EXHIBIT 10.23
SERVICE AGREEMENT
This Service Agreement (the "Agreement") is made and entered into
this 6th day of November 1998, by and between COMSAT Mobile Communications,
a business unit of COMSAT Corporation, a corporation organized and existing
under the laws of the District of Columbia, with offices located at 0000
Xxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000 ("COMSAT"), and MCI
International, Inc., a corporation organized and existing under the laws of
Delaware, with offices at 0 Xxxxxxxxxxxxx Xxxxx, Xxx Xxxxx, Xxx Xxxx 00000
("MCI"). COMSAT and MCI are hereinafter collectively referred to as the
"Parties" and individually referred to as a "Party".
WHEREAS, COMSAT provides mobile satellite communications services to and
from mobile earth stations via the International Mobile Satellite
Organization ("Inmarsat") satellite system through COMSAT's land earth
stations and switching facilities; and
WHEREAS, MCI maintains a terrestrial telecommunications network and
provides telecommunication services, including telex services, within the
United States and abroad; and
WHEREAS, both Parties desire to obtain the services of the other Party and
are willing to interconnect facilities for the purpose of facilitating the
mutual provision of services in accordance with the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein expressed, COMSAT and MCI agree as follows:
1. DEFINITIONS
1.1 "COMSAT Facilities" shall mean land earth stations ("LES") and
switching facilities provided by COMSAT.
1.2 "COMSAT Services" shall mean Standard-A, -M, -B, Mini-M and Aero
mobile satellite communication services to and from mobile earth
stations via the Inmarsat satellite system through COMSAT
Facilities.
1.3 "Effective Date" shall mean November 1, 1998.
1.4 "Fixed-to-Mobile Traffic" shall mean U.S. traffic originating on
MCI Facilities in a fixed location and destined to terminate at a
mobile earth station via the Inmarsat satellite system.
1.5 "Inmarsat Ocean Regions" shall mean the Pacific Ocean Region
("POR"), the Atlantic Ocean Region-West ("AOR-W"), the Atlantic
Ocean Region-East ("AOR-E") and the Indian Ocean Region ("IOR").
1.6 "MCI Facilities" shall mean MCI's international switching centers
and other terrestrial facilities owned or controlled by MCI or, as
the case may be, the facilities of any local exchange carriers
selected by MCI for the termination of Mobile-to-Fixed Traffic.
MCI's Facilities shall not include facilites owned and operated by
Worldcom, Inc. or its affiliates prior to the merger of Worldcom,
Inc. and MCI Communications Corporation.
1.7 "MCI Services" shall mean terrestrial communications services to
and from fixed international or domestic land points via MCI
Facilities.
1.8 "MES" shall mean mobile earth station.
1.9 "Mobile-to-Fixed Traffic" shall mean traffic originating from a
mobile earth station via the Inmarsat satellite system and
COMSAT's Facilities and destined to terminate at a fixed
international or domestic land point.
1.10 "Transit Traffic" shall mean traffic to an Inmarsat MES
originating from a fixed location in a country in which no
Inmarsat land earth station exists to provide service to such MES
and which traffic is routed over MCI Facilities to COMSAT
Facilities for delivery to its final destination.
2. TERM OF AGREEMENT.
Unless otherwise terminated pursuant to Article 7 hereof, this
Agreement shall be effective for a period of one year, commencing
on the Effective Date ("Initial Term").
3 SERVICE PROVISION AND RATES
3.1 COMSAT shall provide COMSAT Services to MCI at the rates set forth
in Attachment A hereto in order to allow MCI to terminate U.S.
originated Fixed-to-Mobile Traffic. Notwithstanding the foregoing,
COMSAT shall provide a discount to its rates for Standard -A
services in consideration of MCI's commitment to program its
switches and undertake any other measures necessary to direct to
COMSAT a minimum of seventy-five (75%) of MCI's U.S.-originated
Xxxxxxxx -X, -X, -X, Mini-M and Aero Fixed-to-Mobile Traffic
destined to the AOR-E, AOR-W and POR. The discount rate shall be
as set forth in Attachment A. In order to receive the discount,
internal monthly reviews shall be conducted by COMSAT to measure
actual Fixed-to-Mobile traffic delivered by MCI to COMSAT. The
rates set forth in Attachment A shall be inclusive of all space
and ground segment charges. COMSAT shall be solely responsible for
such charges and MCI shall have no responsibility therefor.
3.2 MCI shall provide MCI Services to COMSAT to allow COMSAT to
terminate Mobile-to-Fixed Traffic at the rates set forth in
Attachment B hereto. COMSAT shall be eligible for discounts as
described in Attachment B. The rates set forth in Attachment B
shall be inclusive of all pay-outs and other amounts payable to
any local, long distance or other carrier or administration and/or
other operating entities with respect to MCI Service terminating
in or transiting through their jurisdictions. MCI shall be solely
responsible for settlements with and payments to such carriers and
COMSAT shall have no responsibility therefor.
3.3 The rates set forth in Attachments A and B shall be effective as of
November 1, 1998.
3.4 Transit Traffic
3.4.1 For Transit Traffic, COMSAT will establish transit rates with the
foreign administrations for the LES component of the charge and
MCI will establish the international land line charges.
3.4.2 For Transit Traffic where the foreign administration accounts and
settles with COMSAT for the LES component ("Direct Settlement"),
the foreign telephone administration shall account and settle with
MCI for the international land line charges. In the event that
cascade accounting is utilized, MCI shall credit COMSAT the amount
due COMSAT and settlement shall be in accordance with Section
6.1.2. MCI shall provide sufficient detail on a monthly basis to
enable COMSAT to determine the foreign administration from which
the call originated, volume and ocean region destinations of the
Transit Traffic.
4. INTERCONNECTION OF FACILITIES.
4.1 COMSAT and MCI agree to interconnect COMSAT Facilities and MCI
Facilities to permit the exchange of Fixed-to-Mobile and
Mobile-to-Fixed Traffic. The points of interconnections shall be
at COMSAT's Main Distribution Frame ("MDF") at COMSAT's Facilities
at Santa Paula, California and Southbury, Connecticut.
4.2 Each Party shall be responsible for providing and maintaining, at
its own expense and liability, the equipment and circuits located
on its side of the MDF. The Parties shall cooperate in the
detection and correction of problems which can not be immediately
isolated to a specific side of the MDF or segment of a circuit.
4.3 Except as otherwise agreed by the Parties, the technical standards
and methods of operation applied by the Parties in the exchange of
traffic hereunder shall conform to the applicable recommendations
of the International Telecommunications Union - Telecommunications
Standardization Sector ("ITU-T") and to any revisions of same. The
Parties agree that the signaling standard shall continue to be
Signaling System
No. 5. Such signaling standard may be upgraded to Signaling System
No. 7 upon availability and mutual agreement of the Parties.
5. APPLICABLE SERVICE STANDARDS
5.1 COMSAT Services. COMSAT shall provide COMSAT Services through
COMSAT Facilities which satisfy the applicable Inmarsat
specifications for such services. COMSAT's failure to comply with
non-mandatory specifications shall not be deemed to be in conflict
with this Agreement.
5.2 MCI Services. MCI shall provide services through its facilities
which satisfy ITU Recommendations Q. 140 through Q. 157 for Signaling
System No. 5.
6. PAYMENT FOR SERVICE
6.1 Accounting and Settlement Procedures.
6.1.1 Each Party shall be responsible for establishing end-user rates
for services rendered to its respective customers. In addition,
each Party shall be responsible to xxxx and collect service
charges from its respective customers.
6.1.2 No later than sixty (60) days after the end of a service
month, the Parties shall exchange accounting statements for services
provided to each other during the preceding calendar month. Each Party
shall provide to the other Party such detail as each Party may
reasonably require to determine the appropriate settlement between the
Parties. At a minimum, the monthly statement shall contain the type of
service, the Inmarsat Ocean Region, the number of calls, the minutes
carried and the rates applicable to each minute. Such monthly
statement shall be provided via a printed statement until
implementation of settlement disk processing. The Parties shall reduce
to a net balance the sum due in U.S. Dollars each month from each
Party to the other Party. Net balances due from one Party ("Debtor
Party") to the other Party ("Creditor Party") shall be paid by the
Debtor Party to the Creditor Party. Settlement of net balances shall
be made within forty-five (45) days of receipt of invoice from the
Creditor Party. The inability of a Party to collect from its end users
shall not relieve such Party's obligation to make payment to the other
Party for services rendered hereunder.
6.2 Billing Disputes. Each Party is responsible for the accuracy of
any accounting statement or invoice that it submits to the other
Party. An accounting statement shall be deemed to have been
accepted by the Party to whom it is rendered if such Party does
not object in writing thereto before the end of the second
calendar month following the month in which the account is
transmitted by the Party rendering it. Agreed adjustments shall be
included in the following monthly accounting statement. Objections
to an invoice that are not raised within twelve (12) months of the
date on which an invoice is received by a Party shall be deemed
waived by such Party and such invoice shall be deemed final.
6.3.1 Taxes. Each Party shall be responsible for its own tax or tax
related surcharges determined by reference to income, net worth,
franchise or property and any other tax imposed directly on the
Party.
6.3.2 With regard to services originated and billed to a purchaser by
MCI, MCI agrees to be responsible for the determination,
collection and remittance of all appropriate taxes imposed thereon
including but not limited to United States federal excise, state
and local sales, gross receipts and similar taxes. With regard to
services originated and billed to a purchaser by COMSAT, COMSAT
agrees to be responsible for the determination, collection and
remittance of all appropriate taxes imposed thereon including but
not limited to United States federal excise, state and local
sales, gross receipts and similar taxes.
In the event that an exemption certificate is required by either
Party, all efforts will be made to provide such certificate to the
requesting Party.
7. TERMINATION.
7.1 Termination . This Agreement may be terminated by either Party
("Terminating Party") to the other Party (the "Defaulting Party")
in the event that one (1) or more of the following events shall
occur and which event(s) shall not have been cured within the
thirty (30) day period from the date of written notice thereof
from the Terminating Party to the Defaulting Party: (a) failure of
the Defaulting Party to pay any sum due and owing to the
Terminating Party within the payment period specified in Section 6
hereof; or (b) failure of the Defaulting Party to perform any
material obligation contained in this Agreement.
7.1.1 Consequence of Termination. Termination or expiration of this
Agreement in accordance with its terms shall not release the
Parties hereto from any liability which at the time of termination
or expiration has already accrued or which thereafter may accrue
in respect of any act or omission of a Party prior to such
termination or expiration, or from any obligation which is
expressly stated in this Agreement to survive termination or
expiration.
7.1.2 Upon expiration or termination of this Agreement:
a. Neither Party shall be obligated to provide its services to
the other Party;
b. Each Party shall return or destroy all Confidential
Information of the other Party in its possession no later
than five (5) business days following the termination or
expiration date; and
c. All mutual indebtedness of the Parties that shall have
accrued as of the date of termination or expiration shall
become due and payable within thirty (30) days thereof.
8. LIABILITY; GENERAL INDEMNITY
8.1 In no event shall either Party be liable to the other Party for
any special, indirect, incidental, punitive, consequential or
exemplary damages, including without limitation loss of revenue,
loss of profits, loss of clients or goodwill arising in any manner
from this Agreement and the performance or nonperformance of
business hereunder.
8.2 With respect to the service that each Party provides to the other
Party hereunder, neither Party shall be liable for, and expressly
disclaims any liability to the other Party, its customers, assigns
or any other person or entity for any damages, claims, liability,
expenses, or loss, regardless of the degree of fault or failure,
including but not limited to damage to property and claims for
personal injury or death, sustained by the other Party, its
customers, assigns or any other person or entity for any reason
relating to the unavailability, delay, outage, interruption,
disruption, break-down, degradation, error in transmission, or
failure arising out of, relating to, or in any way associated with
the Services, satellites, land earth stations, equipment,
operations, or facilities that are involved in the performance of
this Agreement, regardless of the cause or causes thereof, and
regardless of whether or not attributable to any negligent act or
omission or whether or not such act or omission constitutes, with
respect to any person or entity, failure to meet any of its
obligations.
8.3 With respect to the COMSAT Services provided hereunder, MCI agrees
that Inmarsat shall not be liable to the same extent as the
disclaimers of liability in this Article.
8.4 Each Party agrees to include, in any contract, agreement, tariff
or other undertaking between it and any customer or assign
relating to the services, operations, equipment or facilities
involved in the performance of this Agreement, a provision stating
that the disclaimers of liability as set forth above shall apply
in full to said contract, agreement, tariff or other undertaking.
9. FORCE MAJEURE
9.1 Except for payment obligations, neither Party shall be liable for
failure to perform under this Agreement due to any act, event or
cause beyond its reasonable control ("Force Majeure Event")
including, but not limited to:
Acts of God, peril of the sea, accident of navigation, war,
sabotage, riot, insurrection, civil commotion, national emergency
(whether in fact or by law), martial law, fire, lightning, flood,
cyclone, earthquake, landslide, storm or other adverse weather
conditions, explosion, power shortage, strike or other labor
difficulty (whether or not involving COMSAT employees), epidemic,
quarantine, radiation or radioactive contamination;
Action or inaction of any government or other competent authority,
(including any court of competent jurisdiction), including
expropriation, restraint, prohibition, intervention, requisition,
requirement, direction or embargo by legislation regulation,
decree or other legally enforceable order; and Breakdown of plant,
machinery or equipment, externally caused transmission
interference or satellite failure, or satellite launch failure or
delay, or satellite malfunction, or shortages of labor,
transportation, fuel, power or plant, machinery, equipment or
material.
9.2 In the event that a Force Majeure Event exceeds thirty (30)
consecutive days, then following such thirty-day period, the
Parties shall meet and negotiate the continuation, suspension,
termination, restructuring or other disposition of this Agreement.
Upon removal or cessation of the Force Majeure Event, all
obligations under this Agreement shall resume, unless the Parties
determine to terminate or restructure the Agreement.
10. ASSIGNMENT
This Agreement shall not be assigned or transferred by either
Party without the prior written consent of the other Party, which
consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, either Party may, without the
other's consent, make an assignment to a successor, affiliate,
subsidiary, or to any entity controlling or under the same control
as such a Party.
11. GOVERNMENT APPROVALS
11.1 All agreements covenants, undertakings and obligations herein made
or assumed by the Parties hereto are subject to the obtaining of
all necessary governmental licenses, consents, permits,
authorizations, and approvals. Each Party shall obtain and
continue to maintain such licenses, consents, permits,
authorizations, and approvals.
11.2 Both Parties represent and warrant that they have been authorized
as common carriers by the FCC pursuant to Section 214 of the
Communication Act of 1934, as amended. A copy of this Agreement
shall be filed with the FCC pursuant to Section 211 of such Act
and shall seek confidential treatment of such filing.
12. CONFIDENTIALITY
12.1 The Parties hereby agree that it may be necessary to the
performance of this Agreement for a Party (the "Disclosing Party")
to disclose to the other Party (the "Receiving Party") certain
information that each Party deems to be confidential and
proprietary. The Receiving Party shall maintain the security and
confidentiality of all Confidential Information received from the
Disclosing Party hereunder.
12.2 For purposes hereof, "Confidential Information" shall include
business and technical information or data relating to the
Disclosing Party and its representatives that is reduced to
writing and marked "Confidential" by the Disclosing party.
Notwithstanding anything contained herein to the contrary,
Confidential Information shall not include (i) information
developed independently by the Receiving Party or lawfully
received from a third party not under an obligation of
confidentiality; or (ii) information in the public domain; or
(iii) information known by Receiving Party prior to the execution
of this Agreement; or information disclosed pursuant to law; (iv)
judicial order or governmental regulation.
12.3 The Receiving Party shall not use nor communicate, directly or
indirectly, any of the Confidential Information to any third party
without the prior written consent of the Disclosing Party. The
Receiving Party shall use its best efforts to prevent inadvertent
disclosure of all or any part of the Confidential Information to
any third party.
12.4 The Receiving Party's obligations under this Article shall
continue for a period of two (2) years after the termination or
expiration of this Agreement with respect to each item of
Confidential Information disclosed hereunder. Upon such expiration
or termination, the Receiving Party shall return or destroy all
Confidential Information of the other Party in its possession.
13. INTELLECTUAL PROPERTY RIGHTS
The Parties agree that trademarks, inventions, patents,
copyrights, registered designs, service marks, trade names and all
other intellectual property shall remain in the ownership of the
person or party originating the same and nothing herein shall
confer or be deemed to confer on either Party expressly, implied
or otherwise, any rights or licenses in the intellectual property
of the other.
14. AMENDMENT
This Agreement together with all Attachments and Exhibits, may be
amended, modified or amplified only by written agreement signed by
authorized representatives of both Parties.
15. WAIVER OF TERMS
No waiver by either Party of any provision of this Agreement shall
be binding unless expressly confirmed in writing. Further, any
such waiver shall relate only to such particular matter,
non-compliance or breach as it expressly relates to and shall not
apply to any subsequent or other matter, non-compliance or breach.
16. GOVERNING LAW AND FORUM
16.1 The existence, validity, construction, operation and effect of
this Agreement shall be determined in accordance with and be
governed by the laws of the State of New York.
16.2 Any dispute arising out of or related to this Agreement, which
cannot be resolved by negotiation within thirty (30) days
following the date on which written notice of a dispute has been
given to the other Party, shall be settled by binding arbitration
in accordance with the J.A.M.S./ENDISPUTE Arbitration Rules and
Procedures, as amended by this Agreement. The number of neutral
arbitrators shall be three (3), one appointed by each Party, and
the third appointed by the other two arbitrators. The place of
arbitration shall be Washington, D.C. The costs or arbitration,
including the fees and expenses of the arbitrators, shall be
shared equally by the parties unless the arbitration award
provides otherwise. Each party shall bear the cost of preparing
and presenting its case. The parties agree that this provision and
the arbitrator's authority to grant relief shall be subject to the
United States Arbitration Act, 9 U.S.C. 1-16 et seq. ("USAA") and
the provisions of this Agreement. The arbitrators shall comply
with the ABA-AAA Code of Ethics for Arbitrators in Commercial
Disputes. The parties agree that the arbitrators shall have no
power or authority to make awards or issue orders of any kind
except as expressly permitted by this Agreement, and in no event
shall the arbitrators have the authority to make any award that
provides for punitive or exemplary damages. The arbitrators'
decision shall be final and binding. The award may be confirmed
and enforced in any court of competent jurisdiction. All
post-award proceedings shall be government by the USAA.
17. NOTICES
17.1 All notices, invoices and other communications made hereunder
shall be given in writing and shall be deemed to have been duly
given and effective (i) upon receipt, if delivered in person or by
telecopy, with confirmation; or (ii) one (1) day after deposit
prepaid with a U.S. domestic overnight express service for
domestic delivery; or (iii) three (3) days after deposit in the
United States mail, certified, postage prepaid, return receipt
requested; or (iv) five (5) days after deposit with an overnight
express service for international delivery service.
Notices to COMSAT of a contractual nature shall be directed to the
following address:
COMSAT Mobile Communications
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Contracts Department
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Notices to COMSAT related to invoices and collections shall be
directed to the following addresses:
COMSAT Mobile Communications
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Revenue Accounting Department
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Notices to MCI of a contractual nature shall be directed to the
following address:
MCI International, Inc. MCI Worldcom, Inc.
0 Xxxxxxxxxxxxx Xxxxx 0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxx Xxxxx, Xxx Xxxx 00000 Xxxxxxxxxx, X.X. 00000
Attention: Attention: International Commercial
Affairs Law and Public Policy
Telephone Number:
Facsimile Number: Facsimile Number: (000) 000-0000
Notices to MCI related to invoices and collections shall be
directed to the following address:
MCI International, Inc.
0 Xxxxxxxxxxxxx Xxxxx
Xxx Xxxxx, Xxx Xxxx 00000
Attention:
Telephone Number:
Facsimile Number:
18. MISCELLANEOUS
18.1 No Third Party Beneficiary. The provisions of this Agreement are
for the benefit only of the Parties hereto, and no third party may
seek to enforce or benefit from those provisions.
18.2 No Partnership Or Agency Relationship. The relationship between
COMSAT and MCI shall not be that of partners or agents of one
another, and nothing contained in this Agreement shall be deemed
to constitute a partnership or agency agreement between them.
18.3 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of each Party's successors and permitted
assignees.
18.4 Headings. The titles in the headings of paragraphs are intended
for organization and convenience only and do not apply in the
interpretation of any of the Agreement terms.
18.5 Survival of Terms. The terms and provisions contained in this
Agreement that by their sense and context are intended to survive
the performance thereof by the Parties hereto shall so survive the
completion of
18.6 Rule of Construction. No rule of construction requiring
interpretation against the drafting party hereof shall apply in
the interpretation of this Agreement.
19. ENTIRE AGREEMENT
This Agreement, together with all attachments incorporated herein
specifically by reference, represents the entire understanding of
the Parties with respect to the subject matter hereof and all
other agreements (written or oral) between the Parties relating to
the Service shall be superseded by this Agreement.
20. SEVERABILITY
If any one or more of the provisions contained in this Agreement
or any document executed in connection herewith shall be invalid,
illegal or unenforceable in any respect under any applicable law,
the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired; provided, however, that in such case the Parties agree
to use their best efforts to achieve the purpose of the invalid
provision by a new legally valid stipulation.
21. SUPERSEDES OTHER AGREEMENTS
This Agreement specifically supersedes and cancels the Agreement
dated 1 September 1993, entered into by COMSAT and MCI
International, Inc., which Agreement shall be null and void,
except for any liabilities of the Parties that arise thereunder
prior to the date of such cancellation and which remain
outstanding.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in
counterparts on the day and year first above written.
COMSAT Mobile Communications, MCI International, Inc.
a business unit of COMSAT Corporation
/s/ Xxxxx X. Xxxxxxxxxxx /s/ Xxxxxxx Xxxxxxx
XXXXX X. XXXXXXXXXXX XXXXXXX XXXXXXX
20 NOVEMBER 1998 11/6/98
