n               same time, also Ready for Provisional Acceptance, the Purchaser\n               has consented, in its sole discretion, to accept such DLS as\n               Ready for Provisional Acceptance,\n\n                    (b) such DLS is complete in all material respects (and in\n               any event is Ready for Commercial Acceptance),\n\n                    (c) the results of Acceptance Testing of such DLS\n               demonstrate that such DLS has satisfied the System Performance\n               Requirements,\n\n                    (d) Contractor has substantially performed its obligations\n               under Article 18 (Intellectual Property) then required to be\n               performed by it,\n\n                    (e) all Permits are obtained for such DLS, and\n\n               (ii) with respect to the System, the System is complete in all\n          material respects (and in any event is Ready for Commercial\n          Acceptance), all DLSs are Ready for Provisional Acceptance with self-\n          healing ring protection capability and per DLS protection capability\n          and line monitoring and network management capability (all as\n          described in the System Description section of the Technical Volume\n          and Appendix 7) and\n\n               (iii)  with respect to any System Upgrade, the results of\n          Acceptance Testing of such System Upgrade demonstrate that such System\n          Upgrade is \n\n \n                                                                              12\n\n          complete in all material respects and is sufficient to realize the\n          Performance Requirements.\n\n          REPRESENTATIVES has the meaning set forth in Article 36(B).\n\n          RETAINAGE means an amount equal to * of the Initial Contract Price.\n\n          RETESTING has the meaning set forth in Sub-Article 9(B)(3).\n\n          ROUTE SURVEY means the route survey described in the Marine section of\n     the Technical Volume.\n\n          SCHEDULED SYSTEM RFS DATE has the meaning set forth in Sub-Article\n     9(A).\n\n          SCHEDULED UPGRADE DATE means for any System Upgrade, the date by which\n     the Contractor agrees such System Upgrade will be Ready for Provisional\n     Acceptance pursuant to Sub-Article 6A(K) hereof.\n\n          SEGMENT means Segment 1, Segment 2, Segment 3, Segment 4 or Segment 5,\n     as the case may be.\n\n          SEGMENT 1 means the Segment of the System from Grover Beach,\n     California, United States to Branching Unit 1 and landing in Grover Beach\n     in locations capable of interconnecting with major telecommunications\n     carriers.\n\n          SEGMENT 2 means the Segment of the System from Branching Unit 1 to\n     Puerto Vallarta, Mexico and landing in Puerto Vallarta in locations capable\n     of interconnecting with major telecommunications carriers, as such Segment\n     may be modified by Article 6E (Alternate Mexico Configuration; Alternate\n     Mexico Configuration Option).\n\n          SEGMENT 3 means the Segment of the System from Branching Unit 1 to\n     Branching Unit 2.\n\n          SEGMENT 4 means the Segment of the System from Branching Unit 2 to\n     Acapulco, Mexico and landing in Acapulco in locations capable of\n     interconnecting with major telecommunications carriers, as such Segment may\n     be modified by Article 6E (Alternate Mexico Configuration; Alternate Mexico\n     Configuration Option).\n\n          SEGMENT 5 means the Segment of the System from Branching Unit 2 to\n     Fort Amador, Panama and landing in Fort Amador in locations capable of\n     interconnecting with major telecommunications carriers.\n\n          SHIP COSTS has the meaning set forth in Sub-Article 10(A)(2).\n\n          SHIP PERIOD has the meaning set forth in Sub-Article 10(A).\n\n\n*    Material omitted and separately filed with the Commission under an\n     application for confidential treatment.\n\n \n                                                                              13\n\n          SUPPLIES means any and all materials, plant, machinery, equipment,\n     hardware and items supplied by the Contractor under this Contract.\n\n          SUSPENSION means a suspension in Work pursuant to Sub-Article 15(A) or\n     15(B).\n\n          SYSTEM means the Base System; provided, that the term \"System\" shall\n     for all purposes of this Contract, including without limitation, Sub-\n     Article 9(A)(7) and Article 22, include each option listed in Articles 6B\n     through 6D, to the extent elected by Purchaser, except to the extent\n     expressly herein stated otherwise.\n\n          SYSTEM PERFORMANCE REQUIREMENTS has the meaning set forth in the\n     System Description section of the Technical Volume.\n\n          SYSTEM UPGRADE has the meaning set forth in Sub-Article 6A(A).\n\n          TAX means any tax, duty, levy, charge or custom (including, without\n     limitation, any sales or use tax, VAT or octroi duty relating to the\n     Contract items and fiscal stamps connected with Contract legalization)\n     imposed or collected by any taxing authority or agency (domestic or\n     foreign).\n\n          TECHNICAL VOLUME means, with respect to the System, the Technical\n     Volume attached hereto as Appendix 6 and, with respect to Cook's Crossing\n     and related options, includes Appendix 7-5.\n\n          TRANSFEREE means any entity to which purchaser assigns rights\n     hereunder pursuant to Sub-Article 37(D) hereof.\n\n          UPGRADE BILLING SCHEDULE means, with respect to the System, exclusive\n     of Cook's Crossing and related options, the billing schedule attached\n     hereto as Appendix 2A and, with respect to Cook's Crossing and related\n     options, the billing schedule attached hereto as Appendix 7-2A.\n\n          UPGRADE COMMISSIONING REPORT has the meaning set forth in the\n     Commissioning and Acceptance section of the Technical Volume.\n\n          UPGRADE OPTION PERIOD has the meaning set forth in Sub-Article 6A(B).\n\n          UPGRADE PLAN OF WORK means, with respect to the System, exclusive of\n     Cook's Crossing and related options, the plan of work attached hereto as\n     Appendix 3A and, with respect to Cook's Crossing and related options, the\n     plan of work attached hereto as Appendix 7-3A.\n\n          UPGRADE PRICE means, for any System Upgrade, the Initial Upgrade Price\n     for such System Upgrade, plus any variations pursuant to Article 6\n     (Contract Variations), \n\n \n                                                                              14\n\n     Taxes as set forth in Sub-Article 4(B) and other adjustments to such\n     Upgrade Price provided for in this Contract.\n\n          UPGRADE PROVISIONING SCHEDULE means, with respect to the System,\n     exclusive of Cook's Crossing and related options, the provisioning schedule\n     attached hereto as Appendix 1A and, with respect to Cook's Crossing and\n     related options, the provisioning schedule attached hereto as Appendix 7-\n     1A.\n\n          UPGRADE WARRANTY PERIOD has the meaning set forth in Sub-Article\n     10(A).\n\n          UPGRADE WORK means the activities and services to be performed or\n     provided by Contractor under Article 6A (Optional Upgrades).\n\n     *\n\n          WARRANTY PERIOD has the meaning set forth in Sub-Article 10(A).\n\n          WORK means all activities and services (other than the activities and\n     services specified in this Contract to be provided by Purchaser) necessary\n     to be performed or provided in developing, planning, designing,\n     manufacturing, constructing, delivering, installing and testing the System,\n     until the System is Ready for Final Acceptance, including without\n     limitation, designating, coordinating, obtaining and paying for on behalf\n     of Purchaser the Access Rights and obtaining all Permits except Landing\n     Licenses.  Whether or not used in conjunction with the term \"Supplies\", the\n     term \"Work\" shall always be deemed to include the provision of the relevant\n     Supplies, unless the context requires otherwise.\n\n          YEAR 2000 COMPLIANT means, when used with respect to any software or\n     materials, that such software or materials will operate accurately and,\n     without \n\n\n\n*    Material omitted and separately filed with the Commission under an\n     application for confidential treatment.\n\n \n                                                                              15\n\n     interruption, accept, possess and in all manner retain full functionality\n     when referring to, or involving, any year or date in the twentieth or\n     twenty-first centuries.\n\nARTICLE 4  CONTRACT PRICE\n---------  --------------\n\n     A.  Contract Price\n\n          1.   The initial Contract Price for the Work, in United States Dollars\n               (US$) is a fee of * (the \"Initial Contract Price\"). The Initial\n               Contract Price does not include the cost of optional upgrades\n               which are described in Article 6A (Optional Upgrades), any\n               contract variations as provided for in Article 6 (Contract\n               Variations), Article 6B (Optional System), Article 6C (Optional\n               Branching Unit), Article 6D (Cook's Crossing), or any Taxes. The\n               Initial Contract Price includes, with respect to the Base System,\n               all charges for CIF, and all costs and expenses incurred in\n               obtaining all Permits (including Access Rights) and includes all\n               the Work.\n\n          2.   The Initial Upgrade Price for any Upgrade Work, in United States\n               Dollars (US$) is the fixed fee set forth in (with respect to the\n               System, exclusive of Cook's Crossing and related options),\n               Appendix 2A and (with respect to Cook's Crossing and related\n               options), Appendix 7-2A (the \"Initial Upgrade Price\"). No Initial\n               Upgrade Price includes the cost of any contract variations as\n               provided for in Article 6 (Contract Variations) or any Taxes.\n\n          3.   The Provisioning Schedule sets forth the Contractor's estimate of\n               the breakdown of the Initial Contract Price among various aspects\n               of the Work.  If the actual cost of any aspect of the Work is\n               greater or less than that set forth in the Provisioning Schedule,\n               such fact shall not cause any change in the Initial Contract\n               Price, except as set forth in Sub-Article 6(D).\n\n          4.   Without the prior written consent of the Purchaser, which consent\n               shall not be unreasonably withheld or delayed, the Contractor\n               shall not arrange for any\n\n               (a)  Access Right which requires payments to be made by the\n                    Purchaser or made after the System is Ready for Provisional\n                    Acceptance or\n\n               (b)  Permit which requires aggregate payments in excess of\n                    * to be made by Purchaser or made after the System\n                    is Ready for Provisional Acceptance.\n\n     B.  Taxes, Levies and Duties\n\n\n\n*    Material omitted and separately filed with the Commission under an\n     application for confidential treatment.\n\n \n                                                                              16\n\n          1.   The Initial Contract Price and each Initial Upgrade Price, as\n               stated in Sub-Article 4(A) above, excludes any Tax. The Contract\n               Price and each Upgrade Price shall without duplication be\n               adjusted for any Tax imposed on or in connection with this\n               Contract (including, without limitation, the execution and\n               delivery of this Contract, the Work, the Upgrade Work and the\n               Supplies, but excluding any Excluded Taxes) (any such Taxes,\n               other than Excluded Taxes, are hereinafter referred to as\n               \"Contract Taxes\"). Contractor has provided a good faith estimate\n               of the Contract Taxes payable by the Purchaser; it being\n               understood that the Contractor shall have no liability under this\n               Contract or otherwise to the Purchaser for any errors or\n               omissions in such estimate or any losses arising therefrom. The\n               Contractor shall be responsible for any Excluded Tax that might\n               be incurred by the Contractor as well as any Tax described in\n               clause (iv) of the definition of Excluded Tax.\n\n          2.   The Purchaser will be ultimately responsible for the payment of\n               all Contract Taxes (including, without limitation, Contract Taxes\n               that are VAT, octroi duties relating to Contract items and fiscal\n               stamps, etc. connected with Contract legalizations to the\n               authorities in their countries). In the case of any Contract\n               Taxes paid by the Contractor, the Contractor shall submit payment\n               on the Purchaser's behalf and Contractor will be reimbursed by\n               the Purchaser in accordance with Article 5 (Terms of Payment by\n               Purchaser).\n\n          3.   The Contractor agrees to use reasonable efforts including,\n               without limitation, by registering for VAT and any applicable\n               sales Taxes in any country, state or other jurisdiction where\n               legally required, to cooperate with and assist Purchaser in its\n               efforts (i) to have Supplies which are the subject of this\n               Contract made exempt from Contract Taxes, whether in the\n               manufacture of the Supplies or related to the importation or\n               location or installation of the Supplies, (ii) to request\n               revisions, drawbacks, remissions, reclassifications or the like\n               to the jurisdictions identified by the Purchaser; or (iii) to\n               reduce or eliminate Contract Taxes (including the provision of\n               applicable certifications and forms) and to obtain any available\n               refunds of Contract Taxes, provided that the Contractor shall not\n                                          --------                              \n               be required to act other than in accordance with the relevant\n               Laws then in force. The Purchaser shall reimburse the Contractor,\n               in accordance with Article 5, for any reasonable costs (including\n               the reasonable fees and expenses of legal counsel, accountants\n               and other advisors) incurred by the Contractor under this Sub-\n               Article 4(B)(3) provided that Purchaser was notified and has\n                               --------                                    \n               consented to the incurrence of such costs, fees and expenses.\n               Contractor shall not be required to cooperate with and assist\n               Purchaser in its efforts under this Sub-Article 4(B)(3) or to\n               take any action hereunder which in the Contractor's good faith\n               judgment would incur any costs or if in Contractor's good faith\n               judgment it would be advisable to obtain the advice of counsel,\n               accountants or other advisors prior to \n\n \n                                                                              17\n\n               cooperating with or assisting purchaser or taking any action,\n               unless in each case, Purchaser has agreed to reimburse Contractor\n               under the foregoing proviso.\n\n          4.   Prior to the Date of Provisional Acceptance with respect to the\n               System or any System Upgrade, the Contractor shall provide\n               evidence of having made all payments for Taxes included in the\n               Contract Price or Upgrade Price or described in clause (iv) of\n               the definition of Excluded Taxes, other than VAT due on payments\n               of the Contract Price or Upgrade Price made on or after the Date\n               of Provisional Acceptance of the System or System Upgrade, which\n               evidence shall be provided within sixty (60) days of the date of\n               each such payment.\n\n          5.   As part of Work or any Upgrade Work, the Contractor shall obtain\n               at its expense, on Purchaser's behalf, any import license or\n               other official authorization and carry out all customs\n               formalities necessary for the importation or exportation of goods\n               in connection with such Work or Upgrade Work. The Purchaser\n               agrees to be the Importer or Exporter of Record or designate an\n               Importer or Exporter of Record\/Consignee on its behalf. Purchaser\n               must provide a Letter of Authorization from any third party\n               designate stating it agrees to be the Importer or Exporter of\n               Record on Purchaser's behalf and identify the name and address of\n               the designated  Importer or Exporter of Record.\n\n          6.   The Supplies to be installed or held on land shall be delivered\n               to the agreed point at the named place of destination and shall\n               be consigned to the Purchaser.\n\n     C.  Withholding Tax\n\n          1.   If withholding for any Tax is required in respect of any payment\n               to the Contractor, the Purchaser shall (i) withhold the\n               appropriate amount from such payment, (ii) pay such amount to the\n               relevant authorities in accordance with the applicable Laws and\n               (iii) in the case of any such withholding in respect of a\n               Contract Tax or a Nexus Tax and subject to the Contractor's\n               satisfying the obligations set forth in the last sentence of this\n               Sub-Article 4(C)(1), pay the Contractor an additional amount such\n               that the net amount received by the Contractor is the amount the\n               Contractor would have received in the absence of such\n               withholding. In such a case, the Purchaser shall provide to the\n               Contractor, as soon as reasonably practicable, a certified copy\n               of an official tax receipt for any Tax which is retained from any\n               payment due to the Contractor or for any Tax which is paid on\n               behalf of the Contractor. All such receipts shall be in the name\n               of the Contractor. The Contractor agrees to complete accurately\n               and timely provide to the Purchaser or, if required, to the\n               applicable taxing authority, such forms, certifications or other\n               documents as may be requested in \n\n \n                                                                              18\n\n               timely manner by Purchaser, in order to allow it to make payments\n               to the Contractor without any deduction or withholding on account\n               of withholding Taxes (or at a reduced rate thereof) or to receive\n               a refund of any amounts deducted or withheld on account of\n               withholding Taxes.\n\n          2.   If the Contractor shall become aware that it is entitled to\n               receive a refund or credit from a relevant taxing or governmental\n               authority in respect of a Contract Tax or Nexus Tax as to which\n               the Purchaser has paid an additional amount pursuant to Sub-\n               Article 4(C)(1) above, the Contractor shall promptly notify the\n               Purchaser of the availability of such refund or credit and shall,\n               within 30 days after receipt of a request by the Purchaser\n               (whether as a result of notification that it has made to the\n               Purchaser or otherwise), make a claim to such taxing or\n               governmental authority for such refund or credit at the\n               Purchaser's expense. If the Contractor receives a refund or\n               credit in respect of a Contract or Nexus Tax as to which the\n               Purchaser has paid an additional amount pursuant to Sub-Article\n               4(C)(1) above, or if, as a result of the Purchaser's payment of\n               such additional amounts, the Contractor or any other member of an\n               affiliated group, as defined in section 1504(a) of the Code, of\n               which the Contractor is a member, receives a credit against Taxes\n               imposed on its income or franchise taxes imposed on it by the\n               country under the laws of which it is organized or any political\n               subdivision thereof, the Contractor shall promptly notify the\n               Purchaser of such refund or credit and shall within 30 days from\n               the date of  receipt of such refund or benefit of such credit pay\n               over the amount of such refund or benefit of such credit\n               (including any interest paid or credited by the relevant taxing\n               or governmental authority with respect to such refund or credit)\n               to the Purchaser (but only to the extent of the additional\n               payments made by the Purchaser under Sub-Article 4(C)(1) above\n               with respect to the Contract or Nexus Tax giving rise to such\n               refund or credit), net of all out-of-pocket expenses of the\n               Contractor; provided, however, that the Purchaser, upon the\n                           --------  -------                              \n               request of the Contractor, agrees to repay the amount paid over\n               to the Purchaser (plus penalties, interest or other charges due\n               to the appropriate authorities in connection therewith) to the\n               Contractor in the event the Contractor is required to repay such\n               refund or credit to such relevant authority.\n\nARTICLE 5  TERMS OF PAYMENT BY PURCHASER\n---------  -----------------------------\n\n     A.  General Conditions of Payment\n\n          1.   All payments shall be made and all invoices shall be rendered in\n               US Dollars (US$). The Purchaser shall be responsible for and\n               shall pay all costs and fees for payment, as well as the banking\n               and wiring costs. All banking documents and correspondence must\n               be in English.\n\n \n                                                                              19\n\n     B.  Invoice Procedures\n\n          1.   All invoices for Work shall be submitted according to the Billing\n               Schedule, provided, that at the time of any such Invoice the\n                         --------                                          \n               relevant Milestones have been achieved. All invoices for Work\n               shall have a certificate addressed to Purchaser in the form of\n               Appendix 4A attached.\n\n          2.   Any Contract Variations shall be invoiced and paid in accordance\n               with the terms of the Contract Variation as specified in Article\n               6 (Contract Variations).\n\n          3.   Invoices for Upgrade Work shall be submitted according to the\n               Upgrade Billing Schedule and shall be paid in accordance with\n               this Article 5.\n\n          4.   Invoices for amounts not described in Sub-Sections 1-3 above,\n               which may become payable hereunder shall be submitted after\n               applicable costs have been incurred or such other time as may be\n               specified in this Contract. Such invoices shall be accompanied by\n               a certificate of the Contractor explaining such amount and\n               certifying that it is payable.\n\n          5.   The Contractor shall render all invoices to the following address\n               or facsimile number:\n\n                    Pan American Crossing Ltd.\n                    Wessex House\n                    45 Reid Street\n                    Hamilton HM12\n                    Bermuda\n                    Facsimile:  441-296-6749\/8606\n                    Attn:  Robert Klug\n\n               with a copy to\n\n                    Conexart Technologies, Inc.\n                    124 de Charante\n                    Saint Lambert\n                    Quebec, Canada\n                    J4S 1K3\n                    Facsimile: 514-466-1093\n                    Attn: Mr. Martin Fournier\n\n     C.  Payment Procedures\n\n          1.   The Purchaser shall pay the Contractor, and the Contractor shall\n               accept payment, in accordance with this Article 5 (Terms of\n               Payment by Purchaser).\n\n \n                                                                              20\n\n          2.   Purchaser agrees to pay an initial payment to Contractor in the\n               amount of *. Within three business days of the time this Contract\n               is executed and delivered by both Parties, the first portion of\n               the initial payment, in the amount of *, shall be paid by\n               Purchaser to Contractor. The second portion of the initial\n               payment, in the amount of *, shall be paid by Purchaser to\n               Contractor within 56 days of the execution and delivery of this\n               Contract by both Parties. Failure to receive these payments shall\n               entitle Contractor, upon 2 business days' notice to Purchaser of\n               intent to suspend, to immediately suspend Work hereunder and, in\n               the case of such suspension, to an equitable extension in the\n               Scheduled System RFS Date.\n\n          2a.  In the event the Optional System is elected, Purchaser agrees to\n               pay an initial payment to Contractor in the amount of * of the\n               Optional System Price.  Within three business days after such\n               election, the first portion of such initial payment, in the\n               amount of * of the Optional System Price, shall be paid by\n               Purchaser to Contractor. The second portion of such initial\n               payment, in the amount of * of the Optional System Price, shall\n               be paid by Purchaser to Contractor within 56 days of the date of\n               such election.  Failure to receive these payments shall entitle\n               Contractor, upon 2 business days' notice to Purchaser of intent\n               to suspend, to immediately suspend Work relating to the Optional\n               System, and, in the case of such suspension, to an equitable\n               extension in the Scheduled System RFS Date.\n\n          2b.  In the event Cook's Crossing, and any related options as are set\n               forth in Article 6D, is elected, Purchaser agrees to pay an\n               initial payment to Contractor in the amount of *. Within three\n               business days after such election, the first portion of such\n               initial payment, in the amount of *, shall be paid by Purchaser\n               to Contractor. The second portion of such initial payment, in the\n               amount of *, shall be paid by Purchaser to Contractor within 56\n               days of the date of such election. Failure to receive these\n               payments shall entitle Contractor, upon 2 business days' notice\n               to Purchaser of intent to suspend, to immediately suspend Work\n               relating to the Cook's Crossing, and, in the case of such\n               suspension, to an equitable extension in the Scheduled System RFS\n               Date.\n\n          3.   Invoices given to the Purchaser (and the Independent Engineer) on\n               or before the last day of any month shall, subject to Sub-Article\n               5(C)(5) below, be due and payable on the last day of the next\n               month or such other time as may be specified in this Contract;\n               provided that invoices given to Purchaser on or before June 30,\n               --------                                                       \n               1998 shall be due and payable no earlier than August 31, 1998.\n\n          4.   Invoices not paid when due shall accrue late payment charges from\n               the day, following the day, on which payment was due until the\n               day on which it is paid. Invoices for such extended payment\n               charges shall not be issued \n\n\n\n\n*    Material omitted and separately filed with the Commission under an\n     application for confidential treatment.\n\n \n                                                                              21\n\n               for an amount less than U.S. $1,000. Extended payment charges\n               shall be computed at the rate of one percent (1%) per month.\n\n          5.   In the event that the Purchaser has an objection to any invoice\n               or other payment obligation or any amount owing by Contractor to\n               Purchaser shall not have been paid when due, the Purchaser shall\n               promptly notify the Contractor of such objection and such amount,\n               and the Purchaser and Contractor shall make every reasonable\n               effort to settle promptly the dispute concerning the payment(s)\n               in question.  In the event such dispute cannot be settled, the\n               Purchaser will have the right to withhold payment of the disputed\n               amount(s) (or withhold from the invoice amount a sum equal to the\n               amount purportedly owing by Contractor) so long as it deposits,\n               in full, such disputed amount(s) into the Dispute Account.\n\n               (a)  Provided such disputed amount is placed into the Dispute\n                    Account in a timely manner, the Purchaser shall not be\n                    deemed to be in breach of or in default for failing to pay\n                    Contractor.\n\n               (b)  The Escrow Agent will distribute the disputed amount in\n                    accordance with the terms of the Escrow Agreement.\n\n               (c)  In addition, the prevailing Party shall be entitled to\n                    receive from the Dispute Account an amount equal to the\n                    interest earned by the Escrow Agent on the distributed,\n                    disputed amount, which shall be distributed by the Escrow\n                    Agent under clause (b) above.\n\n               The Contractor and the Purchaser will share equally the costs and\n               expenses of the Escrow Agent.\n\n               The Contractor and the Purchaser will execute and deliver an\n               Escrow Agreement substantially in the form of Exhibit D hereto,\n               with such changes therein as the Escrow Agreement may reasonably\n               request.\n\n          6.   The Purchaser shall make timely payments for that portion of the\n               invoice not in dispute in accordance with Sub-Article 5(C) or\n               such payments will be assessed extended payment charges as set\n               forth in Sub-Article 5(C)(4). Pending resolution of the dispute,\n               the Purchaser may not withhold payment (unless also subject to\n               dispute) on any other invoice concerning different goods and\/or\n               services submitted by Contractor.\n\nARTICLE 6  CONTRACT VARIATIONS\n---------  -------------------\n\n     A.  Either Party may request, during construction of the System or any\nSystem Upgrade, by written order, a contract variation requiring additions or\nalterations to, deviations or deductions from the System or System Upgrade\n(\"Contract Variation\"). If the other Party \n\n \n                                                                              22\n\nconsents, in its sole discretion, this change will be formalized as an amendment\nto this Contract by a Contract Variation; provided, that the Contractor will not\n                                          -------- \nunreasonably withhold its consent to a Contract Variation requested by the\nPurchaser; and provided further, that Purchaser will not unreasonably withhold\n               ----------------\nits consent to a Contract Variation requested by the Contractor so long as such\nContract Variation does not affect the Contract Price, any Upgrade Price, the\nScheduled System RFS Date, any Scheduled Upgrade Date, any warranties or the\nPerformance Standards.\n\n     B.  A Contract Variation shall not become effective unless and until the\nprice adjustment, the terms and schedule of payment and the extension of time\nand all other terms have been mutually agreed upon by the Parties (and the\nParties shall act reasonably and in good faith in connection with all such\nterms) and such Contract Variation is signed by an authorized representative of\neach Party. Each Contract Variation shall be incorporated as an amendment to the\nContract.\n\n     C.  Contractor may seek a Contract Variation for any change, after the date\nof execution and delivery of this Contract by both Parties, of any Law (except,\nand to the extent, affecting Taxes or wages) which requires a change in the Work\nor the Upgrade Work or affects the costs (other than wages) incurred or to be\nincurred by the Contractor or any combination of the foregoing and Purchaser\nshall agree to any such change in Work or Upgrade Work as may be required and to\nan equitable adjustment to the Contract Price or the applicable Upgrade Price.\nAs of the date hereof, neither Party has Actual Knowledge of any proposed change\nin any Law that would require a change in the Work or the Upgrade Work.\n\n     D.  The Initial Contract Price is based on the assumptions that (i)\nContractor will acquire ownership of land and build, on such land, two cable\nstations in Mexico and one cable station on the Pacific coast of Panama and will\nacquire additional land and will enlarge an existing cable station in the United\nStates and (ii) the beach manhole to cable station distance with respect to the\ntwo cable stations in Mexico will be no more than four (4) miles in total.  To\nthe extent that such assumptions are incorrect (if, for example, the Contractor\nor the Purchaser shall lease space in one or more existing cable stations) both\nParties will agree to an equitable adjustment, up or down, to the Contract Price\nand the terms and schedule of payments.  The Contractor will consult with, and\nobtain the consent of the Purchaser (not to be unreasonably withheld or delayed)\nregarding the location of cable stations and whether to acquire, build, or lease\nsuch cable stations.  Any lease for space in a cable station shall be reasonably\nsatisfactory in form and substance to the Purchaser.  The Initial Contract Price\nis also based on the assumption that the SDH low speed interconnect\nconfiguration shall be as set forth in the System Description section of the\nTechnical Volume.  Purchaser may elect to change such configuration by\neliminating, replacing or adding STM-1 optical interfaces, SDH equipment, DS-3s\nand\/or E1s, each with respect to one or more DLSs.  If Purchaser makes such\nelection, both Parties shall agree to an equitable adjustment, up or down, based\non the prices set forth in the Provisioning Schedule, to the Contract Price\nand\/or the Scheduled System RFS Date, as necessary.  The equitable adjustment\nshall take into account the actual costs incurred by Contractor, such as costs\nassociated with cancelling firm commitments.\n\nARTICLE 6A.  OPTIONAL UPGRADES\n-----------  -----------------\n\n \n                                                                              23\n\n     A.  This Article includes the terms and conditions governing an option for\nfuture upgrades to the System (each a \"System Upgrade\") that may be exercised by\nPurchaser during the Upgrade Option Period.\n\n     B.  *\n\n     C.  *\n\n     D.  *\n\n     E.  *\n\n\n\n\n*    Material omitted and separately filed with the Commission under an\n     application for confidential treatment.\n\n \n                                                                              24\n\n     F.  *\n\n     G.  *\n\n\n\n\n\n\n\n*    Material omitted and separately filed with the Commission under an\n     application for confidential treatment.\n\n \n                                                                              25\n\nH.  *\n\nI.  *\n\nJ.  *\n\nK.  *\n\n\n*  Material omitted and separately filed with the Commission under an \n   application for confidential treatment.\n\n\n \n                                                                              26\n\nL.  *\n\n\n\n\n*  Material omitted and separately filed with the Commission under an \n   application for confidential treatment.\n\n \n                                                                              27\n\nM.  *\n\nARTICLE 6B  OPTIONAL SYSTEM\n----------  ---------------\n\nA.  *\n\nB.  *\n\nARTICLE 6C  OPTIONAL BRANCHING UNIT\n----------  -----------------------\n\n    *\n\n\n\n\n*  Material omitted and separately filed with the Commission under an \n   application for confidential treatment.\n\n\n \n                                                                              28\n\nARTICLE 6D  COOK'S CROSSING\n----------  ---------------\n\nA.  *\n\nB.  *\n\n\n\n*  Material omitted and separately filed with the Commission under an \n   application for confidential treatment.\n\n \n                                                                              29\n\nC.  *\n\nARTICLE 6E  ALTERNATE MEXICO CONFIGURATION; ALTERNATE MEXICO CONFIGURATION\n----------  --------------------------------------------------------------\nOPTION\n------\n\nA.  *\n\n\n*  Material omitted and separately filed with the Commission under an \n   application for confidential treatment.\n\n \n                                                                              30\n\nB.    *\n\nC.    *\n\nD.    *\n\nARTICLE 7  RESPONSIBILITIES FOR PERMITS  ; COMPLIANCE WITH LAWS\n---------  ----------------------------  ----------------------\n\nA.  The Purchaser shall reasonably cooperate with and assist the Contractor to\nobtain all Permits, including Access Rights (except those specified in paragraph\nC below), to the extent that Purchaser's cooperation and assistance are\nnecessary for Contractor to expeditiously and cost-efficiently obtain such\nPermits. The Purchaser agrees to respond promptly to any such request from\nContractor. Further, the Purchaser agrees that it will not impede or interfere\nwith Contractor's activities or Contractor's abilities to perform its\nobligations.  Upon notice from Contractor with respect to a Permit or receipt by\nPurchaser of a copy of a Permit, Purchaser shall fulfill all conditions of such\nPermit and perform all responsibilities thereunder, except to the extent that\nsuch conditions or responsibilities are those of the Contractor under Work.\nContractor will inform Purchaser as to any such conditions or responsibilities\nthat, in the Contractor's reasonable judgment, are not ordinary and routine and\nobtain Purchaser's consent, which consent shall not be unreasonably withheld,\nthereto prior to arranging for any such Permit.\n\n\n*  Material omitted and separately filed with the Commission under an \n   application for confidential treatment.\n\n \n                                                                              31\n\nB.  Subject to paragraph C below, the Contractor shall have the responsibility\nfor obtaining, at Contractor's sole cost and expense (subject to Sub-Articles\n6D(A) and 6D(B)), all Permits on Purchaser's behalf.  The Contractor will cause\nall Permits not issued in the name of Purchaser to be assignable to Purchaser,\nand to be assigned to Purchaser at the time title to the System is transferred\nto Purchaser pursuant to this Contract.  Subject to Sub-Article 4(A)(4),\nPurchaser shall be responsible for payment of all Permit fees and other costs\nand expenses due with respect to any Permit after the Date of Provisional\nAcceptance of the System.\n\nC.  The Purchaser shall be responsible for obtaining, at its expense, all\nLanding Licenses that the System requires (which shall include all Landing\nLicenses that Cook's Crossing requires).  The Contractor will cooperate with the\nPurchaser in connection therewith.  Purchaser shall reimburse reasonable outside\ncounsel fees, reasonable independent consultant fees and other reasonable out-\nof-pocket expenses incurred by Contractor in connection with such cooperation.\n\nD.  Any delay in obtaining or failure to obtain any Permit shall constitute a\nForce Majeure and be treated as described in Article 17 (Force Majeure), except\nto the extent such delay is a result of Contractor's negligence or willful\nmisconduct.\n\nE.  Except with respect to variations necessitated by complying with any\nchanges, enacted after the date hereof, in any Laws (the costs with respect to\nwhich shall be borne by the Purchaser), the Contractor shall be responsible for\nthe payment of any and all costs incurred as a result of the need to vary\ndesign, drawings, plans or procedures to comply with any of the circumstances\nset forth in this Article.  The Contractor shall, before making any variations\nfrom the designs, drawings, plans or procedures that may be necessitated by so\ncomplying with any Laws and that would represent a material change to the\noverall design of the System, give to the Purchaser written notice, specifying\nthe variations proposed to be made, and the reasons for making them.  As of the\ndate hereof, neither Party has Actual Knowledge of any proposed changes in the\nLaws which would necessitate any such variation.\n\nF.  The Contractor shall (i) give all notices required by any Laws to be given\nto any authority and (ii) perform or permit the performance by authorized\npersons of any inspection required by the said Laws, subject to Sub-Article\n6(C).\n\nG.  Within 30 days after the date of execution of this Contract, the Contractor\nwill prepare and deliver to the Purchaser a detailed list of Permits that to its\nknowledge are required to be obtained under current law in order to complete the\nWork and shall update such list from time to time if it becomes aware of changes\nin Permit requirements. Such list, as updated from time to time, shall set forth\nthe projected dates of filing for such Permits and an estimate of when such\nPermits are expected to be obtained. Without limiting Contractor's liabilities\nin respect of Sub-Articles 7(B), Contractor shall have no liability in respect\nof the accuracy of the information furnished under this Sub-Article, except in\nthe case of gross negligence or willful misconduct.\n\nARTICLE 8  ROUTE SURVEY\n---------  ------------\n\n \n                                                                              32\n\nA.  The Contractor shall conduct the Route Survey and select the cable route for\nthe System in accordance with the information in the Final Survey Report.\nContractor shall be permitted to make changes, at its discretion, to the route\nselection, if necessary for operational reasons without additional cost to\nPurchaser.\n\nB.  Any changes to the route selection requested by Purchaser (such as a change\nof location for, or an addition of, a cable station) shall be treated as a\nContract Variation in accordance with Article 6 (Contract Variations).\n\nARTICLE 9  ACCEPTANCE\n---------  ----------\n\nA.  General\n\n1.  The Acceptance Testing shall be performed by the Contractor. The Purchaser\nand its designated representatives (including the Independent Engineer) may\nobserve, at their own expense, the Contractor's tests and review the test\nresults. Purchaser may request and conduct any additional tests, at its own\nexpense, but any delay caused by such process shall be a Force Majeure event.\n\n2.  Until the Date of Final Acceptance of the System or if a System Upgrade is\nrequested by Purchaser, the Date of Final Acceptance of such System Upgrade, the\nPurchaser agrees to allow Contractor necessary access to all DLSs of the System.\n\n3.  The Purchaser shall issue a Certificate of Commercial Acceptance in\naccordance with the provisions of Sub-Article 9(D)(1).\n\n4.  Once a DLS of the System, the System, or a System Upgrade is Ready for\nProvisional Acceptance, the Purchaser shall issue a Certificate of Provisional\nAcceptance; provided, that it is within the Purchaser's sole discretion as to\n            --------                                                         \nwhether to accept a DLS instead of the System.\n\n5.  Once the System or a System Upgrade is Ready for Final Acceptance, the\nPurchaser shall issue a Certificate of Final Acceptance.\n\n6.  The Purchaser shall not unreasonably withhold or delay issuance of a\nCertificate of Commercial Acceptance, a Certificate of Provisional Acceptance or\na Certificate of Final Acceptance.\n\n7.  The Contractor agrees that the Date of Provisional Acceptance or Commercial\nAcceptance of the System will occur by February 29, 2000 (as such date may be\nextended under Article 6 (Contract Variations), Article 17 (Force Majeure) or\notherwise under this Contract or by agreement of the Parties, the \"Scheduled\nSystem RFS Date\").\n\n8.  The Date of Commercial Acceptance, Provisional Acceptance and Final\nAcceptance, as the case may be, shall be deemed to have occurred with respect to\na DLS, the System, or a \n\n \n                                                                              33\n\nSystem Upgrade if a Certificate of Commercial Acceptance, a Certificate of\nProvisional Acceptance or a Certificate of Final Acceptance is issued with\nrespect thereto.\n\nB.  Notice of Acceptance or Rejection\n\n1.  Within thirty (30) days of receipt by Purchaser and Independent Engineer of\nthe Commissioning Report or Upgrade Commissioning Report, as the case may be,\nthe Purchaser must issue notification to the Contractor of the following:\n\n(a)  issuance of a Certificate of Provisional Acceptance in accordance with Sub-\n     Article 9(C); or\n\n(b)  rejection of a Certificate of Provisional Acceptance, but instead issuance\n     of a Certificate of Commercial Acceptance in accordance with Sub-Article\n     9(D) below; or\n\n(c)  rejection of the DLS, the System or System Upgrade in its existing\n     condition and issuance of neither a Certificate of Provisional Acceptance\n     nor a Certificate of Commercial Acceptance, with in the case of the System\n     or System Upgrade a written explanation of reasons for rejection (it being\n     understood that acceptance of a DLS instead of the System is at the sole\n     discretion of the Purchaser).\n\nIf the Purchaser (or the Independent Engineer on its behalf) fails to respond\nwith such notification within thirty (30) days, then the Date of Provisional\nAcceptance of the DLS (subject to Purchaser's consent), the System or System\nUpgrade shall be deemed to be the date such Commissioning Report or Upgrade\nCommissioning Report, as the case may be, was received by the Purchaser.\n\n2.  On receipt of a notice from the Purchaser pursuant to Sub-Articles\n9(B)(1)(b) or (c) above, the Contractor shall be entitled to address any\ndisputes and explain any discrepancies to the Purchaser regarding the results of\nthe Acceptance Testing. Unless Purchaser, for good cause, rejects such\nexplanation, it shall issue a new notice pursuant to Sub-Article 9(B)(1) above,\nwhich shall be deemed to have been issued on the date of the original notice.\n\n3.  In case of rejection, and if the explanation by the Contractor as in Sub-\nArticle 9(B)(2) above is not accepted, for good cause, by the Purchaser, the\nContractor shall carry out the necessary corrective actions and will effect a\nnew series of Acceptance Testing (\"Retesting\"). After receipt by Purchaser and\nIndependent Engineer of the new Commissioning Report or Upgrade Commissioning\nReport, as the case may be, describing the results of Retesting, the Purchaser\nwill be granted a new period of thirty (30) days to analyze the new Report\naccording to the provisions of Sub-Article 9(B)(1) and any new notice of the\nPurchaser shall apply from the date the Purchaser receives such new\nCommissioning Report or Upgrade Commissioning Report, as the case may be.\n\nC.  Provisional Acceptance\n\n \n                                                                              34\n\n1.  The Certificate of Provisional Acceptance may have annexed to it a list of\nany outstanding deficiencies to be corrected by the Contractor.\n\n2.  The Contractor shall, as soon as reasonably practicable, correct such\ndeficiencies and complete the Work or Upgrade Work indicated on all such listed\nitems so as to comply in all material respects with the requirements of this\nContract, provided that the Purchaser allows Contractor the necessary access to\nthe DLS(s) as the Contractor needs to correct such deficiencies and complete the\nWork or Upgrade Work. The Contractor shall give the Purchaser reasonable notice\nof its requirement for such access.\n\nD.  Commercial Acceptance\n\n1.  A Certificate of Commercial Acceptance shall be issued by Purchaser with\nrespect to a DLS, the System or System Upgrade if the results of the Acceptance\nTesting demonstrate that such DLS, the System or such System Upgrade does not\njustify the issuance of a Certificate of Provisional Acceptance, but\nnevertheless, such DLS, the System or such System Upgrade is Ready for\nCommercial Acceptance; provided, that such acceptance of a DLS instead of the\n                       --------                                              \nSystem shall be in the sole discretion of the Purchaser.\n\n2.  Each Certificate of Commercial Acceptance shall have annexed to it a\nmutually agreed list of all outstanding items to be completed by the Contractor.\n\n3.  The Contractor shall, as soon as reasonably practicable, remedy the\noutstanding items, provided that the Purchaser allows Contractor the necessary\naccess to the DLS(s) as the Contractor needs to remedy such outstanding items.\nThe Contractor shall give the Purchaser reasonable notice of its requirement for\nsuch access. Notwithstanding the above, provided that Contractor has been\nallowed access to the DLS(s) as required in Sub-Article 9(A)(2), the Contractor\nshall continue to carry the risk of loss for any outstanding item until such\nitem is no longer outstanding.\n\n4.  When the outstanding items referenced in Sub-Article 9(D)(3) above have been\nremedied, and the DLS(s) or System Upgrade is otherwise Ready for Provisional\nAcceptance, the Purchaser will promptly issue a Certificate of Provisional\nAcceptance; provided, that acceptance of a DLS instead of the System shall be in\n            --------                                                            \nthe sole discretion of the Purchaser.\n\n5.  The issuance of a Certificate of Commercial Acceptance with respect to a DLS\nor System Upgrade shall in no way relieve the Contractor from its obligation to\nprovide a DLS or System Upgrade conforming with the Performance Requirements at\nthe time of the issuance of a Certificate of Commercial Acceptance.\n\nE.  Final Acceptance\n\n1.  Within thirty (30) days of the date of receipt by Purchaser and Independent\nEngineer of the Final Commissioning Report, the Purchaser shall issue a\nCertificate of Final Acceptance or reject such Report. If the Purchaser neither\nissues a Certificate of Final Acceptance nor rejects \n\n \n                                                                              35\n\nsuch Report within such thirty (30) day period, then the Date of Final\nAcceptance of the System shall be deemed to be the date such Final Commissioning\nReport was received by the Purchaser.\n\nF.  Title and Risk of Loss\n\n1.  If the Purchaser, in its sole discretion, chooses to accept a DLS prior to\naccepting the System, then upon payment of all amounts listed in the Billing\nSchedule with respect to a DLS (other than the Retainage with respect thereto)\nand the issuance of a Certificate of Commercial Acceptance or a Certificate of\nProvisional Acceptance with respect to such DLS by the Purchaser in accordance\nwith this Contract, title (free and clear of all liens other than those deriving\nthrough or from the Purchaser) to such DLS shall vest in the Purchaser.\n\n2.  Upon (i) payment of all amounts listed in the Billing Schedule with respect\nto the System (other than the Retainage) and (ii) the issuance of a Certificate\nof Commercial Acceptance or a Certificate of Provisional Acceptance with\nrespect to the System by the Purchaser in accordance with this Contract, title\n(free and clear of all liens other than those deriving through or from the\nPurchaser) to the System shall vest in the Purchaser.\n\n3.  Upon payment of the Upgrade Price with respect to a System Upgrade and the\nissuance of a Certificate of Commercial Acceptance or a Certificate of\nProvisional Acceptance with respect to such System Upgrade by the  Purchaser in\naccordance with this Contract, title to such System Upgrade shall vest in the\nPurchaser.\n\n4.  As from the date of vesting of title in a DLS, the System or a System\nUpgrade, the Purchaser shall, except as set forth in the following sentence,\nassume the risk of loss in respect of all parts of such DLS, the System or\nSystem Upgrade and responsibility for its maintenance. As stated in Sub-Article\n9(A)(2), the Contractor will be allowed access to such DLS, and, so long as the\nContractor has been allowed access to such DLS as may be required, the\nContractor shall continue to carry the risk of loss with respect of each item\noutstanding under Sub-Article 9(C)(1) and 9(D)(2) until such item is no longer\noutstanding.\n\nARTICLE 10  WARRANTY\n----------  --------\n\nA.  The Contractor warrants that the System and each System Upgrade, including\nits spares, shall be free from defects in supplies, workmanship and design for a\nperiod of * commencing from the Date of Provisional Acceptance of the System or\nsuch System Upgrade, as the case may be, (hereinafter \"Warranty Period\" and\n\"Upgrade Warranty Period\"), with Ship Costs being covered for the first * of the\nWarranty Period (the \"Ship Period\") and the Purchaser being responsible for all\nShip Costs thereafter.\n\n1.  During the Warranty Period for the System or the Upgrade Warranty Period for\na System Upgrade, the Contractor shall make good, by repair or replacement, at\nits sole option, any defects in the System or such System Upgrade, as the case\nmay be, including any spares, which may become apparent or be discovered due to\nimperfect workmanship, faulty design or faulty material supplied by the\nContractor, or any act, neglect or omission on the Contractors part.\n\n\n\n\n*  Material omitted and separately filed with the Commission under an \n   application for confidential treatment.\n\n \n                                                                              36\n\n(a)  If at any time within the Warranty Period or the Upgrade Warranty Period\n     for a System Upgrade any defect occurs which causes the System or such\n     System Upgrade, as the case may be, to fail to meet its overall Performance\n     Requirements, the Contractor shall repair or replace such part or parts. In\n     making such repairs, Contractor may make changes to the System or such\n     System Upgrade, as the case may be, or substitute equipment of later or\n     comparable design, provided the changes, modifications, or substitutions\n     under normal and proper use do not cause the System or such System Upgrade\n     as the case may be to fail to meet the Performance Requirements.\n\n(b)  The Contractor shall use reasonable efforts to minimize the period of time\n     that any DLS or the System is out of service for testing and repair. The\n     Purchaser agrees to cooperate with the Contractor to facilitate the\n     Contractor's repair activity.\n\n(c)  It is understood that if there is a problem on the System, the Purchaser\n     may immediately dispatch the maintenance authority to effect repairs.  If\n     and to the extent that such problem is determined to be caused by a defect\n     in the System covered by this warranty, the Contractor shall reimburse the\n     Purchaser for its actual Non-Ship Costs incurred and, with respect to any\n     such repair relating to a defect identified in good faith by Purchaser in\n     writing prior to the end of the Ship Period, actual Ship Costs incurred.\n\n(i)  The Contractor shall be given advance notice and be entitled to have a\n     representative on board ship to observe at sea repairs and shall be given\n     the earliest possible notice of any such repair.\n\n(ii) Subject to the foregoing and to Sub-Article 10(D), any repair by the\n     Purchaser shall not in any way diminish the Contractor's obligation under\n     the warranty.  Any equipment discovered to be defective or faulty and\n     recovered during a warranty repair shall be returned to the Contractor at\n     its request.\n\n(d)  In the event that the Contractor fails to make the repair or to make\n     reasonable efforts to minimize the period of time that the System is out of\n     service for repair, the Purchaser may repair the System or the System\n     Upgrade and the Contractor shall reimburse the Purchaser for Non-Ship Costs\n     and, with respect to any such repair relating to a defect identified in\n     good faith by Purchaser in writing prior to the end of the Ship Period,\n     Ship Costs.\n\n(i)  The Contractor shall be given advance notice and be entitled to have a\n     representative on board ship to observe at sea repairs and shall be given\n     the earliest possible notice of any such repair.\n\n(ii) Subject to the foregoing, any repair by the Purchaser shall not in any way\n     diminish the Contractor's obligation under the warranty.  Any equipment\n     discovered to be defective or faulty and recovered during a warranty repair\n     shall be returned to the Contractor at its request.\n\n2.  Contractor shall bear the Ship Costs of only those repairs of the defects\nidentified in good faith by Purchaser in writing prior to the end of the Ship\nPeriod. However, the Contractor shall \n\n \n                                                                              37\n\nbear the Non-Ship Costs of each repair, replacement or improvement required\nduring the Warranty Period.\n\nAs used herein, \"Ship Cost\" means the costs of operating a vessel, including but\nnot limited to running and standing charges for the vessel (including but not\nlimited to labor charges for the vessel's crew, at sea insurance, port charges,\nfuel and lube oils, consumables, cable loading, cable unloading, navigation and\nmaritime communications) as well as the costs associated with the use and\noperation of a remotely operated vehicle and the tracked self-propelled burial\ntool, and \"Non-Ship Costs\" means the costs of making a repair, including the\ncost of components, equipment or materials requiring replacement, the cost of\nany additional equipment necessary to effect the repair, the cost of making the\nrepair, including the cost of reburying any previously buried portion, the cost\nof labor and engineering assistance or development required to make the repair\nand all necessary associated costs, such as, but not limited to, shipping and\ncustoms and services that may be required to make the repair, but excluding any\nof the foregoing which are Ship Costs.\n\n3.  The Contractor shall effect all warranty repairs of the System and shall\nsupply all necessary repair materials. However, the Contractor may use, with the\nconsent of the Purchaser, which shall not be unreasonably withheld, the\nmaterials needed to effect a repair from the Purchaser's available spare\nmaterials. The Contractor shall promptly replace in kind such materials supplied\nfrom the Purchaser's spare materials, or at the option of the Purchaser,\nreimburse the Purchaser for such materials at its original purchase price. The\nreplacement of or reimbursement for such materials shall be made at a time\nmutually agreed to by the Purchaser and the Contractor.\n\n4.  The Contractor warrants that services furnished hereunder will be performed\nin a workmanlike manner using materials free from defects except when such\nmaterials are provided by the Purchaser (it being understood that all materials\narranged for directly by Contractor, whether or not purchased in the name of\nPurchaser, are not materials provided by the Purchaser). If such services prove\nto be not so performed and Purchaser notifies the Contractor within six (6)\nmonths from the completion of the service, the Contractor will promptly correct\nthe defect.\n\n5.  Any part which replaces a defective part during the applicable Warranty\nPeriod or Upgrade Warranty Period, shall be subject to the remaining Warranty\nPeriod and Ship Period, if any, or Upgrade Warranty Period, as the case may be,\nof the part which was replaced. However, the Warranty Period shall never exceed\n* from the Date of Provisional Acceptance of the System and the Upgrade Warranty\nPeriod for any System Upgrade shall never exceed * from the Date of Provisional\nAcceptance of such System Upgrade. Further, Ship Costs shall be included only\nwith respect to defects identified in good faith by Purchaser in writing during\nthe first * from the Date of Provisional Acceptance of the System.\n\nB.  *\n\n\n\n\n*  Material omitted and separately filed with the Commission under an \n   application for confidential treatment.\n\n \n                                                                              38\n\nC.  The Contractor warrants that all Deliverable Software and Deliverable\nTechnical Materials are Year 2000 Compliant.\n\nD.  The warranties provided above in Sub-Articles 10(A) and (B) by the\nContractor shall not apply to defects or failures of performance, which result\nfrom damage caused by acts or omissions of the Purchaser or its agents,\nemployees or representatives or third parties (other than the Contractor), or\nwhich result from modifications, misuse, neglect, accident or abuse, repair,\nstorage or maintenance by other than the Contractor or its agents or use in a\nmanner not in accordance with the System Description or other causes set forth\nin Article 12 (Purchaser's Obligations) or Article 17 (Force Majeure).\n\nE.  THE FOREGOING WARRANTY IS EXCLUSIVE AND IS IN LIEU OF ALL OTHER EXPRESS AND\nIMPLIED WARRANTIES INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY\nAND FITNESS FOR A PARTICULAR PURPOSE WHICH ARE SPECIFICALLY DISCLAIMED.  THE\nPURCHASER'S SOLE AND EXCLUSIVE REMEDY WITH RESPECT TO DEFECTS COVERED BY THE\nFOREGOING WARRANTY SHALL (EXCEPT AS SET FORTH IN SUB-ARTICLE B ABOVE) BE THE\nCONTRACTOR'S OBLIGATION TO MAKE REPAIRS OR REPLACEMENTS AS SET FORTH IN THIS\nARTICLE; PROVIDED, THAT CONTRACTOR'S FAILURE TO SO PERFORM SHALL BE SUBJECT TO\n         --------                                                             \nARTICLE 13 HEREOF.\n\nF.  The Contractor shall, in accordance with its normal operating practices,\ninvestigate any defective part or parts repaired or replaced pursuant to this\nArticle 10 to determine the type of defect and the cause of failure of the part\nor parts. The Contractor shall provide a written report to the Purchaser on the\nresults of the investigation, if any.\n\nG.  Contractor warrants that the System and the Optional Branching Unit and\/or\nthe Cook's Crossing Branching Unit, as applicable, shall be designed in a manner\n(i) adequate to support, without modification to the System, any extension\nconstructed by Contractor from the applicable branching unit and (ii) such that\nany extension will have performance equal to or better than the System; provided\nthat (i) and (ii) are contingent upon each such extension falling within the\napplicable distance parameters set forth in Appendix 6 (Technical Volume) and\nAppendix 7 (Cook's Crossing Appendix).\n\n \n                                                                              39\n\nARTICLE 11  CONTRACTOR SUPPORT\n----------  ------------------\n\nA.  For a period of ten (10) years from the applicable Date of Provisional\nAcceptance or Date of Commercial Acceptance of the System whichever is earlier,\nthe Contractor will make available to the Purchaser replacement parts and repair\nservice for the System as may be reasonably necessary for its operation,\nmaintenance or repair. Where identical parts cannot be supplied, the Contractor\nshall provide fully compatible parts with characteristics equal or superior to\nthose originally provided by the Contractor. Such parts and services shall be\nprovided under commercially reasonable conditions of price and delivery.\n\nB.  Notwithstanding Sub-Article 11(A), if for any reason the Contractor or\nContractor's suppliers intend to cease or ceases manufacturing or having\nmanufactured identical or fully compatible replacement parts, the Contractor\nshall use reasonable efforts to give one year's prior written notice to the\nPurchaser to allow the Purchaser to order from the Contractor any required\nreplacement parts and shall provide full details of the arrangements to provide\nequivalents.\n\nARTICLE 12  PURCHASER'S OBLIGATIONS\n----------  -----------------------\n\nA.  Purchaser agrees to pay all amounts payable by it when due under this\nContract and to perform all of its other obligations under this Contract.\n\nB.  In the event the Purchaser establishes a branch office in any of the\nrelevant jurisdictions, the Purchaser shall be solely responsible to perform all\nactivities necessary to establish such branch office.\n\nC.  If any loss, damage, delay or failure of performance of the System or a\nSystem Upgrade results from the Purchaser's failure to perform its obligations\nunder this Contract and results in an increase in the costs of performance or\nthe time required for performance of any of the Contractor's duties or\nobligations under this Contract, the Contractor shall be entitled, as\nappropriate, to (i) an equitable adjustment in the Contract Price or applicable\nUpgrade Price, (ii) an equitable extension of time for completion of its Work or\nthe Upgrade Work, (iii) reimbursement for all such additional costs incurred,\nand (iv) to the extent necessary in light of Purchaser's failure and the\nadjustments made in accordance with clauses (i), (ii) and (iii) above, an\nequitable adjustment of the Work and\/or Upgrade Work.\n\n1.  The Contractor shall inform the Purchaser promptly of any occurrence covered\nunder this Sub-Article 12(C), and shall use reasonable efforts to minimize any\nsuch additional costs or delay.\n\n2.  The Contractor shall promptly provide to the Purchaser an estimate of the\nanticipated additional costs and time required to complete the Work or Upgrade\nWork and request relief from contractual obligations or duties, as appropriate.\nPurchaser shall, upon notification, make advance payment to Contractor for the\nestimated amount of anticipated additional costs; provided that Purchaser may\n                                                  --------                   \ndeposit such amount into the Dispute Account and Sub-Article 5(C)(5) shall\n\n \n                                                                              40\n\napply. Contractor shall without limiting Purchaser's obligations in the\nforegoing sentence, discuss such costs with Purchaser upon Purchaser's request.\n\n3.  As soon as reasonably practicable after the actual costs become known to the\nContractor, the Contractor shall provide a statement of such actual costs to the\nPurchaser.\n\n4.  If the estimated amount is greater than the amount of actual costs, then the\nContractor shall reimburse the Purchaser. If the amount of actual costs incurred\nis greater than the estimated amount, then the Purchaser shall reimburse the\nContractor for any shortfall in accordance with Article 5 (Terms of Payment of\nPurchaser).\n\nARTICLE 13  TERMINATION FOR DEFAULT\n----------  -----------------------\n\nA.  Either Party may, by written Notice of Termination for Default, immediately\nupon receipt or such later date as specified in the notice, terminate the whole\nor any part of this Contract in any one of the following circumstances (each an\n\"Event of Default\"):\n\n1.  In the case of the Purchaser, (a) if Contractor materially fails to comply\nwith the terms and conditions of this Contract and, if such failure occurs prior\nto the Date of Commercial Acceptance or the Date of Provisional Acceptance, it\nwould not be reasonable to believe that the Contractor will be able to provide\nthe System which is Ready for Provisional Acceptance, within 200 days after the\nScheduled System RFS Date or (b) the Contractor fails to cause the System to be\nReady for Commercial Acceptance or Provisional Acceptance within 200 days after\nthe Scheduled System RFS Date;\n\n2.  If the other Party defaults on any of its payment obligations and does not\ncure such default within a period of thirty (30) days (or such longer period as\nthe non-breaching Party may authorize in writing) after receipt of written\nnotice demanding cure (subject to dispute provisions);\n\n3.  If the other Party shall commence a voluntary case or other proceeding\nseeking liquidation, reorganization or other relief with respect to itself or\nits debts under any bankruptcy, insolvency or other similar law now or hereafter\nin effect or seeking the appointment of a trustee, receiver, liquidator,\ncustodian or other similar official of it or any substantial part of its\nproperty, or shall consent to any such relief or to the appointment of or taking\npossession by any such official in an involuntary case or other proceeding\ncommenced against it, or shall make a general assignment for the benefit of\ncreditors, or shall fail generally to pay its debts as they become due, or shall\ntake any corporate action to authorize any of the foregoing;\n\n4.  If an involuntary case or other proceeding shall be commenced against the\nother Party seeking liquidation, reorganization or other relief with respect to\nit or its debts under any bankruptcy, insolvency or other similar law now or\nhereafter in effect or seeking the appointment of a trustee, receiver,\nliquidator, custodian or other similar official of it or any substantial part of\nits property, and such involuntary case or other proceeding shall remain\nundismissed and unstayed for a period of 60 days; or an order for relief shall\nbe entered against the other Party.\n\n \n                                                                              41\n\nB.  If this Contract is terminated by the Purchaser as provided in Sub-Article\n13(A), the Purchaser, in addition to any other rights provided in this Article\nand upon payment to Contractor of all monies due and owing as set forth in\nclauses 1 and 2 of Sub-Article 13(C) below, may require the Contractor to\ntransfer title and deliver to the Purchaser in the manner and to the extent\ndirected by the Purchaser any completed equipment, material or supplies, and\nsuch partially completed cable and materials, parts, tools, dies, jigs,\nfixtures, plans, drawings, information, and contract rights (hereinafter\ncollectively \"Manufacturing Materials\") as the Contractor has had specifically\nproduced or specifically acquired for the performance of such part of this\nContract as has been terminated and which, if this Contract had been completed,\nwould have been required to be furnished to the Purchaser; and the Contractor\nshall, upon the direction of the Purchaser, protect and preserve property in the\nContractor's possession in which the Purchaser has an interest.\n\nC.  If the Contract is terminated by Contractor as provided in Sub-Article\n13(A), the Purchaser shall pay, in addition to any other damages payable\npursuant to Sub-Article 13(E) below, the total of:\n\n1.  the cost of settling and paying claims rising out of the termination of Work\nunder the contracts in orders, as provided in Sub-Article 13(C)(2) below which\nare properly chargeable to the terminated portion of this Contract; and\n\n2.  the reasonable costs of settlement including accounting, legal, clerical and\nother expenses necessary for the preparation of settlement claims and supporting\ndata with respect to the terminated portion of this Contract and for termination\nand settlement of contracts thereunder, together with reasonable storage,\ntransportation and other costs incurred in connection with the protection,\npreservation and disposition of property proper to this Contract.\n\nD.  Force Majeure events pursuant to Article 17 (Force Majeure) shall not\nconstitute a default or provide a basis for termination under this Article.\n\nE.  Regardless of any termination of this Contract as provided in Sub-Article\n13(A), neither Party shall be relieved from any liability for damages or\notherwise which may have been incurred by reason of any breach of this Contract.\n\nF.  Without limitation to the foregoing, in the event that Purchaser terminates\nthis Contract pursuant to Sub-Article 13(A), the Contractor shall be liable to\nPurchaser (without duplication) for the total of all costs and expenses\nreasonably incurred by Purchaser in completing the Work or in correcting\ndeficiencies in the Work to the extent that the payments made to Contractor\npursuant to this Contract, together with such costs and expenses, exceed the\nContract Price.\n\nARTICLE 14  TERMINATION FOR CONVENIENCE\n----------  ---------------------------\n\nA.  The performance of Work under this Contract may be terminated by the\nPurchaser in whole, or in part, at its discretion. The Purchaser shall deliver\nto the Contractor a written notice specifying the extent to which performance of\nWork under this Contract is terminated, and the \n\n \n                                                                              42\n\ndate upon which such termination becomes effective (a \"Notice of Termination\").\nUpon termination, the Purchaser will make payment to Contractor of all monies\ndue and owing as set forth in Sub-Article 14(D) below.\n\nB.  After receipt of such Notice of Termination, and except as otherwise\ndirected by the Purchaser, the Contractor shall:\n\n1.  Stop Work under this Contract on the date and to the extent specified in the\nNotice of Termination;\n\n2.  Place no further orders or contracts for materials, services or facilities\nexcept as may be necessary for completion of such portion of Work under this\nContract as is not terminated;\n\n3.  Use reasonable efforts to terminate all orders and contracts to the extent\nthat they relate to the performance of Work terminated by the Notice of\nTermination;\n\n4.  Assign to the Purchaser, in the manner, at the time, and to the extent\ndirected by the Purchaser, all of the Contractor's rights, title and interest\nunder the orders and contracts so terminated;\n\n5.  Use reasonable efforts to settle all outstanding liabilities and all claims\narising out of such termination of orders and contracts, with the Purchaser's\napproval or ratification to the extent required;\n\n6.  Transfer title and deliver to the Purchaser in the manner, at the time and\nto the extent (if any) directed for the fabricated or unfabricated parts, work\nin process, completed work, supplies and other material produced as a part of,\nor acquired in connection with, the performance of the Work terminated by the\nNotice of Termination;\n\n7.  Use reasonable efforts to sell, in the manner, at the time, to the extent\nand at the price or prices directed or authorized by the Purchaser, any property\nof the types referred to in Sub-Article 13(B)(6) above provided, however, that\n                                                       --------  -------      \nthe Contractor:\n\n(a)  shall not be required to extend credit to any buyer; and\n\n(b)  may acquire any such property under the conditions prescribed by and at a\n     price approved by the Purchaser;\n\nand provided further that the net proceeds of any such transfer or disposition\n    -------- -------                                                          \nshall be applied in reduction of any payments to be made by the Purchaser to the\nContractor under this Contract or, if no such payments are due, paid in such\nother manner as the Purchaser may direct;\n\n8.  Complete performance of such part of the Work which was not terminated by\nthe Notice of Termination; and\n\n \n                                                                              43\n\n9.  Take such action as may be necessary, or as the Purchaser may reasonably\ndirect, for the protection and preservation of the property related to this\nContract which is in the Contractor's possession and in which the Purchaser has\nacquired or may acquire an interest.\n\nC.  After such Notice of Termination, the Contractor shall submit to the\nPurchaser a written termination claim. Such claim shall be submitted promptly,\nbut, unless otherwise extended, in no event later than six months from the\neffective date of termination.\n\nD.  In the settlement of any such partial or total termination claim, the\nPurchaser shall pay to the Contractor the total of:\n\n1.  all amounts invoiced in accordance with the Contract plus, for Work or\nSupplies which have been done or provided but which have not been invoiced, an\namount calculated by reference to the prices set forth in the Provisioning\nSchedule and to the amount of such Work or Supplies done or provided;\n\n2.  the cost of settling and paying claims arising out of the termination of\nWork under the contracts in orders, as provided in Sub-Article 14(D)(4) below\nwhich are properly chargeable to the terminated portion of this Contract; and\n\n3.  the reasonable costs of settlement including accounting, legal, clerical and\nother expenses necessary for the preparation of settlement claims and supporting\ndata with respect to the terminated portion of this Contract and for termination\nand settlement of contracts thereunder, together with reasonable storage,\ntransportation and other costs incurred in connection with the protection and\ndisposition of property proper to this Contract.\n\nE.  In arriving at the amount due to the Contractor under this Article 14, all\nunliquidated payments made to the Contractor, any liability which the Contractor\nmay have to the Purchaser, and the agreed price for, or the proceeds of sale of\nany materials, supplies or other things acquired by the Contractor or sold,\npursuant to the provisions of this Article 14, and not otherwise recovered by or\ncredited to the Purchaser shall be deducted.\n\nF.  The Purchaser may, from time to time, under such terms and conditions as\nthey prescribe approve partial payments and payments on account against costs\nincurred by the Contractor in connection with the terminated portion of this\nContract. If such payments total in excess of the amount finally agreed or\ndetermined to be due under this Article 14, such excess shall be refunded, upon\ndemand, by the Contractor to the Purchaser.\n\nG.  For a period of one year after final settlement under this Contract, the\nContractor shall preserve and make available to the Purchaser at reasonable\ntimes at the Contractor's office, but without direct charge to the Purchaser,\nall supporting books, records and documents required to be kept relating to the\nterminated Work.\n\nARTICLE 15  SUSPENSION\n----------  ----------\n\n \n                                                                              44\n\nA.  The Purchaser may, at its convenience, order the Contractor to suspend all\nor part of the Work for such period of time as the Purchaser determines to be\nappropriate. If, as a result of such Suspension, the Contractor incurs\nadditional costs or losses in the discharge of its responsibilities under this\nContract, and where such suspension, losses or costs are not caused by the\nContractor's act or omission and could not have been reasonably prevented by the\nContractor, the Contractor shall be allowed an equitable adjustment to the\nContract Price or the Provisioning Schedule in Appendix 1 and an equitable\nextension in the time required for performance.\n\nB.  Upon the occurrence of:\n\n(i)   an Event of Default by the Purchaser;\n\n(ii)  any transfer prior to the Date of Final Acceptance of any portion of the\n      System except in accordance with Article 37; or\n\n(iii) any supplement executed by a Transferee shall not be in full force and\neffect;\n\nthe Contractor, in addition to any other rights provided in Article 13, may\nsuspend performance of its obligations and all Work and (in the case of clause\n(i)) Upgrade Work.\n\nC.  Every thirty (30) days, or such shorter period as the Parties shall mutually\nagree, during the period of Suspension, the Parties shall meet formally and\nreview the circumstances surrounding the Suspension including without\nlimitation, the anticipated date of re-commencing Work.\n\nD.  Thereafter, if the Suspension continues for a total of one hundred and\neighty (180) days, the Contractor may terminate the Contract by notice to the\nPurchaser and the Contract shall be deemed to have been terminated by Purchaser,\neffective on the date of Contractor's notice, in accordance with Sub-Article\n13(A) and the remaining provisions of Article 13 shall apply.\n\nARTICLE 16  TITLE AND RISK OF LOSS\n----------  ----------------------\n\nA.  Except as provided in Article 18 (Intellectual Property), Article 20\n(Safeguarding of Information and Technology) and Article 21 (Export Control),\ntitle to all Supplies provided by the Contractor hereunder for incorporation in\nor attachment to a DLS shall pass to and vest in the Purchaser in accordance\nwith Article 9 (Acceptance). Risk of loss or damage to all Supplies provided by\nthe Contractor for incorporation in or attachment to such DLS shall pass to and\nvest in the Purchaser in accordance with Article 9. Upon termination of this\nContract pursuant to Article 13 (Termination for Default) or 14 (Termination for\nConvenience), the Purchaser may require, upon full payment of all amounts due\nthereunder (provided that, without limiting Purchaser's obligation to make any\n            --------                                                          \nsuch payment, if this Contract is terminated by Purchaser because of a\nBankruptcy Event full payment shall not be required prior to the transfer of\ntitle), that title to the equipment, materials and supplies, which has not\npreviously passed to the Purchaser, pass to the Purchaser, free and clear of all\nliens, claims, charges and other encumbrances other than those deriving through\nPurchaser.\n\n \n                                                                              45\n\nB.  Upon the passage of title in accordance with the terms of Article 13 (except\na transfer described in the proviso of the last sentence of Sub-Article 16(A)),\nthe Contractor warrants that all parts, materials, and equipment to which title\nhas passed will be free and clear of all liens, claims, charges and other\nencumbrances other than those deriving through the Purchaser.\n\nARTICLE 17  FORCE MAJEURE\n----------  -------------\n\nA.  The Contractor shall not be responsible for any loss, damage, delay or\nfailure of performance resulting directly or indirectly from any cause which is\nbeyond its reasonable control (\"Force Majeure\"), including but not limited to:\ndelay in obtaining or failure to obtain any Permits (subject to the provisions\nof Sub-Article 7(D)); acts of God or of the public enemy; acts or failure to act\nof any governmental authority; war or warlike operations, civil war or\ncommotion, mobilizations or military call-up, and acts of similar nature;\nrevolution, rebellions, sabotage, and insurrections or riots; fires, floods,\nepidemics, quarantine restrictions; strikes, and other labor actions; freight\nembargoes; unworkable weather; trawler or anchor damage; damage caused by other\nmarine activity such as fishing, marine research and marine development; acts or\nomissions of transporters; or the acts or failure to act of any of the\nPurchaser, of its representatives or agents, provided that (i) a loss by\n                                             --------                   \nContractor of employees (other than by reasons of Force Majeure), (ii) strikes\nand other labor actions involving the Contractor's own work force, (iii) the\nfirst 5 days of unworkable weather (unless any such day occurs during the 30\ndays immediately preceding the then Scheduled System RFS Date), (iv) the failure\n(other than by reason of force majeure) of any subcontractor, supplier or\ntransporter to perform its obligations to Contractor (including on account of\ninsolvency) unless such supplies or transportation or other services are\ngenerally unavailable in the marketplace, (v) the unavailability of any raw\nmaterials or components, unless such raw materials or components are generally\nunavailable in the marketplace or are unavailable by reason of force majeure or\n(vi) any increase in Contractor's costs, shall not in and of itself constitute\nForce Majeure.\n\nB.  If any such Force Majeure causes an increase in the time required for\nperformance of any of its duties or obligations, the Contractor shall be\nentitled to an equitable extension of time for completion of the Work or the\nUpgrade Work, as the case may be.\n\nC.  Increase in cost due to Purchaser will be as provided for in Article 12,\nPurchaser's Obligations.\n\nD.  The Contractor shall inform the Purchaser promptly with written\nnotification, and in all cases within fourteen (14) days of discovery and\nknowledge, of any occurrence covered under this Article and shall use its\nreasonable efforts to minimize such additional delays. The Contractor shall\npromptly provide an estimate of the anticipated time required to complete the\nWork or the Upgrade Work.  Contractor shall be entitled to an extension of time\nequal to at least one day for each day of delay resulting from the Force Majeure\ncondition.\n\nE.  Within thirty (30) days of receipt of such a notice from Contractor, the\nPurchaser and the Independent Engineer may provide a written response. The\nabsence of a response shall be deemed as acceptance of Contractor's notice and\nrequest for additional time.\n\n \n                                                                              46\n\nF.  If a Force Majeure continues for a total of two hundred (200) days, either\nParty may terminate the Contract by notice to the other and the Contract shall\nbe deemed to have been terminated by Purchaser, effective on the date of the\nterminating Party's notice, in accordance with Sub-Article 14(A) and the\nremaining provisions of Article 14 shall apply to such termination.\n\nARTICLE 18  INTELLECTUAL PROPERTY\n----------  ---------------------\n\nA.  Ownership\n\nAll right, title, and interest in and to all Intellectual Property (excluding\nProject Patent Rights) created or developed by Contractor in the course of its\nperformance under this Contract that is (a) specifically and exclusively\napplicable to the System or a System Upgrade; and (b) either (i) embodied in\nDeliverable Technical Material (as that term is defined in Sub-Article 18(B)\nbelow) or (ii) embodied in the System or a System Upgrade (the \"Project\nIntellectual Property\"), is and shall remain the sole property of Purchaser.\nAll right, title and interest in and to all Intellectual Property created or\ndeveloped by Contractor before commencing its performance under this Contract,\nor created or developed by Contractor exclusively in connection with activities\nother than its performance under this Contract, or created or developed by\nContractor in the course of its performance under this Contract that is not\nProject Intellectual Property, and all Project Patent Rights (collectively, the\n\"Contractor Intellectual Property\"), is and shall remain the sole property of\nContractor.  Unless otherwise expressed in this Contract, no license is implied\nor granted herein to Purchaser to any Contractor Intellectual Property by virtue\nof this Contract, nor by the transmittal or disclosure of any such Contractor\nIntellectual Property to Purchaser.  Any Contractor Intellectual Property\ndisclosed, furnished, or conveyed to Purchaser that is marked as \"Proprietary\"\nor \"Confidential\" (or if transmitted orally is identified as being proprietary\nor confidential in a subsequent writing) shall be treated in accordance with the\nprovisions of Article 20 (Safeguarding of Information and Technology).  As used\nherein, \"Intellectual Property\" means any information, computer or other\napparatus programs, software, specifications, drawings, designs, sketches,\ntools, market research or operating data, prototypes, records, documentation,\nworks of authorship or other creative works, ideas, concepts, methods,\ninventions, discoveries, improvements, or other business, financial and\/or\ntechnical information (whether or not protectable or registrable under any\napplicable intellectual property law).  As used herein, \"Project Patent Rights\"\nmeans all inventions, discoveries, methods and improvements of a patentable\nnature created or developed by Contractor in the course of its performance under\nthis Contract.  Project Intellectual Property will include the materials to be\nlisted in a Schedule to be created mutually by the Parties within thirty (30)\ndays of execution of this Contract, as it may be amended from time to time by\nmutual agreement of the Parties.\n\nB.  Licenses\n\nContractor shall furnish to Purchaser, upon the transfer of title to any portion\nof the System or a System Upgrade pursuant to Article 9, copies of all technical\ninformation, specifications, drawings, designs, sketches, tools, operating data,\nrecords, documentation and\/or other types of engineering or technical data or\ninformation reasonably relating to the operation, maintenance or \n\n \n                                                                              47\n\nrepair of each component of such portion of the System or System Upgrade as\ndelivered by Contractor (the \"Deliverable Technical Material\"). Contractor\ngrants to Purchaser a perpetual, royalty-free, non-transferable (except under\nthe circumstances specified in Sub-Article 18(F) below) license to use and\nreproduce those Deliverable Technical Materials owned, controlled, or developed\nby Contractor and all Contractor Intellectual Property included in or necessary\nto use all the Deliverable Technical Materials for purposes of fulfilling\nPurchaser's obligations under this Contract and using and operating the System\n(as upgraded by any System Upgrades) supplied by Contractor with the right to\nemploy third parties (under appropriate written obligations respecting\nconfidentiality) to assist Purchaser in fulfilling its obligations under this\nContract and in using and operating the System (as upgraded by any System\nUpgrades), but with no right to sublicense. Contractor grants to Purchaser a\nperpetual, royalty-free, non-transferable (except under the circumstances\nspecified in Sub-Article 18(F) below) license to use and reproduce those\nportions of Deliverable Technical Materials owned or controlled by third parties\n(but only to the extent of any rights which may have been granted to Contractor\nby such third parties) for the purpose of fulfilling Purchaser's obligations\nunder this Contract and using and operating the System supplied by Contractor\nwith the right to employ third parties (under appropriate written obligations\nrespecting confidentiality) to assist Purchaser in fulfilling its obligations\nunder this Contract and in using and operating the System (as upgraded by any\nSystem Upgrades), but with no right to sublicense. Except as set forth in this\nprovision, no license under Contractor's patents, copyrights, trade or service\nmarks, trade secrets or other intellectual property rights protectable under law\nin the United States or any foreign country is granted to Purchaser. It is\nexpressly understood that it shall not be a violation of this license for\nPurchaser, on its own behalf or through third parties (under appropriate written\nobligations respecting confidentiality) specifically employed for the purpose,\nto use and reproduce Deliverable Technical Material that is not Project\nIntellectual Property to modify the System (as upgraded by any System Upgrades)\nor connect the System (as upgraded by any System Upgrades) to other systems,\nprovided that Purchaser may not use the Deliverable Technical Materials that is\nnot Project Intellectual Property in achieving such modification or\ninterconnection for any purpose other than determining the technical\nconfiguration, systems interface and\/or interoperability requirements of the\nSystem (as upgraded by any System Upgrades) as delivered by Contractor (subject\nto the rights of third parties therein and thereto), and subject to the\nlimitations on Contractor's obligations as set forth in Articles 10(D) and 19(A)\nconcerning any such modification or interconnection.\n\nC.  Deliverable Software\n\nContractor shall furnish to the Purchaser, upon transfer of title to any portion\nof the System or System Upgrade pursuant to Article 9, copies of all computer or\nother apparatus programs and software, in executable form, and related\ndocumentation relating to the operation, maintenance, or repair of the computer\nsystems of such portion of the System or System Upgrade, as the case may be, as\ndelivered by Contractor (the \"Deliverable Software\").  In the case of Contractor\nIntellectual Property, such copies of programs and software shall consist solely\nof executable code provided in offline media (e.g., tapes, or diskettes) for\nrestoration purposes, sufficient to operate, maintain or repair the computer\nsystems of such portion of the System or System Upgrade, as the case may be, as\ndelivered by Contractor, and in the case of Project Intellectual Property, such\nprograms and software shall be delivered in both source and object code forms.\n\n \n                                                                              48\n\nContractor shall furnish to Purchaser, from time to time during the Warranty\nPeriod or any Upgrade Warranty Period, copies of all computer or other apparatus\nprograms and software, in executable form (and in the case of Project\nIntellectual Property, in source code form), and related documentation that\nContractor may develop to correct errors or to maintain Deliverable Software\npreviously furnished to Purchaser, which shall also be treated as Deliverable\nSoftware for purposes of this Contract upon delivery thereof to Purchaser.\nContractor grants to Purchaser a perpetual, royalty-free, non-transferable\n(except under the circumstances specified in Sub-Article 18(F) below) license to\nuse and reproduce the Deliverable Software Materials owned, controlled, or\ndeveloped by Contractor for the purpose of fulfilling Purchaser's obligations\nunder this Contract and using and operating the System (as upgraded by any\nSystem Upgrades) supplied by Contractor with the right to employ third parties\n(under appropriate written obligations respecting confidentiality) to assist\nPurchaser in fulfilling its obligations under this Contract and in using and\noperating the System (as upgraded by any System Upgrades), but with no right to\nsublicense. Contractor grants to Purchaser a perpetual, royalty-free, non-\ntransferable (except under the circumstances specified in Sub-Article 18(F)\nbelow) license to use and reproduce those portions of Deliverable Software owned\nor controlled by third parties (but only to the extent of any rights which may\nhave been granted to Contractor by such third parties) for the purpose of\nfulfilling Purchaser's obligations under this Contract and using and operating\nthe System (as upgraded by any System Upgrades) supplied by Contractor with the\nright to employ third parties (under appropriate written obligations respecting\nconfidentiality) to assist Purchaser in fulfilling its obligations under this\nContract and in using and operating the System (as upgraded by any System\nUpgrades), but with no right to sublicense. These licenses shall be limited to\nthe right to use Deliverable Software that is not Project Intellectual Property\nonly with the particular type of computer equipment or substantially similar\nreplacement equipment for which such Deliverable Software was provided in the\nSystem (as upgraded by any System Upgrades) as supplied by Contractor.\n\n1.  Confidentiality\n\nPurchaser shall keep the Deliverable Software that is not Project Intellectual\nProperty confidential in accordance with Article 20 (Safeguarding of Information\nand Technology) and Article 21 (Export Control) to the extent that such\nDeliverable Software is designated as Confidential Information by its owner and\nagrees to use its best efforts to see that its employees, consultants, and\nagents, and other users of such software, comply with the provisions of this\nContract. Purchaser also agrees to refrain from taking any steps, such as\nreverse assembly or decompilation, to derive a source code equivalent of any\nobject code that is furnished by Contractor, provided that Contractor continues\nto maintain the Deliverable Software that is not Project Intellectual Property\nin accordance with the terms of a support and maintenance agreement to be\nentered into on such terms to be agreed upon by the Parties, which terms shall\nin all events contain assurances of support and maintenance at least as\nfavorable to Purchaser as those contained in the Operating, Administration and\nMaintenance Agreement concerning AC-1 or is willing and able to enter into an\nagreement to maintain the Deliverable Software upon terms reasonably comparable\nto the pertinent terms of the initial agreement to be entered into by the\nParties with regard to support and maintenance after the expiration or\ntermination thereof or does not go insolvent or bankrupt to thereby *. In the\ncase of insolvency or bankruptcy of Contractor, Purchaser shall limit any\nderivation of a source code equivalent to that portion of the Deliverable\nSoftware that is\n\n\n*  Material omitted and separately filed with the Commission under an \n   application for confidential treatment.\n\n\n \n                                                                              49\n\nContractor Intellectual Property. Purchaser shall not under any circumstances\ntake any steps to derive a source code equivalent from that portion of the\nDeliverable Software comprising commercial, off-the-shelf software developed or\nprovided by third parties.\n\n2.  Backup Copies\n\nPurchaser may make and retain two archive copies in executable form of the\nDeliverable Software that is not Project Intellectual Property. Any copy will\ncontain the same copyright notice and proprietary markings as are on the\noriginal software and shall be subject to the same restrictions as the\noriginals.\n\n3.  Termination of Software Licenses\n\nIn the event of (i) use by the Purchaser of Deliverable Software that is not\nProject Intellectual Property in a manner other than that permitted in Sub-\nArticle 18(C) or (ii) any other material breach of this Article 18 by Purchaser\nthat in either event is not cured within sixty (60) days from receipt by\nPurchaser of written notice of such impermissible use or breach, Contractor, at\nits option, may terminate the rights granted to Purchaser pursuant to this\nArticle, upon written notice to Purchaser, which termination shall take effect\nno sooner than sixty (60) days following receipt by Purchaser of a subsequent\nwritten notice of termination. Upon termination, Purchaser shall either return\nor destroy, at Contractor's option, all copies of Deliverable Software that is\nnot Project Intellectual Property furnished under this Contract.\n\n4.  Indemnification\n\nIn the event of (i) use by Purchaser of Deliverable Software that is not Project\nIntellectual Property furnished hereunder other than that permitted in Sub-\nArticle 18(C) or (ii) any other material breach of this Article 18 by Purchaser,\nthe Purchaser shall indemnify and hold Contractor harmless from any and all\nthird party claims resulting therefrom whether arising from a defect in the\nsoftware or otherwise.\n\nD.  Trademarks, Tradenames, etc.\n\nNo rights are granted herein to either Party to use any identification (such as,\nbut not limited to tradenames, trademarks, service marks or symbols, and\nabbreviations, contractions, or simulations thereof) owned or used by the other\nParty or its parent company or its affiliates to identify itself or its\naffiliates or any of its products or services. Each Party agrees that it will\nnot, without the prior written permission of the other Party, use such\nidentification in advertising, publicity, packaging, labeling, or in any other\nmanner to identify itself or any of its products, services, or organizations, or\nrepresent directly or indirectly that any product, service, or organization of\nit is a product, service, or organization of the other Party or its affiliates,\nor that any product or service of a Party is made in accordance with or utilizes\nany intellectual property of the other Party or its affiliates.\n\nE.  DISCLAIMER, LIMITATION OF LIABILITY\n\nCONTRACTOR REPRESENTS THAT ANY INFORMATION OR INTELLECTUAL PROPERTY FURNISHED IN\nCONNECTION WITH THIS CONTRACT SHALL BE TRUE AND ACCURATE TO THE BEST OF ITS\nKNOWLEDGE AND BELIEF, BUT \n\n \n                                                                              50\n\nCONTRACTOR SHALL NOT BE HELD TO ANY LIABILITY FOR UNINTENTIONAL ERRORS OR\nOMISSIONS THEREIN. EXCEPT AS EXPRESSLY PROVIDED, CONTRACTOR MAKES NO\nREPRESENTATIONS OR WARRANTIES, EXPRESSLY OR IMPLIEDLY. BY WAY OF EXAMPLE, BUT\nNOT OF LIMITATION, CONTRACTOR AND ITS PARENT COMPANY AND AFFILIATES MAKES NO\nREPRESENTATIONS OR WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR\nPURPOSE, OR THAT THE USE OF INFORMATION OR INTELLECTUAL PROPERTY DISCLOSED OR\nPROVIDED HEREUNDER WILL NOT INFRINGE ANY PATENT OR OTHER INTELLECTUAL PROPERTY\nRIGHT OF A THIRD PARTY. EXCEPT AS OTHERWISE PROVIDED IN THIS CONTRACT,\nCONTRACTOR AND ITS PARENT AND AFFILIATES SHALL NOT BE HELD TO ANY LIABILITY WITH\nRESPECT TO ANY CLAIM BY PURCHASER OR ANY THIRD PARTY CLAIM AGAINST PURCHASER ON\nACCOUNT OF, OR ARISING FROM, PURCHASER'S USE OF INFORMATION OR INTELLECTUAL\nPROPERTY DISCLOSED OR PROVIDED BY CONTRACTOR.\n\nF.  Transferability\n\nThe licenses granted to Purchaser by Contractor in the Deliverable Technical\nMaterials and Deliverable Software are personal and non-transferable, except\nthat Purchaser may assign or transfer such licenses to an affiliated entity\nunder common control with the Purchaser or to any entity succeeding to\nPurchaser's entire interest in the System (as upgraded by any System Upgrades)\nas a result of reorganization or restructuring of the Purchaser or in the event\nof a change of control of the Purchaser.\n\nG.  *\n\n\n\n\n\n*  Material omitted and separately filed with the Commission under an \n   application for confidential treatment.\n\n \n                                                                              51\n\nARTICLE 19  INFRINGEMENT\n----------  ------------\n\nA.  The Contractor agrees to defend or settle at its own expense all suits for\ninfringement of any patent, copyright, trademark or other form of intellectual\nproperty right in any country of the world, for the use and operation of the\nSystem (as upgraded by any System Upgrades) as supplied by Contractor and for\nany component part thereof or material or equipment used therein (or the\nmanufacture of any material or the normal use thereof) provided by the\nContractor or on its behalf pursuant to this Contract and will hold the\nPurchaser harmless from all expense of defending any such suit and all payments\nfor final judgment assessed on account of such infringement, except such\ninfringement or claim arising from:\n\n1.  The Contractor's adherence to the Purchaser's directions in the design and\nconfiguration of the System (as upgraded by any System Upgrades) or to use\nmaterials, parts or equipment of the Purchaser's selection; or\n\n2.  Such material, parts or equipment furnished to the Contractor by the\nPurchaser, other than in each case, items of the Contractor's design or\nselection or the same as any of the Contractor's commercial merchandise or in\nprocesses or machines of the Contractor's design or selection used in the\nmanufacture of such standard products or parts; or\n\n3.  Use of the System (as upgraded by any System Upgrades) or the materials,\nparts or equipment furnished by Contractor other than for the purposes indicated\nin, or reasonably to be inferred from, this Contract or in conjunction with\nother products; or\n\n4.  Modification of the System (as upgraded by any System Upgrades) or the\nmaterials, parts or equipment furnished by the Contractor, or connection of the\nSystem to another system by any person or entity other than Contractor, without\nprior expressed written approval by Contractor.\n\nB.  The Purchaser will, at its own expense, defend all suits against the\nContractor for such excepted infringement and hold the Contractor harmless from\nall expense of defending any such suit and from all payments by final judgment\nassessed against the Contractor on account of such excepted infringement.\n\nC.  The Contractor and the Purchaser agree to give each other prompt written\nnotice of claims and suits for infringement, full opportunity and authority to\nassume the sole defense, including appeals and, upon request and at its own\nexpense, the other agrees to furnish all information and assistance available to\nit for such defense.\n\n \n                                                                              52\n\nD.  If all or any portion of the System (as upgraded by any System Upgrades) or\nany material, part or equipment provided by the Contractor or on its behalf is\nheld to constitute an infringement (excluding such excepted infringements\nspecified in Sub-Article 19(A)) and is subject to an injunction restraining its\nuse or any order providing for its delivery up to or destruction, or if in\nrespect of any such claim of infringement the Contractor deems it advisable to\ndo so, the Contractor shall at its own expense either:\n\n1.  Procure for the Purchaser the right to retain and continue to use the\nSystem, the affected portion thereof, or any such material, part or equipment\nwithout interruption for the Purchaser;\n\n2.  Replace or modify the System, the affected portion thereof, or any material,\npart or equipment so that it becomes noninfringing while continuing to meet the\nPerformance Requirements or\n\n3.  If the remedies specified in Sub-Articles 19(D)(1) an 19(D)(2) are not\nfeasible, refund to the Purchaser the full purchase price paid for the System,\nthe affected portion thereof, or any material, part or equipment found to be\ninfringing.\n\nE.  In no event shall the Purchaser make any admission or settle any claim in\nrelation with any claim for infringement without Contractor's consent.\n\nARTICLE 20  SAFEGUARDING OF INFORMATION AND TECHNOLOGY\n----------  ------------------------------------------\n\nA.  In performance of this Contract, it may be mutually advantageous to the\nParties hereto to share certain specifications, designs, plans, drawings,\nsoftware, market research or operating data, prototypes, or other business,\nfinancial, and or\/technical information related to products, services, or\nsystems which are proprietary to the disclosing Party or its affiliates (and in\nthe case of Contractor, Contractor's parent company) (together with this\nContract and related documents, \"Information\"). The Parties recognize and agree\nthat Information includes information that was supplied in contemplation hereof\nprior to execution of this Contract, and further agree that Information includes\ninformation in both tangible and intangible form.\n\nB.  Unless such Information was previously known to the Party receiving such\nInformation free of any obligation to keep it confidential, or such Information\nhas been or is subsequently made public through other than unauthorized\ndisclosure by the receiving Party or is independently developed by the receiving\nParty (as documented by the records of the receiving Party), it shall be kept\nconfidential by the Party receiving such Information, shall be used only in the\nperformance of this Contract, and may not be used for any other purposes except\nupon such terms as may be agreed upon in writing by the Party owning such\nInformation. The receiving Party may disclose such Information to other persons,\nupon the furnishing Party's prior written authorization, but solely to perform\nacts which this Article expressly authorizes the receiving Party to perform\nitself and further provided such other person agrees in writing (a copy of which\nwriting will be provided to the furnishing Party at its request) to the same\nconditions respecting disclosure and use of Information contained in this\nArticle and to any other reasonable conditions requested by the furnishing\nParty. Nothing herein shall prevent a Party from disclosing \n\n \n                                                                              53\n\nInformation (a) upon the order of any court or administrative agency, (b) upon\nthe request or demand of, or pursuant to any regulation of, any regulatory\nagency or authority, (c) to the extent reasonably required in connection with\nthe exercise of any remedy hereunder and (d) to a Party's legal counsel or\nindependent auditors.\n\nC.  The Purchaser may disclose Information to its lenders and their\nrepresentatives in connection with obtaining financing for the System, provided\nthat each such lender or third party enters into a confidentiality agreement\ncontaining terms and conditions similar to those in this Contract. Any such\ndisclosure of Information shall be subject to the restrictions in Sub-Article\n20(B).\n\nARTICLE 21  EXPORT CONTROL\n----------  --------------\n\nThe Parties acknowledge that any products, software, and technical information\n(including, but not limited to, services and training) provided by either Party\nunder this Contract are or may be subject to export laws and regulations of the\nUnited States and destination countries and any use or transfer of such\nproducts, software and technical information must be authorized under those\nLaws. The Parties agree that they will not use, distribute, transfer or transmit\nthe products, software or technical information (even if incorporated into other\nproducts) except in compliance with export Laws. If requested by either Party,\nthe other Party agrees to sign all necessary export-related documents as may be\nrequired to comply with export Laws.\n\nARTICLE 22  LIQUIDATED DAMAGES\n----------  ------------------\n\nA.  If the System is not Ready for Commercial Acceptance or Provisional\nAcceptance by the Scheduled System RFS Date, as it may have been extended under:\n\n1.  Article 6 (Contract Variations);\n\n2.  Article 17 (Force Majeure); or\n\n3.  Other arrangements as agreed between the Purchaser and the Contractor;\nthen Contractor shall pay to Purchaser for each day of delay, for up to 200\ndays, by way of pre-estimated and liquidated damages for the delay and not as a\npenalty, an amount equal to * of the Contract Price (less Taxes) for the\nSystem; provided, that, if Purchaser, in its sole discretion, elects to accept a\nDLS prior to acceptance of the System, the Contract Price (less Taxes), for\npurposes of this Sub-Article 22(A), shall be reduced by that portion of the\nContract Price (less Taxes) allocable (which allocation shall be determined in\ngood faith by mutual agreement of the Parties) to such DLS.\n\n\nB.  If a System Upgrade is not Ready for Commercial Acceptance or Provisional\nAcceptance by the Scheduled Upgrade Date, as it may have been extended under:\n\n1.  Article 6 (Contract Variations);\n\n\n\n\n\n*  Material omitted and separately filed with the Commission under an \n   application for confidential treatment.\n\n \n                                                                              54\n\n2.  Article 17 (Force Majeure); or\n\n3.  Other arrangements as agreed between the Purchaser and the Contractor;\n\nthen Contractor shall pay to Purchaser for each day of delay, for up to 90 days,\nby way of pre-estimated and liquidated damages for the delay and not as a\npenalty, an amount equal to * of the Initial Upgrade Price for such System\nUpgrade.\n\nARTICLE 23  LIMITATION OF LIABILITY\/INDEMNIFICATION\n----------  ---------------------------------------\n\nA.  NOTWITHSTANDING ANY OTHER PROVISION IN THIS CONTRACT, AND IRRESPECTIVE OF\nANY FAULT, NEGLIGENCE OR GROSS NEGLIGENCE OF ANY KIND, IN NO EVENT SHALL EITHER\nPARTY OR ANY OF ITS DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS BE LIABLE FOR ANY\nCONSEQUENTIAL, INCIDENTAL, INDIRECT, RELIANCE OR SPECIAL (INCLUDING PUNITIVE)\nDAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF REVENUE, LOSS OF BUSINESS\nOPPORTUNITY OR THE COSTS ASSOCIATED WITH THE USE OF RESTORATION FACILITIES\nRESULTING FROM ITS FAILURE TO PERFORM PURSUANT TO THE TERMS AND CONDITIONS OF\nTHIS CONTRACT.\n\nB.  EXCEPT AS SET FORTH BELOW IN THE LAST TWO SENTENCES OF THIS SUB-ARTICLE\n23(B), THE CONTRACTOR'S MAXIMUM AGGREGATE LIABILITY, WHETHER IN TORT, CONTRACT\nOR OTHERWISE, EXCEPT FOR CLAIMS RELATING TO SYSTEM UPGRADES, SHALL NOT EXCEED *\nOF THE CONTRACT PRICE. THE CONTRACTOR'S MAXIMUM AGGREGATE LIABILITY FOR CLAIMS\nRELATING TO SYSTEM UPGRADES (IF CONTRACTOR CAN PROVE THAT THE SYSTEM WAS\nDESIGNED WITH SUFFICIENT TRANSMISSION MARGIN AND THUS SUCH CLAIMS DO NOT ARISE\nUNDER CLAUSE (ii) OF SUB-ARTICLE 10(B)) SHALL NOT EXCEED * OF THE APPLICABLE\nUPGRADE PRICE. THE FOREGOING LIMITATION SHALL NOT APPLY TO CLAIMS UNDER SUB-\nARTICLES 19(A) AND 23(C). IF CONTRACTOR CANNOT PROVE THAT THE SYSTEM WAS\nDESIGNED WITH SUFFICIENT TRANSMISSION MARGIN FOR A SYSTEM UPGRADE, THE\nCONTRACTOR'S MAXIMUM AGGREGATE LIABILITY FOR CLAIMS ARISING UNDER CLAUSE (ii) OF\nSUB-ARTICLE 10(B) SHALL NOT EXCEED *.\n\nC.  Contractor, at its expense, shall defend, indemnify and hold harmless\nPurchaser, its agents, subcontractors and employees against any and all claims,\ndemands, and judgments for losses due to any act or omission, arising out of, or\nin connection with this Contract or, prior to risk of loss passing to Purchaser,\nthe operation and maintenance of the System, to the extent such losses were\ncaused by the negligence or willful misconduct of the Contractor, its\nsubcontractors, employees or agents. The defense, indemnification and save\nharmless obligation is specifically conditioned on the following: (i) Purchaser\nproviding prompt notification in writing of any such claim or demand when it\nobtains Actual Knowledge thereof, unless such failure shall not have materially\nimpaired Contractor's ability to defend against such claim; (ii) Contractor\nhaving \n\n\n\n\n\n*  Material omitted and separately filed with the Commission under an \n   application for confidential treatment.\n\n \n                                                                              55\n\ncontrol of the defense of any such action, claim or demand and of all\nnegotiations for its settlement or compromise; and (iii) Purchaser cooperating,\nat Contractor's expense, in a reasonable way to facilitate the defense of such\nclaim or demand or the negotiations for its settlement.\n\nD.  Purchaser, at its expense, shall defend, indemnify and hold harmless\nContractor, its agents, subcontractors and employees against any and all claims,\ndemands, and judgments for losses due to any act or omission, arising out of, or\nin connection with this Contract or, after risk of loss passes to Purchaser, the\noperation or maintenance of the System, to the extent such losses were caused by\nthe negligence or willful misconduct of the Purchaser, its subcontractors,\nemployees or agents (other than Contractor). The defense, indemnification and\nsave harmless obligation is specifically conditioned on the following (i)\nContractor providing prompt notification in writing of any such claim or demand\nwhen it obtains Actual Knowledge thereof, unless such failure shall not have\nmaterially impaired Purchaser's ability to defend against such claim; (ii)\nPurchaser having control of the defense of any such action, claim or demand and\nof all negotiations for its settlement or compromise; and (iii) Contractor\ncooperating, at Purchaser's expense, in a reasonable way to facilitate the\ndefense of such claim or demand or the negotiations for its settlement.\n\nARTICLE 24  COUNTERPARTS\n----------  ------------\n\nThis Contract may be signed in any number of counterparts, each of which shall\nbe an original, with the same effect as if the signatures thereto and hereto\nwere upon the same instrument.\n\nARTICLE 25  DESIGN AND PERFORMANCE RESPONSIBILITY\n----------  -------------------------------------\n\nA.  The Contractor shall be solely responsible for the design of and for all\ndetails of the System and the System Upgrades and for the adequacy thereof.\n\nB.  The Contractor's responsibility for design of the System and the System\nUpgrades shall not in any way be diminished nor shall the Contractor's design\napproach be restricted or limited by the Purchaser's acceptance of the\nContractor's guidance or recommendations as to engineering standards and design\nspecifications, or by the Purchaser's suggestions or recommendations on any\naspect of the design.\n\nC.  Purchaser shall use reasonable efforts in assisting the Contractor to obtain\nin a timely manner accurate information required for the Contractor to perform\nthe Work and the Upgrade Work, which Contractor cannot expeditiously and cost-\neffectively obtain from any source other than the Purchaser.\n\nARTICLE 26  PRODUCT CHANGES\n----------  ---------------\n\nThe Contractor may at any time make changes to the System or System Upgrades\nfurnished pursuant to this Contract, or modify the drawings and published\nspecifications relating thereto, or substitute equipment of later design,\nprovided the changes, modifications, or substitutions under \n\n \n                                                                              56\n\nnormal and proper use do not impact upon the form, fit, expected life or\nfunction of the System as provided in the System Performance Requirements.\n\nARTICLE 27  RISK AND INSURANCE\n----------  ------------------\n\nA.  The Contractor shall at all times maintain, after the date which is 30 days\nfrom the date hereof, and upon request, the Contractor shall furnish the\nPurchaser with certificates, or other reasonable evidence, that Contractor\nmaintains, the following insurance or has adequate self-insurance (other than as\nrequired to comply with any statutory insurance requirements); provided, that\n                                                               --------      \nthe following insurance coverages may be combined or in different form so long\nas Contractor maintains insurance consistent with the following requirements:\n\n1.  Workmen's Compensation and Employers Liability Insurance (with a limit of\nnot less than * for any one incident or series of incidents arising from\none event or such higher limit as may be required by the laws of any\njurisdiction) covering the officers and employees of the Contractor for all\ncompensation or other benefits required of the Contractor by the laws of any\nnation or political sub-division thereof to which the Contractor and its\noperations under this Contract are subject in respect of injury of death of any\nsuch employee.\n\n2.  Comprehensive General Public Liability Insurance, covering personal injury\nand\/or property damage, with combined single limits of not less than * \nfor claims of injury or death of any persons or loss of or damage to property\nresulting from any one accident. This insurance to be extended to provide Marine\nComprehensive General Liability including liabilities arising out of the\noperation of subsea equipment.\n\n3.  Comprehensive Automobile Liability insurance covering all vehicles and\nautomotive equipment owned, hired, or in the custody and control of Contractor\nand complying with all applicable legislation with limits not less than *\ncombined single limit for the death or injury of any person per accident and not\nless than * for the loss or damage to property resulting from any one accident.\n\n4.  All Risk Insurance in respect of all property of Contractor, its respective\nofficers, agents and employees connected with the performance of the Work\nagainst all loss or damage from whatever cause.\n\n5.  Conventional Marine Hull and Machinery Insurance including War Risks or any\nvessel(s) owned, operated or chartered by the Contractor, in an amount equal to\nthe full value thereof. In the event of damage to or loss of such vessel(s), the\nContractor agrees to look to its insurance carrier for payment of such loss or\ndamage and hereby releases the Purchaser and waives any claims against the\nPurchaser for the loss of such vessel(s) unless due to the negligence of\nPurchaser, its agent or representatives (other than Contractor).\n\n6.  All vessels are to be entered in a Mutual Protection and Indemnity\nAssociation with a full and unlimited entry or to have Marine Protection and\nIndemnity Insurance with a limit of not less than * including coverage far\nillness, injury or death of crew members (unless\n\n\n\n\n*  Material omitted and separately filed with the Commission under an \n   application for confidential treatment.\n\n \n                                                                              57\n\ncovered under Workmen's Compensation Insurance), Contractual Liability Coverage,\nCollision and Tower's Liability, Removal of Wreck and Debris and Third Party\nLiability.\n\n7.  Excess Liability Coverage over that required in Sub-Articles 27(A)(1), (2)\nand (3) with minimum limits of * for any one accident or occurrence.\n\n8.  Specialist Operations Insurance with a limit of not less than * as per\nLondon Wording 1993 or equivalent.\n\n9.  Transit Insurance including inland, air, and Marine Cargo coverage including\nWar (other than on land) in an amount sufficient to cover the expected highest\nvalue of any one shipment. Coverage to include Institute Cargo Clauses, all\nrisks 1.1.63, Institute War Clauses, London Malicious Damage Clause, and\nInstitute Strikes Riots and Civil Commotion Clauses or their equivalent.\n\n10.  Marine Cargo or equivalent is required to protect, for full cost, against\nall risks of physical loss or damage to the plant, equipment and supplies to be\nincluded in the System  (other than War Risks) beginning with when each such\nitem is ready for shipping and ending when the submersible plant and equipment\nare placed overside the cable laying vessel and when the equipment and supplies\nare delivered to the cable stations, central offices, or network operation\ncenter.  The coverage continues to cover cable lying on the seabed.\n\n11.  Sea Bed or equivalent coverage (including an Old Mines and Torpedoes\nClause, including other derelict weapons of War) is required to protect, for\nfull cost, against all risks of physical loss or damage to the submersible plant\nand equipment described in Sub-Article 27(A)(10) above. See last paragraph.\n\n12.  War Risks or equivalent coverage is required to protect against damage to,\nseizure by and\/or destruction of the System by means of war, piracy, takings at\nsea and other warlike operations until discharge of the submersible plant and\nequipment. For the purposes of this Article \"discharge of the submersible plant\nand equipment\" shall be deemed to take place when the plant and equipment\nreaches the sea bottom, as far as the submersible plant and equipment is\nconcerned, and when the plant is off-loaded in the respective terminal country,\nas far as non-submersible plant is concerned.\n\n13.  Pollution Liability (EIL) insurance for installation operations and as\narising from the use of vessels in an amount not less than * or such higher sum\nas may be required to meet any legal requirement in area of operations.\n\nThe Comprehensive General Liability Insurance required pursuant to Sub-Article\n27(A)(2) above, shall include Contractual Liability Coverage which shall\nspecifically apply to the obligations assumed by the Contractor under the Terms\nand Conditions of this Contract.\n\nB.  1.  All the foregoing insurances shall be effected with a creditworthy\ninsurer and shall be endorsed to provide Purchaser with at least thirty (30)\ndays prior written notice of cancellation or material change.\n\n\n\n\n*  Material omitted and separately filed with the Commission under an \n   application for confidential treatment.\n\n \n                                                                              58\n\n2.  All the foregoing insurances shall name Purchaser as an additional insured\nas to operations hereunder, in which event the Contractor's insurance shall be\nprimary to any insurance carried by Purchaser.\n\n3.  The limits specified herein are minimum requirements and shall not be\nconstrued in any way as limits of liability or as constituting acceptance by\nPurchaser of such responsibility for financial liabilities in excess of such\nlimits. The Contractor shall bear all deductibles applicable to any insurance.\n\n4.  If it is judicially determined that the monetary limits of insurance\nrequired hereunder or of any indemnity voluntarily assumed under the Terms and\nConditions of this Contact which the Contractor agrees will be supported either\nby available liability insurance or voluntarily self-insured, in part or whole,\nexceeds the maximum limits permitted under applicable law, it is agreed that\nsaid insurance requirements or indemnity shall automatically be amended to\nconform to the maximum monetary limits permitted under such law.\n\n5.  Contractor shall take reasonable steps to provide that any sub-contractor\nengaged by it has in effect or will effect Employer's Liability, Workmen's\nCompensation, Hull and Machinery and Protection and Indemnity insurances and any\nother insurances required by law, together with such other insurances as the\nContractor may consider necessary.\n\n6.  If the Contractor fails to effect or keep in force any of the insurances\nrequired under this Contract, Purchaser may effect and keep in force any such\ninsurances and pay such premiums as may be necessary for that purpose and from\ntime to time deduct the amount so paid by Purchaser from any money due or which\nmay become due to the Contractor hereunder or recover the same as a debt due\nfrom the Contractor, provided that Purchaser is not in Default.\n\n7.  Each Party shall give the other prompt notification of any claim with\nrespect to any of the insurances to be provided hereunder, accompanied by full\ndetails giving rise to such claim. Each Party shall afford the other all such\nassistance as may be required for the preparation and negotiation of insurance\nclaims.\n\n8.  Contractor shall report to Purchaser as soon as practicable all accidents or\noccurrences resulting in injuries to Contractor's employees or third parties, or\ndamage to property of third parties, arising out of our during the course of\nservices for Purchaser by Contractor.\n\nC.  The Contractor may organize such levels of deductibles, excesses and self-\ninsurance as it considers appropriate and which are within prudent industry\nstandards.\n\nD.  The insurance requirements of this Article 27 will remain in place with\nrespect to each DLS, the System or System Upgrade, as the case may be, and will\nnot in any way be diminished or reduced until the transfer of title and risk of\nloss shall have passed to Purchaser of such DLS, System or System Upgrade, as\nthe case may be, even in the event of the sale of substantially all the assets\nof the Contractor by way of a merger, consolidation or sale of assets.\n\n \n                                                                              59\n\nARTICLE 28  PLANT AND WORK RULES\n----------  --------------------\n\nEmployees and agents of each Party shall, while on the premises of the other or\nits subcontractors, comply with all plant rules and governmental regulations.\n\nARTICLE 29  RIGHT OF ACCESS\n----------  ---------------\n\nA.  The Contractor shall, upon reasonable notice of not less than ten (10)\nworking days, during normal business hours and in a manner to avoid any\ndisruption of the work on the premises including performance of other contracts,\npermit access by the Purchaser or its Quality Assurance (QA) Representative\n(other than a competitor of the Contractor or any affiliate of a competitor) to\nthe Contractor's premises where the work will be performed, and will use its\nbest endeavors to secure rights of access to premises of its subcontractors\nwhere the work will be performed, having subcontracts or orders in the amount\nof, or equivalent to U.S. $125,000 or more, in accordance with the Contractor's\ncontractual arrangements with its subcontractors, and allow the Purchaser or its\nQA Representative to:\n\n1.  audit the Contractor's quality assurance system and its application to the\nWork and Upgrade Work, including manufacture, development and raw materials and\ncomponents provision;\n\n2.  inspect all parts of the Work and Upgrade Work to the extent reasonably\npracticable to ensure that their quality meets the Technical Specification.\n\nThis right of access shall allow for the Purchaser and\/or its QA representative\n(up to a total of three (3) persons). The Purchaser shall provide the name(s),\nnationality and title of each such visitor prior to the visit.  The Contractor\nshall not be responsible for any costs, including travel and accommodation\ncosts, of the Purchaser or its representatives.\n\nB.  The right of access shall also allow for the Purchaser and\/or\nrepresentatives (up to a total of three (3) persons) to be aboard the vessel(s)\nduring installation and the route survey, provided accommodations are available.\nThe Contractor shall not be responsible for any costs of the Purchaser or its\nrepresentatives, except for living expenses on board the vessel which includes\none (1) daily telex or fax, all other travel and accommodation costs for the\nPurchaser or its QA Representatives shall be for the account of the Purchaser.\n\nC.  Any right of access shall not be construed as creating any obligation\nrequiring the Contractor or its subcontractors to disclose trade secrets or\nproprietary information. Further, such right of access may be conditioned on the\nexecution of a confidentiality and non-disclosure agreement and\/or subject to\nroutine building or security rules, regulations or procedures.\n\nD.  Any exercise of any right of the Purchaser hereunder to inspect, audit,\nvisit or to serve any part of the Work or System Upgrades shall not be construed\nas limiting any obligation of Contractor hereunder, including without\nlimitation, under Articles 1 and 10 hereof.\n\n \n                                                                              60\n\nE.  Contractor will have access to the System as necessary to accomplish its\nresponsibilities under this Contract and in order to make repairs and to make\nSystem Upgrades. Contractor will provide reasonable notice of its need for\naccess and will take reasonable steps to minimize disruptions to the operation\nof the System.\n\nF.  Contractor shall give the Purchaser reasonable prior written notice of each\nmonthly project management review meeting with respect to the status of the\nconstruction and\/or installation of the System, and Purchaser's representatives\n(up to three such representatives) and the Independent Engineer shall at their\ncost be permitted to attend and participate in such meetings.\n\nARTICLE 30  QUALITY ASSURANCE\n----------  -----------------\n\nAll equipment, material and supplies provided under this Contract shall be\ninspected and tested by representatives designated by the Contractor to the\nextent reasonably practical to assure that the quality of the equipment,\nmaterials and supplies being incorporated is sufficient to realize the System\nPerformance Requirements. The inspection and test program established for such\nequipment, materials and supplies shall be consistent with commercial practices\nnormally employed by the Contractor in the construction of submarine cable\nsystems. The foregoing shall not be construed as limiting any of the\nContractor's obligations under this Contract.\n\nARTICLE 31  DOCUMENTATION\n----------  -------------\n\nThe Contractor shall furnish to the Purchaser five copies of the standard\ndocumentation in the English language for the System provided hereunder. Such\ndocumentation shall be provided prior to the Acceptance testing. Additional\ncopies of the documentation are available at additional cost.\n\nARTICLE 32  TRAINING\n----------  --------\n\nThe Contractor will provide, as part of the Initial Contract Price, until the\nDate of Final Acceptance, any and all training, as more particularly described\nin the training section of Appendix 6, necessary for the operation and\nmaintenance of the System.\n\nARTICLE 33  SETTLEMENT OF DISPUTES\/ARBITRATION\/LITIGATION\n----------  ---------------------------------------------\n\nA.  The Parties shall endeavor to settle amicably by mutual discussions any\ndisputes, differences, or claims whatsoever related to this Contract.\n\nB.  Failing such amicable settlement, any controversy, claim or dispute arising\nunder or relating to this Contract, including the existence, validity,\ninterpretation, performance, termination or breach thereof, shall, if both\nParties agree in writing thereto, finally be settled by arbitration in\naccordance with the International Arbitration Rules of the American Arbitration\nAssociation (\"AAA\"). Unless the Parties agree to a sole arbitrator, there shall\nbe three (3) arbitrators, with each Party appointing one arbitrator, who\ncollectively will select a third. The \n\n \n                                                                              61\n\nlanguage of the arbitration shall be English. The Arbitrator will not have\nauthority to award punitive damages to either Party. Each Party shall bear its\nown expenses, but the Parties shall share equally the fees and expenses of the\nArbitration Tribunal and the AAA. This Contract shall be enforceable, and any\narbitration award shall be final, and judgment thereon may be entered in any\ncourt of competent jurisdiction. In any such arbitration, the decision in any\nprior arbitration under this Contract shall not be deemed conclusive of the\nrights as among themselves of the Parties hereunder. The arbitration shall be\nheld in New York, New York, U.S.A.\n\nC.  1.If both Parties do not agree to arbitration pursuant to paragraph (B)\nabove, then either Party may institute suit in the Supreme Court of the State of\nNew York sitting in New York County or the United States District Court of the\nSouthern District of New York, or any appellate court from any thereof.\n\n2.Each Party hereby irrevocably and unconditionally submits to the non-exclusive\njurisdiction of any New York State or Federal court sitting in The City of New\nYork, and any appellate court from any thereof, in any action or proceeding\narising out of or relating to this Contract, and each Party hereby irrevocably\nand unconditionally agrees that all claims in respect of such action or\nproceeding may be heard and determined in such New York State court or, to the\nextent permitted by law, in such Federal court. Each Party hereby irrevocably\nand unconditionally waives, to the fullest extent it may effectively do so, any\ndefense of an inconvenient forum to the maintenance of such action or proceeding\nin any such court and any right of jurisdiction on account of the place of\nresidence or domicile of either Party. The Contractor hereby irrevocably and\nunconditionally appoints CT Corporation System (the \"New York Process Agent\"),\n                                                     ----------------------   \nwith an office on the date hereof at 1633 Broadway, New York, New York, as its\nagent to receive on behalf of the Contractor and its respective property service\nof copies of the summons and complaint and any other process which may be served\nin any such action or proceeding in any such New York State or Federal court and\nagrees promptly to appoint a successor New York Process Agent in The City of New\nYork (which successor Process Agent shall accept such appointment in a writing\nprior to the termination for any reason of the appointment of the initial New\nYork Process Agent).  In any such action or proceeding in such New York State or\nFederal court sitting in The City of New York, such service may be made on the\nContractor by delivering a copy of such process to the Contractor in care of the\nappropriate Process Agent at such Process Agent's above address and by\ndepositing a copy of such process in the mails by certified or registered air\nmail, addressed to the Contractor at its address referred to in Article 35 of\nthis Contract (such service to be effective upon such receipt by the appropriate\nProcess Agent and the depositing of such process in the mails as aforesaid). The\nContractor hereby irrevocably and unconditionally authorizes and directs such\nProcess Agent to accept such service on its behalf. As an alternate method of\nservice, the Contractor also irrevocably and unconditionally consents to the\nservice of any and all process in any such action or proceeding in such New York\nState or Federal court sitting in The City of New York by mailing of copies of\nsuch process to the Contractor, as the case may be, by certified or registered\nair mail at its address referred to in Article 35 of this Contract. The\nContractor agrees that, to the fullest extent permitted by applicable law, a\nfinal judgment in any such action or proceeding shall be conclusive and may be\nenforced in other jurisdictions by suit on the judgment or in any other manner\nprovided by law.\n\n \n                                                                              62\n\n3.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST\n    --------------------                                                  \nEXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN\nANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS\nAGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,\nTORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO\nREPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY\nOR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK\nTO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER\nPARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER\nTHINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.\n\nD.  THE OBLIGATIONS OF EACH PARTY IN RESPECT OF THIS CONTRACT DUE TO ANY PARTY\nSHALL, NOTWITHSTANDING ANY JUDGMENT IN A CURRENCY (THE \"JUDGMENT CURRENCY\")\n                                                        -----------------  \nOTHER THAN DOLLARS, BE DISCHARGED ONLY TO THE EXTENT THAT ON THE BUSINESS DAY\nFOLLOWING RECEIPT BY SUCH PARTY OF ANY SUM ADJUDGED TO BE SO DUE IN THE JUDGMENT\nCURRENCY SUCH PARTY MAY IN ACCORDANCE WITH NORMAL BANKING PROCEDURES PURCHASE\nDOLLARS WITH THE JUDGMENT CURRENCY; IF THE AMOUNT OF DOLLARS SO PURCHASED IS\nLESS THAN THE SUM ORIGINALLY DUE TO SUCH PARTY IN DOLLARS, EACH PARTY AGREES, AS\nA SEPARATE OBLIGATION AND NOTWITHSTANDING ANY SUCH JUDGMENT, TO INDEMNIFY SUCH\nPARTY AGAINST SUCH LOSS, AND IF THE AMOUNT OF DOLLARS SO PURCHASED EXCEEDS THE\nSUM ORIGINALLY DUE TO ANY PARTY TO THIS CONTRACT, EACH PARTY AGREES TO REMIT TO\nSUCH PARTY, SUCH EXCESS.\n\nARTICLE 34  APPLICABLE LAW\n----------  --------------\n\nTHIS CONTRACT SHALL BE CONSTRUED AND GOVERNED IN ACCORDANCE WITH THE LAWS OF THE\nSTATE OF NEW YORK, UNITED STATES, EXCLUDING ITS CONFLICTS OF LAW PROVISIONS AND\nEXCLUDING THE CONVENTION FOR THE INTERNATIONAL SALE OF GOODS.\n\n\nARTICLE 35  NOTICES\n----------  -------\n\nA.  Any notices, consent, approval, or other communication pursuant to this\nContract shall be in writing, in the English language, and shall be deemed to be\nduly given or served on a Party if sent to the Party at the address stipulated\nin Sub-Article 35(B) and if sent by any one of the following means only:\n\n1.  Sent by hand: Such communication shall be deemed to have been received on\nthe day of delivery provided receipt of delivery is obtained.\n\n \n                                                                              63\n\n2.  Sent by facsimile: Such communication shall be deemed to have been received,\nunder normal service conditions, twenty-four (24) hours following the time of\ndispatch or on confirmation by the receiving Party, whichever is earlier.\n\n3.  Sent by registered or certified mail: Such communication shall be deemed to\nhave been received, under normal service conditions, on the day it was received\nor on the tenth day after it was dispatched, whichever is earlier.\n\nB.  For purposes of this Article, the names, addresses and fax numbers of the\nParties are as detailed below. Any change to the name, address, and facsimile\nnumbers may be made at any time by giving thirty (30) days prior written notice.\n\nTyco Submarine Systems Ltd.\n340 Mt. Kemble Avenue\nMorristown, New Jersey 07960\nTel: 973-326-2600\nFax: 973-326-2711\n\nPan American Crossing Ltd.\nWessex House\n45 Reid Street\nHamilton HM12\nBermuda\nFax:  441-296-6749\/8606\nAttn:  Cameron Adderley\n\nC.  All provisions in this Contract regarding notices, consents, approvals and\nother communications to and from, and other actions taken on behalf of, the\nContractor are subject to the provisions of Article 42 hereof.\n\nARTICLE 36  PUBLICITY AND CONFIDENTIALITY\n----------  -----------------------------\n\nA.  No information relating to this Contract shall be released by either Party\nto any newspaper, magazine, journal or other written, oral or visual medium\nwithout the prior written approval of an authorized representative of the other\nParty; provided that, subject to Article 20 (Safeguarding of Information and\n       --------                                                             \nTechnology) and the following Sub-Article, this Article shall not restrict\neither Party from (i) responding to customary press inquiries or otherwise\nmaking public or private statements in the normal course of business, so long as\nconsistent with a mutually agreed press-release and (ii) assisting in the\nobtaining of financing in accordance with Sub-Article 37(C), including the\npublication of a financial tombstone.\n\nB.  This Contract and any non-public information, written or oral, with respect\nto this Contract, \"Confidential Information\", will be kept confidential and\nshall not be disclosed, in whole or in part, to any person other than\naffiliates, officers, directors, employees, agents or representatives of a Party\n(collectively, \"Representatives\") who need to know such Confidential \n\n \n                                                                              64\n\nInformation for the purpose of negotiating and executing this Contract. Each\nParty agrees to inform each of its Representatives of the non-public nature of\nthe Confidential Information and to direct such persons to treat such\nConfidential Information in accordance with the terms of this Article. Nothing\nherein shall prevent a Party from disclosing Confidential Information (a) upon\nthe order of any court or administrative agency, (b) upon the request or demand\nof, or pursuant to any regulation of, any regulatory agency or authority, (c) to\nthe extent reasonably required in connection with the exercise of any remedy\nhereunder, (d) to a Party's legal counsel or independent auditors, (e)\nprospective lenders to the Purchaser or Purchaser's parent companies, and (f) to\nany actual or proposed assignee of all or part of its rights hereunder provided\nthat such actual or proposed assignee agrees in writing to be bound by the\nprovisions of this Article.\n\nARTICLE 37  ASSIGNMENT; SUBCONTRACTORS\n----------  --------------------------\n\nA.  Except as provided in this Article, neither Party shall assign this Contract\nor any right or interest under this Contract, nor delegate any work or\nobligation to be performed under this Contract (\"Assignment\"), without the other\nParty's prior written consent which shall not be unreasonably withheld (it being\nunderstood that it shall be deemed to be reasonable to withhold consent to the\nassignment of this Contract or any rights, interest or obligations hereunder to\na competitor of Contractor or an affiliate of a competitor or uncreditworthy\nparty). Nothing herein shall preclude a Party from employing a subcontractor in\ncarrying out its obligations under this Contract. A Party's use of such\nsubcontractor shall not release the Party from its obligations or liability\n(including warranties) under this Contract. If a proposed subcontractor of major\nequipment (i.e., equipment listed on Exhibit E) is not listed on Exhibit E\nhereto, Contractor shall obtain approval thereof from Purchaser, which approval\nshall not be unreasonably withheld.\n\nB.  The Contractor has the right to assign all of its rights under this Contract\nor to delegate all of its duties hereunder at any time without the Purchaser's\nconsent to any successor to substantially all the assets of the Contractor by\nway of a merger, consolidation or sale of assets provided that in the case of\nany assignment or delegation pursuant to this Sub-Article 37(B) such assignee\nshall assume in writing all warranties, representations and obligations of\nContractor under this Contract. The Contractor shall give the Purchaser written\nnotice 30 days prior to the assignment.\n\nC.  The Parties acknowledge that Purchaser may finance construction of the\nSystem on a \"project finance\" basis and that in connection therewith the\nfinancing parties will require that such financing be secured by certain assets\nof Purchaser (including but not limited to this Contract). The Purchaser may, in\nconnection with any such project financing grant a collateral assignment of the\nSystem and\/or its rights and obligations under this Contract to any such\nfinancing parties, and in connection therewith, the Contractor will execute and\ndeliver a Consent, substantially in the form of Exhibit B hereto; provided that\nContractor agrees to make such changes or additions to such form as may be\nreasonably requested by such financing parties, and Purchaser, and such\nfinancing parties, may transfer in accordance with such Consent.  Contractor\nwill also deliver an Opinion in the form of Exhibit C hereto, and a similar\nopinion of * with respect to the * to Purchaser and such financing parties and\nsuch other documents as are reasonably requested by such financing parties.\n\n* Material omitted and separately filed with the Commission under an \napplication for confidential treatment.\n\n \n                                                                              65\n\nD.  The Purchaser has the right to assign all of its rights and delegate all of\nits duties under this Contract to any other entity to whom all of Purchaser's\nrights and interests in the System have been transferred.  Purchaser also has\nthe right (i) to assign all of its rights hereunder with respect to any\nparticular Landing Assets to any Transferee, (ii) to assign Permits with respect\nto such Landing Assets, or have Permits with respect to such Landing Assets\nissued in the name of, such Transferee and (iii) to transfer such Landing Assets\nor have such Landing Assets transferred directly to, such Transferee; provided\n                                                                      --------\nthat such Transferee shall execute a supplement to this Contract whereby it\nbecomes jointly and severally liable, together with Purchaser, for all of\nPurchaser's obligations under this Contract. \"Landing Assets\" means, with\nrespect to each jurisdiction where a portion of the System is located, all or\npart of such portion of the System located therein. It is understood that the\nPurchaser, at its option, may assign and transfer rights with respect to Landing\nAssets in different jurisdictions to different Transferees. Purchaser shall not\ntransfer any of its rights under this Contract or the System except in\naccordance with the foregoing. Any assignment or transfer not expressly\npermitted by Sub-Article 37(D) shall be of no force and effect. Any assignment\nor transfer which results in any increase in costs or any loss, damage, delay or\nfailure of performance shall constitute a Force Majeure, and, without limiting\nthe applicability of Article 17 (Force Majeure), Purchaser shall be responsible\nfor any increase in costs resulting therefrom.\n\nARTICLE 38  RELATIONSHIP OF THE PARTIES\n----------  ---------------------------\n\nAll work performed by a Party under this Contract shall be performed as an\nindependent contractor and not as an agent of the other and no persons furnished\nby a Party shall be considered the employees or agents of the other. Each Party\nshall be responsible for its employees' compliance with all Laws while\nperforming under this Contract. This Contract shall not form a joint venture or\npartnership between the Parties.\n\nARTICLE 39  SUCCESSORS BOUND\n----------  ----------------\n\nThis Contract shall be binding on the Contractor and the Purchaser and their\nrespective successors and permitted assigns.\n\nARTICLE 40  ARTICLE CAPTIONS\n----------  ----------------\n\nThe captions of the Articles do not form part of this Contract and shall not\nhave any effect on the interpretation thereof.\n\nARTICLE 41  SEVERABILITY\n----------  ------------\n\nIf any of the provisions of this Contract shall be invalid or unenforceable,\nsuch invalidity or unenforceability shall not invalidate or render unenforceable\nthe entire Contract, but rather the entire Contract shall be construed as if not\ncontaining the particular invalid or unenforceable provision or provisions and\nthe rights and obligations of the Contractor and the Purchaser shall be\nconstrued and enforced accordingly. In the event such invalid or unenforceable\nprovision is an \n\n \n                                                                              66\n\nessential and material element of this Contract, the Parties shall promptly\nnegotiate a replacement provision.\n\nARTICLE 42   *\n----------  -----------\n\n*\n\nARTICLE 43  SURVIVAL OF OBLIGATIONS\n----------  -----------------------\n\nThe Parties' rights and obligations, which, by their nature would continue\nbeyond the termination, cancellation or expiration of this Contract, including,\nbut not limited to, those contained in Sub-Article 4(B) (Taxes, Levies and\nDuties) and Sub-Article 4(C) (Withholding Tax), Article 18 (Intellectual\nProperty), Article 20 (Safeguarding of Information and Technology), Article 21\n(Export Control) and Article 23 (Limitation of Liability\/Indemnification) shall\nsurvive termination, cancellation or expiration hereof. Article 10 (Warranty)\nand Article 11 (Contractor Support), shall survive termination, cancellation or\nexpiration hereof, if and only if, this Contract is terminated by Purchaser\npursuant to Sub-Article 13(A).\n\nARTICLE 44  NON-WAIVER  -\n----------  ----------  -\n\nA waiver of any of the terms and conditions of this Contract, or the failure of\neither Party strictly to enforce any such term or condition, on one or more\noccasions shall not be construed as a waiver of the same or of any other term or\ncondition of this Contract on any other occasion.\n\nARTICLE 45  LANGUAGE\n----------  --------\n\nThis Contract has been executed in the English language and English will be the\ncontrolling language for interpretation of this Contract.\n\nARTICLE 46  ENTIRE AGREEMENT\n----------  ----------------\n\nThis Contract supersedes all prior oral or written understanding between the\nParties and constitutes the entire agreement with respect to the subject matter\nherein. Any modification, amendment, waiver, approval or consent given hereunder\nmust be evidenced by a writing signed by authorized representatives of all\nParties.\n\n\n\n*  Material omitted and separately filed with the Commission under an \n   application for confidential treatment.\n\n \n                                                                              67\n\nThis Contract is executed in Bermuda by a duly authorized representative of the\nPurchaser, and in Nassau, the Bahamas, by a duly authorized representative of\nContractor, as set forth below.\n\n                              TYCO SUBMARINE SYSTEMS LTD.\n\n                              By:\/s\/ Adam C. Morton   \n                                 --------------------\n                              Name: Adam C. Morton\n                              Title: Director, American Region\n\n\n\n                              PAN AMERICAN CROSSING LTD.\n\n                              By:\/s\/ K. Eugene Shutler\n                                 ----------------------\n                              Name: K. 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