SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
Commission File No. 0-22531
PanAmSat Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware 95-4607698
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
One Pickwick Plaza, Greenwich, CT 06830
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: 203-622-6664
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
As of March 31, 1998, an aggregate of 149,150,246 shares of the Company's Common
Stock were outstanding.
<PAGE>
Cautionary Statement For Purposes Of The "Safe Harbor" Provisions Of The Private
Securities Litigation Reform Act of 1995
This Quarterly Report contains historical information and forward-looking
statements. The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for certain forward-looking statements. When used in this Form
10-Q the words "estimate," "project," "anticipate," "expect," "intend,"
"believe" and other similar expressions are intended to identify forward-looking
statements and information. The Company identifies the following important
factors which could cause the Company's actual results to differ materially from
any results which might be projected, forecasted, estimated or budgeted by the
Company in forward-looking information: (i) risks associated with technology,
(ii) regulatory risks, (iii) effect of loss of key personnel, and (iv)
litigation. Such factors are more fully described under the caption "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Risk Factors" in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997. Reference is also made to such other risks
and uncertainties detailed from time to time in the Company's other filings with
the Securities and Exchange Commission. The Company cautions that the foregoing
list of important factors is not exclusive. Furthermore, the Company operates in
an industry sector where securities values may be volatile and may be influenced
by economic and other factors beyond the Company's control.
<PAGE>
PanAmSat Corporation
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
----------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 48,569 $ 91,739
Accounts receivable-net 82,266 41,030
Net investment in sales-type leases 27,767 27,757
Prepaid expenses and other 83,705 77,891
Deferred income taxes 41,952 46,940
----------- ------------
Total current assets 284,259 285,357
SATELLITES AND OTHER PROPERTY AND
EQUIPMENT-Net 2,671,985 2,506,082
NET INVESTMENT IN SALES-TYPE LEASES 302,429 324,689
GOODWILL-Net of amortization 2,482,258 2,498,498
DEFERRED CHARGES AND OTHER ASSETS 54,729 67,808
----------- ------------
TOTAL ASSETS $ 5,795,660 $ 5,682,434
----------- ------------
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements
<PAGE>
PanAmSat Corporation
CONSOLIDATED BALANCE SHEETS - (continued)
(in thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
----------- ------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 16,259 $ 16,398
Accounts payable and accrued liabilities 25,316 26,828
Deferred gains on sales-leasebacks 37,977 42,870
Deferred revenues 14,106 18,822
----------- ------------
TOTAL CURRENT LIABILITIES 93,658 104,918
DUE TO AFFILIATES (PRINCIPALLY MERGER-RELATED
INDEBTEDNESS) 1,801,229 1,802,195
LONG-TERM DEBT 786,660` 640,123
DEFERRED GAINS ON SALE-LEASEBACKS 161,186 191,882
DEFERRED INCOME TAXES 203,798 179,267
OTHER LIABILITIES AND DEFERRED CREDITS 98,096 103,029
ACCRUED OPERATING LEASEBACK
EXPENSE 54,494 100,184
----------- ------------
TOTAL LIABILITIES $ 3,199,121 $ 3,121,598
----------- ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock, $0.01 par value 400,000,000
shares authorized, 149,150,246 shares issued
and outstanding 1,491 1,491
Additional paid-in-capital 2,501,699 2,501,344
Retained earnings 93,349 58,001
----------- ------------
Total Stockholders' Equity 2,596,539 2,560,836
----------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,795,660 $ 5,682,434
----------- ------------
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements
<PAGE>
PanAmSat Corporation
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months Ended March 31, 1998 and 1997
(in thousands, except share data)
<TABLE>
<CAPTION>
March 31, March 31,
1998 1997
----------- ------------
<S> <C> <C>
REVENUES:
Operating leases, satellite services and other $ 181,788 $ 86,527
Outright sales and sales type leases 11,237 41,026
----------- ------------
Total revenues 193,025 127,553
----------- ------------
OPERATING COSTS AND EXPENSES:
Cost of outright sales and sales type leases - 16,422
Leaseback expense, net of deferred gain 13,762 15,417
Depreciation and amortization 58,002 14,585
Direct operating costs 22,321 8,158
Selling, general and administrative expenses 14,064 5,460
----------- ------------
Total operating costs and expenses 108,149 60,042
----------- ------------
INCOME FROM OPERATIONS 84,876 67,511
INTEREST EXPENSE, NET (22,208) (1,778)
OTHER INCOME - 1,232
----------- ------------
INCOME BEFORE INCOME TAXES 62,668 66,965
INCOME TAXES 27,320 25,112
----------- ------------
NET INCOME $ 35,348 $ 41,853
----------- ------------
NET INCOME PER COMMON SHARE - BASIC AND DILUTED $ 0.24 $ -
----------- ------------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 149,403,886 -
----------- ------------
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements
<PAGE>
PanAmSat Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months Ended March 31, 1998 and 1997
(in thousands)
<TABLE>
<CAPTION>
March 31, March 31,
1998 1997
----------- ------------
<S> <C> <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income $ 35,348 $ 41,853
Adjustments to reconcile net income to
net cash provided by operating activities:
Cost of outright sales - 4,838
Gross profit on sales-type leases - (12,124)
Depreciation and amortization 58,002 14,585
Deferred income taxes 29,519 7,510
Amortization of gains on sale-leasebacks (9,902) (10,717)
Provision for uncollectible receivables - (4,534)
Interest expense capitalized (16,977) (5,254)
Changes in assets and liabilities:
Collections on investments in sales-type leases 22,250 5,536
Operating lease and other receivables (28,157) (17,664)
Prepaid expenses and other current assets (5,814) 4,771
Accounts payable and accrued liabilities (2,139) (1,037)
Accrued operating leaseback expense (26,810) (35,173)
Deferred gains and revenues (9,021) (619)
----------- ------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 46,299 (8,029)
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (138,681) (349,471)
Early buyout of sale-leaseback (96,574) -
----------- ------------
NET CASH USED IN INVESTING ACTIVITIES (235,255) (349,471)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
New borrowings 875,000 -
Net contributions from parent company - 357,503
Repayments of long-term debt (729,568) -
Stock issued to 401(k) plan 354 -
----------- ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 145,786 357,503
----------- ------------
NET (DECREASE)INCREASE IN CASH AND CASH EQUIVALENTS (43,170) 3
CASH AND EQUIVALENTS, beginning of period 91,739 29
----------- ------------
CASH AND EQUIVALENTS, end of period $ 48,569 $ 32
----------- ------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash received for interest $ 3,893 $ -
----------- ------------
Cash paid for interest $ 31,610 $ -
----------- ------------
Cash paid for taxes $ 1,719 $ -
----------- ------------
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements
<PAGE>
PanAmSat Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) General.
These unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Rule 10-01 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments which
are of a normal recurring nature necessary to present fairly the
financial position, results of operations and cash flows as of and
for the three-month periods ended March 31, 1998 and 1997 have
been made. Operating results for the three months ended March 31,
1998 and 1997 are not necessarily indicative of the operating
results for the full year. For further information, refer to the
financial statements and footnotes thereto included in PanAmSat's
Annual Report on Form 10-K for the fiscal year ended December 31,
1997.
(2) Business Combination.
The Company commenced operations on May 16, 1997 upon the merger
of PanAmSat International Systems, Inc. (then operating under its
previous name, PanAmSat Corporation ("PanAmSat International"))
and the Galaxy Satellite Services division of Hughes
Communications, Inc. (the "Galaxy Business") (the "Combination").
Pursuant to the Combination, the aggregate consideration paid to
PanAmSat International shareholders consisted of approximately
$1.5 billion in cash and approximately 42.5 million shares of
PanAmSat Common Stock having an estimated value of $1.3 billion.
Concurrent with the Combination and as an integral part thereof,
the Company sold its direct-to-home ("DTH") television rights in
certain foreign markets to an affiliate for $225 million (the "DTH
Options").
The Company has applied the purchase method of accounting to the
transaction with the Galaxy Business as the acquiror. The purchase
price has been allocated to the assets acquired and liabilities
assumed based on estimates of their respective fair values. Assets
acquired totaled $2.0 billion, liabilities assumed were $3.2
billion (including $1.7 billion of merger debt) and shares valued
at $1.3 billion were issued in the transaction. A total of $2.5
billion, representing the excess of acquisition value over the
fair value of PanAmSat International's net tangible assets, has
been allocated to intangible assets and is being amortized over 40
years.
The Company's consolidated results of operations have incorporated
PanAmSat International's activity commencing upon the effective
date of the Combination. The unaudited pro forma information shown
below for the three months ended March 31, 1997, presents combined
results of operations as if the Combination had occurred at the
beginning of 1997 (excluding the impact of the $225 million gain
on the sale of the DTH Options as well as certain professional and
advisory fees incurred in connection with the Combination totaling
$31.6 million, both of which are non-recurring items that are not
<PAGE>
PanAmSat Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
indicative of the Company's ordinary course of business). The
unaudited pro forma information shown below for the three months
ended March 31, 1997 is not necessarily indicative of the results
of operations of the combined company had the Combination occurred
at the beginning of 1997, nor is the information shown below
necessarily indicative of future results.
(unaudited; in thousands, except per share data)
Three Months Ended
March 31,
-------------
1998 1997
(Pro forma)
---- ----
Revenues $ 193,025 $ 202,092
Net income 35,348 24,075
Net income per share
-basic and diluted 0.24 0.16
(3) New Accounting Pronouncements.
In June 1997, the financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income", which requires a statement of comprehensive
income to be included in the financial statements for fiscal years
beginning after December 15, 1997. The adoption of this statement
in the first quarter of 1998 resulted in no change to total
comprehensive income.
In addition, in June 1997 the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 131 (FAS
131), "Disclosures about Segments of an Enterprise and Related
Information", which requires disclosure of certain information
about operating segments and about products and services, the
geographic areas in which a company operates and their major
customers. Any resulting change in disclosure will be reflected in
the consolidated financial statements for the year ended December
31, 1998.
(4) Galaxy VIII-i: Placed in Service.
On December 8, 1997, the Company successfully launched its Galaxy
VIII-i Atlantic Ocean Region Satellite, the dedicated transmission
platform for the Galaxy Latin America DTH television service
called DIRECTV. The 3560-kilogram satellite will transmit more
then 200 digital television and music channels for reception by
Galaxy Latin America's growing DTH subscriber base. Galaxy VIII-i
is co-located at 95 degrees west longitude with the Galaxy IIIR
satellite and commenced service on February 24, 1998, after
successful completion of its in-orbit testing.
(5) Financing Activities.
On January 16, 1998, PanAmSat completed a private placement
pursuant to Rule 144A under the Securities Act of 1933 for $750
million aggregate principal amount of new debt securities (the
"Offering"). The net proceeds from the Offering were used to repay
bank loans incurred to finance the tender offer for certain debt
securities of PanAmSat's subsidiaries, as well as for general
corporate purposes.
<PAGE>
PanAmSat Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
In connection with the Offering, the Company executed a Credit
Agreement (the "Credit Agreement") with certain lenders and
Citicorp USA, Inc. as administrative agent. The Credit Agreement
amends and restates the credit agreement among the parties dated
December 24, 1997 (the "Original Credit Agreement"). The Original
Credit Agreement provided the Company with up to $500 million of
revolving credit loans (the "Revolving Credit Loans")for five
years, and up to $300 million in short-term loans maturing on
April 30, 1998 (the "Term Loans"). The Credit Agreement amends the
Original Credit Agreement to terminate the Term Loan facility. The
Company currently has $500 million of Revolving Credit Loans
available to it under the Credit Agreement.
Also in connection with the Offering, the Company entered into
certain U.S. Treasury rate lock contracts to reduce its exposure
to fluctuations in interest rates. The aggregate nominal value of
these contracts was $375 million and these contracts were
accounted for as hedges because they were applied to a specific
refinancing plan that was consummated shortly after December 31,
1997. The cost to unwind these instruments during the first
quarter of 1998 was approximately $9 million and will be amortized
to expense over the term of the newly-placed debt securities to
which such hedges were applied.
(6) Subsequent Event.
Subsequent to March 1998, the Company became aware of certain
anomalies and their effects relative to its Galaxy IV spacecraft
which serves the domestic U. S. marketplace. These anomalies are
expected to shorten substantially the useful life of the satellite
and to affect services to some of the C-band transponder customers
on the satellite. Management is evaluating the effects of these
anomalies and is working with its customers to develop plans to
meet their requirements and to satisfy the Company's obligations
to certain of the customers. The Company intends to procure a
replacement satellite on an accelerated basis for a scheduled
in-service date before the Galaxy IV spacecraft reaches the end of
its expected useful life. As with its other satellites, the
Company has insurance coverage on the affected satellite and
intends to file a claim with its insurance carriers in the near
future. Based on the information currently available, management
has evaluated the potential financial statement impact of these
anomalies in accordance with its stated accounting policies and
does not believe that a material loss will result from these
anomalies because remaining revenues to be earned on the satellite
together with the expected insurance recovery will enable the
Company to recover its investment in the satellite and any other
costs it may incur.
<PAGE>
PanAmSat Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations. The Company's results of operations have
incorporated PanAmSat International's activity commencing on May 16, 1997, the
effective date of the Combination. Since the results of operations for the three
months ended March 31, 1997 would include no activity for PanAmSat
International, management has determined that for comparative purposes, it would
be more meaningful to present the information shown below on a "pro forma" basis
reflecting the Combination as though it had occurred at the beginning of 1997
(excluding the impact of the $225 million gain on the sale of the DTH Options as
well as certain professional and advisory fees incurred in connection with the
Combination totaling $31.6 million, both of which are non-recurring items that
are not indicative of the Company's ordinary course of business.) The pro forma
results for the three months ended March 31, 1997 are not necessarily indicative
of the combined results that would have occurred had the Combination actually
occurred at the beginning of fiscal 1997.
<TABLE>
<CAPTION>
(unaudited; in thousands,
except per share data)
Three Months Ended
March 31,
----------------------------
1998 1997
(Pro forma)
---- ----
<S> <C> <C>
Revenues
Operating leases, satellite services and other $ 181,788 $ 161,066
Outright sales and sales type leases 11,237 41,026
---------- ----------
Total Revenues 193,025 202,092
---------- ----------
Costs and Expenses
Cost of outright sales and sales
type leases - 16,422
Leaseback expense, net of deferred
gain 13,762 15,417
Direct operating and SG&A costs 36,385 32,539
Depreciation and amortization 58,002 46,313
---------- ----------
Total 108,149 110,691
---------- ----------
Income from operations 84,876 91,401
Interest expense, net 22,208 30,993
Other income - (1,232)
---------- ----------
Income before income taxes and
minority interest 62,668 61,640
Income tax expense 27,320 29,673
Minority interest - 7,892
---------- ----------
Net income $35,348 $ 24,075
---------- ----------
Net income per share - basic and diluted $ 0.24 $ 0.16
</TABLE>
<PAGE>
PanAmSat Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Revenues. Revenues decreased $9.1 million, or 4%, to $193.0 million for
the three months ended March 31, 1998 from $202.1 million for the same pro forma
period in 1997. Video services revenues were $143.1 million for the three months
ended March 31, 1998, a decrease of 16% from the same pro forma period in 1997.
The decrease was primarily due to less sales and sales-type lease activity as
compared to the first quarter of 1997. Telecommunications services revenues were
$37.5 million for the three months ended March 31, 1998, an increase of 17% from
the same pro forma period in 1997. The increase was due primarily to the start
of several new carrier and Internet-related service agreements during the
quarter.
The revenue results can also be analyzed based on the type of
agreement. Revenues from sales and sales-type leases decreased to $11.2 million
for the three months ended March 31, 1998 from $41.0 million for the same pro
forma period in 1997. The decrease is attributable to a lower volume in 1998
relative to 1997 of outright sales and sales-type leases. Revenues from
operating leases of transponders, satellite services and other increased $20.7
million, or 13%, to $181.8 million for the three months ended March 31, 1998
from $161.1 million for the same pro forma period in 1997 due primarily to
increased service agreements associated with available transponder capacity and
the provision of short-term, special events services.
Cost of Outright Sales and Sales-Type Leases of Transponders. The
Company recorded no cost of outright sales and sales-type leases of transponders
for the three months ended March 31, 1998, as compared to $16.4 million for the
same pro forma period in 1997. The pro forma cost of outright sales and
sales-type leases of transponders for the three months ended March 31, 1997 are
related to several outright sales and sales-type leases executed during that
period.
Leaseback Expense, Net of Deferred Gain. Leaseback expense, net of
deferred gain, decreased $1.6 million, or 10%, to $13.8 million for the three
months ended March 31, 1998 from $15.4 million for the same pro forma period in
1997. The decrease is primarily attributable to the exercise by the Company of
an early buy out opportunity on one of its sale-leaseback arrangements during
the first quarter of 1998.
Direct Operating and Selling, General and Administrative Costs. Direct
operating and selling, general and administrative costs increased $3.9 million,
or 12%, to $36.4 million for the three months ended March 31, 1998 from $32.5
million for the same pro forma period in 1997. The increase is due primarily to
additional costs associated with satellites launched since the first quarter of
1997.
<PAGE>
PanAmSat Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Depreciation and Amortization. Depreciation and amortization increased
$11.7 million, or 25%, to $58.0 million for the three months ended March 31,
1998 from $46.3 million for the same pro forma period in 1997, due primarily to
depreciation expense associated with additional satellites placed in service.
Income from Operations. Income from operations decreased $6.5 million,
or 7%, to $84.9 million for the three months ended March 31, 1998 from $91.4
million for the same pro forma period in 1997, due primarily to the decrease in
total revenues.
Interest Expense, Net. Interest expense, net decreased $8.8 million, or
$28%, to $22.2 million for the three months ended March 31, 1998 from $31.0
million for the same pro forma period in 1997. The decrease was due primarily to
the reduction in the company's overall blended interest rate as a result of the
debt tender offer and restructuring program for certain debt securities of
PanAmSat's subsidiaries which commenced in November 1997.
Income Tax Expense. Income tax expense decreased $2.4 million, or 8%,
to $27.3 million for the three months ended March 31, 1998 from $29.7 million
for the same pro forma period in 1997. The decrease was due to a lower effective
tax rate in 1998 principally as a result of utilization of foreign sales
corporation tax credits.
Minority Interest. Minority interest, representing perferred stock
dividends of PanAmSat International, were $0 for the three months ended March
31, 1998 as compared to $7.9 million for the same pro forma period in 1997. The
decrease was due to the conversion of PanAmSat International's 12 1/4%
Mandatorily Exchangeable Senior Redeemable Preferred Stock due 2005 into 12 3/4%
Senior Subordinated Notes due 2005 (the "Exchange Notes") in the third quarter
of 1997 and the related termination of dividend payment obligations.
Approximately 99% of the Exchange Notes were subsequently retired in connection
with the tender offer and restructuring program described above.
Galaxy IV Satellite Update. Subsequent to March 1998, the Company
became aware of certain anomalies and their effects relative to its Galaxy IV
spacecraft which serves the domestic U. S. marketplace. These anomalies are
expected to shorten substantially the useful life of the satellite and to affect
services to some of the C-band transponder customers on the satellite.
Management is evaluating the effects of these anomalies and is working with its
customers to develop plans to meet their requirements and to satisfy the
Company's obligations to certain of the customers. The Company intends to
procure a replacement satellite on an accelerated basis for a scheduled
in-service date before the Galaxy IV spacecraft reaches the end of its expected
useful life. As with its other satellites, the Company has insurance coverage on
the affected satellite and intends to file a claim with its insurance carriers
in the near future. Based on the information currently available, management has
evaluated the potential financial statement impact of these anomalies in
accordance with its stated accounting policies and does not believe that a
material loss will result from these anomalies because remaining revenues to be
earned on the satellite together with the expected insurance recovery will
enable the Company to recover its investment in the satellite and any other
costs it may incur.
Financial Condition.
Pursuant to the Combination, aggregate consideration paid to PanAmSat
International shareholders consisted of approximately $1.5 billion in cash and
approximately 42.5 million shares of PanAmSat Common Stock. In connection with
the Combination, the Company obtained a term loan in the amount of $1.725
billion from Hughes Electronics Corporation, an affiliate of the company ("HE").
In addition to the $1.725 billion loan, at March 31, 1998 the Company also had
long-term indebtedness of $862.9 million (comprised primarily of $750 million of
bonds under the Offering (as defined below) and $76.2 million due to
affiliates).
The significant cash outlays for the Company will continue to be
primarily capital expenditures related to the construction and launch of
satellites and debt service costs. With the commencement of construction of
PAS-6B, the Company now has seven satellites under various stages of development
for which the Company has budgeted capital expenditures. The Company will
require approximately $900 million to complete the construction, insurance and
launch of PAS-6B, PAS-7, PAS-8, Galaxy X, Galaxy XI, PAS-9, and PAS-1R, together
with related equipment. This amount is expected to be funded from cash flow from
operations, vendor financing and borrowings under the credit Agreement (as
defined below). In addition to funding the
<PAGE>
PanAmSat Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
construction and launch of new satellites, the Company also expects to exercise
its remaining early buy-out options under certain satellite sale-leaseback
transactions entered into in prior years which will require the Company to fund
outlays of approximately $152 million in 1998 (for which an early buy-out option
for $96.6 million relating to transponders on SBS-6 was exercised by the Company
in January 1998) and approximately $366 million in 1999. Such additional outlays
are expected to be funded from cash flow from operations and borrowings under
the Credit Agreement.
On January 16, 1998, PanAmSat completed a private placement pursuant to
Rule 144A under the Securities Act of 1933 for $750 million aggregate principal
amount of new debt securities (the "Offering"). The net proceeds from the
Offering were used to repay bank loans incurred to finance the tender offer for
certain debt securities of PanAmSat's subsidiaries, as well as for general
corporate purposes.
In connection with the Offering, the Company executed a Credit
Agreement (the "Credit Agreement") with certain lenders and Citicorp USA, Inc.
as administrative agent. The Credit Agreement amends and restates the credit
agreement among the parties dated December 24, 1997 (the "Original Credit
Agreement"). The Original Credit Agreement provided the Company with up to $500
million of revolving credit loans (the "Revolving Credit Loans") for five years,
and up to $300 million in short-term loans maturing on April 30, 1998 (the "Term
Loans"). The Credit Agreement amends the Original Credit Agreement to terminate
the Term Loan facility. The Company currently has $500 million of Revolving
Credit Loans available to it under the Credit Agreement.
PanAmSat believes that the Credit Agreement, vendor financing, future
cash flow from operations (assuming satellites in development are successfully
launched and commence service on the schedule currently contemplated) and cash
on hand will be sufficient to fund PanAmSat's operations, anticipated exercise
of early buy-out options on certain satellite sale-leaseback transactions and
its remaining costs for the construction and launch of satellites currently
under development for the next twelve months. There can be no assurance,
however, that PanAmSat's assumptions with respect to future construction and
launch costs will be correct, or that additional vendor financing, PanAmSat's
future cash flow from operations and borrowings under the Credit Agreement will
be sufficient to cover any shortfall in funding for future launches caused by
launch failures, cost overruns, delays or other unanticipated expenses. If
circumstances were to require PanAmSat to incur additional indebtedness, the
ability of PanAmSat to incur any such additional indebtedness would be subject
to the terms of PanAmSat's outstanding indebtedness. The failure to obtain such
financing could have a material adverse effect on PanAmSat's operations and its
ability to accomplish its business plan.
<PAGE>
PanAmSat Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net cash provided by (used in) operating activities increased to $46.3
million for the three months ended March 31, 1998 from $(8.0) million for the
three months ended March 31, 1997. The increase in 1998 was primarily
attributable to larger adjustments related to amounts of depreciation and
amortization and deferred income taxes as a result of the Combination.
Net cash used in investing activities decreased to $235.3 million for
the three months ended March 31, 1998, from $349.5 million for the three months
ended March 31, 1997. The decrease in 1998 was primarily attributable to fewer
capital expenditures for satellite systems under development as compared to the
same period in 1997.
Net cash provided by financing activities decreased to $145.8 million
for the three months ended March 31, 1998 from $357.5 million for the three
months ended March 31, 1997. The decrease in 1998 was primarily due to new
borrowings in connection with the Offering, the proceeds of which were used to
repay bank loans incurred to finance the recent tender offer for certain debt
securities of PanAmSat's subsidiaries and for general corporate purposes.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit No.
3.2 Restated Bylaws of PanAmSat.
10.9.5 Side Letter, dated as of March 9, 1998, to Agreement for
Launching into Geostationary Transfer Orbit of the PanAmSat 6
Satellite by an Ariane Launch Vehicle, No. 94.5.918, between
PanAmSat International and Arianespace S.A., constituting
Exhibit 10.12 to Amendment No. 4 to PanAmSat International's
Registration Statement on Form S-1 (Reg. No. 33-84836), dated
March 29, 1995. (1)
10.15.5 Amendment No. 3, dated as of January 8, 1998, to Agreement for
Launching into Geostationary Orbit of PanAmSat Satellites by
an Ariane Launch Vehicle, No. 95.5.933, between PanAmSat
International Systems, Inc. and Arianespace S.A., constituting
Exhibit 10.12.3 to PanAmSat International's Quarterly Report
on Form 10-Q for the period ended March 31, 1996. (1)
10.15.6 Amendment No. 1, dated as of January 8, 1998, to Side Letter
to Agreement for Launching into Geostationary Transfer Orbit
of PanAmSat Satellites by an Ariane Launch Vehicle, No.
95.5.933, between PanAmSat International and Arianespace S.A.,
constituting Exhibit 10.12.4 to PanAmSat International's
Quarterly Report on Form 10-Q for the period ended March 31,
1996. (1)
10.15.7 Amendment No. 4, dated as of March 9, 1998, to Agreement for
Launching into Geostationary Transfer Orbit of PanAmSat
Satellites by an Ariane Launch Vehicle, No. 95.5.933, between
PanAmSat and Arianespace S.A., constituting Exhibit 10.12.3 to
PanAmSat International's Quarterly Report on Form 10-Q for the
period ended March 31, 1996. (1)
10.15.8 Side Letter No. 2, dated as of March 9, 1998, to Agreement for
Launching into Geostationary Transfer Orbit of PanAmSat
Satellites by an Ariane Launch Vehicle, No. 95.5.933, between
PanAmSat International and Arianespace S.A., constituting
Exhibit 10.12.3 to PanAmSat International's Quarterly Report
on Form 10-Q for the period ended March 31, 1996. (1)
10.18.3 Amendment, dated as of March 5, 1998, to Letter Agreement
between the News Corporation Limited, Globo Comunicacoes e
Participacoes, S.A., Grupo Televisa, S.A. and PanAmSat
International, constituting Exhibit 10.17.1 to PanAmSat
International's Quarterly Report on Form 10-Q/A for the period
ended March 31, 1996. (1)
<PAGE>
10.25.1 Amendment, dated as of March 5, 1998, to Full-Time Transponder
Service Agreement From PAS-3 (European Beam) between PanAmSat
International and Televisa S.A., constituting Exhibit 10.16 to
PanAmSat International's Quarterly Report on Form 10-Q for the
period ended September 30, 1996. (1)
10.27.2 Second Amended and Restated Transponder Purchase and Sale
Agreement, dated as of March 5, 1998, between PanAmSat
International and NetSat Servicos Ltda. (1)
10.41.2 Schedule identifying substantially identical agreements to the
Indemnity Agreement constituting Exhibit 10.41 to PanAmSat's
Quarterly Report on Form 10-Q for the period ended June 30,
1997 in favor of Charles H. Noski, Frederick A. Landman,
Patrick J. Costello, Steven D. Dorfman, John J. Higgins, Ted
G. Westerman, Dennis F. Hightower, James M. Hoak, Joseph R.
Wright, Jr., Michael T. Smith, Lourdes Saralegui, Carl A.
Brown, Kenneth N. Heintz, Robert A. Bednarek, James W.
Cuminale, David P. Berman and Roxanne S. Austin.
10.45.1 Amendment, dated as of March 6, 1998, to the Agreement between
PanAmSat International and Frederick A. Landman, constituting
Exhibit 10.11.16 of PanAmSat International's Quarterly Report
on Form 10-Q for the period ended June 30, 1996.
10.51 Fixed Price Contract for PAS 6B HS601HP Spacecraft, Related
Services and Documentation--Contract No. 98-PAS-001, dated as
of March 9, 1998, between PanAmSat International and Hughes
Space and Communications Company. (1)
10.52 Transponder Service Agreement, dated as of March 5, 1998,
between PanAmSat International and Sky Multi-Country Partners.
(1)
27 Financial Data Schedule
- --------
(1) Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
(b) Reports on Form 8-K.
Registrant filed a Current Report on Form 8-K, dated January
16, 1998, in respect of Registrant's press release dated
January 16, 1998 announcing the consummation of an offering of
certain debt securities of the Registrant (Items 5 and 7(c)).
Registrant filed a Current Report on Form 8-K/A, dated March
25, 1998, in respect of pro forma financial information in
connection with the merger of PanAmSat International and the
Galaxy Services division of Hughes Communications, Inc. (Items
7(b) and (c)).
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PanAmSat Corporation
Date: May 15, 1998 /s/ Kenneth N. Heintz
----------------------------
Kenneth N. Heintz
Executive Vice President and
Chief Financial Officer
and a Duly Authorized
Officer of the Company
Exhibit 3.2
RESTATED BYLAWS
OF
PANAMSAT CORPORATION
ARTICLE I
Stockholders
SECTION 1.1. Annual Meetings. An annual meeting of stockholders shall
be held for the election of directors at such date, time and place, either
within or without the State of Delaware, as may be designated by resolution of
the Board of Directors from time to time. Any other proper business may be
transacted at the annual meeting.
SECTION 1.2. Special Meetings. Special meetings of stockholders for
any purpose or purposes may be called at any time by the Board of Directors, or
by a committee of the Board of Directors that has been duly designated by the
Board of Directors and whose powers and authority, as provided in a resolution
of the Board of Directors, include the power to call such meetings, but such
special meetings may not be called by any other person or persons.
SECTION 1.3. Notice of Meetings. Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given that shall state the place, date and hour of the meeting and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called. Unless otherwise provided by law, the certificate of incorporation or
these Bylaws, the written notice of any meeting shall be given not less than ten
(10) nor more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting. If mailed, such notice shall be
deemed to be given when deposited in the United States mail, postage prepaid,
directed to the stockholder at his address as it appears on the records of the
Corporation.
SECTION 1.4. Adjournments. Any meeting of stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the Corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, notice of the adjourned meeting shall be given
to each stockholder of record entitled to vote at the meeting.
SECTION 1.5. Quorum. Except as otherwise provided by law, the
certificate of incorporation or these Bylaws, at each meeting of stockholders
the presence in person or by proxy of the holders of shares of stock having a
majority of the votes which could be cast by the holders of all outstanding
shares of stock entitled to vote at the meeting shall be necessary and
sufficient to constitute a quorum. Where a separate vote by a series, class or
classes is required, a majority of the outstanding shares of stock of such class
or classes on any particular issue, present in person or represented by proxy,
shall be necessary and sufficient to constitute a quorum for purposes of such
issue. In the absence of a quorum, the stockholders so present may, by majority
vote, adjourn the meeting from time to time in the manner provided in Section
1.4 of these Bylaws until a quorum shall attend. Shares of its own stock
belonging to
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the Corporation or to another corporation, if a majority of the shares entitled
to vote in the election of directors of such other corporation is held, directly
or indirectly, by the Corporation, shall neither be entitled to vote nor be
counted for quorum purposes; provided, however, that the foregoing shall not
limit the right of the Corporation to vote stock, including but not limited to
its own stock, held by it in a fiduciary capacity.
SECTION 1.6. Organization. Meetings of stockholders shall be presided
over by the Chairman of the Board, if any, or in his absence by the President,
or in his absence by an Executive Vice President, or in the absence of the
foregoing persons by a chairman designated by the Board of Directors, or in the
absence of such designation by a chairman chosen at the meeting. The Secretary
shall act as secretary of the meeting, but in his absence the chairman of the
meeting may appoint any person to act as secretary of the meeting. The chairman
of the meeting shall announce at the meeting of stockholders the date and time
of the opening and the closing of the polls for each maker upon which the
stockholders will vote.
SECTION 1.7. Voting; Proxies. Each stockholder entitled to vote at any
meeting of stockholders shall be entitled to one vote for each share of stock
held by such stockholder which has voting power upon the matter in question. At
all meetings of stockholders for the election of directors, a plurality of the
votes cast shall be sufficient to elect a director. All other elections and
questions shall, unless otherwise provided by law, the certificate of
incorporation, these Bylaws or the rules or regulations of any stock exchange
applicable to the Corporation, be decided by the affirmative vote of the holders
of shares of stock having a majority of the votes present in person or
represented by proxy and entitled to vote thereon. Each stockholder entitled to
vote at a meeting of stockholders may authorize another person or persons to act
for him by proxy, but no such proxy shall be voted or acted upon after three
years from is date, unless the proxy provides for a longer period. A proxy shall
be irrevocable if it states that it is irrevocable and if, and only as long as,
it is coupled with an interest sufficient in law to support an irrevocable
power. A stockholder may revoke any proxy which is not irrevocable by attending
the meeting and voting in person or by filing an instrument in writing revoking
the proxy or by delivering a proxy in accordance with applicable law bearing a
later date to the Secretary of the Corporation. Voting at meetings of
stockholders need not be by written ballot.
SECTION 1.8. Fixing Date for Determination of Stockholders of Record.
In order that the Corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted by
the Board of Directors and which record date: (i) in the case of determination
of stockholders entitled to vote at any meeting of stockholders or adjournment
thereof, shall, unless otherwise required by law, not be more than sixty nor
less than ten (10) days before the date of such meeting; and (ii) in the case of
any other action, shall not be more than sixty (60) days prior to such other
action. If no record date is fixed: (i) the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held; and (ii) the record date for
determining stockholders for any other purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto. A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall
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apply to any adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjured meeting.
SECTION 1.9. List of Stockholders Entitled to Vote. The Secretary
shall prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof and may be inspected by any stockholder who is
present.
SECTION 1.10. Stock Ledger. The stock ledger of the Corporation shall
be the only evidence as to who are the stockholders entitled to examine the
stock ledger, the list required by Section 1.9 of this ARTICLE I, or to vote in
person or by proxy at any meeting of stockholders.
SECTION 1.11. Conduct of Meetings. The Board of Directors of the
Corporation may adopt by resolution such rules and regulations for the conduct
of the meeting of stockholders as it shall deem appropriate. Except to the
extent inconsistent with such rules and regulations as adopted by the Board of
Directors, the chairman of any meeting of stockholders shall have the right and
authority to prescribe such rules, regulations and procedures and to do all such
acts as, in the judgment of such chairman, are appropriate for the proper
conduct of the meeting. Such rules, regulations or procedures, whether adopted
by the Board of Directors or prescribed by the chairman of the meeting, may
include, without limitation, the following: (i) the establishment of an agenda
or order of business for the meeting; (ii) rules and procedures for maintaining
order at the meeting and the safety of those present; (iii) limitations on
attendance at or participation in the meeting to stockholders of record of the
Corporation, their duly authorized and constituted proxies or such other persons
as the chairman of the meeting shall determine: (iv) restrictions on entry to
the meeting after the time fixed for the commencement thereof; and (v)
limitations on the time allotted to questions or comments by participants.
Unless and to the extent otherwise determined by the Board of Directors or the
chairman of the meeting, meetings of stockholders shall not be required to be
held in accordance with the rules of parliamentary procedure.
SECTION 1.12. Advance Notice of Stockholder Nominations and Business.
(A) Annual Meetings of Stockholders.
(1) Nominations of persons for election to the Board of Directors
and the proposal of business to be considered by the stockholders may be
made at an annual meeting of stockholders (a) pursuant to the Corporation's
notice of meeting, (b) by or at the direction of the Board of Directors or
(c) by any stockholder of the Corporation who was a stockholder of record
at the time of giving of notice provided for in this Bylaw, who is entitled
to vote at the meeting and complies with the notice procedures set forth in
this Bylaw.
(2) For nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (c) of
paragraph (A)(l) of this Bylaw, the stockholder must have given timely
notice thereof in writing to the Secretary of the Corporation and such
other business must otherwise be a proper matter for stockholder action. To
be timely, a
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stockholder's notice shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of business
on the 60th day nor earlier than the close of business on the 90th day
prior to the first anniversary of the preceding year's annual meeting;
provided, however, that in the event that the date of the annual meeting is
more than thirty (30) days before or more than sixty (60) days after such
anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the close of business on the 90th day prior to
such annual meeting and not later than the close of business on the later
of the 60th day prior to such annual meeting or the 10th day following the
day on which public announcement of the date of such meeting is first made
by the Corporation. In no event shall the public announcement of an
adjournment of an annual meeting commence a new time period for the giving
of a stockholder's notice as described above. Such stockholder's notice
shall set forth (a) as to each person whom the stockholder proposes to
nominate for election or re-election as a director all information relating
to such person that is required to be disclosed in solicitations of proxies
for election of directors in an election contest, or is otherwise required,
in each case pursuant to Regulation 14A under the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and Rule 14a-11 thereunder
(including such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected); (b) as to
any other business that the stockholder proposes to bring before the
meeting, a brief description of the business desired to be brought before
the meeting, the reasons for conducting such business at the meeting and
any material interest in such business of such stockholder and the
beneficial owner, if any, on whose behalf the proposal is made; and (c) as
to the stockholder giving the notice and the beneficial owner, if any, on
whose behalf the nomination or proposal is made (i) the name and address of
such stockholder, as they appear on the Corporation's books, and of such
beneficial owner, (ii) the class and number of shares of the Corporation
which are owned beneficially and of record by such stockholder and such
beneficial owner, and (iii) whether the proponent intends or is part of a
group which intends to solicit proxies from other stockholders in support
of such proposal or nomination.
(3) Notwithstanding anything in the second sentence of paragraph
(A)(2) of this Bylaw to the contrary, in the event that the number of
directors to be elected to the Board of Directors of the Corporation is
increased and there is no public announcement by the Corporation naming all
of the nominees for director or specifying the size of the increased Board
of Directors at least seventy (70) days prior to the first anniversary of
the preceding year's annual meeting, a stockholder's notice required by
this Bylaw shall also be considered timely, but only with respect to
nominees for any new positions created by such increase, if it shall be
delivered to the Secretary at the principal executive offices of the
Corporation not later than the close of business on the 10th day following
the day on which such public announcement is first made by the Corporation.
(B) Special Meetings of Stockholders. Only such business shall be conducted at a
special meeting of stockholders as shall have been brought before the meeting
pursuant to the Corporation's notice of meeting. Nominations of persons for
election to the Board of Directors may be made at a special meeting of
stockholders at which directors are to be elected pursuant to the Corporation's
notice of meeting (a) by or at the direction of the Board of Directors or (b)
provided that the Board of Directors has determined that directors shall be
elected at such meeting, by any stockholder of the Corporation who is a
stockholder of record at the time of giving of notice provided for in this
Bylaw, who shall be entitled to vote at the meeting and who complies with the
notice procedures set forth in this Bylaw. In the event the Corporation calls a
special meeting of stockholders for the purpose of electing one or more
directors to the Board of Directors, any such stockholder may nominate a person
or persons (as the case
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may be) for election to such position(s) as specified in the Corporation's
notice of meeting, if the stockholder's notice required by paragraph (A)(2) of
this Bylaw shall be delivered to the Secretary at the principal executive
offices of the Corporation not earlier than the close of business on the 90th
day prior to such special meeting and not later than the close of business on
the later of the 60th day prior to such special meeting, or the 10th day
following the day on which public announcement is first made of the date of the
special meeting and of the nominees proposed by the Board of Directors to be
elected at such meeting. In no event shall the public announcement or an
adjournment of a special meeting commence a new time period for the giving of a
stockholder's notice as described above.
(C) General.
(1) Only such persons who are nominated in accordance with the
procedures set forth in this Bylaw shall be eligible to serve as directors
and only such business shall be conducted at a meeting of stockholders as
shall have been brought before the meeting in accordance with the
procedures set forth in this Bylaw. Except as otherwise provided by law,
the certificate of incorporation or these Bylaws, the chairman of the
meeting shall have the power and duty to determine whether a nomination or
any business proposed to be brought before the meeting was made or
proposed, as the case may be, in accordance with the procedures set forth
in this Bylaw and, if any proposed nomination or business is not in
compliance with this Bylaw, to declare that such defective proposal or
nomination shall be disregarded.
(2) For purposes of this Bylaw, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document
publicly filed by the Corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Bylaw, a
stockholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this Bylaw. Nothing in this Bylaw shall be deemed to
affect any rights (i) of stockholders to request inclusion of proposals in
the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange
Act or (ii) of the holders of any series of Preferred Stock to elect
directors under specified circumstances.
SECTION 1.13. Stockholder Action. Any action required or permitted to
be taken by any stockholders of the Corporation must be effected at a duly
called annual or special meeting of such stockholders and may not be effected by
any consent in writing by such stockholders. Except as otherwise required by
law, special meetings of stockholders of the Corporation may be called only by
the Board of Directors pursuant to a resolution approved by a majority of the
entire Board of Directors.
SECTION 1.14. Inspectors of Election. The Corporation shall, in
advance of any meeting of stockholders, appoint one or more inspectors of
election, who may be employees of the Corporation, to act at the meeting or any
adjournment thereof and to make a written report thereof. The Corporation may
designate one or more persons as alternate inspectors to replace any inspector
who fails to act. In the event that no inspector so appointed or designated is
able to act at a meeting of stockholders, the person presiding at the meeting
shall appoint one or more inspectors to act at the meeting. Each inspector,
before entering upon the discharge of his or her duties, shall take and sign an
oath to execute faithfully the duties of inspector with strict impartiality and
according to the best of his or her ability. The inspector or inspectors so
appointed or designated shall (i) ascertain the number of shares of capital
stock of the
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Corporation outstanding and the voting power of each such share, (ii) determine
the shares of capital stock of the Corporation represented at the meeting and
the validity of proxies and ballots, (iii) count all votes and ballots, (iv)
determine and retain for a reasonable period a record of the disposition of any
challenges made to any determination by the inspectors, and (v) certify their
determination of the number of shares of capital stock of the Corporation
represented at the meeting and such inspectors' count of all votes and ballots.
Such certification and report shall specify such other information as may be
required by law. In determining the validity and counting of proxies and ballots
cast at any meeting of stockholders of the Corporation, the inspectors may
consider such information as is permitted by applicable law. No person who is a
candidate for an office at an election may serve as an inspector at such
election.
ARTICLE II
Board of Directors
SECTION 2.1. Number; Qualifications. The Board of Directors shall
consist of one or more members, the number thereof to be determined from time to
time by resolution of the Board of Directors. Directors need not be
stockholders.
SECTION 2.2. Election; Resignation; Removal; Vacancies. At the first
annual meeting of stockholders and at each annual meeting thereafter, the
stockholders shall elect directors each of whom shall hold office for a term of
one year or until his successor is elected and qualified. The number of
directors constituting the initial Board of Directors shall be ten. Subject to
the rights of holders of any series of Preferred Stock to elect directors under
specified circumstances, the number of directors may be modified from time to
time exclusively by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of directors which the Corporation would have if
there were no vacancies. Any director may resign at any time upon written notice
to the Corporation. Any newly created directorship or any vacancy occurring in
the Board of Directors for any cause may be filled by a majority of the
remaining members of the Board of Directors, although such majority is less than
a quorum, or by a plurality of the votes cast at a meeting of stockholders, and
each director so elected shall hold office until the expiration of the term of
office of the director whom he has replaced or until his successor is elected
and qualified.
SECTION 2.3. Regular Meetings. Regular meetings of the Board of
Directors may be held at such places within or without the State of Delaware and
at such times as the Board of Directors may from time to time determine, and if
so determined notices thereof need not be given.
SECTION 2.4. Special Meetings. Special meetings of the Board of
Directors may be held at any time or place within or without the State of
Delaware whenever called by the President, any Vice President, the Secretary, or
by any member of the Board of Directors. Notice of a special meeting of the
Board of Directors shall be given by the person or persons calling the meeting
at least twenty-four hours before the special meeting.
SECTION 2.5. Telephonic Meetings Permitted. Members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting thereof by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Bylaw shall constitute presence in person at such meeting.
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SECTION 2.6. Quorum; Vote Required for Action. At all meetings of the
Board of Directors a majority of the whole Board of Directors shall constitute a
quorum for the transaction of business. The vote of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
SECTION 2.7. Organization. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board, if any, or in his absence by the
President, or in their absence by a chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his absence the chairman
of the meeting may appoint any person to act as secretary of the meeting.
SECTION 2.8. Informal Action by Directors. Unless otherwise restricted
by the certificate of incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board of
Directors or such committee, as the case may be, consent thereto in writing, and
the writing or writings are filed with the minutes of proceedings of the Board
of Directors or such committee.
ARTICLE Ill
Committees
SECTION 3.1. Committees. The Board of Directors shall appoint the
committees provided for in these Bylaws in Sections 3.2 and 3.3 and may, by
resolution passed by the Board of Directors, designate one or more additional
committees, each committee to consist of one or more of the directors of the
Corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of a
member of the committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member. Any such committee,
to the extent permitted by law and to the extent provided in the resolution of
the Board of Directors, shall have and may exercise all the powers and authority
of the Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it.
SECTION 3.2. Compensation Committee.
(a) At each annual meeting of the Board of Directors, the Board of
Directors shall, by a resolution adopted by the Board of Directors, designate
and appoint from its members a Compensation Committee consisting of three or
more directors, each of whom shall be a "disinterested" person.
(b) The Compensation Committee shall have the powers and
responsibilities designated by the Board of Directors from time to time.
(c) Action taken by the Compensation Committee or at meetings duly
called shall require the affirmative vote of at least a majority of its members.
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SECTION 3.3. Audit Committee.
(a) At each annual meeting of the Board of Directors, the Board of
Directors shall, by a resolution adopted by the Board of Directors, designate
and appoint from its members an Audit Committee consisting of three or more
directors, none of whom is an officer or employee of the Corporation.
(b) The Audit Committee shall have the powers and responsibilities as
designated by the Board of Directors from time to time.
SECTION 3.4. Committee Rules. Unless the Board of Directors otherwise
provides, each committee designated by the Board of Directors may make, alter
and repeal rules for the conduct of its business. In the absence of such rules
each committee shall conduct its business in the same manner as the Board of
Directors conducts its business pursuant to ARTICLE 11 of these Bylaws.
ARTICLE IV
Officers
SECTION 4.1. Executive Officers; Election; Qualifications; Term of
Office; Resignation; Removal; Vacancies. The Board of Directors shall elect a
President and Secretary, and it may, if it so determines, choose a Chairman of
the Board from among its members. The Board of Directors may also choose one or
more Executive Vice Presidents, one or more Senior Vice Presidents, one or more
Assistant Secretaries, a Treasurer and one or more Assistant Treasurers. Each
such officer shall hold office until the first meeting of the Board of Directors
after the annual meeting of stockholders next succeeding his election, and until
his successor is elected and qualified or until his earlier resignation or
removal. Any officer may resign at any time upon written notice to the
Corporation. The Board of Directors may remove any officer with or without cause
at any time, but such removal shall be without prejudice to the contractual
rights of such officer, if any, with the Corporation. Any number of offices may
be held by the same person. Any vacancy occurring in any office of the
Corporation by death, resignation, removal or otherwise may be filled for the
unexpired portion of the term by the Board of Directors at any regular or
special meeting.
SECTION 4.2. Powers and Duties of Executive Officers. The officers of
the Corporation shall have such powers and duties in the management of the
Corporation as may be prescribed in a resolution by the Board of Directors and,
to the extent not so provided, as generally pertain to their respective offices,
subject to the control of the Board of Directors.
SECTION 4.3. Chairman of the Board. The Chairman of the Board shall be
a member of the Board of Directors. He shall preside at each meeting of the
Board of Directors or the stockholders. Unless the Chairman also holds another
office described in these Bylaws, he shall be a non-executive officer of the
Corporation.
SECTION 4.4. The President. The President shall be the chief executive
officer of the Corporation. He shall, in the absence of the Chairman of the
Board, preside at each meeting of the Board of Directors or the stockholders.
The President shall be responsible for the general supervision and control of
the business and affairs of the Corporation, subject to the direction of the
Board of Directors. The
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President may sign or countersign certificates, contracts, agreements and other
documents and instruments in the name and on behalf of the Corporation, unless
and except to the extent that any document or instrument is required by law or
by the Board of Directors to be signed or countersigned by another officer of
the Corporation. The President may appoint additional officers that are not
executive officers described in these Bylaws (unless such appointments are
approved by the Board of Directors), and such additional officers shall serve
the Corporation at the discretion of the President. The President shall perform
all duties incident to the office of the President, and such other duties as may
from time to time be assigned to him by the Board of Directors.
SECTION 4.5. Executive Vice President. Each Executive Vice President
shall perform all such duties as from time to time may be assigned to him by the
Board of Directors or the President. At the request of the President or in his
absence or in the event of his inability or refusal to act, the Executive Vice
President, or if there shall be more than one, the Executive Vice Presidents in
the order determined by the Board of Directors (or if there be no such
determination, then the Executive Vice Presidents in the order of their
appointment), shall perform the duties of the President, and when so acting,
shall have the powers of and be subject to the restrictions placed upon the
President in respect of the performance of such duties.
SECTION 4.6. Senior Vice President. Each Senior Vice President shall
perform all such duties as from time to time may be assigned to him by the Board
of Directors or the President. Each Senior Vice President shall perform all
duties incident to the office of such Senior Vice President, and such other
duties as may from time to time be assigned to him by the Board of Directors.
SECTION 4.7. Chief Financial Officer. The Chief Financial Officer
shall be responsible for the financial affairs of the Corporation and shall be
the chief accounting officer for public securities purposes. If the Chief
Financial Officer is not also the Treasurer of the Corporation, he shall be
responsible for the supervision of the Treasurer. He shall perform all duties
incident to the office of Chief Financial Officer, and such other duties as may
from time to time be assigned to him by the Board of Directors.
SECTION 4.8. Treasurer. The Treasurer shall:
(a) have charge and custody of, and be responsible for, all the funds
and securities of the Corporation;
(b) keep full and accurate accounts of receipts and disbursements in
books belonging to the Corporation;
(c) deposit all moneys and other valuables to the credit of the
Corporation in such depositaries as may be designated by the Board of Directors
or pursuant to its direction;
(d) receive, and give receipts for, moneys due and payable to the
Corporation from any source whatsoever;
(e) disburse the funds of the Corporation and supervise the
investments of its funds;
(f) render to the Board of Directors, whenever the Board of Directors
may require, an account of the financial condition of the Corporation; and
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(g) in general, perform all duties incident to the office of Treasurer
and such other duties as from time to time may be assigned to him by the Board
of Directors.
In the event that any officer of the Corporation other than the
Treasurer shall be designated as the Corporation's chief financial officer, the
Treasurer shall share the foregoing powers and duties with such chief financial
officer, and all references in these Bylaws to the Treasurer shall be deemed to
include such chief financial officer of the Corporation.
SECTION 4.9. Secretary. The Secretary shall:
(a) keep or cause to be kept in one or more books provided for the
purpose, the minutes of all meetings of the Board of Directors, the committees
of the Board of Directors and the stockholders;
(b) see that all notices are duly given in accordance with the
provisions of these Bylaws and as required by law;
(c) be custodian of the records and the seal of the Corporation and
affix and attest the seal to all certificates for shares of the Corporation and
affix and attest the seal to all other documents to be executed on behalf of the
Corporation under its seal;
(d) see that the books, reports, statements, certificates and other
documents and records required by law to be kept and filed are properly kept and
filed; and
(e) in general, perform all duties incident to the office of Secretary
and such other duties as from time to time may be assigned to him by the Board
of Directors.
SECTION 4.10. Assistant Secretaries. During the absence or disability
of the Secretary, the Assistant Secretary shall have and may exercise all of the
powers and shall discharge all of the duties of the Secretary. Each Assistant
Secretary shall also perform all such other duties as are incident to his office
or are properly requested by the President, the Secretary or the Board of
Directors.
SECTION 4.11. Assistant Treasurers. During the absence or disability
of the Treasurer, the Assistant Treasurer shall have and may exercise all of the
powers and shall discharge all of the duties of the Treasurer. Each Assistant
Treasurer shall also perform all such other duties as are incident to his office
or are properly requested by the President, the Treasurer or the Board of
Directors.
SECTION 4.12. Additional Officers. The Board of Directors may appoint
such other officers and agents as it may deem appropriate, and such other
officers and agents shall hold their offices for such terms and shall exercise
such powers and perform such duties as may be determined from time to time by
the Board of Directors. The Board of Directors may from time to time delegate to
any officer or agent the power to appoint subordinate officers or agents and to
prescribe their respective rights, terms of office, authorities and duties. Any
such officer or agent may remove any such subordinate officer or agent appointed
by him, for or without cause.
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ARTICLE V
Stock
SECTION 5.1. Certificates. Every holder of stock shall be entitled to
have a certificate signed by or in the name of the Corporation by the Chairman
or the President or an Executive Vice President, and by the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary of the
Corporation, certifying the number of shares owned by him in the Corporation.
Any of or all the signatures on the certificate may be a facsimile. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the Corporation with the same effect as if he were such officer, transfer
agent or registrar at the date of issue.
SECTION 5.2. Lost, Stolen or Destroyed Stock Certificates; Issuance of
New Certificates. The Corporation may issue a new certificate of stock in the
place of any certificate theretofore issued by it alleged to have been lost,
stolen or destroyed, and the Corporation may require the owner of the lost,
stolen or destroyed certificate, or his legal representative, to give the
Corporation a bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
ARTICLE VI
Miscellaneous
SECTION 6.1. Fiscal Year. The fiscal year of the Corporation shall be
determined by resolution of the Board of Directors.
SECTION 6.2. Seal. The corporate seal shall have the name of the
Corporation inscribed thereon and shall be in such form as may be approved from
time to time by the Board of Directors.
SECTION 6.3. Waiver of Notice of Meetings of Stockholders, Directors
and Committees. Any written waiver of notice, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at nor the purpose of any
regular or special meeting of the stockholders, directors or members of a
committee of directors need be specified in any written waiver of notice.
SECTION 6.4. Manner of Notice. Except as otherwise provided herein,
notices to directors and stockholders shall be in writing and delivered
personally or mailed to the directors or stockholders at their addresses
appearing on the books of the Corporation. Notice to directors may be given by
telegram, telecopier, telephone or other means of electronic transmission.
SECTION 6.5. Interested Directors; Quorum. No contract or transaction
between the Corporation and one or more of its directors or officers, or between
the Corporation and any other
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corporation, partnership, association or other organization in which one or more
of its directors or officers are directors or officers, or have a financial
interest, shall be void or voidable solely for this reason, or solely because
the director or officer is present at or participates in the meeting of the
Board of Directors or committee thereof which authorizes the contract or
transaction, or solely because his or their votes are counted for such purpose,
if: (i) the material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the Board of Directors or
the committee, and the Board of Directors or committeve in good faith authorizes
the contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; or (ii) the material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (iii) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approved or ratified, by the Board of Directors, a committee thereof, or the
stockholders. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
which authorizes the contract or transaction.
SECTION 6.6. Form of Records. Any records maintained by the
Corporation in the regular course of its business, including its stock ledger,
books of account and minute books, may be kept on, or be in the form of, punch
cards, magnetic tape, photographs, microphotographs, or any other information
storage device, provided that the records so kept can be converted into clearly
legible form within a reasonable time.
SECTION 6.7. Amendment of Bylaws. These Bylaws may be altered or
repealed, and new bylaws made, by the Board of Directors, but the stockholders
may make additional bylaws and may alter and repeal any Bylaws whether adopted
by them or otherwise.
12
Exhibit 10.9.5
Mr Frederick Landman,
PanAmSat Coporation
One Pickwick Plaza - Suite 270
Greenwich, CT 06830
U.S.A.
Evry, 9 March 1998
Re: PAS 6 Satellite (LSA 94.5.918 "Pas 6 LSA")
This letter will confirm our agreement that, notwithstanding the terms of the
Pas 6 LSA, PanAmSat agrees to [****************************
********************************************************************************
***********************************************************************]
[*******************************************************************************
********************************************************************************
************************************************]
This letter formally constitutes an amendment to the PAS 6 LSA. In order to
signify your approval, could you kindly return an executed original of this
letter to my attention.
Best Regards,
Michele FRANCI
ACKNOWLEDGED AND AGREED TO BY PANAMSAT
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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Annex A
ARIANESPACE LETTERHEAD
Mr Frederick Landman,
PanAmSat Coporation
One Pickwick Plaza - Suite 270
Greenwich, CT 06830
U.S.A.
(DATE)
Re: [********************************************]
Dear Mr. Landman,
[*******************************************************************************
********************************************************************************
******************]
Sincerely,
ARIANESPACE S.A.
By:__________________________________
Title:_________________________________
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
Exhibit 10.15.5
PanAmSat /MultiLaunch Amdt 3/95.5.933
Confidential ARIANESPACE PROPRIETARY
AMENDMENT#3 TO THE
AGREEMENT FOR THE
LAUNCHING INTO GEOSTATIONARY
TRANSFER ORBIT
OF PANAMSAT SATELLITES
BY AN ARIANE LAUNCH VEHICLE
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AMENDMENT #3 TO THE
MULTI LAUNCH SERVICES AGREEMENT
This Amendment 3 to the Multi Launch Services Agreement is entered into
BY AND BETWEEN
PanAmSat Corporation, hereinafter referred to as "Customer", a company
organized under the laws of the State of Delaware, with principal offices
located at One Pickwick Plaza, Greenwich CT, 06830 U.S.A.
ON THE ONE HAND,
AND
ARIANESPACE, a company organized under the laws of France with principal
offices located at Boulevard de l'Europe, Immeuble Ariane, 91000 EVRY,
France, hereinafter referred to as "ARIANESPACE".
ON THE OTHER HAND,
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WHEREAS Customer has approached ARIANESPACE with a view to launching up to four
(4) PanAmSat Satellites using an ARIANE Launch Vehicle, and
WHEREAS ARIANESPACE has proposed to Customer either dedicated Launches, i.e.
Launches by an ARIANE Launch Vehicle the only payload of which is Customer's
Satellite, or Shared Launches, i.e. Launches by an ARIANE Launch Vehicle the
payload of which is made up at the same time of Customer's Satellite and the
satellites of Third Party Customer(s) of ARIANESPACE, and
WHEREAS Customer has selected Shared Launches under the conditions set forth
under this Agreement, being aware of the particular constraints involved in such
a Launch, and
WHEREAS Customer and ARIANESPACE, aware of the constraints involved in any
Launch operation and of the complex nature of the technologies involved, have
reached an agreement in accordance with the terms and conditions set forth in
Agreement 95.5.933 entered into by the Parties on 20 December 1995 ("the
Agreement").
WHEREAS the Parties have agreed to amend the Agreement in the manner set forth
in this Amendment #3 to the Agreement which shall replace the initial Terms and
Conditions of the Agreement and constitutes an amendment to the Agreement within
the terms of its Paragraph 20.6.
WHEREAS PanAmSat International Systems, Inc., formerly known as PanAmSat
Corporation ("PanAmSat International") has contemporaneously with the execution
of this amendment with ARIANESPACE's consent, assigned this Agreement to the new
PanAmSat Corporation.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS :
3
<PAGE>
CONTENTS
PART I
TERMS AND CONDITIONS
Pages
ARTICLE 1 DEFINITIONS..................................................9
ARTICLE 2 SUBJECT OF THE AGREEMENT.....................................17
ARTICLE 3 CONTRACTUAL DOCUMENTS........................................18
ARTICLE 4 ARIANESPACE'S SERVICES......................................19
ARTICLE 5 CUSTOMER TECHNICAL ..........................................25
ARTICLE 6 LAUNCH SCHEDULE ............................................26
ARTICLE 7 COORDINATION BETWEEN ARIANESPACE AND CUSTOMER................28
ARTICLE 8 REMUNERATION.................................................29
ARTICLE 9 PRICE ESCALATION FORMULA.....................................38
ARTICLE 10 PAYMENT SCHEDULE............................................41
ARTICLE 11 LAUNCH POSTPONEMENTS/ACCELERATION...........................51
ARTICLE 12 RIGHT OF OWNERSHIP AND CUSTODY..............................60
ARTICLE 13 REPLACEMENT LAUNCH..........................................61
ARTICLE 14 ALLOCATION OF POTENTIAL LIABILITIES AND RISKS...............66
ARTICLE 15 INSURANCE...................................................72
ARTICLE 16 OWNERSHIP OF DOCUMENTS AND WRITTEN INFORMATION..............74
4
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CONFIDENTIALITY/PUBLIC STATEMENTS......................................74
ARTICLE 17 PERMITS AND AUTHORIZATIONS - GROUND STATIONS................77
ARTICLE 18 TERMINATION BY CUSTOMER.....................................78
ARTICLE 19 TERMINATION BY ARIANESPACE..................................84
ARTICLE 20 MISCELLANEOUS...............................................85
ARTICLE 21 APPLICABLE LAW..............................................89
ARTICLE 22 ARBITRATION.................................................90
ARTICLE 23 EFFECTIVE DATE..............................................91
PART II
A N N E X E S
ANNEX 1 LAUNCH SPECIFICATIONS
ANNEX 2 ARIANESPACE TECHNICAL COMMITMENTS
ANNEX 3 CUSTOMER'S TECHNICAL COMMITMENTS
ANNEX 4 LAUNCH RISK GUARANTEE
ANNEX 5 ESA - ARIANESPACE CONVENTION (EXTRACT)
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P A R T I
T E R M S A N D C O N D I T I O N S
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ARTICLE 1 DEFINITIONS
In this Agreement the terms set forth hereafter shall have the meaning given in
this Article:
Agreement means this Agreement as defined in Article 3 of this document, as
amended at the date hereof, including, without limitation, this Amendment #3.
Ancillary Equipment means all equipment, devices and software to be provided by
Customer on the Launch Base in order to make Satellite ready for Launch.
Associated Service(s) means those supplementary launch services defined in
Sub-paragraphs 4.2.2. and 4.2.3. of Article 4 of this Agreement.
Associates means all individuals or legal entities, organized under public or
private law, who shall act, directly or indirectly, on behalf or at the
direction of either Party to this Agreement or of the Third Party Customer(s) of
ARIANESPACE to fulfill the obligations undertaken by such Party in this
Agreement, or by the Third Party Customer(s) of ARIANESPACE including, without
limitation, the employees of each of the Parties, or of the Third Party
Customer(s) of ARIANESPACE, their suppliers and subcontractors at any tiers.
Base Rate means the Chase Manhattan Bank (N.Y.) prime rate plus one (1)
percentage point for any amount expressed in U.S. dollars, or the Taux de base
bancaire of Credit Lyonnais (Paris) plus one (1) percentage point for any amount
expressed in French Francs, or the yield at maturity of short term ECU
denominated bonds as published weekly on Wednesday by the Luxembourg Stock
Exchange plus one (1) point for any amount expressed in ECU.
Cash Option means, only in the event an Ariane 4 Launch Vehicle is designated to
perform the Launch Services, the option provided to Customer to receive a
payment from ARIANESPACE subject to the conditions specified in Sub-paragraph
4.6.2. of Article 4.
Combined Space Vehicle means the Launch Vehicle, and/or the Satellite, and/or
the satellite of any Third Party Customer(s) of ARIANESPACE, and/or their
components.
Commercial Insurance Market means the providers of insurance or reinsurance for
first party space-related risks on a regular basis that are not affiliated with
or controlled directly or indirectly by Customer.
Deviation means non compliance with the specifications included in the D.C.I.
(Document de Controle des Interfaces / Interface Control Document, including its
reference documents, applicable documents and annexes) of:
a) the performance of the various systems of the Launch Vehicle; and/or the
environmental conditions to which the Satellite was subjected during the
period from the
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instant when the Launch occurred until the instant when the
activation of either the propulsion and/or orientation systems of the
Satellite should have occurred; and/or
b) the behavior of the Satellite of (a) Third Party Customer(s) of ARIANESPACE
from the instant when the Launch occurred until the earlier of the
following:
-the instant when the propulsion and/or orientation systems of the
satellite of the Third party Customer(s) of ARIANESPACE are activated,
or
-the instant when the activation of either the propulsion and/or
orientation systems of the Satellite should have occurred.
Double Launch means a Launch with two satellites including the Satellite
supplied by Customer.
Elected Amount means an amount comprised between Thirty Million European
Currency Units (ECU30,000,000) and Eighty Five Million European Currency Units
(ECU85,000,000) elected by Customer when exercising the Relaunch Credit Option
or the Cash Option.
Events of Force Majeure means events such as but not limited to explosions,
fires, earthquakes, floods, bad weather and other Acts of God, wars, whether or
not declared, social uprisings, strikes, lock-outs and other labor problems,
governmental or administrative measures, and all other events beyond the
reasonable control of either Party or its Associates that impede the execution
of the obligations of either Party or its Associates and, including, but without
limitation, the accomplishment of the Launch within the Launch Period, Slot,
Day, Window or at Launch Time, provided such difficulties may not be overcome
using efforts which may reasonably be expected of the Party affected and/or its
Associates under the circumstances.
Guarantee Amount means an amount in European Currency Units (ECU's) determined
as follows:
0.7 ECU x LSP
$
Where LSP means the Launch Services Price determined under Paragraph 8.1.1. of
this Agreement, without taking into consideration the ECU/$ exchange rate.
For example, the Guarantee Amount for the Launch Services Price of the Firm
Launch #1 as set forth under Paragraph 8.1.1.A) shall be [**************]
Interested Party (ies) in the Launch means any individual or legal entity
governed by private or public law, that has commissioned ARIANESPACE to proceed
with the Launch, or has any interest including without limitation a legal
interest in the Launch Vehicle. For the
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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purpose of Article 14 of the Agreement,Interested Party(ies) in the Launch
shall be deemed ARIANESPACE Associates.
Interested Party(ies) in the Satellite means any individual or legal entity
governed by private or public law, that has commissioned Customer to proceed
with the Launch, or has any interest including without limitation a legal
interest in the Satellite to be so launched, including without limitation,
insurers, any person or entity to whom Customer has sold or leased, directly or
indirectly, or otherwise agreed to provide any portion of the Satellite or
Satellite service. For the purpose of Article 14 of this Agreement, Interested
Party(ies) in the Satellite shall be deemed Customer's Associates.
Interested Party(ies) in the satellite of the Third Party Customer(s) of
ARIANESPACE means any individual or legal entity that has commissioned the Third
Party Customer(s) of ARIANESPACE to proceed with the Launch or has any interest
including without limitation legal interest in this satellite to be so launched,
including without limitation, insurers, any person or entity to whom Third Party
Customer(s) of ARIANESPACE has sold or leased, directly or indirectly, or
otherwise agreed to provide any portion of the satellite or satellite services.
For the purpose of Article 14 of this Agreement, Interested Party(ies) in the
satellite of the Third Party Customer(s) of ARIANESPACE shall be deemed Third
Party Customer(s) of ARIANESPACE's Associates.
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L means the first day of the most recently agreed Launch Period or Launch Slot
(except for construing Articles 10 and 13.2.2 of this Agreement where, subject
to Paragraph 11.4. of this Agreement, L refers to the first day of the initial
Launch Period). Notwithstanding the foregoing, in the case of Optional Launch #1
and Optional Launch #2, for the purpose of the application of Article 10 to the
initial Launch Period, L shall mean the first day of the three month Launch
Period defined pursuant to Paragraph 6.2 for all payments due further to such
narrowing of the initial Launch Period.
Launch or Launching means the ignition of the 1st stage engine(s) (Viking
engines on Ariane 4 - Vulcain engine on Ariane 5) of the Launch Vehicle that has
been integrated with the Satellite supplied by Customer and with other
satellite(s) supplied by (a) Third Party Customer(s) of ARIANESPACE, if said
ignition is followed by (i) opening of the table clamps with consequent release
of the said Launch Vehicle for an Ariane 4 Launch Vehicle; or (ii) the order of
ignition of solid propellant booster(s) for an Ariane 5 Launch Vehicle.
Launch Abort means the launch operations of the Launch Vehicle that has been
integrated with the Satellite supplied by Customer and with other satellite(s)
supplied by (a) Third Party Customer(s) of ARIANESPACE up to the ignition of
first stage engine(s) of the Launch Vehicle (Viking engines on Ariane 4 -
Vulcain engine on Ariane 5) without the Launch occurring.
Launch Base means the ARIANE launch base in Kourou, French Guiana, including all
its facilities and equipment.
Launch Day or Day means a calendar day (established for the Launch pursuant to
this Agreement) within the Launch Slot during which the Launch Window is open.
Launch Failure means that:
a) the Satellite is destroyd or lost during the period extending from the
instant when the Launch occurred and the instant when the Satellite is
separated from the Launch Vehicle, or if such Satellite cannot be separated
from the Launch Vehicle; or
b) the occurrence, due to Deviation of a reduction, expressed in percentage,
of more than LFF of the operational capability of the Satellite for
Customer's intended communication purposes, using reasonable business
judgment.
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LFF (Launch Failure Factor) means FIFTY PERCENT (50%), unless Customer procures
on the Commercial Insurance Market a policy of launch insurance applying the
Loss Quantum for the relevant Satellite, in which case LFF shall mean the
percentage specified in that insurance policy to define a constructive total
loss providing for the payment of the full amount of insurance. Said reduction
of the operational capability shall be determined by using the Loss Quantum.
Launch Opportunity means the availability to Customer of a Satellite position
within a Launch Period or Launch Slot for a Launch on a Launch Vehicle on which
the other allocated satellite(s) have a launch mission and a satellite mission
compatible with that of Customer(s)' Satellite(s) in accordance with Annex 1 to
this Agreement. This availability is linked to the time required to complete the
mission analysis studies and to select the Launch Vehicle/Satellite
configuration.
Launch Period or Period means a period of (3) three consecutive calendar months,
except in the case of Optional Launch #1 and Optional Launch #2, for which the
initial Launch Periods shall extend over a six month period.
Launch Possibility means a position for Customer's Satellite, made available by
ARIANESPACE (if necessary) postponing the launch of another satellite, on the
next scheduled launch within a Launch Period or Launch Slot, whose other
allocated satellite(s) have a launch mission, launch window, frequency, mass,
volume and satellite mission compatible with those of Customer's Satellite in
accordance with Annex 1. The availability of such a position is conditioned upon
there being sufficient time after the date of any request for postponement of
the Launch to have the mission analysis and the adaptation of the Launch/payload
interfaces carried out.
Launch Rank means the chronological position of the Satellite in order of the
satellites to be launched by ARIANESPACE fixed by reference to the Launch Period
or Launch Slot allocated to Customer's Satellite (as the same may from time to
time be postponed) pursuant to the Agreement and by reference to the Launch
Period or Launch Slot allocated to the satellites of other clients of
ARIANESPACE (as the same may from time to time be postponed) pursuant to the
agreements between ARIANESPACE and other clients.
Launch Services means the services to be provided by ARIANESPACE as defined in
(i) Paragraphs 1 and 4 of Annex 2 to this Agreement and (ii) Paragraph 4.5.
hereof. or if the Relaunch Credit Option or the Cash Option is exercised and
maintained (iii) Paragraph 4.6. hereof.
Launch Services Price means the price indicated under Paragraph 8.1.1. for the
relevant Launch including the discounts or escalators, if any.
Launch Slot or Slot means a period of one calendar month within a Launch Period
with daily Launch Window possibilities.
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Launch System means the launch assembly complex consisting of the ARIANE Launch
Vehicle, the Launch Base (ELA), and the Payload Preparation Assembly (EPCU).
Launch Time means the instant, within the Launch Window, that the ignition of
the first stage engines is scheduled to take place, defined in hours, minutes
and seconds (GMT Universal Time). The initial Launch Time occurs at the first
second of the opening of the Launch Window.
Launch Vehicle means the vehicle belonging to the ARIANE family chosen by
ARIANESPACE to perform the Launch.
Launch Vehicle Mission or Launch Mission means the mission assigned to the
ARIANE Launch Vehicle as defined in Annex 1 to this Agreement.
Launch Window means a time period as defined in Annex 1 to this Agreement.
Loss Quantum means the degradation factor of the Satellite resulting from the
application of determination mode as mutually agreed in good faith by the
Parties on or prior to L minus (-) THREE (3) months based on a Customer's
written proposal; provided, that, if Customer has taken out, either in insurance
or in reinsurance, on the Commercial Insurance Market for at least EIGHTY PER
CENT (80%) of the amount insured, one or more policy(ies) of launch insurance,
the determination mode of the loss quantum provided for in the insurance policy
with the higher cover, as delivered by Customer to ARIANESPACE on or prior to L
(-) minus THREE (3) months, shall apply. If a different determination mode is
further agreed with the Commercial Insurance Market, for that policy with higher
cover, this new determination mode shall consequently apply; it being understood
that Customer shall promptly inform ARIANESPACE, and in any event before the
Launch has occurred of any change.
Optional Launch means a Launch ordered by Customer as the result of the exercise
of a Launch Option.
Partial Failure means the occurrence due to a Deviation of a reduction of more
than a percentage defined as PFF but not more than LFF of the operational
capability of the Satellite for Customer's intended communication purposes,
using reasonable business judgment.
12
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PFF (Partial Failure Factor) means TWENTY PERCENT (20%), unless Customer
procures on the Commercial Insurance Market a policy of launch insurance
applying the Loss Quantum for the relevant Satellite in which case PFF shall
mean the percentage specified in that insurance policy to define the deductible
applicable for a partial loss. Said reduction of the operational capability
shall be determined by using the Loss Quantum.
Party or Parties means Customer or ARIANESPACE or both according to the context.
Payload Preparation Complex (Ensemble de Preparation Charges Utiles "EPCU")
means the complex composed of various facilities and equipment located in
Kourou, French Guiana, that is to be used by Customer for the preparation of the
Satellite for Launch.
[*******************************************************************************
**********]
Postlaunch Services means (i) the reports and range services as defined in
Paragraphs 1, 2, 3, and 4 of Annex 2 to this Agreement that are to be provided
to Customer by ARIANESPACE after the Launch and (ii) the services provided for
in Paragraph 4.5. hereof or if the Relaunch Credit Option or the Cash Option is
exercised and maintained (iii) Paragraph 4.6. hereof.
Property means the property that ARIANESPACE, and/or Customer, and/or their
respective Associates, and/or Third Party Customer(s) of ARIANESPACE, and/or
its(their) Associates, according to the context in which this term is used
hereunder, use(s) in connection with the performance of this Agreement or/and
any other agreements which may directly or indirectly have any effect on the
fulfillment of the obligations undertaken by the Parties including without
limitation, agreements entered into between ARIANESPACE and the Third Party
Customer(s) of ARIANESPACE. This Property shall also include the Property of
ARIANESPACE and the Property of Customer.
Property of ARIANESPACE means, for purposes of this Agreement, all tangible
property which ARIANESPACE shall use in connection with the Launch, or shall
place at Customer's disposal for this purpose, including without limitation the
Launch Vehicle and the Launch Base.
Property of Customer means, for purposes of this Agreement, all property which
Customer shall use for the Launch and the interface test(s), including in
particular, but without limitation, the Satellite and its Ancillary Equipment.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
13
<PAGE>
Reflight means, only in the case when the previous Launch has been performed on
an Ariane 5 Launch Vehicle, a Replacement Launch under Paragraph 4.5. of Article
4 of this Agreement.
Relaunch Credit Option means, only in the event of an Ariane 4 Launch Vehicle is
designated to perform the Launch Services, the option provided to Customer for
(i) a credit on the price of a Replacement Launch if the Launch Mission results
in a Launch Failure, or (ii) a payment if the Launch Mission results in a
Partial Failure, as determined under Sub-paragraph 4.6.1 of Article 4 to this
Agreement subject to the conditions specified therein.
Replacement Launch means a Launch which, subject to the best efforts of
ARIANESPACE, follows a previous Launch when, for any reason whatsoever, the
Launch Vehicle Mission or the Satellite Mission of the previous launch has not
been accomplished.
Satellite (Spacecraft in Annexes 1, 2, and 3) means a space vehicle supplied by
Customer that is compatible with the Launch Vehicle and the Launch Vehicle
Mission, and meets the specifications set forth in Annex 1 to this Agreement.
Satellite Mission means the mission assigned to the Satellite by Customer after
separation from the ARIANE Launch Vehicle.
Services means any and all services to be provided by ARIANESPACE under this
Agreement.
Shared Launch means a Launch with more than two satellites, including the
Satellite supplied by Customer.
Third Party means any individual or legal entity other than the Associates, a
Third Party Customer(s) of ARIANESPACE, the Interested Party(ies) or the
Parties.
Third Party Customer(s) of ARIANESPACE means other Customer(s) of ARIANESPACE
that use(s) ARIANESPACE's launch services for the same Launch.
14
<PAGE>
ARTICLE 2 SUBJECT OF THE AGREEMENT
2.1. The subject of this Agreement is the Launch of up to four Satellites
supplied by Customer at the Launch Base for the purpose of accomplishing
the Launch Mission in accordance with the terms and conditions of this
Agreement.
2.2. Any Replacement Launch other than a Reflight shall form the subject of a
separate Launch Services agreement drawn up in accordance with the
provisions of Article 13 of this Agreement.
2.3. The Parties agree to negotiate in good faith, if needed, additional
Launches to be covered under this Agreement to meet Customer's needs in
excess of the Launches covered under this Agreement.
15
<PAGE>
ARTICLE 3 CONTRACTUAL DOCUMENTS
3.1. This Agreement consists of the following documents which are contractually
binding between the Parties :
1. Terms and Conditions
2. Launch Specifications
3. ARIANESPACE Technical Commitments
4. Customer's Technical Commitments
5. ESA-ARIANESPACE Convention (Extract) (Annex 4)
3.2. Terms and Conditions shall prevail over the Annexes. There is no order of
precedence among the Annexes.
16
<PAGE>
ARTICLE 4 ARIANESPACE'S SERVICES
4.1. ARIANESPACE undertakes to use its best efforts to perform the Services
specified in this Agreement.
4.2. ARIANESPACE's commitments under this Agreement cover :
4.2.1. Launch Services, ARIANESPACE shall notify Customer in writing as to
the type of Launch Vehicle (i.e. Ariane 4 or Ariane 5) chosen for
the Launch on or prior to L- 4 months.
4.2.2. Associated Service(s) ordered by the Customer as set forth in the
present Agreement and as defined in Annex 2, Paragraph 2, under the
heading "General Range Support Provided by ARIANESPACE and
Additional Options Ordered by the Customer" in accordance with the
conditions as specified therein.
4.2.3. Subject to additional order(s) of the Customer, one or more
Service(s) as set forth in (i) Paragraph 3 of Annex 2 to this
Agreement, under the heading "Additional Options Available to the
Customer"; and/or (ii) the latest issue of the User's Manual
(M.U.A.) as at the date of such additional order(s) of the Customer,
in accordance with the then applicable conditions, as well as any
other service(s) requested by Customer provided that such order for
the said other services is accepted by ARIANESPACE.
4.3. Launch Services for each Launch, to the exception of Postlaunch Services,
shall be deemed to be accomplished by ARIANESPACE once the Launch has taken
place, ARIANESPACE having no control of the Launch Vehicle after the
Launch. In the event that, for any reason whatsoever, a Launch Abort
occurs, ARIANESPACE shall postpone the Launch in accordance with the
conditions set forth in Article 11 of this Agreement.
17
<PAGE>
4.4. ARIANESPACE hereby grants to Customer the following option rights:
Customer shall have the right to exercise a Launch Option for Optional
Launch #1 and Optional Launch #2 respectively no later than eighteen (18)
months prior to the initial Launch Period of the Optional Launch concerned.
In the absence of exercise of such Launch Option at L-18 months, the
nominal Launch Period shall be postponed for period(s) of six months until
exercise, provided that the Launch Options may not be exercised later than
the following dates:
i) for Optional Launch #1: 30 June 1999
ii) for Optional Launch #2: 31 December 1999
18
<PAGE>
Upon exercise of a Launch Option, unless otherwise agreed by the Parties at
that time, the then current nominal Launch Period for the Launch for which
the option is exercised shall be deemed to be the `initial Launch Period'.
If the Parties so agree, an initial Launch Period may begin earlier or
later than the nominal Launch Period. Any Launch Option under this
Paragraph 4.4. may not be exercised by Customer later than the dates set
forth hereabove. Upon exercise of the corresponding Launch Option, Customer
shall inform ARIANESPACE of the baseline mass selected between i) 3450 kg
and ii) 4500 kg (all masses without adaptor).
Further Optional Launches may be added to the Launches covered under this
Agreement as set forth under Paragraph 2.3.
4.5. Should the Launch be performed on an Ariane 5 Launch Vehicle and the Launch
Mission result in a:
4.5.1. Launch Failure, ARIANESPACE shall perform a Reflight in accordance
with the provisions of this Agreement, provided that no further
payment by Customer to ARIANESPACE shall be due for the provision
of: (i) Launch Services for the Launch of a replacement Satellite on
condition that the maximum mass of such Satellite is equal to the
mass of the initial Satellite, and (ii) such Associated Services as
are retained by Customer as of the date of execution of this
Agreement, except as provided for in Paragraph 8.1.4. of Article 8
of this Agreement, in case of postponement.
Customer may order additional mass and/or Associated Services for
additional cost under the conditions specified under Article 13
hereof for a Replacement Launch.
4.5.2. Partial Failure, ARIANESPACE shall pay to Customer an amount as
determined by multiplying the Guarantee Amount by the Loss Quantum.
The resulting amount will be subject to a deductible equal to PFF of
the Guarantee Amount provided for the Launch, in accordance with the
following formula:
(Guarantee Amount x Loss Quantum) minus deductible.
19
<PAGE>
Notwithstanding the foregoing, if the insurance policy taken out by
Customer (i) provides for a deductible higher or lower than PFF, such
deductible as provided for in the said insurance policy shall apply, or
(ii) does not provide for a deductible, no deductible shall apply.
4.6 Customer shall have the right to exercise the Relaunch Credit Option or the
Cash Option within thirty (30) days following receipt of the written notice
from ARIANESPACE stating that the Launch Vehicle selected for the Launch is
an Ariane 4. Customer written notice shall specify which option is
exercised and which Elected Amount is elected.
4.6.1. Should the Relaunch Credit option be exercised and maintained
ARIANESPACE shall, if the Ariane 4 Launch result in a:
(i) Launch Failure, credit to Customer an amount equal to the Elected
Amount to be applied as partial payment of the Launch Services
Price for the Replacement Launch, or
(ii) Partial Failure, pay to Customer an amount as determined pursuant
to Subparagraph 4.5.2. above except that the Guarantee Amount
shall be replaced by the Elected Amount.
4.6.2. Should the Cash Option be exercised and maintained, ARIANESPACE
shall, if the Ariane 4 Launch results in a:
(i) Launch Failure, pay to Customer an amount equal to the Elected
Amount, or
(ii) Partial Failure, pay to Customer an amount as determined pursuant
to Subparagraph 4.5.2. above except that the Guarantee Amount
shall be replaced by the Elected Amount
20
<PAGE>
4.7. There shall not be any cover for Launch Failure or Partial Failure and
consequently the provisions of Paragraphs 4.5. and 4.6. of Article 4 hereof
shall not apply, in any of the following cases:
4.7.1. If Customer does not notify in writing ARIANESPACE of any event that
would entitle Customer to any right under Paragraphs 4.5 and 4.6. of
Article 4 of this Agreement before the first to occur of any of the
THREE (3) following events;
(i) the day the Satellite is put into commercial operation,
(ii) the SIXTIETH (60th) day following the date of station
acquisition of the Satellite,
(iii) the NINETIETH (90th) day at zero hour following the date of
the Launch.
Notwithstanding the foregoing, an extension of the periods hereabove
might be obtained upon request from Customer if both of the
following conditions occur:
(a) the launching does not conform to the specifications of the
D.C.I. and the Satellite reached its final positioning such
that it cannot be determined that a Launch Failure or
Partial Failure has occurred and;
(b) Customer's request for extension is received before the
first of the THREE (3) events specified above.
In no event shall such extension extend beyond the ONE HUNDRED AND
EIGHTIETH (180th) day following the date of the Launch.
and/or
21
<PAGE>
4.7.2. If the Launch Failure or the Partial Failure is caused by, or
results from one or more of the following events A - War, hostile or
warlike action in time of peace or war, including action in
hindering, combating or defending against an actual, impending or
expected attack by (a) any government or sovereign power (de jure or
de facto), or (b) any authority maintaining or using a military,
naval or air force, or (c) a military, naval or air force, or (d)
any agent of any such government, power, authority or force; B - any
anti-satellite device, or device employing atomic or nuclear fission
and/or fusion, or device employing laser or directed energy beams; C
- insurrection, strikes, riots, civil commotion, rebellion,
revolution, civil war, usurpation or action taken by a government
authority in hindering, combating or defending against such an
occurrence whether there be a declaration of war or not; D
confiscation by order of any government or governmental authority or
agent (whether secret or otherwise), or public authority; E nuclear
reaction, nuclear radiation, or radioactive contamination of any
nature, whether such loss or damage be direct or indirect, except
for radiation naturally occurring in the space environment; F -
willful or intentional acts of Customer designed to cause loss or
failure of the Satellite; G - electromagnetic or radio frequency
interference, except for physical damage to the Satellite resulting
from such interference and except for interference naturally
occurring in the space environment.
22
<PAGE>
ARTICLE 5 CUSTOMER TECHNICAL COMMITMENTS
5.1. Customer undertakes to fulfill the Technical Commitments set forth in
Annexes 1 and 3 to this Agreement, and in particular to provide the
Satellites at the Launch Base within time limits that are consistent with
the Launch schedule set forth in this Agreement.
5.2. Customer shall notify ARIANESPACE on a timely basis of any event likely to
impact on the Launch schedule of the Satellite to be Launched under this
Agreement or that may result in a termination of the Launch under this
Agreement.
5.3. At L-18 months of each Launch, Customer undertakes to inform ARIANESPACE of
the applicable technical specifications for the relevant Satellite and the
intended use of such Satellite. Subject to applicable technical
constraints, the choice of which Satellite to be Launched may be changed by
Customer, but the initial selection shall remain valid for the application
of Paragraph 18.3 of Article 18 of this Agreement.
23
<PAGE>
ARTICLE 6 LAUNCH SCHEDULE
6.1. The Launch of the Satellite(s) shall take place during the following Launch
Period(s) :
A) Firm Launch #1:
The initial Launch Period was 1 July 1997 up to and including 30
September 1997.
By mutual agreement, the Parties have agreed to redefine the Launch
Period as extending from September 1st, 1998 up to and including
October 31st, 1998 ("Redifined Launch Period").
B) Firm Launch #2:
15 May 1999 up to and including 15 August 1999.
C) Optional Launch #1:
The nominal Launch Period shall be:1 January 2000 up to and including
30 June 2000.
D) Optional Launch #2:
The nominal Launch Period shall be:1 January 2001 up to and including
30 June 2001.
24
<PAGE>
In the case of Optional Launch #1 and Optional Launch #2, a three
month Launch Period within the six month Launch Period shall be
determined upon exercise of the corresponding Launch Option.
6.2. The Launch Slot within the Launch Period shall be determined by mutual
agreement of the Parties no later than twelve and a half (12 1/2) months
prior to the first day of the Launch Period, taking into account the
available Launch Opportunities and the Satellite Construction and delivery
schedule.
Notwithstanding the foregoing, the Launch Slot within the Redefined Launch
Period for the Firm Launch 1 shall be determined by mutual agreement of the
Parties no later than January 31st, 1998 taking into account the available
Launch Opportunities and the Satellite Construction and delivery schedule.
Customer may request no later than January 31st, 1998 an acceleration of
the Firm Launch 1 to August 1998 and ARIANESPACE will accept such
acceleration provided that there is a Launch Opportunity in August 1998.
6.3. The Launch Day within the Launch Slot shall be determined, no later than
four and a half (4 1/2) months prior to the first day of the Launch Slot,
by mutual agreement of the Parties, based on a proposal made by
ARIANESPACE.
6.4. The Launch Window set forth in Paragraph 1.6 of Annex 1 to this Agreement
shall be determined, no later than the Final Mission Analysis Review, by
mutual agreement of the Parties, based on a proposal made by ARIANESPACE.
6.5. In the event that, for any reason whatsoever, the Parties fail to agree
upon the Launch Slot within the Launch Period, the Launch Day, or the
Launch Window, ARIANESPACE shall determine said Launch Slot, Launch Day, or
Launch Window taking into account the available Launch Opportunities, and
the requirements and respective interests of Customer and of the Third
Party Customer(s) of ARIANESPACE provided that ARIANESPACE shall notify the
Customer of each applicable date not later than ten (10) days after the
last day specified for selection under paragraph 6.2. or 6.3 above as
applicable.
25
<PAGE>
ARTICLE 7 COORDINATION BETWEEN ARIANESPACE AND CUSTOMER
7.1. Customer and ARIANESPACE shall each designate a project coordinator
(Mission Manager) no later than two (2) months following the effective date
of this Agreement.
7.2. The task of the project coordinators shall be to supervise and to
coordinate the performance of the Services and of the respective Technical
Commitments of the Parties within the Launch schedule set forth in this
Agreement.
7.3. The project coordinators shall be endowed upon their appointment by each of
the Parties with sufficient powers to enable them to settle any technical
questions that may arise during the performance of this Agreement, as well
as any other questions arising from its day-to-day management.
7.4. Either Party may replace its project coordinator (Mission Manager) by
informing the other Party in writing of such action and indicating the
effective date of designation. Such notification shall be signed by an
official of the respective Party who is authorized to amend this Agreement,
and shall become part of this Agreement when received by the other Party.
26
<PAGE>
ARTICLE 8 REMUNERATION
8.1.
8.1.1. The remuneration of ARIANESPACE for the provision of Launch Services
and the Associated Services included in the Launch Services Price as
specified in Annex 2 to this Agreement for the Launch of a Satellite
of the individual masses specified hereafter (without adaptor) are
prices defined as follows:
A) For Firm Launch #1:
[*******************************************************************
********************] for a mass of 3450 kg.
B) For Firm Launch #2:
[*******************************************************************
********************] for a mass of 4500 kg.
C) For Optional Launch #1 and Optional Launch #2:
i) if Customer selects a baseline mass of 3450 kg.: [***************
*****************************************************]
The price under this Subparagraph C)i) is valid for a Launch to take
place prior to 1 April 1998 and for Launches beyond this date this
price shall be increased by application of the escalation formula
contained in Article 9 of this Agreement to the Launch Services
Price from 1 October 1996 up to and including the date that is L-18
months of the initial Launch Period as determined at the date of
exercise of the relevant Launch Option. Notwithstanding the
foregoing, the application of the escalation formula under this
subparagraph i) shall be capped to an increase of the price of [*]
per the number of quarters or portion thereof over the period
considered. OR
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
27
<PAGE>
ii) if Customer selects a baseline mass of 4500 kg.: [***************
*************************************************************], or
The price under this Subparagraph C)ii) is valid for a Launch to take
place prior to 1 April 1999, for Launches beyond this date, this price
shall be increased by application of the escalation formula contained
in Article 9 of this Agreement to the Launch Services Price from 1
October 1997 up to and including the date that is L-18 months of the
initial Launch Period as determined at the date of exercise of the
relevant Launch Option. Notwithstanding the foregoing, the application
of the escalation formula under this subparagraph ii) shall be capped
to an increase of the price of [*] per the number of quarters or
portion thereof over the period considered.
D) The Launch Services Prices stated under Paragraphs A), B), and C)
under Subparagraph 13.2.2. hereafter above shall be subject to a price
reduction as follows:
i) For Firm Launch #1:
[*********************************************************************
********************]
ii) For Firm Launch #2:
[*******************************************************************
********************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
28
<PAGE>
iii) For Optional Launch #1:
a) if the Launch Option is exercised on or prior to 1 July 1998:
[*] of the Launch Services Price under Subparagraph 8.1.1.C) i) or ii)
(as increased for the initial Launch Period of Optional Launch #1), as
applicable, or
b) if the Launch Option is exercised after 1 July 1998:
[*] of the Launch Services Price under Subparagraph 8.1.1.C) i) or ii)
(as increased for the initial Launch Period of Optional Launch #1), as
applicable.
iv) For Optional Launch #2:
a) if Optional Launch #1 has been exercised or a Replacement Lauch has
been ordered on or prior to 1 July 1998, at the date of exercise of
Optional Launch #2 and provided Optional Launch is exercised on or
prior to 1 July 1999:
the percentage applicable to Optional Launch #1 under Subparagraph
iii) above or, if applicable to the Replacement Launch, plus [*] times
the Launch Services Price under Subparagraph 8.1.1.C) i) or ii) as
applicable (as increased for the initial Launch Period of Optional
Launch #2), or
b) in all other cases:
[*] of the Launch Services Price under Subparagraph 8.1.1.C) i) or ii)
(as applicable and as increased for the initial Launch Period of
Optional Launch #2).
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
29
<PAGE>
v) For Replacement Launches ordered under this Agreement:
Provided that the Replacement Launch is ordered no later than 31
December 2001, the percentage applicable to the last Launch ordered
under this Agreement (including Replacement Launches) plus [*] times
the applicable Launch Services Price under Article 13. Further, if a
Replacement Launch is ordered on or prior to 1 July 1998, any further
option(s) exercised hereunder shall be subject to a price reduction
determined under Subparagraph 8.1.1.D)iv) above.
The price reduction as calculated under this Sub-paragraph 8.1.1.D)
shall be deducted from the payment due at L-9 months and, if the price
reduction exceeds this payment, the excess price reduction shall be
deducted equally from the payments at L-8 months and at L-10 months
under Paragraph 10.1.1. A), B) or C) as applicable. Furthermore,
notwithstanding the foregoing, in the event a Launch ordered under
this Agreement is terminated, the Price Reduction of the other
Launches ordered shall be recalculated to take into account such
termination. Notwithstanding the foregoing, the price reduction under
this Sub-paragraph 8.1.1.D) may not in any case exceed [*] of the
relevant Launch Services Price under Paragraph 10.1.1A), B) or C) for
any Launches under this Agreement
8.1.2 The applicable amount mentioned in the above Sub-paragraph 8.1.1.
shall be increased in a firm fixed amount as follows:
A) For all Launches under this Agreement not covered under
Subparagraph 8.1.2.B):
(i) The amount in European Currency Units obtained by multiplying the
Elected Amount by [*******************************], if Customer
exercises the Relaunch Credit Option, or
(ii) The amount in European Currency Units obtained by multiplying the
Elected Amount by [****************], if Customer exercises the
Cash Option
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
30
<PAGE>
B) For Launches (i) whose initial Launch Period is beyond 1
January 2000, or (ii) Launches postponed by Customer beyond 1
January 2000 under Paragraph 11.2.1. unless an option under this
Subparagraph 8.1.2. was already exercised and the postponement
does not postpone the Launch Period beyond 1 April 2000 and,
ARIANESPACE shall use its best efforts to offer to Customer a
Launch Risk Guarantee or similar coverage comparable to the
Relaunch Credit option or the Cash Option under this Agreement.
Such coverage shall be offered at the then applicable conditions.
Should eventually the Ariane 5 Launch Vehicle be selected by
ARIANESPACE to perform the Launch or should the Launch Period
fall beyond the period of coverage provided in Subparagraph B)
above, ARIANESPACE shall refund such amount within THIRTY (30)
days of receipt by Customer of the corresponding written notice
from ARIANESPACE with consequent cancellation of the option
exercised.
8.1.3. A) For Firm Launch #1 and for Optional Launches #1 and #2 if
Customer has selected a mass of 3450 kg:
Up to L-12 months of the Launch, Customer may increase or
decrease the Satellite mass referred to under Paragraph 8.1.1. by
up to one hundred fifty kilograms (150 kg.). Customer undertakes
to inform ARIANESPACE as soon as possible of any Satellite mass
increase or decrease from the Satellite mass stated in Paragraph
8.1.1. hereabove.
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<PAGE>
Any increase or decrease in mass, as provided for in this
Paragraph A) above shall be subject to a price variation in the
remuneration stated above in Subparagraph 8.1.1., up or down
depending on whether it is an increase or decrease or mass, as
follows:
i) from 0 kilogram to 50 kilograms: [**************]
ii) from 51 kilograms to 150 kilograms: [*************
*********]
iii) Notwithstanding subparagraphs i) and ii), if the Launch
is performed by way of a dedicated Ariane 4 Launch
Vehicle, ARIANESPACE shall notify Customer at L-3
months of any available extra mass on the Launch
Vehicle concerned in excess of the contractual mass
defined under the terms of this Article 8 at such time.
Customer shall then have the right within ten days of
such notification to increase the Satellite mass by
such available extra mass [**************************]
Failing response during such period, Customer shall be
deemed to have refused this additional mass.
iv) Notwithstanding subparagraphs i) and ii), if the Launch
is performed by way of an Ariane 5 Launch Vehicle or a
Shared Ariane 4 Launch Vehicle, ARIANESPACE shall
notify Customer at L-3 months of any available extra
mass on the Launch Vehicle concerned. Such available
extra mass shall be shared with the Third Party
Customer(s) of ARIANESPACE on a pro rata basis of the
of the respective masses of the Satellite and the
satellite(s) of the Third Party Customer(s) of
ARIANESPACE. Customer shall then have the right within
ten days of such notification to increase the Satellite
mass by such available extra mass for the Satellite
[**************************]. Failing response during
such period, Customer shall be deemed to have refused
this additional mass.
The above prices are firm and fixed prices and apply for each
additional kilogram or fraction of a kilogram the Satellite mass
is increased or decreased.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
32
<PAGE>
B) For Firm Launch #2, and for Optional Launches #1 and #2 only if Customer has
selected a mass of 4500 kg for the relevant Launch:
Up to L-12 months of the Launch, Customer may increase or decrease the
Satellite mass referred to under Paragraph 8.1.1. by up to two hundred
kilograms (200 kg.). Customer undertakes to inform ARIANESPACE as soon
as possible of any Satellite mass increase or decrease from the
Satellite mass stated in Paragraph 8.1.1. hereabove.
Any increase in mass, as provided for in this Paragraph B) shall be
subject to a price increase in the remuneration stated above in
Subparagraph 8.1.1., as follows:
i) from 0 kilogram to 50 kilograms: [*****************]
ii) from 51 kilograms to 200 kilograms: [********************]
iii) Notwithstanding subparagraphs i) and ii), if the Launch is
performed by way of a dedicated Ariane 4 Launch Vehicle,
ARIANESPACE shall notify Customer at L-3 months of any available
extra mass on the Launch Vehicle concerned in excess of the
contractual mass defined under the terms of this Article 8 at
such time. Customer shall then have the right within ten days of
such notification to increase the Satellite mass by such
available extra mass [************************]. Failing response
during such period, Customer shall be deemed to have refused this
additional mass.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
33
<PAGE>
iv) Notwithstanding subparagraphs i) and ii), if the Launch is
performed by way of an Ariane 5 Launch Vehicle or a Shared Ariane
4 Launch Vehicle, ARIANESPACE shall notify Customer at L-3 months
of any available extra mass on the Launch Vehicle concerned. Such
available extra mass shall be shared with the Third Party
Customer(s) of ARIANESPACE on a pro rata basis of the of the
respective masses of the Satellite and the satellite(s) of the
Third Party Customer(s) of ARIANESPACE. Customer shall then have
the right within ten days of such notification to increase the
Satellite mass by such available extra mass for the Satellite
[************************]. Failing response during such period,
Customer shall be deemed to have refused this additional mass.
Any decrease in mass, as provided for in this Paragraph B) shall be
subject to a price decrease in the remuneration stated above in
Subparagraph 8.1.1. as follows:
i) from 0 kilogram to 50 kilograms: [*******************]
ii) from 51 kilograms to 200 kilograms:
a) [********************] if the Launch is performed by way of an
Ariane 5 Launch Vehicle or if the Launch is performed by way of a
dedicated Ariane 44 LP Launch Vehicle, or
b) [****************] if the Launch is performed by way of a
dedicated 44L Launch Vehicle.
The above prices are firm and fixed prices and apply for each
additional kilogram or fraction of a kilogram the Satellite mass is
increased or decreased and will be paid or credited in the manner set
forth under Paragraph 10.1.3.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
34
<PAGE>
8.1.4. For the provision of Associated Services not included in the
Launch Services Price and ordered by Customer after the date
of execution of this Agreement and Associated Services which
will have to be reperformed due to a postponement requested by
Customer, the Catalogue price for the applicable year of the
relevant Launch will be applied (Firm Fixed prices).
8.2. In consideration of the options offered to Customer under this
Agreement, Customer has paid to ARIANESPACE a one time Option Fee
of [***********************************] at the date of execution
of this Agreement. The Option Credit(s) under Paragraph 10.1.1.B)
(if any) credited from this Option Fee will be considered as part
of the Launch Services Price that has been paid for the Launch
considered.
8.3. Prices, expenses, and charges mentioned in the present Agreement
are free of any and all French taxes and other duties. Customer
will not be charged for any taxes or duties.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
35
<PAGE>
ARTICLE 9 PRICE ESCALATION FORMULA
9.1. The amount of
A) any Launch Services Price subject to escalation under Paragraph
8.1.1.C)i) and ii), and
B) each payment subject to escalation under Paragraph 13.2.2. or
will be escalated according to the following escalation formulae :
Index
PA = PAo --------
(Index)o
WHERE:
A) For the purpose of Paragraph 8.1.1.C)i) and ii)
PA is the escalated launch services price under Paragraph
10.1.1C)ii) in US Dollars.
PA is [**********************************************]
Index is the US Department of Labor, Bureau of Labor Statistics index
for the "Private Business Sector, All Persons, Productivity,
Hourly Compensation, Unit Labor Costs and Price Seasonally
adjusted, Table 1" a) 1 October 1996 value for the application of
Paragraph 8.1.1.C)i) and b) 1 October 1997 value for the
application of Paragraph 8.1.1.C)ii).
Index is the same index as defined above with official value valid for
the month corresponding to L-18 months of the Optional Launch as
determined at the date of exercise of the relevant Launch Option.
This index being published on a quarterly basis, its value is defined as
follows :
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
36
<PAGE>
(i) The index corresponding to the first month of a quarter is the index
published for the previous quarter.
Example : January 85 index is the one issued for the last quarter of
84 (IV-84).
(ii) The index corresponding to the second or the third month of a quarter
is calculated by linear interpolation.
Example : February 85 index is equal to January 85 index (IV-84) plus
one third of (April 85 index (I-85) minus January 85 (IV-84) index).
B) For the purpose of Paragraph 13.2.2.:
PA is the escalated payment amount in US Dollars.
PA is the unescalated payment amount in US Dollars.
Index is the US Department of Labor, Bureau of Labor Statistics index for
the "Private Business Sector, All Persons, Productivity, Hourly
Compensation, Unit Labor Costs and Price Seasonally adjusted, Table
1" November 1995 value.
Index is the same index as defined above with official value valid for the
month corresponding to the month in which the payment is due.
This index being published on a quarterly basis, its value is defined as
follows :
(i) The index corresponding to the first month of a quarter is the index
published for the previous quarter.
Example : January 85 index is the one issued for the last quarter of
84 (IV-84).
37
<PAGE>
(ii) The index corresponding to the second or the third month of a quarter
is calculated by linear interpolation.
Example : February 85 index is equal to January 85 index (IV-84) plus
one third of (April 85 index (I-85) minus January 85 (IV-84) index).
9.2. Should one or several indices used in the escalation formula cease to be
issued by the relevant Authority(ies), the index (indices) intended for
substitution will be proposed by ARIANESPACE for agreement by Customer,
unless the index (indices) is (are) imposed or recommended by the
Authority(ies), in which case the imposed or recommended index (indices)
shall apply.
38
<PAGE>
Article 10 Payment SCHEDULE
10.1. Payment of the remunerations under Paragraph 8.1. of Article 8 of this
Agreement shall be made in accordance with the following payment schedules
:
10.1.1.
For the price referred to under the relevant Subparagraph of Paragraph
8.1.1.:
A) For the Firm Launch #1
- --------------------------- --------------------------------------------------
DATE Percentage of the portion of the Launch Services
Price referred to in Subparagraph 8.1.1.A) of
Article 8 of this Agreement
- --------------------------- --------------------------------------------------
[***********] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
39
<PAGE>
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
[****] [************]
- --------------------------- --------------------------------------------------
Where
* Pr means the price reduction calculated under Subparagraph 8.1.1.D).The
Parties agree that, at the date hereof, this price reduction for the Launch
Services Price under Paragraph 8.1.1.A), equals [****************]
[*************************]
[*********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
*******************************************************************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
40
<PAGE>
B) For the Firm Launch #2
- --------------------------- --------------------------------------------------
DATE Percentage of the portion of the Launch
Services Price referred to in Subparagraph
8.1.1.B) of Article 8 of this Agreement
- --------------------------- --------------------------------------------------
[***********] [******************************
*****************************]
- --------------------------- --------------------------------------------------
[****************] [*******************
********************************]
- --------------------------- --------------------------------------------------
[************************] [************************]
************]
- --------------------------- --------------------------------------------------
[**********] [**********]
- --------------------------- --------------------------------------------------
[**********] [**********]
- --------------------------- --------------------------------------------------
[**********] [**********]
- --------------------------- --------------------------------------------------
[**********] [**********]
- --------------------------- --------------------------------------------------
[**********] [**********]
- --------------------------- --------------------------------------------------
[**********] [**********]
- --------------------------- --------------------------------------------------
[**********] [**********]
- --------------------------- --------------------------------------------------
[**********] [**********]
- --------------------------- --------------------------------------------------
[**********] [**********]
- --------------------------- --------------------------------------------------
[**********] [**********]
- --------------------------- --------------------------------------------------
[**********] [**********]
- --------------------------- --------------------------------------------------
[**********] [**********]
- --------------------------- --------------------------------------------------
[**********] [**********]
- --------------------------- --------------------------------------------------
[**********] [**********]
- --------------------------- --------------------------------------------------
[**********] [**********]
- --------------------------- --------------------------------------------------
[**********] [**********]
- --------------------------- --------------------------------------------------
[**********] [**********]
- --------------------------- --------------------------------------------------
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
41
<PAGE>
Where
* Pr means the price reduction under Subparagraph 8.1.1.D).The Parties
agree that, at the date hereof, this price reduction for the Launch
Services Price under Paragraph 8.1.1.B), equals [**********]
C) For Optional Launches #1 and #2:
i) If Customer selects a baseline mass of 3450 kg, for the prices
referred to in Paragraph 8.1.1.C)i) :
- --------------------------- --------------------------------------------------
DATE Percentage of the portion of the relevant
Launch Services Price referred to in
Subparagraphs 8.1.1. C)i) of Article 8 of this
Agreement
- --------------------------- --------------------------------------------------
[**********] [***************************]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
42
<PAGE>
- --------------------------- --------------------------------------------------
[************] [*****]
- --------------------------- --------------------------------------------------
Where:
*the Option Credit means:
For Optional Launch #1: [*********]
For Optional Launch #2 : [*********]
** Pr means the applicable price reduction under Subparagraph 8.1.1.
D) If the Price Reduction concerned exceeds the value of this payment,
the excess Price Reduction shall be equally aportioned between the
payments due at L-10 months and L-8 months.
*** [***********************************************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
43
<PAGE>
ii) If Customer selects a baseline mass of 4500 kg, for the
prices referred to in Paragraph 8.1.1.C)ii) :
- --------------------------- --------------------------------------------------
DATE Percentage of the portion of the Launch Services
Price referred to in Subparagraph 8.1.1.C)ii)
of Article 8 of this Agreement
- --------------------------- --------------------------------------------------
[**********] [***************]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[**********] [*****]
- --------------------------- --------------------------------------------------
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
44
<PAGE>
Where
*the Option Credit means:
For Optional Launch #1: [**********]
For Optional Launch #2 : [**********]
** Pr means the price reduction calculated under Subparagraph 8.1.1.
D) If the Price Reduction concerned exceeds the value of this payment,
the excess Price Reduction shall be equally aportioned between the
payments due at L-10 months and L-8 months.
10.1.2. The price of the Relaunch Credit Option or the Cash Option shall be
paid in accordance with the following payment schedule:
- --------------------------- --------------------------------------------------
DATE Percentage of the price of the applicable option
referred to in Sub-paragraph 8.1.2. of Article 8
of this Agreement
- --------------------------- --------------------------------------------------
Date of exercise [***]
L minus 3 months [***]
- --------------------------- --------------------------------------------------
10.1.3. The price increase or decrease under Paragraph 8.1.2. for variation
of the Satellite mass shall be due or, in the event of a price
decrease, credited by ARIANESPACE at the date of the next payment
due under Paragraph 10.1.1. immediately following notification to
ARIANESPACE by Customer under Paragraph 8.1.2.A) or B). If no such
payment remains due under the relevant payment schedule, the price
increase or decrease, shall be due at the applicable date referred
to above under this Paragraph 10.1.2. and payable thirty days
thereafter, or, notwithstanding Paragraphs 10.3.1. and 10.3.2.
shall be payable five days before the Launch Day whichever is the
earlier.
10.1.4. The Option Fee under Subparagraph 8.2. has been paid at the date of
execution of this Agreement.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
45
<PAGE>
10.2. Payment for Associated Service(s)
Associated Services referred to in Paragraph 8.1.3. of this Agreement shall
be paid against ARIANESPACE invoice presented upon completion of the
corresponding service(s). Associated Services included in the Launch
Services Price which are not actually used by Customer are not subject to a
reimbursement by ARIANESPACE to Customer.
10.3. Terms and conditions of payment/ARIANESPACE's invoices
10.3.1. In all cases where this Agreement establishes a precise payment
date, payment shall be made on such date, or within thirty (30)
days of Customer's receipt of the corresponding ARIANESPACE
invoice, whichever is later, except for the first payment provided
for in Paragraph 10.1. of this Article and for the Option Fee under
Subparagraph 8.2. , for which invoice(s) will be presented and paid
upon execution of this Agreement.
10.3.2. In all cases where this Agreement does not establish a precise
payment date, payment shall be made on the date that payment
becomes due, or within thirty (30) days of Customer's receipt of
the corresponding ARIANESPACE invoice, whichever is later.
10.3.3. ARIANESPACE invoices may contain, if applicable, the provisional
application of the escalation formula set forth in Article 9 of
this Agreement, using the most recent indices available on the date
of said invoice.
10.3.4. A complementary ARIANESPACE invoice, showing the definitive
total(s) after application of the escalation formula set forth in
Article 9 of this Agreement, shall be prepared following
publication of the indices applicable on the due date for payment.
10.3.5. Any and all ARIANESPACE invoices shall be drawn up in two copies
(one original and one copy) and sent to :
46
<PAGE>
PanAmSat Corporation
One Pickwick Plaza
Greenwich, Connecticut 06830
USA
Attention: Comptroller
The method for calculating the amount of each such invoice shall
be shown clearly.
10.3.6. Payments shall be made, to the account(s) designated on the
relevant invoice, by telegraphic bank transfer, free of charge
for ARIANESPACE, with telex notice from the issuing bank to the
receiving bank. ARIANESPACE shall be responsible for telex
expenses. The notice shall clearly state the value date to be
applied and the bank through which the funds will be made
available to the receiving bank or its correspondent.
Payment shall be effective as of the date on which the amount of
the ARIANESPACE invoice is received by ARIANESPACE's bank.
10.3.7. Customer's payment(s) shall be in the amount(s) invoiced by
ARIANESPACE, and shall be made net, free and clear of any and all
taxes, duties, or withholdings that may be imposed in the Country
from which they are paid so that ARIANESPACE receives each such
payment in its entirety as if no such tax, duty, or withholding
had been made.
47
<PAGE>
10.4. Late Payment
10.4.1. In the event of late payment, Customer shall pay ARIANESPACE during
the delay interest equal to the average Base Rate increased by one
(1) point. The computation of interest for late payments shall be
based on a year of 360 days.
In the event that such late payment has not been cured by Customer
at latest fifteen (15) days after written notice to that effect by
ARIANESPACE, ARIANESPACE shall be entitled to suspend any and all
of its activities in preparation for the Launches during any such
period of non-payment and to reschedule the Launches under
Subparagraph 11.3.1. of Article 11 of this Agreement.
10.5. Waiver of Deferral, Withholding or Set-off
Customer irrevocably waives any right to defer, withhold or set-off by
counterclaims or otherwise all or any part of any payment under this
Agreement for any reason whatsoever. All payments due under this Agreement
shall be made in their entirety and on the dates set out under this
Agreement.
48
<PAGE>
ARTICLE 11 LAUNCH POSTPONEMENTS/ACCELERATION
11.1. Each postponement of the Launch Period, the Launch Slot, the Launch Day or
the Launch Time, for whatever reason, shall be governed by the following
conditions, and any right of the Parties which is not mentioned in this
Agreement shall be expressly excluded.
11.2. Postponements requested by Customer
11.2.1. Postponement of Launch Period or Launch Slot
11.2.1.1. Customer shall have the right for any reason whatsoever to
postpone either the Launch Period of the Launch or the
Launch Slot once determined, in which case it will propose
by notifying in writing to ARIANESPACE the new requested
Launch Period or, as the case may be, a new requested Launch
Slot.
11.2.1.2. Within two weeks of receipt of Customer's written request,
ARIANESPACE shall inform Customer whether a Launch
Opportunity exists within the Launch Period, or within the
Launch Slot requested, or will propose a new Launch Period
or Launch Slot. Customer shall have a thirty (30) day period
following receipt of ARIANESPACE's proposition to give its
written consent or to propose an alternative Launch Period
in which case the procedure stated in Paragraph 11.2.1.1.
hereabove shall apply.
11.2.1.3. Should for a Launch under this Agreement, the aggregate
duration of all postponements other than the duration of any
postponement under Paragraph 11.2.1.5. requested by Customer
under this Agreement exceed a total of twelve (12) months
(to the exclusion of postponements due to Force Majeure
Events up to a cumulative maximum of six months per Launch),
the Launch Services Price of the relevant Launch shall be
adjusted as if the Launch had been postponed under the
provisions of Paragraph 11.2.1.5..
49
<PAGE>
11.2.1.4. [***********************************************************
***********************************]
11.2.1.5 Notwithstanding the foregoing, Customer shall have the right
to postpone the nominal Launch Period of Optional Launches
#1 and #2 by written notice received by ARIANESPACE prior to
the exercise of a Launch Option and no later than L-18
months of the Optional Launch concerned. Postponement of an
Optional Launch under the conditions of this Paragraph shall
postpone the date of exercise of the Optional Launch
correlatively and shall cause an adjustment of the Launch
Services Price under the conditions of Paragraphs 8.1.1.C)
and the applicable payment schedule shall be suspended under
the conditions of Paragraph 11.4. provided that, in
accordance with Paragraph 4.4., in no event may Customer
exercise its right under this Paragraph 11.2.1.5. to
postpone a Launch beyond a six month Launch Period starting:
(2)i) for Optional Launch #1: 1 January 2001, and
ii) for Optional Launch #2: 1 July2001.
11.2.2. Postponement of the Launch Day and/or Launch Time within
Launch Slot
11.2.2.1. Customer shall have the right, upon written request, to
postpone the Launch Day within the Launch Slot, for any
reason whatsoever. The choice of a new Launch Day shall
be made by mutual agreement of the Parties taking into
account the technical needs and interests of Customer
and the Third Party Customer(s) of ARIANESPACE, the
time necessary for the revalidation of the Launch
System, and the meteorological forecasts.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
50
<PAGE>
11.2.2.2. Each such postponement shall be subject to the
following postponement fees to be paid by Customer:
Date Postponement fees per effective day of
of request Postponement for a
for Postponement Launch in 1997
[***************** [*****]
*****]
[***************] [**********]
[***************] [**********]
[***************] [**********]
[***************] [**********]
[***************] [**********]
[***************] [**********]
Where
D = Launch Day within the Launch Slot.
* = First and last day included
11.2.2.3. Postponement requests, received by ARIANESPACE, once the filling
of the cryogenic stage has been started or has already been
achieved, shall be subject to an additional payment of [**
***********************************************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
51
<PAGE>
11.2.2.4. The amounts set forth in Paragraphs 11.2.2.2. and 11.2.2.3. are
valid for a Launch to occur in calendar year 1997. For a Launch
taking place after calendar year 1997, these amounts will vary in
the same proportion as the price of Associated Services, such
increase being in any case limited to 10% per year. Said amounts
are due for payment as of the date of said postponement request.
11.2.2.5. Should postponement of the Launch Day finally lead to
postponement beyond the Launch Slot, Paragraph 11.2.1. of Article
11 of this Agreement, shall govern.
11.2.2.6. Postponements by Customer of the Launch Time within the Launch
Window may only be requested during the countdown period. If,
after Customer has requested such postponement, technical
reasons, including those linked with the Third Party Customer(s)
of ARIANESPACE, or meteorological reasons prevent ARIANESPACE
from performing the Launch in the Launch Window opening during
the Launch Day, this postponement shall be considered as a
postponement of the Launch Day, and Sub-paragraphs 11.2.2.2. and
11.2.2.3. of Article 11 of this Agreement, shall govern.
11.2.3. Notwithstanding the foregoing, no postponement fees shall be payable to
ARIANESPACE for postponements as a result of:
(i) an Event of Force Majeure up to a cumulative period of six (6)
months, and/or
(ii) any damage(s) to the Property of Customer and/or the property of its
Associates when caused by ARIANESPACE and/or Third Party Customer(s)
of ARIANESPACE and/or other customers of ARIANESPACE and/or their
Associates, and/or
52
<PAGE>
(iii) any damage(s) for bodily harm sustained by Customer and/or its
Associates when caused by ARIANESPACE and/or Third Party Customer(s)
of ARIANESPACE and/or other customers of ARIANESPACE and/or its or
their Associates.
11.2.4. The postponement by Customer of the Launch Day, Launch Window or
Launch Time shall not be subject to the payment of postponement
fees when it is due to ARIANESPACE's non-fulfillment of its
obligations. In this event, provided that ARIANESPACE has not cured
such non-fulfillment within ten days of a notice to that effect by
Customer and subject to such failure making the Launch impossible
within the Launch Period, Launch Slot or during Launch Window of
the Launch Day, or at the Launch Time, the terms of Paragraph 11.3.
of Article 11 of this Agreement shall govern.
Such postponement shall be deemed to have been requested by
ARIANESPACE at the date of Customer's request for a postponement of
the Launch.
11.2.5. In no event shall the aggregate liability of Customer which shall
be due to ARIANESPACE under this Paragraph 11.2. exceed for a
Launch under this Agreement [******************************
**********************]
11.3. Launch postponement requested by ARIANESPACE
11.3.1. ARIANESPACE shall have the right to postpone the Launch, for the
following reasons :
11.3.1.1. Postponement of Launch Period and of Launch Slot.
a) ARIANESPACE or its Associates encounter adverse
technical problems preventing the Launch from taking
place under satisfactory conditions of safety or
reliability.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
53
<PAGE>
b) ARIANESPACE cannot perform the Launch as a Double
Launch for any reason whatsoever.
c) ARIANESPACE is requested to perform replacement
launch(es), or to launch scientific satellite(s) whose
mission(s) may be degraded in the event of
postponement.
d) ARIANESPACE reschedules the launch(es) due to
postponement(s) by ARIANESPACE of satellite(s) having
an earlier Launch Period or Slot than Customer's
Satellite(s).
11.3.1.2. Postponement of Launch Day within the Launch Slot and/or Launch
Time within the Launch Window.
a) For any of the reasons listed in Subparagraph 11.3.1.1.
a) b) c) and d) above, and
b) If ARIANESPACE cannot perform the Launch as a Shared
Launch for any reason whatsoever.
11.3.2. The Parties shall determine by mutual agreement a new Launch
Period and/or a new Launch Slot as near as possible to the
postponed one in accordance with the following criteria :
- the availability of a Launch Possibility;
- Launch Rank of Customer's Satellite ;
- date of signature of this Agreement.
The Launch Day and the Launch Window within the new Launch Slot
shall be determined by ARIANESPACE according to the technical
constraints of ARIANESPACE, Customer and the Third Party
Customer(s) of ARIANESPACE, and their respective interests.
54
<PAGE>
In the event that ARIANESPACE shall be obliged to postpone the
launch of a satellite of another client of ARIANESPACE ("Third
Party Launch") in order to make available a Launch Possibility
for Customer's Satellite, then , in determining which satellite
to retain on such Third Party Launch, ARIANESPACE shall retain
the satellite which is compatible in size with Customer's
Satellite or, if two or more satellites on such Third Party
Launch are compatible in size and in class with Customer'
Satellite, ARIANESPACE shall apply the criteria numbered (1) to
(3) inclusive in, and in the order which is set out in
Sub-paragraph 11.3.2. of this Article 11.
11.3.3. The postponement by ARIANESPACE of the Launch Period, Launch Slot,
Launch Day, Launch Window, or Launch Time is not subject to the
payment of postponement fees by Customer, unless it is due to
Customer's non-fulfillment of its obligations under this Agreement.
In this event, provided that Customer has not cured such
non-fulfillment within ten days of a notice to that effect from
ARIANESPACE and subject to such failure making the Launch
impossible within the Launch Period, Launch Slot, or during Launch
Window of the Launch Day, or at the Launch Time :
- The terms of Sub-paragraph 11.2.1. of Article 11 of this
Agreement shall govern if ARIANESPACE decides to postpone
the Launch Period or the Launch Slot ;
- The terms of Sub-paragraph 11.2.2. of Article 11 of this
Agreement shall govern if ARIANESPACE decides to postpone
the Launch Day.
Such a postponement shall be considered as requested by Customer as
of the date of Customer's non-fulfillment of its obligations.
11.3.4. Postponements of Launches by ARIANESPACE shall not be subject to
the payment of liquidated damages by Customer.
11.4. Any Launch postponement provided for in Article 11 of this Agreement shall
not modify the progress payment schedule set forth in Paragraph 10.1. of
Article 10 of this Agreement. Notwithstanding the foregoing:
55
<PAGE>
i) Should a Launch be postponed one or more times by ARIANESPACE in
accordance with Sub-paragraph 11.3.1. or 11.2.4., then Customer shall be
allowed, for the Launch, [*************************************************
***************************************************************************
***************************************************************************
***************************************************************************
***************************************************************************
***************************************************************************
***************************************************************************
***************************************************************************
***************************************************************************
**********************************]
ii) if Customer postpones an Optional Launch under the provisions of
Paragraph 11.2.1.5., the payments due after the date of such postponement
under the payment plan of Paragraph 8.1.1B) shall be suspended and then
resumed and shifted forward by the duration of the Customer postponement
under Paragraph 11.2.1.5.
11.5. Acceleration of a Launch Period or of a Launch Slot
11.5.1. ARIANESPACE undertakes to inform Customer of any LaunchOpportunity
which may appear during the period included between:
(i) the first day of the concerned initial Period and the first day
of the Launch Period or of the Launch Slot allocated to the
Launch concerned under Subparagraph 11.3.2., in the case of
Customer not having requested a postponement earlier; or
(ii) the first day of the last Launch Period or of the last Launch
Slot requested by Customer under Subparagraph 11.2.1.1., and the
actual Launch date of the Launch concerned, in the case of
Customer already having requested postponement of the Launch
concerned.
Within a period of fifteen (15) days from notification by ARIANESPACE,
Customer may take advantage of its first right of refusal to accelerate a
Launch to any Launch Opportunity so indicated by ARIANESPACE. If it has not
replied within that time, it will be considered that Customer has declined
the offer for an advancement.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
56
<PAGE>
11.5.2. In addition, Customer may, at any time, request that ARIANESPACE
accelerate a given Launch Period or Slot to a date which Customer
will designate. As quickly as possible, and at the latest within
thirty days following receipt of this request, ARIANESPACE will let
Customer know if there is a Launch Opportunity within the requested
period and will make every effort to allocate to the Launch in
question the Launch Opportunity nearest to the date requested by
Customer.
11.5.3. For the purposes of application of Paragraph 11.3.4. of this
Article 11, the number of days by which the Launch under this
Agreement has been accelerated under this Paragraph 11.5. will be
deducted from the number of days for which ARIANESPACE must pay
Customer liquidated damages for the Launch.
11.5.4. In the case of the Launch Period or the Launch Slot of the Launch
being accelerated as stipulated in this Paragraph, the payments
remaining due at the date to which such Launch has been accelerated
will be advanced by a period equal to that of the acceleration of
such Launch and the net present value of the applicable Launch
Services price shall be restored using the Base Rate as rate of
return. Such adjustment shall be due by Customer to ARIANESPACE as
of the date of the decision of acceleration is made.
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ARTICLE 12 RIGHT OF OWNERSHIP AND CUSTODY
12.1. The obligations of ARIANESPACE under this Agreement being strictly limited
to the Services set forth in this Agreement, Customer acknowledges that at
no time shall it have any right of ownership of, or any other right in, or
title to, the Property of ARIANESPACE. Said Property shall at all times be
considered to be the absolute property of ARIANESPACE.
12.2. On the other hand, ARIANESPACE acknowledges that at no time during the
implementation of this Agreement shall it have any right of ownership, or
any other right in, or title to, the Property of Customer. Said Property
shall at all times be considered to be the absolute property of Customer.
12.3. At all times during the implementation of this Agreement, each Party shall
be deemed to have full custody and possession of the Property it is deemed
to own.
12.4. ARIANESPACE is hereby authorized to destroy, without indemnity or damages
being payable to Customer, the Launch Vehicle and the Satellite in the
event that, following ignition of the Launch Vehicle, such action shall
prove necessary to avoid damage to persons or property. The foregoing
shall not be deemed to waive Customer's rights for the Launch under
Paragraph 4.4 of this Agreement.
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ARTICLE 13 REPLACEMENT LAUNCH
13.1. Terms
13.1.1. Customer is entitled to request a Replacement Launch from
ARIANESPACE in the event that, following the Launch, either the
Launch Mission or the Satellite Mission has not been accomplished
for any reason whatsoever. Replacement Launch Services are subject
to the conditions set forth in Article 13 of this Agreement. Any
and all other rights and remedies of Customer are excluded whatever
their nature.
13.1.2. Customer shall be entitled to have a Replacement Launch Slot
allocated to it by ARIANESPACE within [**************************
*******] following the calendar month within which a written
Replacement Launch request has been received by ARIANESPACE or
within such longer period as may be indicated by Customer in said
request up to a maximum of twenty six calendar months after the
date of Customer's request.
13.1.3. The written Replacement Launch request must:
-have been received by ARIANESPACE no later than the second
calendar month following the month in which the cause of the
failure of either the Launch Vehicle Mission or the Satellite
Mission has been established, except that such Satellite Mission
failure must have occurred within the twenty-seven (27) calendar
month period following the Launch Slot of the initial Launch.
Notwithstanding the foregoing, if Customer is entitled to a
Reflight, such written request shall be received by ARIANESPACE
within the ninety (90) day period following the date when the
Parties have agreed on a Launch Failure.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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-indicate the Launch Period requested by Customer within the period
under Paragraph 13.1.2. of Article 13 of this Agreement. It is
understood that the replacement Satellite and its Ancillary
Equipment shall be placed at ARIANESPACE's disposal pursuant to the
schedule of Annex 3 to this Agreement, L being the first day of the
Launch Period desired by Customer.
13.1.4. ARIANESPACE shall inform Customer, within the calendar month
following receipt of said request, if a Launch Opportunity exists
within the requested Launch Period and, in any event, shall
allocate a Launch Period (and if reasonably practicable a Launch
Slot) to Customer, whose first day shall be earlier than the
expiration of the period specified in Paragraph 13.1.2. of Article
13 of this Agreement by postponing if necessary the launch of
another customer of ARIANESPACE other than a replacement launch
requested prior to Customer's order of the Replacement Launch under
this Paragraph. The Launch Slot allocated shall not begin earlier
than the beginning of the Launch Period requested by Customer.
13.1.5. The replacement Satellite shall be in accordance with the interface
control file (DCI) governing the initial payload.
Notwithstanding the foregoing, if Customer is entitled to a
Replacement Launch, the replacement satellite may differ from the
DCI and need not have the same satellite mission (i.e. it may be
another satellite in Customer's fleet of satellites awaiting
launch). In such a case, the Parties agree to adjust consequently
this Agreement, including the technical annexes and ARIANESPACE
shall allocate to Customer the nearest Launch Opportunity.
13.2. Conditions
13.2.1 Except for a Reflight, remuneration for Replacement Launch Services
shall be the then applicable price for a satellite of a mass
similar to that of the replacement Satellite under the ARIANESPACE
pricing policy for a Launch at the date of the Replacement Launch,
adjusted for the costs of refinancing due to the shorter payment
schedule, as well as any charges for modification of equipment with
respect to the Launch Vehicle designated for the Replacement
Launch, that ARIANESPACE shall have incurred.
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13.2.2. A) Notwithstanding Sub-paragraph 13.2.1. hereabove, the Launch
Services Price for a Replacement Launch which is not a Reflight
taking place at the latest by:
i) twenty four (24) months after the actual date of the Launch if
said Launch has resulted in a Launch Failure, or
ii) in all other cases, 31 December 2003.
shall be a fixed price of:
a) [****************************************************************
*********] for an individual mass of 3450 kg, or
The above prices is, subject to reduction under Paragraph 8.1.1.D)
and is based on: i) November 1995 economic conditions and ii) the
following payment schedule:
- --------------------------- ----------------------------------------------------
DATE Pertcentage of the portion of the Launch
Services Price referred to in this Subparagraph
13.2.2.A)
- --------------------------- ----------------------------------------------------
[*********] [***]
- --------------------------- ----------------------------------------------------
[*********] [***]
- --------------------------- ----------------------------------------------------
[*********] [***]
- --------------------------- ----------------------------------------------------
[*********] [***]
- --------------------------- ----------------------------------------------------
[*********] [***]
- --------------------------- ----------------------------------------------------
[*********] [***]
- --------------------------- ----------------------------------------------------
[*********] [***]
- --------------------------- ----------------------------------------------------
[*********] [***]
- --------------------------- ----------------------------------------------------
[*********] [***]
- --------------------------- ----------------------------------------------------
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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The price referred to in this Paragraph 13.2.2.A)i) shall be adjusted
as appropriate using a) the Base Rate against the shortened payment
schedule in order to restore the net present value in all cases where
the date of request of the Replacement Launch does not permit to
respect the above payment schedule and b) the escalation formula
contained in Article 9 of this Agreement from November 1995 up to and
including the due date of each progress payment.
b) the price set forth under Paragraph 8.1.1.C)ii) for an individual
mass of 4500 kg and payable as per the payment plan under
Paragraph 10.1.1.C).
The price referred to in this Paragraph 13.2.2.A) shall be adjusted as
appropriate using the Base Rate against the shortened payment schedule
in order to restore the net present value in all cases where the date
of request of the Replacement Launch does not permit to respect the
above payment schedule.
B) At the time of order of the Replacement Launch, Customer may increase
or decrease the Satellite mass referred to under Paragraph 13.2.2. A):
i) under the conditions stated under Paragraph 8.1.3.A) if Customer
has selected an individual mass of 3450 kg, or
ii) under the conditions stated under Paragraph 8.1.3.B) if Customer
has selected an individual mass of 4500 kg.
Except that in both cases, the applicable price shall be due at the
date of order of the Replacement Launch.
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C) Furthermore for Launches with an initial Launch Period starting on or
after 1 January 2001, the prices set forth in Paragraphs 13.2.2.A) and
B) shall only be valid if at the date of order of the Replacement
Launch, the fixing rate published by the Paris Stock Exchange for the
exchange rate between the French Franc/U.S. Dollar is equal to or
higher than [*****************] Should the U.S. Dollar fall under the
above stated value at said date, the prices shall be adjusted
accordingly.
13.2.3. The remuneration for Associated Service(s) shall be the applicable
price for a Launch to take place within the calendar year of the
Replacement Launch.
13.2.4. The price set forth in Paragraphs 13.2.1. of Article 13 of this
Agreement shall be escalated in accordance with Article 9 of this
Agreement on the basis of economic conditions prevailing on the
date that said price is determined.
13.2.5. The payment schedule shall enable the payment of the entire price
for Replacement Launch Services prior to said Replacement Launch.
13.2.6. Except for a Reflight, any Replacement Launch shall form the
subject of a separate launch services agreement drafted in
accordance with the principles set forth in this Agreement.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 14 ALLOCATION OF POTENTIAL LIABILITIES AND RISKS
14.1. Allocation of damages and risks caused by one of the Parties and/or its
Associates to the other Party and/or its Associates.
14.1.1. Due to the special character of Services, the Parties have agreed
that any liability of ARIANESPACE or of Customer arising from the
defective, late, or non-performance of ARIANESPACE's Services and
Customer's technical obligations under this Agreement shall, in all
circumstances, including termination of this Agreement, be strictly
limited to the liability expressly provided for in this Agreement,
to the exclusion of any other remedies or claims for damages or
indemnities.
14.1.2. Each Party shall bear any and all loss of or damage to property and
any bodily harm (including death) and all consequences, whether
direct or indirect, of such loss, damage or bodily harm (including
death), and/or of a Launch Mission failure and/or of a Satellite
Mission failure, which it or its Associates may sustain that arises
in any way in connection with this Agreement or the performance of
this Agreement. Each Party irrevocably agrees to a no-fault,
no-subrogation, inter-party waiver of liability, and waives the
right to make any claims or to initiate any proceedings whether
judicial, arbitral, or administrative on this account against the
other Party or that other Party's Associates for any reason
whatsoever.
Each Party agrees to bear the financial and any other consequences
of such loss, damage or bodily harm (including death) and/or of a
Launch Mission failure and/or a Satellite Mission failure which it
or its Associates may sustain, without recourse against the other
Party or the other Party's Associates.
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14.1.3 In the event that one or more Associates of a Party shall proceed
against the other Party and/or that Party's Associates as a result
of such loss, damage or bodily harm (including death) and/or Launch
Mission failure and/or Satellite Mission failure, the first Party
shall indemnify, hold harmless, dispose of any claim, and defend,
when not contrary to the governing rules of procedure, the other
Party and/or its Associates, as the case may be, from any liability
or expense, including attorneys' fees, on account of such loss,
damage or bodily harm (including death) and/or Launch Mission
failure and/or Satellite Mission failure and shall pay all expenses
and satisfy all judgments and awards which may be incurred by or
rendered against that other Party and or its Associates.
14.2. Loss or damage or bodily harm caused or sustained by Third Party
Customer(s) of ARIANESPACE or its (their) Associates
14.2.1 Each Party shall bear any and all loss or damage to property and
any bodily harm (including death) and all consequences, whether
direct or indirect, of such loss, damage or bodily harm (including
death) and/or Launch Mission failure and/or Satellite Mission
failure, which it or its Associates may sustain, that is caused, in
any way, by (a) Third Party Customer(s) of ARIANESPACE or its
(their) Associates in connection with or by the performance of this
Agreement and/or the agreement signed by ARIANESPACE with such
Third Party Customer(s) of ARIANESPACE.
14.2.2 Customer hereby irrevocably agrees to a no-fault, no-subrogation,
inter-party waiver of liability and waives the right to make any
claims or to initiate any proceedings whether judicial, arbitral,
administrative or otherwise on account of any such loss, damage or
bodily harm (including death) and/or Launch Mission failure and/or
Satellite Mission failure against Third Party Customer(s) of
ARIANESPACE, and/or ARIANESPACE and/or their respective Associates
for any reason whatsoever.
Customer agrees to bear the financial and any other consequences of
such loss, damage or bodily harm (including death) and/or Launch
Mission failure and/or Satellite Mission failure caused in any way
by (a) Third Party Customer(s) of ARIANESPACE or its (their)
Associates without recourse against the Third Party Customer(s) of
ARIANESPACE and/or ARIANESPACE and/or their respective Associates.
65
<PAGE>
In the event that one or more of Customer's Associate(s) proceed
against the Third Party Customer(s) of ARIANESPACE and/or
ARIANESPACE and/or their respective Associates as a result of such
loss, damage or bodily harm (including death) and/or Launch Mission
failure and/or Satellite Mission failure caused in any way to it by
such Third Party Customer(s) of ARIANESPACE or its (their)
Associates, Customer shall indemnify, hold harmless, dispose of any
claim and defend, when not contrary to the governing rules of
procedure, such Third Party Customer(s) of ARIANESPACE, and/or
ARIANESPACE and/or their respective Associates from any liability
or expense, including attorneys' fees, on account of such loss,
damage or bodily harm (including death) and/or Launch Mission
failure and/or Satellite Mission failure, and shall pay all
expenses and satisfy all judgments and awards which may be incurred
by or rendered against the Third Party Customer of ARIANESPACE
and/or ARIANESPACE, and/or their respective Associates.
14.2.3 In the event that (a) Third Party Customer(s) of ARIANESPACE and/or
its (their) Associates proceed against Customer and/or its
Associates as a result of loss, damage or bodily harm (including
death) and/or launch mission failure and/or satellite mission
failure caused in any way to it and/or its (their) Associates in
connection \with or by the performance of this Agreement and/or the
agreement signed by ARIANESPACE with such Third Party Customer(s)
of ARIANESPACE, ARIANESPACE shall indemnify, hold harmless, dispose
of any claim and defend, when not contrary to the governing rules
of procedure, Customer and/or its Associates from any liability or
expense, including attorney's fees, on account of such loss, damage
or bodily harm (including death), and/or Launch Mission failure
and/or Satellite Mission failure, and shall pay expenses and
satisfy all judgments and awards which may be incurred by or
rendered against Customer and/or its Associates.
14.3 Indemnification
Each Party obligates itself to take all necessary and reasonable steps to
foreclose claims for loss, damage or bodily harm (including death) by any
participant in the Launch activity. Each Party shall require its
Associate(s) to agree to a no-fault, no-subrogation, inter-party waiver of
liability and indemnity for loss, damage or bodily harm (including death)
its Associates sustain identical to the Parties respective undertakings
under this Article 14 of this Agreement. Furthermore, ARIANESPACE shall
require all Third Party Customer(s) of ARIANESPACE entering into launch
services agreement with ARIANESPACE to agree to the inter-party waiver and
indemnities as set forth in this Article 14 of this Agreement.
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<PAGE>
14.4. Liability for damages suffered by Third Parties
14.4.1. Each Party shall be solely and entirely liable for loss, damage or
bodily harm (including death), in any case whether direct or
indirect, which it or its Associates shall cause to be sustained
whether directly or indirectly by a Third Party in the performance
of this Agreement.
14.4.2. In the event of any proceeding, whether judicial, arbitral,
administrative or otherwise, by a Third Party against one of the
Parties, or its Associates on account of loss or damage or bodily
harm (including death) caused whether directly or indirectly by the
other Party, its Property or its Associates, the latter Party shall
indemnify and hold harmless the former Party and/or the former
Party's Associates, as the case may be, and shall advance any funds
necessary to defend their interests.
14.5. Infringement of Industrial property rights of third parties
14.5.1. ARIANESPACE undertakes to indemnify and hold Customer harmless with
respect to any injury, cost, and expenditure resulting from an
infringement or claim of infringement of patent rights or any other
industrial or intellectual property rights of a third party which
may arise from Customer's use of ARIANESPACE's Services, including
without limitation the use of any and all products, processes,
articles of manufacture, supporting equipment, facilities, and
services by ARIANESPACE in connection with said Services unless the
infringement of rights set forth above shall have been mainly
caused by an infringement of a right of a third party for which
Customer is liable pursuant to Paragraph 14.5.2. of Article 14 of
this Agreement.
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<PAGE>
14.5.2. Customer undertakes to indemnify and hold ARIANESPACE harmless with
respect to any injury, cost, and expenditure resulting from an
infringement or claim of infringement of the patent rights or any
other industrial or intellectual property rights of a third party
which shall have been caused by Customer with respect to the design
or manufacture of the Satellite, or by ARIANESPACE's compliance
with specifications furnished by Customer with respect to the
Launch Mission and the Satellite Mission unless such infringement
of rights set forth hereabove shall have been mainly caused by an
infringement of a right of a third party for which ARIANESPACE is
liable pursuant to Paragraph 14.5.1. of this Agreement.
14.5.3. The rights to indemnification provided hereunder shall be subject
to the observance of the following conditions:
14.5.3.1. The Party seeking indemnification shall promptly advise the
other Party of the filing of any suit, or of any written or
oral claim, alleging an infringement of the third party's
rights, which it may receive in relation to the execution of
this Agreement.
14.5.3.2. The Party sued or against whom the claim is otherwise made
shall take no steps in the dispute with the third party, nor
shall it reach a compromise, without the prior written
approval of the other Party, which approval shall not be
unreasonably withheld or delayed.
14.5.4. The Party required to hold the other harmless shall assist and
assume, when not contrary to the governing rules of procedure, the
defense of any claim or suit and/or settlement thereof, shall take
all other steps which it may reasonably be expected to take, given
the circumstances on the one hand, and on the other hand the
obligations incurred by it under the preceding provisions, to
avoid, settle, or otherwise terminate the dispute under Article 14
of this Agreement on the other hand, and shall pay all litigation
and administrative costs and expenses incurred in connection with
the defense of any such suit, shall satisfy any judgments rendered
by a court of competent jurisdiction in such suits, and shall make
all settlement payments.
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<PAGE>
14.5.5. In the event that ARIANESPACE, with respect to the Launch, and
Customer, with respect to the Satellite, shall be the subject of
the same court action or the same proceedings based on alleged
infringements of patent rights or any other industrial or
intellectual property rights of a third party pursuant to both
Sub-paragraphs 14.5.1. and 14.5.2. of Article 14 of this Agreement,
ARIANESPACE and Customer shall jointly undertake the defense and
shall bear the damages, costs and expenditures pro rata according
to their respective liabilities. In the event that the pro rata
calculation of this Sub-paragraph 14.5.5. is applicable but should
cause a problem, the Parties undertake in good faith to resolve the
problem by means of negotiation.
14.5.6. It is expressly understood that neither Party's entry into this
Agreement, and either Party's performance of acts required by this
Agreement, grants any rights to or under any of either Party's
respective patents, proprietary information, and/or data, to each
other or to any third party, unless such grant is expressly recited
in a separate written document duly executed by or on behalf of the
granting Party.
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<PAGE>
ARTICLE 15 INSURANCE
15.1. ARIANESPACE shall, for the Launch, take out an occurrence basis type
insurance policy at no cost to Customer, to protect itself and Customer
against liability for property and bodily harm which Third Parties may
sustain and which are caused by the Combined Space Vehicle or part
thereof. In said insurance policy the natural and corporate bodies
hereafter shall be named as assured :
1. The Government of France.
2. The Centre National d'Etudes Spatiales "C.N.E.S." and any state
of launch as per Convention of March 29, 1972 related to the
international liability for damages caused by spacecraft.
3. The auxiliaries of any kind, whom ARIANESPACE and/or the C.N.E.S.
would call for in view of the preparation and the execution of
the launching operations.
4. The European Space Agency "E.S.A." but only in its capacity as
owner of certain facility and/or outfits located at the Centre
Spatial Guyanais in Kourou and made available to ARIANESPACE
and/or to the C.N.E.S. for the purpose of the preparation and the
execution of the launches.
5. The firms, who have participated in the design and/or in the
execution and/or who have provided the components of the Launch
Vehicle, of its support equipment's including propellants and
other products either liquid or gaseous necessary for the
functioning of the said Launch Vehicle, their contractors,
sub-contractors and suppliers.
6. Customer and Third Party Customer(s) of ARIANESPACE on whose
behalf ARIANESPACE executes the launch services as well as their
co-contractors and sub-contractors.
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7. When they act in the scope of their activities, the Officers and
Directors, the legal representatives, the Managing Director, the
employees, agents as well as the interim staff employed by
ARIANESPACE or by the ASSURED mentioned in hereabove Paragraphs
from 1 to 6 (included).
15.2. Said insurance coverage shall come into effect as of the day of the
Launch, and shall be maintained for twelve (12) months or for so long as
all or any part of the Combined Space Vehicle remains in orbit, whichever
period is shorter.
15.3. This insurance policy shall be taken out in the amount of 400,000,000
French Francs (four hundred million French Francs). During the period
provided for in Paragraph 15.2. of this Article 15, ARIANESPACE undertakes
to settle all liabilities, indemnify and hold Customer harmless for
property damages and bodily harm caused to Third Parties by the Combined
Space Vehicle or part thereof which shall exceed the amount covered by
said insurance policy. At the expiration of the validity of said insurance
policy in accordance with Paragraph 15.2. of this Article 15, Customer
shall settle all liabilities for property damages and bodily harm caused
to third parties by the Satellite or part thereof.
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ARTICLE 16 OWNERSHIP OF DOCUMENTS AND WRITTEN INFORMATION
CONFIDENTIALITY/PUBLIC STATEMENTS
16.1. Title to all documents and written information furnished to Customer by
ARIANESPACE or its Associates during the implementation of this Agreement
shall remain exclusively with ARIANESPACE.
16.2. Title to all documents and written information furnished to ARIANESPACE by
Customer or its Associates during the implementation of this Agreement
shall remain exclusively with Customer or with said Associates as to their
respective documents and written information.
16.3. Each Party shall use the documents and written information supplied to it
by the other Party or the other Party's Associates solely to implement and
perform this Agreement and related activities.
16.4. To the extent necessary for the implementation of this Agreement, each
Party shall be entitled to divulge to its own Associates, attorneys and
technical consultants and actual and proposed lenders, investors, insurers
and successors in interest the documents and written information received
from the other Party or from the other Party's Associates, provided that
such receiving Parties have first agreed to be bound by nondisclosure and
use restrictions that are comparable to those set forth in this Agreement.
16.5. Subject to the provisions of Paragraph 16.4. of Article 16 of this
Agreement, each Party shall not divulge any and all documents and written
information which it receives from the other Party or the other Party's
Associates, but shall protect all such documents and written information
which is marked with an appropriate and valid proprietary legend from
unauthorized disclosure except as provided herein, in the same manner as
the receiving Party protects its own confidential information, provided,
however, that each Party shall, that each Party shall have the right to
use and duplicate such documents and written information for any Party
purpose subject to the nondisclosure requirements and use restrictions
provided herein.
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If the information disclosed by one Party to the other Party or by or to
their respective Associates is deemed confidential by the disclosing Party
or Associate and is verbal, not written, such verbal confidential
information shall be identified prior to disclosure as confidential and,
after acceptance by and disclosure to the receiving Party, shall be
reduced to writing promptly, labeled confidential, but in no event later
than twenty (20) days thereafter, and delivered to the receiving Party in
accordance with this paragraph.
16.6. The obligation of the Parties to keep secret and confidential the
documents and written information shall not apply to those documents and
written information that :
- are invalidity marked ;
- are in the public domain or use ;
- shall become in public use, by publication or otherwise, and due
to no
fault of the receiving Party ;
- the receiving Party can demonstrate were legally in its
possession at the
time of receipt ;
- are rightfully acquired by the receiving Party from third parties
;
- are commonly disclosed by ARIANESPACE and/or its Associates ;
- are inherently disclosed by any product or service marketed by
ARIANESPACE or its Associates ;
- are independently developed by the receiving Party ;
- are approved for release by the written authorization of the
disclosing
Party ; or
- are required, but only to the extent necessary, to be disclosed
pursuant to
governmental or judicial order, in which event the Party
concerned shall
notify the other Party of any such requirement and the
information
required to be disclosed prior to such disclosure.
16.7. The provisions of this Article shall remain valid after the term of this
Agreement for whatever reason until said documents and written information
become part of the public domain.
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Each Party shall however be entitled to destroy documents and written
information received from the other Party, or to return these documents or
such written information to the other Party, at any time after Launch (or
after Replacement Launch, if any).
16.8. The present Agreement and each part thereof shall be considered to be
confidential by both Parties. Any disclosure of the same by one Party
shall require the prior written approval of the other Party, which
approval shall not be unreasonably withheld or delayed.
Except for manifest publications, either Party shall obtain the prior
written approval of the other Party only through such Party's authorized
representative concerning the content and timing of news releases,
articles, brochures, advertisements, speeches, and other information
releases concerning the work performed or to be performed hereunder by
ARIANESPACE and its Associates. Each Party agrees to give the other Party
reasonable advance time for review of any material submitted to the other
Party for approval under this paragraph.
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ARTICLE 17 PERMITS AND AUTHORIZATIONS - GROUND STATIONS
17.1. The obligations of ARIANESPACE being limited to those provided for in
Article 4 above, Customer shall be required to obtain all permits,
authorizations, or notices of non-opposition from all national or
international, public or private authorities having jurisdiction over the
Satellite Mission.
17.2. Customer shall also obtain all government permits and authorizations
regarding the transfer of the Satellite and its Ancillary Equipment from
the country of origin to the Launch Base, and the availability of
Satellite's ground stations.
17.3. ARIANESPACE agrees to assist and support Customer and its Associates, free
of charge, with any administrative matters related to the importation into
French Guiana of the Satellite and its Ancillary Equipment, and related to
their preservation and possible repatriation, as well as to the entry,
stay, and departure of Customer and its Associates.
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ARTICLE 18 TERMINATION BY CUSTOMER
18.1. Customer shall be entitled to terminate any Launch under this Agreement at
any time prior to Launch. Customer's right is not subject to any
condition, and shall cover termination situations for reasons of
convenience as well as those of delay or impossibility in which one of the
Parties may find themselves. Notice of termination shall be given by
registered letter with acknowledgment of receipt, and shall take effect
upon receipt of such letter by ARIANESPACE or by way of telecopy with copy
by registered letter with acknowledgment of receipt and shall take effect
upon receipt of the telecopy by ARIANESPACE.
18.2. Whatever the reason for termination of a Launch other than a Reflight
under this Article 18.0, ARIANESPACE shall be entitled to termination fees
equal to the aggregate of the following:
18.2.1. A basic termination fee as follows:
- --------------------------- ----------------------------------------------------
Effective Date of Termination Fees expressed in % of Launch Services
Termination Price (LSP)
- --------------------------- ----------------------------------------------------
[*********] [***]
- --------------------------- ----------------------------------------------------
[*********]
******] [***]
- --------------------------- ----------------------------------------------------
[*********
******] [***]
- --------------------------- ----------------------------------------------------
[*********
******] [***]
- --------------------------- ----------------------------------------------------
[*********] [***]
- --------------------------- ----------------------------------------------------
where:
LSP means the Launch Services Price excluding any price increase
resulting from the exercise of option(s) under Paragraph 8.1.2. and
any mass increase.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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C means the date obtained by i) adding to the first day of the
initial Launch
Period (or, for Optional Launch #1 and Optional Launch #2, if
applicable, the initial three month Launch Period defined within
such Launch Period) for the Launch concerned the aggregate
duration of Launch Period or Launch Slot postponement(s)
requested by ARIANESPACE for such Launch pursuant to
Sub-paragraph 11.3.1. of Article 11 AND ii) deducting the
aggregate duration of acceleration(s) under Paragraph 11.5 of
this Agreement.
18.2.2. Plus i) any other amount(s) beyond the L.S.P. paid or due
(including postponement fees - late payment interest) for the
Launch at the effective date of termination, and ii) the price of
those Associated Services, ordered by the Customer after the
signature of this Agreement for the Launch concerned and performed
at the date of termination.
18.3. Notwithstanding the provisions of Paragraph 18.2. hereabove, Customer
shall have the following termination rights:
18.3.1. If Customer decides irrevocably not to proceed to the launch of one
or more of the PanAmSat Satellites covered by this Agreement, on
any launch vehicle whatsoever and consequently Customer terminates
this Agreement as to such Satellite(s), ARIANESPACE shall be
entitled to termination fees equal to the aggregate of the
following:
18.3.1.1. A basic termination fee as follows:
- --------------------------- ----------------------------------------------------
Effective Date of Termination Fees expressed in % of
Termination Launch Services Price (LSP)
- --------------------------- ----------------------------------------------------
[*********] [***]
- --------------------------- ----------------------------------------------------
[**********
***] [***]
- --------------------------- ----------------------------------------------------
[*********] [***]
- --------------------------- ----------------------------------------------------
where:
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
77
<PAGE>
LSP means the Launch Services Price excluding any price
increase resulting from the exercise of options under
Paragraph 8.1.2. and any mass increase.
C means the date obtained by i) adding to the first day
of the initial Launch Period: a) the aggregate duration
of Launch Period or Launch Slot postponement(s)
requested by ARIANESPACE for such Launch pursuant to
Sub-paragraph 11.3.1. of Article 11 and b) the
aggregate duration of postponements requested by
Customer under Paragraph 11.2.1.5. AND ii) deducting
the aggregate duration of acceleration(s) under
Paragraph 11.5 of this Agreement. .
18.3.1.2. Plus i) any other amount(s) beyond the L.S.P. paid or due
(including postponement fees - late payment interest) for
the Launch at the effective date of termination, and ii) the
price of those Associated Services, ordered by the Customer
after the signature of this Agreement for the Launch
concerned and performed at the date of termination.
18.3.1.3. In the event of termination by Customer under the present
Paragraph 18.3.1., if Customer decides within five years of
such termination to proceed to the launch of the Satellite
the Launch of which was terminated under this Paragraph
18.3.1., the relevant Launch shall be reinstated
automatically under this Agreement and the Parties undertake
to negotiate in good faith necessary adjustments to be made
to this Agreement and the payment terms contained therein in
view of maintaining the net present value of the Launch
Services Price.
78
<PAGE>
18.3.2. If the Launch concerned is a Reflight, ARIANESPACE shall be
entitled to termination fees equal to the aggregate of the
following:
18.3.2.1. A basic termination fee as follows:
- --------------------------- ----------------------------------------------------
Effective Date of Termination Fees expressed in % of Guarantee Amount
Termination
- --------------------------- ----------------------------------------------------
[*********] [***]
- --------------------------- ----------------------------------------------------
[*********
******] [***]
- --------------------------- ----------------------------------------------------
[*********] [***]
- --------------------------- ----------------------------------------------------
where:
C means the date obtained by i) adding to the first day of
the initial Launch Period or Launch Slot as determined
pursuant to Article 13 of this Agreement of the Reflight: a)
the aggregate duration of Launch Period or Launch Slot
postponement(s) requested by ARIANESPACE for such Launch
pursuant to Sub-paragraph 11.3.1. of Article 11 and b) the
aggregate duration of postponements requested by Customer
under Paragraph 11.2.1.5. AND ii) deducting the aggregate
duration of acceleration(s) under Paragraph 11.5 of this
Agreement.
* Notwithstanding the foregoing, if Customer terminates the
Reflight no later than thirty days after the later of i) the
date of order of said Reflight or ii) thirty days after the
establishment of the cause of the Launch Failure and the
scheduling of the resumption of launches of the Ariane 5
launch vehicle as notified by ARIANESPACE to Customer, the
termination fee under this Paragraph 18.3.2.1. shall,
independently of the initial Launch Period of said Reflight,
be limited to [*********************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
79
<PAGE>
18.3.2.2. Plus i) any other amount(s) paid or due (including
postponement fees - late payment interest) for the
Launch at the effective date of termination and ii) the
price of those Associated Services, ordered by the Customer
after the signature of this Agreement for the Launch
concerned and performed at the date of termination.
18.3.3. Notwithstanding the fo3regoing, if a Reflight performed by an
Ariane 5 Launch Vehicle results in a Launch Failure, Customer shall
have the right, within the later of i) ninety (90) days of the day
the Parties have agreed on the Launch Failure or ii) thirty days
after the establishment of the cause of the Launch Failure and the
scheduling of the resumption of launches of the Ariane 5 Launch
Vehicle as notified by ARIANESPACE to Customer to terminate the
Reflight of the Reflight under this Paragraph 18.3.3. In this case,
the Parties agree that ARIANESPACE shall reimburse to Customer an
amount equal to [**************************************************
*******************************************************************
*********************************************]
18.4. Termination fees are due by the Customer to ARIANESPACE as of the
effective date of termination and payable within thirty (30) days of the
receipt by the Customer of the corresponding invoice. Any amount paid by
the Customer for the Launch concerned (including, if applicable, any
Option Credit) in excess of the termination fees shall be refunded by
ARIANESPACE to the Customer within thirty (30) days of the effective date
of termination. For the purpose of this Paragraph 18.4., in the case of a
Reflight, the Guarantee Amount shall be deemed to be a payment and the
sole payment made by the Customer.
[*************************************************************************
**************************************************************************
**************************************************************************
**************************************************************************
**************************************************************************
**************************************************************************
***********************************************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
80
<PAGE>
18.5. Notwithstanding the foregoing, in the event that the aggregate of all
postponements for a given Launch (other than postponement due to Events of
Force Majeure up to a period of six months for each Launch as provided
under Paragraph 11.3.5. of Article 11 of this Agreement) requested by
ARIANESPACE under Paragraph 11.3. of Article 11 of this Agreement should
result in ARIANESPACE delaying a Launch under this Agreement by more than
twelve (12) months, excluding delays due to Events of Force Majeure and
after deduction of the aggregate duration of acceleration(s) under
Paragraph 11.5 of this Agreement, Customer shall have the right, within
ninety (90) days of the receipt of the corresponding ARIANESPACE notice
for postponement or if no such notice is given, at the date at which the
aggregate of ARIANESPACE postponements for the forthcoming Launch exceeds
twelve months, to terminate the relevant Launch. ARIANESPACE shall
promptly refund to Customer all payments made by Customer for said Launch.
In such an event, Customer shall be liable only for the payment of
Associated Service(s) performed prior to the date of termination. For the
purpose of this Paragraph 18.5., in the case of a Reflight, the Guarantee
Amount shall be deemed to have been a payment and the sole payment made by
Customer.
18.6. If Customer does not exercise Optional Launch #1 by 30 June 1999 and/or
Optional Launch #2 by 31 December 1999, ARIANESPACE shall reimburse to
Customer the Option Price which was not the object of an applied Option
Credit under Paragraph 10.1.1.B) or C).
For the avoidance of doubt, except for any portion of the Option Fee that
may not be the object of a refund to Customer under the terms of this
Agreement, Customer shall have no termination liability vis-a-vis any
Optional Launch for which an Option is not exercised.
81
<PAGE>
ARTICLE 19 TERMINATION BY ARIANESPACE
19.1. In the event that Customer fails to comply with its payment obligations
pursuant to the payment schedule and other payment dates set forth in this
Agreement, and does not pay within thirty (30) days of the receipt of a
notice to that effect, ARIANESPACE shall be entitled to terminate the
Launch concerned by registered letter with acknowledgment of receipt.
19.2. In the event of termination pursuant to the provisions of this Article 19,
the provisions of Paragraph 18.2. of Article 18 of this Agreement shall be
applicable.
82
<PAGE>
ARTICLE 20 MISCELLANEOUS
20.1. Working language
Any communication by one Party to the other shall be made in English.
All communications between Customer and its Associates on the Launch Base,
as well as all communications between ARIANESPACE or its Associates on the
Launch Base with Customer's personnel and/or that of its Associates, shall
be made in English.
20.2. Notices
Unless expressly provided otherwise under this Agreement, all
communications and notices to be given by one Party to the other in
connection with this Agreement shall be in writing and in the language(s)
of this Agreement and shall be sent by registered mail, or transmitted by
telex telegram or facsimile and confirmed by registered letter.
The following addresses have been designated :
ARIANESPACE :
Immeuble Ariane
Boulevard de l'Europe
91000 Evry
FRANCE
83
<PAGE>
Customer :
PanAmSat Corporation
One Pickwick Plaza
Greenwich, Connecticut, 06830
U.S.A.
Attention: Mr. Frederick LANDMAN, President and CEO
or such other address or other persons attention as either Party may
modify in accordance with this Paragraph.
20.3. Waiver
Waiver on the part of either ARIANESPACE or Customer of any term,
provision, or condition of this Agreement shall only be valid if made in
writing and accepted by the other Party. Said acceptance shall not
obligate the Party in question to waive its rights in connection with any
other previous or subsequent breaches of this Agreement.
20.4. Headings
The headings and sub-headings used in this Agreement are provided solely
for convenience of reference, and shall not prevail over the content of
the Articles of this Agreement.
84
<PAGE>
20.5. Assignment
Customer shall not be entitled to assign all or part of its rights and
obligations under this Agreement without the prior written consent of
ARIANESPACE which shall not be unreasonably withheld, conditioned or
delayed. Notwithstanding the foregoing, ARIANESPACE's consent shall not be
required for any assignment of this Agreement by Customer to a reorganized
entity (which may include additional investors) to which all or
substantially all of the assets of the Customer are also assigned.
Customer shall promptly notify ARIANESPACE of any such assignment.
In addition, launch rights may be purchased hereunder by Customer's
subsidiary, PanAmSat International (formerly the "Customer" hereunder) for
its own account.
Such purchase shall be treated the same way as Customer's purchases
hereunder, counting both toward the number of available options hereunder
and for and for multilaunch purposes discounts, the only difference being
that the rights to particular launches purchased by PanAmSat International
and the obligations to make payment for such launches shall reside solely
with PanAmSat International.
With respect to the foregoing it is agreed that "Customer's" rights and
obligations to "Firm Launch #1" belong to PanAmSat International and the
rights and obligations to Firm Launch #2 remain with Customer.
85
<PAGE>
20.6. Entire Agreement and Modifications
The Contractual Documents as amended at the date hereof comprise the
entire understanding between the Parties with respect to the subject of
this Agreement, superseding all prior and contemporaneous discussions
between them. Neither Party shall be bound by the conditions, warranties,
definitions, statements, or documents previous to the execution of this
Agreement, unless this Agreement makes express reference thereto. Any
undertakings subsequent to the execution of this Agreement shall be made
in writing and signed by duly authorized representatives of each of the
Parties and shall expressly state that it is such an amendment or
modification.
20.7. Registration of Customer's Satellite
In accordance with the Convention on Registration of Objects Launched into
Outer Space of U.N.O., Customer:
i) if a state or consortium of states, shall register the Satellite, or
ii) if not a state or consortium of states, shall obtain registration of
the Satellite through the state or a state which has jurisdiction over
Customer.
86
<PAGE>
ARTICLE 21 APPLICABLE LAW
This Agreement shall govern the relationship between the Parties as to the
subject of this Agreement. To the extent the Parties have failed to address any
question arising hereunder, or in the event of the need for any interpretation
of any term of this Agreement, French law shall be applied, unless it is
contrary to the explicit terms or the underlying common intentions of the
Parties to this Agreement.
87
<PAGE>
ARTICLE 22 ARBITRATION
In the event of disputes arising in connection with this Agreement, the Parties
undertake to use their best efforts to reach an amicable settlement. If an
amicable settlement cannot be achieved, the dispute shall be referred to the
President of ARIANESPACE and of Customer, who will use their best efforts to
reach an agreement acceptable to both Parties. Should an amicable settlement
prove impossible, the dispute(s) shall be finally settled under the rules of
Conciliation and Arbitration of the international Chamber of Commerce (I.C.C.)
in Geneva, Switzerland by three arbitrators appointed in accordance with the
then existing rules. The Arbitration shall be conducted in the English language.
The award of the Arbitrators shall be final and binding, and execution thereof
may be entered in any court having jurisdiction.
88
<PAGE>
ARTICLE 23 EFFECTIVE DATE
This Agreement shall take effect after signature by the two Parties.
Executed
On , 1998.
In 2 originals
ARIANESPACE CUSTOMER
- ---------------------------- ----------------------------
89
<PAGE>
P A R T II
A N N E X E S
90
<PAGE>
ANNEX 4
E.S.A./ARIANESPACE Convention (Extract)
Certain European Governments, members of the European Space Agency, (hereinafter
referred to as "the Participants") have committed themselves to using the Ariane
Launcher, developed within the framework of the European Space Agency programs.
Arianespace must provide the European Space Agency and the Participants, as a
priority, with the services and launch slots necessary for their programs.
Arianespace must also make sure that in the event of a shift in the launch slots
caused by the launcher system and/or any of the technical equipment which has to
be used for the launch, the payload concerned of the Agency or Participant
retains its position in the launch schedule. In addition, in the event of the
failure of an Agency or Participant mission, the Agency or Participant may ask
Arianespace to provide them, for a new launch, with the first or failing that
the second launch slot compatible with the availability of the replacement
payload if the failure was due to the launch system and/or any of the technical
equipment used for the launch, and the first compatible slot or failing that the
first slot scheduled at the latest 10 months after the written relaunch request
if the failure was due to the payload itself. Finally, Arianespace has committed
itself to the Agency and to the Participants to pay particular attention to the
specific requirements imposed by scientific missions.
91
<PAGE>
Confidential ARIANESPACE PROPRIETARY
PanAmSat MultiLaunch Amdt 3/ 95.5.933 Page PAGE \* ARABE1
Confidential ARIANESPACE PROPRIETARY
92
<PAGE>
Exhibit 10.15.6
ARIANESPACE CONFIDENTIAL AND PROPRIETARY
This Amendment #1 to the Side Letter to the Launch Services Agreement 95.5.933
between the Parties is entered into between:
ARIANESPACE S.A., a company organized under the laws of France and having its
principal office at Boulevard de l'Europe, 91006 EVRY, France.
and
PanAmSat Corporation a company organized under the laws of the State of Delaware
with principal offices located at One Pickwick Plaza, Greenwich, Connecticut,
U.S.A.
Reference is made to the Launch Services Agreement 95.5.933 executed between
PanAmSat Corporation and ARIANESPACE on December 20th, 1995, for the Launch of
PanAmSat Satellites (said Agreement being hereinafter referred to as the
"Agreement" and the Launches covered under said Agreement being hereafter
referred to as the "Launches").
On December 20th 1995, the Parties entered into a side letter to the Agreement
("the Side Letter"). This Amendment #1 to the Side Letter amends and replaces
the terms of the Side Letter.
The two Parties agree that the conditions listed hereafter shall be applicable
to the Launches. Unless otherwise indicated, words defined under the Agreement
shall have the same meaning in the present Amendment #1 to the Side Letter.
I.
In order to give PanAmSat greater schedule flexibility, the Agreement foresees
the use of either the Ariane 4 or the Ariane 5 Launch Vehicles to perform the
Launches.
The Parties agree that the Ariane 5 Launch Vehicle shall be the preferred Launch
Vehicle for the Launches and that ARIANESPACE shall use its best efforts to
affect Ariane 5 Launch Vehicles to the Launches under the terms and conditions
of the Agreement.
1
<PAGE>
II.
If despite these efforts, ARIANESPACE is unable to affect an Ariane 5 Launch
Vehicles to any of the Launches within the contractual launch schedule provided
for under the Agreement, ARIANESPACE shall inform PanAmSat as soon as possible
and PanAmSat shall have the option to wait for the next scheduled Ariane 5
Launch Vehicle for which there is a Launch Possibility or have the relevant
Satellite Launched as scheduled on an Ariane 4 Launch Vehicle.
In the event that ARIANESPACE shall be obliged to postpone the launch of a
satellite of another client of ARIANESPACE ("Third Party Launch") in order to
make available a Launch Possibility for Customer's Satellite, then, in
determining which satellite to retain on such Third Party Launch, ARIANESPACE
shall retain the satellite which is compatible in size with PanAmSat's Satellite
or, if two or more satellites on such Third Party Launch are compatible in size
and in class with PanAmSat's Satellite, ARIANESPACE shall apply the criteria
numbered (1) to (3) inclusive in, and in the order which is set out in
Sub-paragraph 11.3.2. of this Article 11 of the Agreement.
III.
[*******************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
******************************************************************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
2
<PAGE>
IV.
Notwithstanding the provisions of Paragraphs I to III above, the Parties agree
that:
a) Paragraph I to III shall not be applicable to Firm Launch #2 under the
Agreement if said Launch is accelerated under the provisions of Paragraph
11.5 of the Agreement to a date prior to 1 January 1999, and
b) ***************************************************************************
***************************************************************************
***************************************************************************
************************************]
V.
Notwithstanding the terms of Paragraphs 4.1.5 and 13.1.5 of the Agreement, in
the event that, under the Agreement and/or this Side Letter, PanAmSat shall be
entitled to a Reflight for an initial Satellite of a baseline mass of 3450 kg,
Customer shall, at the time of order of the Reflight, have the right to increase
the mass of the Satellite object of the Reflight up to a baseline mass of 4500
kg. Said increase in mass shall be subject to the payment of a sum of [*****
**********************] ("the Optional Mass Price"). This sum shall be due and
payable at the time of order of the Replacement Launch. The Optional Mass Price
is valid for a Launch to take place prior to 1 April 1999 and for Launches
beyond this date, this price shall be increased by a factor of [**************]
per the number of calendar quarters or portion thereof between 1 April 1999 and
the first day of the initial Launch Period for the Reflight.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
3
<PAGE>
VI.
[*******************************************************************************
*******************************************************************************]
[******************************************************************************]
[*******************************************************************************
********************************************************************************
********************]
[*******************************************************************************
********************************************************************************
********************************************************************************
************************************************************]
[*******************************************************************************
********************************************************************************
*******************************************************************]
[*******************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
*****************************]
VII.
The Parties agree that in the event that PanAmSat declines an available Ariane 4
Launch Vehicle proposed by ARIANESPACE in order to wait for an Ariane 5 Launch
Vehicle under the provisions of Paragraph II hereof, the delay between the
Ariane 4 Launch Period or Launch Slot and the Ariane 5 Launch Period or Launch
Slot shall not be considered to constitute a postponement of the Launch by
either Party within the meaning of Article 11 of the Agreement.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
4
<PAGE>
VIII.
This Side Letter constitutes an amendment to the Agreement within the meaning of
its Paragraph 20.6 and the terms of this Side Letter shall prevail in the event
of any inconsistency with the terms of the Agreement. This Side Letter shall
remain confidential and unless indicated expressly otherwise, authorization to
disclose the Agreement shall not include authorization to disclose this Side
Letter.
Executed this 8th day of January, 1998.
FOR ARIANESPACE FOR PANAMSAT CORPORATION
5
Exhibit 10.15.7
Confidential - Arianespace Proprietary
"This Amendment #4 to the Launch Services Agreement 95.5.933 is entered into
between:
ARIANESPACE S.A., a company organized under the laws of France and having its
principal office at Boulevard de l'Europe, 91006 EVRY, France.
AND
PanAmSat Corporation a company organized under the laws of the State of Delaware
with principal offices located at One Pickwick Plaza, Greenwich, Connecticut,
U.S.A. (hereinafter referred to as "PanAmSat Corporation")
and
PanAmSat International a company organized under the laws of the State of
Delaware with principal offices located at One Pickwick Plaza, Greenwich,
Connecticut, U.S.A. (hereinafter referred to as "PanAmSat International")
Reference is made to the Launch Services Agreement 95.5.933 executed between
PanAmSat Corporation and ARIANESPACE on December 20, 1995 for the Launch of up
to four PanAmSat Satellites as amended (said agreement being hereinafter
referred to as the "Agreement").
The Parties hereby amend the Agreement as follows:
ARTICLE 1
CONDITIONS APPLICABLE TO FIRM LAUNCH #1
A) The Parties hereby define by mutual agreement the Redefined Launch Slot for
Firm Launch #1 as follows:
From 1 October 1998 up to and including 31 October 1998
B) Notwithstanding the terms of the Agreement, until 1 April 1998, PanAmSat
shall have the option to increase the mass of the Satellite of Firm Launch #1 to
3800 kg (without adaptor). The price for this increase in mass shall be
[************] which,
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
1
<PAGE>
notwithstanding the provisions of Paragraph 10.3.1. of the Agreement, shall be
paid no later than 15 April 1998. For greater certainty, it is hereby specified
that his price shall not be subject to the price reduction under Paragraph
8.1.1.D) of the MLSA.
Provided that the Launch takes place no later than 1 April1999, this Launch will
be performed by way of a dedicated Ariane 44LP Launch Vehicle and PanAmSat
International shall be entitled to exercise its rights under Paragraph 8.1.3.A)
iii) of the Agreement. If the Launch takes place after said date ARIANESPACE and
PanAmSat International shall discuss in good faith if this mass increase will be
maintained taking into consideration their respective interests and the
corresponding price adjustment provided that if ARIANESPACE allocates a
dedicated Ariane 4 Launch Vehicle, PanAmSat International shall also be entitled
to exercise its rights under Paragraph 8.1.3.A) iii) of the Agreement.
ARTICLE 2
FIRM LAUNCH #3
A) A Firm Launch #3 is hereby added to the Agreement for the PAS 6B Satellite.
Using the priority allocation for a Replacement Launch Slot for PAS 6, the
Launch Slot allocated to this Launch will be:
from 1 October 1998 up to and including 31 October 1998.
Optional Launches #1 and #2 will remain available to Customer.
B) The Launch Services Price for this Firm Launch #3 under Paragraph 8.1.1. of
the Agreement shall be a price of [********************************************
**********************] for a mass of 3475 kg.
This Launch Services Price shall be paid by Customer as follows:
- 15 March 1998* [************]
- 1 August 1998 [*****************]
* This amount shall have been received by ARIANESPACE on 15 March 1998 or ten
days after execution of the present amendment to the Agreement, whichever
is the latest notwithstanding the provisions of Paragraph 10.3.1. of the
Agreement.
** At the date of execution of this amendment, the price reduction under
Paragraph 8.1.1.D) of the Agreement equals [**********]. The applicable
price reduction shall be deducted from this payment.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
2
<PAGE>
ARTICLE 3
PRICE REDUCTIONS UNDER PARAGRAPH 8.1.1.D) OF THE AGREEMENT
Paragraph 8.1.1.D) of the Agreement is hereby replaced by the following:
D) The Launch Services Prices stated under Paragraphs A), B), and C) under
Subparagraph 13.2.2. hereafter above shall be subject to a price reduction
as follows:
i) For Firm Launch #1:
[***********************************************]
ii) For Firm Launch #2:
[***********************************************************]
iii) For Firm Launch #3
[************************************************************]
iv) For Optional Launch #1:
a) if the Launch Option is exercised on or prior to 1 March 1999:
[**] of the Launch Services Price under Subparagraph 8.1.1.C) i) or
ii) (as increased for the initial Launch Period of Optional Launch
#1), as applicable, or
b) if the Launch Option is exercised after 1 March 1999:
[**] of the Launch Services Price under Subparagraph 8.1.1.C) i) or
ii) (as increased for the initial Launch Period of Optional Launch
#1), as applicable.
v) For Optional Launch #2:
a) if Optional Launch #1 has been exercised or a Replacement Launch
has been ordered on or prior to 1 March 1999, at the date of exercise
of Optional Launch #2 and provided Optional Launch is exercised on or
prior to 1 March 2000:
the percentage applicable to Optional Launch #1 under Subparagraph
iii) above or, if applicable, to the Replacement Launch, plus [**]
times the Launch Services
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
3
<PAGE>
Price under Subparagraph 8.1.1.C) i) or ii) as applicable (as
increased for the initial Launch Period of Optional Launch #2), or
b) in all other cases:
[**] of the Launch Services Price under Subparagraph 8.1.1.C) i) or
ii) (as applicable and as increased for the initial Launch Period of
Optional Launch #2).
vi) For Replacement Launches ordered under this Agreement:
Provided that the Replacement Launch is ordered no later than 31
December 2001, the percentage applicable to the last Launch ordered
under this Agreement (including Replacement Launches) plus [**] times
the applicable Launch Services Price under Article 13. Further, if a
Replacement Launch is ordered on or prior to 1 March 1999, any further
option(s) exercised hereunder shall be subject to a price reduction
determined under Subparagraph 8.1.1.D)iv) above.
The price reduction as calculated under this Sub-paragraph 8.1.1.D)
shall be deducted from the payment due at L-9 months and, if the price
reduction exceeds this payment, the excess price reduction shall be
deducted equally from the payments at L-8 months and at L-10 months
under Paragraph 10.1.1. A), B) or C) as applicable. Notwithstanding the
foregoing, for Firm Launch #3, the price reduction shall be deducted
from the payment due on 1 August 1998.
Furthermore, notwithstanding the foregoing, in the event a Launch
ordered under this Agreement is terminated, the Price Reduction of the
other Launches ordered shall be recalculated to take into account such
termination by deducting two percent from all Launches ordered after
the date of order of the Launch terminated.
Notwithstanding the foregoing, the price reduction under this
Sub-paragraph 8.1.1.D) may not in any case exceed [**] of the relevant
Launch Services Price under Paragraph 10.1.1A), B) or C) or for Firm
Launch #3 under the provisions of Article 2 of this Amendment for any
Launch under this Agreement
ARTICLE 4
PRICE ESCALATION FORMULA
The Parties agree to discuss in good faith no later than three weeks after
execution of this Amendment the precise index to be applied for the application
of Index 0 under Paragraphs 9.1.A) and B) of the Agreement.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
4
<PAGE>
ARTICLE 5
Paragraph 20.5 of the Agreement shall be replaced by the following:
20.5. Assignment
Customer shall not be entitled to assign all or part of its rights and
obligations under this Agreement without the prior written consent of
ARIANESPACE which shall not be unreasonably withheld, conditioned or
delayed. Notwithstanding the foregoing, ARIANESPACE's consent shall not be
required for any assignment of this Agreement by Customer to a reorganized
entity (which may include additional investors) to which all or
substantially all of the assets of the Customer are also assigned.
Customer shall promptly notify ARIANESPACE of any such assignment.
In addition, launch rights and corresponding obligations may be purchased
hereunder by Customer's subsidiary, PanAmSat International (formerly the
"Customer" hereunder) for its own account.
Such purchase shall be treated the same way as Customer's purchases
hereunder, counting both toward the number of available options hereunder
and for multilaunch purposes discounts, the only difference being that the
rights to particular Launches purchased by PanAmSat International and all
obligations under this Agreement pertaining to such Launches shall reside
solely with PanAmSat International.
With respect to the foregoing it is agreed that "Customer's" rights and
obligations to "Firm Launches #1 and #3" belong to PanAmSat International
and the rights and obligations to Firm Launch #2 remain with Customer.
5
<PAGE>
ARTICLE 6
This Amendment #4 constitutes an amendment to the Agreement within the meaning
of its Paragraph 20.6.
Executed this 9th day of March 1998
For ARIANESPACE For PanAmSat Corporation:
By: By:
Title: Title:
For PanAmSat International
By:
Title:
6
Exhibit 10.15.8
Confidential - Arianespace Proprietary
This Side Letter #2 to the Launch Services Agreement 95.5.933 between the
Parties is entered into between:
ARIANESPACE S.A., a company organized under the laws of France and having its
principal office at Boulevard de l'Europe, 91006 EVRY, France.
AND
PanAmSat Corporation a company organized under the laws of the State of Delaware
with principal offices located at One Pickwick Plaza, Greenwich, Connecticut,
U.S.A. (hereinafter referred to as "PanAmSat Corporation")
and
PanAmSat International a company organized under the laws of the State of
Delaware with principal offices located at One Pickwick Plaza, Greenwich,
Connecticut, U.S.A. (hereinafter referred to as "PanAmSat International")
Reference is made to Amendment #1 to the Side Letter to Launch Services
Agreement 95.5.933 executed between PanAmSat Corporation and ARIANESPACE on
December 20, 1995, for the Launch of PanAmSat Satellites (said Agreement being
hereinafter referred to as the "Agreement" and the Launches covered under said
Agreement being hereafter referred to as the Launches and said Amendment #1 to
the Side Letter dated 8 January 1998 being hereinafter referred to as "Side
Letter #1"). All capitalized terms herein shall have the same meaning as under
the Agreement.
On this day, the Parties have entered into Amendment #4 to the Agreement in
order to add a Firm Launch #3 to the Agreement.
The Parties agree that the conditions listed hereafter shall be applicable
notwithstanding the terms of the Agreement or of the Side Letter #1. Unless
otherwise indicated, words defined under the Agreement shall have the same
meaning in the present Side Letter.
<PAGE>
I. Launch Slots of PAS 7 and 6B under the MLSA
The Parties recognize that although the PAS 7 Launch and the PAS 6B Launch are
both allocated Launch Slots in October 1998, only one of these two Launches may
take place during the same calendar month.
In view of the delays in the manufacturing of PAS 7 which have lead to
subsequent reschedulings of the Launch Slot, it is the intention of the Parties
to Launch these two Satellites as soon as possible taking into consideration the
date of availability of the Satellites and the available Launch Opportunities.
Both Parties shall therefore consult regularly on Launch Opportunities and the
date of availability of the Satellites and shall use their best efforts in order
to accelerate either Launch to a Launch Slot beginning prior to 1 October 1998.
More specifically, no later than 15 April 1998, the Parties will explore the
possibility of accelerating either one of these two Launches under the
provisions of Paragraph 11.5. of the MLSA to a Launch Slot in August 1998 (as
previously foreseen for PAS 7 prior to Satellite manufacturing delays) in order
to leave the October Launch Slot available for the other Launch.
Should these efforts fail, the Parties shall meet no later than 15 June 1998 in
order to discuss the progress of the manufacturing of the PAS 6B and 7
Satellites. The Launch Slot will be attributed to the Satellite designated by
PanAmSat International among these two Satellites no later than 1 July 1998. The
other Launch will automatically be rescheduled by mutual agreement of the
Parties to a Launch Slot extending from 1 December 1998 up to and including 31
December 1998, or, if possible to an earlier Launch Slot taking into
consideration the date of availability of the Satellites and the available
Launch Opportunities.
<PAGE>
ARTICLE 2
SPECIAL PROVISIONS FOR FIRM LAUNCH #3
The provisions of Articles I. to IV. of the Side Letter #1 shall not apply to
Firm Launch #3 under the Agreement and said Firm Launch #3 shall not be taken
into consideration for the application of said provisions.
[*******************************************************************************
********************************************************************************
********************************************************************************
********************************************************************]
ARTICLE 3
This Side Letter constitutes an amendment to the Agreement within the meaning of
its Paragraph 20.6 as well as an amendment to the Side Letter #1 and the terms
of this Side Letter shall prevail in the event of any inconsistency with the
terms of the Agreement or with the terms of Side Letter #1. This Side Letter
shall remain confidential and unless indicated expressly otherwise,
authorization to disclose the Agreement shall not include authorization to
disclose this Side Letter.
Executed this 9th day of March, 1998.
FOR ARIANESPACE FOR PANAMSAT CORPORATION
_____________________________________ ____________________________________
FOR PANAMSAT INTERNATIONAL
__________________________________
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
Exhibit 10.18.3
March 5, 1998
The News Corporation Limited
New York, New York
Globo Comunicacoes e Participacoes, S.A.
Rio de Janeiro, Brazil
Grupo Televisa, S.A.
Mexico City, Mexico
PanAmSat International Systems, Inc.
Greenwich, Connecticut
Gentlemen:
Reference is made to that certain letter agreement dated February 29,
1996, as amended, by and among the entities recipients to this letter (also
referred to herein as the "parties") identified above (the "Letter Agreement").
In that connection, the parties acknowledge and, to the extent that it
may be required, consent to the following:
(1) PanAmSat International Systems, Inc., formerly known as PanAmSat
Corporation ("PanAmSat") and NetSat Servicos Ltda. (an entity that is owned by
The News Corporation Limited ("News"), Globo Comunicacoes e Participacoes, S.A.
("Globo"), and Tele-Communications International Inc. ("TINTA")) are about to
enter into a "Second Amended and Restated Transponder Purchase and Sale
Agreement," substantially in the form that has been reviewed by the parties or
their representatives (the "Brazil Agreement");
(2) PanAmSat and Sky Multi-Country Partners, previously referenced as
Multi-Country Partners GP (an entity that is owned by News, Globo, TINTA, and
Grupo Televisa, S. A. ("Televisa")), are about to enter into a "Transponder
Service Agreement," substantially in the form that has been reviewed by the
parties or their representatives (the "Multi-Country Agreement");
(3) The parties understand and agree that the combination of the
Brazil Agreement and the Multi-Country Agreement (together the "PAS-6
Agreements"), supersedes the Letter Agreement as to PAS-3 and PAS-6 and the
rights and obligations of the parties to the Letter Agreement relative thereto,
but that the rights and obligations of the parties to the Letter Agreement
relative to PAS-5, except as expressly set forth below, are unaffected and
remain binding.
<PAGE>
(4) The parties acknowledge and agree that [***********************
********************************************************************************
********************************************************************************
********************************************************************************
***********************************************]
This letter may be executed in several counterparts, each of which shall be
deemed an original, and all such counterparts together shall constitute but one
and the same instrument.
Please indicate your agreement of the foregoing by signing in the
appropriate place indicated below.
Notarized: THE NEWS CORPORATION
LIMITED
By:
Its
Notarized: GLOBO COMUNICACOES E
PARTICIPACOES, S.A.
By:
Its
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
<PAGE>
Notarized: GRUPO TELEVISA, S.A.
By:
Its
and
By:
Its
and
By:
Its
Notarized: PANAMSAT INTERNATIONAL
SYSTEMS, INC.
By:
Its
Exhibit 10.25.1
EXECUTION COPY
AMENDMENT
This Amendment (the "Amendment") is entered into as of this 5th day of
March, 1998, by and between PanAmSat International Systems, Inc., a Delaware
corporation, formerly known as PanAmSat Corporation ("PanAmSat") and Televisa,
S.A. de C.V., a sociedad Anonima de Capital Variable, formed under the laws of
the United Mexican States ("Customer"). This Amendment amends that certain
"Full-Time Transponder Service Agreement from PAS-3 (European Beam)" dated as of
September 20, 1996, by and between the parties hereto (the "Agreement"). This
Amendment is being entered contemporaneously with that certain Transponder
Service Agreement by and between PanAmSat and Sky Multi-Country Partners,
previously referenced as Multi-Country Partners, GP ("Multi-Country," the
"Multi-Country Agreement").
MATTERS AMENDED
In consideration of the foregoing and of the mutual promises set forth
below, and for other valuable consideration, the receipt and adequacy of which
is hereby acknowledged, PanAmSat and Customer mutually agree that the following
provisions of the Agreement are amended or added, as applicable. Sections
referenced correspond to the Agreement and replace the Sections of the
corresponding numbers (if any) in the Agreement:
1.2 Beam and Transponder Designation. The Beams, and subject to Section
5.3 and Appendix C, the particular Transponders upon which Customer shall be
provided Service (the "Service Transponders") are shown in Appendix A. It is
hereby acknowledged that through October 31, 1997, the Service Transponders were
the following three (3) Transponders: 7, 11, and 15 (all Europe downlink Beams),
and that, effective as of November 1, 1997, the Service Transponders were
changed to the following five (5) Ku-band Transponders: 6, 10, 11, 13, and 14.
At Customer's request, Transponders 6, 10, 13, and 14 have or will be switched
into the NSA or SSA downlink Beams of PAS-3 to accommodate the requirements of
Multi-Country. In addition, in circumstances under which Multi-Country would
have the right to have the uplink Beam changed if the same Service was supplied
to it by PanAmSat under the Multi-Country Agreement, at Customer's request
(based upon Multi-Country's request to it) the uplink Beam will be changed for
the applicable Transponder(s). When Multi-Country is no longer entitled to the
use of these Transponders under its sublease agreement with Televisa, Televisa
shall so notify PanAmSat (the "End of the Multi-Country Availability
1
<PAGE>
Requirement"), and these Transponders will be switched to the Europe or North
America downlink Beams, as applicable, and, if applicable, the uplink Beams back
to the Europe/North America Beam.
The foregoing notwithstanding, at Customer's request, PanAmSat shall leave
the Transponders in the configuration established for Multi-Country under the
preceding paragraph, provided that: (a) such configuration shall only be
permitted to be used for the transmission of "Customer's Television Service"
with the definition of "Commonly Controlled Entities" (other than Multi-Country)
limited to entities in which there is a minimum of 50.1% common equity ownership
with Customer; and (b) PanAmSat may require the Transponders to be switched to
the configuration shown in Appendix A (without regard to the footnotes) at any
time on notice to Customer if such a switch is necessary to allow the use of the
frequencies by another satellite without interference to or from that satellite
(or its use), at PanAmSat's desired location of use. The restrictions set forth
in this paragraph shall not apply, and Customer's use of the Transponders as
configured for the benefit of Multi-Country shall be subject to the other more
general provisions of this Amendment and the Agreement, if PanAmSat is
technically unable to switch the Transponders back to the configuration shown in
Appendix A (without regard to the footnotes) at the End of the Multi-Country
Availability Requirement; provided that, within sixty (60) days of PanAmSat's
determination that such Transponder(s) cannot be switched, PanAmSat shall have
the right, on notice to Customer to terminate this Agreement as to one or more
of such unswitchable Transponders.
No other switching of downlink Beams (or uplink beams) shall be permitted
without PanAmSat's express written consent. All changes of downlink Beams are
subject to the following additional requirements:
(a) If the change cannot be accomplished using reasonable
engineering standards, this Agreement shall continue to operate with the Service
Transponders in their then-existing configuration without the contemplated
change;
(b) If the change was expressly authorized by the first
paragraph of this Section 1.2 (i.e., as to the downlink Beams to NSA or SSA to
accommodate Multi-Country and back to Europe or North America when no longer
needed for Multi-Country, or, if applicable, as to the change of uplink Beams to
accommodate Multi-
2
<PAGE>
Country if it would be permitted under the Multi-Country Agreement and back to
the Europe/North America uplink Beam when no longer required by Multi-Country),
Then, as to a change of downlink Beams, PanAmSat shall bear the
risk of loss if the Service Transponder(s) is damaged or made unusable as a
result of attempting to make such change (i.e., if the Service Specifications
for such Transponder can no longer be met in any configuration, the provisions
of this Agreement that apply to a failure of a Service Transponder on a
Confirmed Basis shall apply) and, as to a change of uplink Beams, PanAmSat shall
bear such risk if it would have had such risk if the Service had been supplied
by it to Multi-Country under the Multi-Country Agreement; and
(c) Except as provided in the preceding clause (b), Customer
shall accept the risk of loss if a Service Transponder(s) is damaged or made
unusable as a result of attempting to make any further switch to which PanAmSat
may consent (i.e., the Service Transponder shall not be deemed to have failed on
a Confirmed Basis).
1.2A. Beam Election. Implemented.
1.3A Additional Use Restrictions. Customer acknowledges and agrees
that, notwithstanding anything in this Agreement to the contrary, its use of any
Transponder in the SSA, NSA, or North America downlink Beams of PAS-3 (and all
uses that may be permitted under this Agreement) shall be subject to all of the
[*******************************************************************************
********************************************************************************
********************************************************************************
**************************************].
1.5 Interim Marketing of the Capacity.
(a) If neither Customer nor Multi-Country requires all of the
capacity provided hereunder, until the End of the Multi-Country Availability
Requirement, upon Customer's request, PanAmSat shall use all reasonable efforts
to market services for occasional use from the Service Transponders (which
Customer would thereafter cease to employ) on a rolling sixty (60) day cycle,
subject to recall by Customer on sixty-five (65) days' notice (but subject to
preemption on twenty-four (24) hours notice if required by
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
3
<PAGE>
Customer for
Multi-Country [******************************************] to other potential
customers for video, data, or other uses, as market demand and technical
considerations may warrant, as reasonably determined by PanAmSat in consultation
with Customer, and subject to PanAmSat's reasonable discretion with regard to
the terms and conditions of service and selection of appropriate customers,
which shall be consistent with its general practices in this regard. In such
event, PanAmSat shall credit against Customer's next monthly Service Fee (which
shall continue to be payable) [*********************************************
********************************************************************************
********************************************************************************
******************************************************************] In addition,
after deducting [*******] specified above, if the monthly service fees actually
received by PanAmSat for service from the Service Transponders exceed the
monthly Service Fees to be paid to PanAmSat by Customer for the remarketed
capacity (the "Excess Amount") in addition to crediting the next month's Service
Fee payment, [*****************************************************].
1.6 Additional Marketing of Excess Capacity.
(a) At Customer's written request (an "Availability Notice"),
which may be given at any time after the End of the Multi-Country Availability
Requirement, PanAmSat shall use all reasonable efforts to market services from
one or more of the Service Transponders (which Customer would thereafter, on a
minimum of thirty (30) days' notice from PanAmSat, or such lesser period of
notice as Customer may agree in writing, cease to employ), as shall be
designated in the Availability Notice to other potential customers on a
full-time, full transponder basis for video, data, or other uses, as market
demand and technical considerations may warrant, as reasonably determined by
PanAmSat in consultation with Customer, and subject to PanAmSat's reasonable
discretion with regard to the terms and conditions of service and selection of
appropriate customers, which shall be consistent with its general practices in
this regard. In such event,
(i) PanAmSat shall actively market services from the Service
Transponders in good faith provided that PanAmSat shall not be obligated to use
the
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
4
<PAGE>
Service Transponders ahead of any other capacity that PanAmSat may also have
available for comparable service. Unless otherwise agreed by both parties, the
marketing shall be for full-time, fixed term uses. In addition, subject to the
considerations stated above, if Customer identifies to PanAmSat a potential
customer who desires to purchase service from PanAmSat that employs the Service
Transponders, PanAmSat shall seek, in good faith, promptly to enter into a
service agreement with said customer, provided that if PanAmSat was already in
negotiations with said potential customer for other PanAmSat capacity, PanAmSat
shall not be required to discontinue such negotiations; and
(ii) PanAmSat shall credit against Customer's next monthly
Service Fee (which shall continue to be payable) [*****************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
**********************] In addition, after deducting [*******] specified above,
if the monthly Service Fees actually received by PanAmSat for service from the
Service Transponders exceed the monthly Service Fees to be paid to PanAmSat by
Customer for the remarketed capacity (the "Excess Amount") in addition to
crediting the next month's Service Fee payment, [***************************
*************************************]
(b) At any time that is six months or more after the date that
Customer shall have given an unwithdrawn Availability Notice, Customer shall be
permitted on notice to PanAmSat to replace an Availability Notice with a
"Sublease Notice" as to such Service Transponder(s) that had been subject to the
Availability Notice. Upon giving of such a notice, subject to any customer
agreements that PanAmSat may have entered under and consistent with the
Availability Notice, Customer shall be permitted to sublease such Service
Transponder capacity itself to third parties on a full-time, full transponder
basis, subject to the following conditions:
(i) Any such sublease shall be subject to PanAmSat's prior written
consent; provided that such consent shall not be unreasonably withheld or
delayed, it being understood that PanAmSat may withhold its consent only if:
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
5
<PAGE>
(A) PanAmSat determines in good faith, that some or all of the sublease's
programming (information about which Customer shall provide to PanAmSat upon
PanAmSat's request) may be pornographic, involve religious fanaticism or
political advocacy, obscene, indecent, slanderous, or in violation of any
governmental programming restrictions; or (B) PanAmSat was demonstrably already
engaged in marketing other PanAmSat capacity with comparable coverage
("Comparable Capacity") to the required sublessee(s), evidence of which (which,
if in writing, may be excised to protect proprietary information and, if oral,
will be summarized by PanAmSat) shall be provided to Customer by PanAmSat at
Customer's written request;
(ii) Any marketing by Customer to potential sublessees shall be
only via "soft marketing," i.e., one-to-one, private and confidential
discussions with third parties and shall not include any public or mass
marketing of such capacity, or employ the use of brochures or similar materials
intended for broad distribution. If Customer is informed (either by PanAmSat or
by a potential sublessee) that the sublessee is in negotiation with PanAmSat for
Comparable Capacity, Customer shall discontinue its marketing efforts directed
at such sublessee);
(iii) Customer: (A) shall remain responsible directly to PanAmSat
for compliance with all obligations under this Agreement, including payment; (B)
shall be responsible for and shall require its sublessees to comply with all of
the conditions of use (operational and content) of this Agreement; and (C) if
any sublessee will have an uplink to the Satellite that is not under Customer's
direct operational control, shall require said sublessee(s) to enter into a
third party access agreement(s) with PanAmSat, which makes said sublessee's
obligations to comply with the conditions of use (operational and content) of
this Agreement enforceable directly by PanAmSat against such third party (as
well as against Customer); and
(iv) Customer shall notify PanAmSat of all consideration promised
and/or received by its sublessees. In the event that such consideration exceeds
the amount of (A) Customer's Service Fee for the applicable Service Transponder
and for the same period of use; and (B) such costs reasonably incurred by
Customer for providing any related services and equipment to said sublessee, not
provided by PanAmSat, that may be associated with the provision of such service,
e.g., turnaround, compression, or other terrestrial services of facilities or in
subleasing the Service Transponder or in remarketing such capacity (the "Excess
Amount"), then, in addition to the monthly
6
<PAGE>
Service Fees to be paid to PanAmSat by Customer, Customer shall pay
[********************************************************] to PanAmSat.
(c) Subject to any third party agreements which PanAmSat may have
entered while the Service Transponder(s) are made available to it under Section
1.6(a) above consistent with the Notice of Availability that was given, Customer
may withdraw an Availability or Sublease Notice at any time; provided that,
until withdrawn, PanAmSat may, on notice to Customer, terminate this Agreement
as to one or more of the Service Transponders that are then subject to an
Availability or Sublease Notice, subject to any sublease agreements to which
PanAmSat may have consented pursuant to Section 1.6(b) above.
2.2 (b) The Service Term for the remaining two (2) Service Transponders
(the "Remaining Two"), and the change of designation of two of the three Initial
Group Transponders, is acknowledged to have commenced on November 1, 1997. (For
the avoidance of doubt, there is no change to clauses (a) or (c) of Section
2.2.)
Appendix A, Transponder Designations. A revised Appendix A is attached to
this Amendment.
Appendix B, Service Specifications. In addition to the Service
Specifications that are (and remain, where applicable) part of the PAS-3
Agreement, Service Specifications associated with the use of the Service
Transponders when switched into the SSA or NSA beams are attached to this
Amendment. [same as used for MultiCountry PAS-3 specs]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
7
<PAGE>
Each of the parties has duly executed and delivered this Amendment as of
the day and year first written above.
PANAMSAT INTERNATIONAL SYSTEMS, INC.
By:
Name:
Title:
TELEVISA, S.A. de C.V.
By:
Name:
Title:
<PAGE>
APPENDIX A (REVISED)
SERVICE TRANSPONDERS
PAS-3
INITIAL GROUP (March 1, 1997 through October 31, 1997)
UPLINK DOWNLINK
Transponder # MHz Band Beam Band Beam
7-EK 64 Ku Eur/No. Amer V Ku Europe H
11-EK 54 Ku Eur/No. Amer V Ku Europe V
15-EK 54 Ku Eur/No. Amer V Ku Europe V
FIVE TRANSPONDERS (November 1, 1997, and thereafter)
11-EK 54 Ku Eur/No. Amer V Ku Europe V
13-K 54 Ku Eur/No. Amer V Ku Europe V*
6-K 54 Ku Eur/No. Amer H Ku No. Amer V**
10-K 54 Ku Eur/No. Amer H Ku No. Amer V**
14-K 54 Ku Eur/No. Amer H Ku No. Amer V**
* To be switched to NSA Beam for Multi-Country and then back to Europe.
** To be switched to SSA Beam for Multi-Country and then back to No. Amer.
Exhibit 10.27.2
EXECUTION COPY
SECOND AMENDED AND RESTATED
TRANSPONDER PURCHASE AND SALE AGREEMENT
This Agreement (the "Agreement") is entered into this 5th day of March,
1998, (the "Execution Date") by and between PanAmSat International Systems,
Inc., a Delaware corporation formerly known as PanAmSat Corporation ("PanAmSat")
and NetSat Servicos Ltda., a Brazilian limited liability quota company
("Buyer"). This Agreement covers the sale of Ku-band Transponders to Buyer
(referred to generally as the "Buyer's Transponders"). Initially, Buyer
purchased four (4) Transponders (the "PAS-3 Transponders") in the Brazil Beam of
the Atlantic Ocean Region Satellite referred to by the parties as PAS-3, aka
PAS-3R ("PAS-3") that was constructed by Hughes Space and Communications
Company, formerly a division of Hughes Aircraft Company ("Hughes"), launched,
and placed into commercial service on February 20, 1996. Buyer then purchased
twelve (12) Transponders (the "PAS-6 Transponders") in the Brazil Beam of the
Atlantic Ocean Region Satellite referred to by the parties as PAS-6 ("PAS-6")
that was constructed by Space Systems/Loral, Inc. ("Loral"), and placed into
commercial service on September 19, 1997. Under the circumstances specified
below, Buyer will purchase twelve (12) Transponders (the "PAS-6B Transponders")
and shall under the circumstances specified below be given access to the two
[****] Transponders" (as defined below) in the Brazil Beam of that certain
Atlantic Ocean Region Satellite referred to by the parties as PAS-6B ("PAS-6B").
PAS-6B is now under construction by Hughes. Under the circumstances specified
below, Buyer may "trade-in" the PAS-3 Transponders and/or in the case of the
purchase of PAS-6B Transponders, the PAS-6 Transponders. The Buyer's
Transponders are more particularly identified in Appendix A and each satellite
(generally referred to as a "Satellite") is described in Appendix B (one for
each Satellite) of this Agreement. References in this Agreement to the "Primary
Satellite" means PAS-6 before the "Delivery" (under and as defined in this
Agreement) of PAS-6B and PAS-6B on and after the Delivery of PAS-6B. For the
avoidance of doubt, if there is never a PAS-6B Delivery Date or if there is one,
but it is negated under the provisions of Section 2.1A ("Condition Subsequent to
PAS-6B Delivery") below, the Primary Satellite shall remain PAS-6. The Buyer's
Transponders shall be supplied by PanAmSat in outerspace. The transponders on
each Satellite and the beams in which these transponders are grouped are
referred to as "Transponder(s)" and the "Beam(s)," respectively.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
1
<PAGE>
This Agreement amends and restates that certain Amended and
Restated Transponder Purchase and Sale Agreement, dated as of June 26, 1996, by
and between PanAmSat and Buyer which implemented that certain letter agreement
dated February 29, 1996, by and among PanAmSat, The News Corporation Limited
("News"), Globo Comunicacoes e Participacoes ("Globo") and Grupo Televisa, S.A.
("Televisa") (the "Letter Agreement"). For the avoidance of doubt, the parties
acknowledge and agree that the combination of this Agreement and that certain
"Transponder Service Agreement," by and between PanAmSat and Sky Multi-Country
Partners, a Delaware Partnership, previously referenced as Multi-Country
Partners GP ("Multi-Country Platform"), dated the same day as this Agreement
(the "Multi-Country Agreement") supersedes the Letter Agreement as to PAS-3 and
PAS-6 and the rights and obligations of the parties relative thereto, but that
the rights and obligations of the parties to the Letter Agreement relative to
PAS-5 are unaffected and remain binding. Further, the parties acknowledge and
agree that the negotiation of this Agreement and the Multi-Country Agreement
have responded to special circumstances regarding the [*****************] of
PAS-6 that are not relevant to PAS-5 and that it is neither anticipated nor
required that the rights and obligations of the parties to the Letter Agreement
vis-a-vis PAS-5 will reflect this Agreement or the Multi-Country Agreement.
References in this Agreement to Multi-Country Platform also refers to any
permitted assignees of its rights under the Multi-Country Agreement.
AGREEMENT
In consideration of the foregoing and of the mutual promises set forth
below, PanAmSat and Buyer mutually agree as follows:
ARTICLE 1. SALE OF TRANSPONDERS
1.1 The Sale. PanAmSat agrees to provide and convey, and Buyer agrees
to purchase, the Buyer's Transponders. Except as otherwise specifically
permitted under this Agreement, PanAmSat shall not preempt or interrupt Buyer's
use of the Buyer's Transponders. In no event shall these exceptions be construed
so as to permit PanAmSat to preempt Buyer's use of the Buyer's Transponders so
as to allow PanAmSat to use the Buyer's Transponders to provide Transponder
capacity for itself or for another customer.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
2
<PAGE>
1.1A [****] Transponders. Commencing on the earliest of (a) thirty (30)
months after the PAS-6B Delivery Date, (b) March 1, 2001, and (c) such earlier
date as PanAmSat may specify in its sole discretion (the "Availability Date")
and for as long as this Agreement remains effective as to PAS-6B, PanAmSat shall
make available to Buyer [*******************************************************
**********************************************************************
************************] the two (2) PAS-6B Brazil Beam Transponders denoted as
[***] in Appendix A, provided that Buyer, in its good faith judgment,
[*************************] Transponders for "Buyer's DTH Service" (as defined
below) for use in Brazil. If at any time [****************************
***********] for Buyer's DTH Service, Buyer shall return them (or, if one is
needed, return one) to PanAmSat's use, [*************************************
***************************************]. The [*****] have been designed to
perform in accordance with the Performance Specifications for the Buyer's
Transponders on PAS-6B, but PanAmSat makes no representation or warranty
regarding whether they will perform in this condition when their use is
requested by Buyer. Title to the [***] Transponders shall not be conveyed to
Buyer and Buyer shall not be entitled to any right of [***] or Substitute
Capacity in connection with any failure of the [***] Transponders to perform,
whether before or after their requested use, nor shall any right to [***]
Transponders be required to be implemented with respect to any "Successor
Satellite" or "Collocated Satellite," each as defined below. Where required
under Section 5.3, PanAmSat shall employ available spare TWTAs (as defined
below) to restore a failed [***] Transponder, but any such spare TWTA employed
shall be preemptible by PanAmSat to protect any other Buyer's Transponder on
PAS-6B that may fail to meet its Performance Specifications, even if such
failure occurs after the initial use of the spare TWTA to restore a [***]
Transponder to its Performance Specifications. For the avoidance of doubt, the
frequency preemptibility provision shall not apply to TWTAs substituted in the
course of the reassignment of TWTAs to restore a non-[***] Transponder to its
applicable Performance or Service Specifications (reference is made to the
second paragraph of Section 5.3) unless the TWTA employed for a [***]
Transponder was already preemptible pursuant to the previous operation of this
Section 1.1A. Except for provisions in conflict with the above, the [***]
Transponders shall be governed by the provisions of this Agreement that govern
Buyer's Transponders. This Section 1.1A shall not be effective until and unless
there is a PAS-6B Delivery Date and shall cease to be effective upon the
termination of this Agreement otherwise as to PAS-6B.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
3
<PAGE>
1.2 PAS-3 Transponder Trade-In. Upon "Delivery" (as defined below) of
the PAS-6B Transponders, Buyer shall "trade-in" and reconvey the PAS-3
Transponders to PanAmSat; provided that, if less than [***] PAS-6B Transponders
are Delivered, for each one below [***] PAS-6B Transponders that are not
Delivered, Buyer shall have the [***] (a "PAS-3 [***]") of retaining one PAS-3
Transponder, up to all [***], if only [***] or fewer PAS-6B Transponders are
Delivered. The PAS-3 [***] shall be exercised by Buyer, if at all, no later than
sixty (60) days after Delivery of such fewer number of PAS-6B Transponders;
provided that, not later than thirty (30) days after the PAS-6B Delivery Date,
Buyer shall notify PanAmSat which of Buyer's Transponders (if the PAS-3 [***] is
for less than [***] Transponders) to which it intends the PAS-3 [***] to apply,
if exercised, at which point the PAS-3 [***] as to the remaining PAS-3
Transponders shall expire. Buyer's exercise of the PAS-3 [***] shall be
effective retroactive to the PAS-6B "Delivery Date."
Subject, if applicable, to the availability of the PAS-3
[***] specified above, Buyer's trade in and reconveyance of the PAS-3
Transponders shall be effective [***] days after the PAS-6B Delivery Date (said
[***] day period being referred to herein as the "Dual Illumination Period"),
without any further action of Buyer or PanAmSat required; provided that said
trade-in and reconveyance shall not be effective until [***] days after the
PAS-6B Delivery Date for one PAS-3 Transponder if said Transponder is required
for Buyer's home page (the "Home Page Transponder"). Buyer shall notify PanAmSat
no later than [***] days after the PAS-6B Delivery Date if Buyer will require
said additional time for the trade-in of Buyer's Home Page Transponder and which
PAS-3 Transponder Buyer desires to use for this purpose. If the PAS-3 [***] is
available (i.e., less than [***] Transponders on PAS-6B have been or will be
Delivered), as to all PAS-3 Transponders for which the PAS-3 [***] is not
exercised, Buyer's trade-in of the PAS-3 Transponders will be effective on the
earlier of sixty (60) days after the PAS-6B Delivery Date or the date that Buyer
notifies PanAmSat of Buyer's election not to exercise the PAS-3 [***] , in whole
or in applicable part, but in no event earlier than [***] days after the PAS-6B
Delivery Date. At PanAmSat's request, Buyer shall execute such document of
reconveyance as PanAmSat may reasonably request to confirm that such
reconveyance has occurred.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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If this Agreement terminates as to PAS-6B without the
occurrence of a PAS-6B Delivery Date, Buyer shall have the right on notice to
PanAmSat to "trade-in" and reconvey one or more of the PAS-3 Transponders within
thirty (30) days of such termination. In such event the "trade-in" and
reconveyance shall be effective upon timely notice from Buyer to PanAmSat of
Buyer's exercise of such right. Upon the effective date of any trade in and
reconveyance of PAS-3 Transponders as permitted above, this Agreement shall
terminate as to PAS-3 Transponders that are reconveyed to PanAmSat and the
provisions of Section 7.6 shall apply.
The foregoing notwithstanding, Buyer's obligation to make
Installment payments for the PAS-3 Transponders reconveyed to PanAmSat under any
part of this Section shall cease (as determined on a Transponder by Transponder
Basis): (a) if there is a PAS-6B Delivery Date, on the later of: (i) the PAS-6B
Delivery Date, or (ii) as of the date that is [***] days prior to the date that
Buyer notifies PanAmSat of Buyer's election not to exercise the PAS-3 [***] for
the applicable Transponders; or (b) if this Agreement is terminated as to PAS-6B
without a PAS-6B Delivery Date, upon the termination of this Agreement as to
PAS-6B. PanAmSat shall be entitled to retain the Installments already paid and
shall be entitled to any Installments due prior to the effective date of the
trade in of PAS-3 Transponders, as determined above, but not already paid. For
the avoidance of doubt, payments made for the PAS-3 Transponders shall not apply
to the PAS-6 or the PAS-6B "Purchase Price" (as defined below), which shall be
payable in full.
1.2A PAS-6 Transponder Trade-In. Upon "Delivery" (as defined below) of
the PAS-6B Transponders, Buyer shall "trade-in" and reconvey the PAS-6
Transponders to PanAmSat. Buyer's trade in and reconveyance of the PAS-6
Transponders shall be effective [***] days after the PAS-6B Delivery Date,
without any further action of Buyer or PanAmSat required. At PanAmSat's request,
Buyer shall execute such document of reconveyance as PanAmSat may reasonably
request to confirm that such reconveyance has occurred. Upon the effective date
of such trade in and reconveyance, this Agreement shall terminate as to all of
PAS-6 Transponders and the provisions of Section 7.6 shall apply. The foregoing
notwithstanding, Buyer's obligation to make Installment payments for the PAS-6
Transponders reconveyed to PanAmSat under this Section shall cease on the PAS-6B
Delivery Date. PanAmSat shall be entitled to retain the Installments already
paid and shall be entitled to any Installments due prior to the effective date
of the trade in of
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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PAS-6 Transponders, as determined by the previous sentence, but not already
paid. For the avoidance of doubt, payments made for the PAS-6 Transponders shall
not apply to the PAS-6B "Purchase Price" (as defined below), which shall be
payable in full. Further, this Section 1.2A shall not apply if there is never a
PAS-6B Delivery.
1.2B Interference Between PAS-6 and PAS-6B. Buyer acknowledges and
agrees that its Transponders on PAS-6B cannot be used at the same time as the
Transponders of the same frequency on PAS-6 while the Satellites are located in
the same orbital slot and that, during the Dual Illumination Period, Buyer shall
not be entitled to any remedy for any interference that may be suffered to the
Buyer's Transponders due to the co-frequency operation of Transponders on PAS-6
and PAS-6B by Buyer or Multi-Country Platform.
1.3 Beam Switching, PAS-3. Certain of the Buyer's Transponders on PAS-3
are designed to be capable of operation from different uplink Beams. Their
current configuration is shown in Appendix A. Upon Buyer's written request,
subject to PanAmSat's consent not to be unreasonably withheld, including,
without limitation, for reasons of actual or potential interference to existing
satellites, satellites that are under construction and/or notified or subject to
other application to the FCC or the ITU, or use by other customers, PanAmSat
will, if required, but not to be on a frequent basis, make additional changes to
the uplink Beam of these switchable Transponders; provided as follows: (a) if
the change cannot be accomplished using reasonable engineering standards, this
Agreement shall continue to operate with the Buyer's Transponders in their
then-existing configuration, as if the request for a change had not been made;
(b) if Buyer requested the change in order to replace Buyer's Transponder to be
uplinked from a location which was lost because of a failure of another Buyer's
Transponder to meet the Performance Specifications, in circumstances in which
such other Buyer's Transponder could not be restored with "Spare Equipment" or
"Substitute Capacity," as defined in Section 5.3, PanAmSat shall bear the risk
of loss if the Buyer's Transponder(s) is damaged or made unusable as a result of
attempting to make the change (i.e., if the Performance Specifications for such
Transponder can no longer be met, the provisions of this Agreement that apply to
a failure of a Buyer's Transponder on a Confirmed Basis shall apply); and (c)
except as provided in the preceding clause (b), Buyer shall accept the risk of
loss if the Buyer's Transponder(s) is damaged or made unusable as a result of
attempting to make the switch (i.e., the Buyer's Transponder shall not be deemed
to have failed on a Confirmed Basis).
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1.3A Beam Switching on PAS-6B. Certain of the Buyer's Transponders on
PAS-6B may be capable of operation in the downlink of the Latin Beam of PAS-6B.
Upon Buyer's written request, subject to PanAmSat's consent not to be
unreasonably withheld, including, without limitation, for reasons of actual or
potential interference to existing satellites, satellites that are under
construction and/or notified or subject to other application to the FCC or the
ITU, or use by other customers, PanAmSat will, if required, but not to be on a
frequent basis, change the downlink Beam of such switchable Transponders (if
any) to the Latin Beam; provided as follows: (a) if the change cannot be
accomplished using reasonable engineering standards, this Agreement shall
continue to operate with the Buyer's Transponders in their then-existing
configuration, as if the request for a change had not been made; (b) Buyer shall
accept the risk of loss if the Buyer's Transponder(s) is damaged or made
unusable as a result of attempting to make the switch (i.e., the Buyer's
Transponder shall not be deemed to have failed on a Confirmed Basis); (c) the
Transponder(s) being switched shall continue to count toward Buyer's Minimum
Complement; (d) Buyer shall not be permitted to switch the [***] Transponders or
to use the [***] Transponders while any of Buyer's other Transponders are
switched out of the Brazil Beam; and (e) while payment for such Transponder(s)
will continue to be made under the pricing provisions set forth in this
Agreement, [******] must (i) consent to such switch and (ii) unless [*****] has
exercised its [******] under Section 18.2 of the[***], must agree with PanAmSat
in writing to[******************************************************************
**************] for determining the [******] to PanAmSat and otherwise adjust
its [***] to treat such switched Transponders the same way that "Additional
Transponders" (as defined in the [***] provided from another satellite would be
treated; provided that PanAmSat may in its sole discretion expressly waive in
writing the requirements of this clause (e)(ii), in which event the [***] of
[*****] to PanAmSat under the [***] shall then be unaffected by the switch.
1.4 Covenants on Use. Buyer acknowledges and agrees that the sale that
is the subject of this Agreement is being made in consideration, among other
things, of Buyer's agreement and promise to use the Buyer's Transponders for
particular purposes. In this regard, Buyer agrees as follows:
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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(a) DTH Service. Except as otherwise provided herein, Buyer's
Transponders shall be used to meet the satellite transmission requirements of
Buyer's direct to home service, which for purposes of this Agreement, except for
the specific purposes of Section 1.7, means video and audio programming that is
provided on a pay or subscription basis, with associated audio and data signals
(e.g., authorization codes) together with any other direct broadcast or
interactive or multimedia service, (including, without limitation, internet
access and video games) and that is intended for direct reception (or by means
of SMATV) by, and is made available primarily to, end user recipients in the
home or business via "Ku-band" (as defined below) satellite transponders in
Brazil ("DTH Service"). Other uses of the Buyer's Transponders shall be
permitted to the extent provided under this Section 1.4 and Sections 1.6 below.
References in this Agreement to Buyer's "transmissions" and, except where
specifically limited to "video," references to Buyer's "programming" shall be
deemed to include all permitted video and non-video applications. As used in
this Agreement, "Ku-band" means the frequency band between 10.7 and 17.8 GHz,
excluding minor overlaps of other bands to the extent generally recognized as
falling outside the "Ku-band" designation and also excluding authorizations that
may be granted (on a general applicability basis) for minor portions of the band
solely for use in connection with frequencies located outside of the band.
(b) Buyer's DTH Service. As used in this Agreement, the
reference to "Buyer's DTH Service" shall be deemed to include any DTH Service
that is owned, operated or managed by Buyer or any entity that is directly or
indirectly "Controlled" by a combination of one or more of the "Approved
Participating Companies" that also, directly or indirectly, Control the Buyer.
The Approved Participating Companies mean any one or more of the following
companies that directly or indirectly has an equity holding, investment, or
other economic interest in the Buyer: News, Tele-Communications International,
Inc. ("TINTA"), Globo, and/or any of the "Approved Companies" that are
identified in Appendix I. News, Globo, and TINTA are also referred to herein as
the "Founding Partners." At Buyer's request, the list of Approved Companies may
be expanded, subject to PanAmSat's prior written consent, not to be unreasonably
withheld, conditioned, or delayed; provided that, in appropriate circumstances,
PanAmSat may limit its consent to the involvement of an Approved Company: (i) so
that Control of Buyer is retained by other Approved Participating Companies,
(ii) to exclude separate programming rights under Section 1.4(c)
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below, and/or (iii) to exclude rights to be an assignee under Section 10.5 of
this Agreement. PanAmSat shall make all decisions required under this paragraph
in good faith based upon the financial qualifications and programming practices
(i.e., with respect to considerations identified in Section 10.5 below) of a
proposed Approved Company. For purposes of this Agreement, "Control" means
voting control over ordinary business activities (positive or negative) that may
be exercised directly or indirectly. As a condition for their interest in Buyer
and participation in Buyer's DTH Service, Buyer shall require each of the
Approved Participating Companies to agree to and to comply with the terms and
conditions of the Agreement as they relate to them and shall make PanAmSat a
third party beneficiary entitled to enforce such provisions directly against the
Approved Participating Companies. It is understood that Buyer's DTH Service may
carry programming provided to it by third parties.
Buyer may permit video programming signals (with associated
audio and data signals) that are owned by one of the Founding Partners or their
"Affiliates" and that are being carried on Buyer's DTH Service also to be
received (the same feed), on an ancillary basis, by cable head ends, SMATV,
MMDS, and other facilities that may be developed for the distribution of video
programming ("Non-DTH Outlets"). As used in this Agreement, "Affiliate" means,
with respect to any entity, any entity directly or indirectly, through one or
more intermediaries, Controlling, Controlled by, or under common Control with
such entity. For purposes of this paragraph, "Affiliates" of the Founding
Partners shall also be deemed to include (except for purposes of making
determinations under clause (iii) that follows) entities in which all of the
following are the case: (i) a Founding Partner individually owns, directly or
indirectly, at least 25% of the equity of the entity; (ii) the Founding Partner
has a board seat or comparable management participation in the entity; and (iii)
if the entity or its Affiliates has ever entered into a satellite transponder
transaction with PanAmSat, the Founding Partner has had liability exposure to
PanAmSat thereunder, either as a general partner of the entity or as guarantor
(in whole or in part) of the entity's obligations to PanAmSat.
(c) Non-DTH Use. Buyer, each Founding Partner (as long as it
directly or indirectly, owns or has an investment or economic interest in Buyer
or in Buyer's DTH Service), each Approved Participating Company that has a
minimum 10% voting equity in the Buyer, and each entity that is an Affiliate of
any of the foregoing entities is referred to herein as a "Buyer Company." To the
extent that the capacity provided by the Buyer's Transponders exceeds the
requirements of the Buyer
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Companies for the satellite transmission of DTH Service in the Ku-band (as they
reasonably determine) and the Buyer Companies are not using other Ku-band
satellite capacity in lieu of the Buyer's Transponders, to meet such
requirements for Brazil, the Buyer Companies may use the Buyer's Transponders
for their own needs with respect to transmission of video, audio, data and
teletext signals and any other electronic information, including (without
limitation) interactive video applications, however transmitted, whether in the
form of data, teletext or packets; provided that the rights set forth in this
Section 1.4(c) shall not be available to Buyer during any period in which Buyer
is being granted access (at Buyer's request) to one or both of the [***]
Transponders in accordance with Section 1.1A above].
(d) Use by Others. In any circumstances in which Buyer is
permitted herein to allow the Buyer's Transponders to be used by other Buyer
Companies, or in circumstances in which Buyer's DTH Service may carry
programming services provided to it by others, Buyer shall remain ultimately
responsible to PanAmSat for all such use. In such circumstances, Buyer's
responsibilities to PanAmSat with respect to Buyer's use of Buyer's
Transponders, Buyer's transmissions to the Satellite(s), Buyer's programming and
the responsibilities of Buyer to PanAmSat for other activities hereunder shall
be read to include the use, transmissions, programming, and activities of any
such other entity.
(e) International PSN Restriction. In no event may the Buyer's
Transponders (except to the extent that they are remarketed by PanAmSat, as
provided below) be used for switched public international telecommunications
services.
(f) Intent of Third Party Use. Buyer acknowledges and agrees
that it is the parties' intent, in allowing the carriage of programming services
provided by others, to further Buyer's ability to develop the DTH market, but
not to allow Buyer to resell or otherwise make the Buyer's Transponder(s)
available to others at a profit solely on the capacity itself, and that Buyer
shall not, through the permission granted or through any other agreement or
arrangement, enter into any agreement to, or use the Buyer Transponder(s) in any
way that would, materially conflict with this intent.
1.5 Transmission Plan for Transponders. Buyer's transmissions to the
Satellite(s) (which may be performed by one or more third party uplink
providers, as provided in Section 4.2 below) shall conform to digital
transmission plans to be
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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submitted by Buyer to PanAmSat and that shall be subject to PanAmSat's prior
written approval. The transmission plan shall include such information as called
for in the form of transmission plan that is attached hereto as Appendix M and
such other technical information as PanAmSat may require in its reasonable
engineering judgment to manage the operation of its satellites. Buyer shall be
permitted to modify these transmission plans from time to time, subject to
PanAmSat's prior written approval. PanAmSat shall not unreasonably withhold its
approval of a transmission plan or modification to such a plan, which approval
shall be based solely upon the considerations identified in Section 4.1 below.
PanAmSat makes no representation, warranty, or covenant regarding the efficacy
of the use of any number of carriers or other alternative uses of capacity
provided under this Agreement. If not otherwise provided by PanAmSat pursuant to
separate agreement, Buyer will provide PanAmSat, at no cost to PanAmSat, with
equipment necessary to decode its signals. It is understood that, in some
circumstances, PanAmSat may provide uplink services to Buyer, in which event
Buyer shall not be responsible to PanAmSat for the technical operation or
performance of such PanAmSat-provided uplinks under this or other sections of
this Agreement.
1.6 Marketing by PanAmSat of Buyer's Capacity. At Buyer's request,
PanAmSat shall market up to four of Buyer's Transponders for use by third
parties on an interim basis until Buyer requires them for the DTH Service;
provided that no such marketing shall occur during the period between the
[***********************************] and the earlier of (a) the [***] or (b)
the termination of this Agreement as to [***] without the occurrence of a
[*******] (the "Interim Period"). In such circumstances that marketing is
requested, PanAmSat shall use all reasonable efforts to market services from the
Buyer's Transponders (up to four) made available for this purpose (which Buyer
would thereafter cease to employ) for the interim period to other potential
customers for video, data, or other uses, as market demand and technical
considerations may warrant, as reasonably determined by PanAmSat in consultation
with Buyer, and subject to PanAmSat's reasonable discretion with regard to the
terms and conditions of service and selection of appropriate customers, which
shall be consistent with its general practices in this regard and Buyer's
consent rights set forth in clause (b) of this Section. In such event:
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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(a) PanAmSat shall actively market services from the Buyer's
Transponders in good faith provided that PanAmSat shall not be obligated to use
theBuyer's Transponders ahead of any other capacity that PanAmSat may also have
available for comparable service. Following the Interim Period, unless otherwise
agreed, marketing shall be for full-time, fixed term uses. With the exception of
the marketing of the Buyer's Transponders for occasional use prior to the
Interim Period, all contracts regarding possible use by third parties of Buyer's
Transponders, as permitted under this Section 1.6, shall be promptly forwarded
by PanAmSat to Buyer for specific written approval, rejection, or proposed
modification by Buyer, it being understood that neither PanAmSat nor a third
party customer shall be required to accept Buyer's proposed modifications, but
also may not go forward with an unmodified agreement for Buyer's Transponders
under this Section 1.6 that Buyer has not approved. Buyer shall also have the
right to approve or reject any particular customers for service from Buyer's
Transponders that are made available under this Section. In addition, subject to
the considerations stated above, if Buyer identifies to PanAmSat a potential
customer who desires to purchase service from PanAmSat that employs the Buyer's
Transponders, PanAmSat shall seek, in good faith, promptly to enter into a
service agreement with said customer, provided that if PanAmSat was already in
negotiations with said potential customer for other PanAmSat capacity, PanAmSat
shall not be required to discontinue such negotiations; and
(b) PanAmSat shall credit against Buyer's next monthly
"Installment" (as defined below) (which shall continue to be due and payable
during this period), such amounts that are actually received from other
customers for service from the Buyer's Transponders for the previous month less
costs reasonably incurred by PanAmSat for which PanAmSat is not separately
reimbursed for providing any related services and equipment that may be
associated with the provision of such service, e.g., turnaround, compression, or
other terrestrial services or facilities ("Additional Facilities Costs") and
costs (including reasonable attorneys' fees) reasonably incurred by PanAmSat in
marketing such services to, or negotiating a service agreement with, third
parties) ("Transaction Costs") up to the amount of the Installment paid by Buyer
for the applicable period for the Buyer's Transponders made available by Buyer
to PanAmSat for remarketing under this Section 1.6. For purposes of marketing
for occasional use, the parties agree that PanAmSat's Transaction Costs shall be
deemed to equal [***] of the revenues actually received from such effort. In
addition, after deducting the
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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Additional Facilities Costs, if any, and Transaction Costs specified above, if
the [************************] by PanAmSat for [***] from the Buyer's
Transponders [***] the [***] to be [***] to PanAmSat by Buyer for the [***] (the
"[***]") in [***] to crediting the next month's Installment payment, PanAmSat
shall[***], as an [********] of such [***] and shall [***] Buyer [***] of
such[***].
1.7 [***]
(a) General Obligations.
(i) PanAmSat. Subject to the exceptions stated in
this Section 1.7, PanAmSat agrees that, during the "Term" of this Agreement (as
defined below), neither it nor any "PanAmSat Company" (defined herein as an
Affiliate of PanAmSat) will:
(A) use or enter into any transponder
contract (service, lease, purchase, or other vehicle) that does [***] the [***]
of any Ku-band Transponder on any satellite (x) which is owned, operated or
managed by PanAmSat or any PanAmSat Company, (y) which is located in the
[********] (defined herein to be the [***] at which the Primary Satellite is
[**********] and (z) which has Ku-band coverage over [***] (other than by
a[***]) for the purpose of delivering any DTH Service in [***] and, in such
contracts that provide Ku-band coverage over [***] for[***], specifying Buyer as
a [*********] entitled to [***] such[***]; or
(B) [***] its [***] for any satellite
located in the [*********] unless the assignee agrees to be bound by the
provisions of the previous clause (A).
The foregoing notwithstanding, neither PanAmSat nor any PanAmSat Company shall
be required to place [***] on its Ku-band Transponders that [***] the [***] of
transmissions [*****] or [*****], as part of a [***] that is [***] for this
purpose and that is [***] for other purposes (e.g., [***] to [***]), nor shall
PanAmSat or any PanAmSat Company be required to place [***] on the use of
Ku-band Transponders whose [**************]of [***] (such as the Ku-band
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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Transponders on PAS-6 that are being provided to [****************************
****************] but that may have [***](in terms of [***] for DTH Service)
over a [***] of[***]. For the avoidance of doubt, none of the restrictions on
PanAmSat or any PanAmSat Company that are stated in this Section 1.7 shall apply
to any satellite that is not [***************************].
(ii) Buyer. Subject to the exceptions stated in this
Section 1.7, Buyer agrees that, during the Term of this Agreement, neither it
nor any Buyer Company will:
(A) own, invest in, or hold an economic
interest in a DTH Service [************] that [****************************]
other than that provided by [***] pursuant to [***]; or
(B) use any [*******************] with
coverage over[***], other than that provided by [***] pursuant to this [***],
for the [***] of[***********].
(iii) General Exceptions. It is understood and agreed
that nothing herein shall prohibit: (A) PanAmSat or a PanAmSat Company or Buyer
or a Buyer Company from making an investment in [***] or its DTH Services; (B)
PanAmSat or a PanAmSat Company from making an investment in Buyer, a Buyer
Company, or in Buyer's DTH Service; (C) Buyer or any Buyer Company from making
an investment in PanAmSat or a PanAmSat Company.
(b) Buyer Exceptions. Subject to Section 1.7(g) below, this
Section 1.7 shall cease to apply to Buyer or any Buyer Company in any [***] of
the following circumstances:
(i) Buyer is required by law or other compelling
Brazilian government force, as Buyer reasonably determines to be the case (the
basis for which Buyer shall promptly disclose to PanAmSat in reasonable detail),
to [***] DTH Services from its [***] or[****************************]; or
(ii) (A) Buyer is using [***] of the [***] provided
hereunder for the [****] DTH Service, (B) Buyer requests in writing, PanAmSat to
[*****
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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********] Ku-band capacity for its DTH Service, which request shall make express
reference to Buyer's intent to invoke its rights under this clause, and (C)
PanAmSat is [***] to make such [***] available, at agreed upon [***] or, if
applicable, [***] as [***] under Section 16.1(a)(ii) that Buyer has accepted,
within [***] of such written request and agreement on, or acceptance of, [***]
and (D) within [***] following the date that PanAmSat notifies Buyer that
PanAmSat is [***] to meet such [***] request within said period, Buyer acquires
or enters into a binding agreement to acquire such [***]. PanAmSat shall keep
Buyer reasonably apprised of its efforts in response to a written request under
this clause andshall notify Buyer at any such time that PanAmSat reasonably
determines that it will not meet such request within the [***] period.
(iii) At Buyer's[***], if this Agreement is
terminated as to PAS-6B without the occurrence of a PAS-6B Delivery Date or upon
the occurrence of the PAS-6B Delivery Date.
(c) Intentionally Deleted.
(d) [**********]. At Buyer's [***], the provisions of this
Section 1.7 shall [***] to a [***] on and after such date that it [***] to have
or be Affiliated with an entity that has any direct or indirect ownership,
investment or other economic interest in the Buyer or its DTH Service; provided
as follows: (i) in [***] shall more than [***] of the [***] or Affiliates of
more than [***] of them, directly or indirectly, own, invest in, or otherwise
hold an economic interest in the [***] DTH Service [***] within [***] (other
than the Buyer's DTH Service); and (ii) Buyer shall, and shall contractually
require the [*****] to notify PanAmSat at such time that a [*****](or any of its
(their) Affiliates) enters or takes any material step toward entering (e.g.,
securing [******] or [******] for a DTH Service) the business of providing DTH
Service in [***] or acquires, direct or indirectly, an ownership, investment or
other economic interest in another DTH Service operating or which has taken or
takes material steps toward operating within [***] (any such event being
referred to herein as a [******].
(e) Intentionally Deleted.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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(f) Notices. Each party shall promptly notify the other of an
event that gives rise to a right to [***] the [***] of this Section 1.7 in
relevant part. Within [***] (or, in the case of clause 1.7(b)(ii), [***]) of
receiving such notice or notice of an event that would permit a party to [***]
the [***] of this Section 1.7 in relevant part, the party receiving such notice,
must [***] the right granted or it shall be [***] as to the event giving rise
thereto (but not as to any future independent circumstances that may give rise
to a separate right).
(g) Survival. The [***] provisions of this Section 1.7 shall
not relieve Buyer, the Buyer Companies, and, even if no longer a Buyer Company,
the Founding Partners from the notice obligations stated in Section 1.7(d)(ii).
(h) [***] of DTH Service. For purposes of this Section 1.7,
[***] do [***] DTH Service. In addition, except for operations from the Primary
Satellite Orbital Slot, for purposes of this Section 1.7, the definition of "DTH
Service" is [***] to [***] with associated [***] and [***] that is intended for
[***] via satellite by [********] in the[***].
(i) [*********]. The obligations specified in this Section 1.7
shall [***] at such time that this Agreement is [***] as to [******] and [***],
even if this Agreement [***] in [***] for PAS-3 Transponders.
(j) Successors in Interests. For the avoidance of doubt and
not for limitation, the provisions of this Section 1.7 shall be binding upon any
entity that acquires all or substantially all of the assets of an entity that is
otherwise subject to the provisions to the same extent that the provisions would
be applicable to the entity being acquired.
(k) Individual Conduct. If any individual(s) who Controls an
entity that is subject to this Section 1.7 or any entity that is directly or
indirectly Controlled by such individual(s) takes an action, including (without
limitation) material steps toward doing so, of the kind described in Section
1.7(d)(ii) above, that would be prohibited under this Section, if said
individual were an entity, then the party that is not (if such individual(s)
were an entity) Affiliated with such individual may [***] the [***] of this
Section 1.7 on notice to the other party. In addition, the conduct of such an
individual, if he or she, if an entity, would be that of an Affiliate of a
Founding
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
16
<PAGE>
Partner, shall have the same additional consequences under Sections 1.7(d) and
Article 16 of this Agreement as if that Founding Partner were a Founding Partner
in Competition.
ARTICLE 2. DELIVERY, TITLE.
2.1 Term, Delivery. The term of this Agreement (the "Term") is
acknowledged to have commenced as of April 15, 1996 and, subject to 16.1(f),
shall remain in effect until this Agreement is terminated in accordance with its
terms, as to all of the PAS-3, PAS-6, and PAS-6B Transponders.
"Delivery" of Buyer's PAS-3 Transponders is acknowledged to
have occurred on April 15, 1996 and "Delivery" of the Buyer's PAS-6
Transponder(s) is acknowledged to have occurred on September 19, 1997. In this
regard, PanAmSat hereby certifies to Buyer that, as of their respective Delivery
Dates, PAS-3 and PAS-6each were placed in their assigned orbital position with
all four (4) PAS-3 Brazil Beam Transponders and all twelve (12) Brazil Beam
PAS-6 Transponders meeting their respective "Performance Specifications" set
forth in Appendix C. Delivery of Buyer's PAS-6B Transponders shall occur on the
date that PAS-6B has been placed in its assigned orbital position, with at least
the "Minimum Complement" of Buyer's Transponders meeting the Performance
Specifications set forth in Appendix C, and PanAmSat so certifies to Buyer and
makes such Transponders available to Buyer for its use, unless Buyer agrees to
accept Delivery from fewer of Buyer's Transponders than the Minimum Complement,
which fewer number would then be deemed to be the Minimum Complement for PAS-6B
hereunder. The foregoing notwithstanding, if PanAmSat is unable initially to
Deliver (i.e., at the PAS-6B "Delivery Date") the Minimum Complement of Buyer's
Transponders on PAS-6B, PanAmSat will not be required to Deliver to Buyer a
fewer number, if less than the number of PAS-6 Brazil Beam Transponders that
then currently are capable of meeting their Performance Specifications. PanAmSat
shall give the certification to Buyer required for Delivery of PAS-6B, if it
would be true and correct, when PAS-6B is ready to be placed into commercial
service. For each Satellite, the date of Delivery is referred to in this
Agreement as the "Delivery Date." Subject to the earlier part of this paragraph,
the "Minimum Complement" of Buyer's Transponders on PAS-6B is [***]; provided
that any [***] Transponders that meet their Performance Specifications and that
are used by Buyer or available to it on 120 days' notice under Section 1.1A
shall be counted toward
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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<PAGE>
the PAS-6B Minimum Complement. PAS-6B is anticipated to be launched in October,
1998, and the Delivery Date for PAS-6B is currently anticipated to occur no
later than November 30, 1998, the "Latest Anticipated Delivery Date" for PAS-6B.
Subject to Section 2.4 below, any Buyer's Transponder on PAS-6B that does not
meet the PAS-6B Performance Specifications at the time that one or more other
Buyer's Transponders on PAS-6B are "Delivered" shall at that time cease to be a
Buyer's Transponder or subject to this Agreement. For the avoidance of doubt,
while PAS-3 is anticipated to have a lifetime of between fourteen (14) and
fifteen (15) years, PAS-6 is anticipated to have a lifetime of between twenty
(20) and twenty-one (21) years, and PAS-6B is anticipated to have a lifetime of
eighteen and one-half (18-1/2) to nineteen and one-half (19-1/2) years, the
Performance Specifications shall be deemed to be met regardless of anticipated
life after launch and, subject to Section 7.6 in the event of early termination,
the full Purchase Price shall be due. PanAmSat shall use commercially
reasonableefforts to cause each of Buyer's Transponders on PAS-6B to be
Delivered on or before the Latest Anticipated Delivery Date for PAS-6B.
Buyer acknowledges and agrees that the PAS-6 and PAS-6B
Satellites have been designed by their manufacturers for planned lives of
fifteen (15) years, but the launch of PAS-6 and the anticipated launch of PAS-6B
are now predicted to allow enough fuel for the Satellites to be maintained for
longer periods. Buyer further acknowledges and agrees that such extended life
beyond the approximate fifteen (15) years that would otherwise be anticipated is
due to unusual circumstances associated with the launch of PAS-6 (and the
anticipated launch of PAS-6B) and is not anticipated or required to be repeated
in the case of [***************************************************], from which
capacity may be taken or ordered pursuant to this Agreement.
2.1A Condition Subsequent to PAS-6B Delivery. If the Minimum Complement
of PAS-6B Transponders cannot be provided as of the date that is forty-five (45)
days after the PAS-6B Delivery Date, the PAS-6B Delivery Date shall be deemed
not to have occurred and the parties shall be returned to the status quo ante,
in all respects as if the PAS-6B Delivery Date had not occurred; provided that
in the circumstances set forth in Section 2.1 where Buyer would have had the
[***] to waive the Minimum Complement and accept a fewer number of Transponders
on PAS-6B at Delivery (which would then be the Minimum Complement) and if
PanAmSat would have been required to Deliver such fewer number, Buyer shall have
the same [***] under this Section 2.1A to be exercised, if at all no later than
ten (10) days after the earlier of: (a)
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
18
<PAGE>
the date that it is determined that the Minimum Complement cannot be met, or (b)
forty-five (45) days after the PAS-6B Delivery Date.
2.2 Assumption of Risk. Subject to Section 7.6 below, any loss of or
damage to the Buyer's Transponders on or after the Delivery Date will be at the
risk of Buyer. Subject to Section 2.5 below, any risk or loss of or damage to
the Buyer's Transponder(s) prior to Delivery will be at the risk of PanAmSat.
2.3 Ownership and Title. Upon payment by Buyer to PanAmSat of the full
Purchase Price, PanAmSat shall transfer title to the Buyer's Transponders to
Buyer at a location outside of the U.S. by delivery of an executed bill of sale
for the Buyer's Transponders free and clear of all liens, claims, encumbrances
and rights of others, except as created by action or failure to act of Buyer, in
the form of Appendix F hereto.
2.4 Degraded Transponders. Either before or after Delivery, if a
Buyer's Transponder, while operational, does not meet the Performance
Specifications, Buyer shall have the right, within ten (10) days of being
notified of this condition, provisionally to waive the Performance
Specifications to the extent that they are not met.
If Buyer gives such a provisional waiver, Buyer shall have an
additional fifty (50) days (for a total of sixty from being notified of the
condition) in which to determine whether to accept the degraded capacity and
grant a permanent waiver of the Performance Specifications to reflect the
affected Transponder(s)' current operating level, or not. The applicable
termination provisions of Section 7.2 or 7.3 shall also be stayed during any
period in which Buyer is considering electing a permanent waiver. During this
period, Buyer and PanAmSat shall negotiate in good faith, to the extent that the
degradation reflects a material loss in the capacity provided, to reach
agreement as an appropriate price reduction for the affected capacity (which
would, if agreed, be applied retroactively to the time of the failure to meet
the applicable Performance Specifications), provided that nothing herein shall
require that a price reduction be given or that an agreement be reached.
If Buyer gives a provisional waiver, it shall take and pay for
(without Warranty Credit) the affected degraded capacity, as if Delivered or
provided in accordance with the Performance Specifications until the conclusion
of the sixty day period specified above. On or before the end of this sixty-day
period, either Buyer
19
<PAGE>
shall grant a permanent waiver of the Performance Specifications (subject to any
change in price as to which both Buyer and PanAmSat shall have agreed) or the
termination provisions of this Agreement, as to the capacity that does not meet
the Performance Specifications shall, at that time, apply.
If a permanent waiver is given, it shall be deemed to apply
retroactively to the time of such failure to meet the Performance Specifications
(so that, for example, Delivery shall be deemed to have occurred on the same day
as the Delivery of the other Buyer's Transponders on the Satellite that meet
their Performance Specifications). In such event the Performance Specifications
for the affected Buyer's Transponder(s) shall be reduced to reflect the current
operating level of the affected Buyer's Transponder(s); provided that PanAmSat
continues, if there are further steps may practically be taken, to use
reasonable efforts to restore the affected Transponder to meet the Performance
Specifications; provided further that if any price reduction was agreed upon,
the restoration of a Transponder to its Performance Specifications shall also
result in the restoration of the original price to be paid for the applicable
capacity from that point forward. For the avoidance of doubt, a waiver given
under this Section 2.4 shall not, unless otherwise agreed by Buyer, be deemed to
apply to any further reduction in performance from the operating level of the
affected Buyer's Transponders at the time that the waiver was given.
2.5 Pre-Delivery Testing. PanAmSat shall have Hughes conduct the
pre-Delivery testing of PAS-6B in a manner that does not interfere with Buyer's
use of Buyer's Transponders on PAS-6. PanAmSat shall use all reasonable efforts
to coordinate with Hughes (who conducts the pre-Delivery in-orbit check out of
PAS-6B) to allow Buyer, in consultation with PanAmSat, if practical under the
circumstances, to test Buyer's transmit and receive equipment to be used with
PAS-6B on a noncommercial basis during the post-launch, pre-Delivery period;
provided that such tests do not interfere with the in-orbit testing, maneuvers,
or other related activities that are being conducted. PanAmSat shall cooperate
with Buyer in carrying out such testing. Buyer shall comply with all of the
provisions of this Agreement regarding such transmissions and any other
additional restrictions of which it may be notified vis-a-vis the requirement
not to interfere with the in-orbit tests or related activities relative to
PAS-6B. Buyer shall be responsible for any damage caused by its failure to abide
by any of these conditions.
20
<PAGE>
ARTICLE 3. PURCHASE PRICE AND PAYMENT SCHEDULE.
3.1 Purchase Price. As set forth in this Agreement, Buyer shall pay to
PanAmSat, on the terms and conditions specified herein, [*******************
*********************************************************************
*****************************************************] for each PAS-3
Transponder that is Delivered; [**************************************
*********************************************************] for each PAS-6
Transponder that is Delivered; and subject to the [***] provisions of Section
3.2A [************************************************************************
*******************************************************************] for each
PAS-6B Transponder that is Delivered (the "Purchase Price"). As set forth below,
payment shall be made in Installments with interest accruing on the unpaid
portion of the Purchase Price at 6.079% per annum compounded monthly
(effective rate of 6.252% per annum), commencing with the Delivery Date of each
Satellite. Payment shall be made as follows:
(a) Deposit. PanAmSat acknowledges its receipt of a total
"Deposit" of [****************************************************
******************] (the "Deposit"). This Deposit has been fully applied to
offset the first two (2) Installment payments [**************************
********], with the remaining portion of the Deposit applied to offset the
initial Installment payment(s) for PAS-6 .
(b) Installments. The Purchase Price for each of Buyer's
Transponders shall, subject to Section 3.1(c) below, be payable in one hundred
eighty (180) monthly installments for PAS-3, running separately, two hundred and
forty four (244) monthly installments for PAS-6, and, running separately, two
hundred and thirty four (234) monthly installments for PAS-6B of principal and
interest (each an "Installment"), of [*************************************
******************************************************************************
*****] per Buyer's Transponder per month.
The first Installment payment for each Satellite (subject to
the previous application of the Deposit), shall be due on the Delivery Date for
the applicable Satellite. Buyer shall make each and all Installment payments
(except as to Installments, or applicable portion thereof, for which the
Deposits have been applied), in advance, no later than the same day (or, if not
a business day, the next business day), of each month that follows until the
Purchase Price for the Buyer's Transponders on the
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
21
<PAGE>
applicable Satellite is fully paid. Amortization schedules (the "Amortization
Schedules") showing the principal and interest paid with each Installment are
set forth in Appendix H to this Agreement. For the avoidance of doubt, the
predicted or actual shortened life of a Satellite below that which is
anticipated shall not affect PanAmSat's right to the payment of each
Installment, in full, with the interest component specified based upon the full
Purchase Price, up to the time that the Satellite is actually taken out of
commercial service. Buyer may prepay the Installments at any time. The
prepayment price shall be the total amount of the Installments (principal and
interest, as if not prepaid), [***] for [***] at a rate of [***] per annum from
the date prepaid to the date otherwise due.
If the Installments are prepaid, in circumstances in the
future under which Buyer would have been entitled to a "Warranty Credit" under
Section 5.2 orwould have been relieved of its obligations to make future
Installment payments under Section 7.6, Buyer shall be entitled to a refund that
shall be equivalent to the Warranty Credit or relief from future payments that
Buyer would have otherwise received, except that, for this purpose, the monthly
per Transponder [***] payments against which these calculations are made shall
be calculated as follows on a Satellite by Satellite basis: each monthly
Installment payment per Transponder shall be deemed to be the [***] by Buyer
with respect to the Satellite, [***] by the [***] of the [***] of Buyer's
Transponders at the time of prepayment [***] by the [***] for which Installment
payments were still due at the time of prepayment.
(c) [******************]. During the Interim Period (as
defined in Section 1.6 above), PanAmSat shall [*********] to [***************]
for such Period (and [******] the [************] by the [******] that would have
been covered in such Installments) on PAS-6 as if such [***************] for
Buyer's Transponders that Buyer does not use during this Period, subject to the
following qualifications:
(i) Subject to the further qualifications set forth
below, Buyer shall [*********] for a [***] of [*********] collectively on PAS-3
and PAS-6 (the [******] whether or not[***] as long as at least
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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[***] of Buyer's Transponders collectively on PAS-3 and PAS-6 meet their
respective Performance Specifications.
(ii) Buyer is currently using the following
[***************************************************************************
********]. Buyer shall notify PanAmSat prior to employing any additional
[************] which notice shall specify what additional [***] will be
employed, it being understood that prior to such notice PanAmSat may elect to
keep such[***************************]. At any time that Buyer exceeds its
[************] the [***] of [************] shall, subject to the qualifications
set forth below, thereafter become the[******] subject to further increase if
additional [******] are [***] by Buyer.
(iii) Buyer may, on notice to PanAmSat, [***] its
[******] in any of the following circumstances set forth below, provided that
Buyer and [************] as much of the [******] to them by [***************] as
may be [***] without reaching any of the thresholds specified in these
provisions:
(A) the number of [************] on
PAS-6, with [*********************] is [***************] at the time of all of
the [*********] that are then employed by Buyer and [*********]
(B) there is not the equivalent of
at least [*********] each for the [*********************] or
(C) the number of [******]
reasonably projected to meet their applicable [******************************]
for at least [*********] following the date on which PAS-6B is scheduled to
commence commercial operation [******] the [*****************************
****************] of Buyer [******************].
Buyer shall not be permitted to [*********] of [***]
that it uses in circumstances where (i) it would, when [***] with
[*******************] of [***] exceed the then [******************] for
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
23
<PAGE>
[******]or (ii) if it would allow [************] to [***] its [************]
under [******] of its Agreement, subject, however, to [************] right to
waive such [***] in its [************].
(iv) PanAmSat shall report to Buyer monthly on the
number of [*********] available, the number of [*****************************]
into the [******************] and the number of [*********************]
projected to meet their applicable [************] for at least [************]
following the date on which PAS-6B is scheduled to go into commercial operation,
and shall notify Buyer within forty-eight (48) hours of any reported[******].
3.2 TT&C Fee. In the event that (i) PAS-3 remains in Service
[******************] (ii) PAS-6B [******************************************] or
(iii) if Buyer exercises its termination right under Section 7.9 of this
Agreement, PAS-6 remains in service [****************] or otherwise PAS-6
remains in service [************************************** ******] and all
Installment payments with respect to Buyer's Transponders on the applicable
Satellite up to said point have been made, if Buyer decides to continue to use
the Buyer's Transponders on the Satellite, it may do so for the [*********] of
the applicable Satellite [**************************************************
*******************************************************************************
********************************************************************************
**************] by paying PanAmSat a monthly TT&C fee of [**********************
************] per Transponder (the "TT&C Maintenance Fee"). The TT&C Maintenance
Fee shall be due and payable monthly on the same day of the month that the
Installments were previously due. If Buyer elects to continue to use a Buyer's
Transponder on the affected Satellite during this period, it must pay the TT&C
Maintenance Fee for all of Buyer's Transponders on the affected Satellite that
continue to meet the Performance Specifications and/or that Buyer continues to
use on a degraded basis. If Buyer does not pay the TT&C Maintenance Fee, Buyer
shall not be permitted to continue to use (or allow others to use) the Buyer's
Transponders on the affected Satellite, this Agreement shall be terminated as to
the affected Satellite, and, as compensation for PanAmSat's continuing operation
of the Satellite, PanAmSat shall be permitted to use and/or permit others to use
the Buyer's Transponders on the affected Satellite for any purpose whatsoever.
For the avoidance of doubt, for (i) the [***********] PAS-3, (ii) the
[***************************] of life of
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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PAS-6B, and, (iii) if Buyer exercises its early termination right under Section
7.9, the [*****************] on PAS-6; for the [***************] of the life of
PAS-6 if Buyer does not exercise its early termination right under Section 7.9,
the TT&C fee is calculated into the Purchase Price and TT&C will be provided by
PanAmSat (and/or its contractors) during these periods at [*********] to Buyer.
3.3 Manner Of Payment. All payments by Buyer shall be made in U.S.
dollars; shall be deemed to be made only upon receipt by PanAmSat of collected
funds; and shall be made by bank wire transfer to such bank account as PanAmSat
may designate by notice to Buyer, or by cashier's or certified check, from a
U.S. bank, delivered to PanAmSat at its principal place of business, as
designated in Section 14.5(b).
3.4 Late Payment. Any payment due from Buyer to PanAmSat that is not
received by PanAmSat on the date that it is due shall be subject to a
delinquency charge (liquidated damages) at the rate of
[************************] on such overdue amount from the due date until it is
actually received by PanAmSat. Buyer acknowledges that such delinquency charge
is reasonable under all the circumstances existing as of this date.
3.5 Taxes.
(a) Buyer's Responsibility. Buyer shall be responsible for,
and shall indemnify PanAmSat against, all Taxes (x) imposed by [***] (which for
purposes of this Section 3.5 shall be deemed to include any [***************]
(y) imposed by [******] as a result of the [***] to Buyer's Transponder or
[******] from Buyer's Transponders of encrypted signals (or, in the case of
signals which are not encrypted, any such [***] to or from such [***] or (z)
imposed by [******] from which Buyer makes payments to PanAmSat hereunder, in
each case including any political subdivision or taxing authority thereof or
therein, in each case with respect to the [*********] or [***] of Buyer's
Transponders, and with respect to [***] under this Agreement, [***] to the
extent of:
(i) any Taxes [***] on PanAmSat by reason of its
having an [************] or other [******] of business in
[***]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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<PAGE>
other than any [*********] or [******] in [***] PanAmSat is
required by [***] law to maintain to fulfill its obligations
under this Agreement and/or to provide any other satellite
capacity, satellite transmission or ancillary service thereto
to any customer, which ancillary service does not involve
PanAmSat's having [***************] provided that PanAmSat
shall use commercially reasonable efforts to accomplish such
tasks in a manner that limits or does not expose itself to
such Taxes for which Buyer could be responsible; or
(ii) any Taxes to the extent imposed on [***] to
PanAmSat solely by reason of the [***] of PanAmSat to provide,
at the written request of the Buyer, any documentation or
certification reasonably required to be made to [******] from,
or [***] of, such Taxes; or
(iii) in the case of an assignment of PanAmSat's
rights under Section 10.4 to any entity organized outside, or
receiving payments outside of, the [***] any Additional
Amounts exceeding the Additional [***] (as defined below) that
would have been imposed had the payment been made to PanAmSat.
(such non-excluded Taxes, "Buyer Indemnified Taxes").
If any Buyer Indemnified Taxes are imposed through
[***] at the [***] on payments to be made under this Agreement, Buyer shall
[***] to PanAmSat such additional amounts ("Additional Amounts") as may be
necessary such that everypayment to PanAmSat hereunder, after [***] or [***] for
or on account of such Buyer Indemnified Taxes, will not be [***] than the amount
provided for under this Agreement. Buyer shall promptly forward to PanAmSat any
receipt or other official evidence of [***] it receives in respect of such Buyer
Indemnified Taxes.
For purposes of this Agreement, "Taxes" shall mean
all foreign, federal, state, provincial, and local income, franchise, sales,
use, receipts, value added, transfer, profits, excise, stamp, withholding and
property taxes, duties or assessments and governmental charges of any kind
whatsoever (including interest, penalties and additions with respect thereto).
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
26
<PAGE>
If any Additional Amounts paid by Buyer are based on
rates of [***] or [***] in [***] of the appropriate rate applicable to payments
to PanAmSat and, as a result thereof, PanAmSat is entitled to make a claim
against the jurisdiction imposing such Tax for refund or credit against future
withholdings of such [***] then PanAmSat shall, upon Buyer's request, assign and
transfer all right, title and interest to any such claim for a refund or credit
of such [***] to Buyer and shall take such reasonable actions as may be
necessary to vest such right, title and interest in Buyer. Buyer shall keep
PanAmSat informed of all material aspects of such claims for refund or credit.
If PanAmSat is able to claim a credit against its
income tax liability in the country of its incorporation for [***] Taxes with
respect to which Buyer has paid Additional Amounts hereunder not previously
refunded pursuant to the preceding sentence, PanAmSat will notify Buyer and upon
the reasonable request of Buyer, PanAmSat shall seek such credit and, if and at
such time that PanAmSat actually receives economic benefit of such claim (e.g.,
a refund or a credit against taxes that would be otherwise immediately due and
payable), PanAmSat shall pay to Buyer the amount of the economic benefit so
received, it being understood that Buyer shall have no right to participate in
or control any of PanAmSat's tax positions, filings, contests, or claims for
refund, except as provided in the previous paragraph.
(b) PanAmSat's Responsibility. PanAmSat shall be responsible
for, and shall indemnify Buyer against, all Taxes imposed with respect to the
purchase, sale, use or ownership of Buyer's Transponders or with respect to
payments under this Agreement by (x) [*********] which for purposes of this
Section 3.5 shall be deemed to include any [***************] or any political
subdivision thereof, or (y) any [******] towhich PanAmSat directs [***]
hereunder to be made, to which Buyer makes payments hereunder pursuant to an
assignment of PanAmSat's rights hereunder or in which such assignee is [***] or
has its [************] in each case including any political subdivision or
taxing authority thereof or therein (any of the foregoing a "PanAmSat Country"),
except to the extent of:
(i) Any Taxes [***] on Buyer by reason of its having
an [*********] or [******] of business in, or other connection
with, the [***] or any PanAmSat Country, other than a
connection consisting solely of the [***] of Buyer's
Transponders or
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
27
<PAGE>
the execution and performance of Buyer's
obligations required pursuant to this Agreement;
(ii) any Taxes imposed on Buyer solely by reason of
the [***] of Buyer to provide, at the written request of
PanAmSat, any documentation or certification reasonably
required to be made to [******] from, or [***] of, such Taxes;
or
(iii) in the case of an assignment of Buyer's rights
under Section 10.5 to any entity organized or domiciled
outside [***] any [******************] that would have been
imposed on Buyer had no such assignment occurred.
3.6 Reconstitution of Agreement. Each party agrees to negotiate in good
faith, if so requested by the other, to seek to [***] this transaction to
[*********] while [***] the [******] of the parties. The [***] to reach such a
[***] agreement shall not, however, affect the continuing validity of this
Agreement.
ARTICLE 4. BUYER'S OBLIGATIONS IN USING THE BUYER'S TRANSPONDERS.
4.1 Non-interference and Use Restrictions. Buyer's transmissions to and
from each of the Satellites and its use of the Buyer's Transponders shall comply
with all applicable governmental laws, rules and regulations, and with the
operational requirements (the "Operational Requirements") set forth in Appendix
D, as the same may be modified from time to time by PanAmSat, in its reasonable
discretion, but only for good technical cause(s). Buyer will follow established
practices and procedures for frequency coordination and will not use the Buyer's
Transponders, or any portion thereof, in a manner which would or could
reasonably be expected to, under standard engineering practice, interfere with
the use of any other Transponder, the Satellites, or any other satellite or
transponder on such satellite, or cause physical harm to the Buyer's
Transponders, any other Transponder, the Satellites, or any other in-orbit
satellite or transponder on such satellite. Provided that Buyer's transmissions
conform with the transmission plans approved by PanAmSat under Section 1.5
above, Buyer complies with the Operational Requirements, as the same may be
modified as provided above, and Buyer immediately ceases any transmission upon
being notified by PanAmSat of any violation of this Section 4.1 (even if such
transmission is in conformity
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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with the Operational Requirements), Buyer shall not be deemed to be in breach of
its obligations under the preceding sentence.
4.2 No Terrestrial Facilities. Subject to the exception stated in
Section 1.5 above with respect to PanAmSat-provided uplinks, if any, Buyer shall
be responsible for the provision, installation, operation and maintenance of all
earth station facilities and equipment ("Buyer-Provided Facilities"), for
transmitting signals to, or receiving signals from, the Satellite(s) in
accordance with the requirements set forth in this Agreement. Buyer shall also
be responsible for acquiring all authorizations necessary for installation and
operation of Buyer-Provided Facilities. Buyer shall be permitted to contract
with third parties to transmit its signals to, or receive its signals from the
Satellite(s); provided, that, Buyer requires its contractors to agree to comply
with all of the requirements set forth in this Agreement regarding transmissions
to, or reception from, the Satellite(s). If Buyer retains third parties (other
than PanAmSat) as permitted by the previous sentence, these third parties'
facilities shall be deemed to be Buyer-Provided Facilities and the acts and
omissions of these third parties in connection with the transmission or
reception of Buyer's signals shall be deemed to be the acts and omissions of
such third parties and of Buyer. Any provision by PanAmSat (or by an affiliated
company) to Buyer of earth station or other terrestrial facilities or services
shall be the subject of a separate agreement.
[********************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
********************************************************************]
4.3 Buyer's Transmitting Stations. Buyer will configure, equip and
operate its transmit facilities so that the interface of these facilities, in
space, with the Satellites shall conform to the characteristics and technical
parameters of the Satellites. Buyer will follow PanAmSat's procedures for
initiating or terminating any transmission to the Satellites. Buyer will operate
all transmit facilities in a manner that allows for cessation of, and will
cease, transmission immediately upon receiving notice from PanAmSat
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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under Section 15.5(a) ("Telephone Notices"). Buyer will furnish information on a
continuing basis as reasonably required by PanAmSat to prepare for, initiate,
provide, maintain and immediately discontinue the use of the Buyer's
Transponders upon notice by PanAmSat.
PanAmSat shall have the right, but not the obligation, subject to such
reasonable confidentiality and use restrictions as Buyer may impose, to inspect
any Buyer-Provided Facilities together with associated facilities and equipment
used by Buyer, or by a third party under the authority of Buyer, to transmit to
the Buyer's Transponders. PanAmSat will use all reasonable efforts to schedule
inspections to minimize the disruption of the operation of the facilities, and
Buyer shall make the facilities available for inspection at all reasonable
times. Buyer shall, upon PanAmSat's request, provide measured proof that any
transmit facility meets or exceeds the sidelobe envelope described in Appendix
D.
4.4 Consistent Application of Satellite Operating Procedures. PanAmSat
shall have similar (but not necessarily identical) restrictions not to interfere
with or cause physical harm to the Satellites, their Transponders, and other
satellites and their transponders, as contained in this Agreement with all other
customers, including any of its Affiliates, having a right to uplink to the
Satellite and shall enforce these restrictions (and, to the extent it may use
them for its own services, follow these restrictions itself) in a consistent and
nondiscriminatory manner vis-a-vis Buyer and the other customers with a right to
uplink to the Satellites. Allowing for the fact (understood and accepted by
Buyer) that technical variations in the kinds of transmissions that different
customers may employ, different performance characteristics of different
Transponders, differences in the use of adjacent frequencies or the same
frequencies on other satellites, other technical factors, and the use of
different uplink providers andfacilities may require the application of
different restrictions to achieve the same non-interference and satellite
protection goals, PanAmSat shall not require Buyer to follow Operational
Requirements or transmission procedures that are more stringent than those
imposed upon other customers on the same Satellite in comparable technical
circumstances.
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ARTICLE 5. TRANSPONDER FAILURE, PROTECTION.
5.1 Confirmed Outage. There shall be deemed to have occurred a
"Confirmed Outage" of a Buyer's Transponder if a Buyer's Transponder fails to
meet the Performance Specifications for a continuing and uninterrupted period of
[*********] (or, if [***] is [***] a [***] period of [*********] or [***] during
any [*********] and such failure is confirmed by PanAmSat. Any "Warranty Credit"
(as defined below) shall be measured in accordance with the procedures set forth
in Section 5.2.
5.2 Warranty Credit. If there is a Confirmed Outage of a Buyer's
Transponder: on PAS-3 [************] of the Delivery Date of PAS-3; on PAS-6
[************************] of the Delivery Date of PAS-6 (but only
[************************] of PAS-6 if Buyer exercises its termination [***]
under Section 7.9 hereof); or within [******************] of Delivery Date of
PAS-6B (for each Satellite, the "Warranty Period"), PanAmSat shall credit to
Buyer's next Installment payment a "Warranty Credit" that shall be determined by
the following formula:
Warranty Credit [***]
[************]
[***]
[*******************************************************************************
*****************************************]
[*********************************]
[*******************************************************************************
**********************************]
Buyer shall not be entitled to any Warranty Credit for any Transponder failure
that does not constitute a Confirmed Outage. For purposes of determining
Warranty Credits, each failure that is confirmed by PanAmSat shall be measured
as commencing from the later to occur of (i) Buyer's cessation of use of the
affected Buyer's Transponder and (ii) notice from Buyer to PanAmSat of such
failure (provided that the
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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affected Buyer's Transponder is, in fact, not meeting the Performance
Specifications). Any such failure shall be deemed to have ended upon the earlier
to occur of (i) Buyer's resumption of use of the affected Buyer's Transponder
and (ii) notice to Buyer from PanAmSat that the affected Buyer's Transponder has
been restored to the Performance Specifications (provided that the affected
Buyer's Transponder is, in fact, meeting the Performance Specifications). No
Warranty Credit shall be provided for any failure of a Buyer's Transponder that
occurs after the [******] such Transponders at such point being available, if at
all, on an "as is" basis; nor shall a Warranty Credit be provided during the
[******] for any Transponder that is not one of the Transponders being [***] for
as part of the [******].
5.3 Transponder Failure. If, after the applicable Delivery Date for a
Satellite, a Buyer's Transponder fails to meet the Performance Specifications
for: (a) any period of [************] or (b) a [******] of [*********] during
any [************] or (c) any [*********] following a [******] under
circumstances that make it [******] that a [***] described in clauses (a) or (b)
will occur, such Transponder shall be deemed to have failed on a "Confirmed
Basis." Any such failure must be confirmed by PanAmSat, which it shall take
steps to do as expeditiously as possible. If confirmed, the failure shall be
measured as commencing from notice from Buyer to PanAmSat of such failure
(provided that the affected Buyer's Transponder is, in fact, not meeting the
Performance Specifications). Any such failure shall be deemed to have ended upon
notice from PanAmSat to Buyer that the affected Buyer's Transponder is capable
of meeting the Performance Specifications (provided that the affected Buyer's
Transponder is, in fact, meeting the Performance Specifications); provided,
further, that if PanAmSat enters into an agreement to provide Ku-band capacity
from the Satellite on which a Buyer's Transponder is located and such agreement
provides that, for purposes of employing said "Spare Equipment" on the
Satellite, failure on a Confirmed Basis shall be deemed to have occurred in less
than the applicable time periods specified above, PanAmSat shall determine
whether a failure on a Confirmed Basis hasoccurred for Buyer's Transponder on
the same Satellite under this Agreement using the time periods specified in such
other agreement.
In the event a Buyer's Transponder fails on a Confirmed Basis,
PanAmSat shall, as soon as possible and to the extent technically feasible,
employ certain redundant equipment units, as described in Appendix B ("Spare
Equipment") on a first-
[***] Filed separately with the Commission pursuant to a request for
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needed, first-served basis as among Buyer and other Transponder owners,
lessees, and users, including without limitation, PanAmSat and its predecessors
in interest ("Protected Parties"), as a substitute for a Buyer's Transponder
equipment unit which has failed; provided, that PanAmSat may elect to use
"Substitute Capacity" on the same Satellite as the failure shall have occurred
(as provided below), if available and not subject to any additional operational
restrictions that Buyer is not willing to accept, in lieu of using Spare
Equipment.
Buyer acknowledges and agrees that the Spare redundancy plan
of each Satellite may require PanAmSat to reassign certain traveling wave tube
amplifiers ("TWTAs") among Transponders to make use of a Spare. In circumstances
in which a spare TWTA is required to be employed for any customer and to do so
requires a change in the TWTA assigned to Buyer, Buyer shall, on notice from
PanAmSat, cease transmitting to the applicable Buyer's Transponder(s) to allow
the TWTA that is assigned to its Transponder(s) to be reassigned and a different
unit (that meets the Performance Specifications) to be put in its place.
PanAmSat shall use all reasonable efforts to keep to a minimum the time during
which Buyer is required to cease transmitting under this paragraph, in
accordance with good engineering practices, to make the shift in the
assignments.
If (a) a Buyer's Transponder fails to meet its Performance
Specifications on a Confirmed Basis, and (b) the Spare Equipment associated with
such Buyer's Transponder is not available, and (c) equivalent capacity on
another Transponder meeting the Performance Specifications in the Brazil Beam of
the same Satellite as the failure shall have occurred and designated by PanAmSat
for DTH use (the "Substitute Capacity"), is available, and its use by Buyer in
accordance with PanAmSat's Operational Requirements would not be predicted to
interfere with the use or rights of others using the Satellite (or, even if no
longer used by Buyer, PAS-6 or PAS-6B), then PanAmSat shall, as soon as possible
and to the extent technically feasible, employ such Substitute Capacity for the
failed Buyer's Transponder to satisfy PanAmSat's obligations under this
Agreement. PanAmSat may condition its provision of Substitute Capacity on
Buyer's acceptance, in writing, of such additional restrictions on its use that
PanAmSat in good faith believes are necessary so as to protect other Protected
Parties from interference. If Buyer does not accept such conditions, PanAmSat
shall not be obligated to provide Buyer with the Substitute Capacity. In the
event that PanAmSat employs such Substitute Capacity for a Buyer's Transponder,
such Substitute Capacity
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shall be deemed to be such Buyer's Transponder for all purposes under this
Agreement.
If title to the Buyer's Transponder has already passed to
Buyer upon any substitution of capacity as provided above, the title to the
capacity that is employed for Buyer shall be deemed transferred to Buyer and
title to the capacity previously supplied to Buyer shall be deemed to be
transferred back to PanAmSat, in all cases free and clear of all liens, claims,
and encumbrances, except if created by action or failure to act of the party
that would be the recipient of the title. In confirmation thereof, Buyer and
PanAmSat each agrees to execute such documents of conveyance as the other may
reasonably request to confirm that such transfers have occurred.
In the event that [*********] Transponders [****************]
to meet their respective [***] or [******] and are entitled to [***] under any
applicable agreement with PanAmSat, and if all of said Transponders are assigned
to Buyer and [*********] then, unless PanAmSat receives contrary instructions
signed by Buyer and[*********] PanAmSat shall, to the extent [************] to
the [******] in accordance with the [******] to be supplied and executed by
Buyer and [*********] and delivered to PanAmSat, except that priority will not
be given to the [***] Transponders. Until and unless such fully executed
instructions are received by PanAmSat, such [******] shall be made by PanAmSat
in [*********]. Upon the written request of all affected parties, PanAmSat
shall, if it has not already [************] at the time that the request is
made, in any case of [******] or if the use of Spare Equipment would require the
[***] of the [***************] for instructions for up to [************]
provided that, the [***] shall be deemed to have [***] at such point as PanAmSat
notifies Buyer that PanAmSat is [***] to[************] pending the
[************]. As used in this Section 5.3, the term [***] shall be deemed to
mean [******************]. All determinations as to when [*********] shall have
occurred, for purposes of determining whether the failures are [***] shall be
made by[******************].
In the event that [*********] Transponders [****************]
to meet their respective [***] or [******]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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and are entitled to [***] under any applicable agreement with PanAmSat, and if
one or more of said Transponders is assigned to a person or entity other than
Buyer or[*********] then the Protected Party who [******] a definitive agreement
as to the affected Satellite with PanAmSat or its predecessors in interest
shall, to the extent[******] have [***] as to use of the [******] or the
[******] provided that, if [***] from a Transponder is provided to more than
[***] Protected Party (for example, if there are [***] customers each taking
service from [***] of a Transponder), PanAmSat's decision may be made in
accordance with the order that the [***] Protected Party(ies) using the
Transponder(s) [******] with PanAmSat or its predecessors in interest; provided
further that, [******] as between Buyer [***************] shall be determined in
the same way that [*********] Buyer and the [*********] are to be determined
under the preceding grammatical paragraph. As used in this Section 5.3, the term
[***] shall be deemed to mean [***************]. All determinations as to when
[*********] shall have occurred, for purposes of determining whether the
failures are [***] shall be made by[******************]. PanAmSat hereby
confirms that the only [******] for a [************] that [************] this
one (as deemed below and other than with [***] is with [*********] for
[*********] Transponder and that there are [*********] for PAS-6 or PAS-6B.
For purposes of this Section 5.3, this Agreement and the
"Multi-Country Agreement" shall all be deemed to be executed simultaneously as
of February 29, 1996.
5.4 Reduction in Number of Transponders as Overall Power on the PAS-6
Satellite is Decreased. Buyer acknowledges that it has been advised by PanAmSat
that it [************************] on PAS-6 and that it is anticipated that
[******] will be subject to such a power constraint in the future, so that the
remaining Transponders continue to meet their applicable Performance or Service
Specifications. This power on PAS-6 is [***] sufficient to support [**********]
consistent with the [***] set forth in Section 3.1(c)(iii).
When [******] can be anticipated, before [***] one of Buyer's
Transponders, PanAmSat shall [***] with Buyer and all other entities who
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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have agreed to purchase or take service from the Satellite and, provided that it
is consistent with [************] and [***] of the Satellite, shall allow Buyer
and such other entities [***] to select which Transponder(s) shall be[***]. To
be effective, such selection must be given in writing, signed by Buyer and all
other entities referenced in the previous sentence, and given to PanAmSat before
PanAmSat is required, as determined by [************] to proceed with the [***]
of Transponder(s). If PanAmSat has not received such instructions, signed by all
affected entities, at the time that [***] is required, PanAmSat shall make the
decision as to which Transponder(s) [******************]. The [***] of a Buyer's
Transponder under this Section 5.4 shall be treated as a [******] and shall
[***] toward determining whether the applicable Transponder
has[***************]. This paragraph is not anticipated to be relevant to
[************] but the principles stated will apply if it becomes necessary to
do so; provided that it is agreed that the first of Buyer's or [***************]
Transponders to be [***] shall be the [***] Transponders.
If this Agreement is terminated as to PAS-6B without a PAS-6B
Delivery Date (and, therefore, Buyer remains on PAS-6), the then current
[******] on PAS-6 will be addressed, in accordance with the preceding paragraph,
subject to the following qualifications:
(a) Within five (5) days of termination of this
Agreement as to PAS-6B, PanAmSat shall notify Buyer [***************] as to the
number of Transponders on PAS-6 that [*********] at that time with existing
PAS-6 power. For the avoidance of doubt, the power [***] set forth in Section
3.2(c)(iii) above shall not be considered for such purpose.
(b) If [*********] will also be remaining on PAS-6
[***************] then Buyer and [*********] shall have fifteen (15) days to
select by [*********] to PanAmSat which PAS-6 Transponders should be
[************] to leave [***] the [***] number of Transponders specified in
PanAmSat's notice, which selection PanAmSat shall follow as long as consistent
with the overall health and performance of the Satellite. If Buyer [*********]
fail to give such notice within the time period specified, PanAmSat shall make
the selection and so notify Buyer [*********]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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within ten (10) days of the last day that Buyer [************] had to make such
selection. Until the selection is made, Buyer shall not increase its [***] of
PAS-6 above that which is permitted during the Interim Period, except with
[*********] written consent delivered to PanAmSat (but, in all events, when
[***] with [************] within the overall Transponder power limits of PAS-6).
The selection, once made, shall be deemed made retroactive to the day that this
Agreement was terminated as to PAS-6B, with any Buyer's Transponder on PAS-6
then specified to be [***********] deemed to have [***************] as of that
date. Any further [******] shall be handled in accordance with the general
provisions of this Section 5.4.
(c) If [*********] will not be remaining on PAS-6,
then (subject to any "Dual Illumination Period" rights it may have under the
[*********] Buyer would only have to [************] Buyer's Transponders in the
event that there is not [******] on PAS-6 to support Buyer's Transponders, in
which event the procedures set forth above would apply (but without requiring
any concurrence by[************]).
5.4A Limitation on Buyer Discretion. Sections 5.3 and 5.4
notwithstanding, if Buyer exercises its right to select which Transponder to
[*********] under those Sections in such a manner that the Minimum Complement
for the [***] Beam of the Primary Satellite is [***] when a different selection
would have resulted in that Minimum Complement being preserved (and no other
Minimum Complement [***]), for purposes of this Agreement, there shall be deemed
to be [******] of Minimum Complement; provided that if there is a further
failure on a Confirmed Basis of Transponder capacity on the applicable Brazil
Beam (other than that which could have been avoided by a different selection),
the Minimum Complement will then be deemed[************]. By way of example
only, if, after PAS-6B is Delivered (i) only [***] of Buyer's Transponders
remain under this Agreement, while Service from [******] Transponders to be
provided on PAS-6B to Multi-Country Platform continues; (ii) a [************
********] under Section 5.4; and (iii) Buyer and [************] elect to have
[************************](so that the number of Buyer's Transponders is reduced
to [***] in the [***] Beam), instead of a Transponder assigned to [******]
Buyer's Minimum Complement shall not be deemed[*********].
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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5.4B. Special Considerations Relative to the Operation of PAS-6 and
PAS-6B at the [*********]. It is not contemplated that, except during the Dual
Illumination Period specified herein, NetSat [************] would receive
capacity from different Primary Satellites (i.e., one on PAS-6B and the other on
PAS-6). The situation[******], however, if at the time of the PAS-6B Delivery
Date, the applicable Minimum Complement on PAS-6B can only be met for one of
these entities, leaving the other on PAS-6. (For reference, when PAS-6 or PAS-6B
serves as the "Primary Satellite" (as defined in the[*********]) for[*********],
but not NetSat, that Satellite is referred to in this Section as the "Other
Satellite.") In such circumstances, after the Dual Illumination Period and
during such period in which the PAS-6 and PAS-6B each serves as a "Primary
Satellite," one for NetSat and the other for[*********], the following
provisions shall apply:
(1) In the event that this Agreement is to be terminated as to
any individual [***] Transponder pursuant to Section 7.3, whether due to a
particular Transponder failure or an overall [******] on the Satellite, to the
extent technically feasible, [***] shall have the right to select as to which
Transponder this Agreement shall be terminated, provided that [***] selection
leaves NetSat with as many Transponders in the [***] Beam that meet their
Performance Specifications as would be available had [***] not exercised this
right.
(2) In the event that the Buyer's Transponders are on PAS-6B
while the [*********] has terminated as to PAS-6B and is operating on PAS-6,
Buyer acknowledges that, due to limitations on the co-frequency operation of
transponders on PAS-6 and PAS-6B, it may be necessary to [***] one or more of
Buyer's PAS-6B Transponders or the [************] PAS-6 Transponders to prevent
interference to a transponder operated by the other Platform on the Other
Satellite, and that, in such event, the [************] subject to [***] shall be
Buyer's [***] Transponders. In no event, however, shall either of the [***]
Transponders be [***] to permit use of a Transponder on PAS-6 or PAS-6B by
PanAmSat or a third-party customer [*********************] of PanAmSat.
Furthermore, if Transponders are [***] under this paragraph, such [***] shall
not reduce the Minimum Complement, and any Transponders [***] shall be
considered [********************************************************************
*************************.]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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(3) PanAmSat shall operate the PAS-6 and PAS-6B Satellites in
a manner so that their telemetry signals do not interfere with each other.
(4) For the avoidance of doubt, there is no obligation of
PanAmSat to provide or for Buyer to take inter-Satellite protection (e.g.,
Transponders from either PAS-6 or PAS-6B as substitutes for the other).
5.5 Buyer Cooperation. If a Buyer's Transponder fails to meet the
Performance Specifications, Buyer shall use all reasonable efforts to cooperate
and aid PanAmSat in curing such failure; provided that all reasonable efforts
can be done at no cost to Buyer. These obligations of Buyer shall include, but
not be limited to, the following:
(a) At the request of PanAmSat, if there is a problem that can
be compensated for by increasing the power and/or changing other parameters of
its transmission to the Satellite, without affecting its Buyer's use of the
Buyer's Transponders, Buyer shall do so to the extent it can with existing
equipment; and
(b) Permitting PanAmSat, at PanAmSat's [***] and at PanAmSat's
cost and expense, to upgrade the Buyer-Provided Facilities.
5.6 Application to Individual Buyer's Transponders. All determinations
of failures on a Confirmed Basis, protection rights and Confirmed Outages to be
made under this Article 5 shall be made on an individual Buyer's Transponder by
Buyer's Transponder basis.
5.7 Replacement Launch. Pursuant to the prior agreement covering PAS-6
and PAS-3 between the parties, payments from Buyer to PanAmSat totaling [***]
toward a possible Loral replacement satellite are acknowledged; [***] of said
amount has already been or will be applied to offset Buyer's obligation
hereunder. It is further acknowledged that the remaining [***] is[******].
ARTICLE 6. PREEMPTIVE RIGHTS.
6.1 (a) Preemptive Rights In Abnormal Circumstances. Buyer recognizes
that it may be necessary, in unusual or abnormal technical situations or other
unforeseen technical conditions, for PanAmSat deliberately to preempt or
interrupt Buyer's use of one or more of the Buyer's Transponders, solely in
order to protect the overall health and performance of the Satellite(s). Such
decisions shall be made by PanAmSat in its sole
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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discretion, exercised in good faith. To the extent technically feasible,
PanAmSat shall give Buyer at least 24 hours' notice of such preemption or
interruption and will use all reasonable efforts to schedule and conduct its
activities during periods of such preemption or interruption so as to minimize
the disruption of the services on the affected Satellite. Buyer shall
immediately cease transmissions to the Buyer's Transponder(s) at such time as
its use of the Buyer's Transponder(s) preempted or interrupted pursuant to this
Section. To the extent that such preemption results in a loss to Buyer of its
use of a Buyer's Transponder sufficient to constitute a Confirmed Outage or a
failure on a Confirmed Basis, Buyer shall have all the rights and remedies
regarding Warranty Credits and termination set forth in Articles 5 and 7.
(b) Testing in the Event of Failure. If a Buyer's Transponder
is not meeting Performance Specifications, but Buyer elects to continue to use
(and pay for) the Transponder, as degraded, PanAmSat may, with Buyer's
reasonable consent as to the time such action will be taken, interrupt Buyer's
use as necessary to perform testingor take any other action that may be
appropriate to attempt to restore the affected Transponder(s) to the Performance
Specifications. In such event, PanAmSat shall coordinate activities with
affected customer(s) and shall use all reasonable efforts to minimize the
overall disruption of use to the affected customer(s). If Buyer refuses to
provide the consent referred to in the first sentence of Section 6.1(b) when
such consent is requested, the availability of remedies for failure to meet
Performance Specifications, including the use of Spare Equipment and Substitute
Capacity and termination for failure to meet Performance Specifications shall be
commensurately delayed.
ARTICLE 7. TERMINATION RIGHTS.
7.1 Termination for Delay in Launch of PAS-6B.
If:
(a)(i) a [************] (as defined below) occurs prior to
[************] and (ii) (A)PanAmSat notifies Buyer that either: (x) Hughes has
not shipped (i.e., put in transport) the PAS-6B Satellite to the launch site by
[************] unless the delay was due to the unavailability of the launch
vehicle or other "Hughes Force Majeure" event, as defined below or (y) the
Delivery Date of PAS-6B will not occur by [************] (either which notice
PanAmSat will give if circumstances
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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make it clearly ascertainable that this is the case) or (B) the Delivery Date
does not occur on or before [************];
Or
(b) whether or not a [*********] has occurred as of
[************] if (A) PanAmSat notifies Buyer that the Delivery Date of PAS-6B
will not occur by [*********] (which notice PanAmSat will give if circumstances
make it clearly ascertainable that this is the case) or (B) the Delivery Date
for PAS-6B does not occur by [**********]
Then
At any time prior to the launch of PAS-6B, Buyer may terminate
this Agreement as to PAS-6B on [******] days' notice to PanAmSat, unless, in the
case of clause a(ii)(A)(x) the required event takes place within said [******]
days notice period. It is further agreed that, in the case of clause
(a)(ii)(A)(x), Buyer may give its notice, ifthe other circumstances for such
notice are met, as early as [************] so as to make PanAmSat's cure period
coincide with the [*********] deadline.
The foregoing notwithstanding:
(i) Buyer shall not be permitted to terminate this
Agreement as to PAS-6B under this Section 7.1 as to a delayed event if it occurs
within thirty (30) days of the date as Buyer may have been previously notified
that the relevant event was anticipated to occur without Buyer exercising its
termination right within thirty (30) days of said notice; provided that, if
Buyer's termination right accrued before the occurrence of a [*********] and
there subsequently occurs a [*********] Buyer shall have another thirty (30)
days (from the [*********]) to make its decision to terminate, whether the
[*********] occurs before or after [*********] except that this further right to
terminate will not accrue if, at the time of the [************] PAS-6B has
already been shipped (i.e., put in transport) to the launch site and the
Delivery Date of the Satellite is scheduled to occur within sixty (60) days of
the [*********]; and
(ii) Buyer shall also not be permitted to terminate
this Agreement under this Section 7.1 unless at the same time [*************
****************
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*******************] as to PAS-6B under [***************]Agreement.
PanAmSat shall also be permitted to terminate this Agreement
as to PAS-6B on notice to Buyer, if the construction or launch of PAS-6B has
been substantially delayed [***************] by force majeure conditions and
PanAmSat determines because of force majeure conditions not to proceed with the
construction or launch of PAS-6B. In such event, PanAmSat shall give Buyer
immediate notice of PanAmSat's determination, which determination shall be made
promptly following the event(s) of force majeure that lead to such a
determination.
In any circumstances in which Buyer has a right to terminate
under this Section 7.1 and Buyer's time period for decision overlaps the time
period during which PAS-6B is scheduled to be shipped to the launch site,
PanAmSat may require Buyer to accelerate its decision process so that a decision
is made before PAS-6B is actually shipped.
7.1A. [**********************************************]. If there is a
[******************] prior to the launch of PAS-6B, Buyer shall be permitted to
terminate this Agreement asto PAS-6B on notice to PanAmSat to be exercised
within thirty (30) days of the [******] (but in all events prior to the launch
of PAS-6B); provided that [********************** *******************
*******************] as to PAS-6B under [***************] agreement. In such
event, within [*********] of invoice from PanAmSat, Buyer shall [******] for
[********************************* ***************] to [************] in
connection with the terminated PAS-6B program, provided that [******] to [***]
in connection with said termination shall be reduced by whatever amounts
[***********************] in connection with its [*********] to [***] under
[***************************] and further provided that PanAmSat shall [******]
to Buyer or [************] as they shall [***] direct PanAmSat in writing, any
[******************************** ******************] given to [***] of such
[******] in connection with any mitigation of such liability that may be
available, which [***] shall use all reasonable efforts to enforce. The contract
[***************] that Buyer [************] are [****************
************************************** **********************] in the event of a
[***************] by PanAmSat,
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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to use*******************************************
[*************************************************************************
*************************************]. In addition, if PanAmSat elects [***]
proposal (which PanAmSat agrees to do if Buyer [***************] have
[*********] required to be [******************] under this Section 7.1A and the
[*****************************] Buyer and [*********] are
[****************************************************** ******************
*************************************************************] from the above.
If [*********] does not [****************************************] as
to PAS-6B under the [******************] Agreement, Buyer's notice of
termination under this Section 7.1A shall be treated as an [*******************]
which, within thirty (30) days of receipt, PanAmSat may either (in writing)
[***] or, instead, [***] but, if[***] grant Buyer the right to [***] the Buyer's
Transponders on a [********************************************************]
subject to Buyer's [******] to PanAmSat as to[*********]. If PanAmSat [***] (in
writing) Buyer's [***] termination under this paragraph (i.e., in circumstances
where [**********************************************************************
********************] neither Buyer nor PanAmSat would have any further
obligation to each other with respect to PAS-6B.
7.1B Certain Definitions Relevant to Termination Provisions. As used
herein:
(i) [********************] means [***] of a sufficient number
of Transponders on [*********] to [*********************************************
********************] such that either:
(A) On or before [**********************] there is
[********************] (Buyer's rights otherwise under Sections [**********
******************************] notwithstanding) on [**********] that PanAmSat
makes, or if permitted by Buyer or [*************] could make, available to
NetSat, [***************], and under PanAmSat's [*************************
************] to [***] that would yield at least [*********] on each of the
[******************************] and the [***] of [***] (in each case when [***]
with [***] from the associated [****************************************
***************] that meet their applicable [********************************]
or
[***] Filed separately with the Commission pursuant to a request for
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(B) On or before [*********] there is [**************
*******] (Buyer's rights otherwise under [******************************
********************] notwithstanding) on [*********] that PanAmSat makes, or if
permitted by Buyer or [*********] could make, available to NetSat, [*********]
and under PanAmSat's [*********************] to[***] that would yield at least
[*********] on each of the [*******************************] and the
[****************] (in each case when [***] with [***] from the associated
[**************************************] respectively) that meet their
applicable[************************];
unless
(C) PanAmSat is able (as to either (A) or (B)) to
[***] a sufficient number of Transponders to [******************************
**********************] within thirty (30) days of their applicable [***] (i.e.,
as provided in [***] of the Agreement, with respect to normal [******]) so that
the applicable level of [******] defined immediately above is not met; provided
that PanAmSat shall notify Buyer if and as soon as it becomes clearly
ascertainable to PanAmSat that sufficient [***] to a level so that the [******]
standard specified above will no longer be met is not possible, at which point
Buyer's notice of termination shall be effective, even if less than thirty (30)
days after the point at which the [******] first occurred. Said cure period
notwithstanding, for purposes of Section 7.1 and Section 7.1A, subject to
PanAmSat's cure rights in (C), the timing of the [******] shall be deemed to
have occurred when the [******] standard in either (A) or (B) is met and Buyer's
right to give notice of termination (and period in which it has such right),
subject to PanAmSat's cure rights, shall commence at the point of such
cumulative failure; and
(ii) "Hughes Force Majeure" means any delay that is caused by
act of God, or of the public enemy, fire, flood, earthquake, epidemic,
quarantine restriction, strike, walkout, freight embargo, or any other event
which is beyond its control or does not arise from the acts or omissions of
Hughes or its respective subcontractors.
7.2 Other PAS-6B Pre-Delivery Termination. This Agreement shall also
terminate as to PAS-6B in either of the following events: (i) PAS-6B suffers a
"Launch Failure" or (ii) if, after a launch, which is not a Launch Failure but
before the PAS-6B
[***] Filed separately with the Commission pursuant to a request for
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Delivery Date, the Minimum Complement of the Buyer's Transponders on PAS-6B are
not capable of meeting the Performance Specifications unless Spare Equipment is
provided by PanAmSat in accordance with Section 5.3 so that the Minimum
Complement of the Buyer's Transponders is provided in accordance with their
Performance Specifications; provided that, if (A) one or more (but not the
Minimum Complement) of the Buyer's Transponders are capable of being provided in
accordance with their Performance Specifications, and (B) at the time, at least
as many Buyer's Transponders on PAS-6B are capable of meeting their Performance
Specifications as Buyer's Transponders on PAS-6 are capable of meeting their
Performance Specifications, termination under this clause (ii) shall be at
Buyer's [***] exercisable (if at all) within fifteen (15) days of Buyer's
receiving notice of this condition. If Buyer fails to exercise the termination
right set forth in the previous sentence within the time specified, the Buyer's
Transponders meeting the Performance Specifications, if PanAmSat so elects on
notice to Buyer within ten (10) days of the last day for Buyer to have exercised
its termination right, shall be deemed accepted under Section 2.1 above. As used
herein, "Launch Failure" means an event prior to the PAS-6B Delivery Date that
results in the destruction of PAS-6B or the declaration of PAS-6B as a total
loss (which includes a constructive total loss) under PanAmSat's launch and
initial operations insurance policy for PAS-6B.
7.3 Termination For Failure After the Delivery Date. Subject to Section
2.4, on a Transponder by Transponder basis, this Agreement shall automatically
terminate if, after the applicable Delivery Date for the Satellite, a Buyer's
Transponder fails on a Confirmed Basis, unless, within thirty days of such
failure, PanAmSat restores the Transponder to its Performance Specifications
using, if required, any available Spare Equipment or replaces the Transponder
with Substitute Capacity from the same Satellite. In the event one or more of
the Buyer's Transponders fails on a ConfirmedBasis and PanAmSat does not restore
or replace the Transponder so that the Performance Specifications are met, but
one or more of Buyer's Transponder(s) still meet the Performance Specifications,
this Agreement shall continue as to the remaining Buyer's Transponder(s), so
long as the Minimum Complement (already defined for PAS-6B; [***] Brazil Beam
Transponders for PAS-6, including any available PAS-3 Brazil Beam Transponders
during the Interim Period and any Brazil Beam PAS-3 Transponders that Buyer has
elected under Section 1.2 above to retain thereafter) of Transponders applicable
to the Satellite (or, as to the applicable Satellite, on and after
[***] Filed separately with the Commission pursuant to a request for
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the date that is [*********] after the Delivery Date of Buyer's Transponders on
said Satellite, such lesser number of Buyer's Transponders as Buyer was actually
using for the provision of DTH Service to Brazil immediately prior to such
failure, which for purposes of this Section 7.3 would then be deemed to be the
Minimum Complement) continues to meet their applicable Performance
Specifications. Subject to Section 5.4A above, if the applicable Minimum
Complement cannot be provided, as to the remaining Transponders on the affected
Satellite, said termination right shall apply to all of the Transponders on the
affected Satellite (and under Section 7.8 below, at Buyer's [***] to previously
retained Transponders on PAS-3). A termination of this Agreement in applicable
part for loss of a Minimum Complement shall be exercised, if at all, no later
than six months after the occurrence of such event. Termination shall be
effective immediately on notice to PanAmSat; provided that, at Buyer's[***] if
within said six-month period, Buyer enters into a binding agreement to take
transponder capacity for the provision of its DTH Service from PanAmSat or
another provider, Buyer may, in its notice of termination, make its termination
effective upon the date that such other capacity is available to Buyer; provided
that, pursuant to Section 1.7(b)(ii), Buyer shall have first sought such
capacity from PanAmSat but PanAmSat was unable to provide the requested capacity
within comparable period of time. In such event, Buyer shall notify PanAmSat of
the projected date of such availability and of any change thereto. If Buyer
fails to exercise the termination right for the loss of the Minimum Complement
within the period specified, this Agreement shall continue, with the number of
Buyer's Transponders that continue to meet their applicable Performance
Specifications (thereafter, that lower number being the "Minimum Complement").
7.4 Satellite [************]. PanAmSat may determine to take a
Satellite [*********] or, in the case of clauses (d) or (e) below, relocate it
to other use if:
(a) in PanAmSat's [*********], the remaining [***] on
board the Satellite is [*********] to maintain [************************
********************************] allowing sufficient [*********] the Satellite;
(b) with respect to [***] the Satellite
[************] or more [***] Transponders or [***************] Transponders to
meet their applicable performance or service specifications;
[***] Filed separately with the Commission pursuant to a request for
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(c) (i) with respect to PAS-6, the Satellite
[******************] or more Transponders to meet their applicable performance
or service specifications or (ii) with respect to PAS-6B, the Satellite suffers
failure of sixteen (16) or more Transponders to meet their applicable
performance or service specifications;
(d) with respect to PAS-6 or PAS-6B, the total of the
number of Transponders on the Satellite that have failed to meet their
applicable performance or service specifications and, even if they have not
failed themselves, the number of Transponders for which [*********] under the
[**************************************************************************
********] or more for [***] or [***] or more for [***]
(e) with respect to the Primary Satellite, Buyer or
Multi-Country Platform has agreed to [****************************************]
at such time that said Successor Satellite is ready to be placed into commercial
service. In such event, PanAmSat shall promptly notify Buyer of such
determination and [************************************************] or
(f) with respect to PAS-6B, at any time that a
Successor Satellite is ready to be placed into commercial service, but not
earlier than the earlier of: (i) the date that is [*********] after the PAS-6B
Delivery Date, or (ii) the date on which the Satellite is predicted by PanAmSat
in its good faith judgment, to have remaining fuel on board PAS-6B for only
[******] (or less) life, assuming ordinary stationkeeping operations, plus
sufficient fuel to de-orbit the Satellite (the "Time for Early Replacement").
The foregoing notwithstanding, in the case of clause (c), if:
(i) Buyer agrees to make a [***********************************************
*****************************] as defined in and determined in accordance with
Article 16 of this Agreement, (ii) [***************] Installment payments
required to be paid under this Agreement, Buyer [************************
*****************************************************************] of the
Satellite after the occurrence of the [***] otherwise giving rise to PanAmSat's
rights under clause (b) (less any [******] with respect to the same Satellite
for the same period under Section 3.2 above), and (iii) permitting
[***************] PanAmSat's [***************] for the Satellite (other than as
to the Buyer's Transponders that would still be
[***] Filed separately with the Commission pursuant to a request for
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[********* ***************] PanAmSat will not take[*********************
*********] pursuant to this clause (c) until the[****************************
****************************************]. On the date that the Satellite is
[***************], this Agreement shall [******] as to the [***] Satellite.
7.5 Termination By PanAmSat For Cause. PanAmSat may terminate this
Agreement if Buyer fails: (a) to make payment of any amount due and such amount
remains unpaid within ten (10) business days after receiving from PanAmSat a
notice of such nonpayment (but only if the payment is at least twenty (20)
business days past due at the time of termination), or (b) to cease any activity
in violation of Section 4.1 or 6.1 upon receiving telephone or facsimile notice
from PanAmSat (provided that PanAmSat shall not be entitled to terminate the
Agreement under this clause (b) if all of the following requirements are met:
(i) Buyer is (and remains) in compliance with Section 15.5(a), and the operator
on duty mistakenly did not implement PanAmSat's initial notice; (ii) the mistake
was rectified as soon as it became apparent to Buyer; (iii) appropriate steps
are taken to prevent a future recurrence of the mistake and the problem is not
recurring; and (iv) no damage occurred as a result of the mistake or Buyer
immediately reimburses and indemnifies PanAmSat for all such damage, or (c) to
cease any other activity in material violation of Buyer's obligations under this
Agreement, other than any part of Section 1.7, within thirty (30) days after
receiving from PanAmSat a notice of such violation.
In the event of a termination under Section [***] PanAmSat may
declare immediately due and payable the balance of the remaining Installments
(principal and interest as if not prepaid) for all of the Buyer's Transponders
based on the then predicted life of the Satellites (and, in the case of PAS-3
and PAS-6, if the Transponders are still subject to trade-in under Section 1.2
or Section 1.2A, the date of such contemplated trade-in, and, in the case of
PAS-6 (if no longer subject to trade in), if the termination right specified in
Section 7.9 is still available, through the [*****************] PAS-6 Delivery
Date), [***] for [****************************************************] from the
date paid to the date otherwise due in the absence of termination, and apply any
remaining unapplied portion of the Deposit against the termination liability. In
the event of a termination under Section [******] Buyer shall be responsible for
payments of the remaining Installments that would be otherwise due and as they
would otherwise become due on and after the date of such termination; provided
that if Buyer fails to make payment of any such amount due and
[***] Filed separately with the Commission pursuant to a request for
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such amount remains unpaid within ten (10) business days after receiving from
PanAmSat a notice of such nonpayment (but only if payment is at least twenty
(20) business days due at the time of termination), then PanAmSat may declare
immediately due and payable the remaining Installments (principal and interest
as if not prepaid), discounted for present value as provided above.
The foregoing notwithstanding, with respect to PAS-6, if the
termination right under Section [***] has been exercised, Buyer's termination
liability under this Section 7.5 shall be limited to the amount of
[*******************************] through the [******] of the PAS-6 Delivery
Date.
In the event of such termination, in addition to all of
PanAmSat's other remedies at law or in equity, PanAmSat shall be entitled to
[***] the Buyer's Transponders or to [******] on such Transponders to [***]
PanAmSat [******] and Buyer shall [*********] to any [******] with respect to
such [***] or any [***] of amounts paid to PanAmSat; provided, as follows: In
the event that Buyer has paid (and, if applicable, continues timely to pay to)
PanAmSat all amounts due hereunder including, without limitation, pursuant to
the preceding paragraphs of this Section 7.5 (the "Termination Payment(s)"),
PanAmSat shall use all [******] to [***] the Buyer's Transponders and in the
event PanAmSat subsequently reaches an agreement to provide service to a
[******] a Buyer's Transponder during the period that said Transponder would
have otherwise been made available to Buyer hereunder, PanAmSat shall [***] to
Buyer as a [***] of the Termination Payment(s) any [******] it receives from
[*********] with respect to the use of such Buyer's Transponder during such
period, up to the amount paid by Buyer for such Buyer's Transponder for its use
during such period over and above all Installments that were paid or due prior
to the date that this Agreement was terminated, less (i) any amounts owed by
Buyer to PanAmSat under this Agreement; (ii) any [******] (including
[***************] by PanAmSat in [*********] such amounts from Buyer; (iii) any
other [*********] by PanAmSat as a result of Buyer's breach of its obligations
hereunder; (iv) any [******] (including [*********] by PanAmSat in [***] such
Buyer's Transponder to, or [************] with, [******] and (v) any [*********]
by PanAmSat in [*********] and equipment for which PanAmSat is not [******] that
may be associated with the provision of such service in addition to those agreed
to be provided under this
[***] Filed separately with the Commission pursuant to a request for
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Agreement. Nothing herein shall be [*********] PanAmSat to [******] such
[*********], if the [***] of the party, the party's proposed use of the
transponder or [***] for terms and conditions for service, or other reasonable
and appropriate factors, lead PanAmSat [***************] to determine not to
enter such a [******] nor shall PanAmSat be obligated to [***] the Buyer's
Transponders [***] of any other [***] that PanAmSat may also have available.
Buyer acknowledges that the foregoing rights of PanAmSat: (i) are [***] under
all of the circumstances existing as of this date; (ii) constitute [******] for
the [***] of a [***] and (iii) do[*****************].
7.5A The foregoing notwithstanding, PanAmSat shall not be permitted to
terminate this Agreement under Section 7.5(a) if, for reasons beyond the
reasonable control of Buyer and any Buyer Company, Buyer is prohibited by a law
of general applicability from making payments to PanAmSat (a "Payment Force
Majeure") and all of the following conditions are met: (i) regardless of any
Payment Force Majeure, Buyer (or a third party on Buyer's behalf) makes payment,
including late payment charges, of all unpaid amounts within either (A) sixty
(60) days of the date otherwise due, or (B) ninety (90) days of the date
otherwise due (without regard to the application of the letter of credit
specified below) if prior to the Payment Force Majeure event, Buyer shall have
caused a New York commercial bank, acceptable to PanAmSat, to provide PanAmSat
with a letter of credit, in form and substance acceptable to PanAmSat, for one
month's payment (as measured as of the time of the Payment Force Majeure),
entitling PanAmSat to draw down payment upon notification to it by Buyer of the
existence of a Payment Force Majeure and PanAmSat shall, in fact, have been
permitted to draw down such amount (so that Buyer's total permitted late payment
under this paragraph is no more than sixty (60) days); (ii) Buyer promptly
notifies PanAmSat of the existence of the Payment Force Majeure (in all cases
within any grace period for nonpayment otherwise permitted under Section
7.5(a)), uses all reasonable efforts to have the condition giving rise to the
Payment Force Majeure removed as soon as possible, and (iii) Buyer uses all
commercially reasonable and legal methods to have payment made as soon as
possible, from sources (including, on Buyer's behalf, from Buyer Companies) as
to which the Payment Force Majeure does not apply, and keep PanAmSat promptly
apprised of such efforts.
If all of the conditions set forth above, except (i) are met,
PanAmSat shall still have the right to exercise all of the remedies stated in
Section 7.5; provided that, in
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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such circumstances, if within one hundred and eighty (180) days of the permitted
termination of this Agreement, Buyer is able to make payments, including for the
period during which this Agreement was terminated (less any payment PanAmSat may
have received from third parties for the relevant capacity during this period),
to the extent that PanAmSat has not already committed the Buyer's Transponders
to other customers, it shall permit Buyer to recommence the operation of this
Agreement, upon payment of such amounts, the next monthly payment due, and late
payment charges.
7.6 Rights and Obligations Upon Termination. Each sale is made based
upon an anticipated Satellite life [************] above. It is understood,
however, that a variety of factors including the final weight of the Satellite
when completed by the manufacturer, the quality of the launch and failure of
on-board equipment may result in a shorter (or longer) life.
As compensation for any shortened life, upon termination of
this Agreement in accordance with any of Sections 7.3, or 7.4 above, or Sections
7.7, 7.8, 7.9 or 8.1 below, as PanAmSat's sole warranty obligation to Buyer,
other than as expressly provided in Section 5.2 above, Buyer's obligation to
make Installment payments for the terminated Buyer's Transponder(s) that have
not already become due under the Agreement shall cease and, in lieu of a
Warranty Credit under Section 5.2, PanAmSat shall promptly refund to Buyer any
portion of the previous month's Installment pro rata for the portion of the
month after which the applicable Buyer's Transponder(s) ceased to made available
to Buyer following a failure of a Buyer's Transponder(s) on a Confirmed Basis.
PanAmSat shall be entitled to retain all other Installments paid and shall be
entitled to any Installments due prior to the effective date of termination; in
all cases, with all specified interest as of the time of termination
notwithstanding the early termination of the Agreement as to one or more
Transponders. The termination of this Agreement for any reason in accordance
with this Agreement shall extinguish all of PanAmSat's obligations to sell and
convey title to the affected Buyer's Transponder(s), and Buyer's obligations to
purchase, the affected Buyer's Transponder(s), but shall not relieve either
party of any obligation that may have arisen prior to such termination,
including (without limitation), under Section 7.5 above, nor shall termination
affect the parties obligations under Article 11 ("Confidentiality") that shall
survive termination of this Agreement. If title to the Buyer's Transponders has
already been conveyed under this Agreement, then upon the termination of this
Agreement, as to the affected Buyer's Transponders, Buyer shall reconvey title
back to PanAmSat free and clear of liens,
[***] Filed separately with the Commission pursuant to a request for
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claims, and encumbrances, except if created by action or failure to act of
PanAmSat. In confirmation thereof, Buyer shall execute such document of
conveyance as PanAmSat may reasonably request to confirm that such reconveyance
has occurred. For the avoidance of doubt, following termination of this
Agreement, PanAmSat shall [******************** *****************] what had been
the Buyer's Transponders, without limitation, for the provision
[*******************************************].
7.7 Termination for Patent Infringement. In the event that: (a)
PanAmSat's provision of the Buyer's Transponders infringes upon the patents or
intellectual property rights of third parties; (b) such infringement exists
independent of the combination of the Buyer's Transponders with any
Buyer-Provided Facilities; and (c) as a result, Buyer cannot use the Buyer's
Transponders without infringing upon the patent or intellectual property rights
of third parties, Buyer may terminate this Agreement as to the affected
Satellite upon thirty (30) days' notice to PanAmSat, unless (i) such
infringement ceases to exist within this thirty (30)-day notice period; or (ii)
PanAmSat agrees (to the extent that Buyer is not protected under the indemnity
provided by PanAmSat's Satellite manufacturer) to indemnify and hold harmless
Buyer from any claim or suit based on such infringement and arising from
PanAmSat's continued provision and Buyer's continued use of the Buyer's
Transponders on and after the date that PanAmSat agrees to so indemnify Buyer.
In this latter instance, Buyer agrees to cooperate with PanAmSat and the
Satellite manufacturer, as applicable, in the defense of such claim and
specifically agrees, as a condition to this indemnity, to take all steps within
its power that are required of it and/or that are necessary for PanAmSat to take
in order to receive the benefits of the Satellite manufacturer's indemnify, in
accordance with the relevant provisions of PanAmSat's contract with the
Satellite manufacturer.
7.8 Cross Termination by Buyer. Upon the termination of this Agreement
with respect to the entire Primary Satellite under any of Sections 7.3, 7.4,
7.7, 7.9, or 8.1, Buyer shall have the [***] to terminate this Agreement as to
the PAS-3 Satellite effective immediately on notice to PanAmSat. Such notice
must be given, if at all, at the same time that Buyer notifies PanAmSat of its
termination of the Agreement as to the Primary Satellite, or, if termination of
the Agreement as to the Primary Satellite occurs under the listed sections on
PanAmSat's notice to Buyer, within ten (10) days of that notice. For the
avoidance of doubt, other than under Section 7.5 (Termination by PanAmSat of
Cause), the termination of this Agreement with respect to PAS-3 or,
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provided that the Minimum Complement is maintained, the partial termination of
this Agreement as to individual Transponders on the Primary Satellite, shall not
result in a termination of this Agreement as to other Transponders, nor (except
as provided in Section 7.5 above) shall the termination of this Agreement as to
one of PAS-6 or PAS-6B result in the termination of this Agreement as to the
other one.
7.9 Early Termination Right. In recognition of the additional risks to
maintaining satellite operations beyond the specified design life of the
Satellite, Buyer shall have the right, subject to the conditions specified in
this Section 7.9, to terminate this Agreement [************************
*********************************] after the PAS-6 Delivery Date. Exercise of
such termination rights by Buyer must occur, if at all, on or before the earlier
of: (a) the [************************] of the PAS-6 Delivery Date; or (b)
[*******************] PanAmSat notifies Buyer of PanAmSat's firm intention to
launch a Successor Satellite, with the intention to place it into commercial
service prior to the end of the [**********************] if Buyer exercises its
termination right under this Section 7.9, but in no event shall such exercise
decision be required earlier than [*********************************] PAS-6
Delivery Date. For the avoidance of doubt, such rights do not apply to PAS-6B,
where (subject to Buyer's warranty rights under Section 7.6) the risks of such
operation beyond [******] have been addressed differently in this Agreement.
ARTICLE 8. FORCE MAJEURE.
8.1 Failure To Deliver Or To Perform. Any failure or delay in the
performance by PanAmSat of its obligation to Deliver the Buyer's Transponders or
to continue to make them available to Buyer shall not be a breach of this
Agreement, if such failure or delay results from any Act of God, governmental
action (whether in its sovereign or contractual capacity), or any other
circumstance reasonably beyond the control of PanAmSat, including, but not
limited to, receive earth station sun outage, meteorological or astronomical
disturbances, earthquake, hurricane, snowstorm, fire, flood, strikes, labor
disputes, war, civil disorder, epidemics, quarantines, embargoes, or
acts or omissions of Buyer or any third parties (except that the acts or
omissions of third parties acting on behalf of PanAmSat, including PanAmSat's
Satellite manufacturer and launch contractor, shall not constitute a force
majeure unless their acts and omissions are themselves the result of force
majeure conditions of the kind set forth above). Subject to the following
sentence, either party shall be permitted to terminate this
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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Agreement, as to the affected Buyer's Transponder(s), if, because of force
majeure conditions: (a) after the applicable Delivery Date for the Satellite,
PanAmSat does not make available the Buyer's Transponders meeting the
Performance Specifications and their availability cannot be recommenced within
sixty (60) days; or (b) the nature of the force majeure event makes it clearly
ascertainable that PanAmSat's ability to make available the Buyer's Transponders
meeting the Performance Specifications will not be able to recommence within
this sixty (60) day period. The foregoing notwithstanding, Buyer's rights to
terminate under Sections 7.1, 7.1A, and 7.2, and, to the extent a failure to
provide the Buyer's Transponders results from a malfunction of a Satellite,
under Section 7.3, shall be governed by those Sections. Buyer shall not be
permitted to terminate this Agreement if PanAmSat's inability to perform is due
to acts or omissions of Buyer or its employees, agents, or contractors that are
not in conformance with Appendix D or for intermittent failures due to any or
all of the following: sun outages, meteorological or astronomical disturbances.
In addition, in circumstances that are not governed by Sections 7.1, 7.1A, 7.2,
or 7.3 and that are not due to events described in the previous sentence, if a
Buyer's Transponder is not made available by PanAmSat in accordance with the
Performance Specifications due to a force majeure condition, provided that if
Buyer ceases use of the affected Buyer's Transponders during such period (except
in coordination with PanAmSat to determine if the Buyer's Transponders can be
restored to the Performance Specifications), Buyer shall be entitled to Warranty
Credits for the affected Buyer's Transponders, as calculated under Section 5.2
hereof, to reflect the period during which the Buyer's Transponder(s) were not
made available.
ARTICLE 9. LIMITATION OF LIABILITY AND INDEMNIFICATION.
9.1 Limitation Of PanAmSat's Liability. EXCEPT AS EXPRESSLY PROVIDED IN
SECTION 7.6 ABOVE, ANY AND ALL EXPRESS AND IMPLIED WARRANTIES, INCLUDING, BUT
NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PURPOSE OR USE,
ARE EXPRESSLYEXCLUDED AND DISCLAIMED. IT IS EXPRESSLY AGREED THAT PANAMSAT's
SOLE OBLIGATION AND BUYER'S EXCLUSIVE REMEDIES FOR ANY CAUSE WHATSOEVER ARISING
OUT OF OR RELATING TO THIS AGREEMENT ARE LIMITED TO THOSE SET FORTH IN SECTIONS
3.1(c), 5.2, 5.3, 8.1, 9.4, AND 9.5 AND ARTICLE 7 AND ALL OTHER REMEDIES OF ANY
KIND ARE EXPRESSLY EXCLUDED. In no event shall PanAmSat be liable for any
incidental or consequential
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damages or loss of revenues, whether foreseeable or not, occasioned by any
defect in the Satellite(s), the Transponders or the provision of the Buyer's
Transponders to Buyer, any delay in the Delivery of the Buyer's Transponders to
Buyer, any failure of PanAmSat to continue to make available the Buyer's
Transponders, or any other cause whatsoever.
9.2 Limitation Of Liability Of Others. Without limiting the generality
of the foregoing, Buyer acknowledges and agrees that it shall have no right of
recovery for the satisfaction of any cause whatsoever, arising out of or
relating to this Agreement, against (a) any supplier of services or equipment to
PanAmSat in connection with the construction, launch, operation, maintenance,
tracking, telemetry and control of the Satellite(s) or the Buyer's
Transponder(s), or the provision of the Buyer's Transponders to Buyer in any
circumstances in which PanAmSat would be obligated to indemnify the supplier, or
(b) any officer, director, employee, agent or partner of (i) PanAmSat or (ii)
any service or equipment provider under 9.2(a). Except as provided in Article 17
and Appendix L of this Agreement and subject to PanAmSat's right as a third
party beneficiary under Section 1.4(b), PanAmSat acknowledges and agrees that it
shall have no right of recovery for the satisfaction of any cause whatsoever,
arising out of or related to this Agreement, against any officer, director,
employee, agent or partner of Buyer, except with respect to any partner or agent
to the extent arising out of the transmission of signals to the Satellite(s) by
it or on its behalf.
9.3 Indemnification. Buyer shall defend and indemnify the "PanAmSat
Group" (defined herein to mean PanAmSat and all officers, directors, employees,
agents and partners of PanAmSat) from any claims, liabilities, losses, costs, or
damages, including attorneys' fees and costs, arising out of the provision of
the Buyer's Transponders to Buyer from, or Buyer's use of, the Satellite or the
Buyer's Transponder(s), that (a) is caused by the fault or negligence of Buyer,
(b) arises under a warranty, representation, or statement by Buyer to any third
party in connection with transmissions carried on the Buyer's Transponders, (c)
arises out of the content of Buyer's programming, including any libel, slander,
obscenity, indecency, pornography, religious fanaticism, or political advocacy,
infringement of copyright, infringement of patents, breach in the privacy or
security of transmissions; or (d) arises out of disputes between or among Buyer
and any program supplier and/or its program recipients. The limitation of
liability set forth in this Article 9 shall apply to, and the indemnifications
set forth in this Article 9 shall run in favor of, the PanAmSat Group.
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9.4 Equitable Relief. Nothing contained in this Article 9 or elsewhere
in this Agreement shall preclude either party from seeking injunctive relief to
prevent a willful breach or to compel performance in the event of a willful
failure to comply with this Agreement.
9.5 Patents, Copyrights, Mask Work Rights and Proprietary Computer
Programs. To the extent that the manufacturer of the Satellite or any part
thereof may be obligated to indemnify PanAmSat for any infringement of any
patent, copyright, "mask work" (as defined in the Semiconductor Chip Protection
Act, 17 U.S.C. Secs. 901-14) right or other proprietary computer right with
respect to the manufacture of, or provision of services from the Satellite and
the Buyer's Transponders and such indemnification obligations may be passed
through to protect PanAmSat's customers, PanAmSat shall pass such protection
through to Buyer; provided, that PanAmSat makes no representation or warranty
that any manufacturer's indemnification obligation exists or will continue to
exist or may be passed through; and provided further that, to the extent such
indemnification rights are limited, PanAmSat may equitably share such
indemnification protections for the common benefit of PanAmSat and its
customers.
9.6 Indemnitor Rights. If Buyer is obligated to provide indemnification
pursuant to this Article 9 or Section 3.5(a) or PanAmSat undertakes to indemnify
Buyer under Section 7.7 or is obligated to provide indemnification pursuant to
Section 3.5(b), the indemnifying party (the "Indemnitor") shall promptly defend
any claims against the party entitled to indemnification (the "Indemnitee") with
counsel of Indemnitor's choosing at its own cost and expense. The Indemnitee
shall allow the Indemnitor to control the defense and cooperate with, and assist
as reasonably requested by, Indemnitor in the defense of any such claim,
including the settlement thereof on a basis stipulated by Indemnitor (with
Indemnitor being responsible for all costs and expenses of defending such claim
or making such settlement); provided, however, that except with respect to Buyer
Indemnified Taxes imposed by way of withholding at its source (1) Indemnitor
will not, without the Indemnitee's consent, settle or compromise any claim or
consent to any entry of judgment which does not include the giving by the
claimant or the plaintiff to the Indemnitee of an unconditional release from all
liability for which the Indemnitor does not fully indemnify the Indemnitee with
respect to such claim (provided, however, that with respect to Buyer Indemnified
Taxes imposed by way of withholding at the source, Indemnitor shall have
acknowledged in writing its
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obligation to pay Additional Amounts, with respect thereto to Indemnitee prior
to such settlement, compromise or consent) (2) the Indemnitee shall be entitled
to participate at its sole expense in support of Indemnitor's action in the
defense of any such claim and to employ counsel at the Indemnitee's own expense
to assist in the handling of such claim, and (3) the Indemnitee shall have the
right to pay, settle or compromise any such claim as to itself, provided that in
such event Indemnitor shall be relieved of any liability or obligation which
would otherwise then or thereafter have existed or arisen in respect of such
claim.
9.7 Limitation of Liability [**************************************].
Buyer's money damages exposure to PanAmSat with respect to any breach of
obligations under Section [****************************************************
******************************************************************************
***************************] is [***] to [******] and neither party is precluded
from seeking injunctive relief in the event of a willful breach.
ARTICLE 10. SUBORDINATION AND ASSIGNMENT.
10.1 Intentionally Deleted.
10.2 Collateral Trustee.
With respect to PAS-3:
(a) Buyer hereby acknowledges that this Agreement and all
rights granted to Buyer hereunder are subject and subordinate to a security
interest and lien in favor of First Trust National Association (the "Trustee"),
as the same may be assigned (the "Security Interest") in and to the
Transponder(s) that may be owned and operated by PanAmSat and which are the
subject of this Agreement (and/or the proceeds from the sale or other
disposition of all or any portion thereof, or any insurance that may be received
by PanAmSat as a result of any loss or destruction of, or damage to, the
Transponders identified above). The Security Interest shall be deemed to arise
under all security agreements, indentures, mortgages, pledge agreements and
other collateral documents between Trustee and PanAmSat, including all renewals,
modifications, consolidations or replacements thereto (collectively, the
"Collateral Documents"). Notwithstanding the Security Interest, the Trustee
agrees that Buyer shall continue to have the benefits of this Agreement
notwithstanding any default on
[***] Filed separately with the Commission pursuant to a request for
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the part of PanAmSat under the Collateral Documents, so long as (i) Buyer is not
in default under the terms and conditions of this Agreement, (ii) Buyer shall
not pay any of its obligations under this Agreement more than 30 days prior to
their scheduled payment date under this Agreement, (iii) this Agreement is not
supplemented, amended or extended or otherwise modified in any manner which
adversely affects the interests of the Trustee on behalf of the holders of the
Senior Secured Notes (as defined in the Collateral Documents) in a degree
greater than the manner in which it adversely affects PanAmSat, and (iv) after
receipt of notice from the Trustee of a default by PanAmSat under the Collateral
Documents, Buyer agrees to make, and makes, all payments thereafter as
instructed by the Trustee.
(b) Buyer acknowledges and consents to the foreclosure, should
it occur, upon this Agreement by the Trustee or its designee, successor or
assignee, and the consequent replacement of PanAmSat under this Agreement by the
Trustee, its designee, successor or assignee, or another purchaser or assignee,
provided that any successor to PanAmSat under this Agreement (i) expressly
assumes PanAmSat's obligations hereunder for the benefit of Buyer, and (ii)
succeeds to substantially all of the right, title, and interest in and to all
assets of PanAmSat reasonably necessary for such successor to perform its
obligations under this Agreement. Upon such succession and assumption by a party
other than the Trustee, the Trustee and its successors under this Agreement,
other than the ultimate successor, shall be released from any further liability
under this Agreement.
(c) The Trustee shall be entitled to exercise all rights and
to cure any defaults of PanAmSat under this Agreement, within such cure period
as may be available to PanAmSat under this Agreement. Upon receipt of notice
from the Trustee, Buyer agrees to accept such exercise and cure by the Trustee
and to render all or any part of the performance due by Buyer under this
Agreement to the Trustee.
(d) Provided that Buyer performs its payment and other
obligations under this Agreement, after payment in full of the Purchase Price
for the Buyer's Transponders, Trustee shall release its lien upon the Buyer's
Transponders.
(e) The Trustee shall be deemed an express third party
beneficiary of this Section 10.2. This Section 10.2 shall be self-operative and
no further instrument of subordination shall be required by any security
agreement, mortgage or other
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document reflecting the Security Interest to make this subordination effective.
In confirmation of such acknowledged subordination, Buyer shall execute promptly
any instrument or certificate which PanAmSat or the Trustee may reasonably
request.
10.3 Subordination to Other Entities. Buyer acknowledges and agrees
that PanAmSat may grant additional security interests in the Transponders and/or
the Satellite to other parties. In such event, provisions that are the same as
in Section 10.2 above or, to the extent that changes are requested by another
secured party, similar provision shall apply.
10.4 PanAmSat's Right To Assign. Buyer agrees that PanAmSat may assign
its rights and interests under this Agreement and to the Satellite(s) and any or
all sums due or to become due under this Agreement to an assignee for any
reason; provided that, except with respect to the granting of a security
interest or the assignment of a right to payment, such assignee agrees in
writing to assume all of the duties and obligations of PanAmSat hereunder. Buyer
agrees that upon receipt of notice from PanAmSat of such assignment, Buyer shall
perform all of its obligations directly for the benefit of the assignee and
shall pay all sums due or to become due directly to the assignee, if so
directed. Upon receipt of notice of such assignment, Buyer agrees to execute and
deliver to PanAmSat such documentation as assignee may reasonably require from
PanAmSat. As used in this Section 10.4, assign shall mean to grant, sell,
assign, encumber or otherwise convey directly or indirectly, in whole or in
part.
10.5 Buyer Assignment. Buyer may assign its rights under this Agreement
and/or to the Buyer's Transponders only in whole, only to an Approved
Participating Company (or any entity Controlled by an Approved Participating
Company), and only if the following conditions are satisfied: (a) the proposed
assignee in writing assumes all of Buyer's obligations with respect to this
Agreement and agrees to be treated as Buyer for all purposes under this
Agreement; (b) such written undertaking is delivered to PanAmSat at least thirty
(30) days in advance of the assignment; (c) Buyer guarantees assignee's
performance of payment obligations which obligations shall also continue to be
subject to the guarantee requirements stated under Article 17 below; and (d)
either (i) the assignee agrees in writing to continue the programming practices
of Buyer; (ii) the assignee is one of the Approved Participating Companies as to
whom (as shown in Appendix I) PanAmSat has consented to its current programming
practices and said assignee agrees to follow the assignor's current programming
practices (as
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exist as of the date of this Agreement) with respect to the use of Buyer's
Transponders, or (iii) PanAmSat consents to such assignment in advance and in
writing, such consent not to be unreasonably withheld or delayed; it being
understood that PanAmSat may withhold its consent only if PanAmSat determines,
in good faith, that some or all of the assignee's programming may be
pornographic, involve religious fanaticism or political advocacy, obscene,
indecent, slanderous, or in violation of any governmental programming
restrictions. Buyer may also assign its rights under the Agreement in a sale
lease back transaction with a bona fide financial institution, but only if such
a sale lease back transaction is transparent to PanAmSat; i.e., among other
things, Buyer must remain in operational control with full rights of beneficial
use of the Buyer's Transponders; all obligations of the Agreement of Buyer and
the Buyer Companies shall remain as if the sale lease back agreement does not
exist, and in no event, including (without limitation) any default by Buyer
under the underlying sale lease back agreement(s), shall operational control or
beneficial use of the Buyer's Transponders be removed from Buyer's control.
Without limitation, any assignee shall be required to use the Transponders
assigned in accordance with Section 1.4.
The foregoing notwithstanding, following the date that is
fifteen (15) years after the Delivery Date of the applicable Satellite, the
condition that the assignment be made only to an Approved Participating Company
shall no longer be required to be met; provided that any such assignment to a
non-Approved Participating Company vis-a-vis the Primary Satellite shall, unless
already exercised, extinguish the successor and collocated satellite rights
stated in this Agreement it being understood, without limitation, that such
successor and collocated satellite rights are not assignable to a non-Approved
Participating Company without PanAmSat's express written consent.
10.6 Successors. Subject to all the provisions concerning assignments,
above, this Agreement shall be binding on and shall inure to the benefit of any
successors and assigns of the parties. The foregoing notwithstanding, no
assignment of this Agreement shall relieve either party of its obligations to
the other party, without the express written consent of the other party, not to
be unreasonably withheld. Any purported assignment by either party not in
compliance with the provisions of this Agreement shall be null and void and of
no force and effect.
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10.7 No Resale. Except as expressly permitted in Sections 1.4, 1.6, and
10.5, the Buyer's Transponders are being provided for Buyer's own use and in no
event shall Buyer be permitted to resell them, in whole or in part, to any other
person or entity.
ARTICLE 11. CONFIDENTIALITY
11.1 Publicity. The terms of this Agreement, the transactions
contemplated herein, and the information exchanged in their connection shall be
kept strictly confidential by the parties and their advisors and shall be used
solely for the purposes contemplated by this Agreement and specifically not in
any way for the purpose of competing with any party hereto or any of its
Affiliates; provided, however, that the parties may disclose such information:
(i) to their respective shareholders, directors, officers, partners, lenders,
insurance agents, accountants, and advisors on an as needed and confidential
basis and the foregoing agree (or are subject to agreement or other obligations
of professional responsibility (e.g., lawyers) to keep such information
confidential; (ii) to regulatory authorities or the general public if and to the
extent a party is required by law or securities exchange rules or regulations to
make such disclosures (including, but not limited to, in connection with a
public offering); (iii) to actual and proposed potential partners, investors,
lenders, and successors in interest; and (iv) to Globo, News, Televisa, TINTA,
Multi-Country Platform, entities under any of their Control and such venture as
some or all of them may form in connection with the provision of DTH services on
an as needed and confidential basis. Subject to the proviso of the preceding
sentence, the parties will mutually agree on the timing and substance of the
initial announcement of this Agreement to the general public. To the
extent practicable, any other disclosures to the general public will be
coordinated and approved by the parties prior to release.
ARTICLE 12. REPRESENTATIONS, WARRANTIES AND COVENANTS.
PanAmSat has (for PAS-3 and PAS-6) or will use all reasonable efforts
to obtain by the PAS-6B Delivery Date (for PAS-6B) and will use all reasonable
efforts to maintain all consents and authorizations from the FCC and other
governmental entities that may be necessary to Deliver the Buyer's Transponders
as contemplated in this Agreement; provided that, except as it may relate to
actions that may need to be taken with third parties or non-U.S. governmental
agencies a "best efforts" standard shall apply to PanAmSat's activities before
the FCC with respect to PAS-3, PAS-6, and PAS-
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6B. Subject to the understanding that certain consents and authorizations have
not yet been obtained and that certain applications in this regard may be
pending or subsequently filed with the FCC or other applicable governmental
entity, PanAmSat and Buyer each represents and warrants to, and agrees with, the
other that:
12.1 Authority. It has the right, power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement shall not result in the breach or non-performance
of any document, instrument or agreement by which it is bound.
12.2 Partnership And Corporate Approvals. It has taken all requisite
partnership or corporate action, as applicable, to approve execution, delivery
and performance of this Agreement, and this Agreement constitutes a legal, valid
and binding obligation upon itself in accordance with its terms.
12.3 Consents. The fulfillment of its obligations will not constitute a
material violation of any existing applicable law, rule, regulation or order of
any governmental authority. All necessary or appropriate public or private
consents, permissions, agreements, licenses or authorizations necessary for the
performance of its obligations under this Agreement to which it is subject have
been obtained, or it will use all reasonable efforts to obtain, in a timely
manner.
12.4 Litigation. To the best of its knowledge, there is no outstanding
or threatened judgment, pending litigation or proceeding, involving or affecting
the transactions provided for in this Agreement, except as set forth in the
"Disclosure Schedule" set forth in Appendix G or as has been previously
disclosed in writing by either party to the other.
12.5 No Broker. It does not know of any broker, finder or intermediary
involved in connection with the negotiations and discussions incident to the
execution of this Agreement, or of any broker, finder or intermediary who might
be entitled to a fee or commission upon the consummation of the transactions
contemplated by this Agreement.
12.6 Good Faith. Each party shall carry out its obligations under this
Agreement, including (without limitation) with respect to all matters requiring
that a consent be given, in good faith.
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ARTICLE 13. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF PANAMSAT.
13.1 Orbital Location. PanAmSat has been authorized to construct,
launch, and operate PAS-3 and PAS-6 in geostationary orbit at 43(degree) West
Longitude ("W.L."). PanAmSat will promptly apply to the FCC for authority to
launch and operate PAS-6B in geostationary orbit at 43(degree) W.L. As long as
Buyer has rights hereunder to use the applicable Satellite, PanAmSat shall use
such orbital location (or, to the extent that PanAmSat obtains FCC authority to
do so, any location(s) within five degrees of 43(degree) W.L.), unless prevented
by subsequent order of the FCC, in which event PanAmSat shall use such orbital
position(s) closest to the range identified above that the FCC may designate.
PanAmSat shall use all reasonable efforts to resist any move of the
Satellite(s), from which Buyer has rights to use hereunder, from outside the
orbital range specified above. In the event that PanAmSat is required to change
a Satellite's orbital location, such change shall not affect the continuing
validity of this Agreement, except to the extent such change prevents PanAmSat
from providing Buyer with Transponders that meet the Performance Specifications,
in which event the termination provision set forth in Section 7.3 shall apply.
The foregoing notwithstanding, the parties agree that the placement of a
Satellite outside of the orbital range from 38(degree) W.L. through and
including 48(degree) W.L. shall, for purposes of Section 7.3, constitute a
failure of the Transponders on that Satellite to meet their Performance
Specifications.
13.2 Government Authorizations. PanAmSat shall use all reasonable
efforts to obtain and maintain all necessary governmental authorizations or
permissions to operate the Satellite(s) and to comply in all material respects
with all FCC and other governmental regulations regarding the operation of the
Satellite(s); provided that, except as it may relate to actions that may need to
be taken with third parties or non-U.S. governmental agencies, a "best efforts"
standard shall apply to PanAmSat's activities before the FCC with respect to
PAS-3, PAS-6, and PAS-6B.
13.3 Operational Reports. PanAmSat shall provide Buyer a quarterly
written operational report concerning the Satellite(s) which shall include
information regarding the status of Spare Equipment and updated projections
regarding the predicted life of the Satellite(s). PanAmSat shall also notify
Buyer as soon as practicable of any significant anomalies with respect to the
Satellite which have a material effect on the Buyer's Transponder(s) or
materially reduce the projected life of a Satellite.
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ARTICLE 14. PROGRESS REPORTS, INSPECTIONS AND ACCESS TO WORK IN PROGRESS.
14.1 Progress Reports. Beginning not later than ninety (90) days after
the date of execution of this Agreement and continuing until PAS-6B Delivery,
PanAmSat shall furnish to the Buyer on a monthly basis a written progress report
that shall state PanAmSat's projected scheduled launch date and projected date
of Delivery for PAS-6B. PanAmSat shall notify Buyer as soon as possible of any
significant change in the then-anticipated Delivery Date, including any
anticipated delay beyond the Latest Anticipated Delivery Date for PAS-6B or any
change in the month of anticipated delivery or of launch for PAS-6B beyond
October, 1998, and of any formal notification of a delay in construction or
launch of PAS-6B that PanAmSat may receive from its construction or launch
contractors. PanAmSat shall keep Buyer informed periodically of written
communications to PanAmSat from the FCC which materially affect PanAmSat's
ability to fulfill its obligations to Buyer under this Agreement and to timely
Deliver the Buyer's Transponders, and shall promptly deliver copies to Buyer of
any such written communications.
14.2 Inspection Rights of Buyer. PanAmSat shall give Buyer reasonable
notice of the commencement of pre-Delivery in-orbit testing for PAS-6B. Subject
to the consent of PanAmSat's manufacturer, which PanAmSat shall seek to obtain
and Buyer's execution of any additional proprietary data agreement that the
applicable manufacturer may require, Buyer shall be given access to the test
data from such tests that are relevant to the Performance Specifications of
Buyer's Transponders and Buyer shall be allowed to be present during such
in-orbit testing.
In addition, again subject to the consent of the manufacturer
and the execution of any necessary proprietary data agreement that the
manufacturer may require, PanAmSat shall give Buyer access to pre-Delivery test
information and reports relevant to the Buyer's Transponders, allow Buyer to
inspect the work in progress at reasonable times and upon reasonable notice, and
allow Buyer to be present during pre-Delivery testing for which PanAmSat also
has access. It is understood, in this regard, that the implementation of this
paragraph is intended to be implemented at a cooperative level largely between
the respective engineers of the parties and that formal notice of events or
information will not be required.
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This Section 14.2 does not apply to PAS-3 and has already been
implemented for PAS-6.
ARTICLE 15. MISCELLANEOUS.
15.1 Applicable Law And Entire Agreement. This Agreement shall be
interpreted according to the laws of the State of New York, U.S.A. Subject to
the following sentence, the parties agree that the appropriate and exclusive
forum for any disputes arising under this agreement shall be the United States
District Court for the Southern District of New York. Each party consents to the
jurisdiction of this court, but, if that court determines it lacks jurisdiction,
consents to the jurisdiction of the State courts of New York. The parties agree
to waive any or all rights they may have to a jury trial with respect to
disputes arising under this Agreement. Each party agrees that service of process
in any action or proceeding shall be deemed sufficient if mailed, first class,
postage prepaid, to the other at the address set forth in Section 15.5(b), as
the same may be changed in accordance with that Section. This Agreement may not
be amended or modified in any way, and none of its provisions may be waived,
except by a prior writing signed by an authorized officer of each party.
15.2 Severability; Reconstitution. Nothing contained in this Agreement
shall be construed so as to require the commission of any act contrary to law.
In the event that the transactions set forth in this Agreement are challenged
before a court or regulatory body of competent jurisdiction by other persons or
entities not parties hereto, PanAmSat and Buyer agree that each will use its all
reasonable efforts before such court or regulatory body to support the
continuing operation of this Agreement by its terms. If any provision of this
Agreement shall be invalid or unenforceable, the provisions of this Agreement so
affected shall be curtailed and limited only to the extent necessary to permit
compliance with the minimum legal requirements; provided that if the effect is
such so that the economic relationships or benefits and burdens contemplated
under the Agreement are substantially affected, the parties shall seek and use
all reasonable efforts to reconstitute this Agreement so as best possible to
restore to each party to the economic position contemplated in this Agreement.
15.3 No Third Party Beneficiary. The provisions of this Agreement are
for the benefit only of Buyer and PanAmSat, and, except as provided under
Sections 10.2, 10.3 and 17.1, no third party may seek to enforce or benefit from
these provisions, except
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that both parties acknowledge and agree that the provisions of Sections 9.2 and
9.3 are intended for the benefit of the PanAmSat Group. Any member of the
PanAmSat Group shall have the right to enforce, as a third party beneficiary,
the provisions of Sections 9.2 and 9.3 either by (a) an action brought solely by
itself, or (b) joining PanAmSat, or other members of the PanAmSat Group in
bringing an action against Buyer for violation of Sections 9.2 or 9.3. The
foregoing notwithstanding, both parties acknowledge and agree that the
non-interference requirements of Section 4.1, with respect to PAS-3 are intended
for the benefit of both PanAmSat and all other Protected Parties on PAS-3,
except that no Protected Party who has the right to uplink to a Satellite shall
be entitled to third party beneficiary rights to enforce Section 4.1 against
Buyer, unless the agreement giving such other Protected Party the right to
uplink to a Satellite also gives Buyer comparable third party beneficiary rights
against it. Any other Protected Party shall have the right, as a third party
beneficiary (a) to enforce the non-interference requirements of Section 4.1,
against Buyer directly, in an action brought solely by itself, or (b) to join
with PanAmSat or any other Protected Parties in bringing an action against Buyer
for violation of the non-interference requirements of Section 4.1.
15.4 Non-Waiver Of Breach. Either party may specifically waive any
breach of this Agreement by the other party, provided that no such waiver shall
be binding or effective unless in writing and no such waiver shall constitute a
continuing waiver of similar or other breaches. A waiving party may at any time,
upon notice given in writing to the breaching party, direct future compliance
with the waived term or terms of this Agreement, in which event the breaching
party shall comply as directed from such time forward.
15.5 Notices.
(a) Telephone Notices. For the purpose of receiving notices
from PanAmSat regarding preemption, interference or other technical problems,
including with respect to Transponder failure and restoration, Buyer shall
maintain at each earth station transmitting signals to the Satellite(s) a
telephone that is continuously staffed at all times during which customer is
transmitting signals to the Satellite(s) and an automatic facsimile machine in
operation and capable of receiving messages from PanAmSat at all times. THOSE
PERSONS STAFFING THE EARTH STATION, FOR THE PURPOSES OF RECEIVING SUCH MESSAGES
FROM PANAMSAT, MUST
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HAVE THE TECHNICAL CAPABILITY AND ABSOLUTE AUTHORITY IMMEDIATELY TO TERMINATE OR
MODIFY THE TRANSMISSION IF NOTIFIED BY PANAMSAT. PanAmSat shall also maintain a
telephone that is continuously staffed for the purposes of receiving notices
regarding the matters identified in the first sentence of this Section 15.5(a).
All such notices shall be made in English and shall be effective upon the
placement of a telephone call from one party to the other. Each party shall
promptly confirm all telephone notices that may be given under this Agreement in
writing in accordance with Section 15.5(b) below. Any unsuccessful efforts to
reach a party by telephone shall be followed by telecopy and telephone calls to
other contact points, e.g., the corporate headquarters of the other party, that
said party may have provided the notifying party.
(b) General Notices. All notices and other communications from
either party to the other, except as otherwise stated in this Agreement, shall
be in English writing and, shall be deemed received upon actual delivery or
completed facsimile addressed to the other party as follows:
To PanAmSat if by recognized courier PanAmSat International Systems, Inc.
service or by personal delivery to One Pickwick Plaza
its principal place of Greenwich, Connecticut 06830
business: Attention: General Counsel
To PanAmSat if by facsimile: 203-622-9163
Attention: General Counsel
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With a copy to:
If by recognized courier service or Goldberg, Godles, Wiener & Wright
by personal delivery to its principal 1229 Nineteenth Street, N.W.
place of business: Washington, D.C. 20036
Attention: Henry Goldberg
If by facsimile: 202-429-4912
Attention: Henry Goldberg
To Buyer if by recognized courier NetSat Servicos Ltda.
service or by personal delivery to its Av. Paulista, 1106 5 Andar
principal place of Cerqueira Cesar CEP 01310-100
business: Sao Paulo SP
Brazil
Attention: General Manager
To Buyer if by facsimile:
With a copy to:
If by recognized courier service or by The News Corporation Limited
personal delivery to its principal 1211 Avenue of the Americas
place of business: New York, New York 10036
Attention: Group General Counsel
If by facsimile: 212-852-7147
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and
The News Corporation/Sky
Latin America
10201 West Pico Boulevard
Los Angeles, California 90035
If by facsimile: 310-369-3742
Attention: Executive Vice President,
Business Affairs
and
If by facsimile: 310-369-3595
Attention: Executive Vice President,
Legal Affairs
and
Globo Comunicacoes e Participacoes
Ltda.
A.V. Afranio De Mello Franco
135 - 1 Andar
Rio de Janeiro - RJ - Brasil
CEP 22 430-060
Attention: Ronaldo Mascarenhas
If by facsimile: 011-55-21-529-7695
and
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Attention: Michael J. Gillespie
If by facsimile: 212-909-6836
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and
Tele-Communications
International, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
If by facsimile: 303-267-5651
Attention: President
and
If by facsimile: 303-488-3207
Attention: General Counsel
Each party will advise the other of any change in the address, designated
representative or telephone or facsimile number.
For the avoidance of doubt, notices and certifications given by either
party to the other while relevant to the timing of further action by the
notified party shall not be deemed in and of themselves to establish the fact
stated in the notice. So, for example, under Section 5.3, the fact that Buyer
notifies PanAmSat that a Transponder does not meet the Performance
Specifications and/or that PanAmSat notifies Buyer that a Transponder has been
restored to its Performance Specifications shall not be deemed conclusive
evidence, in and of itself, of failure and/or restoration. Each party shall
timely notify the other if said party believes that any such notice is
inaccurate.
15.6 Headings. The descriptive headings of the Articles and sections of
this Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
15.7 Documents. Each party agrees to execute, and, if necessary, to
file with the appropriate governmental entities and international organizations,
such documents as the other party shall reasonably request in order to carry out
the purposes of this Agreement.
15.8 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and all such
counterparts together shall constitute but one and the same instrument.
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15.9 Absence of Partnership. The relationship between the parties shall
not be that of partners and nothing in this Agreement shall be construed to
create a partnership between such parties.
ARTICLE 16. SUCCESSOR OR COLLOCATED SATELLITES.
16.1 Successor or Collocated Satellite.
(a) PanAmSat Elects to Launch.
(i) In the event that PanAmSat, or a PanAmSat Company
(collectively referred to as "PanAmSat" for purposes of this Section 16.1)
determines to launch a new "Collocated Satellite" or a "Successor Satellite"
(each as defined herein) during the Term hereof or during the survival period
specified in clause (f) below, with Ku-band transponders covering [***] the
[*************] as the Buyer's Transponders that are [********] to or [********]
from the Buyer's Transponders on PAS-6 ("Brazil Ku-Band Transponders"), PanAmSat
shall give Buyer the right to [***] or enter into a [******************] with
respect to, at Buyer's election, some or all (but in no event less than the
lesser of (i) [***] and (ii) an amount equal to [***] of the [***] Ku-band [***]
on such satellite, a [*************] of the Brazil Ku-Band Transponders or
[********] on such Collocated and/or Successor Satellite at a price to be
negotiated but not to [********************] as determined below, and on other
terms and conditions to be negotiated in good faith, but which shall
be[********] in relevant part, to this Agreement, [***] as appropriate to
reflect [***] in [********] and [******************] and other [***] in
circumstances that reasonably require [***] in, or [***] from, the terms and
conditions stated herein. The negotiation period for each Collocated or
Successor Satellite shall be for [********] during which time each party agrees
to negotiate in good faith exclusively with the other party (i.e., PanAmSat with
respect to the Brazil Ku-band Transponders subject to negotiation and Buyer and
the Buyer Companies with respect to transponder capacity to be used for the
provision of DTH Service to Brazil).
(ii) During the [*************] negotiation period,
PanAmSat agrees to [***] Buyer a [******************] for a [********] on the
applicable satellite that shall, subject to the qualifications stated below,
[********] a [*************] paid in equal monthly installments over
[***********************
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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****************************************************************************
****************************************] per month per Transponder increased
for [***] by a [***] equal to the increase in the [***] (as defined below) from
the Delivery Date of the PAS-6 Buyer's Transponders to the month and year of the
Delivery Date of the applicable Successor or Collocated Satellite (with
adjustment as necessary to reflect the change in the [***] from the time of the
negotiation to the Delivery Date of such Successor or Collocated Satellite). The
[***] means the [*************] now known as the[*************************
**********************************] for [*************************************
*************] for [*****************]. If such [***] shall be discontinued, the
foregoing calculations shall be made using a reasonably equivalent successor or
comparable measure of [***] in the [*********] in the United States as
[********] by PanAmSat. The price per Transponder as determined under this
clause (ii), modified, if applicable, under clause (iii) below, is referred to
in this Agreement as the [*************].
(iii) The foregoing notwithstanding, PanAmSat shall
be permitted to [***] the purchase price above that stated above with respect to
the [***] to reflect any extraordinary and substantial increase in its [***] and
[***] in [******************] and [******************], and [******] a Successor
or Collocated Satellite relative to the costs of the[********] including
increases in [********] or the need to purchase[********] increases in launch
[***] rates in excess of [***] of the [***] value (unless the [*************] of
launch [***] is less than [********] to [****************************] because
the [********] are [***] or other extraordinary factors the failure to take into
account of which would frustrate the intent of this[********] which is to
[*************] that allows PanAmSat to earn a [*************************
**********]. PanAmSat shall also be permitted to [******************] to reflect
any [*********************] that result from [***] a satellite above and beyond
the [********] of PAS-6 adjusted to reflect then [***] technological standards.
(iv) The [********] negotiating period may be
initiated by either party on notice to the other at any time within the time
period set forth below. Each negotiation period (per Collocated or Successor
Satellite) shall not begin earlier than the date on which both of the following
conditions have been satisfied: (a) PanAmSat notifies Buyer of, or publicly
announces, a [********] to launch a Collocated or Successor Satellite; and (b)
[********] prior to the proposed launch of the
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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Collocated or Successor Satellite. Each negotiation period shall not commence,
if at all later than [*******] prior to the date that the applicable Collocated
or Successor Satellite is scheduled to be launched. If negotiations are not
initiated by such date or successfully concluded with a binding purchase or
service agreement within the [******] negotiation period, unless Buyer has given
PanAmSat a "Buyer's Offer" (as defined below), neither party shall have any
further obligation pursuant to this Section 16.1. The conclusion or failure to
conclude such an agreement for a transponder or transponders on a Collocated or
Successor Satellite shall not otherwise affect the parties' obligations
hereunder.
(v) At any time prior to the end of the applicable
negotiation period specified above, Buyer shall have the right to make to
PanAmSat Buyer's [************] ("Buyer's Offer") of the [***] and other [***]
terms and conditions (sufficiently detailed, if accepted, to form a binding
contract) on which it is willing to [***] or enter into an [****************
*****] for a [***] number of Brazil Ku-band Transponders on the applicable
Collocated or Successor Satellite.
(vi) If Buyer makes the Buyer's Offer, for as long as
it is held open (i.e., that it may be accepted by PanAmSat without Buyer's
subsequent right to withdraw it), until [******] after the launch of the
Collocated or Successor Satellite, PanAmSat will not, without [***] offering the
Buyer the [***] to do so, and for a period of [************] following notice of
such offer to Buyer, enter into a [***] or [******************] for the
[******************] Brazil Ku-band Transponders on the same Satellite than
stated in Buyer's Offer that, overall, taking into account the price (which, for
purposes of comparison, will be calculated on a [*************************
***********] by PanAmSat, but notified to Buyer so that Buyer may make an [***]
in its offer to reflect this [*************] and [***] terms and conditions (but
not [********] individual terms and conditions) are, [*******************] to
PanAmSat than, Buyer's Offer.
(b) Related Collocated Satellite Rights. PanAmSat shall notify
Buyer of any determination by PanAmSat to launch a Collocated Satellite, even if
the Satellite will [***] have [***] transponders that fall within the definition
of clause(a)(i) above for which Buyer's rights under this Article 16 apply, if
the [***] of the [***] would [***] the [***] of the [****************] on the
Collocated Satellite for the provision of Transponder Capacity to Buyer for use
in Brazil on a future Collocated
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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Satellite. (For the avoidance of doubt, in no event shall PanAmSat be permitted
to launch a Collocated Satellite which uses frequencies that would [***] with
the Buyer's Transponders so as to [***] their meeting their [***]
Specifications.) Before committing to such a Collocated Satellite that would
[***] the use of such [**********************] by Buyer in Brazil, other than
pursuant to an obligation under the[*************] PanAmSat shall give Buyer the
opportunity to exercise its rights, if still extant, under clause (c) below to
require PanAmSat to launch a Collocated Satellite, subject to applicable[******]
and[*********] employing such [*************] with Ku-band [***] for use in
Brazil, Buyer shall have until the later of: (i) [******] from PanAmSat's notice
to Buyer, or (ii) until the [****************] specified below, to exercise such
rights.
Buyer shall not be required to make any decision
regarding [***********************************************] either under this
clause (b) or clause (a) above [****************************] as to any
[********] that is [******************************] unless in either case
PanAmSat is required by [*************] to proceed with the [***] of a
[*************] under the [*************] (the "Decision Period"). In addition,
PanAmSat will not require Buyer to make a decision whether [*************
*************************************************] (and the "Decision Period"
will be so extended), unless either (i) PanAmSat was [***********]
by[*************], as provided above, or (ii) PanAmSat [************] to
[***********************] that it acquires on a Collocated Satellite to any
third party for any lawful purpose, subject to Buyer's ultimate obligations
therefore, consistent with Section 10.6 of this Agreement (i.e., an
[******************] the [*********************************] without the consent
of the other party).
Accordingly, by way of example, unless PanAmSat was
[***********************************************************************
***********************] if PanAmSat notifies Buyer in [**************] of
PanAmSat's [******************] a [*********] either with [***************
*********] or [***************] Transponders that would have a [*************
*****************************] to have Brazil Ku-band Transponders, Buyer
[*******************] whether to [******] an agreement to [*********] on such
Satellite or [*********
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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*********] of a Satellite employing such frequencies for [***************]
Transponders until [************] such [*************] could not be placed into
[***************************] unless Buyer's right to so decide is extended
until [************] and, unless PanAmSat allows Buyer the right specified above
to [****************] Buyer will have until [***************] to make a
decision, effectively [***] PanAmSat from committing to any [*************] of
such [*******************].
The foregoing notwithstanding, if Buyer requests
PanAmSat to provide [******************] under Section 1.7(b)(ii)(B) above,
Buyer shall [***] to have the right to [***] a decision to [******] from
a[**************]. Informal discussions or exchange of correspondence by the
parties regarding the possibility of a[****************] including (without
limitation), consultation under clause (d) below, that does not clearly state
that it is intended as a notice under this clause or a request under Section
1.7(b)(ii)(B) shall not be deemed to give rise to rights under this or related
provisions.
(c) PanAmSat Obligated to Launch. Buyer may
[******************] to [******************] with the [***********] and [***] of
a [***] and/or a Successor Satellite under the following circumstances:
(i) The obligation may be applied only to a [******]
for [*****************************************] and, if Buyer agrees to
[******] on a [**********************************] of the Delivery Date of
[******************************************************] each with at least
[***] "Brazil Ku-band Transponders," meeting the criteria set forth in clause
(a) above;
(ii) Buyer shall use all reasonable efforts to
[******] exercise of rights under this Section 16.1 with the [**************
**********] by [*******************] under the [***************] so that the
same [*************] may be used to satisfy the needs of each entity, but
placement into service of such Satellite shall not be unreasonably delayed to
accommodate such coordination;
(iii) Buyer must [*************] or enter into
[******] of [************] for at [*************] Ku-band transponders on each
satellite that PanAmSat is required to cause to be [*************************]
provided that
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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PanAmSat may [***] Buyer to [************] Ku-band transponders if Buyer is
otherwise unwilling to do so, but only if PanAmSat grants Buyer the right to
assign to any third party for any lawful purpose the number above [******]
("Extra Transponders") that Buyer is required to take (subject to Buyer's
ultimate obligations as under Section 10.6) and PanAmSat agrees to use
reasonable efforts to assist Buyer in assigning its rights to such capacity;
(iv) Except under circumstances in which Buyer is
acting in response to a notice given to it by PanAmSat under clause (b) of this
Section 16.1 of PanAmSat's intention to launch a Collocated Satellite, all or
substantially all of the [***] provided to it under this Agreement must be
[*******] Buyer's DTH Service and, at the time that such required Satellite is
placed in service, all [***] provided under this Agreement, with the exception
of any Extra Transponders that Buyer may be [*********] under the previous
clause (iii), may only be [******] the [***] of DTH Service;
(v) PanAmSat shall not be obligated to proceed with
[***] until all [*********************************] or other [************
********] and [************************] have been obtained or resolved.
PanAmSat shall use all reasonable efforts to obtain [*************************
******] and to resolve such other issues, provided that PanAmSat will use
efforts in respect of Buyer's [***] at least as great as it has used or uses
during the [***] period for other capacity. If permitted by law, PanAmSat will
go forward in advance of such resolution if Buyer [***] for and [***] the
[******] (e.g., [***] and[*************]) of proceeding along such a course);
(vi) PanAmSat may [***] Buyer to[***] as and
[*********] the date that [****************] are due, [************] PanAmSat's
[***] in [***] and [***] the Satellite (including, without limitation, the [***]
of [**********************************************] or other [***] and
launch[***]. In such event, PanAmSat shall [***] such [*************] against
the [****************************] otherwise due for the Collocated or Successor
Satellite [*************************] at a rate of [**********] per annum;
(vii) If Buyer requires PanAmSat to proceed with the
construction, launch and operation of a Successor or Collocated Satellite, the
purchase
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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price or service fees for transponders on such satellite, unless otherwise
agreed, shall be set in accordance with the [******] established under Section
16.1(a) above. Other terms of the agreement to [*******************] shall be
negotiated between the parties in good faith, shall be [********** *********] in
relevant part, to this Agreement, [***] as appropriate to [******************]
whether[*********************************************** ****************
***************************] and other [***] in circumstances that reasonably
require[****************************************************** **********]
herein; and
(viii) If Buyer exercises its rights under this
Section 16.1(c) to require the construction of a Successor Satellite, it shall
do so sufficiently in advance so that, as applicable: (A) a Successor Satellite
for PAS-6 can be scheduled to be available (subject to the conditions stated
herein, at Buyer's election) either [***************************************
**********************] of PAS-6 (an "Early Successor Satellite") or, provided
that the termination right specified in [***] above is not exercised and
provided that Multi-Country Platform has not agreed to acquire capacity on an
"Early Successor Satellite," by such time that the underlying satellite is to be
taken out of service in accordance with [***] above, and (B) a Successor
Satellite for PAS-6B can be scheduled to be available no earlier than the
[************************] and no later than the date that the Satellite would
otherwise be scheduled to be taken out of service under [***] (it being
understood that PanAmSat may in its discretion, also elect itself to proceed
with a Successor Satellite scheduled to be available at any time during this
period), and (C) a Successor Satellite for a Collocated Satellite, if any, can
be scheduled to be available by the time that such Collocated Satellite is to be
taken out of service (or by such other period as the parties may negotiate in
connection with any underlying agreement for the provision of capacity from such
a Collocated Satellite).
(d) Consultation. PanAmSat will consult on the planning and
design of Successor and Collocated Satellites (including, without limitation,
the Ku-band transponders, [***] etc.) intended for [***************************]
it being understood that [*****************] (e.g., [***********] that [******]
may be [*****] to Buyer at [*****] and beyond the [******] stated in clause
16.1(a)(ii) above, if applicable.
(e) Condition of [***************]. Buyer shall cease to have
any rights under this Article 16 if there is any [*********************
*********] unless a [******
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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***********] of Buyer remains with the [************ *****] which shall
include[***] who, as of the Execution Date, held a majority of the voting equity
of the Buyer. Buyer shall [************] under clause (c) above if Buyer [***]
to have any obligations under Section 1.7(a)(ii). If Buyer [***] to have [***]
under Section 1.7(a)(ii) other than by pursuant to clause 1.7(b)(iii), Buyer
shall [******] to have any further rights under this Section 16.1 vis-a-vis
Collocated Satellites other than with respect to
[**********************************] that may be already subject to a
[********************************] between PanAmSat and Buyer at that time.
(f) Survival. The termination of this Agreement under Section
7.4 or, if the number of Buyer's Transponders (on the Primary Satellite and, if
applicable, PAS-3 Transponders that are retained by Buyer under Section 1.2)
that meet their Performance Specifications[*************] under Section 7.3,
shall not [***] the parties [******************] under Section 16.1, until such
time, if it has not already done so, as PanAmSat makes available to Buyer for
[***] or [************] a Collocated or Successor Satellite (including, without
limitation, an "Early Successor Satellite"). If Buyer then enters into a
[**************] agreement, the [*******************************] of this
Section 16.1 shall be [*********************************] in that agreement,
provided that in [***] right shall such rights [***] beyond [************]. At
such time as such [**************] agreement is entered or at the [******]
"Negotiation Period" (as defined in Section 16.1) without such a
[**************] agreement being entered (except for the operation of Section
16.1(a)(vi) as to the satellite that had been under negotiation, if a Buyer's
Offer was made), this Section 16.1 shall [****************].
(g) Definitions. For purposes of this Agreement, the term
"Successor Satellite" shall mean any satellite containing [************] that
PanAmSat launches or causes to be launched to replace the Primary Satellite (or,
if Buyer makes a [**************] of [***] on a [*******************] to [***]
such [**************] at its presently assigned location or at such
[*******************] to which the FCC may authorize the Primary Satellite to be
moved, or, to the extent that this Section 16.1 survives the termination of this
Agreement under clause (e) above, the [*********] of the Primary Satellite from
which Buyer [*************] provided under this Agreement. For purposes of this
Section 16.1, the term "Collocated Satellite" shall mean any [***] Satellite
(i.e., [***] one that has [******] launched as of the date of this Agreement),
other than successor satellite(s) to previously launched satellites,
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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containing Ku-band capacity that PanAmSat launches or causes to be launched to
be in the [*********] as the Primary Satellite while the Primary Satellite is
still in[***************] or, to the extent that this Section 16.1 survives the
termination of this Agreement under clause (f) above, the [************] of the
Primary Satellite from which Buyer [***] the [***] provided under this
Agreement. PAS-6B shall not be deemed to be a Successor Satellite or a
Collocated Satellite to PAS-6.
(h) [******************************]. This Section 16.1 does
[******] to [***] or its successor satellite(s) or, unless there is no PAS-6B
Delivery Date, [***] nor shall the termination of this Agreement solely as it
relates to [************************************] have any [***] on this Section
16.1. Except as provided in clause (f) above, this Section 16.1 shall [***] to
apply at such time that this Agreement is [*******************************].
Neither PanAmSat nor Buyer shall be required to make any decision or take any
action under this Section 16.1 until after the end of the Interim Period.
ARTICLE 17. PARTICIPANT GUARANTIES.
17.1 The Guaranties. Each party's entry into this Agreement is
expressly conditioned upon the contemporaneous execution and delivery to
PanAmSat of the several guaranties of Globo, News and TINTA (the "Current
Guarantors") in the form set out in Appendix L. If said Guaranties are not
executed and delivered to PanAmSat on the date of this Agreement, this Agreement
shall be null and void. PanAmSat agrees that, if the
[******************************************] Buyer is[***] PanAmSat shall,
subject to PanAmSat's prior written consent, not to be unreasonably withheld,
conditioned or delayed, allow the [******************************************]
to reflect their interests by substituting for the [***********************] the
guarantees of [*****************] (so that
[******************************************** *******************] obligations
of Buyer under this Agreement), provided that the [***********] are of
[*******************************] (as of the date hereof) and provide PanAmSat
with their guaranties in the form set out in Appendix L. PanAmSat acknowledges
and agrees that the guarantors under this Section 17.1 are third party
beneficiaries of the provisions of this Section 17.1 regarding adjustments to
guaranteed amounts and are entitled to enforce said provisions directly against
PanAmSat.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 18. [***********] RIGHTS.
18.1 [******************]. PanAmSat has entered into an agreement with
[****** *********************************************************************]
at a price of [***************] to secure [***************] for a
[*************] Satellite (to have [********************] configuration and
performance as [*****] which Hughes would then agree (subject to provisions
regarding unanticipated delays) to make available in time for [***] within [***]
of ordered completion, but not earlier than [********] provided that the order
for completion may not be made later than [***************************] after
the [************].
Buyer [************************] are evaluating whether to
commit to a [***] in the event of a [************************]. Not later
than[*********] Buyer [****************** *********] shall notify PanAmSat
whether they desire to pursue a [***********] in accordance with the first
paragraph of this Section 18.1. In such event, the parties shall negotiate in
good faith to reach an amendment to this Agreement to provide for such a
[**************************************] such negotiations to be concluded, and
an amendment executed (if at all) no later than [*********].
It being understood and agreed that certain material terms
will have to be negotiated at the time, certain basic parameters of the
contemplated [***] amendment, if entered, are as follows:
(1) Buyer [************************] would both
commit to take [*************] transponder capacity from [*****************
*******************************] and would be required to exercise any available
[******] as to [**********************************].
(2) Buyer [************************] would continue
to be obligated to take capacity from PAS-6 (and, if applicable, PAS-3)
[**********************] and in the event that [********************************
*******************************] or if the [***] program is otherwise terminated
(e.g., for delay -- the conditions of such termination to be negotiated), the
Agreement as to PAS-6 (and, if applicable, PAS-3) [***].
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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(3) Upon the execution of the [***] Amendment,
PanAmSat shall order the [*********] from[***], subject to item (4),
at[*********]. If [*************************], PanAmSat would then order [***]
to be completed and launched, again subject to item (4), at [*********].
(4) Once this Agreement is amended as to[***] if
Buyer terminates this Agreement as to PAS-6B [***] Buyer [****************
*******************] shall be[***********************************************
****************] subject to any available [***] from[***]. Further, if PanAmSat
orders [***] to complete PAS-6C [*******************] any pre-launch termination
by Buyer [*************************] of PAS-6C (under conditions to be
negotiated) shall be subject to their [***********************] of its
[*********************************************************].
It is understood and agreed that if the parties are unable to
reach agreement on a [***] Amendment, this Agreement shall continue in full
force and effect. Further, in no circumstances will PanAmSat be required to
commit to [************************************] if Buyer and [***********
**********] are not also so committed.
Without limiting the above, it is understood that PanAmSat is
also exploring other potential [***] satellite [********] in this event. If
presented by PanAmSat, Buyer agrees in good faith to consider such alternate
proposal(s).
ARTICLE 19. INDEX TO DEFINED TERMS.
For ease of reference, there follows a list of defined terms, which
identifies the place in this Agreement where each such term is defined:
Defined Term Defined At:
Additional Amounts 3.5(a)
Additional Facilities Costs 1.6(b)
Affiliate 1.4(b)
Agreement Preamble
Amortization Schedule 3.1(b)
Approved Companies 1.4(b)
Approved Participating Companies 1.4(b)
Availability Date 1.1A
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
81
<PAGE>
Beam Preamble
Brazil Ku-band Transponders 16.1(a)(i)
[******] 16.1(a)(i)
Buyer Company 1.4(c)
Buyer Preamble
Buyer's DTH Service 1.4(b)
Buyer Indemnified Taxes 3.5(a)
Buyer's Offer 16.1(a)(v)
Buyer-Provided Facilities 4.2
Buyer's Transponders Preamble
[******] 16.1(a)(ii)
Catastrophic Failure 7.1B(i)
Collateral Documents 10.2(a)
[******] 16.1(g)
Confidentiality 7.6
Confirmed Basis 5.3
Confirmed Outage 5.1
Control 1.4(b)
[******] 16.1(a)(ii)
Current Guarantors 17.1
Decision Period 16.1(b)
Delivery 2.1
Delivery Date 2.1
Deposit 3.1(a)
DTH Service 1.4(a) and 1.7(h)
Dual Illumination Period 1.2 and 5.4(c)
[******] 16.1(c)(viii)
Excess Amount 1.6(b)
Execution Date Preamble
Extra Transponders 16.1(c)(iii)
[******] 1.3A
[******] Transponders Preamble
Founding Partner in Competition 1.7(d)
Founding Partners 1.4(b)
Globo Preamble
Home Page Transponder 1.2
Hughes Preamble
Hughes Force Majeure 7.1B(ii)
Indemnitee 9.6
Indemnitor 9.6
Installment 3.1(b)
Interim Period 1.6
Ku-band 1.4(a)
Latest Anticipated Delivery Date 2.1
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
82
<PAGE>
Launch Failure 7.1
Letter Agreement Preamble
[******] 18.1
Loral Preamble
Minimum Complement 2.1
[******] 3.1(c)(i)
Multi-Country Agreement Preamble and 5.3
Multi-Country Platform Preamble
Negotiation Period 16.1(f)
News Preamble
Non-DTH Outlets 1.4(b)
Operational Requirements 4.1
Other Satellite 5.4B
PanAmSat Company 1.7(a)(i)
PanAmSat Country 3.5(b)
PanAmSat Group 9.3
PanAmSat Preamble
PAS-3 Preamble
[******] 1.2
PAS-3 Transponders Preamble
PAS-6 Preamble
PAS-6B Preamble
PAS-6 Transponders Preamble
PAS-6B Transponders Preamble
Payment Force Majeure 7.5A
Performance Specifications 2.1
Primary Satellite Preamble
[******] 1.7(a)(i)(A)
Protected Parties 5.3
Purchase Price 3.1
[******] 3.1(c)(iii)(A)
Satellite Preamble
Security Interest 10.2(a)
simultaneous 5.3
Spare Equipment 5.3
Substitute Capacity 5.3
[******] 16.1(g)
Taxes 3.5(a)
Telephone Notices 4.3
Televisa Preamble
Term 2.1
Termination Payment(s) 7.5
Time for Early Replacement 7.4(f)
TINTA 1.4(b)
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
83
<PAGE>
Transaction Costs 1.6(b)
Transponder Preamble
Transponder Service Agreement Preamble
Trustee 10.2(a)
TT&C Maintenance Fee 3.2
TWTAs 5.3
Warranty Credit 5.2
Warranty Period 5.2
W.L. 13.1
Defined terms include plural or singular versions and derivatives therefrom
(e.g., "Control," "Controlling").
84
<PAGE>
Each of the parties has duly executed and delivered this Agreement as
of the day and year first written above.
Notarized: PANAMSAT INTERNATIONAL
SYSTEMS, INC.
By:
Name:
Title:
Notarized: NETSAT SERVICOS LTDA.
By:
Name:
Title:
85
Exhibit 10.41.2
Schedule identifying substantially identical agreements by PanAmSat Corporation
("PanAmSat") in favor of each of the following persons, to the form of Indemnity
Agreement constituting Exhibit 10.41 to PanAmSat International Systems, Inc.'s
Quarterly Report on Form 10-Q for the period ended September 30, 1996.
- --------------------------------------------------------------------------------
Name
----
Charles H. Noski
Frederick A. Landman
Patrick J. Costello
Steven D. Dorfman
John J. Higgins
Ted G. Westerman
Dennis F. Hightower
James M. Hoak
Joseph R. Wright, Jr.
Michael T. Smith
Lourdes Saralegui
Carl A. Brown
Kenneth N. Heintz
Robert a. Bednarek
James W. Cuminale
David P. Berman
Roxanne S. Austin
Exhibit 10.45.1
March 6, 1998
Mr. Frederick A. Landman
President and Chief Executive Officer
PanAmSat Corporation
One Pickwick Plaza
Greenwich, Connecticut 06820
Re: Modification of Employment Agreement
Dear Fred:
Reference is made to that certain Employment Agreement, dated May 15, 1997 (the
"Agreement"), between you and PanAmSat Corporation (then known as Magellan
International, Inc.). This letter will confirm our mutual agreement to the
following amendment in the third line of paragraph 7(d) on page 8:
delete the words "during the first year following the Effective Date,"
substitute in lieu thereof the words "on or before November 15, 1998,"
Except as amended hereby, the Agreement remains in full force and effect.
If the foregoing is acceptable to you, please indicate your agreement to this
amendment by signing it and returning the enclosed copy of this letter.
Sincerely,
PanAmSat Corporation
By__________________
Michael T. Smith
Chairman of the Board
AGREED TO:
__________________________
Frederick A. Landman
Exhibit 10.51
FIXED PRICE CONTRACT
BETWEEN
PANAMSAT INTERNATIONAL SYSTEMS, INC.
AND
HUGHES SPACE & COMMUNICATIONS COMPANY
FOR
PAS 6B HS601HP
SPACECRAFT, RELATED SERVICES AND DOCUMENTATION
CONTRACT No. 98-PAS-001
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE 1. EXHIBITS AND INCORPORATIONS.................................3
ARTICLE 2. ORDER OF PRECEDENCE.........................................4
ARTICLE 3. SPACECRAFT, DOCUMENTATION AND RELATED SERVICES..............5
ARTICLE 4. DELIVERABLES AND SCHEDULE...................................8
ARTICLE 5. PRICE......................................................10
ARTICLE 6. PAYMENTS...................................................13
ARTICLE 7. SPACECRAFT LAUNCH DATE.....................................32
ARTICLE 8. BUYER-FURNISHED ITEMS......................................34
ARTICLE 9. INSPECTION AND ACCEPTANCE..................................37
ARTICLE 10. ACCESS TO WORK IN PROCESS..................................39
ARTICLE 11. TERMINATION FOR DEFAULT; LIMITATION OF LIABILITY...........40
ARTICLE 12. EXCUSABLE DELAYS...........................................43
ARTICLE 13. AMENDMENTS.................................................46
ARTICLE 14. TERMINATION FOR CONVENIENCE................................47
ARTICLE 15. TITLE AND RISK OF LOSS.....................................51
ARTICLE 16. SPACECRAFT WARRANTY........................................55
ARTICLE 17. INDEMNIFICATION............................................57
ARTICLE 18. SPACECRAFT NOT LAUNCHED WITHIN SIX MONTHS AFTER
ACCEPTANCE..............................................59
ARTICLE 19. PATENT/COPYRIGHT INDEMNITY.................................61
<PAGE>
ARTICLE 20. RIGHTS IN INVENTIONS.......................................63
ARTICLE 21. INTELLECTUAL PROPERTY RIGHTS...............................66
ARTICLE 22. FURNISHED DATA AND INFORMATION, DISCLOSURE AND USE.........67
ARTICLE 23. PUBLIC RELEASE OF INFORMATION..............................70
ARTICLE 24. TAXES......................................................71
ARTICLE 25. GOVERNING LAW..............................................72
ARTICLE 26. TITLES.....................................................73
ARTICLE 27. NOTICES AND AUTHORIZED REPRESENTATIVES.....................74
ARTICLE 28. INTEGRATION................................................76
ARTICLE 29. CHANGES....................................................77
ARTICLE 30. EFFECTS OF STORAGE ON BATTERIES............................83
ARTICLE 31. INTER-PARTY WAIVER OF LIABILITY............................84
ARTICLE 32. SPACECRAFT STORAGE.........................................85
ARTICLE 33. DISPUTES...................................................86
ARTICLE 34. ASSIGNMENT.................................................89
ARTICLE 35. LIMITATION OF LIABILITY....................................91
ARTICLE 36. NO THIRD PARTY AGREEMENT...................................92
ARTICLE 37 LIQUIDATED DAMAGES FOR LATE SHIPMENT.......................94
ARTICLE 38 CORRECTIVE MEASURES; OPERATIONAL DEFICIENCIES..............95
ARTICLE 39 REPLACEMENT SPACECRAFT.....................................97
ARTICLE 40 INDEX OF DEFINED TERMS.....................................99
ARTICLE 41 EFFECTIVE DATE OF CONTRACT................................102
<PAGE>
This FIXED PRICE CONTRACT (the "Contract") is entered into as of the 9th day of
March, 1998, by and between PANAMSAT INTERNATIONAL SYSTEMS, INC. (herein called
"Buyer"), a Delaware corporation having a place of business at One Pickwick
Plaza, Greenwich, Connecticut 06830, and HUGHES SPACE AND COMMUNICATIONS COMPANY
(herein called "Contractor"), a Delaware corporation having a place of business
at 909 North Sepulveda Boulevard, El Segundo, California 90245.
WITNESSETH:
WHEREAS, PanAmSat Corporation (a Delaware corporation and the parent
company of Buyer) and Contractor are party to that certain letter agreement
dated December 24, 1997, as supplemented by that certain supplemental letter
agreement dated February 9, 1997 (as so supplemented, the "Letter Agreement"),
pursuant to which, in exchange for payment of consideration by PanAmSat
Corporation, Contractor undertook to proceed with certain preliminary design,
procurement and manufacturing efforts for a proposed PAS 6B spacecraft to
support the launch date specified therein;
WHEREAS, such proposed PAS 6B spacecraft would be built from a
spacecraft already under construction by Contractor for a third party, and
Contractor has reached agreement with such third party to terminate the
agreement for construction and delivery of such other spacecraft; and
WHEREAS, the Parties now desire to enter into this Contract for Buyer
to purchase and Contractor to manufacture, deliver and perform (as applicable)
the PAS 6B Spacecraft, Documentation and Related Services as provided and
defined herein below;
1
<PAGE>
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:
2
<PAGE>
ARTICLE 1. EXHIBITS AND INCORPORATIONS
The following documents are hereby incorporated and made a part of this
Contract with the same force and effect as though set forth herein:
1.1 Exhibit A - PAS 6B Statement of Work - dated February 1998.
1.2 Exhibit B - PAS 6B Spacecraft Specification - dated February
1998.
1.3 Exhibit C - PAS 6B Spacecraft Integration Test Plan - dated
February 1998.
1.4 Exhibit D - PAS 6B Product Assurance Plan - dated February
1998.
1.5 Exhibit E - Certain Documentation - dated February 1998.
1.6 Exhibit F - Maximum Termination Liability - dated February
1998.
1.7 Exhibit G - [****************] - dated February 1998.
1.8 Exhibit H - PAS 6C Payment Plan - dated March 1998.
1.9 Exhibit I - Sample Incentives Obligations Payment Schedule -
dated March 1998.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
3
<PAGE>
ARTICLE 2. ORDER OF PRECEDENCE
In the event of any conflict or inconsistency among the provisions of
this document and the exhibits attached and incorporated into this
Contract, such conflict or inconsistency shall be resolved by giving
precedence to this document, and then to the attached and incorporated
exhibits in the order listed in Article 1 herein, entitled "Exhibits
and Incorporations."
4
<PAGE>
ARTICLE 3. SPACECRAFT, DOCUMENTATION AND RELATED
SERVICES ("DELIVERABLES")
3.1 Contractor shall sell and provide, and Buyer shall purchase,
the items and services referred to in Section 4.1. Contractor
shall provide the necessary personnel, material, services and
facilities to design, fabricate, test and deliver one (1) HS
601HP type Spacecraft for PAS 6B (hereinafter referred to as
"PAS 6B" or the "Spacecraft"), Documentation and Related
Services (as defined in Article 4) in accordance with the
provisions of this Contract and in the manner specified under
Exhibits A, B, C and D hereto.
3.2 All materials and services specified in Exhibit A, "PAS 6B
Statement of Work," shall meet the requirements of Exhibit B,
entitled "PAS 6B Spacecraft Specification."
3.3 If Contractor has not made delivery [************************
**************************************************************
*******] or if, prior to the Launch Date, [*******************
**************************************************************
******] Buyer at its election may:
[*** ****************************************************
****************************************************
****************************************************
***********]
[*** ****************************************************
****************************************************
****************************************************
****************************************************
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
5
<PAGE>
*****************************************************
*****************************************************
*****************************************************
*****************************************************
*****************************************************
*****************************************************
**************]
Any such election shall be made by Buyer in writing. [********
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
*****]
3.4 [*************************************************************
***************************************************]in
accordance with: (i) current directives and instructions in
the Hughes Spacecraft Operators Handbook, utilized at either
Buyer's Operations Control Center (OCC) or Contractor's
Mission Control Center (MCC); and (ii) any other Documentation
utilized, including that Documentation which takes into
consideration the unique or special characteristics of the
contracted Spacecraft. [**************************************
**************************************************************
**************************************************************
********] Contractor has responsibility and liability for the
Mission Control Center. Buyer has responsibility and liability
for the Operations Control Center and its associated ground
station(s).
3.5 Spacecraft, Documentation and Related Services described above
shall be
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
6
<PAGE>
delivered to Buyer at the indicated locations on the dates set
forth in Article 4 entitled, "Deliverables and Schedule"
herein.
7
<PAGE>
ARTICLE 4. DELIVERABLES AND SCHEDULE
4.1 The following deliverables to be furnished under this Contract
shall be furnished at the designated location(s) on or before
the dates specified below:
- -------------------------------------------------------------------------------
Date of Shipment, Location of Shipment,
Delivery Delivery or
or Performance Performance
Deliverable(s)
- -------------------------------------------------------------------------------
o Shipped from Contrac-
1. One PAS 6B Shipment on September tor's facility.
Spacecraft 29, 1998 ("Shipment Date") o Delivery Site at
to support Launch Date of Ariane facility,
October 20, 1998* Kourou, French
Guyana (subject
to change pursuant
to Paragraph 4.2.)
- -------------------------------------------------------------------------------
o Performance Site to be
2. Launch Support, In Accordance with determined pursuant to
Mission Operations Exhibit A Paragraph 4.2.
and In-Orbit o Fillmore, California
Testing ("Related Services") o Castle Rock, Colorado
o El Segundo, California
- -------------------------------------------------------------------------------
3. Documentation In Accordance with 1500 Hughes Way
("Documentation") Exhibit A Long Beach, California
- -------------------------------------------------------------------------------
*Contractor agrees to ship the Spacecraft from its facility on or
before such Shipment Date in order to support the launch of
the Spacecraft on the Launch Date in accordance with the
requirements of this Contract and the Exhibits hereto. [*************
*********************************************************************
**************************************************************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
8
<PAGE>
4.2 Designation of Launch Vehicle.
4.2.1 The initial launch vehicle (the "Launch Vehicle")
designation for the Spacecraft is an Ariane launch
vehicle. Buyer may change the designation of the
Spacecraft's Launch Vehicle at any time on or before
[********] months prior to the scheduled Launch Date
for the Spacecraft, in which event the Contract Price
shall be increased or decreased by the applicable
amount specified in Paragraph 5.3. If, subsequent to
the date that is [********] months prior to such
Launch Date, Buyer requests a change in the Launch
Vehicle or Approved Storage Facility for the
Spacecraft, such request shall be dealt with as a
Change Order Request of Buyer under Article 29.
4.2.2 Buyer shall pay the costs of delivering the
Spacecraft to the Launch Site, which costs are
included in the Contract Price.
4.3 Contractor shall be responsible for obtaining and maintaining:
(i) all U.S. Government export licenses to enable export of
the Spacecraft, related test and support equipment to the
Launch Site and (ii) all authorizations required for the
performance of this Contract.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
9
<PAGE>
ARTICLE 5. PRICE
5.1 The total price (the "Contract Price") for Contractor to
provide the Spacecraft, Documentation and Related Services
shall be [**********************************************]
5.2 Buyer shall pay Contractor the Contract Price stated in
Paragraph 5.1 above in accordance with Article 6, Paragraph
6.2 of this Contract.
5.3 The Contract Price stated in Paragraph 5.1 is contingent upon
the utilization of the Launch Vehicle initially designated for
the Spacecraft in Paragraph 4.2.1. If Buyer changes the
designated Launch Vehicle for the Spacecraft in accordance
with Paragraph 4.2.1 (as opposed to Article 29), the Contract
Price shall be adjusted in accordance with the following
table:
Table 5.3.1
Adjustment to Contract Price
--------------------------------------------------
Launch Vehicle Adjustment
--------------------------------------------------
Delta III [********]
--------------------------------------------------
Atlas IIAS/AR [********]
--------------------------------------------------
Proton [*********]
--------------------------------------------------
5.4 Any adjustment to the Contract Price under Paragraph 5.3 shall
be allocated pro rata over the entire Payment Plan for such
Spacecraft (including In-Orbit Performance Incentive
Obligations). Adjustments allocated to payments already made
shall be promptly paid by Buyer or refunded by Contractor, as
the case may be.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
10
<PAGE>
5.5 Buyer agrees to pay to Contractor a delivery incentive (the
"Delivery Incentive") as follows:
(i) Buyer shall pay to Contractor an additional
amount of [**************************************] in
the event that [***************************************
*******************************************************
*******************************************************
*******************************************************
*******************************************************
*******************************************************
***************]
(ii) In addition to any amount in clause (i)
above, Buyer shall pay an additional amount equal to
[******************************************************
*******************************************] up to a
maximum amount in this clause (ii) of [****************
*********************] and a maximum total Delivery
Incentive under clauses (i) and (ii) of ***************
******************************]
Contractor shall submit an invoice for any Delivery Incentive
after such amount is earned, and Buyer shall pay such Delivery
Incentive within thirty (30) days of receipt by Buyer of such
invoice. [****************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**********] Notwithstanding anything herein to the contrary,
in the event that Contractor [********************************
**************************************************************
**************************************************************
**********] in achieving any part of the Delivery Incentive
provided by this Paragraph, Contractor [*********************
***********************
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
11
<PAGE>
***************************************************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
12
<PAGE>
ARTICLE 6. PAYMENTS
6.1 Pursuant to the terms set forth in this Article 6, and subject
to Buyer's rights, defenses and remedies as expressly stated
in this Contract, Buyer shall pay to Contractor the Contract
Price as stated in Article 5 herein for the applicable
Spacecraft, Documentation, and Related Services under this
Contract.
6.2 Invoices shall be prepared and submitted by Contractor for
each Spacecraft in a form reasonably acceptable to Buyer.
Payments to Contractor for each Spacecraft shall be made
according to the following payment plans:
[**********]
[*****************************]
----------------------------------------------------------------------
[*************] [****************]
[*****] [**] [**]
----------------------------------------------------------------------
[**************] [****] [****]
----------------------------------------------------------------------
[****] [****] [****]
----------------------------------------------------------------------
[****] [****] [****]
----------------------------------------------------------------------
[****] [****] [****]
----------------------------------------------------------------------
[****] [****] [****]
----------------------------------------------------------------------
[****] [****] [****]
----------------------------------------------------------------------
[****] [****] [****]
----------------------------------------------------------------------
[****] [****] [****]
----------------------------------------------------------------------
[****] [****] [****]
----------------------------------------------------------------------
[****] [****] [****]
----------------------------------------------------------------------
[********************
*******] [****] [****]
----------------------------------------------------------------------
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
13
<PAGE>
[************************
**********************] [****] [****]
----------------------------------------------------------------------
[********************
***************] [****] [****]
----------------------------------------------------------------------
[*******************
************************] [****] [****]
----------------------------------------------------------------------
(1) [*****************************************************************
******************************************************************
******************************************************************
******************************************************************
********]
(2) [*******************************************]
6.3 Incentives Obligations.
6.3.1 The following definitions are applicable to this Section 6.3:
6.3.1.1 "Specified Operation Lifetime" means fifteen (15)
years.
6.3.1.2 "Successfully Operating Payload". The
Spacecraft shall be equipped with one or
more Payloads, as specified in Exhibit B.
Each Payload shall be deemed to be
Successfully Operating if at least that
number of Transponders that is one more than
one-half of the total number of Transponders
within such Payload are Successfully
Operating Transponders (as defined below).
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
14
<PAGE>
6.3.1.3 "Successfully Operating Transponder". A
Successfully Operating Transponder is a
Transponder which meets either or both of
the following two criteria:
(a) The Transponder meets or exceeds the
performance specifications set forth in
Exhibit B. For the avoidance of doubt, if
the Spacecraft is placed into inclined
orbit, then the Transponders shall be deemed
not to meet the criteria stated in this
Paragraph 6.3.1.3(a) at such time as the
Spacecraft would have ceased to have a
Useful Commercial Life, (as mutually
determined by the Parties) had it not been
placed in such an orbit.
(b) The Transponder, while not meeting or
exceeding the performance specifications,
provides Buyer with no material loss in its
commercial value.
A Transponder shall also be deemed to be a
Successfully Operating Transponder if it
meets the performance specifications through
use of any redundant or spare equipment not
already in use by another Transponder.
6.3.1.4 "Useful Commercial Life". The Useful
Commercial Life of a Spacecraft means the
period beginning on the Commencement Date
and ending on the earlier to occur of (i)
the date on which there is just sufficient
fuel remaining on board the Spacecraft only
to eject the Spacecraft from its
geostationary orbital location or (ii) the
date on which at least one-half of the
Transponders on each Payload are not
Successfully Operating Transponders.
15
<PAGE>
6.3.1.5 "Successfully Injected Spacecraft". The Launched
Spacecraft shall be deemed to be a Success-
fully Injected Spacecraft if:
(a) The transfer orbit/spacecraft attitude meets
the following required criteria:
(1) Perigee altitude error is less than or
equal to +/-3 sigma;
(2) Apogee Altitude error is less than or
equal to +/-3 sigma;
(3) Inclination error is less than or equal
to +/-3 sigma;
(4) Argument of perigee error is less than
or equal to +/-3 sigma; and
(5) The Spacecraft has been separated with
attitude rate errors of less than or equal
to +/-3 sigma and
(b) The Spacecraft has not suffered physical
damage which resulted from Launch Vehicle
malfunction.
The calculated amount of Useful Commercial Life (the
"Calculated Operational Lifetime") shall be mutually
determined by Buyer and Contractor, based on
standard engineering practices, using measured
actuals of the Spacecraft, existing at the time of
the operational hand-off of the Spacecraft to
Contractor from the Launch Vehicle provider. If the
attained transfer orbit/Spacecraft
16
<PAGE>
attitude does not meet the criteria stated in this
Section, but the Calculated Operational Lifetime is
greater than or equal to the Specified Operational
Lifetime for the Spacecraft, then the Spacecraft
shall be deemed to have been a Successfully Injected
Spacecraft. If, on the other hand, the attained
transfer orbit/Spacecraft attitude does not meet the
criteria stated above, and the Calculated
Operational Lifetime is less than the Specified
Operational Lifetime, then the Spacecraft shall be
deemed not be a Successfully Injected Spacecraft. If
Buyer and Contractor cannot agree on the Calculated
Operational Lifetime, then the Parties shall resolve
such disagreement in acceptance with the dispute
resolution procedures set forth in Article 33.
During such dispute resolution procedure, Buyer
shall commence all payments under Section 6.3.2 to
Contractor based on Contractor's calculation of such
Calculated Operational Lifetime, except only the
disputed amount(s) which shall be paid by Buyer in
escrow as set forth in Section 29.4, and the
prevailing party shall be entitled to interest as
provided therein.
6.3.1.6 "Incentives Interest Rate". The
Incentives Interest Rate shall be
the lesser of (i) the prime rate of
Chase Manhattan, New York, as
calculated on the first business day
of each month for which interest is
calculated plus [******************
***********************************]
or 9ii0 [***************************
*********************]
6.3.1.7 "Commencement Date". The
Commencement Date shall be the date
on which Buyer receives written
certification from Contractor that,
based upon the
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
17
<PAGE>
results of completed in-orbit
performance tests, at least one
Payload is a Successfully Operating
Payload.
6.3.2 Buyer shall pay to Contractor the Incentives
Obligations and the Change Order Profit Component (if
applicable), as follows:
6.3.2.1 Incentives Obligations and Change
Order Profit Component. Subject to
Section 6.3.2.3 through 6.3.2.6,
Buyer shall be obligated to pay to
Contractor the Incentives Obligation
and any Change Order Profit
Component (if applicable), as
follows: Buyer shall pay Contractor
an equal monthly payment that, when
calculated on a net present value
basis to the Commencement Date using
the Incentives Interest Rate, equals
the total amount of Incentives
Obligations plus Change Order Profit
Component due hereunder. For
example, if the Spacecraft is a
Successfully Injected Spacecraft and
on the Commencement Date all
Transponders on the Spacecraft are
and continue to be Successfully
Operating Transponders for fifteen
(15) years, assuming the maximum [**
******************************] for
the entire period, the monthly
Incentives Obligations payment would
be [**************] (the "Nominal
Payment"). If the Incentives
Interest Rate is less than [***
**********************] for any
given month, the Incentives
Obligations payment will be less
than the Nominal Payment. In such
circumstances, the
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
18
<PAGE>
amount of each month's payment will
be calculated on a net present value
basis to the date of the last
month's payment using the remaining
unpaid principal as the new
principal, the Incentives Interest
Rate, and a term equal to the number
of months remaining in the
Incentives period. The Parties shall
agree in writing upon an appropriate
allocation of the portion of the
Incentive Obligations which shall be
payable for each Payload on the
Spacecraft. The Incentives
Obligations, identified above, shall
be payable in 180 equal and
consecutive monthly installments
over a fifteen (15) year life of the
Spacecraft, except as may be
adjusted as set forth herein. Except
as provided in Paragraph 6.3.4, the
first installment of each Incentives
Obligations shall be paid on the
Spacecraft's Commencement Date. A
sample schedule matrix showing
Incentives Obligations payments for
fifteen years, assuming fully
successful operation, and with
varying hypothetical interests rates
will be attached to this Contract as
Exhibit I.
The foregoing notwithstanding:
(a) If the Spacecraft is not a Successfully
Injected Spacecraft pursuant to Section
6.3.1.4 but is successfully placed into its
on-station orbit by Hughes during the
"Transfer Period"
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(defined as the period from separation of
the Launch Vehicle through on-station
acquisition) then, subject to Section
6.3.2.3, Buyer shall pay the Incentives
Obligations for the Spacecraft in equal and
consecutive monthly installments over a
period of the Spacecraft's On Station
Operational Lifetime (defined at Section
6.3.2.1(b)).
(b) If the Spacecraft is Successfully Injected,
but is not successfully placed into its
on-station orbit by Contractor during the
Transfer Period, then the total amount of
the Incentives Obligations for the
Spacecraft shall be multiplied by a
percentile equal to (i) the On-Station
Operational Lifetime divided by (ii) the
Calculated Operational Lifetime, which
percentile shall, in no event, be greater
than one. Subject to Section 6.3.2.3, Buyer
shall pay such Incentives Obligations for
the Spacecraft in equal and consecutive
monthly installments over a period of the
Spacecraft's On-Station Operational
Lifetime. The "On Station Operational
Lifetime" shall be mutually determined by
Buyer and Contractor, based on standard
engineering practices, using measured
actuals of the Spacecraft, existing at the
end of the Transfer Period. However, should
the Spacecraft continue to operate
successfully beyond the On-Station
Operational Lifetime, Contractor will
continue to earn Incentives Obligations at
the same monthly rate up to the Specified
Operational Lifetime.
(c) Finally, if the Spacecraft is not a
Successfully Injected Spacecraft and, in
addition, is not successfully placed into
its on-station orbit during the Transfer
Period, then the total
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amount of the Incentives Obligations shall
be multiplied by the sum of (A)(i) the
Specified Operational Lifetime, plus (ii)
the On-Station Operational Lifetime, minus
(iii) the Calculated Operational Lifetime,
divided by (B) the Specified Operational
Lifetime, which percentile shall, in no
event, be greater than one. Subject to
Section 6.3.2.3, Buyer shall pay such
Incentives Obligations for the Spacecraft in
equal and consecutive monthly installments
over a period of the Spacecraft's On-Station
Operational Lifetime.
For purposes of any provision of this
Contract, if the Incentives Obligations or
related payment periods are to be
recalculated, the monthly installments due
shall be recalculated to reflect the imputed
interest element that is reflected in the
payment plans specified above.
6.3.2.2 Notwithstanding the foregoing, if at any
time Buyer continues to utilize for
revenue-producing purposes any Transponder
that is not a Successfully Operating
Transponder, then Buyer shall pay a pro
rated amount of the Incentives Obligation
attributable to such Transponder that is
proportionate to the partial benefit that
Buyer derives from such Transponder (the
"Partial Incentive Payment"), all as
mutually agreed upon by the Parties in good
faith.
6.3.2.3 Except for any Change Order Profit Component
(which is non-contingent), payment of any
Incentives Obligation shall be contingent
upon the Transponders being Successfully
Operating Transponders, as set forth herein,
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on the applicable Payload and shall be
pro-rated, therefore, on a Transponder
equivalent-by-Transponder equivalent basis
over the duration of the applicable term of
such Obligation; provided, however, that
beginning on the date, if any, that any one
or more of the Payloads are no longer a
Successfully Operating Payload, as and when
ascertained pursuant to in Section 6.3.2.4
(the "Degraded Payload"), then Buyer's
then-remaining Incentives Obligations for
such Payload(s) (exclusive of any Change
Order Profit Component, as applicable) shall
be deemed extinguished.
6.3.2.4 Whether any Transponder is not Successfully
Operating shall be mutually determined by
Buyer and Contractor, based on relevant
technical data, reports and analyses, and
each Party will make available to the other
Party for its review, upon reasonable
request, all data used in making such
determination. If Contractor disagrees with
such determination, then the Parties shall
resolve such disagreement in accordance with
the dispute resolution procedure set forth
in Article 33.
6.3.2.5 If the Spacecraft has not been, or is not
being, Properly Operated by the Buyer, and
any Transponders thereof are not
Successfully Operating Transponders, then
the Transponders of the Spacecraft which
were Successfully Operating prior to such
improper operation of the Spacecraft shall
be deemed to be Successfully Operating
Transponders for purposes of Contractor's
entitlement to payment of any applicable
Incentives Obligations for such period as
such Transponders would have reasonably been
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predicted to continue to be Successfully
Operating had the Spacecraft and transponder
thereon been Properly Operated by Buyer;
provided, however, that if the failure is
the result of a defect in the deliverable
software or if Buyer demonstrates that the
failure of any Transponder to be
Successfully Operating was not caused
primarily, directly or indirectly, by any
act or omission of Buyer, its agents,
Subcontractors, Consultants or
representatives of any kind, then the
foregoing provision shall not apply with
respect to such Transponder.
6.3.2.6 Buyer may prepay any portion of the
Incentives Obligations or the Change Order
Profit Component pursuant to the schedule
matrix attached as Exhibit 6.3.2.1. Any
remaining Incentives Obligations so prepaid
shall be subject to refund by Contractor to
Buyer, in any instance and to the extent
that Buyer's obligation to make such
payments is relieved pursuant to this
Article 6, as outlined in the last sentence
of Section 6.3.4.1 hereof.
6.3.3 "Spacecraft Retirement Payment". At any time
following the Spacecraft's Delivery, Buyer may, at
its option, cease to utilize the Spacecraft for any
purpose; provided, however, that if Buyer does cease
using the Spacecraft (or if the Spacecraft is
rendered a total loss by virtue of Buyer's failure
to Properly Operate the Spacecraft), then, upon the
exercise date of such option or the declaration of
the Spacecraft as a total loss as applicable, all
remaining Incentives Obligations payments for any
Transponder (and any Change Order Profit Component,
if applicable) (subject to the provisions of Section
6.3.2.3 through 6.3.2.5) shall become
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immediately due and payable, all relative to the
Spacecraft; and Buyer shall pay to Contractor such
amounts, in immediately available funds, along with
the outstanding balance of principal and accrued
interest on any other outstanding payment
obligations with respect to the Spacecraft, if any,
as of such date. In determining the amount of
principal and interest due, present value analysis
discounted at the Incentives Interest Rate per annum
shall be done for any scheduled payment stream
previously created by the Parties hereunder.
Notwithstanding the foregoing, Buyer shall have the
right to cease using the Spacecraft and remove it
from its orbital location at any time following the
expiration of the Spacecraft's Useful Commercial
Life, without payment of such Spacecraft Retirement
Payment.
6.3.4 Incentive Obligations and Launch Delay
6.3.4.1 If the Spacecraft has not been launched
by the 121st day after Delivery of the
Spacecraft, then, except as set forth in
Paragraph 6.3.4.2, the first of the equal
and consecutive monthly installment
payments for Incentive Obligations on the
Spacecraft shall be due and payable and
the fifteen year period shall be deemed
to have begun for purposes of this
Paragraph 6.3 and such payments shall
commence (the "Pre-Launch Incentive
Payments"). If upon the Commencement Date
or at any time thereafter, any
Transponder ceases to be a successfully
Operating Transponder or a Payload
becomes a Degraded Payload, then
Contractor shall deliver to Buyer a
refund (without interest) of that portion
of the Pre-Launch Incentive Payment
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attributable to such Transponder or
Payload, taking into account the amount
of such time such Transponder or Payload
met the performance specifications, and
Buyer's subsequent Incentives Obligations
shall be reduced thereafter on a pro rata
basis; provided, if applicable, Buyer
shall receive a credit to the extent of
any Pre-Launch Incentive Payments, to be
applied as an offset against Buyer's
consecutive monthly installment payments
for the Incentives Obligations otherwise
due and payable for the months
immediately following the Commencement
Date.
6.3.4.2 Subject to the second sentence below, if
on or before the 121st day following the
Satellite's Delivery Date, the Satellite
has not been Launched, then the first of
the equal and consecutive monthly
installments payments for the Incentives
Obligations on the Spacecraft shall be
due and payable on the earlier to occur
of the Spacecraft's Commencement Date or
the 241st day following such Spacecraft's
Date of Delivery (except that interest on
such Incentives Obligations shall begin
to accrue on the 121st day following the
Delivery Date, as such date may be
modified herein). If, however, the
Spacecraft has not been Launched due
primarily to (1) Contractor's Fault after
Delivery or (2) Contractor's failure to
timely meet the Spacecraft's scheduled
Delivery Date (where such failure in
Delivery is not caused by a Buyer's
Delay) (or a combination of clauses (1)
and (2) immediately above) then the first
of the equal and consecutive monthly
installments of the
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Incentives Obligations on the Spacecraft
shall be due and payable on, and interest
shall not accrue until, the Causation
Date. If upon Spacecraft Commencement, or
at any time thereafter, any Transponder
on the Spacecraft (which has been subject
to a Launch delay under this Paragraph
6.3.4.2) ceases to be a Successfully
Operating Transponder or a Payload
becomes a Degraded Payload, then
Contractor shall deliver to Buyer a
refund (without interest) of that portion
of the Pre-Launch Incentives Payments
attributable to such Transponder or
Payload, taking into account the amount
of time such Transponder or Payload met
the performance specifications, and
Buyer's subsequent Incentives Obligation
for the affected Payload on the
Spacecraft shall be reduced thereafter on
a pro rata basis; provided, however, that
Buyer shall receive a credit to the
extent of any Pre-Launch Incentive
Payments, such credit to be applied as an
offset against Buyer's consecutive
monthly installment payments for the
Incentives Obligations otherwise due and
payable for the months immediately
following the Commencement Date.
6.3.4.3 If, for any reason other than primarily
Contractor's Fault, the Spacecraft has
not been Launched within 24 months
following the Spacecraft's Delivery Date,
then the full amount of the Incentives
Obligations (and any Change Order Profit
Component, if applicable) (including
principal and accrued interest, if any)
shall become immediately due and payable
upon the last day
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of such 24th month. If, however, the
Spacecraft is subsequently Launched
within 54 months of the Delivery Date and
any Transponder of the Spacecraft ceases
to be a Successfully Operating
Transponder or a Payload becomes a
Degraded Payload, then Buyer shall be
entitled to a proportionate refund
(without interest) for any Incentives
Obligations (and any Change Order Profit,
if applicable) paid for such Transponder
or Payload, taking into account the
amount of time such Transponder or
Payload met the performance
specifications. If, for any reason, the
Spacecraft has not been Launched prior to
the third anniversary of the Delivery
Date (the "Third Anniversary"), then
Buyer shall have an option (the
"LOPS/MOPS Option"), exercisable in
writing received by Contractor on or
before the Third Anniversary, to extend
its right to utilize the Related Services
for the Spacecraft to the fifth
anniversary of the Delivery Date (the
"Extension Period"). If Buyer does not
timely exercise the LOPS/MOPS Option,
then Contractor shall credit any unused
portion of the Baseline Launch Costs for
the Spacecraft against any due and unpaid
payment obligations of Customer under
this Contract (the "LOPS/MOPS Refund").
If Buyer timely exercises the LOPS/MOPS
Option, then the price associated with
the Related Services (pursuant to
Paragraph 6.3) for the Spacecraft during
the Extension Period, shall be increased
by a [****************************]
beginning on the Third Anniversary. Buyer
shall be obligated to pay such Escalation
Amount within 30 days of receipt
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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of invoice from Contractor. In any case,
Contractor's obligation to provide such
services shall terminate on the date
which is fifty-four (54) months (or as
early as thirty-six (36) months) from the
Delivery Date for the Spacecraft. If
Contractor's obligation to provide Launch
and Mission Operations Services is
terminated under the immediately
preceding sentence, then Buyer shall
receive a LOPS/MOPS Credit or LOPS/MOPS
Refund, as applicable.
6.3.4.4 If, for any reason, other than
Contractor's Fault, a launch failure
occurs between the time of Launch and the
Commencement Date (or if no Commencement
occurs), then the full amount of the
Incentives Obligations (and any Change
Order Profit Component, if applicable)
(the "Recoverable Amount(s)") shall
become immediately due and payable upon
the date of such launch failure.
Contractor shall be entitled to obtain
payment of such Recoverable Amounts from
the proceeds of the launch insurance
obtained by Buyer and shall be entitled
to a priority in obtaining such proceeds
over Buyer and all other parties or
claims; provided, however, that nothing
herein shall relieve Buyer of its
obligations to pay to Contractor all such
Recoverable Amounts, as set forth herein.
During the six (6) months immediately
following such launch failure, Buyer
shall use best reasonable efforts to
obtain the proceeds of its launch
insurance to pay Contractor the
Recoverable Amounts, hereunder. Provided
further, however, that if Contractor does
not receive all such Recoverable
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Amounts from the proceeds of Buyer's
launch insurance within such six (6)
month period, then Buyer shall be
obligated immediately to compensate
Contractor for, and Contractor may also
look to Buyer directly for satisfaction
of, all such Recoverable Amounts. For
purposes of this Paragraph 6.3.4.4,
"Launch" shall mean, with respect to an
Ariane IV Launch Vehicle, the ignition of
the first stage engines of the Launch
Vehicle, if said ignition is followed by
opening of the table clamps with
consequent release of such Launch
Vehicle.
6.4 Contractor shall not be obligated to deliver the Spacecraft to
the Launch Site if there are any outstanding Delinquent
Payments owed by Buyer to Contractor with respect to such
Spacecraft under this contract one month prior to shipment of
such Spacecraft from the Contractor facility. "Delinquent
Payments" are defined as those payments not received by
Contractor within thirty (30) days of the dates due as defined
in Paragraphs 6.2.1 and 6.2.2 above. Once Buyer has paid
Contractor for any "Delinquent Payments" and any interest
accrued in accordance with Paragraph 6.6 below, Contractor
shall use its reasonable best efforts to ship such Spacecraft
to the Launch Site so as to enable launch on the scheduled
Launch Date and in any event to make shipment as soon as
practicable and no later than sixteen (16) weeks after payment
by Buyer of such Delinquent Payments. Buyer will be
responsible for and will pay to Contractor any reasonable
costs and [***] profit on such costs that Contractor may incur
as a result of a delay in delivery due to Buyer's Delinquent
Payments. Notwithstanding the foregoing, this Section 6.4
shall not relieve Contractor of its obligation to deliver a
Spacecraft, and no "Delinquent Payment" shall be deemed to
have occurred, due to any non-
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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payment by Buyer on account of an alleged breach by Contractor
or other dispute as to such payment. In such event, Buyer
shall, within thirty (30) days of the date such payment is
due, pay the full amount of such payment into an
interest-bearing escrow account to be established at Bank of
America, Concord, California. Upon settlement of the dispute
as to such payment and alleged breach in accordance with
Article 33, the Party entitled to the amount in escrow shall
receive such amount together with all accrued interest thereon
and the other Party shall pay all costs and fees associated
with the escrow of such amount.
6.5 Invoice
6.5.1 Invoices submitted to Buyer for payment shall contain
a cross-reference to the Contract number and the date
specified in the Payment Plan of Paragraphs 6.3.1.
Contractor shall submit one (1) original invoice for
the Spacecraft in each instance to:
PanAmSat Corporation
One Pickwick Plaza
Greenwich, CT 06830
Fax: (203)622-6664
Attention: Robert Bednarek, Senior Vice President
and Chief Technology Officer
cc: Stephen G. Salem, Senior Counsel
Marty Wolff
6.5.2 Invoice amounts, as specified in Paragraph 6.3,
provide for billings to be submitted by the 15th day
of each month and shall be paid by Buyer within
thirty (30) days upon receipt of the invoice by
Buyer.
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6.6 Late Payments
In the event of a failure by the Buyer or the Contractor to
make a payment required pursuant to this Contract, the
delinquent Party shall pay interest at the rate of [****
********************] on the overdue amount for the number of
days that the payment is overdue, commencing on the date
payment is due and terminating on the date the overdue amount
is paid in full. Notwithstanding the foregoing, this Section
6.6 shall not apply to any payment made into escrow in
accordance with Section 29.4.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 7. SPACECRAFT LAUNCH DATE
7.1.1 "Launch Date" Defined. The calendar date during which
a Launch will occur. The Launch Date shall be
notified by Buyer to Contractor no later than six (6)
months prior to the first day of the applicable
Launch Slot and once established, shall become an
express term of this Contract. As of the Effective
Date of this Contract, the Launch Date shall be
October 20, 1998, subject to change in accordance
with this Article 7.
7.1.2 "Launch Window" Defined. A period of time within the
Launch Date during which a Launch can occur and meet
mission requirements. The Launch Window shall be
established by notified by Buyer to Contractor no
later than forty-five (45) days prior to the Launch
Date and once established, shall become an express
term of this Contract.
7.1.3 Adjustment of dates. The time periods as delineated
in Sections 7.1.1 and 7.1.2 shall be adjusted to
reflect applicable launch provider contracts,
consistent with ordinary practices of such providers
as familiar to the Parties.
7.2 The Contract Price set forth in Paragraph 5.1 includes
Contractor furnished launch support services, post launch
support services, in-orbit test support services, and post
title transfer monitoring and command of the Spacecraft if
Buyer invokes the remedial provisions of Article 3, Paragraph
3.3.
7.3 No less than sixteen (16) weeks prior to the Launch Date,
Buyer shall order Contractor by notice in writing to commence
launch campaign preparations.
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7.4 If a Spacecraft Launch Date is postponed for any reason other
than the sole fault of Contractor, excluding any postponement
due to an Excusable Delay as defined in Article 12, the
Parties shall negotiate in good faith to determine an
equitable adjustment to the price and affected terms of this
Contract, if any. If the cost of supplies or materials made
obsolete or excess as a result of a such postponement is
included in the equitable adjustment, Buyer shall have the
right to prescribe the manner of disposition of such supplies
or materials. Costs included in the equitable adjustment shall
include but not be limited to: support personnel standby;
extra travel expenses; transport termination or rescheduling
fees and a profit rate of [********************]
7.5 Notwithstanding the foregoing, if a Spacecraft Launch Date is
postponed by either Party due to an Excusable Delay, as
defined in Paragraph 12.1 herein, the terms of Article 12
herein shall govern such postponement.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 8. BUYER-FURNISHED ITEMS
8.1 The following facilities, equipment, and services ("Buyer-Furnished
Items") shall be furnished by Buyer at no cost to Contractor, in a
timely manner, so as to enable Contractor to perform the work described
herein.
1) Facilities (buildings, power, phones and data lines)
and enumerated services: (i) transportation of a
Spacecraft, Contractor related test equipment and
personnel within the Launch Site; (ii) storage of a
Spacecraft and related test equipment for all force
majeure events (which prevent Buyer from supplying
Buyer-Furnished Items) and/or launch vehicle delays;
(iii) fueling; (iv) photographs; (v) interface
hardware at the Launch Site; and (vi) earth station
facilities for IOT including appropriate RF
facilities, but not specialized test equipment.
2) Reservation and procurement of launch services and
associated services.
Contractor will provide preliminary requirements of Item 1
above to Buyer no later than two (2) months after the
Effective Date of this Contract to assist Buyer's compliance
with this Article, which shall be consistent with what
Contractor has generally required Buyer to secure for previous
launches with the same launch provider. Subject to the
confidentiality requirements of the applicable agreements,
Contractor will be allowed to review the list of basic and
optional service which Buyer has procured in Buyer's
contract(s) for launch services.
In the event that the Buyer-Furnished Items set forth above
are not suitable for the intended purpose or are not provided
in a timely manner, excluding
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any excusable delay as defined in Article 12 herein, then
Buyer shall be liable to Contractor for all applicable costs
which shall include but not be limited to; procurement or
rental of suitable substitutes for such Buyer Furnished Items
at no higher than market prices; with title and possession of
all such procured items reverting to Buyer after Contractor's
use under this Contract; support personnel standby; extra
travel expenses; transport termination or rescheduling fees;
and installation/de-installation of communication links to the
Launch Site and a profit rate of [*******************] In the
event that the Buyer-Furnished Items are not suitable for the
intended purpose or are not provided in a timely manner and
the Contractor must procure or rent suitable substitutes, and
the foregoing process has materially affected Contractor's
ability to ship the Spacecraft on or prior to the Shipment
Date, the parties agree to adjust the Shipment Date to account
for any delay resulting from the non-suitability or non-timely
provision of such Buyer-Furnished Items.
8.2 Contractor shall maintain a system to ensure the adequate
control and protection of Buyer's Property. For the purposes
of this Article, Buyer Property shall be defined as any item
which Buyer provides to the Contractor or directs Contractor
to maintain in storage or an inventory account under this
Contract. Upon receipt of notification from Buyer, the
Contractor shall complete and return within fifteen (15)
working days a Property System Certification describing the
system that will be used to control Buyer's Property.
Additionally, Buyer's representative may, at its option and at
no additional cost to Buyer, conduct surveillance at a
reasonable time of the Contractor's Property Control System as
Buyer deems necessary to assure compliance with the terms and
conditions of this Article.
8.3 Contractor shall, commencing with its receipt and during its
custody or the
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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use of any Buyer's Property, accomplish the following:
A. Establish and maintain inventory records and make
such records available for review upon Buyer's
request;
B. Provide the necessary precautions to guard against
damage from handling and deterioration during
storage;
C. Perform periodic inspection to assure adequacy of
storage conditions; and
D. Ensure that Buyer's Property is used only for
performing this Contract, unless otherwise provided
in this Article or approved by the cognizant
contracting officer.
8.4 Contractor shall not modify, add-on, or replace any Buyer
Property without Buyer's prior written authorization.
Contractor shall immediately report to Buyer's contract
representative the loss of any Buyer Property or any such
property found damaged, malfunctioning, or otherwise
unsuitable for use. The Contractor shall determine and report
the probable cause and necessity for withholding such property
from use.
8.5 Upon termination or completion of this Contract, and upon
request by Buyer, the Contractor shall perform a physical
inventory, adequate for accountability and disposition
purposes, of all Buyer's Property applicable to such
terminated or completed agreement and shall cause its
subcontractors and suppliers at every tier to do likewise.
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ARTICLE 9. INSPECTION AND ACCEPTANCE
9.1 Inspection of all Hardware, documentation and Contractor's
services provided hereunder shall take place in accordance
with the terms of Article 10, entitled "Access to Work in
Process," herein.
9.2 Preliminary Acceptance of the Spacecraft shall occur when all
in-plant tests required to be performed by Contractor for the
Hardware have been completed and the Contractor has
demonstrated at the pre-ship review that the Hardware and
contract deliverables meet the requirements of this Contract,
at which time Buyer shall accept the Hardware on a Preliminary
basis in writing within five (5) business days subject to
completion of Launch Integration Facility and/or Launch Site
tests specified in Exhibit C, Spacecraft Integration Test
Plan. If the Hardware is unacceptable, Contractor shall
promptly and at its expense, rectify the unsatisfactory
Hardware and resubmit the Hardware for acceptance by Buyer as
provided above. In either case, the Hardware shall be deemed
accepted upon failure of Buyer to notify Contractor in writing
within the above five (5) business days that it is accepted,
rejected or that in Buyer's opinion further corrective action
must be taken by the Contractor. In the event that Buyer has
not given Preliminary Acceptance of the Spacecraft, Contractor
shall not ship the Spacecraft from Contractor's facility
without Buyer's prior written consent.
9.3 Final Acceptance of the Spacecraft shall occur upon the
earliest of i) the completion of In-orbit Testing in
accordance with Exhibit A, ii) fifty (50) days after
Intentional Ignition (as defined in Article 16, Paragraph 16.2
of this Contract) or iii) immediately before a Partial
Failure, Total Failure or Total Constructive Failure (as each
such term is defined in the applicable Launch Insurance
Contract or successor contract), which occurs at or after
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Intentional Ignition. Buyer shall have access to Launch
Integration Facility and/or Launch Site test results during
the launch campaign in accordance with the provisions of
Article 10, Paragraph 10.1 "Access to Work in Process."
9.4 With respect to deliverable Hardware which Buyer orders
Contractor to store, the Hardware shall be stored at a
location to be negotiated and Final Acceptance shall occur at
the end of the [**********] warranty period as set forth in
Article 16 herein, entitled "Spacecraft Warranty," or such
other event mutually agreed upon between the Parties.
9.5 Non-Conforming Products.
9.5.1 If (i) the Spacecraft does not meet its
weight requirements and (ii) Buyer will be
required to pay for additional weight from
the launch provider in order to achieve the
Specified Operational Lifetime without
delaying the placing of the Spacecraft in
its orbital location by more than fifteen
(15) additional days, then Contractor shall
reimburse Buyer for such additional payments
up to [********]
9.5.2 Any Preliminary Acceptance or Final
Acceptance by Buyer of a Spacecraft that
does not conform to the requirements of this
Contract (whether or not related to weight)
shall not affect the Parties rights and
obligations under Paragraph 6.3 ("Incentive
Obligations") with respect to the Spacecraft
or other deliverable that does not perform
to the specifications of this Contract.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 10. ACCESS TO WORK IN PROCESS
10.1 Contractor shall afford Buyer access to work in progress
being performed at Contractor's plants and at the Launch
Integration Facility and/or Launch Site pursuant to this
Contract, including technical data, documentation, and
hardware, at reasonable times during the period of Contract
performance, provided such access does not unreasonably
interfere with such work or require the disclosure of
Contractor's proprietary information to third Parties and
subject to (i) Contractor's Security Procedures and (ii)
U.S. or Foreign Government Regulations.
10.2 To the extent that the Contractor's major subcontracts
permit, Contractor shall afford Buyer access to work being
performed pursuant to this Contract in subcontractor's
plants in the company of Contractor's representatives.
Contractor shall exert its reasonable best efforts in
subcontracting to obtain permission for Buyer access to
those major subcontractors' plants. Major subcontracts are
defined as those subcontracts in excess of [************
********************************]
10.3 Buyer shall have the right to witness on a non-interference
basis all system and subsystem tests scheduled by Contractor
in connection with the performance of work under this
Contract. If the system or subsystem tests are performed by
a subcontractor of Contractor, Contractor shall take all
reasonable steps to secure Buyer's access to the
subcontractor's facility or facilities. Buyer's right to
witness testing shall be on a non-interference basis with
the subcontractor's activities and subject to (i) any
subcontractor security procedures and (ii) U.S. or Foreign
Government Regulations.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 11. TERMINATION FOR DEFAULT; LIMITATION OF LIABILITY
11.1 Subject to provisions of Article 3 entitled "Spacecraft,
Documentation and Related Services," Article 5 entitled
"Price" and Article 12 entitled "Excusable Delays," Buyer
may issue a written notice of default to Contractor if: (i)
Contractor fails [*****************************************
********************] as confirmed in writing by the
Contractor's and Buyer's Senior Executives and such failure
may result in a delay in launch of more than [**************
****]; or (ii) Contractor fails to ship the Spacecraft on or
before the Shipment Date other than due to the primary fault
of Buyer or a Force Majeure Event and such failure to ship
results in a delay of launch of the Spacecraft of more than
{*************] days. Subsequent to the issuance of said
notice, the Buyer may terminate this Contract in whole and
thereafter elect remedies as identified in Paragraph 11.2
below. [****************************************************
************************************************************
************************************************************
************************************************************
************************************************************
**********]
11.2 If Buyer terminates this Contract as provided in Paragraph
11.1 herein, Buyer, at its sole option, shall either: (i)
take title to all deliverable hardware, all hardware in
process which ultimately would have been deliverable by
Contractor and all drawings and data produced by Contractor
which ultimately would have been deliverable by Contractor,
the cost of which has been charged or becomes chargeable to
any work terminated plus all reasonable reprocurement costs
up to a maximum amount of [*******************************];
or (ii) receive a refund of all payments submitted to
Contractor by the Buyer for performance of
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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this Contract for the portion terminated by Buyer, plus
[***********************************************************
************************************************************
************************************************************
***********************************] and Contractor shall
retain title and possession to all terminated Hardware which
ultimately would have been deliverable by Contractor.
11.3 Except as expressly provided in Paragraph 11.4, there will
be no termination for default after Intentional Ignition of
the Launch Vehicle for the Spacecraft.
11.4 In the event that the delivery of the Certain Documentation
listed on Exhibit E is delayed (other than due to the
primary fault of Buyer or Force Majeure Event) for more than
[**********************************************************]
Buyer may issue a written notice of default to Contractor
and may thereafter terminate the Contract in part as to such
Certain Documentation only. If Buyer elects to terminate
this Contract in part as to such Certain Documentation, then
Buyer shall be relieved of payment of [*********************
************************************************************
************] (or any such amount already paid shall be
refunded), and Contractor shall pay Buyer an additional
[*********] for reprocurement costs.
11.5 If, after termination of this Contract (or portion thereof)
under the provisions of this Article, it is determined for
any reason that Contractor was not in default under the
provisions of this Article, or that the default was
excusable under the provision of Article 12 entitled
"Excusable Delays," the rights and obligations of the
Parties shall be the same as if notice of termination had
been issued pursuant to Article 14, entitled "Termination
for Convenience," or pursuant to Article 12, Paragraph
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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12.4, as the case may be.
11.6 Except as otherwise provided in the Contract, the rights and
remedies of the Parties provided in this Article shall be in
lieu of any other rights and remedies provided by law or in
equity in the event Contractor or Buyer fails to meet its
obligations under this Contract. Buyer shall have no other
rights or remedies for late delivery of the Spacecraft,
Documentation and Related Services under this Contract
except for those rights and remedies expressly provided for
in this Contract.
11.7 In the event Buyer elects the remedy set forth in clause
(ii) of Paragraph 11.2, Contractor shall pay such amount as
follows: [****************************] of the total amount
to be paid by Contractor pursuant to such clause shall be
paid within thirty (30) days of the effective date of
termination; and (b) the remaining [********************] of
the total amount to be paid by Contractor pursuant to such
clause shall be paid upon the first to occur of (I) [*******
***************************************************] or (II)
[***********************************************************
************************************************************
************************************************************
************************************************************
***************************************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 12. EXCUSABLE DELAYS
12.1 If either Party or a subcontractor of either Party is
delayed by act of God, or of the public enemy, fire, flood,
earthquake, epidemic, quarantine restriction, strike,
walkout, freight embargo, or any other event which is beyond
their control or does not arise from the acts or omissions
of either Party or its respective subcontractors, said delay
shall constitute an excusable delay ("Force Majeure
Events"). In the event of an excusable delay, there shall be
an equitable adjustment to the time of delivery and/or
performance stated in this Contract. The affected Party
shall give notice in writing to the other Party within 10
working days that an excusable delay condition exists after
learning of such delay. Such notification shall include the
cause of the excusable delay, the expected length of the
excusable delay, and alternate plans to mitigate the effect
of the excusable delay.
12.2 If the affected Party, as defined in Paragraph 12.1 above,
requests or experiences, on a cumulative basis, excusable
delay(s) greater than [**********] days, the Parties shall
enter into good faith negotiations to develop a mutual
course of action and/or an equitable adjustment to the
affected terms of this Contract.
12.3 Notwithstanding the foregoing, if the Launch Date for the
Spacecraft defined in Paragraph 7.1 herein is delayed due to
a Force Majeure event affecting Buyer's ability to furnish
any item to be supplied by it under Article 8 hereof, Buyer
shall reimburse Contractor for all reasonable expenses
incurred as a result, including without limitation expenses
for: support personnel standby; extra travel expenses; and
transport termination or rescheduling fees.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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12.4 Notwithstanding anything herein to the contrary, in the
event that a Force Majeure Event occurs and Contractor's
performance of its obligations as to the Spacecraft is
delayed or prevented for a period of [**************] or
longer, then Buyer shall have the right to either: (i)
terminate this Contract with respect to the Spacecraft upon
thirty (30) days written notice or (ii) [******************]
************************************************************
****************] The period of such delay shall be measured
from the initial occurrence of such Force Majeure Event or
Contractor fault (whichever occurred first). Notwithstanding
the foregoing, Buyer agrees that [**************************
************************************************************
************************************************************
************************************************************
************************************************************
************************************************************
************************************************************
************************************************************
*****************]
12.5 In the event of a termination under clause (i) of Paragraph
12.4, Buyer shall be entitled to a refund equal to [********
************************************************************
*******************************************************] and
Contractor shall retain title to all Deliverables produced
by Contractor under this Contract with respect to the
Spacecraft. For purposes of this Section 12.4, [************
************************************************************
************************************************************
************************************************************
******************]
12.6 In the event of [********************************] under
clause (ii) of
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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Paragraph 12.4, the price (including any
profit component) [***************************] shall be
paid as follows:
[******************************************************
**************************************************
**************]
[*******************************************************
**************************************************
**************************************************
******************************]
[********************************************************
**************************************************
**************************************************
**************************************************
**************]
[*******************************************************
**************************************************
**************************************************
**********************]
Buyer and Contractor agree to negotiate in good faith the
schedule for delivery of the Spacecraft [**********].
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 13. AMENDMENTS
The terms and provisions of this Contract shall not be amended or
modified without specific written provision to that effect, signed by
the Authorized Representative(s) of both Parties. These Authorized
Representative(s) are identified in Article 27, "Notices and Authorized
Representative(s)." No oral statement of any person shall in any manner
or degree modify or otherwise affect the terms and provisions of this
Contract.
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ARTICLE 14. TERMINATION FOR CONVENIENCE
14.1 Buyer may terminate all or any portion of the work to be
performed pursuant to this Contract upon five (5) days written
notice to Contractor. Buyer shall pay Contractor, in the event
of such termination, termination liability equaling all Costs
(as defined in Paragraph 14.5 below) expended by Contractor
for all work done up to the date of termination on the
terminated portion of the Contract, settlements with
subcontractors for work performed prior to termination on the
terminated portion of the Contract, and Contractor's
reasonable costs related to termination which would not
otherwise have been incurred plus a [****] profit for the
applicable termination costs and charges, but in no event more
than the maximum termination liability that is set forth in
Exhibit F hereto, as of date of termination, less amounts
previously paid by Buyer to Contractor pursuant to the Payment
Article; provided that the Parties agree that Exhibit F sets
forth the maximum termination liability if the entire Contract
is terminated under this Article 14, and that the maximum
termination liability shall be pro rated appropriately in the
event of a termination under this Article 14 of less than all
of the work to be performed by Contractor. Buyer's termination
liability shall also include Costs incurred by Contractor for
the parts of the Base Spacecraft incorporated into the PAS 6B
Spacecraft, but shall exclude any amounts retained or received
by Contractor (whether for Costs, profits or otherwise) in
connection with the termination of its agreement with a third
party for the construction and delivery of the Base
Spacecraft. Buyer shall pay the unpaid balance of such
termination liability within thirty (30) days of Buyer's
receipt of certification of Contractor's costs. In the event
that Buyer has paid to Contractor any amount in excess of such
termination liability, then Contractor shall refund such
excess amount to Buyer within
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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thirty (30) days of certification of costs. In no event shall
the termination liability exceed either the Contract price
defined in Article 5 herein or the amount specified in Exhibit
F.
14.2 In the event of termination by Buyer hereunder, and upon
payment in full of all amount due (if any) under 14.1 above
(or, if any amount is in dispute, payment of such amount into
escrow in the manner set forth in Paragraph 6.4), all tangible
work in process inventories generated under this Contract,
with respect to the terminated work, shall become the property
of Buyer. Buyer shall direct disposition of such property
within sixty (60) days from date of termination (which
disposition may include requesting Contractor to undertake
mitigation efforts in accordance with Paragraph 14.4 below) or
such other date as agreed to by the Parties. Final acceptance
and transfer of title for all tangible work in process
inventories to be delivered to the Buyer in the event of
termination shall be the subject of separate negotiations
between Buyer and Contractor and shall be subject to
applicable U.S. Government Export Regulations. The expense of
disposition shall be borne by Buyer.
14.3 In the event of partial termination, the Contract Price shall
be adjusted accordingly.
14.4 At Buyer's request, Contractor shall use reasonable best
efforts to identify an alternate use (i.e. sale to third
Parties and/or internal utilization) for any Hardware affected
by a termination under this Article 14, the Contractor shall
submit a proposal to Buyer, which, at a minimum, defines (i)
the applicable Hardware, (ii) the intended use of the
Hardware, (iii) the original acquisition cost/value of the
applicable Hardware, as available, and (iv) the sale/transfer
payment(s) to be received by Buyer. Contractor
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shall use its reasonable best efforts to obtain fair market
value for the applicable Hardware. Buyer, at its sole option,
may accept or reject the proposal submitted by Contractor. In
the event that Buyer accepts the proposal submitted by
Contractor, payment by Contractor to Buyer of the agreed upon
payment value shall occur within thirty (30) days of the
sale/transfer of the applicable Hardware, or such other
payment period as mutually accepted between the Parties. If
the Contractor's proposal is rejected by Buyer, if Contractor
is unable to find any alternative use within two (2) years of
being requested to do so or if Buyer so directs, then Title to
the applicable Hardware shall be vested as stated in Paragraph
14.2 above.
14.5 As used in this Article 14, Contractor's "Costs" shall
mean costs actually incurred by Contractor in performing its
obligations hereunder (including G&A costs not to exceed
[*****************] of such costs), all such costs to be
determined in accordance with Contractor's normal accounting
practices. Contractor shall provide to Buyer an invoice
certified by the Chief Financial Officer of the company
stating Contractor claim for costs properly includes only the
costs specified in this paragraph. In the event Buyer desires
independent verification of claim, Buyer may request to have
independent certified public accountants (CPA) audit costs
incurred by Contractor and report to the Parties. The CPA to
perform such audit shall be selected by Buyer, subject to the
approval of Contractor, which approval shall not be
unreasonably withheld (and in any event shall not be withheld
if Buyer selects a "Big Six" accounting firm). Such audit
shall be at Buyer's expense unless such audit shows
Contractor's costs to have been overstated (in which event
Contractor shall bear the audit expense). Such audit shall
constitute a final determination of actual costs
notwithstanding the provision of Article 33; provided that, if
the costs
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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determined by such report exceed the amount of Contractor's
termination claim, Buyer shall only be obliged to pay the
amount of Contractor's termination claim.
14.6 Contractor shall use its reasonable best efforts to include in
its subcontracts for work hereunder on terms that will enable
Contractor to terminate such subcontracts in a manner
consistent with this Article 14.
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ARTICLE 15. TITLE AND RISK OF LOSS
15.1 Title and risk of loss or damage in respect of all items to be
delivered under this Contract shall pass from Contractor to
Buyer as follows:
15.1.1 Risk of loss of the Spacecraft and title
shall pass from Contractor to Buyer upon the
earliest of: (i) the completion of In-orbit
Testing in accordance with Exhibit A, (ii)
fifty (50) days after Intentional Ignition
(as defined in Article 15, Paragraph 15.2 of
this contract) or (iii) immediately before a
Partial Failure, Total Failure or Total
Constructive Failure (as each such term is
defined in the applicable Launch Insurance
Contract or successor contract) which occurs
at or after Intentional Ignition.
15.1.2 In respect to a Spacecraft which Buyer
directs Contractor to store, title and risk
of loss shall remain with the Contractor
until Final Acceptance as specified in
Article 9.4 herein.
15.1.3 Notwithstanding Paragraph 15.1.2 above, upon
removal of the Spacecraft from storage, the
Contractor shall not assume risk of loss
relative to a Battery which Buyer directs
Contractor to replace after the five-year
storage period which disqualifies the
battery for a 15-year mission. In that
event, Article 30 herein entitled "Effects
of Storage on Batteries," shall apply.
15.1.4 "Risk of Loss" for purposes of this Article
15 is limited to the responsibility and
liability for a Partial Failure, Total
Failure or Total Constructive Failure (as
each such term is
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as defined in the applicable Launch
Insurance Contract or successor contract).
Responsibility and liability for the
Spacecraft prior to intentional ignition is
with the Contractor.
15.2 In the event of damage to or destruction of Hardware when
Contractor shall have risk of loss, Contractor shall repair or
replace (at Contractor's option) said Hardware. The Buyer
shall participate in the decision to repair or replace said
Hardware and the provisions of Article 16 shall apply.
15.3 Insurance Provided By Contractor. The Contractor shall, at its
own expense, provide and maintain the following insurance:
15.3.1 "All Risk" Insurance
(i) The Policy for "All Risks" insurance shall
insure the Contractor and name Buyer as additional
insured and Loss Payee as their interest may
appear.
(ii) The insurance shall cover the Spacecraft while
in or about the Contractor's and subcontractors'
plants, while at other premises which may be used
or operated by the Contractor for construction or
storage purposes, while in transit, or while at the
Designated Launch Site until Intentional Ignition,
or while Spacecraft is stored by the Contractor at
Buyer's direction until Final Acceptance as
specified in Article 9.4.
(iii) Such insurance shall be sufficient to cover
the full replacement value or selling price of the
Spacecraft and may be issued with deductibles, for
which losses shall be borne by the Contractor.
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(iv) This "All Risk" insurance shall be in force
from the time of the Effective Date of this
Contract and shall continue in effect until
Contractor's liabilities have expired at
intentional ignition.
15.3.2 Third Party Liability Insurance
(i) The Policy(s) for Third Party Liability
insurance shall be written on forms the Buyer may
review and shall include Buyer as additional
insured.
(ii) This Third Party Liability insurance shall be
in force from the time of the Effective Date of
this Contract and shall continue in effect until
Contractor's liabilities have expired at
intentional ignition.
(iii) The Policy(s) may be issued with deductibles,
for which losses shall be borne by the Contractor.
15.4 General Insurance Requirements
(i) The Contractor shall, upon request, provide to
the Buyer certificates of the Insurance Policy(s)
issued by an agent of the Contractor's Insurer(s)
for coverage which the Contractor is required to
provide pursuant to the provisions of these
Articles.
(ii) All Policies of insurance to be provided and
maintained pursuant to these Articles shall require
the insurer(s) or its authorized agent(s) to give
each insured not less than thirty (30) days prior
written notice in the event of cancellation or any
proposed material change in such policies, except
for ten (10) days prior written notice in the event
of cancellation due to non-
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payment of premium.
(iii) The Contractor may also acquire and maintain,
at its own expense, other insurance for amounts and
perils, and upon such terms, conditions and
deductibles as it may deem advisable or necessary
to cover any loss or damage to persons or property
that may occur as a result of the performance of
this Contract.
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ARTICLE 16. SPACECRAFT WARRANTY
16.1 Contractor warrants that the Spacecraft, upon successful
completion of Spacecraft in plant Tests pursuant to Article 9
herein, shall be free from any defects in material or
workmanship and shall conform to the applicable specifications
and drawings, as evidenced by the acceptance criteria in
Exhibits A-D herein.
16.2 This warranty shall start from the date of Preliminary
Acceptance of the Spacecraft as stated in Article 9 herein,
entitled "Inspection and Acceptance," and continue for a
period of [***********] or until the "Intentional Ignition"
(defined herein as the Intentional Ignition of any rocket
motor on the first stage of the Launch Vehicle) of the
applicable Launch Vehicle, whichever is earlier. [************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************]("Warranty
Time Period"). Contractor shall not be liable in Contract or
in Tort for any incidental, special, contingent, or
consequential damages.
16.3 Buyer shall have the right at any time during the Warranty
Time Period to reject any goods not conforming to this
warranty and require that Contractor, at its expense, correct
or replace (at Contractor's option) such goods with conforming
goods. If any time during the Warranty Time Period Contractor
fails to correct or replace such defective goods and fails to
initiate reasonable efforts to correct or replace such
defective goods within a reasonable period after written
notification and authorization from Buyer, Buyer may then, by
contract or otherwise, correct or replace such defective goods
and equitably adjust the price.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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16.4 Except as otherwise expressly agreed upon in this Contract,
Contractor shall have no liability, or responsibility in
Contract or in Tort with respect to the Spacecraft after
Intentional Ignition (as defined in Paragraph 16.2) of the
Launch Vehicle.
16.5 THE ABOVE WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING FITNESS FOR PARTICULAR PURPOSE OR
MERCHANTABILITY AND THE REMEDY PROVIDED HEREIN IS THE SOLE
REMEDY FOR FAILURE BY CONTRACTOR TO FURNISH A SPACECRAFT THAT
IS FREE FROM MATERIAL DEFECTS IN MATERIAL OR WORKMANSHIP AS
SET FORTH IN PARAGRAPH 16.1 ABOVE. ALL OTHER WARRANTIES OR
CONDITIONS IMPLIED BY ANY OTHER STATUTORY ENACTMENT OR RULE OF
LAW WHATSOEVER ARE EXPRESSLY EXCLUDED AND DISCLAIMED.
CONTRACTOR AND ITS SUBCONTRACTORS SHALL HAVE NO LIABILITY IN
CONTRACT OR IN TORT (INCLUDING NEGLIGENCE) OR IN ANY OTHER
MANNER WHATSOEVER FOR A SPACECRAFT AFTER INTENTIONAL IGNITION
OTHER THAN AS EXPRESSLY PROVIDED IN THIS CONTRACT.
16.6 Any limitations on warranties, liability or requests for
indemnification from liability for the malfunction of
delivered items which are imposed upon the Contractor by its
various equipment suppliers shall be passed on directly to
Buyer provided, however, nothing therein shall decrease or
invalidate the rights of the Buyer during, or the length of,
the Warranty Time Period as stated in this Article.
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ARTICLE 17. INDEMNIFICATION
17.1 Each Party shall indemnify and hold the other and/or all its
officers, agents, servants, subsidiaries, affiliates, parent
companies and employees, or any of them, harmless from any
liability or expense in connection herewith on account of
damage to property (excepting other Spacecraft in flight)
and injuries, including death, to all persons including but
not limited to employees of the Parties, and their
subcontractors, and of all other persons performing any part
of the work hereunder, arising from any occurrence caused by
an negligent act or omission of the indemnifying Party or
its subcontractors, or any of them in connection with the
work to be performed by such Party under this Contract. The
indemnifying Party shall have the right, but not the
obligation, to participate in any legal or other proceedings
concerning claims for which it is indemnifying under this
Article 17 and to direct the defense of such claims.
However, with respect to such legal or other proceedings,
the indemnifying Party shall pay all expenses (including
attorneys fees incurred by the indemnified Party in
connection with such legal or other proceedings) and satisfy
all judgments, costs or other awards which may be incurred
by or rendered against the indemnified Party. The
indemnifying Party shall not settle any such claim, legal or
other proceeding without first giving thirty (30) days prior
written notice of the Terms and Conditions of such
settlement and obtaining the consent of the indemnified
Party, which consent shall not be unreasonably withheld or
delayed.
17.2 Notwithstanding the foregoing, neither the Contractor nor
its subcontractors shall have any liability in Contract or
in Tort, for damages to or caused by the Spacecraft after
Intentional Ignition (as defined in Paragraph 16.2), and
Buyer shall obtain waivers of
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subrogation rights from Buyer's insurers against Contractor,
and affiliates and subcontractors of Contractor.
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ARTICLE 18. SPACECRAFT NOT LAUNCHED WITHIN SIX MONTHS AFTER ACCEPTANCE
18.1 If the Spacecraft is not launched within six (6) months
after its Preliminary Acceptance per Article 9, entitled
"Inspection and Acceptance," and is subsequently ordered to
be launched within [************] following its Preliminary
Acceptance, it is agreed that the Spacecraft shall be
returned at Contractor's option at Contractor's expense, to
Contractor's facility for inspection and refurbishment. Any
inspection and refurbishment undertaken by Contractor to
meet the requirements of Article 16 entitled, "Spacecraft
Warranty," shall be at Contractor's expense, including
Spacecraft transit insurance.
18.2 If the Spacecraft is not launched within six (6) months
after its Preliminary Acceptance and is subsequently ordered
to be launched later than [**************] following its
Preliminary Acceptance, it is agreed that the Spacecraft
shall be returned, at Buyer's expense, to Contractor's
facility for inspection and refurbishment. An equitable
adjustment to Contract price for such inspection and
refurbishment, to include a [***] profit component shall be
negotiated by the Parties unless the fact that the launch is
scheduled for later than [******************] is due to
Contractor's negligent acts or omissions.
18.3 If the Spacecraft is returned to Contractor's facility for
inspection and refurbishment per the terms of Paragraph 18.2
above, all charges to return the Spacecraft to the Launch
Site shall be borne by Buyer.
18.4 If the Spacecraft has not been launched within [**********
****] after its preliminary Acceptance, neither Party shall
be further obligated to the other with respect to the
Spacecraft. Disposition of the Spacecraft shall
[***] Filed separately with the Commission pursuant to a request for
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be at the option of Buyer with costs of such disposition to
be borne by Buyer.
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ARTICLE 19. PATENT/COPYRIGHT INDEMNITY
19.1 Contractor shall indemnify and hold Buyer harmless against
any liability or expense as a result of claims, actions, or
proceedings against Buyer alleging the infringement of any
trademarks, United States Copyright or mask work, United
States Letters Patent, any other intellectual property
rights, by any article fabricated by Contractor and
delivered to Buyer pursuant to this Contract as set forth
below.
19.2 Contractor agrees to defend at its own expense any claim,
action, proceeding or request for royalty payments or any
claim for equitable relief or damages against Buyer, its
officers, employees, agents, or subsidiaries based on an
allegation that the manufacture of any item under this
Contract or the use, lease, or sale thereof infringes any
United States Letters Patent trademark, United States
Copyright or mask work or any other intellectual property
right, and to pay any royalties and other costs related to
the settlement of such claim, action, proceeding or request
and to pay the costs and damages, including reasonable
attorney's fees finally awarded as the result of any claim,
action or proceeding based on such request, provided that
Contractor is given prompt written notice of such request or
claim by Buyer and given authority and such assistance and
information as is available to Buyer for resisting such
request or for the defense of such claim, action or
proceeding. Any such assistance or information which is
furnished by Buyer at the written request of Contractor is
to be at Contractor's expense.
19.3 In the event that, as a result of any such claim, action,
proceeding or request: a) prior to delivery, the manufacture
of any item is enjoined; or b) after delivery, the use,
lease or sale thereof is enjoined, Contractor
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agrees to utilize its best effort to either: (1) negotiate a
license or other agreement with plaintiff so that such item
is no longer infringing; or (2) modify such item suitably or
substitute a suitable item therefore, which modified or
substituted item is not subject to such injunction, and to
extend the provisions of this Article thereto. In the event
that neither of the foregoing alternatives is suitably
accomplished by Contractor, Contractor shall be liable to
Buyer for Buyer's additional costs and damages arising as a
result of such injunction; provided however, that in no
event shall Contractor's entire liability under this Article
exceed [****************************************] for
each Spacecraft. The existence of one or more claims,
actions, proceedings or lawsuits shall not extend such
amount.
19.4 The foregoing indemnity shall not apply to any infringement
resulting from a modification or addition, by other than
Contractor, to an item after delivery.
19.5 If the infringement results from the compliance by
Contractor with the Buyer's directed designs, specifications
or instructions, the Buyer will defend or settle, at its
expense, any such suit against the Contractor.
19.6 The foregoing constitutes the Parties' entire obligation
with respect to claims for infringement.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 20. RIGHTS IN INVENTIONS
20.1 As used in this Contract, "Program Invention" shall mean any
invention, discovery or improvement conceived of and first
reduced to practice in the performance of Work under this
Contract. Information relating to Inventions shall be
treated as proprietary information in accordance with the
provisions of this Contract. Rights to inventions conceived
solely by Contractor or its employees shall vest completely
with Contractor.
20.2 Contractor shall be the owner of all Program Inventions
invented solely by Contractor. Contractor grants Buyer a
royalty-free, nonexclusive license in Program Inventions to
use Program Inventions solely for the purposes of
maintenance and operation of the Spacecraft and delivered
Equipment. Contractor agrees that it will not revoke such
license if Buyer is in compliance with the terms of the
license.
20.3.1 In the case of joint Program Inventions, that
is, inventions conceived jointly by one or more
employees of both Parties hereto, each Party
shall have an equal, undivided one-half
interest in and to such joint Program
Inventions, as well as in and to patent
applications and patents thereon in all
countries.
20.3.2 In the case of such joint Program Inventions,
Contractor shall have the first right of
election to file patent applications in any
country, and Buyer shall have a second right of
election. Each Party in turn shall make its
election at the earliest practicable time, and
shall notify the other Party of its decision.
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20.3.3 The expenses for preparing, filing and securing
each joint Program Invention patent
application, and for issuance of the respective
patent shall be borne by the Party which
prepares and files the application. The other
Party shall furnish the filing Party with all
documents or other assistance that may be
necessary for the filing and prosecution of
each application. Where such joint Program
Invention application for patent is filed by
either Party in a country which requires the
payment of taxes, annuities, maintenance fees
or other charges on a pending application or on
an issued patent, the Party which files the
application shall, prior to filing, request the
other Party to indicate whether it will agree
to pay one-half of such taxes, annuities,
maintenance fees or other charges. If within
sixty (60) days of receiving such request, the
non-filing Party fails to assume in writing the
obligation to pay its proportionate share of
such taxes, annuities, maintenance fees or
other charges, or if either Party subsequently
fails to continue such payments within sixty
(60) days of demand, it shall forthwith
relinquish to the other Party, providing that
said other Party continues such payments, its
interest in such application and patent and the
Invention disclosed therein, subject, however,
to retention of a paid-up, non-exclusive,
non-assignable license in favor of the
relinquishing Party, its parent, and any
subsidiary thereof to make, use, lease and sell
apparatus and/or methods under said application
and patent.
20.4 Each owner of a jointly-owned patent application or patent
resulting therefrom shall, provided that it shall have
fulfilled its obligation, if any, to pay its share of taxes,
annuities, maintenance fees and other charges
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on such pending application or patent, have the right to
grant non-exclusive licenses thereunder and to retain any
consideration that it may receive therefor without
obligation to account therefor to the other Party. In
connection therewith, each of the Parties hereby consents to
the granting of such non-exclusive licenses by the other
Party and also agrees not to assert any claim with respect
to the licensed application or patent against any licensee
of the other Party thereunder during the term of any such
license.
20.5 No sale or lease hereunder shall convey any license by
implication, estoppel or otherwise, under any proprietary or
patent rights of Contractor, to practice any process with
such product or part, or, for the combination of such
product or part with any other product or part.
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ARTICLE 21. INTELLECTUAL PROPERTY RIGHTS
Except as provided in Article 20, neither Party shall acquire any
rights with respect to any patent, trademark, trade secret, or any
other intellectual property developed or used by the other Party in the
performance of this Contract.
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ARTICLE 22. FURNISHED DATA AND INFORMATION, DISCLOSURE AND USE
Proprietary Information shall mean any data and information received by
one Party from the other Party, which is identified as proprietary in
accordance with either of the following methods: (i) if in writing, it
shall be marked by the disclosing Party with an appropriate proprietary
legend, or (ii) if disclosed orally, it shall be presented by the
disclosing Party as Proprietary at the time of disclosure and shall be
confirmed by the disclosing Party as Proprietary Information in writing
within fifteen (15) days of its initial oral disclosure.
22.1 The receiving Party agrees to protect such data and
information with the same degree of care which the receiving
Party uses to protect its own confidential data and
information;
22.2 The receiving Party shall not disclose or have disclosed to
third Parties, in any manner or form, or otherwise publish
such data and information so long as it remains proprietary
without the explicit authorization of the other Party or
except as otherwise permitted in this Article 22;
22.3 The receiving Party agrees that it shall use such data and
information solely in connection with the performance of Work
under this Contract, unless otherwise explicitly authorized by
or on behalf of the other Party with the designation of
specific data and information and use;
22.4 The foregoing obligations with regard to such data and
information shall exist unless and until such time as:
22.4.1 Such data and information are to the receiving
Party or otherwise publicly available prior to its
receipt by the receiving Party
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without the default of the receiving Party; or
22.4.2 Such data and information have been lawfully
disclosed to the receiving Party by a Third Party
which has the right to disclose such data; or
22.4.3 Such data and information are shown by written
record to have been independently developed by the
receiving Party; or
22.4.4 Such data and information are otherwise available
in the public domain without breach of this
Contract by the receiving Party; or
22.4.5 Such data and information are disclosed by or with
the permission of the disclosing Party to a Third
Party without restriction; or
22.4.6 Such data and information that a Party may be
required by law or government regulation or order
to disclose.
22.4.7 Such data and information are released for
disclosure in writing by or with the permission of
the disclosing Party.
22.5 Providing Buyer shall obtain from the recipient a
nondisclosure agreement at least as restrictive as this
Article 22, Buyer may disclose any proprietary information on
a need to know basis to its customer(s), contractors,
insurers, agents, counsel and actual or prospective lenders,
investors, or successors in interest.
22.6 Any copyrighted material belonging to a Party to this Contract
may be copied by the other Party as necessary to enable the
receiving Party to perform its obligations under this
Contract, provided always that the
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copyright legend is retained on the material.
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ARTICLE 23. PUBLIC RELEASE OF INFORMATION
Neither Party shall issue news releases, articles, brochures,
advertisements, prepared speeches, and other information releases
concerning the work performed or to be performed under this Contract by
Contractor or its subcontractors, or any employee or consultant of
either, which contains new information not previously disclosed as
permitted under the Contract, without first obtaining the prior written
approval of the other Party concerning the content and timing of such
release which approval shall not be unreasonably withheld. The
initiating Party shall provide such releases to the other Party for
review within a reasonable time prior to the desired release date and
the other Party shall be required to respond within said time period.
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ARTICLE 24. TAXES
24.1 The price which shall be paid by Buyer for Spacecraft,
Documentation and Related Services [******************
*****************] any U.S. (federal, state or local) sales or
use taxes, or fees or other U.S. taxes against real or
personal property, however designated, which may be levied or
assessed against Contractor. Buyer shall be responsible for
the payment of all personal property taxes, if any, with
regard to goods which are levied upon subsequent to the date
of delivery to Buyer. Buyer shall be responsible for any
inventory taxes, state taxes or any other taxes that are
assessed to Contractor as a result of storage of a Spacecraft
in accordance with Article 32.
24.2 In the event Contractor in the performance of this Contract is
required to pay non-U.S. customs, import duties, value-added
or sales taxes, commercial card fees, port fees, harbor
maintenance tax, other charges, or taxes, or fees,
(collectively, "Assessments") however designated (except for
(i) any Assessment based on Contractor's income and (ii) any
Assessment incurred as a result of or associated with
Contractor's manufacture of a Spacecraft), then Buyer will
reimburse Contractor for such Assessments within thirty (30)
days of written notification by Contractor of payment;
provided, however that, Contractor shall used its reasonable
best efforts to obtain waivers, exemptions and/or relief from
such Assessments when practicable, and Buyer shall not be
required to pay any Assessment to the extent any such waiver,
exemption or relief is pending or has been obtained.
Notification shall then be supported by an invoice and
attachment(s) evidencing such payment having been made by
Contractor.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 25. GOVERNING LAW
This Contract shall be deemed made in the State of California and shall
be construed in accordance with the laws of the State of California.
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ARTICLE 26. TITLES
Titles given to the Articles herein are inserted only for convenience
and are in no way to be construed as part of this Contract or as a
limitation of the scope of the particular article to which the title
refers.
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ARTICLE 27. NOTICES AND AUTHORIZED REPRESENTATIVES
Any notice or request required or desired to be given or made hereunder
shall be in writing and shall be effective if delivered in person or
sent by mail or by facsimile as indicated below:
1. PanAmSat International Systems, Inc.
One Pickwick Plaza
Greenwich, Connecticut 06830
Attention: Robert Bednarek, Senior Vice President and
Chief Technology Officer
cc: Stephen G. Salem, Senior Counsel
and
cc: Phil Rubin
Jim Frownfelter
Rubin & Associates
1350 Connecticut Avenue, Suite 610
Washington, DC 20036
Authorized Representative(s): Frederick Landman,
President and Chief Executive
Officer
Robert Bednarek,
Senior Vice President and
Chief Technology Officer
2. Hughes Space and Communications Company
Post Office Box 92919, Airport Station
Bldg. S41, M/S A374
Los Angeles, California 90009
Attention: Samuel C. Tricoli, Contracts Manager
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cc: Bernie Bienstock, Program Manager
Authorized Representative(s): Harold McDonnell
Vice President
or in each case as a Party may direct by notice to the other Party in
accordance with this Article 27.
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ARTICLE 28. INTEGRATION
This document, with Exhibits, constitutes the entire understanding
between the Parties with respect to the subject matter of this Contract
and supersedes all previous oral and/or written negotiations,
commitments, and understandings of the Parties (and/or their
affiliates), including without limitation that certain Letter Agreement
dated as of December 24, 1997, as supplemented by the supplemental
letter agreement thereto dated February 9, 1998.
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ARTICLE 29. CHANGES
Subject to Paragraphs 4.2.1 and 5.3 and Article 38:
29.1 Any changes requested by Contractor during the performance of
this Contract, within the general scope of this Contract,
which will add or delete work, stop work, affect the design of
the Spacecraft, change the method of shipment or packing, or
the place or time of delivery, or will affect any other
requirement of this Contract, shall be submitted in writing
("Change Proposal") to Buyer [********] days prior to the
proposed effective date of the change. If such Contractor
requested change causes an increase or decrease in the total
price or other terms of this Contract, Contractor shall submit
a proposal to Buyer detailing the impact of such change.
29.2 Buyer shall notify Contractor in writing within ten (10) days
after receipt of the requested change and price adjustment
(downward or upward), if any, whether or not it agrees with
and accepts such Change Proposal. If Buyer agrees with and
accepts the Contractor requested Change Proposal, Contractor
shall proceed with the performance of the Contract as changed
or in the case of a stop work order, suspend the performance
of this Contract, and an amendment to the Contract reflecting
the Change Proposal shall be incorporated into the Contract.
If Buyer does not agree with the Contractor requested Change
Proposal, the Parties shall attempt to reach agreement on such
Change Proposal. If the Parties are unable to agree on the
requested change and price adjustment, then the Parties shall
proceed with the performance of this Contract, as unchanged.
In the event the Parties are able to reach agreement on the
change, but not on the price adjustment component, then the
Parties shall elevate such dispute to the Senior Executives of
the respective companies for resolution. If resolution
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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can not be achieved within a reasonable period of time under
the circumstances, Buyer may make a qualified acceptance of
the Change Proposal, accepting all matters other than price
adjustment, and the issue of price adjustment shall be
submitted for resolution by arbitration in accordance with the
provisions of Paragraph 33.2 hereof. Pending such resolution
of the price issue, the Parties shall perform their
obligations under the Contract, or in the case of a Stop work
order, suspend their obligations, as if the Change Proposal
had been accepted; provided, however, that Buyer shall pay any
disputed amount of the price adjustment into an escrow account
in accordance with Paragraph 29.4 hereof on the date such
amount would have been due and payable had the Change Proposal
been accepted, or if the Change Proposal could result in a
downward adjustment in the Contract Price in excess of the
amount remaining to be paid by the Buyer, Contractor shall
deposit the disputed amount of such excess into an escrow
account in accordance with Paragraph 29.4 hereof.
29.3 Buyer may submit to Contractor in writing (a "Change Order
Request") detailing any changes requested by Buyer during the
performance of this Contract, within the general scope of the
Contract, which will add or delete work, stop work, affect the
design of the Spacecraft, change the method of shipment or
packing, or the place or time of delivery, or will affect any
other requirement of this Contract. Contractor shall respond
to such Change Order Request in writing to Buyer within [***
****] days after such request. If Contractor determines that
the change requested by Buyer is feasible and can be made at
no additional cost and with no associated delays, then
Contractor shall so notify, Buyer and Contractor shall
commence implementing such change. If the Contractor
determines otherwise, then, Contractor shall submit to Buyer,
a proposal detailing the impact of such change and the price
adjustment (downward or upward), if
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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any, (the "Change Order Offer"). Buyer shall notify Contractor
in writing, within ten (10) days after receipt of Contractor's
Change Order Offer, whether or not it agrees with and accepts
Contractor's Change Order Offer. If Buyer agrees with and
accepts Contractor's Change Order Offer, Contractor shall
immediately proceed with the performance of the Contract as
changed, or in the case of a stop work order, suspend the
performance of this Contract, and an amendment to the Contract
reflecting such change shall be incorporated into the
Contract. If Buyer does not agree with the Contractor's Change
Order Offer, the Parties shall attempt to reach agreement on
such Change Order Offer. In the event the Parties are able to
reach agreement on the change, but not on the price adjustment
component, then the Parties shall elevate such dispute to the
Senior Executives of the respective companies for resolution.
If resolution can not be achieved within a reasonable period
of time under the circumstances, Buyer may make a qualified
acceptance of the Change Order Offer, accepting all matters
other than price, and the issue of price shall be submitted
for resolution by arbitration in accordance with the
provisions of Paragraph 33.2 hereof. Pending such resolution
of the price issue, the Parties shall perform their
obligations under the Contract, or in the case of a Stop work
order, suspend their obligations, as if the Change Order Offer
had been accepted; provided however, that the Buyer shall pay
any disputed amount of the price adjustment into an escrow
account in accordance with Paragraph 29.4 hereof on the date
such amount would have been due and payable had the Change
Order Offer been accepted, or if the Change Order Request
could result in a downward adjustment in the Contract Price in
excess of the amount remaining to be paid by Buyer, Contractor
shall deposit the disputed amount of such excess into an
escrow account in accordance with Paragraph 29.4 hereof. The
dispute shall then be resolved by arbitration under the
provisions of Article 33, entitled "Disputes."
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29.4 Escrow Provisions - Disputed Amounts
Disputed amounts with respect to any change under this Article
29 shall be paid into an interest bearing escrow account to be
established at Bank of America, Concord, California. Upon
settlement of the dispute as to such payment and alleged
breach in accordance with Article 33, the Party entitled to
the amount or part thereof in escrow, shall receive such
amount together with all accrued interest thereon and the
other Party shall pay all costs and fees associated with the
escrow of said amount. The placement of disputed amounts into
an escrow account shall not relieve either Party of its
remaining obligations under this contract.
29.5 Determination of Price Adjustment of Change
The Parties agree that the change order price adjustment
(downward or upward) for any change shall be equal to the sum
of (i) the "Change Order Cost" plus (ii) the "Change Order
Profit Component". The "Change Order Cost" shall mean those
additional or reduced recurring and non-recurring costs to
Contractor to implement such change (or which are not required
to be implemented), as determined in accordance with
Contractor's normal accounting practices, including those
general and administrative costs ("G&A Costs") of such change,
as determined in accordance with Contractor's normal
accounting practices, [*********************************] of
Contractor's costs for such change. The "Change Order Profit
Component" shall be equal to [**********************] of the
Change Order Cost. The Total Change Order Cost shall be
payable in accordance with the payment plan agreed by the
Parties or, if applicable, by the Arbitrator. Unless otherwise
agreed by the Parties, the Change Order Profit Component shall
be payable in equal monthly installments at the same time as
the monthly installments of Incentives Obligations; provided,
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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however, that payment of the Change Order Profit Component
shall not be conditioned upon performance of the Spacecraft or
any component thereof.
29.6 If Contractor makes any improvements to the generic HS-601HP
Spacecraft design, then Contractor shall provide reports to
Buyer concerning such improvements. Buyer may request that any
improvement to the HS-601HP Spacecraft design reported to
Buyer be incorporated into the Spacecraft, and such
improvements shall be considered a Change and shall be dealt
with in accordance with the Change Order process in this
Article 29. The foregoing shall not apply to any changes to
the generic HS-601HP Spacecraft design, to correct or mitigate
the impact of anomalies with respect to such design, made by
Contractor on its own accord or as necessary in Contractor's
reasonable engineering judgment, which changes shall not
relieve Contractor of its obligations to meet the technical
specifications for the Spacecraft, as set forth in Exhibit B,
hereto. Contractor shall notify Buyer on a periodic basis or
as requested by Buyer from time to time of any anomalies with
respect to such HS-601HP Spacecraft design.
29.7 The Change Order Price shall be allocated and payable as
follows: The Change Order Profit Component shall be an
independent payment obligation not contingent upon performance
of the Spacecraft and shall be payable at the same time as the
monthly installments of the Incentives Obligations for the
Spacecraft as set forth in Paragraph 6.3.4 and, in any case,
the then-remaining Change Order Profit Component for the
Spacecraft shall be paid in full with the last Incentives
Obligations Payment. The Total Change Order Cost shall be
payable as agreed by the Parties.
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29.8 To the extent that (i) any change agreed under this Article 29
deletes any Hardware already produced by Contractor, then the
provisions of Paragraphs 14.2 and 14.4 shall apply to the
disposition of such Hardware.
29.9 The Spacecraft shall be designed to support the Launch Vehicle
interface requirements issued by the Launch Vehicle provider
(as to Ariane, Proton, Delta and Atlas launch vehicles)
existing at the time of the date required of any change in
Launch Vehicle designation under Paragraph 4.2.1. If there are
any changes to such interface requirements thereafter, then
any such change shall be deemed to be a Change Order Request
by Buyer, and the Change Order process set forth in Section
29.3 shall apply.
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ARTICLE 30. EFFECTS OF STORAGE ON BATTERIES
For Spacecraft batteries to provide the required minimum fifteen (15)
years of in-orbit services per Exhibit B, it is understood that launch
must occur within three (3) years from the date of activation of the
first battery cell. In the event Buyer directs Contractor to store any
deliverable Spacecraft and the period of such storage causes a launch
later than three (3) years from the date of activation of that
Spacecraft's first battery cell, and Buyer upon its election to either:
(i) install replacement batteries or (ii) recondition batteries, so
directs Contractor, Buyer shall pay Contractor its costs plus a [***]
profit rate. In either case (i) or (ii), the batteries shall meet a
fifteen (15) year in-orbit service requirement.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 31. INTER-PARTY WAIVER OF LIABILITY
31.1 Prior to the time Buyer and the Contractor enter the Launch
Integration Facility and/or Launch Site, they each agree that
they will not make a claim against each other for an event
that occurs at the Launch Integration Facility and/or Launch
Site premises involving damage to, loss of, or loss of use of
their property or the property of others in their possession,
caused by the fault or negligence of the other Party to this
Contract, or otherwise caused by any defect in any product
manufactured or sold by the other Party to this Contract. Such
claims are waived and each Party will bear its own losses.
Buyer will include a comparable clause in each of its
contracts with vendors, subcontractors or customers for
services or benefits expected as a result of the launch or
orbiting of the Spacecraft. Such comparable clause shall
include a requirement to flow the clause down to lower-tier
contractors.
31.2 Notwithstanding any other provisions of this Contract, prior
to the time any Party, associated with launch activities at
the Launch Integration Facility and/or Launch Site, shall
enter the Launch Integration Facility and/or Launch Site, such
Parties shall be required to sign an Inter-Party Waiver of
Liability consistent with that between Buyer and the
Contractor as incorporated herein under Paragraph 31.1 of this
provision or other similar agreement as may be required by the
launch agency. Each Party shall have the responsibility to
assure that all the Parties associated with the launch of the
Spacecraft (for which they have control or privity of Contract
with hereunder) have executed said Inter-Party Waiver of
Liability.
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ARTICLE 32. SPACECRAFT STORAGE
32.1 Buyer may, at its option, order Contractor to store, in
accordance with the provisions of Exhibit B Spacecraft
Specification, the deliverable Spacecraft (including separate
storage of Batteries, if needed) for a period of up to two (2)
years from the date of their delivery to Buyer. Buyer shall
provide written notice to the Contractor not later than six
(6) months prior to the scheduled delivery of the Spacecraft.
Contractor's price for providing storage shall be provided to
Buyer in accordance with Article 29, "Changes," (and such
price shall be deemed a "Change Proposal" for purposes of
Article 29) within 30 days after receipt of Buyer's notice to
store the Spacecraft and Contractor shall provide storage
facilities. If such storage facilities are unavailable,
Contractor and Buyer shall hold discussions to determine a
mutually agreed storage arrangement.
32.2 Six (6) months prior to a stored Spacecraft's scheduled launch
date, Buyer shall, by notice in writing, order the Contractor
to remove said Spacecraft from storage and ship it to a Launch
Site designated by Buyer.
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ARTICLE 33. DISPUTES
33.1 Disputes
33.1.1 In the event any dispute arises between the
Contractor and the Buyer relating to this Contract,
either Party may give written notice to the other
of its objections and reasons therefore. The
Contractor and Buyer shall consult in an effort to
reach a mutual agreement to resolve such dispute.
In the event a mutual agreement cannot be reached
within fifteen (15) days after receipt of this
notice, the respective positions of the Parties
shall be forwarded to Contractor and Buyer's
respective Executive Offices for discussions and
they shall attempt to reach a mutual agreement to
resolve such dispute within another fifteen (15)
day period.
33.2 Arbitration of Disputes
33.2.1 Grounds for Arbitration and Notice Requirement. Any
dispute, disagreement, controversy or claim arising
out of or relating to this Contract or the
interpretation thereof or any arrangements relating
thereto, or the validity or enforceability thereof,
or contemplated therein or the breach, termination
or invalidity thereof which is not settled to the
mutual satisfaction of the Parties in accordance
with Paragraph 33.1 above, then it shall be settled
exclusively and finally by binding arbitration,
after written notice by either Party. Arbitration
of such disputes in accordance with this Article 33
shall be the Parties' exclusive remedy.
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33.2.2 Administration and Rules. Arbitration proceedings
in connection with the Contract shall be
administered by the American Arbitration
Association in accordance with its then in effect
Commercial Arbitration Rules, together with any
relevant supplemental rules including but not
limited to its Supplementary Procedures for Large,
Complex Disputes, as modified by the terms and
conditions of the Contract. With respect to the
selection of arbitrators, arbitration proceedings
in connection with this Contract shall be conducted
before a panel of three (3) arbitrators. Within
fifteen (15) days after the commencement of
arbitration, each Party shall select from a list of
qualified persons one person to serve as an
arbitrator on the panel, and within ten (10) days
of their selection, the two arbitrators shall
select a third arbitrator who is listed as an
active member of the American Arbitration
Association at the time that arbitration
proceedings commence. If the two arbitrators
selected by the respective Parties are unable or
fail to agree upon the third arbitrator in the
allotted time, then the third arbitrator shall be
selected by the American Arbitration Association.
33.2.3 Place of Arbitration. The place of arbitration
shall be in Los Angeles, California, U.S.A.
33.2.4 Discovery. The arbitrators shall have the
discretion to order a pre-hearing exchange of
information by the Parties, including without
limitation, production of requested documents,
exchange of summaries of testimony of proposed
witnesses, and examination by deposition of the
Parties.
33.2.5 Award and Judgment. The arbitrators shall have no
authority to
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award punitive damages, and may not, in any event,
make any ruling, finding or award that does not
conform to the terms and conditions of this
Contract. Subject to the foregoing, the Parties
agree that the judgment of the arbitrators shall be
final and binding upon the Parties and that the
judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction
thereof.
33.2.6 Confidentiality. No Party or arbitrator may
disclose the existence, content, or results of any
arbitration proceedings in connections with this
Contract without prior written consent of all
Parties to the arbitration proceeding.
33.2.7 Fee and Expenses. All fees and expenses of any
arbitration proceedings in connection with this
Contract shall be borne by the losing Party.
However, each Party shall bear the expense of its
own counsel, experts, witnesses, and preparation
and presentation of evidence.
33.2.8 Performance. Contractor and Buyer shall continue
with performance under this Contract during any
disagreement, negotiation, or arbitration.
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ARTICLE 34. ASSIGNMENT
34.1 Neither Party shall assign, or transfer this Contract or any of its
rights, duties or obligations thereunder to any person or entity, in
whole or part without the prior written consent of the other Party
except that either Party may assign or transfer any of its rights,
duties or obligations under this Contract, either in whole or in part,
to its parent company, subsidiary or affiliate.1 In addition,
notwithstanding anything in this Article 34 to the contrary, the
consent of Contractor shall not be required for, and Paragraph 34.2
shall not apply to any assignment by Buyer of its rights, duties and/or
obligations hereunder as security for any indebtedness of Buyer or its
subsidiaries or affiliates.
Neither Party shall unreasonably withhold consent to any assignment or
transfer providing that the requesting Party can demonstrate to the
other Party's satisfaction that:
(1) its successor or assignee possesses the financial resources to
fulfill the obligations of this Contract; and
(2) any such assignment or transfer shall not jeopardize any data
rights or competitive position, or violate laws related to
export or technology transfer, or otherwise increase the other
Party's risks or obligations.
If the requesting Party cannot so demonstrate, both Parties agree to
negotiate in good faith suitable modifications and new provisions to
this Contract which would mitigate the above risks and/or bring this
Contract into conformance with applicable laws.
1 Affiliate: An "affiliate" of, or a person "affiliated" with, a
specified person, is a person
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that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the
person specified.
34.2 The Parties agree that in the event that the ownership or control of
Buyer or Contractor is changed, the Parties reserve the right to
negotiate in good faith suitable modifications and new provisions to
this Contract which would mitigate any additional risks, financial or
otherwise, which may be brought about by such change in ownership or
control.
34.3 This Contract shall be binding upon the Parties hereto and their
successors and permitted assigns.
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ARTICLE 35. LIMITATION OF LIABILITY
35.1 The Parties to this Contract expressly recognize that commercial space
ventures involve substantial risks and recognize the commercial need to
define, apportion and limit contractually such risks associated with
this commercial space venture. The payments and other remedies
expressly set forth in this Contract fully reflect the Parties'
negotiations, intentions and bargained-for allocation of such risks
associated with commercial space ventures.
35.2 In no event shall the Parties be liable for any direct, indirect,
incidental, special, contingent or consequential damages (including,
but not limited to, lost revenues or profits), except as expressly
provided for in this Contract. This Article shall survive the
expiration or termination of this Contract for whatever cause.
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ARTICLE 36. NO THIRD PARTY AGREEMENT OR RIGHTS
36.1 Contractor represents and warrants that: (i) Contractor has terminated
the agreement between Contractor and a third party for construction and
delivery of the spacecraft (the "Base Spacecraft") from which PAS 6B
will now be built; and (ii) neither Contractor nor such third party
have any continuing rights or obligations with respect to PAS 6B or the
Base Spacecraft (or otherwise arising under such terminated agreement).
Contractor agrees to indemnify Buyer for, and hold Buyer harmless from,
any and all liability, loss, claim or damage to which Buyer or its
affiliates (or any director, officer, employee or agent of Buyer or one
of its affiliates) may become subject, arising from any claim by such
third party or any breach of the representations and warranties made by
Contractor in this Article 36.
36.2 The provisions of this Contract are for the benefit of only the parties
hereto, and no third party may seek to enforce, or benefit from, the
terms and conditions of this Contract, other than as expressly provided
in the immediately following sentence. The parties agree and
acknowledge that (i) the first two sentences of Paragraph 14.4, and
Contractor's obligation to make payment to Buyer in the event that
Buyer accepts Contractor's proposal as provided in such Paragraph 14.4,
are for the benefit of Buyer and of Buyer's customers NetSat ServiAos
Ltda. ("NetSat") and Multi-Country Partners GP ("Multi-Country") and
(ii) each of NetSat and Multi-Country shall have the right to enforce,
as a third party beneficiary, the obligations of Contractor under the
first two sentences of Paragraph 14.4, and Contractor's obligation to
make payment to Buyer in the event that Buyer accepts Contractor's
proposal as provided in such Paragraph 14.4, directly against
Contractor, either in an action brought solely by such party or in a
joint action with each other and/or with Buyer.
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36.3 This Article 36 shall survive delivery of the Spacecraft and the
Documentation, the performance of the Related Services and any
termination of this Contract.
93
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ARTICLE 37. LIQUIDATED DAMAGES FOR LATE PERFORMANCE
37.1 In the event that the launch of the Spacecraft is delayed due to the
fault of Contractor (and/or Contractor's subcontractors or suppliers)
or the Spacecraft is not shipped on or prior to the Shipment Date in
accordance with the requirements of this Contract and the Exhibits
hereto, Contractor shall pay to Buyer liquidated damages as follows:
37.1.1 For [************************] of delay, Contractor
shall [**************************]
37.1.2 For the next [**************] of delay, Contractor
shall [**********************************************
*****************************************************
******************************]
37.2 Contractor shall pay to Buyer the liquidated damages owed pursuant to
Paragraphs 37.1 within thirty (30) days of invoice from Buyer.
37.3 The Parties understand and agree that the liquidated damages provided
under this Article 37 shall be in lieu of all other remedies of any
kind except for Buyer's rights and remedies under Articles 11 and 14.
The amounts presented in Paragraph 37.1 shall constitute liquidated
damages for such late shipment and shall not constitute a penalty. The
Parties acknowledge and agree that such liquidated damages are believed
to represent a genuine estimate of the losses that would be suffered by
reason of any such delay (which losses would be difficult or impossible
to calculate with certainty).
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 38. CORRECTIVE MEASURES; OPERATIONAL DEFICIENCIES
38.1 Without limiting the obligations of Contractor under other provisions
of this Contract, if the data available from another satellite
manufactured or under manufacture or design by Contractor (a
"Contractor Satellite") indicates that there is or may be a material
deficiency in the design or manufacture of such Contractor Satellite
which, in the reasonable opinion of Contractor, will or may adversely
affect the Spacecraft produced under this Contract, or the operations
of such Spacecraft, then Contractor shall notify Buyer of such any such
material deficiency. Contractor shall promptly take appropriate
corrective measures, at Contractor's expense, with respect to the
Spacecraft so as to satisfactorily eliminate from such Spacecraft prior
to its shipment all the material deficiencies discovered in Contractor
Satellite(s), subject to the provisions of Paragraph 38.5.
38.2 In the event that the corrective measures performed pursuant to this
Article 38 cause a delay, then: (i) Contractor shall [*****************
****************************] in accordance with Paragraph 4.1; (ii)
the time periods provided in Paragraph 5.5 and 37.1 [***************
********] and (iii) Buyer and Contractor shall discuss the impact (if
any) to the construction and delivery of the Spacecraft.
38.3 If Contractor, in performing corrective measures in accordance with
this Article 38, replaces any equipment or part determined to be
deficient, such deficient equipment or part shall remain or become the
property of Contractor.
38.4 Contractor shall disclose to Buyer sufficient technical and operational
information regarding a material deficiency [*******************
*********] to enable Buyer to make an informed decision regarding the
taking of corrective measures.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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Notwithstanding the foregoing, Contractor shall not be obligated by
this Article 38 to disclose the identity (or any identifying
information) of any such satellite, or the owners or customers of such
Contractor Satellite, on which a material deficiency is discovered.
38.5 Contractor shall be obligated to notify Buyer if Contractor proposes to
resolve technical deficiencies (arising during the design and/or
manufacturing process of the Spacecraft) through the imposition of
operational constraints. The Parties agree promptly to enter into good
faith negotiations to resolve any such deficiency and, if appropriate,
agree to adjust equitably the Contract Price and/or schedule, subject
to Paragraph 38.2. In the event that the Parties cannot reach an
agreement within five (5) business days as to the resolution of such
deficiency or its adjustment (if any) to Contract Price and/or
schedule, then the unresolved issues shall be submitted to the
Contractor's and Buyer's senior executives for resolution. If such
senior executives cannot reach agreement within ten (10) business days
thereafter, then the remaining unresolved issues shall be submitted for
resolution by arbitration pursuant to Paragraph 33.2.
96
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ARTICLE 39. REPLACEMENT SPACECRAFT
39.1 Buyer shall have the right to purchase a replacement spacecraft ("PAS
6C") for PAS 6B in the event that PAS 6B suffers a launch failure
(including any total or constructive total loss that occurs prior to
the placement of PAS 6B into commercial operations). PAS 6C shall have
substantially the same configuration and performance of PAS 6B. If
Buyer orders PAS 6C, the price for such spacecraft (and its Related
Services and Documentation) shall [*******************************
***********************] which shall include as a baseline launch on an
Ariane Launch Vehicle, and Contractor shall construct and deliver PAS
6C and Documentation, and shall perform the required Related Services,
to support a launch of PAS 6C within twelve (12) months from written
direction from Buyer for the order of PAS 6C. Except as expressly
specified in this Article, the terms and conditions of this Contract
shall apply in context to PAS 6C if ordered under this Article. PAS 6C
may be ordered at any time through one hundred twenty (120) days after
the launch of PAS 6B. Attached as Exhibit H hereto is a payment plan
for PAS 6C based upon a price of [*************]
39.2 In order to have the right to order PAS 6C in accordance with Paragraph
39.1, Buyer shall direct Contractor to purchase long lead items for PAS
6C by written notice to Contractor no later than April 20, 1998;
provided, that if, prior to April 20, 1998, the Launch Date has been
revised from October 20, 1998 in accordance with the terms of this
Contract, then such written notice shall be required no later than six
(6) months prior to such revised Launch Date. If Buyer provides such
written notice, then Contractor shall purchase long lead items and take
such other steps as may be required to enable Contractor to have PAS 6C
ready to be launched within twelve (12) months of the PAS 6B launch
failure. The price for the long lead items shall be [**************
**********************] payable
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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in accordance with the following payment schedule:
[***********]
[**********************************]
--------------------------------------------------
[*****]
[****] [**********]
--------------------------------------------------
[*] [***]
--------------------------------------------------
[*] [***]
--------------------------------------------------
[*] [***]
--------------------------------------------------
[*] [***]
--------------------------------------------------
[*] [***]
--------------------------------------------------
[*] [***]
--------------------------------------------------
39.3 If Buyer has purchased long lead items in accordance with Paragraph
39.2, then, within one hundred twenty (120) days of the successful
launch of PAS 6B, Buyer shall direct disposition of such long lead
items either: (a) to build PAS 6C at the same price for launch within
twelve (12) months of such direction; or (b) direct the disposition of
such long lead items pursuant to Paragraphs 14.2 and 14.5.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
98
<PAGE>
ARTICLE 40. INDEX OF DEFINED TERMS
Each of the following capitalized terms has the meaning ascribed to
such term in the applicable Paragraph.
----------------------------------------------------------
Defined Terms Paragraph
----------------------------------------------------------
Affiliate 34
----------------------------------------------------------
Assessments 24.2
----------------------------------------------------------
Authorized Representations 27
----------------------------------------------------------
Base Spacecraft 36
----------------------------------------------------------
Buyer Introduction
----------------------------------------------------------
Buyer-Furnished Item 8.1
----------------------------------------------------------
Calculated Operational 6.3.1.5
Lifetime
----------------------------------------------------------
Certain Documentation Exhibit E
----------------------------------------------------------
Change Order Cost 29.5
----------------------------------------------------------
Change Order Offer 29.3
----------------------------------------------------------
Change Order Profit Component 29.5
----------------------------------------------------------
Change Order Request 29.3
----------------------------------------------------------
Change Proposal 29.1
----------------------------------------------------------
Contract Introduction
----------------------------------------------------------
Contract Price 5.1
----------------------------------------------------------
Contractor Introduction
----------------------------------------------------------
Contractor Satellite 38.1
----------------------------------------------------------
Costs 14.5
----------------------------------------------------------
Degraded Payload 6.3.2.3
----------------------------------------------------------
Delinquent Payments 6.4
----------------------------------------------------------
99
<PAGE>
----------------------------------------------------------
Deliverables 3
----------------------------------------------------------
Documentation 4.1
----------------------------------------------------------
Effective Date 39
----------------------------------------------------------
Extension Period 6.3.4.3
----------------------------------------------------------
G&A Costs 29.5
----------------------------------------------------------
Holdback Amount 12.5
----------------------------------------------------------
Incentives Interest Rate 6.3.2.2
----------------------------------------------------------
Intentional Ignition 16.2
----------------------------------------------------------
Launch Date 7.1.1
----------------------------------------------------------
Launch Vehicle 4.2.1
----------------------------------------------------------
Launch Window 7.1.2
----------------------------------------------------------
Letter Agreement Recitals
----------------------------------------------------------
LOPS/MOPS Option 6.3.4.3
----------------------------------------------------------
LOPS/MOPS Refund 6.3.4.3
----------------------------------------------------------
MCC 3.3(a)
----------------------------------------------------------
OCC 3.3(b)
----------------------------------------------------------
PAS 6B 3.1
----------------------------------------------------------
Pre-Launch Incentive Payments 6.3.4.1
----------------------------------------------------------
Program Invention 20.1
----------------------------------------------------------
Properly Operated 3.4
----------------------------------------------------------
Recoverable Amount 6.3.4.4
----------------------------------------------------------
Related Services 4.1
----------------------------------------------------------
Risk of Loss 15.1.4
----------------------------------------------------------
Shipment Date 4.1
----------------------------------------------------------
Spacecraft 3.1
----------------------------------------------------------
100
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----------------------------------------------------------
Spacecraft Retirement Payment 6.3.3
----------------------------------------------------------
Specified Operational 6.3.1.1
Lifetime
----------------------------------------------------------
Successfully Injected 6.3.1.5
Spacecraft
----------------------------------------------------------
Successfully Operating 6.3.1.2
Payload
----------------------------------------------------------
Successfully Operating 6.3.1.3
Transponder
----------------------------------------------------------
Third Anniversary 6.3.4.3
----------------------------------------------------------
Useful Commercial Life 6.3.1.4
----------------------------------------------------------
Warranty Time Period 16.2
----------------------------------------------------------
101
<PAGE>
ARTICLE 41. EFFECTIVE DATE OF CONTRACT
The "Effective Date" of this Amended and Restated Contract No. 98-PAS-001 shall
be 9 March 1998.
102
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this Amended and Restated
Contract No. 98-PAS-001 to become effective upon the date specified in Article
39, herein entitled, "Effective Date of Contract."
HUGHES SPACE & COMMUNICATIONS COMPANY
SIGNATURE: /s/ Michael J. Houterman
---------------------------------
NAME: Michael J. Houterman
--------------------------------------
TITLE: VP HSC
-------------------------------------
DATE: March 9, 1998
--------------------------------------
PANAMSAT INTERNATIONAL SYSTEMS, INC.
SIGNATURE: /s/ Frederick Landman
---------------------------------
NAME: Frederick Landman
--------------------------------------
TITLE: President & Chief Executive Officer
-------------------------------------
DATE: March 9, 1998
--------------------------------------
Exhibit 10.52
EXECUTION COPY
TRANSPONDER SERVICE AGREEMENT
This Agreement (the "Agreement") is entered into this 5th day of March,
1998 (the "Execution Date"), by and between PanAmSat International Systems,
Inc., a Delaware corporation formerly known as PanAmSat Corporation ("PanAmSat")
and Sky Multi-Country Partners, a Delaware partnership, previously referenced as
Multi-Country Partners GP ("Customer"). This Agreement covers the provision of
twenty-four hour fixed term non-preemptible satellite signal reception and
retransmission service (the "Service") by PanAmSat to Customer from Ku-band
transponders. As more particularly described in Article 2 below, the Service has
been (pursuant to the "Letter Agreement," as defined below) and shall be
provided, during specified periods from various combinations of eight (8)
Transponders, four (4) in the SSA Beam and four (4) in the NSA Beam, each as
identified in Appendix C, of that certain Atlantic Ocean Region Satellite
referred to by the parties as PAS-3, aka PAS-3R ("PAS-3") that was constructed
by Hughes Space and Communications Company, formerly a division of Hughes
Aircraft Company ("Hughes"), launched, and placed into commercial service on
February 20, 1996; twenty-four (24) Transponders, twelve (12) in the NTSC Beam
and twelve (12) in the Argentina Beam of that certain Atlantic Ocean Region
Satellite referred to by the parties as PAS-6 ("PAS-6") that was constructed by
Space Systems/Loral, Inc. ("Loral") launched, and placed into commercial
operation on September 19, 1997; and sixteen (16) Transponders in the Latin Beam
of that certain Atlantic Ocean Region Satellite referred to by the parties as
PAS-6B ("PAS-6B"). PAS-6B is now under construction by Hughes. The Transponders
used to provide Customer with Service are referred in this Agreement as the
"Service Transponders." The Service Transponders are more particularly
identified in Appendix A and each satellite (generally referred to as a
"Satellite") is described in Appendix B (one for each Satellite) of this
Agreement. References in this Agreement to the "Primary Satellite" means PAS-6
before the PAS-6B "Service Date" (under and as defined in this Agreement) and
PAS-6B on and after the PAS-6B Service Date under this Agreement. For the
avoidance of doubt, if there is never a PAS-6B Service Date or if there is one,
but it is negated under the provisions of Section 2.2(f) ("Condition Subsequent
to PAS-6B Service Date") below, the Primary Satellite shall remain PAS-6. The
Service shall be supplied by PanAmSat in outerspace. The transponders on each
Satellite and the beams in which these transponders are grouped are referred to
as "Transponder(s)" and the "Beam(s)," respectively.
1
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This Agreement implements that certain letter agreement dated February
29, 1996, by and among PanAmSat, The News Corporation Limited ("News"), Globo
Comunicacoes e Participacoes ("Globo") and Grupo Televisa, S.A. ("Televisa")
(the "Letter Agreement"). For the avoidance of doubt, the parties acknowledge
and agree that the combination of this Agreement and that certain "Second
Amended and Restated Transponder Purchase and Sale Agreement," by and between
PanAmSat and NetSat Servicos Ltda., a Brazilian limited liability quota company
("NetSat") dated the same day as this Agreement (the "Brazil Agreement")
supersedes the Letter Agreement as to PAS-3 and PAS-6 and the rights and
obligations of the parties relative thereto, but that the rights and obligations
of the parties to the Letter Agreement relative to PAS-5 are unaffected and
remain binding. Further, the parties acknowledge and agree that the negotiation
of this Agreement and the Brazil Agreement have responded to special
circumstances regarding the [*******************] of PAS-6 that are not relevant
to PAS-5 and that it is neither anticipated nor required that the rights and
obligations of the parties to the Letter Agreement vis-a-vis PAS-5 (said rights
and obligations, as the same may now or in the future be amended or documented,
are referred to herein as the "Mexico Agreement" and references to the customer
thereunder are referred to herein as the "Mexico Platform") will reflect this
Agreement or the Brazil Agreement. References in this Agreement to NetSat also
refers to any permitted assignees of its rights under the Brazil Agreement. For
the avoidance of doubt, any PAS-3 Transponder that may be made available by
Televisa to Customer under separate sublease arrangement shall not constitute a
Service Transponder hereunder.
AGREEMENT
In consideration of the foregoing and of the mutual promises set forth
below, PanAmSat and Customer mutually agree as follows:
ARTICLE 1. PROVISION OF SERVICE, COVENANTS ON USE.
1.1 The Service. PanAmSat agrees to provide, and Customer agrees to
accept, the Service. Except as otherwise specifically permitted under this
Agreement, PanAmSat shall not preempt or interrupt Customer's use of the
Service. In no event shall these exceptions be construed so as to permit
PanAmSat to preempt Customer's use of the Service so as to allow PanAmSat to use
the Service Transponders to provide Transponder capacity for itself or for
another customer.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
2
<PAGE>
1.2 Intentionally deleted.
1.3 Beam Switching on PAS-3. Certain of the Customer's Transponders on
PAS-3 are designed to be capable of operation from different uplink Beams. The
current configuration of the NSA Beam Transponders from which Service is
provided to Customer in [*******] (as defined below) of this Agreement and
[*****************************************************] the planned
configuration of the SSA Transponder [**********************************] is
shown in Appendix A. Upon Customer's written request, subject to PanAmSat's
consent not to be unreasonably withheld, including, without limitation, for
reasons of actual or potential interference to existing satellites, satellites
that are under construction and/or notified or subject to other application to
the FCC or the ITU, or use by other customers, PanAmSat will, if required, but
not to be on a frequent basis, make additional changes to the uplink Beam of
these switchable Transponders; provided as follows: (a) if the change cannot be
accomplished using reasonable engineering standards, this Agreement shall
continue to operate with the Service Transponders' in their then-existing
configuration, as if the request for a change had not been made; (b) if Customer
requested the change in order to replace Service from a Service Transponder to
be uplinked from a location which was lost because of a failure of another
Service Transponder to meet the Service Specifications, in circumstances in
which such other Service Transponder could not be restored with "Spare
Equipment" or "Substitute Capacity," as defined in Section 5.3, PanAmSat shall
bear the risk of loss if the Service Transponder(s) is damaged or made unusable
as a result of attempting to make the change (i.e., if the Service
Specifications for such Transponder can no longer be met, the provisions of this
Agreement that apply to a failure of a Service Transponder on a Confirmed Basis
shall apply); and (c) except as provided in the preceding clause (b), Customer
shall accept the risk of loss if a Service Transponder(s) is damaged or made
unusable as a result of attempting to make the switch (i.e., the Service
Transponder shall not be deemed to have failed on a Confirmed Basis).
1.3A Beam Switching on PAS-6B. Certain of the Customer's Transponders
on PAS-6B may be capable of operation in the Brazil downlink Beam. Upon
Customer's written request, subject to PanAmSat's consent not to be unreasonably
withheld, including, without limitation, for reasons of actual or potential
interference to existing satellites, satellites that are under construction
and/or notified or subject to other application to the FCC or the ITU, or use by
other
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
3
<PAGE>
customers, PanAmSat will, if required, but not to be on a frequent basis, change
the downlink Beam of such switchable Transponders (if any) to the Brazil Beam;
provided as follows: (a) if the change cannot be accomplished using reasonable
engineering standards, this Agreement shall continue to operate with the
Customer's Transponders in their then-existing configuration, as if the request
for a change had not been made; (b) Customer shall accept the risk of loss if
the Customer's Transponder(s) is damaged or made unusable as a result of
attempting to make the switch (i.e., the Customer's Transponder shall not be
deemed to have failed on a Confirmed Basis); (c) the Transponder(s) being
switched shall continue to count toward Customer's Minimum Complement; (d) for
purposes of [**************************] hereunder, any switched Transponder
during the period of its switch shall be treated as a "Non-DTH Transponder" (as
defined below); and (e) [*********] must consent to such switch.
1.4 Covenants on Use. Customer acknowledges and agrees that the
provision of Service that is the subject of this Agreement is being made in
consideration, among other things, of Customer's agreement and promise to use
the Service for particular purposes. In this regard, Customer agrees as follows:
(a) DTH Service. Except as otherwise provided herein, the
Service shall be used to meet the satellite transmission requirements of
Customer's direct to home service, which for purposes of this Agreement, except
for the specific purposes of Section 1.8, means video and audio programming that
is provided on a pay or subscription basis, together with associated audio and
data signals (e.g., authorization codes) and any other direct broadcast or
interactive or multimedia service (including, without limitation, internet
access and video games) and that is intended for direct reception (or by means
of SMATV) by, and is made available primarily to, end user recipients in the
home or business via "Ku-band" satellite transponders in the "Territory" ("DTH
Service"). Other uses of the Service shall be permitted to the extent provided
under this Section 1.4 and Sections 1.6, and 1.7 below. References in this
Agreement to Customer's "transmissions" and, except where specifically limited
to "video," references to Customer's "programming" shall be deemed to include
all permitted video and non-video applications. As used in this Agreement, the
"Territory" means predominately Spanish speaking countries of South America and
Central America except for the following: the Dominican Republic, Costa Rica,
Cuba, Guatemala, Nicaragua, Honduras, El Salvador, Panama, Puerto Rico, and
other islands in the Caribbean that are located in whole or in part
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
4
<PAGE>
north of 12(degree) North Latitude. The foregoing notwithstanding, if this
Agreement is terminated as to both the PAS-6 NTSC Beam and the PAS-6B Satellite
in its entirety, the "Territory" shall be limited to Chile, Argentina, Uruguay
and Paraguay (the "Southern Part of the Continent") and if this Agreement is
terminated on the Argentina Beam of PAS-6 and the PAS-6B Satellite in its
entirety, the Territory shall cease to include said Southern Part of the
Continent, the remaining Territory being referred to herein as the "Northern
Part of the Continent." As used in this Agreement, "Ku-band" means the frequency
band between 10.7 and 17.8 GHz, excluding minor overlaps of other bands to the
extent generally recognized as falling outside the "Ku-band" designation and
also excluding authorizations that may be granted (on a general applicability
basis) for minor portions of the band solely for use in connection with
frequencies located outside of the band.
(b) Customer's DTH Service. As used in this Agreement, the
reference to "Customer's DTH Service" shall be deemed to include any DTH Service
that is owned, operated or managed by Customer or any entity that is directly or
indirectly "Controlled" by a combination of one or more of the "Approved
Participating Companies" that also, directly or indirectly, Control the
Customer. The Approved Participating Companies mean any one or more of the
following companies that directly or indirectly has an equity holding,
investment, or other economic interest in the Customer: News, Televisa, Globo,
Tele-Communications International, Inc. ("TINTA"), and/or any of the "Approved
Companies" that are identified in Appendix I. News, Televisa, and Globo are also
referred to herein as the "Founding Partners." In addition, TINTA may elect,
pursuant to Section 18.4 hereof, on notice to PanAmSat to be given no later than
the date that is sixty (60) days after the Execution Date, to be deemed a
Founding Partner. At Customer's request, the list of Approved Companies may be
expanded, subject to PanAmSat's prior written consent, not to be unreasonably
withheld, conditioned, or delayed; provided that, in appropriate circumstances,
PanAmSat may limit its consent to the involvement of an Approved Company: (i) so
that Control of Customer is retained by other Approved Participating Companies,
(ii) to exclude separate programming rights under Section 1.4(c) below, and/or
(iii) to exclude rights to be an assignee under Section 10.5 of this Agreement.
PanAmSat shall make all decisions required under this paragraph in good faith
based upon the financial qualifications and programming practices (i.e., with
respect to considerations identified in Section 10.5 below) of a proposed
Approved Company. For purposes of this Agreement,
5
<PAGE>
"Control" means voting control over ordinary business activities (positive or
negative) that may be exercised directly or indirectly. As a condition for their
interest in Customer and participation in Customer's DTH Service, Customer shall
require each of the Approved Participating Companies to agree to and to comply
with the terms and conditions of the Agreement as they relate to them and shall
make PanAmSat a third party beneficiary entitled to enforce such provisions
directly against the Approved Participating Companies. It is understood that
Customer's DTH Service may carry programming provided to it by third parties.
Customer may permit video programming signals (with associated
audio and data signals) that are owned by one of the Founding Partners or their
"Affiliates" and that are being carried on the same Service Transponder as part
of Customer's DTH Service also to be received (the same feed), on an ancillary
basis, by cable head ends, SMATV, MMDS and other facilities that may be
developed for the distribution of video programming ("Non-DTH Outlets"),
provided as follows: [******************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
*************************************************************] The foregoing
notwithstanding, [**************************************************
********************************************] in their separate and unrelated
capacity as video programming channel providers that neither Customer nor any
other entity that provides Customer's DTH Service nor their agents or
distributors [******************************************************************
*******************************************************************************]
As used in this Agreement, "Affiliate" means, with respect to any entity (which
for this purpose does not include natural persons), any entity directly or
indirectly, through one or more intermediaries, Controlling, Controlled by, or
under common Control with such entity. For purposes of this paragraph,
"Affiliates" of the Founding Partners shall also be deemed to include (except
for purposes of making determinations under clause (iii) that follows) entities
in which all of the following are the case: (i) a Founding Partner individually
owns, directly or indirectly, at least 25% of the equity of the entity; (ii) the
Founding Partner has a board seat or comparable management participation in the
entity; and (iii) if the entity or its Affiliates has ever entered into
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
6
<PAGE>
a satellite transponder transaction with PanAmSat, the Founding Partner has had
liability exposure to PanAmSat thereunder, either as a general partner of the
entity or as guarantor (in whole or in part) of the entity's obligations to
PanAmSat.
(c) Non-DTH Use. Customer, each Founding Partner (as long as
it directly or indirectly, owns or has an investment or economic interest in
Customer or in Customer's DTH Service), each Approved Participating Company that
(subject to Section 18.4 as to TINTA) has a minimum 10% voting equity in the
Customer, and each entity that is an Affiliate of any of the foregoing entities
is referred to herein as a "Customer Company." To the extent that the capacity
provided by the Service Transponders exceeds the requirements of the Customer
Companies for the satellite transmission of DTH Service in the Territory (as
they reasonably determine) and the Customer Companies are not using other
Ku-band satellite capacity in lieu of the Service Transponders, to meet such
requirements for the Territory, the Customer Companies may use the Service
Transponders for their own needs with respect to the transmission of video,
audio, data and teletext signals and any other electronic information, including
(without limitation) interactive video applications, however transmitted,
whether in the form of data, teletext or packets. Subject to the following
sentence and the specific exception stated in the second grammatical paragraph
in Section 1.4(b) above, [******************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
*****************************************] provided that, it is acknowledged
and agreed that during "Phase 1" (as defined below) Customer and the Customer
Companies were permitted to use capacity on PAS-3 for satellite newsgathering
purposes, under the [***********************************************************
********************************************************************************
*********] A Non-DTH Transponder, once used primarily for Customer's DTH
Service, shall cease to be deemed a Non-DTH Transponder, but may again become a
Non-DTH Transponder if its use reverts primarily to non-DTH use.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
7
<PAGE>
(d) Use by Others. In any circumstances in which Customer is
permitted herein to allow the Service Transponders to be used by other Customer
Companies, or in circumstances in which Customer's DTH Service may carry
programming services provided to it by others, Customer shall remain ultimately
responsible to PanAmSat for all such use. In such circumstances, Customer's
responsibilities to PanAmSat with respect to Customer's use of Service
Transponders, Customer's transmissions to the Satellite(s), Customer's
programming and the responsibilities of Customer to PanAmSat for other
activities hereunder shall be read to include the use, transmissions,
programming, and activities of any such other entity. Customer shall also be
responsible to PanAmSat for [****************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
****************]
(e) International PSN Restriction. In no event may the Service
Transponders (except to the extent that they are remarketed by PanAmSat, as
provided below) be used for switched public international telecommunications
services.
(f) Intent of Third Party Use. Customer acknowledges and
agrees that it is the parties' intent, in allowing the carriage of programming
services provided by others, to further Customer's ability to develop the DTH
market, but not to allow Customer to resell or otherwise make the Service
Transponder(s)
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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available to others at a profit solely on the capacity itself, and that Customer
shall not, through the permission granted or through any other agreement or
arrangement, enter into any agreement to, or use the Customer Transponder(s) in
any way that would, materially conflict with this intent.
1.5 Transmission Plan for Transponders. Customer's transmissions to the
Satellite(s) (which may be performed by one or more third party uplink
providers, as provided in Section 4.2 below) shall conform to digital
transmission plans to be submitted by Customer to PanAmSat and that shall be
subject to PanAmSat's prior written approval. The transmission plan shall
include such information as called for in the form of transmission plan that is
attached hereto as Appendix M and such other technical information as PanAmSat
may require in its reasonable engineering judgment to manage the operation of
its satellites. Customer shall be permitted to modify these transmission plans
from time to time, subject to PanAmSat's prior written approval. PanAmSat shall
not unreasonably withhold its approval of a transmission plan or modification to
such a plan, which approval shall be based solely upon the considerations
identified in Section 4.1 below. PanAmSat makes no representation, warranty, or
covenant regarding the efficacy of the use of any number of carriers or other
alternative uses of capacity provided under this Agreement. If not otherwise
provided by PanAmSat pursuant to separate agreement, Customer will provide
PanAmSat, at no cost to PanAmSat, with equipment necessary to decode its
signals. It is understood that, in some circumstances, PanAmSat may provide
uplink services to Customer, in which event Customer shall not be responsible to
PanAmSat for the technical operation or performance of such PanAmSat-provided
uplinks under this or other sections of this Agreement.
1.6 Marketing by PanAmSat of Customer's Capacity. At Customer's
request, PanAmSat shall market Service from Service Transponders for use by
third parties on an interim basis until Customer requires them for Customer's
DTH Service; provided that no such marketing shall occur in "Phase 2" (as
defined below) and thereafter such marketing shall be limited to a maximum of
[**********] Service Transponders. In such circumstances, PanAmSat shall use all
reasonable efforts to market services from the Service Transponders made
available for this purpose (which Customer would thereafter cease to employ) for
the interim period to other potential customers for video, data, or other uses,
as market demand and technical considerations may warrant, as reasonably
determined by PanAmSat in consultation
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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<PAGE>
with Customer, and subject to PanAmSat's reasonable discretion with regard to
the terms and conditions of service and selection of appropriate customers,
which shall be consistent with its general practices in this regard, and
Customer's consent rights set forth in clause (b) of this Section. In such
event:
(a) During Phase 1, Customer's [*************************
********************************************************************************
*************************************************************************]
Thereafter, subject to Sections 1.7 and 1.8 below, the [*******************] for
any Service Transponders that are released for remarketing shall [********
******************************************************] In all cases, the
applicable Service Fee shall continue to be payable.
(b) PanAmSat shall actively market services from the Service
Transponders in good faith, provided that PanAmSat shall not be obligated to use
the Service Transponders ahead of any other capacity that PanAmSat may also have
available for comparable service. During Phase 1, PanAmSat shall market service
from the Service Transponders made available under this Section for occasional
use; thereafter, unless otherwise agreed, marketing shall be for full-time,
fixed term uses. With the exception of the marketing of the Service Transponders
for occasional use during Phase 1, all contracts regarding possible use by third
parties of Service Transponders, as permitted under this Section 1.6, shall be
promptly forwarded by PanAmSat to Customer for specific written approval,
rejection, or proposed modification by Customer, it being understood that
neither PanAmSat nor a third party customer shall be required to accept
Customer's proposed modifications, but also may not go forward with an
unmodified agreement for Service Transponders under this Section 1.6 that
Customer has not approved. Customer shall also have the right to approve or
reject any particular customers for service from Service Transponders that are
made available under this Section. In addition, subject to the considerations
stated above, if Customer identifies to PanAmSat a potential customer who
desires to purchase service from PanAmSat that employs the Service Transponders,
PanAmSat shall seek, in good faith, promptly to enter into a service agreement
with said customer, provided that if PanAmSat was already in negotiations with
said potential customer for other PanAmSat capacity, PanAmSat shall not be
required to discontinue such negotiations; and
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(c) PanAmSat shall credit against Customer's next monthly
"Service Fee" (as defined below) (which shall continue to be due and payable
during this period) such amounts that are actually received from other customers
for service from the Service Transponders for the previous month less costs
reasonably incurred by PanAmSat for which PanAmSat is not separately reimbursed
for providing any related services and equipment that may be associated with the
provision of such service, e.g., turnaround, compression, or other terrestrial
services or facilities ("Additional Facilities Costs") and costs (including
reasonable attorneys' fees) reasonably incurred by PanAmSat in marketing such
services to, or negotiating a service agreement with, third parties)
("Transaction Costs") up to the amount of the Service Fee paid by Customer for
the applicable period for the Service Transponders made available by Customer to
PanAmSat for remarketing under this Section 1.6. For purposes of marketing for
occasional use, the parties agree that PanAmSat's Transaction Costs shall be
deemed to equal [***********] of the revenues actually received from such
effort. In addition, after deducting the Additional Facilities Costs, if any,
and Transaction Costs specified above, if the
[***********************************************] by PanAmSat for service from
the Service Transponders [**********] the [********************] to be [******]
to PanAmSat by Customer for [***************************] (the
[***************]) in [***********] to crediting the next month's Service Fee
payment, PanAmSat shall [*********] as an [***********************************]
of such [*************************] and shall [***] Customer [*********] of such
[***********************].
1.7 Withdrawal from DTH Business. Customer shall use all reasonable
efforts to use the Service to develop a DTH Service. If despite such efforts,
Customer and each of the Customer Companies (which, for this purpose, includes
the Founding Partners and their Affiliates, whether or not the Founding Partners
continue to hold an equity interest in Customer) ceases to own, operate, or have
an investment in, or otherwise have an economic interest in a DTH Service
operating within the Territory, or, in [**************] (as defined below),
either the Southern Part of the Continent or the Northern Part of the Continent,
with no plan to reenter DTH Service market in the Territory (or Northern or
Southern Part of the Continent, as applicable) on any such basis, then (subject
to Section 1.7A) the following shall occur:
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(i) Customer shall so notify PanAmSat and shall cease using
the Service Transponders, which shall thereafter be available for marketing by
PanAmSat;
(ii) Subject to clause (v), below, Customer shall continue
[**************] PanAmSat [*****************************************************
************************] applicable per Service Transponder;
(iii) PanAmSat and the "PanAmSat Companies" (as defined in
Section 1.8) shall cease to have any obligations under Section 1.8 and Article
16 of this Agreement.
(iv) PanAmSat shall actively market services from the Service
Transponders in good faith subject to PanAmSat's reasonable discretion with
regard to the terms and conditions of service and selection of appropriate
customers, which shall be consistent with its general practices in this regard
provided that PanAmSat shall not be obligated to use the Service Transponders
ahead of any other capacity that PanAmSat may also have available for comparable
service. In addition, subject to the considerations stated above, if Customer
identifies to PanAmSat a potential customer who desires to purchase service from
PanAmSat that employs the Service Transponders, PanAmSat shall seek, in good
faith, promptly to enter into a service agreement with said customer, provided
that if PanAmSat was already in negotiations with said potential customer for
other PanAmSat capacity, PanAmSat shall not be required to discontinue such
negotiations; and
(v) PanAmSat shall credit against Customer's next monthly
"Service Fee" such amounts that are actually received from other customers for
service from the Service Transponders for the previous month less (A) the
[*************************************************] per Service Transponder and
the then [**********************************************************] per
Service Transponder and (B) PanAmSat's Additional Facilities Costs and
Transaction Costs associated with the remarketing of the Service Transponders,
up to the amount of the Service Fee paid by Customer for the applicable period
for the Service Transponders.
1.7A Limitation to Part of the Continent. In [*************] if
Customer's cessation of business, as described in Section 1.7, is limited to the
Northern or the Southern Part of the Continent, then clauses (i) through (v) of
Section 1.7 shall apply only to Customer's Transponders in NTSC or Argentina
Beams of PAS-6, as
[***] Filed separately with the Commission pursuant to a request for
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<PAGE>
applicable, plus any retained Transponders on the "Comparable Beam," as defined
below, of PAS-3).
1.8 [************]
(a) General Obligations.
(i) PanAmSat. Subject to the exceptions stated in
this Section 1.8, PanAmSat agrees that, during the "Term" of this Agreement (as
defined below), neither it nor any "PanAmSat Company" (defined herein as an
Affiliate of PanAmSat) will:
(A) use or enter into any transponder
contract (service, lease, purchase, or other vehicle) that does [*************]
the [*****] of any Ku-band Transponder on any satellite (x) which is owned,
operated or managed by PanAmSat or any PanAmSat Company, (y) which is located in
the [*********************************] (defined herein to be the
[*********************] at which the Primary Satellite is
[*******************************] and (z) which has Ku-band coverage over the
Territory (other than by a [***********************] for the purpose of
delivering any DTH Service in [*****************] and, in such contracts that
provide Ku-band coverage over [************************] for [****************]
specifying Customer as a [***************************] entitled to [**********]
such [***********] or
(B) [********] its [**********] for any
satellite located in the [*******************************************] unless
the assignee agrees to be bound by the provisions of the previous clause (A).
The foregoing notwithstanding, neither PanAmSat nor any PanAmSat Company shall
be required to place [***************] on Ku-band Transponders that
[***********] the [***************************] of transmissions
[***************] in the Territory, as part of a [**************************]
that is [**************] for this purpose and that is [***************] for
other purposes (e.g., [***********] to [*****************]), nor shall PanAmSat
or any PanAmSat Company be required to place [*******************] on the use of
Ku-band Transponders whose [****************************************] of
[********************] (such as the Ku-band Transponders on PAS-6 that are being
provided to [*************************************************] but that may
have [********************] (in terms of [***************] for DTH service) over
a [******************] of [***************]). For the avoidance of doubt, none
of the restrictions on PanAmSat or any PanAmSat Company that are stated in this
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Section 1.8 shall apply to any satellite that is not located in the Primary
Satellite Orbital Slot.
(ii) Customer. Subject to the exceptions stated in
this Section 1.8, Customer agrees that, during the Term of this Agreement,
neither it nor any Customer Company will:
(A) own, invest in, or hold an economic
interest in a DTH Service [**********************************] that
[*********************************************] other than that provided by
[******************] pursuant to this [***********], except as to the
acquisition of transponder capacity for the benefit of Customer's DTH service
under circumstances in which the restrictions of the immediately following
clause (B) are waived and [************************************] are applied; or
(B) use [***********************************
******] with coverage over [********************] other than that provided by
[************] pursuant to this [*****************] for the [*************] of
[**********************************]
(iii) General Exceptions. It is understood and agreed
that nothing herein shall prohibit: (A) PanAmSat or a PanAmSat Company or
Customer or a Customer Company from making an investment in
[********************] or [*********] or their DTH Services; (B) PanAmSat or a
PanAmSat Company from making an investment in Customer, a Customer Company, or
in Customer's DTH Service; (C) Customer or any Customer Company from making an
investment in PanAmSat or a PanAmSat Company; nor (D) during either Phase 2 or
Phase 3A (as defined below), Customer from [************************************
***************************]
(b) Customer Exceptions. Subject to Section 1.8(g) below
(Survival), this Section 1.8 shall cease to apply to Customer or any Customer
Company in any [***] of the following circumstances:
(i) Customer is using [***] of the [*********]
provided hereunder for the [**************] DTH Service, (B) Customer requests
in writing, for PanAmSat to [********************] Ku-band capacity for its DTH
Service, which request shall make express reference to Customer's intent to
invoke its rights under this clause, and (C) PanAmSat is [***********] to make
such [**********************] available, at agreed
[***] Filed separately with the Commission pursuant to a request for
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upon [******] or, if applicable, [*******] as [*********] under Section
16.1(a)(ii) that Customer has accepted, within [***************] of such written
request and agreement on, or acceptance of, [******], and (D) within
[***************] following the date that PanAmSat notifies Customer that
PanAmSat is [**********] to meet such [**************] request within said
period, Customer acquires or enters into a binding agreement to acquire such
[********************] PanAmSat shall keep Customer reasonably apprised of its
efforts in response to a written request under this clause and shall notify
Customer at any such time that PanAmSat reasonably determines that it will not
meet such request within the [*************] period provided; or
(ii) At Customer's option, if this Agreement is
terminated as to PAS-6B without the occurrence of a PAS-6B Service Date or upon
the occurrence of the PAS-6B Service Date.
(c) Intentionally Deleted.
(d) [********************************] At Customer's option,
provisions of this Section 1.8 shall [*************] to a
[**********************] on and after such date that it [**********] to have or
be Affiliated with an entity that has any direct or indirect ownership,
investment or other economic interest in the Customer or its DTH Service;
provided as follows: (i) in [*************] shall more than [***] of the
[********************] or Affiliates of more than [***] of them, directly or
indirectly, own, invest in, or otherwise hold an economic interest in the
[******] DTH Service operating within [*******************] (other than the
Customer's DTH Service) (ii) Customer shall, and shall contractually require the
[*********************] to, notify PanAmSat at such time that a
[***********************] (or any of its (their) Affiliates) enters or takes any
material step toward entering (e.g., securing [********************************]
or [*****************] for a DTH Service) the business of providing DTH Service
in [*****************] or acquires, direct or indirectly, an ownership,
investment or other economic interest in another DTH Service operating or which
has taken or takes material steps toward operating within [****************]
(any such event being referred to herein as a [********************************
***********************************]); (iii) intentionally deleted; (iv) at
PanAmSat's option on notice to Customer, and without regard to any other
[***************************************] otherwise stated in this Agreement
[***********************************************************] and (v) within
thirty (30) days of PanAmSat's notice to Customer under clause (iv) above,
Customer shall [****************************************************************
*******************************************]
[***] Filed separately with the Commission pursuant to a request for
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15
<PAGE>
******] under this Agreement [**************************************************
********************************************************************************
********************************************************************************
********************************************************************************
***]
(e) Intentionally Deleted.
(f) Notices. Each party shall promptly notify the other of an
event that gives rise to a right to [***************] the [***************] of
this Section 1.8 in relevant part. Within [******************] (or, in the case
of clause 1.8(b)(i), [**************]) of receiving such notice or notice of an
event that would permit a party to [*************] the [****************] of
this Section 1.8 in relevant part, the party receiving such notice must
[*************] the right granted or it shall be [*********************] as to
the event giving rise thereto (but not as to any future independent
circumstances that may give rise to a separate right).
(g) Survival. The [******************] provisions of this
Section 1.8 shall not relieve Customer, the Customer Companies, and, even if no
longer a Customer Company, the Founding Partners from the obligations stated in
Sections 1.8(a)(ii)(A) and 1.8(d)(ii), (iv) and (v).
(h) [**********************] of DTH Service. For purposes of
this Section 1.8 and Section 3.2(c) below, [*****************************] do
[*************] DTH Service. In addition, for purposes of this Section 1.8 and
Section 3.2(c), the definition of "DTH Service" is [***********] to
[**********************] with associated [*****] and [**************] that is
intended for [********************] via satellite by [****************
**************************] in the [*****].
(i) [************************************] The obligations
specified in this Section 1.8 shall [******] at such time that this Agreement is
[****************] as to [*************] and [**********] even if this
Agreement [***********] in [**********] for PAS-3 Transponders.
(i)(i) Successors in Interests. For the avoidance of doubt and
not for limitation, the provisions of this Section 1.8 shall be binding upon any
entity that acquires all or substantially all of the assets of an entity that is
otherwise subject to
[***] Filed separately with the Commission pursuant to a request for
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<PAGE>
the provisions to the same extent that the provisions would be applicable to the
entity being acquired.
(j) Individual Conduct. If any individual(s) who Controls an
entity that is subject to this Section 1.8 or any entity that is directly or
indirectly Controlled by such individual(s) takes an action, including (without
limitation) material steps toward doing so, of the kind described in Section
1.8(d)(ii) above, that would be prohibited under this Section, if said
individual were an entity, then the party that is not (if such individual(s)
were an entity) Affiliated with such individual may [*************] the
[*************] of this Section 1.8 on notice to the other party. In addition,
the conduct of such an individual, if he or she, if an entity, would be that of
an Affiliate of a Founding Partner, shall have the same additional consequences
under Sections 1.8(d) and Article 16 of this Agreement as if that Founding
Partner were a Founding Partner in Competition.
ARTICLE 2. TERM, PHASES OF SERVICES, SERVICE TERMS, DEGRADED
SERVICE
2.1 Term, Service Term.
The term of this Agreement (the "Term") is acknowledged to
have commenced as of February 20, 1996 and, unless previously terminated in
accordance with the provisions of this Agreement, shall, subject to Section
16.1(f), remain effective until the latest to end of the "Service Term" for
PAS-3, PAS-6 and PAS-6B (if any). General references to the "Service Term" of
this Agreement shall mean the period from February 20, 1996 (the "PAS-3 Service
Date") to the end of Service Term for all Satellites from which Service is
provided under this Agreement. The date that Service is commenced from a
particular Satellite is referred to in this Agreement as the "Service Date" for
that Satellite; unless otherwise specified, references in this Agreement to the
"Service Date" means the PAS-3 Service Date. Subject to Section 2.4 below, any
Service Transponder that does not meet the Service Specifications at the time
that the Service Date occurs for one or more other Service Transponders on the
same Satellite shall at that time cease to be a Service Transponder or subject
to this Agreement. For the avoidance of doubt, the anticipated lifetime of a
Satellite shall not be considered for purposes of determining whether the
Service Specifications are being met.
[***] Filed separately with the Commission pursuant to a request for
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2.2 Phases of Service.
(a) [*************]. It is acknowledged and agreed that from
the PAS-3 Service Date until, but not including,
[*******************************************************] (said period being
referred to herein as [***********] Customer was provided with Service from four
(4) SSA Beam and four (4) NSA Beam Transponders on PAS-3.
(b) [************************] The period from the
[***********************] until the earlier of: (i) the [***********************
*********] (as defined below) or (ii) the date that this Agreement is terminated
as to [*********] without the occurrence of the [***********************] is
defined herein as [**************]
During [*******]
(i) Subject to the further qualifications
set forth in this Section 2.2(b) below, PanAmSat shall provide Customer with
Service from the [**********************************************] (as
designated in Appendix A) (which Service during [*********] shall, up to the
[********************************************************************
************************************************] such number of
[*****************] and [********************] Transponders as
[*************************] provided that, if [***********
*******************************] Transponders from which Customer shall take
Service from PanAmSat during this period shall be [*****************************
********************************] as long as [********************] of
Customer's Transponders collectively on PAS-3 and PAS-6 meet their respective
Performance Specifications. For the avoidance of doubt, any Transponders
subleased by Customer from Televisa shall not count toward the Minimum Take.
(ii) Customer is currently using the
following [*********************************************************************
**********************] Customer shall notify PanAmSat prior to employing any
additional [**********************************************] which notice shall
specify what additional [******************] will be employed, it being
understood that prior to such notice PanAmSat may elect to keep such
[****************************************************************] At any time
that Customer exceeds its [*************************************************]
the [**************] of [*********************************] shall, subject to
the qualifications set forth below, thereafter become the [******************],
subject to further increase if additional [************************] are
[*******************] by Customer.
[***] Filed separately with the Commission pursuant to a request for
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(iii) Customer may, on notice to PanAmSat,
[**********] its [*********************] in any of the following circumstances
set forth below, provided that Customer and [*****************] as much of the
[************************] to them by [*************************************] as
may be [******] without reaching any of the thresholds specified in these
provisions:
(A) the number of [*****************
**********] on PAS-6, with [****************************************************
****] is[***************************************] at the time of all of the
[****************************] that are then employed by Customer and
[*********]
(B) there is not the equivalent of
at least [************************] each for the
[*************************************************] or
(C) the number of [*****************
***********] reasonably projected to meet their applicable [********************
***************************] for at least [***********************] following
the date on which PAS-6B is scheduled to commence commercial operation
[**************] the [**********************************************************
*********************************************] of Customer and [*******].
Customer shall not be permitted to [***********************]
of [*****************] from which it takes Service in circumstances where (i) it
would, when [**********] with [***************] of [*********], exceed the then
{*****************************] for [***************************], or (ii) if
it would allow [********] to [***********] its [********************] under
{****************************] of its Agreement, subject, however, to [********]
right to waive such [***************] in its [*******************]
(iv) Customer shall [***************************]
Service from the one "Retained SSA Transponder" (as designated 2-K in Appendix
A) [**************************************************************************].
Customer acknowledges being advised that [*********************************] in
connection with the operation of the SSA Transponder. [**] Customer
[****************************], if not in use at the time and if technically
feasible, PanAmSat will [*******************************************************
********************************************************************************
*************************************************************************]
Customer [************************] its overall [****************
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******] requirements shall be [******************] from its number immediately
prior to said exercise.
(v) PanAmSat shall report to Customer monthly on the
number of [********************] available, the number of [*********************
***********************] into the [****************************************] and
the number of [*******************************************] projected to meet
their applicable [**********************************************************]
for at least [**********************] following the date on which PAS-6B is
scheduled to go into commercial operation, and shall notify Customer within
forty-eight (48) hours of any reported [********************]
(c) [**************************************************] From
the [***************************] and for the remaining Service Term of PAS-6B
[***********************************************] Customer will be provided
with Service from [**************] PAS-6B Latin Beam Transponders. In addition
for the first [****************] days of [*********] (the "Dual Illumination
Period"), Customer shall be permitted to use any PAS-3 Transponder and, if
technically feasible, PAS-6 Transponder from which Customer had been taking
Service from prior to the launch of PAS-6B. In addition, Customer shall be
permitted to extend the Dual Illumination Period for one PAS-3 NSA Transponder
and, if employed prior to the launch of PAS-6B, the Retained SSA Transponder,
for an additional [*******************] for a total of [******************] dual
illumination, if required for Customer's home page (the "Home Page
Transponder(s)"). Customer shall notify PanAmSat no later than
[*****************] after the PAS-6B Service Date if Customer will require said
additional time for the trade-in of Customer's Home Page Transponder(s) and
which PAS-3 Transponder(s) Customer desires to use for this purpose. The
foregoing notwithstanding, during the Dual Illumination Period, for purposes of
Service Fee calculations, the maximum number of PAS-3, PAS-6 and PAS-6B
Transponders from which Customer shall be deemed to be taking Service shall be
[******************] plus any [********************************] that Customer
may have agreed [***************************************************]
(d) Interference Between PAS-6 and PAS-6B. Customer
acknowledges and agrees that its Transponders on PAS-6B cannot be used at the
same time as the Transponders of the same frequency on PAS-6 while the
Satellites are located in the same orbital slot and that, during the Dual
Illumination Period, Customer shall not be entitled to any remedy for any
interference that may be
[***] Filed separately with the Commission pursuant to a request for
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suffered to the Customer's Transponders due to the co-frequency operation of
Transponders on PAS-6 and PAS-6B by Customer or NetSat.
(e) PAS-6B Service Date. The PAS-6B Service Date shall be the
date that PAS-6B has been placed in its assigned orbital position, with at least
the "Minimum Complement" of PAS-6B Service Transponders meeting the "Service
Specifications" set forth in Appendix C and PanAmSat so certifies to Customer
and makes such Transponders available to Customer for its use, unless, Customer
agrees to accept Service from fewer PAS-6B Service Transponders than the Minimum
Complement (which fewer number would then be deemed the Minimum Complement for
PAS-6B hereunder); provided that if Customer exercises the "PAS-3 Phase 3
Option" (defined below), the number of PAS-3 Transponders as to which the Option
is exercised that meet their Service Specifications shall be counted toward the
Minimum Complement for PAS-6B. The foregoing notwithstanding, if PanAmSat is
unable initially to provide Service (i.e., at the PAS-6B Service Date) from the
Minimum Complement of PAS-6B Service Transponders, PanAmSat will not be required
to offer Service to Customer from a fewer number of PAS-6B Service Transponders,
if less than the number of PAS-6 Service Transponders that then currently are
capable of meeting their Service Specifications. PanAmSat shall give the
certification to Customer required for Service to commence from PAS-6B, if it
would be true and correct, when PAS-6B is ready to be placed into commercial
service. Subject to the earlier part of this paragraph, the "Minimum Complement"
of Service Transponders on PAS-6B is [****************]. PAS-6B is anticipated
to be launched in October, 1998, and the Service Date for PAS-6B is currently
anticipated to occur no later than November 30, 1998, the "Latest Anticipated
Service Date" for PAS-6B. PanAmSat shall use commercially reasonable efforts to
cause Service from each of the PAS-6B Service Transponders to be commenced on or
before the applicable Latest Anticipated Service Date.
(f) Condition Subsequent to PAS-6B Service Date. If the
Minimum Complement of PAS-6B Transponders cannot be provided as of the date that
is forty-five (45) days after the PAS-6B Service Date, the PAS-6B Service Date
shall be deemed not to have occurred and the parties shall be returned to the
status quo ante, as if the PAS-6B Service Date had not occurred; provided that
in the circumstances set forth in Section 2.2(e) above where Customer would have
had the option to waive the Minimum Complement and accept Service from a fewer
number of Transponders on PAS-6B at the Service Date (which would then be the
Minimum
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
21
<PAGE>
Complement) and if PanAmSat would have been required to offer Customer Service
from such fewer number, Customer shall have the same option under this Section
2.2(f) to be exercised, if at all no later than ten (10) days after the earlier
of: (a) the date that it is determined that the Minimum Complement cannot be
met, or (b) forty-five (45) days after the PAS-6B Service Date.
(g) Continued Service on PAS-3. If on the PAS-6B Service Date,
Service is made available from less than [****************] PAS-6B Transponders,
for each [***] below [************] PAS-6B Transponders made available, Customer
shall have the option (the "PAS-3 [*********] Option") of retaining Service from
one Retained PAS-3 Transponder. The PAS-3 [**********] Option shall be exercised
by Customer, if at all, no later than sixty (60) days after the PAS-6B Service
Date; provided that, not later than thirty (30) days after the PAS-6B Service
Date, Customer shall notify PanAmSat which of the Retained PAS-3 Service
Transponders (if the PAS-3 [**********] Option is for less than all PAS-3
Transponders from which Service provided by PanAmSat to Customer at the time) to
which it intends the PAS-3 [**********] Option to apply, if exercised, at which
point the PAS-3 [**********] Option as to the remaining Retained PAS-3
Transponders shall expire.
(h) Termination of this Agreement as to PAS-6B Prior to PAS-6B
Service Date. If this Agreement is terminated as to PAS-6B without a PAS-6B
Service Date, Customer shall be provided with Service from the date of said
termination and for the remaining Service Term of PAS-6 [*****************
***********************************************] from all of the then available
NTSC and Argentina Beam Transponders on PAS-6 [*********************************
*************************************************************] In addition,
Customer shall have the option to be exercised within thirty (30) days of the
termination of this Agreement as to PAS-6B to continue taking Service from PAS-3
(the "PAS-3 [**********] Option"). Upon timely notice from Customer to PanAmSat
of exercise of said Option, its exercise shall be deemed effective on the date
that this Agreement is terminated as to PAS-6B. Any PAS-3 Transponders so
retained shall (as in the case in [**********]) count toward the "Minimum
Complement" of the "Comparable Beam" of PAS-6. As used herein, the NSA Beam of
PAS-3 shall be deemed to be a "Comparable Beam" to the NTSC Beam of PAS-6 and
the SSA Beam of PAS-3 shall be deemed to be a Comparable Beam to the Argentina
Beam of PAS-6. The Minimum Complement for PAS-6, counted and determined
separately by PAS-6
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
22
<PAGE>
Beam, shall be [*************] Transponders for the NTSC Beam and
[****************] Transponders for the Argentina Beam.
Customer acknowledges and agrees that the PAS-6 and
PAS-6B Satellites have been designed by their manufacturers for planned lives of
fifteen (15) years, but the launch of PAS-6 and the anticipated launch of PAS-6B
are now predicted to allow enough fuel for PAS-6 to be maintained between twenty
(20) years and twenty-one (21) years, and PAS-6B, eighteen and one half (18-1/2)
to nineteen and one-half (19-1/2) years. Customer further acknowledges and
agrees that such extended life beyond the approximate fifteen (15) years that
would otherwise be anticipated is due to unusual circumstances associated with
the launch of PAS-6 and the currently anticipated launch of PAS-6B and is not
anticipated or required for any satellite, from which capacity may be taken or
ordered pursuant to this Agreement.
(i) Service Terms for Individual Satellites. The Service Terms
for Transponders on each Satellite shall commence upon the Service Date for the
applicable Satellite and terminate upon the earliest of: (i) subject to the
express provisions of this Agreement regarding the dual illumination and the
PAS-3 Options, the start of a new Phase of Service (as set forth above) in which
Service from such Satellite or Beam on the Satellite is not specified to be
provided, (ii) the date that the applicable Satellite is taken out of Service;
(iii) the termination of this Agreement in whole or as to the applicable
Satellite in accordance with provisions of Article 7 of this Agreement.
2.3 Change of Configuration. Customer acknowledges and agrees that if
not all of the Service Transponders on PAS-3 meet their Service Specifications,
PanAmSat may, to the extent technically feasible, change the configuration of
the downlink Beams so as to avoid or limit termination under Section 7.3 below;
provided, that, if Customer agrees to accept Service from such Service
Transponders even on Beam(s) for which the Minimum Complement is not met,
PanAmSat shall not reconfigure the downlink Beam(s) of the Service Transponders
without Customer's written consent.
2.4 Degraded Service. Either before or after the applicable Service
Date, if a Service Transponder, while operational, does not meet the Service
Specifications, Customer shall have the right, within ten (10) days of being
notified of this
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
23
<PAGE>
condition, provisionally to waive the Service Specifications to the extent that
they are not met.
If Customer gives such a provisional waiver, Customer shall
have an additional fifty (50) days (for a total of sixty from being notified of
the condition) in which to determine whether to accept the degraded capacity and
grant a permanent waiver of the Service Specifications to reflect the affected
Transponder(s)' current operating level, or not. The applicable termination
provisions of Section 7.2 or 7.3 shall also be stayed during any period in which
Customer is considering electing a permanent waiver.
If Customer gives a provisional waiver, it shall take and pay
for the affected degraded capacity, as if provided in accordance with the
Service Specifications until the conclusion of the sixty day period specified
above. On or before the end of this sixty-day period, either Customer shall
grant a permanent waiver of the Service Specifications or the termination
provisions of this Agreement, as to the capacity that does not meet the Service
Specifications shall, at that time, apply.
If a permanent waiver is given, it shall be deemed to apply
retroactively to the time of such failure to meet the Service Specifications (so
that, for example, the Service Date shall be deemed to have occurred on the same
day as the Service Date of the other Service Transponders on the Satellite that
meet their Service Specifications). In such event the Service Specifications for
the affected Service Transponder(s) shall be reduced to reflect the current
operating level of the affected Service Transponder(s); provided that PanAmSat
shall continue, if there are further steps that may practically be taken, to use
reasonable efforts to restore the affected Transponder to meet the Service
Specifications. For the avoidance of doubt, such a waiver given under Section
2.4 shall not, unless otherwise agreed by Customer, be deemed to apply to any
further reduction in performance from the operating level of the affected
Service Transponders at the time that the waiver was given.
2.5 Pre-Service Testing. PanAmSat shall have Hughes conduct the
pre-Service testing of PAS-6B in a manner that does not interfere with
Customer's Service from PAS-6. PanAmSat shall use all reasonable efforts to
coordinate with Hughes (who conducts the pre-Service in-orbit check out of
PAS-6B) to allow
24
<PAGE>
Customer, in consultation with PanAmSat, if practical under the circumstances,
to test Customer's transmit and receive equipment to be used with PAS-6B on a
noncommercial basis during the post-launch, pre-Service period; provided that
such tests do not interfere with the in-orbit testing, maneuvers, or other
related activities that are being conducted. PanAmSat shall cooperate with
Customer in carrying out such testing. Customer shall comply with all of the
provisions of this Agreement regarding such transmissions and any other
additional restrictions of which it may be notified vis-a-vis the requirement
not to interfere with the in-orbit tests or related activities relative to
PAS-6B. Customer shall be responsible for any damage caused by its failure to
abide by any of these conditions.
ARTICLE 3. CUSTOMER PAYMENTS.
3.1 Monthly Service Fees, Deposit. For each month of the Service Term
beginning on the Service Date, Customer agrees to pay a monthly service fee (the
"Monthly Service Fee") that, subject to [*************************************]
shall be determined in accordance with Section 3.2 below. Not later than three
(3) months after the end of each [**************] (as defined in Section 3.2),
Customer agrees to pay PanAmSat a [************] payment, as and if determined
to be required under Section 3.2, so that Customer's [**************************
*********************************] obligation to PanAmSat for the
[*******************] is satisfied. Customer shall make each and all payments of
the Monthly Service Fee, in advance, no later than the first business day of
each month of the Service Term. Payments due for Service under this Agreement
are more generally referred to as "Service Fee(s)."
PanAmSat acknowledges its receipt of a "Deposit" of
[****************************************************] all of which has been
applied toward Service Fees hereunder. [****************************************
*****] of the Deposit was applied to offset the Service Fees for the first two
months of Service from the PAS-3 Service Transponders. The remainder of the
Deposit was applied, until exhausted, to offset the initial Monthly Service Fees
for Service from the PAS-6 Service Transponders.
As set forth in Section 3.2(b), Monthly Service Fee payments,
above the [******************] per Transponder, shall be calculated
[********************************************************************] This
does not relieve Customer of its obligation to make payment [*******************
********************************************************************************
********] By way of example only, [***************************************
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
25
<PAGE>
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
****************************************************************]
3.2 [*************************] Service Fee.
(a) [*********] Obligation. For each [*****************] the
total of Customer's "Monthly Service Fees" and [*****************] payment to
PanAmSat (each as determined below) for each Service Transponder (other than any
[***********************************] shall yield [***************] Service Fee
per Transponder [***************] to PanAmSat that shall be determined by the
following table:
[******************************
********************************* [********************************
***************************] ********************]
[*****************] [*********************************
**********************************
*********************]
[*****************] [*********************************
**********************************
*********************]
[*****************] [*********************************
**********************************
*********************]
[*****************] [*********************************
**********************************
*********************]
[*****************] [*********************************
**********************************
*********************]
[*************************************]
[*********************************************].
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
26
<PAGE>
As used in this Agreement, [******************] means each [***] month period
commencing on the Service Date and each [****************] thereafter, except
that, for ease of [**************], the then current [***************] shall end
upon the last day of [*************] (and be calculated pro rata to that point
and a new [***************] shall be deemed to commence on the first day of
[********************] as applicable. In addition, if there is a
[**************], a similar shortening of the then current [***************]
(with pro rata calculations) shall occur on [************************], with the
next [***************] commencing [*********************************************
*******************************************************************************]
As used in this Agreement, [****************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
*******************************************************************************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
27
<PAGE>
[********************************]
[********]
[*********************************************************************]
[**********************************************************************
***********************************************************************
*******************************************]
[*********************************************************************]
[**********************************************************************
***********************************************************************
***********************************************************************
***********************]
[*******************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
*******************************************************************************]
[*************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
28
<PAGE>
*******************************************************************************
********************************************************************************
*****]
[**********************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
*****************]
[*****] [*******************************
***********]
[**] [*************]
[**] [*************]
[**] [*************]
[**] [*************]
[**] [*************]
[*******************************************************************************
*****************************************************]
[*******************************************************************************
********************************************************************************
*******************************************************************************]
(b) Monthly Obligation. Customer's Monthly Service Fee for
each Service Transponder [************************************] shall be
determined based upon the [*****************************************************
*******************************************] applicable Monthly Service Fee is
due, in accordance with the following table:
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
29
<PAGE>
[********************************
***************************** [*********************************
**************************] *************************]
[*******************] [***********************************
***********************************]
[*******************] [***********************************
************************************
*******************************]
[*******************] [***********************************
************************************
*******************************]
[*******************] [***********************************
************************************
****************************]
[*******************] [***********************************
************************************
****************************]
[*******************************************************************************
*******************************************************************************]
[********************************************]
After the first Monthly Service Fee payment for each [****************],
subsequent Monthly Service Fee payments shall be [******************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
************************************************************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
30
<PAGE>
[*******************************
*************************** [*******************************
************************] ****************]
[*******************] [*************************************
**********]
[*******************] [*************************************
*************************************]
[*******************] [*************************************
*************************************]
[*******************] [*************************************
*************************************]
[*******************] [*************************************
*************************************]
[**************************************************************************
*************************************************************]
[***********************************]
[*****************************************]
(c) Use of [***************************] If customer
[*******************************************************************************
********************************************************************************
********************************************************************************
********************] then, except as provided in this Section 3.2(c), from and
after the Service Date under this Agreement, the [****************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
*****************************************] without implying any additional
rights to use such [**********************************************] and without
prejudice to any remedy to seek injunctive relief to prevent such use as
permitted under Section 9.4 of this Agreement.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
31
<PAGE>
If Customer [******************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
***********************************************]
The foregoing notwithstanding, from and [************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
32
<PAGE>
***************************************] The previous sentence notwithstanding,
[*******************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************]
[*************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
************************************]
[*************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
33
<PAGE>
********************************************************************************
********************************************************************************
*******************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
*************************************************]
(e) Early Termination. In the event that this Agreement is
terminated in whole or in part as to any individual Service Transponder(s) or
certain Service Transponders [****************************************] for some
or all of the [*************] the above [*************] shall be made pro rata
based on the percentage of the [**************] in which the Service
Transponder(s) were made available to Customer under this Agreement. [*********
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************]
(f) [*********************************************] Customer
shall, consistent with good business practice, use all reasonable efforts to use
the Service provided hereunder to develop and grow a DTH business [************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
*********************************************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
34
<PAGE>
[***************************************]
[****************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
**************************************************]
3.3 Manner Of Payment. All payments by Customer shall be made in U.S.
dollars; shall be deemed to be made only upon receipt by PanAmSat of collected
funds; and shall be made by bank wire transfer to such bank account as PanAmSat
may designate by notice to Customer, or by cashier's or certified check, from a
U.S. bank, delivered to PanAmSat at its principal place of business, as
designated in Section 14.5(b).
3.4 Late Payment. Any payment due from Customer to PanAmSat that is not
received by PanAmSat on the date that it is due shall be subject to a
delinquency charge (liquidated damages) at the rate of [***************
***********************************] on such overdue amount from the due date
until it is actually received by PanAmSat. Customer acknowledges that such
delinquency charge is reasonable under all the circumstances existing as of this
date.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
35
<PAGE>
3.5 Taxes. Customer shall be responsible for, and shall indemnify
PanAmSat against, all Taxes that may be asserted as a result of the Service
provided to Customer and/or Customer's use of the Service, except for U.S.
income, property, or employment taxes imposed on PanAmSat; provided, that, to
the extent that Taxes may be imposed with respect to the Satellite(s)
themselves, Customer shall be responsible for a pro rata share (to be reasonably
determined by PanAmSat) in proportion to the capacity of the applicable
Satellite used by Customer, but in no event greater than a fraction equal to the
number of Service Transponders divided by the number of Transponders on such
Satellite. For purposes of this Agreement, "Taxes" shall mean all foreign,
federal, state, provincial, and local income, franchise, sales, use, receipts,
value added, transfer, profits, excise, stamp, withholding and property taxes,
duties or assessments and governmental charges of any kind whatsoever (including
interest, penalties and additions with respect thereto). [**********************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
******************]
ARTICLE 4. CUSTOMER'S OBLIGATIONS IN USING THE SERVICE TRANSPONDERS.
4.1 Non-interference and Use Restrictions. Customer's transmissions to
and from each of the Satellites and its use of the Service shall comply with all
applicable governmental laws, rules and regulations, and with the operational
requirements (the "Operational Requirements") set forth in Appendix D, as the
same may be modified from time to time by PanAmSat, in its reasonable
discretion, but only for good technical cause(s). Customer will follow
established practices and procedures for frequency coordination and will not use
the Service Transponders, or any portion thereof, in a manner which would or
could reasonably be expected to, under standard engineering practice, interfere
with the use of any other Transponder, the Satellites, or any other satellite or
transponder on such satellite, or cause physical harm to the Service
Transponders, any other Transponder, the Satellites, or any other in-orbit
satellite or transponder on such satellite. Provided that Customer's
transmissions conform with the transmission plans approved by PanAmSat under
Section 1.5 above, Customer complies with the Operational Requirements, as the
same may be modified as provided above, and Customer immediately ceases any
transmission upon being notified by PanAmSat of any
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
36
<PAGE>
violation of this Section 4.1 (even if such transmission is in conformity with
the Operational Requirements), Customer shall not be deemed to be in breach of
its obligations under the preceding sentence.
4.2 No Terrestrial Facilities. Subject to the exception stated in
Section 1.5 above with respect to PanAmSat-provided uplinks, if any, Customer
shall be responsible for the provision, installation, operation and maintenance
of all earth station facilities and equipment ("Customer-Provided Facilities"),
for transmitting signals to, or receiving signals from, the Satellites in
accordance with the requirements set forth in this Agreement. Customer shall
also be responsible for acquiring all authorizations necessary for installation
and operation of Customer-Provided Facilities. Customer shall be permitted to
contract with third parties to transmit its signals to, or receive its signals
from the Satellites; provided, that, Customer requires its contractors to agree
to comply with all of the requirements set forth in this Agreement regarding
transmissions to, or reception from, the Satellites. If Customer retains third
parties (other than PanAmSat) as permitted by the previous sentence, these third
parties' facilities shall be deemed to be Customer-Provided Facilities and the
acts and omissions of these third parties in connection with the transmission or
reception of Customer's signals shall be deemed to be the acts and omissions of
such third parties and of Customer. Any provision by PanAmSat (or by an
affiliated company) to Customer of earth station or other terrestrial facilities
or services shall be the subject of a separate agreement.
[***********************************************************
******************************************************************************
***************************************************************************
******************************************************************************
*******************************************************************************
******************************************************************************
******************************************************************************
***************************************************************]
4.3 Customer's Transmitting Stations. Customer will configure, equip
and operate its transmit facilities so that the interface of these facilities,
in space, with the Satellites shall conform to the characteristics and technical
parameters of the Satellites. Customer will follow PanAmSat's procedures for
initiating or terminating any transmission to the Satellites. Customer will
operate all transmit
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
37
<PAGE>
facilities in a manner that allows for cessation of, and will cease,
transmission immediately upon receiving notice from PanAmSat under Section
15.5(a) ("Telephone Notices"). Customer will furnish information on a continuing
basis as reasonably required by PanAmSat to prepare for, initiate, provide,
maintain and immediately discontinue the use of the Service Transponders upon
notice by PanAmSat.
PanAmSat shall have the right, but not the obligation, subject
to such reasonable confidentiality and use restrictions as Customer may impose,
to inspect any Customer-Provided Facilities together with associated facilities
and equipment used by Customer, or by a third party under the authority of
Customer, to transmit to the Service Transponders. PanAmSat will use all
reasonable efforts to schedule inspections to minimize the disruption of the
operation of the facilities, and Customer shall make the facilities available
for inspection at all reasonable times. Customer shall, upon PanAmSat's request,
provide measured proof that any transmit facility meets or exceeds the sidelobe
envelope described in Appendix D.
4.4 Consistent Application of Satellite Operating Procedures. PanAmSat
shall have similar (but not necessarily identical) restrictions not to interfere
with or cause physical harm to the Satellites, their Transponders, and other
satellites and their transponders, as contained in this Agreement with all other
customers, including any of its Affiliates, having a right to uplink to the
Satellite(s) and shall enforce these restrictions (and, to the extent it may use
the Satellite(s) for its own services, follow these restrictions itself) in a
consistent and nondiscriminatory manner vis-a-vis Customer and the other
customers with a right to uplink to the Satellites. Allowing for the fact
(understood and accepted by Customer) that technical variations in the kinds of
transmissions that different customers may employ, different performance
characteristics of different Transponders, differences in the use of adjacent
frequencies or the same frequencies on other satellites, other technical
factors, and the use of different uplink providers and facilities may require
the application of different restrictions to achieve the same non-interference
and satellite protection goals, PanAmSat shall not require Customer to follow
Operational Requirements or transmission procedures that are more stringent than
those imposed upon other customers on the same Satellite in comparable technical
circumstances.
38
<PAGE>
ARTICLE 5. TRANSPONDER FAILURE, PROTECTION.
5.1 Intentionally Deleted.
5.2 Intentionally Deleted.
5.3 Transponder Failure. If, after the applicable Service Date for a
Satellite, a Service Transponder fails to meet the Service Specifications for:
(a) any period of [*************************] or (b) a [******************
*************] of [***********************] during any [*******************
***************], or (c) any [****************] following a [*************
********] under circumstances that make it [***********************] that a
[*************] described in clauses (a) or (b) will occur, such Transponder
shall be deemed to have failed on a "Confirmed Basis." Any such failure must be
confirmed by PanAmSat, which it shall take steps to do as expeditiously as
possible. If confirmed, the failure shall be measured as commencing from notice
from Customer to PanAmSat of such failure (provided that the affected Service
Transponder is, in fact, not meeting the Service Specifications). Any such
failure shall be deemed to have ended upon notice from PanAmSat to Customer that
the affected Service Transponder is capable of meeting the Service
Specifications (provided that the affected Service Transponder is, in fact,
meeting the Service Specifications); provided, further, that if PanAmSat enters
into an agreement to provide Ku-band capacity from the Satellite on which a
Service Transponder is located and such agreement provides that, for purposes of
employing said "Spare Equipment" on the Satellite, failure on a Confirmed Basis
shall be deemed to have occurred in less than the applicable time periods
specified above, PanAmSat shall determine whether a failure on a Confirmed Basis
has occurred for Service Transponder on the same Satellite under this Agreement
using the time periods specified in such other agreement.
In the event a Service Transponder fails on a Confirmed Basis,
PanAmSat shall, as soon as possible and to the extent technically feasible,
employ certain redundant equipment units, as described in Appendix B ("Spare
Equipment") on a first-needed, first-served basis as among Customer and other
Transponder owners, lessees, and users, including without limitation, PanAmSat
and its predecessors in interest ("Protected Parties"), as a substitute for a
Service Transponder equipment unit which has failed; provided, that PanAmSat may
elect to use "Substitute Capacity" on the same Satellite as the failure shall
have occurred
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
39
<PAGE>
(as provided below), if available and not subject to any additional operational
restrictions that Customer is not willing to accept, in lieu of using Spare
Equipment.
Customer acknowledges and agrees that the Spare redundancy
plan of each Satellite may require PanAmSat to reassign certain traveling wave
tube amplifiers ("TWTAs") among Transponders to make use of a spare TWTA. In
circumstances in which a spare TWTA is required to be employed for any customer
and to do so requires a change in the TWTA assigned to Customer, Customer shall,
on notice from PanAmSat, cease transmitting to the applicable Service
Transponder(s) to allow the TWTA that is assigned to its Transponder(s) to be
reassigned and a different unit (that meets the Service Specifications) to be
put in its place. PanAmSat shall use all reasonable efforts to keep to a minimum
the time during which Customer is required to cease transmitting under this
paragraph, in accordance with good engineering practices, to make the shift in
the assignments.
If (a) a Service Transponder fails to meet its Service
Specifications on a Confirmed Basis, and (b) the Spare Equipment associated with
such Service Transponder is not available, and (c) equivalent capacity on
another Transponder meeting the Service Specifications in same Beam of the same
Satellite as the failure shall have occurred and designated by PanAmSat for DTH
use (the "Substitute Capacity"), is available, and its use by Customer in
accordance with PanAmSat's Operational Requirements would not be predicted to
interfere with the use or rights of others using the Satellite (or, even if no
longer used by Customer, PAS-6 or PAS-6B), then PanAmSat shall, as soon as
possible and to the extent technically feasible, employ such Substitute Capacity
for the failed Service Transponder to satisfy PanAmSat's obligations under this
Agreement. PanAmSat may condition its provision of Substitute Capacity on
Customer's acceptance, in writing, of such additional restrictions on its use
that PanAmSat believes in good faith are necessary so as to protect other
Protected Parties from interference. If Customer does not accept such
conditions, PanAmSat shall not be obligated to provide Customer with Service
from the Substitute Capacity. In the event that PanAmSat employs such Substitute
Capacity for a Service Transponder, such Substitute Capacity shall be deemed to
be a Service Transponder for all purposes under this Agreement.
In the event that [*******************] Transponders
[***************************************************] to meet their respective
[***********] or [*****************************] and are entitled to
[**********] under any applicable agreement with PanAmSat, and if
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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all of said Transponders are assigned to Customer or [******] then, unless
PanAmSat receives contrary instructions signed by Customer and [******] PanAmSat
shall, to the extent [******************************************] to the
[*******************] in accordance with the [*********************] to be
supplied and executed by Customer and [******] and delivered to PanAmSat, except
that priority will not be given to the "[*****] Transponders" specified in the
[******] Agreement. Until and unless such fully executed instructions are
received by PanAmSat, such [*******************] shall be made by PanAmSat in
[********************] Upon the written request of all affected parties,
PanAmSat shall, if it has not already [***********************************] at
the time that the request is made, in any case of [***************************]
or if the use of Spare Equipment would require the [********************] of the
[*************************************] for instructions for up to
[**************************] provided that, the [***********] shall be deemed to
have [******] at such point as PanAmSat notifies Customer that PanAmSat is
[******] to [****************************] pending the [***********************
*****************]. As used in this Section 5.3, the term [*******************]
shall be deemed to mean [**************************************] All
determinations as to when [*******************************] shall have occurred,
for purposes of determining whether the failures are [*****************] shall
be made by [******************************************************]
In the event that [*****************] Transponders
[***********************************************] to meet their respective
[******] or [****************************] and are entitled to [******] under
any applicable agreement with PanAmSat and if one or more of said Transponders
is assigned to a person or entity other than Customer or [******], then the
Protected Party who [*****************] a definitive agreement as to the
affected Satellite with PanAmSat or its predecessors in interest shall, to the
extent [***************************] have [******] as to use of the
[*******************] or the [************************] provided that, if
[******] from a Transponder is provided to more than [***] Protected Party (for
example, if there are [***] customers each taking service from [************] of
a Transponder), PanAmSat's decision may be made in accordance with the order
that the [******] Protected Party(ies) using the Transponder(s)
[********************] with PanAmSat or its predecessors in interest; provided
further that, [******************] as between Customer [*********] shall be
determined in accordance with the preceding paragraph. As used in this Section
5.3, the term [****************] shall be deemed to mean [*****************
*******************]. All determinations as to when [***************************
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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****************] shall have occurred, for purposes of determining whether the
failures are [******************] shall be made by [******************
**********************************] PanAmSat hereby confirms that the only
[**************************] for a [***************************************]
that [*************************] this one (as deemed below and other than
with [******] is with [**********************] for [*********] Transponder and
there are [************************] for PAS-6 or PAS-6B.
For purposes of this Section 5.3, this Agreement and the
Brazil Agreement shall both be deemed to be executed as of February 29, 1996.
5.4 Reduction in Number of Transponders as Overall Power on the PAS-6
Satellite is Decreased. Customer acknowledges that it has been advised by
PanAmSat that it [**********************************************
**************************] on PAS-6 and that it is anticipated that
[*****************************] will be subject to such a power constraint in
the future, so that the remaining Transponders continue to meet their applicable
Performance or Service Specifications. The power on PAS-6 is [**********]
sufficient to support [*************************************] consistent with
the [************] set forth in Section 2.2(b)(iii).
When [*****************************] can be anticipated,
before [*************] one of Customer's Transponders, PanAmSat shall [******]
with Customer and all other entities who have agreed to purchase or take service
from the Satellite and, provided that it is consistent with [************
********************] and [**************] of the Satellite, shall allow
Customer and such other entities [******] to select which Transponder(s) shall
be [****************]. To be effective, such selection must be given in writing,
signed by Customer and all other entities referenced in the previous sentence,
and given to PanAmSat before PanAmSat is required, as determined by
[********************************] to proceed with the [******************] of
Transponder(s). If PanAmSat has not received such instructions, signed by all
affected entities, at the time that [********************] is required, PanAmSat
shall make the decision as to which Transponder(s) [******************
*******************] The [***************] of a Customer's Transponder under
this Section 5.4 shall be treated as a [*********************] and shall count
toward determining whether the applicable Transponder has [*******************
********************] This paragraph is not anticipated to be relevant to
[*******************] but the principles stated will apply if it becomes
necessary to do so; provided that it is agreed that the first of Customer's or
[*******************] Transponders to be [************] shall be the [******]
Transponders" (as defined in the [************************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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If this Agreement is terminated as to PAS-6B without a PAS-6B
Service Date (and, therefore, Customer remains on PAS-6), the then current
[********************] on PAS-6 will be addressed in accordance with the
preceding paragraph, subject to the following qualifications:
(a) Within five (5) days of termination of this
Agreement as to PAS-6B, PanAmSat shall notify Customer [*****************] as to
the number of Transponders on PAS-6 that [*********************] at that time
with existing PAS-6 power. For the avoidance of doubt, the power [********] set
forth in Section 2.2(b)(iii) above shall not be considered for such purpose.
(b) If [******] will also be remaining on PAS-6
[*********************************] then Customer and [******] shall have
fifteen (15) days to select by [************************] to PanAmSat which
PAS-6 Transponders should be [**********************************] to leave
[***********] the [*************] number of Transponders specified in PanAmSat's
notice, which selection PanAmSat shall follow as long as consistent with the
overall health and performance of the Satellite. If Customer and [******] fail
to give such notice within the time period specified, PanAmSat shall make the
selection and so notify Customer and [******] within ten (10) days of the last
day that Customer [**********] had to make such selection. Until the selection
is made, Customer shall not increase its [***] of PAS-6 above that which is
permitted under Phase 2, except with [********] written consent delivered to
PanAmSat (but, in all events, when [**********] with [***************] within
the overall Transponder power limits of PAS-6). The selection, once made, shall
be deemed made retroactive to the day that this Agreement was terminated as to
PAS-6B, with any of the Service Transponders on PAS-6 then specified to be
[********************************] deemed to have [******************
***************] as of that date. Any further [********************] shall be
handled in accordance with the general provisions of this Section 5.4.
(c) If [******] will not be remaining on PAS-6, then
(subject to any "Dual Illumination Period" rights it may have under the
[**************************] Customer would only have to [***************
***************] Customer's Service Transponders in the event that there is not
[********************] on PAS-6 to support Customer's Transponders, in which
event the procedures set forth above would apply (but without requiring any
concurrence by [******]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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5.4A Limitation on Customer Discretion. Sections 5.3 and 5.4
notwithstanding, if Customer and NetSat exercise their rights to select which
Transponder to [***************************] under those Sections in such a
manner that the Minimum Complement of a particular Beam of the Primary Satellite
is [******] , when a different selection would have resulted in that Minimum
Complement being preserved (and no other Minimum Complement [******] for
purposes of this Agreement, there shall be deemed to be [*******] of Minimum
Complement; provided that if there is a further failure on a Confirmed Basis of
Transponder capacity on the affected Beam (other than that which could have been
avoided by a different selection), the Minimum Complement will then be deemed
[******************] By way of example only, if, after the PAS-6B Service Date,
(i) only [***************] of the Service Transponders remain under this
Agreement, while the use of [*********************] Transponders in the Brazil
Beam (for NetSat) continues; (ii) a [**********************************] under
Section 5.4; and (iii) Customer and [******] elect to have [************
***************************] in the Customer's Latin Beam [*****************]
(so that the number of Service Transponders in this Beam is reduced to
[***********] instead of a Transponder assigned to NetSat, the Minimum
Complement on the NTSC Beam shall not be deemed [***************]
5.4B Special Considerations Relative to the Operation of PAS-6
and PAS-6B at the [*******************]. It is not contemplated that, except
during the Dual Illumination Period specified herein, NetSat and Customer would
receive capacity from different Primary Satellites (i.e., one on PAS-6B and the
other on PAS-6). The situation [***********] however, if at the time of the
PAS-6B Service Date, the applicable Minimum Complement on PAS-6B can only be met
for one of these entities, leaving the other on PAS-6. (For reference, when
PAS-6 or PAS-6B serves as the "Primary Satellite" (as defined in the [*********
************] for [******] but not Customer, that Satellite is referred to in
this Section as the "Other Satellite.") In such circumstances, after the Dual
Illumination Period and during such period in which the PAS-6 and PAS-6B each
serves as a "Primary Satellite," one for NetSat and the other for Customer, the
following provisions shall apply:
(1) In the event that this Agreement is to be
terminated as to any individual Service Transponder pursuant to Section 7.3,
whether due to a particular Transponder failure or an overall [**********
***********] on the Satellite, to the extent technically feasible,
[***************] shall have the right to select as to which Transponder this
Agreement shall be terminated, provided that [****************]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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<PAGE>
selection leaves Customer with as many Transponders in the affected Beam of the
Satellite that meet their Service Specifications as would be available had
[***********] not exercised this right; provided further that, within sixty (60)
days of the Execution Date, PanAmSat shall designate, by notice to Customer,
four (4) Transponders on each Beam of PAS-6 and PAS-6B, that, to the extent
technically feasible, including meeting the standard set forth in the previous
proviso; would be the last Service Transponder(s) to be so selected for
termination by PanAmSat.
(2) PanAmSat shall operate the PAS-6 and PAS-6B
Satellites in a manner so that their telemetry signals do not interfere with
each other.
(3) For the avoidance of doubt, there is no
obligation of PanAmSat to provide or for Customer to take inter-Satellite
protection (e.g., Service from either PAS-6 or PAS-6B as substitutes for the
other).
5.5 Customer Cooperation. If a Service Transponder fails to meet the
Service Specifications, Customer shall use all reasonable efforts to cooperate
and aid PanAmSat in curing such failure; provided that all reasonable efforts
can be done at no cost to Customer. These obligations of Customer shall include,
but not be limited to, the following:
(a) At the request of PanAmSat, if there is a problem that can
be compensated for by increasing the power and/or changing other parameters of
its transmission to a Satellite, without affecting its Customer's use of the
Service, Customer shall do so to the extent it can with existing equipment; and
(b) Permitting PanAmSat, at PanAmSat's option, and at
PanAmSat's cost and expense, to upgrade the Customer-Provided Facilities.
5.6 Application to Individual Service Transponders. All determinations
of failures on a Confirmed Basis and protection rights to be made under this
Article 5 shall be made on an individual Service Transponder by Service
Transponder basis.
5.7 Replacement Launch. Pursuant to the Letter Agreement, payments from
Customer to PanAmSat totaling [*****************] toward a possible Loral
replacement satellite are acknowledged; [*****************] of said amount has
already
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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<PAGE>
been or will be applied to offset Customer's obligation hereunder. It is further
acknowledged that the remaining [*******************] is [******************]
ARTICLE 6. PREEMPTIVE RIGHTS.
6.1 (a) Preemptive Rights In Abnormal Circumstances. Customer
recognizes that it may be necessary, in unusual or abnormal technical situations
or other unforeseen technical conditions, for PanAmSat deliberately to preempt
or interrupt Service to Customer from, and Customer's use of, one or more of the
Service Transponders, solely in order to protect the overall health and
performance of the Satellite(s). Such decisions shall be made by PanAmSat in its
sole discretion, exercised in good faith. To the extent technically feasible,
PanAmSat shall give Customer at least 24 hours' notice of such preemption or
interruption and will use all reasonable efforts to schedule and conduct its
activities during periods of such preemption or interruption so as to minimize
the disruption of the services on the affected Satellite. Customer shall
immediately cease transmissions to the Service is at such time as its use of the
Service Transponder(s) preempted or interrupted pursuant to this Section. To the
extent that such preemption results in a loss to Customer of its use of a
Service Transponder sufficient to constitute a failure on a Confirmed Basis,
Customer shall have all the rights and remedies regarding termination set forth
in Articles 7.
(b) Testing in the Event of Failure. If the Service is not
meeting Service Specifications, but Customer elects to continue to use (and pay
for) the Service, as degraded, PanAmSat may, with Customer's reasonable consent
as to the time such action will be taken, interrupt Customer's use as necessary
to perform testing or take any other action that may be appropriate to attempt
to restore the affected Transponder(s) to the Service Specifications. In such
event, PanAmSat shall coordinate activities with affected customer(s) and shall
use all reasonable efforts to minimize the overall disruption of use to the
affected customer(s). If Customer refuses to provide the consent referred to in
the first sentence of Section 6.1(b) when such consent is requested, the
availability of remedies for failure to meet Service Specifications, including
the use of Spare Equipment and Substitute Capacity and termination for failure
to meet Service Specifications shall be commensurately delayed.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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<PAGE>
ARTICLE 7. TERMINATION RIGHTS.
7.1 Termination for Delay in Launch of PAS-6B.
If:
(a)(i) a [**************************] (as defined below)
occurs prior to [***********************] and (ii) (A)PanAmSat notifies Customer
that either: (x) Hughes has not shipped (i.e., put in transport) the PAS-6B
Satellite to the launch site by [***********************] unless the delay was
due to the unavailability of the launch vehicle or other "Hughes Force Majeure"
event, as defined below or (y) the Service Date of PAS-6B will not occur by
[********************] (either which notice PanAmSat will give if circumstances
make it clearly ascertainable that this is the case) or (B) the Service Date
does not occur on or before [**********************];
Or
(b) whether or not a [**************************] has occurred
as of [********************] if (A) PanAmSat notifies Customer that the Service
Date of PAS-6B will not occur by [****************] (which notice PanAmSat will
give if circumstances make it clearly ascertainable that this is the case) or
(B) the Service Date for PAS-6B does not occur by [****************]
Then
At any time prior to the launch of PAS-6B, Customer may
terminate this Agreement as to PAS-6B on [*************] days' notice to
PanAmSat, unless, in the case of clause a(ii)(A)(x) the required event takes
place within said [************] days notice period. It is further agreed that,
in the case of clause (a)(ii)(A)(x), Customer may give its notice, if the other
circumstances for such notice are met, as early as [**********************] so
as to make PanAmSat's cure period coincide with the [**************] deadline.
The foregoing notwithstanding:
(i) Customer shall not be permitted to terminate this
Agreement as to PAS-6B under this Section 7.1 as to a delayed event if it occurs
within thirty (30) days of the date as Customer may have been previously
notified that the relevant event was anticipated to occur without Customer
exercising its
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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<PAGE>
termination right within thirty (30) days of said notice; provided that, if
Customer's termination right accrued before the occurrence of a [***********
***********] and there subsequently occurs a [************************] Customer
shall have another thirty (30) days (from the [*************************] to
make its decision to terminate, whether the [**********************] occurs
before or after [********************] except that this further right to
terminate will not accrue if, at the time of the [**********************] PAS-6B
has already been shipped (i.e., put in transport) to the launch site and the
Service Date of the Satellite is scheduled to occur within sixty (60) days of
the [**********************] and
(ii) Customer shall also not be permitted to
terminate this Agreement under this Section 7.1 unless at the same time
[**************************************************] as to PAS-6B under
[***************************************************************************]
PanAmSat shall also be permitted to terminate this Agreement
as to PAS-6B on notice to Customer, if the construction or launch of PAS-6B has
been substantially delayed [***************************] by force majeure
conditions and PanAmSat determines because of force majeure conditions not to
proceed with the construction or launch of PAS-6B. In such event, PanAmSat shall
give Customer immediate notice of PanAmSat's determination, which determination
shall be made promptly following the event(s) of force majeure that lead to such
a determination.
In any circumstances in which Customer has a right to
terminate under this Section 7.1 and Customer's time period for decision
overlaps the time period during which PAS-6B is scheduled to be shipped to the
launch site, PanAmSat may require Customer to accelerate its decision process so
that a decision is made before PAS-6B is actually shipped.
7.1A. [************************************************] If there is a
[**********************************] prior to the launch of PAS-6B, Customer
shall be permitted to terminate this Agreement as to PAS-6B on notice to
PanAmSat to be exercised within thirty (30) days of the [***********
************] (but in all events prior to the launch of PAS-6B); provided that
[**********************************************] as to PAS-6B under
[*****************************************] agreement. In such event, within
[*****************] of invoice from PanAmSat, Customer shall [************
********]
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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for [********************************************************************] to
[*********************************] in connection with the terminated PAS-6B
program, provided that [************************] to [**************] in
connection with said termination shall be reduced by whatever amounts
[************************************] in connection with its [**********
************] to [*************] under [*************************************
************************************] and further provided that PanAmSat shall
[****************] to Customer or [******], as they shall [************] direct
PanAmSat in writing, any [*************************************
********************] given to [***********] of such [*******************] in
connection with any mitigation of such liability that may be available, which
[**********] shall use all reasonable efforts to enforce. The contract
[************************************] that Customer and [******] are
[*****************************************************************************
********], in the event of a [**********************************] by PanAmSat,
to use [************************************************************************
********************************************************************************
***********] In addition, if PanAmSat elects [*******] proposal (which PanAmSat
agrees to do if Customer [************] have [********************] required to
be [*******************************] under this Section 7.1A and the
[*****************************************************] Customer and [******]
are [***************************************************************************
********************************************************************************
********] from the above.
If [******] does not [***********************************] as to PAS-6B
under the [***********************************] Agreement, Customer's notice of
termination under this Section 7.1A shall be treated as an [****************
******] which, within thirty (30) days of receipt, PanAmSat may either (in
writing) [******] or, instead, [******] but, if [*******************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
*****************************************************************] If PanAmSat
[********] (in writing) Customer's [************] termination under this
paragraph (i.e., in circumstances where [***************************************
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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<PAGE>
*************************************] neither Customer nor PanAmSat would have
any further obligation to each other with respect to PAS-6B.
7.1B Certain Definitions Relevant to Termination Provisions. As used
herein:
(i) [*************************] means [*************] of a
sufficient number of Transponders on [*******************] to [*****************
*****************************************************************] such that
either:
(A) On or before [*********************] there is
[***********************************] (Customer's rights otherwise under
[******************************************] notwithstanding) on
[******************] that PanAmSat makes, or if permitted by Customer or
[*******] could make, available to NetSat, Customer, and under PanAmSat's
[*********************************************] to [*******] that would yield at
least [***********************] on each of the [*********************
******************] and [*********] of [*************************] (in each case
when [*******] with [**************] from the associated [********************
************************************************] that meet their applicable
[********************************************] or
(B) On or before [************************] there is
[*****************************************] (Customer's rights otherwise under
[**********************************************************] notwithstanding) on
[*****************] that PanAmSat makes, or if permitted by Customer or
[*******] could make, available to NetSat, Customer, and under PanAmSat's
[********************************************] to [*******] that would yield at
least [***********************] on each of the [***************
******************************] and the [***********************] (in each case
when [*******] with [*************] from the associated [***********************
****************************] respectively) that meet their applicable
[******************************************]
unless
(C) PanAmSat is able (as to either (A) or (B)) to
[*******] a sufficient number of Transponders to [***************************
******************************************] within thirty (30) days of their
applicable [*******] (i.e., as provided in [****************] of the Agreement,
with respect to normal [********************] so that the applicable level of
[********************] defined immediately above is not met;
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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provided that PanAmSat shall notify Customer if and as soon as it becomes
clearly ascertainable to PanAmSat that sufficient [*********] to a level so that
the [*******************] standard specified above will no longer be met is not
possible, at which point Customer's notice of termination shall be effective,
even if less than thirty (30) days after the point at which the
[**********************] first occurred. Said cure period notwithstanding, for
purposes of Section 7.1 and Section 7.1A, subject to PanAmSat's cure rights in
(C), the timing of the [***********************] shall be deemed to have
occurred when the [***********************] standard in either (A) or (B) is met
and Customer's right to give notice of termination (and period in which it has
such right), subject to PanAmSat's cure rights, shall commence at the point of
such cumulative failure; and
(ii) "Hughes Force Majeure" means any delay that is caused by
act of God, or of the public enemy, fire, flood, earthquake, epidemic,
quarantine restriction, strike, walkout, freight embargo, or any other event
which is beyond its control or does not arise from the acts or omissions of
Hughes or its respective subcontractors.
7.2 Other PAS-6B Pre-Service Date Terminations. This Agreement shall
also terminate as to PAS-6B in either of the following events: (i) PAS-6B
suffers a Launch Failure or (ii) if, after a launch, which is not a Launch
Failure but before the PAS-6B Service Date, the Minimum Complement of the
Service Transponders on PAS-6B are not capable of meeting the Service
Specifications unless Spare Equipment is provided by PanAmSat in accordance with
Section 5.3 so that the Minimum Complement of the Service Transponders is
provided in accordance with their Service Specifications; provided that, if (A)
one or more (but not the Minimum Complement) of the Service Transponders are
capable of being provided in accordance with their Service Specifications, and
(B) at the time, at least as many Service Transponders on PAS-6B are capable of
meeting their Service Specifications as Service Transponders on PAS-6 are
capable of meeting their Service Specifications, termination under this clause
(ii) shall be at Customer's option exercisable (if at all) within fifteen (15)
days of Customer's receiving notice of this condition. If Customer fails to
exercise the termination right set forth in the previous sentence within the
time specified, the Service Transponders meeting the Service Specifications
shall, if PanAmSat so elects on notice to Customer within ten (10) days of the
last day for Customer to have exercised the termination right, be deemed
accepted under Section 2.2(e) above. As used herein, "Launch Failure"
[***] Filed separately with the Commission pursuant to a request for
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means an event prior to the PAS-6B Service Date that results in the destruction
of PAS-6B or the declaration of PAS-6B as a total loss (which includes a
constructive total loss) under PanAmSat's launch and initial operations
insurance policy for PAS-6B.
7.3 Termination For Failure After the Service Date. Subject to Section
2.4, on a Transponder by Transponder basis, this Agreement shall automatically
terminate if, after the applicable Service Date for the Satellite, a Service
Transponder fails on a Confirmed Basis, unless, within thirty days of such
failure, PanAmSat restores the Transponder to its Service Specifications using,
if required, any available Spare Equipment or replaces the Transponder with
Substitute Capacity from the same Satellite. In the event one or more of the
Service Transponders fails on a Confirmed Basis and PanAmSat does not restore or
replace the Transponder so that the Service Specifications are met, but one or
more of Service Transponder(s) still meet the Service Specifications, this
Agreement shall continue as to the remaining Service Transponder, so long as
(with respect to PAS-6, on a Beam by Beam basis) the applicable Minimum
Complement of Transponders applicable to the Satellite (or, on and after the
date that is [***********************] after the Service Date for such
Satellite, such lesser number of Service Transponders as Customer was actually
using for the provision of DTH Service to the Territory immediately prior to
such failure, which for purposes of this Section 7.3 would then be deemed to be
the Minimum Complement) continues to meet their applicable Service
Specifications. Subject to Section 5.4A above, if the applicable Minimum
Complement cannot be provided, subject, in the case of PAS-3 Transponders, to
PanAmSat's reconfiguration rights under Section 2.2 above, Customer shall be
permitted to terminate this Agreement as to the remaining Transponders on the
affected Beam of the affected Satellite. Said termination right shall be
exercised, if at all, no later than six months after the occurrence of such
event. Termination shall be effective immediately on notice to PanAmSat;
provided that, at Customer's option, if within said six-month period, Customer
enters into a binding agreement to take transponder capacity for the provision
of its DTH Service from PanAmSat or another provider, Customer may, in its
notice of termination, make its termination effective upon the date that such
other capacity is available to Customer; provided that Customer shall have first
sought such capacity from PanAmSat but PanAmSat was unable to provide the
requested capacity within a comparable time period. In such event, Customer
shall notify PanAmSat of the projected date of such
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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availability and of any change thereto. If Customer fails to exercise the
termination right for the loss of the Minimum Complement within the period
specified, this Agreement shall continue, with the number of Service
Transponders that continue to meet their applicable Service Specifications
(thereafter, that lower number being the "Minimum Complement"), [*************
********************************************************************************
********************************************************************************
***********************************]
7.4 Satellite [*****************] PanAmSat may determine to
take a Satellite [*******************] or, in the case of clauses (d) or (e) or
(f) below, relocate it to other use if:
(a) in PanAmSat's [**************************] the
remaining [****] on board the Satellite is [***************************]
maintain [****************************************************************]
allowing sufficient [***********************] the Satellite;
(b) with respect to [*******] the Satellite [*******
**********************] or more [*********] Transponders or [**************
******************] Transponders to meet their applicable performance or service
specifications;
(c)(i) with respect to PAS-6, the Satellite
[*********************************] or more Transponders to meet their
applicable performance or service specifications, or (ii) with respect to
PAS-6B, the Satellite suffers failure of sixteen (16) or more Transponders to
meet their applicable performance or service specifications;
(d) with respect to PAS-6 or PAS-6B, the total of the
number of Transponders on the Satellite that have failed to meet their
applicable performance or service specifications and, even if they have not
failed themselves, the number of Transponders for which capacity is returned
under the [*********************************************************************
**************************] or more for [*******] or [***********] or more for
[*******]
(e) with respect to the Primary Satellite, if
Customer or NetSat has agreed to [********************************************],
at such time that said Successor Satellite is ready to be placed into commercial
service, in which event,
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PanAmSat shall promptly notify Customer of such determination and
[*****************************************] or
(f) with respect to PAS-6B, at any time that a
Successor Satellite is ready to be placed into commercial service, but not
earlier than the earlier of: (i) the date that is [********************] after
the PAS-6B Service Date, or (ii) the date on which the Satellite is predicted by
PanAmSat in its good faith judgment, to have remaining fuel on board PAS-6B for
only [***********] (or less) life, assuming ordinary stationkeeping operations,
plus sufficient fuel to de-orbit the Satellite (the "Time for Early
Replacement").
The foregoing notwithstanding, in the case of clause (c), if:
(i) Customer agrees to make a [************************************************
*****] as defined in and determined in accordance with Article 16 of this
Agreement, (ii) [********************] Service Fees required to be paid under
this Agreement, Customer [*****************************************************
****************************************************] of the Satellite after the
occurrence of the [*********] otherwise giving rise to PanAmSat's rights under
clause (b), and (iii) permitting [***************************************]
PanAmSat's [***************************************] for the Satellite (other
than as to the Service Transponders that would still be [*************
*****************************************] PanAmSat will not take [**********
*******************************] pursuant to this clause (c) until the
[******************************************************************************]
On the date that the Satellite is [**************************] this Agreement
shall [****************************] as to the [*******] Satellite.
7.5 Termination By PanAmSat For Cause. PanAmSat may terminate this
Agreement if Customer fails: (a) to make payment of any amount due and such
amount remains unpaid within ten (10) business days after receiving from
PanAmSat a notice of such nonpayment (but, only if the payment is at least
twenty (20) business days past due at the time of termination), or (b) to cease
any activity in violation of Section 4.1 or 6.1 upon receiving telephone or
facsimile notice from PanAmSat (provided that PanAmSat shall not be entitled to
terminate the Agreement under this clause (b) if all of the following
requirements are met: (i) Customer is (and remains) in compliance with Section
15.5(a), and the operator on duty mistakenly did not implement PanAmSat's
initial notice; (ii) the mistake was rectified as soon as it became apparent to
Customer; (iii) appropriate steps are taken to prevent a future recurrence of
the mistake and the problem is not
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recurring; and (iv) no damage occurred as a result of the mistake or Customer
immediately reimburses and indemnifies PanAmSat for all such damage, or (c) to
cease any other activity in violation of Customer's material obligations under
this Agreement other than any part of Section 1.8 of this Agreement (exclusive
of the payment obligations set forth under clauses (iv) and (v) of Section
1.8(d) or Section 3.2(c), the failure of which to meet shall be subject to
PanAmSat's termination and related rights under clause (a) of this Section 7.5)
within thirty (30) days after receiving from PanAmSat a notice of such
violation.
In the event of a termination under Section [******] PanAmSat
may declare immediately due and payable the [*******] for all of the Service
Transponders based on the then predicted life of the Satellites, provided that,
if such termination occurs during Phase 2, calculations will be made assuming no
retention of PAS-3 or PAS-6 Transponders upon the Service Date of PAS-6B (which
will be assumed to occur on its then predicted date), and if termination occurs
during Phase 3A, calculations will be made assuming that the termination right
specified in [************] if still available would be exercised. Such amount
shall then be [************] for [*******************************************
*******************] from the date paid to the date otherwise due in the absence
of termination. In the event of a termination under Section [****************]
Customer shall be responsible for payments of the remaining [*******] for all of
the Service Transponders that would be otherwise due and as they would otherwise
become due on and after the date of such termination; provided that if Customer
fails to make payment of any such amount due and such amount remains unpaid
within ten (10) business days after receiving from PanAmSat a notice of such
nonpayment (but only if payment is at least twenty (20) business days due at the
time of termination), then PanAmSat may declare immediately due and payable the
remaining Service Fees [*******************************************************
**********************] as provided above. For purposes of this paragraph,
[*******] shall be deemed to equal the greater of: [**************************
****************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
******************************************************************************]
The foregoing notwithstanding, with respect to PAS-6, if the
termination right under Section [****] has been exercised, Customer's
termination
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liability under this Section 7.5 shall be limited to the amount calculated as
due above through the date that is fifteen (15) years, seven (7) months after
the PAS-6 Service Date.
In the event of such termination, in addition to all of
PanAmSat's other remedies at law or in equity, PanAmSat shall be entitled to
[***] the Service Transponders or to [****************] on such Transponders to
[**************] PanAmSat [***********] and Customer shall [*****************]
to any [****************] with respect to such [***] or any [********] of
amounts paid to PanAmSat; provided, as follows: In the event that Customer has
paid (and, if applicable, continues timely to pay to) PanAmSat all amounts due
hereunder including, without limitation, pursuant to the preceding paragraphs of
this Section 7.5 (the "Termination Payment(s)"), PanAmSat shall use all
[******************] to [***********] the Service Transponders and in the event
PanAmSat subsequently reaches an agreement to provide service to a
[***************] a Service Transponder during the period that said Service
Transponder would have otherwise been available to Customer hereunder, PanAmSat
shall remit to Customer as a [********] of the Termination Payment(s) any
[**************] it receives from [******************] with respect to such
Service Transponder during such period, up to the Termination Payment(s) paid by
Customer for such Service Transponder over and above all Service Fees that were
paid or due prior to the date that this Agreement was terminated, less (i) any
amounts owed by Customer to PanAmSat under this Agreement; (ii) any
[*******************] (including [*****************************************] by
PanAmSat in [**************************] such amounts from Customer; (iii) any
other [******************************] by PanAmSat as a result of Customer's
breach of its obligations hereunder; (iv) any [******************] (including
[*****************************************] by PanAmSat in [*************] such
Service Transponder to, or [**************] a [******************] with,
[****************] and (v) any [******************************] by PanAmSat in
[*****************************] and equipment for which PanAmSat is not
[**********************] that may be associated with the provision of such
service in addition to those agreed to be provided under this Agreement. Nothing
herein shall be [********************] PanAmSat to [**************] such
[*************************] if the [********] of the party, the party's proposed
use of the transponder or [***********] for terms and conditions for service, or
other reasonable and appropriate factors, lead PanAmSat [**************
******************] to determine not to enter such a service agreement; nor
shall PanAmSat be obligated to [****] the capacity formerly used to provide
Service to
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Customer [*******] of any other [************] that PanAmSat may also have
available. Customer acknowledges that the foregoing rights of PanAmSat: (i) are
[***************] under all of the circumstances existing as of this date; (ii)
constitute [*********************] for the [*****] of a [**********]; and (iii)
do [**************************]
7.5A The foregoing notwithstanding, PanAmSat shall not be permitted to
terminate this Agreement under Section 7.5(a) if, for reasons beyond the
reasonable control of Customer and any Customer Company, Customer is prohibited
by a law of general applicability from making payments to PanAmSat (a "Payment
Force Majeure") and all of the following conditions are met: (i) regardless of
any Payment Force Majeure, Customer (or a third party on Customer's behalf)
makes payment, including late payment charges, of all unpaid amounts within
either (A) sixty (60) days of the date otherwise due, or (B) ninety (90) days of
the date otherwise due (without regard to the application of the letter of
credit specified below) if prior to the Payment Force Majeure event, Customer
shall have caused a New York commercial bank, acceptable to PanAmSat, to provide
PanAmSat with a letter of credit, in form and substance acceptable to PanAmSat,
for one month's payment (as measured as of the time of the Payment Force
Majeure), entitling PanAmSat to draw down payment upon notification to it by
Customer of the existence of a Payment Force Majeure and PanAmSat shall, in
fact, have been permitted to draw down such amount (so that Customer's total
permitted late payment under this paragraph is no more than sixty (60) days);
(ii) Customer promptly notifies PanAmSat of the existence of the Payment Force
Majeure (in all cases within any grace period for nonpayment otherwise permitted
under Section 7.5(a)), uses all reasonable efforts to have the condition giving
rise to the Payment Force Majeure removed as soon as possible, and (iii)
Customer uses all commercially reasonable and legal methods to have payment made
as soon as possible, from sources (including, on Customer's behalf, from
Customer Companies) as to which the Payment Force Majeure does not apply, and
keep PanAmSat promptly apprised of such efforts.
If all of the conditions set forth above, except (i) are met,
PanAmSat shall still have the right to exercise all of the remedies stated in
Section 7.5; provided that, in such circumstances, if within one hundred and
eighty (180) days of the permitted termination of this Agreement, Customer is
able to make payments, including for the period during which this Agreement was
terminated (less any payment PanAmSat may have received from third parties for
the relevant capacity
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during this period), to the extent that PanAmSat has not already committed the
Service Transponders to other customers, it shall permit Customer to recommence
the operation of this Agreement, upon payment of such amounts, the next monthly
payment due, and late payment charges.
7.6 Rights and Obligations Upon Termination. Upon termination of this
Agreement in accordance with any of Sections 7.3, or 7.4 above, or Sections 7.7,
7.8, 7.9, or 8.1 below or if this Agreement expires by its terms, [*************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
************************] The termination of this Agreement for any reason in
accordance with this Agreement shall extinguish all of PanAmSat's obligations to
provide, and Customer's obligations to accept and pay for, the Service under
this Agreement, but shall not relieve either party of any obligation that may
have arisen prior to such termination, including (without limitation), under
Section 7.5 above, nor shall termination affect the parties obligations under
Article 11 ("Confidentiality") that shall survive termination of this Agreement.
7.7 Termination for Patent Infringement. In the event that: (a)
PanAmSat's provision of the Service infringes upon the patents or intellectual
property rights of third parties; (b) such infringement exists independent of
the combination of the Service with any Customer-Provided Facilities; and (c) as
a result, Customer cannot use the Service Transponders without infringing upon
the patent or intellectual property rights of third parties, Customer may
terminate this Agreement as to the affected Satellite upon thirty (30) days'
notice to PanAmSat, unless (i) such infringement ceases to exist within this
thirty (30)-day notice period; or (ii) PanAmSat agrees (to the extent that
Customer is not protected under the indemnity provided by PanAmSat's Satellite
manufacturer) to indemnify and hold harmless Customer from any claim or suit
based on such infringement and arising from PanAmSat's continued provision and
Customer's continued use of the Service Transponders on and after the date that
PanAmSat agrees to so indemnify Customer. In this latter instance, Customer
agrees to cooperate with PanAmSat and the Satellite manufacturer, as applicable,
in the defense of such claim and specifically agrees, as a condition to this
indemnity, to take all steps within its power that are required of it and/or
that are necessary for PanAmSat to take in order to
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receive the benefits of the Satellite manufacturer's indemnify, in accordance
with the relevant provisions of PanAmSat's contract with the Satellite
manufacturer.
7.8 Cross Termination by Customer. Upon the termination of this
Agreement with respect to the entire Primary Satellite under any of Sections
7.3, 7.4, 7.7, 7.9, or 8.1, Customer shall have the option to terminate this
Agreement as to the PAS-3 Satellite effective immediately on notice to PanAmSat.
Such notice must be given, if at all, at the same time that Customer notifies
PanAmSat of its termination of this Agreement as to the Primary Satellite, or,
if termination of the Primary Satellite occurs under the listed sections on
PanAmSat's notice to Customer, within ten (10) days of that notice. For the
avoidance of doubt, other than under Section 7.5 (Termination by PanAmSat of
Cause), the termination of this Agreement with respect to PAS-3 or, provided
that the Minimum Complement is maintained on the Beam(s)), partial termination
of this Agreement as to individual Transponders, shall not result in a
termination of this Agreement as to other Transponders, nor (except under
Section 7.5) shall the termination of this Agreement as to one of PAS-6 or
PAS-6B result in the termination of this Agreement as to other one.
7.9 Early Termination Right. In recognition of the additional risks to
maintaining satellite operations beyond the specified design life of the
Satellite, Customer shall have the right, subject to the conditions specified in
this Section 7.9, to terminate this Agreement [********************
*****************************************] after the PAS-6 Service Date.
Exercise of such termination rights by Customer must occur, if at all, on or
before the earlier of: (a) the [********************************] of the PAS-6
Service Date; or (b) [*************************] PanAmSat notifies Customer of
PanAmSat's firm intention to launch a Successor Satellite, with the intention to
place it into commercial service prior to the end of the [*************
*************] if Customer exercises its termination right under this Section
7.9, but in no event shall such exercise decision be required earlier than
[****************************************] PAS-6 Service Date.
ARTICLE 8. FORCE MAJEURE.
8.1 Failure To Commence Service Or To Perform. Any failure or delay in
the performance by PanAmSat of its obligation to commence or to continue to
provide Service shall not be a breach of this Agreement, if such failure or
delay results from any Act of God, governmental action (whether in its sovereign
or
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contractual capacity), or any other circumstance reasonably beyond the control
of PanAmSat, including, but not limited to, receive earth station sun outage,
meteorological or astronomical disturbances, earthquake, hurricane, snowstorm,
fire, flood, strikes, labor disputes, war, civil disorder, epidemics,
quarantines, embargoes, or acts or omissions of Customer or any third parties
(except that the acts or omissions of third parties acting on behalf of
PanAmSat, including PanAmSat's Satellite manufacturer and launch contractor,
shall not constitute a force majeure unless their acts and omissions are
themselves the result of force majeure conditions of the kind set forth above).
Subject to the following sentence, either party shall be permitted to terminate
this Agreement, as to the affected Service Transponder(s), if, because of force
majeure conditions: (a) after the applicable Service Date for the Satellite,
PanAmSat does not make Service in accordance with the Service Specifications
available, the Service Transponders meeting the Service Specifications and their
availability cannot be recommenced within sixty (60) days; or (b) the nature of
the force majeure event makes it clearly ascertainable that PanAmSat's ability
to make available the Service from the Service Transponders meeting the Service
Specifications will not be able to recommence within this sixty (60) day period.
The foregoing notwithstanding, Customer's rights to terminate under Sections
7.1, 7.1A, and 7.2, and, to the extent a failure to provide Service results from
a malfunction of a Satellite, under Section 7.3, shall be governed by those
Sections. Customer shall not be permitted to terminate this Agreement if
PanAmSat's inability to perform is due to acts or omissions of Customer or its
employees, agents, or contractors that are not in conformance with Appendix D or
for intermittent failures due to any or all of the following: sun outages,
meteorological or astronomical disturbances. In addition, in circumstances that
are not governed by Sections 7.1, 7.1A, 7.2, or 7.3 and that are not due to
events described in the previous sentence, if Service is not made available by
PanAmSat in accordance with the Service Specifications during a
[***************] due to a force majeure condition, provided that Customer
ceases use of the affected Service Transponders during such period (except in
coordination with PanAmSat to determine if the Service can be restored to the
Service Specifications), the [**************************] due from Customer for
the affected Service Transponders during the applicable [***************] shall
be adjusted pro rata to reflect the period during which Service from the Service
Transponders was not made available. [*****************************************
***********]
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ARTICLE 9. LIMITATION OF LIABILITY AND INDEMNIFICATION.
9.1 Limitation Of PanAmSat's Liability. EXCEPT AS EXPRESSLY PROVIDED IN
SECTION 7.6 ABOVE, ANY AND ALL EXPRESS AND IMPLIED WARRANTIES, INCLUDING, BUT
NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PURPOSE OR USE,
ARE EXPRESSLY EXCLUDED AND DISCLAIMED. IT IS EXPRESSLY AGREED THAT PANAMSAT's
SOLE OBLIGATION AND CUSTOMER'S EXCLUSIVE REMEDIES FOR ANY CAUSE WHATSOEVER
ARISING OUT OF OR RELATING TO THIS AGREEMENT ARE LIMITED TO THOSE SET FORTH IN
SECTIONS 2.2(b), 5.3, 8.1, 9.4, AND 9.5 AND ARTICLE 7 AND ALL OTHER REMEDIES OF
ANY KIND ARE EXPRESSLY EXCLUDED. In no event shall PanAmSat be liable for any
incidental or consequential damages or loss of revenues, whether foreseeable or
not, occasioned by any defect in the Satellite(s), the Transponders or the
provision of the Service Transponders to Customer, any delay in the provision of
Service to Customer, any failure of PanAmSat to continue to provide Service, or
any other cause whatsoever.
9.2 Limitation Of Liability Of Others. Without limiting the generality
of the foregoing, Customer acknowledges and agrees that it shall have no right
of recovery for the satisfaction of any cause whatsoever, arising out of or
relating to this Agreement, against (a) any supplier of services or equipment to
PanAmSat in connection with the construction, launch, operation, maintenance,
tracking, telemetry and control of the Satellite(s) or the Service
Transponder(s), or the provision of the Service Transponders to Customer in any
circumstances in which PanAmSat would be obligated to indemnify the supplier, or
(b) any officer, director, employee, agent or partner of (i) PanAmSat or (ii)
any service or equipment provider under 9.2(a). Except as provided in Article 17
and Appendix L and, subject to PanAmSat's rights as a third party beneficiary
under Section 1.4(b) of this Agreement, PanAmSat acknowledges and agrees that it
shall have no right of recovery for the satisfaction of any cause whatsoever,
arising out of or related to this Agreement, against any officer, director,
employee, agent or partner of Customer, except with respect to any partner or
agent to the extent arising out of the transmission of signals to the
Satellite(s) by it or on its behalf.
9.3 Indemnification. Customer shall defend and indemnify the "PanAmSat
Group" (defined herein to mean PanAmSat and all officers, directors, employees,
agents and partners of PanAmSat) from any claims, liabilities, losses,
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costs, or damages, including attorneys' fees and costs, arising out of the
provision of Service to Customer from, or Customer's use of, the Satellite(s) or
the Service Transponder(s), that (a) is caused by the fault or negligence of
Customer, (b) arises under a warranty, representation, or statement by Customer
to any third party in connection with transmissions carried on the Service
Transponders, (c) arises out of the content of programming, including any libel,
slander, obscenity, indecency, pornography, religious fanaticism, or political
advocacy, infringement of copyright, infringement of patents, breach in the
privacy or security of transmissions; or (d) arises out of disputes between or
among Customer and any program supplier and/or its program recipients. The
limitation of liability set forth in this Article 9 shall apply to, and the
indemnifications set forth in this Article 9 shall run in favor of, the PanAmSat
Group.
9.4 Equitable Relief. Nothing contained in this Article 9 or elsewhere
in this Agreement shall preclude either party from seeking injunctive relief to
prevent a willful breach or to compel performance in the event of a willful
failure to comply with this Agreement.
9.5 Patents, Copyrights, Mask Work Rights and Proprietary Computer
Programs. To the extent that the manufacturer of the Satellite(s) or any part
thereof may be obligated to indemnify PanAmSat for any infringement of any
patent, copyright, "mask work" (as defined in the Semiconductor Chip Protection
Act, 17 U.S.C. Secs. 901-14) right or other proprietary computer right with
respect to the manufacture of, or provision of services from the Satellite(s)
and the Service Transponders and such indemnification obligations may be passed
through to protect PanAmSat's customers, PanAmSat shall pass such protection
through to Customer; provided, that PanAmSat makes no representation or warranty
that any manufacturer's indemnification obligation exists or will continue to
exist or may be passed through; and provided further that, to the extent such
indemnification rights are limited, PanAmSat may equitably share such
indemnification protections for the common benefit of PanAmSat and its
customers.
9.6 Indemnitor Rights. If Customer is obligated to provide
indemnification pursuant to this Article 9 or PanAmSat undertakes to indemnify
Customer under Section 7.7, the indemnifying party (the "Indemnitor") shall
promptly defend any claims against the party entitled to indemnification (the
"Indemnitee") with counsel of Indemnitor's choosing at its own cost and expense.
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The Indemnitee shall allow the Indemnitor to control the defense and cooperate
with, and assist as reasonably requested by, Indemnitor in the defense of any
such claim, including the settlement thereof on a basis stipulated by Indemnitor
(with Indemnitor being responsible for all costs and expenses of defending such
claim or making such settlement); provided, however, that (1) Indemnitor will
not, without the Indemnitee's consent, settle or compromise any claim or consent
to any entry of judgment which does not include the giving by the claimant or
the plaintiff to the Indemnitee of an unconditional release from all liability
for which the Indemnitor does not fully indemnify the Indemnitee with respect to
such claim, (2) the Indemnitee shall be entitled to participate at its sole
expense in support of Indemnitor's action in the defense of any such claim and
to employ counsel at the Indemnitee's own expense to assist in the handling of
such claim, and (3) the Indemnitee shall have the right to pay, settle or
compromise any such claim as to itself, provided that in such event Indemnitor
shall be relieved of any liability or obligation which would otherwise then or
thereafter have existed or arisen in respect of such claim.
9.7 Limitation of Liability [**************************************]
Customer's money damages exposure to PanAmSat with respect to any breach of
obligations under Section [***************************************************
******************************************************************************
********************] shall be no greater than would be PanAmSat's liability
exposure to Customer for a breach by PanAmSat of its obligations under that
Section; i.e., [*******************] is [***********] to [**********
*************] and neither party is precluded from seeking injunctive relief in
the event of a willful breach.
ARTICLE 10. SUBORDINATION AND ASSIGNMENT.
10.1 Intentionally Deleted.
10.2 Collateral Trustee
With respect to PAS-3:
(a) Customer hereby acknowledges that this Agreement and all
rights granted to Customer hereunder are subject and subordinate to a security
interest and lien in favor of First Trust National Association (the "Trustee"),
as the same may be assigned (the "Security Interest") in and to the
Transponder(s) that
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may be owned and operated by PanAmSat and which are the subject of this
Agreement (and/or the proceeds from the sale or other disposition of all or any
portion thereof, or any insurance that may be received by PanAmSat as a result
of any loss or destruction of, or damage to, the Transponders identified above).
The Security Interest shall be deemed to arise under all security agreements,
indentures, mortgages, pledge agreements and other collateral documents between
Trustee and PanAmSat, including all renewals, modifications, consolidations or
replacements thereto (collectively, the "Collateral Documents"). Notwithstanding
the Security Interest, the Trustee agrees that Customer shall continue to have
the benefits of this Agreement notwithstanding any default on the part of
PanAmSat under the Collateral Documents, so long as (i) Customer is not in
default under the terms and conditions of this Agreement, (ii) Customer shall
not pay any of its obligations under this Agreement more than 30 days prior to
their scheduled payment date under this Agreement, (iii) this Agreement is not
supplemented, amended or extended or otherwise modified in any manner which
adversely affects the interests of the Trustee on behalf of the holders of the
Senior Secured Notes (as defined in the Collateral Documents) in a degree
greater than the manner in which it adversely affects PanAmSat, and (iv) after
receipt of notice from the Trustee of a default by PanAmSat under the Collateral
Documents, Customer agrees to make, and makes, all payments thereafter as
instructed by the Trustee.
(b) Customer acknowledges and consents to the foreclosure,
should it occur, upon this Agreement by the Trustee or its designee, successor
or assignee, and the consequent replacement of PanAmSat under this Agreement by
the Trustee, its designee, successor or assignee, or another purchaser or
assignee, provided that any successor to PanAmSat under this Agreement (i)
expressly assumes PanAmSat's obligations hereunder for the benefit of Customer,
and (ii) succeeds to substantially all of the right, title, and interest in and
to all assets of PanAmSat reasonably necessary for such successor to perform its
obligations under this Agreement. Upon such succession and assumption by a party
other than the Trustee, the Trustee and its successors under this Agreement,
other than the ultimate successor, shall be released from any further liability
under this Agreement.
(c) The Trustee shall be entitled to exercise all rights and
to cure any defaults of PanAmSat under this Agreement, within such cure period
as may be available to PanAmSat under this Agreement. Upon receipt of notice
from the
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Trustee, Customer agrees to accept such exercise and cure by the Trustee and to
render all or any part of the performance due by Customer under this Agreement
to the Trustee.
(d) Intentionally Deleted.
(e) The Trustee shall be deemed an express third party
beneficiary of this Section 10.2. This Section 10.2 shall be self-operative and
no further instrument of subordination shall be required by any security
agreement, mortgage or other document reflecting the Security Interest to make
this subordination effective. In confirmation of such acknowledged
subordination, Customer shall execute promptly any instrument or certificate
which PanAmSat or the Trustee may reasonably request.
10.3 Subordination to Other Entities. Customer acknowledges and agrees
that PanAmSat may grant security interests in the Transponders and/or the
Satellite(s). In such event, provisions that are the same as in Section 10.2
above or, to the extent that changes are requested by another secured party,
similar provisions shall apply.
10.4 PanAmSat's Right To Assign. Customer agrees that PanAmSat may
assign its rights and interests under this Agreement and to the Satellite(s) and
any or all sums due or to become due under this Agreement to an assignee for any
reason; provided that, except with respect to the granting of a security
interest or the assignment of a right to payment, such assignee agrees in
writing to assume all of the duties and obligations of PanAmSat hereunder.
Customer agrees that upon receipt of notice from PanAmSat of such assignment,
Customer shall perform all of its obligations directly for the benefit of the
assignee and shall pay all sums due or to become due directly to the assignee,
if so directed. Upon receipt of notice of such assignment, Customer agrees to
execute and deliver to PanAmSat such documentation as assignee may reasonably
require from PanAmSat. As used in this Section 10.4, assign shall mean to grant,
sell, assign, encumber or otherwise convey directly or indirectly, in whole or
in part.
10.5 Customer Assignment. Customer may assign its rights under this
Agreement only in whole, only to an Approved Participating Company (or any
entity Controlled by one or more of the Approved Participating Companies), and
only if the following conditions are satisfied: (a) the proposed assignee in
writing
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assumes all of Customer's obligations with respect to this Agreement and agrees
to be treated as Customer for all purposes under this Agreement; (b) such
written undertaking is delivered to PanAmSat at least thirty (30) days in
advance of the assignment; (c) Customer guarantees assignee's performance of
payment obligations which obligations shall also continue to be subject to the
guarantee requirements stated under Article 17 below; and (d) either (i) the
assignee agrees in writing to continue the programming practices of Customer, or
(ii) the assignee is one of the Approved Participating Companies as to whom (as
shown in Appendix I) PanAmSat has consented to its current programming practices
and said assignee agrees to follow the assignor's current programming practices
(as exist as of the date of this Agreement) with respect to the use of the
Service Transponders, or (iii) or PanAmSat consents to such assignment in
advance and in writing, such consent not to be unreasonably withheld or delayed;
it being understood that PanAmSat may withhold its consent only if PanAmSat
determines, in good faith, that some or all of the assignee's programming may be
pornographic, involve religious fanaticism or political advocacy, obscene,
indecent, slanderous, or in violation of any governmental programming
restrictions. Without limitation, any assignee shall be required to use the
Transponders assigned in accordance with Section 1.4.
Customer shall also be permitted to assign, in part,
but not in whole, or in collective parts but that do not equal a whole, its
obligation to make payment and such other limited rights, and associated
obligations, as Customer and PanAmSat shall negotiate in good faith for Service
from individual Transponders to local distributors of Customer's DTH Service in
which Customer or any Approved Participating Company holds, directly or
indirectly, at least, or in combination with each other, at least 25% of its
equity ("Partial Assignees"), provided that: (i) all of the conditions set forth
in the previous paragraph are met (except, as to (a), that the assumption shall
be limited to the obligations and rights so assigned pursuant to the above
pursuant to an assignment and assumption agreement that shall reflect what is to
be agreed above and shall otherwise be in form and substance satisfactory to
PanAmSat, as it shall determine in good faith, and that condition (d) is met
under alternative (d)(i) only); (ii) all rights and obligations of Customer
under this Agreement shall be interpreted and exercised, regardless of any such
partial assignment, as an integrated whole (e.g., Minimum Complement) and any
failure of any Partial Assignee or Customer to perform its obligations to
PanAmSat may be treated by PanAmSat as a failure of Customer and
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all of its Partial Assignees to perform, and PanAmSat may exercise its remedies
accordingly; (iii) Customer shall act as the sole agent for any Partial Assignee
for purposes of implementing this Agreement, both to provide a single point of
contact for notice from PanAmSat and to give PanAmSat notice of any exercise of
rights by a Partial Assignee (PanAmSat being entitled to rely on a notice given
to it by Customer, in this regard, without inquiry); (iv) any such partial
assignment notwithstanding, PanAmSat's sole liability under this Agreement shall
be, as otherwise specified in this Agreement, to Customer and Customer shall
indemnify and hold harmless PanAmSat from any cause of action of any kind that
may be brought against PanAmSat by any Partial Assignee that is derived in any
respect from any partial assignment that may be permitted hereunder (including,
without limitation, any dispute between or among Customer and its Partial
Assignees), including the reimbursement of PanAmSat for reasonable attorneys
fees and costs associated with defending such action, and for any other material
costs or damages that PanAmSat may incur by virtue of having permitted a partial
assignment that PanAmSat would not have been reasonably likely to have incurred
had this Agreement not been so partially assigned and had remained entirely with
Customer. For the avoidance of doubt, under no circumstance shall Customer be
permitted to assign separately from a permitted assignment of the entire
Agreement its rights under Articles 16 or 18 hereof.
10.6 Successors. Subject to all the provisions concerning assignments,
above, this Agreement shall be binding on and shall inure to the benefit of any
successors and assigns of the parties. The foregoing notwithstanding, no
assignment of this Agreement shall relieve either party of its obligations to
the other party, without the express written consent of the other party, not to
be unreasonably withheld. Any purported assignment by either party not in
compliance with the provisions of this Agreement shall be null and void and of
no force and effect.
10.7 No Resale. Except as expressly permitted in Sections 1.4, 1.6,
7.1A, and 10.5, the Service Transponders are being provided for Customer's own
use and in no event shall Customer be permitted to resell them, in whole or in
part, to any other person or entity. This Section 10.7 shall not be construed to
prohibit the Customer from subleasing capacity to the extent permitted in
Section 1.4 hereof, for usage and [**********************] purposes that are
consistent with Customer's obligations to PanAmSat under this Agreement.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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ARTICLE 11.
11.1 Publicity. The terms of this Agreement, the transactions
contemplated herein, and the information exchanged in their connection shall be
kept strictly confidential by the parties and their advisors and shall be used
solely for the purposes contemplated by this Agreement and specifically not in
any way for purpose of competing with any party hereto or any of its Affiliates;
provided, however, that the parties may disclose such information: (i) to their
respective shareholders, directors, officers, partners, lenders, insurance
agents, accountants, and advisors on an as needed and confidential basis and the
foregoing agree (or are subject to agreement or other obligations of
professional responsibility (e.g., lawyers) to keep such information
confidential; (ii) to regulatory authorities or the general public if and to the
extent a party is required by law or securities exchange rules or regulations to
make such disclosures (including, but not limited to, in connection with a
public offering); (iii) to actual and proposed potential partners, investors,
lenders, and successors in interest; and (iv) News, Televisa, TINTA, Globo,
Mexico Platform, NetSat, entities under any of their Control and such venture as
some or all of them may form in connection with the provision of DTH services on
an as needed and confidential basis. Subject to the proviso of the preceding
sentence, the parties will mutually agree on the timing and substance of the
initial announcement of this Agreement to the general public. To the extent
practicable, any other disclosures to the general public will be coordinated and
approved by the parties prior to release.
ARTICLE 12. REPRESENTATIONS, WARRANTIES AND COVENANTS.
PanAmSat has (for PAS-3 and PAS-6) or will use all reasonable efforts
to obtain by the PAS-6B Service Date (for PAS-6B) and will use all reasonable
efforts to maintain all consents and authorizations from the FCC and other
governmental entities that may be necessary to provide the Service as
contemplated in this Agreement; provided that, except as it may relate to
actions that may need to be taken with third parties or non-U.S. governmental
agencies a "best efforts" standard shall apply to PanAmSat's activities before
the FCC with respect to PAS-3, PAS-6, and PAS-6B. Subject to the understanding
that certain consents and authorizations have not yet been obtained and that
certain applications in this regard may be pending or subsequently filed with
the FCC or other applicable governmental entity,
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PanAmSat and Customer each represents and warrants to, and agrees with, the
other that:
12.1 Authority. It has the right, power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement shall not result in the breach or non-performance
of any document, instrument or agreement by which it is bound.
12.2 Partnership And Corporate Approvals. It has taken all requisite
partnership or corporate action, as applicable, to approve execution, delivery
and performance of this Agreement, and this Agreement constitutes a legal, valid
and binding obligation upon itself in accordance with its terms.
12.3 Consents. The fulfillment of its obligations will not constitute a
material violation of any existing applicable law, rule, regulation or order of
any governmental authority. All necessary or appropriate public or private
consents, permissions, agreements, licenses or authorizations necessary for the
performance of its obligations under this Agreement to which it is subject have
been obtained, or it will use all reasonable efforts to obtain, in a timely
manner.
12.4 Litigation. To the best of its knowledge, there is no outstanding
or threatened judgment, pending litigation or proceeding, involving or affecting
the transactions provided for in this Agreement, except as set forth in the
"Disclosure Schedule" set forth in Appendix G or as has been previously
disclosed in writing by either party to the other.
12.5 No Broker. It does not know of any broker, finder or intermediary
involved in connection with the negotiations and discussions incident to the
execution of this Agreement, or of any broker, finder or intermediary who might
be entitled to a fee or commission upon the consummation of the transactions
contemplated by this Agreement.
12.6 Good Faith. Each party shall carry out its obligations under this
Agreement, including (without limitation) with respect to all matters requiring
that a consent be given, in good faith.
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ARTICLE 13. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF PANAMSAT.
13.1 Orbital Location. PanAmSat has been authorized to construct,
launch, and operate PAS-3 and PAS-6 in geostationary orbit at 43(degree) West
Longitude ("W.L."). PanAmSat will promptly apply to the FCC for authority to
launch and operate PAS-6B in geostationary orbit at 43(degree) W.L . As long as
Customer has rights to Service hereunder from the applicable Satellite, PanAmSat
shall use such orbital location (or, to the extent that PanAmSat obtains FCC
authority to do so, any location(s) within five degrees of 43(degree) W.L.),
unless prevented by subsequent order of the FCC, in which event PanAmSat shall
use such orbital position(s) closest to the range identified above that the FCC
may designate. PanAmSat shall use all reasonable efforts to resist any move of
the Satellite(s), from which Customer has right to Service, from outside the
orbital range specified above. In the event that PanAmSat is required to change
the Satellite(s) orbital location, such change shall not affect the continuing
validity of this Agreement, except to the extent such change prevents PanAmSat
from providing Customer with Transponders that meet the Service Specifications,
in which event the termination provision set forth in Section 7.3 shall apply.
The foregoing notwithstanding, the parties agree that the placement of a
Satellite outside of the orbital range from 38(degree) West Longitude through
and including 48(degree) West Longitude shall, for purposes of Section 7.3,
constitute a failure of the Service Transponders on that Satellite to meet their
Service Specifications.
13.2 Government Authorizations. PanAmSat shall use all reasonable
efforts to obtain and maintain all necessary governmental authorizations or
permissions to operate the Satellite(s) and to comply in all material respects
with all FCC and other governmental regulations regarding the operation of the
Satellite(s); provided that, except as it may relate to actions that may need to
be taken with third parties or non-U.S. governmental agencies, a "best efforts"
standard shall apply to PanAmSat's activities before the FCC with respect to
PAS-3, PAS-6, and PAS-6B.
13.3 Operational Reports. PanAmSat shall provide Customer a quarterly
written operational report concerning the Satellite(s) which shall include
information regarding the status of Spare Equipment and updated projections
regarding the predicted life of the Satellite(s). PanAmSat shall also notify
Customer as soon as practicable of any significant anomalies with respect to a
Satellite which
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have a material effect on the Service Transponder(s) or materially reduce the
projected life of a Satellite.
ARTICLE 14. PROGRESS REPORTS, INSPECTIONS AND ACCESS TO WORK IN PROGRESS.
14.1 Progress Reports. Beginning not later than ninety (90) days after
the date of execution of this Agreement and continuing until the PAS-6B Service
Date, PanAmSat shall furnish to the Customer on a monthly basis a written
progress report that shall state PanAmSat's projected scheduled launch date and
projected date that Service will commence for PAS-6B. PanAmSat shall notify
Customer as soon as possible of any significant change in the then-anticipated
PAS-6B Service Date, including any anticipated delay beyond the Latest
Anticipated Service Date for PAS-6B or any change in the month of anticipated
delivery or of launch for PAS-6B beyond October, 1998, and of any formal
notification of a delay in construction or launch of PAS-6B that PanAmSat may
receive from its construction or launch contractors. PanAmSat shall keep
Customer informed periodically of written communications to PanAmSat from the
FCC which materially affect PanAmSat's ability to fulfill its obligations to
Customer under this Agreement and to timely provide the Service, and shall
promptly deliver copies to Customer of any such written communications.
14.2 Inspection Rights of Customer. PanAmSat shall give Customer
reasonable notice of the commencement of pre-commercial service in-orbit testing
for PAS-6B. Subject to the consent of PanAmSat's manufacturer, which PanAmSat
shall seek to obtain and Customer's execution of any additional proprietary data
agreement that the applicable manufacturer may require, Customer shall be given
access to the test data from such tests that are relevant to the Service
Specifications of Service Transponders and Customer shall be allowed to be
present during such in-orbit testing.
In addition, again subject to the consent of the manufacturer
and the execution of any necessary proprietary data agreement that the
manufacturer may require, PanAmSat shall give Customer access to pre-commercial
service test information and reports relevant to the PAS-6B Service
Transponders, allow Customer to inspect the work in progress at reasonable times
and upon reasonable notice, and allow Customer to be present during
pre-commercial service testing for which PanAmSat also has access. It is
understood, in this regard, that the
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implementation of this paragraph is intended to be implemented at a cooperative
level largely between the respective engineers of the parties and that formal
notice of events or information will not be required.
This Section 14.2 does not apply to PAS-3 and has already been
implemented for PAS-6.
ARTICLE 15. MISCELLANEOUS.
15.1 Applicable Law And Entire Agreement. This Agreement shall be
interpreted according to the laws of the State of New York, U.S.A. Subject to
the following sentence, the parties agree that the appropriate and exclusive
forum for any disputes arising under this agreement shall be the United States
District Court for the Southern District of New York. Each party consents to the
jurisdiction of this court, but, if that court determines it lacks jurisdiction,
consents to the jurisdiction of the State courts of New York. The parties agree
to waive any or all rights they may have to a jury trial with respect to
disputes arising under this Agreement. Each party agrees that service of process
in any action or proceeding shall be deemed sufficient if mailed, first class,
postage prepaid, to the other at the address set forth in Section 15.5(b), as
the same may be changed in accordance with that Section. This Agreement may not
be amended or modified in any way, and none of its provisions may be waived,
except by a prior writing signed by an authorized officer of each party.
15.2 Severability; Reconstitution. Nothing contained in this Agreement
shall be construed so as to require the commission of any act contrary to law.
In the event that the transactions set forth in this Agreement are challenged
before a court or regulatory body of competent jurisdiction by other persons or
entities not parties hereto, PanAmSat and Customer agree that each will use its
all reasonable efforts before such court or regulatory body to support the
continuing operation of this Agreement by its terms. If any provision of this
Agreement shall be invalid or unenforceable, the provisions of this Agreement so
affected shall be curtailed and limited only to the extent necessary to permit
compliance with the minimum legal requirements; provided that if the effect is
such so that the economic relationships or benefits and burdens contemplated
under the Agreement are substantially affected, the parties shall seek and use
all reasonable efforts to reconstitute this
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Agreement so as best possible to restore to each party to the economic position
contemplated in this Agreement.
15.3 No Third Party Beneficiary. The provisions of this Agreement are
for the benefit only of Customer and PanAmSat, and, except as provided under
Sections 10.2, 10.3 and 17.1, no third party may seek to enforce or benefit from
these provisions, except that both parties acknowledge and agree that the
provisions of Sections 9.2 and 9.3 are intended for the benefit of the PanAmSat
Group. Any member of the PanAmSat Group shall have the right to enforce, as a
third party beneficiary, the provisions of Sections 9.2 and 9.3 either by (a) an
action brought solely by itself, or (b) joining PanAmSat, or other members of
the PanAmSat Group in bringing an action against Customer for violation of
Sections 9.2 or 9.3. The foregoing notwithstanding, both parties acknowledge and
agree that the non-interference requirements of Section 4.1, with respect to
PAS-3, are intended for the benefit of both PanAmSat and all other Protected
Parties on PAS-3, except that no Protected Party who has the right to uplink to
a Satellite shall be entitled to third party beneficiary rights to enforce
Section 4.1 against Customer, unless the agreement giving such other Protected
Party the right to uplink to a Satellite also gives Customer comparable third
party beneficiary rights against it. Any other Protected Party shall have the
right, as a third party beneficiary (a) to enforce the non-interference
requirements of Section 4.1, against Customer directly, in an action brought
solely by itself, or (b) to join with PanAmSat or any other Protected Parties in
bringing an action against Customer for violation of the non-interference
requirements of Section 4.1.
15.4 Non-Waiver of Breach. Either party may specifically waive any
breach of this Agreement by the other party, provided that no such waiver shall
be binding or effective unless in writing and no such waiver shall constitute a
continuing waiver of similar or other breaches. A waiving party may at any time,
upon notice given in writing to the breaching party, direct future compliance
with the waived term or terms of this Agreement, in which event the breaching
party shall comply as directed from such time forward.
15.5 Notices.
(a) Telephone Notices. For the purpose of receiving notices
from PanAmSat regarding preemption, interference or other technical problems,
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including with respect to Transponder failure and restoration, Customer shall
maintain at each earth station transmitting signals to the Satellite(s) a
telephone that is continuously staffed at all times during which customer is
transmitting signals to the Satellite(s) and an automatic facsimile machine in
operation and capable of receiving messages from PanAmSat at all times. THOSE
PERSONS STAFFING THE EARTH STATION, FOR THE PURPOSES OF RECEIVING SUCH MESSAGES
FROM PANAMSAT, MUST HAVE THE TECHNICAL CAPABILITY AND ABSOLUTE AUTHORITY
IMMEDIATELY TO TERMINATE OR MODIFY THE TRANSMISSION IF NOTIFIED BY PANAMSAT.
PanAmSat shall also maintain a telephone that is continuously staffed for the
purposes of receiving notices regarding the matters identified in the first
sentence of this Section 15.5(a). All such notices shall be made in English and
shall be effective upon the placement of a telephone call from one party to the
other. Each party shall promptly confirm all telephone notices that may be given
under this Agreement in writing in accordance with Section 15.5(b) below. Any
unsuccessful efforts to reach a party by telephone shall be followed by telecopy
and telephone calls to other contact points, e.g., the corporate headquarters of
the other party, that said party may have provided the notifying party.
(b) General Notices. All notices and other communications from
either party to the other, except as otherwise stated in this Agreement, shall
be in English writing and, shall be deemed received upon actual delivery or
completed facsimile addressed to the other party as follows:
To PanAmSat if by recognized courier PanAmSat International Systems, Inc.
service or by personal delivery to One Pickwick Plaza
its principal place of Greenwich, Connecticut 06830
business: Attention: General Counsel
To PanAmSat if by facsimile: 203-622-9163
Attention: General Counsel
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With a copy to:
If by recognized courier service or Goldberg, Godles, Wiener & Wright
by personal delivery to its principal 1229 Nineteenth Street, N.W.
place of business: Washington, D.C. 20036
Attention: Henry Goldberg
If by facsimile: 202-429-4912
Attention: Henry Goldberg
To Customer if by recognized courier Sky Multi-Country Partners
service or by personal delivery to its c/o Sky Latin America
principal place of 14750 NW 77th Court, Suite 220
business: Miami Lakes, Florida 33016
To Customer if by facsimile: 305-816-5111
Attention: President
With a copy to:
If by recognized courier service or by The News Corporation Limited
personal delivery to its principal 1211 Avenue of the Americas
place of business: New York, New York 10036
Attention: Group General Counsel
If by facsimile: 212-852-7147
and
The News Corporation/Sky
Latin America
10201 West Pico Boulevard
Los Angeles, California 90035
If by facsimile: 310-369-3742
Attention: Executive Vice President,
Business Affairs
and
If by facsimile: 310-369-3595
Attention: Executive Vice
President, Legal Affairs
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and
Globo Comunicacoes e Participacoes
Ltda.
A.V. Afranio De Mello Franco
135 - 1 Andar
Rio de Janeiro - RJ - Brasil
CEP 22 430-060
Attention: Ronaldo Mascarenhas
If by facsimile: 011-55-21-529-7695
and
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Attention: Michael J. Gillespie
If by facsimile: 212-909-6836
and
Televisa International LLC
201 South Biscayne Blvd.
Miami, Florida 33131
Attention: General Counsel
If by facsimile: 305-377-8129
and
Tele-Communications
International, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
If by facsimile: 303-267-5651
Attention: President
and
If by facsimile: 303-488-3207
Attention: General Counsel
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and
Grupo Televisa S.A.
Avenida Vasco de Quiroga #2000
3er Piso, Colonia Sante Fe
Mexico, D.F. 01210
Attention: Chief Financial Officer
If by facsimile: (525)-261-2044
and
Norman P. Leventhal
Leventhal Senter & Lerman
2000 K Street, NW, Suite 600
Washington, DC 20006
If by facsimile: (202)-293-7783
Each party will advise the other of any change in the address, designated
representative or telephone or facsimile number.
For the avoidance of doubt, notices and certifications given by either
party to the other while relevant to the timing of further action by the
notified party shall not be deemed in and of themselves to establish the fact
stated in the notice. So, for example, under Section 5.3, the fact that Customer
notifies PanAmSat that a Transponder does not meet the Service Specifications
and/or that PanAmSat notifies Customer that a Transponder has been restored to
its Service Specifications shall not be deemed conclusive evidence, in and of
itself, of failure and/or restoration. Each party shall timely notify the other
if said party believes that any such notice is inaccurate.
15.6 Headings. The descriptive headings of the Articles and sections of
this Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
15.7 Documents. Each party agrees to execute, and, if necessary, to
file with the appropriate governmental entities and international organizations,
such documents as the other party shall reasonably request in order to carry out
the purposes of this Agreement.
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15.8 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and all such
counterparts together shall constitute but one and the same instrument.
15.9 Absence of Partnership. The relationship among the parties shall
not be that of partners and nothing in this Agreement shall be construed to
create a partnership between such parties.
ARTICLE 16. SUCCESSOR OR COLLOCATED SATELLITES.
16.1 Successor or Collocated Satellite.
(a) PanAmSat Elects to Launch.
(i) In the event that PanAmSat, or a PanAmSat Company
(collectively referred to as "PanAmSat" for purposes of this Section 16.1)
determines to launch a new "Collocated Satellite" or a "Successor Satellite"
(each as defined herein) during the Term hereof or during the survival period
specified in clause (f) below, with Ku-band transponders covering [*******
********] the [*********************] as the Service Transponders over the
Territory that are [***********************] to or [***************************]
from the PAS-6 or PAS-6B Service Transponders ("South American Ku-Band
Transponders"), PanAmSat shall give Customer the right to [************] or
enter into a [***************************] with respect to, at Customer's
election, some or all (but in no event less than the lesser of (A) [**********]
and (B) an amount equal to [*********] of the [******] Ku-band [***********] on
such satellite, a [*********************] of the South American Ku-Band
Transponders or [**********************] on such Collocated and/or Successor
Satellite at a price to be negotiated but not to [*****************
*************] as determined below, and on other terms and conditions to be
negotiated in good faith, but which shall be [**********************], in
relevant part, to this Agreement, [**********] as appropriate to reflect
[********] in [*******], whether payment is [******************] changes in
[************] and [****************************************************] and
other [************] in circumstances that reasonably require [***************]
in, or [***********] from, the terms and conditions stated herein. The
negotiation period for each Collocated or Successor Satellite shall be for
[***************] during which time each party agrees to negotiate in good faith
exclusively with the other party (i.e., PanAmSat with respect to the South
American Ku-band Transponders subject to negotiation and Customer and the
Customer Companies
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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with respect to transponder capacity to be used for the provision of DTH Service
to the Territory).
(ii) During the [****************] negotiating
period: (A) if the Transponders on the Collocated or Successor Satellite are
comparable (in terms of power and coverage) to the PAS-6 Transponders, PanAmSat
agrees to [*******] Customer an end of life service contract with service fees
for a [*********************] on the applicable satellite that shall, subject to
the qualifications stated below, be [*******************************************
*************************************************************************] per
month per Transponder increased for [*************] by a [***************] equal
to the increase in the [***] (as defined below) from the Service Date of the
PAS-6 Service Transponders to the month and year of the Service Date of the
applicable Successor or Collocated Satellite (with adjustment as necessary to
reflect the change in the [***] from the time of the negotiation to the Service
Date of such Successor or Collocated Satellite), or (B) if the Transponders on
the Collocated or Successor Satellite are comparable (in terms of power and
coverage) to the PAS-6B Transponders, PanAmSat agrees to offer Customer an end
of life service contract with service fees for a Bulk Acquisition on the
applicable satellite that shall, subject to the qualifications stated below, be
[*****************************************************************************
********************************************************] per month per
Transponder increased for [***************] by a percentage equal to the
increase in the [***] (as defined below) from the Service Date of the PAS-6B
Service Transponders to the month and year of the Service Date of the applicable
Successor or Collocated Satellite (with adjustment as necessary to reflect the
change in the [***] from the time of the negotiation to the Service Date of such
Successor or Collocated Satellite). The [***] means the [*******************
*****] now known as the [*******************************************************
***************] for [***************************************************] for
[**************************] If such [***] shall be discontinued, the foregoing
calculations shall be made using a reasonably equivalent successor or comparable
measure of [**************] in the [************] in the United States as
reasonably determined by PanAmSat. The price per Transponder as determined under
this clause (ii), modified, if applicable, under clause (iii) below, is referred
to in this Agreement as the [******************]
(iii) The foregoing notwithstanding, PanAmSat shall
be permitted to [************] the service fees above that stated above with
respect to the [****] to reflect any extraordinary and substantial increase in
its [******] and [*********] in
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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[**************************************] and [**************************] and
[*************] a Successor or Collocated Satellite relative to such costs of
the [*******] or PAS-6B [********] (as applicable in clause (ii) above),
including increases in [******************] or the need to purchase
[*****************] increases in launch [*************] rates in excess of
[****] of the [***********] value (unless the [*********************] of launch
[*************] is less than [*****************] to [**************************
****************] because the [**************] are [**********] or other
extraordinary factors the failure to take into account of which would frustrate
the intent of this [********************] which is to [********************]
that allows PanAmSat to earn a [********************************************]
PanAmSat shall also be permitted to [*****************] to reflect any
[******************************] that result from [**************] a satellite
above and beyond the [*****************************] of PAS-6 or PAS-6B, as
applicable, adjusted to reflect then [*****************] technological
standards.
(iv) The [*******************] negotiating period may
be initiated by either party on notice to the other at any time within the time
period set forth below. Each negotiation period (per Collocated or Successor
Satellite) shall not begin earlier than the date on which both of the following
conditions have been satisfied: (A) PanAmSat notifies Customer of, or publicly
announces, a [****************] to launch a Collocated or Successor Satellite;
and (B) [*************] prior to the proposed launch of the Collocated or
Successor Satellite. Each negotiation period shall not commence, if at all later
than [*************] prior to the date that the applicable Collocated or
Successor Satellite is scheduled to be launched. If negotiations are not
initiated by such date or successfully concluded with a binding purchase or
service agreement within the [**************] negotiation period, unless
Customer has given PanAmSat a "Customer's Offer" (as defined below), neither
party shall have any further obligation pursuant to this Section 16.1. The
conclusion or failure to conclude such an agreement for a transponder or
transponders on a Collocated or Successor Satellite shall not otherwise affect
the parties' obligations hereunder.
(v) At any time prior to the end of the applicable
negotiation period specified above, Customer shall have the right to make to
PanAmSat Customer's [*********************] ("Customer's Offer") of the
[********] and other [***********] terms and conditions (sufficiently detailed,
if accepted, to form a binding contract) on which it is willing to
[************] or enter into an [*******************************] for a
[********] number of South American Ku-band Transponders on the applicable
Collocated or Successor Satellite.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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(vi) If Customer makes the Customer's Offer, for as
long as it is held open (i.e., that it may be accepted by PanAmSat without
Customer's subsequent right to withdraw it), until [***************] after the
launch of the Collocated or Successor Satellite, PanAmSat will not, without
[*******] offering the Customer the [**************] to do so, and for a period
of [**********************] following notice of such offer to Customer, enter
into a [*************] or [**********************************************] for
the [***********************] South American Ku-band Transponders on the same
Satellite than stated in Customer's Offer that, overall, taking into account the
price (which, for purposes of comparison, will be calculated on a [**********
******************************************] by PanAmSat, but notified to
Customer so that Customer may make an [******************] in its offer to
reflect this [*******************] and [**********] terms and conditions (but
not [****************] individual terms and conditions) are [*********
**********************] to PanAmSat than, Customer's Offer.
(b) Related Collocated Satellite Rights. PanAmSat shall notify
Customer of any determination by PanAmSat to launch a Collocated Satellite, even
if the Satellite will [***] have [**********] transponders that fall within the
definition of clause(a)(i) above for which Customer's rights under this Article
16 apply, if the [*******] of the [****] would [**********] the [****] of the
[*************************] on the Collocated Satellite for the provision of
Service to Customer for use in the Territory on a future Collocated Satellite.
(For the avoidance of doubt, in no event shall PanAmSat be permitted to launch a
Collocated Satellite which uses frequencies that would [**********] with the
Service Transponders so as to [***********] their meeting their [***********]
Specifications.) Before committing to such a Collocated Satellite that would
[***********] the use of such [*************************************] by
Customer in the Territory, other than pursuant to an obligation under the
[******************] PanAmSat shall give Customer the opportunity to exercise
its rights, if still extant, under clause (c) below to require PanAmSat to
launch a Collocated Satellite, subject to applicable [***************], and
[***************************] employing such [**********************] with
Ku-band [**************] for use in the Territory. Customer shall have until the
later of: (i) [******************] from PanAmSat's notice to Customer, or (ii)
until the [**************************] specified below, to exercise such rights.
Customer shall not be required to make any decision
regarding [****************************************************************]
either under this clause (b) or clause (a) above [****************************
*************] as to any [**************************]
[***] Filed separately with the Commission pursuant to a request for
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that is [********************************************************************
************************] unless in either case PanAmSat is required by
[***********] to proceed with the [*****************] of a
[********************] under the [*******************] (the "Decision Period").
In addition, PanAmSat will not require Customer to make a decision whether
[*******************************************************************************
***************] (and the "Decision Period" will be so extended), unless either
(i) PanAmSat was [**********************] by [**********], as provided above,
or (ii) PanAmSat [******************************] to [**************************
**********] that it acquires on a Collocated Satellite to any third party for
any lawful purpose, subject to Customer's ultimate obligations therefore,
consistent with Section 10.6 of this Agreement (i.e., an [**********************
*****************] the [***********************************************] without
the consent of the other party).
Accordingly, by way of example, unless PanAmSat was
[**************************************************************************
*********] if PanAmSat notifies Customer in [******************] of PanAmSat's
[********************] a [*******************] either with [**********
***********************************] or [***************************]
Transponders that would have a [********************************
*******************************************] to have South American Ku-band
Transponders, Customer [*******************************] whether to
[**************] an agreement to [****************] on such Satellite or
[***********************] of a Satellite employing such frequencies for
[**********************************] Transponders until [*************
*********] such [*******************] could not be placed into [**********
************************************] unless Customer's right to so decide is
extended until [**********************] and, unless PanAmSat allows Customer the
right specified above to [************************] Customer will have until
[*******************] to make a decision, effectively [***************] PanAmSat
from committing to any [***************] of such [*****************************]
The foregoing notwithstanding, if Customer requests
PanAmSat to provide [******************************] under Section 1.8(b)(i)(B)
above, Customer shall [******] to have the right to [*******] a decision to
[*************] from a [*************************] Informal discussions or
exchange of correspondence by the parties regarding the possibility of a
[***********************] including (without limitation), consultation under
clause (d) below, that does not clearly state that it is intended as a notice
under this clause or a request under Section 1.8(b)(i)(B) shall not be deemed to
give rise to rights under this or related provisions.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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(c) PanAmSat Obligated to Launch. Customer may
[*******************] to [***********************] with the
[***********************] and [***************] of a [******************]
and/or, a Successor Satellite under the following circumstances:
(i) The obligation may be applied only to the
[**************************] for [*********************************
****************] and, if Customer agrees to [*******************] on a
[*******************************************] of the Service Date of [***
******************************************************************************]
each with at least twelve "South American Ku-band Transponders," meeting the
criteria set forth in clause (a) above;
(ii) Customer shall use all reasonable efforts to
[**************] exercise of rights under this Section 16.1 with the
[*****************************] by [*********] under the [***********
***********] so that the same [*********************] may be used to satisfy the
needs of each entity, but placement into service of such Satellite shall not be
unreasonably delayed to accommodate such coordination;
(iii) Customer must [***********************] or
enter into [*********] of [*******************] for at [*******************]
Ku-band transponders on each satellite that PanAmSat is required to cause to be
[*******************************************] provided that PanAmSat may
[**********] Customer to [*********************] Ku-band transponders if
Customer is otherwise unwilling to do so, but only if PanAmSat grants Customer
the right to assign to any third party for any lawful purpose the number of
transponders above [***] ("Extra Transponders") that Customer is required to
take (subject to Customer's ultimate obligations as under Section 10.6) and
PanAmSat agrees to use reasonable efforts to assist Customer in assigning its
rights to such capacity;
(iv) Except under circumstances in which Customer is
acting in response to a notice given to it by PanAmSat under clause (b) of this
Section 16.1 of PanAmSat's intention to launch a Collocated Satellite, all or
substantially all of the [*************] provided to it under this Agreement
must be [****************] Customer's DTH Service and, at the time that such
required Satellite is placed in service, all [***************] provided under
this Agreement, with the exception of any Extra Transponders that Customer may
be [************************] under the previous clause (iii), may only be
[***********] the [************] of DTH Service;
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(v) PanAmSat shall not be obligated to proceed with
[*****************] until all [*************************************] or other
[**************************************] and [*************************
****************] have been obtained or resolved. PanAmSat shall use all
reasonable efforts to obtain [********************************************] and
to resolve such other issues, provided that PanAmSat will use efforts in respect
of Customer's [************] at least as great as it has used or uses during the
[***************] period for other capacity. If permitted by law, PanAmSat will
go forward in advance of such resolution if Customer [*******] for and [*******]
the [***********] (e.g., [*********] and [**********************] of proceeding
along such a course);
(vi) PanAmSat may [*********] Customer to [****], as
and [******************] the date that [**********************] are due,
[**************] PanAmSat's [******] in [*****************] and [*************]
the Satellite (including, without limitation, the [********] of [************
****************************************] or other [****************] and launch
[***************] In such event, PanAmSat shall [*********] such [**********
********************] against the [*****************] otherwise due for the
Collocated or Successor Satellite [**************************] at a rate of
[******************] per annum;
(vii) If Customer requires PanAmSat to proceed with
the construction, launch and operation of a Successor or Collocated Satellite,
the purchase price or service fees for transponders on such satellite, unless
otherwise agreed, shall be set in accordance with the [*******************]
established under Section 16.1(a) above. Other terms of the agreement to
[******************************] shall be negotiated between the parties in good
faith, shall be [**********************] in relevant part, to this Agreement,
[************] as appropriate to [**************************] whether
[*******************************************************************************
****************************] and other [***************] in circumstances that
reasonably require [*******************************************************
**********] herein; and
(viii) If Customer exercises its rights under this
Section 16.1(c) to require the construction of a Successor Satellite, it shall
do so sufficiently in advance so that, as applicable: (A) a Successor Satellite
for PAS-6 can be scheduled to be available (subject to the conditions stated
herein, at Customer's election) either [****************************************
*****************] of PAS-6 (an "Early Successor Satellite") or, provided that
the termination right specified in [****************] above is not exercised and
provided that NetSat has not agreed to acquire capacity on
[***] Filed separately with the Commission pursuant to a request for
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an "Early Successor Satellite," by such time that the underlying satellite is to
be taken out of service in accordance with [**************] above, and (B) a
Successor Satellite for PAS-6B can be scheduled to be available no earlier than
the [****************************] and no later than the date that the Satellite
would otherwise be scheduled to be taken out of service under [**************]
(it being understood that PanAmSat may in its discretion, also elect itself to
proceed with a Successor Satellite scheduled to be available at any time during
this period), and (C) a Successor Satellite for a Collocated Satellite, if any,
can be scheduled to be available by the time that such Collocated Satellite is
to be taken out of service (or by such other period as the parties may negotiate
in connection with any underlying agreement for the provision of service from
such a Collocated Satellite).
(d) Consultation. PanAmSat will consult with Customer on the
planning and design of Successor and Collocated Satellites (including, without
limitation, the Ku-band transponders, [**************] etc.) intended for
[*******************************************] it being understood that
[****************************] (e.g., [**********************] that
[*************] may be [*************] to Customer at [************] and beyond
the [****************] stated in clause 16.1(a)(ii) above, if applicable.
(e) Condition of [***************] Customer shall cease to
have any rights under this Article 16 if there is any
[************************************] unless a [******************
*************] of Customer remains with the [*********************] who, as of
the Execution Date, held a majority of the voting equity of the Customer. (If
TINTA elects to be deemed a Founding Partner under Section 18.4, it shall be
deemed a Founding Partner for the purposes of the preceding sentence.) Customer
shall [*********************] under clause (c) above if Customer [*********] to
have any [***************] under Section 1.8(a)(ii)(B). If Customer [**********]
to have obligations under Section 1.8(a)(ii)(B), other than by pursuant to
clause 1.8(b)(ii), Customer shall [**********] to have any further rights under
this Section 16.1 vis-a-vis Collocated Satellites other than with respect to
[**************************************] that may be already subject to a
[********************************] between PanAmSat and Customer at that time.
(f) Survival. The termination of this Agreement under Section
7.4 or, if the number of Service Transponders (on the Primary Satellite and, if
applicable, PAS-3 Transponders that are retained by Customer under either
Section 2.2(g) or Section 2.2(h)) that meet their Service Specifications
[***************
[***] Filed separately with the Commission pursuant to a request for
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<PAGE>
*****], under Section 7.3, shall not [*************] the parties [*********
************] under Section 16.1, until such time, if it has not already done
so, as PanAmSat makes available to Customer for [**************] or
[*****************] a Collocated or Successor Satellite (including, without
limitation, an "Early Successor Satellite"). If Customer then enters into a
[*******************] agreement, the [***************************************]
of this Section 16.1 shall be [*************************************] in that
agreement, provided that in [**] right shall such rights [***********] beyond
[*******************] At such time as such [********************] agreement is
entered or at the [********************] "Negotiation Period" (as defined in
Section 16.1) without such a [***********************] agreement being entered
(except for the operation of Section 16.1(a)(vi) as to the satellite that had
been under negotiation, if a Customer's Offer was made), this Section 16.1 shall
[*********************]
(g) Definitions. For purposes of this Agreement, the term
"Successor Satellite" shall mean any satellite containing [********************]
that PanAmSat launches or causes to be launched to replace the Primary Satellite
(or, if Customer makes a [*******************] of [**************] on a
[**************************] to [*********] such [************************] at
its presently assigned location or at such [************************
************] to which the FCC may authorize the Primary Satellite to be moved,
or, to the extent that this Section 16.1 survives the termination of this
Agreement under clause (e) above, the [**************************] of the
Primary Satellite from which Customer [************************] provided under
this Agreement. For purposes of this Section 16.1, the term "Collocated
Satellite" shall mean any new Satellite (i.e., [****] one that has
[*****************] launched as of the date of this Agreement), other than
successor satellite(s) to previously launched satellites, containing Ku-band
capacity that PanAmSat launches or causes to be launched to be in the
[*************************] as the Primary Satellite while the Primary Satellite
is still in [**********************], or, to the extent that this Section 16.1
survives the termination of this Agreement under clause (f) above, the
[**************************] of the Primary Satellite from which Customer [****]
the [************] provided under this Agreement. PAS-6B shall not be deemed to
be a Successor Satellite or a Collocated Satellite to PAS-6.
(h) [***************************************] This Section
16.1 does [******************] to [********] or its successor satellite(s) or,
unless there is no PAS-6B Service Date, [*********] nor shall the termination of
this Agreement solely as it relates to[*************************************
********] have any [********] on this Section 16.1. Except as provided in clause
(f) above, this Section 16.1 shall [*********] to apply at such time that
[***] Filed separately with the Commission pursuant to a request for
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this Agreement is [*********************************************] Neither
PanAmSat nor Customer shall be required to make any decision or take any action
under this Section 16.1 until after the end of the Interim Period.
ARTICLE 17. GUARANTIES.
17.1 The Guaranties. Each party's entry into this Agreement is
expressly conditioned upon the contemporaneous execution and delivery to
PanAmSat of the several guaranties of Globo, Televisa, TINTA, and News (the
"Current Guarantors") in the form set out in Appendix L. If said Guaranties are
not executed and delivered to PanAmSat on the date of this Agreement, this
Agreement shall be null and void. PanAmSat agrees that, if the [**********
***************************************] Customer is [*************] PanAmSat
shall, subject to PanAmSat's prior written consent, not to be unreasonably
withheld, conditioned or delayed, allow the [*********************************
*******************] to reflect their interests by substituting for the
[*****************************************] the guarantees of [**************
***********************************] (so that [*********************
**************************************************] obligations of Customer
under this Agreement), provided that the [**********************] are of
[****************************************************************] (as of the
date hereof) and provide PanAmSat with their guaranties in the form set out in
Appendix L. PanAmSat acknowledges and agrees that the guarantors under this
Section 17.1 are third party beneficiaries of the provisions of this Section
17.1 regarding adjustments to guaranteed amounts and are entitled to enforce
said provisions directly against PanAmSat.
ARTICLE 18. OPTIONAL RIGHTS.
18.1 [*********] Option. PanAmSat has entered into an agreement with
[*****************************************************************************
*********] at a price of [*********************] to secure [***********
***********] for a [******************] Satellite to have [***********
************] configuration and performance as [***********] which Hughes would
then agree (subject to provisions regarding unanticipated delays) to make
available in time for [***********] within [***************] of ordered
completion, but not earlier than [******************] provided that the order
for completion may not be made later than [********************
******************] after the [**********************]
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Customer and [**********] are evaluating whether to commit to
a [**********] in the event of a [********************************] Not later
than [******************] Customer [*************************] shall notify
PanAmSat whether they desire to pursue a [******************] in accordance with
the first paragraph of this Section 18.1. In such event, the parties shall
negotiate in good faith to reach an amendment to this Agreement to provide for
such a [********************************************] such negotiations to be
concluded, and an amendment executed (if at all) no later than [******
************]
It being understood and agreed that certain material terms
will have to be negotiated at the time, certain basic parameters of the
contemplated [********] Amendment, if entered, are as follows:
(1) Customer [****************] would both commit to
take [**********************] transponder capacity from [*************
**********************************************] and would be required to
exercise any available [***********************] as to [*************
*********************]
(2) Customer [******************] would continue to
be obligated to take capacity from PAS-6 (and, if applicable, PAS-3)
[*************************] and in the event that [*****************************
******************************************************] or if the [***********]
program is otherwise terminated (e.g., for delay -- the conditions of such
termination to be negotiated), the Agreement as to PAS-6 (and, if applicable,
PAS-3) [*******************]
(3) Upon the execution of the [***********]
Amendment, PanAmSat shall order the [********************] from [*********],
subject to item (4), at [**********************] If [********************
*******************] PanAmSat would then order [***********] to be completed and
launched, again subject to item (4), at [***************]
(4) Once this Agreement is amended as to [******
********] if Customer terminates this Agreement as to PAS-6B [**************]
Customer [********* ******************] shall be [******************
*********************************************************] subject to any
available [****************] from [********]. Further, if PanAmSat orders
[**********] to complete PAS-6C [**********************************] any
pre-launch termination by Customer [*************] of PAS-6C (under conditions
to be negotiated) shall be subject to their [********************
***************] of its [*******************************************************
**********]
[***] Filed separately with the Commission pursuant to a request for
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It is understood and agreed that if the parties are unable to
reach agreement on a [***********] Amendment, this Agreement shall continue in
full force and effect. Further, in no circumstances will PanAmSat be required to
commit to [*************************************************] if Customer and
[*********] are not also so committed.
Without limiting the above, it is understood that PanAmSat is
also exploring other potential [*************] satellite options in this event.
If presented by PanAmSat, Customer agrees in good faith to consider such
alternate proposal(s).
18.2 [************] Option. Not later than sixty (60) days from the
Execution Date of this Agreement, Customer may elect on notice to PanAmSat (the
[*****************************]) to [***********] this Agreement, as it would
apply on and after the PAS-6B Service Date, to [***************************
********************************************************************************
********************************************************] In such event,
effective on the PAS-6B Service Date (and, for avoidance of doubt, only if the
occurrence of the PAS-6B Service Date is not deemed negated under Section
2.2(f)), this Agreement shall be deemed amended, without further action of the
parties, into the form of agreement that is set forth in Appendix N hereto.
If the [*****************************] is exercised, PanAmSat shall
also permit Customer to [*******************************************************
*************************************************]
[*************************************************************
********************************************************************************
*********************************************************************]
[*************************************************************
********************************************************************************
********************************************************************************
*****]
[*************************************************************
*******************************************************************************]
[**********************************************************************
********************************************************************************
*************************************
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
**********************************************************************]
[*******************************]
[*************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
****************************************************]
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confidential treatment.
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[*************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
*************************************************************]
[**********************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
**************************************************]
18.4 TINTA Option. TINTA may elect, on notice to PanAmSat, to be given
no later than the date that is sixty (60) days after the Execution Date, to be
deemed a Founding Partner, in which event TINTA shall also be deemed to be a
Customer Company. If TINTA does not exercise this option, it will not be deemed
a Founding Partner and it will only be deemed to be a Customer Company if (and
for so long as)
[***] Filed separately with the Commission pursuant to a request for
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it has a voting equity in Customer that is higher than ten percent (10%), it
being understood that, as of the Execution Date, TINTA's interest is exactly ten
percent (10%). For the avoidance of doubt, by operation of Section 1.4(c) of
this Agreement, if TINTA becomes a Customer Company, its "Affiliates" shall also
be deemed Customer Companies.
ARTICLE 19. INDEX TO DEFINED TERMS.
For ease of reference, there follows a list of defined terms, which
identifies the place in this Agreement where each such term is defined:
Defined Term Defined At:
[**********] 3.2(b)
Additional Facilities Costs 1.6(c)
Additional Transponders 3.2(c)
Affiliate 1.4(b)
Agreement Preamble
Approved Companies 1.4(b)
Approved Participating Companies 1.4(b)
[**********] 3.1
[************************************************] 3.2(a)
Beam Preamble
Brazil Agreement Preamble
[******************] 16.1(a)(i)
[**************] 16.1(a)(ii)
Catastrophic Failure 7.1(B)(i)
Collateral Documents 10.2(a)
[**********************] 16.1(g)
Comparable Beam 2.2(h)
Condition Subsequent to PAS-6B Service Rate Preamble
Confirmed Basis 5.3
Control 1.4(b)
[***] 1.1(a)(ii)
Current Guarantors 17.1
Customer Company 1.4(c)
Customer Preamble
Customer's DTH Service 1.4(b)
Customer's Offer 16.1(a)(v)
Customer-Provided Facilities 4.2
Decision Period 16.1(b)
[***************] 3.2(c)
Deposit 3.1
Disclosure Schedule 12.4
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DTH Service 1.4(a)
Dual Illumination Period 5.4(c)
[**************************] 16.1(c)(viii)
[**] 3.2(a)
[*******************] 1.6(c)
Execution Date Preamble
Extra Transponders 16.1(c)(iii)
[*************] 3.2(a)
Founding Partner in Competition 1.8(d)
Founding Partners 1.4(b)
[******] Transponders 5.4
Globo Preamble
Home Page Transponder(s) 2.2(c)
Hughes Force Majeure 7.1B(ii)
Hughes Preamble
Indemnitee 9.6
Indemnitor 9.6
Intervening Negotiations 18.3(b)
Ku-band 1.4(a)
[*****************] 18.3(b)
Latest Anticipated Service Date 2.2(e)
Launch Failure 7.2
Letter Agreement Preamble
Limiting Negotiations 18.3(b)
[******************] 18.1
Loral Preamble
Mexico Agreement Preamble
Mexico Platform Preamble
Minimum Complement 2.2(e)
[*************************] 1.6(a)
[******************] 2.2(b)(i)
[*********************************] 3.2(b)
Monthly Service Fee 3.1
Negotiation Period 16.1(f)
NetSat Preamble
News Preamble
Non-DTH Outlets 1.4(b)
Non-DTH Transponder 1.4(c)
Northern Part of the Continent 1.4(a)
Operational Requirements 4.1
Option 18.3(a)
Other Satellite 5.4(B)
PanAmSat Company 1.8(a)(i)
PanAmSat Group 9.3
PanAmSat Preamble
PAS-3 [***********] Option 2.2(h)
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PAS-3 Preamble
PAS-3 Service Date 2.1
PAS-5 Preamble
PAS-6 Preamble
PAS-6 Service Date 2.2(a)
[****************************] 18.2
PAS-6B Preamble
[*********************] 18.1
Payment Force Majeure 7.5A
[********] 2.2(a)
[********] 2.2(b)
[********] 2.2(h)
Primary Satellite Preamble
[*******************************] 1.8(a)(i)(A)
programming 1.4(a)
Protected Parties 5.3
[*********] 3.2(b)
[**********] 18.3(a)
[*******************] 18.3(a)
Repayment Period 18.2
[*****************] 2.2(b)(iii)(A)
Retained SSA Transponder 2.2(b)(iv)
Satellite Preamble
[***********************] 3.2(c)
Security Interests 10.2(a)
Service Date 2.1
Service Fee 3.1
Service Preamble
Service Specifications 2.2(e)
Service Term 2.1
Service Transponders Preamble
simultaneous 5.3
South American Ku-Band Transponders 16.1(a)(i)
Southern Part of the Continent 1.4(a)
Spare Equipment 5.3
[***************] 2.2(b)(iv)
Substitute Capacity 5.3
[******************] 16.1(g)
Taxes 3.5
Televisa Preamble
Term 2.1
Termination Payment(s) 7.5
Territory 1.4(a)
Time for Early Replacement 7.4(f)
TINTA 1.4(b)
Transaction Costs 1.6(c)
[***] Filed separately with the Commission pursuant to a request for
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transmissions 1.4(a)
Transponder Preamble
Trustee 10.2(a)
TWTAs 5.3
[**********************] 3.2(d)
Defined terms include plural or singular versions and derivatives therefrom
(e.g., "Control," "Controlling").
[***] Filed separately with the Commission pursuant to a request for
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Each of the parties has duly executed and delivered this Agreement as
of the day and year first written above.
Notarized: PANAMSAT INTERNATIONAL
SYSTEMS, INC.
By:
Name:
Title:
SKY MULTI-COUNTRY PARTNERS
Notarized: By: SESLA, INC., a General Partner
By:
Name:
Title:
Notarized: By: DTH USA, INC., a General Partner
By:
Name:
Title:
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Notarized: By: TELEVISA MCOP HOLDINGS, INC.,
a General Partner
By:
Name:
Title:
Notarized: By: TCI MULTICOUNTRY DTH, INC.,
a General Partner
By:
Name:
Title:
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LIST OF APPENDICES
A. Service Transponders
B. Satellite Description and Spare Equipment*
C. Service Specifications*
D. Operational Requirements*
E. Intentionally Deleted
F. Intentionally Deleted
G. Disclosure Schedule
H. Sample Calculations
I. Approved Companies
J. Intentionally Deleted
K. Intentionally Deleted
L. Form of Guaranty
M. Form of Transmission Plan
N. [****************************************]
* Three versions each are supplied: one for each of PAS-3, PAS-6 and PAS-6B.
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the PanAmSat
Form 10-Q for the quarterly period ended March 31, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 48,569
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<ALLOWANCES> (1,031)
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<PP&E> 3,147,782
<DEPRECIATION> (475,797)
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0
0
<COMMON> 1,491
<OTHER-SE> 2,595,048
<TOTAL-LIABILITY-AND-EQUITY> 5,795,660
<SALES> 193,025
<TOTAL-REVENUES> 193,025
<CGS> 0
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<NET-INCOME> 35,348
<EPS-PRIMARY> $ .24
<EPS-DILUTED> $ .24
</TABLE>
