PORTIONS OF THIS EXHIBIT HAVE BEEN DELETED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER RULE 406 OF THE SECURITIES ACT OF 1933 AND THE
FREEDOM OF INFORMATION ACT.
INTERNATIONAL TELECOMMUNICATION SERVICES AGREEMENT
BETWEEN
VIDESH XXXXXXX XXXXX LTD.
AND
STARTEC INCORPORATED
This Agreement made at Bombay and on this 12th day of
November, 1992 by Videsh Xxxxxxx Xxxxx Limited (a Government of
India Enterprise), incorporated under the Indian Companies Act,
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1956 and having its registered office at Videsh Sanchar Bhavan
Xxxxxxx Xxxxxx Xxxx, Xxxxxx 000 000, Xxxxx (hereinafter referred
to as "VSNL" which expression shall, unless excluded by or
repugnant to the context or meaning thereof, include its
successors and assignees) of the One Part and STARTEC
Incorporated, a corporation incorporated and existing under the
laws of the state of Maryland in the United States of America and
having its registered office at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx
000, Xxxxxxxxx, Xxxxxxxx 00000, X.X.X. (hereinafter referred to
as "STARTEC" which expression shall, unless excluded by or
repugnant to the context or meaning thereof, include its
successors and assignees).
WHEREAS, VSNL is a duly authorized international
telecommunications carrier, existing and operating under the laws
of India.
AND WHEREAS, STARTEC is a duly authorized telecommunications
carrier existing and operating under the laws of Maryland and the
United States of America.
AND WHEREAS, VSNL and STARTEC have agreed to provide jointly
on a non-exclusive basis telecommunications services between
India and U.S.A. and pursuant to that agreement VSNL and STARTEC
have set up [CT REQUESTED] lines between Washington D.C. and
Delhi since July 1990, and have jointly installed and completed
the testing of STARTEC's Fax Node between Washington D.C. and
Bombay;
WHEREAS, the purpose of the Agreement is to provide a basis
for further expansion of the VSNL and STARTEC relationship to the
common benefit;
NOW IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO AS
FOLLOWS:
ARTICLE I
1. This Agreement contemplates cooperation between the Parties
hereto to provide on a non-exclusive basis telecommunication
services including telephone, facsimile Node services, voice
services, (collectively referred to as "PSTN Service"), and other
value added services such as remote office and video
conferencing.
2. The present Agreement details out the understanding for
cooperation and expansion for PSTN Service.
3. The understanding for other valued added services will be
negotiated on a case by case basis and entered into as
Supplementary Agreements as and when concluded.
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ARTICLE II
Agreement for Proposed Expansion of Services
Subject to compliance with the new financial terms and conditions
set out in this part, the Parties agree to implement expansion as
stated herein below subject to the understanding that until the
date for expansion is decided in writing and the expansion is
implemented, the Parties shall continue operations as per the
existing terms and conditions, and on furnishing the [CT
REQUESTED] of this agreement before 1st January, 1993.
1. PSTN Voice
i. the number of circuits will be increased to [CT
REQUESTED] initially. Thereafter, the Parties will increase
circuits by mutual Agreement to reflect traffic patterns,
provided that before any such increase in number of circuits is
effected by VSNL, dues if any, up to the end of the quarter
previous to the quarter in which decision for increase in number
of circuits is proposed, shall be settled by STARTEC and realized
by VSNL.
ii. All circuits will be configured as two way and extended
initially to Bombay, Delhi and Madras. Gradually, circuits will
be extended to all Indian Gateways, upon mutual Agreement to
reflect traffic patterns.
2. Facsimile Node:
i. The parties have installed one Fax Node at STARTEC's
premises in Washington, D.C. and the other at VSNL's premises in
Bombay.
ii. STARTEC has provided all the software involved with the
operation of the Fax Node.
iii. STARTEC has provided at its own cost peripheral
hardware like Fax Cards, Voice boards and modems as required for
the Fax Node in Bombay.
iv. STARTEC has trained VSNL personnel for the operation
and maintenance of the Fax Node. STARTEC has met all expenses
for any training to be imparted in the U.S.
v. VSNL has procured the Personal Computers required for
setting up the Fax Node in india.
vi. Traffic on the Fax Node will be on a two way basis.
vii. The accounting of the Fax traffic will be similar to
the accounting for the voice, as paid minutes of traffic sent on
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the telephone lines. Settlement will be done on a duration
basis, not on a page basis.
viii. Both parties agree to jointly proliferate the Fax
Nodes and interconnect them.
ix. STARTEC agrees to market the Fax Node in the U.S.A. as
a STARTEC/VSNL joint service, and similarly VSNL agrees to market
it as a VSNL/STARTEC joint product in India.
x. The Fax Nodes installed using STARTEC technology will
be used exclusively with STARTEC.
xi. Traffic will be both ways with VSNL offering the
service through all its telecommunications Bureaus.
xiii. Commercial operation of the Fax Node will commence
upon mutual Agreement, but no later than when the additional
circuits are commissioned.
3. STARTEC Direct:
i. VSNL will provide STARTEC with a direct access number
for customers in India, wishing to access with STARTEC network in
U.S.A.
ii. Calls originating via this plan will be treated as
incoming into India.
iii. STARTEC will remit accounts and settlements to VSNL for
this service, in accordance with the procedure adopted for the
PSTN Voice Service.
4. Leased Lines:
i. VSNL agrees to assist STARTEC in providing its
customers with dedicated leased lines, as and when requested.
ii. The actual terms and conditions for this service will
be decided on a case by case basis via faxes.
5. Remote Offices:
i. The parties agree to explore the possibility of setting
up digital links between the U.S.A. and technology parks in
India, which would enable to transmission of data from the U.S.A.
for processing in India.
ii. Specific terms for this service will be subsequently
negotiated, agreed upon and recorded in a supplementary
Agreement.
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6. Video Conferencing:
i. The Parties agree to explore the possibility of setting
up video conferencing facilities between India and U.S.A.
ii. Specific terms for this service will be subsequently
negotiated, agreed upon and recorded in a supplementary
Agreement.
ARTICLE III
Link Specifications:
I. Operations will commence initially via the [CT REQUESTED].
ii. Thereafter circuits will be expanded upon mutual Agreement
via CME or new routes.
iii. STARTEC will pay for transit charges on a full length basis
for hard patched circuits, in case traffic is routed on dedicated
international links. If the traffic is routed via auto transit
facilities of other international carriers, STARTEC will bear the
full transit charges and VSNL will be entitled to fifty percent
of the Total Accounting Rate.
iv. The circuits will be configured as two way circuits and
STARTEC will receive return traffic in accordance with VSNL's
practice with other International carriers of U.S.A.
ARTICLE IV
Accounting Rate and Procedures
1. The Total Accounting Rate between U.S.A. and India will
be $2.00 per minute until March 31, 1993. This is based on the
Agreement that at all times the same total Accounting Rate (TAR),
including any revisions, will be equally applicable to all U.S.
based carriers including STARTEC.
2. The accounting rate shall be shared between the parties
in such a way that VSNL receives 50% if the Total Accounting Rate
(T.A.R.) and transit charges if payable to other international
carriers will be borne by STARTEC.
3. Service messages between the parties will be exchanged
free of charge.
4. Each Party shall keep full and complete records of all
calls originated on its side and each party shall be responsible
as between the parties for the collections of the charges in
respect of al messages originated on its side. For purposes of
accounting between the parties no allowance shall be made for bad
debts.
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5. Both parties shall render to the other an account of
traffic routed on its side during each calendar month not later
than the 20th of the following month to which the account
relates.
6. The account shall be deemed to have accepted by the
party to whom it is rendered if that party does not take
objection thereto in writing within one month of the receipt of
the account by the other party to which that account refers.
7. Settlement and payment of dues on such account shall
take place not later than the last working day of the month
following the month in which the account is tendered by TMO,
Demand Drafts or Bank Transfers. Unless specifically agreed the
payment shall be effected in U.S. Dollars.
8. Any hard patch or transit charges payable by STARTEC in
respect of hard patched charges will be made in advance or
directly to the third carrier by STARTEC.
ARTICLE V
1. Liability for Loss/Damage:
Neither party shall be liable to the other Party for any
losses or damages either direct, indirect, consequential or
otherwise sustained by reason of any failure in or breakdown of
the communications systems or facilities herein provided for, or
for any interruption of the service, whether caused by Act of
God, insurrection or civil disorder, war or military operations,
national or local emergency, acts or omissions of any Government
authorities, industrial disputes, fire, lightening, explosion,
inclement weather, or other causes beyond the control of either
Party.
2. Sales Effort:
Each Party undertakes with the other Party to promote on a
non-exclusive basis the sale of the agreed upon
telecommunications services.
3. Transfer of Rights:
Neither Party shall transfer or assign its rights or
obligations under this Agreement, without prior written consent
of the other Party, which consent shall not be unreasonably
withheld or delayed. No consent shall be required for transfers
or assignments by either Party to its legal successor or Parent
or Subsidiary.
4. Government Regulations:
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At all times during the terms of this Agreement, the parties
hereto agree to comply and remain in compliance with all
applicable laws, rules and regulations relating to or affecting
the performance of each of their obligations hereunder and shall
secure and maintain in full force and effect all licenses,
permits and authorizations from al government agencies, to the
extent the same are required or necessary for the performance of
their respective obligations hereunder.
5. Intellectual Property Rights:
The Parties agree that trademarks, inventions, patents,
copyrights, registered designs, service marks, trade name and all
other intellectual property shall remain in the ownership of the
person or Party originating the same for the terms of this
Agreement, and nothing contained 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.
6. Proper Notice:
Any communication or notice by either Party should be sent
to the registered office of the addressee as given in the
preamble to this Agreement, or to such other address as xxx be
notified in writing by either party to the other as an address to
which such communications may be sent. All such communications
will be sent by registered mail or registered courier only.
7. Arbitration:
Any dispute, controversy or claim arising out of or in
connection with this Agreement, or breach, termination or
validity hereof, shall first be settled through friendly
discussion or negotiations between the Parties. If the dispute
cannot be amicably settled either Party, as soon as practicable,
the dispute amicably has been made to the other Party, give to
the other notice in writing of the existence of such question,
dispute or difference, specifying the nature and the point at
issue, and the same shall be finally settled by Arbitration in
India, in accordance with the Indian Arbitration Act and relevant
regulations in force at that time. Arbitration will be conducted
by a neutral arbitrator acceptable to both parties.
8. [CT REQUESTED]
9. Term and Termination:
a. the Agreement will become effective from the date
on which both Parties sign below and shall continue in effect for
an initial term of two years from that date. The agreement shall
be renewed for successive two year terms, unless terminated in
accordance with the provisions below.
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b. This Agreement may be terminated for violation of
any terms incorporated in this Agreement by either Party by
giving at least three months written notice to the other Party.
In particular the Agreement could be terminated:
(i) for default in payment of dues.
(ii) for poor grade of telephony service
compared to the performance of other
international carriers of USA.
and (iii) if the traffic volume overaged over a
period of calendar month in terms of paid
minutes per circuit per day falls below
the average performance of other USA
carriers.
The grade of service and traffic volumes referred
under b (ii) and be (iii) will be reckoned after
the expansion of circuits as referred in
Article-II and Article-III of this agreement.
c. If the Party to whom written notice is given in
accordance with the provisions contained herein, rectifies the
same, the Agreement shall continue for its full term, including
any renewal of the same.
d. In case of termination of this Agreement, the
parties shall continue to be liable for the dues arising out of
the Agreement and shall settle the same in accordance with the
provisions of this Agreement.
IN WITNESS WHEREOF THE SECRETARY OF VSNL AND THE REPRESENTATIVE
OF STARTEC HAVE HEREUNDER SET THEIR RESPECTIVE HANDS THE DAY AND
YEAR FIRST ABOVE WRITTEN.
Signatures:
For STARTEC For Videsh Xxxxxxx Xxxxx Limited
Name /S/ Name /s/
XXXXXX XXXXXXX XXXXXX XXXXXX
Title Legal Advisor & Title
authorized signatory
Date 12th Nov.'92 Date 12-11-92
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