Exhibit 10.21
INDEFEASIBLE RIGHT OF USE AGREEMENT
THIS AGREEMENT ("Agreement"), dated as of the ______ day of October 1999, is
among FLAG ATLANTIC LIMITED, a company organized under the laws of Bermuda and
having its principal office at The Emporium Building, 69 Front Street, 4th
Floor, Xxxxxxxx, Bermuda, FLAG ATLANTIC USA LIMITED, a company organized under
the laws of Delaware, USA and having its principal office at 000 Xxxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, XXX, (FLAG ATLANTIC LIMITED AND FLAG
ATLANTIC USA LIMITED being hereinafter jointly and severally referred to as
"FA-1") and TELEGLOBE USA INC. ("Purchaser"), a corporation organized under the
laws of Delaware, USA, and having its principal office at 00000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxx, Xxxxxxxx 00000, XXX.
WITNESSETH:
WHEREAS, FA-1 and its Affiliates are constructing and will directly and/or
indirectly own, operate and maintain a fiberoptic cable system as more fully
described in Schedule 1 (the "System"); and
WHEREAS, the System is currently scheduled to be commercially available in
stages with the initial stage, as more particularly described in Schedule 1
("Initial Stage"), currently scheduled to be commercially available on or about
30 March 2001 ("Scheduled Initial RFS Date") and with the final stage, as more
particularly described in Schedule 1 ("Final Stage"), currently scheduled to be
commercially available on or about 30 June 2001 ("Scheduled Final RFS Date");
and
WHEREAS, Purchaser desires to acquire from FA-1, and FA-1 is willing to provide
to Purchaser (i) an indefeasible and exclusive right of use ("IRU") in the
derivable capacity from a fiber pair on the subsea portion of the System as set
out in Part A of Schedule 2 (the "Submarine IRU") and (ii) an IRU (except as
otherwise specifically provided in clause 2.8 of this Agreement) in a dark fiber
pair on the backhaul portion of the System as set out in Part B of Schedule 2
(the "Terrestrial IRU"); and
WHEREAS, FA-1 intends to convey to Purchaser the Submarine IRU and the
Terrestrial IRU in two steps, an initial IRU to be granted after Initial RFS
Date for the Initial Stage of the System (the "Initial IRU") and a second IRU to
be granted after Final RFS Date in the remaining portion of the System (the
"Final IRU") (the Initial IRU and the Final IRU being referred to collectively
as the "System IRU"); and
WHEREAS, FLAG Atlantic Limited and Purchaser are entering into a certain
collocation and maintenance agreement concurrently herewith; and
WHEREAS, FA-1 and Purchaser (the "Parties") desire to define the terms and
conditions under which the System IRU will be acquired by Purchaser.
NOW, THEREFORE, the Parties hereby agree as follows:
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE PORTIONS OF
THIS AGREEMENT MARKED WITH THREE ASTERISKS (***) AND THE REDACTED MATERIAL HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
1. DEFINITIONS
1.1 "ACKNOWLEDGEMENT" shall have the meaning set forth in clause 2.4.
1.2 "AFFILIATE" shall mean any other entity that controls, is controlled by
or is under common control with an entity.
1.3 "ALCATEL" shall mean Alcatel Submarine Networks and, where applicable,
certain of its Affiliates.
1.4 "BIS TESTS" shall have the meaning set forth in clause 2.5.
1.5 "DARK FIBER" means individual strands of optical fiber in the System
provided by FA-1 to Purchaser without electronics or optronics and
which is not "lit" or activated.
1.6 "FA-1 FINANCIAL CLOSURE" shall have the meaning set forth in clause
24.3.
1.7 "FINAL CLOSING" shall have the meaning set forth in clause 3.1.3.
1.8 "FINAL CONFIRMATION" shall have the meaning set forth in clause 2.5.2.
1.9 "FINAL RFS DATE" shall have the meaning set forth in clause 2.5.
1.10 "FINANCING AGREEMENT" shall mean the definitive project financing
agreement for the funding of the construction of the System as amended
or supplemented from time to time, obligating the financial
institutions party thereto to make loans for the construction of the
System (subject to satisfaction of conditions precedent).
1.11 "INDEMNITY EVENT" shall have the meaning set forth in clause 14.3.1.
1.12 "INITIAL CLOSING" shall have the meaning set forth in clause 3.1.2.
1.13 "INITIAL CONFIRMATION" shall have the meaning set forth in clause
2.5.2.
1.14 "INITIAL PAYMENT" shall have the meaning set forth in clause 3.1.
1.15 "INITIAL RFS DATE" shall have the meaning set forth in clause 2.5.
1.16 "INTELLECTUAL PROPERTY" shall have the meaning set forth in clause
13.2.
1.17 "PROPOSAL" shall have the meaning set forth in clause 8.4.
1.18 "PURCHASE PRICE" shall have the meaning set forth in clause 3.1.
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1.19 "SUPPLY CONTRACT" shall mean that certain agreement dated 20 September
1999 between FLAG Atlantic Limited and certain of its subsidiaries and
Alcatel for the construction of the subsea portions of the System
(including related electronics), as amended from time to time.
1.20 "SYSTEM LIFE" shall mean the period of time between the Initial RFS
Date and the date the System is decommissioned in accordance with
clause 9.
1.21 "TAX REDUCTION" shall have the meaning set forth in clause 4.3.4.
1.22 "TERRESTRIAL FIBER LEASE" shall have the meaning set forth in clause
2.8.
1.23 "WITHHOLDING TAXES" shall mean any taxes, duties or charges to be borne
by Purchaser pursuant to clause 4.3.1.
2. PURCHASE AND GRANT OF SYSTEM IRU
2.1 PURCHASE AND GRANT. FA-1 hereby grants to Purchaser, and Purchaser
hereby accepts such grant, on the occurrence of the Initial Closing and
the Final Closing for the System Life the Initial IRU and the Final
IRU, respectively, subject to the terms and conditions of this
Agreement.
2.2 USE OF SYSTEM IRU. Notwithstanding anything in this Agreement to the
contrary, following the grant Purchaser may resell, assign, transfer or
otherwise use the System IRU for any lawful purpose. Notwithstanding
any resale, assignment or transfer, Purchaser remains liable for its
obligations under this Agreement. FA-1 agrees and acknowledges that
from the date of grant under clause 2.1, it shall have no right to use
the Initial IRU or the Final IRU, as applicable, during the System
Life.
2.3 PROPERTY INTEREST.
2.3.1 ***
2.3.2 ***
2.4 ***
2.5 TESTING.
2.5.1 ***
2.5.2 ***
2.6 ***
2.7 COLLOCATION AND MAINTENANCE AGREEMENT. Purchaser and FLAG Atlantic
Limited are entering into a collocation and maintenance agreement
concurrently herewith.
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2.8 TERRESTRIAL FIBER LEASES.
2.8.1 In the event that (i) after using commercially reasonable
efforts, FA-1 does not have the underlying rights to grant an
IRU on portions of the Terrestrial IRU located in France,
England and between France and England, and/or (ii) if any
jurisdiction in which the System is located does not currently
recognize or does not recognize in the future the conveyance
of telecommunications facilities on an IRU basis, and/or (iii)
FA-1 chooses not to obtain an IRU on the portion of the
Terrestrial IRU located in England, then as to such portions
of the System IRU or such jurisdiction(s) only, this Agreement
shall be considered an agreement for a lease of the capacity
on the relevant portions of the Terrestrial IRU ("Terrestrial
Fiber Lease"). The term of the Terrestrial Fiber Lease shall
be from the grant of the Initial IRU for the System Life. All
amounts owed under this Agreement shall be paid as provided in
this Agreement and Purchaser shall not be required to make any
additional payments as a result of the above-described change
in status of the rights granted under this Agreement.
Notwithstanding the foregoing, the Terrestrial Fiber Lease
shall provide Purchaser with all of the same rights and
privileges contained in this Agreement as the rest of the
System IRU except for the nature of its interest.
2.8.2 In the event that this Agreement is to be treated as a
Terrestrial Fiber Lease for any portion of the System IRU,
then as to such portion only, the terms "purchase,"
"Purchaser," and any variations thereon shall mean "lease,"
"Lessee," or the appropriate variation thereof, and the terms
"indefeasible and exclusive right of use" and "IRU" shall mean
"Lease." Any other terms and conditions of this Agreement also
shall be deemed modified only to the extent necessary to be
consistent with the grant of a lease to the Purchaser. All
other terms and conditions of this Agreement shall remain
unchanged and fully valid and enforceable.
2.8.3 Notwithstanding the provisions of clauses 2.8.1 and 2.8.2, it
is the intent of the Parties that the Purchaser be granted an
IRU or the next highest rights with regard to use of the
System IRU. To the extent that (i) FA-1 obtains the ability to
grant an IRU on a portion of the System IRU previously
conveyed as a Terrestrial Fiber Lease pursuant to clause
2.8.1(i) and (ii) any jurisdiction(s) recognizes the
conveyance of telecommunications facilities on an IRU basis at
any time during the term of the Agreement, then, the rights
and interest granted in connection with the relevant portion
of the System IRU shall be an IRU, and the terms of this
Agreement relating to the lease of capacity shall be of no
force or effect as to such portion of the System IRU.
2.9 ***
2.10 ***
3. CONSIDERATION FOR GRANT OF SYSTEM IRU AND CLOSING OF IRU PURCHASES
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3.1 PURCHASE PRICE. In consideration of the grants of the Initial IRU and
Final IRU, Purchaser agrees to pay to FA-1 an aggregate purchase price
of *** (the "Purchase Price") as follows:
3.1.1 INITIAL PAYMENT. Purchaser shall pay to FA-1 *** of the
Purchase Price (the "Initial Payment") pursuant to an invoice
delivered by FA-1 after the satisfaction of each of the
following items:
***
***
3.1.2 INITIAL CLOSING. Purchaser shall pay to FA-1 *** of the
Purchase Price (the "Initial Closing") pursuant to an invoice
delivered by FA-1 and receipt by Purchaser from FA-1 of a
certificate dated as of a recent date as to the following:
***
3.1.3 FINAL CLOSING. Purchaser shall pay to FA-1 the remaining ***
of the Purchase Price (the "Final Closing") pursuant to an
invoice delivered by FA-1 and receipt by Purchaser from FA-1
of a certificate dated as of a recent date as to the
following:
***
4. PAYMENTS
4.1 INVOICES. FA-1 shall render to Purchaser invoices for all amounts
payable pursuant to this Agreement. All invoices for the Purchase Price
shall be due and payable within 30 days after delivery to Purchaser.
All other invoices shall be due and payable within 45 days after
delivery to Purchaser.
4.2 DEFAULT INTEREST. Any amount payable pursuant to this Agreement which
is not paid when due shall accrue interest as follows at the annual
rate of *** above the U.S. Dollar LIBOR for one month in each case as
quoted in THE WALL STREET JOURNAL on the first business day of the
month in which the payment is due. All such default interest shall
accrue from the day following the date payment of the relevant amount
was due until it is paid in full and shall accrue both before and after
judgement. Such interest shall be payable on demand.
4.3 WITHHOLDING
4.3.1 All amounts payable by Purchaser pursuant hereto shall be paid
in full in U.S. dollars (or such other currency as FA-1 may
designate) by wire transfer free and clear of all bank or
transfer charges to such account(s) as FA-1 may by notice to
Purchaser designate without reduction for any deduction or
withholding for or on account of any tax, duty or other charge
of whatever nature imposed by any taxing authority. ***
Purchaser shall make the
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required deduction or withholding, shall pay the amount so
deducted or withheld to the relevant governmental authority
and shall promptly provide FA-1 with evidence of such payment.
4.3.2 FA-1 and Purchaser will work together in good faith and use
their respective reasonable commercial efforts to minimize or
eliminate Withholding Taxes within the legal and/or
administrative framework of the relevant country's (or
subdivision thereof) tax authorities, including, without
limitation, applying at Purchaser's expense for Withholding
Tax waivers from such relevant tax authorities.
4.3.3 Notwithstanding clause 4.3.2, should Purchaser have to
withhold Withholding Taxes by virtue of the laws of any
country (or subdivision thereof), FA-1 and Purchaser will at
Purchaser's expense work together in good faith and use their
reasonable commercial efforts to claim a refund of such
Withholding Taxes from the relevant tax authority(ies).
4.3.4 ***
4.3.5 ***
4.4 Purchaser's obligation to pay the Purchase Price and other amounts that
have become due and payable pursuant hereto shall not be subject to any
set-off, counterclaim, deduction, defense or other right which
Purchaser may have against FA-1 or any other party, provided that
nothing in this clause shall prevent in any way Purchaser from
otherwise enforcing any of its rights against FA-1.
4.5 Prior to FA-1 Financial Closure Purchaser shall deliver to FA-1 such
security for payment of the Purchase Price as is set forth in Schedule
3.
5. TAXES
5.1 TAXES. Save as the context requires or as otherwise stated herein all
references to payments made in this Agreement are references to such
payments exclusive of all sales and use taxes, gross turnover taxes,
value added taxes, or other similar turnover or sales based taxes,
excise taxes, duties, fees, charges, levies, surcharges to recover the
cost of universal service contributions, or similar liabilities (other
than the general income taxes of FA-1) imposed by any authority,
government or government agency in connection with or as a result of or
in respect of the supply for which the payment is or is deemed to be
consideration (collectively "taxes"). Subject to clause 5.2, where
applicable such taxes shall be added to the invoice and shall be paid
to FA-1 at the same time as the relevant invoice is settled in
accordance with clause 3.
5.2 VAT. Subject to clause 4.3, in the event that value added tax in the UK
or France is considered to be applicable, FA-1 shall notify Purchaser
to this effect prior to the issuance of the relevant VAT invoice and
both Parties shall work together in good faith to restructure the
arrangements to reduce the impact of VAT on Purchaser, where legally
possible, but such that there is no adverse cashflow
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impact for FA-1. Notwithstanding these discussions, invoices (excluding
the VAT) shall be issued and be payable in accordance with clauses 3
and 4.1.
5.3 RATES. Purchaser shall be responsible for all rates and similar
property based taxes appropriately assessed and arising directly or
indirectly from Purchaser's interest in the System IRU and exercise of
its rights in connection with the System IRU.
6. DEFAULT AND TERMINATION
6.1.1 In the event that Purchaser shall have failed to pay any
amount payable by Purchaser pursuant hereto for more than ***
days after its due date, then Purchaser shall not be entitled
to activate any additional capacity within the System IRU or
to effect any upgrade pursuant to clause 8 until Purchaser has
paid in full all amounts overdue together with applicable
default interest. If such failure continues for a further ***
days, FA-1 shall be entitled to refrain from performing any
services for Purchaser required by this Agreement or the
collocation and maintenance agreement referred to in clause
2.7, deny Purchaser the right of access to co-located spaces
(except for the purpose of maintaining its existing services
to its customers), and refuse to carry out any additional
break-outs along the route of the Dark Fiber on which
Purchaser has its Terrestrial IRU until Purchaser has paid in
full all undisputed amounts overdue together with applicable
default interest.
6.1.2 FA-1 shall be entitled to terminate this Agreement without
liability to Purchaser if either the Initial Payment or the
payment constituting the Initial Closing is not made within
*** days of its due date. FA-1 shall be entitled to terminate
Purchaser's right to purchase the Final IRU if the payment
constituting the Final Closing is not made within *** days of
its due date.
6.2 Initial RFS Date.
6.2.1 If the Initial Confirmation has not been delivered to
Purchaser within *** months and 10 days after the Scheduled
Initial RFS Date, whether due to a force majeure event or
otherwise, Purchaser shall have the right to immediately
terminate its obligation to purchase the System IRU upon
written notice of termination delivered to FA-1. In the event
Purchaser has not exercised this right of termination, FA-1
may notify Purchaser of the revised expected Initial RFS
Date ***. Purchaser shall have *** days from receipt of this
notice to notify FA-1 that it wishes to terminate its
obligation to purchase the System IRU or that it accepts the
delay to the revised expected Initial RFS Date (and failure
by Purchaser to provide a timely notice shall be deemed
acceptance of the delay). If the Initial Confirmation is not
delivered to Purchaser within 10 days after the revised
expected Initial RFS Date the above procedure will be repeated
until the earlier of the actual delivery of the Initial
Confirmation to Purchaser and Purchaser's termination of its
obligation to purchase the System IRU.
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6.2.2 If Purchaser has exercised its right to terminate its
obligation to purchase the System IRU and the Initial RFS Date
actually occurs prior to the date *** months after the
Scheduled Initial RFS Date, Purchaser shall be entitled within
six months from the date that FA-1 delivers the Initial
Confirmation to notify FA-1 that it wishes to acquire capacity
on the FLAG Atlantic-1 System (of which the System would have
been a part) in the amount of the Initial Payment of the
Purchase Price, the amount of the capacity being determined on
the basis of the then prevailing rate for comparable capacity
on the FLAG Atlantic-1 System at the time of such delivery of
the Initial Confirmation. In such case, this Agreement shall
be amended by the Parties to reflect the different nature of
the capacity being acquired and the different rights and
obligations of the Parties as a consequence thereof.
6.2.3 If the Initial RFS Date has not occurred within *** months
after the Scheduled Initial RFS Date, Purchaser may by 30 days
notice terminate this Agreement ***. Purchaser shall have no
obligation to make any further payments of the Purchase Price
under this Agreement following a termination.
6.3 FINAL RFS DATE. If the Final Confirmation has not been delivered to
Purchaser within the later of *** months and 10 days after the
Scheduled Final RFS Date and *** months and 10 days after the Initial
RFS Date, whether due to a force majeure event or otherwise, Purchaser
shall have the right to immediately terminate its obligation to
purchase the Final IRU without further liability to pay the portion of
the Purchase Price applicable to the Final IRU upon written notice
delivered to FA-1. In the event Purchaser has not exercised this right
of termination of its obligation to purchase the Final IRU, FA-1 may
notify Purchaser of the revised expected Final RFS Date ***. Purchaser
shall have *** days from receipt of this notice to notify FA-1 that it
wishes to terminate its obligation to purchase the Final IRU or that it
accepts the delay to the revised expected Final RFS Date (and failure
by Purchaser to provide a timely notice shall be deemed acceptance of
the delay). If the Final Confirmation is not delivered to Purchaser
within 10 days after the revised expected Final RFS Date the above
procedure will be repeated until the earlier of the actual delivery of
the Final Confirmation and Purchaser's termination of its obligation to
purchase the Final IRU.
6.4 Except as provided herein, Purchaser shall have no right to terminate
or cancel this Agreement or its obligation to purchase the System IRU
for any reason whatsoever.
7. OPERATION
7.1 Purchaser shall conduct all operations and use of the System IRU in a
manner which does not interrupt, impair or interfere with the
operations of the System or the use thereof by FA-1 or any other
purchaser or user of optical fibers or capacity in the System. If,
after notification by FA-1, Purchaser does not take immediate
corrective action to comply with its obligations under this clause 7.1,
FA-1 may take reasonable action required to protect the System,
including but not limited to the interruption of Purchaser's use of the
System IRU and installation of protective equipment. Purchaser shall,
within 15 days of receipt of an invoice, reimburse FA-1 for its total
reasonable direct costs properly incurred *** for any
protective measures reasonably required by FA-1 to be installed on the
System resulting from the use of the System IRU in violation of
this clause.
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7.2 Except where FA-1 is carrying out emergency, routine or preventative
maintenance or repair activities (which shall be carried out in
accordance with clause 11.5 of the collocation and maintenance
agreement), FA-1 shall conduct all operations and use of the System in
a manner which does not interrupt, impair or interfere with the use of
the System IRU by Purchaser or Purchaser's customers.
8. SYSTEM ENHANCEMENTS AND UPGRADES
8.1 FA-1 reserves the right to upgrade the amount of the capacity of the
System and to make any enhancements to the System from time to time.
FA-1 shall use reasonable efforts to minimize the interruption,
interference or impairment of the System caused by the implementation
of any such enhancement or upgrade and shall indemnify Purchaser for
any damage or interruption to the System IRU as a result of FA-1's
failure to use such reasonable efforts.
8.2 FA-1 INITIATED UPGRADES. FA-1 will notify Purchaser of any planned
upgrade of, or enhancement to, the System. Such notice shall set forth
the costs of such upgrade or enhancement, based on its pricing
agreement with or proposal from its suppliers. If Purchaser wishes to
participate in such upgrade or enhancement for the purposes of
upgrading or enhancing the Submarine IRU it shall notify FA-1 within 30
days of receiving notice from FA-1. If Purchaser agrees to participate
in the upgrade or enhancement, the upgrade or enhancement will then be
treated as FA-1 project managing the upgrade or enhancement, pursuant
to clause 8.4. If Purchaser elects not to participate or fails to
timely respond to the notice, FA-1 shall be entitled to proceed with
the upgrade or enhancement without participation by Purchaser.
8.3 PURCHASER INITIATED UPGRADES. Purchaser shall be entitled at its own
cost at any time to upgrade the capacity on the Submarine IRU,
including upgrading the Submarine IRU so that it is equipped with the
ability to carry greater than 400 Gbps of traffic when this becomes
possible, provided that such upgrades are carried out in consultation
with FA-1 and at a time mutually agreed by the Parties (which agreement
will not be unreasonably withheld or delayed). *** FA-1 agrees to use
reasonable efforts to coordinate with the third party supplier.
Purchaser shall indemnify FA-1 for any damage or interruption to the
System as a result of the upgrades.
8.4 FA-1 PROJECT MANAGED UPGRADES. Purchaser may at any time request FA-1
to project manage any upgrade of the Submarine IRU provided that each
upgrade shall be a minimum of 40 Gbps on each segment being upgraded.
Upon FA-1 receiving such request FA-1 will, within 60 days, subject to
receiving from Purchaser the information required, submit to Purchaser
a proposal for the upgrade ("Proposal"). The Proposal will identify
third party costs and a completion timeline for the upgrade.
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Purchaser will notify FA-1 within 30 days of receiving the Proposal as
to whether it accepts or rejects the Proposal.***
8.5 TERRESTRIAL IRU UPGRADES. Purchaser shall be entitled at its own cost
at any time to upgrade the Terrestrial IRU (including any portion
covered by a Terrestrial Fiber Lease) provided that such upgrades are
carried out in consultation with FA-1 and at a time, not later than 30
days after the date Purchaser wishes to do the work, mutually agreed by
the Parties (which agreement will not be unreasonably withheld nor
delayed).
9. SYSTEM DECOMMISSIONING
The System shall be decommissioned at such time, no earlier than 15
years and no later than 25 years from the Initial RFS Date, as either
FA-1 or the holders of three quarters of the then activated capacity on
the System determine that the System is technically obsolete or has
reached the end of its useful economic life. There shall be no
compensation payable to Purchaser whether Purchaser voted for or
against decommissioning. FA-1 shall where possible notify Purchaser if
the System or any material portion thereof is to be decommissioned at
least 12 months prior to such decommissioning (or by such later date as
may be possible if 12 months notice is not possible). This provision is
without prejudice to the rights of FA-1 to decommission the System
without any liability to Purchaser whatsoever in the event of a force
majeure event which makes it impossible to maintain the business
efficacy of the System.
10. REPRESENTATIONS, WARRANTIES AND COVENANTS
10.1 Purchaser represents, warrants and covenants to FA-1 as follows:
10.1.1 Purchaser is duly established and in good standing under the
laws of Delaware, USA and has full power and authority to
enter into this Agreement.
10.1.2 This Agreement constitutes the legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in
accordance with its terms.
10.1.3 Purchaser has obtained or will obtain all necessary consents,
licenses, permits and other approvals, both governmental and
private, as may be necessary to permit Purchaser to perform
its obligations under this Agreement and to acquire and use
the System IRU.
10.1.4 Purchaser shall perform its obligations under this Agreement
and use the System IRU in a manner consistent with applicable
law, and shall not use, or knowingly permit the System IRU to
be used, for any illegal purpose or in any other unlawful
manner.
10.2 FLAG Atlantic Limited and FLAG Atlantic USA Limited each represents,
warrants and covenants to Purchaser as follows:
10.2.1 It is duly established and in good standing under the laws of
the country of its incorporation and has full power and
authority to enter into this Agreement.
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10.2.2 This Agreement constitutes its legal, valid and binding
obligation enforceable against it in accordance with its
terms.
10.2.3 It is qualified to do business in all jurisdictions where such
qualification is required by applicable law, and where the
failure to be so qualified reasonably could be expected to
have a material adverse effect on FA-1's ability to perform
its obligations under this Agreement.
10.2.4 ***
10.2.5 The execution and performance of this Agreement by FA-1 will
not result in a breach of any agreement FA-1 may have with
third parties or any applicable law, which reasonably could be
expected to have a material adverse effect on its ability to
perform its obligations under this Agreement.
10.2.6 There are no pending or, to its knowledge, threatened claims,
actions, suits, audits, investigations or proceedings by or
against it which reasonably could be expected to have a
material adverse effect on its ability to perform its
obligations under this Agreement.
10.2.7 FA-1 shall perform its obligations under this Agreement and
use the System in a manner consistent with applicable law, and
shall not use, or knowingly permit the System to be used, for
any illegal purpose or in any other unlawful manner in each
case to the extent any failure to so act would have a material
adverse effect on the System IRU.
10.2.8 The Terrestrial IRU will be designed and implemented in
accordance with Schedule 2.
10.2.9 FLAG Atlantic Limited and FLAG Atlantic USA Limited each
undertakes to use reasonable commercial efforts to obtain all
material consents, approvals, licenses, permits, both
governmental and private, as are necessary to permit it to
perform its obligations under this Agreement.
10.2.10 ***
10.3 Except as provided herein, FA-1 disclaims, and Purchaser waives, all
representations and warranties regarding the System IRU, including any
warranty of merchantability or fitness for a particular use, and in
particular, without limiting the foregoing FA-1 does not warrant that
the System IRU will be uninterrupted or error free or that the System
IRU will meet Purchaser's requirements for the equipment to be deployed
by Purchaser in connection with the System IRU or services to be
offered by Purchaser utilizing this equipment.
11. FORCE MAJEURE
No failure or omission by any Party to carry out or observe any of the
terms and conditions of this Agreement (other than any payment
obligation) which is not a result of the negligence or willful
misconduct of that Party shall give rise to any claim against such
Party or be deemed a breach of
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this Agreement if such failure or omission arises from an act of God,
or any other circumstance or act of government commonly known as "force
majeure" which event was not within the reasonable control of, or
reasonably preventable by, such Party. In the event of a force majeure
occurrence, the Party claiming the occurrence shall, within 60 days
thereof, notify the other Parties hereto of the existence of the event
and its expected consequences on the System or the performance of its
obligations hereunder.
12. CONFIDENTIALITY
The provisions of this Agreement and any non-public information,
written or oral, with respect to this Agreement ("Confidential
Information") will be kept confidential and shall not be disclosed, in
whole or in part, to any person other than Affiliates, officers,
directors, employees, agents or representatives of a Party
(collectively, "Representatives") who need to know such Confidential
Information for the purpose of negotiating, executing and implementing
this Agreement. Each party agrees to inform each of its Representatives
of the non-public nature of the Confidential Information and to direct
such persons to treat such Confidential Information in accordance with
the terms of this clause 12. Nothing herein shall prevent a party from
disclosing Confidential Information (i) upon the order of any court or
administrative agency, (ii) upon the request or demand of, or pursuant
to any regulation of, any regulatory agency or authority, (iii) to the
extent reasonably required in connection with the exercise of any
remedy hereunder, (iv) to a Party's legal counsel, financial or other
advisors or independent auditors, (v) in the case of FA-1, to existing
or prospective lenders under the Financing Agreement or their
Affiliates, and (vi) to any actual or proposed assignee, transferee or
lessee of all or part of its rights hereunder provided that such actual
or proposed assignee agrees in writing to be bound by the provisions of
this clause 12. Notwithstanding the foregoing, in the event that
Purchaser intends to disclose any Confidential Information pursuant to
clause (i) or (ii) of the preceding sentence, Purchaser agrees to (a)
provide FA-1 with prompt notice before such disclosure in order that
FA-1 may attempt to obtain a protective order or other assurance that
confidential treatment will be accorded such Confidential Information
and (b) cooperate with FA-1 in attempting to obtain such order or
assurance. The foregoing shall not restrict either Party from publicly
announcing that it has entered in this Agreement with the Parties
provided that (x) the initial announcement by either Party containing
the other Party's name shall be subject to such other Party's consent,
and (y) in the case of an announcement by Purchaser, such announcement
shall provide no details as to the System other than the name of the
System except for details (i) that have already been disclosed publicly
by FA-1, (ii) relating to the amount of capacity Purchaser has
activated on the System or (iii) otherwise relating to matters
particular to Purchaser's use of the System IRU. Notwithstanding the
foregoing, no such public announcement shall be permitted to include
any details of this Agreement.
13. NO LICENSE
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13.1 Nothing in this Agreement shall or shall be deemed to give rise to any
right of either Party to use any Intellectual Property of the other
Parties except as may be needed to utilize the System IRU or to
maintain the System.
13.2 "Intellectual Property" means any and all patents, trade marks, rights
in designs, copyrights, and topography rights, (whether registered or
not and any applications to register or rights to apply for
registration of any of the foregoing), rights in inventions, know-how,
trade secrets and other confidential information, rights in databases
and all other intellectual property rights of a similar or
corresponding character which may now or in the future subsist in any
part of the world, together with the goodwill relating thereto.
14. INDEMNIFICATION
14.1 ***
14.2 Subject to the provisions of clauses 14.3 and 21, Purchaser hereby
releases and agrees to indemnify, defend, protect and hold harmless
FA-1, its employees, officers, directors, agents, shareholders and
affiliates, from and against, and assumes liability for:
14.2.1 Any injury, loss or damage to any person, tangible property or
facilities of any third person or entity other than FA-1 or an
Affiliate of FA-1 or any officers, employees, affiliates,
agents, contractors, licensees, invitees or vendors of FA-1 or
any such Affiliate (including reasonable attorneys' fees and
costs) to the extent arising out of or resulting from the acts
or omissions, negligent or otherwise, of Purchaser, its
officers, employees, affiliates, agents, contractors,
licensees, invitees or vendors constituting a breach by
Purchaser in the performance of its obligations hereunder or
arising out of or resulting from the breach of any
representation or warranty made by Purchaser under this
Agreement.
14.2.2 Any claims, liabilities or damages arising out of any failure
by Purchaser to comply with any regulation, rule, statute or
court order of any local, state, national or European Union
governmental agency, court or body in connection with its use
of the System IRU hereunder.
14.2.3 Any claims, liabilities or damages arising out of any
interference with or infringement of the rights of any third
party as a result of Purchaser's use of the System IRU not in
accordance with the provisions of this Agreement.
14.3 A Party's obligation to indemnify under this clause 14 is subject to
the indemnified Party:
14.3.1 promptly notifying the indemnifier of an event giving rise to
the indemnification ("Indemnity Event")
14.3.2 giving the indemnifier the sole conduct of the defense to any
claim or action in respect of such Indemnity Event and not at
any time admitting liability or otherwise attempting to settle
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or compromise except upon the express instructions of the
indemnifier (provided that the indemnifier shall not admit
liability nor wrong doing by the indemnified party without the
consent of the indemnified party); and
14.3.3 acting in accordance with the reasonable instructions of the
indemnifier and giving to the indemnifier such assistance as
it shall reasonably require in respect of the conduct of the
said defense including without prejudice to the generality of
the foregoing the filing of all pleadings and other court
process and the provision of all relevant documents.
14.4 The Parties hereby expressly recognize and agree that each Party's
obligation to indemnify, defend, protect and save the other harmless is
not a material obligation to the continuing performance of the other
Parties' obligations, if any, hereunder. In the event that a Party
shall fail for any reason to so indemnify, the injured party hereby
expressly recognizes that its sole remedy in such event shall be the
right to bring an action against the other Party for its damages as a
result of the other Party's failure to indemnify, defend, protect and
save harmless. These obligations shall survive the expiration or
termination of this Agreement.
14.5 To the extent not precluded by any other agreement, nothing contained
herein shall operate as a limitation on the right of any Party hereto
to bring an action for damages against any third party *** based on any
acts or omissions of such third party as such acts or omissions may
affect the construction, operation or use of the System IRU or the
System.
14.6 The indemnification provided for in this clause 14 shall survive the
expiration or termination of this Agreement until the expiration of all
statutes of limitation applicable to any claims, liabilities or damages
otherwise subject to this clause 14.
15. ASSIGNMENT
15.1 This Agreement and all the provisions hereof shall be binding upon and
inure to the benefit of the Parties hereto and their respective
successors and permitted assigns; provided that, except for the
assignment of FA-1's rights under this Agreement to one or more
financial institutions and/or export credit agencies as collateral
security for financing provided to FA-1 or in connection with a sale of
receivables by FA-1 and the assignment by such financial institutions
(and their assignees) of the rights and obligations under this
Agreement to any other persons following exercise of any rights or
remedies on such collateral security, neither this Agreement nor any of
the rights, interest or obligations hereunder shall be assigned or
transferred by any of the Parties hereto without the prior written
consent of the other Parties, and any attempted assignment or transfer
in violation of this clause shall be void. Notwithstanding the
foregoing, Purchaser may assign its rights under this Agreement upon
notice to FA-1 but without FA-1's prior consent, to Purchaser's
Affiliates, provided:
15.1.1 the Affiliate agrees to be bound by all terms and conditions
of this Agreement; and
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15.1.2 the Affiliate is authorized or permitted under the laws and
regulations of its country to acquire and use the transferred
portion of the System IRU.
15.2 Notwithstanding clause 15.1, FLAG Atlantic Limited and FLAG Atlantic
USA Limited may allocate their rights and obligations under this 0
Agreement between themselves and their affiliates, provided that they
remain jointly and severally liable for each of their obligations
hereunder.
15.3 FLAG Atlantic Limited and FLAG Atlantic USA Limited may use
subcontractors or agents to fulfil their obligations hereunder.
16. ENTIRE AGREEMENT
This Agreement (including the Schedules and Annexes hereto) constitutes
the whole agreement between the Parties and supersedes any previous
agreements, arrangements or understandings between them relating to the
subject matter hereof. Each of the Parties acknowledges that it is not
relying on any statements, warranties or representations given or made
by any of them relating to the subject matter hereof, save as expressly
set out in this Agreement.
17. VARIATION
No variation or amendment to this Agreement shall be effective unless
in writing signed by authorized representatives of each of the Parties.
18. WAIVER
18.1 Failure by a Party at any time to enforce any of the provisions of this
Agreement shall neither be construed as a waiver of any rights or
remedies hereunder nor in any way affect the validity of this Agreement
or any part of it and no waiver of a breach of this Agreement shall
constitute a waiver of any subsequent breach.
18.2 Termination of this Agreement shall not operate as a waiver of any
breach by a Party of any of the provisions hereof and shall be without
prejudice to any rights or remedies of a Party which may arise as a
consequence of such breach or which may have accrued hereunder up to
the date of such termination.
18.3 No waiver of a breach of this Agreement shall be effective unless given
in writing.
19. INVALIDITY
If any provision of this Agreement is or becomes (whether pursuant to
any judgment or otherwise) invalid, illegal or unenforceable in any
respect under the law of any applicable jurisdiction:
(a) the validity, legality and enforceability under the
law of that jurisdiction of any other provision; and
15
(b) the validity, legality and enforceability under the
law of any other jurisdiction of that or any other
provision,
shall not be affected or impaired in any way thereby.
20. NOTICE
20.1 Any notice, request, demand or other communication required or
permitted hereunder shall be sufficiently given if in writing in
English and delivered by hand or sent by prepaid registered or
certified mail (airmail if international), by facsimile or by prepaid
international courier service of international reputation addressed to
the appropriate Party at the following address or to such address as
such Party may from time to time designate:
If to Purchaser:
Teleglobe USA Inc.
00000 Xxxxxxxx Xxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Tel: (000) 000-0000
Fax: (000) 000-0000
If to FA-1:
FLAG Atlantic Limited
The Emporium Building
69 Front Xxxxxx
0xx Xxxxx
Xxxxxxxx XX 00
Xxxxxxx
Xxxxxxxxx: Co-chairmen
Tel: x0-000-000-0000
Fax: x0-000-000-0000
With a copy to:
FLAG Telecom Limited
000 Xxxxx Xxxxxx - 0xx Xxxxx
00
Xxxxxx X0X 0XX
U.K.
Attention: General Counsel
Tel: x00-000-000-0000
Fax: x00-000-000-0000
With a copy to:
GTS Carrier Services
Xxxxxxxxxxxxxxxxx 0X
0000 Xxxxxxxxx
Xxxxxxx
Attention: Legal Director
Tel: x000-000-0000
Fax: x000-000-0000
20.2 Purchaser acknowledges that all communications in connection with this
Agreement shall be between Purchaser and FLAG Atlantic Limited. For
this purpose, FLAG Atlantic USA Limited hereby appoints FLAG Atlantic
Limited as its agent to receive and send all communications in
connection with this Agreement.
20.3 Any notice, request, demand or other communication given or made
pursuant to this clause shall be deemed to have been received (i) in
the case of hand delivery or courier, on the date of receipt as
evidenced by a receipt of delivery from the recipient, (ii) in the case
of mail delivery, on the date which is seven days after the mailing
thereof and (iii) in the case of transmission by facsimile, on the date
of transmission with confirmed answer back. Each such communication
sent by facsimile shall be promptly confirmed by notice in writing
hand-delivered or sent by courier, mail or air mail as provided herein,
but failure to send such a confirmation shall not affect the validity
of such communication.
21. LIABILITY
21.1 Except as otherwise specifically set forth in this Agreement, FA-1
shall not be liable to Purchaser for any loss or damage sustained by
reason of any delay in completion, failure or breakdown of the
facilities constituting the System or any interruption of service,
regardless of the cause of such delay in completion, failure or
breakdown, and regardless of how long it shall last.
21.2 If the Initial Confirmation has not been delivered to Purchaser within
*** after the Scheduled Initial RFS Date Purchaser shall be entitled to
terminate its obligation to purchase the System IRU pursuant to clause
6.2 ***. Clause 6.2 and the foregoing shall be the limit of Purchaser's
right for delays to the Initial RFS Date.
21.3 ***
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21.4 Subject to clause 21.5, FA-1 shall have the right to relocate any
portion of the System, including any of the facilities used or required
in providing the System IRU, and shall have the right to proceed with
such relocation, including, but not limited to, the right to determine
the extent of, the timing of, and methods to be used for such
relocation and Purchaser shall reimburse FA-1 for its proportionate
share of the cost of such relocation; ***.
21.5 If FA-1 is required to relocate any portion of the System, including
any of the facilities used or required in providing the System IRU,
because it has not secured the right to use that portion of the System
for the System Life, FA-1 shall have the right to proceed with such
relocation, including, but not limited to, the right to determine the
extent of, the timing of, and methods to be used for such relocation;
***.
21.6 Notwithstanding any other provision in this Agreement to the contrary,
no Party shall be liable to any other Party for any indirect, special,
punitive or consequential damages (including, but not limited to, any
loss of profit or business or claim from any customer for loss of
services) arising out of this Agreement or from any breach of any of
the terms and conditions of this Agreement.
21.7 Any financier of the System, at its election, shall have a right to
cure any breach by FLAG Atlantic Limited (or, if applicable, an
affiliate thereof) under this Agreement, provided however, that such
financier shall not assume any liabilities of FLAG Atlantic Limited
under this Agreement.
22. COUNTERPARTS
This Agreement may be executed in counterparts. Any single counterpart
or set of counterparts signed, in either case, by all the Parties
hereto shall constitute a full and original agreement for all purposes.
23. WAIVER OF IMMUNITY
The Parties acknowledge that this Agreement is commercial in nature,
and the Parties expressly and irrevocably waive any claim or right
which they may have to immunity (whether sovereign immunity or
otherwise) for themselves or with respect to any of their assets in
connection with an arbitration, arbitral award or other proceedings to
enforce this Agreement, including, without limitation, immunity from
service of process, immunity of any of their assets from pre- or
post-judgment attachment or execution and immunity from the
jurisdiction of any court or arbitral tribunal.
24. FA-1 FINANCIAL CLOSURE
24.1 The obligation of the Purchaser to pay the Purchase Price (or any
installment thereof) and the obligation of FA-1 to provide the System
IRU are conditional upon the occurrence of FA-1 Financial Closure.
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24.2 If FA-1 Financial Closure has not occurred by 31 October 1999, then
this Agreement shall terminate (with the exception of clauses 12, 14,
21, 23 and 25 which shall survive termination).
24.3 For the purposes of this Agreement, "FA-1 Financial Closure" shall be
deemed to take place on the date when at least 66% of the costs of the
construction of the System are covered by secured commitments of
equity, and by commitments of debt under the executed Financing
Agreement.
25. GOVERNING LAW AND DISPUTE RESOLUTION
25.1 This Agreement shall be construed in accordance with New York law,
without regard to the law of New York governing conflicts of law.
25.2 Except as otherwise provided herein, any dispute or controversy arising
under or in connection with this Agreement shall be finally settled
under the Rules of Arbitration of the International Chamber of Commerce
by one arbitrator appointed in accordance with such Rules. Any such
dispute or controversy to be settled under this clause shall be between
Purchaser and FA-1 and Purchaser shall not have to identify whether the
dispute or controversy is with FLAG Atlantic Limited or FLAG Atlantic
USA Limited. The place of arbitration shall be New York. The
arbitration shall be conducted in English. The decision and award
resulting from such arbitration shall be final and binding on the
Parties. Judgment upon the arbitration award may be rendered by any
court of competent jurisdiction, or application may be made to such
court for a judicial acceptance of the award and an order of
enforcement. Insofar as permissible under the applicable laws, the
Parties hereby waive all rights to object to any action for judgment or
execution which may be brought before a court of competent jurisdiction
on an arbitration award or on a judgment rendered thereon.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first set forth above.
FLAG ATLANTIC LIMITED
BY /s/ Name of Signatory
--------------------------
Name:
Title:
FLAG ATLANTIC USA LIMITED
BY /s/ Name of Signatory
--------------------------
Name:
Title:
TELEGLOBE USA INC.
BY /s/ Name of Signatory
--------------------------
Name:
Title:
