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 March 31, 2000
Commission File No. 0-22531
PanAmSat Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware 95-4607698
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
One Pickwick Plaza, Greenwich, CT 06830
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: 203-622-6664
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
As of March 31, 2000, an aggregate of 149,451,675 shares of the Company's Common
Stock were outstanding.
<PAGE>
Cautionary Statement for Purposes of the "Safe Harbor"
Provisions of the Private Securities Litigation Reform Act of 1995
This Quarterly Report 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
of launch failures, launch delays and in-orbit failures or reduced performance,
(ii) risks of government regulation, (iii) risks of doing business
internationally, (iv) risks of uninsured loss, (v) risks associated with the
Company's Internet initiative and (vi) 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
under the caption "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, 1999. Reference is also made to such
other risks and uncertainties detailed from time to time in the Company's
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.
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PANAMSAT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the Three Months Ended March 31, 2000 and 1999
(In Thousands, Except Share Data)
<S> <C> <C>
March 31, March 31,
2000 1999
----------- -----------
REVENUES:
Operating leases, satellite services and other $ 200,027 $ 187,382
Outright sales and sales-type leases 99,077 6,127
----------- -----------
Total revenues 299,104 193,509
----------- -----------
OPERATING COSTS AND EXPENSES:
Cost of outright sales and sales-type leases 45,252 -
Leaseback expense, net of deferred gains - 7,695
Depreciation and amortization 73,667 67,734
Direct operating costs 31,894 25,238
Selling, general and administrative expenses 21,011 14,527
----------- -----------
Total operating costs and expenses 171,824 115,194
----------- -----------
INCOME FROM OPERATIONS 127,280 78,315
INTEREST EXPENSE, net 24,453 24,389
----------- -----------
INCOME BEFORE INCOME TAXES 102,827 53,926
INCOME TAXES 46,272 23,458
----------- -----------
NET INCOME $ 56,555 $ 30,468
----------- -----------
NET INCOME PER COMMON SHARE - basic and diluted
$ 0.38 $ 0.20
----------- -----------
Weighted average common shares outstanding 150,098,942 149,304,397
----------- -----------
The accompanying notes are an integral part of these consolidated financial statements
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
PANAMSAT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
<S> <C> <C>
March 31, December 31,
2000 1999
----------- ------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 41,420 $117,259
Accounts receivable-net 93,180 41,941
Net investment in sales-type leases 24,443 21,814
Prepaid expenses and other (principally prepaid insurance) 27,353 26,808
Deferred income taxes 17,173 17,353
Insurance claim receivable 2,364 33,359
----------- -----------
Total current assets 205,933 258,534
SATELLITES AND OTHER PROPERTY AND
EQUIPMENT-Net 3,198,729 3,140,014
NET INVESTMENT IN SALES-TYPE LEASES 178,251 146,147
GOODWILL-Net of amortization 2,352,339 2,368,579
DEFERRED CHARGES 83,137 71,435
----------- -----------
TOTAL ASSETS $ 6,018,389 $ 5,984,709
----------- ------------
The accompanying notes are an integral part of these consolidated financial statements
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
PANAMSAT CORPORATION
CONSOLIDATED BALANCE SHEETS - (continued)
(In Thousands, Except Share Data)
<S> <C> <C>
March 31, December 31,
2000 1999
----------- ------------
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 76,208 $ 122,094
Deferred revenues 14,580 21,049
----------- -----------
Total Current Liabilities 90,788 143,143
DUE TO AFFILIATES (principally 1,807,928 1,797,163
merger-related indebtedness)
LONG-TERM DEBT 796,598 817,814
DEFERRED INCOME TAXES 347,554 306,922
DEFERRED CREDITS AND OTHER (principally customer deposits and deferred
revenue) 99,295 103,678
----------- -----------
TOTAL LIABILITIES 3,142,163 3,168,720
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock, $0.01 par value -- 400,000,000 shares
authorized; 149,451,675 and 149,351,786 outstanding at
March 31, 2000 and December 31, 1999,
respectively 1,494 1,493
Additional paid-in-capital 2,513,333 2,509,652
Retained earnings 361,399 304,844
----------- -----------
Total stockholders' equity 2,876,226 2,815,989
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 6,018,389 $ 5,984,709
----------- -----------
The accompanying notes are an integral part of these consolidated financial statements
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
PANAMSAT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months Ended March 31, 2000 and 1999
<S> <C> <C> <C>
(In Thousands)
March 31, March 31,
2000 1999
----------- -----------
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income $56,555 $ 30,468
Adjustments to reconcile net income to
net cash provided by operating activities:
Gross profit on sales and sales-type leases (48,538) -
Depreciation and amortization 73,667 67,734
Deferred income taxes 40,812 22,148
Amortization of gains on sale-leasebacks - (5,381)
Amortization of debt issuance costs 1,527 1,528
Provision for uncollectable receivables (989) -
Changes in assets and liabilities:
Collections on investments in sales-type leases 5,647 5,340
Operating leases and other receivables (5,940) (20,007)
Prepaid expenses and other assets (13,774) (9,279)
Accounts payable and accrued liabilities (23,879) 18,661
Accrued operating leaseback expense - (29,609)
Deferred gains and revenues (7,703) 3,137
----------- -----------
Net cash provided by operating activities 77,385 84,740
----------- -----------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (including capitalized interest) (158,004) (198,563)
Early buy-out of sale-leasebacks - (141,253)
Net book value of satellites recovered through insurance 33,836 -
----------- -----------
Net cash used in investing activities (124,168) (339,816)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
New borrowings 13,050 405,000
Repayments of long-term debt (44,300) (320,000)
Repayments of incentive obligations (1,488) (1,551)
Stock issued to 401(k) plan 3,682 797
----------- -----------
Net cash (used in)/provided by financing activities (29,056) 84,246
----------- -----------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS
(75,839) (170,830)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
117,259 177,542
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD
$ 41,420 $6,712
----------- -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash received for interest $ 1,251 $ 1,697
----------- -----------
Cash paid for interest $ 55,783 $ 49,913
----------- -----------
Cash paid for taxes $ 21,278 $ 7,344
----------- -----------
The accompanying notes are an integral part of these consolidated financial
statements
</TABLE>
7
<PAGE>
PANAMSAT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) General
These unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments which are of a normal recurring nature necessary to present
fairly the financial position, results of operations and cash flows as of
and for the three month periods ended March 31, 2000 and 1999 have been
made. Certain prior period amounts have been reclassified to conform with
the current year's presentation. Operating results for the three months
ended March 31, 2000 and 1999 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 Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999
(the "Form 10-K").
(2) Satellite Developments
Reference is made to "Item 1. - Business - The Satellites and - Satellite
Procurement and Launch Arrangements" and "Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations - Satellite
Deployment Plan and Planned Satellites" in the Form 10-K for a detailed
description of the Company's satellite network and satellite deployment
plan.
8
<PAGE>
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
<TABLE>
<CAPTION>
<S> <C> <C>
2000 1999
---- ----
Three Months Ended
March 31,
(unaudited; in thousands)
Operating leases, satellite services and other $200,027 $187,382
Outright sales and sales-type leases 99,077 6,127
Total revenues 299,104 193,509
Cost of outright sales and sales-type leases 45,252 -
Leaseback expense, net of deferred gains - 7,695
Depreciation and amortization 73,667 67,734
Direct operating and SG&A costs 52,905 39,765
Income from operations 127,280 78,315
Interest expense, net 24,453 24,389
Income taxes 46,272 23,458
</TABLE>
9
<PAGE>
PANAMSAT CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Revenues. Revenues were $299.1 million for the three months ended March
31, 2000, compared to revenues of $193.5 million for the same period in 1999.
Revenues included $93.8 million of new outright sales and sales-type lease
transactions executed during the first quarter of 2000 for which there were no
comparable transactions in 1999. Revenues, excluding new outright sales and
sales-type leases, increased $11.8 million, or 6%, to $205.3 million for the
three months ended March 31, 2000 from $193.5 million for the same period in
1999, principally as 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, excluding the
revenue from new sales-type lease activity, were $140.7 million for the three
months ended March 31, 2000, an increase of 2% from the same period in 1999. The
increase in video services revenues for the three months ended March 31, 2000
was due primarily to the commencement of new service agreements.
Telecommunications services revenues, excluding the revenue from outright sales
activity, were $51.6 million for the three months ended March 31, 2000, an
increase of 16% from the same period in 1999. The increase in telecommunications
services revenues was due primarily to the growth in data and Internet-related
service agreements.
Revenues can also be analyzed based on the type of agreement. Revenues
from outright sales and sales-type leases increased to $99.1 million for the
three months ended March 31, 2000 from $6.1 million for the same period in 1999.
The increase in revenues from outright sales and sales-type leases for the three
month period is due primarily to the revenues from new sales and sales-type
lease transactions executed during the first quarter of 2000. Revenues from
outright sales and sales-type leases represent substantial long-term commitments
for services, and these transactions are subject to greater variation from
period to period than are operating lease revenues. Revenues from operating
leases of transponders, satellite services and other increased $12.6 million, or
7%, to $200.0 million for the three months ended March 31, 2000 from $187.4
million for the same period in 1999. The increase in revenues from operating
leases of transponders, satellite services and other for the three month period
is due primarily to increased available transponder capacity on new
international satellites placed in service since the first quarter of 1999.
Cost of Outright Sales and Sales-Type Leases. Cost of outright sales
and sales-type leases were $45.3 million for the three months ended March 31,
2000 due to the
10
<PAGE>
execution of new sales and sales-type lease agreements. There were no
comparable costs for the same period in 1999.
Leaseback Expense, Net of Deferred Gain. For the three months ended
March 31, 2000, the Company recorded no leaseback expense, net of deferred gain
as compared to $7.7 million for the same period in 1999. The decrease is
attributable to the exercise by the Company of certain sale-leaseback early
buy-out options during 1999.
Depreciation and Amortization. Depreciation and amortization increased
$5.9 million, or 9%, to $73.7 million for the three months ended March 31, 2000
from $67.7 million for the same period in 1999. The increase in depreciation and
amortization for the three month period ended March 31, 2000 is due primarily to
depreciation expense associated with the addition of two new satellites placed
in service and depreciation expense on transponders acquired through the
exercise of sale-leaseback early buy-outs.
Direct Operating and Selling, General and Administrative Costs. Direct
operating and selling, general and administrative costs increased $13.1 million,
or 33%, to $52.9 million for the three months ended March 31, 2000 from $39.8
million for the same period in 1999. The increase is due primarily to direct
costs associated with the addition of new satellites placed in service and costs
associated with the continued growth of the Company.
Income from Operations. Income from operations was $127.3 million for
the three months ended March 31, 2000 an increase of $49.0 million or 63%, from
$78.3 million for the same period in 1999. The increase in income from
operations for the three month period ended March 31, 2000 is due primarily to
the gross profit associated with the new outright sales and sales-type lease
activity during the quarter.
Interest Expense, Net. Interest expense, net was $24.5 million for the
three months ended March 31, 2000, as compared to $24.4 million for the same
period in 1999.
Income Taxes. Income taxes increased $22.8 million, or 97%, to $46.3
million for the three months ended March 31, 2000, from $23.5 million for the
same period in 1999. The increase in income taxes for the three month period
ended March 31, 2000 is due primarily to the gross profit from new outright
sales and sales-type lease activity.
Satellite Developments. Reference is made to "Item 1. - Business - The
Satellites and - Satellite Procurement and Launch Arrangements" and "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Satellite Deployment Plan and Planned Satellites" in the Form 10-K
for a detailed description of the Company's satellite network and satellite
deployment plan.
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
11
<PAGE>
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
March 31, 2000 the Company also had long-term indebtedness of $796.6 million
(comprised primarily of $750 million of public notes and $46.5 million of notes
assumed in connection with the exercise of an early buy-out opportunity under a
sale-leaseback transaction).
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
four satellites under various stages of development and intends to implement its
Internet initiative, NET/36, for which the Company has budgeted capital
expenditures. The Company will require approximately $465 million to construct,
insure and launch the satellites and plans to invest up to $250 million in
capital and operating expenses over the next two years to deploy NET/36. The
Company expects that the largest portion of its investment in NET/36 will be
used to deploy PanAmSat-owned antennas and servers at high-speed Internet
service providers, including cable headends and digital subscriber line provider
sites.
Assuming satellites in development are successfully launched, services on
the satellites commence on the schedule currently contemplated and NET/36 is
deployed as and when expected, the Company believes that amounts available under
its $500 million revolving credit facility with certain lenders and Citicorp
USA, Inc. as administrative agent (the "Revolving Credit Facility"), vendor
financing, future cash flow from operations and cash on hand will be sufficient
to fund its operations and its remaining costs for the construction and launch
of satellites currently under development for the next twelve months and for the
deployment of NET/36 for the next twenty-four months. There can be no assurance,
however, that the Company's assumptions with respect to costs for future
construction and launch of its satellites and costs to deploy NET/36 will be
correct, or that amounts available under the Revolving Credit Facility, vendor
financing, future cash flow from operations and cash on hand will be sufficient
to cover any shortfalls in funding for (i) launches caused by launch failures,
(ii) cost overruns, (iii) delays, (iv) capacity shortages, (v) NET/36 technical
integration problems, (vi) additional costs associated with NET/36 strategic
relationships or (vii) other unanticipated expenses. In addition, if the Company
were to consummate any strategic transactions or undertake any other projects
requiring significant capital expenditures, it may be required to seek
additional financing. If circumstances were to require the Company to incur
additional indebtedness, the ability of the Company to incur any such additional
indebtedness would be subject to the terms of the Company's outstanding
indebtedness. The failure to obtain
12
<PAGE>
such financing could have a material adverse effect on the Company's operations
and its ability to accomplish its business plan.
Net cash provided by operating activities decreased to $77.4 million for
the three months ended March 31, 2000, from $84.7 million for the three months
ended March 31, 1999. The decrease in 2000 was primarily attributable to net
changes in working capital items which included income tax payments of $21.3
million in the first quarter of 2000 as compared to $7.3 million for the
comparable period in 1999.
Net cash used in investing activities decreased to $124.2 million for the
three months ended March 31, 2000, from $339.8 million for the three months
ended March 31, 1999. The decrease in 2000 was primarily attributable to lower
capital expenditures in 2000 for satellite systems under development and to no
comparable sale-leaseback early buy-out transactions in the first quarter of
2000.
Net cash used in financing activities was $29.1 million for the three
months ended March 31, 2000, compared to net cash provided by financing
activities of $84.2 million for the three months ended March 31, 1999. The
decrease in 2000 was primarily due to lower net borrowings as a result of the
lower level of cash required to fund capital expenditures and early buy-out
opportunities in 2000 offset somewhat by the higher cash balances retained at
quarter end in the current year.
Market Risk. There have been no material changes regarding the Company's
market risk position from the information provided in the Form 10-K.
13
<PAGE>
PANAMSAT CORPORATION
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS.
Reference is made to the description of the action commenced by Comsat
Corporation ("Comsat") against the Company, News Corporation Limited
and Grupo Televisa, S.A. in "Item 3. Legal Proceedings" in the Form
10-K. Such action was settled by all parties as of March 31, 2000. The
parties filed a Joint Motion for Dismissal with Prejudice on April 13,
2000 with the U.S. District Court for the Central District of
California, which was granted on April 14, 2000. The financial impact
of the settlement to the Company was not material.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No.
3.2 Restated Bylaws of PanAmSat.
10.58.1 Extension of Employment Agreement between PanAmSat Corporation and
R. Douglas Kahn, dated as of April 1, 1999. *
10.61 Contract for Launch Services, dated as of March 15, 2000, between
Sea Launch Limited Partnership and PanAmSat Corporation.(1)
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 an executive contract or compensatory
plan or arrangement.
(1) Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
14
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PanAmSat Corporation
Date: May 15, 2000 /s/ Kenneth N. Heintz
----------------------------
Kenneth N. Heintz
Executive Vice President and
Chief Financial Officer
and a Duly Authorized
Officer of the Company
<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 three month period ending March 31, 2000 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 41,420
<SECURITIES> 0
<RECEIVABLES> 97,097
<ALLOWANCES> 3,917
<INVENTORY> 0
<CURRENT-ASSETS> 205,933
<PP&E> 4,003,586
<DEPRECIATION> 804,857
<TOTAL-ASSETS> 6,018,389
<CURRENT-LIABILITIES> 90,788
<BONDS> 796,598
0
0
<COMMON> 1,494
<OTHER-SE> 2,874,732
<TOTAL-LIABILITY-AND-EQUITY> 6,018,389
<SALES> 299,104
<TOTAL-REVENUES> 299,104
<CGS> 0
<TOTAL-COSTS> 171,824
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 24,453
<INCOME-PRETAX> 102,827
<INCOME-TAX> 46,272
<INCOME-CONTINUING> 56,555
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 56,555
<EPS-BASIC> .38
<EPS-DILUTED> .38
</TABLE>
Exhibit 3.2
RESTATED BYLAWS
OF
PANAMSAT CORPORATION
ARTICLE I
Stockholders
SECTION 1.1. Annual Meetings. An annual meeting of
stockholders shall be held for the election of directors at such date, time and
place, either within or without the State of Delaware, as may be designated by
resolution of the Board of Directors from time to time. Any other proper
business may be transacted at the annual meeting.
SECTION 1.2. Special Meetings. Special meetings of
stockholders for any purpose or purposes may be called at any time by the Board
of Directors, or by a committee of the Board of Directors that has been duly
designated by the Board of Directors and whose powers and authority, as provided
in a resolution of the Board of Directors, include the power to call such
meetings, but such special meetings may not be called by any other person or
persons.
SECTION 1.3. Notice of Meetings. Whenever stockholders are
required or permitted to take any action at a meeting, a written notice of the
meeting shall be given that shall state the place, date and hour of the meeting
and, in the case of a special meeting, the purpose or purposes for which the
meeting is called. Unless otherwise provided by law, the certificate of
incorporation or these Bylaws, the written notice of any meeting shall be given
not less than ten (10) nor more than sixty (60) days before the date of the
meeting to each stockholder entitled to vote at such meeting. If mailed, such
notice shall be deemed to be given when deposited in the United States mail,
postage prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation.
SECTION 1.4. Adjournments. Any meeting of stockholders, annual
or special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the Corporation may transact any business which
might have been transacted at the
<PAGE>
original meeting. If the adjournment is for more than thirty (30) days, or if
after the adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
SECTION 1.5. Quorum. Except as otherwise provided by law, the
certificate of incorporation or these Bylaws, at each meeting of stockholders
the presence in person or by proxy of the holders of shares of stock having a
majority of the votes which could be cast by the holders of all outstanding
shares of stock entitled to vote at the meeting shall be necessary and
sufficient to constitute a quorum. Where a separate vote by a series, class or
classes is required, a majority of the outstanding shares of stock of such class
or classes on any particular issue, present in person or represented by proxy,
shall be necessary and sufficient to constitute a quorum for purposes of such
issue. In the absence of a quorum, the stockholders so present may, by majority
vote, adjourn the meeting from time to time in the manner provided in Section
1.4 of these Bylaws until a quorum shall attend. Shares of its own stock
belonging to the Corporation or to another corporation, if a majority of the
shares entitled to vote in the election of directors of such other corporation
is held, directly or indirectly, by the Corporation, shall neither be entitled
to vote nor be counted for quorum purposes; provided, however, that the
foregoing shall not limit the right of the Corporation to vote stock, including
but not limited to its own stock, held by it in a fiduciary capacity.
SECTION 1.6. Organization. Meetings of stockholders shall be
presided over by the Chairman of the Board, if any, or in his absence by the
President, or in his absence by an Executive Vice President, or in the absence
of the foregoing persons by a chairman designated by the Board of Directors, or
in the absence of such designation by a chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his absence the chairman
of the meeting may appoint any person to act as secretary of the meeting. The
chairman of the meeting shall announce at the meeting of stockholders the date
and time of the opening and the closing of the polls for each maker upon which
the stockholders will vote.
SECTION 1.7. Voting; Proxies. Each stockholder entitled to
vote at any meeting of stockholders shall be entitled to one vote for each share
of stock held by such stockholder which has voting power upon the matter in
question. At all meetings of stockholders for the election of directors, a
plurality of the votes cast shall be sufficient to elect a director. All other
elections and questions shall, unless otherwise provided by law, the certificate
of incorporation, these Bylaws or the rules or regulations of any stock exchange
applicable to the Corporation, be decided by the affirmative vote of the holders
of shares of stock having a majority of the votes present in person or
represented by proxy and entitled to vote thereon. Each stockholder entitled to
vote at a meeting of
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stockholders may authorize another person or persons to act for him by proxy,
but no such proxy shall be voted or acted upon after three years from its date,
unless the proxy provides for a longer period. A proxy shall be irrevocable if
it states that it is irrevocable and if, and only as long as, it is coupled with
an interest sufficient in law to support an irrevocable power. A stockholder may
revoke any proxy which is not irrevocable by attending the meeting and voting in
person or by filing an instrument in writing revoking the proxy or by delivering
a proxy in accordance with applicable law bearing a later date to the Secretary
of the Corporation. Voting at meetings of stockholders need not be by written
ballot.
SECTION 1.8. Fixing Date for Determination of Stockholders of
Record. In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the Board of Directors and which record date: (i) in the case of
determination of stockholders entitled to vote at any meeting of stockholders or
adjournment thereof, shall, unless otherwise required by law, not be more than
sixty nor less than ten (10) days before the date of such meeting; and (ii) in
the case of any other action, shall not be more than sixty (60) days prior to
such other action. If no record date is fixed: (i) the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held; and (ii) the record
date for determining stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjured meeting.
SECTION 1.9. List of Stockholders Entitled to Vote. The
Secretary shall prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or if not so
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specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof and may be inspected by any stockholder who is present.
SECTION 1.10. Stock Ledger. The stock ledger of the
Corporation shall be the only evidence as to who are the stockholders entitled
to examine the stock ledger, the list required by Section 1.9 of this ARTICLE I,
or to vote in person or by proxy at any meeting of stockholders.
SECTION 1.11. Conduct of Meetings. The Board of Directors of
the Corporation may adopt by resolution such rules and regulations for the
conduct of the meeting of stockholders as it shall deem appropriate. Except to
the extent inconsistent with such rules and regulations as adopted by the Board
of Directors, the chairman of any meeting of stockholders shall have the right
and authority to prescribe such rules, regulations and procedures and to do all
such acts as, in the judgment of such chairman, are appropriate for the proper
conduct of the meeting. Such rules, regulations or procedures, whether adopted
by the Board of Directors or prescribed by the chairman of the meeting, may
include, without limitation, the following: (i) the establishment of an agenda
or order of business for the meeting; (ii) rules and procedures for maintaining
order at the meeting and the safety of those present; (iii) limitations on
attendance at or participation in the meeting to stockholders of record of the
Corporation, their duly authorized and constituted proxies or such other persons
as the chairman of the meeting shall determine: (iv) restrictions on entry to
the meeting after the time fixed for the commencement thereof; and (v)
limitations on the time allotted to questions or comments by participants.
Unless and to the extent otherwise determined by the Board of Directors or the
chairman of the meeting, meetings of stockholders shall not be required to be
held in accordance with the rules of parliamentary procedure.
SECTION 1.12. Advance Notice of Stockholder Nominations and
Business.
(A) Annual Meetings of Stockholders.
(1) Nominations of persons for election to the Board
of Directors and the proposal of business to be considered by the
stockholders may be made at an annual meeting of stockholders (a)
pursuant to the Corporation's notice of meeting, (b) by or at the
direction of the Board of Directors or (c) by any stockholder of the
Corporation who was a stockholder of record at the time of giving of
notice provided for in this Bylaw, who is entitled to vote at the
meeting and complies with the notice procedures set forth in this
Bylaw.
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(2) For nominations or other business to be properly
brought before an annual meeting by a stockholder pursuant to clause
(c) of paragraph (A)(l) of this Bylaw, the stockholder must have given
timely notice thereof in writing to the Secretary of the Corporation
and such other business must otherwise be a proper matter for
stockholder action. To be timely, a stockholder's notice shall be
delivered to the Secretary at the principal executive offices of the
Corporation not later than the close of business on the 60th day nor
earlier than the close of business on the 90th day prior to the first
anniversary of the preceding year's annual meeting; provided, however,
that in the event that the date of the annual meeting is more than
thirty (30) days before or more than sixty (60) days after such
anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the close of business on the 90th day prior
to such annual meeting and not later than the close of business on the
later of the 60th day prior to such annual meeting or the 10th day
following the day on which public announcement of the date of such
meeting is first made by the Corporation. In no event shall the public
announcement of an adjournment of an annual meeting commence a new time
period for the giving of a stockholder's notice as described above.
Such stockholder's notice shall set forth (a) as to each person whom
the stockholder proposes to nominate for election or re-election as a
director all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors in an
election contest, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and Rule 14a-11 thereunder (including such
person's written consent to being named in the proxy statement as a
nominee and to serving as a director if elected); (b) as to any other
business that the stockholder proposes to bring before the meeting, a
brief description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting and
any material interest in such business of such stockholder and the
beneficial owner, if any, on whose behalf the proposal is made; and (c)
as to the stockholder giving the notice and the beneficial owner, if
any, on whose behalf the nomination or proposal is made (i) the name
and address of such stockholder, as they appear on the Corporation's
books, and of such beneficial owner, (ii) the class and number of
shares of the Corporation which are owned beneficially and of record by
such stockholder and such beneficial owner, and (iii) whether the
proponent intends or is part of a group which intends to solicit
proxies from other stockholders in support of such proposal or
nomination.
(3) Notwithstanding anything in the second sentence
of paragraph (A)(2) of this Bylaw to the contrary, in the event that
the number of directors to be elected to the Board of Directors of the
Corporation is increased
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and there is no public announcement by the Corporation naming all of
the nominees for director or specifying the size of the increased Board
of Directors at least seventy (70) days prior to the first anniversary
of the preceding year's annual meeting, a stockholder's notice required
by this Bylaw shall also be considered timely, but only with respect to
nominees for any new positions created by such increase, if it shall be
delivered to the Secretary at the principal executive offices of the
Corporation not later than the close of business on the 10th day
following the day on which such public announcement is first made by
the Corporation.
(B) Special Meetings of Stockholders. Only such business shall
be conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the Corporation's notice of meeting. Nominations
of persons for election to the Board of Directors may be made at a special
meeting of stockholders at which directors are to be elected pursuant to the
Corporation's notice of meeting (a) by or at the direction of the Board of
Directors or (b) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any stockholder of the
Corporation who is a stockholder of record at the time of giving of notice
provided for in this Bylaw, who shall be entitled to vote at the meeting and who
complies with the notice procedures set forth in this Bylaw. In the event the
Corporation calls a special meeting of stockholders for the purpose of electing
one or more directors to the Board of Directors, any such stockholder may
nominate a person or persons (as the case may be) for election to such
position(s) as specified in the Corporation's notice of meeting, if the
stockholder's notice required by paragraph (A)(2) of this Bylaw shall be
delivered to the Secretary at the principal executive offices of the Corporation
not earlier than the close of business on the 90th day prior to such special
meeting and not later than the close of business on the later of the 60th day
prior to such special meeting, or the 10th day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting. In no
event shall the public announcement or an adjournment of a special meeting
commence a new time period for the giving of a stockholder's notice as described
above.
(C) General.
(1) Only such persons who are nominated in accordance
with the procedures set forth in this Bylaw shall be eligible to serve
as directors and only such business shall be conducted at a meeting of
stockholders as shall have been brought before
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the meeting in accordance with the procedures set forth in this Bylaw.
Except as otherwise provided by law, the certificate of incorporation
or these Bylaws, the chairman of the meeting shall have the power and
duty to determine whether a nomination or any business proposed to be
brought before the meeting was made or proposed, as the case may be, in
accordance with the procedures set forth in this Bylaw and, if any
proposed nomination or business is not in compliance with this Bylaw,
to declare that such defective proposal or nomination shall be
disregarded.
(2) For purposes of this Bylaw, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones News
Service, Associated Press or comparable national news service or in a
document publicly filed by the Corporation with the Securities and
Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange
Act.
(3) Notwithstanding the foregoing provisions of this
Bylaw, a stockholder shall also comply with all applicable requirements
of the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth in this Bylaw. Nothing in this Bylaw
shall be deemed to affect any rights (i) of stockholders to request
inclusion of proposals in the Corporation's proxy statement pursuant to
Rule 14a-8 under the Exchange Act or (ii) of the holders of any series
of Preferred Stock to elect directors under specified circumstances.
SECTION 1.13. Stockholder Action. Any action required or
permitted to be taken by any stockholders of the Corporation must be effected at
a duly called annual or special meeting of such stockholders and may not be
effected by any consent in writing by such stockholders. Except as otherwise
required by law, special meetings of stockholders of the Corporation may be
called only by the Board of Directors pursuant to a resolution approved by a
majority of the entire Board of Directors.
SECTION 1.14. Inspectors of Election. The Corporation shall,
in advance of any meeting of stockholders, appoint one or more inspectors of
election, who may be employees of the Corporation, to act at the meeting or any
adjournment thereof and to make a written report thereof. The Corporation may
designate one or more persons as alternate inspectors to replace any inspector
who fails to act. In the event that no inspector so appointed or designated is
able to act at a meeting of stockholders, the person presiding at the meeting
shall appoint one or more inspectors to act at the meeting. Each inspector,
before entering upon the discharge of his or her duties, shall take and sign an
oath to execute faithfully the duties of inspector with strict impartiality and
according to the best of his or her ability. The inspector or inspectors so
appointed or designated shall (i) ascertain the number of shares of capital
stock of the Corporation outstanding and the voting power of each such share,
(ii) determine the shares of capital stock of the Corporation represented at the
meeting and the validity of proxies and ballots, (iii) count all votes and
ballots, (iv) determine and retain for a reasonable period a record of the
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disposition of any challenges made to any determination by the inspectors, and
(v) certify their determination of the number of shares of capital stock of the
Corporation represented at the meeting and such inspectors' count of all votes
and ballots. Such certification and report shall specify such other information
as may be required by law. In determining the validity and counting of proxies
and ballots cast at any meeting of stockholders of the Corporation, the
inspectors may consider such information as is permitted by applicable law. No
person who is a candidate for an office at an election may serve as an inspector
at such election.
ARTICLE II
Board of Directors
SECTION 2.1. Number; Qualifications. The Board of Directors
shall consist of one or more members, the number thereof to be determined
from time to time by resolution of the Board of Directors. Directors need not
be stockholders.
SECTION 2.2. Election; Resignation; Removal; Vacancies. At the
first annual meeting of stockholders and at each annual meeting thereafter, the
stockholders shall elect directors each of whom shall hold office for a term of
one year or until his successor is elected and qualified. The number of
directors constituting the initial Board of Directors shall be ten. Subject to
the rights of holders of any series of Preferred Stock to elect directors under
specified circumstances, the number of directors may be modified from time to
time exclusively by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of directors which the Corporation would have if
there were no vacancies. Any director may resign at any time upon written notice
to the Corporation. Any newly created directorship or any vacancy occurring in
the Board of Directors for any cause may be filled by a majority of the
remaining members of the Board of Directors, although such majority is less than
a quorum, or by a plurality of the votes cast at a meeting of stockholders, and
each director so elected shall hold office until the expiration of the term of
office of the director whom he has replaced or until his successor is elected
and qualified.
SECTION 2.3. Regular Meetings. Regular meetings of the Board
of Directors may be held at such places within or without the State of Delaware
and at such times as the Board of Directors may from time to time determine, and
if so determined notices thereof need not be given.
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SECTION 2.4. Special Meetings. Special meetings of the Board
of Directors may be held at any time or place within or without the State of
Delaware whenever called by the President, any Vice President, the Secretary, or
by any member of the Board of Directors. Notice of a special meeting of the
Board of Directors shall be given by the person or persons calling the meeting
at least twenty-four hours before the special meeting.
SECTION 2.5. Telephonic Meetings Permitted. Members of the
Board of Directors, or any committee designated by the Board of Directors, may
participate in a meeting thereof by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Bylaw shall constitute presence in person at such meeting.
SECTION 2.6. Quorum; Vote Required for Action. At all meetings
of the Board of Directors a majority of the whole Board of Directors shall
constitute a quorum for the transaction of business. The vote of a majority of
the directors present at a meeting at which a quorum is present shall be the act
of the Board of Directors.
SECTION 2.7. Organization. Meetings of the Board of Directors
shall be presided over by the Chairman of the Board, if any, or in his absence
by the President, or in their absence by a chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his absence the chairman
of the meeting may appoint any person to act as secretary of the meeting.
SECTION 2.8. Informal Action by Directors. Unless otherwise
restricted by the certificate of incorporation or these Bylaws, any action
required or permitted to be taken at any meeting of the Board of Directors, or
of any committee thereof, may be taken without a meeting if all members of the
Board of Directors or such committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board of Directors or such committee.
ARTICLE Ill
Committees
SECTION 3.1. Committees. The Board of Directors shall appoint
the committees provided for in these Bylaws in Sections 3.2 and 3.3 and may, by
resolution passed by the Board of Directors, designate one or more additional
committees, each committee to consist of one or more of the directors of the
Corporation. The Board of
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Directors may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. In the absence or disqualification of a member of the committee,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in place of any
such absent or disqualified member. Any such committee, to the extent permitted
by law and to the extent provided in the resolution of the Board of Directors,
shall have and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the Corporation, and
may authorize the seal of the Corporation to be affixed to all papers which may
require it.
Section 3.2 Compensation and Nominating Committee.
(a) At each annual meeting of the Board of Directors, the
Board of Directors shall, by a resolution adopted by the Board of Directors,
designate and appoint from its members a Compensation and Nominating Committee
consisting of three or more directors, each of whom shall be a "disinterested"
person.
(b) The Compensation Committee and Nominating Committee shall have the powers
and responsibilities designated by the Board of Directors from time to time.
(c) Action taken by the Compensation and Nominating Committee
or at a meeting duly called shall require the affirmative
vote of at least a majority of its members.
SECTION 3.3. Audit Committee.
(a) At each annual meeting of the Board of Directors, the
Board of Directors shall, by a resolution adopted by the Board of Directors,
designate and appoint from its members an Audit Committee and the Board shall
designate the Chairman of the Committee. The Audit Committee shall be comprised
of a minimum of three directors, each of whom is financially literate or becomes
financially literate within a reasonable period of time after his or her
appointment to the Audit Committee, and at least one member of the Audit
Committee must have accounting or related financial management expertise. The
Audit Committee shall be comprised solely of independent directors, except as
otherwise permitted below. Directors shall be considered independent if they
have no relationship to the corporation that may interfere with the exercise of
their
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independence from management of the corporation as same may be determined in
accordance with the rules of the Nasdaq or such securities exchange on which the
corporation's common stock is listed. Notwithstanding the foregoing, one
director who is not independent and who is not an employee or an immediate
family member of an employee may be appointed to the Audit Committee if the
Board, under exceptional and limited circumstances, determines that membership
on the Committee by the individual is required by the best interests of the
corporation and its stockholders, and the Board discloses, in the next annual
report to stockholders subsequent to such determination, the nature of the
relationship and the reasons for that determination..
(b) The Audit Committee shall have the powers and
responsibilities as designated by the Board of Directors from time to time, and
those responsibilities shall be set forth in a Statement Of The Duties,
Responsibilities And Activities Of The Committee which statement shall represent
the charter of the Committee.
SECTION 3.4. Committee Rules. Unless the Board of Directors
otherwise provides, each committee designated by the Board of Directors may
make, alter and repeal rules for the conduct of its business. In the absence of
such rules each committee shall conduct its business in the same manner as the
Board of Directors conducts its business pursuant to ARTICLE 11 of these Bylaws.
ARTICLE IV
Officers
SECTION 4.1. Executive Officers; Election; Qualifications;
Term of Office; Resignation; Removal; Vacancies. The Board of Directors shall
elect a President and Secretary, and it may, if it so determines, choose a
Chairman of the Board from among its members. The Board of Directors may also
choose a Chief Operating Officer, one or more Executive Vice Presidents, one or
more Senior Vice Presidents, one or more Vice Presidents, one or more Assistant
Secretaries, a Treasurer and one or more Assistant Treasurers. Each such officer
shall hold office until the first meeting of the Board of Directors after the
annual meeting of stockholders next succeeding his election, and until his
successor is elected and qualified or until his earlier resignation or removal.
Any officer may resign at any time upon written notice to the Corporation. The
Board of Directors may remove any officer with or without cause at any time, but
such removal shall be without prejudice to the contractual rights of such
officer, if any, with the Corporation. Any number of offices may be held by the
same person. Any vacancy occurring in any office of the Corporation by death,
resignation, removal or otherwise
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may be filled for the unexpired portion of the term by the Board of Directors at
any regular or special meeting.
SECTION 4.2. Powers and Duties of Executive Officers. The
officers of the Corporation shall have such powers and duties in the management
of the Corporation as may be prescribed in a resolution by the Board of
Directors and, to the extent not so provided, as generally pertain to their
respective offices, subject to the control of the Board of Directors.
SECTION 4.3. Chairman of the Board. The Chairman of the Board
shall be a member of the Board of Directors. He shall preside at each meeting of
the Board of Directors or the stockholders. Unless the Chairman also holds
another office described in these Bylaws, he shall be a non-executive officer of
the Corporation.
SECTION 4.4. The President. The President shall be the chief
executive officer of the Corporation. He shall, in the absence of the Chairman
of the Board, preside at each meeting of the Board of Directors or the
stockholders. The President shall be responsible for the general supervision and
control of the business and affairs of the Corporation, subject to the direction
of the Board of Directors. The President may sign or countersign certificates,
contracts, agreements and other documents and instruments in the name and on
behalf of the Corporation, unless and except to the extent that any document or
instrument is required by law or by the Board of Directors to be signed or
countersigned by another officer of the Corporation. The President may appoint
additional officers that are not executive officers described in these Bylaws
(unless such appointments are approved by the Board of Directors), and such
additional officers shall serve the Corporation at the discretion of the
President. The President shall perform all duties incident to the office of the
President, and such other duties as may from time to time be assigned to him by
the Board of Directors.
SECTION 4.5. Chief Operating Officer. The Chief Operating
Officer shall report to the President and shall be responsible for day-to-day
management of the sales, operations and strategic activities of the Corporation
and such other duties as may from time to time be assigned to him by the
President or the Board of Directors. At the request of the President, or in his
absence or in the event of his inability or refusal to act, the Chief Operating
Officer shall perform the duties of the President, and when so acting, shall
have the powers of and be subject to the restrictions placed upon the President
in respect of the performance of such duties.
SECTION 4.6. Executive Vice President. Each Executive Vice
President shall perform all such duties as from time to time may be assigned to
him by the Board of
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Directors or the President. At the request of the President or the Chief
Operating Officer or in his absence or in the event of his inability or refusal
to act, the Executive Vice President, or if there shall be more than one, the
Executive Vice Presidents in the order determined by the Board of Directors (or
if there be no such determination, then the Executive Vice Presidents in the
order of their appointment), shall perform the duties of the Chief Operating
Officer, and when so acting, shall have the powers of and be subject to the
restrictions placed upon the Chief Operating Officer in respect of the
performance of such duties.
SECTION 4.7. Senior Vice President. Each Senior Vice President
shall perform all such duties as from time to time may be assigned to him by the
Board of Directors or the President. There shall be no duties that are incident
to the office of the Senior Vice President, other than those which are
specifically assigned by the Board of Directors or the President. A Senior Vice
President may not sign or countersign certificates, contracts, agreements and
other documents and instruments in the name and on behalf of the Corporation,
unless and except to the extent that the Board of Directors or President assigns
such responsibility to such officer.
SECTION 4.8. Chief Financial Officer. The Chief Financial
Officer shall be responsible for the financial affairs of the Corporation and
shall be the chief accounting officer for public securities purposes. If the
Chief Financial Officer is not also the Treasurer of the Corporation, he shall
be responsible for the supervision of the Treasurer. He shall perform all duties
incident to the office of Chief Financial Officer, and such other duties as may
from time to time be assigned to him by the Board of Directors.
SECTION 4.9. Vice President. Each Vice President shall perform
all such duties as from time to time may be assigned to him by the Board of
Directors or the President. There shall be not duties that are incident to the
office of the Vice President, other than those which are specifically assigned
by the Board of Directors or the President. A Vice President may not sign or
countersign certificates, contracts, agreements and other documents and
instruments in the name and on behalf of the Corporation, unless and except to
the extent that the Board of Directors or President assigns such responsibility
to such officer.
SECTION 4.10. Treasurer. The Treasurer shall:
(a) have charge and custody of, and be responsible for, all
the funds and securities of the Corporation;
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(b) keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation;
(c) deposit all moneys and other valuables to the credit of
the Corporation in such depositaries as may be designated by the Board of
Directors or pursuant to its direction;
(d) receive, and give receipts for, moneys due and payable to
the Corporation from any source whatsoever;
(e) disburse the funds of the Corporation and supervise the
investments of its funds;
(f) render to the Board of Directors, whenever the Board of
Directors may require, an account of the financial condition of the
Corporation; and
(g) in general, perform all duties incident to the office of
Treasurer and such other duties as from time to time may be assigned to him by
the Board of Directors.
In the event that any officer of the Corporation other than
the Treasurer shall be designated as the Corporation's chief financial officer,
the Treasurer shall share the foregoing powers and duties with such chief
financial officer, and all references in these Bylaws to the Treasurer shall be
deemed to include such chief financial officer of the Corporation.
SECTION 4.11. Secretary. The Secretary shall:
(a) keep or cause to be kept in one or more books provided
for the purpose, the minutes of all meetings of the Board of Directors, the
committees of the Board of Directors and the stockholders;
(b) see that all notices are duly given in accordance with
the provisions of these Bylaws and as required by law;
(c) be custodian of the records and the seal of the
Corporation and affix and attest the seal to all certificates for shares of the
Corporation and affix and attest the seal to all other documents to be executed
on behalf of the Corporation under its seal;
(d) see that the books, reports, statements, certificates and
other documents and records required by law to be kept and filed are properly
kept and filed; and
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(e) in general, perform all duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him by
the Board of Directors.
SECTION 4.12. Assistant Secretaries. During the absence or
disability of the Secretary, the Assistant Secretary shall have and may exercise
all of the powers and shall discharge all of the duties of the Secretary. Each
Assistant Secretary shall also perform all such other duties as are incident to
his office or are properly requested by the President, the Secretary or the
Board of Directors.
SECTION 4.13. Assistant Treasurers. During the absence or
disability of the Treasurer, the Assistant Treasurer shall have and may exercise
all of the powers and shall discharge all of the duties of the Treasurer. Each
Assistant Treasurer shall also perform all such other duties as are incident to
his office or are properly requested by the President, the Treasurer or the
Board of Directors.
SECTION 4.14. Additional Officers. The Board of Directors may
appoint such other officers and agents as it may deem appropriate, and such
other officers and agents shall hold their offices for such terms and shall
exercise such powers and perform such duties as may be determined from time to
time by the Board of Directors. The Board of Directors may from time to time
delegate to any officer or agent the power to appoint subordinate officers or
agents and to prescribe their respective rights, terms of office, authorities
and duties. Any such officer or agent may remove any such subordinate officer or
agent appointed by him, for or without cause.
ARTICLE V
Stock
SECTION 5.1. Certificates. Every holder of stock shall be
entitled to have a certificate signed by or in the name of the Corporation by
the Chairman or the President or an Executive Vice President, and by the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary
of the Corporation, certifying the number of shares owned by him in the
Corporation. Any of or all the signatures on the certificate may be a facsimile.
In case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue.
15
<PAGE>
SECTION 5.2. Lost, Stolen or Destroyed Stock Certificates;
Issuance of New Certificates. The Corporation may issue a new certificate of
stock in the place of any certificate theretofore issued by it alleged to have
been lost, stolen or destroyed, and the Corporation may require the owner of the
lost, stolen or destroyed certificate, or his legal representative, to give the
Corporation a bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
ARTICLE VI
Miscellaneous
SECTION 6.1. Fiscal Year. The fiscal year of the Corporation
shall be determined by resolution of the Board of Directors.
SECTION 6.2. Seal. The corporate seal shall have the name of
the Corporation inscribed thereon and shall be in such form as may be
approved from time to time by the Board of Directors.
SECTION 6.3. Waiver of Notice of Meetings of Stockholders,
Directors and Committees. Any written waiver of notice, signed by the person
entitled to notice, whether before or after the time stated therein, shall be
deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at nor the purpose of any
regular or special meeting of the stockholders, directors or members of a
committee of directors need be specified in any written waiver of notice.
SECTION 6.4. Manner of Notice. Except as otherwise provided
herein, notices to directors and stockholders shall be in writing and delivered
personally or mailed to the directors or stockholders at their addresses
appearing on the books of the Corporation. Notice to directors may be given by
telegram, telecopier, telephone or other means of electronic transmission.
SECTION 6.5. Interested Directors; Quorum. No contract or
transaction between the Corporation and one or more of its directors or
officers, or between the Corporation and any other corporation, partnership,
association or other organization in which one or more of its directors or
officers are directors or officers, or have a financial interest, shall be void
or voidable solely for this reason, or solely because the director or
16
<PAGE>
officer is present at or participates in the meeting of the Board of Directors
or committee thereof which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose, if: (i) the material
facts as to his relationship or interest and as to the contract or transaction
are disclosed or are known to the Board of Directors or the committee, and the
Board of Directors or committeve in good faith authorizes the contract or
transaction by the affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum; or
(ii) the material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders entitled
to vote thereon, and the contract or transaction is specifically approved in
good faith by vote of the stockholders; or (iii) the contract or transaction is
fair as to the Corporation as of the time it is authorized, approved or
ratified, by the Board of Directors, a committee thereof, or the stockholders.
Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or of a committee which authorizes
the contract or transaction.
SECTION 6.6. Form of Records. Any records maintained by the
Corporation in the regular course of its business, including its stock ledger,
books of account and minute books, may be kept on, or be in the form of, punch
cards, magnetic tape, photographs, microphotographs, or any other information
storage device, provided that the records so kept can be converted into clearly
legible form within a reasonable time.
SECTION 6.7. Amendment of Bylaws. These Bylaws may be altered
or repealed, and new bylaws made, by the Board of Directors, but the
stockholders may make additional bylaws and may alter and repeal any Bylaws
whether adopted by them or otherwise.
17
Exhibit 10.58.1
EXTENSION
---------
TO
--
EMPLOYMENT AGREEMENT
--------------------
Pursuant to Section 6 of the Employment Agreement, dated as of April 1,
1999 by and between PanAmSat Corporation (the "Company") and R. Douglas Kahn
(the "Executive") (the "Employment Agreement"), the Company hereby gives its
notification to Executive that it desires to extend the Employment Agreement
until March 31, 2002. This extension shall be effective as of March 31, 2000.
PANAMSAT CORPORATION
By: /s/ Michael T. Smith
--------------------------------
Michael T. Smith
Chairman of the Board
Dated: March 31, 2000
ACKNOWLEDGED AND AGREED:
By: /s/ R. Douglas Kahn
--------------------------------
R. Douglas Kahn
Dated: March 31, 2000
Exhibit 10.61
SEA LAUNCH AND PANAMSAT PROPRIETARY
CONTRACT
FOR
LAUNCH SERVICES
BETWEEN
SEA LAUNCH LIMITED PARTNERSHIP
AND
PANAMSAT CORPORATION
THIS CONTRACT DOCUMENT IS CONSIDERED PROPRIETARY INFORMATION OF SEA LAUNCH, LDC
AND PANAMSAT CORPORATION, AND SHALL NOT BE RELEASED, IN WHOLE OR IN PART, TO THE
PUBLIC OR ANY THIRD PARTY WITHOUT THE PRIOR WRITTEN CONSENT OF BOTH SEA LAUNCH
COMPANY, LDC AND PANAMSAT CORPORATION
<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
TABLE OF CONTENTS
ARTICLE 1 -- DEFINITIONS......................................................4
ARTICLE 2 -- CONTRACTUAL DOCUMENTS............................................7
ARTICLE 3 -- SERVICES TO BE PROVIDED BY SEA LAUNCH............................8
ARTICLE 4 -- CONTRACT PRICE...................................................9
[***************] 9
ARTICLE 5 -- PAYMENTS.........................................................10
ARTICLE 6 -- LAUNCH SCHEDULE..................................................12
ARTICLE 7 -- LAUNCH POSTPONEMENTS.............................................13
ARTICLE 8 -- EXCUSABLE DELAYS.................................................15
ARTICLE 9 -- OBLIGATIONS BEFORE and AFTER LAUNCH..............................15
ARTICLE 10 -- COMMUNICATION and COORDINATION BETWEEN
SEA LAUNCH and PANAMSAT.......................................................16
ARTICLE 11 -- PERMITS AND APPROVALS...........................................17
ARTICLE 12 -- OPTION FOR REFLIGHT OR REFUND...................................18
ARTICLE 13 -- REPLACEMENT LAUNCH..............................................21
ARTICLE 14 -- TERMINATION.....................................................22
ARTICLE 15 -- RISK ALLOCATION.................................................25
ARTICLE 16 -- PROPRIETARY DATA................................................29
ARTICLE 17 -- RIGHTS TO INVENTIONS AND DATA...................................30
ARTICLE 18 -- CHANGES.........................................................31
ARTICLE 19 -- ASSIGNMENT......................................................31
19.1 The Parties agree not to assign their respective rights or obligations
under the Contract without the prior written consent of the other Party;
provided that PanAmSat may assign its rights and obligations regarding one or
more Launch Services to a PanAmSat Affiliate. Any such assignment shall be
mutually agreed to and consent to Assign shall not be unreasonably withheld by
the other Party. For purposes of this Article 19, "PanAmSat Affiliate" shall
include (i) any entity controlled by PanAmSat and (ii) any joint venture or
similar entity in which PanAmSat owns or agrees to acquire an equity
interest......................................................................32
ARTICLE 20 -- DISPUTE SETTLEMENT..............................................32
ARTICLE 21 - COOPERATION ON INSURANCE.........................................32
21.1 Sea Launch shall cooperate in good faith with PanAmSat's efforts to
obtain and maintain launch insurance for Spacecraft launched under this
Contract. Subject to U. S. Export Control laws and regulations, such
cooperation shall include (i)delivering information and data regarding the
Launch Vehicle to PanAmSat's insurers and brokers, (ii) conducting briefings
for such insurers and brokers, (iii) responding to inquiries from such
insurers and brokers, and (iv) exercising reasonable best efforts to obtain
in a timely manner and thereafter maintain any government licenses,
approvals or other authorizations required for such cooperation...............32
ARTICLE 22-- APPLICABLE LAW...................................................32
ARTICLE 23 -- SEVERABILITY....................................................32
ARTICLE 24 -- NO WAIVER.......................................................33
ARTICLE 25 -- ENTIRE AGREEMENT................................................33
-2-
Use or disclosure of data contained on this sheet is subject to the restriction
on the title page of this Contract Document.
[***] Filed separately with the Commission pursuant to a request for
Confidential Treatment.
<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
CONTRACT FOR LAUNCH SERVICES
This Contract is made and entered into by and between Sea Launch Limited
Partnership, an exempted limited partnership organized under the laws of the
Cayman Islands acting through its General Partner, Sea Launch Company, LDC, a
Cayman Islands limited duration company (hereinafter referred to as "Sea
Launch"); and PanAmSat Corporation, (hereinafter referred to as "PanAmSat").
-3-
Use or disclosure of data contained on this sheet is subject to the restriction
on the title page of this Contract Document
<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
ARTICLE 1 -- DEFINITIONS
The terms used in the Contract shall have the meaning provided for in these
definitions:
1.1 Authorized Representatives means: (i) for PanAmSat, R. Douglas Kahn,
Robert A. Bednarek and James B. Frownfelter, and (ii) for Sea Launch,
Wilbur Trafton, W. C. White, Kjell Karlsen. A Party may change its
Authorized Representatives by written notification from an existing
Authorized Representative of such Party to the other Party.
1.2 Contract means this Contract as defined in Article 2.
1.3 Constructive Total Failure means that the operational capacity and/or
expected lifetime of the Spacecraft is reduced by more than 50% due to
the performance of the Launch Vehicle. The orbit and mass at liftoff
specified in the Statement of Work shall be used in the determination
of expected lifetime based on a three sigma Launch Vehicle performance
and a margin of a minimum of one (1) year. The Parties shall use the
Loss Formula to determine whether a Constructive Total Failure has
occurred.
1.4 Day means a calendar day unless otherwise indicated.
1.5 Effective Date means the date of last signature by an authorized
representative of Sea Launch or PanAmSat.
1.6 Home Port means the payload processing area and surrounding facilities
for the loading and unloading of the Launch Vehicle and Spacecraft on
the assembly and command ship and the launch platform.
1.7 Launch means the intentional ignition of the first stage engines of the
Launch Vehicle followed by the release of the hold-down restraints or
destruction of the Launch Vehicle.
1.8 Launch Base means the Sea Launch marine launch platform from which the
Launch will take place, as well as the assembly and command ship from
which Launch operations will be directed and monitored.
1.9 Launch Day means the calendar day within the Launch Slot established
for the Launch pursuant to the Contract.
1.10 Launch Opportunity means the availability of a position in the Sea
Launch manifest for the Launch of the Spacecraft, and is based upon
these criteria: 1) adequate time to make the necessary preparations for
the Launch; and 2) existing commitments to other Sea Launch customers.
1.11 Launch Period means a period of [********************] as established
in Article 6 during which the Launch will occur.
-4-
Use or disclosure of data contained on this sheet is subject to the restriction
on the title page of this Contract Document.
[***] Filed separately with the Commission pursuant to a request for
Confidential Treatment.
<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
1.12 Launch Schedule means the then current Launch Period or the then
current Launch Slot or Launch Day, if established.
1.13 Launch Services means the services provided by Sea Launch as defined in
Article 3.
1.14 Launch Slot means a thirty (30) day period of time within the Launch
Period during which the Launch will occur.
1.15 Launch Vehicle means the expendable launch vehicle Zenit 3SL, utilized
by Sea Launch to perform the Launch of the Spacecraft.
1.16 Launch Vehicle Performance means:
1.16.1 The environmental conditions experienced by the Spacecraft as
measured and recorded by Sea Launch via telemetry. Sea Launch
uses the measurements to ascertain compliance with the
environments agreed to by the Parties in the "Sea Launch to
Spacecraft Interface Control Document (ICD)".
1.16.2 If applicable, the functional interface between the Launch
Vehicle and the Spacecraft as measured and recorded by Sea
Launch via telemetry. Sea Launch uses such measurements to
ascertain compliance with the functional interface
requirements agreed to by the Parties in the "Sea Launch to
Spacecraft Interface Control Document (ICD)".
1.16.3 The Spacecraft injection orbit parameters as measured and
recorded by Sea Launch via telemetry. Sea Launch uses the
measurements to ascertain compliance with the injection orbit
parameters as agreed to by the Parties in the "Sea Launch to
Spacecraft Interface Control Document (ICD)".
1.17 Launch Window means a specific daily time period or periods within each
of one or more potential Launch Days during which the Launch can occur
and meet mission requirements.
1.18 Loss Formula means the formula set forth below that calculates the Loss
Factor in order to determine whether a Constructive Total Failure or
Partial Failure has occurred, and in the case of Partial Failure, to
compute the amount of the refund payable if PanAmSat has exercised a
refund option [***************************************************
***********] The Loss Formula shall be provided by PanAmSat. PanAmSat
shall provide the Loss Formula from its Launch Insurance Policy no
later than six (6) months prior to Launch. Inclusion of the formula,
definitions, and terms shall be by mutual agreement of the Parties. It
is agreed that the formula will be amended to take into consideration
PanAmSat's desire to measure Spacecraft Expected Life to be based on
the maximum attainable lifetime using the XIPS drive and a nominal
Launch Vehicle Performance such that the Expected Life will exceed the
specified life contained in the PanAmSat Spacecraft procurement
contract. It is further agreed that this provision shall be subject to
(i) calculating the Expected Life so as to minimize any loss, and (ii)
including a margin of at least one year to measure the Spacecraft's
Expected Life with the actual margin to be agreed upon by Sea Launch,
its Insurers, and PanAmSat based on the increase in predicted Expected
Life.
-5-
Use or disclosure of data contained on this sheet is subject to the restriction
on the title page of this Contract Document.
[***] Filed separately with the Commission pursuant to a request for
Confidential Treatment.
<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
1.19 New Spacecraft Type means any Spacecraft bus type that is not a Prior
Spacecraft Type as of the date that PanAmSat designates or selects a
Spacecraft type.
1.20 Option Launch means the ability of PanAmSat to order from Sea Launch an
additional Launch to be performed under the same provisions as the
Launch Services under this Contract.
1.21 Partial Failure means that the operational capacity and/or expected
lifetime of the Spacecraft is reduced by more than 20% but less than or
equal to 50% due to performance of the Launch Vehicle. The orbit and
mass at liftoff specified in the Statement of Work shall be used in the
determination of expected lifetime based on a three sigma Launch
Vehicle Performance and a margin of a minimum of one (1) year. The
Parties shall use the Loss Formula to determine whether a Partial
Failure has occurred, and to compute the amount of the refund payable
if PanAmSat has exercised a refund option [***************************
*************************************]
1.22 [**********************************************************************
***********************************************************************
***********************************************************************
***********************************************************************
****]
1.23 Party or Parties means Sea Launch or PanAmSat or both depending on the
context.
1.24 Payload means the Spacecraft supplied by PanAmSat to be launched on the
Launch Vehicle.
1.25 Postlaunch Services means the reports and range services as defined in
the Statement of Work that are to be provided by Sea Launch to PanAmSat
after Launch.
1.26 Prior Spacecraft Type shall mean a Spacecraft bus type (e.g., HS-601
HP, HS-702, etc.) that has been previously integrated and launched by
Sea Launch or that, as of the date that PanAmSat designates or selects
a Spacecraft, is scheduled to be integrated and launched prior to the
applicable Option Launch.
1.27 Related Third Parties means any of the following parties:
1.27.1 employees, directors, officers or agents of Sea Launch or
PanAmSat.
1.27.2 customers of Sea Launch or PanAmSat and the employees of those
customers
1.27.3 Contractors and subcontractors at any tier of Sea Launch or
PanAmSat and the employees of those contractors and
subcontractors.
-6-
Use or disclosure of data contained on this sheet is subject to the restriction
on the title page of this Contract Document.
[***] Filed separately with the Commission pursuant to a request for
Confidential Treatment.
<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
1.27.4 any party with a financial interest in Sea Launch, PanAmSat,
the Launch Vehicle, or the Payload
1.28 Spacecraft means a satellite supplied by PanAmSat for Launch by Sea
Launch pursuant to the Contract and which is compatible with the Launch
Vehicle.
1.29 Third Party means any individual or legal entity other than the Parties
or Related Third Parties.
1.30 Total Failure means that the Spacecraft was destroyed or lost,
subsequent to Launch but before separation, due to the performance of
the Launch Vehicle; or, the Spacecraft could not be separated from the
Launch Vehicle.
ARTICLE 2 -- CONTRACTUAL DOCUMENTS
2.1 This Contract shall consist of the following documents
2.1.1. General Provisions, Articles 1 through 25
2.1.2. Statement of Work
2.1.3 Interface Control Document ("ICD")
2.2 In the event of conflict the General Provisions shall have precedence
over the Statement of Work and the ICD.
2.3 The ICD shall be incorporated into this Contract upon its execution by
the Parties (or, in the case of Sea Launch, by Boeing Commercial Space
Company on behalf of Sea Launch) and by the manufacturer of the
Spacecraft. Upon such execution, the ICD shall have precedence over the
Interface Requirements Document included in the Statement of Work. Sea
Launch acknowledges that such Interface Requirements Document has been
delivered to Boeing Commercial Space Company in lieu of Sea Launch.
-7-
Use or disclosure of data contained on this sheet is subject to the restriction
on the title page of this Contract Document.
<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
ARTICLE 3 -- SERVICES TO BE PROVIDED BY SEA LAUNCH
3.1 Sea Launch shall provide Launch Services to PanAmSat in accordance with
the Statement of Work for the Launch of the Galaxy IIIC Spacecraft and
up to four (4) additional Option Launches for additional Spacecraft
provided by PanAmSat. Except for Postlaunch Services, Launch Services
provided under the Contract shall be deemed to have been completed upon
Launch.
3.2 Option Launch Services
3.2.1 Four (4) Option Launches are offered under this contract.
Option Launches shall be used for the Launch of a Prior
Spacecraft Type; provided, however, that PanAmSat shall be
entitled to designate a New Spacecraft Type for one or more
Option Launches, in which event PanAmSat shall pay to Sea
Launch, pro rata in accordance with the payment schedule in
Paragraph 5.1.2, the actual and reasonable costs of Sea Launch
for mission analysis, flight tracking and integration required
due to the differences between such New Spacecraft Type and
Prior Spacecraft Type.
3.2.2 At Contract award, PanAmSat shall pay to Sea Launch a
non-refundable deposit of [**********] for each Option Launch
that PanAmSat desires to reserve. This deposit shall
guarantee a firm Launch in the [******] period associated with
that Option Launch designated in the table in Paragraph 4.2.
PanAmSat shall not be required to exercise the Option Launches
in sequential numeric order (subject to the scheduling
requirements of Paragraphs 3.2.2 and 3.2.3), nor shall the
exercise of any Option Launch be a required condition for the
exercise of any other Option Launch. PanAmSat shall be
entitled to exercise any Option Launch for a Launch Period
other than that designated for such Option Launch in the table
in Paragraph 4.2, subject to (i) available Launch
Opportunities and (ii) price adjustment(whether increase or
decrease) equal to [***] per year, not compounded, based on
the difference between the first day of the applicable Launch
Period in Paragraph 4.2 and the new Launch Period.
3.2.3 In order to exercise an Option Launch PanAmSat shall provide
written notification to Sea Launch at least [***************]
prior to the first day of the Launch Period for that Option
Launch. On the date of Option Launch exercise by PanAmSat,
payments shall be made to Sea Launch in accordance with the
payment schedule described in Article 5 - Payments. The
initial payment made by PanAmSat to Sea Launch following
exercise of an Option Launch shall be reduced by the [*******]
deposit initially paid by PanAmSat at Contract award for that
Option Launch.
-8-
Use or disclosure of data contained on this sheet is subject to the restriction
on the title page of this Contract Document.
[***] Filed separately with the Commission pursuant to a request for
Confidential Treatment.
<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
3.2.4 [************************************************************
*************************************************************
*************************************************************
*************************************************************
*************************************************************
*************************************************************
****************************************]
ARTICLE 4 -- CONTRACT PRICE
4.1 PanAmSat shall pay to Sea Launch, as consideration for the Galaxy IIIC
Launch Services only (no Option Launches exercised), a price of
[*************], subject to adjustment as provided elsewhere in this
Contract.
4.2 If, at the time of Contract award, PanAmSat reserves by payment of the
deposit referred to in Paragraph 3.2.2 above any of the Option Launches
offered under this Contract, the price for the Galaxy IIIC Launch
Services referred to in Paragraph 4.1 shall be adjusted as set forth in
the table below, depending upon the number of Option Launches reserved
by PanAmSat
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[***************]
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[*****] [*****] [*****] [*****] [*****]
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[*************]
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[******] [****] [****] [****] [****] [****]
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[*****************************]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[***** [****** [****** [****] [****] [****] [****] [****]
*****] ******] [***] *****] [***]
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[***** [****** [****** [****] [****] [****] [****] [****]
*****] ******] [***] *****] [***]
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[***** [****** [****** [****] [****] [****] [****] [****]
*****] ******] [***] *****] [***]
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[***** [****** [****** [****] [****] [****] [****] [****]
*****] ******] [***] *****] [***]
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
-9-
Use or disclosure of data contained on this sheet is subject to the restriction
on the title page of this Contract Document.
[***] Filed separately with the Commission pursuant to a request for
Confidential Treatment.
<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
4.3 The final price paid by PanAmSat for the Galaxy IIIC Launch Services
shall be determined in relation to the number of Option Launches that
are fully exercised by PanAmSat. Should PanAmSat exercise fewer Option
Launches than reserved by payment of a deposit at the time of Contract
award, the effective price for the Galaxy IIIC Launch Services will be
changed to reflect the total number of Option Launches exercised by
PanAmSat (see table above). Any deposit(s) made by PanAmSat for any
unexercised Option Launch may be applied to the final Galaxy IIIC
Launch Services price as determined by the number of Option Launches
actually exercised.
4.4 The discount on each Option Launch is also tied to the number of Option
Launches exercised by PanAmSat. If PanAmSat exercises fewer Option
Launches than reserved at the time of Contract award, the Option Launch
prices for the applicable Launch Periods shall revert to the prices
reflected in the table above for the applicable number of Option
Launches actually exercised.
4.5 All unexercised Option Launches shall expire on [***********].
4.6 The Launch Services prices set forth in Paragraphs 4.1 and 4.2 above
include all taxes, duties and other levies imposed by the U. S.
Government and/or any political subdivisions thereof, but exclude any
taxes, duties, or other levies that may be imposed on
PanAmSat-furnished Spacecraft, support equipment, or material used in
the transportation of PanAmSat-furnished Spacecraft or support
equipment[************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
********************] Any taxes, duties, or levies imposed on any
PanAmSat-furnished Spacecraft, support equipment, or material used
in the transportation of PanAmSat-furnished Spacecraft or support
equipment, other than those taxes, duties and other levies that may be
imposed on such Spacecraft, support equipment or material that Sea
Launch has agreed in the first sentence of this Paragraph 4.6 to pay
that become the obligation of Sea Launch to pay, shall be
reimbursed to Sea Launch by PanAmSat within thirty (30) days of receipt
by PanAmSat of Sea Launch's invoice for payment with appropriate
documentation.
ARTICLE 5 -- PAYMENTS
5.1 PanAmSat shall pay the Contract Price in U.S. dollars as follows:
5.1.1 PanAmSat shall make an initial payment of [***************] of
the Contract price for the firm Galaxy IIIC Launch as set
forth in Article 4, Contract Price, as adjusted by the number
of optional launch services for which a deposit payment is
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Use or disclosure of data contained on this sheet is subject to the restriction
on the title page of this Contract Document.
[***] Filed separately with the Commission pursuant to a request for
Confidential Treatment.
<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
made by PanAmSat. PanAmSat shall also pay a [*********]
deposit for each Option Launch reserved at the time of
Contract award. The sum of these two payment amounts shall be
due within thirty (30) days of the effective date of the
Contract.
5.1.2 PanAmSat shall make the balance of the payments of the
Contract price for the firm Galaxy IIIC Launch in
[****************************************
**********************************************************]
and in accordance with the following payment schedule:
[************] [********]
[*************]
------------------------------------------------------
[****************] [***]
[******************]
[***********] [***]
[***********] [***]
[***********] [***]
[***********] [***]
[***********] [***]
[***********] [***]
[********] [***]
5.2 For payment purposes under this Article 5, "L" is defined as the first
calendar day of the Launch Schedule in effect at the time the payment
is due, determined in accordance with Article 6, Launch Schedule, and
taking into account, in accordance with Paragraph 5.6, adjustments to
the Launch Schedule resulting from postponements made by Sea Launch.
Consistent with Paragraph 5.7, Launch Schedule for purposes of this
paragraph 5.2 shall not be adjusted as a result of postponements made
by PanAmSat.
5.3 Sea Launch shall submit invoices to PanAmSat thirty (30) days in
advance of the scheduled payment due date. If a payment due date falls
on a Saturday, Sunday, or legal bank holiday, such payment shall be due
on the following business day.
5.4 Payment shall be made by electronic bank transfer, free of charge, to
the payee, in the amount specified in the invoice and pursuant to the
instructions contained in the invoice. Payment shall be deemed to have
been made when credit for the payable amount has been established in
the payee's designated bank account.
-11-
Use or disclosure of data contained on this sheet is subject to the restriction
on the title page of this Contract Document.
[***] Filed separately with the Commission pursuant to a request for
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<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
5.5 Any past due payments owed by PanAmSat shall bear interest until paid
at a rate that is equal to [******************************************
*****************][***************************************************
**********************************]
5.6. In the event of postponements requested by Sea Launch pursuant to
Paragraph 7.3 of Article 7, Launch Postponement, including
postponements requested by Sea Launch for excusable delays, the payment
schedule shown in Paragraph 5.1.2 shall not be modified as to payments
already made and due, but shall be modified on a day for day basis
consistent with the revised Launch Schedule for all remaining payments.
5.7 In the event of postponements requested by PanAmSat pursuant to
Paragraph 7.2 of Article 7, Launch Postponements, including
postponements requested by PanAmSat for excusable delays, the payment
schedule shown in Paragraph 5.1.2 shall not be adjusted.
5.8 In the event that one Party has not paid the second Party any amount
that is due and payable to the second Party under this Contract, such
second Party shall have the right to set off such amount against any
payment(s) due and payable or to become due and payable to the first
Party, provided, however, any amount being disputed under Article 20 of
this Contract shall not be considered due and payable until the dispute
is finally resolved.
5.9 No payment made under this Contract shall relieve Sea Launch of any of
its obligations under this Contract.
ARTICLE 6 -- LAUNCH SCHEDULE
6.1 The Launch of the Spacecraft shall take place during the following
Launch Period(s):
Launch Launch Period
------ -------------
Galaxy IIIC May 2001
Option Launch 1 [*************]
Option Launch 2 [*************]
Option Launch 3 [*************]
Option Launch 4 [*************]
6.2 The Launch Slot shall be determined by mutual agreement of the Parties
at least [******] [******] prior to the first day of the established
Launch Period based on the availability of Launch Opportunities. Sea
Launch shall submit a proposed Launch Slot to PanAmSat at least
[************] prior to the first day of the established Launch Period.
6.3 The Launch Day shall be determined by mutual agreement of the Parties
at least [******* *********] prior to the first day of the Launch Slot
based on the availability of Launch
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<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
Opportunities. Sea Launch shall submit a proposed Launch Day to
PanAmSat at least [**************] prior to the first day of the
Launch Slot.
6.4 The Launch Window shall be determined by mutual agreement of the
Parties no later than forty five (45) days prior to the Launch Day
based on the availability of Launch Opportunities.
6.5 [******************]
[**********************************************************************
**********************************************************************
*********************************************************************]
6.5.1 [************************************************************
******************************************************]
6.5.1.1. [***************************************************
*************************************************************
*************************************************************
*************************************************************
**************]
6.5.2. [*************************************************************
**********************************************************************
**********************************************************************
**********************]
6.5.3. [*************************************************************
**********************************************************************
**********************************************************************
******************************]
ARTICLE 7 -- LAUNCH POSTPONEMENTS
7.1 Either party shall have the right to postpone the then current Launch
Schedule in accordance with the provisions of this Article 7. The
postponing Party shall provide due notice to the other Party. For
purposes of Paragraph 7.4 of this Article 7, Launch Postponements, and
Paragraphs 14.1.2 and 14.2.2 of Article 14, Termination, the length of
a postponement will be measured from the then current Launch Schedule
at the time of postponement to the Launch Schedule proposed in
conjunction with the initial request for a change to the Launch
Schedule. For Purposes of Paragraph 7.5 of this Article 7, the length
of postponement will be measured from the then current Launch Day at
the time of postponement to the Launch Day proposed in conjunction with
the initial request for a
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<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
change to the Launch Day. Postponements under this Article 7 do not
include excusable delays as defined under Article 8.
7.2 Postponements requested by PanAmSat. [*********] prior to Launch,
PanAmSat, by written notice to Sea Launch, may request a change to the
Launch Schedule for any reason. PanAmSat must request such a change as
soon as PanAmSat has reason to believe that it will not maintain the
then current Launch Schedule. At the time of the request for such
change, PanAmSat shall propose a new Launch Schedule that it is ready
and able to maintain. Within thirty (30) days of the receipt of
PanAmSat's written request for a Launch Schedule change, Sea Launch
shall inform PanAmSat in writing if a Launch Opportunity is available
as requested or shall propose an alternative Launch Schedule as close
as possible to the Launch Schedule requested by PanAmSat. If an
alternative Launch Schedule is proposed by Sea Launch, PanAmSat shall,
within thirty (30) days of receipt of Sea Launch's proposal, either
accept the alternative Launch Schedule proposed by Sea Launch, or
propose another Launch Schedule. [*******************************
*********************************************************************
******************************************************************]
7.2.1 [************************************************************
*************************************************************
*************************************************************
*************************************************************
*************************************************************
************************************************************]
7.3 Postponements by Sea Launch. [***********] prior to Launch, Sea Launch,
by written notice to PanAmSat, may request a change to the Launch
Schedule for any reason. Sea Launch must request such a change as soon
as Sea Launch has reason to believe that it will not maintain the then
current Launch Schedule. At the time of the request for such change,
Sea Launch shall propose a new Launch Schedule that it is ready and
able to maintain. Within thirty (30) days of the receipt of Sea
Launch's written request for a Launch Schedule change, PanAmSat shall
inform Sea Launch in writing of its acceptance of the revised Launch
Schedule proposed by Sea Launch or propose a different revised Launch
Schedule.
7.4 For postponements which occur after a Launch Day has been agreed in
accordance with Article 6, Launch Schedule, postponement fees shall be
paid by the postponing Party as provided in this paragraph 7.4. [*****
**********************************************************************
**********************************************************************
**********************************************************************
**********************************************************************
********************************************************] Postponement
fees shall be deemed as liquidated damages and not as a penalty.
Postponement fees shall be the sole remedy available to the
Parties for any and all impacts associated with a postponement or
cumulative postponement of the Launch Day that [***************
**************************] No Launch postponement fees
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<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
will be assessed for excusable delays as defined under Article 8 of
this Contract [*******************************************************
*********]
7.5 In the event of a Launch delay, the schedule for payments of the
Contract price shall be determined in accordance with Article 5,
Payments.
ARTICLE 8 -- EXCUSABLE DELAYS
8.1 Neither Party shall be held responsible for delays in the performance
of its obligations caused by excusable delay, and the date on which
those obligations are to be fulfilled shall be extended for the period
of time caused by the delay. For purposes of this Contract, excusable
delay shall include, but is not limited to: acts of God; fires;
interruptions of essential services such as electricity, natural gas,
fuels and water; adverse weather or launch safety conditions that do
not permit Launch, any condition which jeopardizes the safety of the
employees of Sea Launch or PanAmSat or their subcontractors; acts
(including delay or failure to act) of any governmental authority (de
jure or de facto) (provided that the Party claiming excusable delay
shall have exercised its reasonable best efforts to obtain in a timely
manner and thereafter maintain, and shall have complied in all other
respects with its obligations hereunder regarding, required licenses,
approvals or other authorizations from any governmental authority),
embargoes, strikes or labor stoppages; wars; riots; revolutions, and
hijacking, which is beyond the reasonable control of the Party claiming
excuse, including any such event affecting a subcontractor of said
Party. Each party shall promptly notify the other Party of a potential
excusable delay event.
8.2 The inability of Sea Launch to perform due to any export control
restrictions or delays caused by or arising from assignment of this
Contract in whole or in part by PanAmSat pursuant to Article 19 shall
be an excusable delay event, provided that Sea Launch has complied with
its obligations under Paragraph 11.3.
ARTICLE 9 -- OBLIGATIONS BEFORE and AFTER LAUNCH
9.1 Each Party shall provide to the other Party the data, hardware and
services identified in the Statement of Work according to the schedules
provided therein. The data, hardware and services will be received in a
condition suitable for their intended use as defined by the
requirements of the Statement of Work. In the event that the data,
hardware or services are not received according to their schedule or
requirements, and the non-availability will affect the Launch Schedule,
the following procedure shall apply.
9.2 The Party receiving or failing to receive the data, hardware or
services shall promptly provide written notification to the other Party
of the non-availability of the data, hardware or services, including a
statement of the discrepancy and recommended solutions. The Party
receiving the notification shall provide written direction to the other
Party on how to proceed,
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<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
considering the recommendations of the other Party, within seven (7)
days of the receipt of notice.
9.3 The Party receiving or failing to receive the data, hardware or
services shall use its best efforts to continue its obligations under
the Contract without affecting the Launch Schedule. If, despite the
best efforts of the receiving Party, the Launch Schedule is affected as
a result of the failure of one Party to deliver the data, hardware or
services in accordance with the schedule or requirements of the
Statement of Work, a launch postponement shall be declared by the
receiving Party and such delay shall be considered a delay under the
appropriate provisions of Article 7, by the Party providing or failing
to provide the data, hardware or services.
9.4 The Parties recognize that Sea Launch has no ability to alter the
performance or in any way to correct any defect in the Launch Vehicle
after Launch. An agreement by PanAmSat to conduct the Launch, given at
the final Launch readiness review, shall constitute a waiver by
PanAmSat of any claim that the Launch Vehicle or Launch Services do not
meet the requirements of the Statement of Work, or that the Launch
Vehicle or Launch Services are not otherwise suitable for their
intended purpose. Except for Postlaunch Services, the sole liability or
obligation of Sea Launch for performance subsequent to Launch is to
provide a reflight or refund in accordance with Article 12, Option for
Reflight or Refund, if such election has been made by PanAmSat prior to
Launch, or to provide a replacement Launch in accordance with Article
13, Replacement Launch. [*********************************************
************************************************************]
ARTICLE 10 -- COMMUNICATION and COORDINATION BETWEEN SEA LAUNCH and PANAMSAT
10.1 All notices and communications between the Parties relating to
financial, contractual or administrative matters of the Contract that
are required or permitted under the Contract, in order to be given
effect, shall be in writing and shall be deemed received upon actual
receipt when delivered in person or by reputable overnight delivery
service or upon acknowledgement of receipt (electronically or
otherwise) if sent by facsimile (or, if acknowledged electronically
after normal business hours, then upon the next succeeding commencement
of normal business hours), addressed as listed below.
Notices to Sea Launch: Sea Launch Company, LDC
Windward I, Safehaven Corporate Center,
West Bay Road
P.O. Box 10168 APO
Grand Cayman
Cayman Islands, British West Indies
Fax (345) 945-8388
Attention: W. C. White
Director of Contracts
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<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
Notices to PanAmSat: PanAmSat Corporation
1500 Hughes Way
Long Beach, California 90810
Fax (310) 525-5806
Attention: Associate General Counsel
With a copy to: PanAmSat Corporation
One Pickwick Plaza
Greenwich, CT 06830
Fax (203) 861-8677
Attention: James B. Frownfelter
Vice President, Space Systems
10.2 Each Party shall designate a Mission Manager no later than one (1)
month after the effective date of the Contract. The task of the Mission
Managers shall be to supervise and coordinate the respective
responsibilities of the Parties. The Mission Managers are not
authorized to direct work contrary to the requirements of the Contract
or to make modifications to the Contract. Each Party may replace its
Mission Manager provided the other Party has received notification in
writing of such action. Sea Launch shall appoint as its Mission Manager
a "U.S. Person" (as such term is defined by 22 C.F.R. ss.120.15)
employed by Boeing Commercial Space Company. Subject to Paragraph 11.1,
PanAmSat shall deliver, or cause the manufacturer of the Spacecraft to
deliver, all technical information and data required under this
Contract to such Mission Manager appointed by Sea Launch.
10.3 All documentation, notices, reports and correspondence under the
Contract shall be submitted and maintained in the English language. All
communication at the Home Port and Launch Base between the Parties and
with Related Third Parties and between the personnel of the Parties or
Related Third Parties shall be in English. The Parties shall mutually
agree upon standards for transliteration and translation of non-English
information.
ARTICLE 11 -- PERMITS AND APPROVALS
11.1 Sea Launch shall be responsible for obtaining and maintaining all U.S.
governmental licenses or authorizations necessary for the performance
of the Launch Services, except that PanAmSat shall be responsible for
obtaining: (1) any license required for radio telecommunication with
the Spacecraft after separation from the Launch Vehicle and (2) any
license or approval required between PanAmSat and a foreign entity in
the event that PanAmSat chooses to procure a Spacecraft from a foreign
manufacturer for an Option Launch, including any agreement or approval
necessary to authorize the re-transfer of foreign-origin technical data
related to the Spacecraft to Boeing Commercial Space Company or Sea
Launch. PanAmSat also shall be responsible to obtain or ensure that its
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SEA LAUNCH AND PANAMSAT PROPRIETARY
Spacecraft manufacturer has obtained all necessary licenses and
approvals required to import the Spacecraft into the United States, if
necessary, or export the Spacecraft to support a Launch in
international waters. It is understood between the Parties that no
license or approval is required for PanAmSat to provide U.S.-origin
technical data and assistance related to the Spacecraft as required by
the Statement of Work or ICD to Boeing Commercial Space Company, as
Mission Manager for Sea Launch under Paragraph 10.2. Each Party agrees
to assist and support the other Party to the extent practicable, in
obtaining such licenses, permits, approvals, and authorizations.
11.2 US GOVERNMENT EXPORT CONTROL: All requirements or obligations of Sea
Launch and PanAmSat under this Contract to provide information,
documentation, or other materials, or to respond to questions or
requests for information may be subject to US export control laws,
regulations and policies and US Government approvals. Inability of
either Party to obtain such approvals, or delays in the timely delivery
of any data or information required under this Contract due to the US
Government approval process, shall not affect either Party's rights
under this Contract, provided, in the case of a Party that is unable to
obtain such an approval, that such Party has complied with its
obligations under Paragraph 11.3.
11.3 Both Parties warrant that they will exercise reasonable best efforts to
obtain and maintain thereafter all necessary licenses/approvals in
order to comply with all requirements and obligations under this
Contract to provide such information or materials and respond to
questions or requests for information
ARTICLE 12 -- OPTION FOR REFLIGHT OR REFUND
12.1 The Launch Service Price provides for one Launch and does not obligate
Sea Launch to provide a reflight or refund in the event that the Launch
is a Total Failure, Constructive Total Failure or Partial Failure.
However, up to [**********] prior to the established Launch Day,
PanAmSat may, by written notice to Sea Launch, elect to purchase from
or through Sea Launch reflight or refund insurance coverage for any
Launch to be provided by Sea Launch. The reflight or refund coverage
applies only to the Launch for which such coverage is elected and is
not transferable to any other Launch. Reflight coverage is applicable
to a Total Failure or a Constructive Total Failure; [*****************
**********************************************************] refund
coverage is applicable to a Total Failure, Constructive Total Failure,
or a Partial Failure.
12.2 The following conditions will apply to the election of reflight or
refund coverage:
12.2.1 Rates for such coverage are [*****] of the Contract Price
provided for in Article 4 for reflight and [*****] of the
Contract Price provided for in Article 4 for refund.
12.2.1.1 PanAmSat may exercise the option for reflight or
refund coverage, at the firm rate stated in
Paragraph 12.2.1, by providing written notice to
Sea Launch no later than [************] prior to
the established Launch
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<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
Day. PanAmSat is not required to pay Sea Launch
for reflight or refund insurance until PanAmSat
exercises this insurance option in accordance with
the terms of this Article.
12.2.1.2 Upon receipt by Sea Launch of written notice from
PanAmSat of its exercise of the optional reflight
or refund coverage, Sea Launch shall submit a
separate invoice to PanAmSat for the insurance
premium which shall be due and payable in
accordance with Article 5, Payments, Paragraph 5.3;
provided that PanAmSat shall be required to pay Sea
Launch no earlier than Sea Launch is required to
pay the premium for such coverage to its insurers.
12.2.2 If the reflight or refund coverage is exercised and the Launch
is declared a Total Failure or Constructive Total Failure, Sea
Launch shall provide to PanAmSat either: (i) one (1) reflight,
if PanAmSat elected reflight coverage, or (ii) a refund of the
full price of the Launch set forth in Article 4, Contract
Price, if PanAmSat elected refund coverage. If the Launch is
declared a Partial Failure, Sea Launch shall provide to
PanAmSat [*****************************************
********************] a refund based on the Loss Formula
multiplied by the refund amount, if PanAmSat elected refund
coverage.
12.2.3 Sea Launch shall provide a reflight [*********************] of
the receipt by Sea Launch of PanAmSat's request for a
reflight, subject to Paragraph 12.2.5 in the case of a New
Spacecraft Type. The Parties will negotiate in good faith a
mutually acceptable Launch Period for the reflight.
12.2.4 The reflight, if requested, will be governed by the terms and
conditions of the Contract, except that the provisions of this
Article, Article 4, Contract Price, and Article 5, Payment,
will not apply.
12.2.5 Spacecraft selected by PanAmSat for the reflight shall be a
Prior Spacecraft Type; provided, however, that PanAmSat shall
pay Sea Launch its actual and reasonable costs of performing
any mission analysis materially different from that for the
failed Spacecraft, [******************]; provided further,
that PanAmSat shall be entitled to designate a New Spacecraft
Type for a reflight, in which event (i) PanAmSat shall pay to
Sea Launch its actual and reasonable costs for interface and
integration of such New Spacecraft Type and the Launch Vehicle
and (ii) the Parties shall negotiate in good faith a Launch
Schedule for such reflight due to additional time required for
such interface and integration work. Any amounts payable by
PanAmSat under this Paragraph 12.2.5 shall be due and payable
pro rata in accordance with the payment schedule in Paragraph
5.1.2.
12.2.6 Coverage for either reflight or refund shall attach upon
Launch and will terminate upon either a Total Failure or
separation of the Spacecraft from the Launch Vehicle. Damage
to the Spacecraft caused by the Launch Vehicle following
separation shall be deemed to have occurred prior to
separation.
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SEA LAUNCH AND PANAMSAT PROPRIETARY
12.2.7 PanAmSat will at all times act with due diligence and take all
actions practical and reasonable to avoid or minimize any loss
or degradation of lifetime or operational capacity of the
Spacecraft.
12.2.8 PanAmSat shall respond to any and all written inquiries and
requests by Sea Launch for information relating to Spacecraft
design, testing, or quality control. Prior to the Launch,
PanAmSat shall provide to Sea Launch all material information,
including but not limited to Spacecraft specifications,
operating conditions, and performance parameters. If, at any
time before Launch, a corporate officer of PanAmSat or
PanAmSat's Program Manager become aware of any changes thereto
made after award of the Contract that could materially affect
the risk of Total Failure, Constructive Total Failure, or
Partial Failure; PanAmSat shall promptly notify Sea Launch of
such change. Upon receipt of such notice, Sea Launch shall
have the right to review all of the terms and conditions of
this Article with PanAmSat, and to the extent the Parties
mutually agree in good faith that the change results in a
material change in risk of Total Failure, Constructive Total
Failure or Partial Failure, to renegotiate the affected terms
of this Article.
12.2.9 In the event that PanAmSat believes that the Spacecraft has
been destroyed, disabled, or impaired so as to constitute a
Total Failure, Constructive Total Failure, or Partial Failure
and that it is entitled to either a reflight,
[*****************] or refund, PanAmSat shall provide written
notice to Sea Launch as soon as possible, and in no event
later than thirty (30) days after PanAmSat has become aware of
such occurrence. Notwithstanding the foregoing, PanAmSat shall
submit a sworn proof of loss or impairment no later than
one-hundred-and-eighty (180) days following the Launch. If
PanAmSat does not provide Sea Launch with such proof of loss
or impairment within one hundred and eighty (180) days of
Launch, Sea Launch has no further obligation under this
Article 12. Refunds will be paid in U. S. currency
seventy-five (75) days after the proof of loss has been agreed
to by the Sea Launch Insurers. Sea Launch Insurers shall be
required to respond within thirty (30) days of receipt of
proof of loss.
12.2.10 In the event that a reflight, [*******************] or refund
is provided to PanAmSat and due to subsequent events, the
anticipated degradation of the lifetime or operational
capacity of the Spacecraft is reduced or eliminated, PanAmSat
will return to Sea Launch an amount equal to the reflight
amount [*** *****************************] or the Launch
Service Price for the failed Launch, or the amount equal to a
proportional refund. Reasonable sums expended by PanAmSat to
reduce the loss shall be deducted from the amount to be
returned to Sea Launch.
12.2.11 In the event the Launch is declared a Total Failure, or a
Constructive Total Failure, and a reflight or refund is
provided by Sea Launch, Sea Launch shall be entitled to share
in any proceeds realized from the operation of the impaired
Spacecraft or of any salvage value from the Spacecraft up to
the amount of the reflight or refund. In the event the Launch
is declared a Partial Failure and a [*****************] refund
is provided by Sea Launch, Sea Launch shall be entitled to
share in any proceeds from the portion of the affected
Spacecraft for which such [*******
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<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
**********] refund was provided. Sea Launch's share of
proceeds under this Paragraph 12.2.11 shall be determined
after good faith negotiations between the Parties and shall be
capped at the amount of such reflight, [******************] or
refund.
12.3 This reflight/refund coverage does not apply to loss or damage caused
by or resulting from:
12.3.1 War, hostile or warlike action in time of peace or war,
including action in hindering, combating or defending against
an actual, impending or expected attack by: (i) any government
or sovereign power (de jure or de facto); (ii) any authority
maintaining or using a military, naval, or air force; (iii) a
military, naval, or air force; (iv) any agent or any such
government, power authority or force.
12.3.2 Any anti-satellite device, or device employing atomic or
nuclear fission and/or fusion, or device employing laser or
directed energy beams.
12.3.3 Insurrection, strikes, riots, civil commotion, rebellion,
revolution, civil war, usurpation, or action taken by a
government authority in hindering, combating or defending
against such an occurrence, whether there be a declaration of
war or not.
12.3.4 Confiscation by order of any government or governmental
authority or agent (whether secret or otherwise) or public
authority.
12.3.5 Nuclear reaction, nuclear radiation, or radioactive
contamination of any nature, whether such loss or damage be
direct or indirect, except for radiation naturally occurring
in the space environment.
12.3.6 Willful or intentional acts of PanAmSat personnel (except for
the Range Safety Officer acting within the limits of his or
her responsibility) designed to cause loss or failure of a
Launch; however, this exclusion shall not apply to actions of
any PanAmSat employee while acting outside of his or her
authorized responsibilities.
12.4 The determination of whether a Total Failure, a Constructive Total
Failure, or a Partial Failure has occurred shall rest with the failure
review board.
12.4.1 The failure review board shall consist of people appointed by
Sea Launch who have sufficient technical expertise to assess
the alleged failure and its cause. PanAmSat may have
representation on the failure review board [*****************
*************************************************]
12.5. The remedies set forth in this Article 12, and in Article 13, if
applicable, shall constitute the sole and exclusive remedies of
PanAmSat for Total Failure, Constructive Total Failure, or Partial
Failure.
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<PAGE>
SEA LAUNCH AND PANAMSAT PROPRIETARY
ARTICLE 13 -- REPLACEMENT LAUNCH
13.1 PanAmSat may request a replacement launch in the event of a Total
Failure, Constructive Total Failure or Partial Failure.
13.2 A request by PanAmSat for a replacement launch shall be in writing and
received by Sea Launch [************************] after the
determination of a Total Failure, Constructive Total Failure or
Partial Failure. The request shall indicate the Launch Period desired
for the replacement launch.
13.3 Sea Launch shall inform PanAmSat, after receipt of PanAmSat's request,
if a Launch Opportunity exists as requested. If a Launch Opportunity
does not exist as requested, the Parties will negotiate in good faith a
mutually acceptable Launch Period. Sea Launch shall provide a
replacement launch within [****************] of the receipt of
PanAmSat's written request for a replacement launch, subject to
Paragraph 13.5 in the case of a New Spacecraft Type.
13.4 Any agreement reached by the Parties on a replacement launch shall be
in writing. The replacement launch shall be provided in accordance with
the terms and conditions of the Contract.
13.5 The Spacecraft selected by PanAmSat for the replacement launch shall be
a Prior Spacecraft Type; provided, however, that PanAmSat shall pay to
Sea Launch its actual and reasonable costs of performing any mission
analysis materially different from that for the failed Spacecraft,
[*******************] provided, further, that PanAmSat shall be
entitled to designate a New Spacecraft Type for a replacement launch,
in which event (i) PanAmSat shall pay to Sea Launch its actual and
reasonable costs for interface and integration of such New Spacecraft
Type and the Launch Vehicle, and (ii) the Parties shall negotiate in
good faith a Launch Schedule for such replacement launch due to
additional time required for such interface and integration work. Any
amounts payable by PanAmSat under this Paragraph 13.5 shall be due and
payable pro rata in accordance with the payment schedule for such
replacement launch.
13.6 PanAmSat shall pay Sea Launch the same price for the replacement launch
as paid for the Launch declared a Total Failure, Constructive Total
Failure or Partial Failure, subject to escalation at a rate of
[***********************] calculated from the first day of the Launch
Period established at the time of Contract award to the first day of
the Launch Period agreed upon by the Parties in accordance with
Paragraph 13.3. [*****************************************************
**********************************************************************
******************************************************************]
13.7 Payment for the replacement launch shall be made by PanAmSat in
accordance with the payment schedule set forth in Article 5, Payments.
The initial payment shall be made by PanAmSat at the time of the
written agreement on the Launch Period of the replacement launch in
accordance with Paragraph 13.3. The initial payment shall include all
sums necessary to make the payments current.
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SEA LAUNCH AND PANAMSAT PROPRIETARY
13.8. The remedies set forth in this Article 13, and in Article 12, if
applicable, shall constitute the sole and exclusive remedies of
PanAmSat for Total Failure, Constructive Total Failure, or Partial
Failure.
ARTICLE 14 -- TERMINATION
14.1 Termination by PanAmSat
14.1.1 PanAmSat, for its convenience, may terminate the
Contract or any Launch under the Contract at any time prior to
Launch by written notice to Sea Launch. In the event of such a
termination, Sea Launch shall be entitled to retain, as a
termination charge and not as a penalty, [******************
*************************************************************
*********** Within thirty (30) days of the date of the
termination, Sea Launch shall refund to PanAmSat the balance
of all payments made for the Launch terminated in excess of
the termination charge.
14.1.2 PanAmSat, by proper written notice to Sea Launch, may
terminate a Launch for cause if Sea Launch, for reasons other
than excusable delay or PanAmSat's changes or postponements,
has delayed or postponed a given Launch by more than
[*************]. PanAmSat's right to terminate under this
paragraph is conditioned upon receipt of written notification
from Sea Launch of a Launch postponement or cumulative
postponements for any given Launch exceeding [**********] or
upon the occurrence of a Launch delay or delays by Sea Launch
which exceed [*********] Upon such termination for cause, Sea
Launch shall refund to PanAmSat all payments theretofore
received by Sea Launch for the terminated Launch, and pay any
unpaid postponement fees assessed in accordance with Paragraph
7.4. Only the Launch delayed or postponed by Sea Launch may be
terminated by PanAmSat under this paragraph.
14.1.3 If PanAmSat brings any claim for material breach prior to
Launch, other than for a Launch delay, the exclusive remedy of
PanAmSat shall be termination of the Contract and refund of an
amount up to the total of all payments made for every Launch
subject to termination.
14.1.4 The exclusive rights and remedies of PanAmSat subsequent to
Launch are limited to a reflight or a refund if such coverage
has been elected in accordance with Article 12, Option for
Reflight or Refund, or a replacement launch in accordance with
Article 13, Replacement Launch.
14.1.5 The rights and remedies of PanAmSat provided in this Contract
shall be the exclusive remedies of PanAmSat in the event of a
delay, default or breach by Sea Launch of this Contract.
14.2 Termination by Sea Launch
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SEA LAUNCH AND PANAMSAT PROPRIETARY
14.2.1 Sea Launch may terminate a Launch Service in the event that
PanAmSat fails to comply with the payment obligations
specified in Article 5, Payments. In no event shall the
effective date of termination by Sea Launch under this
Paragraph be earlier than sixty (60) days after the due date
of any payment made; provided, however, that the Launch
Service shall not be terminated in the event that PanAmSat
makes payment in full to Sea Launch (or, in the event of
disputed amounts, into escrow in accordance with Paragraph
20.2) of such past due amounts prior to the effective date of
termination. Only the Launch Service for which payments are
delinquent may be terminated under this Paragraph. In the
event of such termination, Sea Launch shall retain or receive
as a termination charge and not as a penalty,
[************************************************************
*********************************************] Within thirty
(30) days of the date of the termination, Sea Launch will
refund to PanAmSat the balance of all payments made for the
Launch terminated in excess of the termination charge.
14.2.2 Sea Launch, by proper written notice to PanAmSat, may
terminate a Launch for cause if PanAmSat, for reasons other
than Launch Schedule or Payload changes under Paragraphs 14.5
and 14.6, excusable delay or Sea Launch's changes or
postponements, has delayed or postponed a given Launch
pursuant to Paragraph 7.2 by more than [***********] Sea
Launch's right to terminate under this paragraph is
conditioned upon receipt of written notification from PanAmSat
of a Launch postponement or cumulative postponements for any
given Launch pursuant to Paragraph 7.2 exceeding
[***************], or upon the occurrence of a Launch delay or
delays by PanAmSat pursuant to Paragraph 7.2 which exceed
[***************] In the event of such termination for cause,
Sea Launch shall be entitled to retain, as a termination
charge and not as a penalty, [*******************************
*************************************************************
*****************************************] Only the Launch
delayed or postponed may be terminated under this Paragraph.
14.3 Any termination for default or breach under this Article must be
preceded by thirty (30) days written notification that specifies the
default or breach and the intent to terminate in the event that the
default or breach is not or cannot be cured within thirty (30) days of
such notice.
14.4 Both Parties agree that the settlement terms specified in this Article
represent fair compensation for both Parties, and shall constitute the
exclusive rights and remedies available to the Parties in the event of
termination by either Party.
14.5 [*********************************************************************
*********]
14.5.1 [************************************************************
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14.5.2 [************************************************************
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*************************************************************
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*************************************************************
*************************************************************
*************************************************************
*************************************************************
***********************************]
14.5.3 [************************************************************
*************************************************************
*************************************************************
*************************************************************
*************************************************************
***************]
14.6 [*****************************************************]
14.6.1 [************************************************************
*************************************************************
*************************************************************
*************************************************************
*************************************************************
*************************************************************
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********************]
14.6.2 [************************************************************
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*************]
ARTICLE 15 -- RISK ALLOCATION
15.1 Waiver of Liability
15.1.1 Sea Launch and PanAmSat agree to a reciprocal waiver of
liability pursuant to which each Party agrees not to bring a
claim in arbitration or otherwise or to sue the other Party
or Related Third Parties of the other Party, for any property
damage
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SEA LAUNCH AND PANAMSAT PROPRIETARY
or loss it sustains or for any personal injury to, death of,
or property damage or loss sustained by any of its employees,
directors, officers and agents, arising in any manner in
connection with the performance of or activities carried out
pursuant to the Contract, or other activities on or around the
Home Port or Launch Base, or the operation or performance of
the Launch Vehicle or the Spacecraft. Such waiver of liability
shall also extend to any indirect, special, incidental or
consequential damages or loss of revenue or business injury or
loss resulting from any delay in the Launch Schedule, damage
to the Spacecraft before or after Launch, or from the failure
of the Spacecraft to reach its planned orbit or to operate
properly.
15.1.2 Each Party agrees to waive claims against the other Party
regardless of whether the loss, damage, or injury arises from
the acts or omissions, of either Party or its Related Third
Parties. Except as provided in Paragraph 15.1.5, this waiver
shall extend to all theories of recovery including claims in
contract for property loss or damage, tort, negligence, strict
liability or product liability.
15.1.3 Sea Launch and PanAmSat shall each extend the waiver and
release of claims of liability as provided in Paragraphs
15.1.1 and 15.1.2 to its Related Third Parties (other than
employees, officers or directors) by requiring them to waive
and release all claims of liability they may have against the
other Party and the Related Third Parties of the other Party.
15.1.4 The waiver and release by each Party and its Related Third
Parties of claims against the other Party and the Related
Third Parties of the other Party extend to the successors and
assigns, whether by subrogation or otherwise, of the Party and
its Related Third Parties. Each Party shall obtain a waiver of
subrogation and release of any right of recovery against the
other Party and its Related Third Parties from any insurer
providing coverage for the risks of loss for which the Party
hereby waives claims of liability against the other Party and
its Related Third Parties.
15.1.5 Notwithstanding anything herein to the contrary, the waivers
of liability in this Article shall not act to waive any claim
for liability based on gross negligence or willful misconduct
of a Party.
15.2 Indemnification -Property Loss and Damage and Bodily Injury
15.2.1 To the extent that such liability is not covered by an
insurance policy of either Party, each Party agrees to defend,
hold harmless and indemnify the other Party and its Related
Third Parties, for any liabilities, costs and expenses
(including attorneys' fees, cost and expenses), arising as a
result of claims brought by Related Third Parties of the
indemnifying Party, for property loss or damage, or bodily
injury, including death, sustained by such Related Third
Parties, arising in any manner in connection with the
performance of or activities carried out pursuant to the
Contract, or other activities on or around the Home Port or
Launch Base, or the
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operation or performance of the Launch Vehicle or the
Spacecraft. Such indemnification shall extend to any indirect,
special, incidental or consequential damage or loss of revenue
or business injury or loss resulting from any delay in the
Launch Schedule, damage to the Spacecraft before or after
Launch, or from the failure of the Spacecraft to reach its
planned orbit or to operate properly.
15.2.2 To the extent that such claims of liability are not covered by
insurance of either Party, Sea Launch shall defend, hold
harmless and indemnify PanAmSat and its Related Third Parties
for any and all claims of Third Parties, for property loss or
damage, or bodily injury, including death, arising in any
manner from the operation or performance of the Launch
Vehicle.
15.2.3 To the extent that such claims of liability are not covered by
insurance of either Party, PanAmSat shall defend, hold
harmless and indemnify Sea Launch and its Related Third
Parties for any and all claims of Third Parties, for property
loss or damage, or bodily injury, including death, arising in
any manner from the operation or performance of the Spacecraft
or from any claim for indirect damages, consequential damages
or other loss of revenue or business injury or loss resulting
from any loss of or damage to the Spacecraft before or after
Launch, or from the failure of the Spacecraft to reach its
planned orbit or operate properly.
15.2.4 Notwithstanding Paragraphs 15.2.2 and 15.2.3 above, Sea Launch
shall not be obligated to defend, hold harmless or indemnify
PanAmSat for any claim brought by a Third Party against
PanAmSat resulting from any damage to or loss of the
Spacecraft, whether sustained before or after Launch, and
whether due to the operation, performance, non-performance or
failure of the Launch Vehicle or due to any other causes.
PanAmSat shall defend, hold harmless and indemnify Sea Launch
for any claims brought by Third Parties against Sea Launch for
damage to or loss of the Spacecraft, whether sustained before
or after Launch, or whether due to the operation, performance,
non-performance or failure of the Launch Vehicle, or due to
other causes.
15.2.5 The indemnification provided by this Article for property loss
or damage, or bodily injury, extends to all damage or injury
regardless of whether such loss, damage or injury arises from
the acts or omissions, whether due to simple negligence
(active or passive) or otherwise, but expressly excludes gross
negligence and willful misconduct, of either Party or the
Related Third Parties of either Party.
15.2.6 The right of either Party or Related Third Parties to
indemnification under this Article is not subject to
subrogation or assignment and the obligation of either Party
set forth herein to indemnify the other Party or Related Third
Parties extends only to that Party or those Related Third
Parties and not to others who may claim through them by
subrogation or assignment.
15.3 Indemnification by the United States Government
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SEA LAUNCH AND PANAMSAT PROPRIETARY
15.3.1 The Parties recognize that under the Commercial Space Launch
Act Amendments of 1988, and subject thereto, that to the
extent provided in advance in appropriation Acts or to the
extent there is enacted additional legislative authority to
provide for the payment of claims, the Secretary of
Transportation shall provide for the payment by the United
States Government of successful claims (including reasonable
expenses of litigation or settlement) of a third party against
Sea Launch, or its contractors, subcontractors, or customers,
or the contractors or subcontractor of such customers,
resulting from activities carried out pursuant to a license
issued or transferred under the Act for death, bodily injury,
or loss of or damage to property resulting from activities
carried out under the license, but only to the extent that the
aggregate of such successful claims arising out of any
particular launch-
(A) Is in excess of the amount of insurance or demonstration
of financial responsibilities required by the Secretary of
Transportation; and
(B) Is not in excess of the level that is $1,500,000,000 (plus
any additional sums necessary to reflect inflation occurring
after January 1, 1989) above such amount.
15.3.2 Sea Launch makes no representation, nor provides any warranty,
that payment of claims by the United States Government will be
available pursuant to the Commercial Space Launch Act. The
sole obligation of Sea Launch is to make a good faith effort
to obtain such payment as may be available from the United
States Government.
15.3.3 PanAmSat shall execute and deliver an Agreement for Waiver of
Claims and Assumption of Responsibility, which is required by
the U.S. Department of Transportation as a condition of
granting Sea Launch permission to Launch. In the event of any
inconsistency between any provision in this Article and the
Agreement for Waiver of Claims and Assumption of
Responsibility, such Agreement shall be construed and
interpreted so as to be made consistent with this Article.
15.4 Indemnification - Intellectual Property Infringement
15.4.1 Sea Launch agrees to defend, hold harmless and indemnify
PanAmSat and its Related Third Parties from and against any
liability, cost, risk, loss, damage, or injury, or any
consequences thereof, resulting from an infringement or a
claim for infringement of the patent right or any other
intellectual property rights of a Third Party or a Related
Third Party of Sea Launch which may arise from the provision
of Launch Services by Sea Launch.
15.4.2 PanAmSat agrees to defend, hold harmless and indemnify Sea
Launch and its related Third Parties from and against any
liability, cost, risk, loss, damage, or injury, or any
consequences thereof, resulting from an infringement or a
claim for infringement of the patent right or any other
intellectual property right of a Third Party or a Related
Third Party of PanAmSat which may arise from the design,
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SEA LAUNCH AND PANAMSAT PROPRIETARY
manufacture, installation of the Payload in the Launch
Vehicle, Launch or operation of the Spacecraft (excluding any
infringement or claim for infringement for which Sea Launch is
required to defend, hold harmless and indemnify PanAmSat
pursuant to Paragraph 15.4.1).
15.5 Rights and Obligations
15.5.1 The rights to indemnification specified in Paragraphs 15.2 and
15.4 shall be subject to the following conditions.
15.5.2 The Party seeking indemnification shall promptly advise the
other Party in writing of the filing of any suit, or of any
written or oral claim alleging an infringement of any right of
a Related Third Party or a Third Party, upon receipt thereof,
and shall provide the indemnitor, at the indemnitor's request
and expense, with copies of all relevant documentation.
15.5.3 The Party seeking indemnification shall not make any admission
nor shall it reach a compromise or settlement without the
prior written approval of the other Party, which approval
shall not be unreasonably withheld or delayed.
15.5.4 The Party required to defend, indemnify and hold the other
harmless shall assist in and shall have the right to assume,
when not contrary to the governing rules of procedure, the
defense of any claim or suit or settlement thereof, and shall
pay all reasonable litigation and administrative costs and
expenses, including attorney fees, incurred in connection with
the defense of any such suit, shall satisfy any judgments
rendered by a court of competent jurisdiction in such suits
and shall make all settlement expenses.
15.5.5 The Party indemnified may participate in any defense at its
own expense, using counsel reasonably acceptable to the Party
required to indemnify, provided that there is no conflict of
interest and that such participation does not otherwise
adversely affect the conduct of the proceedings.
15.6 Third Party Liability Insurance.
15.6.1 Sea Launch shall maintain third party liability insurance in
the amount specified by the Secretary of Transportation to
provide for the payment of claims by Third Parties for death
or bodily injury or for loss of or damage to property they may
sustain, and any consequences thereof, resulting from, or
arising in connection with, the performance of the Contract.
Such Third Party liability insurance shall cover Sea Launch
and PanAmSat, and the Related Third Parties of Sea Launch and
PanAmSat.
15.6.2 The third party liability insurance coverage shall attach upon
the time the Spacecraft is under the care, custody and control
of Sea Launch at the Home Port or Launch Base and shall
terminate upon return of all parts of the Launch Vehicle
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SEA LAUNCH AND PANAMSAT PROPRIETARY
to Earth, or twelve (12) months after Launch, whichever is
earlier. If the Spacecraft is removed from the Home Port or
Launch Base for reasons other than to conduct the Launch, the
third party liability coverage shall terminate upon removal of
the Spacecraft from the Home Port or Launch Base.
15.6.3 The third party liability insurance obtained pursuant to this
Article shall not cover loss of or damage to the Spacecraft
even if a claim is brought by a Third Party or Related Third
Party.
ARTICLE 16 -- PROPRIETARY DATA
16.1 The Parties recognize that technical information may be disclosed by
one Party to the other Party in the course of performance under the
Contract and that the disclosing Party may desire to protect such
information against unrestricted use or disclosure to others. To
provide protection for such information, each Party agrees to respect
such information and, to the extent it includes proprietary data, to
handle such information as provided for in this Article.
16.2 For the purpose of this Contract, the term "proprietary data" means
each Party's proprietary, secret, or confidential information, data,
processes, and physical materials, including information originated by,
or available only from the disclosing Party and information originating
with a Third Party with respect to which the disclosing Party has
limited disclosure rights, and which the disclosing Party desires to
protect against unrestricted disclosure to others, provided that such
information, data, processes, and physical materials are marked
"proprietary data" or with an equivalent legend.
16.3 A Party receiving proprietary data shall take all reasonable
precautions to prevent publication or disclosure of proprietary data to
others, and shall use such data only for the purpose of performance
under the Contract. Any other use of such proprietary data shall be
made only upon prior written consent of the disclosing Party. Each
Party agrees to protect the other Party's proprietary data with the
same degree of care as it protects its own proprietary data, and to
restrict disclosures of such proprietary data to those persons and
subcontractors having a need to know the data.
16.4 The aforementioned restrictions on the use and disclosure of
proprietary data shall not apply if the proprietary data:
16.4.1 Is in the public domain at the time of receipt or comes into
public domain thereafter through no act of the receiving Party that is
inconsistent with the aforementioned restrictions;
16.4.2 Known to the receiving Party prior to disclosure by the
disclosing Party;
16.4.3 Disclosed with the prior written approval of the disclosing
Party;
16.4.4 Independently developed by the receiving Party; or
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SEA LAUNCH AND PANAMSAT PROPRIETARY
16.4.5 Lawfully disclosed to the receiving Party by a Third Party under
conditions permitting such disclosure.
16.5 Upon termination or upon completion of performance under the Contract,
and upon the request of one Party, the other Party shall return all
proprietary data (including any copies thereof) received from that
Party, or provide written certification that such proprietary data has
been destroyed, except that either Party may retain a legal file copy.
16.6 Neither Party assumes any liability to the other Party for damages
arising from the use of or reliance upon any information disclosed
pursuant to this Article 16, except as provided elsewhere herein.
ARTICLE 17 -- RIGHTS TO INVENTIONS AND DATA
17.1 Sea Launch and PanAmSat agree that neither Party shall by entry into
the Contract or by performance of the Contract, acquire any rights to
or under the other Party's patents, proprietary data, or other
intellectual property or technical information, unless the grant of any
such right is expressly provided for in a separate written agreement
duly executed by the granting Party.
ARTICLE 18 -- CHANGES
18.1 The Contract shall be modified only upon mutual consent and such
modification shall be made in writing and shall be signed on behalf of
both Parties by their Authorized Representatives.
18.2 PanAmSat may at any time, by a written notice to Sea Launch, request
changes within the general scope of this Contract. If any such change
causes an increase or decrease in the cost of, or the time required
for, the performance of any part of the work under this Contract, an
equitable adjustment, to be negotiated in good faith between the
parties, shall be made in the price, delivery schedule, or other terms
affected by the requested change, and the Contract shall be modified in
writing accordingly. Any claim by Sea Launch for an adjustment must be
made in writing within thirty (30) days of the receipt of any such
notice. Nothing in this Article 18 shall excuse Sea Launch from
proceeding without delay to perform this Contract as changed.
18.3 Sea Launch shall have the right to recommend changes within the general
scope of this Contract. Sea Launch shall submit any such changes to
PanAmSat in writing and PanAmSat shall accept or reject such change in
its sole discretion. PanAmSat shall respond to any such change proposed
by Sea Launch promptly but in no event later than
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SEA LAUNCH AND PANAMSAT PROPRIETARY
forty-five (45) days after the date on which Sea Launch submitted the
proposed change. Subject to Paragraph 18.5, Sea Launch shall not
proceed with any change under this Article until an amendment to this
Contract is executed by both parties authorizing the change and making
the corresponding adjustments to the work and/or the terms of this
Contract necessitated by the change.
18.4 Launch Service(s) postponements by PanAmSat or Sea Launch shall be
resolved in accordance with the applicable provisions of Article 7,
Paragraph 14.5 and Paragraph 14.6 of this Contract.
18.5 In the event that, in connection with a change pursuant to Paragraph
18.2 or 18.3, the Parties agree on work to be done but not the
resulting adjustment (if any) to price and/or schedule, then the
Parties shall proceed with performance of their respective obligations
as modified by such change, and shall resolve the adjustment (if any)
to price and/or schedule in accordance with Article 20.
ARTICLE 19 -- ASSIGNMENT
19.1 The Parties agree not to assign their respective rights or obligations
under the Contract without the prior written consent of the other
Party; provided that PanAmSat may assign its rights and obligations
regarding one or more Launch Services to a PanAmSat Affiliate. Any such
assignment shall be mutually agreed to and consent to Assign shall not
be unreasonably withheld by the other Party. For purposes of this
Article 19, "PanAmSat Affiliate" shall include (i) any entity
controlled by PanAmSat and (ii) any joint venture or similar entity in
which PanAmSat owns or agrees to acquire an equity interest.
ARTICLE 20 -- DISPUTE SETTLEMENT
20.1 The Parties shall endeavor to reach an amicable settlement of any
dispute or controversy resulting from, or arising in connection with,
the performance of this Contract. Prior to filing any legal action, a
dispute or controversy shall be referred to the respective Presidents
of Sea Launch and PanAmSat, who shall use their best efforts to reach a
settlement acceptable to both Parties.
20.2 In the event of any dispute as to payment or price, no amount shall be
deemed unpaid if PanAmSat shall have paid such amount into an escrow
account pending resolution of such dispute. Upon such resolution, the
Party entitled to such amount shall receive such amount together with
all accrued interest thereon, and the other Party shall pay all costs
and fees associated with such escrow account.
ARTICLE 21 - COOPERATION ON INSURANCE
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SEA LAUNCH AND PANAMSAT PROPRIETARY
21.1 Sea Launch shall cooperate in good faith with PanAmSat's efforts to
obtain and maintain launch insurance for Spacecraft launched under this
Contract. Subject to U. S. Export Control laws and regulations, such
cooperation shall include (i) delivering information and data regarding
the Launch Vehicle to PanAmSat's insurers and brokers, (ii) conducting
briefings for such insurers and brokers, (iii) responding to inquiries
from such insurers and brokers, and (iv) exercising reasonable best
efforts to obtain in a timely manner and thereafter maintain any
government licenses, approvals or other authorizations required for
such cooperation.
ARTICLE 22-- APPLICABLE LAW
22.1 The Contract and any matter arising under the Contract, regardless of
whether such matter is addressed in the Contract, shall be governed by
the laws of the state of California, USA, excluding its choice of law
rules.
ARTICLE 23 -- SEVERABILITY
23.1 In the event any of the provisions of the Contract shall, for any
reason whatsoever, be held to be invalid or unenforceable, the
remaining provisions shall not be affected.
ARTICLE 24 -- NO WAIVER
24.1 No waiver of any of the provisions of the Contract shall be binding on
either Party unless evidenced by a written notice signed by the Party
to be bound. Failure of either Party to insist upon performance of any
of the terms or conditions herein or to exercise any right or privilege
shall not constitute a waiver. A waiver by either Party of a breach of
any provision of this contract does not constitute a waiver of any
succeeding breach of the same or any other provision, nor shall it
constitute a waiver of the provision itself.
ARTICLE 25 -- ENTIRE AGREEMENT
25.1 The Contractual Documents referred to in Article 2 comprise the entire
understanding between the Parties with respect to the subject matter of
the Contract and shall supersede all prior and contemporaneous
discussions between the Parties. Neither Party shall be bound by any
conditions, warranties, definitions, statements, or documents previous
to the Contract unless the Contract makes express reference thereto.
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SEA LAUNCH AND PANAMSAT PROPRIETARY
IN WITNESS WHEREOF, the Parties hereto have executed the Contract as of the day
and year stated:
PanAmSat Corporation Sea Launch Limited Partnership acting
through its General Partner,
Sea Launch Company, LDC
By /s/ Robert A. Bednarek By /s/ W. C. White
-------------------------- -----------------------
Title E.V.P. and C.T.O. Title Director of Contracts
--------------------- -----------------------
Date March 15, 2000 Date February 2, 2000
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