Operating Agreement of the Intersputnik International Organization of Space Communication

For the purpose of this Agreement:

The definitions in Article 1 of the Basic Agreement shall apply to this Operating Agreement.

Each Signatory acquires the rights provided for Signatories in the Basic Agreement and in this Operating Agreement and undertakes to fulfill the obligations placed upon it by those two documents.

Each Signatory shall act in accordance with all the provisions of the Basic Agreement and this Operating Agreement.

13 members of the Committee each one representing a Signatory or group of Signatories which have the greatest investment share in the Share Capital of the Organization; the group representation in the Committee shall be defined in the Committee’s rules of procedure according to paragraph 9, Article 4 hereof.

4 members of the Committee from those Signatories which are not represented in the Committee in any other way and elected by the Board irrespective of their investment share in order to observe the principle of fair geographic representation. Any Signatory elected member of the Committee to represent a certain geographic region shall represent each Signatory of the given geographic region that is not represented in the Committee in any other manner and which agrees to this type of representation.

On matters of substance - by a qualified majority of votes as set forth in clause 6 of Article 4 of this Agreement.

On motions of order - by a simple majority of votes at set forth in clause 7 of Article 4 of this Agreement.

Decisions on the status of the matters under discussion shall be taken by a simple majority of votes as set forth in clause 7 of Article 4 of this Agreement.

The Committee shall hold at least two sessions per year, as a rule, in the host country of the Organization. Any Committee member may invite the Committee to conduct a session in the territory of its country. In this case the Committee member shall bear expenses for the organization of the session. An extraordinary session of the Committee may be convened at a Committee member's or the Director General's request provided that at least 4 Committee members are in favour of its convocation.

Any Signatory which is not a member of the Committee may participate in sessions of the Committee as an observer.

The Committee shall elect its Chairman and his Deputy from among its members for a term of 1 year. They may be re-elected for another term.

The quorum at the meeting of the Committee shall be made up of at least half plus one of its members appointed according to Article 4 of this Agreement with an aggregate voting share of at least 2/3 of the total number of weighted votes of all the members of the Committee.

The voting share of a member of the Committee shall be determined on the basis of the investment share of a single Signatory represented by it or investment shares of several Signatories or groups of Signatories represented by it contributed to the Share Capital as set forth in Article 6 of this Agreement.

A decision shall be considered to have been made by a qualified majority if voted for by at least 1/2 of the attending and voting members of the Operations Committee whose aggregate voting share is at least 2/3 of the total number of weighted votes of all the members of the Committee.

A decision shall be considered to have been made by a simple majority if voted for by a half plus one of the attending and voting members of the Committee. Each member of the Committee shall have one vote.

In extraordinary cases the Committee may take decisions without convening a session. In these cases the procedure of decision-making shall be fixed by the Committee in its Rules of Procedure.

The Operation Committee shall approve its Rules of Procedure.

The size of the Share Capital shall be fixed by the Committee.

If, in the course of the Organization's activities and improvement of the space communications system, it is deemed necessary to increase the Share Capital, it may be increased by the decision of the Committee in accordance with Article 6 of this Agreement. The size of the increase in the Share Capital shall be reflected in the finance plan and the balance sheet of the Organization. The debt to Share Capital ratio shall be determined by the Committee. Any debts receivable and credits related to the Share Capital shall be expressed in US$.

The Share Capital shall be made up of investment shares of the Signatories. The investment shares shall consist of:

The proportion of the utilization of these sources shall be defined by the Committee.

The mandatory minimum investment share shall be equal to 1 per cent of the Share Capital and if necessary may be revised by the decision of the Committee whenever required by the Organization.

The mandatory investment shares of the Signatories shall be annually reviewed not later than on the 31st of December according to the extent to which they used the space segment within a year from November 1 of the preceding year under review to October 31 and also upon entry of new Signatories into or withdrawal from the Organization or termination of membership.

Should it be necessary to augment the Share Capital, an additional mandatory investment share shall be contributed according to the investment shares of the Signatories in the Share Capital in per cent.

In the case of entry of a new Signatory into or withdrawal from the Organization or termination of membership the investment shares of all other Signatories shall be changed in the proportion corresponding to their investment share before this change. The difference between the initial and the newly fixed investment share shall be reimbursed by the Organization to the Signatories or by the Signatories to the Organization.

Investment shares under clause 1, Article 6 hereof, may be contributed using:

Shares shall be contributed to the Share Capital in a freely convertible currency to be selected by the Committee.

The size of the investment share, including contributed material values, services and other resources, shall be calculated as a certain amount in freely convertible currency which is selected by the Committee.

The mandatory investment share contributed to the Share Capital in proportion to which the space segment is used shall be paid by December 31 of the year preceding a fiscal year. All other investment shares shall be contributed according to a schedule fixed by the Committee.

Investment shares shall be contributed to the Share Capital only by the Signatories.

A penalty annually fixed by the Committee shall be charged for any overdue payment of shares taking into account internationally accepted rates.

The Committee may, at the request of a Signatory, reduce its investment share as compared with the share fixed for it in compliance with Article 6 of this Agreement provided that other Signatories which agree to increase their investment shares voluntarily and fully assume to recover the difference. In this case the voting share of the Signatory that buys a part of another Signatory's investment share in the Share Capital shall increase as set forth in Article 3 of this Agreement.

The procedure of the transfer of a part of an investment share shall be fixed by the Committee.

The minimum mandatory investment share shall not be subject to any transfer.

Space segment capacity shall be allocated for any telecommunications service according to tariffs fixed by the Committee in freely convertible currency. These tariffs should provide returns to the Organization sufficient to cover all costs resulting from its activities and to make profit.

The principles of the tariff policy shall be revised by the Committee at least once every two years depending on world telecommunications market fluctuations and according to the progress in upgrading the space and terrestrial segments.

Tariffs for each service shall normally be the same for all users of the space segment. However, in certain cases, the Committee may grant discounts.

Should there occur any default of or delay in payment due to the Organization for space segment utilization, the Committee shall, in accordance with recognized international practice, fix an interest rate to be charged for any overdue payment as well as apply other sanctions to be stipulated in each contract for the use of the Organization's space segment.

Financial activities of the Organization shall be based on annual finance plans approved by the Committee. The financial results of the Organization's activities shall be determined on the basis of annual reports of accounts.

Any returns received by the Organization as a result of its activities shall, by the decision of the Committee, be used within the limits of their size for covering the expenses made to ensure the Organization's activities and provided for in the finance plan.

They shall be used to cover the following priorities:

Any profits made by the Organization shall be distributed among the Signatories in proportion to their investment shares in the Share Capital.

If the returns received by the Organization do not cover the expenses under paragraph 2, the deficit may be offset using reserves of the Organization and/or additional mandatory investment shares and/or credits obtained according to Article 12 of this Agreement.

Financial activities of the Organization shall be audited by an Auditing Commission formed according to Article 13 of the Basic Agreement.

Account keeping in the Organization shall be performed according to the accounting standards approved by the International Accounting Standards Committee, London.

To develop the Organization's satellite system, the Committee shall stick to the policy of upgrading the space segment as defined in Article 4 of the Basic Agreement. Their modernization shall include the purchase or lease of necessary systems, subsystems, units, components, equipment, technologies and services with further utilization in relation to the space segment. The Committee shall announce open international tenders for this purchase or lease. The criterion to announce a specific tender and to determine the winner in this tender shall be defined by the Committee in a separate document on the basis of the principle of optimum combination of the offered quality, price and terms of delivery.

The Committee may decide to refrain from open international tenders for any purchase or lease aimed at any modernization whenever:

The Committee may request any Member of the Organization to instruct the Telecommunications Administration under its jurisdiction to provide, jointly with the Organization, the international legal protection of the Organization's planned satellite networks.

In notifying the Organization's planned satellite networks with the International Telecommunication Union, the Telecommunications Administration shall be guided by the Procedures of International Telecommunication Union Notification of the Organization's Planned Satellite Networks and their International Legal Protection approved by the Committee.

The cooperation between the Organization and the notifying Telecommunications Administration shall be regulated by special agreements between the Organization and the Telecommunications Administration and/or an entity (entities) duly authorized by it.

To use the Organization's space segment, any earth station shall obtain permission from the Organization. The Committee shall determine the procedure of submitting applications to obtain permission, as well as the criteria and priorities in giving this permission.

A Signatory or any other duly licensed entity shall submit an application to obtain permission for the earth stations under their jurisdiction.

Each applicant, as defined in paragraph 2, shall be liable in relation to the earth stations covered by the request, observance by these stations of specifications determined according to paragraph 26 of Article 12bis of the Basic Agreement and other operating conditions approved by the Organization.

Any request for the Organization's space segment capacity shall be submitted to the Organization by the Signatories or any other duly licensed entity.

The Committee shall determine the criteria to use the Organization's space segment and the order of priority in granting permission to use the space segment without rejecting the principle of direct access.

Each Signatory or duly licensed entity that have obtained permission to use the Organization's space segment shall bear responsibility for the observance of all the terms and conditions defined by the Organization in relation to this use.

The liability of the Signatories related to the Organization's obligations shall be limited to the size of their investment shares in the Share Capital.

Should, as a result of settlement coordinated with or approved by the Committee or in accordance with a decision of a competent court, the Organization be required to pay a claim resulting from any action committed by the Organization or from any obligation assumed and implemented by the Organization in conformity or in connection with the Basic Agreement or this Operating Agreement, the Signatories shall, unless this claim is satisfied by payment, insurance or any other financial measures, pay to the Organization the uncovered amount of the claim in proportion to their investment shares as at the date of the claim.

Should any Signatory, as a result of settlement coordinated with or approved by the Committee or in accordance with a decision of a competent court, be required to pay a claim resulting from any action committed by the Organization or from any obligation assumed and implemented by the Organization in conformity or in connection with the Basic Agreement or this Operating Agreement, the Organization shall reimburse to it the amount paid under the claim.

If, in compliance with this Article, the Organization is to effect reimbursement in favour of its Signatory and if such reimbursement is not covered by payments, insurance or any other financial measures, the Signatories shall pay to the Organization the uncovered amount of the reimbursement in proportion to their investment shares as at the effective date of liability.

Neither the Organization nor any Signatory shall be liable to any Signatory or the Organization for any loss or damage occurred due to absence, delay in or bad quality of telecommunications which is provided or is to be provided according to the Basic Agreement and this Agreement.

Any contracts for or agreements on satellite communication services between the Organization and third parties should provide for a mechanism of responsibility of these parties for eventual losses that may appear in the process of doing business with the Organization.

Any disputes regarding interpretation or execution of this Agreement arising between Signatories or between Signatories and the Organization shall be settled by way of consultations between the disputing parties. Should a dispute remain unsettled within six months after any disputing party presents its request to settle it and should the disputing parties fail to reach an agreement on any other procedure to settle the dispute, it may be submitted, by any party to the arbitration court according to the procedure provided for in the Annex to this Agreement which shall be an integral part hereof.

Any disputes between the Organization and any Signatory in relation to special agreements or contracts between them shall be settled according to the dispute settlement procedure provided for in these agreements and contracts. Should no procedure be provided for and should the Organization and any Signatory fail to settle a dispute relating to special agreements or contracts in any other way, it may be submitted, to the arbitration court according to the procedure provided for in the Annex to this Agreement.

Any Signatory that withdraws from the Organization shall continue to be bound by this Article with regard to the disputes concerning the rights and obligations resulting from the fact that it has been a Member of the Organization.

Any Member of the Organization or any Signatory may propose an amendment to this Agreement. The proposed amendments shall be submitted to the Directorate which shall enquire all the Signatories and circulate their opinions within 3 months upon receipt of the amendment. The Committee shall consider and approve the amendments at the next meeting but not earlier than 3 months upon their circulation. The amendments shall be deemed approved if voted for by a qualified majority of the Members of the Committee according to Article 4 of this Agreement.

After the amendment is approved by the Committee, it shall be considered at the next session of the Board of the Organization. If the Board confirms the decision of the Committee to approve the amendment, it shall enter into force and shall be binding on all the Signatories.

Should any Signatory fail to fulfill any obligation under the Basic Agreement or this Operating Agreement other than the obligation provided for by paragraph 1 of Article 6 of this Operating Agreement and should this obligation remain unfulfilled within three months after the Committee notifies the Signatory on such default on obligations the Committee may suspend the rights of this Signatory. If the Committee confirms the fact of default on obligations after additional three months the Board may, by a recommendation of the Committee, make a decision to terminate the membership of the Signatory to the Operating Agreement which shall come into force as from the moment of its approval by the Board. In this case this Agreement shall cease to be valid for the Signatory.

Should any Signatory fail to pay a due amount according to para 1 of Article 6 of this Agreement within six months of the date of payment the rights of the Signatory under the Basic Agreement and this Operating Agreement shall be suspended. If the Signatory fails to pay a due amount within additional six months the Committee may take a decision to terminate the membership of the Signatory which comes into force as from the moment of its approval by the Committee. In this case this Agreement shall cease to be valid for the Signatory.

In the period of suspension of the Signatory's rights according to paragraphs 1 and 2 the Signatory shall continue to be under all its obligations under the Basic Agreement and this Operating Agreement.

A Signatory shall not assume any obligations after its membership is terminated. However, it shall not be released from the obligation to repay its debt to the Organization and from liabilities arising out of the actions taken before the termination of membership as well as obligations under Articles 16 and 17 of this Agreement.

The Committee shall, within three months upon the date of a Signatory's withdrawal from the Organization or termination of its membership according to Article 17 of the Basic Agreement and Article 19 of this Operating Agreement, notify the Signatory of the evaluation of the Signatory's financial status in respect of the Organization made by the Committee as at the date of the Signatory's withdrawal from the Organization or termination of its membership. This notification shall include the amount due by the Organization to the Signatory and the amount to be paid by the Signatory to the Organization as at the actual date of the withdrawal from the Organization or termination of membership including the amount being the Signatory's investment share in the Share Capital provided that the Committee took a decision that this amount should be paid before the notification concerning the Signatory's decision on the withdrawal from the Organization is received or before the date of terminating membership.

The Committee may decide to fully or partially release a Signatory from the obligation to contribute its investment share to the Share Capital if the decision to contribute it was taken by the Committee before the Signatory's notification to withdraw from the Organization is received or before the date of terminating its membership in the Organization as well as release it from the responsibility arising out of the actions taken before the reception of the notification or date of terminating membership in the Organization.

The Director General of the Intersputnik International Organization of Space Communications shall be the Depositary of this Agreement.

The Depositary shall immediately inform the Members of the Organization and the Signatories of

Upon entry into force of this Agreement, the Depositary shall forward certified copies of the text of this Agreement to all the Members of the Organization and Signatories as well as send a certified copy to the Secretary General of the United Nations Organization for registration and publication according to Article 102 of the Charter of the United Nations Organization.

This Agreement shall be open for signing by the Signatories within three months after the Protocol on Amendments to the Basic Agreement takes effect. As soon as this three-month period expires provisions of paragraph 3, Article 21 shall become effective.

The provisions of this Agreement shall be applied provisionally by all the Signatories that signed it as from the date of signing this Agreement until it enters into force.

This Operating Agreement shall remain in force as long as the Basic Agreement is in force and shall cease to be in force simultaneously with it.

No reservations are admitted to this Agreement.