*The redacted portions of this contract have been omitted pending the outcome of
a confidential treatment request filed with the Securities and Exchange
Commission.*
FIBER PURCHASE AGREEMENT
THIS FIBER PURCHASE AGREEMENT (the "Agreement') is made and entered into
as of the 11th day of April 2000 (the "Effective Date"), by and between LEVEL 3
LANDING STATION INC., a corporation organized and existing under the laws of the
State of Delaware, LEVEL 3 (BERMUDA) LIMITED, a corporation organized and
existing under the laws of Bermuda, and LEVEL 3 COMMUNICATIONS LIMITED, a
corporation organized and existing under the laws of England, (collectively
"Level 3"), and VIATEL, INC., a corporation organized and existing under the
laws of the State of Delaware ("Viatel").
RECITALS
WHEREAS, Level 3 has entered into certain agreements (the "System
Agreements") whereby Level 3 owns or will own certain Trans-Atlantic
telecommunications fiber on the Yellow submarine cable system between USA and UK
(the "Yellow System").
WHEREAS, Viatel desires to acquire certain Trans-Atlantic
telecommunications fiber.
NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants contained herein, covenant and agree with each other as follows:
1. DEFINITIONS. Capitalized terms used herein shall have the following
meanings:
A. "ACII" shall mean Atlantic Crossing Ltd., a corporation organized and
existing under the laws of Bermuda, and its successors and assigns.
B. "AO&M Payments" shall have the meaning set forth in Section 4.
C. "AO&M Plan" shall have the meaning set forth in Section 4.
D. "Capacity" shall mean the Gbps of telecommunications capacity available
on the Purchased Fibers from time to time.
E. "Capacity and Dark Fiber IRU Agreement" shall mean that certain
Capacity and Dark Fiber IRU Purchase Agreement entered into between Level 3 and
Viatel simultaneously herewith.
F. "Colocation Agreement" shall mean that certain Colocation Agreement
entered into between Level 3 and Viatel simultaneously herewith.
G. "Dollars" or "$" shall mean United States dollars.
H. "Indigo Project" shall have the meaning set forth in Section 13.
I. "First Upgrade" shall mean the addition of 80 Gbps of Capacity to the
Purchased Fiber, bringing the total Capacity of the Purchased Fiber to 160 Gbps.
J. "Payment Due Date" shall mean the due date for payments hereunder by
Viatel.
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K. "Permits" shall have the meaning set forth in Section 9.
L. "Purchase Price" shall mean the amount payable by Viatel to Xxxxx 0 for
the Purchased Fiber and Upgrades, all as set forth in this Agreement.
M. "Purchased Fiber" shall mean two (2) lit fibers on the Yellow System,
initially equipped to 80 Gbps, connecting Bellport, Long Island, New York, USA
and Bude, Cornwall, UK.
N. "RFS Date" shall mean the date on which all of the following have
occurred:
1) the Purchased Fiber has been accepted by Level 3 pursuant to
Section 2.D.;
2) the Backhaul Fibers, AC-I Capacity and Interlink Capacity
(as such terms are defined in the Capacity and Dark Fiber
IRU Agreement) have been completed and are ready to be
provided to Viatel; and
3) the Colocation Space (as defined in the Colocation
Agreement) has been completed and is ready to be provided to
Viatel.
O. "Second Upgrade" shall mean the addition of 160 Gbps of Capacity to
the Purchased Fiber, bringing the total Capacity of the Purchased Fiber to 320
Gbps.
P. "Supplier" shall refer to any party which has contracted with Level 3
or its affiliates to supply, construct, install, manage, operate or maintain the
Yellow System.
Q. "System Agreements" shall have the meaning set forth in the Recitals
hereto.
R. "Taxes" shall have the meaning set forth in Section 3.F.
S. "Technical Specifications" shall refer to the technical specifications
for the Yellow System attached hereto as Exhibit "B".
T. "Upgrades" shall mean the First Upgrade and the Second Upgrade.
U. "Useful Life" shall mean the economic useful life of the Yellow System
as determined in accordance with Section 8.
V. "Yellow System" shall have the meaning set forth in the Recitals hereto
and as further generally described on Exhibit "A" attached hereto.
2. PURCHASED FIBER AND UPGRADES.
A. Purchased Fiber. Viatel hereby agrees to purchase from Xxxxx 0, and
Level 3 hereby agrees to sell to Viatel, the Purchased Fiber, on the terms and
conditions set forth herein. Title to the Purchased Fiber shall pass to Viatel
upon full and complete payment of the portion of the Purchase Price relating to
the Purchased Fiber (i.e., excluding the portion of the Purchase Price due for
the First Upgrade and Second Upgrade).
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B. Upgrades. Level 3 hereby agrees to perform, and Viatel agrees to pay
Level 3 for, the First Upgrade and, if Xxxxx 0 elects to perform the Second
Upgrade, the Second Upgrade, on the terms and conditions set forth herein.
C. Additional Upgrades. In the event Level 3 shall determine that the
Capacity of the Yellow System can be increased, and Level 3 elects to increase
such capacity, above 1.28 Tbps, Level 3 shall offer Viatel the right to purchase
additional Capacity in like proportion to its initial interest in the total
Capacity of the Yellow System. Such additional Capacity shall be offered on a
basis no less favorable than that offered by Level 3 to any other participant
(cable station to cable station basis) in the Yellow System.
D. Acceptance. The Purchased Fibers shall be accepted by Viatel when
accepted by Level 3 under and in accordance with the relevant System Agreement
between Level 3 and Tyco Submarine Systems Ltd. (a Supplier to Level 3) dated
June 15, 1999. Viatel shall have the right to observe in all testing procedures,
results and analysis respecting the acceptance of the Yellow System as relates
to the Purchased Fibers and Capacity. Level 3 shall accept the Purchased Fibers
from the Suppliers when such testing results are in accordance with the
Technical Specifications.
3. PAYMENT FOR PURCHASED FIBER AND UPGRADES.
A. Purchase Price for Purchased Fibers. The portion of the Purchase Price
payable by Viatel for the Purchased Fiber shall be [REDACTED] (less a pro-rata
portion of any liquidated damages Level 3 may receive from any Suppliers related
thereto).
B. Purchase Price for Upgrades. The portion of the Purchase Price payable
by Viatel for the Upgrades shall be:
1) [REDACTED] for the First Upgrade (less a pro-rata portion of
any liquidated damages Level 3 may receive from any suppliers
related thereto).
2) [REDACTED] for the Second Upgrade (less a pro-rata portion of
any liquidated damages Level 3 may receive from any suppliers
related thereto).
C. Payment Due Dates. The Payment Due Dates for the Purchase Price shall
be as follows:
-------------------------------------------------------------------------------
Item Payment Due Date Amount Due**
-------------------------------------------------------------------------------
Purchased Fiber 1st Installment [REDACTED] [REDACTED]
-------------------------------------------------------------------------------
Purchased Fiber 2nd Installment [REDACTED] [REDACTED]
-------------------------------------------------------------------------------
3
Purchased Fiber 3rd Installment [REDACTED] [REDACTED]
-------------------------------------------------------------------------------
Purchased Fiber Final Installment [REDACTED] [REDACTED]
-------------------------------------------------------------------------------
First Upgrade [REDACTED] [REDACTED]
-------------------------------------------------------------------------------
Second Upgrade [REDACTED] [REDACTED]
-------------------------------------------------------------------------------
[REDACTED]
**Amount Due figures comprise the costs of the Yellow System (including
costs incurred in the design, manufacture, acquisition, construction,
installation and delivery) plus a management fee of [REDACTED].
D. Payment. Viatel shall, on or before the respective Payment Due Date,
pay to Level 3, in immediately available Dollars, the portion of the Purchase
Price then due (provided, Level 3 shall give five (5) business days prior notice
of such Payment Due Date to Viatel for any Payment Due Date not specifically
ascertainable in the above schedule).
E. Pricing Principles. [REDACTED]
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F. Taxes. All payments made by Viatel shall be made without any deduction
or withholding for or on account of any tax, duty or other charges of whatever
nature imposed by any taxing or governmental authority (collectively "Taxes").
If Viatel is or was required by law to make any deduction or withholding from
any payment due hereunder to Xxxxx 0, or if Level 3 is required to pay any Taxes
(other than net income taxes) upon, measured by, or reasonably attributable to
the Purchase Price or the cost or value of Purchased Fiber or Capacity, then,
notwithstanding anything to the contrary contained in this Agreement, the gross
amount payable by Viatel to Level 3 will be increased so that, after any such
deduction, withholding or other payment of Taxes, the net amount received by
Level 3 will not be less than Level 3 would have received had no such deduction,
withholding or other payment been required. If any taxing or government
authority asserts that Viatel should have made a deduction or withholding, or
Level 3 should have made any payment, for or on account of any Taxes with
respect to all or a portion of any payment made hereunder, Viatel hereby agrees
to indemnify Xxxxx 0 for such Taxes and hold Level 3 harmless on an after-tax
basis from and against any Taxes, interest or penalties levied or asserted in
connection therewith. Viatel shall not be responsible for any Taxes payable with
respect to any other portions of the Yellow System.
4. ADMINISTRATION, OPERATION AND MAINTENANCE OF YELLOW SYSTEM.
A. Plan. Level 3 shall, within ninety (90) days of the Effective Date,
establish a plan (the "AO&M Plan") for the administration, operation and
maintenance of the Yellow System in accordance with industry standards and in
accordance with the standards set forth in the System Agreements. The AO&M Plan
shall include those components described in Exhibit "C" attached hereto. Level 3
shall consult with, review and discuss the AO&M Plan with Viatel. The AO&M Plan
shall be subject to the approval of Viatel, which approval shall not be
unreasonably withheld or delayed.
B. Performance. Level 3 shall perform or provide for the performance of
the AO&M Plan.
1) Should any condition exist in any segment of the Yellow
System that may impair the integrity of the Yellow System,
Level 3 shall initiate and coordinate planned maintenance on
such relevant segment, which may include the deactivation of
such segment. Level 3 shall, to the extent reasonably
practicable (and to the maximum extent allowable under any
agreements respecting such action), advise Viatel in writing
prior to the initiation of a planned maintenance operation,
of the timing, scope and costs of such planned maintenance
operation and shall use its reasonable efforts to minimize
any disruption of the Yellow System.
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2) In the event of disruption of service of the Purchased
Fiber, Level 3 shall cause service to be restored as quickly
as reasonably possible, and Level 3 shall take such measures
as are reasonably necessary to obtain such objective.
3) Level 3 and Viatel acknowledge that defects or deficiencies
in the Fibers or other components of the Yellow System may
occur from time to time, whether covered by any Supplier
warranty or the AO&M Plan. In such event, pending the
resolution of such defect or deficiency, the parties will
act in good faith to try to equitably equalize the impact of
such event on each of the parties.
4) Level 3 and Viatel shall meet periodically at mutually
agreeable times to review the AO&M Plan and related
procedures.
C. AO&M Payments. For performance of the administration, operation and
maintenance of the Yellow System, in addition to the Purchase Price, Viatel
shall pay to Level 3 "AO&M Payments" for the Useful Life of the Purchased Fiber.
The AO&M Payments shall be equal to a pro rata share of the costs incurred by
Level 3 to obtain such services, whether performed by Level 3 with its own
employees or third parties, based on the ratio which the amount of Capacity then
available to Viatel bears to the total Capacity of Level 3 in the Yellow System,
plus [REDACTED] of such costs, for each year of the Useful Life, adjusted for
any partial years. Viatel's pro rata share of costs shall be subject to
adjustment in accordance with Section 8.
D. Payment of AO&M Payments. The AO&M Payments shall be paid as such costs
are incurred by Xxxxx 0, net of any reimbursements payments credits or setoffs
which Level 3 may have received under any Supplier warranty. Viatel shall have
the right to audit the books and records of Level 3 reasonably necessary to
verify the costs on which the AO&M Payments are based.
E. Certain Beneficial Rights. Viatel acknowledges that it is not a third
party beneficiary of any agreement entered into by Level 3 including, but not
limited to, the System Agreements. Notwithstanding the foregoing, Level 3 agrees
to use reasonable good faith efforts to provide that Viatel shall be a third
party beneficiary of the contract for the administration, operation and
maintenance of the marine portion of the Yellow System.
5. INVOICES; DEFAULT INTEREST.
A. Invoices. Excluding scheduled payments of the Purchase Price for the
Purchased Fiber, Level 3 or its authorized agent shall render invoices under
this Agreement in Dollars, and Viatel shall pay such invoiced amounts in Dollars
within [REDACTED] after invoice. Level 3 shall endeavor to issue such invoices
at least [REDACTED] in advance of each Payment Due Date. Viatel shall make all
payments by means of a wire transfer to an account or accounts specified by
Level 3. Level 3 reserves the right to direct, in writing, that payment be
apportioned among the entities comprising Level 3 as Level 3 directs, or to
separate subsidiaries or affiliates of Level 3.
6
B. Default Interest. Any amounts payable under this Agreement which are
not paid within fifteen (15) days of the Payment Due Date (within five (5) days
after notice given pursuant to 3D) shall accrue interest (from the Payment Due
Date) at an annual rate equal to [REDACTED] above the rate for U.S. dollar LIBOR
for one (1) month as published in The Wall Street Journal on the first business
day of the month in which such payment is due. Such interest shall accrue from
the day following the date payment was due until it is paid in full. In the
event that applicable law does not allow the imposition of "default interest" at
the rate established in accordance with this Section 5.B, such "default
interest" shall be at the lower of the rate provided in this subsection or the
highest rate permitted by applicable law. For purposes of this Section, "paid"
shall mean payment in funds that are available for immediate use by Level 3.
Viatel may avoid the incurrence of default interest or a payment default in the
case of a bona fide dispute by (i) giving written notice of such dispute to
Xxxxx 0 prior to the Payment Due Date (after giving effect to Section 3D), and
(ii) paying the non-disputed amount to Level 3 and retaining, in a segregated
Viatel account, the disputed amount. Viatel shall, upon Level 3's request,
deliver evidence of the retention of such sums in such account. The resolution
of such dispute shall be governed by Section 14. In the event Level 3 is
determined to be entitled to all or any part of such disputed amount, such
amount shall be paid by Viatel to Level 3 together with default interest thereon
from the original Payment Due Date.
6. DEFAULT.
A. Viatel Default.
1) If Viatel fails to pay any undisputed installment of the
Purchase Price relating to the Purchased Fibers when due
(after giving effect to Section 3D), and such failure
continues for a period of [REDACTED] after written notice from
Xxxxx 0 to Viatel, Level 3 shall have the option to terminate
this Agreement and all previously paid installments of the
Purchase Price relating to the Purchased Fibers and any other
sums paid by Viatel shall be non-refundable and the Useful
Life shall be deemed to have ended, In the event of such
termination of this Agreement by Xxxxx 0, the Colocation
Agreement and Capacity and Dark Fiber IRU Agreement shall
automatically terminate. Notwithstanding anything contained
herein to the contrary, Viatel acknowledges and agrees that
this Agreement and the Useful Life shall automatically
terminate and expire upon the occurrence of certain events
specified in the Colocation Agreement and the Capacity and
Dark Fiber IRU Agreement.
2) If Viatel fails to pay any undisputed installment of the
Purchase Price relating to the Upgrades when due (after giving
effect to Section 3D) and such failure continues for a period
of [REDACTED] after written notice from Xxxxx 0 xx Xxxxxx,
Xxxxx 0 shall have the option, at its discretion, to (a)
exercise any and all rights and legal and equitable remedies,
including its rights and remedies to specifically enforce
Viatel's obligations to pay the Purchase Price relating to the
Upgrades, or (b) cause Viatel to transfer, assign and/or make
available to Level 3 during the remaining Useful Life the
additional Capacity provided by such Upgrade.
7
3) Except as set forth in subsection Al) and A2), if Viatel fails
to make a payment required by this Agreement, or if Viatel is
otherwise in material breach of this Agreement, and if such
payment failure or other breach is not fully remedied within
[REDACTED] of such notification (provided, in the case of a
material non-monetary breach, such [REDACTED] period shall be
extended if the nature of the remedy reasonably requires more
than [REDACTED] to complete as long as Viatel commences such
remedy within the [REDACTED] period and thereafter diligently
and in good faith pursues such remedy to completion), Level 3
shall be entitled to pursue any and all rights and legal and
equitable remedies including its rights and remedies to
specifically enforce Viatel's obligations under this
Agreement.
B. Level 3 Default. If Level 3 is in material breach of this Agreement,
Viatel may notify Level 3 in writing of such breach and if such breach is not
fully remedied within [REDACTED] of such notification, Viatel shall be entitled
to withhold payment for any obligations owed to Xxxxx 0, and may offset such
payments against any obligations owed by Level 3 to Viatel, under this
Agreement, the Capacity and Dark Fiber IRU Agreement and the Colocation
Agreement, and pursue any and all rights and legal and equitable remedies,
including its rights and remedies to specifically enforce Level 3's obligations
under this Agreement.
7. USE OF THE PURCHASED FIBER.
A. Non-interference. The operation of the Purchased Fiber and any
equipment associated therewith shall be such as not to interrupt, interfere
with, or impair service over any of the facilities comprising the Yellow System,
or impair privacy of any communications over such facilities, cause damage to
plant or create hazards to employees, affiliates or connecting companies of
Level 3, Viatel, or any other user, owner or operator of the Yellow System or
the public.
B. Availability for Testing and Maintenance. The Purchased Fiber shall be
made available to Level 3 (or its contractors), at such times agreeable to
Viatel and Xxxxx 0, to permit Level 3 to conduct such tests and adjustments as
may be necessary for the Purchased Fiber to be maintained in efficient working
order. Level 3 agrees to provide at least seven (7) days (or such longer period
as allowed under any agreements respecting such action) written notice to Viatel
prior to conducting scheduled maintenance tests or adjustments which might
affect Viatel's use of the Purchased Fiber and to use reasonable efforts to
minimize disruption to the Yellow System.
C. Cooperation. In the event either party experiences a degradation or
significant interruption in the performance of its fibers on the Yellow System,
the parties shall cooperate to the extent reasonable possible to minimize the
impact of such occurrence.
D. Name. Xxxxx 0 will specify a name for the Yellow System for purposes of
maintenance, mapping and legal identification. Viatel shall be bound by the name
so specified by Xxxxx 0 for the purposes of marketing or branding the Purchased
Fibers and shall not refer to it by any other name.
8
E. Status. Level 3 shall keep Viatel apprised of the status of completion
of the Yellow System. Level 3 shall submit monthly, or as otherwise agreed upon,
progress reports to Viatel detailing the progress of development/construction
scheduled dates and anticipated delivery or other delays and such other relevant
information as Viatel may reasonably request. If Level 3 believes there is a
possibility of delay in the delivery of the Yellow System, Level 3 shall advise
Viatel of same and an explanation of the reasons for such delay. Following the
RFS Date, Level 3 and Viatel shall continue to meet on agreed upon regularly
scheduled dates for technical operation and review purposes.
8. USEFUL LIFE.
A. Determination. The Yellow System shall be retired when it has reached
the end of its Useful Life. The determination of the end of the Useful Life of
the Yellow System shall be made by Viatel as follows:
1) In the event that Viatel shall determine that the Useful Life
shall have ended, and Level 3 agrees, then the Useful Life
shall be deemed ended and (a) Viatel shall be deemed to have
abandoned the Purchased Fiber and any and all of its interest
in the Yellow System, (b) Viatel shall have no further right
to utilize the Purchased Fiber or any Capacity in any manner,
and (c) Viatel shall be relieved of its obligation to make
further AO&M Payments to Level 3. Notwithstanding that Viatel
shall have no further right to utilize the Purchased Fiber or
Capacity under this subsection I), Xxxxx 0 may not use the
Purchased Fiber or Capacity without the prior consent of
Viatel.
2) In the event that Viatel shall determine that the Useful Life
shall have ended, but Level 3 shall disagree, then the Useful
Life shall be deemed ended and (a) Viatel shall be deemed to
have abandoned the Purchased Fiber and any and all of its
interest in the Yellow System, (b) Viatel shall have no
further right to utilize the Purchased Fiber or any Capacity
in any manner, and (c) Viatel shall be relieved of its
obligation to make further AO&M Payments to Level 3.
Notwithstanding that Viatel shall have no further right to
utilize the Purchased Fiber or Capacity under this subsection
2), Xxxxx 0 may not use the Purchased Fiber or Capacity
without the prior consent of Viatel.
3) In the event Xxxxx 0 and ACII shall determine that the Useful
Life shall have ended, but Viatel shall disagree, then the
Useful Life shall be deemed to continue and until Viatel
determines that the Useful Life has ended, (a) Level 3 and
ACII shall have no further right to utilize any fibers or
capacity on the Yellow System, (b) Viatel shall assume
responsibility for all further administration, operation and
maintenance of the Yellow System and shall indemnify and hold
harmless Level 3 and ACII from any cost or expense associated
therewith, (c) Viatel shall be relieved of any further
obligation to make further AO&M Payments to Xxxxx 0, and (d)
Viatel shall lease from Xxxxx 0, and Viatel shall commence the
payment to Level 3 of fair market value rent and pro rata
operating expenses (including utilities) associated with,
those portions of the cable landing stations included as
components of the Yellow System. Notwithstanding that Level 3
and ACII shall have no further right to utilize any fibers or
capacity on the Yellow System under this subsection 3), Viatel
may not use those fibers or capacity previously used by Xxxxx
0 and ACII without their prior consent.
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4) In the event Level 3 shall determine that the Useful Life
shall have ended, but Viatel and ACII shall disagree, then the
Useful Life shall be deemed to continue and Level 3 shall have
no further right to utilize any fibers or capacity on the
Yellow System. In such event, Xxxxx 0 may, at its option and
with Viatel's approval, elect to assign all of its rights and
interests in the Yellow System (exclusive of those portions of
the cable landing stations included within the Yellow System)
to Viatel, which assignment may be subject to the approval of
ACII. If Xxxxx 0 elects, and Viatel approves, such option and
ACII consents to such assignment, then (a) Level 3 shall
assign all of its rights and interests in the Yellow System
(exclusive of those portions of the cable landing stations
included within the Yellow System) to Viatel, (b) Viatel shall
assume all of Level 3's duties, obligations and liabilities
with respect to the Yellow System (exclusive of those portions
of the cable landing stations included in the Yellow System)
and indemnify and hold harmless Level 3 in connection
therewith, and (c) Viatel shall lease from Xxxxx 0, and Viatel
shall commence the payment to Level 3 of fair market value
rent and pro rata operating expenses (including utilities)
associated with, those portions of the cable landing stations
included as components of the Yellow System. If Level 3 elects
not to assign its rights and interests or, if so elected, ACII
shall refuse to give its consent to such assignment, then
until such time as either Viatel shall determine that the
Useful Life has ended (in which case subsection 1) shall
apply) or ACII shall determine that the Useful Life has ended
(in which case subsection 3) shall apply), (i) the AO&M
Payments payable by Viatel shall be increased to reflect both
Viatel's and Level 3's pro rata share of the AO&M costs, and
(ii) Viatel shall lease from Xxxxx 0, and Viatel shall
commence the payment to Level 3 of fair market value rent and
pro rata operating expenses (including utilities) associated
with, those portions of the cable landing stations included as
components of the Yellow System. Notwithstanding that Level 3
shall have no further right to utilize any fibers or capacity
on the Yellow System under this subsection 4), Viatel may not
use those fibers or capacity previously used by Level 3
without the prior consent of Level 3.
5) Notwithstanding anything to the contrary contained in
subsections 3) and 4) above, Viatel's lease of those portions
of the cable landing stations included as components of the
Yellow System shall terminate and expire at (a) the end of the
Useful Life of the Yellow System, as determined by Viatel
pursuant to the above, or (b) the expiration of the
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twenty-five year useful life for which the Yellow System was
initially designed by the Suppliers, whichever occurs first.
B. Decommissioning Costs. Notwithstanding anything to the contrary
contained herein, the determination by either Viatel or Level 3 that the Useful
Life has ended shall not relieve such party from the obligation to pay, and such
party shall remain liable for the payment of, its pro rata share of the
reasonable costs of decommissioning, retrieval and/or recovery costs of the
Yellow System which may be required by applicable laws, prevailing industry
standards, or as mutually agreed by the parties (net of such party's pro rata
share of any salvage proceeds received in connection therewith), which
obligation and liability shall survive any termination of this Agreement;
provided, and notwithstanding the foregoing, Viatel shall have no liability
under this Section 8B if this Agreement terminates pursuant to Sections l2D or
12E.
9. APPROVALS; LICENSES.
A. Permits. The performance of this Agreement by each party hereto is
contingent upon the obtaining and continuance of such approvals, consents,
governmental authorizations, licenses and permits (the "Permits") as may be
required or reasonably deemed necessary by such party for performance by a party
hereunder and as may be satisfactory to it. Viatel shall be responsible for
obtaining or modifying any Permit necessary to authorize or allow Viatel to land
and/or operate the Purchased Fiber in the cable landing stations. Level 3 agrees
to cooperate with any such modification, without cost to Level 3. Level 3 and
Viatel each covenant and agree to use commercially reasonable efforts to acquire
or otherwise obtain, upon commercially reasonable terms, all necessary Permits
on or before the RFS Date.
B. Contingency. The performance of this Agreement by Level 3 is contingent
upon obtaining, and the continuance of, such Permits as may be required or
reasonably deemed necessary by Xxxxx 0 for performance by all Suppliers. The
parties shall use reasonable efforts to obtain and continue, and to have
continued, such Permits. No license under patent is granted by Level 3 or shall
be implied or arise by estoppel in Viatel's favor with respect to any apparatus,
system or method used by Viatel in connection with the use of the Purchased
Fiber sold hereunder.
10. DISCLAIMER.
A. No Warranties. Level 3 has entered into the System Agreements to cause
the Yellow System to be placed into operation on the scheduled RFS Date. Neither
Level 3, nor any of its subsidiaries, warrants or guarantees that the RFS Date
for the Yellow System will occur, nor that the Upgrades will occur. VIATEL
ACKNOWLEDGES AND AGREES THAT LEVEL 3 AND ITS SUBSIDIARIES ARE NOT LIABLE FOR A
SUPPLIER'S FAILURE TO PERFORM; PROVIDED, THE FOREGOING SHALL NOT LIMIT OR IMPAIR
VIATEL'S RIGHTS AND REMEDIES UNDER SECTIONS 3A, 3B, 4D, 10B AND 12D, AND UNLESS
SPECIFICALLY SET FORTH IN THIS AGREEMENT, ALL WARRANTIES, EXPRESSED OR IMPLIED,
INCLUDING BUT NOT LIMITED TO, THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE ARE SPECIFICALLY DISCLAIMED. Nothing contained herein shall
limit or impair Viatel's acceptance rights under Section 2D above.
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B. Enforcement of Supplier Obligations. Level 3 shall diligently enforce
any obligations and warranties of Suppliers, and any benefits or payments
received in respect thereof shall be shared proportionately with Viatel.
11. LIMITATIONS OF LIABILITY.
A. Damages. In no event shall Viatel or Level 3 be liable to the other for
consequential, incidental, indirect or special damages, including, but not
limited to, loss of revenue, loss of business opportunity, or the costs
associated with the use of external restoration facilities, including, without
limitation, for any loss or damage sustained by reason of any failure in or
breakdown of the Yellow System or the facilities associated with the Yellow
System, whatever the cause and however long it shall last.
B. Force Majeure. Neither party hereto shall be liable to the other for
any delay, loss or damage which may be suffered by reason of any circumstances
beyond the reasonable control of, and not due to the fault or negligence of,
such party.
12. CONSTRUCTION OF THE YELLOW SYSTEM.
A. Suppliers. Level 3 agrees that it shall not suspend the work under the
System Agreements without the approval of Viatel, which approval shall not be
unreasonably withheld. Level 3 further agrees that it shall not modify any
System Agreement without the approval of Viatel (which shall not be unreasonably
withheld) if the effect of such modification would result in a delay in the
delivery of the Yellow System beyond the date referenced in Section 12D, change
the location of either cable landing station, or change the technical aspects of
the Yellow System.
B. RFS Date. Level 3 shall use reasonable efforts to cause the RFS Date
for the Purchased Fiber to occur no later than [REDACTED].
C. Upgrades. Level 3 shall use reasonable efforts to cause the First
Upgrade to be completed by [REDACTED]. The Second Upgrade and any subsequent
upgrades shall be initiated as and when Xxxxx 0 deems appropriate.
D. Termination For Late Delivery. In the event Suppliers shall fail to
deliver the Yellow System to Level 3 in accordance with the System Agreements on
or before [REDACTED] (as extended by any events of force majeure as described in
the System Agreements) and the RFS Date has therefore not occurred, then Viatel
shall have the right to terminate this Agreement whereupon Level 3 shall refund
to Viatel that portion of the Purchase Price theretofore paid by Viatel,
together with a proportionate share of any liquidated damages Level 3 may have
received from any Suppliers. Any termination of this Agreement by Viatel under
this Section 12D shall also result in the automatic termination of the Capacity
and Dark Fiber IRU Agreement and the Colocation Agreement and in such event
Level 3 shall refund to Viatel that portion of the Purchase Price (as defined in
the Capacity and Dark Fiber IRU Agreement) and that portion of the License
Payment (as defined in the Colocation Agreement) which may have been paid by
Viatel to Level 3 thereunder prior to such termination.
12
E. Termination For Convenience. In the event Level 3 shall terminate any
material System Agreement "For Convenience" (to the extent permitted by such
System Agreement), this Agreement shall terminate and Level 3 shall refund to
Viatel that portion of the Purchase Price theretofore paid by Viatel. Any such
termination by Level 3 shall also terminate the Capacity and Dark Fiber IRU
Agreement and the Colocation Agreement and in such event Level 3 shall refund to
Viatel that portion of the Purchase Price (as defined in the Capacity and Dark
Fiber IRU Agreement) and that portion of the License Payment (as defined in the
Colocation Agreement) which may have been paid by Viatel to Level 3 thereunder
prior to such termination.
13. [REDACTED]
14. SETTLEMENT OF DISPUTES.
A. Amicable Resolution. The parties shall endeavor to settle amicably by
mutual discussions any disputes, differences, or claims whatsoever related to
this Agreement. In the event that any dispute cannot be resolved through such
efforts, then either party shall have the right to declare a deadlock (by
delivery of written notice to the other party) and thereby invoke the escalation
procedures set forth below. After delivery of a notice of deadlock, the parties
shall, within fourteen (14) days after delivery of the notice, escalate the
dispute in the following manner: first, to the senior vice president or senior
management personnel for each party's submarine network development/construction
group; second, to the executive vice president or senior management personnel
within the office of and reporting directly to the Chief Executive Officers of
the public company parent of each party (the "Executive Level"); and, finally
(failing resolution at either level above), to the Chief Executive Officers
("CEO") of the public company parent of each party. Each party agrees to use
reasonable efforts to make necessary management-level personnel reasonably
available for the timely resolution of same, and any potential impacts on the
operation or construction of the Yellow System.
B. Remedies. In the event that the dispute is not resolved after
presentation to the CEOs of the parties, then either party may exercise any
remedy legally available. The parties agree that any action or proceeding
relating to this Agreement shall be held in the U.S. District Court for the
Southern District of New York or state courts located in the State of New York.
The parties further agree that such courts shall have exclusive jurisdiction in
any such action or proceeding.
15. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS XX XXX XXXXX XX XXX XXXX, XXXXXX XXXXXX OF AMERICA.
13
16. WAIVER OF IMMUNITY.
The parties hereto acknowledge that this Agreement is commercial in
nature, and each party hereto expressly and irrevocably waives any claim or
right which it may have to immunity (whether sovereign immunity, act of state or
otherwise) for itself or with respect to any of its assets in connection with an
arbitration, arbitral award or other proceeding to enforce this Agreement,
including, without limitation, immunity from service of process, immunity of any
of it s assets from pre or post judgement attachment or execution and immunity
from the jurisdiction of any court or arbitral tribunal.
17. EXPORT CONTROL.
The parties hereto acknowledge that to the extent any products, software
or technical information provided under this Agreement are or may be subject to
any applicable export laws and regulations, the parties hereto agree that they
will not use, distribute, transfer or transmit the products, software or
technical information (even if incorporated into other products) except in
compliance with such export laws and regulations (or licenses or orders issued
pursuant thereto). If requested by either party hereto the other party agrees to
sign all necessary export related documents as may be required to comply
therewith.
18. REPRESENTATIONS; INDEMNITY.
A. Level 3. Level 3 hereby represents and warrants to Viatel that (i) each
Level 3 entity is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its origin; (ii) the execution,
delivery and performance of this Agreement by Level 3 has been duly authorized
by all necessary corporate action on the part of Level 3 and this Agreement is a
valid, binding and enforceable obligation of Level 3 enforceable in accordance
with its terms; and (iii) the execution, delivery and performance of this
Agreement by Xxxxx 0 does not violate, conflict with or constitute a breach of,
the organizational documents or any order, decree or judgment of any court,
tribunal or governmental authority binding on Level 3.
B. Viatel. Viatel hereby represents and warrants to Level 3 that (i)
Viatel is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization; (ii) the execution, delivery
and performance of this Agreement by Viatel has been duly authorized by all
necessary corporate action on the part of Viatel and this Agreement is a valid,
binding and enforceable obligation of Viatel enforceable in accordance with its
terms; and (iii) the execution, delivery and performance of this Agreement by
Viatel does not violate, conflict with or constitute a breach of, the
organizational documents or any order, decree or judgment of any court, tribunal
or governmental authority binding on Viatel.
C. Governmental Requirements and Compliance. Each party hereby represents
and warrants to the other party that it has obtained or will obtain all
approvals, consents, governmental authorizations, licenses and permits as may be
required to enter into this Agreement, and sell or purchase, as the case may be,
the Purchased Fiber. Each party covenants and agrees to comply with all
applicable laws, rules and regulations respecting its execution and performance
of this Agreement, including the use and operation of its respective interest in
the Yellow System.
14
D. Survival. The representations and warranties in this Agreement shall
survive the execution and delivery of this Agreement.
E. Violations by Viatel. Subject to the limitations of liability set forth
in this Agreement, Viatel agrees to indemnify and hold harmless Level 3 and
their respective officers, directors, employees, agents and representatives from
and against any loss, damage, expense or cost arising out of or in connection
with: (i) any breach or violation by Viatel of applicable law or governmental
regulation or nonpayment of taxes payable by Viatel; and (ii) any claims of
whatever nature by third parties with respect to the services provided by
Viatel.
F. Violations by Level 3. Subject to the limitations of liability set
forth in this Agreement, Level 3 agrees to indemnify and hold harmless Viatel
and its officers, directors, employees, agents and representatives from and
against any loss, damage, expense or cost arising out of or in connection with:
(i) any breach or violation by Xxxxx 0 of applicable law or governmental
regulation or nonpayment of taxes payable by Level 3; and (ii) any claims of
whatever nature by third parties with respect to the services provided by Level
3.
19. RELATIONSHIP OF THE PARTIES.
This Agreement shall not form a joint venture or partnership or similar
business arrangement between the parties hereto, and nothing contained herein
shall be deemed to constitute a partnership or joint venture or similar business
arrangement.
20. NO THIRD PARTY BENEFICIARIES.
This Agreement does not provide and is not intended to provide third
parties (including, but not limited to, customers of Viatel) with any remedy,
claim, liability, reimbursement, cause of action, or any other right.
21. ASSIGNMENT.
A. Limitations. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns; provided that, except as provided in
paragraphs B and C of this Section, neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned, transferred or
otherwise disposed of or delegated by either party hereto without the prior
written consent of the other party, which consent shall not be unreasonably
withheld.
B. Permitted Assignments. Each party shall be permitted, without the
consent of the other party, to assign, transfer or otherwise dispose of any or
all of their rights hereunder and delegate any or all of their obligations
hereunder to any present or future affiliated entity of the transferring party,
or to an entity controlled by, under the same control as, or controlling, the
transferring party, or to an entity purchasing all or substantially all of the
assets of such party, or to an entity into which the transferring party may be
merged or consolidated. The transferring party shall give the other parties
hereto notice of any such assignment, transfer or other disposition or any such
delegation. No such transfer by a party shall release or discharge such party
from its duties and obligations hereunder.
15
C. Permitted Transferees. Nothing contained herein shall prohibit either
party from leasing, licensing, or otherwise granting rights in fibers or
capacity to third parties, provided no such lease, license or other grant of
rights shall release or discharge a party from its duties or obligations
thereof.
D. Breach. Any assignment, transfer or disposition of this Agreement not
in compliance with this Agreement shall be a material breach hereof.
22. NOTICES.
A. Service. Whenever under the provisions of this Agreement it shall be
necessary or desirable for one party to serve any notice, request, demand,
report or other communication on another party, the same shall be in writing and
shall be served (i) personally; (ii) by independent, reputable, overnight
commercial carrier; or (iii) by facsimile transmission (A) where the
transmitting party includes a cover sheet identifying the name, location and
identity of the transmitting party, the phone number of transmitting device, the
date of transmission and the number of pages transmitted (including the cover
page), (B) where the transmitting device or receiving device records
verification of receipt and the date and time of transmission receipt and the
phone number of the other device, and (C) where the facsimile transmission is
immediately followed by service of the original of the subject item in the
manner provided in clause (i), or (ii) hereof; addressed as follows:
1) If to Level 3:
Level 3 International, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx Xx 0XX
Xxxxxxx
Attn: Legal Department
Fax No. 00-000-000-0000
With a copy to:
Level 3 International, Inc.
0000 Xxxxxxxx Xxxx.
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Fax No. 000-000-0000
2) If to Viatel:
Viatel, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
Fax No. 000-000-0000
B. Change/Delivery. Any party may, from time to time, by notice in writing
served upon the other party as aforesaid, designate an additional and/or a
different mailing address or an additional and/or a different person to whom all
16
such notices, requests, demands, reports and communications are thereafter to be
addressed. Any notice, request, demand, report or other communication served
personally shall be deemed delivered upon receipt, if received by independent
courier shall be deemed delivered on the date of receipt as shown by the
addressee's registry or certification receipt or on the date receipt at the
appropriate address, as shown on the records or manifest of the independent
courier, and if served by facsimile transmission shall be deemed delivered on
the date of receipt as shown on the received facsimile (provided the original is
thereafter delivered as aforesaid).
22. WAIVER.
A. Non-waiver. No waiver by any party of any right or remedy under this
Agreement shall be deemed to be a waiver of any other or subsequent right or
remedy under this Agreement. The consent by one party to any act by the other
party requiring such consent shall not be deemed to render unnecessary the
obtaining of consent to any subsequent act for which consent is required,
regardless of whether similar to the act for which consent is given.
B. Writing. No waiver of any term, covenant or condition of this Agreement
shall be valid unless in writing and signed by the obligee party.
C. Limited. The acceptance of any payment or reimbursement by a party
shall not waive any preceding or then-existing breach or default by the other
party of any term, covenant or condition of this Agreement, other than the other
party's prior failure to pay the particular amount or part thereof so accepted,
regardless of the paid party's knowledge of such preceding or then-existing
breach or default at the time of acceptance of such payment or reimbursement.
24. SEVERABILITY.
If any provision of this Agreement is found by an arbitral, judicial or
regulatory authority having jurisdiction to be void or unenforceable, such
provision shall be deemed to be deleted from this Agreement and the remaining
provisions shall continue in full force and effect.
25. HEADINGS.
The Section headings of this Agreement are for convenience of reference
only and are not intended to restrict, affect or influence the interpretation or
construction of provisions of such Section.
26. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which when
executed and delivered shall be deemed an original. Such counterparts shall
together (as well as separately) constitute one and the same instrument.
27. ENTIRE AGREEMENT.
This Agreement together with all attachments hereto supersedes all prior
oral or written understandings between the parties hereto and constitutes the
17
entire agreement with respect to the subject matter herein. This Agreement shall
not be modified or amended except by a writing signed by authorized
representatives of the parties hereto.
28. PUBLICITY AND CONFIDENTIALITY.
The parties agree to be bound be the terms of a Non-Disclosure Agreement
between their respective affiliates dated 17th November 1999, the continuing
efficacy of which, its terms being unmodified herein, is hereby ratified and
confirmed by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
LEVEL 3 LANDING STATION INC.
By /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
LEVEL 3 COMMUNICATIONS LIMITED
By /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
LEVEL 3 (BERMUDA) LIMITED
By /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
VIATEL, INC.
By /s/ Xxxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
Exhibits
A - General System Description
------------------------------
B - Technical Specifications
----------------------------
C - AO&M Plan Components
------------------------
18
EXHIBIT "A"
SYSTEM DESCRIPTION
[REDACTED]
EXHIBIT "B"
TECHNICAL SPECIFICATIONS
[REDACTED]
EXHIBIT "C"
OPERATIONS, ADMINISTRATION & MAINTENANCE COMPONENTS
[REDACTED]
