VoIP Agreement - Pakistan Telecommunication Co. Ltd. and M/S Fusion Telecommunications International Inc. USA
AGREEMENT
BETWEEN
PAKISTAN TELECOMMUNICATION COMPANY LIMITED
AND
M/S FUSION TELECOMMUNICATIONS INTERNATIONAL, INC., USA
FOR
THE TERMINATION OF
ADDITIONAL INTERNATIONAL INCOMING VOICE TRAFFIC
FROM USA & EUROPE
TO PAKISTAN THROUGH VOICE OVER INTERNET PROTOCOL
(VoIP)
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PAKISTAN
Table of Contents
1. DEFINITIONS ............................................................. 2
2. THE AGREEMENT DOCUMENTS ................................................. 4
3. ENTIRE AGREEMENT ........................................................ 4
4. DURATION OF AGREEMENT ................................................... 5
5. SERVICE COMMENCEMENT DATE ............................................... 5
6. OBLIGATIONS OF THE CONTRACTOR ........................................... 5
7. APPROVAL OF EQUIPMENT ................................................... 10
9. TECHNICAL ARRANGEMENTS WITH PTCL NETWORK ................................ 10
10. REPORTING OBLIGATIONS OF CONTRACTOR ................................... 11
14. CURRENCY OF PAYMENT ................................................... 16
15. SUBCONTRACTORS ........................................................ 16
16. REVIEW .............................................................. 16
17. FORCE MAJEURE ......................................................... 17
18. TERMINATION ........................................................... 18
19. OBLIGATION AT TERMINATION ............................................. 21
20. CONTRACTOR TO COMPLY WITH APPLICABLE LAW .............................. 21
21. FAIRNESS AND GOOD FAITH ............................................... 22
22. SETTLEMENT OF DISPUTES & ARBITRATION .................................. 23
23. CONFIDENTIALITY ....................................................... 23
24. INDEMNITIES ........................................................... 24
25. AFFIRMATION ........................................................... 24
26. APPLICABLE LAWS ....................................................... 25
27. RULES OF CONSTRUCTION ................................................. 25
28. NOTICES ............................................................... 26
29. ADDITIONAL TERMS ...................................................... 26
TOPPING UP/DOWN PROCEDURE................................................. 36
SCHEDULES
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Schedule-I IP Telephony Solutions Analysis
Schedule-II Platform Connectivity Topology Diagram
Schedule-III Diagram of Annual International Incoming Minutes and
Schedule-IV Accounting and Method of Settlement
Schedule-V List of Incumbent Carriers in USA and Europe
Schedule-VI Programme of Commitments (Milestone)
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AGREEMENT
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This Agreement is made in duplicate and is deemed to be executed at Islamabad on
this 20 Day of May 2002.
Between
Pakistan Telecommunication Company Ltd., a public limited company incorporated
under the Companies Ordinance 1984, with its registered office at PTCL
headquarters, G-8/4, Islamabad (hereinafter referred to as "PTCL" which
expression shall, where the context so permits, be deemed to mean and include
its successors-in-interest and assigns), through its duly authorised
representative, OF THE ONE PART
And
M/s Fusion Telecommunications International, Inc. USA with its registered office
at 420 Lexington Avenue, Suite 518, New York, New York 10170, USA (hereinafter
referred to as the "Contractor" which expression shall, where the context so
permits, be deemed to mean and include its successors-in-interest and assigns),
through its duly authorised representative, OF THE OTHER PART
WHEREAS PTCL has the exclusive right under the Pakistan Telecommunication
(Re-organisation) Act, 1996 to provide Basic Telephone Services in Pakistan
until 31 December 2002 and PTCL is not barred from executing and performing this
Agreement under the License;
AND WHEREAS PTCL proposes on non- exclusive basis to arrange for the termination
of (illegal) additional incoming international Traffic, focusing on
channellising illegal traffic, from non-Incumbent Carriers through Voice over IP
(VoIP) from USA & Europe into Pakistan;
WHEREAS it is agreed that the Contractor, in consideration of PTCL authorising
the Contractor to procure and install the VoIP Platform to terminate
international voice traffic at the rates and on the terms of this Agreement,
will procure and install at entirely its own cost and expense for and on behalf
of PTCL (at no additional cost to PTCL) appropriate equipment and facilities as
per specifications mentioned in respective Clauses of this Agreement at premises
and at points controlled by PTCL so as to
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enable VoIP traffic to terminate in Pakistan through VoIP gateway at Rawalpindi
to be connected with PTCL's respective transit exchange from the USA & Europe.
AND WHEREAS the Contractor has agreed with PTCL that the VoIP Platform installed
at Rawalpindi by the Contractor shall be owned and operated by PTCL on the terms
and conditions hereinafter appearing.
NOW THEREFORE in consideration of the mutual covenants hereinafter set out and
for good and valuable consideration, the adequacy of which is hereby
acknowledged, the Parties have agreed as under:
1. DEFINITIONS
Unless the context otherwise requires, the following terms, wherever used
in this Agreement, shall have the following meanings:
(a) "Act" means the Pakistan Telecommunication (Re-organisation) Act,
1996 (Act No. XVII of 1996).
(b) "Applicable Law" means the law of Pakistan including any
instruments having the force of law in Pakistan;
(c) "Agreement" means this Agreement between PTCL and the Contractor
along with the other documents forming part of this Agreement as
described in Clause 2 hereof;
(d) "Basic Telephone Service" means "basic telephone service" as
defined in the Act;
(e) "Securitization Agreement" means the agreement between PTCL and
LaSalle National Bank, Chicago dated 14.8.1997 pursuant to which
certain receivables of PTCL are securitized;
(f) "VoIP" or "Voice over IP" means the transmission of voice sent
over the packet switched data communication protocol set of
TCP/IP;
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(g) "Customer" means a person in the USA and/or Europe who makes a
call or fax to Pakistan and such call or fax is routed through the
VoIP Platform in accordance with this Agreement;
(h) "License" means the license issued by PTA to PTCL and any
amendments thereto;
(i) "Party" means PTCL or the Contractor, as the case may be, and
"Parties" means both of them;
(j) "VoIP Platform" means the equipment, hardware/ software to be
installed at PTCL premises at Rawalpindi and connected at the
level of transit exchange by the Contractor for and on behalf of
PTCL to enable international incoming calls to be terminated on
any fixed line or mobile subscribers, through PTCL Network,
anywhere in Pakistan (using VoIP technology);
(k) "US Settlement Rate" means 50% of Total Accounting Rate (TAR), in
US cents per minute, agreed between Incumbent Carriers and PTCL
for termination of international traffic in Pakistan;
(l) "PTA" means the Pakistan Telecommunication Authority established
under the Act;
(m) "Services" means the work to be performed by and the services to
be undertaken by the Contractor pursuant to this Agreement;
(n) "Service Commencement Date" means the date on which VoIP traffic
will start being terminated on the VoIP Platform in accordance
with this Agreement.
(o) "Effective Date" means June 15th 2002.
(p) "Legal Traffic" means total incoming international voice/fax
traffic passing through PTCL's international gateway exchanges and
terminated on any type of telephone subscribers through PTCL
network of transit and local exchanges;
(q) "Illegal Traffic" means international incoming voice/fax traffic
using VoIP or any other technology terminating on any type of
telephony network, bypassing PTCL's international gateway
exchanges through various means including leaky PABX (excluding
VoIP traffic under this Agreement) and/or any other bypass
mechanism using VoIP or any other technology;
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(r) "Day" means a Day on which banks are open for business in USA
and/or Pakistan, as may be relevant. This definition relates only
to payment obligations under this Agreement.
(s) "Terminated Minutes," means the total incoming international
voice/fax traffic terminated at PTCL's transit exchange at
Rawalpindi routed through the VoIP Platform. For avoidance of
doubt, Terminated Minutes shall not include incoming international
voice/fax traffic, the duration of which is less than 6 (six)
seconds;
(t) "Incumbent Carriers" means such foreign carriers of USA & Europe
with whom PTCL has bilateral agreements or arrangements for direct
international traffic "as listed in Schedule V";
(u) "Designated Account" means the bank account to be notified by PTCL
to the Contractor on or before the Service Commencement Date or
from time to time thereafter, in which the Contractor shall make
payments.
(v) "Statement of Qualification (SoQ)": means the statement in the
format specified in the Proposal Form comprising benchmarks and
requirements for eligibility of the party to enter into an
agreement with PTCL for termination of additional incoming
international traffic through VoIP.
(w) "USA" shall mean and include the United States of America and all
other countries bearing Country Code,"+1"
(x) "CDR" shall mean Call Data Record.
Other terms not defined in this Section will have the same meaning as
defined in the Act and, if not defined in the Act, as generally
understood in the telecommunication industry.
2. THE AGREEMENT DOCUMENTS
The following documents form an integral and substantive part of this
Agreement and, in the event of any inconsistencies between them; the
order of precedence shall (unless expressly stated to the contrary) be as
follows:
(a) Preamble and Recitals to this Agreement;
(b) Main body of this Agreement; and
(c) Schedules to this Agreement.
(d) Statement of Qualification
3. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement with respect to the
subject matter hereof and hereby cancels and supersedes any and/ or all
previous or
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contemporaneous agreements, representations or understandings, whether
oral or written between the Parties pertaining to the subject matter
hereof. This Agreement shall not be modified or amended except by an
agreement in writing signed by the Parties.
4. DURATION OF AGREEMENT
This Agreement shall come into effect on the Effective Date and shall
remain valid initially for a term of one (1) year, subject to extension
at the option of Contractor for an additional one (1) year. If, following
the exercise by the Contractor of its option to extend the Agreement for
an additional one (1) year, either Party desires extension in the term of
this Agreement, it shall give the other a notice to this effect 90 days
in advance prior to termination date of the agreement. If the Parties do
not agree to any extension as aforesaid, the term of this Agreement shall
expire on the first anniversary of the Effective Date if the Contractor
has not elected to extend the Agreement by an additional one (1) year or
if the Contractor has so elected (by written notice to PTCL such notice
to be served not less than sixty days prior to the expiry of the first
anniversary of the Effective Date).
5. SERVICE COMMENCEMENT DATE
The Contractor agrees that the Service Commencement Date shall be a date
not later than sixty (60) Days after the Effective Date, or any other
date, which PTCL may agree to in writing prior to the expiry of such 60
(sixty) Days period subject to clause 13 of this Agreement. The
Contractor undertakes and agrees that by the Service Commencement Date
the VoIP Platform shall be fully functional so as to enable Customers to
make international calls to Pakistan using VoIP technology through the
VoIP Platform in the manner and on the terms contemplated by this
Agreement.
6. OBLIGATIONS OF THE CONTRACTOR
The Contractor shall be responsible for the design, supply and
installation of the VoIP Platform in accordance with and subject to the
terms of this Agreement. The Contractor shall on or before the Service
Commencement Date provide PTCL the invoice of the equipment to be
installed in VoIP Platform. In addition to this obligation the Contractor
agrees to use its best efforts to ensure that Customers are made aware of
the option to connect to Pakistan through the VoIP Platform and for such
purpose the Contractor agrees to ensure that
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appropriate marketing takes place of this option and that competitive
prices are charged to Customers so as to ensure the development of an
appropriate market and so as to facilitate the substitution of Illegal
Traffic.
6.1 Standard of Performance
The Contractor shall perform the Services and carry out its
obligations under this Agreement with all due diligence,
efficiency and economy, in accordance with generally accepted
techniques and practices used in the sector and shall observe
sound management practices. The Contractor shall always, in
respect of any matter relating to the installation of the VoIP
Platform, act as faithful contractors to PTCL, and shall at all
times support and safeguard PTCL's legitimate interests, as
reasonably determined by PTCL.
6.2 VoIP Equipment
(a) All the equipment and other items to be installed at VoIP
Platform should be brand new, of the latest model
available, chassis based with embedded processor,
expandable, A-law compatible, having ITU SS7 (ISUP)
signaling capability, supporting voice/fax through dynamic
universal port, ANI authentication, IVR for trouble
announcement and number proscriptions. Moreover, the VoIP
Platform should be capable of passing on call progress
signals, providing billing information and network
management capabilities as per Schedule I. For avoidance of
doubt, Contractor shall not install in the VoIP Platform
such equipment having quality and specifications inferior
to those mentioned in the Agreement.
(b) All equipment, hardware, software and other items to be
installed for the VoIP Platform shall be in accordance with
and as laid down in PTCL specifications approved in writing
by PTCL. PTCL will provide reasonable assistance to the
Contractor in obtaining any required approval, if
necessary, from PTA prior to its installation. The
Contractor is required to provide detailed list for all the
equipment (to be installed and used in VoIP Platform)
including the quantities, origin, model number, existing
certifications and contact names of the
manufacturer/supplier along with relevant literature so
that the approval thereof can be processed expeditiously.
Contractor will not install any unapproved equipment to
interface with PTCL network under any circumstances and
will be entirely
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responsible for all costs incurred if any equipment is not
approved by the PTCL prior to installation.
(c) Performance Criteria for VoIP Equipment
Listed below are some of the key features of the VoIP
Platform that will need to be verified prior to the
approval of the equipment. These items are provided as an
indicative list only and the final approval of the
equipment and its acceptance for interface with the PTCL
network may be based on additional items in the discretion
of PTCL:
(i) The major modules of the system, e.g. hard disks,
CPU, main memory etc. shall be duplicated;
(ii) The system shall be highly reliable and the
configuration of the system shall be such that the
stored data is not lost in any case due to faults in
the system. This will need to be demonstrated under
different kinds of failure scenarios;
(iii) The system shall have fully redundant back up to
cope with the malfunctioning of any part of the VoIP
Platform. It shall have redundant processing units,
subscriber database, storage, administrative
processors, switching network, alarming devices /
systems etc.
6.3 The Services
(a) The Contractor agrees to design, install, test and
commission at entirely its own cost and expense the VoIP
Platform at Rawalpindi in PTCL premises as may be mutually
agreed by the Parties in writing. Once the VoIP Platform is
tested and commissioned into service, the Contractor agrees
that the VoIP Platform shall be handed over to PTCL at no
cost. For avoidance of doubt it is clarified that after the
equipment is handed over to PTCL, the Contractor shall not
under any circumstances or for any reason claim return of
the equipment, its cost, damages etc, if the Agreement
expires or is earlier terminated under the terms hereof.
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(b) The Contractor hereby represents and warrants that the VoIP
Platform shall be free from all material defects and shall
be capable of terminating international calls from the USA
and Europe within the performance parameters contemplated
by this Agreement. Without prejudice to the generality of
the foregoing, the Contractor agrees that the VoIP Platform
when used shall meet the performance criteria set forth in
Section 6.2(c) hereto. The VoIP Platform shall generate
data that presents a complete and accurate picture of usage
of VoIP Platform for termination of international calls. In
the event that there is any defect or fault in the VoIP
Platform during the term of this Agreement, the Contractor
agrees to promptly remedy such defects (including spare
parts) at its own cost and expense. The Contractor shall
use its best endeavors to ensure that any defect or fault
in the VoIP Platform shall be fully remedied within 3
(three) Days of such defects or fault arising.
(C) In order for PTCL to make, the required facilities
available to accommodate the VoIP Platform, the Contractor
shall submit to PTCL details of its requirements in the
form of a site preparation plan within 7 (seven) Days of
the Effective Date. PTCL shall within 7 (seven) Days
thereafter approve such plan or suggest changes therein. In
the event PTCL does not communicate its decision as
aforesaid, the site preparation plan submitted by the
Contractor shall be deemed acceptable, provided however
that, the Contractor shall have at least 45 (forty five)
Days before the anticipated Service Commencement Date to
implement such plan. The site preparation plan will consist
of details of requirements for floor space, electrical
connectivity, air-conditioning etc. If PTCL in its sole
discretion prepares a final plan, the Contractor will be
required to install the VoIP Platform in accordance with
this final plan. In any event PTCL shall supply free of
charge industry standard co-location space to the
Contractor (As per Schedule VI).
(d) While PTCL will provide all available assistance, the
Contractor is completely responsible for performing its own
due diligence regarding the PTCL network for interfacing
the VoIP Platform to the PSTN.
(e) PTCL and the Contractor will jointly prepare analysis for
the traffic requirements and the consequent sizing of the
connectivity requirements of the Contractor for each of the
VoIP Platform. The Contractor will
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provide ample notice to PTCL for the interface requirements
for the VoIP Platform such that the final decision between
the Parties in respect of the same is reached at least 45
(forty five) Days prior to the anticipated Service
Commencement Date. Similar arrangements shall apply after
the Service Commencement Date if the demand for use of the
VoIP service expands and consequently greater connectivity
is required.
(f) The Contractor will market the VoIP service in USA and
Europe at its own cost, expense and responsibility.
(g) The Contractor will be responsible for technically
establishing the new links from USA/EUROPE to VoIP Platform
in Pakistan and between the VoIP Platform and PTCL's PSTN
network including the cost of all hardware/software and
shall be responsible for providing at its own cost
appropriate training for the PTCL staff to ensure that
there is a smooth and effective interface between the VoIP
Platform and the PTCL Digital Transit Exchange (DTE). PTCL
will be responsible for one-half of the cost of
connectivity (or for the Pakistan half circuit in the case
of IPLC) between USA/"Europe" and Pakistan which may be, by
option of Contractor, by (1) PTCL IP IPL between 60 Hudson
Street, New York and Pakistan, (2) IPLC on fiber
(SeMeWe3/FLAG, etc. and onward fiber), or (3) IPLC on
satellite, and in any of these cases PTCL will provide at
its expense all IP connectivity between cable head or earth
station in Pakistan and Contractor's POP in Rawalpindi.
(h) The Contractor shall terminate only traffic from USA and
Europe through the VoIP Platform. Contractor hereby agrees
to terminate 3 to 5 million minutes per month per location
through the VoIP Platform focusing on capturing of Illegal
Traffic. In consideration of the Contractor terminating
traffic under this Agreement, fixed terminations rate of
US$ 0.19 (US cents nineteen only) per minute will be
applicable till the revision of the US carrier settlement
rates (bilateral carrier rate). Subsequent termination
benchmark rate would be revised as provided for in Section
12.6 of this Agreement.
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7. APPROVAL OF EQUIPMENT
PTCL will not unreasonably delay processing of a request for approval of
the equipment to be used in the VoIP Platform from the Contractor. PTCL
shall not unreasonably withhold approval of such equipment for use in the
Services and will inform the Contractor of the reasons for not approving
any such equipment. Any approval provided by PTCL shall not in any way
impact on or derogate from the obligation on the Contractor to obtain all
approvals required under the laws of Pakistan in respect of the such
equipment and the installation thereof including any Type Approvals
required from the PTA. The Contractor shall submit to PTCL details of the
equipment to be used in the VoIP Platform within 7 (seven) Days of the
Effective Date. PTCL shall within 7 (seven) Days thereafter approve such
equipment or suggest changes therein. In the event PTCL does not
communicate its decision as aforesaid, the details of such equipment
submitted by the Contractor shall be deemed acceptable, provided,
however, that the Contractor shall have at least 45 (forty five) Days
before the anticipated Service Commencement Date to implement the same.
8. ACCESS TO THE VOIP PLATFORM
The number of circuits to be provided by PTCL will be based on the size
of the VoIP Platform and the traffic analysis and will be mutually agreed
between PTCL and the Contractor. PTCL will provide the Contractor access
to the VoIP Platform within 60 (sixty) Days of the Effective Date and in
case PTCL is not able to provide such access within this stipulated time,
the Service Commencement Date will be extended accordingly.
9. TECHNICAL ARRANGEMENTS WITH PTCL NETWORK
9.1 PTCL will provide the VoIP Platform, an interconnection at the El
level on the Rawalpindi transit exchange as shown diagrammatically
in Schedule II. No special routing requests from the Contractor
will be entertained by PTCL.
9.2 PTCL and the Contractor will mutually agree to prepare demand
analysis for the projected traffic and the consequent sizing of
the connectivity requirements of the Contractor for the VoIP
Platform in Rawalpindi. This exercise will be conducted at least
once a year but may be conducted earlier or more frequently on
mutual agreement. PTCL will fully cooperate
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with the Contractor in finalizing the connectivity requirement
schedule and will not unreasonably delay such an arrangement.
9.3 PTCL will co-operate with the Contractor and will furnish the
Contractor with all relevant information and data concerning PTCL,
which PTCL and the Contractor mutually agree as appropriate for
determining the compatibility of interfacing its equipment with
the PTCL network.
10. REPORTING OBLIGATIONS OF CONTRACTOR
The Contractor shall submit to PTCL CDRs generated in a platform
installed in USA and Europe on a fortnightly basis. CDRs for the first
fortnight of a given month shall be submitted on or before the 21st of
such month, and the CDRs for the second fortnight in the given month
shall be submitted on or before the 7th of the following month. CDRs
submitted as aforesaid will include number of calls and recorded
Terminated Minutes on a per originating and destination basis, and shall
be in the following format:
-------------------------------------------------------------------------
Date A-Tel* B-Tel Start End Time End Date Duration
Time
-------------------------------------------------------------------------
-------------------------------------------------------------------------
* Note: Country Code will be a part of A-Tel.
11. BILLING & PAYMENT The Contractor shall:
i. Keep accurate and systematic accounts and records in respect of
revenues generated from sale of VoIP service to Customers in
accordance with internationally accepted accounting principles.
For avoidance of doubt it is clarified that CDRs will be generated
on per second basis, however, will be charged on the basis of
cumulative minutes. (e.g. if the total number of cumulative
seconds in a billing period is 106,800,261, then the total number
of minutes to be billed at the Termination Rate will be 1,780,004
minutes).
ii (a) Submit CDRs generated in a platform installed in USA/Europe
to PTCL under Clause 10 above. Such CDRs will be compared
with records created in the PTCL transit exchanges. PTCL
will generate bills based on figures at PTCL transit
exchanges. However, the CDRs supplied by the
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Contractor must be in a format readable by PTCL billing
centers. Subject to provisions of sub clause (b) below, in
case of any variation between the Contractor's CDRs and the
figures generated through CDRs of PTCL transit
exchanges/VoIP Platform, the PTCL CDRs figures shall
(subject to paragraphs (b) and (c) below) be considered as
final and conclusive for the purpose of billing under this
"Agreement". Amount so determined and billed shall be
binding on the Contractor.
(b) In case of any discrepancy in CDR's reconciliation (where
PTCL CDR shows more minutes terminated than the
Contractor's CDR) up to 0.75% or less of the relevant CDR,
the Contractor shall not make the same a basis for dispute
and shall pay the same. However, the contractor will be
given due opportunity to highlight any discrepancy in
PTCL's CDR for correction and if, such discrepancy is
accepted by the PTCL the contractor shall be entitled for
the credit. In case, the discrepancy exceeds the afore said
figure of 0.75 %, the Contractor shall pay the undisputed
amount and the parties will resort to mutual negotiations,
reconciliation and settlement for the disputed amount.
(c) If the settlement is not arrived at amicably within four
weeks, the dispute may be resolved through the dispute
resolution mechanisms provided in this agreement or as may
otherwise be agreed between the parties.
iii. be billed fortnightly for the number of minutes multiplied by the
agreed rate which is US$ 0.19 (US cents nineteen) per minute at
present. The bill will be e-mailed/faxed to the Contractor or its
designated agent, which shall be the valid document for the
purpose of payments. However, for the purposes of record and
fulfillment of other contractual requirements, the hard copies of
such invoices shall later on be provided to the contractor by the
PTCL.
iv. solely be responsible for the payment within seven days of the
"confirmed" issuance/transmission of the invoice through
e-mail/fax. The date and time for the payment shall be calculated
from the date of issuance/transmission of such invoices. For
avoidance of any doubt it is hereby clarified that only the date
of credit of payment into the "Designated Account" shall be
considered as payment receipt date.
v. solely be responsible for the suspension of service at the
discretion of the PTCL for such period of time till the payment is
not made within stipulated
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period of time. PTCL shall have the right to terminate the
"Agreement" if the service is suspended due to non-payment.
12. CHARGES AND DEPOSITS
12.1 Proposal Security
To determine its seriousness in the project, an amount of Rs. 5.0
(M) (rupees five million only) or US$.84,000 (US Dollars
Eighty-four Thousand only) per site in the shape of pay
order/demand draft issued by any Pakistani scheduled Banks as
proposal security was deposited by the contractor with the
Pakistan Telecommunication Company Limited (PTCL). This proposal
security will be refunded to the Contractor after the receipt of
full amount of rolling advance. Failure to deposit rolling advance
within the stipulated period of time so explained in Clause 11 of
the "Agreement" shall result in the forfeiture of the proposal
security without any notice.
12.2 Rolling Advance for Billing
12.2.1 The Contractor shall within 15 (fifteen) days of the
Effective Date of the "Agreement" deposit and maintain in
the "Designated Account" a cash rolling advance to secure
amounts due from the Contractor under this Agreement in
respect of calls terminating through use of the VoIP
Platform. The Rolling Advance shall be based on the PTCL's
billing estimate for 30 (Thirty) Days following the Service
Commencement Date and the minimum amount of the rolling
advance (regardless of actual billing) shall be based on 3
(three) million Terminated Minutes per month per site. In
case the Terminated Minutes per month increase above 3
(three) million, the rolling advance shall be increased PRO
RATA. The rolling advance will be topped up in accordance
with the procedure laid down in clause-12 of the
"Agreement" and the amount of rolling advance shall be
maintained by the contractor until the termination of the
"Agreement" and thereafter till the full and final
settlement of its amounts due to PTCL. In the event there
are no amounts due to PTCL from the Contractor, the balance
of the rolling advance shall be refunded. No interest,
profit or other return shall accrue on the rolling advance
to the Contractor. Whenever traffic exceeds three million
minutes in a calendar month, PTCL will issue the notice to
the contactor for topping up the rolling advance, and the
Contractor shall within 7 (seven) Days top up the rolling
advance. In case Contractor fails to top up the rolling
advance, PTCL may at its sole discretion and without prior
notice to the Contractor terminate this Agreement without
prejudice to
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any other interest or claim that may have accrued in favour
of PTCL or to which PTCL may in the future be entitled to
under this Agreement.
12.2.2 If as a direct consequence of any act, omission or
violation committed by the Contractor in connection with
the provision of the Services (as reasonably demonstrated
by PTCL), the non-VoIP traffic of PTCL from either USA or
Europe decreases as set forth in Schedule-III hereto, other
than as a result of migration of some percentage of
Contractor's existing traffic on the VoIP platform, then
the Contractor will, in addition to being liable to pay
PTCL in accordance with the terms of this Agreement for the
VoIP traffic routed through the VoIP Platform, become
liable to pay compensation to PTCL as calculated and set
forth in Schedule IV. The maximum compensation claimed by
PTCl shall not be more than the total number of minutes
that have been terminated by the Contractor for that
period. PTCL will gave no more that 30 days after the end
of the billing cycle to make such claim. All such claims by
PTCL will be made in writing after the end of thirty (30)
days of the billing cycle shall be invalid. The Contractor
shall however render all possible assistance, cooperation
and support to PTCL to identify parties responsible for
terminating voice traffic bypassing PTCL's International
Gateways.
12.3 The Contractor shall be liable to pay PTCL for each Terminated
Minute of an incoming call routed through the VoIP Platform.
Regardless of the total number of incoming calls routed through
VoIP Platform, the Contractor will make a minimum guaranteed
payment to PTCL based on 3 (three) million incoming Terminated
Minutes of VoIP Platform per month per site, unless it has been
precluded from passing the minimum number of minutes due to Force
Majeure. Keeping in view initial traffic built-up process, the
minimum 3 (three) million Terminated Minutes per month per site
will be averaged over a period of 3 (three) months. However, the
Rolling Advance will increase to cover the difference of 3 (three)
million Terminated Minutes and actual traffic for that month. For
example if the traffic for a month is only 1 (one) million
Terminated Minutes the Rolling Advance will be topped up by an
amount equal to 2 (two) Million Terminated Minutes multiplied by
US$ 0.19 (US cents nineteen) US$ 380,000. However the payment for
first 3 (three) months will be for a minimum of 9 (nine) Million
Terminated Minutes.
12.4 The Contractor shall make all due payments under this Agreement
(as per relevant Clauses/Schedules) in PTCL's Designated account,
which will not be subject to any deductions, counter-claims or
set-off.
- 14 -
<PAGE>
PAKISTAN
12.5 PTCL reserves the right at any time to require the Contractor to
provide an additional security deposit, or irrevocable standby
letter of credit or other form of security acceptable to PTCL, in
case of the Contractor's unsatisfactory financial condition,
payment history or credit check is or becomes unacceptable to
PTCL. In all such cases, the Contractor will be given 15 (fifteen)
Days notice to remedy the situation to the satisfaction of PTCL.
"If the contractor does not agree with the demand of PTCL then
either party has the right to terminate the contract effective
immediately. Unused balance of the rolling advance after making
necessary adjustments will be returned to the contractor within
thirty (30) days of termination of the contract."
12.6 The rates set forth in this Agreement in respect of per minute
charges for incoming calls shall be locked-in until revision of US
carrier settlement rate (bilateral carrier rate). However, these
shall not be more than US$ 0.19 (US cents nineteen) per minute and
shall be reviewed at least biannually on 1st January and 1st July
every year in the light of bilateral settlement accounting rates
to ensure that the rate remains 15% below settlement rate i.e. US
Settlement Rate minus15% of that.
13 PROGRAMME OF COMMITMENTS (MILESTONES)
13.1 Notwithstanding any thing contained in the Agreement, the
commitments for the commencement of service shall be carried out
in accordance with the programme of commitments (Milestones) as
stipulated in Schedule VI.
13.2 If, after the Date of execution of the Agreement, either party
shall have been delayed or impeded by any act or omission of the
said party or any circumstances beyond the reasonable control of
that party, in that event the subsequent milestones shall be
extended by the period of such delay.
13.3 Notwithstanding 13.2, if PTCL does not stay within the timetable
for its tasks as set forth in the attached Milestone Schedule VI,
then at the request of Contractor, the Rolling Advance on deposit
with PTCL and the equipment shall, within five (5) days after such
request, be returned to Contractor and the Agreement shall stand
terminated if the overall delay is more than four weeks,
otherwise, if the overall delay is equal to or less than four
weeks, then PTCL will pay interest on the Rolling Advance to
Contractor at the rate of LIBOR (as measured on the first day of
delay) plus 2% per annum for the total number of days of delay.
- 15 -
<PAGE>
PAKISTAN
13.4 Notwithstanding any thing contained in the Agreement other than
clause 13.2, if the Contractor fails to complete the commitments
by the completion Dates in accordance with the Schedule VI, the
PTCL shall have the right to terminate the Agreement by returning
the Rolling Deposit to Contractor and retaining the equipment by
PTCL, provided that the delay is more than four weeks.
14. CURRENCY OF PAYMENT
All payments by the Contractor under this Agreement except Proposal
Security shall be made to the Designated Account in US Dollars.
15. SUBCONTRACTORS
15.1 The Contractor shall not engage any subcontractor in Pakistan for
the performance of any of the Services without the prior written
approval of PTCL including the terms of such engagement. The
Contractor shall provide to PTCL such details as PTCL may request.
The Contractor may not terminate or amend terms of the approved
subcontractor without prior written approval of PTCL.
15.2 The appointment of any subcontractor shall not relieve the
Contractor from any liability or obligation under this Agreement.
16. REVIEW
16.1 Either Party may seek to amend this Agreement by serving on the
other a review notice if:
(a) the License is materially modified (whether by amendment or
replacement) to the extent that such modification or
replacement directly or indirectly affects the provision of
the Services; or
(b) a material change occurs in the law or regulations
(including codes of practice whether or not having the
force of law) governing telecommunications in Pakistan; or
(c) a material change (including enforcement action by any
regulatory authority) occurs which affects or reasonably
could be expected to affect the commercial or technical
basis of this Agreement.
16.2 A review notice shall set out in reasonable details the issues to
be discussed between the Parties.
- 16 -
<PAGE>
PAKISTAN
16.3 On the service of a review notice, the Parties shall forthwith
negotiate in good faith, the matters to be resolved with a view to
agreeing the relevant amendments to this Agreement.
16.4 If the Parties fail to reach agreement on the subject matter of a
review notice within 3 (three) months from the date of service of
such review notice, either Party may at its option after the
expiry of the aforementioned 3 (three) month period terminate this
Agreement without any further obligation or liability.
16.5 If either Party is required by applicable law or regulation to
modify or discontinue the Services or any part thereof then either
Party reserves the right to do so and will notify the other as
soon as possible of any such modification which shall forthwith be
binding on the Parties and neither will have any further
obligation or liability to the other in respect of such
modification. "However, if these modifications are materially
detrimental to the other Party then that other Party can terminate
this Agreement without liability by providing one month's notice
in writing to the first party."
17. FORCE MAJEURE
For the purposes of the Agreement, "Force Majeure" means an event or
circumstance which is beyond the reasonable control of a Party, and which
makes a Party's performance of its obligations under this Agreement
impossible, and includes, but is not limited to, Acts of God, war, riots,
civil disorder, earthquake, fire, explosion, storm, flood or other
adverse weather conditions, strikes, lockouts or other industrial
action.,
17.1 Force Majeure shall not include:
17.1.1 an event, which is caused by the negligence or willful
action of a Party or its subcontractor;
17.1.2 an event which a diligent Party could reasonably have been
expected to:
(i) have taken into account as at the Effective Date, or
(ii) have avoided or overcome in the course of carrying
out its obligations under this Agreement. 17.2 Force
Majeure shall not include insufficiency of funds or
circumstances arising from a failure to make any
payment required by this Agreement.
17.3 The failure of a Party to fulfill any of its obligations under
this Agreement shall not be considered to be a breach of, or a
default under, this Agreement insofar as the inability arises from
an event of Force Majeure,
- 17 -
<PAGE>
PAKISTAN
provided that the Party affected by that event has taken
reasonable precautions, due care and attempted to put in place
reasonable alternative arrangement all with the objective of
carrying out the terms of this Agreement without delay.
17.4 Measures to be Taken
A Party affected by an event of Force Majeure shall take all
reasonable measures to remove its inability to fulfill its
obligations under this Agreement with a minimum of delay and shall
notify the other Party in writing of the event concerned as soon
as possible, and in any event not later than 7 (seven) Days
following the occurrence of the event concerned, and shall
similarly give notice of the restoration of normal conditions as
soon as possible. The Parties shall take all reasonable measures
to minimize the consequences of any event of the Force Majeure.
17.5 Extension of Time
Any period, within which a Party must, pursuant to this Agreement,
complete any action or task, shall be extended Day-for-Day up to a
period equal to the time during which that Party was unable to
perform such action as a result of Force Majeure.
17.6 Consultation
Not later than 14 (fourteen) Days after a Party has become unable
to perform a material portion of the Services as the result of an
event of Force Majeure, the Parties shall consult with each other
with a view to agreeing on appropriate measures to be taken in the
circumstance.
18. TERMINATION
18.1 Either Party may terminate this Agreement immediately on written
notice if the other:
(a) commits a material breach of this Agreement, which is
capable of remedy, and the Party in breach fails to remedy
the breach within a reasonable time of a written notice to
do so; or
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<PAGE>
(b) commits a material breach of this Agreement which cannot be
remedied; or
(c) is repeatedly in breach of this Agreement "and has had
prior notice in writing that a further breach of this
agreement will result in termination of it"; or
(d) is the subject of a bankruptcy order, or becomes insolvent,
or makes any arrangement or composition with or assignment
for the benefit of its creditors, or if it goes into either
voluntary (other than for reconstruction or amalgamation)
or compulsory liquidation, or a receiver or administrator
is appointed over its assets or if the equivalent of any
such events under the laws of any of the relevant
jurisdictions occurs.
18.2 PTCL may, by not less than 15 (fifteen) Days' written notice to
the Contractor "(during which period the contractor shall be
entitled and permitted to attempt to remedy the breach):,
terminate this Agreement without prejudice to any rights which may
have accrued under this Agreement to either Party prior to such
termination, if:
18.2.1 the VoIP Platform has an adverse impact on PTCL network;
18.2.2 any subcontractor does or allows anything to be done which
in PTCL's reasonable opinion is likely to jeopardize the
operation of the PTCL network;
18.2.3 the Contractor files with PTCL a statement in writing
which has a material effect on the rights, obligations or
interests of PTCL and which the Contractor knows or should
reasonably have known to be false;
18.2.4 the Contractor is unable as a result of Force Majeure or
for any other reason to perform a material portion of the
Services for a continuous period of not less than 60
(sixty) Days;
18.2.5 the Contractor fails to start full scale commencement of
the Service within 30 (thirty) Days of the Service
Commencement Date;
- 19 -
<PAGE>
PAKISTAN
18.2.6 the Contractor introduces any equipment which has not
been approved in advance by PTCL and, where required, by
PTA;
18.2.7 the Contractor introduces or provides any service
through the VoIP Platform or otherwise which has not
been approved by PTCL;
18.2.8 the Contractor commits an act which is in violation or
which places PTCL in violation of its License or of the
Act;
18.2.9 PTCL may terminate this Agreement as provided in Clause
12.2;
18.2.10 Notwithstanding the foregoing, after the first year of
the commencement of service, this Agreement may be
terminated at any time by either Party by giving 90
(ninety) Days written notice to the other Party.
18.2.11 Without prejudice to PTCL's general rights to terminate
the Agreement, the following INTER ALIA shall constitute
a material irremediable breach by the Contractor
entitling PTCL to terminate the Agreement forthwith
without any further liability:-
a. if Contractor terminates more than 5 (five)
million minutes per month through a VoIP
Platform for consecutive 3 (three) months,
provided however that, PTCL shall not exercise
its right to terminate this Agreement under this
Clause, if the additional minutes terminated are
less than 10% (ten per cent) of the aforesaid
volume for such period;
b. if Contractor terminates traffic from origins
other than Europe and USA through VoIP Platform;
c. if more than 25% (twenty five percent)
A-telephone numbers in CDRs are not provided;
d. if Contractor terminates traffic through any
other mechanism (except bilateral gateways)
bypassing VoIP Platform installed under this
Agreement. In addition to the termination, the
Contractor shall also be liable to compensate
for the loss caused due to bypassing of PTCL
International/VoIP Gateways.
- 20 -
<PAGE>
PAKISTAN
e. if the service is suspended for three times in a
calendar year (due to non re-couping and non
toping-up of the rolling advance),.
f. any disclosure contrary to the information,
documents and other material provided by the
contractor.
g. any disclosure contrary to the affirmations
given in Clause 24.
19. OBLIGATION AT TERMINATION
19.1 On termination of this Agreement in accordance with its terms,
or upon expiration of this Agreement as the case may be all
rights and obligations of the Parties shall cease, except:
a. rights and obligations that have accrued as of the date
of termination or expiration; b. the obligation of
confidentiality set forth in this Agreement; c. any
right which a Party may have under the Applicable Law;
d. the indemnification obligations set forth in this
Agreement.
19.2 Upon termination of this Agreement:
(a) the Contractor shall forthwith pay to PTCL any
outstanding amounts, which it is liable to pay under
this Agreement,
(b) PTCL shall without delay return to Contractor all
amounts held by it after the adjustment of payments due
to PTCL , if any .
19.3 Upon termination of this Agreement by notice of either Party to
the other pursuant to this Agreement, the Contractor shall,
immediately on receipt of notice to that effect, take all
necessary steps to bring the Services to a close within 30
(thirty) Days of the receipt of the notice in an orderly manner.
20. CONTRACTOR TO COMPLY WITH APPLICABLE LAW
20.1 The Contractor shall pay all the taxes, levies, duties and
impositions on the import of equipment which are levied on the
Contractor within the time period stipulated by the levying
authority. The Contractor is solely responsible for all such
taxes and duties even if they are imposed or become effective
after the Effective Date.
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<PAGE>
PAKISTAN
20.2 The Contractor shall be solely responsible for obtaining any
authorization, registration, permit or licenses
("Authorization") as required under the Applicable Law at its
own cost for any import/export required to be undertaken for the
performance of its obligations under this Agreement. PTCL will
provide reasonable assistance to the Contractor in this regard
and any delay in clearance of any equipment to be used in the
VoIP Platform shall be considered as Force Majeure pursuant to
the relevant Clause of this Agreement.
20.3 The Parties will at all times comply with the Applicable Law.
The Parties will use their best efforts to ensure that their
respective subcontractors and personnel comply with the
Applicable Law.
21. FAIRNESS AND GOOD FAITH
21.1 The Parties undertake to act in good faith with respect to each
other's rights and obligations under this Agreement and to adopt
all reasonable measures to ensure the realization of the
objectives of this Agreement.
21.2 The Parties recognize that it is impractical in this Agreement
to provide for every contingency, which may arise during the
life of the Agreement, and the Parties agree that it is their
intention that this Agreement shall operate fairly as between
them, and without detriment to the interest of either of them.
If during the term of this Agreement, either Party has evidence
to believe that the other is performing its obligations under
this Agreement unfairly, then the Parties undertake to use their
best efforts to agree on such action as may be necessary to
remove the cause or causes of such unfairness.
21.3 PTCL shall not take any action, discriminatory or arbitrary,
which `materially or adversely affects or is likely to affect
the enjoyment of the rights and interests of the Contractor
under or pursuant to this Agreement.
21.4 The parties agree that, save in respect of death, personal
injury and any other liabilities that can not be excluded by
law, their aggregate liabilities to each other under or related
to this agreement shall not exceed the
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<PAGE>
value of the Rolling Advance at the date upon which the event
giving rise to the liability arose.
22. SETTLEMENT OF DISPUTES & ARBITRATION
22.1 The provisions contained in this Clause shall survive the
termination and/or expiration of this Agreement.
22.2 The Parties shall use their best efforts to settle amicably all
disputes arising out of or in connection with this Agreement or
its interpretation. Any dispute between the Parties as to
matters arising under this Agreement which cannot be settled
amicably within 10 (ten) days after receipt by one Party of the
other Party's request for amicable settlement may be submitted
by either Party to arbitration in accordance with the provisions
set out below.
22.3 In the event of disputes between the Parties arising out of the
terms of this Agreement, the same shall be settled by
arbitration by 2 (two) arbitrators, 1 (one) each to be appointed
by the Parties. The Parties shall appoint such arbitrators
within 10 (ten) working days of receipt of the first notice in
this behalf by a Party. In case of a disagreement among the
arbitrators or if they are unable to resolve the matter within
30 (thirty) days thereafter, the matter will be referred to an
umpire nominated by both parties or their arbitrators who shall
preferably be a retired judge of the High Court of a Province or
the Supreme Court of Pakistan or an internationally reputed
Telecom Lawyer. The award given by the arbitrator(s) as
aforesaid shall be binding on the Parties.
22.4 Arbitration proceedings shall be held in Islamabad, Pakistan.
The procedure shall be that provided in the Arbitration Act 1940
and all subsequent amendments thereto.
22.5 In any arbitration proceedings under this Agreement the decision
of the arbitrator shall be final and binding and shall be
enforceable in any court of competent jurisdiction, and each of
the Parties waives any objections to or claims to immunity in
respect of the enforcement of the claim.
23. CONFIDENTIALITY
23.1 The Contractor shall not, either during the term, or after the
expiration of this Agreement, disclose any proprietary or
confidential information relating to the Services, this
Agreement, or PTCL's business or operations without the prior
written consent of PTCL, unless such disclosure is
- 23 -
<PAGE>
PAKISTAN
required by law or regulation or such information has entered
the public domain other than by a breach of this Agreement. The
Contractor agrees that it will use its best efforts to
ensure-that its subcontractors and personnel are bound by and
comply with the requirement of confidentiality set out in this
Clause.
23.3 PTCL shall not, either during the term, or after the expiration
of this Agreement, disclose any proprietary or confidential
information relating to the Services, this Agreement, or the
Contractor's business or operations without the prior written
consent of the Contractor, unless such disclosure is required by
law or regulation or such information has entered the public
domain other than by a breach of this Agreement. PTCL agrees
that it will use its best efforts to ensure that its
subcontractors and personnel are bound by and comply with the
requirement of confidentiality set out in this Clause.
23.3 Notwithstanding the provisions of the above paragraphs of this
Clause, the Parties may require each other to sign a
Confidentiality Agreement on a case-by-case basis before
specific information can be made available.
24. INDEMNITIES
The Contractor shall keep PTCL, both during and after the term of this
Agreement, fully and effectively indemnified against all losses, claims,
damages, liabilities, costs and expenses incurred by or imposed upon
PTCL as a consequence of:
(a) any conclusive claim made by a subcontractor of the Contractor;
(b) any conclusive claim made by a Customer in respect of the
Services.
25. AFFIRMATION
The Contractor declares and affirms that;
a) The Contractor and its shareholders, directors, officers,
employees, and agents have not paid or received, nor undertaken
to pay or receive, any bribe, pay-off, kick-back or unlawful
commission and that the Contractor and its shareholders,
directors, officers, employees, and agents have not in any other
way or manner paid any sums, whether in Rupees or a foreign
currency and whether in Pakistan or abroad, given or offered to
give any such gifts and presents in Pakistan or abroad, to any
official or employee of the PTCL or any
- 24 -
<PAGE>
other person to procure this Agreement. The Contractor
undertakes not to engage in any of these or similar nets during
the term of this Agreement.
b) Neither the Contractor nor any of its director or executive is
Israeli or Indian national. Notwithstanding any thing contained
elsewhere in this Agreement PTCL will have the right to
terminate the Agreement in the event PTCL has reasons to believe
that the Contractor or any of its director or executive is
Israeli or Indian national.
26. APPLICABLE LAWS
This Agreement shall be governed by the laws of Pakistan.
27. RULES OF CONSTRUCTION
27.1 The captions or headings in this Agreement are strictly for
convenience and shall not be considered in interpreting this
Agreement or as amplifying or limiting any of its content. Words
in this Agreement, which import the singular connotation, shall
be interpreted as plural, and words, which import the plural
connotation, shall be interpreted as singular, as the identity
of the Parties or objects referred to may require.
27.2 Unless expressly defined herein, words having well known
technical or trade meanings shall be so construed. All listing
of items shall not be taken to be exclusive, but shall include
other items, whether similar or dissimilar to those listed, as
the context reasonably requires.
27.3 Except as set forth to the contrary herein, any right or remedy
of PTCL or the Contractor shall be cumulative and without
prejudice to any other right or remedy, whether contained herein
or not.
27.4 This Agreement has been fully negotiated between and jointly
drafted by the Parties.
27.5 All actions, activities, consents, approvals and other
undertakings of the Parties in this Agreement shall be performed
in a reasonable and timely manner, it being expressly
acknowledged and understood that time is of the essence in the
performance of obligations required to be performed by a date
expressly specified herein. Except as specifically set forth
herein, for the purpose of this Clause the normal standards of
performance within the telecommunications industry in the
relevant market shall be the measure of whether a Contractor's
performance is reasonable and timely.
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<PAGE>
PAKISTAN
28. NOTICES
28.1 Any notice, request or consent required or permitted to be given
or made pursuant to this Agreement shall be in writing and shall
be deemed to have been given or made when delivered in person to
any authorized representative of the Party to whom the
communication is addressed, or when sent by registered mail,
telex, telegram or facsimile to such Party at the following
address:
For the Contractor: For PTCL:
Exec. Vice President-Int'l GM (Tele-housing & VoIP)
Fusion Telecommunications Pakistan Telecommunication
International, Inc. Company Limited
420 Lexington Avenue Headquarters G-8/4,
Suite 518, New York, Islamabad
NY, 10170 USA
Telephone: +1-212-972-2000 Telephone: 92-51-2272021
Fax: +1-212-972-7884 Fax: 92-51-2201015/2260710
28.2 A Notice will be deemed to be effective as follows:
In case of personal delivery or registered mail, on delivery;
and in the case of facsimiles, 24 (twenty -four) hours following
confirmed transmission, disregarding weekends and national
holidays. Facsimile notices shall not require confirmation by
hard copies.
23.3 Party may change its address or fax number for notice under this
Agreement by giving the other Party notice pursuant to this
Clause.
29. ADDITIONAL TERMS
29.1 The Contractor undertakes and warrants that the VoIP Platform
and the equipment installed for PTCL will not in any manner
damage property of PTCL or in any way interfere with or affect
PTCL's existing system or services. The Contractor hereby
undertakes to indemnify PTCL for any loss, damage, cost or
expense incurred by PTCL(unless caused by erroneously supplied
information or the act of omission of PTCL) as a consequence of
a breach by the Contractor of this undertaking and warranty. For
the avoidance of doubt, it is understood that commencement of
operations under this Agreement on the Service Commencement Date
shall be deemed fulfillment of this Clause, and the
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<PAGE>
PAKISTAN
Contractor shall, following the Service Commencement Date, have
no liability under this Clause.
29.2 The Contractor does not have an exclusive right under this
Agreement to terminate traffic through VoIP technology, and PTCL
will not be prevented by virtue of this Agreement from engaging
any other contractors to provide VoIP services, in Pakistan.
29.3 VoIP Platform will be installed in PTCL premises to be
interconnected to PSTN network at appropriate levels. This
Agreement is strictly for traffic brought into PTCL network from
USA & Europe through the packet switched data communication
protocol of TCP/IP.
29.4 PTCL has securitized a substantial portion of its future
receivables from its international settlement payments through
the Securitization Agreement. The Contractor will use reasonable
efforts to ensure at its own cost and expense that its entering
into and its performance of its obligations under this Agreement
will not impact PTCL's obligations under the Securitization
Agreement.
29.5 The Contractor will provide free of cost training to 1 (one)
PTCL official in USA and 3 (three) PTCL officials in Pakistan so
that they gain expertise and experience in the operation of VoIP
Platform. For the purpose of this Clause and all matters
connected therewith, the Contractor or its nominees shall be
allowed free access to the premises where the VoIP Platform is
installed. PTCL also undertakes to provide the Contractor or its
nominees due access to the VoIP Platform so that it may, from
time to time, to monitor proper functioning or operations of the
same including its interconnectivity with VoIP Platforms
installed by Contractor in USA and Europe.
29.6 The quality of service of calls routed through VoIP Platform
shall not be less than GSM quality (MOS 3.5 or above).
29.7 The Contractor shall at its own cost and discretion take
appropriate legal action in USA & Europe to stop Illegal Traffic
coming into Pakistan there from.
29.8 The Contractor agrees to cooperate with PTCL in exchange of
relevant information for monitoring of the volume and source of
any Illegal Traffic and
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<PAGE>
PAKISTAN
originating points to safeguard interests of both the Parties.
The Parties agree as to the manner and the mechanism to be
adopted (on best effort basis).
29.9 The Contractor will not enter into any agreement with an
Incumbent Carrier for diversion of normal bilateral traffic on
to VoIP routes. The Contractor will not procure or re-file legal
bilateral traffic of PTCL meaning only gray area traffic will be
addressed. A list of the Incumbent Carriers is attached herewith
as Schedule-V. Any change thereof shall be duly communicated to
the Contractor.
29.10 It is mutually agreed and understood that this agreement is
being executed on a non-exclusive basis. Nothing contained
herein shall curtail, limit or restrict the right of PTCL to
enter into similar agreements with other parties. Provided
always that none of the other parties shall be offered
commercial terms more beneficial than those contained herein.
29.11 All obligations outside Pakistan whether in respect of the
Services or in respect of incoming traffic into the VoIP
Platform shall be the sole responsibility of the Contractor.
PTCL shall in any way neither be responsible nor shall be
considered as providing any Service outside Pakistan as a
consequence of this Agreement. The Contractor hereby indemnifies
PTCL in respect of any conclusive action against PTCL directly
pertaining to this Agreement or the performance of its terms
herein where the action relates to a matter which was the result
of any direct or indirect act or omission of the contractor.
29.12 The Contractor hereby acknowledges and declares that it is an
independent Contractor for the performance of Services mentioned
herein and no relationship of Agency, Licensee or sub Licensee
between PTCL and the Contractor is created by virtue of this
Agreement.
29.13 The Contractor undertakes to make, during the term of this
Agreement, complete written disclosure of its existing and
future business and agreements executed relating to VoIP
services, which directly or indirectly lead to termination of
traffic into Pakistan.
29.14 The PTCL shall have the right to inspect the VoIP Platforms
installed, owned and operated by the Contractor in USA and
Europe, which relate to termination of traffic into Pakistan.
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<PAGE>
29.15 The Parties recognize that time is of the essence of this
Agreement.
IN WITNESS WHEREOF the Parties have caused this Agreement to be signed as of the
Day and year first above written.
FOR AND ON BEHALF FOR AND ON BEHALF OF
OF THE PAKISTAN THE CONTRACTOR
TELECOMMUNICATION
COMPANY LIMITED
/s/ /s/
------------------------------ ---------------------------------
Noor ud Din Baqai(Member-Technical) Eric D. Ram, EVP- Int'l
Witnesses: Witnesses:
(1) /s/ /s/
--------------------------- ---------------------------------
Ashiq Hussain Javed Farrakh Qayyum
Chief Engineer Minister (Trade)
Embassy of Pakistan
Washington, DC
(2) /s/ /s/
--------------------------- ---------------------------------
Iftikhar Ahmad Bashir Commercial Assistant
Legal Advisor Washington, DC
- 29 -
<PAGE>
PAKISTAN
Schedule -I
IP TELEPHONY SOLUTIONS ANALYSIS
TEMPLATE
--------------------------------------------------------------------------------
Hardware
--------------------------------------------------------------------------------
Port Capacity - Analog 0
--------------------------------------------------------------------------------
Port Capacity-T1/E1 10 E-1's
--------------------------------------------------------------------------------
A-law / u - law Compatibility Both
--------------------------------------------------------------------------------
Call Capacity 300 DSO
--------------------------------------------------------------------------------
PC-Based No
--------------------------------------------------------------------------------
Chassis based with embedded processing Yes
--------------------------------------------------------------------------------
Architecture Nomenclature - Nuera GX-21 ORCA
--------------------------------------------------------------------------------
Signaling
--------------------------------------------------------------------------------
ANSI/Euro (ITU) ISDN/SS7/C7 and ISUP Yes
--------------------------------------------------------------------------------
MFC R1/R2 Yes
--------------------------------------------------------------------------------
DTMF support Yes
--------------------------------------------------------------------------------
H.323 Fast Connect No
--------------------------------------------------------------------------------
Type of Service
--------------------------------------------------------------------------------
Registered Service-Pre-Paid No
--------------------------------------------------------------------------------
Registered Service-Post-Paid No
--------------------------------------------------------------------------------
Real-Time Fax-T.30 Yes
--------------------------------------------------------------------------------
T.38 Fax No
--------------------------------------------------------------------------------
Data Calls Yes
--------------------------------------------------------------------------------
Dynamic Universal Port (Voice/Fax/Data) Yes
--------------------------------------------------------------------------------
Multiple Calling Cards No
--------------------------------------------------------------------------------
ANI Authentication Yes
--------------------------------------------------------------------------------
Single Stage Dialing Yes
--------------------------------------------------------------------------------
Pre-Paid Calling Card No
--------------------------------------------------------------------------------
Messaging Services Support No
--------------------------------------------------------------------------------
IVR
--------------------------------------------------------------------------------
Language Selection N/A
--------------------------------------------------------------------------------
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<PAGE>
PAKISTAN
--------------------------------------------------------------------------------
Trouble Announcement N/A
--------------------------------------------------------------------------------
IVR Editor N/A
--------------------------------------------------------------------------------
IVR Location N/A
--------------------------------------------------------------------------------
Creation/Billing Per port Yes
--------------------------------------------------------------------------------
Redundant Routes Yes
--------------------------------------------------------------------------------
Call Routing-Country / Area Code Yes
--------------------------------------------------------------------------------
Proscribed Number ?
--------------------------------------------------------------------------------
Call Block-Destination Number Yes
--------------------------------------------------------------------------------
Maximum GW / GK Ratio N/A
--------------------------------------------------------------------------------
Existing Numbering Plans No
--------------------------------------------------------------------------------
Service Classes & User Groupings ?
--------------------------------------------------------------------------------
Location of Routing Logic Excel Switch
--------------------------------------------------------------------------------
Call Progress Signals
--------------------------------------------------------------------------------
Ring back, Busy Tone Yes
--------------------------------------------------------------------------------
Timer for Inter Digit, First-digit, No Yes
Answer
--------------------------------------------------------------------------------
Maximum latency
o End-to-end
< 400 MS
o Element wise
?
--------------------------------------------------------------------------------
5. Billing
--------------------------------------------------------------------------------
Authentication (User/Subscriber) No
--------------------------------------------------------------------------------
Billing Data Creation per Gateway Yes
--------------------------------------------------------------------------------
Central Billing Data Storage Yes
--------------------------------------------------------------------------------
Retransmit Billing Data During Link Failure N/A
--------------------------------------------------------------------------------
Rating by Country / Area Yes
--------------------------------------------------------------------------------
Automatic Rate Change Yes
--------------------------------------------------------------------------------
Real-Time Billing No
--------------------------------------------------------------------------------
No Charge Function for Small Fraction Call Yes
--------------------------------------------------------------------------------
Standard DB for Billing Storage Yes
--------------------------------------------------------------------------------
Multiple Rates / Route Yes
--------------------------------------------------------------------------------
Drop-Off Rates ?
--------------------------------------------------------------------------------
- 31 -
<PAGE>
PAKISTAN
--------------------------------------------------------------------------------
Billing Increments
Programmable
--------------------------------------------------------------------------------
Billing based on Units or Money Money
--------------------------------------------------------------------------------
Holiday Rates Yes
--------------------------------------------------------------------------------
Grace Period ?
--------------------------------------------------------------------------------
Billing Answer After Egress ?
--------------------------------------------------------------------------------
Network Management
--------------------------------------------------------------------------------
SNMP MIB Yes
--------------------------------------------------------------------------------
Fault Monitoring Yes
--------------------------------------------------------------------------------
Performance Statistics Yes
--------------------------------------------------------------------------------
Command Line Interface Yes
--------------------------------------------------------------------------------
Web-based Management Yes
--------------------------------------------------------------------------------
SS7
--------------------------------------------------------------------------------
Physical Interfaces Yes
--------------------------------------------------------------------------------
Redundant Link No
--------------------------------------------------------------------------------
# Point Codes Supported Yes
--------------------------------------------------------------------------------
Signaling Level Lvl 4 ISUP
--------------------------------------------------------------------------------
Standalone Processor Yes
--------------------------------------------------------------------------------
Embedded Processor Yes
--------------------------------------------------------------------------------
Transport Protocol Suit
--------------------------------------------------------------------------------
H.323 Yes
--------------------------------------------------------------------------------
Support for Industry standard H.323 Clients No
--------------------------------------------------------------------------------
TCP/IP Yes
--------------------------------------------------------------------------------
UDP Yes
--------------------------------------------------------------------------------
RTP/RTCP Yes
--------------------------------------------------------------------------------
RSVP No
--------------------------------------------------------------------------------
SIP Yes
--------------------------------------------------------------------------------
MGCP Yes
--------------------------------------------------------------------------------
o Interfacing / Inter-working With IP-Backbone
--------------------------------------------------------------------------------
ATM N/A
--------------------------------------------------------------------------------
- 32 -
<PAGE>
PAKISTAN
--------------------------------------------------------------------------------
Frame Relay N/A
--------------------------------------------------------------------------------
IP Yes
--------------------------------------------------------------------------------
Other
--------------------------------------------------------------------------------
Secure Administration No
--------------------------------------------------------------------------------
Secure Voice Yes
--------------------------------------------------------------------------------
APIs Yes
--------------------------------------------------------------------------------
Codecs Supported G.711, G.723, G.726, G.729, GSM,
ECELP
--------------------------------------------------------------------------------
Compression Algorithm Scalability 8Kbps-64 Kbps
--------------------------------------------------------------------------------
Built-In Inter-connection Capability for No
Traffic Sharing
--------------------------------------------------------------------------------
- 33 -
<PAGE>
PAKISTAN
Schedule -II
Platform Connectivity Topology Diagram
[GRAPHIC OMITTED]
- 34 -
<PAGE>
PAKISTAN
Schedule-III
------------
ANNUAL INTERNATIONAL INCOMING MINUTES (IN MILLIONS) FROM USA AND EUROPE
-----------------------------------------------------------------------
--------------------------------------------------------------------------------
Actual Incoming Traffic (Million Minutes) Forecast Traffic
--------------------------------------------------------------------------------
S/No. COUNTRY 96-97 97-98 98-99 99-00 00-01 01-02 02-03
--------------------------------------------------------------------------------
1. USA 170.528 178.346 199.907 273.997 359.243 405.945 458.718
--------------------------------------------------------------------------------
2. EUROPE 92.400 109.987 151.167 217.026 183.844 207.744 234.751
--------------------------------------------------------------------------------
USA + Europe 262.928 288.333 351.073 491.023 543.088 613.689 693.468
-----------------------------------------------------------------------------
[GRAPHIC OMITTED]
- 35 -
<PAGE>
PAKISTAN
Schedule-IV
ACCOUNTING AND METHOD OF SETTLEMENT
-----------------------------------
a) Fortnightly traffic account and methods of settlement
i) Within 2 (two) days from the end of every fortnight to which the
account relates, PTCL will prepare a fortnightly accounts settlement
statement in a format designed by PTCL in its discretion showing the
balances from the fortnightly accounts to which it relates and shall
send the same to the Contractor. The contractor shall make payment
within seven days of transmission of invoice as provided in clause-11.
In the event of dispute between the Parties and subject to the
provisions of Clause 11, the Contractor shall still be obliged to make
payment by the Due Date in accordance with PTCL's fortnightly accounts
settlement statement in the Designated Account.
ii) In case the Contractor fails to make the payment by the Due
Date, then PTCL may, at its sole discretion having provided four days
prior notice in writing (during which period, Contractor may remedy the
breach and prevent termination of the Agreement), to the Contractor
terminate the Agreement without prejudice to any other interest or claim
that may have accrued in favour of PTCL or to which PTCL may in the
future be entitled to under the Agreement.
b) ROLLING ADVANCE CALCULATION FOR THIRTY (30) DAYS & APPLICABILITY
The Contractor shall deposit in the Designated Account an amount of US$
570,000 (Five hundred and seventy thousand US$) i.e. the termination
price of 3 million minutes (minimum traffic for thirty days) per VoIP
Platform @ US$ 0.19 (US cents nineteen) per minute within 15 days of the
Effective Date. This is the minimum amount of rolling advance for the
commencement of VoIP Service, rolling advance for subsequent months will
be calculated for a minimum of 3 (three) million Terminated Minutes per
month for one month (30 days) at the applicable rate.
Topping Up/Down Procedure
-------------------------
In case, the per month per VoIP Platform site termination traffic rises
above 3 (three) million minutes, the 30 (thirty) days Rolling Advance
shall be increased by the Contractor pro-rata over and above the minimum
amount specified above. If the traffic through any VoIP Platform is in
excess of 3 (three) million minutes per month per site, within 7 (seven)
days following the end of such month, the Rolling Advance shall be
topped up and if decreases will be topped down according to the
following procedure:
i. PTCL shall determine the traffic for the preceding month
on the basis of data available to PTCL. The recording
and accounting shall be a permanent feature for each
succeeding month during the currency of the Agreement.
ii. PTCL shall give notice to the Contractor to deposit the
additional amount determined by PTCL to top up the
Rolling Advance and accordingly the PTCL shall make
payment to the contractor to top down the rolling
advance, as a result of traffic recorded in PTCL system
according to the following example:
- 36 -
<PAGE>
PAKISTAN
EXAMPLE FOR CALCULATION OF ROLLING ADVANCE
------------------------------------------
Final schedule to be prepared and will be attached at the time of
contract signing, however an example to demonstrate the calculation for
seven months is as under;
ROLLING ADVANCE (AMOUNT IN US$)
--------------------------------------------------------------------------------
MONTH TERMINATED MINUTES RATE AMOUNT RECEIPT MONTHLY
MINUTE FOR PER INCREASED/ /(ADJUSTED) BALANCE
TOPPING MINUTE DECREASE AMOUNT
UP/(DOWN)
--------------------------------------------------------------------------------
Initial advance 3 MM -- 0.19 -- 570,000 570,000
--------------------------------------------------------------------------------
TOPPING-UP/ (DOWN)
--------------------------------------------------------------------------------
Month-1 2MM -- -- -- -- 570,000
--------------------------------------------------------------------------------
Month-2 3MM -- -- -- -- 570,000
--------------------------------------------------------------------------------
Month-3 4MM 1MM 0.19 190,000 -- 570,000
--------------------------------------------------------------------------------
Month-4 5MM 1MM 0.19 190,000 190,000 760,000
--------------------------------------------------------------------------------
Month-5 5MM -- -- -- 190,000 950,000
--------------------------------------------------------------------------------
Month-6 4MM (1MM) 0.19 (190,000) -- 950,000
--------------------------------------------------------------------------------
Month-7 3mm (1MM) 0.19 (190,000) (190,000) 760,000
--------------------------------------------------------------------------------
iii. Within 7 (seven) days after the issuance date of such
notice from PTCL, the Contractor shall make payment of
the incremental amount notified by PTCL into the
Designated Account.
iv. In case the Contractor fails to top up the Rolling
Advance as set forth above, PTCL reserves the right to
terminate the Agreement forthwith.
c) Traffic Dilution Compensation amount calculation &
Reconciliation Procedure
Subject to and as limited by Section 12.2.2 of this Agreement, for any
month the Contractor will be liable to pay PTCL compensation if the
international traffic from the USA and Europe routed through non-VoIP
routes not utilizing the VoIP Platform, falls below the average that may
have been expected in such month from such area, such averages (allowing
for the expected 13% annual increase in volume) being set forth in
Schedule-III hereto for the USA and Europe collectively. The
compensation amount for each month shall be the number of minutes by
which the traffic falls below the average multiplied by carrier
settlement rate minus Contractor settlement rate. The compensation
figure will be calculated monthly following the Service Commencement
Date to determine if any compensation amount is payable to PTCL
hereunder and if so what amount. The compensation amount shall be
payable by the Contractor to PTCL along with its fortnightly bill given
in Clause 11. PTCL's calculation of the same shall be binding on the
Contractor. The Rolling Advance will be adjusted against compensation
amounts due from the Contractor and following such adjustment the
Contractor will be liable forthwith to top up the Rolling Advance.
- 37 -
<PAGE>
PAKISTAN
In case the Contractor fails to pay the compensation amount claimed or fails to
top up the Rolling Advance as set forth above. The method for calculation of
compensation for dilution of bilateral traffic is provided hereunder:
i) In order to setup mechanism to safeguard against dilution of
PTCL legal incoming traffic, such traffic growth
statistics/statement and graphs for last five years with
established compound annual growth (CAGR) are annexed as
Schedule-III. The benchmark line so established would be the
basis of control mechanism against dilution of legal traffic for
the purpose of application of relevant clauses. The statistics
and graph also include traffic variation patterns such as
seasonal trends. Any variation of (-) 5% VoIP measured traffic
from USA and Europe over the benchmark line (and established
seasonal pattern) would be the basis of application of relevant
clause for determining the dilution of legal traffic.
ii) To safeguard PTCL's aforesaid legal benchmark-line including
growth, PTCL will provide monthly data in specified pattern to
the Contractor for information about any variation. If the
variations are within (-) 5% limit of VoIP traffic no
compensation shall be payable by the Contractor.
iii) In case of variation over (-) 5% limit of the minimum guaranteed
(three million) VoIP traffic INTER ALIA the following corrective
and remedial measures would become necessary:
A. The Parties will analyze the reasons for variation and
mutually agree on corrective measures within time limit
of one week. If reasons of variation are due to seasonal
or temporary in nature then no compensation shall be
payable by the Contractor.
B. If the reasons for variation are found to be beyond the
control of both the Parties, the Parties shall equally
share the loss of traffic. For avoidance of doubt,
Contractor's liability in this regard will be restricted
to US Cents 4 per minute (that is: bilateral rate minus
VoIP rate, which is US Cents 23 .00 minus US Cents 19.00
, equal to US Cents 4 ) until revision of US carrier
settlement rate (bilateral carrier rate) of the diluted
traffic.
C. In case of continuous variation over a period of three
monthly the Parties may exercise their right of
termination.
d) Charges & Conditions to terminate Incoming Traffic in VoIP Platform
i) Only traffic from USA/Europe shall be terminated through the
VoIP Platform. Contractor hereby agrees to terminate 3 to 5
million minutes per month of VoIP Platform focusing on capturing
of Illegal Traffic.
ii) Termination rate of US$ 0.19 (US cents nineteen) per minute will
be applicable until revision of US carrier settlement rate
(bilateral carrier rate) . Subsequent termination rate would be
kept up to 15% below the US Carrier Settlement Rate (bilateral
carrier rate) and the same shall be automatically revised inline
with US Carrier Settlement Rate.
- 38 -
<PAGE>
iii) The VoIP service shall be operated only for incoming
international calls from the USA and Europe routed as per
network topology agreed between the Parties.
The Contractor will ensure that only identified calling party is given access to
VoIP Gateway. The CDR provided to PTCL as per Clause 11(ii) must also contain
identity of calling party. Up to (twenty-five) 25% un-identified calling numbers
will be accepted and no further investigation carried out.
- 39 -
<PAGE>
PAKISTAN
Schedule-V
List of Incumbent Carriers in USA and Europe
USA
------------------------------------------------------
S No. Country Carrier
------------------------------------------------------
1 USA Concert
------------------------------------------------------
2 USA MCI World Com
------------------------------------------------------
3 USA Sprint USA
------------------------------------------------------
Europe
------------------------------------------------------
S No. Country Carrier
------------------------------------------------------
1 Austria Austria- (PTA)
------------------------------------------------------
2 Belgium Belgacom
------------------------------------------------------
3 Cyprus CTA
------------------------------------------------------
4 Germany Deutsche Telecom
------------------------------------------------------
5 France France Telecom
------------------------------------------------------
6 Greece OTE
------------------------------------------------------
7 Italy Telecom Italia
------------------------------------------------------
8 Norway Tele nor
------------------------------------------------------
9 Spain Telephonica
------------------------------------------------------
10 Netherlands KPN
------------------------------------------------------
11 Switzerland Swiss Com
------------------------------------------------------
12 United Kingdom Concert
------------------------------------------------------
13 United Kingdom C & WC
------------------------------------------------------
- 40 -
<PAGE>
PAKISTAN
SCHEDULE VI
Programme of commitments (Milestones)
OPTION II
IMPLEMENTATION SCHEDULE FOR VOIP PROJECT THROUGH PAKISTAN INTERNET EXCHANGE
---------------------------------------------------------------------------
--------------------------------------------------------------------------------
S.NO Description of Task Action to be Responsibility
completed by
--------------------------------------------------------------------------------
1 Signing of the Agreement 1st Day PTCL & Contractor
--------------------------------------------------------------------------------
2 Submission of list, 7th Day Contractor
specification & site plan of
the equipment
--------------------------------------------------------------------------------
3 Equipment Approval 14th Day PTCL
--------------------------------------------------------------------------------
4 Availability of 14th Day PTCL
Air-Conditioned space and
commerical power supply in
accordance with the site plane
--------------------------------------------------------------------------------
5 Confirmed Deposit of Rolling 15th Day from Contractor
Advance the Effective
Date
--------------------------------------------------------------------------------
6 Provision of 8 E1s for 24th Day PTCL
connectivity between DTE and
VoIP platform, 2.5 MB clear
channel via PIE and Data fill
in the DTE should be ready
including software and
hardware configerd 100%
guranted to interconnect with
Contractor VoIP platform
--------------------------------------------------------------------------------
7 Equipment on site 28th Day Contractor
--------------------------------------------------------------------------------
8 Equipment installation 30th Day Contractor
completed
--------------------------------------------------------------------------------
9 Testing & commissioning 32nd Day PTCL &
completed Contractor
--------------------------------------------------------------------------------
10 Service commencement 35th Day Contractor
--------------------------------------------------------------------------------
11 Local Training 60th Day PTCL & Contractor
--------------------------------------------------------------------------------
12 Foreign Training 70th Day Contractor
--------------------------------------------------------------------------------
- 41 -
<PAGE>
PAKISTAN
IMPLEMENTATION SCHEDULE FOR VOIP PROJECT THROUGH IPLC EXCHANGE
--------------------------------------------------------------
--------------------------------------------------------------------------------
S.NO Description of Task Action to be Responsibility
completed by
--------------------------------------------------------------------------------
1 Signing of the Agreement 1st Day PTCL & Contractor
--------------------------------------------------------------------------------
2 Submission of list, 7th Day Contractor
specification & site plan of
the equipment
--------------------------------------------------------------------------------
3 Equipment Approval 14th Day PTCL
--------------------------------------------------------------------------------
4 Availability of 14th Day PTCL
Air-Conditioned space and
commerical power supply in
accordance with the site plane
--------------------------------------------------------------------------------
5 Confirmed Deposit of Rolling 15th Day from Contractor
Advance the Effective
Date
--------------------------------------------------------------------------------
6 Provision of 8 E1s for 24th Day PTCL
connectivity between DTE and
VoIP platform, 2.5 MB clear
channel via PIE and Data fill
in the DTE should be ready
including software and
hardware configerd 100%
guranted to interconnect with
Contractor VoIP platform
--------------------------------------------------------------------------------
7 Equipment on site 28th Day Contractor
--------------------------------------------------------------------------------
8 Equipment installation 30th Day Contractor
completed
--------------------------------------------------------------------------------
9 Testing & commissioning 32nd Day PTCL & Contractor
completed
--------------------------------------------------------------------------------
10 Service commencement 35th Day Contractor
--------------------------------------------------------------------------------
11 Local Training 60th Day PTCL & Contractor
--------------------------------------------------------------------------------
12 Foreign Training 70th Day Contractor
--------------------------------------------------------------------------------
TO BE CHANGED BY AMENDMENT
- 42 -