EXECUTION COPY
AMENDED AND RESTATED
ENGINEERING, PROCUREMENT
AND CONSTRUCTION CONTRACT
(OUTSIDE PLANT WORK)
DATED AS OF NOVEMBER 15, 1999,
EFFECTIVE AS OF FEBRUARY 19, 1999
BETWEEN
BECHTEL LIMITED
AS CONTRACTOR
AND
VICAME INFRASTRUCTURE DEVELOPMENT GMBH
AS DEVELOPER
and
VIATEL GERMAN ASSET GMBH
AS OWNER
AND
METROMEDIA FIBER NETWORK GMBH
AS OWNER
AND
CARRIER 1 FIBER NETWORK GMBH & CO. OHG
AS OWNER
---------------------------------------
GERMAN NETWORK DEVELOPMENT PROJECT
GND ▇▇. ▇
▇▇▇
▇▇▇ ▇▇. ▇
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS; INTERPRETATION......................................2
1.1. DEFINED TERMS....................................................2
1.2. RULES OF CONSTRUCTION............................................2
SECTION 2. INTENT OF CONTRACT AND RELATIONSHIP OF THE PARTIES...............3
2.1. Generally........................................................3
2.2. Interpretation...................................................3
2.3. Relationships Among the Parties..................................3
SECTION 3. CONTRACT DOCUMENTS...............................................4
3.1. Form Part of this Contract.......................................4
3.2. Conflicts........................................................4
SECTION 4. RESPONSIBILITIES OF THE CONTRACTOR...............................5
4.1. Scope of Work....................................................5
4.2. Overall System Design Responsibility.............................6
4.3. Technical Information............................................7
SECTION 5. TECHNICAL REQUIREMENTS, MILESTONE SCHEDULE AND PROGRESS
MEETINGS.........................................................7
2 5.1. Technical Requirements...........................................7
5.2. Milestone Schedule...............................................7
5.3. Progress Meetings................................................8
SECTION 6. COMPLIANCE WITH LAWS; PERMITS....................................8
6.1. Compliance With Laws.............................................8
6.2. Variations Required By Law.......................................8
6.3. Permits..........................................................9
6.4. No Liability....................................................10
SECTION 7. THE SCHEDULED ROUTE.............................................10
7.1. Generally.......................................................10
7.2. Wayleave Procurement and Approval...............................10
7.3. Alternative Wayleaves...........................................11
SECTION 8. OWNER OBLIGATIONS...............................................12
8.1. Owner-Procured Equipment and Vendor Specifications..............12
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8.2. POP Sites and Owner Specifications..............................13
8.3. The Developer's Review and Approval.............................14
8.4. Owner Permits...................................................15
8.5. Access to Owner Facilities......................................15
8.6. Cooperation and Non-Interference with Work......................15
8.7. No Diminishment.................................................15
SECTION 9. MAINTENANCE OF BOOKS AND RECORDS................................15
9.1. Maintenance of Records..........................................15
9.2. Access to Records...............................................16
9.3. Subcontractors..................................................16
SECTION 10. TAXES...........................................................17
10.1. General.........................................................17
10.2. Exemption from Taxes............................................17
10.3. Withholding.....................................................17
10.4. Indemnity.......................................................17
SECTION 11. INTELLECTUAL PROPERTY RIGHTS....................................18
11.1. Generally.......................................................18
11.2. Injunction......................................................18
11.3. Infringement Order..............................................19
11.4. New Developments by the Contractor..............................19
11.5. The Contractor's Existing Intellectual Property.................19
SECTION 12. PAYMENTS FOR THE WORK...........................................20
12.1. Compensation....................................................20
12.2. Fixed and Incentive Fees........................................20
(a) GND No. 1 Outside Plant...................................20
(b) GND No. 2 Outside Plant...................................20
12.3. General Conditions of Payment...................................21
12.4. Timing of Payments..............................................22
12.5. Contractor Invoices.............................................24
(b) Reimbursement Invoices....................................24
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(c) Documents.................................................25
12.6. The Developer's Right to Withhold Payment.......................26
12.7. Overdue Payments................................................27
SECTION 13. DEDUCTIONS FROM PAYMENTS TO THE CONTRACTOR......................27
13.1. Amounts Payable.................................................27
13.2. Deduction.......................................................27
13.3. Certificate.....................................................28
SECTION 14. CONTRACTOR SECURITY.............................................28
14.1. Generally.......................................................28
14.2. Form of Contractor Surety Bond..................................28
14.3. Issuer Requirements.............................................28
SECTION 15. CONTRACT VARIATIONS.............................................29
15.1. Equitable Relief................................................29
15.2. Procedure For Implementing Contract Variations..................30
15.3. Effect of Contract Variations...................................30
15.4. Performance Pending Resolution..................................30
15.5. No Delay........................................................30
SECTION 16. OWNER-CAUSED DELAYS.............................................31
16.1. Generally.......................................................31
16.2. Effect..........................................................32
SECTION 17. GUARANTEED RFS DATE.............................................32
17.1. Guaranteed RFS Date.............................................32
17.2. [intentionally omitted].........................................32
SECTION 18. FORCE MAJEURE...................................................32
18.1. Definition......................................................32
18.2. Mitigation......................................................33
18.3. Notice..........................................................33
18.4. Application.....................................................34
18.5. Extension of Time...............................................34
18.6. Limitation......................................................34
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TABLE OF CONTENTS (CONTINUED) PAGE
SECTION 19. PROJECT MANAGER AND THE DEVELOPER'S REPRESENTATIVE.............34
19.1. Project Manager.................................................34
19.2. The Developer's Representative..................................35
SECTION 20. INSPECTION RIGHTS...............................................35
20.1. Generally.......................................................35
20.2. Covered Work....................................................36
20.3. No Relief.......................................................36
SECTION 21. DEFECTIVE WORK..................................................36
21.1. Generally.......................................................36
21.2. Existence of Defects............................................36
SECTION 22. SUSPENSION OF WORK BY THE DEVELOPER.............................37
22.1. Generally.......................................................37
22.2. The Contractor's Duties Upon Suspension.........................37
22.3. The Contractor's Duties After Suspension........................38
SECTION 23. TERMINATION FOR CONVENIENCE.....................................38
23.1. Termination.....................................................38
23.2. Termination Date................................................38
23.3. Termination Payment (Convenience)...............................38
SECTION 24. EVENTS OF DEFAULT AND REMEDIES..................................40
24.1. Events of Default and Remedies..................................40
24.2. No Prejudice....................................................42
24.3. Notice of Exercise of Remedies..................................42
24.4. Contractor's Right to Suspend Work and Terminate Contract.......42
SECTION 25. TAKE OVER AND PAYMENTS TO THE DEVELOPER.........................43
25.1. Replacement Contractors.........................................43
25.2. No Right of Compensation........................................43
25.3. Payments to the Owners..........................................43
SECTION 26. TERMINATION FOR DEFAULT.........................................44
26.1. Effect of Termination...........................................44
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TABLE OF CONTENTS (CONTINUED) PAGE
26.2. Termination Date................................................44
26.3. Right to Terminate..............................................44
26.4. Right to Complete the Work......................................44
SECTION 27. DUTIES UPON TERMINATION.........................................44
27.1. Generally.......................................................44
27.2. Subcontractor Claims............................................46
27.3. Funds Held by the Owners........................................46
SECTION 28. LIMITATION OF LIABILITY.........................................46
28.1. No Consequential Damages........................................46
28.2. Other Limitations...............................................47
28.3. Scope of Limitations............................................47
28.4. Work Provided By Others.........................................47
28.5. Loss, Injury or Damage to Persons, the System or the Work.......47
28.6. Transfer of Ownership...........................................47
28.7. Hazardous Waste or Materials....................................47
SECTION 29. THE CONTRACTOR'S ON-SITE DUTIES.................................48
29.1. Reasonable Precautions..........................................48
29.2. Waste Disposal..................................................48
SECTION 30. PERFORMANCE TESTS...............................................48
30.1. Generally.......................................................48
30.2. Right of Waiver.................................................48
30.3. Long-Term Obligations...........................................49
30.4. Operating Revenues..............................................49
SECTION 31. PLANT ACCEPTANCE................................................49
31.1. Initial Plant Commissioning Report..............................49
31.2. RFS Acceptance..................................................49
31.3. Commercial Acceptance...........................................51
31.4. Documentation to be Delivered Upon RFS Acceptance or
Commercial Acceptance...........................................52
31.5. Failure to Achieve RFS Acceptance or Commercial Acceptance......52
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TABLE OF CONTENTS (CONTINUED) PAGE
31.6. Final Acceptance................................................53
SECTION 32. WARRANTIES......................................................53
32.1. General Warranties..............................................53
32.2. Notification of Breach of Warranty..............................53
32.3. Repair Generally................................................54
32.4. Repair or Replacement...........................................54
32.5. Repair by the Developer.........................................55
32.6. Repaired or Replacement Parts...................................55
32.7. The Developer's Expenses........................................55
32.8. Scope of Liability for Defects..................................55
SECTION 33. ASSIGNMENT AND SUBCONTRACTING...................................55
33.1. Generally.......................................................55
33.2. Subcontracts....................................................56
33.3. Existing Subcontracts...........................................56
33.4. Breach..........................................................56
33.5. Conditional Assignment..........................................56
33.6. No Obligations of Owner Persons to Subcontractors...............57
SECTION 34. THE CONTRACTOR'S PERSONNEL......................................57
SECTION 35. THE DEVELOPER'S STAFF...........................................57
35.1. Generally.......................................................57
35.2. Limitations.....................................................57
SECTION 36. TITLE...........................................................57
36.1. Generally.......................................................57
36.2. Title to Supplies and Work......................................58
36.3. Transfer of Title...............................................58
36.4. Removal of Liens................................................58
36.5. No Release of the Contractor; Contractor Obligations
in Lieu of Transfer of Direct Possession........................59
36.6. Bailment........................................................59
36.7. Title to the Cable Links........................................59
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TABLE OF CONTENTS (CONTINUED) PAGE
SECTION 37. REPRESENTATIONS AND WARRANTIES..................................60
37.1. Contractor's Representations and Warranties.....................60
37.2. The Developer's Representations and Warranties..................62
37.3. Representations and Warranties of the Owners....................63
SECTION 38. DISPUTE RESOLUTION AND CONSENT TO JURISDICTION..................64
38.1. Mutual Discussions; Mediation...................................64
38.2. Consent to Jurisdiction.........................................64
SECTION 39. INDEMNIFICATION.................................................65
39.1. Contractor to Indemnify.........................................65
39.2. Owners to Indemnify.............................................66
39.3. Conditions to Effect Indemnification............................66
SECTION 40. RISK OF LOSS....................................................66
40.1. Generally.......................................................66
40.2. Payments to the Owners..........................................67
SECTION 41. INSURANCE.......................................................67
41.1. Types of Insurance..............................................67
41.2. Notice of Cancellation..........................................67
41.3. Copies..........................................................67
41.4. Failure to Maintain Insurance...................................67
41.5. Compliance With Policies........................................67
41.6. Claim Information...............................................67
41.7. Remedy of Loss or Damage........................................67
41.8. Insolvency of Insurers..........................................67
SECTION 42. DOCUMENTS, INFORMATION AND CONFIDENTIALITY......................68
42.1. Generally.......................................................68
42.2. The Contractor to Retain Drawings...............................68
42.3. Confidentiality.................................................68
SECTION 43. PUBLICITY.......................................................69
SECTION 44. CORRUPT GIFTS AND THE PAYMENT OF COMMISSIONS....................69
44.1. Gifts, Etc......................................................69
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TABLE OF CONTENTS (CONTINUED) PAGE
44.2. Payments........................................................70
44.3. Foreign Corrupt Practices Act...................................70
44.4. Permitted Activities............................................70
44.5. Materiality.....................................................71
SECTION 45. NOTICES.........................................................71
45.1. Methods and Effectiveness.......................................71
45.2. Addresses.......................................................72
45.3. English Language................................................74
SECTION 46. NO CONFLICTS....................................................74
SECTION 47. MISCELLANEOUS...................................................74
47.1. Headings........................................................74
47.2. GOVERNING LAW...................................................74
47.3. Severability....................................................74
47.4. Integration.....................................................75
47.5. Amendments and Waivers..........................................75
47.6. Further Assurances..............................................75
47.7. Counterparts....................................................75
47.8. Successors and Assigns..........................................75
47.9. No Third Party Beneficiaries....................................75
47.10.United Nations Convention On Contracts For The
International Sale Of Goods.....................................75
47.11 Remedies Cumulative.............................................76
EXHIBIT 1 DEFINED TERMS
EXHIBIT 2 FORM OF CONTRACTOR SURETY BOND
EXHIBIT 3 FORM OF CERTIFICATE AND PAYMENT AND FINAL RELEASE
EXHIBIT 4 FORM OF LIEN RELEASE
EXHIBIT 5 FORM OF RETAINAGE LC
EXHIBIT 6 FORM OF CORPORATE GUARANTEE
EXHIBIT 7 FORM OF OWNER ESCROW AGREEMENT
APPENDIX 1 REIMBURSABLE COSTS
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TABLE OF CONTENTS (CONTINUED) PAGE
APPENDIX 1 REIMBURSABLE COSTS TABLE (1-A) STANDARD RATES
APPENDIX 2 NETWORK DESCRIPTION AND PROJECT SCOPE
APPENDIX 2 NETWORK DESCRIPTION AND PROJECT SCOPE
APPENDIX 2 NETWORK DESCRIPTION AND PROJECT SCOPE TABLE (2-A) ROUTE DISTANCES
APPENDIX 2 NETWORK DESCRIPTION AND PROJECT SCOPE TABLE (2-B) DETAILED CABLE
ROUTING
APPENDIX 2 NETWORK DESCRIPTION AND PROJECT SCOPE TABLE (2-C) TECHNICAL
SPECIFICATIONS AND STANDARDS
APPENDIX 2 NETWORK DESCRIPTION AND PROJECT SCOPE TABLE (2-D) DESCRIPTION OF
CONTRACTOR PROVIDED MATERIALS
APPENDIX 3 OWNER-PROCURED EQUIPMENT
APPENDIX 4 MILESTONE SCHEDULE
APPENDIX 5 WAYLEAVE APPLICATION PROCESS
APPENDIX 5 TABLE A WAYLEAVE CRITERIA
APPENDIX 6 INSURANCE
APPENDIX 7 PERFORMANCE TEST STANDARDS
APPENDIX 7 TABLE 7-A PERFORMANCE TEST STANDARDS
APPENDIX 8 STORAGE AND MARKING PROCEDURES
APPENDIX 9 PAYMENT METHODOLOGY [INTENTIONALLY OMITTED]
APPENDIX 10 OWNER ESCROW SCHEDULE
APPENDIX 11 INDEPENDENT EXPERT PROCEDURES
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GND NO. 1
AND
GND NO. 2
GERMAN NETWORK DEVELOPMENT PROJECT
AMENDED AND RESTATED
ENGINEERING, PROCUREMENT AND CONSTRUCTION CONTRACT
(OUTSIDE PLANT WORK)
AMENDED AND RESTATED ENGINEERING, PROCUREMENT AND CONSTRUCTION CONTRACT (OUTSIDE
PLANT WORK), dated as of November 15, 1999, effective as of February 19, 1999,
among and between:
BECHTEL LIMITED, a United Kingdom limited liability company (the
"CONTRACTOR"); and
VICAMEINFRASTRUCTURE DEVELOPMENT GmbH, a GESELLSCHAFT MIT BESCHRANKTER
HAFTUNG organized under the laws of Germany (the "DEVELOPER"); and
VIATELGERMAN ASSET GmbH, a GESELLSCHAFT MIT BESCHRANKTER HAFTUNG organized
under the laws of Germany ("VIATEL"); and
METROMEDIA FIBER NETWORK GmbH, a GESELLSCHAFT MIT BESCHRANKTER HAFTUNG
organized under the laws of Germany ("MFN"); and
CARRIER 1 FIBER NETWORK GmbH & Co. OHG, an OFFENE HANDELSGESELLSCHAFT
organized under the laws of Germany ("CARRIER 1"),
with each of Viatel, MFN and Carrier 1 acting as an Owner hereunder, and
hereinafter individually referred to as an "OWNER" or, collectively, as the
"OWNERS".
W I T N E S S E T H :
WHEREAS, the Owners are developing certain fiber optic
telecommunications networks, consisting, in part, of the Systems (as hereinafter
defined) to be located along the Scheduled Route (as hereinafter defined) in the
Federal Republic of Germany; and
WHEREAS, the Owners previously entered into the Engineering,
Procurement and Construction Contract (Outside Plant Work) dated February 19,
1999 (the "FIXED PRICE CONTRACT") with Contractor and the Developer pursuant to
which the Contractor was to perform certain services necessary for the design,
engineering, procurement, construction, installation and testing of the Outside
Plants (as hereinafter defined) for the German Network Development Project GND
No. 1 and GND No. 2 on a fixed price, turnkey, date-certain basis in accordance
with the Performance Parameters (as hereinafter defined); and
1
WHEREAS, the Parties now desire to amend and restate the Fixed
Price Contract so that, among other things, such Fixed Price Contract reflects a
cost plus arrangement with fixed and incentive fees, effective as of February
19, 1999.
NOW, THEREFORE, the Parties, in consideration of the mutual
undertakings herein expressed, covenant and agree with each other as follows:
SECTION 1. DEFINITIONS; INTERPRETATION
1.1 DEFINED TERMS. As used in this Contract and in all Contract
Documents, capitalized terms shall have the meanings ascribed
thereto in EXHIBIT 1 hereto.
1.2 RULES OF CONSTRUCTION. In the interpretation of this Contract,
unless the context otherwise requires:
(a) The singular includes the plural and vice versa and, in
particular (but without limiting the generality of the
foregoing), any word or expression defined in the singular has
the corresponding meaning used in the plural and vice versa;
(b) The term "or" is not exclusive;
(c) The term "including" shall mean "including, without
limitation";
(d) Any reference to any gender includes the other gender;
(e) Any reference to any agreement, instrument, contract or other
document shall:
(i) Include all appendices, exhibits, annexes and schedules
thereto; and
(ii) Be a reference to such agreement, instrument, contract
or other document as amended, supplemented, modified,
suspended, restated or novated from time to time;
(f) Any reference to any Codes and Standards shall include all
statutory and administrative provisions consolidating,
amending or replacing such Codes and Standards, and shall
include all rules and regulations promulgated thereunder;
(g) Any reference to "hereof", "hereto", "herein", "hereunder" or
any other similar term is a reference to this Contract as a
whole, and not to any particular provision or part of this
Contract;
(h) Any reference to any Person includes its permitted successors
and assigns;
(i) Unless otherwise specified, a reference to a Section, Exhibit,
or Appendix is to the Section, Exhibit, or Appendix of this
Contract;
2
(j) Unless otherwise specified, any right may be exercised at any
time and from time to time;
(k) The fact that counsel to any Party shall have drafted this
Contract shall not affect the interpretation of any provision
of this Contract in a manner adverse to such Party or
otherwise prejudice or impair the rights of such Party; and
(l) If an index or similar reference referred to in this Contract
is changed or no longer published or reported by the Person
(or such Person's successor) who, on the date hereof,
publishes or reports such index or reference, then the Parties
shall use their best efforts to replace such index with the
best substitute for the changed or nolonger published index or
reference.
SECTION 2. INTENT OF CONTRACT AND RELATIONSHIP OF THE PARTIES
2.1. GENERALLY. The Contractor shall:
(a) undertake all necessary Work and perform in full its obligations
hereunder in order to plan, supply, install, assemble, test and
furnish to each Owner (to the extent of its respective ownership
interest therein) each Outside Plant (or segment thereof) as set
forth in the Technical Requirements; and
(b) achieve RFS Acceptance for each Outside Plant (or segment thereof)
on or before the Guaranteed RFS Date therefor,
in each case, upon and subject to the provisions of this Contract.
2.2. INTERPRETATION. The Contractor shall perform all of the Work specified or
reasonably inferred from this Contract. The Contractor's performance
hereunder shall include everything requisite and necessary to complete the
entire Work notwithstanding the fact that every item necessarily involved
may not be specifically mentioned in the Technical Requirements. The
intent of this Contract is to relieve the Owner Persons of the necessity
of engaging or supplying any labor, service, equipment or material to
complete the Outside Plants, unless the labor, service, equipment or
material is expressly itemized in this Contract as being furnished by any
such Owner Persons.
2.3. RELATIONSHIPS AMONG THE PARTIES. The Parties hereto agree that:
(a) THE OWNERS. Each of the Owners is entering into this Contract as a
several but not joint obligor, and, in any event, each such Owner's
liability with respect to all obligations hereunder shall be limited
pro rata to its percentage of ownership in the Outside Plants to be
delivered by the Contractor hereunder, which percentage shall be:
(i) [REDACTED], in the case of Viatel;
(ii) [REDACTED], in the case of MFN; and
3
(iii) [REDACTED], in the case of Carrier 1,
subject to the proviso that, such percentages may be adjusted from
time to time and the Developer shall provide timely Notice to the
Contractor with respect to any such adjustment.
(b) APPOINTMENT OF DEVELOPER AS AGENT. Each Owner has appointed the
Developer as its sole and exclusive agent, with full and complete
authority to act on its behalf with respect to all matters relating
to the administration and performance of this Contract.
(c) NON-LIABILITY OF THE DEVELOPER TO THE CONTRACTOR. The Developer is
acting solely in the capacity as an agent of each Owner and shall
bear no liability hereunder to any Contractor Person.
(d) EXCLUSIVE POINT OF CONTACT. No Owner Person other than the Developer
shall be entitled to instruct or direct the Contractor with respect
to any matter hereunder. The Contractor shall disregard any
instructions purported to be given on behalf of any Owner unless
given by the Developer acting through its Developer's Representative
appointed pursuant to Section 19.2. In the event, however, that the
Contractor has failed to achieve RFS Acceptance of the Outside
Plants by March 31, 2000, each Owner (acting singly or with other
Owners as they may elect) shall be entitled to pursue all available
remedies against the Contractor to the full extent of such Owner's
(or Owners') pro rata ownership interest in the Outside Plants.
(e) NO IMPLIED RELATIONSHIPS. Unless expressly contemplated herein, the
relationships between and among the Parties shall not be that of
partners or joint venturers, and nothing herein contained shall be
deemed to constitute a partnership or joint venture among them.
Except for the Developer's agency for the Owners as expressed in
clause (b) of this Section 2.3 and elsewhere in this Contract, or
unless otherwise expressly stipulated herein, no Party shall have
authority or power to bind or act unilaterally as agent for any
other Party.
SECTION 3. CONTRACT DOCUMENTS
3.1. FORM PART OF THIS CONTRACT. Each Contract Document shall be deemed to form
and be read and construed as part of this Contract, and all matters and
things herein expressed as a duty or obligation of either Party (either
actual or potential) therein shall be the duty or obligation of such Party
hereunder.
3.2. CONFLICTS. In the event of any conflict between a provision of this
Contract and a provision of any Contract Document, the former shall
prevail. In the event of any conflict between or among the provisions of
one or more Contract Documents that cannot be resolved by any provision of
this Contract, then the provision in the Contract Document having the
highest order of precedence below shall prevail:
4
(a) Network Description and Project Scope;
(b) Milestone Schedule; and
(c) other Technical Requirements.
SECTION 4. RESPONSIBILITIES OF THE CONTRACTOR
4.1. SCOPE OF WORK. The Contractor shall plan, supply, install, assemble and
test each Outside Plant in accordance with all terms and conditions
contained in this Contract. Each Outside Plant shall be in full accordance
with the Technical Requirements and the other requirements of this
Contract and the Contract Documents. As more specifically described in the
Technical Requirements, including the Network Description and Project
Scope, the Contractor shall perform or continue to perform the following
obligations, with each item listed herein constituting, individually and
as referenced collectively with any other such items, the Work (the
"WORK"):
(a) WAYLEAVE SUPPORT AND SCHEDULED ROUTE SPECIFICATIONS. In accordance
with and subject to the Wayleave Criteria and the terms and
provisions of Section 7 hereof, procurement, as agent for the
Owners, of all Wayleaves necessary to complete each Outside Plant,
including preparation and presentation to the Developer, on an
ongoing basis in accordance with the Wayleave Criteria and this
Contract, of all Wayleave documentation, together with periodic
written updates as to Scheduled Route specifications and completion
status;
(b) FIBER OPTIC CABLE ASSEMBLY AND INSTALLATION. Installation of ducts
and assembly and installation of the Fiber Optic Cable, including
the procurement and provision of all materials, equipment and
services necessary for the joining, secure placement, safeguarding
and maintenance of such Fiber Optic Cable along the Scheduled Route
in accordance with the Technical Requirements;
(c) FIBER OPTIC CABLE SPLICING AND TESTING. Splicing and testing of the
Fiber Optic Cable as provided in the Technical Requirements,
including testing of such Fiber Optic Cable over the entire length
thereof, on an ODF-to-ODF basis, in accordance with the Performance
Test Standards;
(d) REPEATER AND POP SITE SUPPORT. As specified in the Technical
Requirements, identification and presentation to the Developer of
potential Repeater Sites (including preparation and submission for
the Developer's approval of title documents or other instruments
necessary to convey to the Developer the requisite interests in such
sites) complying in all respects with the Vendor Specifications (as
such exist as of the date of this Contract) therefor, as well as
construction of Repeater Facilities and refurbishment of the POP
Sites, in each case, as specified in the Network Description and
Project Scope (Appendix 2) and the other Technical Requirements;
5
(e) COORDINATION WITH VENDORS. Technical coordination with the Vendors
in all aspects of the Work, such that each Outside Plant shall be
compatible with, and meet or exceed, the Performance Parameters and
the other Technical Requirements;
(f) PERFORMANCE PARAMETERS AND THE WARRANTIES. Meeting all terms and
conditions of the Technical Requirements (including the relevant
Performance Parameters) by each Guaranteed RFS Date, and complying
with all Warranties throughout the Warranty Period;
(g) MEET INTENT OF CONTRACT. All other matters specified as the
responsibility of the Contractor in this Contract or any Contract
Document, and satisfying in all respects the intent of this Contract
as expressed in Section 2 hereof and elsewhere in the Contract
Documents; and
(h) RELATED WORK; ADVISORY SERVICES AND ANCILLARY WORK AND SUPPLIES AND
SERVICES. In connection with any and all of the foregoing, the
Contractor shall:
(i) attend and observe final System testing conducted by the
Vendors and others and assist with the resolution of any
issues relating to the Work;
(ii) furnish all construction tools and equipment, small tools and
temporary electricity, water, heat, telephone and other
construction utilities required to complete each Outside
Plant;
(iii) compile and deliver to the Developer all such documents,
drawings, specifications and other data developed by the
Contractor in its performance of the Work (including, subject
to Section 4.2 hereof, all relevant technical and design data)
that are necessary to allow the Owners to own and operate the
Outside Plants as contemplated by this Contract and the
Contract Documents;
(iv) arrange for transportation and receipt, unloading and storage
at appropriate locations of all supplies and other components
of each Outside Plant and the Work;
(v) carry out all Work-item storage, inventory, handling and
marking activities as specified in the Storage and Marking
Procedures in order to maintain and deliver, as the separate
and distinct property of each Owner, all equipment, materials,
supplies and other items of Work procured or installed by the
Contractor that are to be delivered to such Owner hereunder;
and
(vi) obtain, furnish and maintain in effect all Contractor Permits,
to the extent provided for in Section 6.3(a) hereof.
4.2. OVERALL SYSTEM DESIGN RESPONSIBILITY. Each Owner shall, to the extent of
its ownership interest in the Outside Plants, be responsible for (and the
6
Developer, acting on behalf of each Owner, shall provide to the Contractor
all technical data and specifications as required hereunder for) the
overall network design for the System, including the selection,
configuration and integration of System components.
4.3. TECHNICAL INFORMATION. In addition to the requirements for the provision
of technical information described in this Contract, the Contractor shall,
upon request, provide the Developer with such additional technical
information in connection with this Contract as the Developer may
reasonably require.
SECTION 5. TECHNICAL REQUIREMENTS, MILESTONE SCHEDULE
AND PROGRESS MEETINGS
5.1. TECHNICAL REQUIREMENTS. In accordance with Section 4.1 hereof, the Work
shall comply with the Technical Requirements.
5.2. MILESTONE SCHEDULE. The Contractor shall perform all Work in conformity
with the Guaranteed RFS Dates and Critical Path Items set forth in the
Milestone Schedule.
(a) Schedule Recovery. If the Contractor fails to complete (or has
reason to believe that it is likely to fail to complete) any (i)
Critical Path Item or (ii) other items of Work that, taken
individually or in the aggregate, are likely to result in a failure
to complete any Critical Path Item, in each case, by the scheduled
date identified in the Milestone Schedule therefor, the Contractor
shall:
(i) immediately notify the Developer in writing of such failure or
likelihood of delay, specifying the reasons therefor, and
provide the Developer with a detailed work-around plan (a
"SCHEDULE RECOVERY PLAN") for correcting delays or potential
delays in meeting all scheduled dates and the Guaranteed RFS
Date which includes forecasts of the amount of additional
Reimbursable Costs that would be incurred to implement such
Schedule Recovery Plan;
(ii) at the Developer's direction, accelerate its performance of
the Work by providing whatever efforts, resources or means
necessary (which efforts, resources or means shall, in any
event, comply with all other requirements of this Contract) to
recover adherence to the Milestone Schedule, including,
without limitation, additional or overtime labor and
additional construction equipment; and
(iii) furnish to the Developer weekly written status reports
detailing the Contractor's progress under any Schedule
Recovery Plan.
The Contractor hereby acknowledges that its failure (i) to notify the
Developer and furnish a Schedule Recovery Plan within [REDACTED] Days
after becoming aware (or after it should have become aware) of any
delay affecting or likely to affect any Critical Path Item set forth
in the Milestone Schedule or, (ii) with respect to any such delay
actually occurring and continuing, to implement the
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Schedule Recovery Plan immediately after directed by the Developer
to implement such Schedule Recovery Plan and its failure to
implement it at the rate of progress set forth therein, shall
constitute an Event of Default under Section 24.1(a) hereof.
(b) NO DIMINISHMENT. The Contractor's preparation and implementation of
any Schedule Recovery Plan shall in no way relieve or limit the
Contractor's obligations to comply with the Critical Path Items set
forth in the Milestone Schedule and to achieve RFS Acceptance by
each Guaranteed RFS Date, and the Developer's acceptance of Work
performed pursuant to any such Schedule Recovery Plan shall not be
deemed or construed as a waiver by the Developer or any Owner of any
of its rights or remedies under this Contract.
5.3. PROGRESS MEETINGS. The Contractor shall prepare and submit to the
Developer on a monthly basis, accurate and detailed progress reports
providing a narrative description of the status of Work items as against
the Milestone Schedule, and providing projections (identifying anticipated
items of Subcontractor Supplies and Subcontractor Services together with
the Subcontractor Costs payable in respect thereof) of the Reimbursable
Costs that the Contractor reasonably expects to incur during the
subsequent month with a comparison of such Reimbursable Costs as against
the budget; and, in connection therewith, the Contractor shall (i) attend
meetings with the Developer's Representative, at such times and places as
may be reasonably required by the Developer, to discuss the general
progress of the Work, and (ii) furnish, at least twice monthly, summary
progress reports as against the budget and the Milestone Schedule and any
monthly report(s).
SECTION 6. COMPLIANCE WITH LAWS; PERMITS
6.1. COMPLIANCE WITH LAWS. The Contractor shall comply with all Laws and Codes
and Standards of the countries, states, provinces and territories in which
any part of the Work is to be done and with all international treaties in
any way affecting this Contract or applicable to any of the Work.
6.2. VARIATIONS REQUIRED BY LAW. The Contractor shall, before making any
variation from any design, drawing, plan or procedure that may be
necessitated by complying with Laws and Codes and Standards, give to the
Developer written Notice, specifying the variations proposed to be made,
and the reasons for making them, and make proposals for a
Contractor-requested variation in accordance with Section 15.1. The
Contractor shall, upon and subject to the provisions of this Contract:
(a) give all notices required by Codes and Standards to be given to any
Governmental Authority;
(b) perform or permit the performance by authorized Persons of any
inspection required by applicable Codes and Standards; and
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(c) pay as Reimbursable Costs hereunder all fees, charges, impositions
or any other moneys payable to any Governmental Authority or any
public officer in respect of the Work.
6.3. PERMITS.
(a) CONTRACTOR PERMITS. The Contractor shall be responsible for
obtaining, maintaining and complying with all Permits in connection
with the installation of each Outside Plant (collectively, the
"CONTRACTOR PERMITS") including the following (which shall be
Reimbursable Costs hereunder):
(i) Permits from environmental, municipal and highway authorities,
including approvals of all quasi-governmental associations,
corporations and public-interest groups to conduct clearing,
digging, installation and remediation Work (but excluding any
Work in respect of environmentally hazardous materials) upon
public or municipal lands along the Scheduled Route;
(ii) Permits for the Contractor's and its Subcontractors' personnel
and equipment used to perform the Work;
(iii) Permits necessary for the Contractor's and its Subcontractors'
vehicles and equipment to enter and work at all Sites in the
applicable regions or municipalities; and
(iv) all other Permits and approvals for the removal or remediation
of natural and man-made obstructions along the Scheduled
Route.
(b) OWNER PERMITS. Except to the extent of the Contractor's obligations
specified in Section 7 hereof, each Owner shall be solely
responsible, at its expense, for obtaining, maintaining and
complying with all Permits in connection with the permanent
ownership and operation of each Outside Plant (collectively, the
"OWNER PERMITS"), including:
(i) Permits for each Outside Plant to be operated and maintained
(including any Telecom Licenses) on and after RFS Acceptance
along the Scheduled Route;
(ii) Permits and Wayleaves for the permanent or long-term
occupation of public lands along the Scheduled Route; and
(iii) Permits and Wayleaves from the respective owners (including
planning permissions and landlords' consents) to occupy or
cross private lands, existing cable systems, pipelines or
lease blocks and for long-term maintenance agreements at the
occupation or crossing points.
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(c) COOPERATION. Each Party shall:
(i) use all reasonable efforts in assisting the other Party to
obtain the Permits contemplated by this Section 6.3; and
(ii) exchange material information and attend meetings, as
reasonably necessary, with the other Party regarding the
progress in obtaining such Permits.
6.4. NO LIABILITY. No Party shall be responsible for any act or omission of the
other Party that violates any Law.
SECTION 7. THE SCHEDULED ROUTE
7.1. GENERALLY. APPENDIX 2 hereto sets forth the planned Scheduled Route upon
which each Outside Plant is to be completed. It is the intent of this
Contract that such Scheduled Route shall, to the maximum extent
practicable, be located in its entirety upon Public Wayleaves that the
Contractor, as agent for the Owners, shall procure and present to the
Developer for approval and signature in accordance with Section 7.2
hereof.
7.2. WAYLEAVE PROCUREMENT AND APPROVAL. As part of the Work, the Contractor has
conducted, and shall continue to conduct, negotiations with Governmental
Authorities and others in appropriate jurisdictions to document and
secure, as agent for the Owners, sufficient Public Wayleaves to allow the
Outside Plants to be completed along the entirety of the Scheduled Route
in accordance with the Technical Requirements and applicable Codes and
Standards.
(a) DOCUMENTATION PROCEDURES. As part of the Work, the Contractor shall
compile and prepare all documentation necessary to secure each such
Public Wayleave for the benefit of the Owners, and shall present
such documentation to the Developer, whereupon the Developer shall:
(i) in the case of Public Forms, approve and sign (or, in the
Developer's discretion, cause each relevant Owner to grant
power of attorney to a Contractor Person to approve and sign)
each such Public Form, returning the same to the Contractor or
the appropriate Governmental Authority, as applicable, within
a period of [REDACTED] Business Days after the Developer's
receipt thereof; and
(ii) in the case of Public Contracts meeting all criteria specified
in APPENDIX 5 hereto, review, approve, sign and return each
such Public Contract to the Contractor or the appropriate
Governmental Authority, as applicable, within a period of
[REDACTED] Business Days after the Developer's receipt
thereof.
(b) GENERAL TERMS AND CONDITIONS OF PUBLIC WAYLEAVES. Without limiting
the criteria specified with respect to Public Contracts in APPENDIX
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5 hereto, each Public Wayleave procured by the Contractor, as agent
for the Owners, shall, absent a Regulatory Change occurring after
the RFS Date:
(i) be effective for the period provided by the relevant Laws and
Codes and Standards relating thereto; and
(ii) [REDACTED]
(c) APPROVAL BY THE DEVELOPER. The Owners shall assume (in proportion to
their pro rata ownership interests in the Outside Plants) any and
all costs or fees payable to any Governmental Authority in respect
of the use and maintenance of Public Wayleaves entered into by the
Developer, and the Contractor shall be relieved from any further
liability with respect thereto.
7.3. ALTERNATIVE WAYLEAVES. If the Contractor is unable, despite commercially
reasonable professional efforts and compliance with all applicable Laws
and Codes and Standards, to procure Public Wayleaves with respect to any
portion or portions of the Scheduled Route it shall provide Notice to the
Developer and, after consultation with the Developer, as part of the Work,
prepare a work-around plan identifying alternative wayleaves or other
System access rights ("ALTERNATIVE WAYLEAVES") complying with this Section
7.3 and the other requirements of this Contract and the Contract
Documents.
(a) GENERAL REQUIREMENTS FOR CONTRACTOR PROPOSALS. Each Alternative
Wayleave proposed by the Contractor shall (x) be effective (or be
subject to successive renewal) for a period of no less than
[REDACTED] from the RFS Date for the Outside Plant of which it
is a part, and (y) comply in all respects with the criteria set
forth therefor in APPENDIX 5 hereto. Each work-around plan prepared
and submitted by the Contractor in connection with any Alternative
Wayleave shall:
(i) contain a detailed description of the terms and conditions of
each Alternative Wayleave, demonstrating, by specific
reference to the appropriate sections of APPENDIX 5 hereto,
satisfaction of each of the criteria set forth therein;
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(ii) attach form documentation for the conveyance of each such
Alternative Wayleave; and
(iii) specify the adjustment to the Milestone Schedule, if any, to
which the Contractor would be entitled if Outside Plant
completion were to be effected on the basis of such
Alternative Wayleaves.
(b) DEVELOPER REVIEW AND APPROVAL. The Developer shall, immediately upon
receipt thereof, review and consider each such work-around plan and,
within [REDACTED] after such receipt, shall notify the Contractor:
(i) of its acceptance of such plan, whereupon the Developer shall
(x) execute and return to the Contractor the documentation
presented to the Developer for the conveyance of the
applicable Alternative Wayleaves and, (y) if applicable, enter
into a Contract Variation with the Contractor reflecting the
appropriate adjustment to the Guaranteed RFS Dates; or
(ii) of its rejection thereof, specifying, by detailed reference to
each relevant Contract Document, the Developer's reasons for
its determination that (x) the Alternative Wayleaves proposed
do not comply with the criteria set forth in APPENDIX 5
hereto, or (y) such work-around plan is not acceptable to the
Developer in light of the Vendor Specifications, other
Technical Requirements or applicable Codes and Standards;
PROVIDED, that nothing in this Section 7.3 shall be deemed to (A)
require the Developer to consider or accept as part of the Work or
pay for any Contractor proposal that does not comply with the
express terms of this Section 7 or any Contract Document, or (B)
prohibit or limit any activity by the Developer in the
identification, development and implementation of suitable
work-around plans, subject to any rights that the Contractor may
have for Contract Variations in respect of Work affected by any such
plans.
SECTION 8. OWNER OBLIGATIONS
8.1. OWNER-PROCURED EQUIPMENT AND VENDOR SPECIFICATIONS. Each Owner shall
procure and install (or cause to be installed) each item of equipment
identified in APPENDIX 3 hereto (such items individually or collectively,
the "OWNER-PROCURED EQUIPMENT"), in each case, by the date(s) set forth in
the Milestone Schedule for the Contractor's commencement of Work on or
involving any such item. All vendors of Owner-Procured Equipment shall be
obligated by the Developer or, as applicable, the relevant Owner(s) to
cooperate with the Contractor and to so conduct their operations so as not
to interfere with or impede the Contractor in carrying out the Work, and,
to the extent of any Owner-Caused Delay on account of any Vendor's
non-cooperation, the Contractor shall be entitled to a Contract Variation
in respect thereof pursuant to Section 15.1 hereof. Contractor shall use
reasonable efforts to avoid waste of Owner-Procured Equipment. Prior to
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the Contractor's commencement of any Work (i) on or with respect to any
item(s) of Owner-Procured Equipment or (ii) that is, by its nature,
dependent upon or subject to coordination with the specifications for any
item(s) of Owner-Procured Equipment, the Developer shall furnish to the
Contractor any modifications or supplements to the Vendor Specifications
(all of which shall be integrated into and form a part of the Technical
Requirements) for each relevant item of Owner-Procured Equipment on or
before the date set forth in the Milestone Schedule for the Contractor's
commencement of any such Work. If any modification or supplement to any
Vendor Specification requires a change in the scope of Work as set forth
in the Technical Requirements which affects materially a Guaranteed RFS
Date, the Parties shall equitably adjust the applicable Guaranteed RFS
Date pursuant to a Contract Variation.
8.2. POP SITES AND OWNER SPECIFICATIONS. The Developer shall, as agent for and
at the sole cost and expense of the Owners, select and procure POP Sites
complying in all respects with the POP Site Specifications annexed as
APPENDIX 2 hereto.
(a) POP SITES GENERALLY. With respect to each such POP Site so selected
and procured after the effective date of this Contract, the
Developer shall:
(i) promptly notify the Contractor of the location thereof, and
furnish all specifications and data necessary for the
Contractor to verify its compliance with the POP Site
Specifications, however, such verification shall not confer
any responsibility on the part of the Contractor for floor
loadings or hazardous materials;
(ii) obtain all landlord consents, planning permissions, Permits
and Wayleaves necessary for refurbishment of the POP Sites and
the conversion thereof, if applicable (other than building
permits which will be procured by the Contractor) to the uses
envisioned by this Contract; and
(iii) secure all other consents and approvals, if any, necessary to
allow Contractor Persons to enter upon such POP Site and
commence the Work to be performed thereon on or prior to the
date specified in the Milestone Schedule for the commencement
of such Work.
The Contractor shall review all POP Site specifications, records and
documents supplied by the Developer and shall notify the Developer, no
later than ten (10) Business Days after its receipt of the relevant data,
of its consent, not to be unreasonably withheld, to the proposed POP Site
(PROVIDED, that the Contractor shall not be entitled to any such right of
consent with respect to the selection of POP Sites procured or
contractually committed to by the Owners, or by the Developer on behalf of
such Owners, on or before the effective date of this Contract). As the
Contractor's review of proposed POP Sites shall not encompass any
assessment of potentially hazardous materials or floor loadings, the
Contractor's consent to any POP Site shall not be construed as its approval
with respect tosuch matters. In the event that the Contractor is unable to
grant its consent to any such Developer proposal, it shall provide a
written statement identifying, by specific reference to the relevant
sections of the POP Site Specifications, the reasons for its rejection
thereof. The Contractor shall, in
13
accordance with and subject to Section 15.1 hereof, be entitled to
appropriate adjustments through a Contract Variation for any material
Owner-Caused Delays associated with the Developer's selection (on behalf of
the Owners) of acceptable POP Sites, or if any such POP Site selected is
subsequently found to contain hazardous materials or substandard floor
loadings rising to the level of Owner-Caused Delay.
(b) OWNER SPECIFICATIONS. Included as part of the Technical Requirements
are Owner Specifications that provide (subject to the remainder of
this Section 8.2(b)), with respect to the POP Sites and in relation
to items of equipment, materials and services to be furnished by the
Owners (whether acting directly or by and through the Developer)
hereunder, detailed specifications therefor (the "OWNER
SPECIFICATIONS") containing sufficient technical data and
instruction to enable the Contractor to complete each Outside Plant
in accordance with the Technical Requirements. From time to time,
the Developer may provide on behalf of the Owners modifications,
clarifications or additions to the Owner Specifications. The
Contractor shall comply in all respects with and be entitled to rely
upon such Owner Specifications, as modified, in the performance of
the Work. The Owners shall be responsible (to the extent of their
respective ownership interests in the Outside Plants) for the
overall network design for the System, including the selection,
configuration and integration of System components. The Owners
shall, in accordance with their pro rata ownership interests in the
Outside Plants indemnify the Contractor from and against any Losses
to the extent arising from any infringement or claimed infringement
of patent, copyright or other industrial or intellectual property
rights by reason of the Contractor's use, in accordance with the
terms and conditions of this Contract, of the Owners' overall system
design or Owner-supplied or Owner-supplied technology, design and
equipment. To the extent that any modifications to the Owner
Specifications purport to require a change in the scope of Work as
set forth in the Technical Requirements, the applicable Guaranteed
RFS Date(s) shall be equitably adjusted pursuant to a Contract
Variation subject to Section 15.1 hereof. In the event, however,
that the Contractor determines, in respect of any item of Work, that
(x) an Owner Specification conflicts with any Vendor Specification
or other Technical Requirement, or (y) any technical information
needed by the Contractor for due performance of the Work is not
accurately or comprehensively set forth in the Contract Documents,
it shall immediately apply to the Developer for instruction thereon
and shall not continue such Work until it has received an Owner
Specification with respect thereto. The Contractor shall not be
entitled to receive any payment for Work performed in contravention
of the preceding sentence.
8.3. THE DEVELOPER'S REVIEW AND APPROVAL. The Developer hereby undertakes to,
as expeditiously as possible (but in no event later than the dates herein
specified therefor), to (i) review and approve all items of Work complying
with the Contract Documents for which such approval is required hereunder
and, (ii) in relation to any application for, or granting of any
authorizations or rights of way (including any Wayleaves, Permits, or
14
other rights and interests in the Sites and the Systems) required for the
installation of Outside Plant components, review, approve and sign all
relevant documentation conforming to this Contract submitted to it by the
Contractor (unless the Contractor is duly authorized to sign on the
Owners' behalf) and take such other steps that may be necessary (including
the payment of any fees, premiums or rents) in connection with such
applications, authorizations and grants hereunder. The Developer
recognizes that such expeditious review and approval is critical to the
Contractor's completion of the Work in accordance with the Milestone
Schedule, and the Developer acknowledges that its unreasonable refusal or
delay with respect to conforming Work may entitle the Contractor to
schedule relief pursuant to Contract Variations. In addition, the
Developer shall use commercially reasonable efforts to meet the
Contractor's requests for accelerated review of all submissions to the
Developer conspicuously marked "Urgent - For Expedited Review" or with
words of similar effect.
8.4. OWNER PERMITS. The Owners shall, at their own expense and in proportion to
their respective ownership interests, procure and maintain the Owner
Permits.
8.5. ACCESS TO OWNER FACILITIES. The Developer shall grant or obtain permission
for Contractor Persons to enter into Owner facilities forming a part of
the Systems to perform items of Work hereunder.
8.6. COOPERATION AND NON-INTERFERENCE WITH WORK. The Developer shall cooperate
with, and refrain from interfering with, the Contractor Persons in their
performance of the Work, and the Developer shall cause all Owner Persons
to so cooperate and refrain from such interference.
8.7 NO DIMINISHMENT. The Contractor's responsibility for the design and
installation of each Outside Plant shall not in any way be diminished, nor
shall the Contractor's design approach be restricted or limited, by any
Owner Person's:
(a) acceptance of the Contractor's guidance or recommendations as to
engineering standards and design specifications;
(b) suggestions or recommendations on any aspect of the design of any
part of the Outside Plants, except to the extent specifically set
forth in any Vendor Specification or in an Owner Specification
expressly marked as such;
(c) acceptance or approval of any portion of the Work delivered in
connection therewith; or
(d) acceptance or approval of any Subcontractor.
SECTION 9. MAINTENANCE OF BOOKS AND RECORDS
9.1. MAINTENANCE OF RECORDS. The Contractor shall compile and shall maintain
for a period ending upon the later of:
(a) three (3) years after the RFS Date; and
15
(b) the date on which no claim based upon, arising out of or related to
this Contract is outstanding,
all books, records, vouchers and accounts pertaining to this Contract and
the Work, including such books, records, accounts and vouchers related to
the Contractor's payments to Subcontractors and the Reimbursement
Invoices.
All such books, records, vouchers and accounts shall be maintained in
accordance with generally accepted accounting principles and practices
consistently applied, and shall, upon the Developer's prior instruction,
be organized to allow for segregation of System investment and related
records as the Developer may direct. At the Developer's request, all
records required to be maintained pursuant to this Section 9.1 shall be
delivered to the Developer on Final Acceptance, in which case the
Contractor shall be entitled to keep copies thereof (subject to its
confidentiality obligations under Section 42 hereof). The Contractor shall
maintain its customary fiscal records and books of account in accordance
with generally accepted accounting principles and practices consistently
applied. Nothing contained herein shall give any Owner Person the right to
audit or examine the actual costs incurred by the Contractor with respect
to any Reimbursable Costs for which the Owners have agreed to pay the
rates specified on Table (1-A) to Appendix 1 to this Contract.
9.2. ACCESS TO RECORDS. The Contractor shall, during the period in which
Contractor is required to compile and maintain books, records, vouchers
and accounts pursuant to Section 9.1 hereof, give each Owner Person
access, at the times and in such a manner as the Developer may direct, to
all documentation and records required to be kept, obtained and maintained
pursuant to Section 9.1 hereof; PROVIDED, HOWEVER, that with respect to
all such books, vouchers, documentation and records created prior to the
execution date of this Contract (the "PRE-CONTRACT EXECUTION PERIOD"), the
Contractor shall provide all such material to the Owner Persons to the
extent and in the form it exists and to provide it in a format the
Developer or such Owner Person may reasonably request, to the extent to
which it has not previously been delivered. The Contractor shall not
destroy any such documentation or records without affording the Developer
an opportunity to review or copy the same. At the Developer's request,
prior to Final Acceptance, copies of all documentation and records
required to be kept, obtained and maintained pursuant to Section 9.1
hereof shall be delivered to the Developer (subject to any confidentiality
obligations under Section 42 hereof).
Notwithstanding any of the foregoing, with respect to the Pre-Contract
Execution Period, the Contractor shall be relieved of any obligation to
provide any Owner Person with access to or copies of documentation of the
nature set forth in Section 9.1 hereof that were not in existence during
the Pre-Contract Execution Period. To the extent that such documentation
was in existence during the Pre-Contract Execution Period and in
Contractor's possession, the provisions of the first paragraph of Section
9.1 hereof shall apply to such documentation.
9.3. SUBCONTRACTORS. The Contractor shall obtain from its Subcontractors such
supporting records, as applicable, in form and substance similar to
thoserequired of the Contractor
16
under Section 9.1 above, and the Contractor shall maintain such records
for the period referred to in Section 9.1 above.
SECTION 10. TAXES
10.1. GENERAL. The Owner acknowledges that Taxes in respect of the Work shall
constitute Reimbursable Costs, and that any Taxes actually paid in respect
of any Subcontractor Services or Subcontractor Supplies shall constitute
Subcontractor Costs.
10.2. EXEMPTION FROM TAXES. The Parties shall take commercially reasonable
measures (including, without limitation, the accommodation of
Tax-efficient Owner Person entity structures and title-transfer
arrangements) to have all items of Work made exempt from all Taxes (or to
maximize later refunds or credits in respect of Value Added Taxes and
other Taxes already assessed or paid), whether in the procurement,
assembly or installation thereof, and shall cooperate fully with each
other in this respect.
10.3. WITHHOLDING. With respect to any Tax payable or assessed in relation to
any payment due to the Contractor, the following procedures shall apply:
(a) If the Developer or any Owner:
(i) receives a notice, order or instruction from a competent
Governmental Authority that a Tax is required to be withheld
by Law; or
(ii) otherwise has a reasonable belief that any Tax is required to
be withheld from any payment due to the Contractor,
then the Developer (acting for itself or on behalf of the relevant
Owner) shall promptly so inform the Contractor as far in advance of
any proposed withholdings as practicable.
(b) If any requirement to withhold Tax becomes applicable, the
Contractor shall obtain documentary evidence from the relevant
taxing authorities reasonably satisfactory to the Developer that the
Developer (or relevant Owner) is not required to withhold such Tax.
If the Contractor is unable to obtain such documentary evidence on a
timely basis, then the Developer (or relevant Owner) shall proceed
to withhold any such Tax via an escrow agent or other mutually
agreeable procedure. Thereafter, the Developer (or relevant Owner)
shall, at the Contractor's expense, provide any documentation or
other cooperation as may be reasonably requested by the Contractor
to permit the Contractor to recover any withheld amounts to which
the Contractor is entitled.
10.4. INDEMNITY. The Contractor shall protect, defend, indemnify in full and
hold harmless each Owner Person from and against any Losses based upon,
arising out of or otherwise related to Taxes that are owed by the
Contractor to any taxing authority.
17
SECTION 11. INTELLECTUAL PROPERTY RIGHTS
11.1. GENERALLY. The Parties hereby acknowledge and agree that:
(a) the Developer shall furnish on behalf of the Owners, and the Owners
shall be solely responsible (to the pro rata extent of their
respective ownership interests in the Outside Plants) for the
procurement of intellectual property rights, if any, sufficient to
realize the goals contemplated by this Contract relating to, the
Owner-Procured Equipment, the Vendor Specifications, the Owner
Specifications and the overall network design for the Systems
(including the selection, configuration and integration of System
components), and that the Owners shall (to such pro rata extent)
indemnify, protect, defend and hold harmless the Contractor from and
against all Losses based upon, arising out of, or otherwise related to
an infringement or claimed infringement of patent, copyright or other
industrial or intellectual property rights by reason of the
Contractor's possession or use of such Owner- or Developer-supplied
items in its performance of the Work; PROVIDED, that (i) the Developer
shall bear no such indemnity liability hereunder,and (ii) the Owners
shall be under no indemnity obligation with respect to any Losses
arising out of or relating to any Contractor Person's possession or
use of any such item in a manner or for a purpose inconsistent with
terms of this Contract or any Contract Document; and
(b) with respect to all items other than as addressed in the preceding
clause (a) of this Section 11.1, the Contractor (i) grants to or
shall cause the respective owners of such intellectual property
rights to grant to Developer and the Owners all other patent,
copyright and other industrial or intellectual property rights
applicable to the Work or necessary for completion, use and
operation of each Outside Plant or any part thereof in accordance
with this Contract (and all costs incurred by the Contractor
relating to this clause (i) shall be Reimbursable Costs hereunder),
and (ii) in connection with clause (i) above, shall indemnify,
protect, defend and hold harmless each Owner Person from and against
all Losses based upon, arising out of, or otherwise related to an
infringement or claimed infringement of patent, copyright or other
industrial or intellectual property rights by reason of any Owner
Person's possession, enjoyment or use of the Work or the Outside
Plants or any part thereof. Notwithstanding the foregoing, the
Contractor shall be under no obligation to indemnify Owner Persons
with respect to any Losses relating to any infringement or claimed
infringement where the assembly, installation, possession or use for
which infringement is claimed was undertaken by the Contractor at
the Developer's express written instruction or direction. The Owners
(to the pro rata extent of their respective ownership interests in
the Outside Plants) shall, in such cases, indemnify and hold
harmless the Contractor from and against any Losses so incurred by
the Contractor at the Developer's written direction.
11.2. INJUNCTION. If, as a consequence of any action or claim described in
Section 11.1 hereof, the use of either Outside Plant is enjoined, the
Party subject to the indemnity obligation therefor shall use its best
efforts to negotiate with the claimant so as to remove such injunction or
18
to obtain for the Developer, the Contractor or the relevant Owner(s), as
the case may be, a license or other agreement in respect thereof as soon
as possible. If such responsible Party is unable to have the injunction
removed, and such Party is (i) the Contractor, it shall be liable to the
Owners for any and all Losses arising as a result of such injunction, or
(ii) the Developer (or any Owner or all of them), the Developer shall
execute and deliver to the Contractor, in accordance with and subject to
Section 15.1 hereof, a Contract Variation providing for equitable relief
to Contractor in respect of the material impact upon the Guaranteed RFS
Date(s) caused by such injunction on the Work.
11.3. INFRINGEMENT ORDER. Except to the extent relating to the Owner-Procured
Equipment, the Vendor Specifications and the Owner Specifications, in the
event that either Outside Plant or any part thereof is held to constitute
infringement and is subject to an order restraining its use or providing
for its surrender or destruction, the Contractor shall at its own expense
promptly (but in no event later than sixty (60) Days after such
injunction, or such shorter period imposed by any claimant) either:
(a) procure for the Developers and the Owners the right to retain and
continue to use the affected portions of the Outside Plant; or
(b) modify the Outside Plant so that it becomes non-infringing in a
manner acceptable to the Developer.
11.4. NEW DEVELOPMENTS BY THE CONTRACTOR. If, in performing the Work, the
Contractor develops any new items or processes that are independent of
items or processes developed by the Contractor otherwise than pursuant to
this Contract, any intellectual property rights therein shall belong to
the Owners (pro rata in accordance with their ownership interests in the
Outside Plants), and the Contractor shall have a non-exclusive
royalty-free license to use the same for any purpose.
11.5. THE CONTRACTOR'S EXISTING INTELLECTUAL PROPERTY. All intellectual property
rights in items or processes developed by the Contractor otherwise than
pursuant to this Contract shall remain the property of the Contractor, but
to the extent that the Contractor uses any such items or processes in
performing the Work, the Owners (pro rata in accordance with their
ownership interests in the Outside Plants) shall have a non-exclusive,
royalty-free license to use the same for any purpose connected with the
Systems, including the right to grant sub-licenses for any such purpose.
19
SECTION 12. PAYMENTS FOR THE WORK
12.1. COMPENSATION. The Developer on behalf of the Owners shall pay the
Contractor for its Work in the manner and at the times specified in
Section 12.3 hereof, compensation consisting of an amount equal to the sum
of (a) Reimbursable Costs, as set forth in APPENDIX 1 hereto, and (b) a
fixed fee (the "FIXED FEE") as set forth in Section 12.2 below. In
addition, the Contractor may be entitled to certain Incentive Fees as set
forth in Section 12.2 below.
12.2. FIXED AND INCENTIVE FEES. Upon RFS Acceptance of GND No. 1 Outside Plant,
the Contractor shall be paid a Fixed Fee of [REDACTED]. In addition,
provided that no Event of Default has occurred and is continuing, the
Contractor shall be entitled to receive certain incentive fees (each, an
"INCENTIVE FEE") within [REDACTED] the applicable invoice therefor, in the
following amounts and subject to the following conditions and the terms
hereof:
(a) GND NO. 1 OUTSIDE PLANT. If the GND No. 1 Outside Plant meets the
criteria for RFS Acceptance set forth in Section 31.2 hereof on or
before the Guaranteed RFS Date applicable thereto, the Contractor
shall be entitled to receive an Incentive Fee of [REDACTED].
(b) GND NO. 2 OUTSIDE PLANT. For each segment of GND No. 2 Outside Plant
other than Hamburg-Berlin (i.e., Essen-Dortmund, Dortmund-Bremen,
Bremen-Hamburg, Berlin-Dresden, Dresden-Leipzig, Leipzig-Nurnberg,
Nurnberg-Munchen and Munchen-Karlsruhe) that meets the criteria for
RFS Acceptance set forth in Section 31.2 hereof on or before the
Guaranteed RFS Date applicable thereto, the Contractor shall be
entitled to receive an Incentive Fee of [REDACTED]; and if the
Hamburg-Berlin segment of GND No. 2 Outside Plant meets the criteria
for RFS Acceptance set forth in Section 31.2 hereof on or before the
Guaranteed RFS Date applicable thereto, the Contractor shall be
entitled to receive an Incentive Fee of [REDACTED].
(c) TOTAL COMPLETION COST UNDERRUN FEE. If the Total Completion Cost is
equal to or less than the amount set forth in the Total Completion
Cost column in the table below, the Contractor shall be entitled to
the applicable Incentive Fee set forth in the corresponding column
below:
---------------------------------------------------------------
TOTAL COMPLETION COST INCENTIVE FEE ENTITLEMENT
---------------------------------------------------------------
---------------------------------------------------------------
[REDACTED] [REDACTED]
---------------------------------------------------------------
---------------------------------------------------------------
[REDACTED] [REDACTED]
---------------------------------------------------------------
---------------------------------------------------------------
[REDACTED] [REDACTED]
---------------------------------------------------------------
For purposes of calculating an adjustment to the Fixed Fee and the
Incentive Fees described in Section 12.2 and paragraphs (a) and (b) of
Section 12.2 above in accordance with Section 15.1(b) hereof, such Fixed
Fee and Incentive Fees are based on the following percentages of Target
Cost:
20
---------------------------------------------------------------------
FIXED FEE INCENTIVE FEE
---------------------------------------------------------------------
---------------------------------------------------------------------
GND 1 [REDACTED] [REDACTED]
---------------------------------------------------------------------
---------------------------------------------------------------------
GND 2 - each segment other [REDACTED] [REDACTED]
than Hamburg-Berlin
---------------------------------------------------------------------
---------------------------------------------------------------------
GND 2 -Hamburg-Berlin segment [REDACTED] [REDACTED]
---------------------------------------------------------------------
If the Target Cost increases or decreases in accordance with Section
15.1(b) hereof, the Total Completion Cost column in the table set forth in
Section 12.2(c) will be increased or decreased by the amount of the
adjustment in the Target Cost.
12.3. GENERAL CONDITIONS OF PAYMENT.
(a) PAYMENTS IN DEUTSCHE MARKS. All payments to the Contractor hereunder
shall be made in Deutsche Marks; PROVIDED, that (i) to the extent
that applicable Law otherwise requires, the currency of any
relevant payment shall be as specifically provided in such Law or
Laws, and (ii) upon the general unavailability, for any reason, of
Deutsche Marks, all payments and obligations arising or denominated
hereunder in Deutsche Marks shall be valued and payable in the Euro
equivalent thereof. All payments hereunder are to be made to
Contractor by electronic wire transfer or Automated Clearing House
transfer to:
Citibank N.A.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Account Number : ▇▇▇▇▇▇▇
Credit: Bechtel Limited
Reference: (Bechtel Invoice Number)
Swift Code: ▇▇▇▇▇▇▇▇
(b) ▇▇▇▇▇▇▇▇. All Contractor Invoices shall be submitted to the
Developer in accordance with Section 12.5 hereof.
(c) FINAL PAYMENT. On receipt by the Contractor of the final payment of
the Reimbursable Costs, the Fixed Fee and the Incentive Fee
hereunder (the "FINAL PAYMENT"):
(i) the Developer and each Owner shall thereby be released from
all claims whatsoever by the Contractor, whether at law or in
equity, contract or tort or otherwise, by reason of anything
based upon, arising out of or relating to this Contract, other
than:
(A) claims asserted in writing on or before the Final
Payment is made;
(B) claims arising from circumstances, acts or events
occurring after the Final Payment is made; and
21
(C) claims that the Contractor was not aware of, and could
not have been aware of, and that are based on the acts
or omissions of Owner Persons; and
(ii) the covenants and agreements of the Developer and each Owner
shall terminate and be of no further force and effect except
the requirement of the Developer to return to the Contractor
the Retainage LC at the expiration of the Warranty Period.
(d) EFFECT OF PAYMENT. No payment (final or otherwise) made under or in
connection with this Contract shall be conclusive evidence of the
performance of the Work, or of this Contract, in whole or in part,
and no such payment shall:
(i) be construed to constitute the acceptance of any Defective
Work or supplies containing Defects; or
(ii) release the Contractor from any of its obligations under this
Contract.
(e) EXCHANGE RATE. The rate of exchange to be used by the Contractor in
the conversion of all non-Euro currencies shall be the average daily
rate of exchange for the period covered by the invoice. The exchange
rates shall be those published in THE FINANCIAL TIMES.
12.4. TIMING OF PAYMENTS.
(a) RETAINAGE LC. On or before March 16, 1999, the Contractor shall
deliver in favor of the Developer an irrevocable, first-demand
letter of credit (the "RETAINAGE LC") in the amount, until the
[REDACTED] anniversary of the later to occur of the two RFS Dates,
of [REDACTED] and reduced to [REDACTED] of such stated amount
thereafter, as security for performance of the Contractor's
obligations hereunder. The Retainage LC shall be effective as of the
date of this Contract and shall remain in effect until the Final
Acceptance Date. Nothing in this Contract shall limit the
Developer's ability to draw on the Retainage LC in connection with
any Event of Default or with respect to any amount due from the
Contractor to the Developer or any Owner in satisfaction (or in
partial satisfaction) of any obligation of the Contractor to such
Persons under this Contract. If the Retainage LC has an expiry date
which is prior to the date of Final Acceptance, the Retainage LC
shall provide for a right of the Developer to draw down in full all
available amounts thereunder if the Retainage LC is not renewed or
extended prior to thirty (30) Days before such expiry date. The
Developer shall return the Retainage LC to the Contractor
concurrently with the Developer's delivery of the Certificate of
Final Acceptance.
(b) RETURN OF CONTRACTOR SURETY BOND. The Developer shall return the
Contractor Surety Bond to the Contractor concurrently with delivery
of the Certificate of RFS Acceptance in respect of the later of the
two Outside Plants to achieve RFS Acceptance.
22
(c) PAYMENTS GENERALLY. Neither the Developer nor any Owner shall have
any obligation to pay for any portion of the Work that is not
complete or has a Defect; and all amounts invoiced pursuant to this
Section 12.4 shall be:
(i) subject to appropriate inspection by the Developer or its
designee of any Work tendered by the Contractor and the
Developer's determination in accordance with Sections 12.6 and
13 hereof;
(ii) due and payable [REDACTED] Days after the earlier of:
(A) the date that the Contractor provides the Developer a
copy of the Contractor Invoice by facsimile (PROVIDED
that the original Contractor Invoice is delivered to the
Developer within one week thereafter); or
(B) the date that the Developer receives the original
Contractor Invoice.
(d) OWNER ESCROW. The Owners shall, on or before March 31, 1999,
establish for the benefit of the Contractor, an escrow account (the
"OWNER ESCROW") on terms substantially in the form of EXHIBIT 7
hereto and with a bank reasonably acceptable to the Contractor as
security for payments for the Work. The Owners shall maintain in
such Owner Escrow, for each relevant period, the amounts set forth
in APPENDIX 10 hereto (as such amounts may be revised from time to
time pursuant to the Owner Escrow Agreement). The Owners shall be
entitled to withdraw from the Owner Escrow any amounts that are in
excess of the required amount specified in APPENDIX 10 hereto (as
such required amount may be revised from time to time pursuant to
the Owner Escrow Agreement). If the Owners, or the Developer on
behalf thereof, request the Contractor to review proposed changes to
the Owner Escrow, the Contractor shall respond to any such request
within [REDACTED] following receipt of such request. The Contractor
shall be entitled to have a security interest in the Owner Escrow.
Prior to exercising any rights against the Owner Escrow, the
Contractor shall notify the Developer and each Owner that the
Developer has failed to pay on behalf of the Owners, within the
period specified for such payment, an amount due and payable to the
Contractor in respect of a Contractor Invoice duly submitted by the
Contractor in accordance with this Section 12. The Developer shall,
to the extent that no Event of Default nor other event entitling the
Developer to withhold payments to the Contractor has occurred and is
continuing, reimburse the requested amount on behalf of the Owners
to the Contractor by the close of business on the [REDACTED]
Business Day next succeeding the Contractor's Notice, whereupon the
Developer's failure to do so, shall entitle the Contractor to draw
upon the Owner Escrow in the amount of such outstanding payment.
Upon the Contractor's exercise of any rights
23
against the Escrow Account in accordance with this Section 12.4(d),
the Owners shall, within [REDACTED] Business Days thereafter,
deposit (in accordance with such Owners' respective ownership
interests in the Outside Plants) funds in an aggregate amount
sufficient to restore the balance of the Escrow Account to the
required amount specified in APPENDIX 10 hereto (as such required
amount may be revised from time to time pursuant to the Owner Escrow
Agreement), for the date on which such funds are restored. Any
failure by the Owners to so replenish the Owner Escrow to the full
required balance thereof within such [REDACTED] period shall be
deemed an Owner Default for purposes of Section 24.4 hereof.
12.5. CONTRACTOR INVOICES.
(a) GENERALLY. The Contractor shall be entitled to submit to the
Developer twice monthly Contractor Invoices for its Reimbursable
Costs applicable to the Work performed ("REIMBURSEMENT INVOICE").
Each Reimbursement Invoice shall be a Contractor Invoice in form and
substance satisfactory to the Developer and shall detail, in respect
of each of the individual Owners and with specific reference to
applicable item numbers stated in any Vendor Specification or Owner
Specification, the Work items deliverable to such Owners, together
with all amounts payable to the Contractor in respect thereof.
(b) REIMBURSEMENT INVOICES. The Contractor shall attach to or include in
each Reimbursement Invoice a statement (x) certifying to the
Developer (together with such proof of payment as the Developer may
reasonably request) that the full amount of the invoiced
Reimbursable Costs have in fact been expended or disbursed by the
Contractor as of the date of such Reimbursement Invoice, and (y)
allocating the Reimbursable Costs between those costs described on
APPENDIX 1 and Subcontractor Costs, and shall submit together
therewith the following - documents:
(i) as to Reimbursable Costs described on APPENDIX 1, (1) an
itemized statement supported by data indicating the names,
dates of performance, salary grades, job positions and job
hours of Contractor's personnel who have been engaged in the
performance of the Work during the period covered by such
invoice; (2) a Lien Release executed by the Contractor,
certifying that each person engaged by it to perform Work
hereunder has been paid in full and that there are no Liens
asserted with respect to the Work for which reimbursement is
sought; and (3) in the case of Other Direct Costs, such
substantiating data as the Developer may require; and
(ii) as to Subcontractor Costs, (1) an itemized statement detailing
each payment made to or Contractor-approved invoice from the
Subcontractor(s) with specific identification (by reference to
the relevant Subcontract) of items of Subcontractor Supplies
or Subcontractor Services for which reimbursement is claimed;
(2) the Subcontractor Cost Verification as to Subcontractor
Services or Subcontractor Supplies having a Subcontractor Cost
(including all prior payments made to the relevant
Subcontractor in respect thereof) in excess of [REDACTED] for
which reimbursement is sought; and (3) a lien release
certification executed by each Subcontractor with respect to
24
all Subcontractor Services or Subcontractor Supplies having a
Subcontractor Cost (including all prior payments made to the
relevant Subcontractor in respect thereof) in excess of
[REDACTED] for which reimbursement is sought; PROVIDED,
HOWEVER, that if the Contractor has certified in its
Subcontractor Cost Verification, submitted pursuant to (2) of
this clause (ii), that it will pay the relevant
Subcontractor(s) when due, the Contractor can satisfy such
lien release certification requirement by certifying to the
Developer that such lien release certification will be
furnished within [REDACTED] after the Contractor has effected
its payment to the Subcontractor(s).
Notwithstanding anything contained in this clause (ii) to the
contrary, at the request of the Developer, the Contractor
shall submit the documents referred to in (2) and (3) of this
clause (ii) without regard to whether the Subcontractor Costs
are less than [REDACTED] for which reimbursement is sought if
the Subcontract or Subcontracts associated with the
Developer's request are still open and have not been closed
out as a result of the completion of the Subcontractor(s)
work.
The Contractor shall indemnify in full and hold harmless the
Developer and the Owners from and against any Losses suffered
or incurred by the Developer or the Owners arising out of or
related to instances wherein the Contractor has certified to
the Developer that it will pay the relevant Subcontractor(s)
when due or that it will furnish the lien release
certification from such Subcontractor(s) within [REDACTED]
after the Contractor has effected its payment to the
Subcontractor(s) and the Contractor either has not effectuated
such payment when due or at all or has not provided such lien
release certification within [REDACTED] after the Contractor
has effected its payment to the Subcontractor(s) or at all.
Notwithstanding the foregoing, with respect to the
Pre-Contract Execution Period, the Contractor shall be
relieved of the obligation to provide the Developer with
documentation of the nature set forth in this clause (ii) that
(A) was not in existence during the Pre-Contract Execution
Period and (B) cannot be procured by the Contractor using
Prudent Practices. To the extent that such documentation was
in existence during the Pre-Contract Execution Period or can
be procured by the Contractor using Prudent Practices, the
provisions of this clause (ii) shall apply to such
documentation.
(c) DOCUMENTS. The Contractor shall provide one (1) original and three
(3) copies of each Reimbursement Invoice, plus one (1) additional
copy to be sent by facsimile on the date of issuance of such
Reimbursement Invoice. At a minimum and where applicable, the
following documents in the following quantities shall accompany each
Contractor Invoice:
(i) Lien Release - One (1) original and three (3) copies;
25
(ii) Work Release Certificate, signed by the Contractor and the
QA/QC Contractor, and counter-signed by the Developer's
Representative or other Developer designee (in each case,
within a reasonable time after the Contractor's submission
thereof for signature) - One (1) original and three (3)
copies; and
(iii) such other documentation necessary to demonstrate compliance
with the terms of this Contract in such quantities as the
Developer shall request.
12.6. THE DEVELOPER'S RIGHT TO WITHHOLD PAYMENT.
(a) GENERALLY. Notwithstanding the foregoing, the Developer may withhold
any payment or other amount due to the Contractor hereunder in an
amount and to such extent as the Developer may determine to be
reasonably necessary to protect the Owners from any Loss or damage
reasonably determined by the Developer to exceed the then-available
funds under the Contractor Security because of:
(i) Defective Work not remedied in accordance with this Contract;
(ii) Work that has been paid for and is not complete;
(iii) the Contractor's failure to comply with any Warranty;
(iv) the Contractor's failure to perform the Work in accordance
with this Contract;
(v) third-party suits, stop notices, attachments, levies or Liens
(other than Owner Liens) against either Outside Plant, the
Work or any Party resulting from the Contractor's failure to
perform its obligations in accordance with this Contract;
(vi) Losses or other damage to any Owner or any Subcontractor that
results from the Contractor's failure to obtain or maintain
insurance required hereunder;
(vii) the Contractor's failure to provide on a timely basis the
documentation required under Section 12 hereof; or
(viii)reasonable evidence that any payment previously made
hereunder (together with all other previously requested
amounts) exceeds the amount payable with respect to the Work
actually performed.
In the Notice to the Contractor referenced above, the Developer
shall set forth its justification for the proposed withholding and
provide the Contractor with a [REDACTED] period to cure the matter
(or agree in principle with the Developer on a plan for remedial
action with respect thereto) giving rise to the proposed withholding
prior to the implementation thereof.
26
(b) THE DEVELOPER'S APPLICATION OF FUNDS WITHHELD. The Developer may,
upon Notice to the Contractor of its intention to do so, apply any
funds withheld or moneys to become due to the Contractor to satisfy,
discharge or secure the matters set forth in Section 12.6(a) above
if the Contractor has continued to fail to cure such matter within
[REDACTED] after Notice by the Developer as provided in Section
12.6(a) above. Any such application shall be deemed payment to the
Contractor. No action by either Party during the above activities
shall affect the Milestone Schedule unless a Contract Variation is
agreed to by the Developer. If the Developer's withholding is
determined to be wrongful, the Developer shall promptly pay on
behalf of the Owners the withheld amount with interest at the rate
set forth in Section 12.7 from the due date thereof until the date
of payment.
(c) RELEASE OF PUNCH LIST RESERVE. Within [REDACTED] after the
Contractor has, to the Developer's satisfaction, remedied the
deficiencies and completed the Work indicated on any Punch List, the
Developer shall release to the Contractor the Punch List Reserve
held by the Developer in respect of such incomplete or Defective
Work.
12.7. OVERDUE PAYMENTS. If a party shall fail to pay any undisputed amount
within [REDACTED] after the due date for such payment, such amount shall
accrue interest, at a rate equal to the lesser of (i) the one (1) month
London Interbank Offered Rate for Euros (as published for such period in
THE FINANCIAL TIMES) PLUS [REDACTED] percent ([REDACTED]%) or (ii) the
maximum interest rate permitted by applicable Law, for each day from such
due date until payment in full.
SECTION 13. DEDUCTIONS FROM PAYMENTS TO THE CONTRACTOR
13.1. AMOUNTS PAYABLE. To the extent that an amount is not withheld in respect
thereof pursuant to Section 12.6 hereof or has not been drawn or obtained
for the Owners' benefit under any Contractor Security, all Losses that
Owner Persons shall have incurred or sustained by reason of any act that
entitles the Owners to indemnification under this Contract or any default
or omission of the Contractor in the performance of this Contract,
together with any sum or sums payable to the Developer (for the Owners'
account) under this Contract, shall be paid by the Contractor on or prior
to the earlier of:
(a) the date that is [REDACTED] after receipt of the certificate
referenced in Section 13.3 hereof; and
(b) the date the Final Payment is made.
13.2. DEDUCTION. Should the Contractor fail to make any payment required under
Section 13.1 hereof by the due date thereof, the Developer may then deduct
the amount of the requested payment from any moneys that are, or may
become, due to the Contractor or have been made available by it under any
Contractor Security. If the moneys so due or deposited shall be less than
the amount so deductible, the difference shall be treated as a debt by the
Contractor to the Owners (the collection of which to be carried out by the
Developer) and shall be paid by the Contractor to the Developer within
27
[REDACTED] after the Contractor's receipt of the Developer's demand
therefor. If the Contractor fails to make such payment within such period,
then the amount of such deficiency may be recovered in any court of
competent jurisdiction.
13.3. CERTIFICATE. A certificate signed by the Developer stating the amount of
the Losses, costs, charges, expenses, damages or other amounts referred to
in this Section 13 shall be PRIMA FACIE evidence of the matter stated.
SECTION 14. CONTRACTOR SECURITY
14.1. GENERALLY. In addition to the Contractor's security provided by the
Retainage LC as set forth in Section 12.4(a), the performance of the
Contractor's obligations under this Contract shall also be secured by the
following:
(a) the Corporate Guarantee, which shall be delivered on or before April
15, 1999 and remain in effect until the Final Acceptance Date and
shall secure the Contractor's unconditional obligation to achieve
RFS Acceptance of each Outside Plant; and
(b) a performance and payment surety bond in substantially the form,
with such changes as the issuer thereof may require, of EXHIBIT 2
hereto (the "CONTRACTOR SURETY BOND") which shall be delivered on or
before August 1, 1999 and shall secure the performance of all of the
Contractor's obligations under this Contract.
14.2. FORM OF CONTRACTOR SURETY BOND. The Contractor Surety Bond shall:
(a) be issued and outstanding until the date on which the Developer
issues the Certificate of RFS Acceptance in respect of the later of
the two Outside Plants to achieve RFS Acceptance;
(b) be in an amount equal to [REDACTED]; and
(c) name the Developer, each Owner or their respective successors and
permitted assigns as beneficiaries thereof.
14.3. ISSUER REQUIREMENTS. The Contractor Surety Bond and all renewals,
extensions and replacements thereof shall be issued by a bonding or
insurance company acceptable to the Developer at the time of issuance. If
the financial condition of any such bonding or insurance company declines
to less than an A.M. Best rating of A, the Contractor shall, at its sole
cost and expense, within thirty (30) Days after any such decline in
rating, replace the issuer of the Contractor Surety Bond with an entity
acceptable to the Developer; PROVIDED that if the Contractor Surety Bond
is provided by more than one bonding or insurance company and each such
company is jointly and severally liable thereunder, the highest rating of
any one of such companies shall be controlling.
28
SECTION 15. CONTRACT VARIATIONS
15.1. EQUITABLE RELIEF. The parties shall be entitled to equitable relief with
respect to the requirements of this Contract in the following
circumstances and in accordance with the following procedures (any such
equitable relief in accordance with this Section 15 shall be recorded by
means of a formal writing (a "CONTRACT VARIATION") agreed to between, and
executed by, the Parties in accordance with the procedure set forth
herein):
(a) ADJUSTMENT TO GUARANTEED RFS DATES. If the Contractor is, despite
the exercise of Prudent Practices and through no fault or omission
of any Contractor Person, delayed in its performance of the Work,
the Contractor may, to the extent that such delays result directly
from any Change Event or any change or addition to the general scope
of this Contract or change to the method or manner of performance of
the Work as instructed by the Developer on behalf of the Owners
(such instructions, "OWNER-REQUESTED VARIATIONS") or any combination
of Change Events or Owner-requested Variations, be entitled to an
adjustment to the applicable Guaranteed RFS Date(s). Notwithstanding
anything to the contrary set forth herein, the Contractor shall be
entitled to a Contract Variation executed and delivered in
accordance with this Section 15.1(a) with respect to the applicable
Guaranteed RFS Date only to the extent that its performance of the
Work is materially delayed or is likely to be materially delayed
(despite the Contractor's use of Prudent Practices in mitigation
thereof) by any Change Event or Owner-requested Variations (or
combination thereof).
(b) ADJUSTMENT TO FIXED FEE OR INCENTIVE FEES IN LIMITED CIRCUMSTANCES.
The Developer may from time to time issue written notices to the
Contractor directing additions to, revisions to or deletions from
the scope of Work under this Contract. The Contractor shall give
immediate effect to each such notice; PROVIDED, that such notice
shall in no way limit the Contractor's entitlement to Reimbursable
Costs in respect of Work performed by the Contractor in its due
prosecution of the Work prior to the Developer's notice of additions
to, deletions or reductions of the relevant item(s) of Work. The
Fixed Fee and Incentive Fees referred to in Sections 12.2 and
12.2(a) and (b) hereof shall be subject to adjustment in accordance
with this Section 15.1(b) by adjusting the Target Cost, and the
Incentive Fees referred to in Section 12.2(c) hereof shall be
subject to adjustment in accordance with this Section 15.1(b) by
adjusting the Total Completion Cost column in the table in such
Section 12.2(c), in each case only in the following circumstances:
(i) the addition or deletion of a POP or (ii) the addition of a new
point-to-point route (e.g., a proposed Hamburg to Hanover to Bremen
POP route) to the Detailed Cable Routing described in Table 2-B of
Appendix 2. In the case of an additional POP or point-to-point
route, the amount of the increase in the Target Cost shall be the
Reimbursable Costs incurred in the Work. If a POP is deleted, the
Target Cost will be decreased by the unexpended amount associated
with the deleted POP remaining in the then-current budget. The
Target Cost (or Total Completion Cost column in the table in Section
12.2(c)), as so adjusted, will be set forth in a Contract Variation.
29
15.2. PROCEDURE FOR IMPLEMENTING CONTRACT VARIATIONS. In the event that a Party
wishes to claim any equitable relief hereunder on account of any Change
Event, such Party shall give the other Party written notice of its intent
to submit such claim (which notice shall state the basis of such claim and
the general nature of the relief requested) within [REDACTED] after it
becomes aware of such basis for equitable relief. The submitting Party
shall submit to the recipient its documented and substantiated claim for
such adjustment(s) as soon as practicable after giving such notice, but
not later than [REDACTED] after giving such notice, unless extended in
writing by the submitting Party. Such claim shall include an estimate of
the impact of such proposed relief on the Guaranteed RFS Dates, as
applicable, as supported by sufficient costing and description detail to
allow the recipient to make a reasonable determination as to such impact
and the desirability of such relief in light of available alternatives.
The recipient shall respond to the submitting Party's claim within
[REDACTED] after receipt. If the recipient agrees that the submitting
Party's claim should be implemented, the recipient shall issue a Contract
Variation incorporating such claim. If the recipient disagrees in any way
with the submitting Party's claim for the Contract Variation, the
recipient shall return the submitting Party's claim, marked to show the
recipient's modifications thereto. The original submitting Party shall
within [REDACTED] of receipt of such ▇▇▇▇-up, either advise the original
recipient of its agreement to such modifications or request a meeting with
the original recipient to resolve any and all disagreements with the
modifications made by the original recipient. If the latter option is
taken, the Parties shall meet as soon as practicable to resolve in good
faith discussions any disagreements. In the event that the Parties are
unable to resolve any such dispute within [REDACTED] after commencement of
mutual discussions in respect thereof, such dispute shall be referred for
resolution, within [REDACTED] after such referral, by the Parties'
respective senior management personnel directly, or by the independent
technical expert ("INDEPENDENT EXPERT") whom they may agree to appoint.
All matters that the Parties may desire to refer to an Independent Expert
shall be governed by Independent Expert Procedures annexed as APPENDIX 11
hereto. The resolutions of all disagreements shall be reflected in the
Contract Variation.
15.3. EFFECT OF CONTRACT VARIATIONS. Each Contract Variation, to be effective,
shall be in writing and executed by the Contractor and the Developer. No
Contract Variation shall vitiate or invalidate this Contract. Subject to
the provisions of this Section 15, the Contractor comply with each such
Contract Variation.
15.4. PERFORMANCE PENDING RESOLUTION. If the Parties are unable to agree on
certain aspects of any Contract Variation, at the request of the
Developer, the Contractor shall continue to perform, pending resolution of
the relevant matter, this Contract as provisionally modified by such terms
of the relevant Contract Variation as to which the Parties have evidenced
their agreement in a writing signed by both Parties.
15.5. NO DELAY. In preparing any proposal for a Contract Variation, the
Contractor shall structure its claims for equitable relief such as to
envision completion, to the extent practicable, of the Work under this
Contract, as modified by the proposed Contract Variation, in accordance
30
with the Milestone Schedule. In this respect, the Contractor shall
cooperate with the Developer to prepare all reasonable work-around plans,
alternate sources or any other means available in order to prevent delays.
SECTION 16. OWNER-CAUSED DELAYS
16.1 GENERALLY. The following events or circumstances, to the extent resulting
directly in any increased delay to the Contractor in its completion of the
Work in accordance with the Milestone Schedule and the other requirements
of this Contract, shall, upon the Developer's failure to effect a cure (or
any Owner's failure to effect such cure, the tender of which directly by
any Owner the Contractor hereby agrees to accept) within [REDACTED] after
the Contractor's Notice thereof, constitute "OWNER-CAUSED DELAY" for
purposes of this Contract:
(a) acts or omissions of Owner Persons or Vendors of Owner-Procured
Equipment (A) causing any casualty or damage to the Systems or any
Owner-Procured Equipment or Work, or (B) wrongfully interfering (by
inspection or otherwise, to the extent not otherwise contemplated
herein) with the provision of the Work;
(b) except to the extent that any relevant obligation of the Developer
or the Owners is governed by another express provision of this
Contract, the Developer's or any Owner Person's failure to furnish,
by the date set forth in the Milestone Schedule for the Contractor's
commencement of Work with respect thereto, any item of
Owner-Procured Equipment (including the Developer's or any Owner
Person's failure to furnish items of Owner-Procured Equipment that
are free from defects and deficiencies) or any information
(including the Developer's failure to timely provide accurate and
complete information) that it is required to provide hereunder,
which failure, in each case (A) relates to an item that is necessary
to the Contractor in order to complete the Work in accordance with
the Milestone Schedule and (B) continues (without the Developer's
furnishing thereof or accommodation therefor) for a period in excess
of [REDACTED] after the Contractor's Notice to the Developer
thereof;
(c) any Owner Person's unreasonable refusal to review or approve, or any
unreasonable delay in its review, approval, signature or delivery
of, any item of Work (including, without limitation, the
Wayleave-related documentation specified in Section 7 hereof)
complying with this Contract and Contract Documents, in each case,
within the time periods specified in this Contract for such review,
approval, signature or delivery;
(d) the failure by the Developer to make available to Contractor Persons
the Sites (including any such failure with respect to the POP Sites
to be made available in accordance with Section 8.2(a)) on a timely
basis, or any interruption (except for purposes of reasonable
inspection as envisioned by this Contract) in the availability to
the relevant Contractor Persons of any such Site caused by any Owner
Person (including by virtue of any Owner Person's commercial use or
operation of the Systems or any RFCS Portion thereof); or
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(e) the Developer's exercise of suspension rights pursuant to Section
22.1 hereof.
16.2. EFFECT. At such time as the Developer (or any Owner, as applicable) has
failed to cure any event or circumstance of Owner-Caused Delay within the
period specified in Section 16.1 hereof, the Contractor may be entitled to
a Contract Variation, and the procedures of Section 15 shall apply
thereto.
SECTION 17. GUARANTEED RFS DATE
17.1. GUARANTEED RFS DATE. The Contractor guarantees that RFS Acceptance for
each Outside Plant (or segment thereof) shall occur on or before the
Guaranteed RFS Date for such Outside Plant (or segment thereof), as each
such date may be extended in accordance with Sections 15 and 18 hereof.
17.2. [INTENTIONALLY OMITTED].
SECTION 18. FORCE MAJEURE
18.1. DEFINITION.
(a) INCLUDED EVENTS. An event or circumstance shall be a "FORCE MAJEURE
EVENT" if such event or circumstance:
(i) is beyond the Contractor's reasonable control;
(ii) is not the result of any breach by the Contractor of any
provision of this Contract;
(iii) was not caused by the negligent or careless act or omission of
any Contractor Person;
(iv) will result in a delay in the completion of any material part
of the Work despite the Contractor's exercise of all
commercially reasonable diligence and pursuit of alternative
measures of performance; and
(v) is of a general type or nature falling within one of the
following categories, provided as examples of Force Majeure
Events subject to relief hereunder:
(A) civil disturbance, war, invasion or act of foreign
enemies;
(B) civil uprising or rebellion, or broad-based disruption
in freight or distribution networks;
(C) strikes, lockouts, slowdowns and other labor disruptions
of any kind, except as excluded hereunder pursuant to
paragraph (b)(i) below;
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(D) willful, malicious or criminal acts of sabotage or
interference by individuals or pressure groups
(including, without limitation, by environmentalists),
or disruptive public demonstrations of such Persons,
directed against the System or Contractor Persons
(including their properties or assets) for the purpose
of halting or interrupting performance and completion of
the Work;
(E) fire, flood, epidemic, act of God, natural disaster and
Unusually Severe Weather Conditions (PROVIDED, that the
Contractor shall remain responsible for all weather
conditions that do not constitute Unusually Severe
Weather Conditions);
(F) acts or failures to act, or material and unexcused
delays in acting, of Governmental Authorities (including
Changes in Law and Wayleave or Permit Failures); and
(G) Unanticipated Site Conditions.
(b) EXCLUDED EVENTS. The following events are explicitly excluded from
the term Force Majeure Event and are solely the responsibility of
the Contractor:
(i) any strikes, labor disputes and lockouts involving solely and
exclusively the employees of (A) the Contractor, (B) any
Subcontractor or (C) any of their respective agents hereunder;
(ii) late delivery of equipment or materials (except to the extent
caused by a Force Majeure Event);
(iii) economic hardship;
(iv) default of Subcontractors (except to the extent caused by a
Force Majeure Event);
(v) events and conditions of which the Contractor is deemed
hereunder to have fully informed itself; and
(vi) all other events and acts failing to meet any of the criteria
set forth in Section 18.1(a) hereof for a Force Majeure Event.
18.2. MITIGATION. The Contractor shall use commercially reasonable efforts to
mitigate and minimize the effects of any Force Majeure Event and to resume
in full its performance under this Contract.
18.3. NOTICE. The Contractor shall advise the Developer's Representative in
reasonable detail of any Force Majeure Event within [REDACTED] from the
date of the occurrence thereof; PROVIDED that if the Contractor can
satisfactorily demonstrate to the Developer that the Contractor has been
unavoidably delayed in becoming aware of the occurrence of such Force
Majeure Event, such period and the time period set forth in Section 18.4
hereof shall commence from the date reasonably determined by the Developer
that the Contractor became aware, or should have become aware, of such
occurrence.
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18.4. APPLICATION. If the Contractor is directly delayed in the execution of the
Work by any Force Majeure Event, the Contractor shall have the right to
apply in writing to the Developer's Representative within [REDACTED] after
the occurrence of such Force Majeure Event for an extension of any
Guaranteed RFS Date or any date set forth in the Milestone Schedule, if
and to the extent any such date is affected by such Force Majeure Event.
Such application shall set forth a statement of all the facts on which the
Contractor bases such an application, including a detailed description of
work-around plans, alternate sources or any other means the Contractor
will utilize to make up for any such period of delay and to prevent any
further delay to the Work.
18.5. EXTENSION OF TIME. The extension of time, if any, to be allowed to the
Contractor pursuant to this Section 18 shall be set forth in a Contract
Variation duly executed and delivered in accordance with Section 15
hereof, and shall be for such periods as the Developer approves (which
approval shall not be unreasonably withheld) as necessary to remedy the
schedule effects of the Force Majeure Event, but shall in no event limit
either Party's rights under this Contract, including any Party's rights
with respect to matters arising prior to the occurrence of the Force
Majeure Event.
18.6. LIMITATION. Unless:
(a) an event is a Force Majeure Event as provided in Section 18.1
hereof;
(b) the Contractor notifies the Developer thereof within the time period
provided in Section 18.3 hereof;
(c) the Contractor applies for an extension of time in respect thereof
within the time period provided in Section 18.4 hereof; and
(d) the Developer approves an extension of time in respect thereof in
accordance with Section 18.5 hereof,
the Contractor shall not be entitled to, and shall not claim an extension
of time, for such event, except to the extent that (i) the Contractor,
despite its exercise of due diligence, did not know and was unaware of the
nature and extent of the relevant Force Majeure Event, and (ii) neither
the Developer nor any Owner was not substantially prejudiced by the
Contractor's failure to provide the notices within the time periods
referenced in items (b) and (c) above.
SECTIOM 19. PROJECT MANAGER AND THE DEVELOPER'S REPRESENTATIVE
19.1. PROJECT MANAGER. The Contractor shall designate in writing a project
manager (the "PROJECT MANAGER") to be responsible for the coordination and
monitoring of the Work on the Contractor's behalf, and shall provide the
Developer with a summary of such Project Manager's background and relevant
experience. The Project Manager shall act as the principal point of
34
contact between the Contractor and the Developer, and shall have authority
to act and make decisions on behalf of, and be authorized to bind by
contract or otherwise, the Contractor. If the Project Manager shall resign
or at any time be unable to act, the Contractor shall immediately
designate a successor by Notice to the Developer.
19.2. THE DEVELOPER'S REPRESENTATIVE. The Developer shall designate in writing a
system manager (the "DEVELOPER'S REPRESENTATIVE") to be responsible for
coordination and monitoring of the Work on the Developer's behalf. The
Developer's Representative shall provide the interface with the Contractor
on all technical and contractual matters pertaining hereto, and shall have
authority to act and make decisions on behalf of, and be authorized to
bind by contract or otherwise, the Developer (and, accordingly, the
Owners). The Developer's Representative shall from time to time authorize
in writing Persons to carry out specific tasks on the Developer's behalf.
To the extent that the Developer desires to appoint a third-party (I.E.,
any Person other than an employee or Affiliate of the Developer or any
Owner) as the Developer's Representative, the Developer shall consult with
the Contractor as to such appointment, providing the Contractor with the
opportunity to make reasonable comments with respect thereto.
SECTION 20. INSPECTION RIGHTS
20.1. GENERALLY. At all times during which Work is being performed hereunder,
the Developer and its designees shall, upon reasonable prior notice and
within normal business hours, have full access to the Work. The Contractor
shall provide appropriate facilities for such access and for the purpose
of inspection and testing in accordance with the provisions of the
Technical Requirements. The Developer and its designees shall be allowed
full access to all plants, offices and Sites of the Contractor and its
Subcontractors to enable it to inspect the Work and to monitor progress.
The Developer and its designees shall have the right to establish resident
representative(s) at the Contractor's and its Subcontractors' plants and
at all Sites, and, at the Developer's or its designee's request, the
Contractor and its Subcontractors shall make available suitable office
space and facilities for such representative(s) and, to the extent such
office space and facilities are not otherwise specified in the Technical
Requirements as included in the Work, the Contractor may be entitled, to
the extent provided in Section 15 hereof, to Contract Variation in respect
thereof to the extent the provision of additional office space and
facilities impacts the Milestone Schedule. The Contractor shall include in
all of its Subcontracts such provisions as may be necessary to secure such
rights on behalf of the Developer or its designees. The Developer's and
its designee's inspection activities may include:
(a) an audit of the Contractor's and its Subcontractors' quality control
system and practices and their application to the Work, including to
the design, manufacture, transportation, installation and testing of
the Work, each Outside Plant, and all materials and components
thereof; and
(b) inspection of all parts of the Work to ensure compliance with the
Technical Requirements.
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20.2 COVERED WORK. If any portion of the Work is believed by the Developer to
have been covered contrary to the request of or to requirements
specifically expressed in this Contract, the Developer shall provide
Notice to the Contractor setting forth the basis for the Developer's
belief and the Contractor shall provide its written response within three
(3) Business Days after such Notice. Any disputes shall be settled by good
faith discussion amongst the Project Manager and the Developer's
Representative. If the Developer is able to substantiate its position, the
Work involved must, if required in writing by the Developer or its
designee, be uncovered for its observation and replaced, at the
Contractor's expense. If any other portion of the Work is covered and the
Developer or its designee had not specifically requested the opportunity
to inspect such Work prior to it being covered and it was not covered
contrary to requirements specifically expressed in this Contract, the
Developer or its designee may request the opportunity to inspect such Work
and it shall be uncovered by the Contractor. If such Work is found to be
in accordance with this Contract, the cost of uncovering and recovering
shall be charged to the Owners as a Reimbursable Cost. If such Work is
found not to be in accordance with this Contract, the Contractor shall pay
all costs of uncovering and recovering.
20.3. NO RELIEF. Except as provided by Section 20.1, no inspection, audit or
approval by or on behalf of the Developer or any other Owner Person in
respect of any aspect of the Work shall relieve the Contractor of any of
its responsibilities under this Contract. Notwithstanding the foregoing,
to the extent that the Contractor is required to interrupt performance of
any portion of the Work on account of the Developer's inspection of any
Work found in such inspection to be in compliance with all requirements of
this Contract, the Contractor shall be entitled to an extension of time
equal to the duration of such interruption, to the extent specified in
Section 15.1 hereof.
SECTION 21. DEFECTIVE WORK
21.1. GENERALLY. Without limiting or impairing the Contractor's obligations
pursuant to Section 32 hereof with respect to any Defects in the Work, if
at any time before the relevant RFS Date, any of the Contractor's Work is
found to contain Defects, or is otherwise not in accordance with the
Contract Documents, the Developer or its designee may reject such Work,
and the Owners shall have no liability with respect to payment therefor,
notwithstanding that:
(a) satisfaction may previously have been expressed;
(b) title to such Work may have passed to the Owners in accordance with
Section 36 hereof;
(c) such Work may previously have been accepted; or
(d) payment may have been made in respect of such Work.
21.2. EXISTENCE OF DEFECTS. A Defect shall be deemed to exist when actually
discovered or when it should have been apparent to a prudent contractor
performing the Work, after reasonable inspection or testing, that the
relevant Work is not in conformity with the requirements of the Contract
36
or any Contract Document. Each occurrence of an alleged Defect shall be
subject to expedited review by the Parties as to whether a Defect
attributable to the Contractor or a deficiency attributable to a third
party. If the Contractor has reasonable grounds for disagreement with any
Developer determination as to the existence of a Defect attributed to the
Contractor, such dispute shall be immediately (but in no event more than
two (2) Business Days after the Developer's Notice of such determination)
referred to deliberation amongst the Parties' senior-management personnel
for resolution. If the senior-management personnel are unable to resolve
the dispute within five (5) Business Days after such referral for
resolution in accordance with the Independent Expert Procedures as set
forth in APPENDIX 11 hereto.
SECTION 22. SUSPENSION OF WORK BY THE DEVELOPER
22.1. GENERALLY. Should the Developer desire, in its sole discretion, to suspend
the whole or any part of the Work or suspend for a further period Work
already suspended pursuant to this Section 22, the Developer shall notify
the Contractor, indicating the period of the proposed suspension or
further suspension. If the Contractor believes that such suspension will
result in additional costs or delay for the Contractor, the Contractor
shall, within [REDACTED] after such Notice, furnish an itemized statement
to the Developer indicating (a) the extension of time to which the
Contractor believes it would be entitled if the suspension were
implemented, (b) the Contractor's estimate of the additional Reimbursable
Costs, if any, that would result from the proposed suspension and (c) the
Contractor's estimate as to additional terms of this Contract, if any,
which would be affected by the proposed suspension. Upon receipt of such
itemized statement (or if no such statement is received within the
stipulated [REDACTED], the Developer shall either confirm or cancel the
proposal to suspend or further suspend the Work or further question the
Contractor on the basis of such itemized statement. Promptly after the
Parties agree on any extension of time, they shall execute a Contract
Variation in respect thereof in accordance with Section 15 hereof.
In the event that the Developer shall, pursuant to this Section 22.1,
suspend the Work in its entirety for (i) a period of [REDACTED], or (ii)
periods totaling [REDACTED], such suspension shall, upon the expiry of
such [REDACTED] period, as applicable, constitute a Termination for
Convenience for all purposes hereof.
22.2. THE CONTRACTOR'S DUTIES UPON SUSPENSION. During any such suspension, the
Contractor shall:
(a) cease performance of the Work and place no further orders or
Subcontracts relating to the suspended Work;
(b) protect and care for all materials, equipment and supplies forming a
part of the Work or each Outside Plant, in transit to or from the
Sites or at storage areas for which it is responsible; and
37
(c) give the Developer copies of all outstanding orders and contracts
for materials and services and take any action with respect to such
orders and contracts as the Developer may direct.
22.3. THE CONTRACTOR'S DUTIES AFTER SUSPENSION. Upon the cessation of such
suspension, the Contractor shall resume performance of the Work within a
reasonable period after being directed to do so by the Developer.
SECTION 23. TERMINATION FOR CONVENIENCE
23.1. TERMINATION. The Developer may, upon written Notice (a "NOTICE OF
TERMINATION FOR CONVENIENCE") to the Contractor at any time, terminate
this Contract or otherwise terminate the Contractor's employment hereunder
as to either the whole or part of the Work (a "TERMINATION FOR
CONVENIENCE"). A Termination for Convenience shall not nullify this
Contract but shall operate to terminate the Contractor's right to proceed
with the Work and to discharge the Owners from their obligations under
this Contract, except for the Owners' obligation to pay the Termination
Payment (Convenience). A Termination for Convenience shall not relieve the
Contractor from liability under applicable Law for damages for any failure
or omission to perform any portion of this Contract prior to such
termination or prejudice any legal rights of the Owner Person or the
Contractor, whether those rights arise under this Contract or otherwise.
23.2. TERMINATION DATE. A Termination for Convenience shall be effective, and
this Contract shall be terminated, when the Notice of Termination for
Convenience is delivered to the Contractor.
23.3. TERMINATION PAYMENT (CONVENIENCE).
(a) AMOUNT. In the case of a Termination for Convenience, the Owners
shall make a payment to the Contractor (the "TERMINATION PAYMENT
(CONVENIENCE)") equal to the sum of (i) Reimbursable Costs incurred
by the Contractor as of the Termination Date, (ii) the Fixed Fee and
any Incentive Fee payable in accordance with Section 12.2 hereof so
long as the Contractor has met the criteria for any such fee
pursuant to such Section 12.2, and (iii) the Contractor's reasonable
and necessary costs incurred in connection with the termination of
vendor orders and Subcontracts, demobilization from the Sites and
the performance of its duties upon termination as specified
hereunder
(b) TERMINATION CLAIM. The Contractor shall submit to the Developer a
written termination claim (the "TERMINATION CLAIM"). The Termination
Claim shall set forth a calculation of the Termination Payment
(Convenience) and all other relevant facts, and shall contain
supporting documentation in respect thereof. The Termination Claim
shall be submitted promptly, but, in any event, no later than
[REDACTED] from the effective date of termination of this Contract;
PROVIDED, however, that the Developer and the Contractor may agree
to such additional time as may be reasonably required to compile and
submit such Termination Claim and gather the supporting
documentation therefor.
38
(c) REVIEW PERIOD. Within [REDACTED] after its receipt of the
Termination Claim (the "TERMINATION CLAIM REVIEW PERIOD"), the
Developer shall convey any objections or requests for additional
information it may have with respect to the determination of the
Termination Payment (Convenience). The Contractor shall provide such
information to the Developer as soon as practicable. If the
Developer objects to any portion of the Termination Claim, it shall
notify the Contractor in writing, not later than the end of the
Termination Claim Review Period, of each item it believes requires
adjustment and, for not more than [REDACTED](or such longer period
as the Parties may agree), the Parties shall attempt to resolve any
differences.
(d) ACCOUNTING FIRM. If the Parties are unable to so resolve such
differences within such time period, they shall, within [REDACTED],
jointly submit the items in dispute to a "Big Four" accounting firm
mutually agreed upon by the Contractor and the Developer for
resolution on an expedited basis with a request for a written report
thereon to be submitted within [REDACTED] from such submittal. If
the Parties cannot agree on the determination of the accountant for
the purposes hereof, the accountant shall be a "Big Four" accounting
firm designated by the mutual agreement of a "Big Four" accounting
firm designated by the Developer and a "Big Four" accounting firm
designated by the Contractor. Adjustments to the Termination Claim
by the accountant, if any, shall be:
(i) made in accordance with the criteria set forth in this Section
23.3;
(ii) set forth in its written report; and
(iii) final and binding on the Parties in the absence of manifest
error.
Judgment may be entered thereon in a court of competent
jurisdiction. The accountant shall have no authority to change or
alter the terms and conditions of this Contract. Such determination
by the accountant shall not relieve either Party from liability
under applicable Law for damages for breach of contract or prejudice
any legal right of the Parties, whether those rights arise under
this Contract or otherwise. The Contractor shall provide the
accountant with access, under confidentiality conditions, to all
books of account and records of the Contractor that relate to each
Outside Plant and are relevant to the determination of the
Termination Claim, based on the criteria set forth in this Section
23.3. The fees and expenses incurred in connection with any review
by the accountant pursuant to this Section 23.3(d) shall be borne
one-half by the Owners and one-half by the Contractor.
39
SECTION 24. EVENTS OF DEFAULT AND REMEDIES
24.1. EVENTS OF DEFAULT AND REMEDIES. If at any time (any of the following, an
"EVENT OF DEFAULT"):
(a) the Contractor fails to (i) carry out engineering, fabrication,
supply, delivery, installation and testing of the Work on or with
respect to any Critical Path Item at the rate of progress required
by the Milestone Schedule, and (ii) prepare, implement and comply
with a Schedule Recovery Plan in respect of any such delayed or
incomplete Work, in each case, within the time periods and in
accordance with the provisions set forth in Section 5.2 hereof; or
(b) the Contractor commits any material breach of, or fails in any
material respect to comply with and observe, any provision of this
Contract; or
(c) the Contractor abandons the Work for a period in excess of
[REDACTED] or intimates without lawful cause or justification that
the Work will not or cannot be completed; or
(d) the Contractor shall make a general assignment for the benefit of
creditors, or any proceeding shall be instituted by the Contractor
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of the Contractor or its debts
under Law relating to bankruptcy, insolvency or reorganization or
relief or the appointment of a receiver, trustee or other similar
official for the Contractor or for any substantial part of its
property or the Contractor shall take any corporate action to
authorize any of the actions set forth above in this Section
24.1(d); or
(e) an involuntary petition shall be filed or an action or proceeding
otherwise commenced against the Contractor seeking reorganization,
arrangement or readjustment of the Contractor's debts or for any
other relief under any bankruptcy or insolvency act or Law, now or
hereafter existing and remain undismissed or unvacated for a period
of [REDACTED]; or
(f) a receiver, assignee, liquidator, trustee or similar officer for the
Contractor or for all or any part of its property shall be appointed
involuntarily; or
(g) the Contractor shall file a certificate of dissolution under
applicable Law or shall be liquidated, dissolved or wound up or
shall commence or have commenced against it any action or proceeding
for dissolution, winding up or liquidation, or shall take any
corporate action in furtherance thereof; or
(h) the Contractor either:
(i) fails to make prompt payment of any undisputed invoice due to
any Subcontractor or otherwise for materials or labor; or
40
(ii) repudiates or is in default with respect to any of its
obligations to a Subcontractor; or
(i) the Contractor fails, after being notified thereof by the Developer,
to promptly correct any Defective Work during performance of the
Work or within the Warranty Period; or
(j) any representation or warranty made by the Contractor herein or in
any certificate, financial statement or other document furnished to
any Owner Person by or on behalf of the Contractor shall prove to be
false or misleading in any material respect as of the time made,
confirmed or furnished;
then, upon the occurrence of any Event of Default referred to in
paragraph (a), (b), (i) or (j) of this Section 24.1, the Developer
may, by Notice in writing, advise the Contractor of such Event of
Default and the Contractor shall have [REDACTED] to correct such
Event of Default to the satisfaction of the Developer PROVIDED,
HOWEVER, that, if such Event of Default cannot be cured in such
[REDACTED] period through the diligent efforts of Contractor, but
can be cured in a longer period without there occurring any failure
to meet the Milestone Schedule, the Contractor shall have an
additional period, not to exceed [REDACTED], so long as it shall
commence the cure during such [REDACTED] period and diligently
pursue such cure. If the Contractor fails to correct any such Event
of Default to the satisfaction of the Developer within such
[REDACTED] (or subject to the conditions set forth in the previous
sentence, such longer period), or, upon the occurrence of any other
Event of Default, then the Developer on behalf of the Owners may,
upon written Notice (a "NOTICE OF EXERCISE OF REMEDIES") to the
Contractor, exercise any or all of the following rights and
remedies:
(A) exercise their rights under the Contractor Security;
(B) exercise their rights with respect to the withholding of
payments to the Contractor in accordance with Section
12.5 hereof;
(C) take the Work wholly or partly out of the control of the
Contractor or any other Person in whose control or
possession the Work or any part of it may be, and cause
to be completed the same in accordance with Section 25
hereof (a "TAKE OVER");
(D) terminate this Contract in accordance with Section 26
hereof (such event, a "TERMINATION FOR DEFAULT"; such
Notice of Exercise of Remedies, a "NOTICE OF TERMINATION
FOR DEFAULT"); or
(E) exercise any and all rights and remedies they may have
under law or equity, including seeking specific
performance and the recovery of damages, subject, in any
event, to the provisions of Section 28 hereof.
41
The foregoing remedies are cumulative, and the Developer on behalf
of the Owners may elect one or more thereof without prejudice to any
other right or remedy the Owners may have, subject, however, to
Section 28 hereof. Notwithstanding any of the foregoing, Contractor
shall be entitled upon a Termination for Default to be paid its
Reimbursable Costs (and any applicable Fixed Fee and Incentive Fee
so long as the Contractor has met the criteria for such fee pursuant
to Section 12.2 hereof) for Work performed in accordance with this
Contract and the Contract Documents by the Contractor up to the
effective date of such termination, less any amount owing to the
Owners hereunder, the latter of which amounts may be applied by the
Owners to the payment and performance of any outstanding obligations
of the Contractor hereunder.
24.2. NO PREJUDICE. No action taken by the Developer under this Section 24 shall
prejudice any right of the Owners under Section 13 hereof.
24.3. NOTICE OF EXERCISE OF REMEDIES. Any Notice of Exercise of Remedies shall
be conclusive evidence of the matters stated therein for the purpose of
allowing the Developer on behalf of the Owners to implement the provisions
of this Section 24.
24.4. CONTRACTOR'S RIGHT TO SUSPEND WORK AND TERMINATE CONTRACT.
(a) SUSPENSION OF WORK BY THE CONTRACTOR. [REDACTED]
(b) TERMINATION BY THE CONTRACTOR. [REDACTED]
42
(c) EFFECT OF CONTRACTOR TERMINATION. Any termination of this Contract
by the Contractor on account of any of the circumstances referenced
in the foregoing Section 24.4(b) hereof shall be treated hereunder
as a Termination for Convenience for purposes of the Owners'
obligation to make payment to the Contractor in the amounts and in
the manner specified in Section 24.3 hereof.
SECTION 25. TAKE OVER AND PAYMENTS TO THE DEVELOPER
25.1. REPLACEMENT CONTRACTORS. If the Developer on behalf of the Owners elects a
Take Over, the Owners may contract with and employ any Person or Persons
(each, a "REPLACEMENT CONTRACTOR") to further execute and complete the
Work or any portion thereof, and each Replacement Contractor may provide
such supplies and labor as may be necessary to enable that completion.
25.2. NO RIGHT OF COMPENSATION. In the event of a Take Over (whether or not
through a Replacement Contractor), the Contractor shall have no right to
any compensation arising from such action and the Owners may pay each
Replacement Contractor such amounts of money as may be agreed upon between
such Replacement Contractor and the Owners.
25.3. PAYMENTS TO THE OWNERS. If the Developer on behalf of the Owners elects a
Take Over, the Contractor shall, without prejudice to any other rights or
remedies of the Owners hereunder or under applicable Law with respect to
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the Event of Default (including recourse to the Contractor Security), be
liable to the Owners (subject, in any event, to the provisions of Section
28 hereof) as direct damages for an amount equal to:
(a) all costs (including the costs of redoing any portion of the Work
not reasonably usable in the completion of each Outside Plant) so
incurred by the Owners; MINUS
(b) the total amount paid to the Owners under the Contractor Security.
The Contractor shall refund to the Owners all amounts paid to the
Contractor for Work not reasonably usable in the completion of each
Outside Plant within [REDACTED] after written Notice that such Work has
been rejected by the Developer.
SECTION 26. TERMINATION FOR DEFAULT
26.1. EFFECT OF TERMINATION. A Termination for Default shall not nullify this
Contract but shall operate to terminate the Contractor's right to proceed
with the Work and to discharge the Owners from their obligations under
this Contract. A Termination for Default shall not relieve the Contractor
from liability under applicable Law for damages for any failure or
omission to perform any portion of this Contract prior to such termination
or prejudice any legal rights of the Owners or Contractor, whether those
rights arise under this Contract or otherwise, subject, in any event, to
the provisions of Section 28 hereof.
26.2. TERMINATION DATE. A Termination for Default shall be effective, and this
Contract shall be terminated, when the Notice of Termination for Default
is served upon the Contractor.
26.3. RIGHT TO TERMINATE. The Developer on behalf of the Owners may exercise
their right to terminate this Contract whether or not any of the Work
remains to be executed or whether or not the time limit for completion of
the Work has expired.
26.4. RIGHT TO COMPLETE THE WORK. On a Termination for Default, the Owners shall
be empowered to complete the Work in the same manner as provided for under
Section 25 hereof, as if the Work had been taken wholly out of the control
of the Contractor by the Owners and this Contract had not been terminated.
SECTION 27. DUTIES UPON TERMINATION
27.1. GENERALLY. Upon receipt of a Notice of Termination for Convenience or a
Notice of Termination for Default (each, a "NOTICE OF TERMINATION"),
unless otherwise directed by the Developer in such Notice, the Contractor
shall:
(a) stop work under this Contract on the date and to the extent
specified in the Notice of Termination;
(b) place no further orders or contracts for materials, services or
facilities except as may be necessary for completion of the portion
of the Work, if any, under this Contract that is not terminated;
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(c) unless otherwise directed by the Developer, use reasonable efforts
to terminate all orders and contracts and Subcontracts (other than
Subcontracts conditionally assigned to the Owners in accordance with
Section 33.5 hereof) to the extent that they relate to the
performance of Work terminated by the Notice of Termination;
(d) assign to the Owners (or at the Developer's direction, any
Replacement Contractor), in the manner, at the time and to the
extent directed by the Developer, all of the Contractor's right,
title and interest under such orders, contracts and Subcontracts,
whether or not terminated;
(e) use reasonable efforts to settle all outstanding liabilities and all
claims arising out of such termination of orders and contracts, with
the Developer's approval or ratification to the extent the Developer
so requires;
(f) transfer title to the Owners as provided for in Section 36 hereof
and deliver the following to the Developer in the manner, at the
time, at the place and to the extent (if any) directed by the
Developer:
(i) the fabricated or unfabricated parts, Work in process,
completed Work, supplies and all other items commenced, partly
executed, produced or completed as part of, or acquired in
connection with, the performance of the Work terminated by the
Notice of Termination; and
(ii) the completed or partially completed plans, drawings,
information, Permits and other property or items that, if this
Contract had not been terminated, would have been required to
be furnished to the Owners;
(g) in the case of any property or items referred to in Section 27.1(f)
hereof:
(i) use its best efforts in the case of an Event of Default or
reasonable efforts in the case of a Termination for
Convenience to use such property or items in the manufacture
of other projects that the Contractor has, or will have, under
contract for other customers; the amount received by
Contractor therefor shall be deducted from the Termination
Payment (Convenience) or paid in such other manner as the
Developer on behalf of the Owners may direct; and
(ii) use reasonable efforts to sell, in the manner, at the times,
to the extent and at the price or prices directed or
authorized by the Developer; the proceeds of any such sale
shall be deducted from the Termination Payment (Convenience)
or paid in such other manner as the Developer may direct;
(h) complete performance of such part of the Work as may not have been
terminated by the Notice of Termination;
(i) take such action as may be necessary, or which the Developer may
direct, for the protection and preservation of the property related
to this Contract that is in the Contractor's possession and in which
the Owners have or may acquire an interest;
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(j) grant to the Owners, any Replacement Contractor and each
Subcontractor a continuing right to use any and all patented or
proprietary information that the Developer deems necessary to
complete each Outside Plant, subject to reasonable proprietary
restrictions; and
(k) at the Developer's request and at the Contractor's expense:
(i) for Default, supply any proprietary components needed for the
completion and operation of each Outside Plant;
(ii) assist the Developer in preparing an inventory of all
equipment in use or in storage;
(iii) assign to the Owners or to any Replacement Contractor and make
available all issued Permits then held by the Contractor
pertaining to each Outside Plant; and
(iv) remove all such equipment, waste and rubbish as the Developer
may designate.
27.2. SUBCONTRACTOR CLAIMS. For a Notice of Termination for Default,
notwithstanding Section 27.1(e), the Owners shall not be liable to the
Contractor with respect to any claim that any Subcontractor may raise or
assert arising out of any termination of this Contract.
27.3. FUNDS HELD BY THE OWNERS. Without prejudice to Section 13 hereof, for a
Notice of Termination for Default:
(a) all sums of money that may remain in the hands of the Owners or the
Developer with respect to this Contract; and
(b) all funds made available under any Contractor Security or any other
security retained for the due fulfillment of this Contract,
at the election of the Developer may be withheld pending the final
determination of the rights and obligations of the Parties under this
Contract.
SECTION 28. LIMITATION OF LIABILITY
28.1. NO CONSEQUENTIAL DAMAGES. Except as otherwise specified herein, neither
Party (which shall include, for purposes of this Section 28, all
Subcontractors and Vendors) shall be liable, whether by contract, at law,
in tort or otherwise, for any indirect or consequential losses or any loss
of income or profit, loss of opportunity to do business, claims of
customers or the costs of, or associated with, the use of restoration
facilities or like items of indirect or consequential damage. Neither
Party shall make claims to the other for such indirect or consequential
loss and each Party hereby releases, subject to the other terms of this
Contract, the other from any such losses and shall take all steps
necessary to extend like releases to such other Party's Subcontractors or
Vendors, as applicable.
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28.2. OTHER LIMITATIONS. The total aggregate liability of the Contractor to all
Owner Persons under, arising out of or in connection with this Contract or
otherwise with respect to the Work shall not exceed an aggregate amount
(the "TOTAL LIABILITY CAP") equal to [REDACTED] of the Reimbursable Costs.
Notwithstanding any of the foregoing, the following shall not be included
in, or subject to, the Total Liability Cap, and shall not be taken into
account in establishing the Contractor's total aggregate liability
hereunder:
(a) Indemnifiable Losses, for which there shall be no limit; and
(b) the Contractor's unconditional obligations to achieve RFS Acceptance
of each Outside Plant.
28.3. SCOPE OF LIMITATIONS. With respect to matters falling within the Total
Liability Cap, the waivers and disclaimers of liability, releases from
liability, limitations and apportionments of liability and exclusive
remedy provisions expressed in this Contract shall apply even in the event
of the fault, negligence (in whole or in part), strict liability, breach
of contract, or otherwise of the Party released or whose liability is
waived, disclaimed, limited, apportioned or fixed by such exclusive remedy
provision, and shall extend to such Party's related or Affiliated entities
and its and their directors, officers, employees and agents.
28.4. WORK PROVIDED BY OTHERS. The Contractor shall have no liability for
services, materials or equipment furnished by Vendors. To the extent
practicable, the Owners shall procure that all indemnity, all releases and
all hold-harmless agreements contained in such Owner's contracts with
third parties engaged to perform services or supply materials for the
System, whereby such parties agree to indemnify, release and hold the
Owner harmless shall extend like protection to the Contractor.
28.5. LOSS, INJURY OR DAMAGE TO PERSONS, THE SYSTEM OR THE WORK. Except to the
extent constituting Indemnifiable Losses hereunder, (i) the Contractor's
liability for Loss of or damage to any elements of the System or the Work,
or for any injury to, or death or disease of, any Person, shall be limited
to those payments made on the Contractor's behalf by the insurers
affording the insurance described in Section 41 hereof, and (ii) the
Owners shall release the Contractor from any Loss, damage or expense in
excess of those payments as a result of Loss of or damage to other
property of the Owners or in the custody of the Owners (or as a result of
any injury to, or death or disease of, any Person).
28.6. TRANSFER OF OWNERSHIP. The Owners agree that any future recipient of any
interest in the Systems or the Outside Plant will be bound by such
releases and limitations of liability such that the total aggregate
liability of the Contractor to such Persons shall not exceed the limits of
liability set forth herein.
28.7. HAZARDOUS WASTE OR MATERIALS. Except to the extent constituting
Indemnifiable Losses hereunder, the Contractor shall have no liability for
or in respect of hazardous waste or materials that may be encountered in
carrying out the Work, and the Owners shall indemnify the Contractor
against any additional costs and any liabilities to third parties that the
Contractor may incur as a consequence of such waste or materials being
encountered.
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SECTION 29. THE CONTRACTOR'S ON-SITE DUTIES
29.1. REASONABLE PRECAUTIONS. The Contractor acknowledges that, until such time
as title to each Outside Plant has passed in its entirety to the Owners,
it shall remain solely responsible for the institution and maintenance of
all such usual and reasonable precautions for the protection of the Sites,
the Outside Plant and any Work, and for the prevention of danger or damage
to all persons or property on or near the Sites. Without limiting the
generality of the foregoing, the Contractor shall, as part of the Work,
ensure that each Site is constructed, secured, illuminated and maintained
in such manner as would a reasonably prudent owner of a facility analogous
to such Site.
29.2. WASTE DISPOSAL. The Contractor shall, as part of its Work hereunder,
manage and dispose of all waste materials in strict accordance with
applicable Codes and Standards, and shall, as part of its Work hereunder,
keep each Site free from debris and waste resulting from the performance
of the Work and the presence of the Contractor Persons at such Site. In
the event that any Contractor Person shall discover the presence of, or
cause the discharge of, any material of a hazardous nature on or from any
Site, the Contractor shall immediately notify the Developer, and shall
instruct all Contractor Persons to desist immediately from the Work until
further instruction from the Developer.
SECTION 30. PERFORMANCE TESTS
30.1. GENERALLY.
(a) THE CONTRACTOR'S OBLIGATION TO CONDUCT PERFORMANCE TESTS. The
Contractor shall conduct and repeat as necessary the Performance
Tests as required hereunder in connection with RFS Acceptance (and,
as applicable, Commercial Acceptance) and Final Acceptance, in
accordance with the Performance Test Standards and such supplemental
testing procedures, consistent with such Performance Test Standards,
prepared by the Contractor in accordance with normal industry
standards. The Contractor shall permit the Developer's
representatives to be present during the conduct of Performance
Tests and shall provide to the Developer reports and result data
based upon the conduct of such Performance Tests.
(b) SAFETY. If during any Performance Test, it is discovered that
testing cannot be conducted in a safe manner in accordance with
industry practice, such Performance Test shall be terminated and the
Contractor shall remedy the unsafe condition, whereupon such
Performance Test shall start over.
30.2. RIGHT OF WAIVER. The Developer may, but shall have no obligation to,
waive, defer or reduce any of the requirements relating to the achievement
of RFS Acceptance or Final Acceptance at any time by written Notice to the
Contractor; PROVIDED that the Developer's exercise of any rights hereunder
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shall apply only to such requirements as the Developer may specify and
shall in no event relieve the Contractor of any requirements, liability or
other obligations not so specified.
30.3. LONG-TERM OBLIGATIONS. Nothing in this Section 30, including the
Developer's approvals, nor the issuance of a Certificate of Commercial
Acceptance or a Certificate of RFS Acceptance, shall in any way modify or
alter the Contractor's obligations with respect to Warranties hereunder.
Neither the inspection, approval or payment, including the Final Payment,
under this Contract shall:
(a) be construed to be an acceptance of any Defective Work;
(b) be an admission of the Contractor's satisfactory performance of the
Work; or
(c) relieve the Contractor of any of its obligations under this
Contract.
30.4. OPERATING REVENUES. Any and all revenues generated by the operation of the
Outside Plants shall be solely for the account of the Owners.
SECTION 31. PLANT ACCEPTANCE
31.1. INITIAL PLANT COMMISSIONING REPORT. At such time as the Contractor
determines that it has met the requirements for a Certificate of RFS
Acceptance in respect of either Outside Plant (or segment thereof), it
shall submit to the Developer under cover of a Notice an initial plant
commissioning report (an "INITIAL PLANT COMMISSIONING Report") with
respect to such Outside Plant (or segment thereof) prepared in accordance
with the Testing and Acceptance Specifications referenced in Table 2-C to
the Network Description and Project Scope. Within thirty (30) Days after
its receipt of the relevant Initial Plant Commissioning Report, the
Developer shall:
(a) issue a Certificate of RFS Acceptance in accordance with Section
31.2 hereof; or
(b) not accept the relevant Outside Plant (or segment thereof) in its
existing condition and the terms and provisions of Section 31.5
hereof shall apply.
31.2. RFS ACCEPTANCE.
(a) GENERALLY. The Contractor shall, together with its submission of
Initial Plant Commissioning Report to the Developer in connection
with its application for RFS Acceptance of either Outside Plant (or
segment thereof), certify to the Developer that, as of the date set
forth in such certification:
(i) such Outside Plant (or segment thereof) (A) has been completed
in accordance with the Technical Requirements and any other
requirements of this Contract (except for Punch List Items, if
any), and (B) has passed, as of such certification date, all
Performance Tests as required by the Technical Requirements;
and
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(ii) all requirements of this Contract (except for Punch List
Items, if any) relating to such Outside Plant or segment
thereof (including all Technical Requirements) have been
fulfilled and all required documentation has been completed,
in each case other than those that do not, by the express
terms hereof, have to be fulfilled or completed on or prior to
the RFS Date; PROVIDED, that RFS Acceptance shall not be
deemed to include or require (A) completion of work by the
Vendors or other of the Owners' agents or contractors
hereunder, except to the extent necessary to allow the
Contractor to test each Outside Plant in accordance with the
Performance Test Standards (and to the extent that any such
necessity results in any delay or increased cost to the
Contractor in achieving RFS Acceptance, such event shall be
deemed a Owner-Caused Delay, and the Contractor shall be
entitled to equitable relief to the extent specified in
Section 15.1 hereof) or (B) the absence of minor defects that
do not materially affect the use or operation of the Outside
Plant and are included on a Punch List adopted by the Parties.
The Developer shall review the Contractor's submission within the
period specified in Section 31.1 hereof and, to the extent that the
Developer has neither requested additional information nor raised a
Dispute with respect to the Contractor's submission by written
Notice to the Contractor (which Notice shall articulate the reasons
for the Developer's determination that the Contractor's
certifications made in its application for RFS Acceptance are
erroneous or are inaccurately dated) prior to the expiration of such
period, shall issue a "CERTIFICATE OF RFS ACCEPTANCE" in accordance
with the Technical Requirements dated, and to be effective as of,
the date (the "RFS DATE") as of which the Contractor has certified,
by its Notice given pursuant to Section 31.1 hereof, that all
conditions for RFS Acceptance have been met. The following shall
occur on the RFS Date:
(A) each Outside Plant shall be deemed to be provisionally
accepted by the Owners; and
(B) title to any part of the relevant Outside Plant that has
not previously passed shall be transferred to the Owners
in accordance with Section 36.7 hereof and the risks
thereof and responsibility for routine maintenance
shall, subject to Section 31.2(b) hereof, pass to the
Owners.
(b) PUNCH LIST. The Certificate of RFS Acceptance may, in the
Developer's sole discretion, be unqualified or may have annexed to
it a Punch List, which shall be compiled by the Developer, of any
outstanding minor deficiencies or items to be completed by the
Contractor. The Contractor shall, as part of its Work hereunder and
as soon as practicable, remedy the deficiencies and complete the
Work indicated on all such listed items so as to ensure full
compliance with the requirements of this Contract.
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31.3. COMMERCIAL ACCEPTANCE. If at any time the Developer determines that, based
upon information supplied by the Contractor, any portion of the Outside
Plant is suitable to be put into commercial service (such portion, the
"RFCS PORTION"), then the Developer, at its option and without obligation
(except to the extent specified in clause (a) of this Section 31.3), shall
issue, with the consent (except as provided in such clause (a)) of the
Contractor (which consent shall not be unreasonably withheld or delayed),
to the Contractor a "CERTIFICATE OF COMMERCIAL ACCEPTANCE."
(a) RFCS SEGMENTS. If, based upon ODF-to-ODF Performance Test results
(as well as any other information and testing data that would
otherwise be required to demonstrate RFS Acceptance for either
Outside Plant on an overall basis) provided to it by the Contractor,
the Developer determines that any RFCS Segment meets the criteria
for RFS Acceptance as set forth in Section 32.1 hereof and is
suitable to be put into commercial service, then the Developer shall
issue to the Contractor, within fifteen (15) Days after receiving
from the Contractor all testing data and other information necessary
to make the foregoing determination, a Certificate of Commercial
Acceptance in respect of the relevant RFCS Segment. In the event
that the Developer is unable to issue a Certificate of Commercial
Acceptance for any RFCS Segment, it shall notify the Contractor
promptly (but, in any event, within the foregoing 15-Day period
after the Contractor's submission of the relevant data) with a
written Notice specifying in reasonable detail the reasons for its
inability to do so.
(b) EFFECT OF COMMERCIAL ACCEPTANCE. Upon the Commercial Acceptance Date
with respect to any RFCS Portion:
(i) the Owners shall be entitled to commence commercial service
over such RFCS Portion;
(ii) title to the RFCS Portion that has not previously passed shall
be transferred to the Owners in accordance with Section 36.7
hereof, and the responsibility for routine maintenance
thereof, pass to the Owners;
(iii) the risk for the RFCS Portion shall be vested in the Owners,
except that any risk attributable to the Outside Plant or part
of the Outside Plant that requires corrective action by the
Contractor shall remain the sole responsibility of the
Contractor;
(iv) the requirements of RFS Acceptance for such RFCS Portion shall
be deemed to have been met as of the date of the relevant
Certificate of Commercial Acceptance and, for purposes of the
Developer's assessment of RFS Acceptance for overall Outside
Plant of which such RFCS Portion is a part, such RFCS Portion
shall require no further testing or inspection in connection
with that RFS Acceptance process; and
(v) the Warranty Period shall commence in respect of such RFCS
Portion.
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(c) PUNCH LIST. The Certificate of Commercial Acceptance shall have as
an attachment a list of items requiring corrective action and items
still to be provided. Such corrective action shall be taken promptly
and such items completed by the Contractor as part of its Work
hereunder. When:
(i) the outstanding corrective action has been taken;
(ii) all outstanding items have been delivered and approved; and
(iii) the conditions described in Section 31.2 hereof have been
satisfied, the Developer shall issue a Certificate of
Commercial Acceptance. Upon such issuance, title to the
remainder of the Outside Plant shall be transferred to the
Owners in accordance with Section 36.7 hereof and the risk
with respect to such remainder of the Outside Plant shall pass
to the Owners and the provisions of Section 31.2(b) shall
apply.
(d) NO DIMINISHMENT OF THE CONTRACTOR'S OBLIGATIONS. The issuance of a
Certificate of Commercial Acceptance shall in no way relieve the
Contractor from its obligation to provide Outside Plants complying
with the technical and other requirements of this Contract and, in
particular, any deterioration or Defects in either Outside Plant
occurring or becoming known between the date of issuance of such
Certificate and the date of issuance of a Certificate of RFS
Acceptance shall be corrected at the sole expense of the Contractor,
except to the extent that such Defects are attributable to the
operation or maintenance (or lack thereof) of the RFCS Portion under
the control of the Owners.
(e) EQUITABLE RELIEF FOR INTERFERENCE WITH WORK. In the event that the
Owners' commencement of commercial operations on or with respect to
any RFCS Portion(s) obstructs, delays or otherwise interferes with
the Contractor's prosecution of the Work, such obstruction, delay or
interference shall be treated as an "Owner-Caused Delay" pursuant to
Section 16.1(e) hereof, entitling the Contractor to appropriate
adjustment to the Milestone Schedule or the Target Cost, determined
in accordance with Section 15.1 hereof.
31.4. DOCUMENTATION TO BE DELIVERED UPON RFS ACCEPTANCE OR COMMERCIAL
ACCEPTANCE. Within forty-five (45) Days after achieving each RFS Date and
any Commercial Acceptance Date, as applicable, the Contractor shall submit
to the Developer the following documents, in each case, relating to the
particular Outside Plant or RFCS Portion having achieved, respectively,
RFS Acceptance or Commercial Acceptance:
(a) one (1) hard copy and one (1) electronic copy of the "as built"
drawings for such Outside Plant or RFCS Portion; and
(b) test documentation, the operating manuals and serial numbers for the
equipment associated with such Outside Plant or RFCS Portion.
31.5. FAILURE TO ACHIEVE RFS ACCEPTANCE OR COMMERCIAL ACCEPTANCE. If neither a
Certificate of RFS Acceptance nor a Certificate of Commercial Acceptance
52
is issued due to the existence of Defects with respect to either Outside
Plant or the Work, the Developer shall, without prejudice to any of its
other rights and remedies under this Contract, issue a list detailing such
Defects and advise the Contractor of a period of time in which such
Defects shall be remedied to the satisfaction of the Developer. The
Contractor shall issue an additional commissioning report similar in form
and substance to the Initial Plant Commissioning Report to the Developer
after all actions required to remedy such Defects have been taken by the
Contractor and such report shall be considered in accordance with the
provisions of Section 31.1 hereof.
31.6. FINAL ACCEPTANCE. The Developer shall issue to the Contractor a
"CERTIFICATE OF FINAL ACCEPTANCE" in respect of each Outside Plant within
ten (10) Days after the date on which all of the following conditions
have, in the Developer's judgment, been satisfied in full:
(a) the Developer has issued a Certificate of RFS Acceptance;
(b) the Warranty Period applicable to each component of the Outside
Plant has expired and there are no Warranty claims outstanding with
respect thereto;
(c) any and all items on all Punch Lists relating to the Outside Plant
have been completed; and
(d) the Developer has received the Certificate of Payment and Final
Release.
SECTION 32. WARRANTIES
32.1. GENERAL WARRANTIES. Notwithstanding any Outside Plant having been
provisionally accepted by the Owners and without prejudice to any other
warranty made by the Contractor hereunder, the Contractor warrants until
the expiration of the Warranty Period to the Owners that the Work and each
Outside Plant shall (each of the following, a "GENERAL WARRANTY"):
(a) be free from Defects in design (to the extent of the Contractor's
responsibility therefor, as limited as described in Section 4.2
hereof), materials, construction and workmanship;
(b) comply with all applicable requirements of Laws and Codes and
Standards;
(c) be fit for the particular use described in the Technical
Requirements; and
(d) meet the Network Description and Project Scope, the Performance
Parameters and all other requirements of this Contract.
32.2. NOTIFICATION OF BREACH OF WARRANTY. If any aspect of the Work has not been
performed in accordance with any General Warranty, the Contractor shall,
at its own expense, either repair (in accordance with Section 32.3 hereof)
or replace (in accordance with Section 32.4) all such Work; PROVIDED that:
53
(a) the Developer has provided the Contractor with a written Notice
stating with reasonable specificity the basis for Developer's belief
that the relevant Work has not been performed to the requirements of
the applicable General Warranty; and
(b) such Notice has been given within a reasonable time after any
Owner's discovery of the facts or circumstances giving rise to such
Owner's belief and, except to the extent relating to any latent
Defect not reasonably discoverable by the Owners within the time
period available, is issued prior to the expiration of the Warranty
Period.
32.3. REPAIR GENERALLY. If at any time within the Warranty Period any Defect
occurs in either Outside Plant as a result of a failure of a General
Warranty, the Contractor shall, upon receiving appropriate Notice given in
accordance with Section 32.2 hereof, promptly repair or replace such part
or parts thereof to the satisfaction of the Developer on behalf of the
Owners without any charge to the Owners. The Contractor shall make every
reasonable effort to minimize the period of time that any Outside Plant is
out of service for repair and testing. For failures or any situations that
cause or risk an outage of any Outside Plant, the Contractor shall
initiate a corrective intervention immediately after receipt of Notice
from the Developer.
32.4. REPAIR OR REPLACEMENT. During the Warranty Period:
(a) the Contractor shall make an appropriate investigation, at its sole
cost and expense, of any items of Defective Work repaired or
replaced pursuant to this Section 32 to determine, to the reasonable
satisfaction of the Developer, the type of Defect and the cause of
failure of the defective item or items. The Contractor shall provide
a descriptive written report to the Developer on the results of the
investigation, the type of Defect found and, when appropriate, the
repair carried out on such defective item or items. The Contractor
shall also state whether the type of Defect and the "root cause" of
the failure are the result of a generic Defect occasioned by not
adhering to the Technical Requirements and whether such failure is
expected to occur elsewhere in the Outside Plant; PROVIDED that the
Contractor's determination shall not be conclusive for the purposes
of this Section 32. Additionally, whether or not having been
occasioned by a Defect, the Contractor may independently undertake
such investigations to determine whether a generic Defect may exist
and, if any generic Defect is identified, the Contractor shall, in
coordination with the Developer appropriately repair or replace all
affected elements of the Outside Plant; or
(b) the Developer may alternatively direct the Contractor to conduct an
investigation of suspected generic Defects wherein the Contractor
shall prepare a descriptive written report as provided for in
Section 32.4(a). If, as the result of any such investigation
conducted pursuant to this Section 32.4(b), all Work is found to be
free of any Defects for which the Contractor is responsible
hereunder, the Developer shall, on behalf of each Owner, reimburse
the Contractor for all costs incurred in the conduct of such
inspection and evaluation, which reimbursement shall include,
exclusively for purposes of this Section 32.4, compensation to the
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Contractor for Contractor Persons engaged and its equipment and
facilities utilized in such connection at each of their respective
rates customarily charged in similar projects.
32.5. REPAIR BY THE DEVELOPER. If upon the occurrence of any breach of a General
Warranty during the Warranty Period the Contractor has failed, after
proper Notice given by the Developer in accordance with Section 32.2
hereof, to (i) make prompt repair or replacement, or (ii) minimize Outside
Plant out-of-service time for testing and repair, the Developer may
arrange for the repair or replacement of any Defective Work and the
Contractor shall reimburse the Developer for the cost of repairs or
replacements; PROVIDED, the Developer satisfies its commitment to (i) give
the Contractor prompt Notice of any such repair undertaking, (ii)
coordinate its repair activities with those of the Contractor, and (iii)
comply with the Contractor's repair policies delivered to the Developer,
and the Contractor shall be permitted to have a representative present to
observe such repairs. Any repair by the Developer shall not in any way
diminish the Contractor's obligations under this Section 32.
32.6. REPAIRED OR REPLACEMENT PARTS. Each defective part repaired or replaced
pursuant to this Section 32 (a "REPLACEMENT ITEM") shall itself be subject
to the provisions of this Section, and shall be warranted from the date of
repair or replacement, as applicable, until a date two (2) years
thereafter; PROVIDED that the Warranty Period applicable to any
Replacement Item shall in no case exceed thirty-three (33) months from the
applicable RFS Date.
32.7. THE DEVELOPER'S EXPENSES. The Contractor shall pay to the Developer all
the expenses (if any) incurred by the Developer in testing or examining
any part of each Outside Plant for the purpose of or in connection with
this Section 32 or in or about or in connection with the correction,
replacement or repair of any part of such Outside Plant attributable to
the Contractor's breach of its General Warranty obligations.
32.8. SCOPE OF LIABILITY FOR DEFECTS. Except to the extent that the Developer or
any Owner may have a remedy pursuant to Section 39 hereof, the remedies
specified in this Section 32 are the Developer's and the Owners' sole and
exclusive remedies for Defects arising out of or in connection with the
Contractor's performance under this Contract. There are no standards of
performance, guarantees or warranties with respect to Defects other than
those expressed in this Section 32.
SECTION 33. ASSIGNMENT AND SUBCONTRACTING
33.1. GENERALLY. The Contractor shall not, without the prior written consent of
the Developer, assign this Contract or any part of the Work, or assign,
mortgage, charge or encumber any of the moneys due or becoming due under
this Contract, or any other benefit or obligation whatsoever arising, or
that may arise under this Contract. The Contractor shall not be relieved
of responsibility under this Contract for such parts of the Work as are
assigned or as may be subcontracted. To the extent that the Contractor
subcontracts portions of the Work to any of its Affiliates, the Contractor
guarantees and shall ensure such Affiliate's compliance with all
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requirements of this Contract and the Contract Documents, and the
Developer and the Owners agree to hold only the Contractor and, to the
extent provided for in the Corporate Guarantee, ▇▇▇▇▇▇▇ Corporation liable
for any Affiliate's failure to so comply.
33.2. SUBCONTRACTS. From and after the execution date of this Contract, the
Contractor shall not enter into a contract with a Subcontractor that
requires payment in excess of DM 200,000 without the written approval of
the Developer. In addition, Contractor shall ensure that each Subcontract
shall contain:
(a) provisions allowing the Developers and its designees reasonable
access to all plants, offices and Sites in accordance with Section
19 hereof;
(b) provisions stating that the Subcontractor shall have no rights
against the Developer or any Owner and shall not create or assert
any Lien (equitable or otherwise) against the Developer, any Owner,
any Outside Plant or any of the Work;
(c) provisions designating the Developers and the Owners as third-party
beneficiaries and setting forth a conditional assignment of such
Subcontract to such Persons in accordance with Section 33.5 hereof;
and
(d) such other provisions of this Contract as prudently should be made
applicable to such Subcontract or Subcontractor in order to permit
the Contractor to fulfill its obligations hereunder or otherwise
give full effect to the provisions of this Contract.
33.3. EXISTING SUBCONTRACTS. The Contractor represents, warrants and covenants
that all Subcontracts entered into by the Contractor on or prior to the
date hereof contain, or shall be amended to contain, provisions addressing
the matters set forth in Section 33.2 hereof.
33.4. BREACH. If the Contractor commits any breach of this Section 33, any
assignment, mortgage, charge, encumbrance or Subcontract in contravention
of this Section 33 shall, as against the Developer or any Owner, be null
and void and of no force and effect, and may be ignored by such Owner
Persons. The Contractor shall protect, defend, indemnify and keep
indemnified the Developer and the Owners against all Losses suffered or
incurred by such Persons arising out of or related to such assignment,
mortgage, charge, encumbrance or Subcontract.
33.5. CONDITIONAL ASSIGNMENT. The Contractor shall make a conditional assignment
to the Developer for the benefit of the Owners of all of the Contractor's
Subcontracts and all Permits entered into, acquired or obtained, as the
case may be, in connection with the performance of this Contract or any
part of the Work. Upon a Termination for Default or Take Over, such
conditional assignment shall become fully effective and the Developer (and
the Owners, as applicable) shall acquire all benefits of such Subcontracts
and Permits (including prices and delivery dates, discounts, rebates and
refunds) except for those Subcontracts or Permits, if any, that relate
exclusively to the portion of the Work, if any, not Taken Over.
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33.6. NO OBLIGATIONS OF OWNER PERSONS TO SUBCONTRACTORS. No Subcontractor or any
of its employees, representatives or agents shall be deemed or construed
to be employees, representatives or agents of the Developer or any Owner.
No Subcontractor shall be deemed a third-party beneficiary of, or have any
interest in, this Contract.
SECTION 34. THE CONTRACTOR'S PERSONNEL
The Contractor shall employ, and shall ensure that its Subcontractors employ,
for Work to be performed in connection with this Contract only such persons who
are safety-conscious, suitably skilled and experienced, and the Contractor shall
agree to provide to the Developer, subject to the Developer's assumption of
appropriate confidentiality undertakings in respect thereof, such resumes and
other relevant biographical and employment data as of such date on file with the
Contractor for all such persons as the Developer may reasonably request. The
Developer, or its designee, may object to and direct the Contractor to remove
any person employed by the Contractor or any Subcontractor as to whom the
Developer may provide substantiation of a lack of safety-consciousness, suitable
skills or experience and such person shall be removed within a reasonable period
of time and shall not be employed again for any portion of the Work without the
prior approval of the Developer's Representative.
SECTION 35. THE DEVELOPER'S STAFF
35.1. GENERALLY. Where the Technical Requirements provide for stipulated Work to
be carried out by the Developer, such Work shall be carried out in the
manner and with the responsibilities as defined therein. Such
participation by any of the Developer's staff (or any other Person
designated by the Developer by contract or otherwise) in the Work shall
not be construed as relieving the Contractor of its responsibility for the
design, quality and performance of each Outside Plant.
35.2. LIMITATIONS. Where any of the Developer's staff (or any other Persons
designated by the Developer by contract or otherwise) participate in the
Work, they shall remain officers, partners, employees or agents and under
the administrative control of the Developer. The Contractor shall not be
liable for any negligent act or omission of such staff, agents or
designees, but if in giving instructions to be carried out by any such
Persons, or by omitting to give such instructions, the Contractor fails to
use proper skill and care, the Contractor shall be deemed to have been
negligent and shall be liable for the consequence of such negligence.
SECTION 36. TITLE
36.1. GENERALLY. The Contractor shall transfer title ("EIGENTUM") to the Cable
Links (and all portions thereof) in accordance with the German Law of
Property ("SACHENRECHT"). Such transfer of title shall be effected by the
Contractor in such manner as to realize that (i) Carrier 1 and MFN will
each acquire separate title ("ALLEINEIGENTUM") to one identical Cable Link
and (ii) Viatel will acquire separate title to (A) one
Contractor-completed Cable Link including Fiber Optic Cable pulling and
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(B) one Contractor-completed Cable Link without such Fiber Optic Cable
pulling. Each of Carrier 1, MFN and Viatel (or any assignee thereof as to
whom the Contractor has been notified in accordance with Section 2.3
hereof) is, for purposes of its right to receive title to Work items
hereunder, referred to in this Section 36 as a "DESIGNATED OWNER".
36.2. TITLE TO SUPPLIES AND WORK. When held or installed by the Contractor at
any Site, all physical items ("KORPERLICHE GEGENSTANDE") of supply,
equipment, materials and other Work (each, an "ITEM") intended for use in
each Cable Link shall be identified by the prominent display of notices
and by marking the Items, in accordance with the Storage and Marking
Procedures to be attached hereto as APPENDIX 8, as being the property of
each Designated Owner. The Contractor shall suitably annotate the relevant
books of inventory and installation, and shall allow the Developer access,
for and on behalf of the Designated Owners, to its premises and records in
order to check that such identification has been carried out.
36.3. TRANSFER OF TITLE. The Contractor shall transfer title ("EIGENTUM") to
each Item intended for use in each Cable Link to the Designated Owner
thereof upon submission to the Developer of the Contractor Invoice
(together with all documentation required under Section 12.5 hereof) for
the Reimbursement Invoice, specifying that such Item is payable by such
Designated Owner, subject, in any event, to any rights the Owners may have
under Section 12.5 hereof. For the purpose of this title transfer
("EIGENTUMSUBER-TRAGUNG"), the submission of the Contractor Invoice to the
Developer for payment by the Developer on behalf of each Designated Owner
constitutes the offer, and the payment thereof by the Developer on behalf
of such Designated Owner constitutes the acceptance, of the agreement
among the Contractor and such Designated Owner that the title to all Items
either (i) identified in such Contractor Invoice and supporting
documentation or (ii) specified in this Contract or any Contract Document
as included in the Milestone Event for which such Contractor Invoice is
paid or payable (the "TRANSFERRED PROPERTY"), shall pass to such
Designated Owner. The Contractor shall transfer direct possession
("UNMITTELBARER BESITZ") of each Item of Transferred Property, as
identified in accordance with the Storage and Marking Procedures, to each
Designated Owner upon the agreement referred to in the preceding sentence
relating thereto; PROVIDED, that if the Contractor is to retain, pursuant
to any provision of this Contract or any Contract Document, possession
("BESITZ", hereinafter "POSSESSION") of any Item of Transferred Property
(each, a "RETAINED ITEM") until any later date, the provisions of Section
36.5 hereof shall apply. The Contractor represents and warrants that each
Designated Owner shall acquire good and clear title to such Transferred
Property, free and clear of all Liens (other than Owner Liens).
36.4. REMOVAL OF LIENS. The Contractor shall secure the removal of any Lien
(other than Owner Liens) on the Work or any portion of each Cable Link or
Outside Plant within thirty (30) Days after obtaining notice thereof. If
any Lien (other than Owner Liens) is not discharged, satisfied or released
within such 30 Days or such earlier time as may be necessary in order for
any Owner to avoid being damaged thereby, the Developer may, upon Notice
to the Contractor of its intention to do so, apply any funds withheld or
moneys to become due to the Contractor hereunder to satisfy, discharge or
58
secure the release (including by posting a bond) of such items. Any such
application by the Developer shall be deemed payment on behalf of the
Owners to the Contractor. Any additional expense incurred by the Developer
(or any Owner) as a result of the Contractor's breach of any provision of
this Section 36.4 shall be borne by the Contractor.
36.5. NO RELEASE OF THE CONTRACTOR; CONTRACTOR OBLIGATIONS IN LIEU OF TRANSFER
OF DIRECT POSSESSION. The transfer of title shall not absolve or release
the Contractor from any other obligation or liability under this Contract.
With respect to Retained Items, the Contractor and each of the Designated
Owners hereby agree that, in lieu of delivering direct Possession, the
Contractor shall diligently safeguard such Retained Items for each of the
Designated Owners ("BESITZMITTLUNGSVERHALTNIS", Secs. 868, 930 of the
German Civil Code [BGB]). To the extent that third parties (such as
Subcontractors or vendors) are in Possession of any Transferred Property
at the time of the transfer of title ("EIGENTUMSUBERTRAGUNG") or obtain
such Possession from the Contractor thereafter, the Contractor hereby
assigns to each Designated Owner any claim the Contractor may have for the
retrieval or reconveyance ("ABTRETUNG DES HERAUSGABEANSPRUCHS") of such
Transferred Property.
36.6. BAILMENT. The Contractor shall serve as bailee of any Retained Items and
shall remain liable to each Designated Owner (acting by and through the
Developer in the enforcement of such liability) and shall bear the risk of
loss or damage thereto, until the risk of loss thereof has passed to such
Designated Owner in accordance with Section 40 hereof. Notwithstanding the
foregoing, it shall be the individual responsibility of the appropriate
Designated Owner to take all action within its reasonable control to
prevent any third party in contravention of the Contractor's aforesaid
bailee rights to take direct Possession of any of the Designated Owner's
Items of Transferred Property while Work on such property is still
ongoing.
36.7. TITLE TO THE CABLE LINKS. To the extent title has not previously been
transferred to the appropriate Designated Owner pursuant to Section 36.3
hereof (other than Work being completed pursuant to Section 27.1(h)
hereof), then, upon:
(a) the issuance of a Certificate of RFS Acceptance or a Certificate of
Commercial Acceptance in accordance with Section 31 hereof; or
(b) termination, in whole or in part, of this Contract or the Contractor
pursuant to Sections 23 or 26 hereof,
Contractor shall be obligated to transfer absolute and exclusive right and
title to and interest in any and all parts of the Cable Links (the
"Remaining Parts"), as such parts shall be specifically identified as the
separate property reserved for each of the Designated Owners:
(i) in the relevant "as built" drawings, in the case of
Certificate of RFS Acceptance or a Certificate of Commercial
Acceptance, to be delivered to the Developer (for the benefit
of the Owners) within the time periods specified herein; or
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(ii) in the case of any termination pursuant to Sections 23 or 26
hereof, all such plans, specifications and inventories
otherwise required to be prepared for or delivered to the
Developer (for the benefit of the Owners) pursuant to Section
27.1 hereof;
to such Designated Owner upon the Developer's payment on behalf of the
Owners of the Final Payment (or, as applicable, any Termination Payment).
To the extent that Possession has not been previously transferred from
Contractor to the Designated Owners, Contractor shall also be obligated to
transfer direct Possession (UNMITTELBARER BESITZ) to the Remaining Parts
to the Designated Owners. For this purpose, the submission of the
Contractor's invoice (with the relevant supporting information) to the
Developer for such payments from the Developer on behalf of each
Designated Owner shall constitute the offer, and the payment thereof by
the Developer on behalf of such Designated Owner shall constitute the
acceptance, of the agreement among the Contractor and such Designated
Owner that the title to all remaining Cable Link portions shall pass to
such Designated Owner. The Contractor represents and warrants that each
Designated Owner shall acquire good and clear title thereto, free and
clear of all Liens (other than Owner Liens).
SECTION 37. REPRESENTATIONS AND WARRANTIES
37.1. CONTRACTOR'S REPRESENTATIONS AND WARRANTIES. The Contractor hereby
represents and warrants that:
(a) ORGANIZATION; POWER AND AUTHORITY. It is a limited liability company
duly organized and validly existing under the Laws of the United
Kingdom, and it or its relevant Affiliates are authorized to do
business in all jurisdictions where the Work is to be performed, and
it has all requisite legal power and authority to execute this
Contract and to perform the terms, conditions and provisions
thereof.
(b) AUTHORIZATION. The execution and delivery by the Contractor of this
Contract has been duly authorized by all requisite corporate action.
(c) ENFORCEABILITY. This Contract constitutes the legal, valid and
binding obligation of the Contractor, enforceable in accordance with
the terms thereof except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar Laws affecting creditors' rights generally and to the
extent that the remedies of specific performance, injunctive relief
and other forms of equitable relief are subject to equitable
defenses, the discretion of the court before which any proceeding
therefor may be brought, and the principles of equity in general.
(d) NO CONFLICT. Neither the execution, delivery or performance by the
Contractor of this Contract, nor the consummation of the
transactions contemplated thereby, will result in:
60
(i) a violation of, or a conflict with, any provision of the
organizational documents of the Contractor;
(ii) a contravention or breach of, or a default under, any term or
provision of any material contract, agreement or instrument to
which the Contractor is a party or by which it or its property
may be bound, which contravention, breach or default could be
reasonably expected to have a material adverse effect on the
ability of the Contractor to perform its obligations under
this Contract to consummate the transactions contemplated by
this Contract; or
(iii) a violation by the Contractor of any Law.
(e) NO VIOLATION OF LAW. It is not in violation of any Law promulgated,
or judgment entered, by any governmental authority, which
violations, individually or in the aggregate, would adversely affect
it or its performance of any obligations hereunder.
(f) LITIGATION. There are no actions, suits or proceedings, now pending
or (to its best knowledge) threatened against it before any court or
administrative body or arbitral tribunal that might materially
adversely affect the ability of the Contractor or any Subcontractor
to perform its obligations hereunder.
(g) LICENSES. It will hold all national, provincial, local and other
Permits required to allow it to operate or conduct its business now
and as contemplated by this Contract.
(h) QUALIFICATIONS. It has:
(i) examined the Contract Documents thoroughly and has become
familiar with their terms;
(ii) full experience and proper qualifications to perform the Work
and to construct the Outside Plants; and
(iii) taken reasonable steps to ascertain the nature and location of
the Work, the general character and accessibility of the
Outside Plant build-out, the existence of above-ground
obstacles to construction, and other general and local
conditions (including labor, safety and environmental) that
might affect its performance of the Work; but the Contractor
has not carried out a detailed survey of the proposed route
and has not established whether unconditional Wayleaves will
be available for the whole of the proposed route; accordingly,
the Contractor does not warrant that the whole of the proposed
route will be suitable or feasible and does not warrant the
precise nature or scope of the work which will be required.
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37.2. THE DEVELOPER'S REPRESENTATIONS AND WARRANTIES. The Developer hereby
represents and warrants that:
(a) ORGANIZATION; POWER AND AUTHORITY. It is a GESELLSCHAFT MIT
BESCHRANKTER HAFTUNG duly organized and validly existing under the
laws of Germany, and is qualified to do business in Germany and in
all jurisdictions in which the nature of the business conducted by
it makes such qualification necessary, and has all requisite legal
power and authority to execute this Contract and to perform the
terms, conditions and provisions thereof.
(b) AUTHORIZATION. The execution and delivery by the Developer of this
Contract has been duly authorized by all requisite corporate action.
(c) ENFORCEABILITY. This Contract constitutes the legal, valid and
binding obligation of the Developer, enforceable in accordance with
the terms hereof except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar Laws affecting creditors' rights generally and to the
extent that the remedies of specific performance, injunctive relief
and other forms of equitable relief are subject to equitable
defenses, the discretion of the court before which any proceeding
therefor may be brought, and the principles of equity in general.
(d) NO CONFLICT. Neither the execution, delivery or performance by the
Developer of this Contract, nor the consummation of the transactions
contemplated thereby, will result in:
(i) a violation of, or a conflict with, any provision of the
organizational documents of the Developer;
(ii) a contravention or breach of, or a default under, any term or
provision of any material contract, agreement or instrument to
which the Developer is a party or by which it or its property
may be bound, which contravention, breach or default could be
reasonably expected to have a material adverse effect on the
ability of the Developer to perform its obligations under this
Contract to consummate the transactions contemplated by this
Contract; or
(iii) a violation by the Developer of any Law.
(e) NO VIOLATION OF LAW. It is not in violation of any Law promulgated,
or judgment entered, by any governmental authority, which
violations, individually or in the aggregate, would adversely affect
it or its performance of any obligations hereunder.
(f) LITIGATION. There are no actions, suits or proceedings, now pending
or (to its best knowledge) threatened against it before any court or
administrative body or arbitral tribunal that might materially
adversely affect the ability of the Developer to perform its
obligations hereunder.
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(g) LICENSES. It will hold (either directly, through its Affiliates or
by contract) all national, provincial, local and other Permits
required to allow it to operate or conduct its business now and as
contemplated by this Contract.
37.3. REPRESENTATIONS AND WARRANTIES OF THE OWNERS. Each Owner hereby
individually represents and warrants to the Contractor that:
(a) FUNDING FOR THE CONTRACT. It has provided to the Developer an
irrevocable letter of credit for the benefit of the Developer which
permits the Developer to draw upon such letter of credit by
presentation of a sight draft to the issuing bank to obtain funds to
pay, among other things, the Owner's share of payments due to the
Contractor hereunder.
(b) ORGANIZATION; POWER AND AUTHORITY. It is a GESELLSCHAFT MIT
BESCHRANKTER HAFTUNG (or, in the case of Carrier 1, an OFFENE
HANDELSGESELLSCHAFT) duly organized and validly existing under the
laws of Germany, and is qualified to do business in Germany and in
all jurisdictions in which the nature of the business conducted by
it makes such qualification necessary, and has all requisite legal
power and authority to execute this Contract and to perform the
terms, conditions and provisions thereof.
(c) AUTHORIZATION. Its execution and delivery of this Contract has been
duly authorized by all requisite corporate action.
(d) ENFORCEABILITY. This Contract constitutes its legal, valid and
binding obligation, enforceable in accordance with the terms hereof
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar Laws
affecting creditors' rights generally and to the extent that the
remedies of specific performance, injunctive relief and other forms
of equitable relief are subject to equitable defenses, the
discretion of the court before which any proceeding therefor may be
brought, and the principles of equity in general.
(e) NO CONFLICT. Neither the execution, delivery or performance by the
Contractor of this Contract, nor the consummation of the
transactions contemplated thereby, will result in:
(i) a violation of, or a conflict with, any provision of the
organizational documents of such Owner;
(ii) a contravention or breach of, or a default under, any term or
provision of any material contract, agreement or instrument to
which such Owner is a party or by which it or its property may
be bound, which contravention, breach or default could be
reasonably expected to have a material adverse effect on the
ability of such Owner to perform its obligations under this
Contract to consummate the transactions contemplated by this
Contract; or
(iii) a violation by such Owner of any Law.
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(f) NO VIOLATION OF LAW. It is not in violation of any Law promulgated,
or judgment entered, by any governmental authority, which
violations, individually or in the aggregate, would adversely affect
it or its performance of any obligations hereunder.
(g) LITIGATION. There are no actions, suits or proceedings, now pending
or (to its best knowledge) threatened against it before any court or
administrative body or arbitral tribunal that might materially
adversely affect the ability of such Owner to perform its
obligations hereunder.
(h) LICENSES. It will hold (either directly, through its Affiliates or
by contract) all national, provincial, local and other Permits
required to allow it to operate or conduct its business now and as
contemplated by this Contract.
SECTION 38. DISPUTE RESOLUTION AND CONSENT TO JURISDICTION
38.1. MUTUAL DISCUSSIONS; MEDIATION.
(a) MUTUAL DISCUSSIONS. If a dispute or difference of any kind
whatsoever shall arise between the Parties in connection with,
relating to or arising out of this Contract, including the
interpretation, performance, non-performance or termination of this
Contract, the Parties shall attempt to settle such dispute in the
first instance by mutual discussions between the Project Manager and
the Developer's Representative.
(b) SENIOR MANAGEMENT REVIEW. If any dispute or difference has not been
resolved within a period of fifteen (15) Days of mutual discussions
conducted in accordance with the foregoing clause (a) of this
Section 38.1, or such longer time as is mutually agreed in writing,
the dispute or difference shall be submitted for resolution to
responsible senior management of each Party who are not directly
involved with this Contract or the Systems, who shall (i) meet in
person, (ii) allocate sufficient time and resources for thorough
consideration of all relevant matters and (iii) endeavor to resolve
the relevant dispute or difference within fifteen (15) Days of the
matter being referred to them.
(c) MEDIATION. In the event that any dispute or difference has not been
resolved within thirty (30) Days (unless the Parties mutually agree
to a longer period) of senior-management discussions carried out in
accordance with the preceding clause (b) of this Section 38.1, the
Parties shall endeavor to settle the same by non-binding mediation
under the Construction Industry Mediation Rules of the American
Arbitration Association prior to any litigation in respect thereof.
38.2. CONSENT TO JURISDICTION. The Parties hereto agree that, without limiting
the ability of either Party to appeal an order of any such court, the
United States District Court for the Southern District of New York and
state courts located in the State of New York shall have exclusive
jurisdiction to enforce the terms of this Contract and to decide any
claims or disputes that may arise or result from, or be connected with,
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this Contract and any superseding agreement, any breach or default
hereunder or thereunder, or the transactions contemplated herein or
therein. Any and all claims, actions, causes of action, suits or
proceedings relating to the foregoing shall be filed and maintained only
in such courts, and the Parties hereto hereby irrevocably consent and
submit to the jurisdiction of such courts. If an action, suit or
proceeding is instituted in the United States District Court for the
Southern District of New York or a state court located in the State of New
York, each Party agrees not to assert, by way of motion, as a defense or
otherwise, in any such action, suit or proceeding, any claim that:
(a) it is not subject personally to the jurisdiction of such court;
(b) such action, suit or proceeding is brought in an inconvenient forum;
(c) the venue of such action, suit or proceeding is improper; or
(d) this Contract and any superseding agreement or the subject matter
hereof or thereof may not be enforced in or by such court.
Any and all service of process, and any other notice in any such action,
shall be given personally or by registered or certified mail, return
receipt requested, or by any other means of mail that requires a signed
receipt, postage prepaid, mailed to such a Party as herein provided. The
Parties agree to and submit to enforcement of interim judgments issued in
any such court.
SECTION 39. INDEMNIFICATION
39.1. CONTRACTOR TO INDEMNIFY. To the extent that any of the following Losses
are not recoverable by the relevant Owner Persons out of the proceeds of
insurance procured and maintained by the Contractor for the benefit of
such Owner Persons in connection with this Contract, the Contractor shall
be liable for, and shall indemnify, protect, defend and hold harmless each
Owner Person from and against, all Losses (each of the following, an
"INDEMNIFIABLE LOSS"), to the extent arising from:
(a) any injury to, or death or disease of, any person, or any damage to,
or loss of use of, any property or asset based upon, arising under
or otherwise related to the negligent act or omission of any
Contractor Person in connection with the performance of this
Contract; or
(b) any infringement or claimed infringement of intellectual property
rights to the extent provided in Section 11.1(b) hereof; or
(c) any act or omission of any Contractor Person that violates any Law
or any Tax requirement; or
(d) the discharge or presence of any environmentally hazardous
construction waste generated from the Contractor's Work, excluding
any such environmentally hazardous construction waste the sole
source of which was pre-existing environmental contamination at the
Site.
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39.2 OWNERS TO INDEMNIFY. To the extent that any of the following Losses are
not recoverable by the relevant Contractor Person out of the proceeds of
insurance procured and maintained by either of the Contractor or the
Owners (acting by and through the Developer in the procurement and
maintenance thereof) in connection with this Contract, each Owner shall
(to the pro rata extent of its ownership interest in the Outside Plants)
be liable for, and shall indemnify, protect, defend and hold harmless each
Contractor Person from and against, all Losses to the extent arising from:
(a) any infringement or claimed infringement of intellectual property
rights as described in Section 11.1(a) hereof; or
(b) any act or omission of any Owner Person that violates any Law.
39.3 CONDITIONS TO EFFECT INDEMNIFICATION. Each Party's obligations with
respect to indemnification as set forth in Sections 11.1(a), 11.1(b), 28.5
and 39.1 and 39.2 shall be subject to the conditions that (a) the
indemnitee provides the indemnitor reasonably prompt Notice of any claim
or suit brought; (b) the indemnitee cooperates in the defense of any such
claim or suit; and (c) the indemnitor has the sole control of the defense
and settlement to the extent of the indemnitor's liability for any such
claim or suit, provided that the indemnitor shall confirm in writing its
obligation to indemnify the indemnitee with respect to all cost and
expenses with respect to such claim or suit. The above referenced
indemnification provisions shall only apply to occurrences during the
performance of the Work and neither Party shall have any obligation to
indemnify against any claim or suit occurring after the expiration of a
period of two (2) years after the Final Acceptance Date.
SECTION 40. RISK OF LOSS
40.1. GENERALLY. Notwithstanding that title in whole or in part to the Work may
have passed to any Owner pursuant to Section 36 hereof, the Contractor
shall retain the risk of loss and remain and be responsible to each
affected Owner (acting by and through the Developer in the enforcement
thereof) to make good for Loss or damage to the Outside Plants or Work
(including the Owner Procured Equipment as described in APPENDIX 3 but
specifically excluding the Nortel switching equipment identified in the
second paragraph of Section 3.1 of APPENDIX 2, subject to the proviso
below) arising from any cause (other than the negligent or willful acts or
omissions of Owner Persons) whatsoever from the date hereof until (i) the
RFS Date, or (ii) the issuance of a Certificate of Commercial Acceptance
(but only to the extent that such supplies or Work constitute part of the
RFCS Portion), whichever is earlier, in accordance with Section 31 hereof;
PROVIDED, that in the case of such Nortel switching equipment, any
insurance proceeds received by the Contractor relating thereto shall be
used to repair or replace such Nortel switching equipment or shall be
delivered to the Developer, at the Developer's option.
66
40.2. PAYMENTS TO THE OWNERS. Where the Contractor has not, either in accordance
with the terms of this Contract or otherwise, without cost or expense to
the affected Owner, corrected any damage to any Outside Plant or any
portion thereof with respect to which it retains the risk of loss, the
Contractor shall pay to the Developer, for the benefit of such Owner,
compensation equal to the expenses reasonably incurred by or on behalf of
such Owner of correcting such damage or other loss. This Section 40 is
without prejudice to the obligations of the Contractor under any other
provision of this Contract.
SECTION 41. INSURANCE
41.1. TYPES OF INSURANCE. The Contractor shall, at its own expense, provide
insurance to the reasonable satisfaction of the Developer until the RFS
Date or Final Acceptance Date, as applicable, of the types and in the
coverage amounts specified in APPENDIX 6 hereto, and the costs of doing so
shall be Reimbursable Costs hereunder.
41.2. NOTICE OF CANCELLATION. All of the insurance coverages shall provide that,
prior to any cancellation or material change thereto initiated by the
insurers, a thirty (30) Day written Notice shall be forwarded to the
Developer.
41.3. COPIES. The Contractor shall furnish the Developer with certificates of
insurance (as accompanied by appropriate documentation to establish the
inclusion in each relevant policy of all terms and conditions as are
required hereunder or in any Contract Document for inclusion therein) to
verify that the Contractor has complied with the insurance requirements
under this Contract.
41.4. FAILURE TO MAINTAIN INSURANCE. If the Contractor fails to effect or keep
in force any of the insurance required by this Section 41, the Developer
may, without prejudice to any other rights it or any Owner may have under
this Contract, effect and keep in force any such insurance and pay the
premium due or take out new insurance satisfactory to the Developer.
41.5. COMPLIANCE WITH POLICIES. The Contractor shall comply with all terms,
conditions and guaranties contained in all policies relating to the
insurance required by this Section 41 and shall make all reasonable
efforts so that its insurance brokers and insurers give the Developer such
information in respect thereto as the Developer may reasonably request.
41.6. CLAIM INFORMATION. The Contractor shall notify the insurers promptly and
shall supply all necessary information concerning any occurrence that may
give rise to a claim under the above insurance policies in order to
expedite the processing of the claim.
41.7. REMEDY OF LOSS OR DAMAGE. Following a loss or damage, the Contractor shall
remedy any such loss or damage with due diligence and dispatch and shall
not wait for any insurance proceeds to effect the repairs.
41.8. INSOLVENCY OF INSURERS. The insolvency, liquidation, bankruptcy or failure
of any insurer providing insurance for the Contractor or any
Subcontractor, or failure of any such insurer to pay claims accruing,
shall not be considered a waiver of, nor shall it excuse the Contractor
67
from complying with, any of the provisions of this Contract.
SECTION 42. DOCUMENTS, INFORMATION AND CONFIDENTIALITY
42.1. GENERALLY. All drawings, diagrams, specifications and any other
information to be provided by the Contractor to the Developer under this
Contract shall be supplied by the Contractor in accordance with the
specified procedures and schedules set forth in the Technical Requirements
(including the Network Description and Project Scope). The Contractor
shall be solely responsible for any delay resulting from failure on its
part to provide such drawings, diagrams, specifications or other
information to the Developer within the times required.
42.2. THE CONTRACTOR TO RETAIN DRAWINGS. All drawings and documents held by the
Contractor at the RFS Date shall be retained by the Contractor during the
Warranty Period to enable the Contractor to supply any replacement parts
or extensions to any Outside Plant if these shall subsequently be
required. At the Developer's request, the Contractor shall provide the
Developer with access to all such documents.
42.3. CONFIDENTIALITY.
(a) GENERALLY. All drawings, diagrams, specifications or other
information supplied in connection with this Contract by or on
behalf of either Party (such disclosing Party or person acting on
its behalf, the "DISCLOSING PARTY") to the other Party (such
recipient Party, together with its directors, officers, employees,
agents or subcontractors or any of their respective directors,
officers, employees, agents or subcontractors, the "RECIPIENTS")
that are marked or designated by the Disclosing Party as being
confidential and proprietary shall be used solely in assisting the
Recipients in performance of this Contract and shall not, at any
time earlier than the third (3rd) anniversary of the latest RFS Date
hereunder be disclosed by such Recipients to any third party without
the prior written consent of the Disclosing Party, except as
expressly permitted under clause (b) of this Section 42.3. Each
Party hereto shall ensure that each potential Recipient under its
control or acting on its behalf in connection with this Contract is
subject to appropriate confidentiality undertakings with respect to
all information disclosed hereunder.
(b) Notwithstanding the absence of the Disclosing Party's prior written
consent, any Recipient may disclose information furnished hereunder:
(i) as necessary for the performance of this Contract (and then
only under conditions of confidentiality as set forth herein);
(ii) as required by Law or pursuant to court order;
(iii) if it is or becomes generally available to the public by
publication or otherwise, other than by disclosure in
violation of this Section 42;
68
(iv) if it was within any Recipient's possession prior to being
furnished to a Recipient by or on behalf of the Disclosing
Party;
(v) if it becomes available to the Recipient on a non-confidential
basis; or
(vi) if it was independently developed by the Recipient without
reference to the information provided by or on behalf of the
Disclosing Party.
To the extent practicable, any Recipient shall give reasonable
advance Notice to the Disclosing Party prior to any disclosure
pursuant to Section 42.3(b)(ii) hereof.
(c) TITLE TO INTELLECTUAL PROPERTY. The copyright and all other forms of
intellectual property in all drawings, specifications and data
issued by either Party in connection with this Contract shall remain
the property of that Party; PROVIDED that any drawings,
specifications and data relating specifically to the Outside Plants
(as distinguished from the Contractor's standard products and
services) provided by or on behalf of any Contractor Person to the
Developer for the benefit of the Owners shall become the property of
each such Owner (in proportion to its respective ownership interest
in the Outside Plants) and the Contractor hereby so assigns to each
Owner all of its right, title and interest, that now exists or may
arise in the future, in and to such drawings, specifications and
data. The Developer and each of the Owners shall have the right to
use and reproduce all drawings, diagrams and specifications and
other information provided by or on behalf of the Contractor for its
own use in connection with the operation, marketing and maintenance
of the Outside Plants and interconnection with other systems, but
not for other commercial purposes.
SECTION 43. PUBLICITY
No publicity relating to this Contract or the Work shall be published in any
newspaper, magazine, journal or any other written, oral or visual medium without
the prior written approval of the Developer's Representative.
SECTION 44. CORRUPT GIFTS AND THE PAYMENT OF COMMISSIONS
44.1. GIFTS, ETC. THE CONTRACTOR:
(a) represents and warrants that no Contractor Person has; and
(b) covenants that no Contractor Person shall,
offer or give or agree to give to any Owner Person any gift, commission,
rebate or consideration of any kind as an inducement or reward for doing,
influencing or carrying out any act in relation to the obtaining or
execution of this Contract or for showing any favor or disfavor to any
Person in relation to this Contract.
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44.2. PAYMENTS. The Contractor covenants that neither it, nor any other
Contractor Person, shall, directly or indirectly:
(a) offer, pay, promise to pay or authorize the payment of any money, or
offer, give, promise to give or authorize the giving of anything of
value to any foreign (non-U.S.) government official or any foreign
political party, official thereof or candidate for political office
for purposes of influencing any act or decision of such government
official or political party, official or candidate, or inducing such
government official or political party, official or candidate to use
its or its influence with the government or instrumentality thereof
to influence any act or decision of such government or
instrumentality;
(b) offer, pay, promise to pay or authorize the payment of any money, or
offer, give, promise to give or authorize the giving of anything of
value to any Person while knowing or having a reason to know that
all or a portion of such money or thing of value will be offered or
given to any such government official or any such political party,
official thereof or candidate for political office for purposes of
influencing any act or decision of such government official or
political party, official or candidate, or inducing such government
official or political party, official or candidate to use its or its
influence with respect to any act or decision of such government or
instrumentality;
(c) use fictitious, inflated, duplicate, anonymous, inadequate,
unrecorded or otherwise false accounts, transfers, records, reports,
documents or bookkeeping entries for the purpose of (i) concealing,
mislabeling, misstating, omitting or otherwise falsifying the
existence, source or application of funds for the uses proscribed by
Section 44.2(a) or 44.2(b) hereof, (ii) excluding them from the
Developer's or any Owner's usual system of financial accountability
or (iii) obtaining approval by any Owner Person of any activities
proscribed by Section 44.2(a) or 44.2(b) hereof.
44.3. FOREIGN CORRUPT PRACTICES ACT. The Contractor acknowledges that the
prohibitions set forth in Section 44.2 hereof conform to the requirements
of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and shall
apply to all activities of each Contractor Person, notwithstanding the
fact that such activities may be permitted by the standards or customs of
countries other than the United States.
44.4. PERMITTED ACTIVITIES. Section 44.2 hereof does not prohibit:
(a) the normal extension of those common courtesies and social amenities
(including meals, holiday gifts and tips of nominal amounts)
consistent with ethical business practices that are offered and
received on a basis of friendship or hospitality, and without the
expectation of anything in return, and are of too little value,
duration or frequency to give even the appearance of impropriety;
PROVIDED that the cost thereof is properly identified and disclosed
on the books of the Developer or relevant Owner;
70
(b) the payment of commissions or fees to responsible and qualified
consultants, agents, marketing representatives, attorneys and others
for necessary and legitimate services actually performed; PROVIDED
that the amount paid is reasonably related to the value of such
services or the benefits resulting therefrom;
(c) payments to Persons whose duties are essentially ministerial or
clerical, which are not intended to influence the misuse of official
position, but rather are intended to encourage the lawful use of
official position to expedite a matter or to act with respect to
matters not involving any discretion; or
(d) any payment to a government official, employee or agency that is
specifically required by Law, regulation or decree equally
applicable to all similarly situated companies.
44.5. MATERIALITY. Breach of this Section 44 may render the Contractor, its
Subcontractors and agents liable to punishment by Law, and any such breach
shall constitute an Event of Default.
SECTION 45. NOTICES
45.1. METHODS AND EFFECTIVENESS. All notices, requests, consents and other
communications hereunder (each, a "NOTICE") shall be in writing and shall
be delivered by one or more of the following methods:
===================================================================
METHOD DATE OF EFFECTIVENESS
===================================================================
Personal delivery Date delivered
===================================================================
Facsimile with return confirmation Date sent if received
of transmission during normal business
hours, otherwise the next
Business Day
===================================================================
Nationally recognized overnight Business Day after the date
courier service sent if within the same
country, otherwise the date
delivered
===================================================================
Firstclass certified mail, postage Fifth Day after the date sent
prepaid and return receipt requested
===================================================================
71
45.2. ADDRESSES. Unless otherwise notified in writing, for the purposes of this
Section 46, the addresses and facsimile numbers of the Parties are:
(a) THE CONTRACTOR. If to the Contractor, at the following addresses:
Bechtel Limited c/▇ ▇▇▇▇▇▇▇ Overseas Corporation
c/o Pipeline Engineering GmbH
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇-▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Project Manager
Facsimile: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇
WITH A COPY TO:
Bechtel Limited
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Project Director
Copy: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, General Manager
Facsimile: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇
AND AN ADDITIONAL COPY TO:
▇▇▇▇▇▇▇ Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
(b) THE DEVELOPER. If to the Developer, at the following address:
ViCaMe Infrastructure Development GmbH
c/o Viatel U.K.
▇▇▇▇▇▇▇ House
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, Project Manager
Facsimile: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇
72
AND A COPY TO:
Viatel, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF AMERICA
Attention: General Counsel
Facsimile: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
(c) THE OWNERS. Notwithstanding Section 2.1(b) hereof, in the event that
notice must be given pursuant to this Contract to any Owner or
Owners, such notice shall be provided as follows:
(i) VIATEL. If to Viatel, at the addresses for the Developer
specified above in paragraph (b).
(ii) MFN. If to MFN, at the following address:
Metromedia Fiber Network, Inc.
▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
Facsimile: ▇▇-▇▇-▇▇-▇▇▇-▇▇▇▇▇
WITH A COPY TO:
Metromedia Fiber Network, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President
Facsimile: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
AND AN ADDITIONAL COPY TO:
Metromedia Fiber Network, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
(iii) CARRIER 1. If to Carrier 1, at the following address:
Carrier 1 Fiber Network GmbH & Co. oHG
Lyoner ▇▇▇▇(▇▇▇▇)▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
73
WITH A COPY TO:
Carrier 1 Fiber Network GmbH & Co. oHG
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇-▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Attention: President
Facsimile: ▇▇▇-▇-▇▇▇-▇▇▇▇
AND AN ADDITIONAL COPY TO:
Providence Equity Partners Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Managing Director
Facsimile: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
or to such other place and with such other copies as either Party may
designate as to itself by written Notice to the other Party.
45.3. ENGLISH LANGUAGE. Except where otherwise provided, all documents relating
to this Contract and all communications between the Parties shall be in
the English language.
SECTION 46. NO CONFLICTS
The Contractor represents and warrants that it has not, nor will it hereafter
enter into, any contract with any customer, and has not, and will not, take or
omit any action, in either case that could jeopardize its ability to perform its
obligations under this Contract.
SECTION 47. MISCELLANEOUS
47.1. HEADINGS. For the purposes of interpretation, the headings of the Sections
hereof shall not be deemed to form part of this Contract.
47.2. GOVERNING LAW. THIS CONTRACT SHALL IN ALL RESPECTS BE CONSTRUED AND
GOVERNED IN ACCORDANCE WITH THE LAWS ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WHOLLY WITHIN
SUCH STATE (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW), BUT, TO THE FULLEST EXTENT PERMITTED BY LAW, EXCLUDING
ALL OTHER CHOICE-OF-LAW AND CONFLICTS-OF-LAW RULES.
47.3. SEVERABILITY. If any provision of this Contract shall be invalid or
unenforceable, such invalidity or unenforceability shall not invalidate or
render unenforceable the entire Contract, but rather the entire Contract
shall be construed as if not containing the particular invalid or
74
unenforceable provision or provisions, and rights and obligations of all
Parties shall be construed and enforced accordingly.
47.4. INTEGRATION. This Contract supersedes all prior oral or written
understandings between the Parties and, constitutes the entire agreement
with respect to the subject matter of this Contract.
47.5. AMENDMENTS AND WAIVERS.
(a) AMENDMENTS. This Contract and any of its provisions may be amended,
supplemented or otherwise modified by another agreement in writing
signed by a duly authorized person on behalf of each Party.
(b) WAIVERS. Any provision of this Contract may be waived if, and only
if, such waiver is in writing and signed by the Party against whom
the waiver is to be enforced. No failure or delay by any Party in
exercising any right, power or privilege hereunder shall operate as
waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of
any right, power or privilege.
47.6. FURTHER ASSURANCES. The Contractor shall provide any and all such
cooperation and assistance as the Developer may reasonably request in
connection with the implementation of this Contract and the engineering,
procurement and construction of the Outside Plants. Specifically, the
Contractor shall promptly provide any technical, engineering, financial or
other information that the Developer is entitled to under this Contract,
whenever requested by the Developer, including in connection with any
requests by, filings to, or regulatory requirements of, Governmental
Authorities.
47.7. COUNTERPARTS. This Contract may be executed in one or more counterparts,
each of which when so executed shall be deemed to be an original. Such
counterparts together shall constitute but one Contract.
47.8. SUCCESSORS AND ASSIGNS. This Contract shall be binding upon, and is solely
for the benefit of, each Party, its successors and permitted assignees.
The Developer or any Owner may assign its interest in this Contract
without the consent of the Contractor to any Affiliate or group of
Affiliates, and such assignment shall be effective immediately upon the
Developer's provision of Notice thereof to the Contractor in accordance
with Section 2.3(a) hereof. The Contractor may not assign its interests in
this Contract without the written consent of the Developer.
47.9. NO THIRD PARTY BENEFICIARIES. Unless otherwise expressly stipulated
herein, nothing in this Contract is intended to confer upon any Person
other than each Party, its successors and permitted assignees any rights
or remedies of any nature whatsoever under or by reason of this Contract.
47.10.UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF
GOODS. The Parties agree that the United Nations Convention on Contracts
for the International Sale of Goods shall not apply to this Contract.
75
47.11.REMEDIES CUMULATIVE. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by Law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
76
IN WITNESS WHEREOF, the Parties have duly executed this Contract as of the
date first set forth above.
BECHTEL LIMITED
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
____________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Title: President
VICAME INFRASTRUCTURE DEVELOPMENT GmbH
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
VIATEL GERMAN ASSET GmbH
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
METROMEDIA FIBER NETWORK GmbH
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Director
CARRIER 1 FIBER NETWORK GmbH & Co. OHG
By/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
____________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
77
EXECUTION COPY
ADDENDUM
TO
AMENDED AND RESTATED
ENGINEERING, PROCUREMENT
AND CONSTRUCTION CONTRACT
(OUTSIDE PLANT WORK)
DATED AS OF NOVEMBER 15, 1999,
EFFECTIVE AS OF FEBRUARY 19, 1999
BETWEEN
BECHTEL LIMITED AS CONTRACTOR
AND
VICAME INFRASTRUCTURE DEVELOPMENT GMBH AS DEVELOPER
and
VIATEL GERMAN ASSET GMBH AS OWNER
AND
METROMEDIA FIBER NETWORK GMBH AS OWNER
AND
CARRIER 1 FIBER NETWORK GMBH & CO. OHG AS OWNER
---------------------------------------
GERMAN NETWORK DEVELOPMENT PROJECT
GND No. 1 and GND No. 2
ADDENDUM TO AMENDED AND RESTATED ENGINEERING, PROCUREMENT AND CONSTRUCTION
CONTRACT (OUTSIDE PLANT WORK), dated as of November 15, 1999, effective as of
February 19, 1999, among and between BECHTEL LIMITED, a United Kingdom limited
liability company (the "CONTRACTOR"); and VICAME INFRASTRUCTURE DEVELOPMENT
GmbH, a GESELLSCHAFT MIT BESCHRANKTER HAFTUNG organized under the laws of
Germany (the "DEVELOPER"); and VIATEL GERMAN ASSET GmbH, a GESELLSCHAFT MIT
BESCHRANKTER HAFTUNG organized under the laws of Germany ("VIATEL"); and
METROMEDIA FIBER NETWORK GmbH, a GESELLSCHAFT MIT BESCHRANKTER HAFTUNG organized
under the laws of Germany ("MFN"); and CARRIER 1 FIBER NETWORK GmbH & Co. OHG,
an OFFENE HANDELSGESELLSCHAFT organized under the laws of Germany ("CARRIER 1"),
with each of Viatel, MFN and Carrier 1 acting as an Owner hereunder, and
hereinafter individually referred to as an "OWNER" or, collectively, as the
"OWNERS".
W I T N E S S E T H :
WHEREAS, the parties have entered into the Amended and Restated
Engineering, Procurement and Construction Contract (Outside Plant Work), dated
as of November 15, 1999, effective as of February 19, 1999 (the "AMENDED EPC
CONTRACT"); and
WHEREAS, the parties desire to adopt this Addendum to the Amended EPC
Contract to clarify certain matters.
NOW, THEREFORE, the parties, in consideration of the mutual undertakings
herein expressed, covenant and agree with each other as follows:
1. ADDENDUM TO THE AMENDED EPC CONTRACT. The Amended EPC Contract shall be
and hereby is amended as follows:
1.1 Section 9.2 of the Amended EPC Contract shall be and is hereby
deleted in its entirety and the following language shall be and is
substituted therefor:
"9.2 ACCESS TO RECORDS. The Contractor shall, during the period in
which Contractor is required to compile and maintain books, records,
vouchers and accounts pursuant to Section 9.1 hereof, give each Owner
Person access to all documentation and records required to be kept,
obtained and maintained pursuant to Section 9.1 hereof; PROVIDED, HOWEVER,
that with respect to all such books, vouchers, documentation and records
created prior to the execution date of this Contract (the "PRE-CONTRACT
EXECUTION PERIOD"), the Contractor shall provide all such material to the
Owner Persons to the extent and in the form it exists and to provide it in
a format the Developer or such Owner Person may reasonably request, to the
extent to which it has not previously been delivered. The Contractor shall
not destroy any such documentation or records without affording the
Developer an opportunity to review or copy the same. At the Developer's
request, prior to Final Acceptance, copies of all documentation and records
required to be kept, obtained and maintained pursuant to Section 9.1 hereof
shall be delivered to the Developer (subject to any confidentiality
obligations under Section 42 hereof).
Notwithstanding any of the foregoing, with respect to the Pre-Contract
Execution Period, the Contractor shall be relieved of any obligation to
provide any Owner Person with access to or copies of documentation of the
nature set forth in Section 9.1 hereof that were not in existence during
the Pre-Contract Execution Period. To the extent that such documentation
was in existence during the Pre-Contract Execution Period and in
Contractor's possession, the provisions of the first paragraph of Section
9.1 hereof shall apply to such documentation."
1.2 The definition of "Warranty Period" contained in Exhibit 1 to the Amended
EPC Contract shall be and is hereby deleted in its entirety and the
following language shall be and is substituted therefor:
"WARRANTY PERIOD" [REDACTED]
2. REFERENCE TO AND EFFECT ON THE AMENDED EPC CONTRACT. Each reference in
the Amended EPC Contract to "the Contract," "this Contract," "hereunder,"
"hereof," "herein" or words of like import shall mean and be a reference to the
Amended EPC Contract as amended hereby. The Amended EPC Contract, as amended
hereby, shall remain in full force and effect.
3. COUNTERPARTS. This Addendum may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
[remainder of page intentionally blank]
2
IN WITNESS WHEREOF, the parties hereto have duly executed this Addendum as
of the date first set forth above.
BECHTEL LIMITED
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
______________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Title: President
VICAME INFRASTRUCTURE DEVELOPMENT GmbH VIATEL GERMAN ASSET GmbH
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_________________________________ ______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director Title: Managing Director
METROMEDIA FIBER NETWORK GmbH CARRIER 1 FIBER NETWORK
GmbH & Co. OHG
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________ ______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director Title: Managing Director
3
EXHIBIT 1
DEFINED TERMS
"AFFILIATE" of any Person means any other Person that, directly or
indirectly through one or more intermediaries, controls the first Person, or any
other Person that is controlled by or under common control with the first
Person. For the purposes of this definition, the term "CONTROL" shall be defined
as direct or beneficial ownership of greater than fifty percent (50%) of the
equity interests or greater than fifty percent (50%) of the voting control of an
entity.
"ALTERNATIVE WAYLEAVE" has the meaning ascribed thereto in Section 7.3 of
the Contract.
"BUSINESS DAY" means any Day, other than a Saturday, Sunday or national
statutory holiday in any of Germany, the United Kingdom or the United States.
"CABLE LINK" means each of (A) the two (2) subducts to be fully completed
by the Contractor and (B) two (2) additional subducts to be completed by the
Contractor without Fiber Optic Cable pulling, in each case, along the Scheduled
Route as part of the Outside Plant, together with all materials, equipment and
supply (including, without limitation, the Fiber Optic Cable as supplied by the
Developer) to be annexed to, installed within or integrated into such subduct in
accordance with the terms and conditions of this Contract and the Contract
Documents.
"CARRIER 1" has the meaning ascribed thereto in the preamble to the
Contract.
"CERTIFICATE OF COMMERCIAL ACCEPTANCE" has the meaning ascribed thereto in
Section 31.3 of the Contract.
"CERTIFICATE OF FINAL ACCEPTANCE" has the meaning ascribed thereto in Section
31.6 of the Contract.
"CERTIFICATE OF PAYMENT AND FINAL RELEASE" means the certificate delivered
by the Contractor to the Developer in the form of Exhibit 3 to the Contract.
"CERTIFICATE OF RFS ACCEPTANCE" has the meaning ascribed thereto in
Section 31.2 of the Contract.
"CHANGE EVENT" means any of the following: (a) a Regulatory Change; (b) a
Wayleave or Permit Failure; (c) Owner-Caused Delay; (d) the Contractor's
implementation of (i) any work-around plan approved by the Developer in respect
of: Force Majeure Events or (ii) Alternative Wayleaves; (e) the Contractor's
exercise of suspension rights pursuant to Section 24.4(a) of the Contract; (f)
to the extent specified in Section 20.3 of the Contract, delays sustained by the
Contractor in connection with the Developer's unwarranted exercise of inspection
rights hereunder; (g) Unanticipated Site Conditions; and (h) any other grounds
specifically referred to in the other provisions of this Contract that expressly
entitle the Contractor to equitable relief pursuant to Section 15.1 of the
Contract.
1
"CODES AND STANDARDS" means the regulations, codes, standards,
specifications, interpretations and other applicable requirements of any
industrial association or professional discipline pertaining to or relating to
any Outside Plant and the Work.
"COMMERCIAL ACCEPTANCE DATE" means the date on which the Developer issues
the Certificate of Commercial Acceptance in respect of any RFCS Portion.
"CONTRACT" means Sections 1 through 47 of the Amended and Restated
Engineering, Procurement and Construction Contract (Outside Plant Work), dated
as of November 15, 1999, effective as of February 19, 1999, among the
Contractor, the Developer and the Owners, including all Exhibits and Appendices
thereto.
"CONTRACT DOCUMENTS" means the items listed in Section 3.2 of the Contract.
"CONTRACT VARIATION" has the meaning ascribed thereto in Section 15 of the
Contract.
"CONTRACTOR" has the meaning ascribed thereto in the preamble to the
Contract.
"CONTRACTOR INVOICE" means an invoice (a) prepared in form and substance
satisfactory to the Developer, (b) naming each of the Owners as several obligors
to the extent of the respective payments (and corresponding line items for Value
Added Tax) specified thereon for such Owners and (c) submitted by the Contractor
to the Developer in accordance with Section 12.5 of the Contract.
"CONTRACTOR PERMITS" has the meaning ascribed thereto in Section 6.3(a) of
the Contract.
"CONTRACTOR PERSON" means (a) the Contractor, (b) any Subcontractor or (c)
any subsidiary, Affiliate, agent, representative, director, manager, officer,
employee (including the Project Manager), transferee, successor or assign of the
Contractor or any Subcontractor.
"CONTRACTOR SECURITY" means any of all of the Contractor Surety Bond, the
Corporate Guarantee or the Retainage LC.
"CONTRACTOR SURETY BOND" has the meaning ascribed thereto in Section 14.1
of the Contract.
"CORPORATE GUARANTEE" means the corporate guarantee in favor of the Owners
from ▇▇▇▇▇▇▇ Corporation, a Nevada corporation, securing the payment and
performance obligations of the Contractor hereunder, to be delivered in
accordance with Section 14.1(a) of the Contract in the form set forth in Exhibit
6 hereto.
"CRITICAL PATH ITEM" means each item of Work identified as such in the
Milestone Schedule.
"DAY" means the 24-hour period beginning and ending at 00.00 hours Central
European Time.
"DEFECTIVE WORK" means any portion of the Work that contains Defects.
2
"DEFECTS" means:
(a) when used with respect to structures, materials and supplies
provided by the Contractor as part of the Work, such items
that are not:
(i) of good quality or free from improper workmanship and
deficiencies; and
(ii) free from errors or omissions in design or manufacture
in light of the Technical Requirements; and
(b) when used with respect to the Work (including any and all
design, engineering, startup activities, materials, equipment,
tools, supplies, installation or quality-control activities)
or any portion thereof:
(i) it is not in accordance with the Contract Documents,
including, without limitation, the Technical
Requirements;
(ii) it is not provided in a workmanlike manner or is of
improper or inferior workmanship; and
(iii) it would, in the Developer's determination based on the
results of the Contractor's inspection and testing
activities (including, without limitation, the
Performance Tests), adversely affect the ability of
either Outside Plant to meet any of the Technical
Requirements over the applicable Warranty Period.
"DESIGNATED OWNER" has the meaning ascribed thereto in Section 36.1 of the
Contract.
"DEUTSCHE ▇▇▇▇" or "DM" means the lawful currency of Germany.
"DEVELOPER" has the meaning ascribed thereto in the preamble to the
Contract.
"DEVELOPER'S REPRESENTATIVE" has the meaning ascribed thereto in Section
19.2 of the Contract.
"DISCLOSING PARTY" has the meaning ascribed thereto in Section 42.3 of the
Contract.
"EURO" means the single currency of the European Monetary Union adopted by
the Member States thereof to be effective as of January 1, 1999.
"EVENT OF DEFAULT" has the meaning ascribed thereto in Section 24.1 of the
Contract.
"FIBER OPTIC CABLE" means the fiber optic cable, as specifically described
in Appendices 2 and 3 to the Contract, to be procured by each Owner at its own
cost and expense, and to be made available by the Developer for installation by
the Contractor, as part of the Work, along the Scheduled Route.
"FINAL ACCEPTANCE" means the issuance of the Certificate of Final
Acceptance.
3
"FINAL ACCEPTANCE DATE" means the date on which Final Acceptance of each
Outside Plant occurs.
"FINAL PAYMENT" has the meaning ascribed thereto in Section 12.3(c) of the
Contract.
"FIXED FEE" has the meaning ascribed thereto in Section 12.2 of the
Contract.
"FIXED PRICE CONTRACT" has the meaning ascribed thereto in the preamble of
the Contract.
"FORCE MAJEURE EVENT" has the meaning ascribed thereto in Section 18.1 of
the Contract.
"GENERAL WARRANTY" has the meaning ascribed thereto in Section 32.1 of the
Contract.
"GERMANY" means the Federal Republic of Germany, and includes all
political or territorial subdivisions thereof.
"GND NO. 1 OUTSIDE PLANT" means the Outside Plant for the GND ▇▇. ▇
▇▇▇▇▇▇.
"▇▇▇ ▇▇. ▇ SYSTEM" means the fiber-optic telecommunications link, as more
precisely described in the Network Description and Project Scope, beginning in
Essen, Germany, and running south along the Scheduled Route in the direction of
and terminating in Karlsruhe, Germany.
"GND NO. 2 OUTSIDE PLANT" means the Outside Plant for the GND ▇▇. ▇
▇▇▇▇▇▇.
"▇▇▇ ▇▇. ▇ SYSTEM" means the fiber-optic telecommunications link, as more
precisely described in the Network Description and Project Scope, beginning in
Essen, Germany, and running clockwise along the Scheduled Route connecting
certain major population centers and terminating in Karlsruhe, Germany.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GUARANTEED RFS DATE" means, [REDACTED]
4
"INCENTIVE FEE" has the meaning ascribed thereto in Section 12.2 of the
Contract.
"INDEMNIFIABLE LOSS" has the meaning ascribed thereto in Section 39.1 of
the Contract.
"INDEPENDENT EXPERT" has the meaning ascribed thereto in Section 15.2 of
the Contract.
"INITIAL PLANT COMMISSIONING REPORT" has the meaning ascribed thereto in
Section 31.1 of the Contract.
"LAW" means any federal, state, provincial, local or other constitution,
charter, act, statute, law, ordinance, code, rule, regulation, order,
proclamation, specified standard or objective criteria, Permit, other approval
or other legislative or administrative action of any Governmental Authority,
including:
(a) a final decree, judgment or order of a court; and
(b) any building code applicable to either Outside Plant.
"LIEN" means any mortgage, pledge, lien, deed of trust, claim, charge,
security interest, attachment or encumbrance of any kind, or any other similar
type of preferential arrangement, including materialmen's, laborers',
mechanics', Subcontractors' and vendors' liens, and including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof.
"LIEN RELEASE" means the lien release executed and delivered by the
Contractor in the form of EXHIBIT 4 hereto, which shall contain:
(a) a waiver and release of any and all Liens arising from or
relating to such portions of the Work to which any Contractor
Invoice relates; and
(b) a certification to the Developer for the benefit of the Owners
that the Outside Plants and Work are free from Liens.
5
"LOSSES" means all damages, obligations, debts, deficiencies, demands,
judgments, causes of action, costs, charges, fines, penalties, claims, actions,
proceedings, liabilities, losses, demands, suits, prosecutions or expenses
(including reasonable attorney's fees, disbursements, costs, expenses and other
charges).
"MFN" has the meaning ascribed thereto in the preamble to the Contract.
"MILESTONE EVENT" means any and all events for which an Activity
Description and commencement and completion dates are provided in the Milestone
Schedule.
"MILESTONE SCHEDULE" means APPENDIX 4 to the Contract.
"NETWORK DESCRIPTION AND PROJECT SCOPE" means APPENDIX 2 to the Contract.
"NOTICE" has the meaning ascribed thereto in Section 45.1 of the Contract.
"NOTICE OF EXERCISE OF REMEDIES" has the meaning ascribed thereto in
Section 24.1 of
the Contract.
"NOTICE OF TERMINATION" has the meaning ascribed thereto in Section 27.1
of the Contract.
"NOTICE OF TERMINATION FOR CONVENIENCE" has the meaning ascribed thereto
in Section 23.1 of the Contract.
"NOTICE OF TERMINATION FOR DEFAULT" has the meaning ascribed thereto in
Section 24.1 of the Contract.
"ODF" means each Optical Distribution Frame of a type and in the
configuration specified in APPENDIX 2 to the Contract.
"OUTSIDE PLANT" means the whole of the Fiber Optic Cable link, on an
ODF-to-ODF basis (but excluding the Owner-Procured Equipment), along the
Scheduled Route (together with all equipment, materials and supplies used or
installed by the Contractor in the assembly, installation and interfacing of
such Fiber Optic Cable in accordance with the Technical Requirements), as more
particularly described in the Network Description and Project Scope.
"OWNER-CAUSED DELAY" has the meaning ascribed thereto in Section 16.1 of
the Contract.
"OWNER DEFAULT" has the meaning ascribed thereto in Section 24.4 of the
Contract.
"OWNER ESCROW" has the meaning set forth in Section 12.3(f).
"OWNER ESCROW AGREEMENT" means the Undertaking and Pledge and Security
Agreement, dated as of February 19, 1999, entered into among and between the
Developer, the Contractor, each Owner and the collateral agent signing as a
party thereto in substantially the form of Exhibit 7 hereto, with such revisions
that the collateral agent may reasonably require as a condition to its execution
thereof.
"OWNER LIEN" means any Lien created directly by the Developer or any
Owner.
6
"OWNER PERMITS" has the meaning ascribed thereto in Section 6.3(b) of the
Contract.
"OWNER PERSON" means:
(a) the Developer, the Developer's Representative, QA/QC
Contractor, and the Vendors;
(b) anyone else acting on behalf of the Developer or any Owner in
connection with the Contract; and
(c) the successors, assigns, employees, agents, officers,
directors and Affiliates of any of the foregoing.
"OWNER-PROCURED EQUIPMENT" has the meaning ascribed thereto in Section 8.1
of the Contract.
"OWNER-REQUESTED VARIATIONS" has the meaning ascribed thereto in Section
15.1(a) of the Contract.
"OWNER SPECIFICATIONS" has the meaning ascribed thereto in Section 8.2(b)
of the Contract.
"PARTIES" means the Developer, the Contractor and the Owners.
"PERFORMANCE PARAMETERS" means all such performance criteria and
acceptable test-result data for the Outside Plants and the components thereof as
set in Appendices 2 and 7 to the Contract.
"PERFORMANCE TEST STANDARDS" means APPENDIX 7 to the Contract.
"PERFORMANCE TESTS" means the Outside Plant tests conducted in accordance
with the Technical Requirements.
"PERMITS" means all:
(a) permits, "no objections", permissions-in-principle,
authorizations, consents, registrations, certificates,
licenses, orders, work authorizations/visas, permissions for
the operation of field equipment (including vehicles,
machinery and communications equipment and facilities) and
similar authorizations; and
(b) consents, licenses, waivers, privileges, acknowledgements,
agreements, concessions, approvals from and all other filings
with and applications submitted to, any Governmental Authority
or any other Person,
but not including Wayleaves, Telecom Licenses or any of the foregoing which
relate to the POPs.
7
"PERSON" means an individual, corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization or Governmental
Authority.
"POP SITE" means, as described in the greater detail in the Network
Description and Project Scope, each physical location of any facility designed
to house termination and switching equipment for the Systems.
"PRE-CONTRACT EXECUTION PERIOD" has the meaning ascribed thereto in
Section 9.2 of the Contract.
"PROJECT MANAGER" has the meaning ascribed thereto in Section 19.1 of the
Contract.
"PRUDENT PRACTICES" means: (a) in respect of any Work constituting
engineering or construction-management work, those practices, methods,
specifications and standards of safety and performance, as the same may change
from time to time, as are commonly used by professional firms regularly
performing engineering and construction-management services in Germany for
facilities of the type and size similar to the System, and (b) in respect of any
Work constituting procurement or contract-administration services, those
practices, methods, equipment, specifications and standards of safety and
performance, as the same may change from time to time, as are commonly used by
professional firms regularly performing engineering and construction services in
Germany for facilities of the type and size similar to the System, which, in
each case, in the exercise of reasonable judgment and in the light of the facts
known at the time the decision was made, are considered professional, safe and
prudent practice in connection with the supervision of design, construction,
installation and use of equipment, facilities and improvements, with
commensurate standards of safety, performance, dependability, efficiency and
economy.
"PUBLIC CONTRACT" means any instrument or document relating to any Public
Wayleave setting forth negotiated terms and conditions differing from, or
supplemental to, the statutory terms and conditions applicable to Public Forms.
"PUBLIC FORM" means any standard-form application, instrument or other
document issued or utilized by, or required for submission to, any Governmental
Authority in Germany that does not contain or require any negotiated provision
or other special term or condition not otherwise set forth in applicable Laws
and Codes and Standards of Germany.
"PUBLIC NOTICE" means, in relation to any Wayleave, Permit or Site
requirement or condition, any statement, report, comment or other indication by
or attributable to any Governmental Authority, regardless of the means of
communication or publication thereof, of which the Contractor knows or is aware.
"PUBLIC WAYLEAVE" means any Wayleave along the Scheduled Route that is (i)
subject to official grant by any appropriate Governmental Authority in Germany,
and (ii) available to the general public upon uniform terms and conditions (or,
in the case of Public Contracts, upon substantially uniform terms and
conditions, subject to limited negotiation of certain provisions) as expressly
set forth in applicable Laws and Codes and Standards of Germany.
8
"PUNCH LIST" means the list prepared by the Developer identifying items of
the Work that are incomplete or that contain Defects.
"PUNCH LIST RESERVE" means an amount in cash equal to two hundred percent
(200%) of the cost of completing or correcting all items identified on the Punch
Lists prepared in connection with Commercial Acceptance or RFS Acceptance.
"QA/QC CONTRACTOR" means the representative nominated by the Developer to
facilitate the quality assurance/quality control program for the Outside Plants.
"RECIPIENT" has the meaning ascribed thereto in Section 2.3 of the
Contract.
"REGULATORY CHANGE" means:
(a) the adoption, enactment or application to either Party, the
Work or any Outside Plant of any Law (including any Tax) or
Codes and Standards of or in the United Kingdom, Germany, the
European Union or the United States not existing or applicable
to such Party or Outside Plant on the date of the Contract; or
(b) any change in any Law (including any Tax) or Codes and
Standards of or in the United Kingdom, Germany, the European
Union or the United States or in the application thereof by a
Governmental Authority after the date of the Contract,
but not including any Law or Codes and Standards or application thereof in
existence on the date of the Contract that, by its terms, becomes or will become
effective and applicable to either Party or any Outside Plant after the date of
the Contract.
"REIMBURSABLE COSTS" shall mean those costs specified in APPENDIX 1 to the
Contract, together with the Subcontractor Costs.
"REIMBURSEMENT INVOICE" has the meaning ascribed thereto in Section
12.5(a) of the Contract.
"REPEATERS" means the Owner-Procured Equipment of a type and in the
configuration specified in the Network Description and Project Scope that is
necessary to amplify the signal transmitted through the Fiber Optic Cable along
the Scheduled Route.
"REPEATER FACILITIES" means any and all equipment, materials and
facilities (other than the Repeaters) to be furnished by the Contractor, as
described in, and meeting the requirements of, the Network Description and
Project Scope.
"REPEATER SITE" means each physical location (including applicable fencing
and parking areas) for any Repeaters or Repeater Facilities, as described in,
and meeting the requirements of, the Network Description and Project Scope.
9
"REPLACEMENT CONTRACTOR" has the meaning ascribed thereto in Section 25.1
of the Contract.
"REPLACEMENT ITEM" has the meaning ascribed thereto in Section 32.6 of the
Contract.
"RETAINAGE LC" means letter of credit delivered by the Contractor to the
Developer pursuant to Section 12.3(a) of the Contract, which shall be
substantially in the form of Exhibit 5 hereto.
"RFCS PORTION" has the meaning ascribed thereto in Section 31.3 of the
Contract.
"RFCS SEGMENT" means each segment contained in the GND No. 2 Outside
Plant, as described further in Section 12.2(b) of the Contract.
"RFS ACCEPTANCE" means the issuance by the Developer of the Certificate of
RFS Acceptance.
"RFS DATE" means, in respect of each Outside Plant (or segment thereof),
the date on which RFS Acceptance of such Outside Plant (or segment thereof)
occurs, as determined in accordance with Section 31.2 of the Contract.
"SCHEDULED ROUTE" means the Fiber Optic Cable route for each of the
Systems, as more precisely identified in APPENDIX 2 of the Contract, as such
route may be subject to change from time to time in accordance with and subject
to the provisions of the Contract (including, without limitation, Section 15
thereof).
"SCHEDULE RECOVERY PLAN" has the meaning ascribed thereto in Section 5.2
of the Contract.
"SITE" means any location or locations at which any Contractor Person is
at any time performing, or, as reflected in the Technical Requirements, is
required to perform, the Work hereunder.
"STORAGE AND MARKING PROCEDURES" means APPENDIX 8 to the Contract.
"SUBCONTRACT" means any contract, or the conclusion of any contract,
between the Contractor and any Subcontractor, or between any Subcontractor and
any other Person, relating to the Work or any supply to be provided by such
Subcontractor in respect of the Outside Plants.
"SUBCONTRACTOR" means any contractor (other than the Contractor), vendor
or supplier that contracts to perform services or provide supplies to the
Contractor constituting part of the Work.
"SUBCONTRACTOR COST" means any payment actually disbursed pursuant to any
Subcontract to any Subcontractor.
10
"SUBCONTRACTOR COST VERIFICATION" means the certification executed by the
Contractor representing and confirming to the Owners that (i) either (a) the
Contractor has, in fact, paid to the relevant Subcontractor(s) the full amount
of Subcontractor Costs as to which such Subcontractor Cost Verification relates
or (b) the Contractor will pay to the relevant Subcontractor(s) when such
payment is due and (ii) to the best of the Contractor's knowledge and based on
its full inspection as required hereunder, the relevant Subcontractor Supplies
and Subcontractor Services are in accordance with the Technical Requirements and
have been completed and delivered to the extent required under the relevant
Subcontract for payment in respect thereof.
"SUBCONTRACTOR SUPPLIES" means any and all materials, plant, machinery,
equipment, hardware and other items provided by any Subcontractor pursuant to a
Subcontract.
"SUBCONTRACTOR SERVICES" means any and all services to be provided by any
Subcontractor pursuant to a Subcontract.
"SYSTEM" means each of the GND No. 1 System and the GND No. 2 System.
"TAKE OVER" has the meaning ascribed thereto in Section 24.1 of the
Contract.
"TARGET COST" means DM [REDACTED], being the Total Completion Cost
estimate agreed by the Parties as of the execution date of the Contract, which
amount shall be fixed throughout the term of the Contract except as otherwise
set forth in Section 15.1(b) of the Contract.
"TAXES" means all taxes and duties of any type, including sales-of-goods
taxes, value added taxes, customs duties or other levies and duties applicable
to the performance of the Work hereunder, but excluding taxes, duties or other
charges levied upon or attributable to the Parties' respective properties or
incomes.
"TECHNICAL REQUIREMENTS" means the following documents:
(a) each of Appendices 1 through 11 to the Contract, and all of
such Appendices collectively;
(b) the Vendor Specifications; and
(c) the Owner Specifications.
"TELECOM LICENSE" means any license or similar authorization of any
Governmental Authority that a Person must hold in order to act as the owner or
operator of telecommunications facilities in a relevant jurisdiction.
"TERMINATION CLAIM" has the meaning ascribed thereto in Section 23.3 of
the Contract.
"TERMINATION CLAIM REVIEW PERIOD" has the meaning ascribed thereto in
Section 23.3 of the Contract.
11
"TERMINATION FOR CONVENIENCE" has the meaning ascribed thereto in Section
23.1 of the Contract.
"TERMINATION FOR DEFAULT" has the meaning ascribed thereto in Section 24.1
of the Contract.
"TERMINATION PAYMENT (CONVENIENCE)" has the meaning ascribed thereto in
Section 23.3 of the Contract.
"TOTAL COMPLETION COST" means the total amount of the Reimbursable Costs
paid or payable to the Contractor pursuant to the Contract.
"TOTAL LIABILITY CAP" has the meaning ascribed thereto in Section 28.3 of
the Contract.
"TRANSFERRED PROPERTY" has the meaning ascribed thereto in Section 36.3 of
the Contract.
"UNANTICIPATED SITE CONDITION" means any physical condition of an
environmental, geological or other material nature (whether natural or man-made)
occurring or existing on, above or below the surface of any Site, excluding,
however, any condition:
(a) disclosed or referenced in (i) any Owner Specification or
other Owner-or Developer-provided Notice, recommendation or
technical information supplied in written format to the
Contractor prior to the effective date of the Contract, or
(ii) any Law, Public Notice or Codes and Standards existing
and effective as of the effective date of the Contract as to
which a prudent contractor performing work identical to the
Work would have informed itself; or
(b) that is otherwise of a type that, given the scope of Work
under this Contract and the Contract Documents (including the
limitations on Site examination and investigative duties
referenced in the preceding clause (a) of this definition), a
prudent contractor performing work identical to that described
in the Network Description and Project Scope would have
undertaken, prior to execution of a contract identical to the
Contract, to independently gather, examine or verify
information with respect thereto; or
(c) resulting directly from the willful or negligent act or
omission of any Contractor Person.
"UNITED STATES" means the United States of America.
"UNUSUALLY SEVERE WEATHER CONDITIONS" means weather conditions occurring
at any Site that are materially more severe than would reasonably be
anticipated, based upon the weather pattern records for the most recent 10-year
12
period maintained by appropriate Governmental Authorities in Germany for the
time of year and geographical location at issue, by a prudent contractor
conducting work similar to the Work.
"VALUE ADDED TAX" means any value added tax applicable to or assessable in
respect of the Work or any portion thereof by any Governmental Authority in
Germany.
"VENDOR" means each supplier of Owner-Procured Equipment identified in
APPENDIX 3 to the Contract.
"VENDOR SPECIFICATIONS" means the detailed specifications and related
technical documentation, as identified by title or other relevant description in
APPENDIX 2 to the Contract, prepared by each Vendor in respect of items of
Owner-Procured Equipment, which specifications and documentation shall be
provided by the Developer to the Contractor prior to the Contractor's scheduled
commencement of any Work upon or involving any such items of Owner-Procured
Equipment.
"VIATEL" has the meaning ascribed thereto in the preamble to the Contract.
"WARRANTY" means any General Warranty.
"WARRANTY PERIOD" means, [REDACTED]
"WAYLEAVE" means any right-of-way, easement, license, Permit (excluding
construction Permits), franchise, crossing, joint-use arrangement or other
access right (but excluding leases of existing transmission capacity or fiber
optic cable from other telecommunications service providers) that may be
identified by the Contractor to the Developer, and entered into by or on behalf
of the Owners, in connection with the construction, maintenance, operation and
ownership of the Outside Plants along the Scheduled Route.
"WAYLEAVE CRITERIA" means Table A of APPENDIX 5 to the Contract.
"WAYLEAVE OR PERMIT FAILURE" means any refusal, delay or conditional
mandate by any Governmental Authority in Germany with respect any application by
the Contractor, duly submitted in full compliance with all applicable Laws,
Codes and Standards and the Wayleave Criteria, for any Public Wayleave or
13
Permit, which refusal, delay or mandate (i) is contrary to, or inconsistent
with, applicable Law or Codes and Standards, (ii) imposes conditions
supplemental to, or more onerous than, the express terms of such Laws or Codes
and Standards, or (iii) represents an arbitrary or capricious act or omission by
any relevant Governmental Authority in the conduct of its official duties.
"WORK" has the meaning ascribed thereto in Section 4.1 of the Contract.
"WORK RELEASE CERTIFICATE" means, in respect of each item of Work tendered
to the Developer, each certificate issued by the Contractor's quality assurance
staff in accordance with Section 3.2.8 of the Network Description and Project
Scope.
EXHIBIT 2
FORM OF CONTRACTOR SURETY BOND
CONTRACTOR SURETY ▇▇▇▇
▇▇ [REDACTED] Performance Bond No. _____
[Date]
KNOW ALL MEN BY THESE PRESENTS: that BECHTEL LIMITED, a United
Kingdom limited liability company, as contractor (hereinafter called
"Contractor"), and _______________ [INSERT FULL NAME AND ADDRESS OF LEGAL TITLE
OF SURETY], as surety (hereinafter called "Surety"), are held and firmly bound
unto Viatel German Asset GmbH, a GESELLSCHAFT MIT BESCHRANKTER HAFTUNG organized
under the laws of Germany, Metromedia Fiber Network GmbH, a GESELLSCHAFT MIT
BESCHRANKTER HAFTUNG organized under the laws of Germany, Carrier 1 Fiber
Network GmbH & Co. OHG, an OFFENE HANDELSGESELLSCHAFT organized under the laws
of Germany, as obligees (collectively, hereinafter called "Owners"), in the
amount of [REDACTED] (the "Bonded Amount"), for the payment whereof Contractor
and Surety bind themselves, their heirs, executors, administrators, successors
and assigns, jointly and severally, firmly by these presents.
WHEREAS, pursuant to the Engineering, Procurement and Construction
Contract (Outside Plant), dated February 19, 1999 (the "Contract"), between and
among Contractor, Owners and ViCaMe Infrastructure Development GmbH, a
GESELLSCHAFT MIT BESCHRANKTER HAFTUNG organized under the laws of Germany
("ViCaMe"), which Contract is by reference made a part hereof, Contractor has
agreed to plan, supply, install, assemble and test the Outside Plants (as more
particularly described in the Contract, the "Outside Plants"); capitalized terms
not defined herein being used as defined in the Contract;
WHEREAS, pursuant to Section 15.1(b) of the Contract, Contractor is
required to secure its obligations under the Contract by obtaining a performance
and surety bond from a bonding or insurance company meeting the requirements of
Section 15.3 of the Contract, and this Performance Bond is the "Contractor
Surety Bond" referred to in Section 15.2;
NOW, THEREFORE, at the request and for the account of Contractor,
Surety hereby irrevocably undertakes as follows:
(a) Suretyshall perform Contractor's payment obligations under the
Contract, up to a maximum aggregate amount equal to the Bonded
Amount, upon presentation to Surety during regular business hours at
Surety's offices at _____, New York, of an original manually signed
certificate issued by ViCaMe containing the following:
(A) The Performance Bond Number appearing above;
(B) Either one of the following statements:
1
(a) "The Contractor has failed properly and fully to
perform its obligations under the Contract."; or
(b) "The Owners have received notice that the
Expiration Date shall not be extended;
(C) The amount Contractor is obligated to pay pursuant to
the Contract; and
(D) Payment instructions.
(b) Suretywill pay the amount stated in such certificate, up to maximum
amount equal to the Bonded Amount, by wire transfer of immediately
available funds within five (5) Business Days of ViCaMe's
presentation of such certificate to Surety in accordance with the
terms and conditions contained herein. For purposes of this
Performance Bond, a "Business Day" shall mean a day on which
commercial banks are not required or authorized to close in New York
and which is not a Saturday or Sunday.
(c) This Performance Bond is effective immediately and expires at the
close of business at our office in [ ] specified in the preamble
hereto upon the first (1st) anniversary (the "Expiry Date") of the
date first shown above, but it is a condition of this Performance
Bond that it will be automatically extended for a period of six (6)
months from the Expiry Date and from each 6-month period thereafter
(such date, as extended, the "Expiration Date"), without any
amendment, unless a written Notice to the contrary is provided, at
least thirty (30) Days prior to the Expiration Date, to the Owners
by registered mail, certified mail, or overnight courier to the
above-listed address, and failure to extend the Expiration Date will
permit the Owners to receive the Bonded Amount.
(d) This Performance Bond cannot be cancelled for failure to pay the
premium or commission payable to Surety or be terminated
unilaterally by Surety.
(e) This Performance Bond shall be governed by and construed in
accordance with the laws of the State of New York.
(f) This Performance Bond may not be assigned without the prior written
consent of Surety.
2
Signed and sealed this ___ day of ______, 1999.
BECHTEL LIMITED
Principal
----------------------------------------
Name:
Title:
Witness:
---------------------------------
[NAME OF SURETY]
Surety
----------------------------------------
Name:
Title:
Witness:
---------------------------------
EXHIBIT 3
FORM OF CERTIFICATE AND PAYMENT AND FINAL RELEASE
CERTIFICATE OF PAYMENT AND FINAL RELEASE
Dated _____________
GERMAN NETWORK DEVELOPMENT PROJECT
GND No. 1 System
and
GND No. 2 System
Reference is made to the Engineering, Procurement and Construction
Contract (Outside Plant Work), dated February 19, 1999 (as amended, supplemented
or otherwise modified from time to time, the "EPC CONTRACT"), among and between
BECHTEL LIMITED, a United Kingdom limited liability company, as contractor (the
"CONTRACTOR"), ViCaMe Infrastructure Development GmbH, a GESELLSCHAFT MIT
BESCHRANKTER HAFTUNG organized under the laws of Germany (the "DEVELOPER"), and
each of the following entities (or such successor or replacement entities
introduced in accordance with the provisions of Section 2.3(a) of the EPC
Contract), acting severally but not jointly as an Owner (each, an "OWNER" and,
collectively, the "OWNERS") thereunder: VIATEL GERMAN ASSET GmbH, a GESELLSCHAFT
MIT BESCHRANKTER HAFTUNG organized under the laws of Germany; METROMEDIA FIBER
NETWORK GmbH, a GESELLSCHAFT MIT BESCHRANKTER HAFTUNG organized under the laws
of Germany; and CARRIER 1 FIBER NETWORK GmbH & Co. OHG, an OFFENE
HANDELSGESELLSCHAFT organized under the laws of Germany. Capitalized terms used
but not otherwise defined herein shall have the meanings ascribed thereto in the
EPC Contract.
1. RELEASE AND WAIVER. In consideration of, and subject to, the Final
Payment, the Contractor hereby and forever releases, waives, and
discharges:
1.1. any rights, Liens or other claims that the Contractor has or may
have against the Developer or any Owner (including any shareholder,
Affiliate, successor or assign of any of them) arising out of or
relating to the Outside Plants or any Work, including any materials,
equipment or supplies forming a part of, or furnished in connection
with, the Work; and
1.2. any other legal or equitable claim or right that the Contractor may
have against any Owner Person in any manner arising out of or
relating to the Outside Plants or the Work.
2. CERTIFICATIONS. The Contractor certifies for the benefit of the Developer
and the Owners that:
1
2.1. acceptance of the Final Payment by the Contractor shall represent
the Contractor's complete satisfaction with the final compensation
for all claims and the Work;
2.2. there are no expected or known Liens arising out of or in connection
with the performance by the Contractor or any Subcontractor of the
Work;
2.3. all Taxes and insurance premiums for which the Contractor is
responsible under the EPC Contract that have accrued to date in
connection with the Work have been fully paid and discharged.
IN WITNESS WHEREOF, the Contractor has executed this Certificate of
Payment and Final Release as of _______________, 19___.
BECHTEL LIMITED
By___________________________________
Name:
Title:
EXHIBIT 4
FORM OF LIEN RELEASE
LIEN RELEASE
Dated _____________
GERMAN NETWORK DEVELOPMENT PROJECT
GND No. 1 System
and
GND No. 2 System
Reference is made to the Engineering, Procurement and Construction
Contract (Outside Plant Work), dated February 19, 1999 (as amended, supplemented
or otherwise modified from time to time, the "EPC CONTRACT"), among and between
BECHTEL LIMITED, a United Kingdom limited liability company (the "CONTRACTOR"),
VICAME INFRASTRUCTURE DEVELOPMENT GmbH, a GESELLSCHAFT MIT BESCHRANKTER HAFTUNG
organized under the laws of Germany (the "Developer"), and each of the following
entities (or such successor or replacement entities introduced in accordance
with the provisions of Section 2.3(a) of the EPC Contract), acting severally but
not jointly as an Owner (each, an "OWNER") thereunder: VIATEL GERMAN ASSET GmbH,
a GESELLSCHAFT MIT BESCHRANKTER HAFTUNG organized under the laws of Germany;
METROMEDIA FIBER NETWORK GmbH, a GESELLSCHAFT MIT BESCHRANKTER HAFTUNG organized
under the laws of Germany; CARRIER 1 FIBER NETWORK GmbH & Co. OHG, an OFFENE
HANDELSGESELLSCHAFT organized under the laws of Germany. Capitalized terms used
but not otherwise defined herein shall have the meanings ascribed thereto in the
EPC Contract.
1. RELEASE AND WAIVER. In consideration of, and subject to, the Developer's
payment, on behalf of each Owner to the extent of such Owner's respective
ownership interest in the Outside Plants, for the Work described in the
Contractor Invoice, dated as of the date hereof (the "CURRENT CONTRACTOR
INVOICE"), the Contractor hereby and forever releases, waives, and
discharges any rights, Liens or other claims (other than claims arising in
connection with dispute resolution that are subject to mutual discussions
in accordance with Section 39 of the EPC Contract) that the Contractor has
or may have against the Developer or any Owner (including any shareholder,
Affiliate, successor or assign of any of them) arising out of or relating
to the Outside Plants or such Work or any other Work heretofore performed
or delivered (collectively, the "WORK-TO-DATE"), including any materials,
equipment or supplies forming a part of, or furnished in connection with,
any Work-to-Date.
2. CERTIFICATIONS. The Contractor certifies that:
1
2.1. there are no expected or known Liens on the Outside Plants or the
Work arising out of or in connection with the performance by the
Contractor or any Subcontractor of the Work-to-Date; and
2.2. all Taxes (excluding any income taxes) and insurance premiums for
which the Contractor is responsible under the EPC Contract that have
accrued to date in connection with the Work-to-Date have been fully
paid and discharged.
IN WITNESS WHEREOF, the Contractor has executed this Lien Release as of
this ___ day of _______________________, _____.
BECHTEL LIMITED
By___________________________________
Name:
Title:
EXHIBIT 5
FORM OF RETAINAGE LC
IRREVOCABLE LETTER OF CREDIT
Letter of Credit No.__________________
ViCaMe Infrastructure Development GmbH
c/o Viatel U.K.
▇▇▇▇▇▇▇ House
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Ladies and Gentlemen:
(g) STATE AMOUNT. We, [___________] (the "Bank"), at the request of and
for the account of Bechtel Limited, a United Kingdom limited
liability company, and for the benefit of Viatel German Asset GmbH,
a GESELLSCHAFT MIT BESCHRANKTER HAFTUNG organized under the laws of
Germany, Metromedia Fiber Network GmbH, a GESELLSCHAFT MIT
BESCHRANKTER HAFTUNG organized under the laws of Germany, Carrier 1
Fiber Network GmbH & Co., OHG, an OFFENE HANDELSGESELLSCHAFT
organized under the laws of Germany (collectively, the "Owners"),
hereby establish in your favor as the agent, for the Owners an
irrevocable credit whereby you are authorized to draw on the Bank,
Irrevocable Letter of Credit No._____, available by draft(s) at
sight, an aggregate amount not exceeding [REDACTED] (the "Initial
Stated Amount") until we receive a written notice signed by you in
the form of Annex E, and thereafter, the lesser of (a) [REDACTED]
and (b) the difference between the Initial Stated Amount and the
aggregate amount you have drawn under this Letter of Credit.
(h) TERM. This Letter of Credit is effective immediately and expires at
the close of banking business at our office in [ ] designated in or
pursuant to Paragraph 3 hereof on [insert date] (the "Expiry Date"),
but it is a condition of this Letter of Credit that it will be
automatically extended for a period of 364 days from the Expiry Date
and from each 364 days thereafter (such date, as extended, the
"Expiration Date"), without any amendment, unless at least thirty
1
(30) days prior to the Expiration Date, a written notice, in the
form of Annex D, is provided to you by registered mail, certified
mail, or overnight courier to the above-listed address.
(i) DRAWING DOCUMENTATION. The Bank irrevocably authorizes you to draw
on the Bank under this Letter of Credit by presentation of your
sight draft in the form of Annex A accompanied by a drawing
certificate in the form of either Annex B or Annex C hereto,
appropriately completed and, in each case, signed by your authorized
signatory. Presentation of drafts and drawing certificates shall be
made at [insert address], Attention: [ ] or such other address as
which may be designated by us by written notice delivered to you.
Presentation of drafts and drawing Certificates may also be made by
facsimile transmission to [ ] (or such other number as may be
notified to you in writing).
(j) DRAWING PROCEDURES. The Bank hereby agrees with you that all drafts
drawn under and in compliance with the terms of this Letter of
Credit will be duly honored upon due presentation to the Bank as
specified in Paragraph 3, if presented on or before the Expiration
Date. If a sight draft and accompanying drawing certificate are in
compliance with the terms of this Letter of Credit and are received
by [specify time and place] time on a Business Day, payment will be
made on the next Business Day, by wire transfer of immediately
available funds to the account specified in the drawing certificate.
If such sight draft and accompanying drawing certificate are
received after [specify] time on a Business Day, payment will be
made in immediately available funds before 11:00 a.m. on the second
succeeding Business Day following the date of receipt. Payment is to
be made in Deutsche Marks or if Deutsche Marks are no longer
available, in Euros from the Bank's own funds. Only you may make a
drawing under this Letter of Credit. As used in this Letter of
Credit, the term "Business Day" means any day other than a Saturday
or Sunday or a day in which banking institutions in [specify place]
are authorized or required by law or executive order to close.
(k) AVAILABLE AMOUNT. Multiple drawings may be made under this Letter of
Credit; provided, that each drawing honored by the Bank hereunder
shall pro tanto reduce the then applicable amount available for
drawing thereafter.
(l) GOVERNING LAW. This Letter of Credit, except as otherwise expressly
stated herein, is subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 (the "UCP"). As to matters not governed
by the UCP, this Letter of Credit shall be deemed to be a contract
made under the laws of the State of New York and shall be governed
by the internal laws of the State of New York.
(m) INTEGRATION. The Letter of Credit (including Annexes attached
hereto) sets forth in full the Bank's undertaking, and such
undertaking shall not in any way be modified, amended, amplified or
limited by reference to any other document, instrument or agreement
2
referred to herein (or in the Annexes attached hereto), and any such
reference shall not be deemed to incorporate herein any such
document, instrument or agreement.
[ISSUING BANK]
By: ---------------------------
Name:
Title:
3
Annex A
SIGHT DRAFT
Irrevocable Transferable Letter of Credit No._______________
Date:____________
For VALUE RECEIVED
At sight pay to the order of ______________, the sum of [Deutsche
Marks ____] [Euro ______] drawn under [Issuing Bank] Irrevocable
Transferable Letter of Credit
No.: ________.
ViCaMe Infrastructure Development GmbH
-----------------------------------------
Authorized Signatory
To:
4
Annex B
Irrevocable Transferable Letter of Credit No. ________
CERTIFICATE FOR DRAWING FOR PAYMENT
To: [Issuing Bank]
[Address]
Attention:
The undersigned, ViCaMe Infrastructure Development GmbH, hereby
certifies to [Issuing Bank] (the "Bank") with respect to Irrevocable Letter of
Credit No. _________, dated February ___, 1999 (the "Letter of Credit")
established by the Bank in favor of the undersigned at the request of and for
the account of and for the benefit of Bechtel Limited, a United Kingdom limited
liability company (the "Contractor") that:
Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed thereto in the Engineering, Procurement and Construction
Contract (Outside Plant), dated February 19, 1999 (the "EPC Contract"), among
and between Bechtel Limited, a United Kingdom limited liability company (the
"Contractor"), ViCaMe Infrastructure Development GmbH, a GESELLSCHAFT MIT
BESCHRANKTER HAFTUNG organized under the laws of Germany (the "Developer"),
Viatel German Asset GmbH, a GESELLSCHAFT MIT BESCHRANKTER HAFTUNG organized
under the laws of Germany, Metromedia Fiber Network GmbH, a GESELLSCHAFT MIT
BESCHRANKTER HAFTUNG organized under the laws of Germany, and Carrier 1 Fiber
Network GmbH & Co. OHG, an OFFENE HANDELSGESELLSCHAFT organized under the laws
of Germany (collectively, the "Owners").
The Contractor has failed properly and fully to perform its
obligations under the EPC Contract.
Written notice has been given to Contractor pursuant to the notice
provisions of the EPC ___ days prior to the date of this certificate.
The undersigned is making a demand for payment under the Letter of
Credit in the amount of $________.
The amount of the draft accompanying this Certificate does not
exceed the amount available under the Letter of Credit.
5
Payment of the amount demanded shall be made by wire transfer to the
following account: ____________________.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate as of the ______ day of __________, _______.
ViCaMe Infrastructure Development GmbH
By: _____________________________________
Authorized Signatory
6
Annex C
Irrevocable Transferable Letter of Credit No. ________
CERTIFICATE AS TO NOTIFICATION OF NON-RENEWAL OF LETTER OF CREDIT
To: [Issuing Bank]
[Address]
Attention:
The undersigned, ViCaMe Infrastructure Development GmbH, hereby
certifies to [Issuing Bank] (the "Bank") with respect to the Irrevocable Letter
of Credit No. _________, dated February ___, 1999 (the "Letter of Credit")
established by the Bank in favor of the undersigned at the request of and for
the account of and for the benefit of Bechtel Limited, a United Kingdom limited
liability company, that:
1. The undersigned is in receipt of a notice, dated _________, from
the Bank notifying us that the Letter of Credit expires in 30 days or less.
2. Payment of the amount demanded shall be made by wire transfer to
the following account: ________________.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate as of the ___ day of ____, ___.
ViCaMe Infrastructure Development GmbH
By: __________________________________________
Authorized Signatory
Annex D
NOTICE OF EXPIRATION OF LETTER OF CREDIT
Irrevocable Transferable Letter of Credit No. __________
[Date]
To: ViCaMe Infrastructure Development GmbH
[Address]
Attention:
Ladies and Gentlemen:
Reference is made to Irrevocable Letter of Credit No. ____ (the
"Letter of Credit") dated February ___, 1999, issued by us in your favor.
This constitutes our thirty days' advance written notice to you that
the Letter of Credit is scheduled to expire on _______________ and has not been
extended.
Very truly yours,
[ISSUING BANK]
By ___________________________
Name:
Title:
7
Annex E
Irrevocable Letter of Credit No. _________
NOTIFICATION AS TO REDUCTION OF
STATED AMOUNT OF LETTER OF CREDIT
To: [Issuing Bank]
[Address]
Attention:
The undersigned, ViCaMe Infrastructure Development GmbH hereby
notifies [Issuing Bank] (the "Bank") with respect to Irrevocable Letter of
Credit No. _____, dated February ___, 1999 (the "Letter of Credit") established
by the Bank in favor of the undersigned at the request and for the account of
Bechtel Limited, a United Kingdom limited liability company (the "Contractor"),
that the first anniversary of the RFS Date for the second Outside Plant
delivered by Contractor has occurred.
Very truly yours,
ViCaMe Infrastructure Development GmbH
By:_________________________________
Authorized Signatory
EXHIBIT 6
FORM OF CORPORATE GUARANTEE
CORPORATE GUARANTEE
GUARANTEE, dated as of February ___, 1999 (this "GUARANTEE"), made by
▇▇▇▇▇▇▇ CORPORATION, a corporation organized under the laws of the State of
Nevada, U.S.A. (the "GUARANTOR"), in favor of Viatel German Asset GmbH, a
GESELLSCHAFT MIT BESCHRANKTER HAFTUNG organized under the laws of Germany,
Metromedia Fiber Network GmbH, a GESELLSCHAFT MIT BESCHRANKTER HAFTUNG organized
under the laws of Germany, and Carrier 1 Fiber Network GmbH & Co. OHG, an OFFENE
HANDELSGESELLSCHAFT organized under the laws of Germany (collectively, the
"OWNERS").
W I T N E S S E T H :
WHEREAS, Bechtel Limited, a United Kingdom limited liability company (the
"CONTRACTOR"), the Owners and ViCaMe Infrastructure Development GmbH, a
GESELLSCHAFT MIT BESCHRANKTER HAFTUNG organized under the laws of Germany (the
"DEVELOPER"), are parties to the Engineering, Procurement and Construction
Contract (Outside Plant Work), dated as February 19, 1999, (as amended,
restated, supplemented or otherwise modified from time to time, the "EPC
CONTRACT"); and
WHEREAS, the Guarantor will derive substantial direct and indirect benefit
from the Contractor's role under the EPC Contract; and
WHEREAS, the Owners have agreed to enter into the EPC Contract only if
this Guarantee is executed by the Guarantor and delivered to the Owners on or
before April 15, 1999;
NOW, THEREFORE, in order to induce the Owners to enter into the EPC
Contract and to consummate the transactions contemplated thereby, and for other
good and valuable consideration, receipt of which is hereby acknowledged, the
Guarantor hereby agrees as follows:
SECTION 1. DEFINITIONS. All capitalized terms used herein that are not
defined herein shall have the meanings set forth in the EPC Contract. In
addition, as used herein, the following terms shall have the following meanings:
"BANKRUPTCY CODE" shall mean Title 11 of the United States Code, as
amended.
"CONTRACTOR" shall have the meaning ascribed thereto in the preamble
hereof.
"EPC CONTRACT" shall have the meaning ascribed thereto in the
recitals hereto.
1
"GUARANTEED OBLIGATIONS" shall mean all obligations of the
Contractor which relate to the achievement of RFS Acceptance (as that term
is defined in the EPC Contract).
"GUARANTEE" shall have the meaning ascribed thereto in the preamble
hereof.
"GUARANTOR" shall have the meaning ascribed thereto in the preamble
hereof.
"OWNERS" shall have the meaning ascribed thereto in the recitals
hereto.
"RELEVANT AGREEMENTS" shall mean this Guarantee and the EPC
Contract.
SECTION 2. GUARANTEE TERMS. (a) GUARANTEE. The Guarantor hereby
acknowledges receipt of each of the Relevant Agreements, and the Guarantor
hereby irrevocably and unconditionally, under any and all circumstances,
guarantees to the Owners and its successors, transferees and assigns the due and
punctual payment and performance by the Contractor in accordance with the terms
and provisions of the EPC Contract of all of the Guaranteed Obligations.
(b) OBLIGATIONS ABSOLUTE. The obligations of the Guarantor hereunder shall
be direct and primary obligations of the Guarantor, shall be absolute,
unconditional and irrevocable and shall constitute a guarantee of performance
and discharge and not merely of collection. Such obligations shall not be
subject to any counterclaim, set-off, deduction, diminution, abatement,
recoupment, suspension, deferment, reduction or defense for any reason
whatsoever, and the Guarantor shall have no right to terminate this Guarantee or
to be released, relieved or discharged from its obligations hereunder for any
reason whatsoever (whether or not the Guarantor or the Contractor shall have any
knowledge or notice thereof), including, without limitation:
(i) Any (A) amendment, modification, addition, deletion or
supplement to or other change in any Relevant Agreement or any other
instrument or agreement applicable to any of the parties to any Relevant
Agreement, (B) assignment, sublease or transfer of any thereof or of any
interest therein or (C) furnishing or acceptance of security or a
guarantee, or any release, substitution or variation of any security or
guarantee, for the obligations of the Contractor or any other party to any
Relevant Agreement;
(ii) Any failure, omission or delay on the part of the Contractor,
the Developer or the Owners to perform or comply with any term of any
Relevant Agreement;
(iii) Any waiver, consent, extension, indulgence, compromise,
release or other action or inaction under or in respect of any Relevant
Agreement or any obligation or liability of the Contractor or the Owners,
or any exercise or non-exercise of any right, remedy, power or privilege
under or in respect of any such instrument or agreement or any such
obligation or liability;
2
(iv) Any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or similar proceeding with respect
to the Guarantor, the Contractor or the Owners or any other Person or any
of their respective properties or creditors, or any action taken by any
trustee or receiver or by any court in any such proceeding;
(v) Any discharge, termination, cancellation, frustration,
irregularity, invalidity, unenforceability, illegality or impossibility of
performance, in whole or in part, of any Relevant Agreement;
(vi) Any dissolution, merger or consolidation (whether permitted or
otherwise) of the Contractor or the Guarantor into or with any other
Person or any sale, lease or transfer of any of the assets of the
Contractor or the Guarantor to any other Person;
(vii) Any change in the ownership of the Contractor;
(viii) Any payment by the Guarantor to the Contractor or the Owners
pursuant to an agreement other than this Guarantee; or
(ix) Any other occurrence or circumstance whatsoever, whether
similar or dissimilar to the foregoing, that might otherwise constitute a
legal or equitable defense or discharge of the liabilities of a guarantor
or surety or that might otherwise limit recourse against the Guarantor.
(c) WAIVERS BY THE GUARANTOR. To the extent permitted by applicable law,
the Guarantor hereby unconditionally waives and agrees to waive at any future
time any and all rights that the Guarantor may have or that now or at any time
hereafter may be conferred upon it, by applicable law or otherwise, to
terminate, cancel, quit or surrender this Guarantee. Without limiting the
generality of the foregoing, it is agreed that, at any time or from time to
time, the occurrence or existence of any one or more of the following shall not
release, relieve or discharge the Guarantor from liability hereunder, and the
Guarantor hereby unconditionally waives and agrees to waive, to the extent
permitted by applicable law:
(i) Notice of any of the matters referred to in Section 2(b)
hereof;
(ii) All notices that may be required by applicable law or
otherwise, now or hereafter in effect, to preserve intact any rights
against the Guarantor including, without limitation, any demand,
presentment and protest, proof of notice of nonpayment under any Relevant
Agreement, and notice of any default or failure on the part of the
Contractor to perform and comply with any covenant, agreement, term or
condition of the EPC Contract;
(iii) The enforcement, assertion or exercise against the Contractor
of any right, power, privilege or remedy conferred in any Relevant
Agreement or otherwise;
(iv) Any requirement of diligence on the part of any Person;
3
(v) Any requirement to proceed against the Contractor prior to
proceeding against the Guarantor or any other guarantee or to utilize or
exhaust any remedies;
(vi) Acceptance of this Guarantee by the Owners; or
(vii) Any other occurrence or circumstance whatsoever, whether
similar or dissimilar to the foregoing, that might otherwise constitute a
legal or equitable discharge, release or defense of a guarantor or surety,
or that might otherwise limit recourse against the Guarantor.
The Guarantor hereby agrees that a separate action may be brought against it
whether or not an action is commenced against the Contractor with respect to any
of the Guaranteed Obligations. It is the intention hereof that the Guarantor
shall remain liable as principal until the full performance of the Guaranteed
Obligations.
(d) REINSTATEMENT OF GUARANTEE. This Guarantee shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned by the recipient thereof upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Contractor, or
upon or as a result of the appointment of a custodian, receiver, intervenor or
conservator of, or trustee or similar officer for, the Contractor or any
substantial part of its property, or upon any settlement or compromise of any
claim effected by the Owners in connection with any such insolvency, bankruptcy,
dissolution, liquidation or reorganization with any claimant (including, without
limitation, the Contractor) or otherwise, all as though such payments had not
been made. If any event specified in the immediately preceding sentence shall
occur, and such occurrence shall prevent, delay or otherwise affect the right of
the Owners to receive any payment in respect of any Guaranteed Obligation, the
Guarantor agrees that, for purposes of this Guarantee and its obligations
hereunder and notwithstanding the occurrence of any of the foregoing events, the
Guarantor shall forthwith pay any such Guaranteed Obligation at such times and
in such amounts as are specified in the EPC Contract.
(e) NO SUBROGATION. Notwithstanding anything to the contrary in this
Guarantee, the Guarantor hereby irrevocably waives all rights that may have
arisen in connection with this Guarantee to be subrogated to any of the rights
(whether contractual, under the Bankruptcy Code (including Section 509 thereof),
under common law or otherwise) of the Owners against the Contractor or against
any collateral security or guarantee held by the Owners for the performance of
the Guaranteed Obligations. So long as the Guaranteed Obligations remain
outstanding, if any amount shall be paid by or on behalf of the Contractor to
the Guarantor on account of any of the rights waived in this Section 2(e), such
amount shall be held by the Guarantor in trust, segregated from other funds of
the Guarantor, and shall, forthwith upon receipt by the Guarantor, be turned
over to the Owners in the exact form received by the Guarantor (duly indorsed by
the Guarantor to the Owners, if required), to be applied against the Guaranteed
Obligations in such order as the Owners may determine. The provisions of this
Section 2(e) shall survive the term of this Guarantee and the payment in full of
the Guaranteed Obligations.
4
(f) LIMITATIONS. Notwithstanding the foregoing or any other provision of
this Guarantee:
(i) The Guarantor's obligations hereunder shall be excused or
reduced to the extent that the Contractor's obligations under the
Guaranteed Obligations are excused or reduced, whether pursuant to the
terms of the EPC Contract, or under law, except those available at law
relating to the lack of validity or enforceability of the obligation of
the Contractor under or with respect to the EPC Contract; and
(ii) Without limiting the generality of the foregoing, the Guarantor
shall be entitled to all defenses, set-offs, recoupments and deductions
available to the Contractor under the EPC Contract. In addition, any
indemnity or release given by the Owners in favor of the Contractor in the
EPC Contract shall inure to the benefit of the Guarantor and any provision
of the EPC Contract which limits the liability of the Contractor connected
with any event shall constitute and be deemed an aggregate limit on the
cumulative liabilities of Contractor and Guarantor relating to such event.
(iii) Payment or performance of any of the Guaranteed Obligations or
other obligations, duties, liabilities, covenants or agreements under the
EPC Contract or other acts which toll any statute of limitations
applicable to the Guaranteed Obligations or the liability of the
Contractor under the EPC Contract, shall also toll the statute of
limitations applicable to the Guarantor's liability under this Guarantee.
SECTION 3. RIGHTS OF THIRD PARTIES. This Guarantee shall not be construed
to create any right in any Person other than the Owners or to be a contract in
whole or in part for the benefit of any Person other than the Owners.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents
and warrants to the Owners as follows:
(a) ORGANIZATION; POWER AND AUTHORITY. The Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Nevada and is qualified to do business in the United States and
has all requisite legal power and authority to execute this Guarantee and
to perform the terms, conditions and provisions hereof.
(b) AUTHORIZATION. The execution and delivery by the Guarantor of this
Guarantee have been duly authorized by all requisite corporate action.
(c) ENFORCEABILITY. This Guarantee constitutes the legal, valid and
binding obligation of the Guarantor, enforceable against the Guarantor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and to the extent that
the remedies of specific performance, injunctive relief and other forms of
equitable relief are subject to equitable defenses, the discretion of the
court before which any proceeding therefor may be brought, and the
principles of equity in general.
5
(d) NO CONFLICT. Neither the execution, delivery or performance by the
Guarantor of this Guarantee, nor the consummation of the transactions
contemplated thereby, will result in:
(i) A violation of, or a conflict with, any provision of the
organizational documents of the Guarantor;
(ii) A contravention or breach of, or a default under, any term or
provision of any material contract, agreement or instrument to which
the Guarantor is a party or by which it or its property may be
bound, which contravention, breach or default could be reasonably
expected to have a material adverse effect on the ability of the
Guarantor to perform its obligations under this Guarantee to
consummate the transactions contemplated by this Guarantee; or
(iii) A violation by the Guarantor of any Law.
(e) NO VIOLATION OF LAW. The Guarantor is not in violation of any Law
promulgated, or judgment entered, by any Governmental Authority, which
violations, individually or in the aggregate, would adversely affect it or
its performance of any obligations under this Guarantee.
(f) LITIGATION. There are no actions, suits or proceedings, now pending or
(to its best knowledge) threatened against the Guarantor before any court
or administrative body or arbitral tribunal that might materially
adversely affect the ability of the Guarantor to perform its obligations
under this Guarantee.
SECTION 5. ASSIGNMENT. (a) GENERALLY. The Guarantor may not assign its
rights and obligations under this Guarantee, directly or indirectly, whether by
pledge, assignment, sale of assets or the sale or merger (statutory or
otherwise), without the prior written consent of the Owners. The Guarantor
acknowledges and agrees that, without the consent of the Guarantor, the Owners
may assign this Guarantee or its rights or obligations thereunder to any
subsidiary or affiliate of the Owners. With the exception described in the
previous sentence, neither party may assign its rights or delegate its duties
without the written consent of the other party, which consent shall not be
unreasonably withheld or delayed.
SECTION 6. DISPUTE RESOLUTION. The Guarantor shall be bound by the dispute
resolution procedures set forth in Article 39 of the EPC Contract and agrees to
participate in such procedures if requested by the Owners.
SECTION 7. MISCELLANEOUS. (a) REMEDIES NONEXCLUSIVE. All remedies provided
in this Guarantee shall be deemed cumulative and not in lieu of, or exclusive
of, each other or of any other remedy available to the Owners at law or in
equity, and the exercise of any remedy, or the existence herein of other
remedies, shall not prevent the exercise of any other remedy.
6
(b) NOTICES. All notices to be given herein shall be effective upon
receipt and shall be in writing and delivered by hand, internationally
recognized overnight courier service, first class mail (postage prepaid),
telegram, telecopy or other similar means (followed with a confirmation by mail)
to the Guarantor or the Owners, as the case may be, at the following address or
such other address as may hereafter be designated, in writing, by the respective
Person in accordance with this Section 7(b):
(i) IF TO THE OWNERS:
ViCaMe Infrastructure Development GmbH
c/o Viatel U.K.
▇▇▇▇▇▇▇ House
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇,
Project Manager
Telecopy: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇
(ii) IF TO THE GUARANTOR:
▇▇▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇▇, Senior Vice President
Telecopy: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇▇▇ Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
(c) NONWAIVER. The Owners shall not be deemed to have waived any right
under this Guarantee unless the Owners shall have delivered to the Guarantor a
written waiver signed by the Owners. No failure or successive failure by the
Owners to enforce any covenant or agreement, and no waiver or successive waivers
by the Owners of any condition of this Guarantee, shall operate as a discharge
of such covenant, agreement or condition, or render the same invalid, or impair
the Owner's right to enforce the same in the event of any subsequent breach or
breaches by the Guarantor.
7
(d) SEVERABILITY. If any of the terms, covenants or conditions hereof or
the application of any such term, covenant or condition shall be held invalid as
to the Guarantor or the Owners or circumstance by any court or arbitrator having
jurisdiction, the remainder of such terms, covenants or conditions shall not be
affected thereby, shall remain in full force and effect and shall continue to be
valid and enforceable in any other jurisdiction, and the Guarantor and the
Owners shall negotiate in good faith to substitute a term or condition in this
Guarantee to replace the one held invalid.
(e) ENTIRE AGREEMENT. This Guarantee constitutes the entire agreement and
contains all of the understandings and agreements of whatsoever kind and nature
existing between the Guarantor and the Owners with respect to the subject matter
hereof and the rights, interests, understandings, agreements and obligations of
the Guarantor and the Owners relating thereto, and supersedes all prior written
or oral agreements, commitments, representations, communications and
understandings between the Guarantor and the Owners.
(f) AMENDMENT. No amendment, waiver or consent relating to this Guarantee
shall be effective unless it is in writing and signed by the Owners.
(g) BENEFITS OF GUARANTEE. All of the terms and provisions of this
Guarantee shall be binding upon and inure to the benefit of the Guarantor and
the Owners and their respective successors and permitted assigns. This Guarantee
is for the sole benefit of the Owners and is not for the benefit of any other
third person.
(h) DESCRIPTIVE HEADINGS. Descriptive headings are for convenience only
and shall not control or affect the meaning or construction of any provision of
this Guarantee.
(i) RULES OF CONSTRUCTION. In the interpretation of this Guarantee, unless
the context otherwise requires:
(i) The singular includes the plural and vice versa and, in particular
(but without limiting the generality of the foregoing), any word or
expression defined in the singular has the corresponding meaning used in
the plural and vice versa;
(ii) The term "or" is not exclusive;
(iii) The term "including" shall mean "including, without limitation";
(iv) Any reference to any gender includes the other gender;
(v) Any reference to any agreement, instrument, contract or other document
(A) shall include all appendices, exhibits and schedules thereto and (B)
shall be a reference to such agreement, instrument, contract or other
document as amended, supplemented, modified, suspended, restated or
novated from time to time;
8
(vi) Any reference to any law shall include all statutory and
administrative provisions consolidating, amending or replacing such law,
and shall include all rules and regulations promulgated thereunder;
(vii) Any reference to "writing" includes printing, typing, lithography
and other means of reproducing words in a visible form;
(viii) Any reference to any Person includes its permitted successors and
assigns;
(ix) Unless otherwise specified, a reference to a Section is to the
Section of this Guarantee;
(x) Unless otherwise specified, any right may be exercised at any time and
from time to time;
(xi) All obligations under this Guarantee are continuing obligations
throughout the term hereof; and
(xii) The fact that counsel to the Owners shall have drafted this
Guarantee shall not affect the interpretation of any provision of this
Guarantee in a manner adverse to the Owners or otherwise prejudice or
impair the rights of the Owners.
(j) GOVERNING LAW, ETC. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD FOR
PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF
ANY OTHER JURISDICTION) AND SHALL BE ENFORCED IN NEW YORK, NEW YORK, UNITED
STATES. PROCESS IN ANY ACTION OR PROCEEDING HEREUNDER MAY BE SERVED ON THE
GUARANTOR ANYWHERE IN THE WORLD, WHETHER WITHIN OR OUTSIDE THE STATE OF NEW
YORK, BY FIRST CLASS, CERTIFIED OR REGISTERED MAIL, POSTAGE PREPAID, RETURN
RECEIPT REQUESTED, OR BY ANY OTHER METHOD ALLOWED BY LAW. IN THE EVENT OF ANY
LITIGATION WITH RESPECT TO THIS GUARANTEE OR ANY INSTRUMENT OR DOCUMENT EXECUTED
AND DELIVERED IN CONNECTION HEREWITH, THE GUARANTOR WAIVES THE RIGHT TO A TRIAL
BY JURY.
(k) LANGUAGE. The official text of this Guarantee shall be in English,
regardless of any translation that may be made for the convenience of the
Guarantor or the Owners. All definitive documents, notices, waivers and all
other communication, written or otherwise, between the Guarantor and the Owners
in connection with this Guarantee shall be in English.
(l) TERM. This Guarantee and all guarantees, covenants and agreements of
the Guarantor contained herein shall terminate and be discharged on the date on
which all of the Guaranteed Obligations shall be paid or otherwise discharged in
9
full; PROVIDED that this Guarantee shall continue to be effective or reinstated,
as the case may be, to the extent provided in Section 2(d) hereof, but provided
always that this Guarantee shall not survive the expiration of Warranty Period
(as that term is defined in the Contract.)
(m) FURTHER ASSURANCES. The Guarantor hereby agrees to execute and deliver
all such instruments and take all such action as the Owners may from time to
time reasonably request in order to effectuate fully the purposes of this
Guarantee.
(n) RELIANCE PRESUMED. The Guarantor waives notice of reliance upon this
Guarantee by the Owners. Each of the Guaranteed Obligations (now or hereafter in
effect) shall be deemed conclusively to have been created, contracted or
incurred in reliance upon this Guarantee.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed and delivered as of the day and year first above written.
▇▇▇▇▇▇▇ CORPORATION
By:___________________________
Name:
Title:
10
EXHIBIT 7
FORM OF OWNER ESCROW AGREEMENT
================================================================================
UNDERTAKING AND PLEDGE AND SECURITY AGREEMENT
Dated as of February 19, 1999
between
VICAME INFRASTRUCTURE DEVELOPMENT GMBH,
Developer,
VIATEL GERMAN ASSET GMBH
Owner,
METROMEDIA FIBER NETWORK GMBH
Owner,
CARRIER 1 FIBER NETWORK GMBH & CO. OHG
Owner,
BECHTEL LIMITED,
Contractor,
and
THE CHASE MANHATTAN BANK,
Collateral Agent
GERMAN NETWORK DEVELOPMENT PROJECT
GND No. 1
and
GND No. 2
================================================================================
TABLE OF CONTENTS
PAGE
SCHEDULE I - Required Amounts
EXHIBIT A - Form of Certificate for Withdrawal by Owners
EXHIBIT B - Form of Certificate for Withdrawal by Contractor
UNDERTAKING AND PLEDGE AND SECURITY AGREEMENT
UNDERTAKING AND PLEDGE AND SECURITY AGREEMENT dated as of February 19, 1999
(this "AGREEMENT") among VIATEL GERMAN ASSET GmbH, a Gesellschaft mit
beschrankter Haftung organized under the laws of Germany, METROMEDIA FIBER
NETWORK GmbH, a Gesellschaft mit beschrankter Haftung organized under the laws
of Germany, CARRIER 1 FIBER NETWORK GmbH & Co. oHG, an offene
Handelsgessellschaft (collectively, hereinafter called "OWNERS") and VICAME
INFRASTRUCTURE DEVELOPMENT GmbH, a Gesellschaft mit beschrankter Haftung
organized under the laws of Germany ("DEVELOPER"), BECHTEL LIMITED, a United
Kingdom limited liability company ("CONTRACTOR"), and THE CHASE MANHATTAN BANK,
a New York banking institution ("COLLATERAL AGENT").
R E C I T A L S :
WHEREAS, pursuant to that certain Engineering, Procurement and Construction
Contract (Outside Plant Work) dated February 19, 1999, among Contractor,
Developer, and the Owners (the "CONTRACT") and the transactions contemplated
thereby, the Contractor will provide certain services necessary for the design,
engineering, procurement, construction, installation and testing of the Outside
Plant for the Systems on a fixed-price, date certain basis;
WHEREAS, in order to induce the Contractor to enter into the transactions
contemplated by the Contract, the Owners have agreed, in accordance with and
subject to the terms and conditions hereof, to deposit certain amounts from time
to time with the Collateral Agent in the amounts set forth herein in order to
secure the Owner Payment Obligations.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
Except as may be otherwise provided herein, capitalized terms used herein
have the respective meanings defined below, for all purposes hereof (such
definitions to be equally applicable to both the singular and plural forms of
the terms defined) or assigned thereto in or by reference to Exhibit 1 to the
Contract. Any agreement referred to in such Exhibit 1 means such agreement as
amended, supplemented and modified from time to time in accordance with the
applicable provisions thereof and of the other Contract Documents. Unless
otherwise specified, Section references are to Sections of this Agreement.
Unless the context otherwise requires, the terms "adverse claim," "entitlement
holder," "entitlement order," "financial asset," "good faith," "investment
property," "securities account," "securities intermediary" and "security
entitlement," whenever used in this Agreement, shall have the meanings ascribed
to such terms in the NYUCC.
"AGREEMENT" shall have the meaning set forth for such term in the preamble
hereto.
"BUSINESS DAY" shall mean a day on which banks are not authorized or
required to be closed under applicable law in New York, New York but shall, in
any case, exclude a Saturday or a Sunday.
"COLLATERAL" has the meaning specified in Section 3.2.
"COLLATERAL ACCOUNT" has the meaning specified in Section 3.1(a).
"COLLATERAL AGENT" has the meaning specified in the preamble hereto.
"CONTRACT " has the meaning specified in the first WHEREAS clause hereof.
"CONTRACT DEFAULT" shall mean the failure of the Owners, or the Developer
on behalf of the Owners, as the case may be, to pay any Owner Payment
Obligations.
"CONTRACTOR" has the meaning specified in the preamble hereto.
"DEFAULT" shall mean a Contract Default or an Undertaking Default.
"DEPOSIT DATE" shall mean each of the dates specified in Schedule I hereto.
"DEPOSIT DATE PERIOD" shall mean, with respect to each Deposit Date, the
period from and including the date of such Deposit Date, to, but excluding, the
date of the immediately succeeding Deposit Date.
"DEVELOPER" has the meaning specified in the preamble hereto.
"DM" means German Deutsche Marks.
"EURO" shall mean the common European currency.
"EVENT OF DEFAULT" has the meaning specified in Section 25.1 of the
Contract.
"FAIR MARKET VALUE" shall mean, with respect to any Permitted Investments,
the market bid price of such Permitted Investments, as determined on public
exchange or any readily identifiable market and with deduction for the cost, if
any, incurred in sale, liquidation or transfer of such Permitted Investments.
"INDEMNIFIED PARTIES" shall have the meaning specified in Section 4.6.
"NOTICE OF EXERCISE OF REMEDIES" means the written notice given by the
Owners to the Contractor under Section 25.1 of the Contract.
"NY-UCC" shall mean the Uniform Commercial Code as in effect in the State
of New York, as amended from time to time.
"OWNER PAYMENT OBLIGATIONS" shall mean all payment obligations of the
Owners from time to time to the Contractor under the Contract.
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"PARTY" and "PARTIES" has the meaning specified in Section 6.7.
"PAYMENT ACCOUNT" means Contractor's account at Citibank, N.A., London,
Swift Code ▇▇▇▇▇▇▇▇, Account No. ▇▇▇▇▇▇▇, Reference: JOB 24221, Attention: ▇▇.▇.
▇▇▇▇▇▇▇, telephone: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, facsimile: 44 171 500 5550 or such other
account as Contractor may from time to time designate in writing to Developer
(on behalf of the Owners) and Collateral Agent.
"PERMITTED INVESTMENTS" means DM or Euro denominated (i) certificates of
deposit and time and other interest bearing deposits (having a maturity of one
(1) year or less) in banks which are rated at least A or higher by a nationally
recognized rating agency, (ii) short-term debt securities issued by or entitled
to the full faith and credit of any European nation participating in the Euro
which has a credit rating at least A or higher by a nationally recognized rating
agency or any of its respective agencies or instrumentalities which is rated at
least A or higher by a nationally recognized rating agency, (iii) commercial
paper (having a maturity of one (1) year or less) which is rated at least P-2 by
▇▇▇▇▇'▇ Investors Services A2 by Standard & Poor's Corporation, and (iv) any
mutual fund the portfolio of which is limited to the debt securities described
in clause (ii) above.
"PROPERTY" shall mean any money, securities, commodities, assets, holdings,
investment property, financial assets, security entitlements or any other
property of any kind or nature whatsoever, real or personal, tangible or
intangible, or any interest in any of the foregoing.
"REQUIRED AMOUNT" shall mean, as of any Deposit Date, the amount set forth
opposite such Deposit Date under the column with the heading "Required Amount"
on Schedule I hereto, as such Schedule is adjusted from time to time pursuant to
Section 3.14.
"SECURED OBLIGATIONS" has the meaning specified in Section 3.2.
"TERMINATION DATE" has the meaning specified in Section 2.3.
"TERMINATION NOTICE" has the meaning specified in Section 3.4.
"UNDERTAKING DEFAULT" shall mean the failure of the Owners to pay any
amount or make any deposit when required hereunder.
SECTION 2. UNDERTAKING
2.1 UNDERTAKING. With respect to each Deposit Date, the Owners shall, on
such Deposit Date deposit into the Collateral Account in immediately available
funds, such amounts as are required to cause the Fair Market Value of the
Permitted Investments (and other Collateral, if any, credited to the Collateral
Account as to which Contractor has a perfected security interest) to be no less
than the Required Amount set forth opposite such Deposit Date in SCHEDULE I
hereto. Immediately upon the making of any such payment, the Owners shall give
written notice thereof to the Contractor and the Collateral Agent via facsimile
and overnight courier in the manner set forth in Section 6.1. The Owners
understand and agree that such undertaking obligations are absolute and
- 3 -
unconditional and shall be terminated only in the manner set forth in Section
2.3, and shall be suspended only in the manner set forth in Section 2.4.
2.2 PAYMENT. Any amount which is to be deposited pursuant to Section 2.1 on
day which is not a Business Day shall be deposited on the next succeeding
Business Day.
2.3 TERMINATION OF UNDERTAKING. This Agreement, and the obligation,
covenants and agreements of the Owners hereunder, shall remain in full force and
effect until the earlier to occur of the following events: (i) the payment in
full of all Owner Payment Obligations, (ii) the receipt by the Collateral Agent
of a Notice of Exercise of Remedies and (iii) the date upon which all amounts on
deposit in the Collateral Account have been transferred by the Collateral Agent
to the Contractor or the Owners, as the case may be, pursuant to and in
accordance with, the terms of this Agreement (such earliest date, the
"TERMINATION DATE").
2.4 SUSPENSION OF ADDITIONAL DEPOSITS. The obligation of the Owners to make
additional deposits into the Collateral Account, as set forth in Section 2.1,
shall be suspended during such time, but only so long as, an Event of Default
has occurred and is continuing. Such obligation to make additional deposits
shall resume immediately, without any formal act or notice, as soon as such
Event of Default shall no longer be continuing. The Developer shall notify the
Collateral Agent promptly of any suspension, or resumption, as the case may be,
of making additional deposits into the Collateral Account.
SECTION 3. COLLATERAL SECURITY
3.1 COLLATERAL ACCOUNT.
(a) COLLATERAL ACCOUNT. The Owners shall establish and maintain at the
principal New York office of the Collateral Agent, for account of the Owners, an
account designated the "Viatel German Asset-GmbH, Metromedia Fiber Network GmbH
i.G., and Carrier 1 Fiber Network GmbH & Co. oHG, Account; Bechtel Limited, as
secured party" (the "COLLATERAL ACCOUNT"). Contractor shall have exclusive
dominion and control over the Collateral Account. For purposes of this
Agreement, the parties confirm and agree as follows:
(i) Collateral Agent confirms that The Chase Manhattan Bank Frankfurt
has established a collateral security account for the account of The Chase
Manhattan Bank London, account number 6231400604, attention ▇▇▇▇▇▇ ▇▇▇▇▇▇,
and titled as provided above.
(ii) Collateral Agent agrees that the Collateral Account is a
"securities account" within the meaning of Section 8501 of the NYUCC.
(iii) Collateral Agent confirms that it is a "securities intermediary"
as defined in Section 8102(a)(14) of the NY-UCC and a "Securities
Intermediary" as defined in Book-Entry Regulations.
(iv) Collateral Agent agrees to treat the other parties hereto as
entitled to exercise the rights that comprise any financial asset credited
to or carried in the Collateral Account.
- 4 -
(v) Upon the delivery or transfer of any Collateral to Collateral
Agent, Collateral Agent shall indicate by book entry that such Collateral
has been credited to the Collateral Account or accept such Collateral for
credit to the Collateral Account, as appropriate.
(vi) The parties hereto agree that each item of Property credited to
or carried in the Collateral Account shall be treated as a financial asset
under Articles 8 and 9 of the NYUCC.
(vii) Each party hereto agrees that the "securities intermediary's
jurisdiction" of Collateral Agent is the State of New York and that New
York law shall be the local law of the "securities intermediary's
jurisdiction" for purposes of Section 9103(6) of the NYUCC.
(viii) If at any time Collateral Agent shall receive an entitlement
order given by Contractor and relating to the Collateral Account or any
financial asset credited thereto or carried therein or any other
Collateral, the Owners hereby agree that Collateral Agent may, and
Collateral Agent agrees that it shall, comply with such entitlement order
without further consent of the Owners or any other Person.
(ix) Each of the Owners agree that it shall have no right to demand
any withdrawal of Collateral from the Collateral Account (except as
expressly set forth in Section 3.5(a)) or to give any entitlement order
with respect to any Collateral credited or required to be credited to the
Collateral Account. Collateral Agent agrees that it shall take all
entitlement orders with respect to the Collateral Account or any financial
asset credited thereto or required to be credited thereto solely from
Contractor and that it will not transfer or release any Collateral to the
Owners or any other Person, except in accordance with an entitlement order
from Contractor.
(x) Collateral Agent represents, warrants and agrees that it does not
currently hold, and during the existence of this Agreement shall not hold,
any "adverse interest", by way of security, setoff or otherwise, in (A) the
Collateral Account or in any financial asset credited thereto or carried
therein, or (B) in other Collateral, and hereby waives and releases any
such interest which it may have in any of the foregoing. Without prejudice
to the preceding sentence in the event that Collateral Agent has or
subsequently obtains by agreement, operation of law or otherwise a security
interest in the Collateral Account or any security entitlement credited
thereto or carried therein, Collateral Agent hereby agrees that such
security interest shall be subordinate to the security interest granted
herein to the Contractor. The financial assets and other items credited to
or carried in the Collateral Account will not be subject to deduction,
setoff, banker's Lien, or any other right in favor of any Person other than
Contractor.
(xi) Except for the claims and interests of Contractor and of the
Owners in the Collateral Account, Collateral Agent represents and warrants
that it does not know of any claim to, or interest in, the Collateral
Account or in any financial asset credited thereto or carried therein.
Collateral Agent will not (A) permit any of its creditors to obtain
- 5 -
"control" (as such term is defined in Articles 8 and 9 of the NYUCC ) over
the Collateral Account or any financial asset credited thereto or carried
therein, or (B) enter into any agreement, arrangement or understanding with
any other Person relating to any part of the Collateral Account and the
financial assets credited or to be credited thereto or to be carried
therein pursuant to which it has agreed to comply with entitlement orders
of such Person. If any Person asserts any Lien or adverse claim against the
Collateral Account or any financial asset credited thereto or carried
therein, and Collateral Agent has actual notice of such Lien or adverse
claim, Collateral Agent shall promptly notify Contractor and the Developer
(on behalf of the Owners) thereof.
(xii) Collateral Agent shall promptly send copies of all statements,
confirmations and other correspondence concerning the Collateral Account or
any financial asset credited thereto or carried therein simultaneously to
Contractor and Developer (on behalf of the Owners) at the address set forth
in Section 6.1.
(xiii) By this Agreement the parties hereto intend and agree that
Contractor has obtained "control" (within the meaning of Section 8106(d) of
the NY-UCC) of the Collateral Account, the financial assets credited or
required to be credited to the Collateral Account and any other Collateral.
(xiv) Collateral Agent confirms and agrees that the first priority
security interest of Contractor with respect to the Collateral is and will
remain reflected in its books and records.
(xv) By this Agreement the parties hereto intend and agree, and
Collateral Agent confirms, that Contractor is the "entitlement holder"
(within the meaning of Section 8102(a)(7) of the NY-UCC) of the Collateral
Account and all financial assets held by Collateral Agent hereunder as the
securities intermediary.
(b) NOTICE OF SECURITY INTEREST. Collateral Agent (i) acknowledges
Contractor's security interest in the Collateral Account and the other
Collateral granted by the Owners pursuant to Section 3.2, (ii) shall record the
pledge of the Collateral Account and the other Collateral made hereby on its
books and (iii) agrees to execute and deliver such acknowledgments as is
customary in its business or as Contractor may reasonably request.
3.2. COLLATERAL; PLEDGE; NO LIENS; TITLE
(a) PLEDGE. As collateral security for the prompt payment when due of all
amounts from time to time payable by the Owners to Contractor under Section 2
and 3.12 of this Agreement and of all Owner Payment Obligations (collectively,
the "SECURED OBLIGATIONS"), the Owners hereby pledge, hypothecate, assign,
transfer, set over and deliver unto Contractor, and grant to Contractor, a first
priority security interest in, Lien upon and right of set off against the
following (collectively, the "COLLATERAL"):
(i) the Collateral Account, including any credit or other balances of
account credited thereto or carried therein or other amounts otherwise
transferred thereto;
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(ii) all investment property, cash, Permitted Investments and other
instruments or amounts or other Property deposited or required to be
deposited from time to time in, or credited to or required to be credited
from time to time to, the Collateral Account and held or to be held by
Collateral Agent hereunder and all income therefrom;
(iii) the Owners' securities entitlement with respect to the financial
assets credited or required to be credited from time to time to the
Collateral Account;
(iv) all rights, claims and causes of action, if any, that the Owners
may have against any Person in respect of the foregoing; and
(v) all proceeds of any or all of the foregoing.
TO HAVE AND TO HOLD the Collateral, together with all rights, titles,
interests, powers, privileges and preferences pertaining or incidental thereto,
unto Contractor, its successors and assigns, forever; subject, however, to the
terms, covenants and conditions hereinafter set forth.
(b) LIENS, ETC. The Owners agree not to withdraw (except as expressly
provided for pursuant to Section 3.5(a)), liquidate, sell, convey, endorse,
negotiate, or in any way dispose of, or create, incur, or permit to exist any
pledge, mortgage, Lien, charge, encumbrance or security interest whatsoever, or
cause any of the foregoing to occur in or with respect to, any of the
Collateral, any interest therein or any cash or other property held and
maintained in or credited to the Collateral Account. The Owners agree at their
own expense, to defend Contractor's security interest in and to the Collateral
against the claims of any Person and to ensure that Contractor has at all times
a first priority perfected Lien on and security interest in the Collateral,
subject to no prior or equal Lien whatsoever.
(c) TITLE. The Owners hereby represent and warrant to Contractor that the
Owners have good title to the Collateral and the cash or other property held and
maintained in or credited to the Collateral Account, free and clear of all
Liens, other than the Lien created hereby, and that this Agreement grants to
Contractor a first priority perfected Lien on and security interest in the
Collateral, subject to no prior or equal Lien whatsoever.
3.3. INVESTMENTS.
(a) GENERALLY. The Owners and Contractor agree that all funds deposited
into the Collateral Account shall be invested and reinvested, and Contractor
hereby instructs Collateral Agent to so invest and reinvest such funds in
Permitted Investments. All earnings on such investment or reinvestment shall be
paid to the Collateral Account as part of the Collateral. Contractor and
Collateral Agent shall have no liability for any losses or liabilities incurred
as a result of such investments (excluding losses resulting from the gross
negligence or willful misconduct of Contractor or Collateral Agent).
(b) INVESTMENT OF COLLATERAL. All interest, dividends and distributions of
property on or in respect of the Collateral, whether constituting scheduled or
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unscheduled payments and whether received in exchange for the Collateral or any
part thereof or as a result of any merger, consolidation, acquisition or other
exchange of assets or on the liquidation, whether voluntary or involuntary, of
any issuer of the Collateral, or otherwise, and all amounts received pursuant to
Section 3.7, shall constitute Collateral hereunder, shall be promptly credited
to the Collateral Account and shall be applied to the prompt purchase of
Permitted Investments. Contractor hereby instructs Collateral Agent to invest in
such Permitted Investments as shall be directed by Developer (on behalf of the
Owners) from time to time until such time that Contractor otherwise instructs
Collateral Agent. Contractor shall not instruct Collateral Agent to not act upon
Developer's direction (on behalf of the Owners) in connection with investing in
Permitted Investments so long as no Default has occurred and is continuing.
3.4 TERMINATION OF COLLATERAL ACCOUNT. At the request of Developer (on
behalf of the Owners) given to Contractor on or after the Termination Date,
Contractor shall deliver prompt written notice of such termination to Collateral
Agent (a "TERMINATION NOTICE"), whereupon the Collateral shall be released from
the Lien of this Agreement, and Collateral Agent shall promptly deliver to
Developer (on behalf of the Owners) or its designee each of the certificates
evidencing the Collateral, as well as any other instruments or documents
delivered to Contractor pursuant to this Agreement.
3.5 RELEASE OF COLLATERAL
(a) PERIODIC RELEASE. If at any time during any Deposit Date Period the
Fair Market Value of the Permitted Investments (and other Collateral, if any
credited to the Collateral Account as to which the Contractor has a perfected
security interest) is greater than the Required Amount set forth opposite the
Deposit Date for such Deposit Date Period, as set forth in SCHEDULE I hereto,
and the Collateral Agent has not received a notice that a Default has occurred
and is continuing, then, upon delivery of a certificate in the form of EXHIBIT A
executed by a person whose authority to execute such certificate for the
Developer (on behalf of the Owners) is evidenced by an extract from the
Handelsregister, the Contractor hereby instructs the Collateral Agent to
transfer the amount of such excess to the account identified in such certificate
within two Business Days and shall sell any such Permitted Investments as may be
required in order to make such transfer. The Collateral Agent shall send written
notice of such transfer via facsimile and overnight courier to the Contractor
and the Developer immediately upon such transfer.
(b) PAYMENT AMOUNT. If at any time the Collateral Agent receives a
certificate in the form of EXHIBIT B executed by a person purporting to be a
duly authorized signatory of the Contractor, it shall transfer the amount stated
in such certificate as being due and owing, to the Payment Account within two
Business Days and shall sell any such Permitted Investments as may be required
in order to make such transfer. The Collateral Agent shall send written notice
of such transfer via facsimile and overnight courier to the Contractor and the
Developer immediately upon such transfer.
3.6 REMEDIES.
(a) SECURED OBLIGATIONS. Upon the occurrence of a Default, Contractor may
take any action permitted herein with respect to the Collateral.
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(b) REMEDIES. If a Default shall have occurred and be continuing,
Contractor may from time to time:
(i) sell, assign, transfer, endorse and deliver the whole or, from
time to time, any part of the Collateral at public or private sale or on
any securities exchange, for cash, upon credit or for other property, for
immediate or future delivery, and for such price or prices and on such
terms as Contractor in its reasonable discretion shall deem appropriate;
and (ii) instead of exercising its remedy under clause (i) of this Section
3.6(b), have any or all of the Collateral registered in its name or that of
its nominee and/or any cash or other property, transferred to it. To
effectuate the foregoing, Contractor may notify Collateral Agent in writing
that Contractor wishes to register or transfer the Collateral and or such
cash or other property to Contractor, whereupon Collateral Agent shall
cause the same to be so registered or transferred without the consent of
the Owners or any other Person. Whether or not the Collateral shall have
been registered in the name of Contractor or its nominee or such cash or
other property shall have been transferred to Contractor, Contractor or its
nominee shall have the right to exercise sole dominion and control over the
Collateral, such cash and such other property, to liquidate the Collateral
and to receive all proceeds thereof, to receive all such cash or other
property and to exercise all voting rights, if any, as to all of the
Collateral, all other rights and all conversion, exchanged, subscription or
other rights, privileges or options pertaining thereto as if it were the
absolute owner thereof, including, without limitation, the right to
exchange or redeem any or all of the Collateral upon the merger,
consolidation, reorganization, recapitalization or other readjustment of
the issuer thereof, or upon the exercise by the issuer thereof of any
right, privilege, or option pertaining to any of the Collateral, and, in
connection therewith, to deliver any of the Collateral to any committee,
depository, transfer agent, registrar or other designated agency upon such
terms and conditions as it may determine, all without liability except to
account for property actually received by it, but Contractor shall have no
duty to exercise any of the aforesaid rights, privileges or options and
shall not be responsible for any failure to do so or any delay in so doing;
and
(iii) exercise any and all of the rights and remedies with respect to
all or any part of the Collateral of a secured party under the NYUCC and or
under other applicable law;
provided, however, that nothing herein shall be deemed to allow the
Contractor to sell or foreclose upon any portion of the Collateral that is
in excess of the Secured Obligations.
(c) SALES TO PURCHASERS UNDER SECURITIES ACT OF 1933. Contractor shall be
authorized at any sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing the Collateral for their own account in compliance with, and
otherwise satisfy the requirements of, the Securities Act of 1933, as amended,
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and upon consummation of any such sale, Contractor shall have the right to
assign, transfer, endorse and deliver to the purchaser or purchasers thereof the
Collateral so sold.
(d) PRIVATE SALES. The Owners hereby acknowledge and agree that a public
sale of the Collateral might require the filing of registration statements with
the Securities and Exchange Commission and various state securities authorities.
Accordingly, the Owners hereby expressly (i) authorize any sale of Collateral
under this Agreement to be made in such a manner as to avoid the foregoing
registration requirements, and (ii) acknowledge that such sales may be made in
one or more privately negotiated transactions without public offer which may
result in a lower overall sales price for the Collateral than could be obtained
in a public offering of the Collateral. Each such purchaser at any such sale
shall hold the property sold absolutely free from any claim or right on the part
of Owners, and the Owners hereby waive (to the extent permitted by law) all
rights of redemption, stay and/or appraisal which the Owners now have or may at
any time in the future have under any law now existing or hereafter enacted.
(e) NOTICE AND CONDUCT OF SALES. The Owners acknowledge and agree that the
Collateral is of a type customarily sold on a recognized market and,
accordingly, to the extent permitted by law, the Owners expressly waive any
notice by Contractor or any other Person of sale or other disposition of the
Collateral and all other rights or remedies of the Owners or formalities
prescribed by law relative to sale or disposition of the Collateral or exercise
of any other right or remedy of Contractor, and to the extent any such notice is
required and cannot be waived, the Owners agree that if such notice is given in
the manner provided in Section 6.1 at least one day before the time of sale or
disposition, such notice shall be deemed reasonable and shall fully satisfy any
requirement for the giving of such notice. At any sale, the Collateral, or
portion thereof to be sold, may be sold in one lot as an entirety or in separate
parcels, as Contractor may in its sole and absolute discretion determine.
Contractor shall not be obligated to make any sale of the Collateral if it shall
determine not to do so, regardless of the fact that notice of sale of the
Collateral may have been given. Contractor may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same was so
adjourned. In case the sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by
Contractor until the sale price is paid by the purchaser or purchasers thereof,
but Contractor shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in case
of any such failure, such Collateral may be sold again upon like notice. At any
public or private sale made pursuant to this Agreement, Contractor may bid for
or purchase, free from any right of redemption, stay and/or appraisal on the
part of the Owners (all said rights being also hereby waived and released to the
extent permitted by law), all or any part of the Collateral offered for sale and
may make payment on account thereof by using any amounts then due and payable to
Contractor from the Owners as a credit against the purchase price, and
Contractor may, upon compliance with the terms of sale, hold, retain and dispose
of such property without further accountability to the Owners therefor. For
purposes hereof, a written notice by Contractor of purchase by Contractor or any
other Person of all or any part of the Collateral shall be treated as a sale
thereof. As an alternative to exercising the power of sale herein conferred,
Contractor may proceed by suit or suits at law or in equity to foreclose this
Agreement and sell the Collateral or any portion thereof pursuant to judgment or
decree of a court or courts having competent jurisdiction.
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(f) ELECTION TO RETAIN COLLATERAL. The Owners acknowledge and agree that
the exercise by Contractor of any or all of its rights hereunder shall not be
deemed an election to retain the Collateral in satisfaction of any Secured
Obligations secured hereby and that any election to retain the Collateral in
satisfaction of any Secured Obligations secured hereby (in lieu of sale pursuant
to this Section 3.6 and application of proceeds pursuant to Section 3.7 hereof)
shall only be deemed to have occurred if Contractor expressly notifies the
Owners of such election and the Owners do not object thereto.
(g) COMPLIANCE WITH LAW. The Owners hereby agree that any sale pursuant to
this Section 3.6 conforms to commercially reasonable standards as provided in
the NYUCC.
3.7 APPLICATION OF PROCEEDS. The proceeds of any sale pursuant to Section
3.6 hereof of all or any part of the Collateral and all or any part of amounts
credited to the Collateral Account from time to time shall be paid by Collateral
Agent to Contractor upon the written request of Contractor and such amount shall
be applied by Contractor as follows:
FIRST, to the payment of any fees due and payable to Collateral Agent;
SECOND, to the payment of all reasonable costs and expenses incurred
by Collateral Agent and Contractor in connection with the enforcement of
this Agreement, including, but not limited to, all court costs and the fees
and disbursements of counsel for Contractor and Collateral Agent in
connection with such enforcement;
THIRD, to the payment in full to Contractor of all Secured Obligations
then due and owing in such order as Contractor may determine; and
FOURTH, following any such termination pursuant to Section 3.4 hereof,
the remainder, if any, to the Owners (or as the Owners or a court of
competent jurisdiction may direct).
3.8 CONTINUING SECURITY INTEREST. This Agreement shall create a continuing
security interest in the Collateral and shall (i) remain in full force and
effect until termination pursuant to Section 3.4 hereto and (ii) be binding upon
the Owners and their respective successors and assigns. Upon such termination,
the Owners shall be entitled to the prompt return of any portion of the
Collateral that shall not have been sold or otherwise disposed of by Contractor
pursuant to the terms hereof.
3.9 DELIVERY OF PERMITTED INVESTMENTS.
(a) CERTIFICATED SECURITIES. To the extent that any portion of the
Collateral constitutes certificated securities, all certificates or instruments
evidencing the same shall be in registered form and specifically indorsed to
Contractor by an effective indorsement and delivered into the possession of
Collateral Agent, to be held by Collateral Agent on behalf of Contractor for the
purpose of perfecting the security interests granted to Contractor hereunder
with respect to such Collateral and disposed of pursuant to the terms of this
Agreement.
(b) UNCERTIFICATED SECURITIES. To the extent that any portion of the
Collateral constitutes an uncertificated security, other than Permitted
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Investments credited to the Collateral Agent pursuant to 3.9(a), such
uncertificated security shall be registered in the name of the Collateral Agent
and credited by the Collateral Agent to the Collateral Account.
3.10 FURTHER ASSURANCES. The Owners agree that they will join with
Contractor in executing and will file or record such notices, financing
statements or other documents as may be necessary for the perfection of the
security interests granted to Contractor hereunder, and as Contractor or its
counsel may reasonably request, such instruments to be in form and substance
satisfactory to Contractor. The Owners also agree that they will do such further
acts and things and execute and deliver to Contractor such additional
conveyances, assignments, agreements and instruments as Contractor may at any
time reasonably request in connection with the administration and enforcement of
this Agreement or relative to the Collateral or any part thereof or in order to
assure and confirm unto Contractor its rights, powers and remedies hereunder.
3.11 ATTORNEY-IN-FACT. Contractor is hereby appointed the attorneyinfact of
the Owners (i) for any period, for the purpose of signing documents and taking
other action to perfect its security interest in the Collateral and (ii) during
any period during which a Default has occurred and has been continuing, for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instruments which Contractor may deem necessary or advisable
to accomplish the purposes hereof, which appointment as attorneyinfact is
irrevocable and coupled with an interest. Without limiting the generality of the
foregoing, during any such period described in clause (ii) above, Contractor
shall have the right and power to receive, endorse and collect all checks made
payable to the order of the Owners representing any payment in respect of the
Collateral or the cash or other property held and maintained in or credited to
the Collateral Account or any part of any of the foregoing and to give full
discharge for the same.
3.12 EXPENSES.
(a) EXPENSES OF CONTRACTOR. The Owners agree to pay to Contractor all
reasonable costs and expenses (including reasonable expenses for legal services
of every kind) of, or incident to, the enforcement of, or protection or
preservation of any right under, any of the provisions of this Agreement, or any
actual or attempted sale, or any exchange, enforcement, collection, compromise
or settlement in respect of any of the Collateral, and for the care of the
Collateral and defending or asserting rights and claims of Contractor in respect
thereof, by litigation or otherwise; and all such expenses shall be Secured
Obligations secured under this Agreement.
(b) EXPENSES OF COLLATERAL AGENT. The Owners agree to pay Collateral Agent
its fees and expenses for acting hereunder, as Developer and Collateral Agent
may separately agree.
3.13 TAXES. Any Taxes payable on or with respect to the Collateral, the
delivery thereof or any earnings therefrom shall be the responsibility of the
Owners, and the Owners hereby agree to indemnify on an aftertax basis, the
Collateral estate, Contractor, and its respective Affiliates from and against
any Taxes arising out of or otherwise attributable to the Collateral or any
earnings therefrom.
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3.14 ADJUSTMENTS TO SCHEDULES. Developer (on behalf of the Owners) and
Contractor hereby agree to work together, in good faith, to make promptly any
necessary adjustments to SCHEDULE I hereto from time to time to reflect any
adjustments to Appendix 10 of the Contract. Developer (on behalf of the Owners)
and Contractor may deliver to the Collateral Agent a substitute SCHEDULE I
reflecting any such agreed to adjustments thereto.
SECTION 4. COLLATERAL AGENT
4.1 APPOINTMENT. Contractor hereby appoints Collateral Agent as its agent
for purposes of holding the Collateral on the terms and conditions of this
Agreement. Collateral Agent hereby accepts such appointment.
4.2 REMOVAL AND RESIGNATION.
(a) Collateral Agent or any successor Collateral Agent may resign at any
time without cause by giving at least 60 days' prior written notice to
Contractor, with copies thereof to Developer, such resignation to be effective
upon the acceptance of appointment by the successor Collateral Agent under
Section 4.2(b) hereof. In addition, Contractor may at any time remove Collateral
Agent without cause by an instrument in writing delivered to Collateral Agent,
with copies thereof to Developer, such removal to be effective upon the
acceptance of appointment by the successor Collateral Agent under Section 4.2(b)
hereof. In the case of the resignation or removal of Collateral Agent,
Contractor may appoint a successor Collateral Agent by an instrument signed by
Contractor, which successor, if no Default shall have occurred and be
continuing, shall be approved by Developer (which approval shall not be
unreasonably withheld or delayed). If a successor Collateral Agent shall not
have been appointed within 30 days after the giving of written notice of such
resignation or the delivery of the written instrument with respect to such
removal, Collateral Agent, Contractor or Developer may apply to any court of
competent jurisdiction to appoint a successor Collateral Agent to act until such
time, if any, as a successor shall have been appointed as above provided. Any
successor Collateral Agent so appointed by such court shall immediately and
without further act be superseded by any successor Collateral Agent appointed as
above provided within one year from the date of the appointment by such court.
(b) ACCEPTANCE OF APPOINTMENT. Any successor Collateral Agent, however
appointed, shall execute and deliver to the predecessor Collateral Agent, with
copies thereof to Contractor and Developer, an instrument accepting such
appointment, and thereupon such successor Collateral Agent, without further act,
shall become vested with all the estates, properties, rights, powers, duties and
trusts of the predecessor Collateral Agent in the trust hereunder with like
effect as if originally named Collateral Agent herein; but nevertheless, upon
the written request of such successor Collateral Agent, such predecessor
Collateral Agent shall execute and deliver an instrument transferring to such
successor Collateral Agent, all Collateral held by such predecessor Collateral
Agent. Upon any such transfer by a predecessor Collateral Agent, such
predecessor Collateral Agent shall provide the successor Collateral Agent,
Developer and Contractor an accounting of Collateral hereunder.
(c) QUALIFICATION. Any successor Collateral Agent, however appointed, shall
be a bank incorporated and doing business within the United States and having a
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combined capital and surplus of at least $100,000,000, if there be such an
institution willing, able and legally qualified to perform the duties of
Collateral Agent hereunder upon reasonable or customary terms.
4.3 WAIVER OF OFFSET RIGHTS. Collateral Agent hereby expressly waives any
right of offset, banker's lien or other similar rights that it might have
against, or any assignment, security interest or other interest that it might
have in, the Collateral.
4.4 DEFAULT. Collateral Agent shall have no responsibility for determining
whether a Default shall have occurred and shall be entitled to rely upon any
notice thereof delivered to it by Contractor.
4.5 DUTIES. The duties and responsibilities of Collateral Agent hereunder
shall be determined solely by the express provisions of this Agreement, and no
other or further duties or responsibilities shall be implied. Collateral Agent
shall not have any liability under, no duty to inquire into the terms and
provisions of any agreement or instructions, other than as outlined in this
Agreement. Anything in this Agreement to the contrary notwithstanding, in no
event shall Collateral Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if Collateral Agent has been advised of the likelihood of such
loss or damage and regardless of the form of action. Collateral Agent confirms
that it shall carry out all duties placed upon it hereunder, but Collateral
Agent shall have no responsibility for determining whether Contractor has a
first priority perfected Lien on and security interest in the Collateral.
Collateral Agent in its capacity as escrow agent hereunder shall not have any
liability for any loss sustained as a result of any investment made pursuant to
the instructions of the parties hereto or as a result of any liquidation of any
investment prior to its maturity or for the failure of the parties to give
Collateral Agent instructions to invest or reinvest the Collateral or any
earnings thereon. Any corporation into which the Collateral Agent in its
individual capacity may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Collateral Agent in its individual capacity shall be
a party, or any corporation to which substantially all the corporate trust
business of the Collateral Agent in its individual capacity may be transferred,
shall be the Collateral Agent under this Agreement without further act.
4.6 INDEMNIFICATION. The Owners shall release, indemnify, defend and hold
harmless Collateral Agent and each of its officers, directors, affiliates and
employees (collectively "INDEMNIFIED PARTIES") from and against any claim,
liability, loss, damage or expense (including reasonable outside counsel fees
and disbursements of such Indemnified Parties) of any nature, directly or
indirectly arising out of or relating to any act or omission under this
Agreement, except for any such claim, liability, loss, damage or expense arising
out of an Indemnified Party's gross negligence or willful misconduct. This
provision shall survive the termination of this Agreement.
4.7 TAX IDENTIFICATION NUMBERS. Developer shall provide Collateral Agent
with Tax Identification Number (TIN) of the Owners as assigned by the Internal
Revenue Service. All items of income, gain, expense and loss recognized in the
Collateral Account shall be reported to the United States Internal Revenue
Service and all state and local taxing authorities under the name and TIN of the
Owners.
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SECTION 5. REPRESENTATIONS AND WARRANTIES
5.1 THE OWNERS, DEVELOPER AND CONTRACTOR. In order to induce each other and
Collateral Agent to enter into this Agreement and transactions contemplated
hereby, each of the Owners, Developer and Contractor hereby makes the following
representations and warranties to each other and Collateral Agent:
(a) it is validly existing and, if applicable under the laws of its
jurisdiction of incorporation, in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to enter into and perform its obligations under this Agreement
and the transactions contemplated hereby;
(b) the execution, delivery and performance of this Agreement by such
party have been duly authorized by all necessary corporate action on the
part of such party and no other corporate proceedings are necessary in
connection therewith; this Agreement has been duly executed and delivered
by such party, and, assuming the due authorization, execution, and delivery
by each other party hereto, this Agreement constitutes the legal, valid and
binding obligation of such party, enforceable against such party in
accordance with the terms hereof;
(c) neither the execution, delivery or performance by such party of
this Agreement, nor the consummation of any of the transactions
contemplated hereby, will contravene any law applicable to or binding on
such party, or any provision of the charter or bylaws of such party; and
(d) neither the execution, delivery or performance by such party of
this Agreement, nor the consummation by such party of any of the
transactions described herein, requires the consent or approval of, the
giving of notice to, the registration with, the recording or filing of any
documents with, or the taking of any other action in respect of, any
governmental authority, any trustee or holders of any indebtedness or
obligations of such party, any stockholder of such party or any other
Person, other than those which shall have been obtained.
5.2 COLLATERAL AGENT. Collateral Agent hereby represents and warrants to
the Owners, Developer and Contractor that:
(i) Collateral Agent is a New York State banking institution duly
organized, validly existing and in good standing under the laws of New York
and has full power, corporate and otherwise, and authority to carry on its
business as currently being conducted, to own or hold under lease all
properties owned or leased by it and to enter into and perform its
obligations under this Agreement.
(ii) The execution and delivery by Collateral Agent of, and the
performance by Collateral Agent of its obligations under, this Agreement
have been duly authorized by all necessary corporate action on the part of
Collateral Agent, and this Agreement constitutes a legal, valid and binding
obligation of Collateral Agent, enforceable against Collateral Agent in
accordance with its terms.
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(iii) Collateral Agent is a bank which in the ordinary course of
business maintains security accounts such as the Collateral Account defined
herein.
(iv) Neither the execution or delivery by Collateral Agent of this
Agreement nor the performance by Collateral Agent of its obligations
hereunder, (a) conflicts or will conflict with or violate in any respect
any currently existing law or governmental rule, regulation, or any
judgment or order or any judicial or administrative order or decree
applicable to or binding upon Collateral Agent or any of its properties,
(b) conflicts or will conflict with or violate the articles of
incorporation or by-laws of Collateral Agent, (c) conflicts or will
conflict with, or contravene, violate or result in a breach of, any
indenture, mortgage, loan agreement or any other agreement or instrument to
which Collateral Agent is a party or by which any of its properties is
bound, in any such case which does or will materially adversely affect the
financial condition or the business or assets of Collateral Agent or its
ability to perform its obligations under this Agreement, (d) requires or
will require, on the part of Collateral Agent, the consent or approval of,
the giving of notice to, the registration with, or the taking of any other
action in respect of, any governmental or public commission, board,
authority or agency, except for filings, if any, made pursuant to any
notice reporting requirement applicable to it, or (e) requires or will
require the consent or approval of its shareholders or any trustee or
holders of any currently existing indebtedness or obligations of Collateral
Agent.
(v) There are no actions, suits or proceedings pending, or to the best
knowledge of Collateral Agent, threatened before any court or by or before
any other federal, state or local government or public commission, board,
authority or agency, or any arbitrator, domestic or foreign, which can
reasonably be expected to have a materially adverse effect on Collateral
Agent's ability to perform its obligations under this Agreement or which
call into question the validity of any such agreement or instrument.
(vi) As of the date hereof, Collateral Agent has received no notice of
any Lien on any of the Collateral other than the lien in favor of
Contractor. Collateral Agent agrees to give prompt notice to Contractor and
Developer of any such Lien of which it receives written notice hereunder
and under other similar agreements, at the address of Contractor and
Developer set forth in Section 6.1.
SECTION 6. MISCELLANEOUS
6.1. NOTICES. All notices, requests, demands, offers, consents and other
communications in connection with this Agreement shall be effective when
received by the party to which the same is sent and only if delivered in writing
and by hand, private express courier service or facsimile to the relevant
attention and address or facsimile number set forth below:
- 16 -
(a) If to Developer, to:
ViCaMe Infrastructure Development GmbH
▇▇▇▇▇▇▇ Lanstrabe 187-189
60314 Frankfurt a.m. Germany
Telephone: ▇▇▇ ▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇
Facsimile: 011 4969 94 99 4100
with a copy to:
ViCaMe Infrastructure Development GmbH
c/o Viatel U.K.
▇▇▇▇▇▇▇ House
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Project Manager
Telephone: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇
WITH A COPY TO:
Viatel, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Attention: General Counsel
Telephone: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
(b) If to Contractor, to:
Bechtel Limited
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Project Manager
COPY: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇
- 17 -
(c) If to Collateral Agent, to:
The Chase Manhattan Bank
450 West 33rd Street, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Attention: Capital Markets Fiduciary
Services, International/
Project Finance Team
Telephone: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇-▇▇▇-▇▇▇-▇▇▇▇/8178
or to such other attention or address (or facsimile number) as may be specified
by notice to the other parties thereto. All notices required to be given by the
parties hereto to the Owners shall be deemed to have been given by notice duly
provided to the Developer pursuant to this Section 6.1.
6.2. INTEGRATION; AMENDMENT. This Agreement (and, with respect to the
Contractor, the Developer and the Owners only, the Contract) constitute(s) the
complete agreement of the parties hereto with respect to the subject matter
hereof. This Agreement shall not be varied in its terms by oral agreement or
representation or otherwise than by an agreement in writing dated subsequent to
the date hereof, executed and delivered by duly authorized representatives of
each party, except that Section 2 hereof (and the definitions related thereto)
may be amended by an agreement in writing between Developer and Contractor, with
a copy thereof to Collateral Agent at the address set forth in Section 6.1.
6.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and inure
to the benefit of the respective successors and assigns of the parties hereto;
PROVIDED, no party may assign any of its rights, or delegate any of its
obligations, hereunder without the prior written consent of the other parties.
6.4 HEADINGS. The descriptive headings of the several sections and
subsections of this Agreement are inserted for the convenience of reference only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.
6.5 COUNTERPARTS, EFFECTIVENESS. This Agreement (a) may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument,
and (b) shall become effective when each of the parties has executed and
delivered a counterpart hereof. A complete set of counterparts of this Agreement
shall be delivered to each party hereto.
6.6. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of any
party in exercising any right, power or privilege hereunder and no course of
dealing between or among any parties shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder. The rights and remedies herein expressly
- 18 -
provided are cumulative and not exclusive of any rights or remedies which any
party would otherwise have in respect of the subject matter of this Agreement.
6.7 JURISDICTION. Each of the Owners, Developer and Contractor (each
individually a "PARTY" and collectively, the "PARTIES") (i) hereby irrevocably
submits itself to the non-exclusive jurisdiction of the United States District
Court for the Southern District of New York and, if such court does not have
jurisdiction, to the courts of the State of New York in New York County, for the
purposes of any suit, action or other proceeding arising out of this Agreement
or the subject matter thereof brought by any Party or its successors or assigns;
PROVIDED, HOWEVER, that the foregoing submission to jurisdiction shall not limit
the availability of any other forum with respect to enforcement of any judgment,
and (ii) to the extent permitted by applicable law, hereby waives, and agrees
not to assert, by way of motion, as a defense, or otherwise, any such suit,
action or proceeding that such action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is improper
or that this Agreement or the subject matter hereof may not be enforced in or by
such court. Each Party agrees that its submission to jurisdiction is made for
the express benefit of each of the other Parties. Final judgment against any
Party in any suit in any court of competent jurisdiction shall be conclusive,
and may be enforced in other jurisdictions by suit on the judgment, a certified
or true copy of which shall be conclusive evidence of the fact and of the amount
of any indebtedness or liability of such Party therein described; PROVIDED,
always that the plaintiff may at its option bring suit, or institute other
judicial proceedings, to enforce any such judgment against any Party or any of
its assets in the courts of any country or place where such Party or such
assets, as the case may be, may be found. All parties hereto waive their rights
to a trial by jury in connection with any disputes arising in connection with
this Agreement. The Developer, and each of the Owners, hereby irrevocably
appoints Viatel, Inc. at the address set forth in Section 6.1 hereof as its
agent for service of process in connection with any suit, action or other
proceeding arising out of this Agreement or the subject matter hereof or any of
the transactions contemplated hereby and agrees that it will at all times during
the term of this Agreement maintain a duly authorized agent to receive service
of process. Any and all service of process, and any other notice in any such
action, shall be given personally or by registered mail or certified mail,
return receipt requested, or by any other means of mail that requires a signed
receipt, postage prepaid, mailed to (i) with respect to Contractor and
Collateral Agent, at their respective address as provided in Section 6.1, and
(ii) with respect to Developer and each Owner, to its agent for service of
process at the address as identified above.
6.8 GOVERNING LAW. This Agreement and all rights and obligations hereunder
shall be governed by the laws of the State of New York.
6.9 SEVERABILITY. Any provision of this Agreement which is invalid, illegal
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without invalidating, prohibiting the observance of or rendering unenforceable
the remaining provisions hereof, and any such invalidity, illegality or
unenforceability in any jurisdiction shall not invalidate, prohibit the
observance of or render unenforceable such provision in any other jurisdiction.
6.10 FURTHER ASSURANCES. Each of the parties hereto shall cause to be
promptly and duly taken, executed, acknowledged and delivered all such further
- 19 -
acts, documents and assurances as the other party may from time to time
reasonably request in order to carry out more effectively the intent and
purposes of this Agreement and the transactions contemplated hereby and thereby.
6.11 WAIVER OF IMMUNITY. Each Owner, to the extent that it has or hereafter
may acquire any immunity (sovereign or otherwise) from any legal action, suit or
proceeding, from jurisdiction of any court or from setoff or any legal process
(whether service or notice, attachment prior to judgment, attachment in aid of
judgment, attachment in aid to execution of judgment or otherwise) with respect
to itself or any of its property, whether or not held for its own account, to
the fullest extent permitted by applicable law hereby irrevocably and
unconditionally waives and agrees not to plead or claim such immunity in respect
of its obligations under this Agreement.
6.12 THIRD PARTIES. This Agreement shall not be deemed to create any right
in any person or entity other than the parties hereto, and their respective
successors and assigns, nor be construed in any respect to be a contract in
whole or in part for the benefit of any person or entity other than the parties
hereto, and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers or representatives to execute and deliver this Agreement as of the date
first above written
- 20 -
Developer: VICAME INFRASTRUCTURE DEVELOPMENT GmbH
By:_________________________________________
Name:
Title:
Owner: VIATEL GERMAN ASSET GmbH
By:_________________________________________
Name:
Title:
Owner: METROMEDIA FIBER NETWORK GmbH
By:_________________________________________
Name:
Title:
Owner: CARRIER 1 FIBER NETWORK GmbH & Co.
oHG
By: Carrier 1 Holding GmbH
By:_________________________________________
Name:
Title:
Contractor: BECHTEL LIMITED
By:_________________________________________
Name:
Title:
Collateral Agent: THE CHASE MANHATTAN BANK
By:_________________________________________
Name:
Title:
- 21 -
SCHEDULE I
REQUIRED AMOUNTS
[REDACTED]
- 22 -
EXHIBIT A
FORM OF CERTIFICATE FOR WITHDRAWAL BY OWNERS
To: The Chase Manhattan Bank
The undersigned, ViCaMe Infrastructure Development GmbH hereby certifies to
The Chase Manhattan Bank (the "COLLATERAL AGENT") with respect to the
Undertaking and Pledge and Security Agreement, dated as of February 19, 1999
(the "UNDERTAKING AGREEMENT"), among the Collateral Agent, Bechtel Limited (the
"CONTRACTOR"), Viatel German Asset GmbH, Metromedia Fiber Network GmbH, Carrier
1 Fiber Network GmbH & Co. oHG, (collectively, hereinafter called "OWNERS") and
ourselves that:
1. Capitalized terms used without definition have the means assigned in the
Undertaking Agreement.
2. No Default has occurred and is continuing.
3. Pursuant to Section 3.5(a) of the Undertaking Agreement, the Fair Market
Value of the Permitted Investments (and other Collateral, if any credited to the
Collateral Account as to which the Contractor has a perfected security interest)
is greater than the Required Amount set forth opposite the Deposit Date most
recently occurring (i.e., the Deposit Date falling on _______________, _____)
and such excess amount should be transferred to the Developer's account, on
behalf of the Owners, at [INSERT NAME OF BANK], ABA No. ________________,
Account No. _______________, Reference: ________________, Attention:
_______________.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate this __________ day of _______, ___.
ViCaMe Infrastructure Development GmbH
By:_________________________________________
Authorized Signatory
cc: Bechtel Limited
EXHIBIT B
FORM OF CERTIFICATE FOR WITHDRAWAL BY CONTRACTOR
To: The Chase Manhattan Bank
The undersigned, Bechtel Limited (the "CONTRACTOR"), hereby certifies to
The Chase Manhattan Bank (the "COLLATERAL AGENT") with respect to the
Undertaking and Pledge and Security Agreement, dated as of February 19, 1999
(the "UNDERTAKING AND PLEDGE AND SECURITY AGREEMENT"), among the Collateral
Agent, Viatel German Asset GmbH, Metromedia Fiber Network GmbH, Carrier 1 Fiber
Network GmbH & Co. oHG (collectively, "OWNERS"), ViCaMe Infrastructure
Development GmbH (the "DEVELOPER") and the Contractor that:
1. Capitalized terms used without definition have the means assigned in the
Undertaking Agreement.
2. The amount of $_______________ (the "PAYMENT AMOUNT") is due and owing
to the Contractor from the Owners pursuant to the terms of the Engineering,
Procurement and Construction Contract (Outside Plant), dated February 19, 1999
(the "CONTRACT"), among Contractor, the Owners and the Developer.
3. The Contractor has notified the Developer and each Owner that the
Developer has failed to pay the Payment Amount on behalf of the Owners, within
the period specified for such payment, an amount due and payable to the
Contractor in respect of a Contractor Invoice duly submitted by the contractor
in accordance with Section 13 of the Contract, and at least three Business Days
have elapsed since such notice was duly given without payment being made to the
Contractor of the Payment Amount.
4. No Event of Default nor any other event entitling the Developer to
withhold payment to the Contractor has occurred and is continuing.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate this __________ day of _______, ___.
Bechtel Limited
By:____________________________________________
Authorized Signatory
GERMAN NETWORK DEVELOPMENT PROJECT
APPENDIX 1
REIMBURSABLE COSTS
[REDACTED]
GERMAN NETWORK DEVELOPMENT PROJECT
APPENDIX 2
NETWORK DESCRIPTION AND PROJECT SCOPE
[REDACTED]
GERMAN NETWORK DEVELOPMENT PROJECT
APPENDIX 3
OWNER-PROCURED EQUIPMENT
[REDACTED]
GERMAN NETWORK DEVELOPMENT PROJECT
APPENDIX 4
MILESTONE SCHEDULE
[REDACTED]
GERMAN NETWORK DEVELOPMENT PROJECT
APPENDIX 5
WAYLEAVE APPLICATION PROCESS
[REDACTED]
GERMAN NETWORK DEVELOPMENT PROJECT
APPENDIX 6
INSURANCE
----------------------------------------------------------------------------
POLICY TYPE MINIMUM COVERAGE AMOUNT
----------------------------------------------------------------------------
(a) Worker's Compensation and Amount and coverage required by
Employer's Liability laws of country, province or
territory in which the Work is
performed.
----------------------------------------------------------------------------
(b) Disability Benefits and Employee Amount and coverage required by
Benefits laws of country, province or
territory in which the Work is
performed.
----------------------------------------------------------------------------
(c) Commercial General Liability and
Professional US$ [REDACTED] per occurrence
Liability
Maximum Deductible:
(Including bodily injury, property US$ [REDACTED] per loss
damage, premises operations, "XCU,"
products/completed operations,
blanket contractual liability, broad
form property damage and independent
contractor's insurance or the
equivalent.)
----------------------------------------------------------------------------
(d) Comprehensive Automobile Liability Bodily Injury
US$ [REDACTED] per occurrence
(Including bodily injury and property Property Damage:
damage liability with with respect US$ [REDACTED] per occurrence
to vehicles owned or hired by the
Contractor.)
----------------------------------------------------------------------------
(e) Contractor All risk Insurance Limit:
Covering all risk of physical loss or [REDACTED]
damage to the Contract Works for
their full replacement value. Deductible:
US$ [REDACTED] per loss
----------------------------------------------------------------------------
1
GERMAN NETWORK DEVELOPMENT PROJECT
APPENDIX 7
PERFORMANCE TEST STANDARDS
[REDACTED]
GERMAN NETWORK DEVELOPMENT PROJECT
APPENDIX 8
STORAGE AND MARKING PROCEDURES
SECTION I DEFINITION
"PHYSICAL ITEM" shall have the meaning ascribed thereto in ss. 90 of the German
Civil Code (BURGERLICHES GESETZBUCH); i.e. an item of physical identity
("KORPERLICHER GEGENSTAND") which is not built into or otherwise linked to any
other item of personal or real property in a way that would make it an
inseparable part ("WESENTLICHER BESTANDTEIL") of such other item of personal or
real property within the meaning of ▇▇.▇▇. 93 and 94, respectively, of the
German Civil Code.
SECTION II MARKING OBLIGATIONS
(1) The Contractor shall, and shall cause all Subcontractors to, ▇▇▇▇ each
Physical Item of supply, equipment, material and other Work, including but not
limited to all ducts, cables and joints (each an "Item"), in a manner that
clearly identifies the Designated Owner of such Item.
(2) Each Item designated to be installed within the four Cable Links, except for
the HDPE ducts described in Appendix 2, Section 3.2.2. of this Contract (for
which sub-section (3) shall apply), shall bear a clearly legible imprint or a
securely and durably fixed tag with the name of the Designated Owner of such
Item: Each Item designated to be installed within the first Cable Link for
Viatel German Asset GmbH shall bear an imprint or name tag reading "Viatel 1".
Each Item designated to be installed within the second Cable Link for Viatel
German Asset GmbH shall bear an imprint or name tag reading "Viatel 2". Each
Item designated to be installed within the Cable Link for Metromedia Fiber
Network GmbH shall bear an imprint or name tag reading "MFN". Each Item
designated to be installed within the Cable Link for Carrier 1 Fiber Network
GmbH & Co. oHG shall bear an imprint or name tag reading "Carrier 1".
(3) Each of the HDPE ducts described in Appendix 2, Section 3.2.2. of this
Contract (each a "Duct") shall be color-coded in a way that identifies the
Designated Owner of each Duct. The Duct designated to be installed within the
first Cable Link for Viatel German Asset GmbH shall be of light ▇▇▇▇ color
(color code: ▇▇▇▇). The Duct designated to be installed within the second Cable
Link for Viatel German Asset GmbH shall be of light ▇▇▇▇ and green striped color
(color code: green). The Duct designated to be installed within the Cable Link
for Metromedia Fiber Network GmbH shall be of light ▇▇▇▇ and black striped color
(color code: black). The Duct designated to be installed within the Cable Link
for Carrier 1 Fiber Network GmbH & Co. oHG shall be of light ▇▇▇▇ and yellow
striped color (color code: yellow).
(4) In order to identify the Designated Owner of each manhole, the entrance to
each manhole shall be marked by clearly visible gray, green, black or yellow
color spots of a minimum diameter of 80 mm in accordance with the color-codes
provided in sub-section (3) above.
1
(5) Each Item, Duct and manhole shall be marked in accordance with sub-sections
(1), (2), (3) and (4) above prior to being invoiced to its respective Designated
Owner pursuant to Sections 37.3 and 37.7, respectively. To ensure a timely and
cost-effective marking procedure, each Item, Duct and manhole should be marked,
to the extent possible and economically reasonable, during the stage of its
production or assembly. Since the Fiber Optic Cables will be supplied by or on
behalf of the Developer in accordance with Appendix 3 hereof, the marking
obligations with respect to such Fiber Optic Cables are primarily borne by the
Developer, subject to sub-section (6) below.
(6) In order to ensure a clear identification of the Designated Owner of each
Fiber Optic Cable, the Contractor shall verify, upon the delivery of each Fiber
Optic Cable by or on behalf of the Developer, that such Fiber Optic Cable has
been marked in accordance with either sub-section (2) above or the color codes
provided in sub-section (3) above. If such Fiber Optic Cable is not marked
accordingly upon such delivery, the Contractor shall ▇▇▇▇ it in accordance with
either sub-section (2) or the color codes provided in sub-section (3) above,
whichever is more economical, at the expense of the respective Designated Owner
prior to its assembly and installation within the respective Cable Link.
2
GERMAN NETWORK DEVELOPMENT PROJECT
APPENDIX 9
PAYMENT METHODOLOGY [INTENTIONALLY OMITTED]
[intentionally omitted]
1
GERMAN NETWORK DEVELOPMENT PROJECT
APPENDIX 10
OWNER ESCROW SCHEDULE
[REDACTED]
1
GERMAN NETWORK DEVELOPMENT PROJECT
APPENDIX 11
INDEPENDENT EXPERT PROCEDURES
PROPOSAL TO REFER OR NOMINATE. Proposals shall be raised and considered in the
following manner:
o the appropriate senior-management representative of the Party wishing
to refer a matter to, nominate a candidate to serve as, an Independent
Expert shall give notice to that effect to the senior management of
the other Party and, with such notice, shall give details of the
reason for the nomination of, and the matter to be referred to, the
Independent Expert, whereupon
o the Parties shall meet and endeavor in good faith to agree upon (i)
referral of the relevant matter to an Independent Expert, and (ii) the
person to serve as the Independent Expert; PROVIDED, that, if within
ten (10) Days from the date of the notice given in accordance with the
foregoing paragraph, the Parties have failed to agree upon an
Independent Expert, the matter shall forthwith be referred to the
dispute resolution procedures set forth in Section 38 of the Contract.
CONFIRMATION OF APPOINTMENT. Upon a person being appointed as Independent Expert
under the foregoing provisions,
o the Parties forthwith shall notify the relevant appointee of his or
her selection and shall request that such person confirm within five
(5) Business Days whether or not he or she is willing and able to
accept an appointment as Independent Expert, and, to the extent that
o the first nominee so proposed is either unwilling or unable to accept
the appointment to act as Independent Expert, or shall not have
confirmed his or her willingness and ability to accept such
appointment within the said period of five (5) Business Days, then
(unless the Parties are able to agree upon the appointment of another
Independent Expert), the matter shall be referred (by either Party) to
the dispute resolution procedures set forth in Section 39 of the
Contract.
DISQUALIFICATION. No person shall be appointed as an Independent Expert under
the Contract:
o unless he or she is qualified by education, experience and training to
determine the matter in dispute; or
o if he or she has an interest or duty which would materially conflict
with his or her role (including being a director, officer, employee or
consultant to a Party or its Affiliates).
2
PRESENTATION AND REVIEW OF RELEVANT INFORMATION. The following provisions shall
apply to the Independent Expert's determination:
o each Party shall supply to the Independent Expert, not later than ten
(10) Business Days after such Independent Expert's confirmation of
appointment, all such information, records, statements and other data
for which such Party desires review, and each Party shall make
available to the Independent Expert all such additional information as
the Independent Expert may request;
o the Independent Expert shall ignore any data, information or
submissions supplied and made after the ten (10) Business Day period
noted above, unless the same are furnished in response to a specific
request from him or her;
o the Independent Expert shall make his or her decision as soon as
reasonably practicable after receipt of sufficient information from
the Parties (but, in no event, more than ten (10) Business Days after
the deadline above for the Parties' submissions or the date of the
Independent Expert's last request for supplemental information), the
failure to so render a decision shall entitle either Party to refer
the matter to the dispute resolution procedures set forth in Section
38 of the Contract;
o the Independent Expert shall be entitled to obtain such independent
professional and/or technical advice as he or she may reasonably
require and to obtain any necessary secretarial assistance as is
reasonably necessary; and
o all communications between the Parties and the Independent Expert
shall be made in writing and a copy thereof provided simultaneously to
the other Party. No meeting between the Independent Expert and the
Parties or either of them, shall take place unless all Parties have a
reasonable opportunity to attend any such meeting.
DECISION-MAKING PROCEDURES. The following provisions shall apply:
o the determination of the Independent Expert shall be in writing and
shall provide full written reasons for his or her decisions;
o if either Party disagrees with the Independent Expert's determination,
such dispute shall be finally settled in accordance with the dispute
resolution procedure in accordance with the procedures set forth in
Section 38 of the Contract; and
o the Independent Expert shall be deemed not to be an arbitrator, but
shall render his or her decision as an expert and the law relating to
arbitration shall not apply to the Independent Expert or his or her
determination or the procedure by which he or she reaches a decision.
ALLOCATION OF COSTS AND EXPENSES. The Parties shall share equally in all fees
charged by the Independent Expert in respect of any referral thereto. Each Party
shall bear the costs of providing all data, information and submissions given by
2
it, and the costs and expenses of all counsel, witnesses and employees retained
by it, but (unless the Independent Expert shall make any award of such costs and
expenses, which award, if made, shall be part of the Independent Expert's
decision) the costs and expenses of the Independent Expert and any independent
advisers to the Independent Expert shall be equally borne by the Parties.
3