*************

FOR

(ISP)

NO. : 845-51/97-VAS

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1. INVITATION OF APPLICATION(S)/PROPOSAL(S) FOR AWARD OF LICENCE(S) FOR PROVIDING INTERNET SERVICE ( ISP - INTERNET SERVICE PROVIDER LICENCE ).

This invitation is open to any Indian Registered company.

A Company registered in India under the Companies Act,1956 will be eligible to submit proposal. Licence to run the service will be issued to the proposer company if found eligible and complies with all the requirements laid down in the application form.

Foreign equity, if any, shall be as per the Government policy and guide-lines from time to time. At present, the foreign equity is permitted to the extent of 49%.

There is no requirement of the applicant company having any prior experience in information technology or telecommunication services.

2.2 Service Area

Separate licences shall be granted to any applicant company for each service area. For this purpose, the country has been divided into separate service areas in three categories as mentioned below :-

(i) Category "A" Service Area - This includes whole of India.

(ii) Category "B" Service Area - This consists of each one of the 20 Territorial Telecom Circles and four Metro Telephone systems of Delhi, Mumbai, Calcutta & Chennai of the Department of Telecommunications (DoT). However, if a licence for the Telephone Systems of four major cities of Ahmedabad, Bangalore, Hyderabad & Pune is required, these will also be treated as a category "B" Service Area on a par with the Telecom circles.

(iii) Category "C" Service Area - Any Secondary Switching Area (SSA) of DoT with geographical boundaries as on l.4.97, will form a separate category "C" Service Area with the exception that each of the four Metro Telephone systems of Delhi, Mumbai, Calcutta & Chennai and Telephone Systems of four major cities of Ahmedabad, Bangalore, Hyderabad & Pune of the DoT with geographical boundaries as on l.4.97, will form a separate category "B" Service Area.

Applicants will be required to submit separate application for each service area. The ISP will be required to set up his nodes/servers within the geographical limits of the service area. However, the subscribers will be responsible for procurement of Subscriber's Terminal Equipment.

An applicant company may be granted any number of licences. Also, there shall be no limit on number of licences that can be granted in a particular service area. The subscribers of the service shall be from within the service area except for dial up access subscribers from anywhere in the country.

Existing E-Mail and VSAT service Licensees may also obtain separate ISP Licence for any number of the above mentioned service areas subject to fulfillment of eligibility criteria and shall implement the service independent of their existing Network.

2.3 VALIDITY OF THE APPLICATION

Each proposal shall be valid for a minimum period of six months from the date of application.

2.4 EVALUATION OF PROPOSALS :

To assist in the examination & evaluation of proposal the TELECOM AUTHORITY or its authorised representative may, at its discretion ask the applicant clarification w.r.t. its proposal. The request for clarification and response thereto shall be in writing.

2.5 The TELECOM AUTHORITY reserves the right to accept or reject any application without assigning any reason.

2.6 PROCESSING FEE :

The proposer shall enclose a DEMAND DRAFT for Rs. 5,000/- (Rupees FIVE Thousand only) in favour of Pay & Accounts Officer, Head Quarters, Department of Telecommunications ,Sanchar Bhavan, New Delhi-110 001 in respect of each service area, separately with each application. The processing fee is not refundable.

2.7 ISSUE OF LICENCE

Separate licence will be issued for each service area proposed, under relevant provisions of Indian Telegraph Act, 1885 and Indian Wireless Telegraphy Act 1933 and the licensee shall abide by the provisions of the said Acts and the rules made thereunder.

2.8 NETWORKING OF THE SYSTEM, INTERCONNECTING WITH OTHER SEPARATELY LICENSED SYSTEM AND DELIVERY OF INTERNET TRAFFIC TO DOT'S INTERNET NODE (DIAS) OR VSNL'S INTERNET GATEWAY (GIAS)

Direct interconnectvity between two separately licensed ISPs shall be permitted. International traffic shall flow only through DoT's Internet Node i.e. DIAS or VSNL's Internet gateway i.e. GIAS. The ISPs shall have option to connect their Internet node either to DoT's node or VSNL's gateway directly for the purpose of delivery of International Traffic.

The licensee may obtain the transmission links on lease from DoT, licensed Basic Service Operator or any other operator specially authorised to lease such lines to the ISPs. The licensee may also establish its own transmission links within its service area for carrying traffic related to his service only provided that such capacities are not available from any other authorised agencies and subject to permission of authority.

An ISP may provide Internet service to any VSAT customer (who could be served by a shared hub commercial service provider or captive private VSAT network), if the VSAT is located within the service area of the ISP. For this purpose, a direct interconnection of VSAT or VSAT-hub through leased line obtained from an authorised provider to the ISP's node/server shall be permitted only for the flow of Internet traffic. The ISP shall provide to the Telecom Authority a monthly report of VSAT customers served with their locations and the leased line interconnection with the VSAT or VSAT hub. The VSAT hub, however, need not be located in the service area of the ISP.

Resources required for operation of the services for extending them over to the network of upstream service provider (DoT/VSNL etc) or any other service provider licensed by the Authority including time frame for provision of the same, will be mutually agreed between the parties and shall be listed. The resources may refer to include but not limited to physical junctions, PCM derived channels, private wires, leased lines, data circuits other communication elements. The licensee shall apply for and obtain the determined resources from the concerned provider. The operation and charge of these resources is outside the scope of this licence agreement. Licensor will have no obligation for such resources. However, licensor may at any time during the currency of the licence, fix a time frame for provision of such resources by authorised providers in consultation with all concerned parties, with a view only to help the ISP licensees for faster provision of service to customers. No legal right against the licensor shall accrue to the licensee in this regard due to delayed or non-provision of resources.

2.9 DELIVERY OF THE SERVICE :

The LICENSEE shall be responsible for installation, testing and commissioning of all the equipment to provide the SERVICE including connectivity to DoT's DIAS or VSNL's GIAS for delivery of Internet traffic.

The licensee shall provide service within l8 months from the date of signing of the licence agreement which will be the effective date of licence unless the extension of implementation time is duly approved by Telecom Authority for reasons to be recorded in writing. Commissioning of service will mean providing commercial service to customers.

2.11 EXTENSION OF LICENCE:

The validity of licence is initially for a period of ten years unless otherwise terminated. If requested by the licensee, extension may be granted by the TELECOM AUTHORITY on suitable terms and conditions for a period of five years or more at a time. The decision of the TELECOM AUTHORITY shall be final in this regard.

3.0 TECHNICAL REQUIREMENTS:

Private ISPs shall use IP ( Internet Protocol) and shall meet the technical requirements of the Internet Service Providers (DoT/MTNL/VSNL/other ISPs) to which it is connected. The equipment used by the Private ISP shall be in conformance with the Interface/Protocol requirements as applicable. Some of the Interfaces required are given below :

(i) Subscriber Access

* 2 wire access over PSTN for Modem interface

* ISDN BRI and PRI interface

* 64K, Nx64K or 2.048 Mb/s, Nx2.048 Mb/s leased lines

* Frame Relay interface

(ii) Network Interface

* X.25 interface

* Frame Relay

* ATM

* G.703

* PRI, BRI interface

(i) Network Protocol

* IP

(ii) Routing Protocol

* As per requirements of IAP & ISP

* IP : RIP, RIP2, OSPF, BGP4 / CIDR

(iii) WAN Protocol

* Point to Point Protocol (PPP) support for PAP & CHAP

authentication over the PPP Link

* Any other as per requirements of IAP & ISP

3.1 QUALITY OF SERVICE: The quality of service over internet is not established and defined as yet. As such, the QUALITY OF SERVICE is not being defined for the time being. However, it may be defined at a later date based on the experience gained in the operation of the service in the interest of the customers.

TELECOM AUTHORITY reserves the right to carry out performance tests and also define the QUALITY OF SERVICE parameters on licensee's network at any time during the currency of licence. It will be mandatory for the Licensee to comply with such parameters of Quality of Service as and when prescribed by the Telecom Authority.

3.2 Voice over Internet:

Voice over Internet is not permitted. The licence will be liable for termination for any violation. The licensee will not take any measure which amounts to abetment of carriage of voice over Internet. The licensee shall also take measures on its own and as and when directed by the Government at his own cost to bar carriage of voice over Internet.

3.3 Obscene material and applicability of Cyber laws :

Flow of obscene, objectionable, unauthorised or any other content infringing copy-rights, intellectual propriety right and international & domestic Cyber laws in any form over the ISP's network is not permitted and the ISP is supposed to take such measures as to prevent it. Any damages arising out of default on the part of the licensee in this respect shall be the sole responsibility of the licensee.

3.4 IP Address, Domain name :

It will be responsibility of the licensee to obtain IP address, domain name etc. from the competent authority. In case the IP addresses are taken from the Department of Telecommunications, the same are non-portable and have to be returned to DoT at the termination of connectivity contract.

4.0 FINANCIAL CONDITIONS

(i) The licence fee shall be waived for a period of five years upto 31.3.2003. The licence fee to be paid relating to period starting from 1.4.2003 by the licensee company shall be intimated on or before 1.4.2001 and shall be payable irrespective of the time of entry of an ISP. Therefore, for all those ISPs also who obtain licences prior to 31.3.2003, licence fee will become payable with effect from 1.4.2003. The Licence Fee shall be paid in advance on yearly basis on or before the date when it becomes due.

(ii) The beginning of the period of one year for the purpose of recovery of Licence fee will be reckoned from the effective date of the licence agreement.

(iii) For access and other charges including MODEM charges payable to the DOT/MTNL/VSNL/other service provider at the prescribed rates, bills will be raised directly by the DOT/MTNL/VSNL/other service provider and shall be a matter between the Licensee and such service provider(s).

(iv) In case of payments over due to the Licensor, an interest will be charged at the highest commercial lending rate of the state bank of India applicable on the date on which the payment becomes due.

4.2 The authority reserves the right to review and fix the licence fee at it's discretion at any time during the validity of the licence, which shall be final and binding on the licensee except for the initial period upto 31.3.2003.

4.3 PERFORMANCE BANK GUARANTEE (PBG):

A performance bank guarantee of Rs 2.00 crores for each category 'A' Service area, Rs. 20.00 lakhs for each category 'B' service area and Rs. 3.00 lakhs for each category 'C' service area valid for two years from any Scheduled Bank in the prescribed form ( Annexure I, Schedule 'D' of the draft Licence Agreement) shall be submitted alongwith the application for each service area. The licensee company will be liable to extend the validity of the Performance Bank Guarantee two months prior to its date of expiry on its own without demand for a further period of one year on year to year basis. On any failure to do so, the performance bank guarantee will be encashed without giving any notice. This is without prejudice to any other action that may be taken under the terms and conditions of the licence.

4.4 FINANCIAL BANK GUARANTEE (FBG):

The licensee shall submit a financial bank guarantee of an amount commensurate with the annual licence fee of the licensed service area(s) separately for each service area in the format as given in Annexure II, Schedule 'D' of the draft Licence Agreement at least 60 days prior to start of the year for which the licence fee is payable. The amount of FBG shall be specified at later date. The LICENSEE shall submit the Financial Bank Guarantee from any Scheduled Bank, to be renewed from time to time and initially valid for a period of two years

The company will be liable to extend the validity of the financial Bank Guarantee two months prior to its date of expiry on its own without demand for a further period of one year on year to year basis. On any failure to do so, the financial bank guarantee will be encashed without giving any notice. This is without prejudice to any other action that may be taken under the terms and conditions of the licence.

4.5 Tariff - ISPs will be free to fix their own tariff. The tariff shall be left open to be decided by market forces. However, the TRAI ( Telecom Regulatory Authority of India) may review and fix a tariff at any time during the validity of the licence which shall be binding on the Licensee .

Cost of Application Form - Rs. 1,000/- only

GOVERNMENT OF INDIA

MINISTRY OF COMMUNICATIONS

DEPARTMENT OF TELECOM

( VAS CELL )

Sanchar Bhavan, 20 Ashoka Road, NEW DELHI-110 001

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(Please read the Guidelines and draft License agreement carefully before filling up this form. The Application form should contain complete information on each and every point. Additional sheets may be added,if required. Incomplete application or application with conditional compliance shall be summarily rejected).

1. Application for the Service Area : _________________________

(Separate application is to be submitted for each service area)

2. Name of other service area(s) 1._____________________________

for which application has been 2._____________________________

submitted separately. 3._____________________________

4._____________________________

(Attach separate sheet,

if required)

3. Name of Applicant Company: ___________________________________

_________________________________________________________________

4. Complete postal address

with Telephone/FAX Nos.

i). Corporate office:___________________________________________

____________________________________________________________

____________________________________________________________

____________________________________________________________

____________________________________________________________

ii). Registered office:___________________________________________

____________________________________________________________

____________________________________________________________

____________________________________________________________

____________________________________________________________

5. Address for correspondence __________________________________

with Telephone/FAX Nos. __________________________________

__________________________________

__________________________________

__________________________________

__________________________________

6. Name of Authorised contact __________________________________

person, his designation and __________________________________

Telephone/FAX Nos. __________________________________

__________________________________

__________________________________

7. Proof of purchase of application form

(Original receipt to be enclosed

as Annexure-I)

8. Certified copy of Certificate of Registration

duly certified by the Registrar of Companies.

(Please enclose as Annexure-II)

9. Promoters/Partners in the Company:

(details of equity holding)

S.No. Name of Promoter/Partner Indian/ Equity

Foreign %age

---- ------------------------ ------- ------

---- ------------------------ ------- ------

---- ------------------------ ------- ------

---- ------------------------ ------- ------

---- ------------------------ ------- ------

---- ------------------------ ------- ------

(Total foreign Equity participation(s), if any, upto the extent of 49%, including NRI equity, both repatriable and non-repatriable, is allowed. Complete break-up of 100% of equity must be given.)

10. Certified copy of Agreement between

the Indian Company and

Foreign Partner(s), if applicable.

(Please enclose as Annexure-III)

11. Certified copy of approval of

Government of India for terms of

Foreign Collaboration or copy of

application submitted to SIA/

Government in this regard

with proof of submission.

(Please enclose as Annexure-IIIA)

12. Income Tax Clearance Certificate

for 1996-97

(Enclose as Annexure-IIIB)

13. List of Telecom Service License(s) held by the company and its

allied/sister concerns, if any, and their present status.

(Attach separate sheet, if required)

(i)

(ii)

(iii)

14. Resolution of Board of Directors/

other proof that the person

signing the application is

authorised signatory.

(Enclose as Annexure-IV)

15. Demand draft towards payment of Processing Fee :

(i) No. and date ______________________________

(ii) Amount Rs.______________________________

(iii) Name of Bank on which drawn ______________________________

(Enclose in a separate cover and attach to the application).

16. Performance Bank Guarantee:

(i) No. and Date ______________________________

(ii) Amount ______________________________

(iii) Valid upto (date) ______________________________

(iv) Name of Bank with full address and Telephone/FAX Nos.

__________________________________________________________

__________________________________________________________

__________________________________________________________

__________________________________________________________

(Enclose in a separate cover and attach to the application)

Certificates:-

1. I hereby certify that I have carefully read the guidelines and draft License Agreement on Internet Service. I fully comply with the terms and conditions therein.

2. I understand that this application if found incomplete in any respect and/or if found with conditional compliance or not accompanied with the processing fee and/or requisite bank guarantee shall be summarily rejected.

3. I understand that processing fee is non-refundable irrespective of whether or not the licence is granted to me.

4. I undertake to sign the License Agreement, a draft of which has been supplied to me within the prescribed time notified to me failing which my application shall be rejected and processing fee forfeited.

5. I understand that all matters relating to the application or licence if granted to me will be subject to jurisdiction of courts in Delhi/New Delhi only.

6. I understand that such companies who have failed to carry out the contractual obligations with regard to other Telecom Service licences granted under section 4 of Indian Telegraph Act, 1885 shall not be granted ISP licence and their allied or sister concerns will also not be eligible.

7. I certify that none of the companies mentioned in Item l3 of the application form are in default of the conditions of licence granted under section 4 of Indian Telegraph Act, 1885.

8. I understand that if at any time any averments made or information furnished for obtaining the licence is found incorrect, my application shall be liable to be rejected and any licence granted on the basis of this application shall be liable for termination.

Date Signature and name of the

Place Authorised Signatory

(Company's Seal)

Note :

1. This application form is accompanied with:

i) Guidelines and general information on Internet service

ii) Draft licence agreement

iii) Draft performance bank guarantee | as per Schedule 'D' of the

iv) Draft financial bank guarantee | draft Licence Agreement.

2. The blank application forms can be purchased from the headquarters of Telecom Commission at New Delhi and Telecom Circles outside Delhi from 18.2.1998 onwards on payment of Rs 1000/- only (Rupees One Thousand only), non-refundable. The payment will be accepted in the form of a crossed Accounts Payee Demand Draft drawn on any scheduled Bank in favour of "The Pay & Accounts Officer (Hqrs.), Department of Telecommunications, Sanchar Bhavan, New Delhi" or " The Accounts Officer, ___________ Telecom Circle (Name of the circle), _____________ (name of the city where the circle headquarters is situated)", as the case may be.

3. Two copies of the application should be submitted (one original & one copy), marked distinctly as "Original" and "Copy". The original application including annexures must be signed in Ink on each page by the authorised signatory . The application should be submitted by registered post/couriers' service or by hand to "The Director (VAS-III), Department of Telecommunications, Room No 516, Dak Bhavan, Sansad Marg, New Delhi - 110 001".

4. Documents required as Annexures II, III, IIIA, IIIB & IV are to be enclosed with application for one of the service areas. In other application(s) it may be mentioned that these Annexures are enclosed with the application of _______________ Service Area. Annexure I is to be enclosed with each application.

5. The Government reserves right to grant or not to grant a License without assigning any reason.

6. Please use this Original Application Form only.

GOVERNMENT OF INDIA

MINISTRY OF COMMUNICATIONS

DEPARTMENT OF TELECOMMUNICATIONS

TELECOM COMMISSION

NO. _______________ DATED __________

TOTAL PAGES _________( )

(Each page duly initialed)

THIS AGREEMENT made on the -----th day of --------, 1997 between the President of India acting through Director (VAS-III), Ministry of Communications, Department of Telecommunications, Sanchar Bhavan, 20 - Ashoka Road, New Delhi-110 001 (hereinafter called the LICENSOR) of the ONE PART

and

M/s_______________________________________________, a company registered under the Companies Act 1956 and having its registered office at _________________________________________ (hereinafter called the LICENSEE which expression shall unless repugnant to the context, include its successor in business, administrators, liquidators and assigns or legal representatives) of the OTHER PART.

WHEREAS pursuant to the request of the LICENSEE, the LICENSOR has agreed to grant licence to the LICENSEE on the terms and conditions appearing hereinafter to establish, maintain and operate Internet Service (hereinafter called the SERVICE) in the country of India as given in Schedule "A" annexed hereto and the LICENSEE has agreed to accept the same.

NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:

1. In consideration of observance of mutual covenants as well as the licence fee payable in terms of schedule `B' and due performance of all the terms and conditions on the part of the LICENSEE, the LICENSOR does, hereby, grant on non-exclusive basis, licence to establish, maintain and operate Service in the area given in Schedule "A", on the terms and conditions mentioned in Schedule "C" annexed hereto.

2. The licence is granted initially for a period of 10 YEARS unless terminated for default or for insolvency or for convenience or for transfer of the licence under the provisions of condition "12" of Part II, Schedule "C". For the purpose of charging the licence fee for the first year, the year shall be reckoned as 12 months beginning with the effective date of the Licence. Payments of licence fee shall be due as mentioned in Schedule "B". If requested by LICENSEE, extension of the Licence, unless terminated earlier under condition "12" of the Schedule "C" Part-II, may be granted by the LICENSOR at suitable terms and conditions for a period of FIVE YEAR or more at one time. The decision of the LICENSOR shall be final who may extend or refuse the extension of the Licence on request of the licensee received latest by the end of 9TH YEAR from the effective date and in the absence of such request for extension, the Licence shall automatically be terminated as per due date.

3. The licence shall be governed by the provisions of the Indian Telegraph Act 1885 and Indian Wireless Telegraphy Act 1933 as modified from time to time.

4. Unless otherwise stated or appearing from context, all the schedules annexed hereto including the Guide lines on Internet service, with subsequent amendments made thereto will form part and parcel of this agreement. Provided, however, in case of conflict or variance on an issue relating to this agreement, the terms set out in the main body of this agreement read with all the Schedules annexed hereto shall prevail.

5. In this Agreement, words and expressions will have the same meaning as is respectively assigned to them in the Schedule "C".

6. The LICENSOR may at any time revoke the Licence by giving a written notice of 30 days after affording a reasonable opportunity of hearing on the breach of any of the terms and conditions herein contained or in default of payment of any consideration payable hereunder.

7.1 The LICENSEE shall clearly indicate the specifications of the SERVICE to the subscribers at the time of entering into contract with such subscriber.

7.2 In case of any complaint or dispute with regard to the Service from any subscriber of the service, such complaint or dispute shall be a matter between such subscriber of the service and the licensee only. The Government/licensor, DOT, MTNL, VSNL or any other service provider licensed to provide connectable systems shall not be party to any such complaint/dispute. The licensee shall be responsible to suitably notify the above to all his subscribers of the service before registering a request for and provisioning of the service.

7.3 The LICENSEE shall plan and provide, operate and maintain the licensed SERVICE to meet the network standards, interface standards, for connectivity to DOT/MTNL/VSNL's network and all other technical specification requirement standards as stipulated in the Guide lines on Internet Service No 845-51/97-VAS. The Licensee shall be solely responsible for installation, networking and operation of necessary equipment and systems, treatment of subscribers' complaints, issue of bills to its subscribers, collection of the revenue, attending to claims and damages arising out of this operation. The LICENSEE shall make its own arrangements for all infrastructures involved in providing the SERVICE. Further the Licensee shall clearly display and publicise major specifications of subscriber terminal equipment at his premises which are necessary for interworking/interfacing to telephone network.

8. The licensee shall be free to fix his own tariff to be charged from subscribers. The tariff shall be left open to be decided by market forces. However, the TRAI ( Telecom Regulatory Authority of India) may review and fix a tariff at any time during the validity of the licence which shall be binding on the Licensee.

8.1. The licensee shall be responsible to obtain its own IP address and domain name from the competent authorities. In case the IP addresses are taken from the Department of Telecommunications, the same are non-portable and have to be returned to DoT at the termination of connectivity contract.

9. The bank guarantees of requisite amount shall be furnished from time to time by the LICENSEE as required under the terms and conditions of this Licence Agreement and in the proforma as provided in Schedule `D', annexed hereto.

10. The LICENSEE shall not, without the prior written consent of the Licensor, either directly or indirectly, assign or transfer its rights in any manner whatsoever to any other party or enter into any agreement for sub-licence and/or partnership relating to any subject matter of the licence to any third party either in whole or in part. Any violation of this term shall be construed as a breach of Licence Agreement and the licence shall be liable for termination. Provided, however, that installation of systems, equipment and network can be given on contract, but, providing the SERVICE can not be given to another party on contract. Provided, further, that the licensee can always employ or appoint agents and servants.

Provided that the aforesaid written consent permitting transfer or assignment will be granted in accordance with the terms and conditions and procedures described in Tripartite Agreement if duly executed amongst LICENSOR, LICENSEE AND LENDERS.

11. The LICENSOR reserves the right to, in case of a default of any of the terms and conditions stipulated in the Licence Agreement , impose any penalty as it may deem fit under the provisions of this agreement.

12. Notwithstanding anything contained hereinbefore, it is further agreed and declared by the parties that:-

(i) The licence is issued on non-exclusive basis i.e. other vendors may be granted licence for the same service at the discretion of the Licenser. DoT itself or through a designated Public Authority has, the right to operate the service in any/all service areas. Provided further that a pilot project may also be approved and licensed for any period by LICENSOR for providing new technology or management techniques or both.

(ii) The LICENSOR reserves the right to modify at any time the terms and conditions of the licence covered under Schedules "A", "B", "C" and "D" annexed hereto, if in the opinion of the LICENSOR it is necessary or expedient to do so in the interests of the general public or for the proper conduct of telegraphs or on security consideration.

(iii) Notwithstanding anything contained anywhere else in the Licence Agreement, the LICENSOR's decision shall be final on all matters relating to this Agreement and application of terms and conditions herein.

(iv) The LICENSOR reserves the right to take over the entire services, equipment and networks of the LICENSEE, in part or in whole of the Service Area, or revoke/terminate/suspend the licence in the interest of national security or in the event of a national emergency/war or low intensity conflict or any other eventuality in public interest as declared by the Government of India. The specific orders or directions from the Government issued under such conditions shall be applicable to the LICENSEE.

13. The LICENSEE shall not normally employ bulk encryption equipment in its network. Any encryption equipment connected to LICENSEE's network has to have prior evaluation and approval by the LICENSOR or officer specifically designated for the purpose.

14. In supersession of any thing provided elsewhere, the effective date of this licence shall be ..............

15. The Licence is granted to the LICENSEE on the condition that any change in the Indian partners or their equity participation during the first three years from the effective date of license, shall not be made without the prior approval of the LICENSOR. Provided, further, that the share holding of each individual Indian promoter/partner must continue to be not less than 10% of the total equity of the company or the holding at the time of grant of licence whichever is lower for the first three years from the effective date of the licence. Provided, however, that the company may change its Indian partners on its own after completion of three years from the effective date.

Provided further that the LICENSEE shall be responsible to ensure that the total foreign equity in the LICENSEE Company must not ,at any time, exceed 49% of the total equity.

The present Indian & Foreign partners/promoters and their equity held in the LICENSEE Company as intimated by the company are recorded as follows:-

Promoter/Partner Country Equity held in the

LICENSEE Company

---------------- -------- ----------------

16. All matters relating to this licence will be subject to jurisdiction of courts in Delhi/New Delhi only.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed through their respective authorised representatives the day and year first above written.

Signed and Delivered for and on behalf of President of India

By Shri ...........

Director(VAS-....), DoT

Signed on behalf of M/s ___________________

by ______________ _____________________, holder of General Power of Attorney dated _________ executed in accordance with the Resolution No. ______ dated ________ passed by the Board of Directors,

in the presence of:

Witnesses:

1. ______________________

2. ______________________

The service area under the scope of this licence is ________________________________________ . For the purpose of providing the service, the licensee may install his equipment anywhere within in this service area. However, the subscribers will be responsible for procurement of Subscriber's Terminal Equipment. The leased line subscribers of the service will be from within the service area. But the dial up access subscribers could be anywhere in the country.

......

1.1 QUANTUM OF LICENCE FEE AND SCHEDULE OF PAYMENTS

(i) The licence fee is payable by the licensee in consideration for grant of this licence, for the complete duration for which this licence is in existence. This has no relation to the actual start/provision of service by the licensee or any mutual obligations between the licensee and any other service provider/DoT/MTNL/VSNL/Departments of the Central or State Government/local or statutory bodies.

Provided, further, that the licence fee payable relating to period starting from 1.4.2003 by the licensee and to be intimated on or before 1.4.2001 shall be paid in time by the licensee on his own without the need for raising any bills on him.

(ii) The licence fee shall be waived for a period upto 31.3.2003, irrespective of the time of entry of an ISP. Therefore, for all those ISPs also who obtain licences prior to 31.3.2003, licence fee will become payable with effect from 1.4.2003. The Licence Fee shall be paid in advance on yearly basis on or before the date when it becomes due.

(iii) The beginning of the period of one year for the purpose of recovery of Licence fee will be reckoned as beginning from the effective date.

(iv) In case of overdue payments , an interest will be charged at the highest commercial lending rate of the state bank of India applicable on the date of which the payment becomes due.

1.2 The Telecom Authority reserves the right to review the licence fee at it's discretion, which shall be final and binding on the licensee except for the initial period upto 31.3.2003.

PROVISIONS RELATING TO THE CONDITIONS

Unless the context otherwise requires, the following expressions shall have the meaning assigned to them in these conditions:-

1. APPLICABLE SYSTEMS: The "applicable system " means the equipment /systems capable of providing INTERNET Service as per technical and quality requirements and other terms and conditions as laid down in the Guidelines for INTERNET Service No. 845-51/97-VAS.

2. "Connectable System" means a telecommunication system which is authorised to be run under a Licence which authorizes connection of that system to the applicable System;

3. "The Auditor" means the Licensee's auditor for the time being appointed in accordance with the requirements of the Companies Act, 1956.

4. DIAS : DoT's Gateway Internet Access Services.

5. DIRECT EXCHANGE LINE (DEL): A telephone connection between the subscriber's terminal equipment and the terminal exchange.

6. DOMAIN NAME: Domain names in India are at present registered by NCST, Mumbai who allot the same to legitimate IP address holder on receipt of a written application.

7. "DOT" means Department of Telecommunications, India, Government of India(including MTNL) and/or its successors.

8. EFFECTIVE DATE : The date on which this Licence Agreement is signed by the parties and if the parties have signed on different dates, the latter of the two dates.

9. "Emergency" means an emergency of any kind, including any circumstances whatever resulting from major accidents, natural disasters and incidents involving toxic or radio-active materials.

10. "Emergency Organization" means in respect of any locality, the relevant public, police, fire, ambulance and coast guard services for that locality.

11. ENGINEERING : The technical application of the dimensioning rules and results thereof in order to provide the specified QUALITY OF SERVICE.

12. GIAS: VSNL's Gateway Internet Access Services.

13. INTERNET : Internet is a global information system that :

* is logically linked together by a globally unique address based on Internet Protocol (IP) or its subsequent extensions /follow-on;

* is able to support communications using the Transmission Control Protocol/Internet Protocol (TCP/IP) suite or its subsequent extensions/ follow-ons, and are other IP compatible protocols; and

* provides, uses or makes accessible, either publically or privately, high level services layered on the communications & related infrastructure.

14. IP Addresses : Operation of Internet service requires IP addresses which is at present a 32 bit binary address. This address is required for each permanent connection in Internet. Typically it is required for ports of routes and other ISP equipment and also for leased lines connections to be provided to end users.

15. ISP : means Internet Service Provider licensed to provide Internet Service under this licence.

16. "Licence" means a licence granted or having effect as if granted under section 4 of the Indian Telegraph Act 1885 and Indian Wireless Telegraphy Act 1933.

17. LICENSEE : A registered Indian Company that has been awarded licence for providing the SERVICE.

18. "LICENSOR" shall refer to the President of India acting through any authorised person, who granted Licence under Section 4 of Indian Telegraph Act 1885 and Indian Wireless Telegraphy Act 1933, unless otherwise specified.

19. "Message" means anything falling within sub Clause/paragraph (3) of section 3 of the Indian Telegraph Act 1885.

20. "MTNL" means Mahanagar Telephone Nigam Limited.

21. "Operator" means any person who is authorised by the LICENSOR to run a Relevant Connectable System.

22. "OR/QR Specifications" means technical and quality requirements contained in the OR/QR Specifications of Telecom Engineering Centre Department of Telecommunications unless otherwise specified.

23. "Public Switched Network" means a fixed specified switched public telecommunication system providing a two-way switched telecommunication service.

24. QUALITY OF SERVICE : "Quality of service" is evaluated on the basis of observable measures on the grade of service, calls lost due to wrong processing, the bit error rate or the response time and also includes acceptable grade of number of faults per unit population of the subscribers served, the mean time to repair (MTTR), faults carried over beyond the MTTR and the satisfactory disposal thereof.

25. SERVICE AREA : Separate licences shall be granted to any applicant company for each service area. For this purpose, the country has been divided into separate service areas in three categories as mentioned below :-

(i) Category "A" Service Area - This includes whole of India.

(ii) Category "B" Service Area - This consists of each one of the 20 Territorial Telecom Circles and four Metro Telephone systems of Delhi, Mumbai, Calcutta & Chennai of the Department of Telecommunications (DoT). However, if a licence for the Telephone Systems of four major cities of Ahmedabad, Bangalore, Hyderabad & Pune is required, these will also be treated as a category "B" Service Area on a par with the Telecom circles.

(iii) Category "C" Service Area - Any Secondary Switching Area (SSA) of DoT with geographical boundaries as on l.4.97, will form a separate category "C" Service Area with the exception that each of the four Metro Telephone systems of Delhi, Mumbai, Calcutta & Chennai and Telephone Systems of four major cities of Ahmedabad, Bangalore, Hyderabad & Pune of the DoT with geographical boundaries as on l.4.97, will form a separate category "B" Service Area.

Applicants will be required to submit separate application for each service area. The ISP will be required to set up his nodes/servers within the geographical limits of the service area. However, the subscribers will be responsible for procurement of Subscriber's Terminal Equipment. An applicant company may be granted any number of licences. Also, there shall be no limit on number of licences that can be granted in a particular service area. The subscribers of the service shall be from within the service area except for dial up access subscribers from anywhere in the country.

Existing E-Mail and VSAT service Licensees may also obtain separate ISP Licence for any number of the above mentioned service areas subject to fulfillment of eligibility criteria and shall implement the service independent of their existing Network.

26. "Services " or "Service" means Internet Access Service and related services thereof, such as Store & Forward Services, Remote Host Login, Electronic Mail using TCP/IP, File Transfer and Information Discovery Services e.g. Gopher (Indexed File Transfer, Worldwide Web (WWW), etc. On line Services such as Internet Telephony, Video-telephony or Video-conferencing, etc. are not permitted.

27. Service Provider - means Central Government engaged in providing Telecom Service and includes a licensee.

28. "Specified Public Telecommunication System" means the public telecommunication systems run by Department of Telecommunications or Mahanagar Telephone Nigam Limited or any other public telecommunication system duly licensed by the Licensor.

29. Subscriber - Subscriber means any person or legal entity who avails the service from the licensee.

30. TELECOM AUTHORITY : The Director General, Telecommunications, Government of India and includes any officer empowered by him to perform all or any of the functions of the Telegraph Authority under the Indian Telegraph Act, 1885 or such other authority as may be established by law.

31. Technical Specifications: As laid down in the Guidelines for INTERNET Service No. 845-51 /97-VAS.

32. TARIFF: Charges payable by a subscriber for the service provided.

33. TRAI - means Telecom Regulatory Authority of India established under TRAI Act, 1997.

34. VALIDITY OF THE LICENCE : The period for which this licence is effective and operative.

35. VSNL: means "Videsh Sanchar Nigam Ltd."

36. "Value Added Service": Value Added Services are enhanced services which add value to the basic tele services and bearer services for which separate licences are issued. At present, Government is issuing licences for following value added services:

i) Cellular Mobile Telephone Service

ii) Radio Paging Service

iii)Public Mobile Radio Trunked Service

iv) Electronic Mail

v) Voice Mail/Audio Tex Service

vi) Closed Users Group Domestic

64 kbps data network VSAT Service via INSAT Satellite

System

vii) Videotex Service

viii)Video conferencing

ix)Internet Service

1.1 The LICENSEE shall install, run Applicable Systems within eighteen months from the effective date of the licence and offer the service on demand to its customers unless the extension of implementation time is duly approved by Telecom Authority for reasons to be recorded in writing. Commissioning of service will mean providing commercial service to customers.

1.2 The LICENSEE shall operate and provide the SERVICE. LICENSEE shall be solely responsible for the installation, networking and operation of necessary equipment and systems, treatment of the subscribers' complaints, issue of bills to its subscribers, collection of its component of the revenue, attending to claims and damages arising out of this operation. The LICENSEE shall make its own arrangements for all infrastructures involved in providing the SERVICE.

1.3 For the purpose of providing the SERVICE, the LICENSEE shall install his own suitable equipment so as to be compatible with the other service provider's equipment and connect the same to DoT's DIAS or VSNL's GIAS for the purpose of delivery of Internet traffic.

1.3.1. The subscriber will be responsible for procurement of subscribers' terminal equipment. However, this will be subject to interface or type approval by TELECOM AUTHORITY or an agency authorised by LICENSOR.

1.4 In the process of operating the SERVICE, the LICENSEE shall be responsible for:-

i) The installation at the sites (the installation of the equipment at subscribers premises will, however, remain at the option of the subscriber);

ii) the proper upkeep and maintenance of the equipment;

iii) maintaining the criteria of performance and quality of service standards.

iv) maintaining the MTTR (Mean Time To Repair) within the specified scope of the quality of Service.

1.5 If the LICENSEE, has in addition, leased or rented other telecommunication resources from the DOT/MTNL/VSNL or any other Telecom Service provider authorised by the Government, purely for the purposes of providing the service and networking its geographically dispersed equipment, such resources will be a matter between the ISP and the service provider(s) and will be subject to tariff as fixed by DOT/MTNL/VSNL/other Telecom Service provider from time to time. Licensor will have no obligation for such resources.

1.6 "WARRANTY AS TO QUALITY":- The LICENSEE shall warrant that SERVICES to be provided by him shall be of the acceptable grade, consistent with the established and generally accepted standards. The LICENSEE shall be responsible for repair of defects and making good any degradation in the SERVICE during the currency of the licence.

1.7 The LICENSEE shall plan and provide, operate and maintain the Licensed SERVICE to meet the network standards, interface standards and the requirements for connectivity of LICENSEE's network to DOT's network as per interface requirement laid down by TEC (DOT) and the provisions of this agreement.

The LICENSEE shall equip itself with the means to measure the originating traffic in respect of each subscriber. It shall be able to generate the billing information, in enough detail, to convince the subscribers satisfactorily. The billing disputes or differences, between the LICENSEE and its subscribers will be settled amongst themselves.

1.9.1 (i) 90% of faults resulting due to subscribers complaints should be rectified within 24 hours and 99% within 3 days.

(ii) MTTR figures would apply only to equipment owned and operated by the Licensee.

1.9.2 The Licensee will keep a record of number of faults and rectification reports in respect of each service area and produce it to the authority as and when and in whatever form desired by the authority .

1.10 SECURITY CONSIDERATION :

1.10.1 The LICENSEE shall not normally employ bulk encryption equipment in its network. However, if any encryption equipment is used and connected to the LICENSEE's network then it should have prior evaluation and written approval of the LICENSOR.

1.10.2 The LICENSEE shall provide to the LICENSOR location details of switching centers, transmission centres, including routing details etc. Implementation of any installation of the concerned equipment and execution of the concerned project shall be taken up only after the approval by the LICENSOR and locations of these centers shall not be changed without prior approval of the LICENSOR. This requirement shall be applicable only to such areas as are sensitive from security point of view, as may be notified from time to time by the LICENSOR.

1.10.3 In case of transmission lines, the LICENSEE shall take prior approval of the route from LICENSOR before commencement of execution of the associated project.

1.10.4 The LICENSEE shall provide necessary facilities to the Government to counteract espionage, subversive act, sabotage or any other unlawful activity. The said facilities to be provided by the LICENSEE will depend upon the specific situation at the relevant time.

1.10.5 The LICENSEE shall make available on demand to the agencies authorised by the Government of India, full access to the switching centres, transmission centres, routes etc. for technical scrutiny and for inspection which can be visual inspection or an operational inspection.

1.10.6 All foreign personnel likely to be deployed by the LICENSEE for installation, operation and maintenance of the LICENSEE's network shall be security cleared by the Government of India prior to their deployment. The security clearance will be obtained from the Ministry of Home Affairs, Govt. of India, who will follow standard drill in the matter.

1.10.7 The LICENSEE shall ensure protection of privacy of communication and ensure that unauthorised interception of messages does not take place.

1.10.8 LICENSOR shall have the right to take over the SERVICE, equipment and networks of the LICENSEE either in part or in whole of the Service Area as per directions if any, issued in the public interest by the Government in case of emergency or war or low intensity conflict or any other eventuality. Provided any specific orders or direction from the Government issued under such conditions shall be applicable to the LICENSEE and shall be strictly complied with.

1.10.9 LICENSOR reserves the right to modify these conditions or incorporate new conditions considered necessary in the interest of national security.

1.11.1 The LICENSEE shall furnish all necessary means and facilities as required for the application of provisions of Section 5 (2) of the Indian Telegraph Act, 1885, whenever occasion so demands.

Section 5 (2) of Indian Telegraph Act reads as under:

1.11.2 APPLICATION OF INDIAN TELEGRAPH RULES

The LICENSEE shall frame a set of commercial code that govern registration, provisioning, operation, maintenance and billing for the SERVICE and get the same approved by the LICENSOR within six months of issue of the licence and in any case before start of survive. LICENSOR shall accord approval after satisfying itself that such code is consistent with the Indian Telegraph Act, 1885 and does not violate the upper limit of tariff specified by the LICENSOR, if any, and otherwise is in the general interests of the public.

1.11.3 Nothing provided and contained anywhere in this Licence Agreement shall be deemed to affect adversely anything provided or laid under the provisions of Indian Telegraphs Act, 1885 or any other law in force.

1.12 PROHIBITION ON CERTAIN ACTIVITIES BY THE LICENSEE

1.12.1 The LICENSEE shall not engage in the business of the provision of any other Telecom SERVICE unless so licensed.

1.12.2 For the avoidance of doubt, it is, hereby, declared that nothing contained in Condition 1.12.1 above shall preclude the LICENSEE from engaging in advertising and promotional activities relating to any of the Applicable Systems or from assembling any telecommunication apparatus comprised or to be comprised in any of the Applicable Systems.

1.12.3 Voice over Internet: Voice over Internet is not permitted. The licence will be liable for termination for any violation. The licensee will not take any measure which amounts to abetment of carriage of voice over Internet. The licensee shall also take measures on its own and as and when directed by the Government at his own cost to bar carriage of voice over Internet.

1.12.4 Obscene material and applicability of Cyber laws : The LICENSEE shall ensure that objectionable, obscene, unauthorised or any other content, messages or communications infringing copyright, Intellectual propriety right and international & domestic cyber laws, in any form are not carried in his network, consistent with the established laws of the country and the ISP should take such measures as to prevent it. In particular LICENSEE is obliged to provide, without delay, all the tracing facilities of the nuisance or malicious calls, messages or communications transported through his equipment and network, to authorised officers of Government of India, when such information is required for investigations of crimes or in the interest of national security. Cyber Laws as and when framed shall be applicable. Any damages arising out of default on the part of licensee in this respect shall be sole responsibility of the licensee.

1.12.5 In case any confidential information is divulged to the LICENSEE for proper implementation of the Agreement, it shall be binding on the LICENSEE, its agents and servants to maintain its secrecy and confidentiality.

The Acceptance Testing for every interface with the DOT network may be carried out by the Acceptance Testing party of the DOT. The Acceptance Testing schedule shall be mutually agreed. Adequate time, not less than 30 days, will be given by the licensee for these tests.

The Authority shall have right to check and measure the quality of service provided by the licensee at any time during the currency of the licence. If the QUALITY OF SERVICE as indicated by measurement is found to be below the standard, the LICENSOR may choose to examine the Quality Assurance measures adopted by the LICENSEE.

The LICENSEE shall submit to the LICENSOR a quarterly report on the quality of SERVICE offered to its subscribers indicating the levels of performance achieved. The LICENSEE shall provide necessary test instruments, assistance and support to the LICENSOR for such measurement.

2.3 LICENSEE will ensure that the Telecommunication installation carried out by him should not become a safety hazard and is not in contravention of Laws of the land.

3.1 The LICENSEE shall be responsible for installation, testing and commissioning of all the equipment to provide the services. It will be the responsibility of the Licensee to obtain IP address, domain name etc. from competent authority. ( In case the IP addresses are taken from the Department of Telecommunications, the same are non-portable and have to be returned to DoT at the termination of connectivity contract.) However, all performance tests required for successful commissioning of the services may also be carried out by the LICENSOR, if it so desires, before the services are commissioned for public use. The LICENSEE shall supply all necessary literature, drawings, installation materials regarding the equipment installed for commissioning of the services. The LICENSEE shall supply all the tools, test instruments and other accessories to the testing party of the LICENSOR for conducting the tests.

3.2 The licensee shall provide service within l8 months from the date of signing of the licence agreement which will be the effective date of licence unless the extension of implementation time is duly approved by Telecom Authority for reasons to be recorded in writing. Commissioning of service will mean providing commercial service to customers.

3.3 The list of performance tests will be furnished by the LICENSEE one month prior to the date of commissioning to the LICENSOR.

3.4 In case the Licensee chooses to conduct performance test, delay caused due to rectification of deficiencies, if any, in the commissioning/provision of SERVICES, will be to the account of the LICENSEE.

3.5 The LICENSEE shall provide the SERVICE in the Service Area to any individual or legal person including customers located in Rural Belt(s) of the licensed service area without any discrimination unless directed by the LICENSOR in writing to so refuse.

3.6 The LICENSEE indemnifies the LICENSOR against all actions brought against the LICENSOR for breach of privacy or unauthorised interruption of message transmitted by the establishment of LICENSEE.

4.1 The LICENSEE shall be responsive to the complaints lodged by his subscribers. He shall rectify the anomalies within the MTTR specified.

4.2 The LICENSEE shall equip itself with adequate system to deal with the complaints from its subscribers, test the part of the equipment and external plant wherever relevant, and take necessary corrective measures to bring the faulty elements back into satisfactory operation. It shall maintain the history sheets for each installation, statistics and analysis on the overall maintenance status.

The LICENSEE shall also publish the information relating to the recovery procedures, relating to the performance of all the equipment in his control.

4.3 The Licensee shall keep a record of first information of all faults reported by his subscribers chronologically and the rectification of faults thereof.

The LICENSOR, or its authorised representative shall have the right to inspect the sites to which and where from the SERVICES are extended. The LICENSOR shall, in particular but not limited to, have the right to have access to leased lines, junctions, terminating interfaces, processing hardware/ software, memories of live, magnetic and optical varieties, wired options, distribution frames, and to enter into dialogue with Input/output devices or terminals. The LICENSEE will provide the necessary infrastructure for continuous monitoring of the same, if required by the LICENSOR or its authorised representative(s). The LICENSOR will ordinarily carry out inspection after reasonable notice except in circumstances where giving such a notice will defeat the very purpose of the inspection.

If at any time, during the continuance of this licence, the performance in whole or in part, by either party, of any obligation under it is prevented or delayed, by reason of war, or hostility, acts of the public enemy, civil commotion, sabotage, fire, flood, Act of State or direction from Statutory Authority, explosion, epidemic, quarantine restriction, strikes and lock-outs (as are not limited to the establishments and facilities of the LICENSEE), or act of GOD (hereinafter referred to as EVENT), provided notice of happenings of any such EVENT is given by either party to the other, within 21 days from the date of occurrence thereof, neither party shall, by reason of such EVENT, be entitled to terminate the licence, nor shall either party have any such claims for damages against the other, in respect of such non-performance or delay in performance. Provided SERVICE under the licence shall be resumed as soon as practicable, after such EVENT comes to an end or ceases to exist. The decision of the LICENSOR as to whether the SERVICE may be so resumed (and the time frame within which the SERVICE may be resumed) or not, shall be final and conclusive. However, the Force Majeure events noted above will not in any way cause extension of the period of Licence and will also not be a ground for non-payment of Licence fee.

7.1 Direct interconnectvity between two separately licensed ISPs shall be permitted. International traffic shall flow only through DoT's Internet Node i.e. DIAS or VSNL's Internet gateway i.e. GIAS. The ISPs shall have option to connect their Internet node either to DoT's node or VSNL's gateway directly for the purpose of delivery of International Traffic.

7.2 The licensee may obtain the transmission links on lease from DoT, licensed Basic Service Operator or any other operator specially authorised to lease such lines to the ISPs. The licensee may also establish its own transmission links within its service area for carrying traffic related only to his service provided that such capacities are not available from any other authorised agencies and subject to permission of Authority.

7.3 An ISP may provide Internet service to any VSAT customer (who could be served by a shared hub commercial service provider or captive private VSAT network), if the VSAT is located within the service area of the ISP. For this purpose, a direct interconnection of VSAT or VSAT-hub through leased line obtained from an authorised provider to the ISP's node/server shall be permitted only for the flow of Internet traffic. The ISP shall provide to t2he Telecom Authority a monthly report of VSAT customers served with their locations and the leased line interconnection with the VSAT hub. The VSAT hub, however, need not be located in the service area of the ISP.

7.4 Resources required for operation of the services for extending them over to the network of upstream service provider (DoT/VSNL etc) or any other service provider licensed by the Authority including time frame for provision of the same, will be mutually agreed between the parties and shall be listed. The resources may refer to include but not limited to physical junctions, PCM derived channels, private wires, leased lines, data circuits other communication elements. The licensee shall apply for and obtain the determined resources from the concerned provider. The operation and charge of these resources is outside the scope of this licence agreement. Licensor will have no obligation for such resources. However, licensor may at any time during the currency of the licence, fix a time frame for provision of such resources by authorised providers in consultation with all concerned parties, with a view only to help the ISP licensees for faster provision of service to customers. No legal right against the licensor shall accrue to the licensee in this regard due to delayed or non-provision of resources.

7.5 Peering Policies or Interconnect Requirements: Internet is a hierarchical network arranged in a mother-daughter fashion. All daughter network connect to their mother network. When such a connection takes place the daughter network has to be compatible to the technical requirements of the mother network. These technical requirements may be hardware oriented like specifying the format for data transmission at physical level i.e. G.703 or may be software oriented like specifying protocols for interconnections i.e. Border Gateway Protocols. Unlike telephony different networks in Internet may use different software for interconnection (or 'Peering').

In general, Private ISPs shall use IP (Internet Protocol) and shall meet the technical requirements of the Internet Service Providers (DoT/MTNL/VSNL/other ISPs) to which it is connected. The equipment used by the Private ISP shall be in conformance with the following Interface/Protocol requirements as applicable. Some of the interfaces required are given below :

(i) Subscriber Access

* 2 wire access over PSTN for Modem interface

* ISDN BRI and PRI interface

* 64K, Nx64K or 2.048 Mb/s, Nx2.048 Mb/s leased lines

* Frame Relay interface

(ii) Network Interface

* X.25 interface

* Frame Relay

* ATM

* G.703

* PRI, BRI interface

(i) Network Protocol

* IP

(ii) Routing Protocol

* As per requirements of IAP & ISP

* IP : RIP, RIP2, OSPF, BGP4 / CIDR

(iii) WAN Protocol

* Point to Point Protocol (PPP) support for PAP & CHAP

authentication over the PPP Link

* Any other as per requirements of IAP & ISP

7.6 QUALITY OF SERVICE: The quality of service over internet is not established and defined as yet. As such, the QUALITY OF SERVICE is not being defined for the time being. However, it may be defined at a later date based on the experience gained in the operation of the service in the interest of the customers.

TELECOM AUTHORITY reserves the right to carry out performance tests and also define the QUALITY OF SERVICE parameters on licensee's network at any time during the currency of licence. It will be mandatory for the Licensee to comply with such parameters of Quality of Service as and when prescribed by the Telecom Authority.

8.1 Subject to Condition 9.2, the LICENSEE shall furnish to the TELECOM AUTHORITY, in such manner and at such times as the AUTHORITY may require, such documents, accounts, estimates, returns or other information and procure and furnish to AUTHORITY such reports.

8.2 The LICENSEE may not be required to procure or furnish a report which would not normally be available to it unless the TELECOM AUTHORITY considers the particular report essential to enable it to exercise its functions.

8.3 Engineering details:

(a) The LICENSEE shall furnish complete technical details with all calculations for engineering, planning and dimensioning of the system/network, concerned relevant literature, drawings, installation materials regarding the equipment for commissioning of SERVICE.

(b) List of performance tests shall be furnished by the LICENSEE one months prior to the date of commissioning of service.

(c) LICENSEE shall supply all tools, test instruments and other accessories to the testing party of LICENSOR for conducting tests, if it so desires.

This licence is valid initially for a period of TEN YEARS unless terminated earlier. If requested by the LICENSEE, extension may be granted by the LICENSOR at suitable terms for a period of five year or more at a time. The decision of the LICENSOR shall be final in the matter. The LICENSOR shall extend or refuse extension of the licence on a request received by it, latest by the 9th year from effective date. If no request for extension is received by then, the licence shall automatically stand extinguished as per due date.

The licence may be renewed on such terms & conditions as may be solely determined by the LICENSOR.

The LICENSOR, may, without prejudice to any other remedy for breach of conditions of licence, by written notice of 30 days, issued to LICENSEE at its registered office 30 days in advance, terminate this licence in whole or part under any of the following circumstances:

(a) if the LICENSEE fails to commission or deliver the SERVICE within the time period(s) specified in the licence or in any extension thereof, if granted by the LICENSOR. However, this does not prevent the licensee from commissioning the service even after scheduled date of commissioning, provided the licence does not already stand terminated and the Performance Tests are satisfactory.

or

(b) if the LICENSEE fails to perform any other obligation(s) under the licence including remittance of timely payments due to the LICENSOR.

and

(c) if the LICENSEE does not rectify the failure within a notice period of 15 days or during such further period as the LICENSOR may authorise in writing in this regard.

In the event of such termination of licence, the amount equivalent to Performance Bank Guarantee (PBG) shall be recovered by encashing the PBG and money so recovered shall be forfeited.

The LICENSOR, may at any time terminate the licence by giving written notice of 90 days to the LICENSEE without compensation to him, if the LICENSEE becomes bankrupt or otherwise insolvent, provided such termination shall not prejudice or affect any right of action which has accrued or will accrue thereafter to the LICENSOR. The right of termination will arise on the LICENSEE being adjudicated or applying for being adjudicated as bankrupt.

10.3 TERMINATION FOR CONVENIENCE:

If the LICENSEE is to surrender the licence, it shall give an advance notice of 30 days to the Licensor to this effect. If the service is in operation, the licensee shall also intimate its subscribers of consequential withdrawal of service by serving a 15 days notice to them. The financial liability of the licensee company for termination of the licence for convenience shall be as below:

(a) After start of service:- If during the notice period, the criteria of QUALITY OF SERVICE are not met, it shall forfeit all claims on the Performance bank guarantee(s) which shall be encashed and the amount shall be adjusted towards damages.

(b) Before start of service:- ( Either prior to or after the schedule date of commissioning)- Amount equivalent to Performance Bank Guarantee (PBG) shall be recovered by encashment of PBG and money so recovered shall be forfeited.

The LICENSEE shall not, in any manner whatsoever transfer the licensing rights granted to it, to any other party. Any violation shall be construed as a breach of licence and the licence shall be terminated in accordance with the provisions in para 10 of the 'Preamble'.

10.5.1 In the event of termination of the licence, the LICENSOR may procure upon such terms and conditions and in such manner as deemed appropriate /fit, the goods and SERVICES and will make up for those not installed, not delivered or not brought into commission so as to enable provision of SERVICE and the LICENSEE shall be liable to the LICENSOR for any excess/extra costs for such corrective efforts. The criteria for determining the terms and conditions for procuring will depend upon the circumstances, as per market forces, prevailing at the time of procurement. The decision of the LICENSOR shall be final in all respects.

10.5.2. Whenever the licence is terminated or not extended, the LICENSOR may in order to ensure the continuity of the SERVICE take such steps as are necessary including the following:

i] permit the Department of Telecommunications to take over; or

ii] issue licence to another Indian Company for running the SERVICE. The LICENSEE shall facilitate taking over by DOT or the new LICENSEE all those assets as are essential for the continuity of the SERVICE. In such circumstances, LICENSEE shall receive from DOT or the new LICENSEE, as the case may be, reasonable compensation for the assets made over based on their future earning potential, market price of the share, current replacement value of the assets etc.

10.5.3.During the period when a notice for termination of licence is pending, the Quality of Service to the Subscribers shall be maintained. If the SERVICE quality is not maintained as per specifications, (during the notice period), it will be treated as breach of licence conditions and will be dealt with as such.

10.5.4. The Performance and Financial Bank Guarantees shall be returned to the licensee company 6 months after the termination of the licence and after ensuring clearance of any dues which the licensee company is liable to pay.

11.1 In the event of any dispute of the LICENSEE with any other service provider or any party other than Licensor due to any reason whatsoever, the dispute will be sorted out among themselves and Licensor will have no liability in any manner. However in case of dispute arising with other parties due to non observance of rules and regulations by the LICENSEE as provided in this licence, the LICENSOR will have full powers to take any action against LICENSEE as is provided in the relevant clauses of this licence. The LICENSEE indemnifies LICENSOR in respect of any action against LICENSOR for acts of commission or omission on the part of the LICENSEE, its agents and servants.

12.1 In the event of any question, dispute or difference arising under the licence, or in connection therewith, except as to matter, the decision of which is specifically provided under the licence, the same shall be referred to the sole arbitration of th TELECOM AUTHORITY or in case its designation has changed, or its office is abolished, then, in such case, to the sole arbitration of the officer for the time being entrusted, whether in addition to the functions of the TELECOM AUTHORITY or by whatever designation such officer may be called (hereinafter referred to as the said officer), and if the TELECOM AUTHORITY or the said officer is unable or unwilling to act as such, to the sole arbitration, then some other person appointed by the TELECOM AUTHORITY or the said officer. The agreement to appoint an arbitrator will be in accordance with the Arbitration and Conciliation Act, 1996.

12.2 There will be no objection to any such appointment that the Arbitrator is a Government Servant, or he has to deal with the matter to which the licence relates, or that in the course of his duties as a Government Servant, he has expressed views on all, or any of the matter in disputes or in differences. The award of the arbitrator shall be final and binding on the parties. In the event of such Arbitrator, to whom the matter is originally referred, being transferred or vacating his office, or being unable to act for any reason whatsoever, such TELECOM AUTHORITY or the said officer shall appoint another person to act as Arbitrator and the person so appointed shall be entitled to proceed from the stage at which it was left out by his predecessor.

12.3 The Arbitrator may, from time to time, with the consent of the parties, increase the time frame for making and publishing the award. Subject to aforesaid Arbitration and Conciliation Act, 1996 and the rules made thereunder, any modification thereof, for the time being in force, shall be deemed to apply to the arbitration proceedings under this clause.

The venue of arbitration proceeding shall be the office of TELECOM AUTHORITY at New Delhi or such other place as the arbitrator may decide.

13.1 TARIFF : ISPs will be free to fix their own tariff to be charged from subscribers. The tariff shall be left open to be decided by market forces. Provided, further that the license company shall intimate the Authority, the tariff for the service to be charged from its subscribers and any changes thereof, at least 10 days prior to its implementation. However, the TRAI (Telecom Regulatory Authority of India) may review and fix a tariff at any time during the validity of the licence which shall be binding on the Licensee.

13.2 Terminal Ownership: The mode of ownership of terminal shall be at the option of the subscriber.

13.3 The communication resources & other support facilities : LICENSEE will have to make its own arrangement for all infrastructure involved in providing the SERVICE. However, the charges for any communication resources required for the purpose of networking and delivery of Internet Traffic to the upstream resource provider, provided by DoT/MTNL/VSNL/ or other licensed service provider on the request of the LICENSEE will be at the rates fixed by the DoT/MTNL/VSNL or other licensed service provider from time to time.

13.4 The LICENSEE shall be bound by the terms and conditions of the licence granted as well as by such regulations and instructions as are issued by the LICENSOR and / or its successors from time to time.

The LICENSEE shall;

(a) maintain and prepare accounting records, sufficient to show and explain its transactions in respect of each complete financial year of the LICENSEE during which this Licence is in force, or of such lesser periods as the LICENSOR may specify, fairly presenting the costs (including capital costs), revenue and financial position of the LICENSEE's business and including a reasonable assessment of the assets employed in and liabilities attributable to the LICENSEE's business.

(b) procure in respect of each of those accounting statements prepared in respect of a complete financial year of the LICENSEE, a report by the LICENSEE's Auditor stating whether in his opinion that statement is adequate for the purposes of this Condition; and

(c) deliver to the LICENSOR a copy of each of the accounting statements not later than six months after the end of the period to which they relate.

In this condition: the "Auditor" means the LICENSEE's auditor for the time being appointed in accordance with the requirements of the Companies Act, 1956.

13.6 FINANCIAL BANK GUARANTEE (FBG):

The licensee shall submit a financial bank guarantee of an amount commensurate with the annual licence fee of the licensed service area(s) separately for each service area in the format as given in Annexure II, Schedule 'D' of the draft Licence Agreement at least 60 days prior to start of the year for which the licence fee is payable. The amount of FBG shall be specified at later date. The LICENSEE shall submit the Financial Bank Guarantee from any Scheduled Bank, to be renewed from time to time and initially valid for a period of two years

The company will be liable to extend the validity of the financial Bank Guarantee two months prior to its date of expiry on its own without demand for a further period of one year on year to year basis. On any failure to do so, the financial bank guarantee will be encashed without giving any notice. This is without prejudice to any other action that may be taken under the terms and conditions of the licence.

If due payment on account of licence fee or any other account is not received in time for a maximum period of 30 days, an adjustment may be made through the Bank Guarantee and notice for termination of licence may be served as per the provisions of "TERMS AND CONDITIONS" of the licence agreement. DOT/MTNL/VSNL will have the option to discontinue the use of its facilities by the LICENSEE immediately thereafter. This is without prejudice to any other remedy that the LICENSOR may decide to resort to.

13.7 PERFORMANCE BANK GUARANTEE (PBG):

A performance bank guarantee of Rs 2.00 crores for each category 'A' Service area, Rs. 20.00 lakhs for each category 'B' service area and Rs. 3.00 lakhs for each category 'C' service area valid for two years from any Scheduled Bank in the prescribed form ( Annexure I, Schedule 'D' of the draft Licence Agreement) shall be submitted alongwith the application for each service area. The company will be liable to extend the validity of the Performance Bank Guarantee two months prior to its date of expiry on its own without demand for a further period of one year on year to year basis. On any failure to do so, the performance bank guarantee will be encashed without giving any notice. This is without prejudice to any other action that may be taken under the terms and conditions of the licence.

13.8 LICENSOR, without prejudice to its rights to any other remedies, is free to encash the Performance and Financial Bank Guarantee, in part or in full, in case of any breach of terms and conditions of the licence by the LICENSEE including non-payment of Licence fee etc..

13.9 Breach or non-fulfilment of licence conditions may come to the notice of the LICENSOR through complaints or as part of regular monitoring. Wherever considered necessary, LICENSOR will conduct an inquiry to determine whether there has been any breach of the terms and conditions of the licence. The LICENSEE will be given an opportunity before any action adverse to his interest is taken.

The LICENSOR shall decide in each case the penalty to be levied for any breach of the terms and conditions of the Licence. If the penalty is not discharged or complied with, the LICENSOR has the right to encash, in part or in full, the Performance and/ or Financial Bank Guarantees.

13.10.1 The LICENSEE shall pay the yearly licence fee through a demand draft drawn on any Scheduled Bank in New Delhi in favour of The Pay & Accounts Officer (HQ), DOT.

The LICENSEE, in addition to paying the Licence fee, will pay the full charges for Access & Communication resources provided to him on his request by the Department of Telecommunications/ MTNL/ VSNL/ other licence service provider at rates applicable from time to time.

CONDITION 14: PUBLICATION OF INTERNET SERVICE DIRECTORY:

The licensee may publish a Internet Service Directory containing all commercial information, names, address and number of the subscribers. If a subscribers does not wish to be listed in the directory, the Licensee is free to delete his name from the directory after taking concurrence of the subscriber in writing.

All the subscribers of the service shall be entitled to one free entry in this directory and any additional information/specific printing in a particular type at the request of the subscriber may be charged for.

The Authority reserves the right to include directory information of the Internet subscribers in the directory which may be published by the Authority for PSTN/Telex/Data Services etc. and the licensee shall be bound to supply the required information as and when asked for.

The Authority or its representative(s) will have an access to the Data base relating to the Internet subscribers of the Licensee. The Licensee shall also update the data relating to his subscribers made available to the Authority at such intervals as may be prescribed. The Licensee shall make available, at any prescribed instant, to the Authority or its representative details of the subscribers using the service.

CONDITION 16: SET OFF

Any sum of money due and payable to the LICENSEE under this licence may be appropriated by the Government or any other person or persons including contracting through the Government of India and the same may be set off against any claim of the Government or such other persons for payment of a sum of money arising out of this licence or under any other licence made by the LICENSEE with the Government or such other person or persons including TELECOM AUTHORITY contracting through Government of India.

This company, hereby, agrees to fully comply with all General, Technical, Commercial and Financial terms and conditions of the Application Form, Guidelines and General Information on Internet Services and amendments/ clarifications issued by the Telecom Authority, without any deviations and reservations.

The company, hereby, agrees and undertakes to fully comply with all terms and conditions stipulated in this Licence Agreement without any deviation and reservation.

Signature of the authorised signatory of the operating company (Licensee).

for and on behalf of M/s ________________________________

(Name of the Company)

PROFORMA FOR PERFORMANCE BANK GUARANTEE

To

The President of India

acting through the Telegraph Authority

In consideration of the President of India acting through the Telegraph Authority (hereinafter referred to as `the Authority') having agreed to grant a licence to M/s____________ of___________ (hereinafter called the `LICENSEE' to establish, maintain and operate Internet service (hereinafter called `the SERVICE') on the terms and conditions contained in the said Licence, which interalia provides for production of a Bank Guarantee to the extent of Rs.__________ (________in words______) for the service by way of security for the due observance and performance of the terms and conditions of the said licence We____________ (indicate the name and address and other particulars of the Bank) (hereinafter referred to as `the Bank') at the request of the LICENSEE hereby irrevocably and unconditionally guarantee to the Authority that the Licensee shall render all necessary and efficient services which may be required to be rendered by the LICENSEE in connection with and/or for the performance of the said LICENSEE and further guarantees that the service which shall be provided by the LICENSEE under the said licence , shall be actually performed in accordance with terms & conditions of the LICENCE to the satisfaction of the Authority.

2. We, the bank hereby undertake to pay to the Authority an amount not exceeding Rs.-------- (Rupees ---------- only) against any loss or damage caused to or suffered or would be caused to or suffered by the Authority by reason of any breach by the said LICENSEE of any of the terms and conditions contained in the said licence.

3. We, the bank hereby, in pursuance of the terms of the said licence, absolutely, irrevocably and unconditionally guarantee as primary obliger and not merely as surety the payment of an amount of Rs.-------- (Rupees ------ only) to the Authority to secure due and faithful performance by the LICENSEE of all his/their obligations under the said Licence.

4. We, the bank hereby also undertake to pay the amounts due and payable under this guarantee without any demur, merely on a demand from the Authority stating that th the amount claimed is due by way of loss or damage caused or would be caused to or suffered by the Authority by reason of breach by the said LICENSEE of any of the terms or conditions contained in the said Licence or by reason of the LICENSEE's failure to perform any of it's obligations under the said Licence."

5. We, the bank ,do hereby agree that the decision of the Authority as to whether the licensee has failed to or neglected to perform or discharge his duties and obligations as aforesaid and/or whether the service is free from deficiencies and defects and is in accordance with or not of the terms & conditions of the said Licence and as to the amount payable to the Authority by the Bank hereunder shall be final and binding on the Bank.

6. WE, THE BANK, DO HEREBY DECLARE AND AGREE that:

(a) the Guarantee herein contained shall remain in full force and effect for a period of two years from the date hereof and that it shall continue to be enforceable till all the dues of the Authority and by virtue of the said Licence have been fully paid and its claims satisfied or discharged or till Authority satisfies that the terms and conditions of the said licence have been fully and properly carried out by the said LICENSEE and accordingly discharged this guarantee.

(b) the Authority shall have the fullest liberty without our consent and without affecting in any manner our obligations hereunder to vary any of the terms and conditions of the said Licence or to extend time of performance of any obligations by the said LICENSEE from time to time or to postpone for any time or from time to time any of the powers exercisable by the Authority against the said LICENSEE and to forbear or to enforce any of the terms and conditions relating to the said Licence and we shall not be relieved from our liability by reason of any variation or extension being granted to the said LICENSEE or forbearance act or omission on the part of the Authority or any indulgence by the Authority to the said LICENSEE or to give such matter or thing whatsoever which under the law relating to sureties would but for this provision, have effect of so relieving us.

(c) any claim which we have against the LICENSEE shall be subject and subordinate to the prior payment and performance in full of all the obligations of us hereunder and we will not without prior written consent of the Authority exercise any legal right or remedy of any kind in respect of any such payment or performance so long as the obligations of us hereunder remains owing and outstanding.

(d) This Guarantee shall be irrevocable and the obligations of us herein shall not be conditional of any prior notice by us or by the LICENSEE.

7. We the BANK undertake not to revoke this Guarantee during its currency except with the previous consent of the Authority in writing.

Dated_________day__________ for ___________________________

(name of the Bank)

Witness:

1............................ 2..............................

......................... ...............................

......................... ...............................

To

The President of India

acting through the Telegraph Authority

In consideration of the President of India acting through the Telegraph Authority (hereinafter called `the Authority') having agreed to grant a licence to M/s _________________of____________ (hereinafter called `the Licensee') to establish ,maintain and operate Internet Service (hereinafter called 'the SERVICE') as per Licence Agreement number ___________ dated __________ (hereinafter called the said licence) in the country in accordance with the Application Form for obtaining Internet Service Licence and on the terms and conditions contained in the said licence, which interalia provides for production of a Bank Guarantee to the extent of Rs.__________(_______in words) under the said licence by way of security for payment of the said licence fee as well as such other fees or charges required to be paid by the Licensee under the Licence We____________ (indicate the name and address and other particulars of the Bank)(hereinafter referred to as 'the Bank') at the request of the Licensee hereby irrevocably and unconditionally guarantee to the Authority that the licensee shall pay all the dues, including but not limited to, the licence fee to the Authority .

2. We, the Bank, hereby undertake to pay to the Authority an amount not exceeding Rs.______________(Rupees___________only) against any loss or damage caused to or suffered or would be caused to or suffered by the Authority by reason of any failure of the licensee to pay all the above mentioned fees, dues and charges or any part thereof within the periods stipulated in the licence.

3. We, the Bank, hereby further undertake to pay as primary obliger and not merely as surety to pay such sum not exceeding Rs.________ (Rupees ___________Only) to the Authority immediately on demand and without demur stating that the amount claimed is due by way of failure of the licensee to pay any fees or charges or any part thereof in terms of the said licence.

4. WE ,THE BANK, DO HEREBY DECLARE AND AGREE that the decision of the Authority as to whether LICENSEE has failed to pay the

said Licence fees or any other fees or charge or any part thereof payable under the said Licence and as to the amount payable to the Authority by the Bank hereunder shall be final and binding on us."

5. WE, THE BANK, DO HEREBY DECLARE AND AGREE that the

(a) Guarantee herein contained shall remain in full force and effect for a period of Two Years from the date hereof and that it shall continue to be enforceable till all the dues of the Authority and by virtue of the said Licence have been fully paid and its claims satisfied or discharged or till Authority satisfies that the terms and conditions of the said licence have been fully and properly carried out by the said Licensee and accordingly discharged this guarantee.

(b) The Authority shall have the fullest liberty without our consent and without affecting in any manner our obligations hereunder to vary any of the terms and conditions of the said License or to extend time of performance of any obligations by the said LICENSEE from time to time or to postpone for any time or from time to time any of the powers exercisable by the Authority against the said LICENSEE and to forbear or to enforce any of the terms and conditions relating to the said Licence and we shall not be relieved from our liability by reason of any variation or extension being granted to the said LICENSEE or forbearance act or omission on the part of the Authority or any indulgences by the Authority to the said LICENSEE or to give such matter or thing whatsoever which under the law relating to sureties would but for this provision, have effect of so relieving us.

(c) Any claim which we have against the LICENSEE shall be subject to and subordinate to the prior payment and performance in full of all the obligations of us hereunder and we will not without prior written consent of the Authority exercise any legal right or remedy of any kind in respect of any such payment or performance so long as the obligations of us hereunder remains owing and outstanding.

(d) This Guarantee shall be irrevocable and the obligations of us herein shall not be conditional of any prior notice by us or by the LICENSEE.

6. We the BANK undertake not to revoke this Guarantee during its currency except with the previous consent of the Authority in writing.

Dated_________day__________ for__________________________

(name of the Bank)

Witness:

1..........................

..........................

..........................

2..........................

..........................

..........................