EXHIBIT 4.11
[ENGLISH TRANSLATION]
AGREEMENT ON PROVISION OF TRANSFERRED FACILITIES FOLLOWING
ASSET TRANSFER AGREEMENT
THIS AGREEMENT ON PROVISION OF TRANSFERRED FACILITIES FOLLOWING ASSET TRANSFER
AGREEMENT (hereinafter referred to as "this Agreement") is made and entered into
by and between Korea Thrunet Co., Ltd. (hereinafter referred to as "Thrunet")
and Powercomm Co., Ltd. (hereinafter referred to as "Powercomm") in connection
with the provision of transferred facilities for use in Thrunet's broadband
Internet service as follows, in order to clearly perform the terms and
conditions of the Asset Transfer Agreement (hereinafter referred to as "the
Asset Transfer Agreement") that was made and entered into on July 31, 2002.
July 31, 2002
[SEAL AFFIXED]
Korea Thrunet Co., Ltd.
0000-0 Xxxxxx-xxxx, Xxxxxx-xx, Xxxxx
CEO: Xxx Xxxx-sun
[SEAL AFFIXED]
Powercomm Co., Ltd.
000 Xxxxxx-xxxx, Xxxxxxx-xx, Xxxxx
CEO: Seo Sa-hyun
1. USE OF TRANSFERRED ASSETS FOLLOWING THE TRANSFER OF THE ASSETS
A. Upon completion of the transfer of the assets pursuant to the
Asset Transfer Agreement, the initial term of this Agreement
shall be 3 years from the effective date of the transfer, and the
term of this Agreement shall be automatically extended for every
3 years on the same terms and conditions unless a party gives a
written notice at
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least 3 months prior to the expiration date.
B. In connection with the provision of the transferred assets under
Clause A, Powercomm shall grant Thrunet exclusive rights of use
for its broadband Internet access service from the effective date
of transfer until December 31, 2002, provided, however, that for
the Bucheon, Anyang and Ulsan areas, such rights of use shall be
valid until October 31, 2002.
C. The fees for the use of facilities under Clause A shall be
applied as follows.
(1) The usage fees for subscribers (approximately 275,000 ID) as
of the effective date of the transfer of the HFC network
shall be 20% of Thrunet's basic sales revenue (excluding
VAT) , and if the number of subscriber IDs exceeds the
number of subscriber IDs as of the effective date of
transfer, the fee shall be calculated by applying 17% of
basic sales revenue (excluding VAT). However, if Thrunet
wishes to amend the subscriber fees, it shall consult with
Powercomm one month in advance, and in the event that such
fees will be reduced by 5% or more in comparison to
competing providers, Powercomm's consent shall be obtained.
(2) The calculation of the usage fees for 1 year from the
effective date of transfer of the HFC network shall be per
ID monthly fees (excluding VAT) based on the cable TV
broadcasting areas, and the usage fee is to be calculated by
discounting 7% from the total amount as set forth below.
(A) Up to 10,000 ID for each cable TV broadcasting area:
Won 5,500 won
(B) From the portion exceeding 10,000 ID to 15,000 ID for
each cable TV broadcasting area: Won 5,250
(C) From the portion exceeding 15,000 ID to 20,000 ID for
each cable TV broadcasting area: Won 5,000
(D) From the portion exceeding 20,000 ID to 25,000 ID for
each cable TV broadcasting area: Won 4,750
(E) For the portion exceeding 25,000 ID for each cable TV
broadcasting area: Won 4,500
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* Example of fee application: In the event of 18,000 ID in one cable TV
broadcasting area:
(a) Apply Won 5,500 up to 10,000 ID
(b) Apply Won 5,250 for 5,000 ID in excess of 10,000 ID to 15,000 ID
(c) Apply Won 5,000 for 3,000 ID exceeding 15,000 ID or more
(d) {[(a)+(b)+(c)] - [(a)+(b)+(c)]x7%} x VAT = Payment Amount
D. The usage fee under Clause C is immediately applicable
from the effective date of transfer, and Thrunet shall
submit to Powercomm a statement necessary for Powercomm
to claim such fees based on the end of the applicable
month, by the 10th day of the following month. Such fee
shall be paid to Powercomm in cash by the end of the
following month.
2. ALLOCATION OF FREQUENCY
A. Powercomm shall allocate the upstream and downstream
bandwidth frequency to Thrunet in connection with the
use of the transferred assets of Thrunet under Article
1.
(1) Upstream Frequency
(A) Primarily 100 subscribers shall be accepted
by 1.6 MHz bandwidth frequency, and Powercomm
shall allocate 6 channels of 1.6 MHz from
20~42 MHz bandwidth per cell.
(B) In the event that the subscribers of Thrunet
exceed or fall short of the foregoing
criteria, Powercomm shall separately make
additional frequency allocation or cell
divisions (CMTS increase for Thrunet) or get
back the frequency from January 1, 2003.
(C) However, Powercomm shall allow Thrunet to use
the upstream bandwidth frequency (9.6 MHz ~
12.8 MHz) that was used at the time of the
effective date of transfer until December 31,
2002.
(2) Downstream Frequency: Powercomm shall allocate
four 6MHz channels above 450 MHz bandwidth
frequency. However, if one cell of downstream
frequency (6MHz) exceeds 600 subscribers, the
additional frequency allocation or cell division
shall be implemented.
B. Thrunet shall complete the adjustment of bandwidth
frequency within
3
2 months from the effective date of transfer in
accordance with the allocation of frequency under
Clause A above.
C. In the event that Thrunet requires a downstream
bandwidth frequency to undertake additional services,
including VOD and GOD, after the effective date of
transfer for Thrunet, it shall have priority, however,
that the usage fee for the HFC network following the
additional services shall be separately agreed.
3. QUALITY STANDARDS AND OTHERS
A. Matters on quality requirements and others following
the provision and use of the HFC network shall conform
to the SLA provided to customers prior to the date of
the transfer of the HFC network by Thrunet.
B. Detailed information on quality criteria and damage
compensation shall be determined by agreement between
the parties within one month from the effective date of
transfer.
4. RELOCATION OF HEADEND
In the event a party to this Agreement wishes to relocate a
headend in which a transferred asset is located, due to the new
construction of an independent headend, expiration of the term of
a leased headend and other causes, relevant matters such as the
relocation place, time and other matters shall be determined by
agreement between the parties on the principle of good faith. In
such event, the overall expenses required for the transfer and
re-installment of facilities following the relocation of a
headend, shall be paid by the owner or the party in possession
for such facility.
5. LEASE OF HFC NETWORK OF OTHER COMPANIES
During a term of 10 years from the date of entering into this
Agreement, Thrunet shall not lease the HFC network of other
companies in the areas where the transferred assets are located
for so long as Thrunet is leasing and using the transferred
assets from Powercomm, except if Thrunet is already leasing a
network pursuant to an agreement executed with a third party
prior to entering into this Agreement, and there is an inevitable
expansion of such network within the same territory (including
renewal of such agreement after entering into this Agreement).
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6. TERMINATION OF THIS AGREEMENT
A. This Agreement may be terminated during the term of the
Agreement by a party in the event that the other party
is in breach of this Agreement without just cause, and
does not take remedial action within one month from the
time of receipt of the notification to cure the
default.
B. In the event of a termination under Clause A of this
Article, the terminating party shall give a
notification one month prior to the termination.
C. The provision of Article 4 (Termination) of the Cable
TV Network Service Agreement (March 25, 1999) for the
provision of value-added services already entered into
by the parties shall not be applicable under this
Agreement.
7. VALIDITY OF AGREEMENT, etc.
A. This Agreement shall have priority over the Asset
Transfer Agreement, and with respect to the matters not
specified under this Agreement, the Asset Transfer
Agreement, the Cable TV Network Service Agreement
(March 25, 1999) entered into for the provision of
value-added services, and the Agreement on Provision of
HFC Network (January 19, 2001) shall apply to the
extent that the terms and conditions of such agreements
doe not amend, reduce, expand, contradict nor interfere
with the content and scope of application of this
Agreement, except for those matters that may not be
applicable due to their nature.
B. This Agreement shall be valid from the date that the
representatives of both parties affix their seals
hereto.
C. To witness the entering of this Agreement, two copies
of this Agreement shall be prepared and each party
shall obtain and keep a copy.
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