EXHIBIT 10.43
TPC-5 CABLE NETWORK
INDEFEASIBLE RIGHT OF USE AGREEMENT
BETWEEN
KDD CORPORATION
AND
STARTEC GLOBAL COMMUNICATIONS CORPORATION
THIS AGREEMENT, made and entered into the last day of December, 1998, by and
between KDD Corporation, a corporation organized and existing under the laws of
Japan and having its principal office at No.3-2, Nishi-Shinjuku 2-Chorric,
Shinjuku-ku, in xxx xxxx xx Xxxxx 000-0000, Xxxxx (hereinafter referred to as
"KDD" which expression shall include its successors and assigns) and Startec
Global Communications Corporation, a corporation organized and existing under
the laws of State of Maryland and having its principal office at 00000 Xxxxx
Xxxx Xxxxx, Xxxxxxxx XX 00000, Xxxxxx Xxxxxx of America (hereinafter referred to
as "Startec" which expression shall include its successors and assigns) and;
WITNESSETH:
WHEREAS, pursuant to an agreement entitled "TPC-5 Cable Network Construction and
Maintenance Agreement" dated October 29. 1992 and "TPC-5 Cable Network
Amendatory Agreement No.1" dated May 16. 199, "TPC-5 Cable Network Amendatory
Agreement No.2" dated October 31, 1995, "TPC-5 Cable Network Amendatory
Agreement No-3" dated June 17, 1996, "TPC-5 Cable Network Amendatory Agreement
No.4" dated December 3, 1996, (hereinafter collectively referred to as the
"C&MA" inclusive of any future Amendatory Agreements), KDD and other signatories
thereto agreed, on the terms and conditions contained therein, to provide,
construct, maintain and operate a submarine cable network linking North America
and Japan, known as the "TPC-5 Cable Network" (hereinafter referred to as the
"TPC-5 CN"); and
WHEREAS, referring the C&MA, hereinafter the Path between the Nodes of Japan -
U.S. Mainland shall be referred to as the "JA-US Path", which shall consist of
Segment A, Segment B, Segment C, Segment D, Segment E, Segment F, Segment G,
Segment H, Segment I, Segment, J, Segment T1 and Segment T2; and
WHEREAS, pursuant to the current C&MA, the TPC-5 CN consisting of two fiber
pairs,
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one Service Fiber Pair and one Restoration Fiber Pair, each providing 64 Basic
System Modules has a total design capacity of four thousand and thirty-two
(4032) Minimum Investment Units (hereinafter referred to as "MIUs"), each of
which allows the use of 2.048 Mbits per second and an additional 420,571.43 bits
per second required for multiplexing purposes, in each direction; and
WHEREAS, pursuant to the C&MA, KDD have been wholly assigned a certain number of
MIUs in the number JA-US Path; and
WHEREAS, KDD, pursuant to the C&MA as wholly assigned MIUs of a Path Assignment
shall be considered as consisting of two half-interests in a MIU assigned to one
Party, may make half interests in the said MIUs available to other Parties to
the C&MA or telecommunications entities not Parties to the C&MA; and
WHEREAS, Startec desires to use KDD's half interests, in a certain number of
MIUs assigned to KDD in the JA-US Path; and
WHEREAS, KDD and Startec desire to define the terms and conditions under which
the said interest in the JA-US Path will be granted to Startec:
NOW THEREFORE, KDD and Startec, in consideration of the natural covenants herein
cxpressed, covenant and agree with each other as follows:
1. (a) KDD hereby grants to Startec on an indefeasible right of use
(hereinafter referred to as "IRU") basis, one (1) half MIU wholly assigned to
KDD in the JA-US Path owned by KDD. Actual route assignment for the granted IRU
half interest(s) shall be subject to the C&MA.
(b) The IRU half interest(s) shall he utilized by Startec in furnishing
jointly with KDD communication services between points in the United States and
points in Japan.
2. For the IRU half interest(s), Startec shall pay a lump sum amount of twenty
million (20,000,000) Japanese Yen.
3. Even if any kind of adjustment in the portion of capital cost (excluding
the
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incremental cost on the relevant cubic stations) incurrcd by KDD is made, as
changes occur in the capital cost of the JA-US Path for any reason, including.
but not limited to the replacement, addition or removal of property, or change
in the capacity of the JA-US Path, no financial adjustment shall be made
regarding the lump sum payment described in Clause 2.
4. For the IRU half interest(s), Startec shall also pay the following costs to
KDD on the MIU proportionate share of the half intcrest(s) granted to Startec in
the KDD's MIU in the JA-US Path at the time of such cost occurrence.
(i) the operating and maintenance costs which KDD incurs and receives
bills, on JA-US Path and the relevant cable stations,
(ii) the costs associated with restoration incurred by KDD, if restoration
is required by Startec on the granted half interest(s), in case of
restoration not via self-healing function of the TPC-5 CN, including the
bills of the terrestrial link charges in Japan, based on the certain terms
and conditions established by KDD.
5. Even if any kind of increase or decrease on the design capacity of the
TPC-5 CN beyond its initial capacity in the Service Fiber Pair should occur, no
adjustment in the capacity of the IRU half interest(s) shall be made hereunder
nor shall financial adjustment be made.
6. (a) KDD shall render bills due under this Agreement in Japanese yen.
Startec shall make payments of such amounts in Japanese yen to the designated
office of KDD within one (1) calendar month after the end of the calendar month
in which such xxxx was rendered.
(b) Regarding the operation and maintenance costs described in Clause 4
(i), KDD shall render bills quarterly to Startec. Regarding the costs associated
with restoration, KDD shall render bills on cost occurrence.
(c) All bills rendered by KDD hereunder may include financial charges
computed at a rate equal to the lowest publicly announced prime rate or
commercial lending rate, however described; for ninety (90)-day loans in the
currency of Japan by the Industrial Bank of Japan, Limited. Tokvo; The Dai -
Ichi Kangyo Bank, Limited, Tokyo; and The Bank of Tokyo-Mitsubishi, Limited,
Tokyo, on the fifteenth (15th) day of the middle
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month of the quarter in which the costs were incurred by KDD from such date to
the due date of the bills. If the fifteenth (15th) day of the month is not a
business day, the interest rate prevailing, on the succeeding business day shall
be used.
(d) Bills not fully paid when due shall accrue late payment interest on
the unpaid portion at the per annum simple interest rate equal to the lowest
standard penalty interest rate of the Industrial Bank of Japan, Limited, Tokyo;
The Dai - Ichi Kangyo Bank, Limited, Tokyo; and The Bank of Tokyo-Mitsubishi,
Limited, Tokyo, applicable on the day following the date payment of the xxxx
was due. In the event that applicable law does not allow the imposition of late
payment interest at the rate provided in this sub-clause, interest rate shall
be at the highest rate permitted by applicable law. The late payment interest
shall accrue on a daily basis from and including the day following the day on
which payment is due until payment is received by KDD.
7. KDD shall keep and maintain or caused to be kept and maintained such books,
records, vouchers, and accounts as may be appropriate to support its billing
under this Agreement as referred in Clause 2, 4 and 6, and shall at all
reasonable times make them available for the inspection of Startec, for a period
of not less than three (3) years from the date the applicable xxxx is rendered.
8. The half interest(s) granted to Startec hereunder shall be maintained or
caused to be maintained by KDD in efficient working order in accordance with the
C&MA.
9. The operation by Startec of the IRU half interest(s) granted to it
hereunder and any equipment associated therewith shall be such as not to
interfere with or impair service over any of the facilities comprising the TPC-5
CN; nor cause damage to plant; nor create hazards to the employees of any of the
owners of the aforementioned facilities or the publc. Startec shall bear the
costs of any additional protective apparatus reasonably required to be installed
because of the use of such half interest(s) in MIUs by Startec, any lessee of
Startec, or any customer or customers of Startec or of any such lessee.
10. Neither KDD nor Startec shall be liable to any other party for any loss or
damage sustained by reason of any failure in or breakdown of facilities
associated with the TPC-5 CN or any interruption or degradation of service,
whatsoever shall be the cause of such failure, breakdown, interruption or
degradation and however long it shall last.
11. This Agreement shall become effective on the day and year first above
written
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and shall continue in effect for the duration of the C&MA, subject to the right
of either KDD or Startec to terminate this Agreement at the end of the initial
period of the C&MA or at any time thereafter upon one (1) year's notice in
writing to the other party. KDD shall give Startec prompt notice in writing of
termination of the C&MA.
12. (a) This Agreement may be terminated forthwith by KDD and KDD shall reclaim
the IRU half interest(s) granted hereunder if:
(i) Startec fails to make any payment required by this Agreement on the day
it is due or otherwise is in breach of this Agreement and fails to remedy
such beach within thirty (30) days (except in case of emergency when KDD
may specify in that notice such shorter period as may be reasonable) after
receipt of a notice specifying the breach and requiring it to be remedied,
or;
(ii) Startec shall become insolvent or have a receiver, administrative
receiver, or manager, appointed over the whole or any part of its assets or
go into liquidation (whether compulsorily or voluntarily) otherwise than
for the purpose of amalgamation or reconstruction or make any arrangement
with its creditors or have any form of execution or distress levied upon
its assets or cease to carry on business.
(b) The rights and obligations of Startec under this Agreement shall
terminate as of the date of reclamation, except the reclamation shall not
relieve Startec of its obligation to make full payment of all amounts incurred
under this Agreement up to and including the day of termination.
13. (a) In the event of lquidation of the JA-US Path or any portion thereof, by
sale or other disposition, KDD shall share with Startec any net proceeds or
costs of such liquidation, sale or disposition received or incurred by KDD.
Startec's share of such proceeds or costs shall be proportionate as making the
payments of the operation and maintenance costs, as referred in Clause 4.
(b) Liquidation of the JA-US Path or any portion thereof, or termination of
the CM&A shall not relieve Startec from any liability arising on account of
claims made by third parties in respect of the JA-US Path or any part thereof
and damages or compensation payable on account of such claims, or obligations
which may arise in relation to the JA-US Path, due to any law, order or
regulation made by any government
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or supranational legal authority pursuant to any international convention,
treaty or agreement. Startec's share of any such liabilities or costs incurred
or benefits accruing in satisfying such obligations shall he proportionate as
referred in Sub-Clause 13(a).
14. KDD shall exercise its rights pertaining to the half interest(s) which are
the subject of this Agrreement in a manner which will not diminish the IRU half
interest(s) grantcd to Startec under this Agreement.
15. (a) KDD and Startec shall treat as confidential and shall not disclose to
any third party nor use for any purpose other than the performance of this
Agreement any information in this Agreement including, but not limited to,
terms, conditions, prices, forms and format with regard to KDD and Startec,
excluding;
(i) what is allowed to disclose to any third parties with written approval
of the other party;
(ii) what is generally available to the public other than by reason of a
breach of this Agreement; and
(iii) what is subsequently acquired by KDD and/or Startec from a third
party who is lawfully entitled to disclose.
(b) Notwithstanding Sub-Clause 15 (a), KDD and/or Startec may disclose such
information to its contractors or sub-contractors or to any of its respective
employees or agents only in the case of necessity of such information for the
purpose of enabling KDD and/or Startec to perform any of its obligations or to
exercise any of its rights under this Agreement.
16. The relationship between KDD and Startec under this Agreement shall not be
that of partners and nothing herein contained shall be deemed to constitute a
partnership between them.
17. No license under patents is granted by KDD or shall be implied or arise by
estoppel in Startec's favor in respect to any apparatus, svstem or method used
by Startec in connection with the use of the IRU half interest(s).
18. Startec shall not, without the written consent of KDD, sell, assign,
transfer or
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dispose of its rights or obligations under this Agreement except to a legal
successor of Startec.
19. (a) This Agreement contains the entire agreement between KDD and Startec
relating to the subject matter of this Agreement and merges all prior
discussions, agreements and understandings of written or oral express or implied
between them.
(b) Any oral attempt to modify and/or add to this Agreement not reduced to
writing and signed by KDD and Startec and each successor and permitted assigns
shall be totally without effect and will not be binding upon them.
20. For all purposes (e.g. billing and making payments) under this Agreement,
the contacts and addresses of KDD and Startec respectively shall be confirmed as
set forth in Attachment 1. KDD and Startec shall provide and receive the revised
information to the other, whenever necessary, accompanied with this Agreement.
21. (a) All disputes, controversies, claims or differences which may arise
between KDD and Startec hereto, out of or in relation to or in connection with
this Agreement, KDD and Startec shall make every reasonable effort to resolve
such disputes in reference with the C&MA.
(b) In the event that such disputes shall not be resolved under the
interpretation of the C&MA, this Agreement shall be governed by and construed in
accordance with Japanese law.
(c) The place of arbitration shall be Tokyo. Japan.
22. This Agreement shall be executed in two (2) counterparts in English, and
each such counterpart when so executed and delivered shall be an original, and
such counterparts shall together (as well as separately) constitute one and the
same instrument.
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IN WITNESS WHEREOF, KDD and Startec have severally subscribed these presents or
caused them to be subscribed in their names and behalf by their respective
representatives thereunto duly authorized.
KDD CORPORATION
By /s/ Y. Shimatani
----------------------------
Yoshiharu Shimatani
Director
Network Planning Department
STARTEC GLOBAL COMMUNICATIONS CORPORATION
By /s/
----------------------------
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