1
EXHIBIT 10.17
CONFIDENTIAL TREATMENT
Agreement on the Utilisation of Fibre Optic Cables
and Infrastructure
("LWL Agreement")
between
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR
CONFIDENTIAL TREATMENT##
- "GVS" -
and
Hermes Europe Railtel B.V.
Xxxxxxxxxxxx 00
XX - 0000 XX Xxxxxxxxx, Xxxxxxxxxxx
- "HER" -
2
TABLE OF CONTENTS
INTRODUCTION
1. SUBJECT MATTER OF THE UTILISATION AGREEMENT 1
1.1 FIBRE OPTIC ROUTES (LWL ROUTES) 1
1.2. USING THE STATIONS, / SYSTEMS ENGINEERING LOCATIONS 2
1.2.1 FINDING LOCATIONS 2
1.2.2 SETTING UP SYSTEMS ENGINEERING LOCATIONS 3
1.2.3 CLOSING DOWN SYSTEMS ENGINEERING LOCATIONS 4
1.3 CONTENT AND SCOPE OF THE RIGHT OF UTILISATION 4
1.3.1 LWL ROUTES 4
1.3.2 OPERATION, REPAIRS AND ADMINISTRATION 4
1.4 LAYING CABLES AT STATIONS 5
1.5 ACCESS TO STATION PREMISES 6
2. COMPLETION AND ACCEPTANCE OF THE LWL ROUTES 5
2.1 COMPLETION DATES 5
2.2 TIME SCHEDULE 5
2.3 INFORMATION ON THE PROGRESS OF THE PROJECT 6
2.4 ACCEPTANCE PROCEDURE ON COMPLETION OF THE LWL ROUTES 6
2.5 DOCUMENTATION 7
2.6 FAILURE TO COMPLY WITH THE COMPLETION DATES AND
TECHNICAL DEFECTS, NOTICE OF TERMINATION 7
2.6.1 BASIC PRINCIPLES 7
2.6.2 DAMAGES 8
2.6.3 HER'S DUTY TO COOPERATE 8
3. REMUNERATION 10
3.1 THE USER FEE AND THE ADJUSTMENT OF THE USER FEE 10
3.1.1 THE USER FEE 10
3.1.2 MARKETING THE ROUTES TO THIRD PARTIES 10
3.1.3 ADJUSTMENT OF THE USER FEE 11
3.2 ADVANCE PAYMENTS 11
3.3 VALUE ADDED TAX 12
3.4 DUE DATES FOR PAYMENT 12
3.5 BANK ACCOUNTS 12
3.6 LATE PAYMENT 13
4. INDEPENDENCE OF THE LWL ROUTES 13
5. TERMINATION UNTIL THE TIME THAT THE ROUTES ARE
MADE AVAILABLE/ UNTIL ACCEPTANCE 14
5.1 TERMINATING THE AGREEMENT IN RESPECT OF ROUTES WHICH 14
HAVE BEEN NEWLY BUILT
5.2 TERMINATION IF IT SHOULD NOT BE POSSIBLE TO FIND 14
SYSTEMS ENGINEERING LOCATIONS
3
6. AVAILABILITY OF THE ROUTES AFTER ACCEPTANCE 15
6.1 PERMISSIBLE DOWNTIMES 15
6.2 PUTTING THE CABLE FACILITIES OUT OF OPERATION 15
6.3 DOWNTIMES, TIME REQUIRED TO RECTIFY FAULTS, SERIOUS DAMAGE 16
6.3.1 EXCEEDING THE PERMISSIBLE DOWNTIMES 16
6.3.2 INTERRUPTIONS TO OPERATIONS CAUSED BY GVS 17
6.3.3 INTERRUPTIONS TO OPERATIONS CAUSED BY HER 17
6.3.4 SERIOUS DAMAGE TO / DESTRUCTION OF THE ROUTES 17
7. LIABILITY 18
8. FORCE MAJEURE 18
9. SCHEDULES TO THIS AGREEMENT 18
10. THE DURATION OF THE AGREEMENT / OPTION TO 18
PROLONG THE AGREEMENT
11. BURDENS IMPOSED BY TAXIES AND LEVIES 20
12. ECONOMIC FEASIBILITY 20
13. ASSIGNMENT OF A PARTY'S CONTRACTUAL RIGHTS 20
AND OBLIGATIONS TO THIRD PARTIES
14. CONFIDENTIALITY 20
15. SEVERABILITY 22
16. ADDITIONS AND AMENDMENTS TO THIS AGREEMENT 22
17. ARBITRATION CLAUSE 22
18. PROPER LAW / LANGUAGE OF BUSINESS 23
19. LIST OF SCHEDULES TO THIS AGREEMENT 23
4
CONFIDENTIAL TREATMENT
1. SUBJECT MATTER OF THE UTILISATION AGREEMENT
The subject matter of this Agreement is that GVS shall make the LWL routes
which are specified in greater detail below available to HER for the purpose of
telecommunications operations and shall provide HER with the possibility of
freely using such routes on a long-term basis.
As the LWL routes which are the subject of this Agreement were not yet ready on
the date of its execution, GVS shall first of all construct these LWL routes.
GVS particularly undertakes to find and provide the locations which are
required to accommodate system equipment for the specified purposes and to set
up systems engineering locations in the manner described in Schedule 4. After
the LWL routes have been made available, GVS, as lessor of the LWL routes,
shall then be responsible for their upkeep and especially for the maintenance
work specified in Schedule 3.
1.1 FIBRE OPTIC ROUTES (LWL ROUTES)
The LWL cables to be laid for the purpose of constructing the routes shall be
laid in a cable duct in the shelter belts of the natural gas pipelines
belonging to GVS. The LWL cables consist of ##MATERIAL OMITTED AND SEPARATELY
FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## of which HER shall make
available to GVS for service purposes in connection with the LWL cable.
Separate LWL cables shall be laid for HER.
The LWL routes to be provided by GVS shall run along the following GVS
pipelines:
* ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR
CONFIDENTIAL TREATMENT## (LWL route 1);
* ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR
CONFIDENTIAL TREATMENT## (LWL route 2). LWL route 2 shall be divided
into two parts: the first part as far as ##MATERIAL OMITTED AND
SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## shall be
designated "LWL Xxxxx 0x" and the second part "LWL Route 2b".
The actual direction of the routes is set out in Schedule 1 (General Map) and
in Schedule 2 (List of the LWL Routes with Their Approximate Lengths). In case
of doubt the List of LWL routes (Schedule 2) shall have priority. The final
lengths are evident from the planned length of the cable duct (deep-level
length including points of intersection). GVS shall calculate these lengths
after constructing the relevant LWL routes and shall provide HER with suitable
evidence of these lengths. These final lengths, rounded up or down to complete
kilometres, shall form the basis for the calculation of the user fee.
Initially only LWL route 1 shall be subject to this Agreement.
5
CONFIDENTIAL TREATMENT
The parties have come to the following arrangement regarding LWL route 2:
HER shall be entitled to make a written declaration including this route in
this Agreement. This route shall then become subject to this Agreement. Such a
declaration must have reached GVS by no later than 15 October 1997.
The technical requirements which the required LWL routes must fulfil and the
specification for the LWL cable and the connector of the long-distance cable
are set out in Schedule 3 (Technical Conditions for the Utilisation of Fibre
Optic Cables and Basic Technical Specifications for Systems Engineering
Locations). The LWL fibres shall end at the connector of the long-distance
cable at GVS's cable terminal.
During the construction phase GVS must take account of the branching points
(branch sleeves) and connection points in its planning. HER shall make these
items known beforehand. GVS shall carry out such work in return for the
reimbursement of the costs on the basis of the actual work done at the usual
rates (non-recurring payments). It shall be possible for HER to add additional
exit points at a later date. Such work shall be carried out by GVS at HER's
request, while HER shall bear the costs in this connection, in as far as this
is not in contradiction with any legal or planning aspects.
1.2. USING THE STATIONS, / SYSTEMS ENGINEERING LOCATIONS
1.2.1 FINDING LOCATIONS
To ensure the operation of the LWL routes, HER requires systems engineering
locations which should be situated at distances of approx. ##MATERIAL OMITTED
AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## km along the
relevant LWL route.
There is a particular need for systems engineering locations at the following
four places along the LWL route, as specified in Schedule 2:
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT##
GVS shall make every effort to provide or find the required locations for
systems engineering equipment at the places set out above. HER shall bear the
costs thereby incurred.
For this purpose GVS shall make available its own station premises which are
its property. These stations shall then be used to accommodate the transmission
equipment in return for an adequate fee, should this be in HER's interests and
should it not be to the serious detriment of GVS's interests. GVS shall not be
entitled to claim the reimbursement of expenses incurred in searching for
locations in as far as it makes its own stations available.
6
CONFIDENTIAL TREATMENT
At present GVS owns the following premises where areas are available for use
systems engineering locations:
Along LWL route 1:
* ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR
CONFIDENTIAL TREATMENT## (compressor station)
* ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR
CONFIDENTIAL TREATMENT## (control point for communication engineering)
* ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR
CONFIDENTIAL TREATMENT## (compressor station)
Along LWL route 2:
* ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR
CONFIDENTIAL TREATMENT## (control point)
Should these locations should not be suitable for the accommodation of systems
engineering equipment, particularly if a reason for their lack of suitability
is that the maximum distances between the systems engineering locations is
exceeded, GVS shall make every endeavour to provide or obtain other suitable
accommodation possibilities or surfaces for the system equipment. HER shall
bear any costs incurred in doing so. The extent of the efforts which GVS shall
make in this respect is set out in Schedule 4 to this Agreement.
The basic technical specifications for the systems engineering locations are
set out in Schedule 3. The detailed specifications required for evidence shall
be handed over to GVS at the dates set out in the Time Schedule (Schedule 5).
At HER's request GVS shall, if necessary, find or set up other or additional
systems engineering locations along the LWL routes. These shall locations that
meet the specifications set out in Schedule 3 and 4 or other systems
engineering plants. HER shall bear the costs incurred.
GVS shall make its contacts available for the connections that HER requires to
the city centres.
1.2.2 SETTING UP SYSTEMS ENGINEERING LOCATIONS
On HER's behalf GVS shall establish four systems engineering locations. This
shall include the necessary infrastructure. HER shall bear the costs incurred
in doing so. The requirements which the establishment of such systems
engineering locations should meet are set out in detail in Schedules 3 and 4 to
this Agreement. HER shall provide GVS with turn-key containers for the purpose
of setting up systems engineering locations. These containers are and shall
remain the property of HER. HER shall provide GVS with the turn-key containers
by no later than 10 November 1997. They shall be delivered
7
CONFIDENTIAL TREATMENT
free of charge to the building site, including a call off period of 5 days and
transport to the relevant location. The containers shall be set up on GVS's
land in such a way that they are removable at any time. They shall be set up
only for the duration of this Agreement pursuant to section 95, paragraph 1 of
the German Civil code (BGB).
GVS shall provide HER with engineering services for systems engineering
locations, as set out in Schedule 4. GVS shall charge HER for these services on
the basis of the effort involved.
1.2.3 CLOSING DOWN SYSTEMS ENGINEERING LOCATIONS
HER may require at any time that systems engineering locations be closed down
and the LWL cable connected up via the former location. HER shall bear the
costs in this connection. GVS shall be entitled to restore the location to its
original condition HER shall bear the costs incurred in doing so.
1.3 CONTENT AND SCOPE OF THE RIGHT OF UTILISATION
1.3.1 LWL ROUTES
GVS shall provide HER with the LWL routes which are the subject matter of this
Agreement and shall also provide HER with systems engineering locations for
HER's free and unrestricted use for purposes of telecommunications. This shall
particularly include the right allow third parties the full or partial use of
the LWL route or its transmission capacity for purposes of telecommunications.
Section 549, paragraph 1 of the German Civil Code shall not apply. GVS shall
allow HER to exercise its rights of way in respect of the LWL cables which are
to be made available.
HER shall have functional control over the LWL route, as defined in the Law on
Telecommunications (TKG).
1.3.2 OPERATION, REPAIRS AND ADMINISTRATION
Within the framework of its obligations as lessor GVS shall be responsible for
repairing the LWL cables in the event of faults, in each case up to the
connector of the long-distance cable. GVS shall also be responsible for
carrying out any modification work on the LWL cables. GVS shall set up or have
a third party set up an emergency service to be on call 24 hours a day.
In addition to this, GVS, within the framework of its obligations as lessor,
undertakes to take on the responsibility for the upkeep (maintenance and
repairs) of the system engineering locations ("first-level maintenance"), also
to the limited extent set out in Schedule 6 to this Agreement and for the
duration of the time that these locations are used by HER. Should more than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT## hours' work (including travelling times) per year
8
CONFIDENTIAL TREATMENT
be required for first-level maintenance, GVS shall charge for the maintenance
services separately and on an hourly basis as from the ##MATERIAL OMITTED AND
SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## hour.
As regards any possible damage to the LWL cable, GVS undertakes to adhere to
the standard repair times for the standard faults, both of which are set out in
Schedule 7.
GVS shall notify HER of all plans for any work which will lead interruptions in
the LWL cable on which the LWL routes are based. Should it be necessary to
divert any cables GVS shall also ensure that the LWL cable is also diverted. In
addition to this, GVS shall, if possible, also notify HER in good time of any
other work in the shelter belt of the gas pipelines which could hinder the
functioning of the LWL cable. The deadlines for such notification and their
required contents are set out in Schedule 3 to this Agreement.
GVS shall ensure the proper administration and enforcement of all rights. This
includes technical administration, such as responding to questions from third
parties in connection with third-party lines. GVS shall have the particular
responsibility of ensuring that rights of way are obtained in order to lay and
operate fibre optic cables for purposes of telecommunications, with the
possibility of leasing them and subleasing them to third parties.
GVS shall be entitled to entrust third parties with the duties set out above.
1.4 LAYING CABLES AT STATIONS
HER shall be entitled to lay cables under the land of the stations which are
owned by GVS, up as far as the boundary of the property. The cables should not
impair the functioning and the safety of GVS's natural gas pipelines nor of the
communication and control facilities which have been installed. In this respect
the consent of GVS must be obtained for the route along which the cables are to
be laid.
GVS shall make every effort to support HER in acquiring rights of way beyond
the boundaries of its property. HER shall bear the costs incurred in this
respect.
1.5 ACCESS TO STATION PREMISES
GVS shall grant HER's specialised manpower and, if applicable, the specialised
manpower of companies to which HER farms out work access to the locations used
by HER and HER's customers, after such staff have received the relevant
instructions and after prior appointment by telephone. This shall apply in as
far as these locations are the property of GVS. If necessary, this right of
access shall also apply outside GVS's normal business hours. Prior appointment
by telephone shall only be required if HER's manpower or the manpower of
companies to which HER farms out
9
CONFIDENTIAL TREATMENT
work enter the premises themselves or have to cross over the premises,
particularly when there are no separating fences.
2. COMPLETION AND ACCEPTANCE OF THE LWL ROUTES
2.1 COMPLETION DATES
The LWL routes, including the systems engineering locations and the remaining
infrastructure which form the subject matter of this Agreement, as set out in
clause 1 and its paragraphs, are to be made available to HER for acceptance
tests (in the form of measurements) by the following dates:
LWL route 1: To be completed for acceptance test by: ##MATERIAL OMITTED
AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT##
LWL route 2: To be completed for acceptance test by: ##MATERIAL OMITTED
AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT##
2.2 TIME SCHEDULE
A time schedule forms Schedule 5 to this Agreement. This Schedule contains a
list of the most important dates for the fulfilment of the obligations which
are the subject matter of this Agreement.
2.3 INFORMATION ON THE PROGRESS OF THE PROJECT
GVS shall immediately inform HER if there are any signs of difficulty in
constructing the route which could influence the completion dates set out in
clause 2.1.
2.4 ACCEPTANCE PROCEDURE ON COMPLETION OF THE LWL ROUTES
By giving at least ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR
CONFIDENTIAL TREATMENT## notice GVS shall notify HER that the relevant LWL
route is ready to be made available and that an acceptance test (measurement)
can be carried out. In this notification GVS shall indicate the date for such a
measurement. The acceptance test (measurement) set out in the specifications in
the Technical Conditions (Schedule 3) shall then be carried out on the
specified date. The test certificates shall be handed over to HER.
If the LWL route meets the requirements set out in the Technical
Specifications, HER shall notify GVS of this within ##MATERIAL OMITTED AND
SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## days of receiving
the test certificates. The route shall be deemed made available when such
notification has been received.
10
CONFIDENTIAL TREATMENT
Should HER receive the test certificates and not submit a complaint regarding
the results of the acceptance test within a time limit of ##MATERIAL OMITTED
AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## days, the LWL
route shall be deemed made available when this time limit has expired.
As from the time that the route has been made available, GVS shall be
responsible for keeping it in functioning order and for its upkeep. HER shall
be obliged to pay the user fee specified in clause 3.1.
If the LWL route does not meet the requirements set out in the Technical
Specifications and should HER submit a complaint regarding the result of the
acceptance test, the route shall be regarded as not having been made available.
If the acceptance test cannot be carried out within ##MATERIAL OMITTED AND
SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## days after GVS
gives punctual notification that the LWL route is ready to be made available
and should this be due to reasons which are the responsibility of HER, the LWL
route shall be deemed made available and handed over after this time has
expired.
Each party shall separately bear the costs it incurs in carrying out the first
acceptance test and recording of the results in a test certificate. GVS shall
be particularly responsible for bearing the costs of the technical part of the
acceptance test.
Should the acceptance test initially show that the LWL route is not fit to be
put into operation and should HER notify GVS of this fact in good time, GVS
shall be obliged to immediately make the LWL route fit to be put into
operation.
Should this be the case and GVS has already started work on making the LWL
route fit for operation, GVS shall immediately notify HER in writing as soon as
such work has been completed. Then the aforesaid procedure shall be repeated at
GVS's expense.
As from the time that the route is made available, GVS shall guarantee that the
rights required in order to use the LWL route for purposes of
telecommunications, including the right to make the route completely or partly
available to third parties, are sufficiently protected against any opposing
interests of the owners of the land. GVS shall particularly guarantee that any
compensation payments that may be due pursuant to section 57 of the Law on
Telecommunications have been paid. These rights must be sufficiently protected
even if GVS partly or completely ceases its gas supply operations on the LWL
routes.
GVS shall also be responsible for obtaining any official approvals which are
required in order to construct and operate the LWL routes. This shall
11
CONFIDENTIAL TREATMENT
particularly include approval or permission in connection with crossing traffic
highways and laying cables along or under traffic highways, including
agreements for the utilisation of highways with those affected by the burden of
the building work. It shall also include approval or permission in connection
with crossing waterways or setting up facilities in or near rivers and lakes
and for work in areas susceptible to flooding or work which could have an
effect on the water economy and approvals which could be necessary in
connection with the German Nature Conservation Act and the nature conservation
and landscape conservation laws of the German Lander, or in connection with
building or planning laws or laws on regional planning.
2.5 DOCUMENTATION
The contracting parties shall provide each other with all the necessary
information and documentation required for planning and implementing the
project and for the operation and upkeep of the routes.
GVS shall allow HER to inspect the plans for the route in as far as this should
be necessary for their subsequent use of the part of HER. HER shall provide GVS
with the documentation and information which GVS requires in order to perform
its obligations under this Agreement.
When the routes are made available, GVS shall provide HER with the plans for
the entire network of LWL routes. These plans shall be drawn up on a scale of
1:25,000 and on a scale of 1:1,000/1:2,000 for the areas around connection
points.
2.6 FAILURE TO COMPLY WITH THE COMPLETION DATES AND TECHNICAL DEFECTS,
NOTICE OF TERMINATION
2.6.1 BASIC PRINCIPLES
Should GVS fail to make the routes available on schedule or fail to make them
available in a proper condition, GVS shall pay HER the liquidated damages set
out in clause 2.6.2. GVS's contractual and legal liability to make the routes
available in good time and in proper condition shall be limited to these
penalties.
Should the routes not be made available or not be made available on schedule
due to failure to obtain rights of way or official approvals or failure to
obtain such rights of way or official approvals in good time, GVS shall assume
no liability or warranty and shall not be liable to pay damages.
Furthermore, should the completion of LWL route 1 be delayed by more than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT## days for reasons which are the responsibility of GVS, HER shall be
entitled to withdraw from this Agreement and to demand the reimbursement of the
advance payment which has already been remitted.
12
CONFIDENTIAL TREATMENT
HER shall not be entitled to withdraw from this Agreement if the completion
deadline is exceeded due to failure to obtain rights of way or official
approvals or due to failure to obtain such rights of way or official approvals
in good time.
The aforesaid arrangements shall also apply if an LWL route has technical
defects at the time that it is made available, as long as the technical defects
are so minor that all LWL fibres are available and the transmission properties
of the LWL fibres diverge from the specifications to such a minor extent that
the LWL route can be used for its intended purpose.
The defects shall be deemed minor if they are not of such as nature as to
prevent the routes being made available and accepted (clause 2.4). In this
event GVS shall rectify these defects within four weeks.
2.6.2 DAMAGES
The damages which GVS shall be obliged to pay to HER in accordance with clause
2.6.1 shall be as follows:
Delay (in days) DM/calendar date/LWL route
--------------- --------------------------
for LWL route 1
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A
REQUEST FOR CONFIDENTIAL TREATMENT## REQUEST FOR CONFIDENTIAL TREATMENT##
more than ##MATERIAL OMITTED AND SEPARATELY FILED ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A
UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## REQUEST FOR CONFIDENTIAL TREATMENT##
for LWL routes 2a and 2b
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A
REQUEST FOR CONFIDENTIAL TREATMENT## REQUEST FOR CONFIDENTIAL TREATMENT##
more than ##MATERIAL OMITTED AND SEPARATELY FILED ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A
UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## REQUEST FOR CONFIDENTIAL TREATMENT##
The damages payable for LWL route 1 shall amount to a maximum of DM ##MATERIAL
OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT##,
while the damages payable for LWL routes 2a and 2b shall amount to a maximum
sum of DM ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR
CONFIDENTIAL TREATMENT##. These damages shall also be payable if a route is
defective at the time that it is made available or accepted, should such
technical defects be greater than merely minor defects, i.e. defects that are
so minor that all LWL fibres are available and the transmission properties
diverge from the specifications to such a minor extent that the LWL route can
be used for its intended purpose.
13
CONFIDENTIAL TREATMENT
2.6.3 HER'S DUTY TO COOPERATE
The parties are in agreement that LWL route 1 can only be made available by the
completion date if HER provides the planning permission documents for the
systems engineering locations punctually by 25 July 1997 and the containers for
the systems engineering locations punctually by 10 November 1997, as envisaged
in the Time Schedule (Schedule 5)
Should HER provide the planning permission documents or the containers for the
systems engineering locations at a date which is later than that specified in
the Time Schedule, GVS shall nevertheless make every effort to comply with the
completion date which has been agreed on for LWL route 1. In detail the
following shall apply:
In view of GVS's obligation to pay damages (clause 2,.6.2) and HER's right to
withdraw from the agreement after a delay in excess of ##MATERIAL OMITTED AND
SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## days (clause
2.6.1), the completion date shall be postponed by the same amount of time that
HER delays in complying with its duty to cooperate (providing the documents or
the containers). The parties are furthermore in agreement that the term for the
completion of LWL route 1 shall be suspended from 22 December 1997 until 6
January 1998. The same shall apply for times when work that is still necessary
to complete the route cannot be carried out due to bad weather conditions,
should such weather conditions delay the construction of the route.
Should the completion of LWL route 1 be delayed to such an extent that it is
still not ready after 15 January 1998 due the planning permission documents or
the containers for systems engineering locations not being made available,
after 15 January 1998 HER shall pay damages amounting to DM ##MATERIAL OMITTED
AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## for each day
that the completion of the route is delayed. Such damages, however, shall be
limited to a maximum sum of DM ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A
REQUEST FOR CONFIDENTIAL TREATMENT##. HER shall not be obliged to pay damages
should the delay be due to the fact that GVS carried out no work on the route
during the period from 22 December 1997 to 6 January 1998 or due to bad weather
conditions.
If it is not possible for the route to be made available by 15 February 1998,
also due to a failure on HER's part to comply with its duty to cooperate, the
LWL route shall be deemed made available in respect of the user fee which is
payable. This shall not apply should the delay be due to the fact that GVS
carried out no construction work during the period between 22 December 1997 and
6 January 1998 or due to bad weather conditions. At all events GVS shall remain
under obligation to complete the route and make it available within the
extended deadline which shall apply due to a delay on HER's part in providing
documents and containers.
Should GVS delay in making the route available after the delayed provision of
the planning permission documents or the containers, HER shall no longer be
obliged to pay damages or user fees as from the time that GVS defaults on its
14
CONFIDENTIAL TREATMENT
obligations. In this respect the general arrangements concerning delayed
completion on the part of GVS set out in clauses 2.6.1 and 2.6.2 shall apply.
Any damages payable by GVS shall be set off against any damages payable by HER.
Within a time limit of one week GVS shall examine the planning permission
documents for the construction of the systems engineering locations which HER
has submitted and shall notify HER of whether the planning permission documents
are complete from the point of view of GVS. GVS shall confirm this in writing
by sending HER a fax within the one-week time limit allowed for the examination
of the planning permission documents. Should GVS confirm that the planning
permission documents are complete from its point of view, HER shall be deemed
to have complied with its obligation to submit planning permission documents as
from the date that GVS receives them. Should this not be the case, HER shall
provide any planning permission documents which are missing as quickly as
possible and the procedure set out above shall be repeated accordingly.
Should it become apparent during the processing of the planning permission
documents that they are incomplete from the point of view of the authorities
and should the completion of LWL route 1 be delayed as a result, the time
allowed for completion on the part of GVS shall be prolonged by a period which
is equal in length to the period during which completion was not possible to
due failure to obtain approval from the authorities. If this means that the
route cannot be made available until after 14 January 1998, HER shall not be
obliged to pay damages. Should completion not be possible until after 15
February 1998 for the same reasons, the LWL route shall be deemed not yet made
available in respect of the payment of the user fee.
3. REMUNERATION
3.1 THE USER FEE AND THE ADJUSTMENT OF THE USER FEE
3.1.1 THE USER FEE
HER shall pay GVS a user fee for the LWL routes which are made available. The
user fee shall be calculated per metre of the length set out in clause 1.1 and
shall amount to DM ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR
CONFIDENTIAL TREATMENT##/m of the final length per year. Should HER be the
first client to use LWL route 2b, the user fee for this route shall be composed
of a non-recurring user fee of DM ##MATERIAL OMITTED AND SEPARATELY FILED UNDER
A REQUEST FOR CONFIDENTIAL TREATMENT##/m and an ongoing user fee of DM
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT##/m per annum.
15
CONFIDENTIAL TREATMENT
3.1.2 MARKETING THE ROUTES TO THIRD PARTIES
Should HER exercise the option set out in clause 1.1 for at least LWL route 2a,
and should part of LWL route 1 be marketed to third parties, GVS shall grant
HER a ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT## % discount on the annual user fee for the part of LWL route 1 that
has been marketed to third parties.
Should HER exercise the option set out in clause 1.1 for LWL route 2b as the
first client to use this route and should LWL route 2b be marketed to third
parties, the annual user fee shall be reduced to DM ##MATERIAL OMITTED AND
SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT##/m for the part of
LWL route 2b that has been marketed to third parties. Should LWL route 2 a be
marketed to one or several third parties GVS shall grant HER a ##MATERIAL
OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## %
discount on the annual user fee for the part of LWL route 2a that has been
marketed to third parties.
If the fibres are used for operational purposes (not for providing commercial
telecommunications services) by GVS or its shareholders, this shall not be
regarded as a case of the route having being marketed to a third party.
3.1.3 ADJUSTMENT OF THE USER FEE
Should the fictitious user fee, which shall adjusted on 1 July of each year in
accordance with the formula set out below, be brought in line with the general
development of wages and salaries and the prices for capital goods and should
such an adjustment mean that the user fee then exceeds the user fee subject to
this Agreement by more than ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A
REQUEST FOR CONFIDENTIAL TREATMENT##, the parties shall negotiate an adequate
adjustment of the user fee. Whenever the adjustment of the fictitious user fee
result in a rise by a further ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A
REQUEST FOR CONFIDENTIAL TREATMENT## in comparison with the user fee subject to
this Agreement, the parties shall once again negotiate an adequate adjustment
of the user fee.
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT##
I(n) The index for capital goods (1) in the relevant year of utilisation
I(0) The index for capital goods (1), as published in the year that the
Agreement was concluded
L(n) The index for wages and salaries (2) in the relevant year of
utilisation
L(0) The index for wages and salaries (2) in the year that the Agreement was
concluded
16
CONFIDENTIAL TREATMENT
(1) The producer price index for commercial products (domestic sales)
according to the Annual Statistics published by the Federal Statistical
Office (series 23.7, Equipment and Facilities for Communication
Technology, 1995 edition)
(2) The index of average gross earnings in industry according to the Annual
Statistics published by the Federal Statistical Office (series 22.2,
The Industry for Capital Goods, 1995 edition)
The formula above relates to the ongoing user fee payable for the utilisation
of LWL route 1, free of any discounts. The fictitious, ongoing user fee payable
for the utilisation of routes 2a and 2b shall calculated by adding the ongoing
user fee payable in the year that this Agreement was concluded and the sum
which results from the difference arrived at by applying the adjustment formula
for route 1 (Ne(n) - NE(0)).
3.2 ADVANCE PAYMENTS
As an advance payment on the payments to be remitted under this Agreement for
the services rendered by GVS in the field of telecommunications and which are
the subject matter of this Agreement HER has already remitted the sum of DM
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT## by virtue of a basic agreement which the two parties concluded on
25 June 1997 (clause 1, paragraph 3 of the said agreement). This advance
payment shall be set off against all claims that GVS has under the present
Agreement in the sequence that such claims become due for payment.
GVS reserves the right to pay back at any time the part of the advance payment
that has not yet been set off against its claims.
3.3 VALUE ADDED TAX
In view of the decision taken by the European Commission on 17 March 1997
(official collection L86/9) and the circular of the German Minister of Finance
dated 29 April 1997 (DSTR 1997, page 700), the parties assume that the services
which GVS shall render for HER under this Agreement will not attract value
added tax in Germany. Should this assumption prove to be incorrect, HER shall
remit all payments plus value added tax at the applicable statutory rate, in as
far as such value added tax is payable.
3.4 DUE DATES FOR PAYMENT
As from the time that the routes are made available and accepted the annual
user fees shall be paid for the 18-year period that HER uses the LWL route.
Such fees shall be due in four equal instalments, each in the middle of a
quarter for the current quarter after an invoice has been issued. The first
17
CONFIDENTIAL TREATMENT
instalment of the user fee shall be paid on the first due date which follows
the origin of the obligation to remit payment.
The non-recurring user fee for LWL route 2b shall be due 14 days after this LWL
route has been made available and an invoice has been issued. All other
payments under this Agreement shall be due within 14 days after an invoice has
been issued.
3.5 BANK ACCOUNTS
Payments shall be deemed remitted on the date on which the bank account entry
becomes effective in GVS's account (on the value date):
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT##
or in HER's account
ABN XXXX
Xxxxxxxxxxx
Xxxxxxx 000
0000 XX Xxx Xxxx
Account no.: 00.00.00.000
Clause 16 of this Agreement (clause on the written form) shall not apply as
regards a change of bank account. In this connection written notification to
the other contracting party by registered mail with acknowledgement of receipt
shall be deemed sufficient.
3.6 LATE PAYMENT
Should HER or GVS be late in remitting any payments due under this Agreement,
interest shall be charged at a rate of ##MATERIAL OMITTED AND SEPARATELY FILED
UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## above the applicable discount rate
of the German Bundesbank.
Should HER default on payment of the user fee for two dates in succession or
should HER be late in paying an amount equal to the amount payable for two
six-monthly periods for a period which encompasses a longer period of time than
two due dates and should HER then fail to remit payment, despite receiving two
reminders (the second threatening to terminate the Agreement), each allowing a
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT##-day period for payment, GVS shall have the right to terminate the
Agreement on exceptional grounds in respect of the LWL route which is affected
by the late payment.
18
CONFIDENTIAL TREATMENT
In this case GVS shall be entitled to claim damages in respect of the user fee
which HER has failed to pay. Such damages shall amount to the annual user fees
set out in clause 3.1 and shall be calculated as from the time that notice to
terminate the Agreement on exceptional grounds becomes effective until the time
that the Agreement expires, as set out in clause 10, less any expenses saved.
The damages shall be immediately payable in a lump sum. The amount which is
payable shall be calculated on the basis of the total expenses incurred by the
time that the Agreement actually expires discounted and reduced by sum of the
expenses saved or the user fees charged to third parties (current value of the
user fees). Interest shall be calculated on the basis of the discount rate
charged by the German Bundesbank at the time that the Agreement expires plus
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT##.
To limit the damage GVS shall endeavour to find suitable alternative clients.
Should GVS succeed in finding such clients for the LWL route affected by the
termination of the Agreement on exceptional grounds, the user fees obtained for
this route shall be set off against GVS's claims for damages.
4. INDEPENDENCE OF THE LWL ROUTES
The LWL routes under this Agreement are legally independent of one other. The
termination of the Agreement in respect of certain LWL routes shall not affect
the rights and duties in connection with the remaining LWL routes.
5. TERMINATION UNTIL THE TIME THAT THE ROUTES ARE MADE AVAILABLE/ UNTIL
ACCEPTANCE
5.1 TERMINATING THE AGREEMENT IN RESPECT OF ROUTES WHICH HAVE BEEN NEWLY
BUILT
Regardless of whether any dates scheduled for completion are overstepped, HER
shall have the right to give written notice of termination in respect of a
route which is being newly constructed up until the time that this new LWL
route is made available (see clause 2.4) if HER is the first client for this
route. The notice of termination shall become effective one week after GVS has
received it
In all cases in which HER gives notice of termination in accordance with the
aforesaid arrangement the following shall apply:
When notice of termination becomes effective GVS and HER shall be released of
their contractual obligations in respect of the LWL route for which notice of
termination has been given with the exception of the obligations set out below.
19
CONFIDENTIAL TREATMENT
GVS shall work out all expenses it has incurred until receipt of the notice of
termination in respect of the LWL route concerned. HER shall reimburse GVS for
these expenses within ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST
FOR CONFIDENTIAL TREATMENT## days after an invoice has been issued.
To limit the damage GVS shall endeavour to find suitable alternative clients
for the LWL route affected by the termination. Should GVS succeed in finding
such clients for the LWL route for which notice of termination has been given
within ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT## months after the notice of termination becomes effective or if
alternative clients have already been found for the route at the time that
notice of termination becomes effective, the contracting parties, in
consideration of the circumstances, shall reach an arrangement which takes
account of the payments rendered by HER as set out above.
Apart from this, the contracting parties shall not have the right to assert any
further claims against the other party.
5.2 TERMINATION IF IT SHOULD NOT BE POSSIBLE TO FIND SYSTEMS ENGINEERING
LOCATIONS
Should GVS not succeed in finding suitable locations for systems engineering
equipment, pursuant to clause 1.2.1, at acceptable conditions within one year
of the completion date set out in clause 2.1., both contracting parties shall
be entitled to terminate this Agreement in respect of the LWL route affected.
In all cases in which HER gives notice of termination in accordance with the
aforesaid arrangement the following shall apply:
When the notice of termination becomes effective GVS and HER shall be released
from their obligations under this Agreement in respect of the new LWL route for
which notice of termination has been given, with the exception of the
obligations set out below.
Should GVS give notice of termination in respect of LWL route 1 according to
the aforesaid arrangement, GVS shall reimburse HER for the advance payment
which HER has remitted in accordance with clause 3.2 for LWL route 1. This
shall be done within a period of 14 days.
Should HER give notice of termination according to the aforesaid arrangement,
GVS shall calculate all expenses which GVS has incurred in relation to the LWL
route concerned up to the time that it receives the notice of termination and
HER shall reimburse GVS for these expenses within 14 days of an invoice having
been issued. If LWL route 1 is affected, these expenses shall be set off against
the advance payment which HER has remitted for LWL route 1. Should the advance
payment be in excess of the expenses which GVS has incurred, GVS shall reimburse
HER for this amount.
20
CONFIDENTIAL TREATMENT
To limit the damage GVS shall endeavour to find suitable alternative clients
for the LWL route for which notice of termination has been given. Should GVS
succeed in finding such alternative clients within ##MATERIAL OMITTED AND
SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## years after
notice of termination becomes effective or should alternative clients already
have been found for the route at the time that the notice of termination
becomes effective, the contracting parties, taking the relevant circumstances
into consideration, shall negotiate an arrangement which takes adequate account
of the payments which HER has remitted, as set out above.
Apart from this, the contracting parties shall not have the right to assert any
further claims against the other party.
6. AVAILABILITY OF THE ROUTES AFTER ACCEPTANCE
6.1 PERMISSIBLE DOWNTIMES
GVS shall be obliged to rectify any faults in the LWL cables as quickly as
possible. GVS shall guarantee the system's availability with regard to
downtimes due to failure as set out in clause 6.3.
6.2 PUTTING THE CABLE FACILITIES OUT OF OPERATION
Should it be necessary and planned to put the cable facilities out of operation
or to switch off the LWL routes owing to maintenance work on the gas pipelines,
such measures shall not be taken into account when calculating the permissible
downtimes. The planning and consultation process for scheduled work is set out
in Schedule 3 (Technical Conditions).
Should it be necessary to put the cable facilities out of operation because it
has become necessary to divert the routes (due to road construction measures
etc.), such measures shall also not be considered when calculating the
permissible downtimes.
The aforesaid arrangements shall not apply if GVS should, by wilful intent or
due to negligence, fail to comply with its obligation to provide information as
set out in Schedule 3, paragraph 6. The degree of negligence involved shall be
irrelevant.
If the cable facilities are put out of operation or switched off due to
measures to divert the routes, such measures should be co-ordinated and carried
out in one block and, if possible, for each LWL route separately and at only
three or four dates in a year.
21
CONFIDENTIAL TREATMENT
6.3 DOWNTIMES, TIME REQUIRED TO RECTIFY FAULTS, SERIOUS DAMAGE
The arrangements set out in the following subparagraphs concerning downtimes
and times required to rectify faults are final. Should an LWL route be put out
of operation due to technical reasons, the contracting parties shall not be
entitled to assert any claims for damages, claims for the payment of the user
fee or claims for reductions in the user fee, nor shall this entitle them to
give notice of termination. Only the legal consequences set out hereunder shall
apply. This shall not affect the right of either party to give notice of
termination on exceptional grounds. The limitation of liability under this
Agreement shall apply in as far as nothing to the contrary is set out in the
more specific subparagraphs below.
6.3.1 EXCEEDING THE PERMISSIBLE DOWNTIMES
Should an LWL route become completely or partially inoperable for longer than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT## hours within the first ##MATERIAL OMITTED AND SEPARATELY FILED
UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## years after it has been made
available and should this be due to one or several downtimes along this route,
GVS shall compensate HER by paying a sum of money which is four times the
amount of the annual user fee for one hour's use of the relevant LWL route
(blanket guarantee for the availability of the network). GVS shall pay such
compensation for each hour and partial hour that the route remains inoperable
after the expiry of the ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST
FOR CONFIDENTIAL TREATMENT## hours set out above, regardless of the question of
blame and regardless of whether the unavailability of the route is due to a
case of force majeure.
Should GVS exceed the regular periods of time allowed for rectifying certain
standard faults, as set out in Schedule 7, GVS shall pay HER damages for each
hour and partial hour and for each separate fault. Such damages shall amount to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT## of the annual user fee for the relevant LWL route.
Should it become apparent in hindsight that the fault in the LWL cable facility
(the LWL cable including the connector of the long-distance cable) was not the
responsibility of GVS, HER shall reimburse GVS for all expenses in connection
with troubleshooting measures and measures to rectify the fault. In such a case
the hours of downtime shall not be considered when calculating the permissible
downtime of ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR
CONFIDENTIAL TREATMENT## years, as set out in paragraph 1, and GVS shall not be
liable for damages in the event that the standard period of time allowed for
rectifying faults has been exceeded.
Should the downtime hours of an LWL route amount to fewer than ##MATERIAL
OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR
22
CONFIDENTIAL TREATMENT
CONFIDENTIAL TREATMENT## years after the route has been made available, HER
shall reimburse GVS any damages it may have paid in this connection.
After the expiry of the introductory period of ##MATERIAL OMITTED AND
SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## years the maximum
downtime guaranteed by GVS shall be adjusted in accordance with the experiences
gained in operating LWL routes in Baden-Wurttemberg and in comparable regions
in Germany and in Europe.
Serious damage or a possible destruction of the LWL routes shall not be taken
into consideration in calculating the hours of downtime. Such cases of serious
damage or destruction shall be subject to the arrangement set out in clause
6.3.4.
Should an LWL route which is the subject to this Agreement become unavailable,
so that HER is unable to use it, without HER being able to assert any claim for
the payment of damages by GVS, HER shall be released from its obligation to pay
the ongoing user fee for the LWL route in question. This shall not apply if the
unavailability of the route is HER's responsibility
6.3.2 INTERRUPTIONS TO OPERATIONS CAUSED BY GVS
Should GVS be guilty of gross negligence in causing an interruption to
operations in the context of the business of supplying gas, GVS's liability for
consequential damage in each case of such an interruption shall be limited to
the sum of DM ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR
CONFIDENTIAL TREATMENT##. This liability is independent of the liability to pay
damages according to the aforesaid arrangement. GVS shall bear the burden of
evidence in proving that it is not guilty of gross negligence. This shall not
affect the arrangements set out in clause 7.
6.3.3 INTERRUPTIONS TO OPERATIONS CAUSED BY HER
GVS shall be released of the obligation to pay the damages set out in clause
6.3.1 above should HER or HER's agents of performance be responsible for the
fact that the downtimes set out in clause 6.3.1 have been exceeded. In this
case HER shall also bear the costs for the repair of the LWL route.
6.3.4 SERIOUS DAMAGE TO / DESTRUCTION OF THE ROUTES
The arrangements set out in clause 6.3.1, clause 6.3.2 and clause 6.3.3 shall
not apply in the case of serious damage to or a possible destruction of any LWL
routes. In these cases the arrangement set out below shall apply.
Serious damage or destruction under this Agreement is defined as an
interruption of operations which is of such a nature that it cannot be remedied
within ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR
23
CONFIDENTIAL TREATMENT
CONFIDENTIAL TREATMENT## hours, even by making exhaustive use of all possible
technical measures.
In such cases GVS shall immediately restore the LWL routes which are affected.
HER shall be released of its obligation to pay the ongoing user fee for the LWL
route affected by such damage as long as this route remains unavailable.
Should GVS cause serious damage to or the destruction to an LWL route by wilful
intent or due to gross negligence, the time during which this LWL route remains
unavailable shall be regarded as a downtime as defined in clause 6.3.1,
paragraph 1.
7. LIABILITY
If nothing to the contrary is stated elsewhere in this Agreement, the
contracting parties shall only be liable towards each other for damage which
has been caused by wilful intent or by gross negligence. In the case of gross
negligence liability shall be limited to direct damage. Compensation for
financial loss shall be excluded. Liability for direct damage shall be limited
to DM ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT## per case of damage.
8. FORCE MAJEURE
In cases of force majeure, the following shall apply in as far as nothing to
the contrary is stated elsewhere in this Agreement:
Should it not be possible for one of the contracting parties to fulfil its
obligations entered into under this Agreement due to events of force majeure,
the contracting party in question shall be released of its obligation to fulfil
these obligations for the duration of such events. In a similar manner, the
other party shall also be released of its corresponding obligations.
The contracting party affected by events of force majeure, as set out in
paragraph 1, shall immediately notify the other contracting party of its
limited ability to comply with its contractual obligations and shall endeavour
to remove the impediments which hinder it in fulfilling its contractual
obligations and to do so with the utmost speed.
Force majeure shall be deemed as any external event whose occurrence cannot be
avoided, even if proceeding with the greatest possible caution. Particular
events of force majeure shall be deemed as war, civil unrest, sabotage, acts on
the part of legislators, strike, in as far as the courts regard a strike as a
case of force majeure, natural catastrophes and exceptionally bad weather
conditions, although other events may also be deemed cases of force majeure.
The parties are in agreement that damage caused by third parties to the LWL
route, apart from cases of sabotage, shall not be regarded
24
CONFIDENTIAL TREATMENT
as force majeure. The same applies for damage caused by GVS or its agents of
performance.
9. SCHEDULES TO THIS AGREEMENT
The Schedules mentioned in the present Agreement form an integral part of this
Agreement in addition to their function of referring to certain points in the
Agreement. In the event of any contradiction between the Agreement and the
Schedules thereto, the arrangements set out in the Agreement shall prevail in
case of doubt.
10. THE DURATION OF THE AGREEMENT / OPTION TO PROLONG THE AGREEMENT
This Agreement shall become effective on execution by the two parties. HER's
right of utilisation shall run for 18 years for each LWL route, starting on the
date that the LWL route is made available/accepted (see too clause 2.6.1.,
paragraph 1).
HER shall have the option to prolong the Agreement and to exercise this option
for each individual LWL route. Should HER wish to exercise such an option, HER
shall be required to submit a written declaration to this effect to GVS by no
later than ##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR
CONFIDENTIAL TREATMENT## months before the end of the contractual period of use
of the first LWL route to be made available. Should this option be exercised,
this Agreement shall be prolonged by such a period for each LWL route that a
total lease of 30 years results, measured in terms of the LWL route first made
available to HER.
The following arrangement shall apply as regards the user fee during the period
affected by the option set out in paragraph 2:
GVS shall calculate the real market value of the network (##MATERIAL OMITTED
AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## of its
replacement value at the time that the option was exercised) at the beginning
of the period when the option starts and shall notify HER of this value.
Should HER not be in agreement with the replacement value as calculated by GVS,
the contracting parties shall endeavour to reach a unanimous agreement
concerning the replacement value within four weeks of receipt of the above
notification. Should it not be possible for the parties to reach such an
agreement within this period, they shall appoint an expert to calculate the
replacement value and shall make such an appointment within a further period of
two weeks. Should the contracting parties, during this extended period, fail to
reach an agreement concerning which expert to appoint, a suitable expert shall
be appointed by the President of the Chamber of Industry and Commerce in
Frankfurt on the application of one of the parties. An expert appointed in this
way shall calculate the replacement value in the
25
CONFIDENTIAL TREATMENT
capacity of an arbitration expert pursuant to sections 315 ff of the German
Civil Code (BGB). The expert shall also decide who is to pay his or her fees.
The real market value calculated in this way (##MATERIAL OMITTED AND SEPARATELY
FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## of the replacement value)
shall be valued using a suitable factor to take account of the cost of capital.
This shall be based on a rate of ##MATERIAL OMITTED AND SEPARATELY FILED UNDER
A REQUEST FOR CONFIDENTIAL TREATMENT## % per annum in the year that the
Agreement was concluded. The market price of leasing comparable LWL routes
shall also be calculated and a discount of ##MATERIAL OMITTED AND SEPARATELY
FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT## shall be deducted to take
account of technical modifications or technical progress. The price of the
option shall correspond to the average of these two values, but shall at least
correspond to the value calculated on the basis of the real market value. The
annual user fee to be paid if this option is exercised shall correspond to the
average of these two values, but shall at least correspond to the value
calculated on the basis of the real market value.
Should HER not be in agreement with the user fee for the option period, HER
shall be entitled to decline to exercise this option by observing a time limit
of 4 weeks, as from the time that GVS notifies HER of the user fee, or from the
time that HER is informed of the conclusions reached by the expert. The
Agreement shall then end on the expiry of the term originally envisaged or, if
this term should have already expired, with immediate effect.
After the expiry of the option period the Agreement shall automatically be
prolonged by a further period of 10 years if neither of the contracting parties
gives notice to terminate it by observing a ##MATERIAL OMITTED AND SEPARATELY
FILED UNDER A REQUEST FOR CONFIDENTIAL TREATMENT##-year period of notice.
11. BURDENS IMPOSED BY TAXIES AND LEVIES
The fees which have been agreed on include all taxes and levies, with the
exception of value added tax (clause 3.3). In the event of any future
additional burdens for the telecommunications industry due to the introduction
of new taxes or levies with regard to the provision of LWL fibres or other
activities falling within the scope of this Agreement, GVS shall be entitled to
raise the fee accordingly.
12. ECONOMIC FEASIBILITY
If the technical, economic or legal preconditions under which the terms of this
Agreement (remuneration and conditions) have been negotiated suffer any
fundamental change, and, in consequence, one of the parties can no longer be
reasonably expected to comply with the terms of this Agreement, because the
contracting parties' intention of giving equitable consideration to the
economic interests of both parties under this Agreement can no longer be
realised, this party can require that the terms of the Agreement are amended in
conformity with the changed circumstances, unless this affects a contractual
provision which explicitly involves a shift in the balance of risk. If this is
the case, no amendment can be required. This shall not affect HER's rights to
terminate the Agreement in accordance with clause 5 with the legal consequences
set out there.
13. ASSIGNMENT OF A PARTY'S CONTRACTUAL RIGHTS AND OBLIGATIONS TO THIRD
PARTIES
With the consent of GVS, HER shall have the right to assign its legal position
under this Agreement to a legal successor. In this event all HER's rights and
obligations under this Agreement shall pass to HER's legal successor. In this
event HER shall inform GVS of the capitalisation of the legal successor.
Should the business of supplying gas be discontinued or should any LWL routes
and/or the relevant gas pipelines be sold, GVS shall take adequate measures to
ensure that the obligations it has entered into towards HER are fulfilled.
26
CONFIDENTIAL TREATMENT
14. CONFIDENTIALITY
The contracting parties hereby undertake to treat as confidential all
information which they obtain either directly or indirectly from the other
party in connection with this Agreement, its preparation and its performance.
"Treating information as confidential" means that the information obtained from
the other contracting party shall not be made accessible to third parties and
that this information may not be used for a party's own commercial purposes,
neither directly nor indirectly, nor exploited on behalf of third parties. The
parties undertake to use the information they receive only for the purpose set
out in the introduction to this Agreement. If the information is to be used for
any additional purposes or disclosed to third parties, this, in every
individual case, shall require the prior written consent of the party which has
provided the information, specifying the contents of the information, its scope
and the addressee. It shall, however, be permissible to pass on information to
corporate groups if this is necessary for the implementation of the project and
to individual consultants on fiscal or legal matters and to pass on technical
information which is needed for the implementation of the project to
subcontractors, without any special written consent on the part of the party
which has provided the information, on condition that no more information is
disclosed than that needed in order to perform this Agreement and that the
receiving parties undertake to treat the information as confidential, as
defined under this Agreement. The parties also undertake to impose an
obligation on their staff to treat such information as confidential.
This shall not affect GVS's right to disclose information to interested parties
about the individual LWL routes which are available along its routes and in its
basic data, in as far as this is necessary and unavoidable for its additional
marketing measures.
Each party shall protect the information given to it by the other party with
the same care as it protects its own business and trade secrets. The parties
shall at least exercise the care incumbent on a cautious businessman.
The obligation to maintain secrecy shall not apply for information
- which was already known to the receiving party at the time that the
information was provided, without there having been an obligation to
maintain secrecy, or
- which was already accessible to the general public at the time that it
was made available or which became generally accessible at a later
date, without the receiving party being at fault, or
- which is regularly received from a third party without there being any
obligation to maintain secrecy.
The party which discloses the information shall bear the burden of proof in
this respect.
There shall be no further obligation imposed upon the parties than that imposed
by the aforesaid arrangement, neither internally nor vis-a-vis third parties.
Any additional obligation shall require a further written agreement.
Without prejudice to the provisions set out above, each party shall be entitled
to comply with its disclosure obligations under the law and according to its
corporate articles, also with regard to the information it has received.
The obligation to maintain confidentiality shall remain in force for a period
of five (5) years after the expiry of the period of utilisation required by
HER.
The content, form date etc. of any public disclosure concerning the business
venture undertaken by the two parties, the Agreement and the parties' jointly
adopted position towards the authorities, associations, owners of land,
governmental units, other companies etc. shall be agreed on between the
parties.
15. SEVERABILITY
Should any provision of this Agreement be or become invalid, this shall not
affect the legal validity of the remaining provisions. To replace the invalid
provision the contracting parties shall agree on a valid provision which comes
as close as possible to the economic intention of the two parties. The same
shall apply for filling any gaps in this Agreement.
16. ADDITIONS AND AMENDMENTS TO THIS AGREEMENT
Amendments and/or additions to this Agreement and side agreements to this
Agreement need to be made in writing and signed by both contracting parties.
The same shall apply for any waiver of the written form.
17. ARBITRATION CLAUSE
Any disputes in connection with this Agreement and its performance shall be
decided by a court of arbitration, excluding normal recourse to a court of law.
The court of arbitration shall be set up according to the following
arrangement.
The court of arbitration shall consist of three arbitrators, of whom one is to
preside as umpire. The umpire must be authorised to practise as a judge. The
court of arbitration shall sit at Frankfurt. The court of arbitration shall be
formed by the active party specifying the subject of the dispute and one
arbitrator and requesting the other party to appoint the other arbitrator. The
arbitrators appointed shall select the umpire. Should the other party not have
complied with the request to appoint the second arbitrator within four weeks
after receiving the request, the party which has issued this request may
request the President of the Provincial Court of Frankfurt to appoint an
arbitrator. The proposal shall be binding on the two parties. If the
arbitrators have not selected the umpire within four weeks after the second
arbitrator has been selected, the President of the Higher Provincial Court of
Frankfurt shall be requested to propose an umpire. This proposal shall be
binding on the two parties.
27
CONFIDENTIAL TREATMENT
Apart from this, the legal provisions of the German Code of Civil Procedure
(ZPO) shall apply for the arbitration procedure, it being specified that the
time limit of one week specified in section 1031 of the German Code of Civil
Procedure shall be replaced by a time limit of four weeks and that the
President of the Higher Provincial Court of Frankfurt shall replace the
competent court mentioned there. The competent court as defined under sections
1045 and 1046 of the German Code of Civil Procedure shall be the Provincial
Court of Frankfurt.
In the event of disputes as defined under section 91, paragraph 1, sentence 1
of the Act Against Restraints of Competition (GWB), a decision by a court of
arbitration shall require a prior agreement.
18. PROPER LAW / LANGUAGE OF BUSINESS
This Agreement shall be subject only to the law of the Federal Republic of
Germany, with the exception of the CISG.
The language of business for the mutual performance of this Agreement shall be
German. This particularly applies for the communication procedures set out in
the Schedules to this Agreement in connection with the operation and
maintenance of the LWL routes and the systems engineering locations.
28
CONFIDENTIAL TREATMENT
19. LIST OF SCHEDULES TO THIS AGREEMENT
The schedules set out below form part of this Agreement:
SCHEDULE 1: General Map
SCHEDULE 2: List of the LWL Routes with Their Approximate Lengths
SCHEDULE 3: Technical Conditions for the Use of Fibre Optic Routes and
Basic Technical Specifications for Systems Engineering
Locations
SCHEDULE 4: Engineering Work for the Systems Engineering Locations
SCHEDULE 5: Time Schedule
SCHEDULE 6: Maintenance Measures
SCHEDULE 7: Standard Faults and Standard Repair Times
SCHEDULE 8: GVS Cost Rates
Stuttgart, dated Stuttgart, dated
...................................... .......................................
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT## (Hermes Europe Railtel B.V.)
29
CONFIDENTIAL TREATMENT
EXHIBIT 1: MAP OF ROUTES
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT##
30
CONFIDENTIAL TREATMENT
EXHIBIT 2: LIST WITH ROUTES AND KM
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT##
31
CONFIDENTIAL TREATMENT
EXHIBIT 3: TECHNICAL CONDITIONS FOR USE OF FIBRE ROUTES AND TECHNICAL
SPECIFICATIONS FOR SYSTEM ENGINEERING LOCATIONS
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT##
32
CONFIDENTIAL TREATMENT
EXHIBIT 4: ENGINEERING WORK REQUIRED FOR SYSTEM ENGINEERING LOCATIONS
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT##
33
CONFIDENTIAL TREATMENT
EXHIBIT 5: TIME SCHEDULE
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT##
34
CONFIDENTIAL TREATMENT
EXHIBIT 6: MAINTENANCE MEASURES
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT##
35
CONFIDENTIAL TREATMENT
EXHIBIT 7: STANDARD PRICE LIST RE FAULT & REPAIR ACTIVITIES
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT##
36
CONFIDENTIAL TREATMENT
EXHIBIT 8: GVS COST RATES
##MATERIAL OMITTED AND SEPARATELY FILED UNDER A REQUEST FOR CONFIDENTIAL
TREATMENT##
