UNITED STATES
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 September 30, 1999
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 September 30, 1999, an aggregate of 149,288,762 shares of the Company's
Common Stock were outstanding.
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Cautionary Statement for Purposes of the "Safe Harbor"
Provisions of the Private Securities Litigation Reform Act of 1995
This Quarterly Report on Form 10-Q contains certain forward-looking statements.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for certain forward-looking statements. When used in this Quarterly Report on
Form 10-Q, the words "estimate," "plan," "project," "anticipate," "expect,"
"intend," "outlook," "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 (including without limitation, delayed launches,
launch failures and in-orbit failures), (ii) regulatory risks, including the
ability to obtain export licenses, (iii) risks associated with the Year 2000
issue and (iv) litigation. Such factors are more fully described in "Item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations" of this Quarterly Report on Form 10-Q and in "Item 3. Legal
Proceedings" and under the captions "Risk Factors" and "Year 2000 Readiness
Disclosure" in "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1998 (the "Form 10-K"). 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.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PANAMSAT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
<S> <C> <C>
September 30, December 31,
1999 1998
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(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 6,834 $177,542
Accounts receivable-net 41,961 63,326
Net investment in sales-type leases 23,277 22,595
Prepaid expenses and other 58,090 38,692
Deferred income taxes 16,404 36,438
Insurance claim receivable 295,684 -
----------- -----------
Total current assets 442,250 338,593
SATELLITES AND OTHER PROPERTY AND
EQUIPMENT-Net 3,063,292 2,895,191
NET INVESTMENT IN SALES-TYPE LEASES 155,885 173,382
GOODWILL-Net of amortization 2,384,818 2,433,538
DEFERRED CHARGES 69,968 49,793
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TOTAL ASSETS $ 6,116,213 $ 5,890,497
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The accompanying notes are an integral part of these consolidated financial statements
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PANAMSAT CORPORATION
CONSOLIDATED BALANCE SHEETS - (continued)
(In Thousands, Except Share Data)
<S> <C> <C>
September 30, December 31,
1999 1998
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(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 96,680 $ 88,005
Deferred gains on sale-leasebacks - 34,303
Deferred revenues 9,875 21,294
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Total Current Liabilities 106,555 143,602
DUE TO AFFILIATES (PRINCIPALLY MERGER-RELATED INDEBTEDNESS) 1,798,976 1,788,353
LONG-TERM DEBT 1,002,814 750,056
DEFERRED GAINS ON SALE-LEASEBACKS - 121,477
DEFERRED INCOME TAXES 308,436 231,373
DEFERRED CREDITS AND OTHER (PRINCIPALLY
CUSTOMER DEPOSITS AND DEFERRED
REVENUE) 113,829 111,239
ACCRUED OPERATING LEASEBACK EXPENSE - 55,982
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TOTAL LIABILITIES 3,330,610 3,202,082
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COMMITMENTS AND CONTINGENCIES
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<S> <C> <C>
STOCKHOLDERS' EQUITY:
Common Stock, $0.01 par value -- 400,000,000
shares authorized; 149,288,762 and 149,231,121
outstanding at September 30, 1999 and December 31, 1998,
respectively 1,493 1,492
Additional paid-in-capital 2,506,474 2,504,316
Retained earnings 277,636 182,607
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Total stockholders' equity 2,785,603 2,688,415
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 6,116,213 $ 5,890,497
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The accompanying notes are an integral part of these consolidated financial statements
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PANAMSAT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the Three Months Ended September 30, 1999 and 1998
(In Thousands, Except Share Data)
<S> <C> <C>
September 30, September 30,
1999 1998
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REVENUES:
Operating leases, satellite services and other $ 204,953 $ 179,750
Outright sales and sales-type leases 5,786 6,790
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Total revenues 210,739 186,540
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OPERATING COSTS AND EXPENSES:
Leaseback expense, net of deferred gain - 10,820
Depreciation and amortization 70,748 59,282
Direct operating costs 25,156 24,298
Selling, general and administrative expenses 16,591 13,813
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Total operating costs and expenses 112,495 108,213
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INCOME FROM OPERATIONS 98,244 78,327
INTEREST EXPENSE, NET 30,286 23,902
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INCOME BEFORE INCOME TAXES 67,958 54,425
INCOME TAXES 33,962 24,500
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NET INCOME $ 33,996 $ 29,925
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NET INCOME PER COMMON SHARE -- basic and diluted
$ 0.23 $ 0.20
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Weighted average common shares outstanding 149,551,485 149,548,470
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The accompanying notes are an integral part of these consolidated financial statements
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PANAMSAT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the Nine Months Ended September 30, 1999 and 1998
(In Thousands, Except Share Data)
<S> <C> <C>
September 30, September 30,
1999 1998
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REVENUES:
Operating leases, satellite services and other $ 586,756 $ 546,815
Outright sales and sales-type leases 17,874 23,830
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Total revenues 604,630 570,645
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OPERATING COSTS AND EXPENSES:
Leaseback expense, net of deferred gain 15,391 36,404
Depreciation and amortization 206,955 178,199
Direct operating costs 76,079 70,845
Selling, general and administrative expenses 47,254 42,111
Provision for loss on Galaxy IV - 6,314
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Total operating costs and expenses 345,679 333,873
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INCOME FROM OPERATIONS 258,951 236,772
INTEREST EXPENSE, NET 82,970 70,542
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INCOME BEFORE INCOME TAXES 175,981 166,230
INCOME TAXES 80,952 73,200
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NET INCOME $ 95,029 $ 93,030
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NET INCOME PER COMMON SHARE -- basic and diluted
$ 0.64 $ 0.62
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Weighted average common shares outstanding
149,491,629 149,635,423
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The accompanying notes are an integral part of these consolidated financial statements
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PANAMSAT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Nine Months Ended September 30, 1999 and 1998
(In Thousands)
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<S> <C> <C>
September 30, September 30,
1999 1998
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CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income $95,029 $ 93,030
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 206,955 178,199
Deferred income taxes 97,097 40,092
Amortization of gains on sale-leasebacks (10,762) (27,564)
Amortization of debt issuance costs 4,583 4,494
Interest expense capitalized (43,465) (45,956)
Provision for uncollectible receivables (1,680) -
Provision for loss on Galaxy IV - 6,314
Changes in assets and liabilities:
Collections on investments in sales-type leases 16,814 35,323
Operating leases and other receivables 23,045 (44,916)
Prepaid expenses and other assets (48,181) 18,023
Accounts payable and accrued liabilities (36,457) (5,288)
Accrued operating leaseback expense (18,624) (34,228)
Deferred gains and revenues 6,352 (12,113)
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Net cash provided by operating activities 290,706 205,410
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<S> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (409,831) (397,862)
Early buy-out of sale-leasebacks (net of $124.1M of assumed
indebtedness) (245,335) (155,530)
Net book value of satellites recovered through insurance 10,779 231,186
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Net cash used in investing activities (644,387) (322,206)
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CASH FLOWS FROM FINANCING ACTIVITIES:
New borrowings (net of $124.1M of assumed indebtedness) 1,440,000 1,165,000
Repayments of long-term debt (1,255,000) (964,566)
Repayments of incentive obligations (4,184) (31,423)
Stock issued to 401(k) plan 2,157 2,670
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Net cash provided by financing activities 182,973 171,681
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NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
(170,708) 54,885
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
177,542 91,739
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CASH AND CASH EQUIVALENTS, END OF PERIOD
$ 6,834 $146,624
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash received for interest $ 2,810 $ 9,923
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Cash paid for interest $ 134,234 $ 112,976
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Cash paid for taxes $ 9,316 $ 7,844
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The accompanying notes are an integral part of these consolidated financial statements
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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 and nine month periods ended September 30, 1999 and
1998 have been made. Certain prior period amounts have been reclassified
to conform with the current year's presentation. Operating results for
the three months and nine months ended September 30, 1999 and 1998 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 the Form 10-K.
(2) Satellite Developments
Reference is made to "Item 1. -- Business -- The Satellites -- Planned
Satellites / Satellite Deployment Plan" and "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations
-- Spacecraft Developments and -- Satellite Deployment Plan" in the Form
10-K for a detailed description of the Company's satellite fleet and its
satellite expansion and restoration plan. For a discussion of certain
delays related to the Company's launch and in-service dates for
satellites under construction and development, see "Management's
Discussion and Analysis of Financial Condition and Results of
Operations-- Satellite Developments" in this Quarterly Report on Form
10-Q.
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PANAMSAT CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Company's selected operating data shown below are not necessarily indicative
of future results.
SELECTED OPERATING DATA
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<S> <C> <C>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ --------------------------
(unaudited; in thousands) (unaudited; in thousands)
1999 1998 1999 1998
Operating leases, satellite services and other $204,953 $179,750 $586,756 $546,815
Outright sales and sales-type leases 5,786 6,790 17,874 23,830
Total revenues 210,739 186,540 604,630 570,645
Leaseback expense, net of deferred gain - 10,820 15,391 36,404
Direct operating and SG&A costs 41,747 38,111 123,333 112,956
Depreciation and amortization 70,748 59,282 206,955 178,199
Income from operations 98,244 78,327 258,951 236,772
Interest expense, net 30,286 23,902 82,970 70,542
Income tax expense 33,962 24,500 80,952 73,200
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PANAMSAT CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Revenues. Revenues were $210.7 million for the three months ended September
30, 1999 and $604.6 million for the nine months ended September 30, 1999. The
comparative analysis of revenues discussed below excludes the effects of a
one-time payment of approximately $15 million during the third quarter that was
associated with the termination of a direct-to-home (DTH) video services
agreement in India. Revenues increased $9.5 million, or 5%, to $196.0 million
for the three months ended September 30, 1999 from $186.5 million for the same
period in 1998. Revenues for the nine months ended September 30, 1999 were
$589.9, an increase of $19.3 million, or 3%, from $570.6 million for the same
period in 1998. These changes are principally a result of changes in the types
of service offerings that the Company provides.
The Company provides video services which are primarily full-time,
part-time and occasional satellite services for the transmission of news,
sports, entertainment and educational programming worldwide. The Company also
provides telecommunications services which support satellite-based networks that
relay voice, video and data communications within individual countries,
throughout regions and on a global basis. Video services revenues were $139.8
million for the three months ended September 30, 1999, an increase of 3% from
the same period in 1998. Video services revenues were $419.5 million for the
nine months ended September 30, 1999, as compared to $417.7 million from the
same period in 1998. The increase in video services revenues for the three and
nine months ended September 30, 1999 was due primarily to the commencement of
new service agreements for full-time video distribution services.
Telecommunications services revenues were $46.1 million for the three months
ended September 30, 1999, an increase of 13% from the same period in 1998.
Telecommunications services revenues were $137.8 million for the nine months
ended September 30, 1999, an increase of 17% from the same period in 1998. The
increase in telecommunications services revenues was due primarily to the growth
in new data service agreements during 1999.
Revenues can also be analyzed based on the type of agreement. Revenues from
sales and sales-type leases decreased to $5.8 million for the three months ended
September 30, 1999 from $6.8 million for the same period in 1998. Revenues from
sales and sales-type leases decreased to $17.9 million for the nine months ended
September 30, 1999 from $23.8 million for the same period in 1998. The decrease
for the three and nine months ended September 30, 1999 is attributable to a
lower volume in 1999 relative to 1998 of sales-type lease agreements
outstanding. Revenues from operating leases of transponders, satellite services
and other increased $10.4 million, or 6%, to $190.2 million for the three months
ended September 30, 1999 from $179.8 million for the same period in 1998.
Revenues from operating leases of transponders, satellite services and other
increased $25.2 million, or 5%, to $572.0 million for the nine months ended
September 30, 1999 from $546.8 million for the same period in 1998. The increase
in revenues from operating leases of transponders, satellite services and other
for the three and nine month
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periods is due primarily to increased available transponder capacity on new
international satellites placed in service since the first quarter of 1998.
Leaseback Expense, Net of Deferred Gain. For the three months ended
September 30, 1999, the Company recorded no leaseback expense, net of deferred
gain as compared to $10.8 million for the same period in 1998. Leaseback
expense, net of deferred gain, decreased $21.0 million, or 58%, to $15.4 million
for the nine months ended September 30, 1999 from $36.4 million for the same
period in 1998. These decreases are primarily attributable to the exercise by
the Company of certain sale-leaseback early buy-out options during 1998 and
1999.
Direct Operating and Selling, General and Administrative Costs. Direct
operating and selling, general and administrative costs increased $3.6 million,
or 10%, to $41.7 million for the three months ended September 30, 1999 from
$38.1 million for the same period in 1998. Direct operating and selling, general
and administrative costs increased $10.4 million, or 9%, to $123.3 million for
the nine months ended September 30, 1999 from $113.0 million for the same period
in 1998. These increases are due primarily to direct costs associated with the
addition of three new satellites placed in service and costs associated with the
continued growth of the Company.
Depreciation and Amortization. Depreciation and amortization increased
$11.5 million, or 19%, to $70.7 million for the three months ended September 30,
1999 from $59.3 million for the same period in 1998. Depreciation and
amortization for the nine months ended September 30, 1999 increased $28.8
million, or 16%, to $207.0 million from $178.2 million for the same period in
1998. The increase in depreciation and amortization for the three and nine month
periods is due primarily to depreciation expense associated with the addition of
three new satellites placed in service and the exercise by the Company of
sale-leaseback early buy-out opportunities.
Income from Operations. Income from operations was $98.2 million for the
three months ended September 30, 1999 and $259.0 million for the nine months
ended September 30, 1999. Excluding the termination payment, as described in the
revenue discussion above, income from operations for the three months ended
September 30, 1999 increased $5.2 million, or 7%, to $83.5 million from $78.3
million for the same period in 1998. Income from operations increased $7.4
million, or 3%, to $244.2 million for the nine months ended September 30, 1999
from $236.8 million for the same period in 1998. The increase in income from
operations for the three and nine month periods ended September 30, 1999, is due
primarily to higher operating lease revenues coupled with lower leaseback
expense resulting from the exercises by the Company of sale-leaseback early
buy-out options during 1998 and 1999.
Interest Expense, Net. Interest expense, net increased $6.4 million, or
27%, to $30.3 million for the three months ended September 30, 1999, from $23.9
million for the same period in 1998. Interest expense, net increased $12.4
million, or 18%, to $83.0 million for the nine months ended September 30, 1999
from $70.5 million for the same period in 1998. These increases are due
primarily to lower levels of interest income in 1999 and higher interest expense
resulting from new debt assumed in connection with the
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exercise of an early buy-out opportunity under a sale-leaseback transaction as
discussed below.
Income Tax Expense. Income tax expense increased $9.5 million, or 39%, to
$34.0 million for the three months ended September 30, 1999, from $24.5 million
for the same period in 1998. Income tax expense increased $7.8 million, or 11%,
to $81.0 million for the nine months ended September 30, 1999 from $73.2 million
for the same period in 1998. The increase in income tax expense for the three
and nine month periods ended September 30, 1999 is due primarily to an increase
in the effective tax rate level between 1999 and 1998 as a result of a reduction
in the estimated tax benefits available from the use of a foreign sales
corporation.
Satellite Developments. Reference is made to "Item 1. -- Business -- The
Satellites -- Planned Satellites / Satellite Deployment Plan" and "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Spacecraft Developments and -- Satellite Deployment Plan" in the
Form 10-K for a detailed description of the Company's satellite fleet and its
satellite expansion and restoration plan.
The Company currently has seven satellites under construction and
development by Hughes Space & Communications Company ("HSC"). As previously
reported by the Company on its Form 10-Q for the quarters ended March 31, 1999
and June 30, 1999, as a result of manufacturing delays communicated to the
Company by HSC in May 1999, the Company revised its satellite launch schedule.
Based upon information provided by HSC, the Company's current estimate of the
launch and in-service dates for the satellites under construction remains the
same as previously reported in its 10-Q for the quarter ended June 30, 1999. On
October 27, 1999, a Proton launch vehicle suffered a launch failure (that did
not carry any of the Company's Satellites). An investigation into the failure
has commenced, but a final report has not been issued. The Company is awaiting
the results of the investigation, but has not yet determined whether the Proton
launch failure will cause a delay in the launch of its Galaxy IV-R spacecraft,
which is currently scheduled for launch on a Proton launch vehicle.
Regulatory Developments. The U.S. Congress recently added communications
satellites to the munitions list governed by the International Traffic in Arms
Regulations ("ITAR"), and transferred responsibility for licensing the export of
satellites and related technical information from the U.S. Commerce Department
to the State Department. With the new regulatory framework, transfer of
information related to satellites to launch providers, insurers, customers,
potential customers, non-U.S. employees, foreign regulatory bodies such as the
International Telecommunications Union and national telecommunications
authorities of other countries, and other non-U.S. persons has become more
difficult. The State Department's interpretation of the regulations as they
would be applied to the Company is not yet complete, but it is possible that
these regulations could adversely affect or delay the Company's ability to
launch and insure its satellites and to sell capacity to non-U.S. customers.
Financial Condition. In addition to a term loan in the amount of $1.725
billion from Hughes Electronics Corporation, an affiliate of the Company, at
September 30, 1999 the
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Company also had long-term indebtedness of $1,002.8 million (comprised primarily
of $750 million of public notes, $185.0 million of notes outstanding under the
Company's commercial paper program and $67.8 million of notes assumed in
connection with the exercise of an early buy-out opportunity under a
sale-leaseback transaction (see below)).
The significant cash outlays for the Company will continue to be primarily
capital expenditures related to the construction and launch of satellites, debt
service costs and potential acquisitions. The Company now has seven satellites
under various stages of development for which the Company has budgeted capital
expenditures. The Company will require approximately $690 million for remaining
construction, insurance and launch costs relating to such satellites. In
addition to funding new satellites, the Company has exercised its remaining
early buy-out options under certain satellite sale-leaseback transactions
entered into in prior years. In January 1999, the Company funded outlays of
$141.3 million in cash in connection with the early buy-out of transponders on
the Galaxy VII satellite. On July 2, 1999, the Company executed the last of its
early buy-out opportunities on the Galaxy VII and Galaxy III-R satellites for a
total cost of approximately $104 million in cash, plus the assumption of $124
million of floating rate debt. As a result, the Company's cash, deferred gains
on sale-leasebacks and accrued operating leaseback expense balances have
declined from December 31, 1998. Other than indemnity obligations, the Company
no longer has any obligations under sale-leaseback agreements.
In April 1999, the Company filed two insurance claims totaling $270 million
related to anomalies on its PAS-8 and PAS-5 satellites. These anomalies are more
specifically described in the Company's Form 10-K and 10-Q for the period ended
June 30, 1999. In August 1999, the Company filed an insurance claim for $96
million on its Galaxy VIIIi satellite for a partial loss primarily resulting
from battery cell failures, bringing the Company's total claimed losses to
approximately $366 million. In September, the Company met with its insurance
carriers and agreed to settle all of the claims for net cash to PanAmSat of
approximately $304 million, the difference representing salvage values to the
insurers on the satellites. The Company expects to receive these insurance
proceeds during the fourth quarter.
During the third quarter, the Company's credit ratings were downgraded to
BBB-/A3 by Standard & Poor's. As a result, the Company expects that it will not
be practicable to issue commercial paper at the current rating level, and it
will instead draw upon its bank credit facility to fund its borrowing needs. In
a separate, unrelated transaction, the Company obtained an amendment to the bank
credit facility during the third quarter to modify a financial covenant
principally as a result of the impact of the manufacturing delays announced in
May 1999.
PanAmSat believes that funds available from operations, insurance claims,
and its existing financing programs will be sufficient to fund its planned
obligations over 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 funds available from its existing sources will be
sufficient to cover any shortfall in funding caused by launch failures, cost
overruns, delays or other unanticipated expenses. The failure to obtain such
funds could have a material adverse effect on PanAmSat's operations and its
ability to
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accomplish its business plan. In addition, any strategic transactions
or other significant projects that the Company might undertake would require
additional financing, which financing would be subject to the terms of
PanAmSat's existing indebtedness.
Net cash provided by operating activities increased to $290.7 million for
the nine months ended September 30, 1999, from $205.4 million for the nine
months ended September 30, 1998. The increase in 1999 was primarily attributable
to lower working capital offset by lower levels of deferred gain amortization
due to the exercise of early buy-out options.
Net cash used in investing activities increased to $644.4 million for the
nine months ended September 30, 1999, from $322.2 million for the nine months
ended September 30, 1998. The increase in 1999 was primarily attributable to
increased capital expenditures for satellite systems under development and the
exercise of the remaining early buy-out options.
Net cash provided by financing activities increased to $183.0 million for
the nine months ended September 30, 1999 from $171.7 million for the nine months
ended September 30, 1998. The increase in 1999 was primarily due to higher net
borrowings during the first nine months of 1999 associated with the Company's
satellites under construction and the exercise of its early buy-out
opportunities.
Year 2000 Readiness Disclosure. Many of the world's computer systems
currently use a two-digit format, as opposed to a four digit format, to indicate
the year. If not modified, these computer systems will be unable to properly
recognize dates beyond the year 1999, which could lead to system failures and
business disruption in the U.S. and internationally. The Company's Year 2000
Plan ("Y2K Plan") addresses Year 2000 issues in the following phases:
(i) identification of the Company's systems, equipment and
suppliers that may be vulnerable to Year 2000 issues;
(ii) assessment of the areas identified to determine risks
associated with their failure to be Year 2000 compliant and
corrective actions that would be necessary to prevent such
failure;
(iii) correction of affected systems and equipment;
(iv) testing of systems and equipment to determine if Year 2000
compliant; and
(v) contingency planning for reasonably likely worst-case
scenarios.
PanAmSat commenced its Y2K Plan in 1997. A project team consisting of
members of the engineering, operations, and software development groups meets
regularly and is in charge of plan scheduling and implementation. Identification
of susceptible systems and assessment of the corrective actions has been
completed by all functional areas. Correction
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and verification testing of affected systems are well underway and correction
and verification testing of all mission critical systems were completed during
the third quarter of 1999. Contingency planning and initial contingency testing
is complete and final contingency tests will be conducted during the fourth
quarter of 1999.
None of the Company's primary assets, the in-orbit satellites, have
date-dependent processing and therefore they are not at substantial risk due to
Year 2000 issues. Stationkeeping operations for the Company's satellites are not
date-dependent and no real-time commands will be required at the time of the
date change.
PanAmSat currently controls 21 satellites from its Long Beach, California
Operations Control Center (OCC), of which 16 of those satellites are owned or
leased by PanAmSat and 5 satellites are operated for third parties. All of
PanAmSat's domestic U.S. satellites and half of its international satellites are
operated by PanAmSat's OCC. The remaining international satellites, identified
below, are operated by third parties. Correction of the telemetry, tracking and
control ("TT&C") software for the PanAmSat operated satellites is the most
significant component of the Y2K Plan. The core TT&C software was delivered by
Raytheon, the software vendor, in March 1999. Modification of the
PanAmSat-unique sections of the software code began immediately and were
completed during the second quarter of 1999. Integration of the unique and
Raytheon sections of the software was also completed during the second quarter.
All subsystem-level and system level testing of the combined code is complete.
Installation of the software at remote TT&C sites was completed during September
1999. The ground control software is now compliant for all existing in-orbit
satellites operated by PanAmSat. Software for Galaxy XI, to be launched during
the fourth quarter of 1999, was delivered to PanAmSat during the third quarter
of 1999 and is Y2K compliant. Final testing of the entire software system,
including newly-delivered Y2K compliant software, is complete.
Five of PanAmSat's international satellites are controlled by third party
satellite operators. PanAmSat has sent requests for compliance certification,
remediation schedules, and contingency plans to each of these operators. GE
Americom, operator of PAS-1, has responded that both the satellite and the TT&C
network are fully compliant. Optus, operator of PAS-4, completed remediation,
testing, and final installation of their ground control software during
September 1999. All of the ground hardware associated with operating PAS-4 has
also been verified to be Y2K compliant or judged to have no operational impact.
Space Systems/Loral, the operator of three of the Company's satellites (PAS-6,
PAS-7, and PAS-8), installed certain TT&C equipment required for PAS-6 during
October 1999. All ground hardware associated with operating PAS-7 and PAS-8 is
already compliant. Final documentation verifying Y2K compliance of all Space
Systems/Loral satellite control systems is expected during November 1999.
PanAmSat is continuing to work with its third-party operators to verify Y2K
compliance and to finalize appropriate contingency plans.
PanAmSat has added Arianespace, the expected launch provider of the
Company's Galaxy XI and Galaxy X-R satellites, to its list of significant
service suppliers who are required to provide documentation of Y2K compliance.
Arianespace has provided information stating that remediation efforts to their
facilities, ground control systems, and launch vehicles are currently being
finalized. Remediation is complete for all aspects of
17
<PAGE>
the Ariane 4 launch vehicle and preparation facilities. Final ground network
installations are also expected to be completed during the fourth quarter of
1999, as is a final qualification test of all Ariane systems.
Compliance verification requests have been sent to all other identified
third-party equipment and system suppliers. PanAmSat's Y2K Plan team worked with
such suppliers to correct all non-compliant systems and most met our target
compliance date of June 30, 1999. All other vendors provided certification
during the third quarter of 1999 except as noted below.
Upgrades to most compressed digital video (CDV) systems were completed in
September 1999. An older CDV system still occasionally used by PanAmSat for
services on PAS-1 is no longer supported by its vendor. The equipment is fully
compliant when operated in unencrypted mode rather than encrypted mode, and the
Company plans to replace the system when the existing services are transferred
to PAS-1R, which will not occur until 2000 due to a delay in the PAS-1R launch
date. Consequently, PanAmSat has begun operating the existing CDV equipment on
PAS-1 in unencrypted mode and will continue to operate in that mode until the
transfer of services to PAS-1R.
Software upgrades for a remote payload monitoring system are in process and
will be completed during the fourth quarter of 1999. In addition, the Company is
acquiring a new carrier monitoring system ("CMS") for monitoring and
troubleshooting remote customer transmissions to replace the Company's existing
system (which is not Year 2000 compliant). While the Company has begun to
install the CMS at the Company's monitoring sites, the final site installation
may not occur until the first quarter of 2000. The mission critical function of
the existing system (real-time payload monitoring) will continue to operate, but
some data archiving functions may be affected.
Verification of compliance has now been received from most third-party
fiber circuit providers, but several companies have yet to provide
certification. Replacement of a phone system in a regional sales office is
currently scheduled for the fourth quarter of 1999.
The Company has also completed an evaluation of the various management
information systems used by the Company for financial and administrative
functions and has determined that such systems are largely Y2K compliant.
Upgrades to non-compliant hardware systems and software applications are now
complete. Modifications to and final testing of core business systems are
complete. Existing back-up procedures can be used to perform normal Company
financial and administrative functions in the event of potentially uncorrected
problems.
PanAmSat has identified the potential loss of real-time satellite control
software functionality as a reasonably likely worst case scenario. For PanAmSat
and Optus operated satellites, a contingency plan involving the use of
back-dated processors installed at each of the primary TT&C locations has been
developed to maintain satellite control capability in the event the main
software processing system experiences a failure during a date rollover. By
having the primary and redundant processors running simultaneously but with
different system dates, the processors will experience the critical date
rollovers at
18
<PAGE>
different times and ensure that at least one processor will be operational at
all times. Experienced satellite control personnel will also be deployed to the
primary TT&C sites. On site personnel and data processing capability also
eliminates the external fiber telecommunications lines from being a part of the
critical failure path. PanAmSat's formal contingency plans were completed in
March 1999 and contingency procedures were completed during the second quarter
of 1999. Installation of the extra data processors and preliminary testing at
the PanAmSat sites was completed in August 1999. Optus completed their
contingency plans and contingency processor installation during the third
quarter of 1999. Final contingency plan testing is underway and expected to be
complete during November 1999 at both PanAmSat and Optus.
Internal efforts on Y2K projects have had a minimal impact on other non-Y2K
IT and non-IT projects. Any transition of activities currently being performed
by third-party Y2K solutions providers to internal resources could delay some
internal software projects.
The Y2K Plan is funded from cash flows from the Company's operations.
Approximately $3.4 million has been incurred through September 30, 1999 in
connection with the Y2K Plan. Of this amount, approximately $250,000 was
incurred in 1998 and $200,000 during 1997. The total cost through completion of
the Y2K Plan is expected to be approximately $4.4 million. No assurance can be
given that the cost of the Y2K Plan will not increase.
Based on its current assessment efforts, the Company does not believe that
Year 2000 issues will have a material adverse effect on the financial condition
or results of operations of the Company. The Company's Year 2000 issues,
however, and any potential business interruption, costs, damages, or losses
related thereto, are also dependent upon the Year 2000 compliance of third
parties, both domestic and international, such as governmental agencies, vendors
and suppliers. As a result, the Company is unable to determine at this time
whether Year 2000 issues for third parties will materially affect the Company.
19
<PAGE>
PANAMSAT CORPORATION
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No.
10.33.2 Amendment to the PanAmSat Corporation Long-Term Incentive Plan
Established in 1997.*
10.42.2 Amendment to the Revolving Credit Agreement between Citibank and
PanAmSat Corporation dated September 29, 1999.
10.56 PanAmSat Corporation Amended and Restated Restoration and Deferred
Compensation Plan.*
10.57 PanAmSat Corporation 1999 Non-Employee Directors Compensation
Deferral Plan.*
10.58 Employment Agreement between PanAmSat Corporation and R. Douglas
Kahn, dated as of April 1, 1999.*
10.59 Amended and Restated Loan and Security Agreement by and among
PanAmSat Corporation, The Chase Manhattan Bank, and certain
lending institutions, dated as of July 2, 1999.
27 Financial Data Schedule.
(b) Reports on Form 8-K.
The Company did not file any reports on Form 8-K during the
quarter for which this report is filed.
- ------------------------
* Exhibits indicated with a * symbol are executive contracts or other
compensatory plans or arrangements.
20
<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: November 12, 1999 /s/ Kenneth N. Heintz
----------------------------
Kenneth N. Heintz
Executive Vice President and
Chief Financial Officer
and a Duly Authorized
Officer of the Company
21
AMENDMENT TO THE
PANAMSAT CORPORATION
LONG-TERM STOCK INCENTIVE PLAN
ESTABLISHED IN 1997
WHEREAS, PanAmSat Corporation (the "Company") sponsors the PanAmSat
Corporation Long-Term Stock Incentive Plan Established in 1997 (the "Plan"), as
amended and restated on April 9, 1998;
WHEREAS, Section 5.10 of the Plan provides that the Board of Directors
of the Company may, subject to the approval of the shareholders of the Company,
amend the Plan from time to time, for among other things, to extend the period
during which an award under the Plan may be exercised; and
WHEREAS, the Company desires to amend the Plan;
NOW THEREFORE, subject to approval by the shareholders of the Company,
the Plan is hereby amended, effective July 9, 1999, as follows:
1. Paragraph (b)(iii) of Section 1.03 of the Plan is amended and
restated in its entirety to read as follows:
"(iii) impose, modify or amend any such limitations, restrictions
and conditions upon any such award as the Committee shall deem
appropriate;"
2. A new subsection (d) is hereby added to Section 1.08 of the Plan to
read
<PAGE>
as follows:
"(d) For purposes of this Section 1.08, effective for any awards
granted under this Plan on or after July 9, 1999, "Company" shall
include PanAmSat Corporation, its subsidiaries and any affiliated
companies."
3. A Section 5.11 is hereby added to the Plan to read as follows:
"Deferral of Restricted Stock.
Subject to the terms of the Plan and the 1999 Non-Employee Directors
Compensation Deferral Plan ("Directors Deferral Plan"), an award of
Restricted Stock made under this Plan to a non-employee director in
connection with his or her service as a member of the Board of
Directors of the Company may be deferred under the terms of the
Directors Deferral Plan; provided, however, that any election to
defer such Restricted Stock is made at least 30 days prior to the
date of the annual meeting of shareholders in which the Restricted
Stock is awarded (or, if applicable, within thirty days of such
director first becoming eligible to participate in the Deferral
Plan). The payment of such award shall be subject to the terms of
the Directors Deferral Plan."
4. In all other respects, the Plan is hereby ratified and confirmed.
IN WITNESS WHEREOF, this Amendment to the Plan has been executed the
9th day of July, 1999.
PANAMSAT CORPORATION
By: /s/ James W. Cuminale
------------------------------------
James W. Cuminale
Executive Vice President & Secretary
EXECUTION
COUNTERPART
AMENDMENT NO. 1
AMENDMENT NO. 1 dated as of September 29, 1999 between PANAMSAT
CORPORATION (the "Borrower") and CITICORP USA, INC., as Administrative Agent (in
such capacity, the "Administrative Agent").
The Borrower, the Lenders named therein, the Co-Documentation Agents
named therein and the Administrative Agent are parties to a Credit Agreement
dated as of February 20, 1998 (the "Credit Agreement") providing, subject to the
terms and conditions thereof, for advances to be made by said Lenders to the
Borrower in an aggregate principal amount not exceeding $500,000,000 at any one
time outstanding. The parties wish to amend the Credit Agreement as hereinafter
provided, and the Required Lenders (as defined in the Credit Agreement) have
consented to such amendment. Accordingly, the Administrative Agent, acting with
the written consent of the Required Lenders, and the Borrower hereby agree as
follows:
SECTION 1. DEFINITIONS. Except as otherwise defined in this Amendment,
terms defined in the Credit Agreement have the same respective meanings when
used herein.
SECTION 2. AMENDMENTS. Effective as of the date hereof, but subject to
due execution and delivery of this Amendment by the parties hereto, the
Administrative Agent, acting with the written consent of the Required Lenders,
and the Borrower agree to amend the Credit Agreement as follows:
(a) Clause (d) in the first sentence of the definition of "EBITDA" in
Section 1.01 of the Credit Agreement shall be amended to read in its
entirety as follows:
"(d) depreciation expense, amortization expense and other non-cash
charges deducted in arriving at such net income (or loss), including,
but not limited to, extraordinary non-cash items which are not
reasonably expected to result in a cash outflow within one year, and
any provision for impairment loss on a satellite required to be
recorded in accordance with Statement of Financial Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed of", determined in accordance with GAAP for the
Borrower and its Subsidiaries on a Consolidated basis, for any period."
(b) Section 5.04(b) of the Credit Agreement shall be amended to read in
its entirety as follows:
<PAGE>
2
"(b) Interest Coverage Ratio. Cause the Interest Coverage Ratio for
each Rolling Period, commencing with the Rolling Period ending in
September, 1999, to be at least equal to 4.0 to 1.0."
SECTION 3. REPRESENTATIONS; RATIFICATION. The Borrower hereby
represents and warrants to the Administrative Agent for the benefit of the
Lenders, as of the date hereof, that (i) the execution, delivery and performance
by the Borrower of this Amendment have been duly authorized by all necessary
corporate action on its part and do not contravene any applicable law or
regulation or any contractual provision applicable to it or require any consent
or approval of any governmental authority, (ii) each of this Amendment and the
Credit Agreement as amended hereby constitutes the legal, valid and binding
obligation of the Borrower, enforceable in accordance with its terms, (iii) the
representations and warranties set forth in Article IV of the Credit Agreement
are true and complete as if made on and as of such date (or, if any such
representation and warranty is expressly stated to have been made of a specific
date, as of such specific date) and as if each reference in such representations
and warranties to the Credit Agreement included reference to such agreement as
amended hereby and (iv) as of the date hereof no Default has occurred and is
continuing under the terms of the Credit Agreement, as amended hereby. The
Borrower agrees that breach of any of the representations and warranties set
forth in this Section 3 shall be an Event of Default for purposes of Section
6.01(b) of the Credit Agreement. Except as specifically amended hereby, the
Credit Agreement and each other Loan Document are in all respects ratified and
confirmed. From and after the date hereof, all references in the Credit
Agreement and in any other Loan Document to "this Agreement", "the Credit
Agreement" and words of like import shall be deemed to refer to the Credit
Agreement as amended hereby.
SECTION 4. MISCELLANEOUS. This Amendment may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Amendment by signing
any such counterpart. This Amendment shall be governed by, and construed in
accordance with, the law of the State of New York.
<PAGE>
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first above written.
PANAMSAT CORPORATION
By /s/ James W. Cuminale
------------------------------------
James W. Cuminale
Title: Executive Vice President & Secretary
CITICORP USA, INC., as Administrative Agent
By /s/ Tracey Navin Ewing
------------------------------------
Tracey Navin Ewing
Title: Vice President
PANAMSAT CORPORATION
AMENDED AND RESTATED RESTORATION AND DEFERRED COMPENSATION PLAN
Originally Effective as of January 1, 1997, as Amended and Restated July 9, 1999
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C>
ARTICLE 1 Definitions.....................................................................................1
ARTICLE 2 Selection, Enrollment, Eligibility..............................................................5
2.1 Selection.......................................................................................5
2.2 Enrollment Requirements.........................................................................5
2.3 Eligibility; Commencement of Participation......................................................5
2.4 Termination of Participation and/or Deferrals...................................................6
ARTICLE 3 Deferral Commitments/Company Matching/Crediting/Taxes...........................................6
3.1 Restoration Deferrals...........................................................................6
3.2 Minimum Non-Restoration Deferrals...............................................................6
3.3 Maximum Non-Restoration Deferrals...............................................................7
3.4 Election to Defer; Effect of Election Form......................................................7
3.5 Withholding of Annual Deferral Amounts..........................................................8
3.6 Annual Company Contribution Amount..............................................................8
3.7 Annual Company Matching Amount..................................................................9
3.8 Vesting.........................................................................................9
3.9 Crediting/Debiting of Account Balances..........................................................9
3.10 FICA and Other Taxes............................................................................9
3.11 Taxation of Distributions......................................................................10
ARTICLE 4 Unforeseeable Financial Emergencies; Withdrawal Election.......................................10
4.1 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies..........................10
4.2 Early Withdrawal...............................................................................10
ARTICLE 5 Termination Benefit; Layoff Benefit............................................................11
5.1 Termination Benefit............................................................................11
5.2 Payment of Termination Benefit.................................................................11
ARTICLE 6 Disability Waiver..............................................................................11
6.1 Waiver of Deferral.............................................................................11
6.2 Return to Work.................................................................................11
ARTICLE 7 Beneficiary Designation........................................................................12
7.1 Beneficiary....................................................................................12
7.2 Beneficiary Designation; Change................................................................12
7.3 Acknowledgment.................................................................................12
7.4 No Beneficiary Designation.....................................................................12
7.5 Doubt as to Beneficiary........................................................................12
7.6 Discharge of Obligations.......................................................................12
ARTICLE 8 Leave of Absence...............................................................................13
8.1 Paid Leave of Absence..........................................................................13
8.2 Unpaid Leave of Absence........................................................................13
ARTICLE 9 Termination, Amendment or Modification.........................................................13
9.1 Termination....................................................................................13
9.2 Amendment......................................................................................13
9.3 Plan Agreement.................................................................................14
9.4 Effect of Payment..............................................................................14
ARTICLE 10 Administration.................................................................................14
10.1 Committee Duties...............................................................................14
10.2 Delegation.....................................................................................14
10.3 Binding Effect of Decisions....................................................................14
10.4 Indemnity of Committee.........................................................................15
<PAGE>
10.5 Employer Information...........................................................................15
ARTICLE 11 Other Benefits and Agreements..................................................................15
ARTICLE 12 Trust..........................................................................................15
12.1 Establishment of Trust.........................................................................15
12.2 Interrelationship of the Plan and the Trust....................................................15
12.3 Distributions From the Trust...................................................................16
12.4 Investment of Trust Assets.....................................................................16
ARTICLE 13 Miscellaneous..................................................................................16
13.1 Status of Plan.................................................................................16
13.2 Unsecured General Creditor.....................................................................16
13.3 Employer's Liability...........................................................................16
13.4 Nonassignability...............................................................................16
13.5 Not a Contract of Employment...................................................................17
13.6 Furnishing Information.........................................................................17
13.7 Terms..........................................................................................17
13.8 Captions.......................................................................................17
13.9 Governing Law..................................................................................17
13.10 Notice.........................................................................................17
13.11 Successors.....................................................................................18
13.12 Validity.......................................................................................18
13.13 Incompetent....................................................................................18
13.14 Court Order....................................................................................18
13.15 Distribution in the Event of Taxation..........................................................18
13.16 Insurance......................................................................................19
</TABLE>
<PAGE>
PANAMSAT CORPORATION
AMENDED AND RESTATED RESTORATION AND DEFERRED COMPENSATION PLAN
Originally Effective as of January 1, 1997, as Amended and Restated July 9, 1999
Purpose
The purpose of this Plan is to provide specified benefits to a select
group of management and highly compensated Employees who contribute materially
to the continued growth, development and future business success of PanAmSat
Corporation, a Delaware corporation, and its subsidiaries, if any, that sponsor
this Plan. This Plan shall be unfunded for tax purposes and for purposes of
Title I of ERISA.
ARTICLE 1
Definitions
For purposes of this Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings:
1.1 "Account Balance" shall mean, with respect to a Participant, a
credit on the records of the Employer equal to the sum of (i) the Deferral
Account balance, (ii) the vested Company Contribution Account balance and (iii)
the vested Company Matching Account balance. The Account Balance, and each other
specified account balance, shall be a bookkeeping entry only and shall be
utilized solely as a device for the measurement and determination of the amounts
to be paid to a Participant, or his or her designated Beneficiary, pursuant to
this Plan.
1.2 "Annual Bonus" shall mean any compensation, in addition to Base
Annual Salary relating to services performed during any calendar year, whether
or not paid in such calendar year or included on the Federal Income Tax Form W-2
for such calendar year, payable to a Participant as an Employee under any
Employer's annual bonus and annual or long term cash incentive plans, excluding
stock options, and excluding compensation provided under the PanAmSat
Corporation Annual Incentive Plan, and the PanAmSat Corporation Long Term Stock
Incentive Plan Established in 1997.
1.3 "Annual Company Contribution Amount" shall mean, for any one Plan
Year, the amount determined in accordance with Section 3.6.
1.4 "Annual Company Matching Amount" for any one Plan Year shall be the
amount determined in accordance with Section 3.7.
1.5 "Annual Deferral Amount" shall mean that portion of a Participant's
Base
<PAGE>
2
Annual Salary and Annual Bonus that a Participant elects to have, and is,
deferred in accordance with Article 3, for any one Plan Year. In the event of a
Participant's Retirement, Disability (if deferrals cease in accordance with
Article 6), death or a Termination of Employment prior to the end of a Plan
Year, such year's Annual Deferral Amount shall be the actual amount withheld
prior to such event.
1.6 "Base Annual Salary" shall mean the annual cash compensation
relating to services performed during any calendar year, whether or not paid in
such calendar year or included on the Federal Income Tax Form W-2 for such
calendar year, excluding bonuses, commissions, overtime, fringe benefits, stock
options, relocation expenses, incentive payments, non-monetary awards,
directors' fees and other fees, automobile and other allowances paid to a
Participant for employment services rendered (whether or not such allowances are
included in the Employee's gross income). Base Annual Salary shall be calculated
before reduction for compensation voluntarily deferred or contributed by the
Participant pursuant to all qualified or non-qualified plans of any Employer and
shall be calculated to include amounts not otherwise included in the
Participant's gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b)
pursuant to plans established by any Employer; provided, however, that all such
amounts will be included in compensation only to the extent that, had there been
no such plan, the amount would have been payable in cash to the Employee.
1.7 "Beneficiary" shall mean one or more persons, trusts, estates or
other entities, designated in accordance with Article 7, that are entitled to
receive benefits under this Plan upon the death of a Participant.
1.8 "Beneficiary Designation Form" shall mean the form established from
time to time by the Committee that a Participant completes, signs and returns to
the Committee to designate one or more Beneficiaries.
1.9 "Board" shall mean the board of directors of the Company.
1.10 "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
1.11 "Committee" shall mean the Compensation Committee of the Company.
1.12 "Company" shall mean PanAmSat Corporation, a Delaware corporation,
and any successor to all or substantially all of the Company's assets or
business or stock.
1.13 "Company Contribution Account" shall mean (i) the sum of the
Participant's Annual Company Contribution Amounts, plus (ii) amounts credited in
accordance with all the applicable crediting provisions of this Plan that relate
to the Participant's Company Contribution Account, less all distributions made
to the Participant or his or her Beneficiary
<PAGE>
3
pursuant to this Plan that relate to the Participant's Company Contribution
Account.
1.14 "Company Matching Account" shall mean (i) the sum of all of a
Participant's Annual Company Matching Amounts, plus (ii) amounts credited in
accordance with all the applicable crediting provisions of this Plan that relate
to the Participant's Company Matching Account, less all distributions made to
the Participant or his or her Beneficiary pursuant to this Plan that relate to
the Participant's Company Matching Account.
1.15 "Deduction Limitation" shall mean the following described
limitation on a benefit that may otherwise be distributable pursuant to the
provisions of this Plan. Except as otherwise provided, this limitation shall be
applied to all distributions that are "subject to the Deduction Limitation"
under this Plan. If an Employer determines in good faith that there is a
reasonable likelihood that any compensation paid to a Participant for a taxable
year of the Employer would not be deductible by the Employer solely by reason of
the limitation under Code Section 162(m), then to the extent deemed necessary by
the Employer to ensure that the entire amount of any distribution to the
Participant pursuant to this Plan is deductible, the Employer may defer all or
any portion of a distribution under this Plan. Any amounts deferred pursuant to
this limitation shall continue to be credited/debited with additional amounts in
accordance with Section 3.9 below, even if such amount is being paid out in
installments. The amounts so deferred and amounts credited thereon shall be
distributed to the Participant or his or her Beneficiary (in the event of the
Participant's death) at the earliest possible date, as determined by the
Employer in good faith, on which the deductibility of compensation paid or
payable to the Participant for the taxable year of the Employer during which the
distribution is made will not be limited by Section 162(m).
1.16 "Deferral Account" shall mean (i) the sum of all of a
Participant's Annual Deferral Amounts, plus (ii) amounts credited in accordance
with all the applicable crediting provisions of this Plan that relate to the
Participant's Deferral Account, less all distributions made to the Participant
or his or her Beneficiary pursuant to this Plan that relate to his or her
Deferral Account.
1.17 "Disability" shall mean any time during which the Participant is
unable substantially to discharge the responsibilities for which he or she is
employed by reason of physical illness or incapacity, whether arising out of
sickness, accident or otherwise, and must be evidenced by the written
determination of a qualified medical doctor acceptable to the Committee and the
Participant (or in the event of the Participant's incapacity to designate a
doctor, the Participant's legal representative), which determination shall
specify the date on which the Disability commenced and that it has continued
uninterrupted for at least 180 days.
1.18 "Election Form" shall mean the form established from time to time
by the Committee that a Participant completes, signs and returns to the
Committee to make an election under the Plan.
<PAGE>
4
1.19 "Employee" shall mean a person who is an employee of any Employer.
1.20 "Employer(s)" shall mean the Company and/or any of its
subsidiaries (now in existence or hereafter formed or acquired) that have been
selected by the Board to participate in the Plan and have adopted the Plan as a
sponsor.
1.21 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.
1.22 "401(k) Plan" shall mean the PanAmSat Corporation Retirement
Savings Plan, as it may be amended or restated from time to time.
1.23 "Participant" shall mean any Employee (i) who is selected to
participate in the Plan, (ii) who elects to participate in the Plan, (iii) who
signs a Plan Agreement, an Election Form and a Beneficiary Designation Form (all
of which may be incorporated into a single form as prescribed by the Committee),
(iv) whose signed Plan Agreement, Election Form and Beneficiary Designation Form
are accepted by the Committee, (v) who commences participation in the Plan, and
(vi) whose Plan Agreement has not terminated.
1.24 "Plan" shall mean the Company's Restoration and Deferred
Compensation Plan, which shall be evidenced by this instrument and by each Plan
Agreement, as they may be amended from time to time.
1.25 "Plan Agreement" shall mean a written agreement, as may be amended
from time to time, which is entered into by and between an Employer and a
Participant. Each Plan Agreement executed by a Participant and the Participant's
Employer shall provide for the entire benefit to which such Participant is
entitled under the Plan; should there be more than one Plan Agreement, the Plan
Agreement bearing the latest date of acceptance by the Employer shall supersede
all previous Plan Agreements in their entirety and shall govern such
entitlement. The terms of any Plan Agreement may be different for any
Participant, and any Plan Agreement may provide additional benefits not set
forth in the Plan or limit the benefits otherwise provided under the Plan;
provided, however, that any such additional benefits or benefit limitations must
be agreed to by both the Employer and the Participant.
1.26 "Plan Year" shall, except for the first Plan Year, mean a period
beginning on January 1 of each calendar year and continuing through December 31
of such calendar year.
1.27 "Retirement," "Retire(s)" or "Retired" shall mean, with respect to
an Employee, severance from employment from all Employers for any reason other
than a leave of absence, death or Disability on or after attainment of age 55
and completion of 6 Years of Service.
<PAGE>
5
1.28 "Termination Benefit" shall mean the benefit set forth in Section
5.1.
1.29 "Termination of Employment" shall mean, as determined in the sole
discretion of the Committee, the severing of employment and the termination of
services (or, in the case of a non-employee, termination of services) with
PanAmSat Corporation, its subsidiaries and any affiliated companies for any
reason, including Retirement, Disability and death.
1.30 "Trust" shall mean one or more trusts which may be established
pursuant to Article 12.
1.31 "Unforeseeable Financial Emergency" shall mean an unanticipated
emergency that is caused by an event beyond the control of the Participant that
would result in severe financial hardship to the Participant resulting from (i)
a sudden and unexpected illness or accident of the Participant or a dependent of
the Participant, (ii) a loss of the Participant's property due to casualty, or
(iii) such other extraordinary and unforeseeable circumstances arising as a
result of events beyond the control of the Participant, all as determined in the
sole discretion of the Committee.
1.32 "Years of Service" shall mean the total number of full years of
service for which a Participant is credited for vesting purposes under the
401(k) Plan, including years prior to the effective date of this Plan.
ARTICLE 2
Selection, Enrollment, Eligibility
----------------------------------
2.1 Selection. Participation in the Plan shall be limited to a select
group of management and highly compensated Employees of the Employers, as
determined by the Committee. From that group, the Committee, after
recommendation of such Employees to the Committee by the President and Chief
Executive Officer of the Company, shall select, in its sole discretion,
Employees to participate in the Plan.
2.2 Enrollment Requirements. As a condition to participation, each
selected Employee shall complete, execute and return to the Committee an
Election Form, a Plan Agreement and any additional forms deemed necessary by the
Committee, all within 30 days after he or she is selected to participate in the
Plan. In addition, the Committee shall establish from time to time such other
enrollment requirements as it determines in its sole discretion are necessary.
2.3 Eligibility; Commencement of Participation. Provided an Employee
<PAGE>
6
selected to participate in the Plan has met all enrollment requirements set
forth in this Plan and required by the Committee, including returning all
required documents to the Committee within the specified time period, that
Employee shall commence participation in the Plan on the day the Employee
completes all enrollment requirements. If an Employee fails to meet all such
requirements within the period required, in accordance with Section 2.2, that
Employee shall not be eligible to participate in the Plan until the first day of
the Plan Year following the delivery to and acceptance by the Committee of the
required documents.
2.4 Termination of Participation and/or Deferrals. If the Committee
determines that a Participant shall no longer be permitted to participate, the
Committee shall have the right, in its sole discretion, to (i) terminate any
deferral election the Participant has made for the remainder of the Plan Year in
which the Participant's membership status changes, (ii) prevent the Participant
from making future deferral elections and/or (iii) immediately distribute the
Participant's then vested Account Balance as a Termination Benefit and terminate
the Participant's participation in the Plan.
ARTICLE 3
Deferral Commitments/Company Matching/Crediting/Taxes
------------------------------------------------------
3.1 Restoration Deferrals. For each Plan Year in which a Participant
has elected to defer the maximum amount which is permissible under the terms of
the 401(k) Plan and the Code, such Participant may elect to defer an additional
Restoration Deferral Amount, in a whole percentage of at least 1%, of Base
Annual Salary and/or Base Annual Bonus; provided, however, that the total
amounts deferred by the Participant pursuant to this Section 3.1 may not exceed
16% of the sum of his or her Base Annual Salary and Annual Bonus prior to giving
effect to the deferral elections under this Section 3.1 and the 401(k) Plan.
Subject to the elections available under Article 4, the deferral period for all
Restoration Deferral Amounts which are eligible for an Annual Company Matching
Amount under Section 3.7 hereof shall be until Termination of Employment, unless
otherwise expressly set forth in the Plan Agreement. Subject to the elections
available under Article 4, the deferral period for any Restoration Deferral
Amounts which are not eligible for an Annual Company Matching Amount under
Section 3.7 hereof shall be the period expressly set forth in the Plan Agreement
and/or Election Form.
3.2 Minimum Non-Restoration Deferrals. For each Plan Year, a
Participant may elect to defer, as his or her Annual Deferral Amount, Base
Annual Salary in a whole percentage of at least 5% or in a stated dollar amount
not less than $5,000, and Annual Bonus in a whole percentage of at least 5% or a
stated dollar amount not less than $5,000; provided, however, that with respect
to the first Plan Year, i.e., the 1997 calendar year, such minimums shall be 1%
or a stated dollar amount not less than $1,000, rather than 5% and $5,000,
respectively. If an election is
<PAGE>
7
made for less than stated minimum percentage or dollar amount, or if no election
is made, the amount deferred shall be zero. Subject to the elections available
under Article 4, the deferral period for all Non-Restoration Deferrals shall be
the period expressly set forth in the Plan Agreement and/or Election Form.
3.3 Maximum Non-Restoration Deferrals.
(a) Base Annual Salary and Annual Bonus. For each Plan Year, a
Participant may elect to defer, in increments of the minimum percentages or
dollar amounts stated above, Base Annual Salary and Annual Bonus up to the
following maximum percentages for each deferral elected:
Deferral Maximum Amount
Base Annual Salary 50%
Annual Bonus 80%
A Participant's election to defer Annual Bonus may specify that no
deferral shall be made with respect to the amount of such Participant's Annual
Bonus up to a dollar amount specified by the Participant, and that a specified
percentage (up to 100%) shall be deferred to the extent that the Annual Bonus
exceeds such specified dollar amount.
(b) Notwithstanding the foregoing, if a Participant first becomes a
Participant after the first day of a Plan Year, (i) the maximum Annual Deferral
Amount, with respect to Base Annual Salary shall be limited to the amount of
compensation not yet earned by the Participant as of the date the Participant
submits a Plan Agreement and Election Form to the Committee for acceptance, and
(ii) no deferral of the Annual Bonus for such Plan Year shall be permitted
unless the Participant enrolls on a timely basis (as determined under Section
2.2) by submitting a Plan Agreement and Election Form to the Committee for
acceptance on or before June 30 of such Plan Year. Notwithstanding the
foregoing, solely with respect to the 1997 Plan Year, an enrollment election
shall be deemed timely filed if it is filed on or prior to October 30, 1997.
3.4 Election to Defer; Effect of Election Form.
(a) First Plan Year. In connection with a Participant's commencement of
participation in the Plan, the Participant shall make an irrevocable deferral
election for the Plan Year in which the Participant commences participation in
the Plan, along with such other elections as the Committee deems necessary or
desirable under the Plan. For these elections to be valid, the Election Form
must be completed and signed by the Participant, timely delivered to the
Committee (in accordance with Section 2.2 above) and accepted by the Committee.
(b) Subsequent Plan Years. For each succeeding Plan Year, an
irrevocable
<PAGE>
8
deferral election for that Plan Year, and such other elections as the Committee
deems necessary or desirable under the Plan, shall be made by timely delivering
a new election form to the Committee, in accordance with its rules and
procedures, before the end of the Plan Year preceding the Plan Year for which
the election is made. If no such Election Form is timely delivered for a Plan
Year, then the Participant shall be deemed elected an Annual Deferral Amount of
zero.
(c) Cancellation of Election. Notwithstanding subsections (a) and (b),
a Participant may cancel his or her Election Form at any time during the Plan
Year. If such cancellation is delivered to the Committee on or before June 30 of
a Plan Year, then deferrals from the Participant's Base Salary shall cease as
soon as administratively feasible following the delivery of the cancellation,
and no deferral of the Participant's Annual Bonus for such Plan Year shall be
made. If such cancellation is delivered to the Committee on or after July 1 of a
Plan Year, then deferrals from the Participant's Base Salary shall cease as soon
as administratively feasible following the delivery of the cancellation, but
deferral of the Participant's Annual Bonus for such Plan Year shall be made as
set forth in the Participant's Election Form notwithstanding the cancellation.
If a Participant cancels his or her Election Form, then the Participant shall
not be entitled to complete a new Election Form for the Plan Year in which such
cancellation occurred or the immediate subsequent Plan Year. Accordingly, no
further deferral shall be allowed for the Plan Year in which such cancellation
occurred, and no deferral shall be allowed for the immediately subsequent Plan
Year.
3.5 Withholding of Annual Deferral Amounts. For each Plan Year, the
Base Annual Salary portion of the Annual Deferral Amount shall be withheld from
each regularly scheduled Base Annual Salary payroll in equal amounts, as
adjusted from time to time for increases and decreases in Base Annual Salary.
The Annual Bonus portion of the Annual Deferral Amount shall be withheld at the
time the Annual Bonus is or otherwise would be paid to the Participant, whether
or not this occurs during the Plan Year itself.
3.6 Annual Company Contribution Amount. For each Plan Year, an
Employer, in its sole discretion, may, but is not required to, credit any amount
it desires to any Participant's Company Contribution Account under this Plan,
which amount shall be for that Participant the Annual Company Contribution
Amount for that Plan Year. The amount, so credited to a Participant may be
smaller or larger than the amount credited to any other Participant, and the
amount credited to any Participant for a Plan Year may be zero, even though one
or more other Participants receive an Annual Company Contribution Amount for
that Plan Year. The Annual Company Contribution Amount, if any, shall be
credited as of the day selected by the Committee, in its sole discretion. The
Committee may announce a separate vesting schedule or other separate rules
concerning vesting to be applicable to the Annual Company Contribution Amount
for any Plan Year or Plan Years; the announcement of such separate vesting
schedule or rules shall be made on or prior to the date the Annual Company
Contribution Amount for a Plan Year is announced. Subject to the elections
available under Article 4, the deferral period for all Annual Company
Contribution Amounts shall be until Termination of Employment, unless otherwise
<PAGE>
9
expressly set forth in the Plan Agreement.
3.7 Annual Company Matching Amount. A Participant's Annual Company
Matching Amount for any Plan Year shall be equal to 100% of the Participant's
Restoration Deferral Amount for such Plan Year; provided, however, that the sum
of such Annual Company Matching Amount and any Employer matching contributions
under the 401(k) Plan may not exceed an amount equal to 4% of the sum of the
Participant's Base Annual Salary and Annual Bonus. The Annual Company Matching
Amount shall be credited from time to time during the Plan Year as of the dates
the related amounts deferred are withheld from compensation. Subject to the
elections available under Article 4, the deferral period for all Annual Company
Matching Amounts shall be until Termination of Employment, unless otherwise
expressly set forth in the Plan Agreement.
3.8 Vesting. A Participant shall at all times be 100% vested in his or
her Deferral Account, Company Matching Contribution Account and Company
Contribution Account, except as set forth in any announcement under Section 3.6
with respect to an Annual Company Contribution Amount.
3.9 Crediting/Debiting of Account Balances. In accordance with, and
subject to, the rules and procedures that are established from time to time by
the Committee, in its sole discretion, amounts shall be credited to a
Participant's Account Balance, at rates set from time to time in the sole
discretion of the Committee. Notwithstanding the foregoing, in no event shall
the rate credited to a Participant's Account Balance be less than 100%t of
Moody's Corporate Bond Index Rate, determined as of the first business day of
the Plan Year. Without limiting the foregoing, a Participant's Account Balance
shall at all times be a bookkeeping entry only and shall not represent any
investment made on his or her behalf by the Company or the Trust (if any); the
Participant shall at all times remain an unsecured creditor of the Company.
3.10 FICA and Other Taxes.
(a) Annual Deferral Amounts. For each Plan Year in which an Annual
Deferral Amount is being withheld from a Participant, the Participant's
Employer(s) shall withhold from that portion of the Participant's Base Annual
Salary and Bonus that is not being deferred, in a manner determined by the
Employer(s), the Participant's share of FICA and other employment taxes on such
Annual Deferral Amount. If necessary, the Committee may reduce the Annual
Deferral Amount in order to comply with this Section 3.10.
(b) Company Matching Amounts. For each Plan Year in which a Participant
is credited with an Annual Company Matching Amount, the Participant's
Employer(s) shall withhold from the Participant's Base Annual Salary and/or
Bonus that is not deferred, in a manner determined by the Employer(s), the
Participant's share of FICA and other employment taxes. If necessary, the
Committee may reduce the Participant's Company Matching Account in order to
<PAGE>
10
comply with this Section 3.10.
3.11 Taxation of Distributions. The Participant's Employer(s), or the
trustee of the Trust, if any, shall withhold from any payments made to a
Participant under this Plan all federal, state, and local income, employment and
other taxes required to be withheld by the Employer(s), or the trustee of the
Trust, if any, in connection with such payments, in amounts and in a manner to
be determined in the sole discretion of the Employer(s) and the trustee of the
Trust, if any.
ARTICLE 4
Unforeseeable Financial Emergencies; Withdrawal Election
---------------------------------------------------------
4.1 Withdrawal Payout/Suspensions for Unforeseeable Financial
Emergencies. If the Participant experiences an Unforeseeable Financial
Emergency, the Participant may petition the Committee to (i) suspend any
deferrals required to be made by a Participant and/or (ii) receive a partial or
full payout from the Plan. The payout shall not exceed the lesser of the
Participant's Account Balance, calculated as if such Participant were receiving
a Termination Benefit, or the amount reasonably needed to satisfy the
Unforeseeable Financial Emergency. If, subject to the sole discretion of the
Committee, the petition for a suspension and/or payout is approved, suspension
shall take effect upon the date of approval and any payout shall be made in a
lump sum within 90 days of the date of approval. If a Participant's petition
under this section is approved, then the Participant shall not be entitled to
complete a new Election Form for the Plan Year in which the payout to the
Participant occurs or the immediate subsequent Plan Year. Accordingly, no
further deferral shall be allowed for the Plan Year in which such payout
occurred, and no deferral shall be allowed for the immediately subsequent Plan
Year. The payment of any amount under this Section 4.1 shall not be subject to
the Deduction Limitation.
4.2 Early Withdrawal. A Participant (or, after a Participant's death,
his or her Beneficiary) may elect, at any time, to withdraw any or all of his or
her Account Balance (other than amounts attributable to that portion of the
Restoration Deferrals described in Section 3.1 which are eligible for an Annual
Company Matching Amount), calculated as if there had occurred a Termination of
Employment as of the day of the election, less a withdrawal penalty equal to 10%
of such amount (the net amount shall be referred to as the "Withdrawal Amount").
This election can be made at any time, before or after Retirement, Disability,
death or Termination of Employment, and whether or not the Participant (or
Beneficiary) is in the process of being paid pursuant to an installment payment
schedule. If made before Retirement, Disability or death, a Participant's
Withdrawal Amount shall be his or her Account Balance (or the applicable portion
thereof) calculated as if there had occurred a Termination of Employment as of
the day of the election. The Participant (or his or her Beneficiary) shall make
this election by giving the Committee advance written notice of the election in
a form determined from time to time by the
<PAGE>
11
Committee. The Participant (or his or her Beneficiary) shall be paid the
Withdrawal Amount within 90 days of his or her election. Once the Withdrawal
Amount is paid, then deferrals from the Participant's Base Salary shall cease as
soon as administratively feasible. The Participant shall not be entitled to
complete a new Election Form for the Plan Year in which such withdrawal occurs,
or the immediate subsequent Plan Year. Accordingly, no further deferral shall be
allowed for the Plan Year in which such withdrawal occurred, and no deferral
shall be allowed for the immediately subsequent Plan Year. The payment of any
amount under this Section 4.2 shall be subject to the Deduction Limitation.
ARTICLE 5
Termination Benefit; Layoff Benefit
-----------------------------------
5.1 Termination Benefit. Subject to the Deduction Limitation, the
Participant shall receive a Termination Benefit, which shall be equal to the
Participant's vested Account Balance if a Participant experiences a Termination
of Employment.
5.2 Payment of Termination Benefit. The Termination Benefit shall be
paid in two installments. The first such installment shall be in an amount equal
to 50% of the Participant's vested Account Balance at the time of his
Termination of Employment and shall be paid as soon as practicable to the
Participant or to his or her Beneficiary if the Participant is not then living.
The second installment shall be an amount equal to the remaining vested portion
of the Participant's Account Balance and shall be paid to the Participant (or to
the Participant's Beneficiary, if the Participant is not then living) as soon as
administratively practicable after the January 1 immediately following the
Participant's Termination of Employment. Any payment made shall be subject to
the Deduction Limitation.
ARTICLE 6
Disability Waiver
-----------------
6.1 Waiver of Deferral. A Participant who is determined by the
Committee to be suffering from a Disability shall be excused from fulfilling
that portion of the Annual Deferral Amount commitment that would otherwise have
been withheld from a Participant's Base Annual Salary and Annual Bonus for the
Plan Year during which the Participant first suffers a Disability. During the
period of Disability, the Participant shall not be allowed to make any
additional deferral elections, but will continue to be considered a Participant
for all other purposes of this Plan.
6.2 Return to Work. If a Participant returns to employment with an
Employer, after a Disability ceases, the Participant may elect to defer an
Annual Deferral Amount for the
<PAGE>
12
next Plan Year following his or her return to employment provided he or she
continues to be eligible to participate in the Plan.
ARTICLE 7
Beneficiary Designation
-----------------------
7.1 Beneficiary. Each Participant shall have the right, at any time, to
designate his or her Beneficiary(ies) (both primary as well as contingent) to
receive any benefits payable under the Plan to a Beneficiary upon the death of a
Participant. The Beneficiary designated under this Plan may be the same as or
different from the Beneficiary designation under any other plan of an Employer
in which the Participant participates.
7.2 Beneficiary Designation; Change. A Participant shall designate his
or her Beneficiary by completing and signing the Beneficiary Designation Form,
and returning it to the Committee or its designated agent. A Participant shall
have the right to change a Beneficiary by completing, signing and otherwise
complying with the terms of the Beneficiary Designation Form and the Committee's
rules and procedures, as in effect from time to time. Upon the acceptance by the
Committee of a new Beneficiary Designation Form, all Beneficiary designations
previously filed shall be canceled. The Committee shall rely on the last
Beneficiary Designation Form filed by the Participant and accepted by the
Committee prior to his or her death.
7.3 Acknowledgment. No designation or change in designation of a
Beneficiary shall be effective until received and acknowledged in writing by the
Committee or its designated agent.
7.4 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided in Sections 7.1, 7.2 and 7.3 above or, if all designated
Beneficiaries predecease the Participant or die prior to complete distribution
of the Participant's benefits, then the Participant's designated Beneficiary
shall be deemed to be his or her surviving spouse. If the Participant has no
surviving spouse, the benefits remaining under the Plan to be paid to a
Beneficiary shall be payable to the executor or personal representative of the
Participant's estate.
7.5 Doubt as to Beneficiary. If the Committee has any doubt as to the
proper Beneficiary to receive payments pursuant to this Plan, the Committee
shall have the right, exercisable in its discretion, to cause the Participant's
Employer to withhold such payments until this matter is resolved to the
Committee's satisfaction.
7.6 Discharge of Obligations. The payment of benefits under the Plan to
a Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to the
Participant, and that Participant's Plan Agreement
<PAGE>
13
shall terminate upon such full payment of benefits.
ARTICLE 8
Leave of Absence
----------------
8.1 Paid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take a paid leave of absence from the
employment of the Employer, the Participant shall continue to be considered
employed by the Employer and the Annual Deferral Amount shall continue to be
withheld during such paid leave of absence in accordance with Section 3.4.
8.2 Unpaid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take an unpaid leave of absence from
the employment of the Employer, the Participant shall continue to be considered
employed by the Employer and the Participant shall be excused from making
deferrals until the earlier of the date the leave of absence expires or the
Participant returns to a paid employment status. Upon such expiration or return,
deferrals shall resume for the remaining portion of the Plan Year in which the
expiration or return occurs, based on the deferral election, if any, made for
that Plan Year. If no election was made for that Plan Year, no deferral shall be
withheld.
ARTICLE 9
Termination, Amendment or Modification
--------------------------------------
9.1 Termination. Although each Employer anticipates that it will
continue the Plan for an indefinite period of time, there is no guarantee that
any Employer will continue the Plan or will not terminate the Plan at any time
in the future. Accordingly, except as otherwise provided in this Section 9.1,
each Employer reserves the right to discontinue its sponsorship of the Plan
and/or to terminate the Plan at any time with respect to any or all of its
participating Employees by action of its board of directors. Upon the
termination of the Plan with respect to any Employer, the Plan Agreements of the
affected Participants who are employed by that Employer shall terminate and
their vested Account Balances, determined as if they had experienced a
Termination of Employment on the date of Plan termination. The termination of
the Plan shall not adversely affect any Participant or Beneficiary who has
become entitled to the payment of any benefits under the Plan as of the date of
termination; provided, however, that the Employer shall have the right to
accelerate installment payments without a premium or prepayment penalty by
paying the Account Balance in a lump sum.
9.2 Amendment. Except as otherwise provided in this Section 9.2, the
<PAGE>
14
Company may, at any time, amend or modify the Plan in whole or in part by the
action of the Board; provided, however, that no amendment or modification shall
be effective to decrease or restrict the value of a Participant's Account
Balance in existence at the time the amendment or modification is made,
calculated as if the Participant had experienced Termination of Employment as of
the effective date of the amendment or modification. The amendment or
modification of the Plan shall not affect any Participant or Beneficiary who has
become entitled to the payment of benefits under the Plan as of the date of the
amendment or modification; provided, however, that the Employer shall have the
right to accelerate installment payments by paying the vested Account Balance in
a lump sum.
9.3 Plan Agreement. Despite the provisions of Sections 9.1 and 9.2, if
a Participant's Plan Agreement contains benefits or limitations that are not in
this Plan document, the Employer may only amend or terminate such provisions
with the consent of the Participant.
9.4 Effect of Payment. The full payment of the benefit under Articles 4
or 5 of the Plan shall completely discharge all obligations to a Participant and
his or her designated Beneficiaries under this Plan and the Participant's Plan
Agreement shall terminate.
ARTICLE 10
Administration
--------------
10.1 Committee Duties. This Plan shall be administered by the Company's
Compensation Committee. Members of the Committee may be Participants under this
Plan. The Committee shall also have the discretion and authority to (i) make,
amend, interpret, and enforce all appropriate rules and regulations for the
administration of this Plan and (ii) decide or resolve any and all questions
including interpretations of this Plan and eligibility for benefits hereunder,
as may arise in connection with the Plan. Any individual serving on the
Committee who is a Participant shall not vote or act on any matter relating
solely to himself or herself. When making a determination or calculation, the
Committee shall be entitled to rely on information furnished by a Participant or
the Company.
10.2 Delegation. In the administration of this Plan, the Committee may,
from time to time, employ agents (who may be Participants) and delegate to them
such duties as it sees fit (including exercise, on behalf of the Committee, and
decision, including discretionary decisions, reserved to the Committee under
this Plan or under law) and may from time to time consult with counsel who may
be counsel to any Employer. Unless the Committee provides otherwise, persons to
whom duties have been delegated may themselves delegate such duties to other
persons.
10.3 Binding Effect of Decisions. The decision or action of the
Committee with
<PAGE>
15
respect to any question arising out of or in connection with the administration,
interpretation and application of the Plan and the rules and regulations
promulgated hereunder shall be final and conclusive and binding uponall persons
having any interest in the Plan.
10.4 Indemnity of Committee. All Employers shall indemnify and hold
harmless the members of the Committee, and any Employee to whom the duties of
the Committee may be delegated, against any and all claims, losses, damages,
expenses or liabilities arising from any action or failure to act with respect
to this Plan, except in the case of willful misconduct by the Committee or any
of its members or any such Employee.
10.5 Employer Information. To enable the Committee to perform its
functions, each Employer shall supply full and timely information to the
Committee on all matters relating to the compensation of its Participants, the
date and circumstances of the Termination of Employment of its Participants, and
such other pertinent information as the Committee may reasonably require.
ARTICLE 11
Other Benefits and Agreements
-----------------------------
The benefits provided for a Participant and Participant's Beneficiary
under the Plan are in addition to any other benefits available to such
Participant under any other plan or program for employees of the Participant's
Employer. The Plan shall supplement and shall not supersede, modify or amend any
other such plan or program except as may otherwise be expressly provided.
ARTICLE 12
Trust
------
12.1 Establishment of Trust. The Company may establish a Trust, and
each Employer may at least annually transfer over to the Trust such assets as
the Employer determines, in its sole discretion, are necessary to provide, on a
present value basis, for its respective future liabilities created with respect
to the Annual Deferral Amounts, Annual Company Contribution Amounts, and Company
Matching Amounts for such Employer's Participants for all periods prior to the
transfer, as well as any debits and credits to the Participants' Account
Balances for all periods prior to the transfer, taking into consideration the
value of the assets in the trust at the time of the transfer.
12.2 Interrelationship of the Plan and the Trust. The provisions of the
Plan and the Plan Agreement shall govern the rights of a Participant to receive
distributions pursuant to the
<PAGE>
16
Plan. The provisions of the Trust shall govern the rights of the
Employers, Participants and the creditors of the Employers to the assets
transferred to the Trust. Each Employer shall at all times remain liable to
carry out its obligations under the Plan.
12.3 Distributions From the Trust. Each Employer's obligations under
the Plan may be satisfied with Trust assets distributed pursuant to the terms of
the Trust, and any such distribution shall reduce the Employer's obligations
under this Plan.
12.4 Investment of Trust Assets. The trustee of the Trust, if any,
shall be authorized, upon written instructions received from the Committee or
investment manager appointed by the Committee, to invest and reinvest the assets
of the Trust in accordance with the applicable Trust Agreement, including the
disposition of stock and reinvestment of the proceeds in one or more investment
vehicles designated by the Committee.
ARTICLE 13
Miscellaneous
13.1 Status of Plan. The Plan is intended to be a plan that is not
qualified within the meaning of Code Section 401(a) and that "is unfunded and is
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees"
within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Plan
shall be administered and interpreted to the extent possible in a manner
consistent with that intent.
13.2 Unsecured General Creditor. Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights, interests
or claims in any property or assets of an Employer. For purposes of the payment
of benefits under this Plan, any and all of an Employer's assets shall be, and
remain, the general, unpledged unrestricted assets of the Employer. An
Employer's obligation under the Plan shall be merely that of an unfunded and
unsecured promise to pay money in the future.
13.3 Employer's Liability. An Employer's liability for the payment of
benefits shall be defined only by the Plan and the Plan Agreement, as entered
into between the Employer and a Participant. An Employer shall have no
obligation to a Participant under the Plan except as expressly provided in the
Plan and his or her Plan Agreement.
13.4 Nonassignability. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate, alienate or convey in advance of
actual receipt, the amounts, if any, payable hereunder, or any part thereof,
which are, and all rights to which are expressly declared to be, unassignable
and nontransferable. No part of the amounts payable shall, prior to actual
payment,
<PAGE>
17
be subject to seizure, attachment, garnishment or sequestration for the
payment of any debts, judgments, alimony or separate maintenance owed by a
Participant or any other person, be transferable by operation of law in the
event of a Participant's or any other person's bankruptcy or insolvency.
13.5 Not a Contract of Employment. The terms and conditions of this
Plan shall not be deemed to constitute a contract of employment between any
Employer and the Participant. Such employment is hereby acknowledged to be an
"at will" employment relationship that can be terminated at any time for any
reason, or no reason, with or without cause, and with or without notice, unless
expressly provided in a written employment agreement. Nothing in this Plan shall
be deemed to give a Participant the right to be retained in the service of any
Employer, either as an Employee or to interfere with the right of any Employer
to discipline or discharge the Participant at any time.
13.6 Furnishing Information. A Participant or his or her Beneficiary
will cooperate with the Committee by furnishing any and all information
requested by the Committee and take such other actions as may be requested in
order to facilitate the administration of the Plan and the payments of benefits
hereunder, including but not limited to taking such physical examinations as the
Committee may deem necessary. Failure to cooperate in good faith by a
Participant or his or her Beneficiary shall absolve the Company of any and all
liability to such Participant or Beneficiary with respect to the Plan.
13.7 Terms. Whenever any words are used herein in the masculine, they
shall be construed as though they were in the feminine in all cases where they
would so apply; and whenever any words are used herein in the singular or in the
plural, they shall be construed as though they were used in the plural or the
singular, as the case may be, in all cases where they would so apply.
13.8 Captions. The captions of the articles, sections and paragraphs of
this Plan are for convenience only and shall not control or affect the meaning
or construction of any of its provisions.
13.9 Governing Law. The provisions of this Plan shall be construed and
interpreted according to federal law, except to the extent that federal law is
not preempted, this Plan shall be construed and interpreted according to the
laws of the State of Connecticut without regard to its conflicts of laws
principles.
13.10 Notice. Any notice or filing required or permitted to be given to
the Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address below:
Compensation Committee
<PAGE>
18
PanAmSat Corporation
One Pickwick Plaza
Greenwich, CT 06830
Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification.
Any notice or filing required or permitted to be given to a Participant
under this Plan shall be sufficient if in writing and hand-delivered, or sent by
mail, to the last known address of the Participant.
13.11 Successors. The provisions of this Plan shall bind and inure to
the benefit of the Participant's Employer and its successors and assigns and the
Participant and the Participant's designated Beneficiaries.
13.12 Validity. In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal or invalid provision had never been inserted herein.
13.13 Incompetent. If the Committee determines in its discretion that a
benefit under this Plan is to be paid to a minor, a person declared incompetent
or to a person incapable of handling the disposition of that person's property,
the Committee may direct payment of such benefit to the guardian, legal
representative or person having the care and custody of such minor, incompetent
or incapable person. The Committee may require proof of minority, incompetence,
incapacity or guardianship, as it may deem appropriate prior to distribution of
the benefit. Any payment of a benefit shall be a payment for the account of the
Participant and the Participant's Beneficiary, as the case may be, and shall be
a complete discharge of any liability under the Plan for such payment amount.
13.14 Court Order. The Committee is authorized to make any payments
directed by court order in any action in which the Plan or the Committee has
been named as a party. In addition, if a court determines that a spouse or
former spouse of a Participant has an interest in the Participant's benefits
under the Plan in connection with a property settlement or otherwise, the
Committee, in its sole discretion, shall have the right, notwithstanding any
election made by a Participant, to immediately distribute the spouse's or former
spouse's interest in the Participant's benefits under the Plan to that spouse or
former spouse.
13.15 Distribution in the Event of Taxation.
(a) In General. If, for any reason, all or any portion of a
Participant's benefits under this Plan becomes taxable to the Participant prior
to receipt, a Participant may petition the Committee for a distribution of that
portion of his or her benefit that has become taxable. Upon the grant of such a
petition, which grant shall not be unreasonably withheld, a Participant's
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19
Employer shall distribute to the Participant immediately available funds in an
amount equal to the taxable portion of his or her benefit (which amount shall
not exceed a Participant's unpaid Account Balance under the Plan). If the
petition is granted, the tax liability distribution shall be made in a lump sum
within 90 days of the date when the Participant's petition is granted. Such a
distribution shall affect and reduce the benefits to be paid under this Plan.
(b) Trust. If the Trust, if any, terminates and benefits are
distributed from the Trust to a Participant in accordance with such termination,
the Participant's benefits under this Plan shall be reduced to the extent of
such distributions.
13.16 Insurance. The Employers, on their own behalf or on behalf of the
trustee of the Trust, if any, and, in their sole discretion, may apply for and
procure insurance on the life of the Participant, in such amounts and in such
forms as the Trust may choose. The Employers or the trustee of the Trust, if
any, as the case may be, shall be the sole owner and beneficiary of any such
insurance. The Participant shall have no interest whatsoever in any such policy
or policies, and at the request of the Employers shall submit to medical
examinations and supply such information and execute such documents as may be
required by the insurance company or companies to whom the Employers have
applied for insurance. If a Participant fails or refuses to comply with the
preceding sentence, he or she shall cease to be a participant hereunder and
shall immediately forfeit his or her entire Company Contributions Account and
Company Matching Account; provided, however, that Participants who submit to
such medical examinations and otherwise supply information reasonably requested
but are denied insurance coverage shall not forfeit any Account Balances nor
cease Plan participation.
IN WITNESS WHEREOF, the Company has signed this Plan document as of
July 9, 1999.
PANAMSAT CORPORATION
By: /s/ James W. Cuminale
---------------------------------
James W. Cuminale
Title: Executive Vice President &
Secretary
PANAMSAT CORPORATION
1999 NON-EMPLOYEE DIRECTORS COMPENSATION DEFERRAL PLAN
1. Purpose. The purpose of the Plan is to provide qualified
individuals who are not employees of the Company who serve as members of the
Board of Directors an opportunity to defer payment of a portion of their
Director's Fees in accordance with the terms and conditions set forth herein.
2. Definitions. For the purposes of the Plan, the following
capitalized words shall have the meanings set forth below:
"Annual Fees" means (i) any annual fee payable to a Non-Employee
Director for service on the Board, (ii) any other fee determined on an
annual basis and payable for service on, or for acting as chairperson
of, any committee of the Board, and (iii) any similar annual fee or
fees payable in respect of service on the board of directors of any
Subsidiary or any committee of any such board of directors.
"Annual Meeting" means an annual meeting of the Company's
stockholders.
"Beneficiary" or "Beneficiaries" means an individual or entity
designated by a Non-Employee Director on a Beneficiary Designation Form
to receive Deferred Benefits in the event of the Non-Employee
Director's death; provided, however, that, if no such individual or
entity is designated or if no such designated individual is alive at
the time of the Non-Employee Director's death, Beneficiary shall mean
the Non-Employee Director's estate.
"Beneficiary Designation Form" means a document, in a form
approved by the Compensation Committee to be used by Non-Employee
Directors to name their respective Beneficiaries. No Beneficiary
Designation Form shall be effective unless it is signed by the
Non-Employee Director and received by the Compensation Committee prior
to the date of death of the Non-Employee Director.
"Board" means the Board of Directors of PanAmSat Corporation.
"Code" means the Internal Revenue Code of 1986, as amended, and
the applicable rules and regulations promulgated thereunder.
"Common Stock" means the common stock, par value $0.01 per share,
of the Company.
"Companies" means the Company and each Subsidiary.
<PAGE>
2
"Company" means PanAmSat Corporation, a Delaware corporation, or
any successor to substantially all of its business.
"Deferral Election Form" means a document, in a form approved by
the Compensation Committee, pursuant to which a Non-Employee Director
makes a deferral election under the Plan.
"Deferral Period" means each period commencing on the date of an
Annual Meeting and ending on the date immediately preceding the next
Annual Meeting; provided, however, that the first Deferral Period under
the Plan shall commence within thirty days after July 9, 1999. If an
individual becomes eligible to participate in the Plan after the
commencement of a Deferral Period, the Deferral Period for the
individual shall be the remainder of such Deferral Period.
"Deferred Benefit" means an amount that will be paid on a deferred
basis under the Plan to a Non-Employee Director who has made a deferral
election pursuant to Section 5.
"Deferred Compensation Account" means the bookkeeping record
established for each Non-Employee Director. A Deferred Compensation
Account is established only for purposes of measuring a Deferred
Benefit and not to segregate assets or to identify assets that may be
used to pay a Deferred Benefit.
"Director's Fees" means the aggregate of a Non-Employee Director's
Annual Fees and Per Diem Fees.
"Effective Date" means July 9, 1999.
"Election Date" means the day immediately preceding the
commencement of a Deferral Period. If an individual first becomes
eligible to participate in the Plan on an Annual Meeting date or after
the start of a Deferral Period, the Election Date shall be the
thirtieth day following such Annual Meeting date or initial
participation date, as the case may be. The Election Date for the first
Deferral Period shall be the last business day prior to the first
fiscal quarter of the Company to begin after the Effective Date.
"Compensation Committee" means the compensation committee of the
Board which has been appointed to administer the Plan.
"Fair Market Value" means the last quoted selling price of a share
of Common Stock as reported by NASDAQ, or such other national
securities exchange as may be designated by the Committee, or, in the
event that the Common Stock is not listed for trading on a national
securities exchange but is quoted on an automated system, on such
<PAGE>
3
automated system, in any such case on the valuation date (or, if there
were no sales on the valuation date, the last quoted selling prices as
reported on NASDAQ or such automated system for the most recent date
during which a sale occurred).
"Non-Employee Director" means a member of the Board who is not an
employee of the Company or any of its Subsidiaries.
"Per Diem Fees" means (i) any meeting fee payable in respect of
attendance at or participation in meetings of the Board or any
committee of the Board or any meeting of the stockholders of the
Company and (ii) any similar meeting fee payable in respect of service
on the board of directors of any Subsidiary or any committee of any
such board of directors.
"Phantom Stock Unit" means a bookkeeping unit representing one
share of Common Stock credited to a Deferred Compensation Account in
accordance with Section 4(c).
"Plan" means the PanAmSat 1999 Non-Employee Director Compensation
Deferral Plan.
"Subsidiary" means a corporation or other entity with respect to
which the Company, directly or indirectly, has the power, whether
through the ownership of voting securities, by contract or otherwise,
to elect at least a majority of the members of such corporation's board
of directors or analogous governing body.
3. Administration.
(a) The Plan shall be administered by the Compensation Committee.
Members of the Compensation Committee may participate under the Plan.
(b) The Compensation Committee shall be authorized to interpret
the Plan, to establish, amend and rescind any rules and regulations relating to
the Plan, to make factual determinations in connection with the administration
or interpretation of the Plan, to determine or resolve all questions including,
but not limited to, questions regarding eligibility for benefits under the Plan
and to make any other determinations that it believes are necessary or advisable
for the administration of the Plan. In the administration of this Plan, the
Compensation Committee may employ agents and delegate to them such duties as it
sees fit (including the exercise of decision making authority on behalf of the
Compensation Committee). The Compensation Committee may correct any defect or
supply any omission or reconcile any inconsistency in the Plan or in any
Deferral Election Form to the extent the Compensation Committee deems desirable
to carry the Plan into effect. Any decision of the Compensation Committee in the
administration of the Plan,
<PAGE>
4
as described herein, shall be final and conclusive. The Compensation Committee
may act only by a majority of its members, except that the members thereof may
authorize any one or more of the Compensation Committee members to execute and
deliver documents on behalf of the Compensation Committee.
(c) The Compensation Committee shall be entitled to rely in good
faith upon any report or other information furnished to it by any officer or
employee of the Companies or from the financial, accounting, legal or other
advisers of the Companies. Each member of the Compensation Committee, each
individual designated by the Compensation Committee to administer the Plan and
each other person acting at the direction of or on behalf of the Compensation
Committee shall not be liable for any determination or anything done or omitted
to be done by him or by any other member of the Compensation Committee or any
other such individual in connection with the Plan, except for his own willful
misconduct or as expressly provided by statute, and to the extent permitted by
law and the bylaws of the Company, shall be fully indemnified and protected by
the Company with respect to such determination, act or omission.
4. Deferral of Director's Fees.
(a) Deferral Elections.
(i) General Provisions. Non-Employee Directors may elect to defer
all or a specified percentage of their Director's Fees with respect to a
Deferral Period in the manner provided in this Section 4. A Non-Employee
Director's Deferred Benefit is at all times nonforfeitable.
(ii) Deferral Election Forms. Before the Election Date applicable
to a Deferral Period, each Non-Employee Director will be provided with a
Deferral Election Form and a Beneficiary Designation Form. In order for a
Non-Employee Director to participate in the deferral portion of the Plan
for a given Deferral Period, a Deferral Election Form, completed and signed
by him, must be delivered to the Company on or prior to the applicable
Election Date. A Deferral Election Form submitted by a Non-Employee
Director for a Deferral Period shall be deemed to be a continuing election
for all subsequent Deferral Periods, unless the Employee Director completes
and files a subsequent Deferral Election Form with the Company prior to the
Election Date applicable to that Deferral Period. A Non-Employee Director
electing to participate in the Plan for a given Deferral Period shall
indicate on his Deferral Election Form:
(A) the percentage of the Director's Fees for the Deferral
Period to be deferred which shall be in multiples of 1 share of Common
Stock; and
<PAGE>
5
(B) if the Deferral Election Form is the first such form
filed by the Non-Employee Director, the Non-Employee Director's
election, in accordance with Sections 4(e) and 4(f), as to the timing
and manner of payment of the Deferred Benefits. A Non-Employee
Director's election as to the timing and manner of payment of Deferred
Benefits in the initial Deferral Election Form shall govern the timing
and manner of payment of all subsequent deferrals under the Plan and
may not be changed or revoked without the prior written consent of the
Compensation Committee, which may be granted upon a determination by
the Compensation Committee, in its sole discretion, that a financial
hardship will result if such consent is not granted.
(iii) Effect of No Deferral Election. A Non-Employee Director who
does not have a completed and signed Deferral Election Form on file with
the Company on or prior to the applicable Election Date for a Deferral
Period may not defer his Director's Fees for such Deferral Period.
(b) Establishment of Deferred Compensation Accounts. A
Non-Employee Director's deferrals will be credited to a Deferred Compensation
Account set up for that Non-Employee Director by the Company in accordance with
the provisions of this Section 4.
(c) Crediting of Phantom Stock Units to Deferred Compensation
Accounts.
(i) Number of Phantom Stock Units. The portion of the Director's
Fees that a Non-Employee Director elects to defer shall be credited to the
Deferred Compensation Account as of the date that such portion of the
Director's Fees would otherwise have been payable to the Non-Employee
Director. The number of Phantom Stock Units to be credited shall equal the
number of shares of Common Stock deferred by the Non-Employee Director.
(ii) Dividend Equivalents. In the event that the Company pays any
cash or other dividend or makes any other distribution in respect of the
Common Stock, the Deferred Compensation Account of a Non-Employee Director
will be credited with additional Phantom Stock Units determined by dividing
(A) the amount of cash, or the value (as determined by the Compensation
Committee) of any securities or other property, paid or distributed in
respect of a corresponding number of shares of Common Stock by (B) the Fair
Market Value of a share of Common Stock as of the date of such payment or
distribution. Any partial Phantom Stock Unit that results from the
application of the previous sentence shall be rounded up to a whole Phantom
Stock Unit. Such credit shall be made effective as of the date of the
dividend or other distribution in respect of the Common Stock.
<PAGE>
6
(iii) No Rights as Stockholder. Except as provided in Section
4(c)(ii) above, the crediting of Phantom Stock Units to a Non-Employee
Director's Deferred Compensation Account shall not confer on the
Non-Employee Director any rights as a stockholder of the Company.
(d) Written Statements of Account. The Company will furnish each
Non-Employee Director with a statement setting forth the value of such
Non-Employee Director's Deferred Compensation Account as of the end of each
Deferral Period and all credits to and payments from the Deferred Compensation
Account during the Deferral Period. Such statement will be furnished no later
than sixty days after the end of the Deferral Period.
(e) Manner of Payment of Deferred Benefit. Payment of the Deferred
Benefits shall be by delivery of shares of Common Stock. Payment shall be made
in a single payment or in a series of five or fewer annual installments. The
amount of each installment payment to a Non-Employee Director shall be
determined in accordance with the formula B/(N - P), where "B" is the total
value of the Deferred Compensation Account as of the installment calculation
date, "N" is the number of installments elected by the Non-Employee Director and
"P" is the number of installments previously paid to the Non-Employee Director.
Any partial unit resulting in the calculation above will be settled in cash.
(f) Commencement of Payment of Deferred Benefit. Payment of a
Non-Employee Director's Deferred Benefit shall commence as soon as practicable
(but in no event more than sixty days) after the earlier to occur of:
(i) termination of service as a member of the Board; and
(ii) the date specified in the Deferral Election Form executed by
the Non-Employee Director.
(g) Death. In the event of a Non-Employee Director's death, the
Non-Employee Director's entire Deferred Benefit (including any unpaid portion
thereof corresponding to installments not yet paid at the time of death), to the
extent not distributed earlier pursuant to Section 4(f), will be distributed in
a single payment to the Non-Employee Director's Beneficiary as soon as
practicable after the date of death, but in no event more than six months after
the Non-Employee Director's date of death.
(h) Restrictions on Transfer. The Company shall pay all Deferred
Benefits payable under the Plan only to the Non-Employee Director or Beneficiary
designated under the Plan to receive such amounts. Neither a Non-Employee
Director nor his Beneficiary shall have any right to anticipate, alienate, sell,
transfer, assign, pledge, encumber or change any benefits to which he may become
entitled under the Plan, and any attempt to do so shall be void. A Deferred
<PAGE>
7
Benefit shall not be subject to attachment, execution by levy, garnishment, or
other legal or equitable process for a Non-Employee Director's or Beneficiary's
debts or other obligations.
5. Designation of Beneficiary.
(a) Beneficiary Designation. Each Non-Employee Director may
designate a Beneficiary to receive any Deferred Benefit due under the Plan on
the Non-Employee Director's death by executing a Beneficiary Designation Form.
(b) Change of Beneficiary Designation. A Non-Employee Director may
change an earlier Beneficiary designation by executing a later Beneficiary
Designation Form and delivering it to the Compensation Committee. The execution
of a Beneficiary Designation Form and its receipt by the Compensation Committee
revokes and rescinds any prior Beneficiary Designation Form.
6. Recapitalization or Reorganization.
(a) Authority of the Company and Stockholders. The existence of
the Plan shall not affect or restrict in any way the right or power of the
Company or the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks having rights superior to or
affecting the Common Stock or the rights thereof or which are convertible into
or exchangeable for Common Stock, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.
(b) Change in Capitalization. Notwithstanding any other provision
of the Plan, in the event of any change in the outstanding Common Stock by
reason of a stock dividend, recapitalization, reorganization, merger,
consolidation, stock split, combination or exchange of shares (a "Change in
Capitalization"): (i) such proportionate adjustments as may be necessary (in the
form determined by the Compensation Committee in its sole discretion) to reflect
such change shall be made to prevent dilution or enlargement of the rights of
Non-Employee Directors under the Plan with respect to the aggregate number of
shares of Common Stock authorized to be awarded under the Plan, the number of
Phantom Stock Units credited to a Non-Employee Director's Deferred Compensation
Account, and (ii) the Compensation Committee may make such other adjustments,
consistent with the foregoing, as it deems appropriate in its sole discretion.
(c) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, all Deferred Benefits credited to the
Non-Employee Director's
<PAGE>
8
Deferred Compensation Account as of the date of the consummation of a proposed
dissolution or liquidation shall be paid in Common Stock to the Non-Employee
Director or, in the event of death of the Non-Employee Director prior to
payment, to the Beneficiary thereof on the date of the consummation of such
proposed action.
7. Termination and Amendment of the Plan.
(a) General Power of Board. Notwithstanding anything herein to the
contrary, the Board may at any time and from time to time terminate, modify,
suspend or amend the Plan in whole or in part and settle all Phantom Stock Units
in shares of Common Stock; provided, however, that no such termination,
modification, suspension or amendment shall be effective without stockholder
approval if such approval is required to comply with any applicable law or stock
exchange rule; and, provided further, that the Board may not, without
stockholder approval, increase the maximum number of shares issuable under the
Plan, except as provided in Section 6(b) above.
(b) When Directors' Consents Required. The Board may not alter,
amend, suspend, or terminate the Plan without the consent of any Director to the
extent that such action would result in the distribution to such Director of
amounts then credited to his Deferred Compensation Account in any manner other
than as provided in the Plan or could reasonably be expected to result in the
immediate taxation to such Director of Deferred Benefits.
8. Miscellaneous.
(a) No Right to Reelection. Nothing in the Plan shall be deemed to
create any obligation on the part of the Board to nominate any of its members
for reelection by the Company's stockholders, nor confer upon any Non-Employee
Director the right to remain a member of the Board for any period of time, or at
any particular rate of compensation.
(b) Unfunded Plan.
(i) Generally. This Plan is unfunded. Amounts payable under the
Plan will be satisfied solely out of the general assets of the Company
subject to the claims of the Company's creditors.
(ii) Deferred Benefits. A Deferred Benefit represents at all times
an unfunded and unsecured contractual obligation of the Company and each
Non-Employee Director or Beneficiary will be an unsecured creditor of the
Company. No Non-Employee Director, Beneficiary or any other person shall
have any interest in any fund or in any specific asset of the Company by
reason of any amount credited to him hereunder, nor shall any Non-Employee
Director, Beneficiary or any other person have any right to receive any
<PAGE>
9
distribution under the Plan except as, and to the extent, expressly
provided in the Plan. The Company will not segregate any funds or assets
for Deferred Benefits or issue any notes or security for the payment of any
Deferred Benefits. Any reserve or other asset that the Company may
establish or acquire to assure itself of the funds to provide benefits
under the Plan shall not serve in any way as security to any Non-Employee
Director, Beneficiary or other person for the performance of the Company
under the Plan.
(c) Other Compensation Arrangements. Benefits received by a
Non-Employee Director pursuant to the provisions of the Plan shall not be
included in, nor have any effect on, the determination of benefits under any
other arrangement provided by the Company.
(d) Securities Law Restrictions. All certificates for shares of
Common Stock delivered under the Plan shall be subject to such stock-transfer
orders and other restrictions as the Compensation Committee may deem advisable
under the rules, regulations, and other requirements of the Securities and
Exchange Commission or any exchange upon which the Common Stock is then listed,
and any applicable federal or state securities law, and the Compensation
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions. No shares of Common Stock shall
be issued hereunder unless the Company shall have determined that such issuance
is in compliance with, or pursuant to an exemption from, all applicable federal
and state securities laws.
(e) Expenses. The costs and expenses of administering the Plan
shall be borne by the Company.
(f) Applicable Law. Except as to matters of federal law, the Plan
and all actions taken thereunder shall be governed by and construed in
accordance with the laws of the State of Connecticut without giving effect to
conflicts of law principles.
(g) Effective Date. The Plan shall be effective as of the
Effective Date, subject to the approval thereof by the stockholders of the
Company at the next Annual Meeting immediately following the Effective Date.
EMPLOYMENT AGREEMENT
This Agreement effective April 1, 1999, is entered into by and between
R. Douglas Kahn (the "Executive") and PanAmSat Corporation ("PanAmSat").
The Parties agree as follows:
A. EMPLOYMENT AND TERMS
Subject to the terms and conditions hereof, effective April 1, 1999,
the Executive shall be employed by PanAmSat, in the position of Chief Executive
Officer ("CEO"). The Executive's office shall be located at PanAmSat
headquarters in Greenwich, Connecticut, and he shall receive the following
salary and shall be eligible for the following employment benefits:
1. SALARY: The Executive's base salary shall be $19,230.77 bi-weekly,
which is equivalent to $500,000 annually.
2. INCENTIVE PAY: The Executive shall be eligible to participate in
PanAmSat's Annual Incentive Plan ("AIP"). Said Plan may be amended from time to
time and any such amendments shall be applicable to the Executive. The
Executive's bonus target for calendar years 1999 and 2000 will each be at least
$500,000. However, the actual bonus amount, if any, payable to the Executive for
calendar years 1999 and 2000 shall be based upon PanAmSat's performance as
determined by pre-established corporate financial performance measures and goals
determined by the Compensation Committee of the Board of Directors and the
Executive's individual performance.
3. STOCK OPTIONS: The Executive shall be eligible to participate in
PanAmSat's Long-Term Stock Incentive Plan (Nonqualified stock option program).
In addition, a grant to the Executive of 70,000 options has been made effective
December 4, 1998 at a strike price of $35.38 per share. An additional grant of
130,000 options shall be made effective April 9, 1999, at a strike price of
$31.125. The combination of these two grants covers the employment period of
1999 and 2000.
<PAGE>
4. RELOCATION BENEFITS: The Executive shall be entitled to relocation
benefits pursuant to the provisions of the PanAmSat policies on Executive
Relocation Benefits, Standard New Hire Relocation Allowance, and Relocation
Expense Agreement, with the following modifications:
a. The time limit for relocation as set forth in the policy on
Executive Relocation Benefits (at page 1 thereof) has been waived.
b. The time period during which temporary living expenses are
allowed as set forth in the policy on Executive Relocation
Benefits (at page 1 thereof) shall be through March 31, 2000. In
addition, recognizing that monies received as reimbursement for
temporary living expenses are taxable as personal income, PanAmSat
will gross-up the amount paid to Executive for temporary living
expenses to cover the resulting tax liability.
5. OTHER BENEFITS: The Executive shall be entitled to participate in
the PanAmSat Corporation Retirement Savings Plan and the Retention and Deferred
Compensation Plan (the "RDC") and shall be entitled to coverage under the group
medical, vision, dental, basic life and business travel accident insurance plans
provided by PanAmSat on the same basis as other executive employees of PanAmSat.
The Executive will be entitled to a car allowance of at least $600 bi-weekly.
Said Plans may be amended for time to time and any such amendments shall be
applicable to the Executive.
6. TERM: The term of employment under this Agreement shall be for a
period of two (2) years commencing on April 1, 1999 through March 31, 2001; and
thereafter may be extended by PanAmSat in one year terms, by providing written
notification to Executive, twelve (12) calendar months prior to the expiration
date of each employment term, of its desire to extend the Agreement.
B. TERMINATION OF EMPLOYMENT
1. NOTICE: The Executive's employment under this Agreement may be
terminated by either the Executive or PanAmSat at any time upon 30 days written
notice to the other of such termination ("Termination Notice").
2
<PAGE>
The Termination Notice shall state the effective date of such termination and
whether such termination is for "Cause" or "Good Reason" as defined in Sections
F1 and F2. Unless the Termination Notice states that the termination is for
Cause or Good Reason with reasonable particularity, the termination shall be
deemed to be without Cause or Good Reason. The Executive's employment shall
automatically terminate upon his death.
2. TERMINATION BY PANAMSAT FOR CAUSE: The Executive's employment under
this Agreement may be terminated at any time for "Cause" as defined in Section
F1 of this Agreement. In the event of termination for Cause, the Executive shall
have no right to receive (other than as required by
3
<PAGE>
law or by the terms of a Plan) any compensation, benefits or severance pay under
this Agreement for any period of time after such termination, but shall be
entitled to amounts accrued or earned prior thereto, including but not limited
to earned but unpaid salary and bonus, accrued vacation and unreimbursed
expenses ("Accrued Obligations").
3. TERMINATION BY PANAMSAT WITHOUT CAUSE: The Executive's employment
under this Agreement may be terminated at any time by PanAmSat without Cause;
provided, however, in such case, the Executive shall be entitled to receive
Severance Pay and Benefits as set forth below in Section C of this Agreement and
Accrued Obligations. However, in the event that Executive is terminated without
Cause, PanAmSat's obligation to pay the cost for medical, vision and dental
coverage shall end the earlier of 1) the date on which Executive secures
alternative employment or 2) for a period of twenty-four (24) consecutive months
following the effective date of his termination.
4. TERMINATION BY THE EXECUTIVE FOR GOOD REASON: The Executive's
employment under this Agreement may be terminated by the Executive at any time
for "Good Reason" as defined in Section F2 of this Agreement. In the event of
termination for Good Reason, the Executive shall be entitled to receive
Severance Pay and Benefits as set for the below in Section C of this Agreement
and Accrued Obligations.
5. TERMINATION BY THE EXECUTIVE WITHOUT GOOD REASON: The Executive's
employment under this Agreement may be terminated at any time by the Executive
without Good Reason as defined in Section F2 of this Agreement. In the event of
termination without Good Reason, the Executive shall have no right to receive
(other than as required by law or by the terms of a Plan) any compensation,
benefits or severance pay under this Agreement for any period of time after such
termination but shall be entitled to Accrued Obligations.
C. SEVERANCE PAY AND BENEFITS
1. In the event PanAmSat elects to involuntarily terminate the
Executive's employment "without Cause" or the Executive terminates his
employment for "Good Reason" as defined in Section F2 of this Agreement, the
Executive shall receive:
a. Severance pay in an amount equal to 1) two (2) times the
Executive's annual base salary in effect at the time of
termination and 2) two (2) times the higher of the actual bonus
amount paid to the Executive under the Annual Incentive Plan for
the bonus year immediately preceding his termination date, or the
Executive's targeted annual bonus under said Plan for the year in
which the Executive's termination is effective. This severance pay
amount, less all legally required withholding or deduction, shall
be paid to the Executive within thirty (30) calendar days of his
effective date of termination. Such amount shall be paid without
offset for any amounts Executive may earn from other employment
and shall not be subject to offset or counterclaim.
b. Pursuant to the provisions of the Consolidated Omnibus
Reconciliation Act of 1985 ("COBRA"), or otherwise, upon
termination the Executive shall be entitled to participate in
PanAmSat's then existing group medical, vision, dental, and basic
life insurance plans. The cost of the Executive's (and his
dependents) participation in said Plans for a period of
twenty-four (24) consecutive months following the effective date
of his termination shall be borne by PanAmSat.
c. In the event PanAmSat elects to involuntarily terminate
Executive's employment "without Cause" or Executive terminates his
employment for "Good Reason" during the initial two (2) year
employment period (April 1, 1999 through March 31, 2001), all
stock options shall become immediately vested and
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exercisable, and all stock options will terminate not later than
the fifth anniversary of the date of termination of employment,
or, if earlier, the expiration date of the option. In the event
that Executive's employment is extended beyond two (2) years,
there shall be no acceleration of vesting for any future stock
options Executive may receive and any vested stock options shall
terminate not later than the first anniversary of the date of
termination of employment, or if earlier, the expiration date of
the option.
d. In the event PanAmSat elects to involuntarily terminate the
Executive's employment "without Cause" or the Executive terminates
his employment for "Good Reason" or Executive's termination is the
result of death or disability, Executive shall be entitled to a
pro-rata AIP bonus for the fiscal year of termination (paid when
AIP bonuses are paid for the fiscal year) and shall be fully
vested in any outstanding stock options and in all amounts under
the RDC.
2. If during the term of this Agreement, there is a "Change in Control"
as hereinafter defined and under the new controlling ownership Executive
terminates his employment for "Good Reason," Executive shall receive severance
pay as set forth in Section C 1a above.
3. The Executive shall not be entitled to receipt of severance pay of
any kind by reason of any Plan or program of PanAmSat in addition to that
provided hereunder.
4. As a condition precedent to receipt of any severance pay or benefits
provided hereunder, the Executive shall execute a written waiver and release
included in this document as Attachment A.
D. COVENANT NOT TO COMPETE AND NON-SOLICITATION
The Executive represents, warrants and agrees that he will not, during
the term of his employment, and for a period of two (2) years following the
termination of his employment, without the specific written consent of PanAmSat,
directly or indirectly engage in, have any interest in any person, firm or
corporation that directly or indirectly competes with the business of PanAmSat
in, 1)
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the sale or lease of, or the provision of satellite services via, transponder
capacity on satellites operating in geostationary earth orbit; or 2) the
provision of telemetry, tracking and control services for such satellites and
for other satellites operating in geostationary earth orbit provided the
foregoing shall not prevent the Executive from owning less than a two percent
(2%) interest in a public entity, from being employed by such a competing entity
at a non-competing portion of the entity or the related entities (and owning
stock in the competing entity as a result of a compensation plan) or being
employed by any investment, commercial or merchant banking organization. In
addition, the Executive warrants and agrees that for a period of two (2) years
from the date of his employment separation from PanAmSat, he will not directly
or indirectly solicit, identify for solicitation, or aid in the solicitation of
any key employee or group of key employees of PanAmSat to accept employment with
any competitor of PanAmSat. The determination of who constitutes a "key"
employee shall be based on the employee's level, duties, and responsibilities
and impact on PanAmSat's ability to perform if the employee leaves.
E. ARBITRATION
The Executive and PanAmSat agree that all claims and disputes arising
out of or related to this Agreement, or any other claim or dispute that the
Executive may have against PanAmSat including, but not limited to, claims
arising out of or related to his employment by PanAmSat or the termination
thereof, shall be resolved by confidential final and binding arbitration before
a single arbitrator administered by the American Arbitration Association ("AAA")
under its Commercial Arbitration Rules in effect on the date the Executive
executes this Agreement. Any such arbitration must be commenced within the
applicable statute of limitations period governing the claim or dispute. At
least sixty (60) days prior to filing it with AAA, the party seeking arbitration
shall, by hand delivery or certified mail, return receipt requested, provide the
other party the written notice of intention to arbitration under the AAA rules
(hereinafter "Arbitration Notice"). The Parties agree to attempt to select a
mutually acceptable arbitrator, within thirty (30) days of service of the
Arbitration Notice, the arbitrator shall be selected in accordance with the
aforementioned rules of the AAA for non-expedited
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procedures. The Parties shall be entitled to all relief and remedies in an
arbitration as would be available to them in a court of law as well as the award
of attorneys' fees and costs. Except, however, that the award of attorneys' fees
and cost shall only be available to PanAmSat if there is a finding that
Executive's claim was frivolous. The arbitrator shall issue a written opinion
explaining the reasons for the award. In the event of a conflict between this
Agreement and the aforementioned AAA rules, the provisions of this Agreement
shall apply. Either the Executive or PanAmSat may bring an action according and
subject to the Federal Arbitration Act in any court of competent jurisdiction in
the State of Connecticut to modify or correct an arbitration award. Any
arbitration shall be held and any award shall be made in the State of
Connecticut.
F. DEFINITIONS
1. CAUSE: The term "Cause" as used herein is defined as any i)
conviction of, or plea of nolo contendere to, a felony; ii) use of illegal
drugs; iii) disability; or iv) willful and intentional misconduct, willful
neglect or gross negligence, in the performance of duties, which has caused a
demonstrable and serious injury to PanAmSat, monetary or otherwise. For purposes
of this Agreement, the Executive will be deemed to have a "disability" if, for
physical or mental reasons, the Executive is unable to perform the essential
functions of his duties under this Agreement, with or without accommodations,
for 180 consecutive days. The disability of Executive will be determined by a
medical doctor selected by written agreement of PanAmSat and the Executive upon
the written request of one party by notice to the other. The determination of
the medical doctor will be binding on both parties. The Executive must submit to
a reasonable number of examinations by the medical doctor making the
determination of disability and the Executive hereby authorizes the disclosure
and release to PanAmSat of such determination. In addition, in the event that
PanAmSat elects not to extend Executive's employment as set forth in Section A 6
herein and, Executive completes his employment obligations for the 12 months
following the non-renewal of employment, his termination shall constitute
termination "without Cause."
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2. GOOD REASON: The term "Good Reason" as used herein is defined as any
reduction in the amount of the Executive's base salary or aggregate incentive
compensation opportunities; any material reduction in the aggregate value of the
Executive's benefits, unless it is pursuant to a general change in benefits
applicable to all executive employees; a material reduction in the Executive's
then duties and responsibilities; a diminution in Executive's then title or a
transfer, without the Executive's consent, of the Executive's principal place of
employment to a location more than fifty (50) miles from the Executive's current
office or current home. Notwithstanding the above, the occurrence of any event
described in this paragraph will not constitute "good reason" unless the
Executive gives PanAmSat written notice, within sixty (60) calendar days after
the Executive knew or should have known of the occurrence of the event, that
such event constitutes "good reason" and PanAmSat thereafter fails to cure the
event within thirty (30) calendar days after receipt of such notice, provided
such right to cure shall not exist in the case of events duplicative of those
previously cured.
3. CHANGE IN CONTROL: The term "Change in Control," as used herein, is
defined as the acquisition of fifty percent (50%) or more ownership of PanAmSat
by any individual, group of individuals or Company.
H. EXCISE TAXES
a. Anything in this Agreement to the contrary notwithstanding and
except as set forth below, if it is determined that any payment or distribution
by PanAmSat, or any other party, to or for the benefit of Executive (whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise) (a "Payment") would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code ("Code"), or any interest or
penalties which are incurred by Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then Executive shall be entitled
to receive an additional payment (a "Gross-Up
8
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Payment") in an amount such that after payment by Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. Notwithstanding the foregoing, provisions of this
paragraph "a", if it is determined that Executive is entitled to a Gross-Up
Payment, but that Executive, after taking into account the Payments and the
Gross-Up Payment, would not receive a net after-tax benefit of at least
$50,000.00 (taking into account both income taxes and any Excise Tax) as
compared to the after-tax proceeds to Executive resulting from the elimination
of the Gross-Up Payment and a reduction of the payments, in the aggregate, to an
amount (the "Reduced Amount") such that the receipt of Payments would not give
rise to any Excise Tax then no Gross-Up Payment shall be made to Executive and
the Payments, in the aggregate, shall be reduced to the Reduced Amount.
b. Subject to the provisions of paragraph "a", all determinations
required to be made under this Section H, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by a nationally
recognized certified public accounting firm selected by PanAmSat (the
"Accounting Firm") which shall be retained to provide detailed supporting
calculations both to PanAmSat and Executive with 15 business days of the receipt
of notice from Executive that there has been a Payment, or such earlier time as
is required by PanAmSat. All fees and expenses of the Accounting Firm shall be
borne solely by PanAmSat. Any Gross-Up Payment, as determined pursuant to this
Section H, shall be paid by PanAmSat to Executive within 5 days of the receipt
of the Accounting Firm's determination. Any determination by the Accounting Firm
shall be binding upon PanAmSat and Executive. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by PanAmSat should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. If PanAmSat exhausts its remedies pursuant to paragraph "c" below,
and Executive thereafter is required to make a payment of any Excise Tax, as
well as penalties and interest, the Accounting Firm shall determine the amount
of the Underpayment, as well as penalties and interest, that has occurred and
any such Underpayment shall be promptly paid by PanAmSat to or for the benefit
of Executive.
c. Executive shall notify PanAmSat in writing of any claim by the
Internal Revenue Service that, if
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<PAGE>
successful, would require the payment by PanAmSat of the Gross-Up Payment. Such
notification shall be given as soon as practicable but not later than 10
business days after Executive is informed in writing of such claim and shall
apprise PanAmSat of the nature of such claim and the date on which such claim is
requested to be paid or appealed. Executive shall not pay such claim prior to
the expiration of the 30-day period following the date on which it gives such
notice to PanAmSat (or such shorter period ending on the date that any payment
of taxes with respect to such claim is due.) If PanAmSat notifies Executive in
writing prior to the expiration of such period that it desires to contest such
claim, Executive shall:
(a) Give PanAmSat any information reasonably required by PanAmSat
relating to such claim;
(b) take such action in connection with contesting such claims as
PanAmSat shall reasonably request in writing from time to time,
including without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by
PanAmSat;
(c) cooperate with PanAmSat in good faith in order to effectively
contest such claim; and
(d) permit PanAmSat to participate in any proceedings relating to
such claim; provided, however, that PanAmSat shall bear and pay
directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall
indemnify and hold Executive harmless, on an after-tax basis, for
any Excise Tax or income tax (including interest and penalties
with respect thereto) imposed as a result of such representation
and payment of costs and expenses. Without limitation on the
foregoing provisions of this paragraph "c", PanAmSat shall control
all proceedings taken in connection with such contest and, at its
sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option,
either direct Executive to pay the tax claimed and sue for a
refund or to contest the claim in any permissible manner, and
Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial
jurisdiction and in one or more
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appellate courts, as PanAmSat shall determine; provided, however,
that if PanAmSat directs Executive to pay such claim and sue for a
refund, PanAmSat shall advance the amount of such payment to
Executive, on an interest-free basis, and shall indemnify and hold
Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to
payment of taxes for the taxable year of Executive with respect to
which such contested amount is claimed to be due is limited to
such contested amount. Furthermore, PanAmSat's control of the
contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder, and Executive shall
be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing
authority.
d. If, after the receipt by Executive of an amount advanced by PanAmSat
pursuant to paragraph "c" above, Executive becomes entitled to receive
any refund with respect to such claim, Executive shall (subject to
PanAmSat's complying with the requirements of paragraph "c" above)
promptly pay to PanAmSat the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If
after the receipt by Executive of any amount advanced by PanAmSat
pursuant to paragraph "c" above, a determination is made that Executive
shall not be entitled to any refund with respect to such claim and
PanAmSat does not notify Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to
the extent thereof, the amount of Gross-Up Payment required to be paid.
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I. GENERAL PROVISIONS
1. NOTICES: Any notice, request, demand or other communication required
or permitted by this Agreement shall be deemed to be properly given when
personally served in writing or three (3) days after being deposited in the
United States mail, registered or certified, postage prepaid, addressed to the
party at the last address supplied to the sending party by the addressed party.
2. WAIVER: The waiver by any party of a breach of any provision of this
Agreement by the other shall not operate or be construed as a waiver of any
subsequent breach of the same provision or any other provisions of this
Agreement.
3. ENTIRE AGREEMENT: This Agreement contains the entire agreement of
the Parties. It supersedes any and all other agreements, either oral or in
writing, between the Parties hereto with respect to the employment of the
Executive by PanAmSat. Each party to this Agreement acknowledges that no
representations, inducements, promises or agreements, oral or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement or promise not contained
in this Agreement shall be valid and binding.
4. AMENDMENTS: No amendments or additions to this Agreement nor
Agreement termination shall be binding unless in writing and signed by both
Parties, except as herein otherwise provided.
5. SEVERABILITY: The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
effect the validity and enforceability of the other provisions herein.
6. CHOICE OF LAW: This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut, without giving effect to
the principles of conflicts of laws.
7. INDEMNIFICATION: PanAmSat hereby agrees that both during and after
Executive's employment, it shall indemnify Executive to the fullest extent
permitted by Section 145 of the Delaware General Corporation Law and
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Executive shall be covered by PanAmSat's Directors and Officers ("D&O")
insurance plan.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
day and year first hereinabove written.
PanAmSat
/s/ R. Douglas Kahn By: /s/ James W. Cuminale
- --------------------- --------------------
R. Douglas Kahn James W. Cuminale
Executive Vice President
/s/ Michael T. Smith
- ---------------------
Michael T. Smith
Chairman of the Board
& Chief Executive Officer
Hughes Electronics
/s/ James W. Cuminale
- ---------------------
James W. Cuminale
Secretary of the Corporation
PanAmSat Corporation
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ATTACHMENT "A"
GENERAL RELEASE
For a valuable consideration, the receipt and adequacy of which are
hereby acknowledged, R. Douglas Kahn ("Kahn") does hereby release and forever
discharge PanAmSat, Hughes Electronics Corporation, their parent(s) and
affiliates and each of their respective associates, owners, stockholders,
predecessors, successors, heirs, assigns, agents, directors, officers, partners,
representatives, employees, lawyers, and all persons acting by, through, under,
or in concert with them, or any of them (each, a "Releasee"), from any and all
manner of action or actions, cause or causes of action, in law or in equity,
suites, debts, liens, contracts, agreements, promises, liabilities, claims,
demands, damages, losses, costs or expenses, of any nature whatsoever, known or
unknown, fixed or contingent (hereinafter called "Claims"), which Kahn now has
or may hereafter have against any of the Releasees by reason of any and all
acts, omissions, events or facts occurring or existing prior to _______________,
except as expressly provided herein, in connection with his employment with
PanAmSat or the termination thereof. The Claims released hereunder include,
without limitation, any alleged breach of any employment agreement between
PanAmSat and Kahn; any alleged breach of any covenant of good faith and fair
dealing, express or implied; any alleged torts or other legal restrictions in
PanAmSat's right to terminate Kahn's employment; and any alleged violation of
any federal, state or local statute or ordinance including without limitation,
the Connecticut General Statutes, Title VII of the Civil Rights Act of 1964, as
amended, the federal Age Discrimination in Employment Act of 1967, as amended
("ADEA"), the Connecticut Human Rights and Opportunities Law, the Fair Labor
Standards Act, the Equal Pay Act, the Employee Retirement Income Security Act of
1973.
In accordance with the Older Workers Benefit Protection Act of 1990,
Kahn is aware of the following with respect to his release of any claims under
the ADEA:
(1) He has the right to consult with an attorney before signing
this Release.
(2) He has twenty-one (21) days, in which to consider this Release
and any ADEA claim; and
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(3) He has seven (7) days after signing this Release to revoke his
release as to any ADEA claim.
This Release shall not be effective until the expiration of seven (7)
days following execution of this Release.
This Release shall not cover any rights of Kahn upon termination under
the Employment Agreement dated, _____________, any rights of indemnification
under PanAmSat's certificate of incorporation, bylaws or any agreement rights to
Directors and Officers insurance rights pursuant to any equity grant or any post
termination rights under any benefit plan.
Kahn represents and warrants to each Releasee that there has been no
assignment or other transfer of any interest in any Claim which Kahn may have
against the Releasees.
Kahn agrees that if he hereafter commences, joins in, or in any manner
seeks relief through any suit arising out of, based upon, or relating to any of
the Claims released hereunder or in any manner asserts against any Releasee any
of the Claims released hereunder, then Kahn will pay to the Releasee, in
addition to any other damages caused thereby, all reasonable attorneys' fees
incurred by the Releasee in defending or otherwise responding to said suit or
Claim.
Dated:------------------ ------------------------
R. Douglas Kahn
15
================================================================================
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
Dated as of July 2, 1999
by and among
PANAMSAT CORPORATION,
THE CHASE MANHATTAN BANK,
as Agent
and
The Institutions Listed on Schedule A hereto,
as Loan Participants
8 Wide Ku-Band and 16 Narrow Ku-Band Transponders
Aboard Galaxy III-R Communications Satellite (HS-601 Series)
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
RECITALS.......................................................................1
GRANTING CLAUSE................................................................2
SECTION 1. Definitions........................................................3
1.1 Terms Defined in This Agreement..................................3
1.2 Terms Defined in Other Operative Documents......................10
SECTION 2. The Loans and the Notes...........................................10
2.1 Loans; Issuance of Notes........................................10
2.2 Repayment of Loans..............................................10
2.3 Conversion and Continuation Options.............................10
2.4 Minimum Amounts of Tranches.....................................11
2.5 Interest Rates and Payment Dates................................11
2.6 Computation of Interest.........................................12
2.7 Inability to Determine Interest Rate............................12
2.8 Pro Rata Treatment and Payments.................................12
2.9 Optional Prepayments............................................13
2.10 Required Prepayment Following Event of Loss or
Certain Other Events...........................................13
2.11 Certain Miscellaneous Provisions...............................14
2.12 Evidence of Loans..............................................15
2.13 Replacement of Notes; Transfer of Notes........................15
2.14 Payment of Taxes or Other Governmental Charges.................16
2.15 Illegality.....................................................16
2.16 Requirements of Law............................................17
2.17 Taxes..........................................................18
2.18 Indemnity......................................................21
2.19 Change of Lending Office.......................................22
SECTION 3. Assumption of Obligations; Fees...................................22
3.1 Assumption of Obligations.......................................22
3.2 Acknowledgment..................................................22
3.3 Fees ........................................................22
SECTION 4. Covenants and Representations and Warranties of PanAmSat, Etc.....22
4.1 Notice of Loan Event of Default; Furnishing Copies of Documents.22
4.2 Certain Limitations on Actions of PanAmSat, Etc.................23
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4.3 Payment of Moneys to Agent......................................23
4.4 Further Assurances; Financing Statements........................23
4.5 Appointment of Agent as Attorney-in-Fact........................24
4.6 Liability of PanAmSat under Granting Clause Documents;
Absence of Liability of Agent..................................24
4.7 Representations and Warranties..................................24
SECTION 5. Application of Proceeds from Collateral Security..................25
5.1 Application of Proceeds Prior to Default........................25
5.2 Application of Other Amounts Held by Agent upon Rent Default....25
5.3 Retention of Amounts by Agent...................................25
5.4 Application of Payments upon an Event of Loss,
Termination or Purchase of Transponders; Other Prepayments.....26
5.5 Payments After Loan Event of Default............................27
5.6 Application of Certain Other Payments...........................27
5.7 Other Payments..................................................28
5.8 Excepted Payments...............................................28
5.9 Payments to PanAmSat............................................28
SECTION 6. Events of Default; Acceleration of Loans..........................28
SECTION 7. Remedies, Etc.....................................................31
7.1 Legal Proceedings...............................................31
7.2 Cost of Collection..............................................31
7.3 Notice of Claimed Default.......................................31
7.4 No Waiver.......................................................31
7.5 Foreclosure.....................................................31
7.6 Power of Sale...................................................32
7.7 Agent Authorized to Execute Deeds, Etc..........................32
7.8 Purchase of Collateral Security by Loan Participants............32
7.9 Receipt a Sufficient Discharge to Purchaser.....................32
7.10 Waiver of Appraisement, Valuation, Etc.........................32
7.11 Sale a Bar.....................................................33
7.12 Application of Proceeds of Sale................................33
7.13 Appointment of Receiver........................................33
7.14 Possession, Management and Income..............................33
7.15 Right of Agent to Perform Covenants, Etc.......................33
7.16 Remedies, Etc., Cumulative.....................................34
7.17 Quiet Enjoyment................................................34
7.18 Waiver of Existing Defaults....................................36
7.19 No Waiver of Certain Obligations...............................36
7.20 Obligations of Agent Upon Exercise of Rights...................36
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SECTION 8. No Assumption of Obligations Under Assigned Documents.............37
SECTION 9. The Agent.........................................................37
9.1 Appointment.....................................................37
9.2 Delegation of Duties............................................38
9.3 Exculpatory Provisions..........................................38
9.4 Reliance by Agent...............................................38
9.5 Notice of Default...............................................39
9.6 Non-Reliance on Agent and Other Loan Participants...............39
9.7 Indemnification.................................................39
9.8 Agent in Its Individual Capacity................................40
9.9 Successor Agent.................................................40
9.10 Funds May Be Held by Agent.....................................40
9.11 Representations and Warranties.................................41
9.12 Action upon Payment of Notes or Transfer of Transponders.......41
9.13 Certain Notices by Agent.......................................42
SECTION 10. Termination of Agreement.........................................42
SECTION 11. Additional Security..............................................42
SECTION 12. Assigned Agreements..............................................43
SECTION 13. Amendments and Supplements to Agreement and Other Documents......43
13.1 Supplements and Amendments with Consent........................43
13.2 Loan Agreement Supplement etc. Without Consent.................45
13.3 Agent Protected................................................45
13.4 Form of Request................................................46
13.5 Documents Mailed to Holder.....................................46
SECTION 14. Notices, Etc.....................................................46
SECTION 15. After-Acquired Property and Substitution.........................46
SECTION 16. Terms Subject to Applicable Law; Governing Law...................47
SECTION 17. Agreement a Security Agreement with Respect to Personal Property.47
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SECTION 18. Operation; Maintenance; Compliance with Law; Location
of Satellite; Substitution of Transponders......................48
SECTION 19. Insurance........................................................51
SECTION 20. Miscellaneous....................................................52
20.1 Severability...................................................52
20.2 Successors and Assigns.........................................53
20.3 Adjustments....................................................56
20.4 Counterparts...................................................56
Schedule A COMMITMENTS OF LOAN PARTICIPANTS
Exhibit 1 PROMISSORY NOTE
Exhibit 2 DEBT AMORTIZATION SCHEDULE
Exhibit 3 ASSIGNMENT AND ACCEPTANCE
Exhibit 4 CASUALTY PAYMENT DATES
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AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT, dated as of July 2,
1999, by and among (i) PANAMSAT CORPORATION, a Delaware corporation
("PanAmSat"), successor-in-interest to Hughes Communications Galaxy, Inc.
("HCG"); (ii) THE CHASE MANHATTAN BANK, successor-by-merger to Chemical Bank and
the other Banks listed on Schedule A hereto (individually a "Loan Participant"
and collectively the "Loan Participants"); and (iii) THE CHASE MANHATTAN BANK,
successor-by-merger to Chemical Bank, as agent for the Loan Participants (in
such capacity, together with its successors and assigns in such capacity, the
"Agent").
RECITALS
WHEREAS, that certain Loan and Security Agreement dated as of February
7, 1996, was entered into by and among HCG, as Lessee and Wilmington Trust
Company, not in its individual capacity but solely as Owner Trustee, Chemical
Bank, as Agent, and the Institutions Listed on Schedule A thereto, as Loan
Participants (the "Existing Loan Agreement");
WHEREAS, that certain Lease Agreement dated as of February 7, 1996, was
entered into by and among HCG, as Lessee and Wilmington Trust Company, not in
its individual capacity but solely as Owner Trustee and Lessor (the "Lease");
WHEREAS, that certain Participation Agreement dated as of February 7,
1996, was entered into by and among PanAmSat as successor-in-interest to HCG, as
Seller and Lessee, General Motors Acceptance Corporation, as Owner Participant,
Wilmington Trust Company, not in its individual capacity but solely as Owner
Trustee and Lessor, The Chase Manhattan Bank as successor-by-merger to Chemical
Bank, as Agent, and the Institutions Listed on Schedule A thereto, as Loan
Participants (the "Participation Agreement");
WHEREAS, PanAmSat gave notice on April 2, 1999 of its intent to (a)
exercise the purchase option set forth in Section 19(a)(ii) of the Lease with
respect to the Transponders on the EBO Date and (b) assume the Initial Notes
pursuant to Section 19(c) of the Lease, Section 5.05(a) of the Participation
Agreement and Section 2.20 of the Existing Loan Agreement;
WHEREAS, pursuant to Section 13.2 of the Existing Loan Agreement,
without the consent of any of the Loan Participants, upon the request of Owner
Trustee and subject to the provisions of Section 13.3 thereof, Agent may join
with the Owner Trustee in entering into further Loan Agreement Supplements to
effect an assumption of Notes in accordance with Section 2.20 thereof;
WHEREAS, PanAmSat desires by this Agreement, among other things, (a) to
provide for the assumption by PanAmSat of the obligations and liabilities of the
Owner Trustee under the Existing Loan Agreement, including but not limited to
(i) the assumption of the Initial Notes and (ii) the provision for the deposit,
mortgage and pledge by PanAmSat with Agent of the Collateral Security as
security for the obligations of PanAmSat under the Notes and this Agreement and
(b) to reflect the termination of the Lease pursuant to the Termination
Agreement (as defined herein).
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NOW, THEREFORE, in consideration of the premises, PanAmSat agrees with
Agent and the Loan Participants to amend and restate the Existing Loan Agreement
as follows:
TO SECURE the payment when and as due and payable of the principal of
and interest on the Notes issued or to be issued under this Agreement by
PanAmSat, the payment of all other amounts due to Agent and Loan Participants
hereunder (including, without limitation, interest accruing at the then
applicable rate provided in this Agreement after the maturity of the Loans (if
unpaid) and interest accruing at the then applicable rate provided in this
Agreement after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to PanAmSat, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding), and the payment of all other indebtedness which this Agreement by
its terms secures and compliance with all the terms hereof, and of the Notes,
the performance and observance by PanAmSat of its agreements and the conditions
applicable to it in favor of Agent and Loan Participants contained herein or in
any of the other Operative Documents or the Hughes Agreements (collectively, the
"Secured Obligations"):
GRANTING CLAUSE
A. PanAmSat does hereby now, as security, grant, bargain, sell,
mortgage, warrant, pledge, assign, transfer and convey, and grant a security
interest in, with power of sale, to Agent and to its successors and assigns,
forever, for the security and benefit of the holders from time to time of the
Notes, the following properties described in this Granting Clause (the
"Collateral Security"):
(a) all estate, right, title and interest now held or hereafter
acquired by PanAmSat in and to the Transponders (including, without
limitation, each Replacement Transponder) and each Transponder Spare;
(b) all estate, right, title and interest now held or hereafter
acquired by PanAmSat in, to and under (i) the Bill of Sale, (ii) the
Purchase Agreement, (iii) the Service Agreement (and any substitute service
agreement), (iv) the Guarantee Agreement, (v) the Performance Certificate,
(vi) any bill of sale, purchase agreement, service agreement and lease with
respect to any Replacement Transponder (the "Additional Documents") and
(vii) any GLA Sublease (the foregoing agreements and instruments referred
to in (i) through (vii) above being collectively referred to herein as the
"Granting Clause Documents"); including, without limitation, (x) all
proceeds of a refinancing under Article XII of the Participation Agreement
(provided such proceeds may only be applied in accordance with Section
2.10(b)(i)), and (y) all rights of PanAmSat to exercise any election or
option or to make any decision or determination or to give or receive any
notice, consent, waiver or approval or to take any other action under or in
respect of any Granting Clause Document;
(c) all estate, right, title and interest now held or hereafter
acquired by PanAmSat in and to all tolls, rents, issues, profits, products,
revenues and other income, and in and to all proceeds and payments, from or
on account of the property, rights and privileges subjected or required to
be subjected to the Lien of this Agreement;
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(d) all insurance and requisition proceeds with respect to the
Transponders payable to PanAmSat, including but not limited to any insurance
that may be required under Section 19 herein (other than pursuant to paragraph
(a) insofar as it relates to general liability insurance and, to the extent not
carried by Agent, paragraph (c) of Section 19 herein);
(e) all estate, right, title and interest now held or hereafter
acquired by PanAmSat in and to any right to restitution from any party to any
Granting Clause Document in respect of any determination of invalidity of any
Granting Clause Document;
(f) all moneys and securities now or hereafter paid or deposited
or required to be paid or deposited to or with Agent by or for the account of
PanAmSat pursuant to any term of any Operative Document and held or required to
be held by Agent hereunder; and
(g) all proceeds of the foregoing;
BUT EXCLUDING, HOWEVER, from the property, rights, privileges,
proceeds, payments and amounts subject to the foregoing Granting Clause all
Excepted Payments (it being agreed that the term "Collateral Security" shall not
include Excepted Payments) and SUBJECT TO the rights of PanAmSat reserved under
Section 13.1 or otherwise under this Agreement;
TO HAVE AND TO HOLD the same unto Agent, its successors and assigns,
forever;
AS COLLATERAL SECURITY, nevertheless, upon the terms herein set forth,
for the equal and proportionate benefit and security of the holders from time to
time of the Notes, without preference of any Note over any other Note for any
reason.
IT IS HEREBY COVENANTED by the parties hereto that the Collateral
Security is to be held and applied subject to the further terms herein set
forth; and Agent hereby agrees to accept the duties herein set forth, and
PanAmSat, for itself and its successors and assigns, hereby covenants and agrees
with Loan Participants, and with Agent for the equal and proportionate benefit
and security of Loan Participants, as follows:
SECTION 1. Definitions.
1.1 Terms Defined in This Agreement. Unless the context shall otherwise
require, the following terms shall have the following meanings for all purposes
hereof (such definitions to be equally applicable to both the singular and
plural forms of the terms defined):
"Additional Documents" has the meaning specified in paragraph A(b) of
the Granting Clause.
"Additional Insurance" means excess life or casualty insurance
described in Section 19(c) hereof.
"Adjusted LIBOR Rate" means the LIBOR Rate plus 1/4 of 1%.
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"Adverse Effect" has the meaning set forth in Section 18(a) hereof.
"Agent" has the meaning specified in the preamble to this Agreement.
"Agent's Office" means Agent's office at 1 Chase Manhattan Plaza (8th
floor), New York, New York 10081, Attention: Winslowe Ogbourne, Agent Bank
Services, telecopier number (212) 552-5700, until notice of a change of address
of such office or telecopier number or attention shall have been given by Agent
in accordance with the Participation Agreement. All payments of funds to be made
available by PanAmSat or Loan Participants at Agent's Office must be made as
follows: ABA #021000021, The Chase Manhattan Bank, New York, New York 10015,
Credit: Commercial Loan Services #7315, 1111 Fannin, 9th Floor, Ref: PANAMSAT
CORPORATION 311-0869396617.
This "Agreement" means this Amended and Restated Loan and Security
Agreement, as the same may be amended, modified or supplemented from time to
time (all references herein to numbered Sections, unless otherwise indicated,
being references to Sections of this Agreement).
"Applicable Rate" means, in respect of any LIBOR Loan, the Adjusted
LIBOR Rate, and in respect of any Prime Rate Loan, the Prime Rate.
"Assignment and Acceptance" has the meaning specified in Section
20.2(c).
"Bankruptcy Default" shall mean any event specified in Section 6(g)
hereof which with the passage of time or the giving of notice or both would
constitute an Event of Default.
"Bill of Sale" means the Bill of Sale, dated July 2, 1999 from
Wilmington Trust Company, not in its individual capacity but solely as Owner
Trustee under the Trust Agreement ("Seller"), to PanAmSat transferring title to
the Transponders from Seller to PanAmSat.
"Board of Governors" means the Board of Governors of the Federal
Reserve System of the United States of America or any successor agency or board
that is at the relevant time performing the functions of the Board of Governors.
"Break Funding Costs" has the meaning specified in Section 2.18.
"Calendar Date" means January 2 or July 2, as the case may be.
"Casualty Notice" has the meaning specified in Section 2.10(a).
"Casualty Payment Date" has the meaning specified in Section 2.10(a).
"Chase" means The Chase Manhattan Bank, successor-by-merger to Chemical
Bank.
"Chemical Bank" means Chemical Bank, the predecessor-in-interest to
Chase.
"Collateral Security" has the meaning specified in the Granting Clause.
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"Commitment" has the meaning specified in Section 2.1(a).
"Control" has the meaning specified in Section 7.20(e).
"Dollars" and "$" means dollars in lawful money of the United States of
America.
"Eurocurrency Reserve Requirements": for any day as applied to a LIBOR
Loan, the aggregate (without duplication) of the rates (expressed as a decimal)
of reserve requirements in effect and actually imposed on such day (including,
without limitation, basic, supplemental, marginal and emergency reserve under
any regulations of the Board of Governors or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements prescribed
for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board of Governors) maintained by a member bank of the
Federal Reserve System.
"Event of Default" shall mean any one of the events enumerated in
Section 6.
"Excepted Payments" means and includes insurance proceeds, if any,
payable to PanAmSat under any Additional Insurance as permitted by Section
19(c).
"Existing Loan Agreement" means the Loan and Security Agreement dated
as of February 7, 1996 by and among Wilmington Trust Company, not in its
individual capacity but solely as Owner Trustee, Chemical Bank, as Agent, and
the Institutions Listed on Schedule A thereto, as Loan Participants.
"FCC Ordered Move" has the meaning specified in Section 18(d).
"Further Use Agreement" means, with respect to any Transponder, any
assignment, sublease, license to use, or Transfer of Control, by User to a third
party other than such User or its Affiliates.
"Granting Clause Documents" has the meaning specified in paragraph A(b)
of the Granting Clause.
"Guarantee Agreement" or "Guaranty Agreement" means the Amended and
Restated Guaranty dated as of July 2, 1999 by General Motors Corporation, a
Delaware corporation, for the benefit of the Guaranteed Parties.
"Hughes Agreements" means the Purchase Agreement and the Service
Agreement and any similar purchase agreement (mutatis mutandi) and service
agreement executed and delivered in connection with a substitution of a
transponder aboard another satellite pursuant to Section 18(e) hereof.
"Initial Notes" means the notes substantially in the form set forth in
Exhibit 1 attached to the Existing Loan Agreement, delivered by Owner Trustee
pursuant to Section 2.1(e) thereof, and any notes delivered in exchange therefor
or in replacement thereof pursuant to Section 2.13 of the Existing Loan
Agreement.
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"Instruction Certificate" means a certificate delivered to Agent and
signed by a Responsible Officer of PanAmSat.
"Interest Payment Date" means: (a) as to any Prime Rate Loan, each
Calendar Date to occur while such Loan is outstanding, and (b) as to any LIBOR
Loan, the last day of the applicable Interest Period.
"Interest Period" with respect to any LIBOR Loan means: (i) initially,
the period commencing on the borrowing or conversion date, as the case may be,
with respect to such LIBOR Loan and ending one, two, three or six months
thereafter, as selected by PanAmSat in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (ii) thereafter,
each period commencing on the last day of the immediately preceding Interest
Period applicable to such LIBOR Loan and ending one, two, three or six months
thereafter, as selected by PanAmSat by irrevocable notice to Agent not less than
three Business Days prior to the last day of the then current Interest Period
with respect thereto; provided, that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(1) if any Interest Period pertaining to a LIBOR Loan would otherwise
end on a day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another calendar
month in which event such Interest Period shall end on the immediately
preceding Business Day;
(2) any Interest Period pertaining to a LIBOR Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a calendar month;
and
(3) PanAmSat shall select Interest Periods so as not to require a
payment of any LIBOR Loan during an Interest Period for such Loan.
"Leveraged Lease Obligation" means the non-recourse obligation of a
trust or special purpose corporation to repay notes issued by it to loan
participants, which notes are issued to finance in part the purchase price of
equipment and secured by such equipment and by the lease of such equipment to a
lessee, where Guarantor has guaranteed the financial obligations of the lessee
under the lease to the holders of the notes.
"LIBOR Base Rate" shall be determined on the basis of the
following provisions:
(i) The arithmetic mean (rounded up, if necessary, to the
nearest basis point) of the offered rates for deposits in Dollars for a
period of time comparable to the applicable Interest Period which appear on
the Telerate LIBOR Page at approximately 10:00 a.m., New York City time, on
the second Business Day prior to the commencement of each Interest Period
(the "Interest Determination Date"). "Telerate LIBOR Page," as used herein,
means the display designated as Page 3750 on the Telerate Service (or such
other page as may replace such page on that service for the purpose of
displaying London interbank offered rates
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of major banks, or, if such display is not available at any such time, a
comparable display of London interbank offered rates of major banks as may
be available from a similar source).
(ii) If fewer than two offered rates appear on the Telerate
LIBOR Page, the LIBOR Base Rate will be the arithmetic mean (rounded up, if
necessary, to the nearest basis point) of at least two offered quotations
from the principal London office of each of the Reference Banks for
deposits in Dollars for a period of time comparable to such Interest Period
to prime banks in the London interbank market at approximately 10:00 A.M.,
New York City time, on such Interest Determination Date and in a principal
amount of not less than $10,000,000 that is representative for a single
transaction in such market at such time. If fewer than two quotations are
provided, the LIBOR Base Rate in respect of such Interest Determination
Date will be the arithmetic mean (rounded up, if necessary, to the nearest
basis point) of the rates quoted by the Reference Banks in The City of New
York at approximately 10:00 A.M., New York City time, on such Interest
Determination Date for loans in Dollars to leading European banks, for a
period of time comparable to such Interest Period and in a principal amount
of not less than $10,000,000 that is representative of a single transaction
in such market at such time; provided, however, that if the Reference Banks
are not quoting as mentioned in this sentence, the LIBOR Base Rate for such
Interest Period will be the same as the LIBOR Base Rate for the immediately
preceding Interest Period.
"LIBOR Loans" means Loans, the rate of interest applicable to
which is based upon the LIBOR Rate.
"LIBOR Rate": with respect to each day during each Interest
Period pertaining to a LIBOR Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest
1/100th of 1%):
LIBOR Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Loan" means a loan to be made by a Loan Participant under
this Agreement and the Participation Agreement.
"Loan Default" means an event or condition which with the
giving of notice, passage of time or both would become a Loan Event of
Default.
"Loan Event of Default" has the meaning specified in Section
6.
"Loan Participant" means any of the institutions listed on
Schedule A under the heading "Loan Participants" and their permitted
successors, transferees and assigns.
"Majority In Interest of Noteholders" means, as of any date
of determination, the holders of more than 50% in aggregate unpaid
principal amount of all Notes outstanding as of such date. For purposes of
the foregoing definition and Section 13 and in determining as of such date
of determination the aggregate unpaid principal amount of the Notes then
outstanding, there shall not be counted as outstanding any Note held by
PanAmSat, Owner Participant, Lessee, Guarantor or any of
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their respective Affiliates (unless PanAmSat, Owner Participant, Lessee or
Guarantor or their respective Affiliates, as the case may be, shall own all
of the Notes then outstanding).
"Non-Excluded Taxes" has the meaning specified in Section
2.17(a).
"Note" means a note substantially in the form set forth in
Exhibit 1 attached hereto, delivered by PanAmSat pursuant to Section
2.1(d), and shall include any note delivered in exchange therefor or in
replacement thereof pursuant to Section 2.13.
"Occasional Use Service Contract" has the meaning set forth
in Section 7.17(b).
"Operative Documents" shall mean, collectively, the
Participation Agreement, the Guaranty Agreement, the Loan Agreement, any
Loan Agreement Supplement, the Notes, the Bill of Sale, the Termination
Agreement, the Performance Certificate, and any similar documents executed
and delivered in connection with a substitution of a transponder aboard
another satellite pursuant to Section 18(e).
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from the execution, delivery or enforcement of this
Agreement, excluding such taxes resulting from the gross negligence or
willful misconduct of Agent or Loan Participant.
"PanAmSat Customary Terms" has the meaning specified in Section
19(a).
"Participation Agreement" means the Participation Agreement dated
as of February 7, 1996 among PanAmSat, as successor-in-interest to HCG, as
Lessee, General Motors Acceptance Corporation, as Owner Participant,
Wilmington Trust Company, not in its individual capacity but solely as
Owner Trustee, The Chase Manhattan Bank, as successor-by-merger to Chemical
Bank, as Agent and the Loan Participants, as the same may be amended,
modified or supplemented from time to time.
"Payment Date" means a Principal Payment Date or an Interest
Payment Date.
"Payment Default" means any event specified in Section 6(a) or (b)
hereof which event with the passage of time or the giving of notice or both
would constitute an Event of Default.
"Prime Rate": for any day, a rate per annum equal to the Prime
Rate in effect on such day. For purposes hereof: "Prime Rate" shall mean
the rate of interest per annum publicly announced from time to time by
Chemical as its prime rate in effect at its principal office in New York
City (the Prime Rate not being intended to be the lowest rate of interest
charged by Chemical in connection with extensions of credit to debtors).
Any change in the Prime Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate.
"Prime Rate Loans" means Loans, the rate of interest applicable to
which is based upon the Prime Rate.
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"Principal Payment Date" means, with respect to each Loan, each
date on which a payment of principal is required to be made on such Loan
pursuant to the Debt Amortization Schedule, as then in effect.
"Reference Banks" means Chase and J.P. Morgan Inc. collectively.
"Register" has the meaning specified in Section 20.2(e).
"Regulation D" means Regulation D of the Board of Governors, as
the same may be amended or supplemented from time to time.
"Replacement Transponder" has the meaning specified in Section
18(e).
"Secured Obligations" has the meaning specified in the paragraph
next preceding the Granting Clause.
"Substitute Loan Participant" has the meaning specified in Section
2.16(d).
"Substitution" has the meaning specified in Section 18(e).
"Termination Agreement" means the Termination Agreement dated as
of July 2, 1999 among PanAmSat, Wilmington Trust Company, not in its
individual capacity but solely as Owner Trustee, General Motors Acceptance
Corporation, as Owner Participant and Chase, as Agent, terminating the
Lease, the Trust Agreement, the Consent and Agreement, the GMAC Bill of
Sale, the Assignment and Assumption Agreement and the Bill of Sale from
Owner Participant to the Owner Trustee.
"Tranche" means the collective reference to LIBOR Loans the then
current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Transponder Obligations" has the meaning specified in Section
7.20(e).
"Transponder Rights" has the meaning specified in Section 7.20(e).
"Type" means, as to any Loan, its nature as a Prime Rate Loan or
LIBOR Loan.
"Use Agreement" has the meaning specified in Section 7.17(b).
"User" has the meaning specified in Section 7.17(b).
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1.2 Terms Defined in Other Operative Documents. Capitalized terms
used but not defined herein shall have the respective meanings given such
terms in Appendix A to the Participation Agreement. Appendix A also
contains the rules of usage that shall apply to all terms defined or
referred to therein.
SECTION 2. The Loans and the Notes.
2.1 Loans; Issuance of Notes. (a) In no event shall the
aggregate principal amount of outstanding Loans by any Loan Participant
exceed at any time the amount set opposite such Loan Participant's name on
Schedule A hereto and Schedule II to the Participation Agreement (such Loan
Participant's "Commitment"). No part of the Commitments which was not
borrowed by HGC on the Commencement Date may be borrowed thereafter.
(b) The Loans may from time to time be (i) LIBOR Loans,
(ii) Prime Rate Loans or (iii) a combination thereof, as determined by
PanAmSat and notified to Agent in accordance with this Section and Section
2.3.
(c) On the date hereof, PanAmSat shall issue one Note to
each of the Loan Participants. All Notes issued on the date hereof shall
have the Debt Amortization Schedule attached thereto (which debt
amortization schedule shall be furnished by PanAmSat pursuant to the
Participation Agreement and shall conform with Section 2.1(d)), and shall
be (x) dated the date hereof, (y) registered in such Loan Participant's
name, and (z) in an aggregate principal amount equal to the amount of the
Loan made by such Loan Participant on the Commencement Date, as provided in
the Participation Agreement.
(d) The Debt Amortization Schedule in effect on the date
hereof shall be as attached hereto as Exhibit 2. Such Debt Amortization
Schedule shall be prepared so that the average life from the Commencement
Date to maturity of the aggregate original principal amount of the Loans
shall not exceed 4.92 years and that the final maturity date of the Loans
and the Notes shall not extend to a date which is later than the earlier of
the last day of the Basic Term or 7.92 years from the Commencement Date.
(e) The proceeds of the Loans were used for the purposes
set forth in the Participation Agreement and PanAmSat is assuming the
Loans.
2.2 Repayment of Loans. PanAmSat agrees to pay to Agent for the
account of each Loan Participant the original principal amount of each Loan
made by such Loan Participant and evidenced by a Note in accordance with
the Debt Amortization Schedule contained in Exhibit 2 attached hereto, as
such Debt Amortization Schedule may be revised from time to time in
accordance with this Section 2.2. PanAmSat hereby further agrees to pay
interest on the unpaid principal amount of the Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates
per annum, and on the dates, set forth in Section 2.5.
2.3 Conversion and Continuation Options. (a) PanAmSat may elect
from time to time to convert LIBOR Loans to Prime Rate Loans by giving
Agent at least two Business Days' prior
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irrevocable notice of such election, provided that any such conversion of
LIBOR Loans may only be made on the last day of an Interest Period with
respect thereto. PanAmSat may elect from time to time to convert Prime Rate
Loans to LIBOR Loans by giving Agent at least three Business Days' prior
irrevocable notice of such election. Any such notice of conversion to LIBOR
Loans shall specify the length of the initial Interest Period or Interest
Periods therefor. Upon receipt of any such notice Agent shall promptly
notify each affected Loan Participant thereof. All or any part of
outstanding LIBOR Loans and Prime Rate Loans may be converted as provided
herein, provided that (i) no Loan may be converted into a LIBOR Loan when
any Loan Event of Default has occurred and is continuing and a Majority In
Interest of Noteholders has determined that such a conversion is not
appropriate and (ii) no Loan may be converted into a LIBOR Loan after the
date that is one month prior to the final maturity of the Loans set forth
in the Debt Amortization Schedule then in effect.
(b) Any LIBOR Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by
PanAmSat giving notice to Agent, in accordance with the applicable
provisions of the definition of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to
such Loans (and upon receipt of any such notice, Agent shall promptly
notify each affected Loan Participant thereof), provided that no LIBOR Loan
may be continued as such (i) when any Loan Event of Default has occurred
and is continuing and a Majority In Interest of Noteholders has determined
that such a continuation is not appropriate or (ii) after the date that is
one month prior to the final maturity of the Loans set forth in the Debt
Amortization Schedule, and provided, further, that if PanAmSat shall fail
to give any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso such Loans
shall be automatically converted to Prime Rate Loans on the last day of
such then expiring Interest Period.
2.4 Minimum Amounts of Tranches. All borrowings, conversions
and continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto (a) the aggregate principal amount of
the Loans comprising each Tranche shall be not less than $1,000,000 and (b)
no more than twelve separate Tranches shall be outstanding at any time.
2.5 Interest Rates and Payment Dates. (a) Each LIBOR Loan
shall bear interest for each day (including the first day but excluding the
last day) during each Interest Period with respect thereto at a rate per
annum equal to the Adjusted LIBOR Rate determined for such day.
(b) Each Prime Rate Loan shall bear interest at a rate
per annum equal to the Prime Rate.
(c) If all or a portion of (i) the principal amount of
any Loan, (ii) any interest payable thereon or (iii) any other amount
payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear
interest at the Overdue Rate, in each case from the date of such
non-payment until such amount is paid in full (after as well as before
judgment).
(d) Interest shall be payable in arrears on each
Interest Payment Date, provided that interest accruing pursuant to
paragraph (c) of this Section shall be payable from time to
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time on demand and provided, further, that accrued but unpaid interest
on a Prime Rate Loan being converted to a LIBOR Loan shall be payable on
the date of conversion.
2.6 Computation of Interest. (a) Interest shall be calculated
on the basis of a 365- (or 366-, as the case may be) day year for the
actual number of days elapsed, except that whenever interest is calculated
on the basis of the LIBOR Rate interest shall be calculated on the basis of
a 360-day year for the actual number of days elapsed. Agent shall as soon
as practicable notify PanAmSat and the Loan Participants of each
determination of a LIBOR Rate. Any change in the interest rate on a Loan
resulting from a change in the Prime Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the
day on which such change becomes effective. Agent shall as soon as
practicable notify PanAmSat and the Loan Participants of the effective date
and the amount of each such change in interest rate.
(b) Each determination of an interest rate by Agent
pursuant to any provision of this Agreement shall be conclusive and binding
on PanAmSat and the Loan Participants in the absence of manifest error.
2.7 Inability to Determine Interest Rate. If on the day which
is two Business Days prior to the first day of any Interest Period:
(a) Agent shall have determined that, by reason of
circumstances affecting the relevant market, adequate and reasonable means
do not exist for ascertaining the LIBOR Rate with respect to any LIBOR Loan
to be outstanding during such Interest Period,
(b) Agent shall have determined that the LIBOR Rate with
respect to any LIBOR Loan to be outstanding during such Interest Period
will not adequately and fairly reflect the cost to the Loan Participants of
making or maintaining their affected LIBOR Loans during such Interest
Period, or
(c) Dollar deposits in the principal amounts of the LIBOR
Loans to which such Interest Period is to be applicable are not generally
available in the London interbank market,
Agent shall give telecopy or telephonic notice thereof to PanAmSat and Loan
Participants as soon as practicable thereafter. If such notice is given (x) any
affected LIBOR Loans requested to be made on the first day of such Interest
Period shall be made as Prime Rate Loans, (y) any affected Loans that were to
have been converted on the first day of such Interest Period to LIBOR Loans,
shall be continued as Prime Rate Loans and (z) any affected outstanding LIBOR
Loans that were to have been continued as such shall be converted on the first
day of such Interest Period to Prime Rate Loans. Until such time as Agent shall
have advised PanAmSat and Loan Participants that the circumstances giving rise
to such notice no longer exist, no further LIBOR Loans shall be made or
continued as such, nor shall PanAmSat have the right to convert Prime Rate Loans
to LIBOR Loans. Each determination by Agent hereunder shall be conclusive and
binding absent manifest error.
2.8 Pro Rata Treatment and Payments. All payments (including
prepayments under Sections 2.9 and 2.10) to be made by PanAmSat hereunder,
whether on account of principal, interest, fees or otherwise, shall be made
without set off or counterclaim and shall be made prior to
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1:00 p.m., New York City time, on the due date thereof to Agent, for the account
of the Loan Participants at the Agent's Office, in Dollars and in immediately
available funds. Payments received by Agent after such time shall be deemed to
have been received on the next Business Day. Agent shall distribute such
payments to the Loan Participants entitled to receive the same promptly upon
receipt in like funds as received and, with respect to each payment (including
each prepayment) by PanAmSat on account of principal and interest on the Loans,
pro rata according to the respective outstanding principal amount of Loans then
held by such Loan Participants. If any payment hereunder (other than payments on
LIBOR Loans) becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day and interest
thereon shall be payable at the then Applicable Rate during the period of such
extension. If any payment on a LIBOR Loan becomes due and payable on a day other
than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend
such payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day. Amounts prepaid pursuant to
Section 2.9 or Section 2.10 may not be reborrowed.
2.9 Optional Prepayments. PanAmSat may at any time prepay the
Loans, in whole but not in part, together with accrued interest to the date of
such prepayment on the amount prepaid, without premium or penalty, upon at least
ten Business Days' irrevocable notice to Agent, specifying the date and amount
of prepayment and whether the prepayment is of LIBOR Loans, Prime Rate Loans or
a combination thereof, and if a combination thereof, the amount allocable to
each; provided, however, that PanAmSat shall not prepay LIBOR Loans under this
Section 2.9 except on the last day of any Interest Period with respect thereto.
Upon receipt of any such notice, Agent shall promptly notify each Loan
Participant thereof. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein.
2.10 Required Prepayment Following Event of Loss or Certain
Other Events.
(a) Event of Loss. If with respect to any Transponder an
Event of Loss occurs, then PanAmSat shall forthwith (and, in any event, within
seven days of such occurrence) give Agent notice of such Event of Loss (the
"Casualty Notice"), which Casualty Notice shall include, if applicable,
PanAmSat's election to provide a Replacement Transponder in accordance with
Sections 2.10(a) or 18(e) and shall also state whether the proviso to the third
sentence of this Section 2.10(a) shall be applicable by reason of PanAmSat's
having in force insurance against loss or damage to the Transponders, pursuant
to Section 19 or voluntarily. The Loans and the Notes shall be prepaid, in part
as provided below, upon the occurrence of an Event of Loss with respect to any
Transponder with respect to which PanAmSat has not in the Casualty Notice chosen
to provide a Replacement Transponder. Such prepayment shall be applied in
accordance with Section 5.4 and shall be made on the date (the "Casualty Payment
Date") specified on Exhibit 4 hereto first occurring not less than 30 days after
the date of such Casualty Notice; provided, however, that if, with respect to
such Transponder, PanAmSat shall have in force insurance against loss or damage
to the Transponders, pursuant to Section 19 or voluntarily, then such prepayment
shall be made within ten days after receipt of any such insurance proceeds (but
in no event later than 120 days after the date of such Casualty Notice). Each
prepayment pursuant to this Section 2.10(a) shall be in an amount equal to the
Applicable Principal Amount with respect to the Transponder that suffered the
Event of Loss, together with accrued and unpaid interest on the principal amount
so prepaid to, but
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excluding, the related Casualty Payment Date; provided that no Break Funding
Costs, if any, shall be due or payable in connection with such prepayment.
Each prepayment of principal pursuant to this Section 2.10(a) shall be applied
to the pro rata reduction of all remaining principal installments of
the Notes. In lieu of making the foregoing prepayment, and so long as, but only
so long as, no Bankruptcy Default or Event of Default has occurred and is
continuing, PanAmSat may, at its option, notify Agent of its intent to, and
thereafter provide (on the Casualty Payment Date first occurring not less than
30 days after the date of the Casualty Notice) a Replacement Transponder, in
accordance with, and subject to, the provisions and the conditions in Section
18(e). Upon payment in full of the prepayment due under this Section 2.10(a) or
the provision of a Replacement Transponder pursuant to the preceding sentence,
(i) the Transponder suffering such Event of Loss to PanAmSat shall no longer be
deemed to be part of the Collateral Security and shall be released from the Lien
of this Agreement, and (ii) if applicable, the Replacement Transponder shall
become part of the Collateral Security and shall be subject to the Lien of this
Agreement.
(b) Other Prepayments. The Loans and the Notes shall be
prepaid (except as otherwise provided in clause (ii) below), in whole but not in
part (except as otherwise provided in clause (iv) below), in any of the
following circumstances:
(i) upon any refunding of the Notes pursuant to Article
XII of the Participation Agreement, the entire principal amount of the Loans
then outstanding shall be prepaid; such prepayment to be made on the date the
Refunding Notes are issued, together with accrued but unpaid interest thereon
to, but excluding, the date of such prepayment, and Break Funding Costs, if any;
(ii) upon any amendment to the Debt Amortization
Schedule which provides for a downward adjustment to the aggregate principal
amount of the Loans then outstanding, the Loans shall be prepaid in an amount
equal to the amount of such net downward adjustment; such prepayment to be made
on the date such amendment becomes effective, together with accrued but unpaid
interest thereon to, but excluding, the date of such prepayment, and Break
Funding Costs, if any.
PanAmSat will give Agent written notice of prepayment under this
Section 2.10. Notice of prepayment having been given as aforesaid, such notice
shall be irrevocable and the amount to be prepaid determined in accordance with
this Section 2.10 shall become due and payable on the date fixed for prepayment.
Upon receipt of such notice, Agent shall promptly notify each Loan Participant
thereof.
2.11 Certain Miscellaneous Provisions. (a) Except as
otherwise provided in Section 2.13, no Notes may be issued except as provided in
Article II of the Participation Agreement.
(b) All Notes and Loans at any time outstanding shall be
equally and ratably secured by this Agreement, without preference, priority or
distinction on account of the date or dates or the actual time or times of the
issue of such Notes (or the making of such Loans), so that all Notes and Loans
at any time issued or outstanding shall have the same right, lien, security,
preference and priority by virtue of this Agreement.
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(c) A Loan Participant shall have no further interest
in, or other right with respect to, the Collateral Security when and if the
principal of and interest on all the Notes held by it, and all other Secured
Obligations theretofore or then payable to such Loan Participant hereunder and
under such Notes shall have been paid in full.
2.12 Evidence of Loans. (a) Each Loan Participant shall
maintain in accordance with its usual practice an account or accounts evidencing
indebtedness of PanAmSat to such Loan Participant resulting from the Loans made
by such Loan Participant from time to time, including the amounts of principal
and interest payable and paid to such Loan Participant from time to time under
this Agreement.
(b) Agent shall maintain the Register pursuant to
Section 20.2(e), and a subaccount therein for each Loan Participant, in which
shall be recorded (i) the amount of each Loan made hereunder, the Type thereof
and, in the case of LIBOR Loans, each Interest Period applicable thereto, (ii)
the amount of any principal or interest due and payable or to become due and
payable from PanAmSat to each Loan Participant hereunder and (iii) both the
amount of any sum received by Agent hereunder from PanAmSat and each Loan
Participant's share thereof, if any.
(c) The entries made in the Register and the accounts of
each Loan Participant maintained pursuant to Section 2.12(b) shall, to the
extent permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of PanAmSat therein recorded; provided, however, that
the failure of any Loan Participant or Agent to maintain the Register or any
such account, or any error therein, shall not in any manner affect the
obligation of PanAmSat to repay (with applicable interest) the Loans made to
PanAmSat by such Loan Participant in accordance with the terms of this
Agreement.
(d) PanAmSat agrees that each Loan Participant is hereby
authorized to record the date, Type and amount of each Loan made by such Loan
Participant, the date and amount of each payment or prepayment of principal
thereof, each continuation thereof, each conversion of all or a portion thereof
to another Type and, in the case of LIBOR Loans, the length of each Interest
Period and LIBOR Rate with respect thereto, on the schedule annexed to and
constituting a part of its Note, and any such recordation shall, to the extent
permitted by applicable law, constitute prima facie evidence of the accuracy of
the information so recorded, provided that the failure to make any such
recordation (or any error therein) shall not affect the obligation of PanAmSat
to repay (with applicable interest) the Loans made to PanAmSat in accordance
with the terms of this Agreement.
(e) All references in the Operative Documents to "Notes"
shall be deemed equally to refer to the "Loans."
2.13 Replacement of Notes; Transfer of Notes. (a) Upon
receipt at the Agent's Office of evidence reasonably satisfactory to PanAmSat of
the loss, theft, destruction or mutilation of any Note, and upon delivery of an
indemnity agreement or bond reasonably satisfactory to PanAmSat (it being
understood that the written undertaking of a Loan Participant shall be
satisfactory indemnity), or, in the case of any such mutilation, upon surrender
at the Agent's Office and cancellation of such Note, PanAmSat at no expense to
it (including with respect to transfer taxes or other governmental charges, if
any, as provided in Section 2.14) will execute and deliver, in lieu thereof, a
new Note, in a
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principal amount equal to the unpaid principal amount of such lost, stolen,
destroyed or mutilated Note, dated so that there will be no loss of interest on
such lost, stolen, destroyed or mutilated Note, and otherwise of like tenor,
with appropriate variations and the Note shall be returned to
PanAmSat marked "cancelled".
(b) Upon the Effective Date (as defined therein) of an
Assignment and Acceptance with respect to any Loans pursuant to Section 20.2 and
presentment at Agent's Office of the related Note for registration of transfer
duly endorsed, or accompanied by a written instrument of transfer duly executed
by the registered holder thereof or his attorney duly authorized in writing,
Agent shall notify PanAmSat and PanAmSat at its expense (except for transfer
taxes or other governmental charges, if any, as provided in Section 2.14) will
execute and deliver, in exchange for such Note, one or more new Notes in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note, dated so that there will be no loss of interest on such
presented or surrendered Note, and otherwise of like tenor, with appropriate
variations.
2.14 Payment of Taxes or Other Governmental Charges.
[INTENTIONALLY OMITTED]
2.15 Illegality. (a) Notwithstanding any other provision
herein, if the adoption of or any change in any law or regulation or in the
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any Loan
Participant to make or maintain LIBOR Loans as contemplated by this Agreement,
or to give effect to its obligations as contemplated hereby with respect to any
LIBOR Loan, then, by written notice to PanAmSat and Agent, such Loan Participant
may:
(i) declare that LIBOR Loans will not thereafter be made by such
Loan Participant hereunder, whereupon any request by PanAmSat for a LIBOR
Loan shall, as to such Loan Participant only, be deemed a request for a
Prime Rate Loan unless such declaration is subsequently withdrawn; and
(ii) require that all outstanding LIBOR Loans made by such Loan
Participant be converted to Prime Rate Loans, in which event all such LIBOR
Loans shall be automatically converted to Prime Rate Loans as of the
effective date of such notice as provided in paragraph (b) below.
In the event any Loan Participant shall exercise its rights under (i) or (ii)
above, all payments and prepayments of principal which would otherwise have been
applied to repay the LIBOR Loans that would have been made by such Loan
Participant or the converted LIBOR Loans of such Loan Participant shall instead
be applied to repay the Prime Rate Loans made by such Loan Participant in lieu
of, or resulting from the conversion of, such LIBOR Loans.
(b) For purposes of this Section 2.15, a notice to PanAmSat
by any Loan Participant shall be effective, if lawful, on the last day of the
then current Interest Period; in all other cases such notice shall be effective
on the date of receipt by PanAmSat.
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(c) In the event any Loan Participant gives a notice pursuant
to paragraph (a) above, PanAmSat may require, at its expense, such Loan
Participant to assign, at par (plus Break Funding Costs, if any, and all accrued
and unpaid interest), without recourse (in accordance with Section 20.2) all its
interests, rights and obligations hereunder (including all of its LIBOR Loans at
the time owing to it and the Notes held by it) to a Substitute Loan Participant,
provided that (i) such assignment shall not conflict with or violate any law,
rule or regulation or order of any court or other Governmental Authority, (ii)
PanAmSat shall have received the written consent of Agent, which consent shall
not be unreasonably withheld, to such assignment and (iii) PanAmSat shall have
paid to the assigning Loan Participant all monies accrued and owing hereunder to
it (including pursuant to this Section).
2.16 Requirements of Law. (a) If after the date of this Agreement
the adoption of or any change in applicable law or regulation or in the
interpretation or administration thereof or compliance with any request or
directive not in effect at the date hereof by any central bank or other
Governmental Authority charged with the administration or interpretation thereof
(whether or not having the force of law):
(i) shall subject any Loan Participant to any tax of any kind
whatsoever with respect to any LIBOR Loan made by it or change the basis of
taxation of payments to any Loan Participant in respect of the principal of
or interest on any LIBOR Loan made by such Loan Participant or any fees or
other amounts payable hereunder (other than taxes imposed on or measured by
the overall net income or gross receipts of such Loan Participant by the
jurisdiction in which such Loan Participant has its principal office (or
lending office) or by any political subdivision or taxing authority
therein);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or other similar requirement against assets of,
deposits with or for the account of, or advances, loans or other extensions
of credit by, any office of such Loan Participant (which requirement is not
otherwise included in the determination of the LIBOR Rate); or
(iii) shall impose on such Loan Participant any other condition
affecting this Agreement or LIBOR Loans made by such Loan Participant;
and the result of any of the foregoing is to increase the cost to such Loan
Participant, by an amount which such Loan Participant deems to be material, of
making, converting into, continuing or maintaining LIBOR Loans, or to reduce any
amount receivable hereunder in respect thereof by an amount deemed by such Loan
Participant to be material, then, in any such case, PanAmSat shall pay to such
Loan Participant, any additional amounts necessary to compensate such Loan
Participant for such increased cost incurred or reduction suffered. If any Loan
Participant becomes entitled to claim any additional amounts pursuant to this
Section, it shall promptly notify PanAmSat, through Agent, of the event by
reason of which it has become so entitled. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
(b) If any Loan Participant shall have determined that the
applicability of any law, rule, regulation or guideline adopted after the date
hereof pursuant to or arising out of the July
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1988 report of the Basle Committee on Banking Regulations and Supervisory
Practices entitled "International Convergence of Capital Measurement and Capital
Standards," or the adoption after the date hereof of any other law, rule,
regulation or guideline regarding capital adequacy, or any change in any of the
foregoing or in the interpretation or administration of any of the foregoing by
any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Loan Participant
or any Loan Participant's holding company with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Loan Participant's or such holding
company's capital as a consequence of its obligations hereunder to a level below
that which such Loan Participant or such holding company could have achieved but
for such adoption, change or compliance (taking into consideration such Loan
Participant's or such holding company's policies with respect to capital
adequacy) by an amount deemed by such Loan Participant to be material, then from
time to time, after submission by such Loan Participant to PanAmSat (with a copy
to Agent) of a written request therefor, PanAmSat shall pay to such Loan
Participant such additional amount or amounts as will compensate such Loan
Participant or such holding company for any such reduction suffered.
(c) A certificate of each Loan Participant setting forth such
amount or amounts as shall be necessary to compensate such Loan Participant or
its holding company as specified in paragraph (a) or (b) above, as the case may
be, shall be delivered to PanAmSat (with a copy to Agent) and shall be
conclusive absent manifest error. PanAmSat shall pay each Loan Participant the
amount shown as due on any such certificate delivered by it within ten Business
Days after its receipt of the same.
(d) In the event any Loan Participant delivers a certificate
pursuant to paragraph (c) above, PanAmSat may require, at its expense, such Loan
Participant to assign, at par, without recourse (in accordance with Section
20.2), all its interests, rights and obligations hereunder (including, in the
case of a Loan Participant, all of its Commitment and the Loans at the time
owing to it and the Notes held by it) to a financial institution specified by
PanAmSat (a "Substitute Loan Participant"), provided that (i) such assignment
shall not conflict with or violate any law, rule or regulation or order of any
court or other Governmental Authority, (ii) PanAmSat shall have received the
written consent of Agent, which consent shall not unreasonably be withheld, to
such assignment and (iii) PanAmSat shall have paid to the assigning Loan
Participant all monies accrued and owing hereunder to it, including but not
limited to Break Funding Costs, if any (including pursuant to this Section).
2.17 Taxes. (a) Except as otherwise required by law, all payments
made by PanAmSat under this Agreement and the Notes shall be made free and clear
of, and without deduction or withholding for or on account of, any present or
future taxes, levies, imposts, charges, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding (i) net income and franchise taxes (imposed in lieu of net
income taxes) that would not be imposed but for a present or former connection
between such Loan Participant and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from such Loan
Participant having executed, delivered or performed its obligations or received
a payment under, or enforced, this
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Agreement or the Notes or the Participation Agreement) and (ii) U.S. withholding
taxes payable with respect to payments hereunder under laws (including any
treaty, ruling, determination or regulation) in effect on the date hereof,
provided that this clause (ii) shall not apply to any increase in U.S.
withholding tax resulting from any determination, ruling or regulation or from
any subsequent change in such laws or treaties occurring (x) after the date
hereof in the case of any Loan Participant as of the date of this Agreement, and
(y) in the case of any other Loan Participant, the date of Assignment and
Acceptance pursuant to which it became a Loan Participant (all such non-excluded
taxes, levies, imposts, charges, deductions and withholdings the "Non-Excluded
Taxes"). If any Non-Excluded Taxes are required by law to be withheld from any
amounts payable to any Loan Participant hereunder or under the Notes, the
amounts so payable to such Loan Participant shall be increased to the extent
necessary so that after making all deductions for Non-Excluded Taxes (including
deductions for Non-Excluded Taxes applicable to additional sums payable under
this section) such Loan Participant receives interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement and
the Notes; provided, however, that PanAmSat shall not be required to increase
any such amounts payable to any Loan Participant that is not organized under the
laws of the United States of America or a state thereof if such Loan Participant
fails to comply with the requirements of paragraph (b) of this Section and
Section 2.19. Whenever any Non-Excluded Taxes are payable by PanAmSat, upon
receipt thereof, PanAmSat shall send to Agent for the account of such Loan
Participant, a certified copy of any original official receipt received by
PanAmSat showing payment thereof. If PanAmSat fails to pay any Non-Excluded
Taxes when due to the appropriate taxing authority, PanAmSat shall indemnify the
applicable Loan Participant (other than any Loan Participant which has failed to
comply with its obligations under paragraph (b) of this Section) for any
incremental taxes, interest or penalties that may become payable by such Loan
Participant as a result of any such failure; provided, however, that at the
request of PanAmSat and solely at PanAmSat's expense such Loan Participant shall
use reasonable efforts to contest the payment of such Non-Excluded Taxes which
PanAmSat and such Loan Participant believe were not correctly or legally
asserted. If any Loan Participant receives a refund in respect of any
Non-Excluded Taxes for which such Loan Participant has received payment from
PanAmSat hereunder, such Loan Participant shall, within 30 days of receipt by
such Loan Participant, repay such refund to PanAmSat, provided that PanAmSat,
upon the request of such Loan Participant, agrees to return such refund (plus
any interest) to the Loan Participant in the event such Loan Participant is
required to repay such refund. The agreements in this Section shall survive the
termination of this Agreement and the payment of the Notes and all other amounts
payable hereunder.
(b) Each Loan Participant that is not incorporated under the
laws of the United States of America or a state thereof shall:
(i) in the case of a Loan Participant that is a "bank"
under Section 881(c)(3)(A) of the Code;
(A) on or before the date of the first payment to such Loan
Participant pursuant to this Agreement following the Commencement Date or on or
before the effective date of the Assignment and Acceptance, deliver to PanAmSat
and Agent (x) two duly completed copies of United States Internal Revenue
Service Form
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1001 or 4224, or successor applicable form, as the case may be, and
(y) an Internal Revenue Service Form W-8 or W-9, or successor applicable form,
as the case may be;
(B) deliver to PanAmSat and Agent two further copies of any
such form or certification on or before the date that any such form or
certification expires or becomes obsolete and promptly upon the occurrence of
any event requiring a change in the most recent form previously delivered by it
to PanAmSat; and
(C) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by PanAmSat or
Agent; or
(ii) in the case of a Loan Participant that is not a "bank" under
Section 881(c)(3)(A) of the Code:
(A) deliver to PanAmSat and Agent (I) a statement under
penalties of perjury that such Loan Participant (x) is not a "bank" under
Section 881(c)(3)(A) of the Code, is not subject to regulatory or other legal
requirements as a bank in any jurisdiction, and has not been treated as a bank
for purposes of any tax, securities law or other filing or submission made to
any Governmental Authority, any application made to a rating agency or
qualification for any exemption from tax, securities law or other legal
requirements, (y) is not a 10-percent shareholder within the meaning of Section
881(c)(3)(B) of the Code and (z) is not a controlled foreign corporation
receiving interest from a related person within the meaning of Section
881(c)(3)(C) of the Code and (II) an Internal Revenue Service Form W-8;
(B) deliver to PanAmSat and Agent a further copy of said Form
W-8, or any successor applicable form or other manner of certification on or
before the date that any such Form W-8 expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by such Loan Participant; and
(C) obtain such extensions of time for filing and complete
such forms or certifications as may be reasonably requested by PanAmSat or
Agent;
unless in any such case any change in treaty, law or regulation has occurred
prior to the date on which any such delivery would otherwise be required which
renders any such forms inapplicable and such Loan Participant so advises
PanAmSat and Agent. Such Loan Participant shall certify (i) in the case of a
Form 1001 or 4224, that it is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes and
(ii) in the case of a Form W-8 or W-9, that it is entitled to an exemption from
United States backup withholding tax. Each Person that shall become an Interest
Participant pursuant to Section 20.2(b) shall, upon the effectiveness of the
related transfer, be required to provide all of the forms and statements
required pursuant to this Section to the Loan Participant from which the related
participation shall have been purchased. Notwithstanding anything herein to the
contrary, a Loan Participant shall not be required to deliver any form or
statement pursuant to this paragraph (b) that such Loan Participant is not
legally able to deliver.
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(c) PanAmSat will pay any Other Taxes to the relevant
government authority in accordance with applicable law.
(d) PanAmSat will pay any transfer or similar tax arising
solely as a result of its assumption of the Initial Notes pursuant to Section
19(c) of the Lease, Section 5.05(a) of the Participation Agreement and Section
2.20 of the Existing Loan Agreement.
(e) In the event PanAmSat is required to increase any amounts
payable to any Loan Participant pursuant to paragraph (a) above (unless such
Loan Participant shall have waived its right thereunder with respect to any
specific increase) or any Loan Participant makes a written demand for an
indemnity in respect of any Non-Excluded Taxes pursuant to paragraph (a) above,
PanAmSat may require, at its expense, such Loan Participant to assign, at par,
without recourse (in accordance with Section 20.2) all its interests, rights and
obligations hereunder (including, in the case of a Loan Participant, all of its
Commitment and the Loans at the time owing to it and the Notes held by it) to a
Substitute Loan Participant, provided that (i) such assignment shall not
conflict with or violate any law, rule or regulation or order of any court or
other Governmental Authority, (ii) PanAmSat shall have received the written
consent of Agent, which consent shall not unreasonably be withheld, to such
assignment and (iii) PanAmSat shall have paid to the assigning Loan Participant
all monies accrued and owing hereunder to it, including but not limited to Break
Funding Costs, if any (including pursuant to this Section).
2.18 Indemnity. PanAmSat agrees to indemnify each Loan Participant
and to hold each Loan Participant harmless from any Break Funding Costs which
such Loan Participant may sustain or incur as a consequence of (a) default by
PanAmSat in making a borrowing of, conversion into or continuation of LIBOR
Loans after PanAmSat has given a notice requesting the same in accordance with
the provisions of this Agreement, so long as any such failure is not solely due
to the failure of Agent or any Loan Participant to comply with its obligations
hereunder, (b) default by PanAmSat in making any prepayment after PanAmSat has
given a notice thereof in accordance with the provisions of this Agreement, so
long as any such failure is not solely due to the failure of Agent or any Loan
Participant to comply with its obligations hereunder, (c) the making of a
payment or prepayment of LIBOR Loans on a day which is not the last day of an
Interest Period with respect thereto, so long as any such failure is not solely
due to the failure of Agent or any Loan Participant to comply with its
obligations hereunder, or (d) an assignment by such Loan Participant pursuant to
any of Sections 2.15(c), 2.16(d) and 2.17(c); provided, however, that PanAmSat
shall not indemnify or hold harmless any Loan Participant from any Break Funding
Costs resulting from the making of a prepayment of LIBOR Loans pursuant to
Section 2.10(a). As used herein, "Break Funding Costs" means an amount equal to
the excess, if any, as reasonably determined by such Loan Participant, of (i)
its cost of obtaining the funds for the Loan being paid, prepaid, converted or
not borrowed, converted or continued (based on the LIBOR Rate applicable
thereto), for the period from the date of such payment, prepayment, conversion
or failure to borrow, convert or continue to the last day of the Interest Period
for such Loan (or, in the case of a failure to borrow, convert or continue the
Interest Period for such Loan which would have commenced on the date of such
failure) over (ii) the amount of interest (as reasonably determined by such Loan
Participant) that would be realized by such Loan Participant in reemploying in
the London interbank market on Dollar deposits the funds so paid,
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prepaid, converted or not borrowed, converted or continued for such period or
Interest Period, as the case may be, plus any reasonable incidental expense
incurred by such Loan Participant in connection therewith. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
2.19 Change of Lending Office. Each Loan Participant agrees that
it will use all reasonable efforts (so long as such designation would not be
adverse to it, as determined in its sole judgment) to designate a lending office
or a different lending office if the making of such a designation would reduce
or obviate the need for PanAmSat to make payments under Section 2.16 or 2.17(a),
or would eliminate or reduce the effect of any adoption or change described in
Section 2.15.
SECTION 3. Assumption of Obligations; Fees.
3.1 Assumption of Obligations. PanAmSat hereby assumes,
irrevocably and unconditionally, all of the obligations and liabilities of Owner
Trustee under the Existing Loan Agreement (as amended and restated by this
Agreement) and the other Operative Documents on a full recourse basis and shall
be entitled to exercise all rights given to it under this Agreement and the
other Operative Documents. Owner Trustee is hereby released and discharged
without further act or formality whatsoever from all of such obligations and
liabilities (other than obligations and liabilities incurred by Owner Trustee on
or prior to the date of this Agreement in its individual capacity and any other
obligations expressly stated to survive the transactions contemplated by this
assumption) and hereby gives up the right to exercise all such rights.
3.2 Acknowledgment. The parties hereto, for their own benefit and
for the benefit of the Loan Participants, hereby acknowledge that
notwithstanding the assumption of obligations contemplated by Section 3.1 and
except as expressly modified by the Termination Agreement, the Participation
Agreement shall remain outstanding (it being understood that PanAmSat is a party
thereto by virtue of its being the successor in interest to HCG). In addition to
any other operative provisions thereof, the representations and warranties of
PanAmSat under Section 4.01 thereof, the covenants of PanAmSat under Article V
thereof and the indemnities of PanAmSat under Articles VI and VIII thereof,
shall, notwithstanding the termination of the Lease, remain in effect for the
benefit of the Agent and the Loan Participants (it being understood by the
parties hereto that Article VII thereof is no longer operative and shall be of
no further force or effect). Such provisions and any other operative provisions
of the Participation Agreement shall be interpreted mutatis mutandis to take
into account the assumption of the obligations contemplated by Section 3.1 and
the Termination Agreement.
3.3 Fees. PanAmSat hereby agrees to pay Agent's ongoing fees with
respect to the administration of this Agreement and the Collateral Security.
SECTION 4. Covenants and Representations and Warranties of PanAmSat, Etc.
4.1 Notice of Loan Event of Default; Furnishing Copies of
Documents. If a Responsible Officer of PanAmSat shall have Actual Knowledge of
an Event of Loss or a Loan Event
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of Default, PanAmSat shall give prompt notice by telecopier, telex or telephone
(confirmed by written notice sent in the manner provided in Section 14) to
Agent, describing in reasonable detail the action PanAmSat is taking or proposes
to take with respect thereto. For all purposes of this Agreement, in the absence
of Actual Knowledge on the part of PanAmSat, PanAmSat shall not be deemed to
have knowledge of an Event of Loss or Loan Event of Default. PanAmSat shall
furnish to Agent (provided, in the case of any successor to Agent, that such
successor has agreed to the provisions of Section 16.01 of the Participation
Agreement), promptly upon receipt thereof, a duplicate or copy of all reports,
notices, requests, demands, certificates, financial statements and other
instruments furnished to PanAmSat under any Operative Document or Hughes
Agreement to the extent that any of the same (a) shall not state on its face or
otherwise that it has already been or is currently being distributed to Agent
and (b) shall not be required to be delivered to Agent under the terms of the
Operative Documents or Hughes Agreements.
4.2 Certain Limitations on Actions of PanAmSat, Etc. PanAmSat will
not take any action expressly prohibited by the terms of this Agreement or any
other Operative Document or Hughes Agreement with respect to any part of the
Collateral Security that might adversely affect Agent or any Loan Participant
except with the prior written concurrence of Agent and such other consents as
are required by the terms of this Agreement. PanAmSat represents and warrants
that it has not assigned, pledged or otherwise dispose of, and hereby covenants
that it will not assign, pledge or otherwise dispose of, so long as the Lien of
this Agreement shall remain in effect, any of its estate, right, title or
interest in the Collateral Security subject to this Agreement to anyone other
than Agent (except as expressly permitted under the applicable provisions of any
of the Operative Documents and the Hughes Agreements). PanAmSat further
covenants that it will not, except with the prior written concurrence of Agent
or as expressly provided in or permitted by any provision of this Agreement or
with respect to any property not constituting part of the Collateral Security,
(a) exercise any election or option, or give any notice, consent, waiver or
approval, or take any other action, under or in respect of any Granting Clause
Document (except in respect of Excepted Payments); (b) submit or consent to the
submission to arbitration of any dispute, difference or other matter arising
under or in respect of any Granting Clause Document (unless the rights of Agent
and the Loan Participants are not adversely affect thereby), other than in
respect of Excepted Payments; (c) take any action expressly prohibited by the
terms of this Agreement or any other Operative Document or any Hughes Agreement,
the taking of which might result in an alteration or impairment of any Note or
any Granting Clause Document (except in respect of Excepted Payments) or any of
the rights or security created or effected thereby; or (d) cancel, terminate,
amend or modify, or consent to the same in respect of, any Granting Clause
Document.
4.3 Payment of Moneys to Agent. PanAmSat agrees that promptly on
receipt thereof it will transfer to Agent any and all moneys from time to time
received by it (other than from Agent) constituting part of the Collateral
Security for distribution or retention by Agent pursuant to this Agreement;
provided, that so long as no Loan Event of Default shall have occurred and be
continuing, PanAmSat shall not be obligated to transfer to Agent any amounts
received by it pursuant to any Use Agreement, Occasional Use Service Contract or
other similar agreement with a third party.
4.4 Further Assurances; Financing Statements. At any time and from
time to time, upon the request of Agent, PanAmSat shall promptly and duly
execute and deliver any and all such
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further instruments and documents presented to it as Agent may reasonably deem
necessary or desirable in obtaining the full benefits of the Lien created or
intended to be created hereby and of the rights and powers herein granted. Upon
the instructions at any time and from time to time of Agent, PanAmSat, at
PanAmSat's expense, shall execute any financing statement (and any continuation
statement with respect to any such financing statement), or any other similar
document relating to the Lien created by this Agreement, presented to it in
proper form for signing or filing as may be specified in such instructions.
Agent and Loan Participants agree that any documents executed in connection
herewith by PanAmSat for purposes of recordation are intended solely for
purposes of effectuating the rights of Agent and Loan Participants hereunder and
that Agent will not take any action thereunder that is inconsistent with the
rights of PanAmSat hereunder.
4.5 Appointment of Agent as Attorney-in-Fact. PanAmSat hereby
unconditionally appoints and constitutes Agent, after the occurrence and during
the continuation of a Loan Event of Default, the true and lawful
attorney-in-fact of PanAmSat, irrevocably, with full power (in the name of
PanAmSat or otherwise) to ask, require, demand, receive, compound and give
acquittance for any and all moneys and claims for moneys due and to become due
that are part of the Collateral Security under or arising out of any Granting
Clause Document and, during the continuance of a Loan Event of Default, to
endorse any checks or other instruments or orders in connection therewith that
are part of the Collateral Security.
4.6 Liability of PanAmSat under Granting Clause Documents; Absence
of Liability of Agent. Anything herein to the contrary notwithstanding, PanAmSat
shall remain liable under each Granting Clause Document to which it is a party
to perform all the obligations (if any) assumed by it thereunder, all in
accordance with and pursuant to the terms and provisions thereof. Agent shall
not have any obligation or liability under any Granting Clause Document by
reason of or arising out of the assignment of any Granting Clause Document
assigned pursuant to this Agreement nor shall Agent be required or obligated in
any manner, except as expressly herein provided, to perform or fulfill any
obligation of PanAmSat under or pursuant to any such Granting Clause Document
or, except as herein expressly provided, make any payment, or make any inquiry
as to the nature or sufficiency of any payment received by it, or present or
file any claim, or take any action to collect or enforce the payment of any
amounts that may have been assigned to it or to which it may be entitled at any
time or times.
4.7 Representations and Warranties. PANAMSAT DOES NOT MAKE ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, VALUE,
CONDITION, QUALITY, DESIGN, COMPLIANCE WITH SPECIFICATIONS, OPERATION,
DURABILITY, MERCHANTABILITY OR FITNESS FOR USE OR PURPOSE OF ANY OF THE
TRANSPONDERS, OR ANY PART THEREOF, OR ANY OTHER REPRESENTATION OR WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE TRANSPONDERS, OR ANY
PART THEREOF, OR OTHERWISE, except as set forth in the Participation Agreement
and further except that PanAmSat hereby represents, warrants and covenants to
Agent and each Loan Participant that (a) PanAmSat shall receive on the date
hereof whatever title to the Transponders as was granted and conveyed to it by
the Owner Trustee, free and clear of any Liens other than the Lien of this
Agreement, (b) the Operative Documents and Hughes Agreements to which PanAmSat
is a party have been duly authorized, and have been duly executed and delivered
by one or more of its officers, and, each such Operative Document or Hughes
Agreement (to the extent of
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PanAmSat's representations, warranties, covenants and other agreements made
therein and assuming each Operative Document and Hughes Agreement constitutes
the legal, valid and binding obligation of all other parties thereto,
enforceable against such parties in accordance with their terms) constitutes the
legal, valid and binding obligation of PanAmSat enforceable against PanAmSat in
accordance with the terms thereof subject, as to enforcement, to bankruptcy,
reorganization, insolvency, receivership, moratorium and other laws of general
application relating to or affecting the enforcement of creditors' rights
generally and to general equitable principles, and (c) PanAmSat has the
corporate authority to enter into and perform its duties and obligations under
the Operative Documents and Hughes Agreements to which it is a party.
SECTION 5. Application of Proceeds from Collateral Security.
All moneys received and other amounts realized by Agent pursuant
to the Participation Agreement or any Granting Clause Document shall be applied
or distributed as hereinafter provided in this Section 5.
5.1 Application of Proceeds Prior to Default. Except as otherwise
provided in Sections 5.3 and 5.5, Agent shall apply all payments in respect of
amounts due under this Agreement, received by it as follows:
(a) so much of such payments as shall be required to pay in
full the aggregate amount of principal of, and interest on, then (or on the next
succeeding Business Day) due on the Loans then outstanding (including any
interest at the Overdue Rate on overdue principal and to the extent permitted by
Applicable Laws, overdue interest) shall be applied to the payment of such
principal and interest (or, in the case of any such amounts not coming due until
the next succeeding Business Day, such portion of the payment shall be held by
Agent until such Business Day and then so applied); and
(b) the balance, if any, of such payments remaining
thereafter shall be remitted by Agent to PanAmSat.
5.2 Application of Other Amounts Held by Agent. Except as
otherwise provided in Section 5.5, if as a result of any Loan Default or Loan
Event of Default by PanAmSat, there shall not have been distributed on any
Payment Date the full amount then distributable pursuant to clause (a) of
Section 5.1, Agent shall apply other payments of the character referred to in
Section 5.7(a) then held by it or thereafter received by it to the Loans to the
extent necessary to make the payments then due pursuant to such clause (a) of
Section 5.1.
5.3 Retention of Amounts by Agent. If at the time of receipt by
Agent of any payment hereunder there shall have occurred and be continuing a
Loan Default arising
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from a Bankruptcy Default or a Loan Default under Section 6(f) or 6(g) of which
Agent shall have Actual Knowledge, Agent shall retain such amount (to the extent
not required to be applied pursuant to clause (a) of Section 5.1) as part of the
Collateral Security, shall invest such amount in accordance with the provisions
of Section 9.10, and at such time as there shall not be continuing any Loan
Default arising from a Bankruptcy Default or a Loan Default under Section 6(f)
or 6(g) of which Agent shall have Actual Knowledge, shall distribute such amount
to PanAmSat.
5.4 Application of Payments upon an Event of Loss, Termination or
Purchase of Transponders; Other Prepayments.
(a) Except as otherwise provided in Section 5.5, Agent shall
apply all moneys received by it under Section 2.9 or 2.10 to the prepayment of
the Loans as follows:
(i) so much of such payment as shall be required to reimburse
Agent for any tax or other expense incurred by Agent and reimbursable and
not reimbursed by PanAmSat in connection with the collection or
distribution of such payment shall be paid to Agent;
(ii) so much of such payments and amounts remaining as shall be
required to pay in full the aggregate unpaid principal amount of the Loans
and the Notes then outstanding (to the extent then to be prepaid, which
prepayment, (A) in the case of an Event of Loss with respect to any
Transponder or Transponders, shall be in the amount specified in Section
2.10(a), and (B) in the case of a prepayment pursuant to Section
2.10(b)(ii), shall be in the amount specified in Section 2.10(b)(ii)), plus
any accrued but unpaid interest thereon to the date of distribution
(including, to the extent applicable and permitted by Applicable Laws,
interest at the Overdue Rate thereon) and in all cases, other than in the
case of an Event of Loss with respect to any Transponder or Transponders,
any Break Funding Costs with respect thereto, and shall be paid to the
Noteholders ratably, without priority of one over any other; and
(iii) the balance, if any, of such payments and amounts remaining
thereafter shall be distributed to PanAmSat;
provided, that if, in the case of an Event of Loss, the proviso to the first
sentence of Section 2.10(a) shall be applicable with the result that two
payments shall be made pursuant to said Section, Agent shall apply each such
payment, to the extent thereof, in accordance with this paragraph (a) but the
aggregate amount distributed pursuant to subparagraph (i) or (ii) of this
paragraph (a) out of both such payments shall not exceed the aggregate amount
distributable under such subparagraph in respect of such Event of Loss.
(b) Except as otherwise provided in Section 5.5, any payment
received directly or indirectly from any Governmental Authority, insurer or
other party pursuant to any provision of Section 2.10 or 19 as the result of
loss or damage not constituting an Event of Loss with respect to any
Transponder, or as a result of such loss or damage constituting an Event of
Loss, if and to the extent that such amounts would at the time be required to be
paid to PanAmSat pursuant to said Section 2.10 but for the fact that a Payment
Default or a Bankruptcy Default shall have occurred and be continuing, shall be
held by Agent as security for the obligations of PanAmSat hereunder, shall be
invested in accordance with the terms of Section 9.10, and, at such time as the
conditions for payment to PanAmSat specified in said Section 2.10 or 19, as the
case may be, shall be fulfilled and there shall not be continuing any Payment
Default or Bankruptcy Default, such amount, and the proceeds of any
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investment thereof, shall, to the extent not theretofore applied, be paid to
PanAmSat to the extent provided herein.
5.5 Payments After Loan Event of Default. Until such time as any
Loan Defaults have been cured, waived or discontinued, in which event payments
shall be applied as set forth in Section 5.1 and Section 5.3 hereof, Agent shall
apply (a) all moneys received and amounts held or realized by it (including any
amounts realized by Agent pursuant to the exercise of any of the remedies
pursuant to this Agreement) after either (x) an Event of Default under Section
6(f) or 6(g) shall have occurred and be continuing, and (unless a Bankruptcy
Default shall have occurred and be continuing) Agent shall have commenced the
enforcement of its rights and remedies hereunder, or (y) the outstanding
principal amount of the Loans shall have been declared to be due and payable
immediately pursuant to Section 6 and (b) all moneys then held or thereafter
received by it under this Agreement or under any Granting Clause Document as
part of the Collateral Security as follows:
(i) so much of such payment and amounts as shall be required to
reimburse Agent for any tax or other expense incurred or paid by it with
its own funds (to the extent incurred in connection with its duties as
Agent and to the extent reimbursable and not previously reimbursed), shall
be paid to Agent for application to itself;
(ii) so much of such payments and amounts remaining as shall be
required to reimburse the then existing or prior Noteholders for
obligations incurred pursuant to Section 9.7 (to the extent reimbursable
and not previously reimbursed) shall be distributed to such then existing
or prior Noteholders in accordance with the amount of any payments or
deposits made by each such then existing or prior holder pursuant to
Section 9.7; and in case the aggregate amount so to be paid to all such
existing and prior Noteholders shall be insufficient to pay all such
amounts as aforesaid, then, ratably, without priority of one such holder
over any other, in the proportion that the amount of such indemnity or
other payments to which each such holder is entitled bears to the aggregate
amount of such indemnity or other payments to which all such holders are
entitled;
(iii) so much of such payments and amounts remaining as shall be
required to pay in full the aggregate unpaid principal amount of the Loans
then outstanding plus any accrued but unpaid interest thereon to the date
of distribution (including, to the extent applicable and permitted by
Applicable Laws, interest at the Overdue Rate thereon) but excluding Break
Funding Costs, if any, shall be paid to the Noteholders ratably, without
priority of one over any other;
(iv) so much of such payments and amounts remaining as shall be
required to pay in full any other amounts secured by this Agreement to be
paid shall be applied to the payment of such amounts; and
(v) the balance, if any, of such payments and amounts remaining
thereafter shall be distributed to PanAmSat.
5.6 Application of Certain Other Payments. Except as otherwise
provided in Section 5.1, 5.2, 5.3, 5.4 or 5.5, any moneys received and amounts
realized by Agent for which
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provision as to the application thereof is made in any of the Operative
Documents, the Hughes Agreements and the other Granting Clause Documents, but
not elsewhere in this Agreement, shall be applied forthwith to the purpose for
which such payment was made in accordance with the terms of such Operative
Document, Hughes Agreement or other Granting Clause Document.
5.7 Other Payments. Except as otherwise provided in Section 5.1,
5.2, 5.3, 5.4, 5.5 or 5.6:
(a) any moneys received and amounts realized by Agent for which no
provision as to the application thereof is made in the Participation
Agreement or any other Operative Document or Hughes Agreement or other
Granting Clause Document or elsewhere in this Agreement shall be
distributed forthwith by Agent to PanAmSat; and
(b) any moneys received and amounts realized by Agent under this
Agreement or otherwise with respect to the Collateral Security after
payment in full of the principal of and interest on all of the Loans
(including interest at the Overdue Rate, if any) and all other amounts due
to Agent and the Noteholders hereunder and under the other Operative
Documents, as well as any other amounts remaining as part of the Collateral
Security after payment in full of the principal of and interest on all of
the Loans and all other amounts due to Agent and the Noteholders hereunder
and under the other Operative Documents, shall be distributed forthwith by
Agent to PanAmSat.
5.8 Excepted Payments. Anything contained herein to the contrary
notwithstanding, any Excepted Payments at any time received by Agent will
promptly be paid over to PanAmSat or other Person entitled thereto.
5.9 Payments to PanAmSat. Any amount distributable hereunder by
Agent to PanAmSat shall be paid to PanAmSat by wire transfer of immediately
available funds to PanAmSat at such office and to such account or accounts of
such Person or Persons as shall be designated from time to time by notice from
PanAmSat to Agent.
SECTION 6. Events of Default; Acceleration of Loans.
If one or more of the following events (individually called a
"Loan Event of Default" and collectively called "Loan Events of Default") shall
occur and be continuing, whether such occurrence shall be voluntary or
involuntary, or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body:
(a) default shall occur, for a period of ten Business Days, in the
due and punctual payment of the principal of or interest on any Loan after
the same shall have become due and payable (whether at maturity or on a
date fixed for any installment payment of principal and/or interest or a
date fixed for any required prepayment or by acceleration, declaration,
demand or otherwise); or
(b) default shall be made in the due and punctual payment of any
other amount payable under this Agreement by PanAmSat and such default
shall continue for more than ten
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Business Days after PanAmSat shall have been given notice by Agent or any Loan
Participant of such default (which Loan Participant shall furnish a copy of such
notice to Agent); or
(c) PanAmSat shall default in the due performance or observance by
it of any of the terms of Section 4.2 and such default shall continue for
more than 30 days after PanAmSat shall have been given written notice of
such default by Agent or any Loan Participant (which Loan Participant shall
furnish a copy of such notice to Agent); or
(d) (i) PanAmSat shall default in the due performance or
observance by it of any of its respective obligations hereunder (other than
those referred to in the foregoing clauses (a), (b), (c), (h), (i), (j),
and (k) of this Section 6), and any such default shall continue for more
than 30 days after PanAmSat shall have been given written notice of such
default by Agent or any Loan Participant (which Loan Participant shall
furnish a copy of such notice to Agent); provided that if such default is
capable of cure but cannot be cured by payment of money and cannot be cured
by diligent efforts within such 30-day period (the "cure period") but such
diligent efforts shall be properly commenced within the cure period and
PanAmSat is diligently pursuing and shall continue diligently to pursue a
remedy of such default, the cure period shall be extended for an additional
period of time as may be necessary to cure, not to exceed 90 days; or
(e) any representation or warranty made by PanAmSat hereunder or
under any Note shall prove to have been false or incorrect in any material
respect on the date as of which made and remain so for more than 30 days
after PanAmSat shall have been given written notice thereof by Agent or any
Loan Participant (which Loan Participant shall furnish a copy of such
notice to Agent), provided that if the consequences of such false or
incorrect representation or warranty cannot be cured by the payment of
money or by diligent efforts within such 30-day period (the "cure period")
but such diligent efforts shall be properly commenced within the cure
period and PanAmSat, is diligently pursuing, and shall continue to pursue
diligently, a remedy of such consequences, the cure period shall be
extended for an additional period of time as may be necessary to cure, not
to exceed 90 days; or
(f) PanAmSat shall (i) file, or consent by answer or otherwise to
the filing against it of a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy or insolvency law of any jurisdiction, (ii)
make an assignment for the benefit of its creditors, (iii) consent to the
appointment of a custodian, receiver, trustee or other officer with similar
powers with respect to itself or with respect to any substantial part of
its property, or (iv) take corporate or comparable action for the purpose
of any of the foregoing; or
(g) a court or governmental authority of competent jurisdiction
shall enter an order appointing, without consent by PanAmSat, a custodian,
receiver, trustee or other officer with similar powers with respect to
PanAmSat, or with respect to any substantial part of its property, or
constituting an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of PanAmSat, as the
case may be, and such order shall remain in force undismissed, unstayed or
unvacated for a period of 90 days after the date of entry thereof; or
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(h) other than with respect to any covenant of PanAmSat set forth
in Section 16.02(b) of the Participation Agreement, PanAmSat shall fail to
perform or observe in any material respect any covenant, condition or
agreement to be performed or observed by it under Sections 18 or 19 or
Guarantor shall fail to perform or observe in any material respect any
covenant, condition or agreement to be performed or observed by it under
the Participation Agreement or the Guarantee Agreement or PanAmSat shall
fail to perform or observe in any material respect any other covenant,
condition or agreement to be performed or observed by it under any of the
other Operative Documents or Hughes Agreements to which it is a party
(other than any such covenant, condition or agreement under the Tax
Indemnification Agreement, if any, not related to the payment of money
thereunder) and, in each such case, such failure shall have continued for
90 days after PanAmSat's receipt of written notice thereof from Agent;
provided, however, that if such failure is capable of cure but cannot be
cured by payment of money and cannot be cured by diligent efforts within
such 90-day period but such diligent efforts shall be properly commenced
within the cure period and PanAmSat is diligently pursuing, and shall
continue to pursue diligently, a remedy of such failure, the cure period
shall be extended for an additional period of time as may be necessary to
cure, not to exceed an additional 30 days; or
(i) any representation or warranty made by Lessee, Seller, HCG or
Contractor, or PanAmSat, as successor-in-interest to each such party, in
any of the Operative Documents (excluding this Agreement) or Hughes
Agreements to which it is a party or in any written statement, report,
schedule, notice or other writing furnished by Lessee, Seller, HCG or
Contractor in connection therewith (other than any representation or
warranty under the Tax Indemnification Agreement, if any) shall prove to
have been inaccurate in any material respect at the time made; provided,
however, that if the representation or warranty was originally made in good
faith, an Event of Default shall not be deemed to exist unless the
inaccuracy materially adversely affects Agent and if capable of being
cured, remains uncured for a period of 90 days after receipt by PanAmSat of
written notice from Agent of such inaccuracy; provided, however, that if
such Default cannot be cured by payment of money and cannot be cured by
diligent efforts within such 90-day period but such diligent efforts shall
be properly commenced within the cure period and PanAmSat is diligently
pursuing, and shall continue to pursue diligently, a remedy of such
failure, the cure period shall be extended for an additional period of time
as may be necessary to cure, not to exceed an additional 30 days; or
(j) the Guarantee Agreement shall cease to be valid and binding or
in full force and effect; or
(k) PanAmSat shall fail to obtain any insurance required to be
obtained pursuant to Section 19 and such failure shall have continued for
30 days, or if such insurance required pursuant to Section 19 shall lapse
and PanAmSat shall fail to renew or replace such insurance with the
required insurance within 30 days from the date of such lapse and such
failure shall continue for 30 days thereafter;
then, and in any such event, Agent, may, and if instructed by a Majority In
Interest of Noteholders shall, at any time thereafter (unless all Loan Events of
Default shall theretofore have been remedied or waived and all costs and
expenses, including, without limitation, legal fees and expenses, incurred by or
on behalf of Agent or any Loan Participant (but only with respect to one counsel
for all Loan Participants), shall have been paid by PanAmSat), by written notice
or
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notices to PanAmSat, declare the principal of all the Notes to be due and
payable (except that, in the case of paragraphs (f), (g) and (h) of this Section
6, the principal of the Notes shall be deemed to have been declared
automatically to be due and payable), whereupon the same shall forthwith become
due and payable, together with interest (including interest at the Overdue Rate,
if any) accrued thereon and all other amounts payable with respect to the Notes
as set forth in the Notes or any schedule thereto, without presentment, demand,
protest or notice, all of which are hereby waived. At any time after such
declaration and prior to the sale or disposition of the Collateral Security, a
Majority In Interest of Noteholders, by notice to Agent and PanAmSat, may
rescind such a declaration and thereby annul its consequences.
SECTION 7. Remedies, Etc.
7.1 Legal Proceedings. If any one or more Loan Events of Default
shall have occurred and be continuing, Agent may, and, if instructed by a
Majority In Interest of Noteholders, shall (a) proceed to protect and enforce
the rights of the Loan Participants by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained herein, or for an injunction against the violation of any of the terms
hereof, or in aid of the exercise of any power granted hereby or by law or (b)
subject to and in accordance with the other provisions of this Section 7
(including but not limited to Section 7.5 and Section 7.17) exercise any or all
of the rights and powers, and pursue any and all of the remedies, pursuant to
this Section 7, including the rights and remedies of a secured party under
Applicable Law.
7.2 Cost of Collection. If PanAmSat shall fail to pay any
principal of or interest on any Note or any other amount payable hereunder or
under any Note, PanAmSat shall, so far as may be lawful, pay or reimburse Agent
and the Loan Participants for all their respective costs and expenses incurred
in connection with the enforcement or preservation of the rights of Agent and
the Loan Participants under this Agreement and the Granting Clause Documents,
provided that PanAmSat shall not be liable for legal fees and expenses other
than the reasonable legal fees and expenses of one single counsel for Agent and
the Loan Participants collectively.
7.3 Notice of Claimed Default. If any Loan Participant shall serve
any notice or demand or take any other action in respect of a claimed default,
PanAmSat will forthwith give written notice thereof to Agent and to Owner
Participant describing the notice, demand or action and the nature of the
claimed default.
7.4 No Waiver. Neither failure nor delay on the part of Agent or
any Loan Participant to exercise any right, remedy, power or privilege provided
for herein or in any Note or in any Granting Clause Document or other Operative
Document or by statute or at law or in equity or otherwise shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
remedy, power or privilege preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.
7.5 Foreclosure. If any Loan Event of Default shall have occurred
and be continuing, Agent may, at any time, at its election (and shall upon the
written request of a Majority In Interest of Noteholders), proceed at law or in
equity or otherwise to enforce the payment of the Loans at the time outstanding
in accordance with the terms hereof and of the Notes and to foreclose the Lien
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of this Agreement in one or more proceedings as against all or, to the extent
permitted by Applicable Laws, any part of the Collateral Security, or any
interest in any part thereof, and to have the same sold under the judgment or
decree of a court of competent jurisdiction or proceed to take either of such
actions. Nothing in this Section 7.5 is intended to derogate from the provisions
of Section 7.17.
7.6 Power of Sale. If a Loan Event of Default shall have occurred
and be continuing, then Agent may (and shall upon written request of a Majority
In Interest of Noteholders) sell, assign, transfer and deliver the whole or,
from time to time, to the extent permitted by Applicable Laws, any part of the
Collateral Security or any interest in any part thereof, at any private sale or
public auction, with or without demand, advertisement or notice of the date,
time or place of sale and any adjournment thereof, or as may be required by law,
for cash or credit or for other property, for immediate or future delivery, and
for such price or prices and on such terms as Agent in its sole discretion may
determine, or as may be required by law, even though it shall not have taken
possession of the Transponders or any thereof and shall not have possession
thereof at the time of such sale.
7.7 Agent Authorized to Execute Deeds, Etc. PanAmSat hereby
unconditionally and irrevocably appoints Agent its true and lawful
attorney-in-fact, with full power of substitution, to the extent permitted by
Applicable Laws, in its name and stead and on its behalf, for the purpose of
effectuating any sale, assignment, transfer or delivery hereunder, if a Loan
Event of Default shall have occurred and be continuing, to execute and deliver
all such deeds, bills of sale, assignments, releases and other proper
instruments as Agent may consider necessary or appropriate, PanAmSat hereby
ratifying and confirming all that such attorney or any substitute shall lawfully
do by virtue hereof. If so requested by Agent or any purchaser, PanAmSat shall
ratify and confirm any such lawful sale, assignment, transfer or delivery by
executing and delivering to Agent or such purchaser, without representation or
warranty (express or implied) by PanAmSat, and without recourse, all deeds,
bills of sale, assignments, releases and other proper instruments to effect such
ratification and confirmation as may be designated in any such request.
7.8 Purchase of Collateral Security by Loan Participants. Agent or
any Loan Participant may be a purchaser of the Collateral Security or of any
part thereof or of any interest therein at any sale thereof, whether pursuant to
foreclosure or power of sale or otherwise hereunder, and may apply to the
purchase price the indebtedness secured hereby owing to such purchaser, to the
extent of such purchaser's distributive share of the purchase price. Any such
purchaser shall, upon any such purchase, acquire title to the properties so
purchased, free of the Lien of this Agreement.
7.9 Receipt a Sufficient Discharge to Purchaser. Upon any sale of
the Collateral Security or any part thereof or any interest therein, whether
pursuant to foreclosure or power of sale or otherwise hereunder, the receipt of
the officer making the sale under judicial proceedings or of Agent shall be
sufficient discharge to the purchaser for the purchase money, and such purchaser
shall not be obliged to see to the application thereof.
7.10 Waiver of Appraisement, Valuation, Etc. PanAmSat hereby
waives, to the full extent it may lawfully do so, the benefit of all
appraisement, valuation, stay, extension and redemption laws now or hereafter in
force and all rights of marshalling in the event of any sale of the Collateral
Security or any part thereof or any interest therein.
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7.11 Sale a Bar. Any sale of the Collateral Security or any part
thereof or any interest therein, whether pursuant to foreclosure or power of
sale or otherwise hereunder, shall be a perpetual bar against PanAmSat after the
expiration of the period, if any, during which PanAmSat shall have the benefit
of any redemption laws which may not be waived pursuant to Section 7.10.
7.12 Application of Proceeds of Sale. The proceeds of any sale of
the Collateral Security or any part thereof or any interest therein, whether
pursuant to foreclosure or power of sale or otherwise, together with any moneys
at the time held by Agent as part of the Collateral Security, shall be applied
as provided in Section 5.5.
7.13 Appointment of Receiver. If a Loan Event of Default shall
have occurred and be continuing, Agent shall, to the extent permitted by
Applicable Laws, be entitled to the appointment of a receiver for all or any
part of the Collateral Security, whether such receivership be incidental to a
proposed sale of the Collateral Security or otherwise, and PanAmSat hereby
consents to the appointment of such receiver and will not oppose any such
appointment.
7.14 Possession, Management and Income. If a Loan Event of Default
shall have occurred and be continuing, Agent, without further notice, to the
extent permitted by Applicable Laws, may take possession of the Collateral
Security or any part thereof without judicial process, by summary proceedings or
otherwise, and may hold, operate and manage the same and receive all earnings,
income, rents, issues and proceeds accruing with respect thereto or any part
thereof. Except as shall be expressly provided in any of the Granting Clause
Documents, Agent shall be under no liability for or by reason of any such taking
of possession, removal or holding, operation or management, except that any
amounts so received by Agent shall be applied to pay:
(a) all costs and expenses of so taking possession of, holding,
operating and managing the Collateral Security or any part thereof, all
other fees and expenses of Agent hereunder, and any Taxes, assessments or
other charges, prior to the Lien of this Agreement, which Agent may
consider it necessary or desirable to pay; and
(b) thereafter, as provided in the order of priorities set
forth in clauses (ii), (iii), (iv) and (v) of Section 5.5.
7.15 Right of Agent to Perform Covenants, Etc. If PanAmSat shall
fail to make any payment or perform any act required to be made or performed by
it hereunder or by it under any Granting Clause Document or if PanAmSat shall
fail to release any Lien affecting the Collateral Security that it is required
to release by the terms of this Agreement, Agent, upon five days' notice to
PanAmSat, and without waiving or releasing any obligation or default, may (but
shall be under no obligation to) at any time thereafter make such payment or
perform such act for the account and at the expense of PanAmSat and may take all
such action with respect thereto as, in Agent's opinion, may be necessary or
appropriate therefor. All sums so paid by Agent and all costs and expenses
(including without limitation legal fees and expenses) so incurred, together
with interest thereon at the Overdue Rate from the date of written demand of
payment, shall constitute additional indebtedness secured by this Agreement and
shall be paid by PanAmSat to Agent on demand.
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7.16 Remedies, Etc., Cumulative. Each right, power and remedy of
Agent or any Loan Participant provided for in this Agreement or now or hereafter
existing at law or in equity or by statute or otherwise shall be cumulative and
concurrent and shall be in addition to every other right, power or remedy
provided for in this Agreement or now or hereafter existing at law or in equity
or by statute or otherwise, and the exercise or beginning of the exercise by
Agent or such Loan Participant of any one or more of the rights, powers or
remedies provided for in this Agreement or now or hereafter existing at law or
in equity or by statute or otherwise, or the exercise of any such right, power
or remedy with respect to any part of the Collateral Security by Agent, shall
not preclude the simultaneous or later exercise by Agent or such Loan
Participant of any or all such other rights, powers or remedies, or the
simultaneous or later exercise by Agent of any such right, power or remedy with
respect to any other part of the Collateral Security.
7.17 Quiet Enjoyment.
(a) Notwithstanding any other provision of this Agreement, or
the timing of entering into any Use Agreements and Occasional Use Service
Contracts, neither Agent nor any Noteholder shall, whether or not an Event of
Default shall have occurred and be continuing, take any action that would
interfere with any User under any Use Agreement or Occasional Use Service
Contract, and such Users' right to quiet and peaceful possession and use or
nonuse of the Transponders thereunder, except in accordance with the express
provisions of such Use Agreement or Occasional Use Service Contract, as
applicable, and any sale or foreclosure or exercising of any remedy by Agent
shall be subject to such Use Agreement or Occasional Use Service Contract, as
applicable (including the terms thereof applicable to defaults thereunder).
(b) Use Agreements. So long as no Bankruptcy Default or Event
of Default shall have occurred and be continuing, PanAmSat may, without the
consent of or prior notice to Agent, lease, sublease, license, enter into short
term or long term service contracts with any Person (including, without
limitation, to a "tax-exempt" entity as defined in Section 168(h) of the Code),
transfer Control of, or permit any such Person (including, without limitation,
to a "tax-exempt" entity as defined in Section 168(h) of the Code) to use all or
any part of any Transponder or Transponders (collectively, the "Use Agreements";
such Use Agreements not including for the purposes of Sections 7.17(b)(i) and
7.17(b)(iv) any occasional use service contract for the provision of part-time,
occasional use transponder capacity on available Ku-band or C-band transponders
on satellites, including the Satellite, owned or operated by PanAmSat or any
Affiliate thereof (an "Occasional Use Service Contract")), on and subject to the
following terms and conditions:
(i) except as otherwise provided in Section 7.17(c), such Use
Agreements shall expressly provide that the rights of any sublessee,
assignee, user or operator thereunder (collectively, "User") are subject
and subordinate to all the terms and conditions of this Agreement,
including, without limitation, Agent's right to repossess any Transponder
and terminate such Use Agreements upon the occurrence of an Event of
Default, except that any Use Agreement with a term of one year or less
shall not be required to be so subject and subordinate;
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(ii) PanAmSat shall remain primarily liable to the Loan
Participants for the performance of all the terms of this Agreement to the
same extent as if such Use Agreements had not occurred;
(iii) the terms and conditions of such Use Agreements shall not be
in violation of Applicable Law; and
(iv) except as otherwise provided in Section 7.17(c), such Use
Agreements shall prohibit the User from entering into any Further Use
Agreements without obtaining (x) the written consent of PanAmSat and (y) an
agreement by any such User further transferring its rights to comply with
the terms and conditions of this Section 7.17(b).
Subject to the provisions of this Section 7.17(b) and the Hughes
Agreements, PanAmSat may render any communications service, so long as the
foregoing provisions of this Section 7.17(b) shall apply, and PanAmSat or any
Affiliate thereof may provide Transponder or Transponders capacity by PanAmSat
or any Affiliate of PanAmSat to any of their respective customers in the
ordinary course of their respective businesses; provided that no rendering of
any such communications service or the providing of Transponder or Transponders
capacity, and neither the entering into or performing of any agreement related
thereto, shall operate to reduce, excuse or in any way affect the obligations of
PanAmSat hereunder and under the other Operative Documents or the Hughes
Agreements to which it is a party; and as to which PanAmSat will remain
primarily liable.
(c) GLA Sublease. Notwithstanding any provision of Sections
7.17(b) to the contrary, at PanAmSat's election, clauses (i) and (iv) of Section
7.17(b) shall not apply to the GLA Sublease, the GLA Sublease shall not be
subject and subordinate to this Agreement (and may contain a provision granting
quiet enjoyment to GLA (and its successors and permitted assigns) under the GLA
Sublease during the term thereof), if and so long as:
(i) the rental payments provided for the Transponders under the
GLA Sublease were determined by HCG (as predecessor-in-interest to
PanAmSat), at the time the GLA Sublease was entered into, in good faith,
after consultation with an independent third party to represent the then
fair market value to HCG of the lease of such Transponders; and such
determination by HCG shall have been conclusive as to such market value;
(ii) effective upon the occurrence of an Event of Default, the GLA
Sublease is collaterally assigned by PanAmSat to Agent as additional
Collateral Security within ten days after the occurrence of such Event of
Default (and the original copy of the GLA Sublease is delivered by PanAmSat
or GLA to Agent during said ten-day period, provided that the GLA Sublease
being "Proprietary Information" within the meaning of Section 16.02 of the
Participation Agreement, Agent shall hold it subject to the confidentiality
requirements of Section 16.01 of the Participation Agreement); and
(iii) at the effective time of such assignment, (A) GLA is not in
default of its obligations under the GLA Sublease and (B) either the
creditworthiness of GLA (or its applicable successor or assign) is
reasonably satisfactory to a Majority In Interest of
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Noteholders or GLA (or its applicable successor or assign) secures
a letter of credit for the benefit of PanAmSat, which letter of credit is
collaterally assigned by PanAmSat to Agent as additional Collateral
Security, and is in an amount and on terms and conditions reasonably
satisfactory to a Majority In Interest of Noteholders.
PanAmSat agrees that it shall take any and all actions reasonably
requested by Agent to cause the collateral assignments to Agent contemplated by
clauses (ii) and (iii)(B) above to be timely effected in a manner reasonably
satisfactory to Agent.
Except as specifically provided in this Section 7.17(c), PanAmSat
shall not have any obligation to assign the User Agreements to Agent.
7.18 Waiver of Existing Defaults. A Majority In Interest of
Noteholders by notice to Agent may waive on behalf of all of the Loan
Participants an existing Loan Default or Loan Event of Default and its
consequences except (i) a Loan Default or Loan Event of Default in the payment
of the principal of or interest on any Note or any other amount due with respect
thereto hereunder or (ii) in respect of a covenant or provision hereof which
pursuant to Section 13.1 cannot be amended or modified without the consent of
each Loan Participant.
7.19 No Waiver of Certain Obligations. Nothing in this Section 7
shall be deemed a waiver by PanAmSat of any obligation of Agent under Applicable
Laws relating to the protection and preservation of the value of any property
included in the Collateral Security.
7.20 Obligations of Agent Upon Exercise of Rights. (a) Immediately
upon Agent's taking or obtaining "Control") (as defined in Section 7.20(e)), in
any manner and for any reason whatsoever, of any Transponder, Agent (1) shall
give notice thereof to PanAmSat and (2) whether or not such notice shall have
been given, shall be liable and obligated for the performance of, and shall
automatically be deemed to have assumed, all the "Transponder Obligations" (as
defined in Section 7.20(e)) that shall originally arise on or after the time
Agent so takes or obtains Control, to the same extent as if Agent were named as
Buyer in the Purchase Agreement and as Owner in the Service Agreement. Agent
agrees that from and after the time that it takes or obtains Control of any
Transponder, it shall be and shall remain liable to PanAmSat for any and all
breaches by it of the Transponder Obligations or other terms or conditions of
the Purchase Agreement or the Service Agreement with respect to such
Transponder(s) originally arising at or after the time that it takes or obtains
Control. From and after the time Agent takes or obtains Control as described in
this Section 7.20(a), PanAmSat will not have any obligation to perform any
Transponder Obligation that shall originally arise at or after the time Agent
takes or obtains Control; provided, however, that, without diminishing the
liabilities or obligations of PanAmSat under the provisions of this Agreement or
any of the Notes, nothing contained in this Section 7.20(a) shall be construed
so as to decrease PanAmSat's liability and obligation with respect to, or
relieve PanAmSat from any liability or obligation with respect to, the
Transponder Obligations originally arising at any time PanAmSat has Control as
provided herein.
(b) PanAmSat, in its capacity as Seller and Contractor,
agrees to perform their respective obligations under the Purchase Agreement and
the Service Agreement to and for the benefit of Agent after Agent has provided
notice that it has taken or obtained Control.
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(c) Prior to the time that Agent takes or obtains Control (in
any manner and for any reason whatsoever), Agent shall not be authorized to
exercise any of the "Transponder Rights" (as defined in Section 7.20(e)) and
shall not have assumed any of the Transponder Obligations. PanAmSat acknowledges
and agrees that references to Agent and the Noteholders in this Section 7.20
shall not give rise to any implication or inference that either Agent or the
Noteholders are authorized to exercise any of the Transponder Rights or have
assumed any of the Transponder Obligations prior to the time Agent takes or
obtains Control (in any manner and for any reason whatsoever).
(d) If (i) Agent assigns its rights to a third party in
compliance with the provisions of this Agreement, the other Operative Documents
and the Hughes Agreements, or (ii) the Transponders are sold to a third party
pursuant to an exercise of rights or remedies by Agent and in compliance with
the provisions of this Agreement, the other Operative Documents and the Hughes
Agreements (in all such cases, such third party is referred to as a "Third Party
Buyer"), then, upon its execution of this Agreement (or the substantive
equivalent hereof), any other applicable Operative Document (or the substantive
equivalent thereof) and any applicable Hughes Agreements (or the substantive
equivalent thereof), such Third Party Buyer shall have the same rights and
obligations as if the Third Party Buyer was Agent hereunder.
(e) For purposes of this Section 7.20:
(i) "Transponder Obligations" means the duties and
obligations of "Buyer" under the Purchase Agreement with respect to the
Transponders and the duties and obligations of "Owner" under the Service
Agreement with respect to the Transponders;
(ii) "Transponder Rights" means the rights of "Buyer"
under the Purchase Agreement with respect to the Transponders and the
rights of "Owner" under the Service Agreement with respect to the
Transponders; and
(iii) "Control" shall mean the legal right to access a
Transponder acquired by a Person pursuant to this Agreement (or any
Transfer of rights derived therefrom).
SECTION 8. No Assumption of Obligations Under Assigned Documents.
No action or inaction on the part of PanAmSat shall adversely
affect or limit in any way the rights of Agent or any Loan Participant under
this Agreement.
SECTION 9. The Agent.
9.1 Appointment. Each Loan Participant hereby irrevocably
designates and appoints Chase as the Agent of such Loan Participant under this
Agreement and the other Operative Documents and the Hughes Agreements, and each
such Loan Participant irrevocably authorizes Chase, as Agent for such Loan
Participant, to take such action on its behalf under the provisions of this
Agreement and the other Operative Documents and the Hughes Agreements and to
exercise such powers and perform such duties as are expressly delegated to Agent
by the terms of this Agreement
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and the other Operative Documents and the Hughes Agreements, together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere in this Agreement, Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Loan Participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against Agent.
9.2 Delegation of Duties. Agent may execute any of its duties
under this Agreement and the other Operative Documents and the Hughes Agreements
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Operative Document or
Hughes Agreement (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Loan
Participants for any recitals, statements, representations or warranties made by
PanAmSat or any officer thereof contained in this Agreement or any other
Operative Document or Hughes Agreement or in any certificate, report, statement
or other document referred to or provided for in, or received by Agent under or
in connection with, this Agreement or any other Operative Document or Hughes
Agreement or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Operative Document or Hughes
Agreement or for any failure of PanAmSat to perform its obligations hereunder or
thereunder. Agent shall not be under any obligation to any Loan Participant to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Operative
Documents or Hughes Agreements, or to inspect the properties, books or records
of PanAmSat.
9.4 Reliance by Agent. Agent shall be entitled to rely, and shall
be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to PanAmSat), independent accountants and other experts
selected by Agent. Agent may treat the payee of any Note as the owner thereof
for all purposes unless the assignment or transfer thereof shall have been
recorded in the Register. Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Operative Document or
Hughes Agreement unless it shall first receive such advice or concurrence of a
Majority In Interest of Noteholders as it deems appropriate or it shall first be
indemnified to its satisfaction by the Loan Participants against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement and the other
Operative Documents and Hughes Agreements in accordance with a request of a
Majority In Interest of Noteholders (unless the consent of all of the Loan
Participants is specifically required pursuant to any
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provision of this Agreement), and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Loan Participants and all
future holders of the Loans.
9.5 Notice of Default. Agent shall not be deemed to have knowledge
or notice of the occurrence of any Loan Default or Loan Event of Default, other
than under Section 6(a), unless Agent has Actual Knowledge thereof. In the event
that Agent has such Actual Knowledge, Agent shall promptly give notice thereof
to the Loan Participants. Agent shall take such action with respect to such Loan
Default or Loan Event of Default as shall be reasonably directed by a Majority
in Interest of Noteholders; provided that unless and until Agent shall have
received such directions, Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Loan Default or
Loan Event of Default as it shall deem advisable in the best interests of the
Loan Participants.
9.6 Non-Reliance on Agent and Other Loan Participants. Each Loan
Participant expressly acknowledges that neither Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by Agent hereinafter taken,
including any review of the affairs of PanAmSat or any other Person, shall be
deemed to constitute any representation or warranty by Agent to any Loan
Participant. Each Loan Participant represents to Agent that it has,
independently and without reliance upon Agent or any other Loan Participant, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of PanAmSat and all other
relevant Persons and made its own decision to make its Loans hereunder and enter
into this Agreement and the Participation Agreement. Each Loan Participant also
represents that it will, independently and without reliance upon Agent or any
other Loan Participant, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of PanAmSat and other relevant Persons. Except for notices,
reports and other documents expressly required to be furnished to Loan
Participants by Agent hereunder, Agent shall not have any duty or responsibility
to provide any Loan Participant with any credit or other information concerning
the business, operations, property, condition (financial or otherwise),
prospects or creditworthiness of PanAmSat or any other Person which may come
into the possession of Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
9.7 Indemnification. The Loan Participants agree to indemnify
Agent in its capacity as such (to the extent not reimbursed by PanAmSat and
without limiting the obligation of PanAmSat to do so), ratably according to
their respective outstanding Loans in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Loans shall have been paid in full, ratably in
accordance with the respective amounts of their Loans outstanding immediately
prior to such date), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be imposed on,
incurred by or asserted against Agent in any way relating to or arising out of
this Agreement, any of the other Operative Documents or any Hughes Agreement or
any documents
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contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by Agent under or
in connection with any of the foregoing; provided that no Loan Participant shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from Agent's gross negligence or willful
misconduct. The agreements in this Section shall survive the payment of the
Notes and all other amounts payable hereunder.
9.8 Agent in Its Individual Capacity. Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with PanAmSat as though Agent were not the Agent hereunder. With respect to its
Loans made or renewed by it, Agent shall have the same rights and powers under
this Agreement and the other Operative Documents and Hughes Agreements as any
Loan Participant and may exercise the same as though it were not the Agent, and
the terms "Loan Participant" and "Loan Participants" shall include Agent in its
individual capacity.
9.9 Successor Agent. Agent may resign as Agent upon 30 days'
notice to each Loan Participant and PanAmSat, such resignation to be effective
upon the acceptance of appointment of a successor agent. If Agent shall resign
as Agent under this Agreement, then PanAmSat (unless a Loan Event of Default
shall have occurred and be continuing) or (if such a Loan Event of Default shall
have occurred and be continuing) a Majority In Interest of the Noteholders shall
appoint from among the Loan Participants a successor agent for Loan
Participants, which successor agent must be reasonably satisfactory to PanAmSat,
whereupon such successor agent shall succeed to the rights, powers and duties of
Agent, and the term "Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Agent's rights, powers and duties as
Agent shall be terminated, without any other or further act or deed on the part
of such former Agent or any of the parties to this Agreement or any holders of
the Notes. If a successor agent shall not have accepted appointment within 30
calendar days after such notice of resignation, Agent, PanAmSat or any Loan
Participant may apply to any court of competent jurisdiction to appoint a
successor agent to act until such time, if any, as a successor agent shall have
been appointed as above provided. The successor agent so appointed by such court
shall immediately and without further act be superseded by any successor agent
appointed as above provided within one year from the date of the appointment by
such court. After any retiring Agent's resignation as Agent, the provisions of
this Section shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement and the other Operative
Documents and Hughes Agreements.
9.10 Funds May Be Held by Agent. Any moneys held by Agent
hereunder as part of the Collateral Security shall, until paid out by Agent as
herein provided, be held by Agent in a collateral account for the purposes for
which held and Agent shall not have any liability for interest upon any such
moneys, and such monies need not be invested or reinvested except as provided in
the following paragraph.
Any monies held by Agent pursuant to this Section 9.10 shall be
invested by Agent from time to time (unless the costs of such investment would
exceed the gains reasonably anticipated therefrom) in obligations of, or fully
secured by, the United States government maturing in not more than 30 days;
provided, however, that if PanAmSat shall have so requested Agent in writing and
no Loan Event of Default shall have occurred and be continuing Agent shall
invest such monies as directed by PanAmSat in (a) marketable direct obligations
of the United States of America or
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marketable obligations directly guaranteed by the United States of America
maturing, in each case, not later than one year from the date of acquisition
thereof, (b) repurchase obligations maturing not later than one year from the
date of acquisition thereof in respect of obligations of the nature referred to
in clause (a) of this paragraph issued by any Loan Participant, or any other
commercial bank organized and existing under the laws of the United States of
America or any state thereof, in either case having combined capital, surplus
and undivided profits of not less than $100,000,000, (c) certificates of deposit
and bankers' acceptances issued by any Loan Participant, or by any other
commercial banks organized and existing under the laws of the United States of
America or any state thereof, in either case having combined capital, surplus
and undivided profits of not less than $100,000,000 and (d) commercial paper not
issued by PanAmSat or any Affiliate thereof and rated A-1 by Standard & Poor's
and P-1 by Moody's, if (in any such case specified above in this proviso) Agent
shall have received a written agreement of PanAmSat satisfactory to Agent that
PanAmSat will be personally liable for and will pay to Agent on demand an amount
equal to any expense or loss (including any loss on such investment) incurred in
connection with any investment of funds pursuant to this proviso. Any income
realized as a result of any investment pursuant to this Section 9.10 shall be
held and applied by Agent in the same manner as the payments held by Agent
pursuant to Section 5, and Agent shall have no liability for any loss resulting
from any such investment. Any such investment may be sold (without regard to
maturity date or gain or loss on such sale) by Agent whenever necessary to make
any distribution required by Section 5.
9.11 Representations and Warranties. AGENT MAKES NO REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, VALUE, CONDITION, QUALITY,
DESIGN, COMPLIANCE WITH SPECIFICATIONS, OPERATION, DURABILITY, MERCHANTABILITY
OR FITNESS FOR USE OR PURPOSE OF ANY OF THE TRANSPONDERS OR ANY PART THEREOF, OR
ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY OF THE TRANSPONDERS OR ANY PART THEREOF, OR OTHERWISE WITH
RESPECT THERETO. Agent makes no representation or warranty as to the
sufficiency, validity, legality or enforceability of any Operative Document or
Hughes Agreement or as to the correctness of any statement contained in any
thereof, except as expressly set forth in the Participation Agreement. Agent
makes no representation as to the value or condition of the Collateral Security
or any part thereof, or as to the title thereto or as to the security afforded
thereby or hereby, or as to the validity or genuineness of any securities at any
time pledged and deposited with Agent hereunder. Nothing in this Section 9.11
shall affect any representation or warranty made by Agent pursuant to Section
4.06 of the Participation Agreement.
9.12 Action upon Payment of Notes or Transfer of Transponders. (a)
Upon termination of this Agreement pursuant to Section 10, Agent shall execute
and deliver to, or as directed in writing by, PanAmSat an appropriate instrument
(in due form for recording, if necessary, prepared by PanAmSat) releasing the
Transponders from the Lien of this Agreement and reassigning all estate, right,
title and interest of Agent to PanAmSat in and to the other Granting Clause
Documents and releasing any other property or rights subject to this Agreement.
(b) In the case of any transfer or other disposition of any
of the Transponders pursuant to Section 2.10(a) (excluding a transfer or other
disposition in connection with
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the substitution of a Transponder to which Section 15(b) of this Agreement
applies) Agent shall, upon the written request of, and at the expense of,
PanAmSat, execute and deliver to, or as directed in writing by, PanAmSat an
appropriate instrument (in due form for recording, if necessary, prepared by or
on behalf of PanAmSat), releasing the Transponder or Transponders then being
transferred or otherwise disposed of from the Lien of this Agreement, provided
that concurrently with or prior to any such release under this Section 9.12(b),
the principal of, and interest on, all of the Notes and all other Secured
Obligations theretofore or then due and payable with respect to the Notes as set
forth herein related to the Transponder or Transponders being disposed of shall
first have been paid in full.
9.13 Certain Notices by Agent. In the event Agent shall have
Actual Knowledge of a Loan Event of Default, it shall give prompt notice of such
Loan Event of Default to PanAmSat by written notice sent in the manner provided
in Section 14, which notice shall set forth in reasonable detail the
circumstances known to it with respect to such Loan Event of Default; provided,
however, that, for all purposes hereof, in the absence of Actual Knowledge,
Agent shall not be deemed to have knowledge of, and shall have no obligation to
take any action as a consequence of, the existence of any Loan Event of Default;
and provided, further, however, that the failure of Agent to give any such
notice to PanAmSat under this Section 9.13 shall not in any way affect the
validity of any action taken by Agent or any Loan Participant pursuant to the
exercise of any of the remedies provided in Section 7.
SECTION 10. Termination of Agreement.
This Agreement and the Lien created hereby shall terminate and
this Agreement shall be of no further force or effect upon the earlier of (a)
payment in full of the principal of and interest on all of the Loans and all
other Secured Obligations theretofore or then due and payable to Agent and to
the Loan Participants hereunder and under the Notes and (b) the sale or other
final disposition by Agent or PanAmSat, as the case may be, of all of the
Collateral Security and the final distribution by Agent of all moneys or other
property or proceeds constituting the Collateral Security in accordance with the
terms of Section 5.
Upon such payment in full of all amounts referred in clause (a)
above, Agent shall pay all monies or other properties or proceeds constituting
part of the Collateral Security, if any (the distribution of which is not
otherwise provided for herein), to PanAmSat.
Upon the termination of this Agreement, PanAmSat and Agent shall
each promptly execute and deliver such releases, notices or other documents as
the other party may reasonably request for the purpose of evidencing such
termination.
SECTION 11. Additional Security.
Without notice to or consent of PanAmSat, and without impairment
of the Lien and rights created by this Agreement, Agent may accept (but PanAmSat
shall not be obligated to furnish or cause to be furnished) additional security
for the Loans at the time outstanding. Neither the giving of this Agreement nor
the acceptance of any such additional security nor the invalidity or
ineffectiveness
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of any security shall prevent Agent from resorting, first, to such additional
security, or first, to the security created by this Agreement, in any case
without affecting the Lien of this Agreement.
SECTION 12. Assigned Agreements.
PanAmSat will not amend, waive or otherwise modify any Granting
Clause Document except with the written concurrence of Agent unless otherwise
expressly permitted by Sections 13.
SECTION 13. Amendments and Supplements to Agreement and Other Documents.
The provisions of this Section 13 shall apply notwithstanding any
provision to the contrary in this Agreement, including the Granting Clause:
13.1 Supplements and Amendments with Consent. At any time and from
time to time (a) but only upon the written request of PanAmSat and with the
written consent of a Majority In Interest of Noteholders and subject to the
provisions of Sections 13.2 and 13.3, Agent shall enter into a Loan Agreement
Supplement with PanAmSat, for the purpose of adding provisions hereto or
eliminating, changing or otherwise modifying provisions hereof, or waive
compliance with any provisions hereof, as may be specified in such request, and
(b) but only upon written request of a Majority In Interest of Noteholders and
with the written consent of PanAmSat, Agent shall enter into or consent to, as
the case may be, a supplement or amendment to any Granting Clause Document or
(with respect to any amendment, waiver or other modification thereof binding on
Agent) the Participation Agreement for the purpose of adding provisions thereto
or eliminating, changing or otherwise modifying the provisions thereof, or waive
compliance with any provisions thereof, as may be specified in such request and,
in the case of any such supplement or amendment, as the respective parties
thereto may agree; provided, however, that without the consent of each Loan
Participant, no such agreement supplemental to this agreement, or supplement or
amendment to any of the documents referred to in the preceding clause (b) and no
such waiver of compliance with any of the provisions hereof or thereof, shall
(i) modify any of the provisions of this Section 13.1 or of
Section 4, 5, 6, 7 or 13.2 or the definitions of the terms "Break Funding
Costs", "Excepted Payments", "Loan Default", "Loan Event of Default"
(except to add additional Loan Events of Default), "Event of Loss" (except
to add additional Events of Loss), or "Majority In Interest of
Noteholders", contained herein or in Appendix A to the Participation
Agreement and as applicable hereto and to the other Granting Clause
Documents, or the percentage of holders of Notes required to take or
approve any action hereunder;
(ii) unless permitted by Section 13.2(iv), change the amount
or the time of payment of any amount owing in respect of any Note or change
the rate of interest payable in respect of any Note,
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(iii) alter or modify the provisions of Section 5 with
respect to the manner of payment or the order of priorities in which
applications or distributions thereunder shall be made,
(iv) reduce, modify or amend any indemnities in favor of any
Loan Participant, the Collateral Security, PanAmSat or Agent (unless
consented to by such Person), or
(v) reduce the amount or change the time of payment of any
payments (other than Excepted Payments) in respect of the Transponders as
set forth in this Agreement or in any Granting Clause Document.
Notwithstanding the foregoing, without the consent of each Loan
Participant, no such Loan Agreement Supplement or waiver of compliance with the
provisions hereof or any other instrument shall permit the creation of any Lien
on the Collateral Security or any part thereof, except as herein expressly
permitted, or deprive any Loan Participant of the benefit of the Lien of this
Agreement on the Collateral Security enjoyed by such Loan Participant
immediately prior thereto, except as herein expressly permitted. Notwithstanding
the foregoing terms of this Section 13.1, but subject to the proviso to the
first sentence of this Section 13.1, PanAmSat may at any time and from time to
time, without the consent of Agent or any Loan Participant,
(i) so long as no Loan Event of Default shall have occurred
and be continuing, enter into any agreement with Seller and/or Contractor
amending, waiving or otherwise modifying the Purchase Agreement or the
Service Agreement, provided that such amendment, waiver or other
modification shall only amend, waive or otherwise modify any provision of
the Purchase Agreement or the Service Agreement provided that the interests
of the Loan Participants and Agent shall not be adversely affected thereby,
or the definition of any term herein or in Appendix A to the Participation
Agreement as used in any of the foregoing provisions subject to the
applicable limitations set forth above, or
(ii) whether or not a Loan Event of Default shall have
occurred and be continuing (and with respect to clause (E) below, with the
consent of Agent), enter into any agreement with Seller and/or Contractor
amending, waiving or otherwise modifying the Purchase Agreement or the
Service Agreement, provided that any such amendment, waiver or other
modification:
(A) shall only amend, waive or otherwise modify one or
more of Section 2.1 and Appendices A and B to the Purchase Agreement
(to amplify or expand the description of the property sold and conveyed
pursuant to said Section 2.1, or Section 6 to the Purchase Agreement
(with respect to the representations, warranties or agreements of the
Buyer), or the definitions of any term in Appendix A to the
Participation Agreement as used in any of the foregoing provisions, or
(B) shall only amend, waive or otherwise modify the
provisions of the Guarantee Agreement relating to Excepted Payments, or
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(C) shall only amend, waive or otherwise modify any of
said agreements in order to cure any ambiguity or to correct or
supplement any provisions thereof which may be inconsistent with any
other provision thereof or of any provision of this Agreement, or to
make any other provision with respect to matters or questions arising
thereunder or under this Agreement which shall not be inconsistent with
the provisions of this Agreement, provided the making of any such
amendment, waiver, modification or other provision shall not adversely
affect the interests of the Loan Participants.
Agent will not effect any waiver or amendment of any provision of this Agreement
or any Note pursuant to this Section 13.1 requiring the consent of each Loan
Participant unless each Loan Participant (irrespective of the amount of Note
owned by it), shall be informed thereof by Agent and shall be afforded the
opportunity to consider the same and shall be supplied by Agent with sufficient
information to enable it to make an informed decision with respect thereto.
13.2 Loan Agreement Supplement etc. Without Consent. Without the
consent of any of the Loan Participants, at any time and from time to time, upon
the request of PanAmSat and subject to the provisions of Section 13.3, Agent
shall join with PanAmSat in entering into further Loan Agreement Supplements,
for one or more of the following purposes:
(i) to evidence the succession of a new agent as Agent
hereunder, in each case if done pursuant to the provisions of Section 9;
(ii) to subject to the Lien of this Agreement any additional
property;
(iii) to evidence the substitution of a Transponder with a
Replacement Transponder in compliance with Sections 2.10(a) or 18(e) and to
subject the related Additional Documents to the Lien of this Agreement;
(iv) to adjust the amortization schedule of any Note or Notes
in accordance with Article XIII of the Participation Agreement but subject to
compliance with the provisions of paragraphs (b) and (c) of Section 2.2;
(v) to cure any ambiguity or to correct or supplement any
provision herein that is inconsistent with any other provision herein, or to
make any other provisions with respect to matters arising under this Agreement
that shall not adversely affect the interests of the Loan Participants; or
(vi) to include on the Notes any legend as may be required by
law.
13.3 Agent Protected. If any document required to be executed
pursuant to the terms of Section 13.1 or 13.2 shall adversely affect any
interest, right, duty, immunity or indemnity in favor of Agent under any
Operative Document or Hughes Agreement, Agent may in its discretion decline to
execute such document unless indemnified to its reasonable satisfaction. In
executing any document otherwise required to be executed by it pursuant to the
terms of Section 13.1 or 13.2, Agent
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shall be entitled to receive, and shall be fully protected in relying on, an
Opinion of Counsel reasonably satisfactory to it that the execution of such
document is authorized or permitted by this Agreement.
13.4 Form of Request. It shall not be necessary for any written
request of a Majority In Interest of Noteholders furnished pursuant to Section
13.1 to specify the particular form of the proposed documents to be executed
pursuant to that Section, but it shall be sufficient if such request shall
indicate the substance thereof.
13.5 Documents Mailed to Holder. Promptly after the execution by
PanAmSat and Agent of any document entered into pursuant to Section 13.1 or
13.2, Agent shall mail, by first-class registered or certified mail, postage
prepaid, or any other manner specified herein pursuant to Section 14, a
conformed copy of each such document to each Loan Participant, and if the
consent of a Majority In Interest of Noteholders is required in connection with
the execution of such document, copies of the document proposed to be executed
shall be so mailed or otherwise delivered to each Loan Participant at least
three Business Days prior to the execution thereof.
SECTION 14. Notices, Etc.
Unless otherwise expressly specified or permitted by the
terms hereof, all notices and other communications hereunder shall be given and
be effective as provided in Section 16.03 of the Participation Agreement.
SECTION 15. After-Acquired Property and Substitution.
(a) After-Acquired Property. All property acquired by
PanAmSat after the date hereof, which by the terms hereof is required or
intended to be required to be subjected to the Lien of this Agreement, shall,
immediately upon the acquisition thereof by PanAmSat and without further
mortgage, conveyance or assignment, become subject to the Lien of this Agreement
as fully as though now owned by PanAmSat and specifically described herein.
Nevertheless, PanAmSat will do all such further acts and execute, acknowledge
and deliver supplements and all such further conveyances, financing statements
and assurances as Agent may deem necessary effectively to subject such
after-acquired property to the Lien of this Agreement.
(b) Substitution. If at any time PanAmSat elects
pursuant to Section 18(e) to substitute a Replacement Transponder for any
Transponder or pursuant to Section 2.10(a) to substitute a Replacement
Transponder for any Transponder that has suffered an Event of Loss, or Seller is
required pursuant to Section 8.1 of the Purchase Agreement to substitute a
Transponder Spare for a failed Transponder Spare and in the case of a
substitution pursuant to Section 18(e) or Section 2.10(a), PanAmSat shall have
fulfilled the conditions specified in such Section 18(e) or Section 2.10(a), as
the case may be, as in effect on the date hereof (together with any additional
or more stringent conditions imposed on PanAmSat in any amendments to such
Section 18(e) or Section 2.10(a), as the case may be, subsequent to the date
hereof), then Agent shall, subject to compliance in full with the provisions of
this Section 15(b) and upon the written request of, and at the expense of,
PanAmSat (but in the case of Sections 18(e) or 2.10(a), only if no Bankruptcy
Default shall have occurred and be
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continuing) execute and deliver to, or as directed in writing by, PanAmSat an
appropriate instrument (in due form for recording, if necessary, prepared by or
on behalf of PanAmSat), releasing the Transponder or Transponders then being
substituted from the Lien of this Agreement. A financing statement or statements
with respect to any Replacement Transponder and the related Additional Documents
shall be filed in such place or places as may be necessary or advisable and all
other action as may be necessary or advisable in order to perfect the security
interest therein created by or pursuant to this Agreement shall be taken and
PanAmSat shall cause to be delivered to Agent an Opinion of Counsel with respect
to the perfection thereof (to the extent that a security interest in a
Transponder may be perfected) similar to the opinion with respect to perfection
delivered on the Commencement Date pursuant to Section 3.01(o) of the
Participation Agreement. PanAmSat shall deliver a Loan Agreement Supplement to
Agent subjecting the Replacement Transponder and the related Additional
Documents to the Lien of this Agreement. In such event, all provisions of this
Agreement relating to the Transponder being replaced and the documents
corresponding to the Additional Documents related thereto shall be applicable to
such Replacement Transponder and the related Additional Documents with the same
force and effect as if such Replacement Transponder was the same Transponder as
the Transponder being replaced and the related Additional Documents being
replaced thereby.
SECTION 16. Terms Subject to Applicable Law; Governing Law.
All rights, powers and remedies provided herein may be exercised only
to the extent that the exercise thereof does not violate any Applicable Laws,
and are intended to be limited to the extent necessary so that they will not
render this Agreement or the Notes invalid, unenforceable or not entitled to be
recorded, registered or filed under any Applicable Laws, and the validity of
other terms of this Agreement or any other application of such terms shall in no
way be affected thereby. Where, however, the provisions of Applicable Laws may
be waived, they are hereby waived by PanAmSat to the full extent permitted by
law, to the end that this Agreement shall be a valid and binding agreement
enforceable in accordance with its terms. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
SECTION 17. Agreement and Security Agreement with Respect to Personal
Property.
To the extent permitted by Applicable Laws, with respect to the
personal property herein described, this Agreement shall constitute a security
agreement and, cumulative of all other rights of Agent hereunder, Agent shall
have for the benefit of the Loan Participants, all of the rights conferred upon
secured parties by the provisions of any applicable Uniform Commercial Code
("UCC") or other similar legislation. Subject to any restrictions herein
expressly contained, Agent may exercise for the benefit of the Loan
Participants, any of or all the remedies of a secured party available to a
secured party under the applicable provisions of the UCC or other similar
legislation with respect to such personal property and PanAmSat agrees that if,
upon a Loan Event of Default, Agent should proceed to dispose of or utilize such
personal property in accordance with the provisions of any applicable UCC, ten
days' notice by Agent to PanAmSat shall be deemed to be reasonable notice under
any provision of the UCC requiring such notice. For all purposes of this
Agreement, the terms "Lien of this Agreement," "Lien hereof," "Lien created
hereby" or words of similar import shall, unless the
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context otherwise requires, be deemed to include reference to the security
interest granted to Agent under this Agreement.
SECTION 18. Operation; Maintenance; Compliance with Law; Location
of Satellite; Substitution of Transponders.
(a) Operation. PanAmSat shall observe and perform each
and every obligation (and shall exercise all rights where failure to do so
would have a material adverse effect on Agent's interest in the
Transponders as Collateral Security hereunder) of Buyer under the Purchase
Agreement and Owner under the Service Agreement to the extent the same
relate to such Transponder, and shall keep the same in full force and
effect. PanAmSat shall not use any Transponder, so long as any obligations
under this Agreement remain outstanding, or authorize any third party to
use such Transponder in breach of the Purchase Agreement, the Service
Agreement or any Applicable Laws applicable to PanAmSat, such third party
or such Transponder (in each case, other than Applicable Laws as to which
noncompliance would not have an Adverse Effect), or in violation of any
authorization relating to such Transponder or the Satellite or PanAmSat
issued by any Governmental Authority having jurisdiction over such
Transponder, the Satellite or PanAmSat other than (i) any provision of such
Applicable Law, authorization or insurance as to which noncompliance would
not have an Adverse Effect or (ii) unless the validity of such Applicable
Law or authorization is being contested in good faith and by appropriate
proceedings (but only so long as such proceedings do not involve any risk
of civil or criminal liability to Agent, and do not involve any material
danger of the sale, forfeiture, loss or diminution in value of such
Transponder or the rights or interests of Agent under any Hughes Agreement
or any Operative Document and adequate reserves with respect thereto shall
have been established in accordance with GAAP). As used herein, "Adverse
Effect" shall mean that which would materially adversely affect the
business, operations or properties of Guarantor on a consolidated basis or
involve any material danger (x) of the loss of any FCC authorization to
operate the Satellite or maintain it in the orbital location permitted by
Section 18(d), (y) of any material adverse effect on the ability of
PanAmSat to perform its obligations hereunder and under the Purchase
Agreement or of the sale, forfeiture, loss or diminution in value of any
Transponder, or (z) of the imposition of criminal or civil liability on any
Loan Participant or Agent.
(b) Maintenance. PanAmSat hereby agrees to fulfill all
of its obligations under the Service Agreement. PanAmSat, as
successor-in-interest to Seller, shall fulfill all of its obligations under
the Purchase Agreement. So long as any obligations of PanAmSat under this
Agreement remain outstanding, the Service Agreement shall have remained in
full force and effect and PanAmSat shall have performed all of its
obligations, if any hereunder and thereunder, as applicable, with respect
to such Transponder, all maintenance, management and monitoring
responsibilities of PanAmSat in connection with such Transponder shall be
deemed fulfilled, and PanAmSat shall have no additional independent
obligations hereunder relating thereto.
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If at any time that obligations of PanAmSat under this
Agreement remain outstanding the Service Agreement shall no longer be in
full force and effect with respect to such Transponder, PanAmSat, at its
expense, shall maintain, manage and monitor, or cause to be maintained,
managed and monitored, the Satellite and such Transponder in good working
order and repair, ordinary wear and tear excepted, (i) in accordance with
the higher of (A) customary industry standards employed by owners of
Ku-Band transponders on domestic communications satellites or (B) standards
at least equal to those used prior to such failure of performance for other
transponders on the Satellite or on another similar satellite owned, leased
or operated by PanAmSat or any of its Affiliates (if at the time PanAmSat
or any Affiliate thereof maintains, manages or monitors satellites similar
to the Satellite for similar commercial purposes); (ii) in compliance with
all Applicable Laws (other than Applicable Laws as to which noncompliance
would not have an Adverse Effect); and (iii) in accordance with all
applicable requirements of any insurance policy then in effect that is
required by Section 19 hereof. The foregoing notwithstanding, if, with
respect to any Transponder, PanAmSat is unable temporarily to perform its
maintenance obligations under the Service Agreement due to any Force
Majeure Event, then, provided such temporary failure to perform does not
cause a permanent material diminution in the value of such Transponder and
is capable of cure before any such permanent diminution in value would
result, such failure shall not constitute a breach of PanAmSat's
obligations under this Agreement.
(c) Compliance with Law. So long as any obligations of
PanAmSat under this Agreement remain outstanding, PanAmSat shall have and
maintain all permits, licenses and approvals required by the FCC or under
any Applicable Law to operate the Satellite and such Transponder and shall
satisfy the requirements of the FCC and any statute, regulation or order
applicable to operators, users or lessees of such Transponder; provided,
however, that PanAmSat shall not be deemed to have breached the foregoing
covenant unless such non-maintenance or non-satisfaction would have an
Adverse Effect. To the extent permitted by law, PanAmSat or any Affiliate
thereof shall prepare and file in timely fashion, or, where Agent shall be
required so to file, prepare and deliver to Agent within a reasonable time
prior to the date for filing, any reports with respect to any Transponder
which are required to be filed with any Governmental Body for such
Transponder while any obligations under this Agreement remain outstanding.
Agent shall notify PanAmSat promptly after Agent has Actual Knowledge of
any reports or filings required of Agent by law in connection with its
ownership of the Transponders; provided, however, that Agent shall not
incur any liability to PanAmSat for failure so to notify PanAmSat. If
PanAmSat shall fail to timely prepare, deliver or file any such report
solely as a result of the failure of Agent timely to provide PanAmSat with
(i) any information required in such report which is in the possession of
Agent and is not reasonably available to PanAmSat or (ii) notice of the
requirement of such report if such report is required as to Agent for any
reason other than Agent's interest in the Transponder or Transponders then
subject to this Agreement, PanAmSat shall incur no liability to Agent
failing to provide such information or notice to the extent such liability
is incurred by the failure to provide such information or notice (unless
PanAmSat already had Actual Knowledge of such requirement, PanAmSat fails
to request such information from Agent and such failure
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has an Adverse Effect). Agent hereby appoints PanAmSat its
attorney-in-fact, to the extent permissible by Applicable Law, to execute
such reports in the name of Agent and to file such reports, and Agent shall
cooperate in furnishing PanAmSat such information as is available to it
which must be included in such reports. Upon demand, PanAmSat shall
reimburse Agent on an After-Tax Basis for any reasonable out-of-pocket
costs incurred by each such Person, respectively, in connection with the
preparation and filing of any such reports. PanAmSat shall, on a periodic
basis, furnish Agent with a copy of all reports filed by PanAmSat on behalf
of Agent pursuant to this Section 18(c).
(d) Location of Satellite. So long as any obligations of
PanAmSat under this Agreement remain outstanding, PanAmSat shall not move
(or cause or suffer to be moved) or seek to move the Satellite to an
orbital location different from the Permanent Orbital Location for the
remaining useful commercial life of such Satellite; provided, however, that
PanAmSat (i) may, and shall be obligated to, move the Satellite at any time
or times if required to comply with a requirement of the FCC (an "FCC
Ordered Move") and (ii) may seek to move, and may move, the Satellite as
part of an overall industry process which will increase or decrease the
number of, or reallocate the, available orbital locations and which
involves a substantial number of satellites being moved in a coordinated
manner. Neither PanAmSat nor any of its Affiliates shall seek any order or
approval from the FCC requiring or allowing the movement of the Satellite
other than pursuant to clause (ii) of the proviso to the immediately
preceding sentence.
(e) Substitution of Transponder. PanAmSat shall have the
right, in its discretion, subject to the conditions set forth in this
Section 18(e) to substitute (a "Substitution"), from time to time (so long
any obligations of PanAmSat under this Agreement remain outstanding), for
any Transponder another transponder of the same type (including, without
limitation, with respect to preemptibility) and power aboard any other
satellite owned by PanAmSat or an Affiliate of PanAmSat (a "Replacement
Transponder").
The Substitution of a transponder pursuant to this
Section 18(e) (or Section 2.10(a)) shall be subject to fulfillment of the
following conditions precedent on the date of the proposed Substitution at
PanAmSat's sole cost and expense (and, in the case of clauses (iii), (iv),
(v) and (vi), to the reasonable satisfaction of Agent): (i) no Bankruptcy
Default or Event of Default shall have occurred and be continuing or will
exist immediately following the proposed Substitution; (ii) on the date of
such Substitution, the Replacement Transponder (A) shall meet the
applicable Transponder Performance Specifications set forth in Appendix D-1
to the Purchase Agreement, (B) shall have a remaining useful commercial
life equal to or greater than the Transponder it is replacing, and (C) a
Narrow Ku-Band Transponder shall only be substituted for a Narrow Ku-Band
Transponder and a Wide Ku-Band Transponder for a Wide Ku-Band Transponder,
and, in each case, such Replacement Transponder shall have the same or
greater value, utility and estimated residual value as the Transponder it
is replacing (all of (A), (B) and (C) as determined pursuant to an
appraisal performed by an appraiser selected by PanAmSat within ten
Business Days of written notice from PanAmSat of a proposed Substitution,
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which appraisal shall be performed within 30 days of the selection of the
appraiser); (iii) if so requested by Agent, PanAmSat shall have delivered a
Loan Agreement Supplement to Agent; (iv) PanAmSat shall have made
arrangements reasonably satisfactory to Agent to enter into a service
agreement with respect to the Replacement Transponder; (v) PanAmSat shall
have delivered to Agent a certificate from an officer of PanAmSat that the
Replacement Transponder meets the required standards set forth in (A), (B)
and (C) of clause (ii), above; (vi) PanAmSat (with the consent of Agent,
not to be unreasonably withheld) shall have entered into a transponder
purchase agreement and transponder service agreement covering such
Replacement Transponder on terms substantially similar to those contained
in the Purchase Agreement and Service Agreement, respectively, such
agreements modified only to reflect the differences in the orbital
location, useful commercial life and other attributes unique to such other
satellite, the transponders thereon, and then-existing contractual
commitments to owners of any such transponders on such other satellite,
provided that such then-existing contractual commitments are substantially
similar to the contractual commitments to owners of transponders on the
Satellite (each such agreement to be deemed for all purposes thereafter, a
Hughes Agreement or Operative Document, as applicable); (vii) the
provisions of Sections 15(a) and 15(b) of the Agreement shall have been
satisfied; and (viii) an opinion of counsel delivered to Agent as to the
enforceability of the agreements referred to in clause (vi) above, subject
to customary exceptions.
Upon Substitution of a transponder pursuant to this
Section 18(e), (i) the Transponder shall no longer be deemed to be part of the
Collateral Security and shall be released from the Lien of this Agreement, and
(ii) the Replacement Transponder shall become part of the Collateral Security
and shall be subject to the Lien of this Agreement. Upon the fulfillment of the
foregoing conditions, such Replacement Transponder shall be deemed to be a
"Transponder" hereunder.
SECTION 19. Insurance.
(a) Non-Discrimination. PanAmSat shall maintain general
liability insurance and/or life or casualty insurance with respect to the
Satellite and the Transponders in such amounts, if any, that PanAmSat deems
prudent and cost-effective but, in any event, PanAmSat shall maintain such
insurance for not less than the amounts, and on terms and conditions no
less favorable than the terms and conditions that PanAmSat and its
Affiliates customarily maintain for similar events or occurrences with
respect to similar transponders owned for tax or book purposes by PanAmSat
or its Affiliates on similar satellites (the "PanAmSat Customary Terms,"
which terms may include deductibles customarily maintained by PanAmSat or
its Affiliates), provided, however, that the foregoing shall not require
PanAmSat to maintain life or casualty insurance for the Transponders in an
amount in excess of the then outstanding principal and accrued but unpaid
interest on the Notes.
51
<PAGE>
(b) Additional Insured. All insurance policies, if any,
carried in accordance with this Section 19 and all policies taken out
in substitution or replacement for any such policies (i) shall name
Agent (so long as this Agreement shall be in effect) as an additional
insured, as its respective interest may appear (but without imposing
upon Agent any obligation imposed upon the insured, including without
limitation, the liability to pay the premium for such policies) and in
the case of life or casualty insurance pursuant to Section 19(a), Agent
(so long as this Agreement shall be in effect) shall be named as a
"loss payee," as its interest may appear; (ii) shall provide that any
loss (other than a loss under general liability insurance) shall be
adjusted by PanAmSat with the insurance carriers and be payable to
Agent (so long as this Agreement shall be in effect), for application
as provided in Section 5 or Section 2.10(a) hereof; and (iii) shall
provide that if such insurance is changed in any material adverse
respect in relation to the interests of Agent (for so long as this
Agreement shall be in effect), or if such insurance is allowed to lapse
for non-payment of premium, or is invalidated by any action or inaction
of PanAmSat or any other Person (other than action or inaction by
Agent), such change, lapse or invalidation shall not be effective as to
Agent (so long as this Agreement shall be in effect) for at least 30
days after receipt by Agent (so long as this Agreement shall be in
effect) of written notice from such insurers, their agents or PanAmSat
of such lapse. Each insurance policy provided under this Section 19
shall be primary without right of contribution from any other insurance
which is carried by Agent with respect to its interest as such in the
Transponders.
(c) Separate Insurance. Nothing contained in this
Agreement shall prevent PanAmSat or Agent, each at its own expense and for
its exclusive benefit, from carrying excess life or casualty insurance
covering the Transponders in addition to the life or casualty insurance, if
any, carried by PanAmSat under Section 19(a) (any such life or casualty
insurance being herein called "Additional Insurance"). If there shall be
any limitation with respect to the amount of Additional Insurance that
PanAmSat or Agent may obtain, whether as a result of market capacity or
otherwise, then each such party shall have the right to purchase an amount
of Additional Insurance for the Transponders as its interests may then
appear. Prior to obtaining any Additional Insurance, Agent shall provide
PanAmSat with reasonable notice of the Additional Insurance (including the
proposed terms thereof) intended to be obtained by it, including evidence
satisfactory to PanAmSat that such proposed terms shall be consistent with
the terms of such insurance as may be carried by PanAmSat under this
Section 19.
SECTION 20. Miscellaneous.
20.1 Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
any provision in any other Granting Clause Document, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. The
provisions of this Agreement shall remain valid and enforceable
notwithstanding the invalidity, unenforceability, impossibility or
illegality of performance of any other Operative Document.
52
<PAGE>
20.2 Successors and Assigns. (a) This Agreement shall be
binding upon PanAmSat and its successors and assigns, and all Persons
claiming under or through PanAmSat and any such successor or assign, and
shall inure to the benefit of and be enforceable by Agent and each Loan
Participant and their respective permitted successors and assigns. Any
request, notice, direction, consent, waiver or other instrument or action
by any Loan Participant shall bind the successors and assigns of such Loan
Participant and any request, notice, direction, consent, waiver or other
instrument or action by PanAmSat shall bind the successors and assigns of
PanAmSat. The headings in this Agreement are for purposes of reference only
and shall not limit or define the meaning hereof.
(b) Any Loan Participant may, in the ordinary
course of its business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("Interest Participants")
participating interests in any Loan owing to such Loan Participant, any
Commitment of such Loan Participant or any other interest of such Loan
Participant hereunder and under the other Operative Documents. In the event
of any such sale by a Loan Participant of a participating interest to an
Interest Participant, such Loan Participant's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged,
such Loan Participant shall remain solely responsible to the other parties
for the performance thereof, such Loan Participant shall remain the holder
of any such Loan for all purposes under this Agreement, the other Operative
Documents and the Granting Clause Documents, and PanAmSat and Agent shall
continue to deal solely and directly with such Loan Participant in
connection with such Loan Participant's rights and obligations under this
Agreement, the other Operative Documents and the other Granting Clause
Documents. PanAmSat also agrees that each Interest Participant shall be
entitled to the benefits of Sections 2.16, 2.17 and 2.18 with respect to
its participation in the Commitments and the Loans outstanding from time to
time as if it was a Loan Participant; provided that, in the case of Section
2.17, such Interest Participant shall have complied with the requirements
of said Section and provided, further, that no Interest Participant shall
be entitled to receive any greater amount pursuant to any such Section than
the transferor Loan Participant would have been entitled to receive in
respect of the amount of the participation transferred by such transferor
Loan Participant to such Interest Participant had no such transfer
occurred.
(c) Subject to the provisions of Section 20.2(f),
any Loan Participant may, in the ordinary course of its business and in
accordance with applicable law, at any time and from time to time assign to
any Loan Participant or any affiliate thereof or, with the consent of Agent
(which in each case shall not be unreasonably withheld), to an additional
bank or financial institutions ("an Assignee") all or any part of its
rights and obligations under this Agreement and the other Operative
Documents pursuant to an Assignment and Acceptance, substantially in the
form of Exhibit 3 ("Assignment and Acceptance"), executed by such Assignee,
such assigning Loan Participant (and, in the case of an Assignee that is
not then a Loan Participant or an affiliate thereof, by Agent) and
delivered to Agent for its acceptance and recording in the Register,
provided that, in the case of any such assignment to an additional bank or
financial institution, the sum of the aggregate principal amount of the
Loans being assigned and, if such assignment is of less than all of the
rights and obligations of the assigning Loan Participant, the sum of the
aggregate principal amount of the Loans remaining with the assigning Loan
Participant are each not less than $10,000,000, unless the amount held by
the assigning Loan Participant is less than $10,000,000, in which case such
assignment must be for the entire amount held by the assigning Loan
Participant). Upon such execution, delivery, acceptance and recording, from
and after the effective date determined pursuant to such Assignment
53
<PAGE>
and Acceptance, (x) the Assignee thereunder shall be a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Loan Participant hereunder with a Commitment as set forth
therein, and (y) the assigning Loan Participant thereunder shall, to the
extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Loan
Participant's rights and obligations under this Agreement, such assigning
Loan Participant shall cease to be a party hereto).
(d) Qualified Loan Assignment by Credit Suisse.
Without the need for the consent of any Person (other than as set forth in
this Section 20.2), but subject to the terms and conditions set forth in
this Section 20.2(d), Credit Suisse may from time to time, elect to grant
to Greenwich Funding Corporation an option (a "Qualified Loan Assignment")
to (i) provide all or any part of the Loans from Credit Suisse to PanAmSat
required by Section 2.1 of this Agreement and the other applicable
provisions of the Operative Documents and (ii) assign to Greenwich Funding
Corporation all or any undivided interest in the right of Credit Suisse to
receive and collect payments required from PanAmSat respecting the Loans,
and the other applicable provisions of the Operative Documents; provided,
that no Qualified Loan Assignment may be made (in whole or in part) if the
same would be in violation of or result in a misrepresentation by either
Credit Suisse or Greenwich Funding Corporation under Section 4.03(a) or (b)
of the Participation Agreement or at any time when Greenwich Funding
Corporation would be entitled to receive any greater amount under any of
Sections 2.16, 2.17 and 2.18 than Credit Suisse would have been entitled to
receive under any such Section had no Qualified Loan Assignment occurred.
No additional Note shall be issued with regard to a Qualified Loan
Assignment; provided, however, to the extent Greenwich Funding Corporation
shall fund any Loan, Credit Suisse shall be deemed to hold the Note in its
possession as an agent for Greenwich Funding Corporation to the extent of
the Loans so funded by Greenwich Funding Corporation. Notwithstanding any
such Qualified Loan Assignment or anything to the contrary in any Operative
Document, (x) to the extent of any Loan funded or maintained by Credit
Suisse, Credit Suisse individually, and to the extent of any Loan funded or
maintained by Greenwich Funding Corporation, Credit Suisse, as
administrative agent for Greenwich Funding Corporation, shall remain
obligated for all obligations of Greenwich Funding Corporation under this
Agreement to the Agent, including without limitation any indemnity and
expense reimbursement obligations under Section 9.7 hereof (which shall be
solely for the account of Credit Suisse, as administrative agent for
Greenwich Funding Corporation), the obligations of Credit Suisse under this
Agreement to the Agent shall remain unchanged, except Credit Suisse shall
be excused pro tanto from its payment obligations in respect of any Loans
under Section 9.7 hereof to the extent any payments on such Loans are made
to the Agent by Greenwich Funding Corporation, (y) Credit Suisse shall
remain primarily responsible for the performance of all obligations
hereunder and under the other Operative Documents (including without
limitation the obligation to make future Loans) of Credit Suisse and
Greenwich Funding Corporation, and (z) Agent and PanAmSat may continue to
deal solely and directly with Credit Suisse, as administrative agent for
Greenwich Funding Corporation, in connection with all of the rights and
obligations of Greenwich Funding Corporation under this Agreement unless
and until Agent and PanAmSat both consent to any proposed replacement of
Credit Suisse as the administrative agent for Greenwich Funding
Corporation.
54
<PAGE>
Each of Agent, the Loan Participants and PanAmSat
hereby agrees that, so long as any Loans funded and maintained by Greenwich
Funding Corporation are outstanding, it shall not institute against, or
join any other Person in instituting against, Greenwich Funding Corporation
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding or other proceedings under any federal or state bankruptcy or
similar law, for one year and a day after the latest maturing commercial
paper note issued by Greenwich Funding Corporation is paid. This Section
20.2(d) shall survive termination of this Agreement.
Agent hereby consents to a future assignment to and
assumption by Credit Suisse of Greenwich Funding Corporation's rights and
obligations under this Agreement and the other Operative Documents in
accordance with the provisions of this Agreement.
(e) Agent, on behalf of PanAmSat, shall maintain at
the Agent's Office a copy of each Assignment and Acceptance delivered to it
and a register (the "Register") for the recordation of the names and
addresses of the Loan Participants and the Commitments of, and principal
amounts of the Loans owing to, each Loan Participant from time to time. The
entries in the Register shall be conclusive, in the absence of manifest
error, and PanAmSat, Agent and the Loan Participants shall treat each
Person whose name is recorded in the Register as the owner of a Loan or
other obligation hereunder as the owner thereof for all purposes of this
Agreement and the other Operative Documents, notwithstanding any notice to
the contrary. Any assignment of any Loan or other obligation hereunder
shall be effective only upon appropriate entries with respect thereto being
made in the Register. Any assignment of any Loan shall be registered on the
Register only upon surrender of the Notes representing such Loan as
provided in Section 2.13(b). The Register shall be available for inspection
by PanAmSat or any Loan Participant at any reasonable time and from to time
upon reasonable prior notice.
(f) Upon its receipt of (x) a copy of the
Participation Agreement and (y) an Assignment and Acceptance, executed by
an assigning Loan Participant (with respect to clause (y) only) and an
Assignee (with respect to clauses (x) and (y)) (and, in the case of an
Assignee that is not then a Loan Participant or an affiliate thereof, by
Agent) together with payment by the Assignee or the assigning Loan
Participant to Agent of a registration and processing fee of $3,500, Agent
shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation
to Loan Participants and PanAmSat. Notwithstanding anything to the contrary
in this Section 2.20, no Loan Participant may assign any or all of its
rights and obligations under this Agreement and the other Operative
Documents if such assignment would cause a violation of any of the
provisions of Section 4.03(a) or (b) of the Participation Agreement by the
assignor or the assignee.
(g) Subject to the execution by each Interest
Participant or Assignee (each, a "Transferee") of a copy of the
Participation Agreement, and its agreement to be bound, among other things,
by the confidentiality requirements therein, PanAmSat authorizes each Loan
Participant to disclose to any Transferee any and all financial information
in such Loan Participant's possession which has been delivered to such Loan
Participant pursuant to this Agreement or the Participation Agreement.
55
<PAGE>
(h) For avoidance of doubt, the parties to this
Agreement acknowledge that the provisions of this Section concerning
assignments of Loans and Notes relate only to absolute assignments and that
such provisions do not prohibit assignments creating security interests,
including, without limitation, any pledge or assignment by a Loan
Participant of any Loan or Note to any Federal Reserve Bank in accordance
with applicable law, provided that no such assignment shall release a Loan
Participant from any of its obligations hereunder.
20.3 Adjustments. If any Loan Participant (a "benefitted
Loan Participant") shall at any time receive any payment of all or part of
its Loans, or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 6(f) or (g) or
otherwise) other than amounts received pursuant to Section 2.15, 2.16, 2.17
or 20.2, in a greater proportion than any such payment to or collateral
received by any other Loan Participant, if any, in respect of such other
Loan Participant's Loans or interest thereon, such benefitted Loan
Participant shall purchase for cash from the other Loan Participants a
participating interest in such portion of each such other Loan
Participant's Loan, or shall provide such other Loan Participant with the
benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefitted Loan Participant to share the excess
payment or benefits of such collateral or proceeds ratably with each of the
Loan Participants, provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such benefitted
Loan Participant, such purchase shall be rescinded, and the purchase price
and benefits returned, to the extent of such recovery, but without
interest.
20.4 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged
with PanAmSat and Agent.
[balance of this page intentionally left blank]
56
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the day and year first above written by their respective
officers thereunto duly authorized.
PANAMSAT CORPORATION
By /s/ Kenneth N. Heintz
-------------------------------
Name: Kenneth N. Heintz
Title: Executive Vice President &
Chief Financial Officer
THE CHASE MANHATTAN BANK, as Agent
By /s/ Tracey Navin Ewing
-------------------------------
Name: Tracey Navin Ewing
Title: Vice President
57
<PAGE>
COMMITMENTS OF LOAN PARTICIPANTS
--------------------------------
<TABLE>
<CAPTION>
Percentage of Aggregate
Name Amount Commitments
- ---- ------ ------------------------
<S> <C> <C>
ABN AMRO Bank N.V. $7,723,192.56 6.2222%
BW Bank Ireland plc $7,723,192.56 6.2222%
Banca Di Roma $7,723,192.56 6.2222%
The Bank of New York $7,723,192.56 6.2222%
Bankers Trust Company $7,723,192.56 6.2222%
The Chase Manhattan Bank $13,791,415.31 11.1111%
Credit Suisse First Boston $11,033,132.22 8.8889%
The First National Bank of Chicago $7,723,192.56 6.2222%
The Industrial Bank of Japan $7,723,192.56 6.2222%
Mitsubishi Trust & Banking Corp. $11,033,132.22 8.8889%
Morgan Guaranty Trust Company $18,756,324.78 15.1111%
NationsBank of Texas $7,723,192.56 6.2222%
Westdeutsche Landesbank $7,723,192.56 6.2222%
TOTAL $124,122,737.56 100.0000%
</TABLE>
<PAGE>
Exhibit 1
---------
PROMISSORY NOTE
---------------
$_____________ New York, New York
Dated: July 2, 1999
FOR VALUE RECEIVED, PanAmSat Corporation, a Delaware corporation
("PanAmSat"), hereby promises to pay to ______________ (the "Loan Participant"),
or registered assigns, the principal sum of ________________ ($_____________) in
installments payable on the Principal Payment Dates (as defined in the Amended
and Restated Loan and Security Agreement, dated July 2, 1999, among PanAmSat
Corporation, The Chase Manhattan Bank (as successor-by-merger to Chemical Bank)
as Agent (the "Agent"), Loan Participant and the other institutions listed on
Schedule A thereto as Loan Participants (the "Loan Agreement")) in accordance
with the amortization schedule attached hereto as it may from time to time be
revised pursuant to the Loan Agreement, and to pay interest on the unpaid
principal amount hereof at the rates per annum and on the dates provided in the
Loan Agreement. Both principal and interest are payable in lawful money of the
United States of America in immediately available funds at the office of Agent
at 270 Park Avenue, New York, New York 10017, for the account of the Loan
Participant.
This Note is one of the Notes referred to in, and is entitled to
the collateral security and other benefits of, the Loan Agreement, which Loan
Agreement, among other things, provides for acceleration of the maturity hereof
upon the happening of certain stated events and for the right of PanAmSat to
make certain prepayments of principal prior to the maturity hereof upon the
terms and conditions therein specified.
This Note supersedes and replaces any notes issued to the Loan
Participant pursuant to the Loan and Security Agreement dated February 7, 1996,
among Wilmington Trust Company as Owner Trustee, Chemical Bank as Agent, Loan
Participant and the other institutions listed on Schedule A thereto as Loan
Participants, which shall be of no further force or effect.
PanAmSat waives presentment, protest and demand, notice of
protest, demand and dishonor and nonpayment of this Note and agrees to pay all
costs of collection when incurred, including legal fees and expenses, to the
extent provided in the Loan Agreement, and to perform and comply with each of
the covenants, conditions, provisions and agreements contained in every
instrument now evidencing or securing the loan or loans intended to be evidenced
hereby.
This Note shall be construed and enforced in accordance with and
governed by the laws of the State of New York applicable to promissory notes
made and to be performed entirely within such State.
PANAMSAT CORPORATION
By
--------------------------------
Name:
Title:
<PAGE>
Exhibit 2
---------
DEBT AMORTIZATION SCHEDULE
---------------------------
<TABLE>
Beginning Loan Balance $211,351,919.00
<CAPTION>
Date Amortization Amount Remaining Balance
- ---- ------------------- -----------------
<S> <C> <C>
01/02/1997 $27,564,479.54 $183,787,439.46
01/02/1998 $29,407,413.82 $154,380,025.64
07/02/1999 $30,257,288.08 $124,122,737.56
01/02/2000 $44,300,073.91 $79,822,663.65
07/02/2000 $12,064,819.64 $67,757,844.01
01/02/2001 $21,215,691.20 $46,542,152.81
01/02/2002 $46,542,152.81 $ 0.00
Total Amortization $211,351,919.00
</TABLE>
<PAGE>
Exhibit 3
---------
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Loan and Security
Agreement, dated as of July 2, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Loan Agreement"), among PanAmSat Corporation
("PanAmSat"), the lending institutions listed on Schedule A as Loan Participants
and The Chase Manhattan Bank, as agent for the Loan Participants (in such
capacity, the "Agent"). Unless otherwise defined herein, terms defined in the
Loan Agreement or any other Operative Document, including any schedule or
appendix thereto, and used herein shall have the meanings given to them in the
Loan Agreement or such Operative Document or schedule or appendix thereto.
The Assignor identified on Schedule I hereto (the "Assignor") and
the Assignee identified Schedule I hereto (the "Assignee") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date (as defined below), the interest described in Schedule 1
hereto (the "Assigned Interest") in and to the Assignor's rights and obligations
under the Loan Agreement with respect to the credit facility contained in the
Loan Agreement (the "Assigned Facility"), in a principal amount for the Assigned
Facility as set forth on Schedule 1 hereto.
2. The Assignor (a) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Agreement or any other
Operative Document or with respect to the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Agreement, any
other Operative Documents or any other instrument or document furnished pursuant
thereto, other than that the Assignor has not created any adverse claim upon the
interest being assigned by it hereunder and that such interest is free and clear
of any such adverse claim; (b) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of PanAmSat or any
other obligor or the performance or observance by PanAmSat or any other obligor
of any of their respective obligations under the Loan Agreement or any other
Operative Document or any other instrument or document furnished pursuant hereto
or thereto; and (c) attaches any Note held by it evidencing the Assigned
Facility and (i) requests that the Agent, upon request by the Assignee, exchange
the attached Note for a new Note payable to the Assignee and (ii) if the
Assignor has retained any interest in the Assigned Facility, requests that the
Agent exchange the attached Note for a new Note payable to the Assignor, in each
case in amounts which reflect the assignment being made hereby (and after giving
effect to any other assignments which have become effective on the Effective
Date).
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Loan Agreement, together with copies of the financial
statements delivered pursuant to subsection 5.01 of the Participation Agreement
thereof, the other Operative Documents and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter
<PAGE>
into this Assignment and Acceptance; (c) agrees that it will, independently and
without reliance upon the Assignor, the Agent or any other Loan Participant and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Agreement, the other Operative Documents, or any other instrument
or document furnished pursuant hereto or thereto; (d) appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise such powers
and discretion under the Loan Agreement, the Operative Documents, or any other
instrument or document furnished pursuant hereto or thereto as are delegated to
the Agent by the terms thereof, together with such powers as are incidental
thereto; and (e) agrees that it will be bound by the provisions of the Loan
Agreement and the Participation Agreement and will perform in accordance with
their terms all the obligations which by the terms of the Loan Agreement are
required to be performed by it as a Loan Participant including, if it is
organized under the laws of a jurisdiction outside the United States, its
obligation pursuant to subsection 2.17(b) of the Loan Agreement.
4. The effective date of this Assignment and Acceptance shall be
the Effective Date of Assignment described in Schedule 1 hereto (the "Effective
Date"). Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance by it and recording by the Agent in the
Register pursuant to the Loan Agreement, effective as of the Effective Date
(which shall not, unless otherwise agreed to by the Agent, be earlier than five
Business Days after the date of such acceptance and recording by the Agent).
5. Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to the Effective Date and to the
Assignee for amounts which have accrued subsequent to the Effective Date. The
Assignor and the Assignee shall make all appropriate adjustment in payments by
the Agent for periods prior to the Effective Date or with respect to the making
of this assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall be a
party to the Loan Agreement and the Participation Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Loan Participant thereunder and under the other Operative Documents and shall be
bound by the provisions thereof and (b) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Agreement and the Participation
Agreement.
7. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed as of the date first above written by their
respective duly authorized officers on Schedule 1 hereto.
3
<PAGE>
Schedule 1
to Assignment and Acceptance
Name of Assignor:
----------------------------
Name of Assignee:
----------------------------
Effective Date of Assignment: ----------------------------
Credit Principal Commitment Percentage
Facility Assigned Amount Assigned Assigned
$__________ __.__________%1*
[Name of Assignee] [Name of Assignor]
By: By:
--------------------------- ------------------------------
Title: Title:
[Accepted:
THE CHASE MANHATTAN BANK,
as Agent
By:________________________________
Title:]
- ---------------------------
*1 Calculate the Commitment Percentage that is assigned to at least 15 decimal
places and show as a percentage of the aggregate commitments of all
Lenders.
<PAGE>
CASUALTY PAYMENT DATES
August 2, 1999
September 2, 1999
October 2, 1999
November 2, 1999
December 2, 1999
January 2, 2000
February 2, 2000
March 2, 2000
April 2, 2000
May 2, 2000
June 2, 2000
July 2, 2000
August 2, 2000
September 2, 2000
October 2, 2000
November 2, 2000
December 2, 2000
January 2, 2001
February 2, 2001
March 2, 2001
April 2, 2001
May 2, 2001
June 2, 2001
July 2, 2001
August 2, 2001
September 2, 2001
October 2, 2001
November 2, 2001
December 2, 2001
January 2, 2002
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This financial data schedule contains summary financial information extracted
from the Consolidated Balance Sheet and related Consolidated Statement of Income
as of and for the nine month period ending September 30, 1999 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 6,834
<SECURITIES> 0
<RECEIVABLES> 46,405
<ALLOWANCES> 4,444
<INVENTORY> 0
<CURRENT-ASSETS> 442,250
<PP&E> 3,753,446
<DEPRECIATION> 690,154
<TOTAL-ASSETS> 6,116,213
<CURRENT-LIABILITIES> 106,555
<BONDS> 1,002,814
0
0
<COMMON> 1,493
<OTHER-SE> 2,784,110
<TOTAL-LIABILITY-AND-EQUITY> 6,116,213
<SALES> 604,630
<TOTAL-REVENUES> 604,630
<CGS> 0
<TOTAL-COSTS> 345,679
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 82,970
<INCOME-PRETAX> 175,981
<INCOME-TAX> 80,952
<INCOME-CONTINUING> 95,029
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 95,029
<EPS-BASIC> .64
<EPS-DILUTED> .64
</TABLE>
