EXHIBIT 10.29
GUARANTY
(FLAG West Asia Cable System)
This GUARANTY, is made as of December 29, 2000 by FLAG Telecom Holdings Limited,
a Bermuda company (the "Guarantor"), in favor of Alcatel Submarine Networks, a
company organized and existing under the laws of France (together with its
successors and assigns, "ASN").
RECITALS
A. ASN and FLAG Asia Limited, a Bermuda company (together with its
successors and assigns "FLAG"), have entered into a Contract to provide
an integrated optical fibre cable system linking Japan and Korea (as
the same may from time to time be amended, modified or supplemented,
the "Contract "), which is entered into contemporaneously with this
Guaranty.
B. ASN has required, as a condition precedent to entering into the
Contract, that the Guarantor execute and deliver this Guaranty. ASN
would not enter into the Contract with FLAG but for the execution and
delivery of this Guaranty by the Guarantor.
C. Guarantor will derive substantial benefit from the performance by ASN
of its obligations to FLAG under the Contract.
D. The Guarantor desires to guaranty all of the obligations of FLAG under
the Contract as provided herein.
E. The Guarantor is the owner either directly or indirectly of all of the
capital stock of FLAG.
NOW, THEREFORE, based upon the foregoing, and in order to induce ASN to
enter into the Contract to which it is a party, the Guarantor hereby agrees as
follows:
SECTION 1 DEFINITIONS. Capitalized terms not otherwise defined in this Guaranty
shall have the meanings ascribed to them in the Contract. As used in this
Guaranty, the following terms have the following meanings unless the context
otherwise requires:
1.1 "Guarantied Obligations" has the meaning ascribed to such term in
Section 2.1.
1.2 "Guaranty" means this Guaranty, as it may be amended, supplemented or
otherwise modified from time to time in writing signed by the Guarantor
and ASN.
SECTION 2 GUARANTY.
2.1 Guarantied Obligations. The Guarantor hereby unconditionally and
irrevocably Guarantys to ASN upon first written demand the full and
punctual payment and discharge by FLAG of all its payment obligations
under the Contract, including, without limitation, the payment of all
damages and other remedies arising out of a failure of payment
including interest payable pursuant to Article 15.2 of the Contract
(collectively, the "Guarantied Obligations"). Such Guarantied
Obligations will extend to any assignment of Flag's rights and
obligations under the Contract pursuant to Article 28.1 of the
Contract. The Guarantied Obligations shall conclusively be deemed to
have been created in reliance upon this Guaranty.
2.2 Term of Guaranty.
2.2.1 This Guaranty shall remain in full force and effect until the
Guarantied Obligations are paid or discharged in full.
2.2.2 The Guarantor's payment or discharge of a portion, but not
all, of the Guarantied Obligations shall in no way limit,
affect, modify or abridge the Guarantor's liability, as set
forth herein, for any portion of the Guarantied Obligations
that has not been completely paid in full.
2.3 Guaranty Unconditional. The Guarantor agrees that it is liable
hereunder as a principal debtor by way of indemnity and not merely as
surety and that the obligations of the Guarantor hereunder shall be
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by
any of the following, whether with or without notice to or assent by
the Guarantor:
2.3.1 any extension, renewal, settlement, compromise, waiver or
release in respect of any payment obligation of FLAG under the
Contract, by operation of law or otherwise;
2.3.2 any modification or amendment of or supplement to the
Contract;
2.3.3 any release, impairment, non-perfection or invalidity of any
direct or indirect security for any payment obligation of FLAG
under the Contract;
2.3.4 any change in the corporate existence, structure or ownership
of FLAG, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting FLAG or its assets or any
resulting release or discharge of any obligation of FLAG
contained in the Contract;
2.3.5 the existence of any claim, set-off or other rights which the
Guarantor may have at any time against ASN, FLAG, or any other
corporation or person, whether in connection herewith or any
unrelated transactions, provided that nothing herein shall
prevent the assertion of any such claim by separate suit;
2.3.6 any invalidity or unenforceability relating to or against
FLAG, for any reason, of the Contract, or any provision of
applicable law or regulation purporting to prohibit the
payment by FLAG of any other amount payable by FLAG under the
Contract; or
2.3.7 any other act or omission to act or delay of any kind by ASN,
FLAG, or any other corporation or person or any other
circumstance whatsoever which might, but for the provisions of
this paragraph, constitute a legal or equitable discharge of
or defense to the Guarantor's obligations hereunder.
Notwithstanding any provision of this Guaranty to the
contrary, the Guarantor shall be entitled to assert as a
defense to any claim for payment or performance of the
Guarantied Obligations, that:
2.3.7.1 such Guarantied Obligations are not currently due
under the terms of the Contract; or
2.3.7.2 that such Guarantied Obligations have previously been
paid or discharge in full; or
2.4 Maximum Liability. Notwithstanding any other provision to the contrary,
in no event shall the obligations of Guarantor hereunder exceed the
obligations Guarantor would have had if it were itself a party to the
Contract, and Guarantor shall have the full benefit of all defenses,
set-offs, counterclaims, reductions or diminution of any obligation or
limitation or exclusion of liability available to FLAG under the
Contract.
2.5 Waivers of Notices and Defenses. The Guarantor hereby waives acceptance
hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken
by any corporation or person against FLAG or any other corporation or
person.
2.6 Stay. The Guarantor agrees that, notwithstanding anything to the
contrary herein, if ASN is stayed upon the insolvency, bankruptcy, or
reorganization of FLAG from exercising its rights to enforce or
exercise any right or remedy with respect to the Guarantied
Obligations, or is prevented from giving any notice or demand for
payment or taking any action to realize on any security or collateral
or is prevented from collecting any of the Guarantied Obligations, in
any such case, by such proceeding or action, the Guarantor shall pay or
render to ASN upon demand therefor the amount that would otherwise have
been due had such rights and remedies been permitted to be exercised by
ASN.
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2.7 No Enforcement of Subrogation. Upon making any payment with respect to
any Guarantied Obligation hereunder, the Guarantor shall be subrogated
to the rights of ASN against FLAG with respect to such payment;
provided that the Guarantor shall not enforce any payment right by way
of subrogation until all Guarantied Obligations have been paid in full.
SECTION 3 REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and
warrants to ASN that the following statements are true and correct:
3.1 Binding Obligation. This Guaranty has been duly and validly executed
and delivered by the Guarantor and constitutes the legal, valid and
binding obligations of the Guarantor enforceable against the Guarantor
in accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency or other similar laws affecting
the enforcement of creditors' rights generally and by equitable
principles relating to the availability of equitable remedies.
3.2 Relationship to FLAG. As of the date hereof, the Guarantor is the
owner, directly or through one or more wholly-owned subsidiaries, of
all of the issued and outstanding capital stock of FLAG; the agreement
of ASN to enter into the Contract to which it is a party with FLAG is
of substantial and material benefit to the Guarantor; and the Guarantor
has reviewed and approved copies of the Contract and all other related
documents and is fully informed of the remedies ASN may pursue upon the
occurrence of a default under the Contract. This Guaranty will remain
in full force and effect if FLAG ceases to be a direct or indirect
subsidiary of Guarantor.
3.3 Status. Guarantor is duly organized and existing under the laws of
Bermuda.
SECTION 4 MISCELLANEOUS.
4.1 Delivery. Any notices, consent, approval, or other communication
pursuant to this Agreement shall be in writing, in the English
language, and shall be deemed to be duly given or served on a party if
sent to the party at the address stipulated below and if sent by any of
the following means only:
4.1.1 Sent by hand: Such communication shall be deemed to have been
received on the Day of delivery provided receipt of delivery
is obtained.
4.1.2 Sent by facsimile: Such communication shall be deemed to have
been received, under normal service conditions, twenty-four
(24) hours following the time of dispatch or on confirmation
by the receiving party, whichever is earlier.
4.1.3 Sent by an internationally recognized courier service: Such
communication shall be deemed to have been received, under
normal service conditions, on the day it was received or on
the third day after it was dispatched, whichever is earlier.
4.1.4 Sent by first class or air mail: Such communication shall be
deemed to have been received, under normal service conditions,
on the day it was received or on the day which is seven days
after the mailing thereof.
4.2 Addresses. For purposes of this Section, the names, addresses and fax
numbers of the Parties are as detailed below. Any change to the name,
address, and facsimile numbers may be made at any time by giving thirty
(30) days' prior written notice.
If to the Guarantor:
FLAG Telecom Holdings Limited
Xxxxx 000
00 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx XX00
Xxxxxxx
With a copy to:
FLAG Telecom Limited
0 Xxxxx Xxxxxx
0
Xxxxxx X0X 0XX
U.K.
Attn: General Counsel
Fax: x00 (00) 0000 0000
If to ASN:
Alcatel Submarine Networks
00 Xxxxxx xx xx Xxxxxxx
00000 Xxxxxxxx
Xxxxxx
Attn: General Counsel
Fax: x00 0 0000 0000
4.3 No Waivers. No failure or delay by ASN in exercising any right, power
or privilege hereunder or under the Contract shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
4.4 Amendments and Waivers. This Guaranty constitutes the complete
agreement of ASN and the Guarantor with respect to the subject matter
hereof and supersedes all prior or contemporaneous negotiations,
promises, covenants, Contract or representations. No amendment,
modification, termination or waiver of any provision of this Guaranty,
shall in any event be effective without the written consent of ASN and
Guarantor.
4.5 Successors and Assigns; Beneficiaries. This Guaranty is a continuing
Guaranty and shall be binding upon the Guarantor and its successors and
assigns, provided, however, that the Guarantor may not assign this
Guaranty or transfer any of the rights or obligations of the Guarantor
hereunder without the prior written consent of ASN and ASN may not
assign this Guaranty as collateral without the prior written consent of
the Guarantor (such consent not to be unreasonably withheld or
delayed). This Guaranty shall inure to the benefit of and may be
enforced by ASN and its successors and assigns. Nothing contained in
this Guaranty shall be deemed to confer upon anyone other than the
parties hereto and the other beneficiaries described in the preceding
sentence any right to insist upon or to enforce the performance or
observance of any of the obligations contained herein.
4.6 Applicable Law. This Guaranty is governed by, and shall be construed in
accordance with, English law. The parties agree that the courts of
England are (subject to Section 4.7) to have exclusive jurisdiction to
settle any disputes (including claims for set-off and counterclaims)
which may arise in connection with the creation, validity, effect,
interpretation or performance of, or the legal relationships
established by, this Guaranty or otherwise arising in connection with
this Guaranty and for such purpose irrevocably submit to the
jurisdiction of the English courts.
4.7 Other Jurisdiction. The agreement contained in Section 4.6 is included
for the benefit of ASN. Accordingly, notwithstanding the exclusive
agreement set forth in Section 4.6 hereof, ASN shall retain the right
to bring proceedings in any other court which has jurisdiction by
virtue of the Convention on Jurisdiction and Enforcement of Judgments
signed 16 September 1988 (as from time to time amended and extended)
and the Guarantor irrevocably waives any objections to the jurisdiction
of any courts referred to in this Section 4.7. The Guarantor
irrevocably agrees that a judgment or order of any court referred to in
this Section 4.7 in connection with this Guaranty is conclusive and
binding on it and may be enforced against it in the courts of any other
jurisdiction.
4.8 Service of Process. The Guarantor irrevocably consents to service of
process or any other document in connection with proceedings in any
court by personal service, delivery at any address specified in this
Guaranty or any other usual address, mail or in any other manner
permitted by English law, the law of the place of service or the law of
the jurisdiction where proceedings are instituted.
4.9 Severability. If any provision in or obligation under this Guaranty
shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
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4.10 Interpretation. Section headings in this Guaranty are included herein
for convenience of reference only and shall not constitute a part of
this Guaranty for any other purpose or be given any substantive effect.
4.11 Further Assurances. At any time or from time to time, upon the request
of ASN, the Guarantor shall execute and deliver such further documents
and do such other acts and things as ASN may reasonably request in
order to effect fully the purposes of this Guaranty. The Guarantor
agrees to be liable for any reasonable expenses incurred by ASN and/or
its successors and assigns with respect to any action or proceeding to
enforce this Guaranty.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty
as of the date first above written.
FLAG TELECOM HOLDINGS LIMITED
By: _____________________________
Name:
Title:
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