TAC TURNKEY CONSTRUCTION AND IRU AGREEMENT

EXECUTION COPY



TAC TURNKEY CONSTRUCTION AND IRU AGREEMENT





IMPSAT S.A.,

AN ARGENTINA CORPORATION



IMPSAT S.A.,

A CHILE CORPORATION





SOUTH AMERICAN CROSSING LTD.,

A BERMUDA CORPORATION



SEPTEMBER 22, 1999







TABLE OF CONTENTS





ARTICLE 1. DEFINITIONS.......................................................4



ARTICLE 2. PROVISION OF THE SYSTEM AND GRANT OF IRU'S.......................12



ARTICLE 3. CONSIDERATION....................................................14



ARTICLE 4. CONSTRUCTION OF TAC..............................................16



ARTICLE 5. ACCEPTANCE AND TESTING...........................................20



ARTICLE 6. CHANGE ORDERS....................................................23



ARTICLE 7. TERM.............................................................24



ARTICLE 8. OPERATIONS.......................................................25



ARTICLE 9. MAINTENANCE AND REPAIR OF THE TAC................................26



ARTICLE 10. PERMITS; RELOCATIONS............................................27



ARTICLE 11. USE OF THE SEGMENTS.............................................30



ARTICLE 12. INDEMNIFICATION.................................................32



ARTICLE 13. LIABILITY; WARRANTY.............................................32



ARTICLE 14. INSURANCE.......................................................35



ARTICLE 15. TAXES, FEES AND OTHER GOVERNMENTAL IMPOSITIONS..................37



ARTICLE 16. NOTICE..........................................................41



ARTICLE 17. CONFIDENTIALITY.................................................42



ARTICLE 18. TERMINATION FOR DEFAULT.........................................43



ARTICLE 19. FOREIGN CORRUPT PRACTICES ACT...................................47



ARTICLE 20. TERMINATION OF TERM.............................................47



ARTICLE 21. FORCE MAJEURE...................................................48



ARTICLE 22. TERMINATION FOR FORCE MAJEURE...................................49



ARTICLE 23. DISPUTE RESOLUTION..............................................51



ARTICLE 24. ASSIGNMENT, SUBCONTRACTORS AND DARK FIBER TRANSFERS.............51



ARTICLE 25. GUARANTOR.......................................................54





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ARTICLE 26. REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS.................54



ARTICLE 27. TITLE AND RISK OF LOSS..........................................55



ARTICLE 28. INTELLECTUAL PROPERTY...........................................55



ARTICLE 29. INFRINGEMENT....................................................56



ARTICLE 30. ACQUISITION OF DARK FIBER.......................................56



ARTICLE 31. GENERAL.........................................................57



Exhibits



Exhibit 1 Executive Summary Exhibit 2 TAC Route Exhibit 3A Technical Specifications for Ducts & Cable Exhibit 3B Technical Specifications for Shelters (Huts) Exhibit 3C Duct Specifications Exhibit 4 Acceptance Tests Exhibit 5 Associated Properties Exhibit 6 Billing Schedule Exhibit 7 Maintenance Services Exhibit 8 As-Built Templates Exhibit 9 Plan of Work Exhibit 10 Project Management Reports Exhibit 11 Fee Components



Exhibit A Form of Guaranty Exhibit B Liquidated Damages Exhibit C Early Completion Bonus for Phase 2 Exhibit D Form of Payment Escrow Agreement Exhibit E Form of Payment Certificate Exhibit F Approved Subcontractors Exhibit G Form of Completion Bond





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TAC TURNKEY CONSTRUCTION AND IRU AGREEMENT



THIS TAC TURNKEY CONSTRUCTION AND IRU AGREEMENT (this "Agreement") is made and entered into as of September 22, 1999 by and among IMPSAT S.A., an Argentina corporation ("IMPSAT Argentina"), and IMPSAT S.A., a Chile corporation ("IMPSAT Chile", and together with IMPSAT Argentina, collectively and individually, as the context may require, "IMPSAT") and SOUTH AMERICAN CROSSING LTD., a Bermuda corporation ("SAC").





WHEREAS, SAC is developing an undersea fiber optic telecommunications network to circle the continent of South America (the "Network") which will connect with the worldwide fiber optic telecommunications network of Global Crossing Ltd. and its Affiliates;



WHEREAS, a portion of the Network will include terrestrial connectivity via fiber optic cable between Las Toninas, Argentina, Buenos Aires, Argentina, Rosario, Argentina, Cordoba, Argentina, Mendoza, Argentina, Santiago, Chile and Algarrobo, Chile, as indicated in Exhibit 2 (such portion, the "TAC Route");



WHEREAS, SAC desires to purchase and own [ ] ducts (the "Owned Ducts") and the Owned Associated Properties (as defined herein) along the Segments (as defined herein) of the TAC Route between (i) Las Toninas and Buenos Aires, (ii) Mendoza and Santiago and (iii) Santiago and Algarrobo (the "Constructed Segments") and wishes to engage IMPSAT Argentina to construct the Owned Ducts and the Owned Associated Properties located in Argentina and to engage IMPSAT Chile to construct the Owned Ducts and Owned Associated Properties located in Chile;



WHEREAS, SAC desires to acquire from IMPSAT Argentina, and IMPSAT Argentina desires to provide to SAC an IRU to (i) one (1) duct (the "SAC IRU Duct" and, together with the Owned Ducts, the "Ducts") along the Segment of the TAC Route between Buenos Aires and Mendoza (the "SAC IRU Segment") and (ii) collocation space and facilities provided in IMPSAT's points of presence ("POPs") and the related Regeneration and OpAmp Facilities (as defined herein) along the SAC IRU Segment, and to the rights-of way, easements, way leaves and/or other real property rights held by IMPSAT along the SAC IRU Segment necessary for the use of the SAC IRU Duct and the related Regeneration and OpAmp Facilities to provide telecommunications services;



WHEREAS, IMPSAT Argentina desires to acquire from SAC, and SAC desires to provide to IMPSAT Argentina, an IRU to (i) one (1) duct (the "IMPSAT Argentina IRU Duct") along the Segment of the TAC Route between Mendoza and the border of Argentina and Chile (the "IMPSAT Argentina IRU Segment") and (ii) collocation space and facilities provided in SAC's POPs and the related Regeneration and OpAmp Facilities along the IMPSAT Argentina IRU Segment, and to the rights-of way, easements, way leaves and/or other real property rights held by SAC along the IMPSAT Argentina IRU Segment necessary for the use of





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the IMPSAT Argentina IRU Duct and the related Regeneration and OpAmp Facilities to provide telecommunications services; and



WHEREAS, IMPSAT Chile desires to acquire from SAC, and SAC desires to provide to IMPSAT Chile, an IRU to (i) one (1) duct (the "IMPSAT Chile IRU Duct") along the Segment of the TAC Route between the border of Argentina and Chile and Santiago (the "IMPSAT Chile IRU Segment") and (ii) collocation space and facilities provided in SAC's POPs and the related Regeneration and OpAmp Facilities along the IMPSAT Chile IRU Segment, and to the rights-of way, easements, way leaves and/or other real property rights held by SAC along the IMPSAT Chile IRU Segment necessary for the use of the IMPSAT Chile IRU Duct and the related Regeneration and OpAmp Facilities to provide telecommunications services; and



WHEREAS, SAC desires to acquire from IMPSAT, and IMPSAT desires to provide to SAC, specified maintenance services as set forth herein;



NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:



ARTICLE 1.





1.01. Unless otherwise defined herein, when used herein, the following terms shall have the following meanings:



"Acceptance Criteria" means the acceptance criteria set forth in

Exhibit 4.



"Acceptance Testing" has the meaning set forth in Section 5.01.



"Additional Amount" has the meaning set forth in Section

15.01(g).



"Affiliate" means, with respect to any entity, any other entity

controlled by or under common control with such entity. For purposes of

this definition, "control" (including the terms "controlling,"

"controlled by" and "under common control with") means the possession,

direct or indirect, of the power to vote more than 50% of the securities

(on a fully diluted basis) having ordinary voting power for the election

of directors, managing general partners or managing members.



"Agreement" has the meaning set forth in the preamble.



"Associated Properties" means the IRU Associated Properties and

the Owned Associated Properties.



"Billing Schedule" means the payment and milestone schedule set

forth in Exhibit 6.



"Bond" has the meaning set forth in Section 4.16.





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"Certificate of Final Acceptance" means a certificate issued by

SAC in accordance with Section 5.05 to IMPSAT certifying that TAC is

Ready for Final Acceptance.



"Certificate of Provisional Acceptance" means a certificate

issued by SAC in accordance with Section 5.04 to IMPSAT certifying that

a Segment is Ready for Provisional Acceptance.



"Change Order" means a written modification to this Agreement,

signed by the parties hereto and entered into in accordance with Article



"Commissioning Report" means a written report from IMPSAT

demonstrating that a Segment is Ready for Provisional Acceptance and has

passed all Acceptance Testing.



"Constructed Segments" has the meaning set forth in the recitals.



"Contract Countries" means Argentina and Chile or any political

subdivisions thereof or taxing authorities therein.



"Date of Provisional Acceptance or Final Acceptance" means the

date set forth in the Certificate of Provisional Acceptance or

Certificate of Final Acceptance, as the case may be, provided that, for

purposes of Section 4.04 and Section 4.05, such date shall be deemed to

be the date that SAC receives a Commissioning Report demonstrating, or

deemed pursuant to Section 5.03 to demonstrate, that a Segment is Ready

for Provisional Acceptance or TAC is Ready for Final Acceptance each in

accordance with Article 5.



"Deficiency" means an instance of a failure to conform to the

Acceptance Criteria.



"Deliverable Technical Material" means copies of all technical

information, specifications, drawings, designs, sketches, tools,

operating data, records, documentation and/or other types of engineering

or technical data or information reasonably relating to the operation,

maintenance or repair of each component of the Ducts and the Associated

Properties, including without limitation Exhibits 1 through 10 hereof.



"Design Life Warranty" has the meaning set forth in Section

13.05.



"Design Specifications" means the design specifications set forth

in Exhibits 3A, 3B and 3C.



"Dollars" or "US$" means United States dollars.



"Downpayment" has the meaning set forth in Section 3.01.



"Ducts" has the meaning set forth in the recitals.



"Fee" means the IMPSAT Argentina Fee and the IMPSAT Chile Fee.





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"Fiber Changeout Amount" has the meaning set forth in Section

2.02.



"Final Commissioning Report" means a written report from IMPSAT

(a) demonstrating that TAC is Ready for Final Acceptance and has passed

all Acceptance Testing and (b) containing (i) a summary of the results

of Acceptance Testing with respect to each Segment, (ii) specifications,

data sheets, plans and drawings plans for each Regeneration and OpAmp

Facility, (iii) customary documentation with respect to each Segment,

and (iv) all other information related to the Work hereunder reasonably

requested by SAC.



"Framework Agreement" means the Amended and Restated Framework

Agreement, dated as of July 27, 1999, as amended, by and between the

Guarantor and Global Crossing Development Co.



"Grantee" means (a) with respect to the SAC IRU Segment, SAC, (b)

with respect to the IMPSAT Argentina IRU Segment, IMPSAT Argentina and

(c) with respect to the IMPSAT Chile IRU Segment, IMPSAT Chile.



"Grantor" means (a) with respect to the SAC IRU Segment, IMPSAT

Argentina and (b) with respect to each IMPSAT IRU Segment, SAC.



"Guarantor" means IMPSAT Corporation, a Delaware corporation and

the ultimate parent company of IMPSAT Argentina and IMPSAT Chile.



"Guaranty" means the guaranty to be entered into by the Guarantor

in favor of SAC, to be substantially in the form of Exhibit A hereto.



"IMPSAT Access Rights" means all ownership, easement, wayleaves

and/or other property rights, from both private and governmental

entities necessary to access, use and occupy the Ducts and the

Associated Properties in order for SAC to own or acquire an IRU in (as

the case may be), operate and, subject to and without limiting the

generality of Article 9, maintain TAC.



"IMPSAT Argentina Fee" has the meaning set forth in Section 3.01.



"IMPSAT Argentina IRU Associated Properties" means the tangible

and intangible property needed for the use of the IMPSAT Argentina IRU

Duct to provide fiber optic telecommunications services along the IMPSAT

Argentina IRU Segment as contemplated in the Design Specifications

(specifically excluding any electronic or optronic equipment or fiber

optic cable) and will include the properties and locations described in

Exhibit 5.



"IMPSAT Argentina IRU Duct" has the meaning set forth in the



"IMPSAT Argentina IRU Fee" has the meaning set forth in Section

2.02.



"IMPSAT Argentina IRU Segment" has the meaning set forth in the





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"IMPSAT Chile Fee" has the meaning set forth in Section 3.01.



"IMPSAT Contract Taxes" has the meaning set forth in Section

15.10.



"IMPSAT IRU" has the meaning set forth in Section 2.02.



"IMPSAT Chile IRU Associated Properties" means the tangible and

intangible property needed for the use of the IMPSAT Chile IRU Duct to

provide fiber optic telecommunications services along the IMPSAT Chile

IRU Segment as contemplated in the Design Specifications (specifically

excluding any electronic or optronic equipment or fiber optic cable) and

will include the properties and locations described in Exhibit 5.



"IMPSAT Chile IRU Duct" has the meaning set forth in recitals.



"IMPSAT Chile IRU Fee" has the meaning set forth in Section

2.02(a).



"IMPSAT Chile IRU Segment" has the meaning set forth in the



"IMPSAT Excluded Tax" shall mean a Tax described in any of the

following clauses:



(i) any franchise, excess profits, net worth, capital or

capital gains Tax, as well as any Tax on doing business or

imposed on net or gross income or receipts (excluding ingresos

brutos under Argentine or Chilean law) (including minimum and

alternative minimum Taxes measured by any items of Tax

preference), but in each case excluding Taxes that are or are in

the nature of sales, use, excise, license, rental, ad valorem,

value added or property Taxes (other than property taxes on

property owned by IMPSAT and not intended to be incorporated into

TAC);



(ii) Taxes imposed on IMPSAT solely as a result of IMPSAT's

gross negligence or willful misconduct; or



(iii) any import duty, other import related charges, sales

or use tax, VAT or property tax imposed by any Non-Contract

Country in respect of supplies brought into (or caused to be

brought into) such Non-Contract Country by IMPSAT or its

Affiliates for testing, modification or other similar purposes

prior to being installed or used outside such Non-Contract



"IMPSAT IRU Associated Properties" means the IMPSAT Argentina IRU

Associated Properties and the IMPSAT Chile IRU Associated Properties



"IMPSAT IRU Fee" means the IMPSAT Argentina IRU Fee and the

IMPSAT Chile IRU Fee.



"IMPSAT IRU Segment" means the IMPSAT Argentina IRU Segment and

the IMPSAT Chile Segment.





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"IMPSAT Permits" means all IMPSAT Access Rights, permits,

approvals, "no objections", permissions-in-principle, authorizations,

consents, registrations, certificates, rights-of-way, certificates of

occupancy, licenses, including without limitation, export and import

licenses, necessary to complete the Work and operate and maintain TAC,

provided that IMPSAT Permits shall not include (a) any of the foregoing

(i) relating to the ownership, operation and maintenance by SAC of the

Constructed Segments and not necessary until after each such Segment is

Ready for Provisional Acceptance, (ii) which is or would be needed by

SAC to engage in any business outside the business of developing, owning

and operating a buried fiber optic cable system or (iii) which is or

would be needed at any time by any purchaser or lessee of capacity on

TAC or (b) any telecommunications licenses required to be held by SAC

and issued by the Secretaria de Comunicaciones and/or the Comision

Nacional de Comunicaciones of Argentina or the Ministerio de Transportes

y Telecomunicaciones of Chile. IMPSAT Permits include all of the

foregoing whether required to be obtained from governmental entities or

private parties.



"IMPSAT System" means the telecommunications system of IMPSAT

along the SAC IRU Segment and other rights associated with the property

and equipment utilized in IMPSAT's telecommunications system along the

SAC IRU Segment.



"Intellectual Property" means any information, computer or other

apparatus programs, software, specifications, drawings, designs,

sketches, tools, market research or operating data, prototypes, records,

documentation, works of authorship or other creative works, ideas,

concepts, methods, inventions, discoveries, improvements, or other

business, financial and/or technical information (whether or not

protectable or registrable under any applicable intellectual property

law).



"Interest Holder" has the meaning set forth in Section 9.07.



"IRU" means (a) with respect to the IRU Ducts, an exclusive,

indefeasible right of use, for the Term, for the purposes described

herein[



] and (b) with respect to the IRU Associated Properties, an

associated, non-exclusive, indefeasible right of use, for the Term, for

the purposes described herein[



].



"IRU Associated Properties" means the SAC IRU Associated

Properties and the IMPSAT IRU Associated Properties.



"IRU Ducts" means the SAC IRU Duct and the IMPSAT IRU Duct.



"IRU Segments" means the SAC IRU Segment and the IMPSAT IRU



"Keep-well Letter" means the Keep-well letter, dated the date

hereof, from Global Crossing Holdings Ltd. to IMPSAT.





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"Liquidated Damages" means amounts of damages payable due to

delay in accordance with Section 4.04.



"Maintenance Services" means those services to be provided by

IMPSAT to SAC pursuant to Article 9.



"MTTR" has the meaning set forth in Section 18.02(b).



"Network" has the meaning set forth in the recitals.



"Non-Contract Countries" means all countries, or any political

subdivisions thereof or taxing authorities therein, other than the

Contract Countries.



"Notice of Termination" has the meaning set forth in Section

21.05.



"Owned Associated Properties" means the tangible and intangible

property needed for the use of the Owned Ducts to provide fiber optic

telecommunications services along the Constructed Segments as

contemplated by the Design Specifications, including, but not limited

to, the related Regeneration and OpAmp Facilities and all IMPSAT Permits

with respect to the Constructed Segments (specifically excluding any

electronic or optronic equipment or fiber optic cable) and will include

the properties and locations described in Exhibit 5.



"Owned Ducts" has the meaning set forth in the recitals.



"Payment Escrow Agent" means the escrow agent under the Payment

Escrow Agreement referred to in Section 3.06(b), and its successors in

such capacity.



"Permits" means the SAC Permits and the IMPSAT Permits.



"Punch List" has the meaning set forth in Section 5.04(a).



"Ready for Final Acceptance" means, for TAC, that



(i) TAC has been completed in accordance with the Design

Specifications,



(ii) all Acceptance Testing of TAC has been successfully

completed,



(iii) SAC has received the Final Commissioning Report, and



(iv) all Deficiencies noted in the Certificates of Provisional

Acceptance have been corrected (other than minor deficiencies

which will not affect the operation of TAC for the use for which

it was intended, in respect of which an equitable adjustment to

the Fee will be made).



"Ready for Provisional Acceptance" means, with respect to any

Segment,



(a) such Segment is complete, except for a Punch List, agreed to

between IMPSAT and SAC, listing the items of the Work not yet completed,

provided, that such





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Segment is complete in all material respects, and such incomplete

portion of the Work will not (i) materially impair SAC's ability to

install and operate fiber and equipment therein in the manner intended

and (ii) during its completion, unreasonably impair SAC's ability to

install and operate fiber and equipment therein in the manner intended.

At the sole discretion of SAC, the Punch List may contain items not

meeting the standards of clauses (i) and/or (ii) above,



(b) the results of Acceptance Testing of such Segment demonstrate

that such Segment has satisfied the Acceptance Criteria,



(c) except as included in the Punch List, all IMPSAT Permits are

obtained and in effect for such Segment and, in the case of the SAC IRU

Segment, IMPSAT has provided to SAC copies of IMPSAT Permits obtained

with respect thereto, and



(d)(i) in the case of the SAC IRU Segment, the Date of

Provisional Acceptance of the Segment between Buenos Aires and Las

Toninas has occurred and (ii) in the case of the Segments between

Mendoza and Algarrobo, the Date of Provisional Acceptance of the SAC IRU

Segment has occurred.



"Recurring Service Charge" has the meaning set forth in Section

9.02(a).



"Regeneration and OpAmp Facilities" has the meaning set forth in

Section 4.02(a).



"SAC Contract Taxes" has the meaning set forth in Section

15.01(a).



"SAC Excluded Tax" me ...