PORTIONS OF THIS EXHIBIT ("CONFIDENTIAL PORTIONS") HAVE BEEN
DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION")UNDER
RULE 406 OF THE SECURITIES ACT OF 1933 AND THE FREEDOM OF
INFORMATION ACT. THE CONFIDENTIAL PORTIONS HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION AND ARE IDENTIFIED IN THIS EXHIBIT
BY THE NOTATION "CT REQUESTED."
INDEFEASIBLE RIGHT OF USE AGREEMENT
BETWEEN
COMPANHIA PORTUGUESA RADIO XXXXXXX, X.X.
AND
STARTEC, INC.
THIS AGREEMENT, made and entered into this 1st day of January
1996, between:
COMPANHIA PORTUGUESA RADIO XXXXXXX, X.X., a corporation organized
and existing under the laws of Portugal, with the capital stock
of PTE 15.600.000.000$00, corporate body 500069131, registered in
the Commercial Registry of Lisbon under the number 10844 and
having its main office at Xx. xxxxx Xxxx, 0, 0000 Xxxxxx Codex,
Portugal (hereinafter referred to as "The Vendor", which
expression shall include its successors and assigns), and
STARTEC, INC., having its principal office at 00000 Xxxxx Xxxx
Xxxxx, Xxxxx 000, Xxxxxxxx, XX 00000, U.S.A., (hereinafter called
"the Purchaser", which expression shall include its successors
and assigns).
WITNESSETH
WHEREAS, pursuant to an Agreement dated July 3, 1989 (hereinafter
called "EURAFRICA Agreement"), a digital fibre optic cable system
between France, Portugal mainland, Morocco and Madeira Island
(hereinafter called "EURAFRICA"), for telecommunication services
between and among points in or reached xxx Xxxxxx, Xxxxxxxx
mainland, Morocco and Madeira Island and points beyond has been
constructed and is being operated.
WHEREAS, pursuant to an Agreement dated November 12, 1992
(hereinafter called "COLUMBUS-ll Agreement"), an optical fiber
cable system linking North America and Europe (hereinafter called
"COLUMBUS-ll"), for telecommunication services between and among
points in or reached via the continental United States and St.
Xxxxxx, U.S. Virgin Islands and Mexico on the west, and points in
or reached via Spain, Italy and Portugal on the east has been
constructed and is being operated.
WHEREAS, part of capacity assigned to the Vendor in EURAFRICA and
COLUMBUS-ll systems is to be sold as Indefeasible Right of Use
(IRU) for use between International Telecommunication Entities
not Parties to the EURAFRICA and COLUMBUS-ll Agreements.
WHEREAS, the Purchaser wishes to obtain from the Vendor and the
VENDOR wishes to sell to the Purchaser the IRU of the half
interests in a number of circuits, owned by the Vendor in
EURAFRICA and COLUMBUS-ll for service between Portugal mainland
and the continental United States.
WHEREAS, the Parties to the present Agreement want to define
terms and conditions according to which the Vendor sells to the
Purchaser the IRU in EURAFRICA and COLUMBUS-ll systems as
follows:
[CT REQUESTED]in the segment Funchal-Sesimbra
[CT REQUESTED]in the segment West Palm Beach-Funchal
NOW THEREFORE, the Parties to the present Agreement, in
consideration of the mutual covenants herein expressed, covenant
and agree with each other as follows:
1. Effective from the date of this Agreement, the Vendor sells
to the Purchaser the IRU of:
EURAFRICA:
[CT REQUESTED]in the segment Funchal-Sesimbra
[CT REQUESTED]
[CT REQUESTED]in the segment West Palm Beach-Funchal
These half circuits will be used for supplying
communications services between points in or reached via
continental United States and points in or reached via
Portugal mainland.
2. For the IRU in the half circuits as indicated in article 1
above, sold to the Purchaser pursuant to this Agreement, the
Purchaser will pay the capital cost of 383,300 USD accrued
by financial charges, under the following payment
conditions:
a) 10 (ten) semestral instalments, being the first payment
due on June 30, 1996. Bills for such installments
shall include:
- 1/10 of the capital cost (38.330 USD).
- financial charges calculated at the LIBOR rate
applicable on a 180 (one hundred eighty) day USD
denominated loan plus 0,25%
Bills for such installments shall be rendered by the
Vendor on the months of May and November and shall be
paid by the Purchaser by the end of the month following
the month the bills are rendered.
b) A quarterly amount equal to the portion of the costs of
operating and maintaining EURAFRICA and COLUMBUS-ll,
allocable to the half circuits sold hereunder on a pro
rata basis. The Vendor or any other entity designated
as its successor will render bills quarterly to the
Purchaser from the date of the present Agreement and
the Purchaser will pay such bills by the end of the
month following the month in which the bills are
rendered.
c) Amounts equal to the portion of the costs incurred for
repairing at sea EURAFRICA and COLUMBUS-ll, allocable
to the half circuits sold to the Purchaser hereunder on
a pro rata basis. Bills for such amounts incurred
subsequent to the effective date of this Agreement
shall be rendered by the Vendor or any other entity
designated as its successor to the Purchaser as soon as
practicable after such costs are charged to the Vendor.
Such bills shall be payable by the Purchaser within one
calendar month after the end of the month in which
bills are rendered.
d) Bills not paid by the due date will incur a quarterly
compounded financing charge at a rate of one hundred
and twenty five (125) percent of the LIBOR rate
applicable on a 180 (one hundred eighty) day USD
denominated loan, effective during the period that the
payment is overdue.
e) If the bills are not paid by the Purchaser within one
year after the end of the month in which the bills are
rendered, the Vendor will be entitled to terminate
automatically this Agreement without any compensation
for the Purchaser.
3. In the event that the total number of circuits which any of
the fibre pairs in EURAFRICA and COLUMBUS-ll is capable of
providing upon its completion is reduced as a result of
physical deterioration, or for other reasons beyond the
control of the Parties to the EURAFRICA and COLUMBUS-ll
Agreements, during the term of this Agreement, the number of
half circuits sold to the Purchaser hereunder may be reduced
in the same proportion as the total number of circuits is
reduced.
4. Neither Party shall be liable to the other for any loss or
damage sustained by reason of any failure in or breakdown of
EURAFRICA and COLUMBUS-ll or of the facilities associated
with EURAFRICA and COLUMBUS-ll or for any interruption of
service, whatsoever shall be the cause of such failure,
breakdown or interruption, and however long it shall last.
5. The operation by the Purchaser of the half circuits sold to
it hereunder and any equipment associated therewith with the
previous written consent of the Vendor shall be such as not
to interrupt, interfere with or impair service over any of
the facilities comprising EURAFRICA and COLUMBUS-ll, any
circuits of the Vendor or any circuits of connecting
companies or of other right of use, impair privacy of any
communications over such facilities, cause damage to plant,
or create hazards to the employees of any of the
aforementioned companies or of any owner of the
aforementioned facilities or to the public. The Purchaser
shall hold harmless the Vendor and bear the cost of any
additional protective apparatus reasonably required to be
installed because of the use of such facilities by the
Purchaser, any lessee of the Purchaser, or any customer or
customers of the Purchaser or of any such lessee, and the
cost of any possible damage thereto related.
A consent granted under this clause may be revoked at
anytime by the Vendor if the provisions of the clause are
not fulfilled. Such equipment, if used, shall not
constitute a part of EURAFRICA and COLUMBUS-ll. Similar
obligations will be included in any such Agreements made
with users of EURAFRICA and COLUMBUS-ll.
6. The half circuits sold to the Purchaser hereunder will be
maintained or caused to be maintained in efficient working
order by the Vendor.
In this regard, at a time agreeable to the Vendor, the half
MAUOs sold to the Purchaser hereunder shall be made
available to the Vendor to make such tests and adjustments
as may be necessary for such circuits to be maintained in
efficient working order.
7. In the event of the liquidation of a segment of EURAFRICA
and COLUMBUS-ll by sale or other disposition, during the
term in which this Agreement is in force, the Vendor shall
share with the Purchaser the net proceeds or cost of any
such sale or disposition, in the proportion in which the
Purchaser contributed to the cost of the Segment
Funchal-Sesimbra of EURAFRICA and Segment West Palm
Beach-Funchal of COLUMBUS-ll.
8. No license under patents is granted by the Vendor or shall
be implied or arise by estoppel in the Purchaser's favor
with respect to any apparatus, system or method used by the
Purchaser in connection with the use of the half circuits
sold to it hereunder. With respect to claims of patent
infringement made by third persons, (i) the Vendor will save
the Purchaser harmless against claims arising out of the use
by the Purchaser of such half circuits in accordance with
the provision of this Agreement, and (ii) the Purchaser will
save the Vendor harmless against claims arising out of
combining such half circuits or using such half circuits in
connection with any apparatus, system or method provided by
the Purchaser.
9. The Vendor or any other entity designated as its successor
shall keep such books, records, vouchers and accounts of all
of its costs with respect to the provision and maintenance
of EURAFRICA and COLUMBUS-ll, as may be appropriate to
support its costs, for a period of three years from the date
on which the corresponding bills were rendered to the
Purchaser.
10. The performance of this Agreement by the Vendor and the
Purchaser is contingent upon the provision and continued
operation of EURAFRICA and COLUMBUS-ll, and upon the
obtaining and continuance of such approvals, consents,
governmental authorizations, licenses and permits as may be
required or be deemed necessary for this Agreement by the
Parties hereto and as may be satisfactory to them. The
Vendor and Purchaser shall use their best efforts to obtain
and continue, or have continued such approvals, consents,
licenses and permits.
11. Unless otherwise stipulated, no transfer of the rights
granted under this Agreement or of any right resulting from
it by either of the Parties to this Agreement shall be
considered valid without the written consent of the other
Party to this Agreement, except to a successor or assign or
subsidiary of such Party, or corporation controlling, or
under the same control as such Party, in which case written
notice shall be given in a timely manner by the Party making
said transfer.
12. Amendments to this Agreement or to any of the conditions
contained herein shall be effected by means of another
written agreement, signed on behalf of each of the Parties
by a person duly authorized to do so.
13. The relationship between the Parties hereto shall not be
that of partners and nothing herein contained shall be
deemed to constitute a partnership between them.
Termination of this Agreement shall not terminate the
provisions of Article 7 above, or prejudice the operation or
effect thereof.
14. This Agreement shall become effective on the day and year
first above written and shall continue in effect for the
duration of the COLUMBUS-ll and EURAFRICA Agreements.
15. For all purposes, the addresses of the Parties to this
Agreement shall be as follows, unless otherwise designated
in writing by the respective Parties:
Vendor
COMPANHIA PORTUGUESA RADIO XXXXXXX, XX
Xx. xxxxx xxxx, x 0
0000 XXXXXX CODEX
PORTUGAL
Purchaser
STARTEC, INC.
10411 Motor Xxxx Xxxxx
Xxxxx 000, Xxxxxxxx
XX00000, X.X.X.
16. This Agreement shall be executed in two counterparts and
each such counterpart shall together, as well as separately,
constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties hereto have severally subscribed
these presents or caused them to be subscribed in their names and
behalf by their respective officers thereunto duly authorized.
COMPANHIA PORTUGUESA RADIO XXXXXXX, XX
by: /s/
STARTEC, INC.
by: /s/
