DOWNRANGE AGREEMENT BETWEEN THE GOVERNMENT OF KIRIBATI AND JAPAN AEROSPACE EXPLORATION AGENCY

[Downrange Agreement]

(Tarawa, 01 April 2006)

ENTRY INTO FORCE : 01 APRIL 2006

DOWNRANGE AGREEMENT

This Agreement dated the 1st day of April 2006.

The Parties

1. The Government of the Republic of Kiribati (“the Government”)

2. Japan Aerospace Exploration Agency (“JAXA) established under the Law concerning Japan Aerospace Exploration Agency

The Background

WHEREAS JAXA wishes to lease certain land and obtain certain services from the Government and the Government wishes to lease certain land and provide certain services to JAXA in connection with the operation of JAXA’s Kiritimati Downrange Station (“Downrange Station”), on the terms and conditions set forth herein.

WHEREAS, the Government and JAXA have agreed to Air Service Agreement to be provided air transportation service for the operation of Downrange Station, (Air Service Agreement”)

NOW, THEREFORE, for and in consideration of the mutual promises contained herein, the parties agree as follows:

PART 1 - LEASE

1. Demise

The Government grants and JAXA takes all that parcel of land in the vicinity of a site known as X Site on the north-coast of Kiritimati (otherwise known as Christmas Island) approximately 1.75 miles to the west of Cape Manning and on the north side of the road, known as A 1 having an area of four acres (be the same a little more or a little less) as indicated on Plans attached hereto as Schedules 4 and 5 (“the Leased Premises”) to hold the same for the term of this Agreement yielding and paying therefore the yearly rent in Australian dollars in accordance with the terms and conditions provided in JAXA LEASE AGREEMENT CONCERNING A PLOT OF LAND ON KIRITIMATI ISLAND.

2. JAXA’s Covenants

JAXA covenants with the Government as follows:

(a) To pay to the Government during the term of this Agreement, a lease and service fee calculated in accordance with Clause 10 of this Agreement (“the Lease and Service Fee”) representing JAXA’s share of the annual costs of the Administration/Operation of Kiritimati, such costs being individually listed in Schedule 1 attached hereto. That sum shall be paid in accordance with Clause 7 of this Agreement;

(b) To use the Leased Premises only for the purpose of a Downrange Station and purposes ancillary thereto;

(c) To maintain, during the term hereof the Downrange Station constructed on the Leased Premises or on part thereof, in accordance with drawings and specifications which were approved by the Government’s predecessor or which shall first be approved by the Government and to maintain and uphold the same in a manner which will prevent any damage or injury being caused to the Government or to the public at large or to any adjacent or adjoining land, and not to erect any buildings or installations without the prior approval of the Government;

(d) To allow the Government, its servants or agents, at all reasonable times during daylight, after not less than 24 hours written notice, to enter and view the state and condition of the Leased Premises and any buildings or installations thereon.

(e) Not to assign, sublease, transfer or part with possession of the Leased Premises or any part or parts thereof without the consent of the Government.

(f) To indemnify the Government from and in respect of any claims arising howsoever from the occupation and use of the Leased Premises by JAXA to the extent that JAXA is liable therefore under the laws of the Republic of Kiribati.

(g) Upon the termination or expiration of the term hereof, to yield up the Leased Premises to the Government and if so required by the Government to dismantle, demolish, remove or dispose of, within a period of six months after such termination or expiration, any buildings or installations on the Leased Premises; provided, however, that if at the end of the period of six months any buildings or installations remain on the Leased Premises those remaining buildings and installations shall become the property of the Republic of Kiribati absolutely and no compensation therefore shall be payable to JAXA.

3. Covenants of the Government

The Government covenants with JAXA as follows:

(a) Subject to its normal right under the Immigration Ordinance and Deportation Act, 1979, that all JAXA personnel and its agents visiting JAXA facilities on the Leased Premises will be promptly granted all visas, required for their visit to or temporary residence at the Leased Premises and that the status of such personnel will not be altered in such a way that the operation of facilities of the Leased Premises is adversely affected. Exemption from payments of administrative fees may be issued in accordance with the relevant laws of Kiribati.

(b) To use its best efforts to ensure the normal security of all JAXA personal, JAXA agent, all JAXA contracted personnel, and upon notification to the Government any other personnel identified by JAXA, who are directly related to Downrange Station activity on the Lease of Premises (hereinafter referred to collectively as “Downrange Personnel”).

(c) That in consideration of payment of the rent, and the Service Fee, and as far as the laws of Kiribati allow, it will exempt JAXA, JAXA Agent and Downrange Personnel, JAXA contracted and other personnel identified by JAXA from the payment of all rates, taxes, customs duties (subject to Clause 3.(d)) or any other impositions otherwise payable to the Government or any instrumentality thereof in respect of the occupation by JAXA of the Leased Premises, or the transportation, exportation, holding or use of the facilities or equipment necessary for the operation of the Downrange Station on the Leased Premises or of facilities solely related thereto.

(d) No equipment, materials or other movables imported by or on behalf of JAXA, or assembled in Kiribati by or on behalf of JAXA with imported materials, brought into Kiribati free of customs duties, may be resold in Kiribati without the express written authority of the Government. At the time of such proposed on-sale the Government may properly demand payment for that portion of the sale proceeds which would otherwise be paid in customs duties by the proposed purchaser.

(e) All Downrange Personnel shall be liable to customs duties on all imported personal effects.

(f) That the hotel in Kiritimati shall provide support to Downrange Personnel use of its accommodation and services provided that adequate notice of JAXA’s requirements is given.

4. Quiet Enjoyment

JAXA may quietly and peaceably enjoy the Leased Premises without interference from the Government, but subject to the legitimate public authority of the Government, provided that JAXA observes and performs the covenants on its part to be observed and performed under this Agreement.

PART 2 - SERVICES

5. Provision of Goods and Services

JAXA acknowledges that as from the date of this Agreement JAXA will be responsible for arranging for the provision of goods and services it requires on Kiritimati. The Government will use its best endeavours to ensure that Downrange Personnel are provided adequate goods and services required on Kiritimati for the operation of the Downrange Station.

6. Provision of Labour

a. JAXA will from the date of this Agreement be directly responsible for the provision of any employees it requires on Kirimati.

b. When JAXA confirms that there is suitable I-Kiribati citizen available for any employment position by virtue of training, experience and or education, I-Kiribati citizen shall be employed in that position in preference to any non I-Kiribati person. JAXA shall consult with the Government in identifying suitable and capable candidates to fill in such position, JAXA will decide the employment after such consultation to be conducted in a timely manner with the Government.

c. Employment of I-Kiribati persons will be in accordance with all rules and regulations of employment including payments to KPF (Kiribati Provident Funds – Superannuation Fund – Retirement Fund)

PART 3 - CALCULATION AND METHOD OF PAYMENT OF LEASE AND SERVICES FEE

7. Payment

Subject to Clauses 9.b, and 9.c, of this Agreement JAXA will pay the Lease and Service Fee due in any given year (the term “year” used in this Agreement refers to a year from April to March) in two instalments in the sums and on the dates specified in Schedule 2 of this Agreement.

8. Place of Payment

Payment of the Installments of the Lease and Service Fee will be made to the account of the Government at the Bank of Kiribati Limited, Bairiki, Tarawa, Kiribati.

9. Apportionment on Termination and Method of Payment

a. Any amount payable or paid by JAXA will be apportioned pro rata should this Agreement expire or terminate before the end of any payment period as set out in the payment schedule annexed or otherwise prior to its term.

b. Payment of the instalments of the Lease and Service fee shall be conditional upon JAXA receiving an invoice from the Government for JAXA’s accounting purposes which sets out the appropriate amount to be paid not later than thirty (30) days before the due date of each payment.

c. The Government may at its option forward invoices for all the payment instalments due in any given year, at the beginning of that year.

d. Any invoices hereunder shall be payable subject to due performance of the services and other obligations of the Government hereunder.

10. Calculation of the Lease and Service Fee

The Lease and Service Fee for any given year shall be calculated in accordance with Schedule 3 of this Agreement.

PART 4 GENERAL

11. Term

The term of this Agreement shall be one year, commencing 1 April 2006 and ending 31 March 2007. This Agreement shall be renewed for any succeeding one year term thereafter, but shall be subject to an annual review by both parties for any changes to the Agreement, unless either party gives notice 3 months prior to the anniversary date hereof that it does not intend to renew this Agreement.

12. Termination by the Government

In case JAXA commits any of the acts listed below, the Government shall have the right to give notice of default to JAXA. If JAXA does not cure such default within a reasonable time after receipt of notice, this Agreement may be cancelled by the Government upon written notice to JAXA:

(a) When JAXA delays the payments specified in Clause 8 for more than thirty (30) days after the due dates provided that JAXA shall have received the invoice specified in Clause 9.b.: or

(b) When JAXA has breached any provisions of this Agreement, any building regulations, or any other contract between JAXA and The Government in connection with or relating to this Agreement.

13. Termination by JAXA

In the event that the Government breaches any provision of this Agreement JAXA shall have the right to give a notice of that default to the Government. If the Government does not cure such default within a reasonable time after receipt of the notice, this Agreement may be terminated by JAXA upon written notice to the Government.

14. Termination

JAXA or the Government may cancel the Agreement at any time for any reason by giving six (6) months advance written notice.

In the event that Air Service Agreement would be terminated, the Government and JAXA shall consult each other and modify or terminate this Agreement if necessary.

15. Notices

All invoices provided for in this Agreement shall be in writing and shall only be sent by air mail or air courier, postage prepaid, to the addresses indicated below. All other notices, communications or other statements provided for in this Agreement shall be in writing and shall be sent by cable, fax or prepaid post addressed as follows, unless a different person has been designated:

If to the Government:	Ministry of Communication, Transport & Tourism Development
Tarawa
Republic of Kiribati	
	Attention:	Permanent Secretary for Communications,
Transport and Tourism Development
Tel: +686-26003
Fax: + 686-26193	
If to JAXA:	Japan Aerospace Exploration Agency
2-1-1 Sengen Tsukuba-shi Ibaraki
305-8505 Japan	
		
	Attention:	Director of Space Transportation Program office
Tel: +81-29-868-5242
Fas: + 81-29-868-5982	

16. Interpretation

This Agreement shall be construed and enforced in accordance with, and shall be governed by the laws of the Republic of Kiribati.

17. Waiver of Sovereign Immunity

The Government expressly waives in any legal action or arbitration commenced in connection with this Agreement, or for the purposes of enforcing any judgment granted with respect thereto any claim or defence of sovereign immunity that it may have, except for national disaster such as natural disaster, or revolution or similar events which destroys functions of the Government, which is permanent and beyond and Government’s ability to cope with.

18. Disputes/Miscellaneous

All disputes arising between the Parties to this Agreement should be submitted, at the request of either party, to arbitration for final resolution in accordance with the Rules of Conciliation and Arbitration International Chamber of Commerce. In the arbitration proceedings, there shall be a sole arbitrator, the place of arbitration shall be in Honolulu, the language to be used in the proceedings shall be in English, and JAXA is responsible for all the costs necessary for the proceeding including the costs related to arbitrator except the Government’s own costs.

19. Force Majeure

In case the performance of either party or both rendered impossible by a force majeure, the parties shall be excused form the performance of such obligations during the period the force majeure event is in effect.

20. Previous Agreements

All previous Agreements between the Government and JAXA concerning or connected with the Downrange Station at Kiritimati are hereby repealed except any liabilities, payments or any other charges payable or due to both parties from the previous Agreements shall be paid and fulfilled accordingly.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written by their duly appointed representatives.

For THE REPUBLIC OF KIRIBATI

By : …………………………………………..
Minister
Ministry of Communications, Transport  and Tourism Development
The Government of the Republic of Kiribati	FOR JAPAN AEROSPACE EXPLORATION AGENCY

(By:……………………………………..)
Director
Contact Department	

LEASE AND SERVICE FEE

Administration/Operation Costs of Kiritimati ($ Australian)

1.	Police	A$ 12, 438	
2.	Fire Service	A$ 108,170	
3.	Communication	A$ 6,760	
4.	Road Maintenance	A$ 9,464	
5.	Electricity and Water Supply	A$ 75,718	
6.	Medical Facilities	A$15,683	
7.	Hotel Operations	A$110,330	
8.	Fuel Farm	A$18,658	
9.	Infrastructure Development	A$94,645	
10.	Miscellaneous	A$18,658	
11.	Administration	A$ 77,391	
	
TOTAL		A$ 547,915	

SCHEDULE 2

PAYMENTS SCHEDULE

1. JAXA shall pay the Lease and Service Fee in two (2) instalments as follows:

(1) On or before 1st July of 2006, four hundred ten thousand and nine hundred and thirty six Australian dollar (A$ 410,936);

(2) On or before 1st November of 2006, one hundred thirty six thousand and nine hundred and seventy nine Australian dollars (A$ 136, 979).

SCHEDULE 3

CALCULATION OF LEASE AND SERVICE FEE

1. The Service Fee for the year 1 April 2006 to 31 March 2007 shall be the sum of A$ 547,915.
The Service Fee for subsequent years shall be calculated in accordance with the following formula

Service Fee = Previous Year Service Fee x (1+5/100)