SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
December 4, 1997
Date of Report (Date of earliest event reported)
AMERICAN MOBILE SATELLITE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-23044 93-0976127
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
10802 Parkridge Boulevard, Reston, Virginia 20191-5416
(Address of principal executive offices) (Zip Code)
(703) 758-6000
(Registrant's telephone number, including area code)
<PAGE>
In addition to historical information, this Current Report on Form 8-K contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The
forward-looking statements contained herein are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
reflected in the forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which reflect management's
analysis only as of the date hereof. The Company undertakes no obligation to
publicly revise these forward-looking statements to reflect events or
circumstances that arise after the date hereof. Readers should carefully review
the risk factors described in other documents the Company files from time to
time with the Securities and Exchange Commission, including the Form 10-K annual
Report and For 10-Q Quarterly Reports filed by the Company prior to this Form
8-K, any Form 10-Q or Form 10-K filed subsequent to this Current Report on Form
8-K, and any other Current Report on Form 8-K filed by the Company.
Item 5. Other Events
On December 4, 1997, the Company entered into two simultaneous
transactions. The Company agreed with TMI Communications and Company, Limited
Partnership ("TMI"), to acquire a one-half ownership interest in TMI's satellite
(the "Shared Satellite", also known as "MSAT-1") at a cost of $60 million
payable in equal installments over a five-year period (the "Satellite Purchase
Agreement"); certain additional payments to TMI are contemplated in the event
that additional benefits are realized by the Company as a result of the
contemplated transactions. Under the Satellite Purchase Agreement, TMI and AMSC
will each own a 50% undivided ownership interest in the Shared Satellite, will
be jointly responsible for the operation of the Shared Satellite, and will share
certain satellite operating expenses, but will otherwise maintain their separate
business operations.
The Shared Satellite, originally designed to have substantially the
same capabilities as the Company's existing satellite ("MSAT-2"), would be
deployed to cover substantially the same territory currently served by MSAT-2.
The Company would have the right to use one-half of the available satellite
capacity on the Shared Satellite, with a right to purchase excess capacity from
TMI on the other half of the Shared Satellite at prices substantially similar to
those in effect under the Company's existing Satellite Capacity Agreement with
TMI (the "Satellite Capacity Agreement"); TMI would have the same right to
purchase excess capacity from the Company on its half of the Shared Satellite,
on the same financial terms. The Satellite Purchase Agreement provides that the
Satellite Capacity Agreement would be suspended upon the Company's purchase of
its one-half interest in the Shared Satellite, but would again become effective
in the event the Satellite Purchase Agreement is terminated. As previously
disclosed, the Satellite Capacity Agreement between the Company and TMI provides
for backup, restoral and excess capacity arrangements between the Company and
TMI under certain circumstances where both the Shared Satellite and MSAT-2 are
operational over North America.
<PAGE>
Simultaneously, the Company entered into an agreement (the "Satellite
Lease Agreement") with African Continental Telecommunications Ltd. ("ACTEL"),
for lease of MSAT-2, for deployment over sub-Saharan Africa. The five-year lease
provides annual lease payments to the Company of $38 million per year; the lease
includes a renewal option through the end of the life of MSAT-2, on the same
lease terms, at ACTEL's election exercisable 2 1/2 years prior to the end of the
initial lease term.
Closing under the Satellite Purchase Agreement and Satellite Lease
Agreement is subject to a number of conditions, including: United States and
Canadian regulatory approvals; a successful financing by ACTEL of at least
$120,000,000; completion of certain satellite testing, inversion and relocation
activities with respect to MSAT-2, to support the contemplated services over
Africa; receipt of various Gibraltar, South African and other legal requirements
to support satellite relocation, including with respect to orbital slot and
spectrum coordination; and completion of certain system development activities
sufficient to support satellite redeployment. It is anticipated that the closing
under both agreements will occur simultaneously in the spring of 1998.
Upon the closing, the Company will own its half interest in the Shared
Satellite, subject to the possibility of default in the event of a failure to
make the required annual purchase price payments and operational cost sharing
payments for tracking, telemetry and control services ("TT&C") to TMI. The TT&C
services, required to maintain and operate the Shared Satellite, are to be
provided by Telesat Canada, a company affiliated with TMI.
If consummated, the transactions are expected to increase substantially
the Company's revenues, without anticipated impact to the Company's ability to
serve and grow its subscribers based on expected capacity available on the
Shared Satellite (including excess TMI capacity available to the Company for
purchase). As has been previously reported with respect to MSAT-2, the Shared
Satellite has experienced certain anomalies in the past and is subject to the
same power management recommendations as currently in effect for MSAT-2. While
there can be no assurances of future performance, the Company believes that the
performance capabilities of the Shared Satellite equal those of MSAT-2.
The Satellite Purchase Agreement and Satellite Lease Agreement are
separate transactions and reflect separate sets of obligations for the Company.
As a result, it is possible, under certain circumstances, that the Company would
remain obligated to make or continue payments under the Satellite Purchase
Agreement to TMI, without receipt from ACTEL of anticipated payments under the
Satellite Lease Agreement, either because of the failure by the Company to
satisfy certain of its obligations to TMI which are not obligations of ACTEL, by
virtue of a default by ACTEL or as a result of a disparate application of a
condition or provision between the TMI and ACTEL agreements. There can be no
assurances that the agreements will operate in parallel, or that the Company
will not be met with certain completion or transactional risks under the
Satellite Lease Agreement. The Company has, however, included a number of
provisions in each of the two agreements to mitigate these risks. While there
can be no assurances, the Company believes that the significant financial
benefits to be achieved through consummation of the transactions offset
potential risks of an adverse impact to the Company resulting from the
transactions.
<PAGE>
SIGNATURES
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 hereunto duly authorized.
AMERICAN MOBILE SATELLITE CORPORATION
(Registrant)
Date: December 8, 1997 /s/RANDY S. SEGAL
Randy S. Segal
Secretary
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit
10.62 -- Satellite Lease Agreement for the AMSC-1 Satellite, dated as of
December 2, 1997, By and Among AMSC Subsidiary Corporation,
American Mobile Satellite Corporation and African Continental
Telecommunications Ltd. (filed herewith).
10.63 -- Satellite Purchase Agreement, dated as of December 2, 1997, By
and Among TMI Communications and Company, Limited Partnership and
AMSC Subsidiary Corporation and American Mobile Satellite
Corporation (filed herewith).
99.14 -- American Mobile Satellite Corporation Press Release No. 97-#22
dated December 4, 1997 (filed herewith).
99.15 -- American Mobile Satellite Corporation Press Release No. 97-#23
dated December 4, 1997 (filed herewith).
<PAGE>
EXHIBIT 10.62
SATELLITE LEASE AGREEMENT
for the AMSC-1 Satellite
By and Among
AMSC Subsidiary Corporation,
American Mobile Satellite Corporation
and
African Continental Telecommunications Ltd.
December 2, 1997
<PAGE>
Table of Contents
Page
----
1 Satellite Lease Agreement
-- General Terms ...........................................
1.1 Satellite Lease Agreement ...........................
1.2 Term ................................................
(a) Initial Lease Term ..............................
(b) Renewal .........................................
1.3 Payments From Lessee.................................
(a) Lease Payments During Lease Term.........................
(b) Initial Payment..........................................
(c) Post-Offering Payment....................................
(d) Initial AMSC Payment Expenses............................
(e) Treatment of Initial Payment, Post-Offering Payment
and Initial AMSC Payment Expenses.....................
(f) Manner of Payment........................................
(g) Late Payment.............................................
(h) Taxes
1.4 Return or Retirement of Satellite Upon Expiration of
Lease Term or Termination of Lease ...............
2 Steps To Be Taken Before Relocation of Satellite.............
2.1 Relocation of Satellite .............................
2.2 In-Orbit Insurance ..................................
2.3 Lessee to Secure TT&C Facilities and
Service to Receive and Operate Satellite .........
3 Obligations and Covenants of Lessee .........................
3.1 Enabling the Satellite to Continue to
Occupy Relocated Orbital Position ................
3.2 Notice of Problems Involving Satellite...............
3.3 Use of Fully-Qualified Personnel.....................
3.4 Satellite Operation: Compliance With Specified Operating
Procedures and Applicable Legal Requirements .....
3.5 TT&C.................................................
3.6 Frequency Coordination...............................
3.7 Safe Operation.......................................
i
<PAGE>
3.8 Reporting............................................
3.9 Government Approvals For Use of Satellite, Etc.......
3.10 Additional Guarantees...............................
3.11 Cooperation and Support in Obtaining and
Maintaining Insurance.............................
3.12 Additional Financial Obligations and Covenants......
(a) Delivery of Business Plan.......................
(b) Delivery of Financial Information...............
(c) Actions Requiring Approval of Lessor During Start-Up.
(d) Other Actions Requiring Approval of Lessor......
(e) Resolution of Disputes..........................
(f) Escrow of Securities............................
(g) Definitions.....................................
4 Other Rights and Obligations of Lessor.......................
4.1 Rights...............................................
(a) Inspection......................................
(b) Action to Protect Satellite.....................
(c) Testing.........................................
4.2 Certain Responsibilities of Lessor...................
(a) Documentation...................................
(b) Performance Tests...............................
(c) U.S. and Canadian Government Approvals
For Relocation and Export of the Satellite..
(d) Timing of Delivery of Satellite.................
5 Termination Rights; Effect of Termination; Lease Continuation.
5.1 Lessee's Right to Terminate in
Certain Circumstances..............................
5.2 Lessor's Right to Terminate in
Certain Circumstances..............................
5.3 Lessor's Right to Terminate in
Certain Additional Circumstances...................
5.4 Lessor's and Lessee's Rights to Terminate
in Event of Total Loss or Constructive Total Loss .
5.5 Lessor's Right to Terminate If Lessee's TT&C
Contract Is Not In Place...........................
5.6 Lease Continuation in Less Than Total or
Constructive Total Loss............................
6 Events of Default; Remedies..................................
(a) Events of Default........................................
(b) Remedies.................................................
ii
<PAGE>
7 Limitation of Liability and Indemnification .................
7.1 Limitation on Lessor's Liability.....................
7.2 Lessee's Indemnification of Lessor...................
7.3 No Consequential, Etc. Damages.......................
7.4 Employees of Lessor..................................
8 Subordination and Assignment ................................
8.1 Security Interests and Secured Parties...............
8.2 Lessor's Right To Assign.............................
8.3 Lessee Assignment....................................
9 Guarantee of Lessee's Obligations ...........................
10 Representations and Warranties of AMSC and AMSC Parent.......
10.1 AMSC................................................
10.2 AMSC Parent.........................................
11 No Warranties and Representations Relating to the Satellite .
11.1 No Warranties......................................
12 Representations and Warranties of Lessee.....................
12.1 Lessee..............................................
13 General Provisions ..........................................
13.1 Binding Effect......................................
13.2 Third-Party Rights; Relationship of Parties.........
13.3 Notices.............................................
13.4 Waiver of Breach/Remedies...........................
13.5 Applicable Law......................................
13.6 Dispute Resolution..................................
13.7 Counterparts and Formal Date........................
13.8 Captions............................................
13.9 Entire Understanding................................
13.10 Dollar Amounts.....................................
13.11 Lessee's Payment Obligations.......................
13.12 Guarantee of Lessor's Obligations..................
13.13 Technical Operations Committee.....................
13.14 Lease Characterization.............................
iii
<PAGE>
Exhibits
Exhibit A: Certain Defined Terms
Exhibit B: Form of Certificate of Lessee [and Guarantor]
Exhibit C: Form of Guarantee
Exhibit D: Choice of Law Agreement
Schedules
Schedule 1.3 Wire Transfer Instructions of the Lessor
Schedule 2.1 Satellite Relocation, Acceptance and Test Plan
Schedule 2.3 Lessee's TT&C Facilities and Services
Schedule 3.8 Reporting Schedule
Schedule 3.12 Officers and Directors Placing Securities in Escrow
Schedule 5.1 and 5.2 Government Approvals and Consents to Relocate
the Satellite and Consummate the Lease Transactions
Schedule 10.1 AMSC Consents
Schedule 10.2 AMSC Parent Consents
Schedule 12.1(d) Lessee Consents
Schedule 12.1(e) Founders and Their Ownership Interests
iv
<PAGE>
SATELLITE LEASE AGREEMENT
This SATELLITE LEASE AGREEMENT ("Lease") is made as of the 2nd day of
December, 1997, by and among AMSC Subsidiary Corporation, a corporation
incorporated under the laws of Delaware, with offices located at 10802 Parkridge
Boulevard, Reston, Virginia 20191-5416 ("AMSC" or "Lessor"); American Mobile
Satellite Corporation, a Delaware corporation ("AMSC Parent"); and African
Continental Telecommunications Ltd., a Gibraltar
company ("Lessee").
Capitalized terms used in this Lease and not defined elsewhere in this
Lease shall have the meanings set forth in Exhibit A.
---------
RECITALS:
1. AMSC is the owner and operator of the Satellite known as "AMSC-1" or
"MSAT-2," which is currently located in geosynchronous orbit at 101(degree) West
Longitude.
2. The Lessee wishes to lease the Satellite from the Lessor and relocate
it to the Relocated Orbital Position.
3. The Lessor is entering into a Purchase Agreement (the "Purchase
Agreement") with TMI Communications and Company, Limited Partnership ("TMI")
pursuant to which the Lessor will purchase a one-half undivided interest in
TMI's satellite and transfer all telecommunications traffic on the Satellite to
the TMI Satellite on or prior to the relocation of the Satellite to the
Relocated Orbital Position.
4. The parties are entering into this Lease to set forth their
agreement as to the terms and conditions upon which the Lessee shall lease the
Satellite from the Lessor.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Satellite Lease Agreement
-- General Terms
-------------------------
1.1 Satellite Lease Agreement. Subject to the terms and conditions of
-------------------------
this Lease, the Lessor shall lease the Satellite to the Lessee.
<PAGE>
1.2 Term
----
(a) Initial Lease Term. The initial term of the Lease (the "Initial
------------------
Lease Term") shall commence on the Start Date and shall terminate on the fifth
anniversary of the Start Date, unless this Lease is earlier terminated pursuant
to Section 5.
(b) Renewal. By written notice given no later than the date which
-------
is two years and one hundred eighty-three days after the Start Date (and
provided this Lease has not earlier been terminated pursuant to Section 5), the
Lessee shall have the right to extend the term of the Lease to the End of
Life of the Satellite (the "Renewal Term"), provided that there is not as of the
giving of such written notice an Event of Default, and there is not as of the
end of the Initial Lease Term an Event of Default. The Renewal Term shall be
governed by all of the same terms and conditions of this Lease. "Lease Term"
shall mean the Initial Term and, if extended as provided herein, the Renewal
Term.
1.3 Payments From Lessee
--------------------
1.3.1(a) Lease Payments During Lease Term. In consideration of the
--------------------------------
lease of the Satellite to the Lessee during the Initial Term, the Lessee shall
pay the Lessor an aggregate of One Hundred Ninety Million Dollars ($190,000,000)
consisting of annual Lease payments of Thirty-Eight Million Dollars
($38,000,000) (net of all taxes, assessments, charges, levies or duties as
provided in Section 1.3(h) of this Lease). Lease payments shall be deemed to
include payments owed to AMSC as consideration for the license of intellectual
property and software owned by AMSC and licensed to the Lessee pursuant to the
separate License Agreement being entered into simultaneously herewith.
1.3.1(b) Initial Payment. On the Satellite Contract Date, the
----------------
Lessee shall pay the initial Seven Million Five Hundred Thousand Dollar
($7,500,000) portion of the Initial Payment to the Lessor, and no later than the
date forty-five (45) days after the Satellite Contract Date, the Lessee shall
pay the remaining Two Million Five Hundred Thousand Dollar ($2,500,000) portion
of the Initial Payment to the Lessor.
1.3.1(c) Post-Offering Payment. Within ten (10) days after
-----------------------
successful completion of the Offering, the Lessee shall make the Post-Offering
Payment to the Lessor.
1.3.1(d) Initial AMSC Payment Expenses. On the Start Date, the
-------------------------------
Lessee shall pay to AMSC an amount equal to the Initial AMSC Payment Expenses
that the Lessee has theretofore directed to be made by the Lessor, as presented
in writing to the Lessee by AMSC, with such reasonable backup documentation as
may be reasonably requested by the Lessee.
<PAGE>
1.3.1(e) Treatment of Initial Payment, Post-Offering Payment
and Initial AMSC Payment Expenses
---------------------------------------------------
(i) Except to the extent another disposition of such amounts
is provided for in this Lease, the Initial Payment and the Post-Offering Payment
shall be applied against and up to the amount of future lease payments in
reverse order from the end of the Lease Term as they are owed pursuant to this
Lease (if the renewal option referred to in Section 1.2(b) is exercised, the
Initial Payment and the Post-Offering Payment shall be applied to the last year
of the Renewal Term).
(ii) The Initial Payment, the Post-Offering Payment and the
Initial AMSC Payment Expenses shall be the property of the Lessor and are
nonrefundable except as provided in Section 5 of this Lease.
1.3.1(f) Manner of Payment. Lease payments shall be due and
-------------------
payable to the Lessor quarterly in arrears on the last day of March, June,
September and December during the Lease Term. The initial quarterly Lease
payment and the final quarterly Lease payment shall be prorated as appropriate
to reflect the actual number of days in that payment period, if such period is
less than a full calendar quarter. Amounts due and payable to the Lessor
pursuant to this Lease shall be paid to the Lessor's account in the United
States, or upon Lessor's direction to an account in Canada, and in the manner
provided on Schedule 1.3 or in such other manner as may be designated from time
------------
to time by the Lessor. All payments by the Lessee shall be deemed to be made
only upon receipt of collected funds.
1.3.1(g) Late Payment. Any payment due from the Lessee to the
------------
Lessor that is not received by the Lessor on the date that it is due shall be
subject to a late payment charge at a rate of one percent (1.0%) per month on
such overdue amount from the due date until it is actually received, provided
that if payment is received within five (5) days of the due date, interest shall
not be due from the Lessee as a result of the late payment.
1.3.1(h) Taxes. The Lessee shall indemnify and hold harmless the
-----
Lessor for any and all taxes, assessments, charges, levies or duties ("Taxes")
which may be asserted by any local, state or national governmental entity as a
result of the Lease other than any such Taxes imposed on the gross or net income
of the Lessor or Taxes in the nature of franchise or doing business Taxes which
would not have been imposed on the Lessor but for the activities of the Lessor,
other than in connection with the Lease, with the exception of any income taxes
imposed on the Lessor in its home jurisdiction. The Lessor shall cooperate with
the Lessee at Lessee's reasonable request to make such filings as may be
necessary or appropriate to recover taxes pursuant to this Section that can be
rebated only to the Lessor or with Lessor's assistance and upon any such rebate
to the Lessor shall pay over such rebate to the Lessee. If the Lessor is
required by law to pay or pays any such Taxes, the Lessee shall promptly
reimburse the Lessor for such payments within thirty (30) days from the date of
Lessor's invoice to the Lessee for same, provided that the Lessor shall, to the
extent reasonably practicable, give the Lessee reasonable advance notice of the
<PAGE>
Lessor's proposed payment of such Taxes and the Lessee shall have fifteen (15)
days after receipt of such notice to give the Lessor written notice that the
Lessee requests that the Lessor not pay such claim and that the Lessee shall
undertake the contest of such Taxes (with counsel subject to the Lessor's
consent, not to be unreasonably withheld, and with the Lessor having the right
to participate in such contest at its own expense) and shall indemnify the
Lessor for any Taxes or other amounts which may be due by the Lessor (including
amounts due as a result of delay in payment and contest), provided further that
the Lessee shall have no such right to require the Lessor not to pay such Taxes
and to assume control of the contest if the failure to pay the Taxes and to
contest involves any risk of criminal liability to the Lessor or other harm to
the Lessor or the Lessor's business which harm to the Lessor it is reasonably
determined may not be adequately compensated for by the payment of money
pursuant to the indemnification provided in this Section. In the event the
Lessor does business in Africa other than in connection with this Lease and
transactions related to this Lease, and as a result of which conduct business
Taxes are imposed on the Lessor, the Lessor, and not the Lessee, shall be
responsible for such Taxes. Notwithstanding the foregoing, the Lessee shall not
be required to indemnify the Lessor for Taxes that would not have been imposed
but for the gross negligence or willful misconduct of the Lessor.
1.4 Return or Retirement of Satellite
Upon Expiration of Lease Term
or Termination of Lease
---------------------------------
1.4.1(a) Upon the expiration of the Lease Term, the Lessor shall
remove the Satellite from the Relocated Orbital Position and shall, at the
option of the Lessor and, except as provided in this Lease, at Lessor's risk,
either relocate the Satellite to the Returned Orbital Position or retire the
Satellite by removing it from geostationary orbit; provided that if at the end
of the Renewal Term, if the relocation or removal of the Satellite results in a
collision to another satellite and the Lessee is not at fault, then the Lessor
shall indemnify the Lessee from any claims with respect to such damage; provided
further that in no event shall the Lessor have any liability to the Lessee, the
Lessee's customers or suppliers, or any other person related to the Lessee. The
Lessor shall have the sole right to determine whether the Satellite is to be
returned or retired, and shall use its best efforts to notify the Lessee of its
choice nine (9) months prior to the expiration of the Lease Term. The Lessee
shall be responsible for the costs associated with the removal or relocation of
the Satellite in an amount not to exceed Six Hundred Thousand Dollars
($600,000), and assuming a rate of drift no slower than one degree of longitude
per day, provided that Lessee's responsibility hereunder shall not exceed one
hundred twenty (120) days at the Lessee's expense.
2. Steps To Be Taken Before
Relocation of Satellite
------------------------
2.1 Relocation of Satellite. The relocation shall be in accordance
-----------------------
with the Satellite Relocation Plan attached to this Lease as Schedule 2.1. The
-------------
Relocation Commencement Date will begin within twenty-one (21) days after the
Satellite Relocation Date, adjusted for delays not caused by the Lessor. The
rate of drift of the Satellite shall be at no more than one degree of longitude
per day.
<PAGE>
2.2 In-Orbit Insurance.
------------------
2.2.1(a) The Lessor shall exercise reasonable commercial
efforts to obtain in-orbit insurance for the Satellite from the Start Date
(including coverage of drift and inversion) on substantially the terms of, and
at a premium rate not in excess of the premium rate under, the Lessor's in-orbit
insurance policy in effect for the Satellite as of October 4, 1997, a copy of
which shall be delivered to the Lessee in connection with the execution of this
Lease (with additional endorsements consistent with this Section 2.2 and Article
5) and in the aggregate amount of $150,000,000; provided that the Lessor may for
its own account obtain insurance in excess of such $150,000,000, and provided
further that as of the On Station Acceptance Date, the Lessor's only obligation
to the Lessee with respect to in-orbit insurance shall be to maintain insurance
in amounts for which the Lessee is to be the beneficiary (i.e., up to Fifty
Million Dollars ($50,000,000)). The Lessor shall make the Lessee the beneficiary
for one-third of the amount of such $150,000,000 (if available) of insurance,
provided that in the event that a lesser amount of insurance is available on
commercially reasonable terms (including as a result of diminished insurable
Satellite value over time), the Lessee shall be named beneficiary for one-third
of such lesser amount. In the event the Lessor determines that insurance on such
terms and such amount is unavailable, the Lessor shall not be required to insure
either its own interest or the Lessee's interest in the Satellite. The Lessee
and the Lessor shall each cooperate and take such actions as may be requested by
the other in connection with securing the insurance and complying with all
insurance policies secured. The in-orbit insurance policies shall provide that
to the extent proceeds are paid under the policies and the Lessee has breached
policy requirements or if an Event of Default under Sections 6(a)(i), (v) or
(vii) has occurred, the Lessor shall be entitled to the Lessee's interest in the
policy and proceeds thereof, which shall be paid to the Lessor, provided that in
the event of an Event of Default under Section 6(a)(i) or 6(a)(v), the Lessor
shall be entitled only to amounts owing and remaining to be owed to the Lessor
under or in connection with the remainder of the Lease.
2.2.1(b) The Lessor shall bear the premium and expenses of
insurance on the Lessee's interest.
2.3 Lessee to Secure TT&C Facilities and Service to Receive and
---------------------------------------------------------------
Operate Satellite.
- ------------------
2.3.1(a) The Lessee shall design and build TT&C facilities in
accordance with the requirements set forth on Schedule 2.3.
------------
2.3.1(b) The Lessee shall arrange to obtain TT&C Services
from a provider and pursuant to terms and conditions acceptable to the Lessor
to enable the Satellite to be received and operated at the Relocated Orbital
Position during the Lease Term.
<PAGE>
3. Obligations and Covenants of Lessee
-----------------------------------
The Lessee hereby agrees and covenants with the Lessor that the Lessee
shall faithfully and diligently perform, at the Lessee's sole cost and expense,
each of the covenants set forth in this Lease, including without limitation,
those set forth in this Section 3.
3.1 Enabling the Satellite to Continue to Occupy Relocated Orbital
-------------------------------------------------------------------
Position. The Lessee shall satisfy all Applicable Legal Requirements (other than
- --------
FCC and Canadian government approvals and any other Applicable Legal
Requirements that the Lessor is responsible for satisfying) to enable the
Satellite to occupy and operate from the Relocated Orbital Position throughout
the Lease Term, and shall provide the Lessor with quarterly status reports and
evidence as to the Lessee's satisfaction of such obligation promptly at the end
of each calendar quarter during the Lease Term.
3.2 Notice of Problems Involving Satellite. Throughout the Lease Term,
--------------------------------------
the Lessee shall as promptly as practicable provide written notice to the Lessor
of any performance problems or anomalies with respect to the Satellite of which
the Lessee is aware.
3.3 Use of Fully-Qualified Personnel. Throughout the Lease Term, the
----------------------------------
Lessee shall permit only fully-qualified personnel to operate the Satellite or
be involved in communications to or from the Satellite; for this purpose,
"fully-qualified personnel" shall be deemed to be those personnel with
substantially the level and quality of experience and background, and in
substantially equivalent numbers, as are employed or under contract in like
activities on behalf of the Lessor with respect to the Satellite on the date
hereof and including, without limitation, Telesat personnel.
3.4 Satellite Operation: Compliance With Specified Operating Procedures
-------------------------------------------------------------------
and Applicable Legal Requirements. Throughout the Lease Term, the Lessee shall
- ----------------------------------
operate the Satellite and install, operate and maintain in good working order
ground facilities and equipment for transmitting signals to, and receiving
signals from, the Satellite ("Lessee-Provided Facilities") in compliance with
all applicable Satellite operating procedures and operational limitations, if
any, issued by the Satellite's manufacturer and/or subcontractors, as well as
Applicable Legal Requirements now or hereafter existing or arising and pursuant
to such additional requirements as may be reasonably directed by the Lessor to
ensure the health and safe operation of the Satellite.
3.5 TT&C
----
3.5.1(a) Throughout the Lease Term, the Lessee shall maintain or
cause to be maintained TT&C facilities from which to control the operation of
the Satellite and provide or cause to be provided TT&C Services for the
Satellite that are of a quality and level consistent with satellite industry
standards, and consistent with the terms and requirements set forth in this
Lease.
<PAGE>
3.5.1(b) Without limiting the obligation of the Lessee as set out
in Section 3.5(a) above, the Lessee acknowledges and agrees that the Lessor may
at any time, and from time to time, when the Lessor determines, through action
of an executive officer of the Lessor, that, absent such intervention, a
reasonable fully-qualified person would determine that it is necessary or
appropriate for the health or safe operation of the Satellite, when an Event of
Default has occurred or when this Lease has otherwise terminated, assume control
for directing the activities of the TT&C Services provider under the TT&C
Services contract with respect to the Satellite, without incurring liability of
any kind to the Lessee, except for the Lessor's gross negligence or willful
misconduct, it being agreed that actions taken under the direction of an
executive officer of the Lessor will not constitute gross negligence. Except in
situations involving the health or safety of the Satellite or an Event of
Default, Lessor shall endeavor to minimize the adverse impact of such activities
on the Lessee's business. For this purpose, the Lessee hereby irrevocably and
unconditionally appoints and authorizes the Lessor individually as its attorney
to issue to the Lessee's TT&C Services provider (or any successor or assign of
such TT&C Services provider) any or all commands, directions and instructions,
and provide all data as is necessary or desirable for the performance of TT&C on
the Satellite. The Lessee further acknowledges and agrees to execute
simultaneously with the signing of this Lease a letter to the Lessee's TT&C
Services provider in form and substance satisfactory to the Lessor, acting
reasonably, which confirms the authority granted to the Lessor pursuant to this
Section 3.5(b). The obligation to pay the Lessee's TT&C Services provider for
TT&C Services under the TT&C Services contract (or otherwise) shall at all times
and under all circumstances remain with the Lessee.
3.6 Frequency Coordination. Throughout the Lease Term, the Lessee shall
----------------------
coordinate electromagnetic spectrum for the operation of the Satellite at the
Relocated Orbital Position and shall satisfy all Applicable Legal Requirements
and established practices and procedures for such coordination. The Lessor shall
have the right to monitor the coordination process, including the right to
attend frequency coordination meetings (which shall be at the expense of the
Lessee if, in the Lessee's reasonable judgment, such attendance is required by
Applicable Legal Requirements, but otherwise, at the expense of the Lessor). The
Lessee shall provide the Lessor with quarterly reports as to the coordination
process and shall provide evidence reasonably acceptable to the Lessor that
Applicable Legal Requirements with respect to coordination have been satisfied.
3.7 Safe Operation. Throughout the Lease Term and until such time (if
---------------
any) as the Satellite is removed from the Relocated Orbital Position, the Lessee
shall not operate or use the Satellite or any portion thereof in a manner which
would or could reasonably be expected to:
(i) damage the Satellite;
(ii) damage any other in-orbit satellite or any portion
thereof; or
(iii) interfere with the use or operation of any other
satellite or any portion thereof.
<PAGE>
3.8 Reporting. During the Lease Term, the Lessee shall provide the
---------
information described in, and on the frequency set forth in, Schedule 3.8, in
------------
such form and specificity as would be standard under similar circumstances in
the satellite industry. In addition, during the Lease Term, the Lessee shall
provide additional reports relating to any events or anomalies relating to the
Satellite as may be reasonably necessary or appropriate (i) for the Lessor to
evaluate whether performance incentive payments are due to the Satellite's
manufacturers with respect to the Satellite and to take action with respect
thereto, (ii) for securing and maintaining insurance covering the Satellite,
(iii) in connection with the Lessor's financial transactions, reporting
obligations under Applicable Legal Requirements and the preparation of
disclosure documents pursuant to Applicable Legal Requirements, (iv) to comply
with Applicable Legal Requirements, and (v) for other reasonable purposes. The
Lessor acknowledges that the Lessee shall not be responsible for performance
incentive payments due to the Satellite's manufacturer.
3.9 Government Approvals For Use of Satellite, Etc. Except as noted in
------------------------------------------------
Section 3.1 about FCC and Canadian government approvals, the Lessee, and not the
Lessor, shall have responsibility for obtaining and maintaining all necessary
approvals of governmental entities and international organizations to use the
Satellite, including but not limited to rights to the Relocated Orbital
Position, securing rights to use the coordinated L-band and Ku-band frequencies
suitable for the Satellite, and all approvals needed to operate the TT&C
facilities and provide the TT&C Services contemplated to be provided by the
Lessee by this Lease. The Lessor shall cooperate with the Lessee in all
reasonable respects in Lessee's efforts to secure and maintain such approvals.
3.10 Additional Guarantees. If, in the opinion of the Lessor, the
----------------------
additional financial assurances of one or more parents or subsidiaries of the
Lessee are reasonably required, then upon the request of the Lessor, the Lessee
shall obtain a written guarantee, substantially in the form of the guarantee
referred to in Section 9 of this Lease, from such parents and/or subsidiaries.
3.11 Cooperation and Support in Obtaining and Maintaining Insurance.
----------------------------------------------------------------
The Lessee shall cooperate with the Lessor in the process of obtaining and
maintaining insurance relating to the Satellite, including in-orbit insurance.
The Lessee shall provide the Lessor access to all technical information and
reports it may have, or may obtain, from Lessee's own technical staff or outside
contractors which may reasonably be required in order to obtain and maintain
insurance on the most beneficial terms to the Lessor or the Lessee. The Lessee
shall also provide the Lessor reasonable access to its satellite technical staff
or outside contractors for purposes of insurance presentations or claim
prosecution.
3.12 Additional Financial Obligations and Covenants
----------------------------------------------
The Lessee hereby agrees and covenants with the Lessor that it shall
faithfully and diligently perform, at its cost and expense, each of the
covenants set forth in this Section 3.12.
<PAGE>
3.12.1(a) Delivery of Business Plan. The Lessee shall deliver to
---------------------------
the Lessor on or prior to the date hereof, a copy of the Lessee's final business
plan, which shall address the business of the Lessee and affiliates through the
end of the Initial Lease Term (the "Business Plan");
3.12.1(b) Delivery of Financial Information. The Lessee shall
------------------------------------
deliver to the Lessor:
(i) Within 120 days of the end of each fiscal year of
the Lessee, the Lessee's annual audited consolidated financial
statements, showing the consolidated financial condition and
results of operations of the Lessee and its Subsidiaries for such
fiscal year, prepared in accordance with GAAP and accompanied by an
unqualified opinion thereon by a firm of independent certified
public accountants;
(ii) Within 45 days of the end of each half year of the
Lessee's fiscal year, the unaudited consolidated financial
statements of the Lessee showing the consolidated financial
condition and results of operations of the Lessee and its
Subsidiaries for such half year, together with a certificate of an
officer of the Lessee that such financial statements have been
prepared in accordance with GAAP;
(iii) Within 30 days of the end of each month, such monthly
financial reports as are ordinarily prepared for the senior
management or Boards of Directors of the Lessee showing their
consolidated financial condition and results of operations for the
preceding month;
(iv) Within 30 days of its adoption, but in any case no
later than 30 days after the start of the Lessee's fiscal year, a
copy of the annual consolidated budget of the Lessee and its
Subsidiaries for such fiscal year; and
(v) Within 10 days of their distribution to the
stockholders of the Lessee, copies of any circulars or other
documents or information that are distributed by the Lessee to its
stockholders.
3.12.1(c) Actions Requiring Approval of Lessor During Start-up.
----------------------------------------------------
Until Net Services Revenue exceeds the annual Lease payment, neither the Lessee
nor any Guarantor under Section 9 shall take any of the following actions
without the Lessor's written approval in advance, which approval shall not be
unreasonably withheld:
(i) Fund any capital expenditure in excess of Five Million
Dollars related to any Second Generation Satellite other than
through Subsequent Financing;
<PAGE>
(ii) Make an acquisition or investment with a value in
excess of Five Million Dollars in another company or business
(whether by the acquisition of stock or any other interest, or the
acquisition of assets), or otherwise enter into any business,
other than as contemplated by the Business Plan or entirely
through Subsequent Financing; or
(iii) Declare or pay any dividends.
3.12.1(d) Other Actions Requiring Approval of Lessor. During
-------------------------------------------
the Term of the Lease, neither the Lessee nor any Guarantor under Section 9
shall take any of the following actions without the Lessor's written
approval in advance, which approval shall not be unreasonably withheld:
(i) Incur any debt whose obligations would rank senior to
the payment obligations of the Lessee pursuant to the Lease; or
(ii) Sell, lease, transfer or otherwise dispose of any
assets other than in the ordinary course of business.
3.12.1(e) Resolution of Disputes. The parties to this Lease
----------------------
confirm that, in the event of a dispute over the applicability of Sections
3.12(c) or (d), including the need for and reasonableness of Lessor approval,
the expedited arbitration procedures of Section 13.6 shall be used.
3.12.1(f) Escrow of Securities. Immediately prior to the
----------------------
Offering, the Lessee shall cause each of the officers and directors named in
Schedule 3.12, as holders of the issued and outstanding shares of the equity
- -------------
securities of the Lessee and any Guarantor, to place their respective shares of
the Lessee and any Guarantor in escrow with a financial institution and on terms
reasonably acceptable to the Lessor; provided that with respect to each of these
officers and directors:
(i) One half of their shares of such equity securities
shall be released from escrow on the Release Date; and
(ii) All of their remaining shares of such equity
securities shall be released one year after the Release Date.
(iii) It is understood that only shares issued to the
named officers and/or directors as of the Offering date will be
included in this escrow. Any shares issued subsequent to the
Offering to one of the officers or directors covered by this
clause either by purchase or pursuant to an employee stock option
plan shall not be covered by this escrow.
3.12.1(g) Definitions. For purposes of this Section 3.12, the
-----------
following terms shall have the following meanings:
"GAAP" shall mean generally accepted accounting principles
----
consistently applied in the United States.
<PAGE>
"Net Services Revenue" shall mean the amount recognized under
---------------------
GAAP as revenue earned by the Lessee from the sale of the
Satellite's services during the Lessee's preceding four fiscal
quarters, less any allowance for bad debts. Net Services Revenue as
defined herein shall exclude any revenue, income or dividends of
Lessee's service providers even if Lessee has an investment
therein.
"Release Date" shall mean the later of the Commercial Service
------------
Date or the first anniversary of the Offering.
"Second Generation Satellite" shall mean any satellite other
-----------------------------
than the Satellite that is operated by the Lessee or its
Subsidiaries or that the Lessee or its Subsidiaries intend to
operate.
"Subsequent Financing" shall mean debt or equity financing
---------------------
obtained after the Offering.
4. Other Rights and Obligations of Lessor
--------------------------------------
4.1 Rights. From the date hereof and throughout the Lease Term, the
------
Lessor shall have the following specific rights, in addition to any other rights
the Lessor may have under applicable law.
4.1.1(a) Inspection. The Lessor shall have the right, but not the
----------
obligation, to inspect all TT&C facilities and Lessee-Provided Facilities and
associated facilities and equipment which are used by the Lessee (or by a third
party under the authority of the Lessee) to transmit signals to and receive
signals from the Satellite. Such inspections shall be at the Lessor's expense,
shall be conducted during normal business hours, and shall be conducted so as
not to unreasonably interfere with Lessee's business. The Lessor shall provide
the Lessee reasonable advance notice of such inspections.
4.1.1(b) Action to Protect Satellite. Without limiting the
------------------------------
generality of Section 3.5(b) above, if circumstances occur which, in the
Lessor's reasonable judgment, pose a threat to the health or safety of the
Satellite, the Lessor shall have the right, by direction of an executive officer
of the Lessor, to take appropriate action to protect the Satellite, including
without limitation issuing binding commands, directions and instructions to
Lessee's TT&C Services provider, and to provide to such TT&C Services provider
all data as necessary to meet any performance specifications applicable to the
Satellite and/or to safeguard the health of the Satellite, without the Lessor
incurring any liability to the Lessee, except for the Lessor's gross negligence
or willful misconduct, it being agreed that actions taken under the direction of
an executive officer of the Lessor will not constitute gross negligence. To the
extent reasonably practicable, the Lessor shall provide the Lessee with prior
notice of any such action it proposes to take.
<PAGE>
4.1.1(c) Testing. Without the Lessor incurring liability to the
-------
Lessee, the Lessor shall have the right to suspend Lessee's communications with
the Satellite on such notice as is reasonable under the circumstances for
purposes of testing in connection with a failure or suspected failure of a
component or subsystem of the Satellite or in response to an order of a court or
governmental agency, or to determine the cause or source of any interference.
Except in situations involving the health or safety of the Satellite or an Event
of Default, the Lessor shall endeavor to minimize the adverse impact of such
activities on the Lessee's business.
4.2 Certain Responsibilities of Lessor.
----------------------------------
4.2.1(a) Documentation. The Lessor shall provide the Lessee with
-------------
the documentation it uses to operate the Satellite, subject to applicable export
control and other Applicable Legal Requirements, approvals for which shall be
the responsibility of the Lessor at Lessor's expense.
4.2.1(b) Performance Tests. The Lessor shall perform the North
------------------
American Performance Tests and the African Performance Tests in accordance with
the Test Plan included in Schedule 2.1 and shall provide the Lessee with a
written report of the results of such Performance Tests within fourteen (14)
days after completion of the applicable Performance Tests.
4.2.1(c) U.S. and Canadian Government Approvals For Relocation and
----------------------------------------------------------
Export of the Satellite. The Lessor, and not the Lessee, shall have
- --------------------------
responsibility for obtaining and maintaining all necessary U.S. and Canadian
government approvals (including FCC and export control approvals) for the
relocation and export of the Satellite to the Relocated Orbital Position. The
Lessee shall cooperate with the Lessor and supply such information and other
assistance as the Lessor may reasonably request in the Lessor's efforts to
obtain and maintain such approvals.
4.2.1(d) Timing of Delivery of Satellite. The Lessor shall use
---------------------------------
best efforts to deliver the Satellite to the Relocated Orbital Position within
twelve (12) to fifteen (15) months after the Start Date, such period to be
adjusted for delays not caused by the Lessor, including but not limited to
regulatory delays in securing approvals for relocation and export of the
Satellite and delays due to the Lessee's failure to perform any of its
obligations under this Lease.
5. Termination Rights; Effect of Termination; Lease Continuation
-------------------------------------------------------------
5.1 Lessee's Right to Terminate in Certain Circumstances
----------------------------------------------------
(a) The Lessee shall have the right to terminate the Lease in
the following circumstances:
(i) If the Lessor fails despite its reasonable commercial
efforts to obtain all necessary American and Canadian government
approvals or consents to relocate the Satellite or to consummate
the transactions contemplated hereby on or before March 15, 1998
(attached to this Lease at Schedule 5.1 is the Lessor's current
-------------
understanding of such approvals and consents); or
<PAGE>
(ii) By written notice given within seven (7) days
after receipt of the North American Performance Tests report
pursuant to Section 4.2(b), if the report demonstrates that the
Satellite does not meet the Minimum Performance Specifications; or
(iii) If the Lessor suffers a Bankruptcy Event on or before
the Relocation Commencement Date; or
(iv) If in-orbit insurance on the terms set forth in
Section 2.2 is not secured by the Start Date.
(b) If the Lease is terminated pursuant to Section 5.1(a)
above, the Lessor shall refund to the Lessee the difference between (i) all
Lease payments made by the Lessee, including the Initial Payment and the
Post-Offering Payment, less (x) the Initial AMSC Payment Expenses and CMIS
Expenses, (y) the unreimbursed Space Segment Expenses, and (z) $5,000,000
in the case of a termination under Section 5.1(a)(ii)-(iv), and (ii) any
insurance paid or payable to the Lessee in respect of the event giving rise to
termination of the Lease, and all Ground Segment Contracts (except for the
License Agreement in accordance with its terms) to which the Lessor is party
shall automatically and simultaneously terminate without penalty to the Lessor.
The parties acknowledge that such amount is a reasonable pre-estimate of the
damages suffered by the Lessor or the Lessee, as the case may be, in the event
of such termination, and the costs and expenses incurred by the Lessor or the
Lessee, as the case may be, in pursuing this transaction.
5.2 Lessor's Right to Terminate in Certain Circumstances
----------------------------------------------------
(a) The Lessor shall have the right to terminate the Lease in
the following circumstances:
(i) If the Lessor fails despite its reasonable commercial
efforts to obtain all necessary American government approvals or
consents to relocate or sell its interest in the Satellite or
to consummate the transactions contemplated hereby on or before
April 30, 1998 (attached to this Lease at Schedule 5.2 is the
-------------
Lessor's current understanding of such approvals and consents); or
(ii) If the Lessor fails despite its reasonable
commercial efforts to obtain all necessary Canadian and American
government approvals or consents to relocate the TMI Satellite
or to consummate the transactions contemplated by the Purchase
Agreement on or before April 30, 1998 (attached to this Lease at
Schedule 5.2 is the Lessor's current understanding of such
------------
approvals and consents); or
(iii) If there is a material adverse change in the
condition of the TMI Satellite prior to the Relocation Commencement
Date; or
(iv) Subject to clause (d) below, if in-orbit insurance on
the terms set forth in Section 2.2 is not secured by the Start
Date.
<PAGE>
(b) If the Lease is terminated pursuant to Section 5.2(a)
above, the Lessor shall refund to the Lessee the difference between (i)
all Lease payments made by the Lessee, including the Initial Payment and the
Post-Offering Payment, less the Initial AMSC Payment Expenses and CMIS
Expenses and less the unreimbursed Space Segment Expenses, and (ii) any
insurance paid or payable to Lessee from insurance maintained by the Lessor
pursuant to Section 2.2 in respect of the event giving rise to termination
of the Lease, and all Ground Segment Contracts (except for the License
Agreement in accordance with its terms) to which the Lessor is party shall
automatically and simultaneously terminate without penalty to the Lessor.
(c) At Lessee's request and expense, the Lessor shall use
commercially reasonable efforts to secure insurance of up to $15,000,000 in
favor of the Lessee to cover damages and loss associated with the ground
segment portion of its System in the event of a material adverse change in the
condition of the TMI Satellite prior to the Relocation Commencement Date.
(d) If the Lease is terminated pursuant to Section 5.2(a)(i),
(ii) or (iv) above, the Lessor agrees not to sell or lease the Satellite to
a third party for one year after such termination.
5.3 Lessor's Right to Terminate in Certain Additional Circumstances.
---------------------------------------------------------------
(a) The Lessor shall have the right to terminate the Lease in
the following circumstances:
(i) If by the date seventy-five (75) days after the date of
this Lease (A) the Lessee has not received and delivered to the
Lessor formal, written permission from the South Africa Reserve
Bank to do the Offering on the Johannesburg stock exchange or
(B) a mutually acceptable alternative Offering for which the
South Africa Reserve Bank approval is not required is not agreed
upon between the Lessee and the Lessor;
(ii) If the Offering has not closed on or before the later
of (A) June 30, 1998 and (B) the date which is seventy-five (75)
days following receipt by the Lessor of all necessary Canadian
and American government approvals to relocate the Satellite;
(iii) If the Post-Offering Payment has not been received on
or before ten (10) days after the date the Offering closes;
(iv) An Event of Default occurs and is continuing at the
time of termination on or before the Relocation Commencement Date;
(v) If the Lessee has not obtained final approval under
all Applicable Legal Requirements for the Satellite to occupy the
Relocated Orbital Position, including coordination of frequencies
for TT&C and initial operation, by April 30, 1998, provided,
however, that in the event and to the extent that a delay in
obtaining any given approval under an Applicable Legal Requirement
occurs and such delay does not, in the Lessor's reasonable
judgment, unreasonably delay the Lessee's beginning or successfully
maintaining commercial service, the Lessor shall not terminate the
Lease on the basis of such a delay; or
<PAGE>
(vi) If the Lessee does not have by June 1, 1998
TT&C facilities in Chilworth operationally complete and ready to
control the Satellite, thus ensuring that the Lessee shall be in a
position to receive and operate the Satellite upon its relocation
by the Lessor to the Relocated Orbital Position.
(b) If the Lease is terminated pursuant to Section 5.3(a)
above, the Lessor shall be entitled to retain all Lease payments, including the
Initial Payment and the Post-Offering Payment, shall retain the Initial AMSC
Payment Expenses and CMIS Expenses and all Ground Segment Contracts (except for
the License Agreement in accordance with its terms) to which the Lessor is party
shall automatically and simultaneously terminate without penalty to the Lessor.
The parties acknowledge that such amount is a reasonable pre-estimate of the
damages suffered by the Lessor or the Lessee, as the case may be, in the event
of such termination, and the costs and expenses incurred by the Lessor or the
Lessee, as the case may be, in pursuing this transaction. The Lessee may retain
all work product funded by the Initial AMSC Payment Expenses, if any, which is
not based on or derived from AMSC owned or licensed proprietary software or
other information and consistent with the terms of the License Agreement; the
Lessee shall make provision for retention of third-party work product directly
with third-party vendors following termination as and if desired.
5.4 Lessor's and Lessee's Rights to Terminate in
Event of Total Loss or Constructive Total Loss
----------------------------------------------
(a) The Lessor and the Lessee shall each individually have the
right to terminate the Lease if, after the Start Date, the Satellite suffers a
Total Loss or Constructive Total Loss.
(b) If the Lease is terminated pursuant to Section 5.4(a) above
on or after the On Station Acceptance Date, the Lessee shall be entitled,
subject to the last sentence of Section 2.2(a), to all insurance proceeds
payable to the Lessee in accordance with Section 2.2(a) under the insurance
policies in respect of such loss, and the Lessor shall retain all Lease payments
made by the Lessee through the termination date, including the Initial Payment,
the Post-Offering Payment, the Initial AMSC Payment Expenses and CMIS Expenses,
and all Ground Segment Contracts (except for the License Agreement in accordance
with its terms) to which the Lessor is party shall automatically and
simultaneously terminate without penalty to the Lessor.
(c) I the Lease is terminated pursuant to Section 5.4(a) above
before the On Station Acceptance Date, the Lessee shall be named in the in-orbit
insurance policy in Section 2.2 as an additional loss payee for such additional
amount of insurance proceeds as necessary to enable the Lessee to recover an
amount equal to all Lease payments (but excluding any Initial AMSC Payment
Expenses, CMIS Expenses or Space Segment Expenses) theretofore made.
(d) If there is a Total Loss or Constructive Total Loss of the
Satellite but the Lease is not terminated by either of the Lessor or the Lessee:
(i) The Lease and all contracts relating to the ground
segment portion of the system between the Lessor and the Lessee
shall remain in force; and
<PAGE>
(ii) The Lessor shall pay to the Lessee one-third of
all insurance proceeds paid or payable to the Lessee (with respect
to the $150,000,000 shared policy maximum, or such lesser amount
available under Section 2.2) (if any) in respect of such loss and
shall retain all Lease payments, including the Initial Payment, the
Post-Offering Payment, the Initial AMSC Payment Expenses and CMIS
Expenses; and
(iii) The Lessor and the Lessee shall enter into good
faith discussions as to any appropriate adjustment to the annual
Lease payment. If such damage or loss occurs prior to achieving
the On Station Acceptance Date at expected performance levels and
if the insurance proceeds received by the Lessee with respect to such
loss by the Lessee are not at least equal to the Lease payments
received by the Lessor to such date, then a retroactive Lease payment
adjustment for such difference shall be made, with such retroactive
adjustment to be paid to the Lessee equally over the remainder of the
Lease Term.
5.5 Lessor's Right to Terminate If Lessee's TT&C Contract
-----------------------------------------------------
Is Not in Place.
---------------
(a) The Lessor shall have the right to terminate the Lease if
the Lessee has not entered into an agreement with Telesat with respect to TT&C
services (substantially on the terms proposed by Telesat, but with the addition
of provisions relating to the Gibraltar earth station) for the on-station TT&C
operation of the Satellite over or near Africa within forty (40) days of
entering into this Lease.
(b) If the Lease is terminated pursuant to Section 5.5(a)
above, the Lessor shall refund to the Lessee all Lease payments made by
the Lessee, including the Initial Payment and the Post- Offering Payment,
less the Initial AMSC Payment Expenses, CMIS Expenses, unreimbursed Space
Segment Expenses and $1,000,000.
5.6 Lease Continuation in Less Than Total or Constructive Total Loss.
------------------------------------------------------------------
If, after the Start Date, the Satellite suffers damage or a loss of performance
(as determined under a mutually- agreed method but excluding normal in-orbit
deterioration) during the Lease Term, and if the damage or loss of performance
is not a Total Loss or Constructive Total Loss, then:
(i) the Lease, the Service Contract and the License
Agreement shall remain in force;
(ii) the Lessor shall pay to the Lessee one-third of
all insurance proceeds paid or payable to the Lessee (with respect
to the $150,000,000 shared policy maximum, or such lesser amount
available under Section 2.2) (if any) in respect of such loss,
shall retain all Lease payments, including the Initial Payment, the
Post-Offering Payment, the Initial AMSC Payment Expenses and the
CMIS Expenses; and
<PAGE>
(iii) the Lessor and the Lessee shall enter into good
faith discussions as to an appropriate adjustment, if any, to
the annual Lease payment. If such damage or loss of performance
occurs prior to On Station Acceptance, any Lease payment adjustment
shall be retroactive with respect to Lease payments already made,
with such retroactive adjustment to be paid to the Lessee by way
of a credit prorated equally against the quarterly Lease payments
to be made by the Lessee to the Lessor over the remainder of the
Lease Term.
6. Events of Default; Remedies
---------------------------
(a) Events of Default. If one or more of the following events of
-----------------
default (each an "Event of Default") occurs and is continuing, the Lessors
shall be entitled to the remedies set forth in Section 6(b):
(i) Any amount payable by the Lessee hereunder is not paid
as and when it becomes payable within ten (10) days after notice
to the Lessee;
(ii) The Lessee or any Guarantor fails to perform or
observe any covenant or agreement to be performed or observed by
it, where such failure could reasonably pose a not immaterial
risk to the health or safe operation of the Satellite, and
does not remedy such failure (or otherwise remove such risk, in
which case the terms of paragraph (iii) of this Section 6(a) shall
apply) on or before the fifth (5th) day after written notice
thereof is given by the Lessor to the Lessee;
(iii) The Lessee or any Guarantor fails to perform or
observe any material covenant or agreement to be performed or
observed by it (other than those referred to in Section 6(a)(i),
6(a)(ii), 6(a)(iv), 6(a)(v) or 6(a)(vi)) and does not remedy the
failure on or before the thirtieth (30th) day after written notice
thereof is given by the Lessor to the Lessee;
(iv) Any material representation or warranty of the
Lessee or any Guarantor in this Lease or any other document
delivered in connection with this Lease proves to have been
incorrect, incomplete or misleading in any material respect at
the time it was made or repeated or deemed to have been made
or repeated, and shall not have been remedied within thirty
(30) days thereafter;
(v) If an Event of Bankruptcy shall occur with respect
to the Lessee or a Guarantor;
(vi) A failure by the Lessee to provide a certificate
in the form of Exhibit B to the Lessor within (5) business days
---------
following receipt of Lessor's written request prior to the
Satellite Relocation Date; and
<PAGE>
(vii) a breach or default by the Lessee under Section 3.2,
3.3, 3.4, 3.5(a), 3.7 or 3.8 of this Lease and such breach or
default is a direct cause of a loss with respect to the
Satellite. (For purposes of this Section 6(a)(vii), "loss" means
any loss for which proceeds would be payable under the insurance
policy procured under Section 2.2 or if no such policy is in
place, then a loss for which proceeds would be payable under the
policy referred to in Section 2.2.) Notwithstanding the foregoing,
in the event of a breach or default that would otherwise
constitute an Event of Default under this Section 6(a)(vii),
but (A) the loss of the Satellite is a Partial Loss, (B) the
Lessor shall receive the insurance proceeds called for pursuant
to Section 2.2 or an equivalent amount and (C) there is no
reduction of the Lease payments under Section 5.6, then there
shall be no Event of Default.
(b) Remedies. If one or more Events of Default occurs and is
--------
continuing, the Lessor shall be entitled to:
(i) retain all amounts paid to the Lessor and retain
any insurance proceeds with respect to insurance maintained by
the Lessor pursuant to, and to the extent provided in, Section
2.2 otherwise payable to the Lessee;
(ii) exercise its rights under any cross-default provisions
under the Ground Segment Contracts, any credit support agreements
and other credit assurance mechanisms for any amounts owed to them,
and to recover expenses and damages;
(iii) sell or lease the Satellite to another customer
and/or remove the Satellite from the Relocated Orbital Position
at the Lessee's expense (whether or not resold or released); and
(iv) any other remedy available to Lessor under applicable
law.
The Lessor shall use commercially reasonable efforts to mitigate its
damages in the exercise of its remedies under this Section 6(b).
7. Limitation of Liability
and Indemnification
-----------------------
7.1 Limitation on Lessor's Liability. It is expressly agreed that,
----------------------------------
except with respect to acts or omissions of the Lessor constituting gross
negligence or willful misconduct, the sole obligations and liabilities of the
Lessor, and the exclusive remedies of the Lessee in relation to anything arising
out of the Lease, including without limitation Total Loss or Constructive Total
Loss of the Satellite, Partial Loss of the Satellite, or any other problem
associated with the Satellite (whether the basis of liability is breach of
contract, tort (including negligence and strict liability) statute or other
legal theory) are limited to those specified in Sections 2.1, 4, 5, 6 and this
Section 7 and all other remedies of any kind are expressly waived by the Lessee.
<PAGE>
7.2 Lessee's Indemnification of Lessor
----------------------------------
7.2.1(a) The Lessee shall indemnify and hold harmless the Lessor,
AMSC, their respective Affiliates and their respective directors, officers,
employees, agents, shareholders, partners and subcontractors (the Lessor and
each such other person, an "Indemnified Party") from any and all claims,
liabilities, losses, costs, or damages, including attorneys' fees and costs of
investigation, incurred or suffered by any of them arising out of:
(i) any claims asserted against any Indemnified Party by
third parties arising out of activities of the Lessee or Lessee's
Agents or any violations of Applicable Legal Requirements by
the Lessee or Lessee's Agents (except to the extent arising out of
activities of the Lessor or Lessor's Agents in breach of this Lease
and any violations of Applicable Legal Requirements by the Lessor
or Lessor's Agents);
(ii) any third-party claim asserted by any customer or
supplier of the Lessee, which claim purportedly arises out of
any act or omission of any Indemnified Party in connection with
goods or services provided, in the case of a customer, by, and in
the case of a supplier, to, the Lessee unless such acts or
omissions are in breach of this Lease;
(iii) any other third party claims asserted against
any Indemnified Party in connection with a contract or
relationship between the Lessee or any of its related parties and
such third party, except to the extent caused by acts or omissions
of the Lessor;
(iv) the lease of the Satellite to the Lessee; or
(v) TT&C activities provided by or on behalf of the Lessee.
7.2.1(b) The Lessee shall, in each of its contracts with its
suppliers, customers, resellers, distributors or other vendors of its services
(in this Section 7.2(b), referred to as "the Party Contracting with the
Lessee"), insert a provision which reads substantially as follows:
"AMSC Subsidiary Corporation ('AMSC') and each of its affiliates,
officers, directors, employees, shareholders, partners,
investors, agents and subcontractors shall not be liable, for any
reason whatsoever, to [the Party Contracting with the Lessee], or
any of its affiliates, officers, directors, employees,
shareholders, partners, investors, agents or subcontractors, for
losses, damages, costs, expenses, liabilities or claims arising
out of:
"(i) the ownership of the Satellite by AMSC or any of its
successors and assigns;
<PAGE>
"(ii) the provision of any goods or services by African
Continental Telecommunications Ltd., or its successors and
assigns to [the Party Contracting with the Lessee];
"(iii) any failure of performance of the Satellite,
including without limitation delays, in-service interruption,
degradation or loss or distortion of services."
7.2.1(c) Promptly after knowledge of any indemnifiable claim
hereunder, any affected Indemnified Party shall notify the Lessee in writing and
specify the amount and nature of such claim. If within thirty (30) days after
receipt of such notice the Lessee gives such Indemnified Party written notice
that (i) the Lessee intends to defend against such claim, at the sole cost and
expense of the Lessee, and (ii) the Lessee acknowledges that it is obligated to
provide indemnification to the Indemnified Party for such claim, then (so long
as such matter does not involve any risk of criminal liability to the
Indemnified Party, the loss of the Satellite by the Lessor or material risk to
the Satellite, the potential loss of Lessor's principal FCC license(s), or other
harm to the Indemnified Party (including with respect to intellectual property
rights of the Lessor or AMSC) or the Indemnified Party's business, including
matters relating to claims by government agencies with jurisdiction over the
Indemnified Party or by AMSC's shareholders and which harm to the Indemnified
Party reasonably may not be adequately compensated by the payment of money
pursuant to the indemnification provided in this Section), the defense of such
claim shall be by the Lessee (with counsel subject to the Lessor's consent, not
to be unreasonably withheld and with the Indemnified Party having the right to
participate in the defense at its own expense) and the Indemnified Party shall
make no payment on such claim so long as the Lessee is conducting a good faith
and diligent defense. Notwithstanding the foregoing, the Indemnified Party may
take such actions as it determines are reasonable or necessary prior to the
expiration of such thirty (30) day period in order to protect its rights. In
furtherance of the foregoing, the parties agree to cooperate with each other in
the defense of any such indemnifiable claim. If an Indemnified Party elects to
conduct its own defense, the Lessee may participate in the defense at its own
expense, provided that the Lessee shall nevertheless remain liable for all
costs, expenses, liabilities and damages incurred by such Indemnified Party
resulting from or arising out of such proceedings or investigations.
7.3 No Consequential, Etc. Damages. In no event shall (i) any
--------------------------------
Indemnified Party be liable, directly or indirectly, to the Lessee, or (ii) the
Lessee be liable, directly or indirectly, to the Lessor, any direct or indirect
users of the Satellite or any other person for any loss of profit, loss of
business, special, indirect, direct, incidental or consequential damages or loss
of revenues arising out of this Lease.
7.4 Employees of Lessor. Every right, exemption from liability, defense
-------------------
and immunity of whatsoever nature applicable to the Lessor or to which it is
entitled shall extend to protect every employee of the Lessor acting in the
course of, or in connection with, this Lease.
<PAGE>
8. Subordination and Assignment
----------------------------
8.1 Security Interests and Secured Parties
--------------------------------------
8.1.1(a) The Lessee hereby acknowledges that this Lease and all
rights granted to the Lessee hereunder are subject and subordinate to (without
the necessity of having further instruments executed on the part of the Lessee
to effectuate such subordination) all security interests and liens whether now
existing or hereafter created granted heretofore or from time to time granted
hereafter by the Lessor (collectively, "Security Interest") in favor of its
creditors (the "Secured Parties") in and to the Lessor's interest in the
Satellite, this Lease, the proceeds of this Lease, the proceeds from the sale or
other disposition of all or any portion of the Satellite or this Lease, or any
insurance proceeds that may be paid or payable to the Lessor in regard to the
Satellite. The Security Interest shall be deemed to include interests under all
security agreements, indentures, mortgages, pledge agreements and other
collateral documents running in favor of Secured Parties, including all
renewals, modifications, consolidations or replacements thereto (collectively
the "Collateral Documents").
--------------------
Notwithstanding the existence of any Security Interests, the Lessee shall
continue to have the benefits of this Lease notwithstanding any default on the
part of the Lessor under any of the Collateral Documents, so long as no Event of
Default shall have occurred under the Lease.
8.1.1(b) Upon exercise by any Secured Party of any of its rights
and remedies under the Security Interests granted in its favor and receipt by
the Lessee of notice from any Secured Party of a default by the Lessor under the
Collateral Documents, the Lessee shall attorn, as the Lessee, to such Secured
Party, as lessor, upon all the terms of this Lease (including making all
payments which are then, or may thereafter become, due and owing hereunder after
such notice in the manner instructed by such Secured Party(ies)), provided that
any successor to the Lessor under this Lease
(i) expressly assumes the Lessor's obligations hereunder
for the benefit of the Lessee; and
(ii) succeeds to substantially all of the right, title,
and interest in and to all assets of the Lessor reasonably
necessary for such successor to perform its obligations under
this Lease.
Upon any subsequent succession and assumption of this Lease by a party other
than a Secured Party, such Secured Party shall be released from any further
obligations and liabilities under this Lease.
8.1.1(c) The Secured Parties of the Lessor shall be entitled to
exercise all rights and to cure any defaults of the Lessor under this Lease,
within such cure period as may be available to the Lessor under this Lease. Upon
receipt of notice from any Secured Parties, the Lessee agrees to accept such
exercise and cure by such Secured Parties and to render all or any part of the
performance due to the Lessor by the Lessee under this Lease to such Secured
Parties.
<PAGE>
8.1.1(d) Each Secured Party of the Lessor shall be deemed an
express third-party beneficiary of this Section. This Section shall be
self-operative, and no further instrument of subordination shall be required by
any security agreement or other document reflecting any Security Interests to
make this subordination effective. In confirmation of such acknowledged
subordination, the Lessee shall execute promptly any instrument or certificate
which the Lessor or its Secured Parties may reasonably request.
8.2 Lessor's Right To Assign. The Lessee agrees that the Lessor may
-------------------------
assign its rights and interests under this Lease, in the Satellite and/or in any
or all sums due or to become due to the Lessor under this Lease to any party at
any time and for any reason, provided that, except with respect to the granting
of a security interest or the assignment of a right to payment, such assignee
agrees in writing to assume all of the duties and obligations hereunder of the
Lessor.
The Lessee agrees that upon receipt of notice of such assignment, the Lessee
shall perform all of its obligations directly for the benefit of the assignee
and shall pay all sums due or to become due to the Lessor directly to the
assignee, or as otherwise directed by such assignee. Upon receipt of notice of
such assignment, the Lessee agrees to execute and deliver such documentation as
assignee may reasonably require from the Lessee to give effect to the intent of
this Section. Upon any such assignment by the Lessor, the Lessor shall be
released from any further obligations and liabilities under this Lease.
8.3 Lessee Assignment. The Lessee shall not Assign the Lessee's
------------------
interest in the Satellite or the Lease without the prior written consent of the
Lessor. Such consent may be granted or withheld in the sole and absolute
discretion of the Lessor if the assignment is a person other than an affiliate
of the Lessee, but shall not be unreasonably withheld if such assignment is to
an affiliate of Lessee. Notwithstanding the foregoing, the Lessee may assign its
rights and interests under this Lease to a wholly-owned subsidiary of the
Lessee, provided that such assignee assumes all of the duties and obligations
hereunder of the Lessee and executes such other instruments as the Lessor may
reasonably request, including, without limitation, instruments making
representations and warranties made by the Lessee in this Lease, all such
assumption and other instruments and documents to be by written instrument in
form and substance satisfactory to the Lessor, and the Lessee executes the
Guarantee and other instruments contemplated by Section 9 of this Lease. If the
Lessor is unable to regain the use of all or any part of the Satellite free and
clear of any claims or liens arising by or through the Lessee (including,
without limitation, the Lessee's subcontractors, customers, creditors or
vendors), then, in addition to any other remedies the Lessor may have, the
Lessee shall indemnify and hold harmless the Lessor from any such claims or
liens and, at the Lessor's option,
(i) the Lessor may elect not to regain use of the
Satellite and the Lessee shall be obligated, without regard to any
such termination or expiration of this Lease, to pay the Lessor the
Lease payments due to it at the rate specified herein for the
period of time that the Satellite remains so encumbered; or
<PAGE>
(ii) the Lessor may elect to regain such use of the
Satellite as it can, and the Lessee shall make such payments to the
Lessor as shall be necessary to make the Lessor whole for such lost
use of the Satellite.
9. Guarantee of Lessee's Obligations
---------------------------------
Upon any permitted assignment of this Lease by the Lessee to a wholly-owned
subsidiary of the Lessee pursuant to Section 8.3, the Lessee shall become a
guarantor of its successor Lessee's obligations under this Lease and shall
simultaneously with such assignment execute a Guarantee in the form attached to
this Lease as Exhibit C, and shall execute such other documents as may be
----------
reasonably requested by the Lessor.
10. Representations and Warranties of AMSC and AMSC Parent
------------------------------------------------------
10.1 AMSC. AMSC hereby represents and warrants to the Lessee:
----
10.1.1(a) that it is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with full
corporate power, right and authority to execute and to deliver this Lease and to
enter into and to consummate the transactions contemplated hereby;
10.1.1(b) that the execution and delivery of this Lease by the
officer so doing, and the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary corporate action on the part of AMSC;
10.1.1(c) that this Lease is a valid and binding obligation of
AMSC, enforceable against AMSC in accordance with its terms;
10.1.1(d) that, subject to obtaining the consents or approvals
listed on Schedule 10.1, the execution, delivery and performance of this Lease
-------------
and the consummation of the transactions contemplated hereby shall not
constitute a breach, violation or default of (i) any material contract,
indenture, deed of trust, loan, note, lease, service agreement or other material
instrument to which AMSC is subject or is a party; or (ii) any law, rule,
regulation, ordinance, judgment, decree, order, governmental permit or license
to which AMSC is subject; and
10.1.1(e) AMSC holds title to and is the sole owner of the
Satellite.
10.2 AMSC Parent. AMSC Parent hereby represents and warrants to the
-----------
Lessee:
10.2.1(a) that it is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with
full corporate power, right and authority to execute and to deliver this Lease
and to enter into and to consummate the transactions contemplated hereby;
10.2.1(b) that the execution and delivery of this Lease by the
officer so doing, and the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary corporate action on the part of AMSC
Parent;
<PAGE>
10.2.1(c) that this Lease is a valid and binding obligation of
AMSC Parent, enforceable against AMSC Parent in accordance with its terms; and
10.2.1(d) that, subject to obtaining the consents or approvals
listed on Schedule 10.2, the execution, delivery and performance of this Lease
-------------
and the consummation of the transactions contemplated hereby shall not
constitute a breach, violation or default of (i) any material contract,
indenture, deed of trust, loan, note, lease, service agreement or other material
instrument to which AMSC Parent is subject or is a party; or (ii) any law, rule,
regulation, ordinance, judgment, decree, order, governmental permit or license
to which AMSC Parent is subject.
11. No Warranties and Representations
Relating to the Satellite
---------------------------------
11.1 No Warranties. THE LESSEE HEREBY ACKNOWLEDGES THAT THE SATELLITE
-------------
WAS CONSTRUCTED, MANUFACTURED AND LAUNCHED BY PERSONS OTHER THAN AMSC, THAT THE
LESSEE WILL BE PROVIDED WITH THE RESULTS OF CERTAIN PERFORMANCE TESTS, AND THAT
THE LESSEE HAS BEEN GRANTED CERTAIN RIGHTS OF TERMINATION HEREIN IN THE EVENT
THAT THE SATELLITE DOES NOT MEET THE SPECIFIED SATELLITE PERFORMANCE.
ACCORDINGLY, THE LESSEE HEREBY ACKNOWLEDGES THAT THE WARRANTIES AND
REPRESENTATIONS OF AMSC CONTAINED IN SECTION 10 CONSTITUTE THE SOLE WARRANTIES
AND REPRESENTATIONS OF THE LESSOR. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, ANY AND ALL EXPRESS AND IMPLIED WARRANTIES WITH RESPECT TO THE
SATELLITE, INCLUDING, BUT NOT LIMITED TO, WARRANTIES AS TO SATELLITE
PERFORMANCE, DESIRABILITY, RELIABILITY, MERCHANTABILITY OR FITNESS FOR ANY
PURPOSE OR USE OR WARRANTIES AGAINST INTERFERENCE OR INFRINGEMENT, ARE EXPRESSLY
EXCLUDED AND DISCLAIMED BY THE LESSOR.
12. Representations and Warranties of Lessee
----------------------------------------
12.1 Lessee. The Lessee hereby represents and warrants to the Lessor:
------
12.1.1(a) that the Lessee is a corporation duly organized, validly
existing and in good standing under the laws of Gibraltar, with full corporate
power, right and authority to execute and to deliver this Lease and to enter
into and to consummate the transactions contemplated hereby;
12.1.1(b) that the execution and delivery of this Lease by the
officer so doing, and the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary corporate action on the part of the
Lessee;
12.1.1(c) that this Lease is a valid and binding obligation of the
Lessee, enforceable against the Lessee in accordance with its terms; and
<PAGE>
12.1.1(d) that, subject to obtaining the consents or approvals
listed on Schedule 12.1(d), the execution, delivery and performance of this
-----------------
Lease and the consummation of the transactions contemplated hereby shall not
constitute a breach, violation or default of (i) any material contract,
indenture, deed of trust, loan, note, lease, service agreement or other
instrument to which the Lessee is subject or is a party; or (ii) any law, rule,
regulation, ordinance, judgment, decree, order, governmental permit or license
to which the Lessee is subject.
12.1.1(e) the Founders and their ownership interests are set forth
on Schedule 12.1(e).
13. General Provisions
13.1 Binding Effect. All the terms and provisions of this Lease shall
---------------
be binding upon and shall inure to the benefit of (i) the Lessor and its
successors and permitted assigns; (ii) AMSC Parent and its successors and
permitted assigns; (iii) the Lessee and its successors and permitted assigns;
and (iv) any Guarantor and its successors and permitted assigns.
13.2 Third-Party Rights; Relationship of Parties. Except as expressly
--------------------------------------------
provided in this Lease, nothing contained in this Lease shall be deemed or
construed by the parties or by any third party to create any rights, obligations
or interests of third parties. Nothing in this Lease is intended to or shall be
construed to create the relationship of principal and agent, partnership or
joint venture, or any other fiduciary relationship or association between any of
the parties.
13.3 Notices. All notices, requests and other communications to any
-------
party shall be in writing (including telecopy or similar writing) and shall be
given as follows:
If to the Lessor, to:
AMSC Subsidiary Corporation
10802 Parkridge Boulevard
Reston, Virginia 20191-5416
Attention: General Counsel
Fax: 703-758-6134
and
American Mobile Satellite Corporation
10802 Parkridge Boulevard
Reston, Virginia 20191-5416
Attention: General Counsel
Fax: 703-758-6134
with a copy to:
AMSC Subsidiary Corporation
10802 Parkridge Boulevard
Reston, Virginia 20191-5416
Attention: Chief Executive Officer
Fax: 703-758-6106
and
<PAGE>
American Mobile Satellite Corporation
10802 Parkridge Boulevard
Reston, Virginia 20191-5416
Attention: Chief Executive Officer
Fax: 703-758-6106
If related to payments, with a copy to
the attention of: Accounting Department
If to the Lessee, to:
African Continental Telecommunications Ltd.
57/63 Line Wall Road
Gibraltar
Attention: C. Paul Dollery
with a copy to:
Paul, Hastings, Janofsky & Walker LLP
Attention: Joel Simon
399 Park Avenue, 31st Floor
New York, New York 10022-4697
or to such other address or telecopier number as such party may hereafter
specify for the giving of notice. All such notices, requests and other
communications shall be deemed received on the date of receipt by the recipient
thereof if received prior to 5:00 p.m. in the place of receipt and such day is a
business day in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed not to have been received until the next
succeeding business day in the place of receipt.
13.4 Waiver of Breach/Remedies. No failure on the part of any party to
-------------------------
notify any other parties of any noncompliance hereunder, and no failure on the
part of any party to exercise its rights hereunder shall prejudice any remedy
for any subsequent noncompliance, and any waiver by any party or any breach or
noncompliance with any term or condition of this Lease shall be limited to the
particular party and the particular instance and shall not operate or be deemed
to waive any future breaches or noncompliance with any term or condition. Except
as provided herein, all remedies and rights hereunder and those available in law
or in equity shall be cumulative and the exercise by any party of any such right
or remedy shall not preclude the exercise of (a) any other right or remedy
available to it under this Lease or in law or in equity or (b) the exercise by
any other party of any right or remedy available to it under this Lease or in
law or in equity.
<PAGE>
13.5 Applicable Law. This Lease shall be construed and enforced in
---------------
accordance with the internal laws of the State of Delaware, United States of
America, without regard to the conflict or choice of laws provisions thereof. On
or prior to the Relocation Commencement Date, the parties will enter into a
choice of law agreement substantially in the form of Exhibit D hereto.
13.6 Dispute Resolution
------------------
13.6.1(a) All controversies or claims arising out of or relating
to this Lease, or breach thereof (a "Dispute"), between the Lessor and/or AMSC
Parent on the one hand and the Lessee and/or a Guarantor on the other hand shall
be resolved in accordance with the procedures set forth in this Section 13.6.
13.6.1(b) Initially, the Dispute shall be referred by written
notice to the Lessee employee designated by the Lessee and the Lessor employee
designated by the Lessor to initially review Disputes. Disputes related to the
health or safety of the Satellite shall be submitted by written notice to the
Technical Operations Committee.
13.6.1(c) If within fifteen (15) days after written notice of the
Dispute is given to them, the employees to whom the Dispute has been referred,
or the Technical Operations Committee in the event of Disputes involving the
health or safety of the Satellite, do not resolve the Dispute, then the Dispute
shall be referred by the party asserting such Dispute by written notice
delivered to the Chief Executive Officer of each of the Lessor and the Lessee,
who shall attempt, in good faith, to resolve the Dispute within fifteen (15)
days after written notice of such Dispute is given to them. Such written notice
shall contain a statement setting forth the nature of the Dispute. At the
request of either the Lessor or the Lessee, the Chief Executive Officers shall
meet at the same location to discuss such Dispute in good faith. If the Chief
Executive Officers are unable to reach agreement to resolve the Dispute within
the fifteen (15) day period after written notice of such Dispute is given to
them, the Dispute may be submitted by either party to arbitration administered
by the American Arbitration Association ("AAA") in accordance with the
provisions governing expedited arbitration contained in the Commercial
Arbitration Rules of the AAA. The place of arbitration shall be Wilmington,
Delaware. Any arbitral award shall be in writing and shall be final and binding
on the parties to such arbitration proceeding. The award may include an award of
costs, including reasonable attorneys' fees and disbursements, but may not
include an award of punitive damages. Judgment upon the award may be entered by
any court having jurisdiction thereof or having jurisdiction over the parties to
such arbitration proceeding or their assets.
13.7 Counterparts and Formal Date. This Lease may be executed in one or
----------------------------
more counterparts, each of which when so executed shall be deemed to be an
original and such counterparts together shall constitute one and the same
instrument and notwithstanding the date(s) of execution by any of the parties
shall be deemed to bear the date written at the beginning of this Lease.
<PAGE>
13.8 Captions. The captions and headings herein are inserted for
--------
convenience and reference only and in no way define or limit the scope or
content of this Lease or in any way affect its provisions.
13.9 Entire Understanding. This Lease, including all exhibits and
---------------------
schedules, represents the entire understanding and agreement among the parties
with respect to the subject matter hereof, and supersedes all prior negotiations
and agreements between or among the parties concerning that subject matter. This
Lease may be amended, supplemented or changed only by an agreement in writing
which makes specific reference to this Lease and which is signed by the Lessor
and the Lessee and, with respect to Sections 9 and 13.12, additionally by the
Guarantor and AMSC Parent, respectively.
13.10 Dollar Amounts. All references herein to dollar amounts are
--------------
expressed in U.S. dollars.
13.11 Lessee's Payment Obligations. The Lessee's Lease payment
-------------------------------
obligations are absolute and are not subject to abatement, reduction or setoff
by reason of any obligations of the Lessor to the Lessee under this Lease or
otherwise, except that the Lessee's Lease payment obligations shall be set off
(i) to the extent of the cost of such insurance, if the Lessor breaches its
obligation to secure in-orbit insurance pursuant to Section 2.2 and the Lessee
procures such insurance, (ii) to the extent the Lessor is liable for and does
not satisfy a monetary judgment owed to the Lessee under this Lease or the
Service Contract or the License Agreement pursuant to a final and binding order
pursuant to Section 13.6 of this Lease, and (iii) by Seven Million Five Hundred
Thousand Dollars ($7,500,000), such offset to be effected by having the annual
Lease payment for the last year of the Lease Term (i.e., the Initial Term if the
Lease Term is not renewed or the Renewal Term if the Lease Term is renewed) be
Thirty Million Five Hundred Thousand Dollars ($30,500,000), with the last
quarterly payment to be Two Million Dollars ($2,000,000), rather than Nine
Million Five Hundred Thousand Dollars ($9,500,000).
13.12 Guarantee of Lessor's Obligations. AMSC Parent hereby guarantees
---------------------------------
absolutely, irrevocably and unconditionally to the Lessee the complete and
prompt observance, fulfillment and performance of each and every provision and
obligation of the Lessor under this Lease or under the Service Contract or
License Agreement, and hereby covenants and agrees that it shall pay the amount
of any damages or other loss suffered by the Lessee as a result of the breach of
any covenant or provision of this Lease, the Service Contract or License
Agreement by the Lessor or as a result of any misrepresentation of any fact in
any representation and warranty in this Lease, the Service Contract or License
Agreement or in any certified statement provided pursuant to this Lease, the
Service Contract or License Agreement, without the necessity of the Lessee first
presenting a claim to, or bringing an action or suit against, the Lessor or
otherwise bringing any action or suit for recovery of such damages; provided
that AMSC Parent shall be liable hereunder only to the extent of the liability
of the Lessor under this Lease, the Service Contract or License Agreement and
shall be entitled to assert all defenses that could be asserted by the Lessor.
<PAGE>
The guarantees set forth in this Section 13.12 shall become effective upon
execution of this Lease by AMSC Parent and shall remain in effect in favor of
the Lessee until the later of the performance in full of all of the obligations
of the Lessor hereunder and under the Service Contract and License Agreement or
the release in writing by the Lessee. The obligations of AMSC Parent under this
Section shall be absolute and unconditional, irrespective of any amendment,
modification or change of any other Section of this Lease or any waiver of
compliance with any obligation hereunder. No assignment or transfer by AMSC
Parent and no termination, amendment, waiver or modification of this guarantee
or any of its terms or provisions shall be effective against the Lessee unless
it is set forth in a written instrument signed by AMSC Parent and the Lessee.
13.13 Technical Operations Committee. The Lessor and the Lessee shall
-------------------------------
establish a technical operations committee (the "Technical Operations
Committee") consisting of one representative from each of the Lessor and the
Lessee (and an alternate member from each). The Lessor and the Lessee may submit
to the Technical Operations Committee for clarification or confirmation matters
related to the operation of the provisions of this Lease concerning safe
operation or the health and safety of the Satellite. The Technical Operations
Committee shall also be the first step in the dispute resolution process with
respect to matters involving the health or safety of the Satellite as provided
in Section 13.6. If the members of the Technical Operations Committee shall
agree on a particular interpretation of a provision of this Lease related to
matters within the Committee's mandate, then actions pursuant to such
agreed-upon interpretation shall presumptively be deemed to be in compliance
with this Lease.
13.14 Lease Characterization. The parties agree that the lease of the
-----------------------
Satellite by the Lessor to the Lessee shall be characterized for purposes of all
applicable law as an operating lease. Notwithstanding any provisions expressed
in or implied by this Lease, property in and title to the Satellite shall at no
time pass to the Lessee and the Satellite shall at all times remain the property
of the Lessor. The Lessee shall take all actions and execute all documents as
may reasonably be requested by the Lessor to implement the intention of this
Section 13.14.
~~ end of page ~~
[signatures appear on next page]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
day and year first above written.
AMSC SUBSIDIARY CORPORATION
By /s/GARY M. PARSONS
Name: Gary M. Parsons
Title: Chief Executive Officer and President
AMERICAN MOBILE SATELLITE CORPORATION
(as Guarantor)
By /s/GARY M. PARSONS
Name: Gary M. Parsons
Title: Chief Executive Officer and President
AFRICAN CONTINENTAL TELECOMMUNICATIONS LTD.
By /s/C.P. DOLLERY
Name: C.P. Dollery
Title: Vice Chairman
<PAGE>
Exhibit A
CERTAIN DEFINED TERMS
13.1 $ shall mean United States dollars.
13.2 African Performance Tests are tests and analyses conducted at the
---------------------------
Relocated Orbital Position to verify that the Satellite operates as specified
and can perform acceptably. The African Performance Tests are set forth on
Schedule 2.1.
- ------------
13.3 Applicable Legal Requirements means satisfying requirements of all
------------------------------
laws, statutes, ordinances, rules and regulations affecting or in any way
relating to the relevant subject matter, including, without limitation, those of
governmental entities and international organizations (including the ITU) having
jurisdiction and including, without limitation, obtaining and maintaining any
applicable licenses and approvals.
13.4 Assign means to grant, transfer, sell, assign, charge, mortgage,
------
encumber or otherwise convey directly or indirectly, in whole or in part.
13.5 Bankruptcy Event with respect to a person means (i) the voluntary
----------------
commencement of any proceeding, or voluntary filing, by such person of a
petition seeking liquidation, reorganization, arrangement or readjustment, in
any form, of such person's debts under any jurisdiction's insolvency,
liquidation or similar laws (each such jurisdiction's laws being referred to as
a Bankruptcy Law), or such person's filing of an answer consenting to or
acquiescing in any such petition, or (ii) the making by such person of any
general assignment for the benefit of such person's creditors or the admission
by such person in writing of such person's inability to pay such person's debts
as they mature, or (iii) the consent by such person to the filing of, the
failure by such person to contravene successfully with respect to, or the
granting of an order of relief with respect to (A) any involuntary petition or
application under any Bankruptcy Law seeking an application for the appointment
of a receiver, trustee, custodian, sequestrator or similar official for the
assets of such person, or (B) any involuntary petition or application under any
Bankruptcy Law seeking liquidation, reorganization, arrangement or readjustment
of such person's debts under any Bankruptcy Law, or (iv) the appointment of a
receiver, trustee, custodian, sequestrator or similar official for the assets of
such person under any Bankruptcy Law or otherwise.
13.6 CMIS Expenses are those expenses to be paid by the Lessor under the
-------------
License Agreement and Service Contract.
13.7 CMIS Sublicense Agreement means that "Sublicense Agreement for TMI
-------------------------
Technology" of even date herewith between the Lessor and the Lessee relating to
the sublicense of certain intellectual property of TMI, or intellectual property
on license to TMI, relating to a certain customer management information system.
<PAGE>
13.8 Commercial Service Date means the date when the Lessee begins
-------------------------
providing or is technically capable of providing commercial service using the
Satellite and its ground-based communication facilities.
13.9 Constructive Total Loss means a Constructive Total Loss as defined
-----------------------
in the in-orbit policy referred to in Section 2.2 or if no such policy shall be
in place, then a Constructive Total Loss as defined in AMSC's in-orbit insurance
policy for the Satellite as of the date of this Lease.
13.10 End of Life or EOL shall mean the earlier of March 31, 2005; the
----------- ---
date on which, in Lessor's reasonable judgment, less than 42 Kg of fuel remains
(including any uncertainty in the estimate of fuel); and the first date on which
the Satellite is unable to transmit or receive on Beams 1, 2 or 3 (Central,
Mountain or West) despite the use of all available backup capacity.
13.11 FCC means the Federal Communications Commission.
---
13.12 Ground Segment Contracts shall mean the CMIS Sublicense
---------------------------
Agreement, the License Agreement, the Service Contract and any other agreements
entered into in connection with the foregoing.
13.13 Guarantor means the guarantor of the Lessee's obligations
---------
pursuant to Section 9 of the Lease. The Lessor may designate another parent or
subsidiary of the Lessee or of the Guarantor as an additional Guarantor if, in
the opinion of the Lessor, the additional financial assurances of that person
would reasonably be required.
13.14 Initial AMSC Payment Expenses means an amount up to Five Million
------------------------------
Dollars ($5,000,000) which is expended by AMSC on the Lease and expenses under
the Ground Segment Contracts. The Initial AMSC Payment Expenses shall be paid by
the Lessee to AMSC on the Start Date.
13.15 Initial Payment means the Ten Million Dollar ($10,000,000)
----------------
payment to AMSC, Seven Million Five Hundred Thousand Dollars ($7,500,000) of
which shall be paid upon the Satellite Contract Date and Two Million Five
Hundred Thousand Dollars ($2,500,000) of which shall be paid, and which the
Lessee agrees to pay, no later than the date forty-five (45) days after the
Satellite Contract Date. Up to Five Million Dollars ($5,000,000) of the Initial
Payment is to be used to fund those expenses to be incurred under the Lease and
Ground Segment Contracts as directed by the Lessee, including satellite
inversion software, other project development and management expenses, TT&C
Services, or otherwise.
13.16 ITU means the International Telecommunication Union.
---
13.17 Lessee's Agents includes all agents, directors, employees,
----------------
officers, partners, owners, contractors, licensees or invitees of the Lessee.
13.18 License Agreement means that intellectual property License
------------------
Agreement of even date herewith between the Lessor and the Lessee relating to
the license of certain intellectual property of the Lessor and the Lessee, or
intellectual property on license to the Lessor, relating to ground-based
communication facilities.
<PAGE>
13.19 Minimum Performance Specifications shall have the meaning set
------------------------------------
forth in the Test Plan.
13.20 North American Performance Tests are tests and analyses conducted
--------------------------------
to verify that the Satellite operates as specified and can perform acceptably
when moved to the Relocated Orbital Position. The North American Performance
Tests are set forth on Schedule 2.1. Performance Tests shall be carried out at
------------
mutually agreed locations in North America corresponding to the locations of
Johannesburg and selected other points in Africa once the Satellite is moved.
The test results shall provide the performance baseline to use in evaluating
satellite performance after relocation.
13.21 Offering means the public floatation of equity of the Lessee or
--------
its permitted assignee on the Johannesburg stock exchange or any similar
offering or offerings of equity with gross proceeds to the issuer of at least
One Hundred Twenty Million Dollars ($120,000,000).
13.22 On Station Acceptance means the Satellite has been moved to the
----------------------
Relocated Orbital Position and the African Performance Tests have been completed
with results meeting the Minimum Performance Specifications at such location.
13.23 On Station Acceptance Date means the date on which On Station
-----------------------------
Acceptance occurs.
13.24 Partial Loss means a loss in Satellite performance that is not a
------------
Total Loss or a Constructive Total Loss.
13.25 Post-Offering Payment means a payment of Twenty-Eight Million
----------------------
Dollars ($28,000,000) by the Lessee to the Lessor minus any Space Segment
Expenses with respect to which the Lessee had previously reimbursed the Lessor.
13.26 Relocated Orbital Position means the geostationary orbital
----------------------------
position located at 11.5(degree) East Longitude or such other nearby orbital
position as may be required for satellite frequency coordination.
13.27 Relocation Commencement Date means the date on which the Lessor
------------------------------
begins relocation of the Satellite to the Relocated Orbital Position.
13.28 Returned Orbital Position means the geostationary orbit position
-------------------------
located at 101(degree) West Longitude or such other orbital position as the
Lessor shall designate which will not be a U.K.-sponsored orbital position
unless separately negotiated.
13.29 Satellite means the MSAT-2 (M-2) satellite also known as AMSC-1,
---------
acquired pursuant to the American Mobile Satellite Corporation Contract with
Hughes Aircraft Company for an MSAT Spacecraft, Contract No. AMSC-S/C-11/90/001,
dated November 29, 1990.
13.30 Satellite Contract Date means the date of the signing of this Lease.
-----------------------
<PAGE>
13.31 Satellite Relocation Date means such date, on or after the Start
--------------------------
Date, when the following conditions have been satisfied or waived in writing by
the Lessor:
(i) Performance Tests are complete and the Lessee has not
terminated this Lease under Section 5.1(a)(ii);
(ii) receipt of all necessary government approvals (including
American, Canadian, English, South African, or otherwise)
to move the Satellite to the Relocated Orbital Position;
(iii) the Lessee has obtained final approval under all Applicable
Legal Requirements for the Satellite to occupy the Relocated
Orbital Position, including coordination of frequencies for
TT&C and initial operation;
(iv) the Lessor has approved, in its reasonable discretion,
the contracts for the construction of the TT&C facilities;
(v) the Lessor shall have determined, in its reasonable
discretion, that the TT&C facilities have been
completed sufficiently to safely permit relocation of
the Satellite to begin;
(vi) the Lessor shall have determined, in its reasonable
discretion, that the ground segment facilities have
been or will be completed sufficiently to safely permit
testing of the Satellite at the Relocated Orbital
Position;
(vii) the Offering has occurred;
(viii) the Lessee has paid the Post-Offering Payment to the Lessor;
and
(ix) there is no Event of Default.
13.32 Service Contract means the services agreement between the Lessee
----------------
and the Lessor of even date herewith.
13.33 Space Segment Expenses means the expenses the Lessor incurred for
----------------------
Satellite inversion, TT&C drift expenses, insurance for the Lessee's benefit and
Satellite testing expenses.
13.34 Start Date means the date on which the Lessee makes the
-----------
Post-Offering Payment, which shall not be more than ten (10) days after the date
of the Offering.
<PAGE>
13.35 Test Plan means the test plan set forth on Schedule 2.1, which
--------- -------------
sets forth the North American Performance Tests and the African Performance
Tests.
13.36 TMI Satellite means the MSAT-1 (M-1) satellite owned by TMI.
-------------
13.37 Total Loss means a Total Loss as defined in the in-orbit
-----------
insurance policy referred to in Section 2.2 or if no such policy shall be in
place, then Total Loss as defined in AMSC's in-orbit insurance policy for the
Satellite in place as of the date of this Lease.
13.38 TT&C means telemetry, tracking and control.
----
13.39 TT&C Services means telemetry, tracking and control services,
-------------
drift orbit operations and other operational services in connection with the
Satellite.
<PAGE>
Exhibit B
FORM OF
Certificate of Lessee [and Guarantor]
This Certificate is given pursuant to Section 6(a)(vi) of the
Satellite Lease Agreement for the AMSC-1 Satellite.
In reliance on the Certificates of AMSC Subsidiary Corporation
("AMSC") and American Mobile Satellite Corporation ("AMSC Parent"), dated as of
the same date as this Certificate, copies of which are attached hereto, the
undersigned Lessee [and Guarantor] under such Satellite Lease Agreement hereby
certify to AMSC and AMSC Parent as follows:
1. The Satellite Lease Agreement is and remains a valid,
binding agreement among the parties thereto.
2. The Satellite Lease Agreement has not been terminated
and remains in full force and effect.
3. The Lessee [and the Guarantor] have made to the Lessor
all payments due to the Lessor as of the date hereof pursuant to
the Satellite Lease Agreement.
4. As of this date, the Lessee has no ability to terminate
the Satellite Lease Agreement pursuant to the terms thereof.
~~ end of page ~~
[signatures appear on following page]
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Certificate
as of the day of , 199 .
------ ---------------- -
[LESSEE]
By
Name:
Title:
[[GUARANTOR]
By
Name:
Title:]
<PAGE>
FORM OF
Certificate of Lessor and AMSC Parent
In reliance on the Certificate of ("Lessee")
---------------------
[and ("Guarantor")], dated as of the same date as this
---------------------
Certificate, a copy of which are attached hereto, the undersigned AMSC
Subsidiary Corporation and American Mobile Satellite Corporation under such
Satellite Lease Agreement hereby certify to Lessee [and Guarantor] as follows:
1. The Satellite Lease Agreement is and remains a valid,
binding agreement among the parties thereto.
2. The Satellite Lease Agreement has not been terminated
and remains in full force and effect.
3. The Lessee [and the Guarantor] have made to the Lessor
all payments due to the Lessor as of the date hereof pursuant to the Satellite
Lease Agreement.
4. As of this date, the Lessee has no ability to terminate
the Satellite Lease Agreement pursuant to the terms thereof.
~~ end of page ~~
[signatures appear on following page]
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Certificate
as of the day of , 199 .
------ --------------- -
AMSC SUBSIDIARY CORPORATION
By
Name:
Title:
AMERICAN MOBILE SATELLITE CORPORATION
By
Name:
Title:
<PAGE>
Exhibit C
FORM OF GUARANTEE
Reference is made to the SATELLITE LEASE AGREEMENT (the "Lease") made
as of the 2nd day of December, 1997, by and among AMSC Subsidiary
Corporation, a Delaware corporation, American Mobile Satellite Corporation,
a Delaware corporation, and African Continental Telecommunications Ltd., a
Gibraltar company. Capitalized terms not otherwise defined herein shall
have the meanings set forth in the Lease.
The Guarantor hereby guarantees absolutely, irrevocably and
unconditionally to the Lessor the complete and prompt observance,
fulfillment and performance of each and every provision and obligation of
the Lessee under the Lease or under the Service Contract or License
Agreement, and hereby covenants and agrees that it shall pay the amount of
any damages or other loss suffered by the Lessor as a result of the breach
of any covenant or provision of the Lease, the Service Contract or License
Agreement by the Lessee or as a result of any misrepresentation of any fact
in any representation and warranty in the Lease, the Service Contract or
License Agreement or in any certified statement provided pursuant to the
Lease, the Service Contract or License Agreement, without the necessity of
the Lessor first presenting a claim to, or bringing an action or suit
against, the Lessee or otherwise bringing any action or suit for recovery
of such damages; provided that the Guarantor shall be liable hereunder only
to the extent of the liability of the Lessee under the Lease, the Service
Contract or License Agreement and shall be entitled to assert all defenses
that could be asserted by the Lessee.
The guarantees set forth in this Guarantee shall become effective upon
execution by the Guarantor of this Guarantee and shall remain in effect in
favor of the Lessor until the later of the performance in full of all of
the obligations of the Lessee under the Lease and under the Service
Contract and License Agreement or the release in writing by the Lessor. The
obligations of the Guarantor under this Guarantee shall be absolute and
unconditional, irrespective of any amendment, modification or change of any
other Section of the Lease, the Service Contract or the License Agreement
or any waiver of compliance with any obligation hereunder. No assignment or
transfer by the Guarantor and no termination, amendment, waiver or
modification of this guarantee or any of its terms or provisions shall be
effective against the Lessor unless it is set forth in a written instrument
signed by the Guarantor and the Lessor.
Representations and Warranties. The Guarantor hereby represents and
warrants to the Lessor:
13.39.1(a) that the Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of , with full
----------------
corporate power, right and authority to execute and to deliver this Lease
and to enter into and to perform the obligations of the Guarantor
hereunder;
13.39.1(b) that the execution and delivery of this Lease by the officer
so doing, and the performance of the obligations of the Guarantor
hereunder, have been duly authorized by all necessary corporate action on
the part of the Guarantor;
13.39.1(c) that this Lease is a valid and binding obligation of the
Guarantor, enforceable against the Guarantor in accordance with its terms;
that the execution, delivery and performance of the Guarantee and the
performance of the obligations of the Guarantor hereunder shall not
constitute a breach, violation or default of (i) any material contract,
indenture, deed of trust, loan, note, lease, service agreement or other
instrument to which the Guarantee is subject or is a party; or (ii) any
law, rule, regulation, ordinance, judgment, decree, order, governmental
permit or license to which the Guarantor is subject.
~~ end of page ~~
[signatures appear on following page]
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Guarantee as
of the day of , 199 .
------ ---------------- -
[[GUARANTOR]
By
Name:
Title:]
<PAGE>
EXHIBIT D
CHOICE OF LAW AGREEMENT
This CHOICE OF LAW AGREEMENT (this "Agreement") is made as of
December 2, 1997, by and among AMSC Subsidiary Corporation, a corporation
incorporated under the laws of the State of Delaware, American Mobile
Satellite Corporation, a Delaware corporation, and African Continental
Telecommunications Ltd., a Gibraltar company.
WITNESSETH:
WHEREAS, the parties entered into a Satellite Lease Agreement
dated as of December 2, 1997 (the "Satellite Lease Agreement");
WHEREAS, pursuant to the Satellite Lease Agreement, the parties
thereto have agreed that the Satellite Lease Agreement shall be construed and
enforced in accordance with the laws of the State of Delaware and that all
proceedings with respect to the Satellite Lease Agreement shall be brought
only in Delaware; and
WHEREAS, the parties wish to confirm that their choice of Delaware
law shall be enforceable in accordance with 6 Del. C. Section 2708.
--- --
NOW, THEREFORE, in consideration of the foregoing and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Single Undertaking. This Agreement and the Satellite Lease
------------------
Agreement and the other documents referred to or provided for therein and the
transactions contemplated thereby shall be read and construed as a single
undertaking among the parties.
2. Consent to Jurisdiction. The parties irrevocably consent to the
-----------------------
exclusive jurisdiction of arbitration in the State of Delaware for all purposes
in connection with any action or proceeding that arises out of or relates to the
Satellite Lease Agreement (collectively, "Proceedings"). The parties hereby
agree that service of summons, complaint, or other process in connection with
any Proceedings may be made as set forth in the Satellite Lease Agreement
with respect to service of notices, and that service so made shall be as
effective as if personally made in the State of Delaware.
3. Acknowledgments. As set forth in the Satellite Lease Agreement
---------------
and in Section 2 above, it is the intent of each of the parties hereto that all
Proceedings be heard exclusively through arbitration in the State of Delaware.
Each of the parties hereto acknowledges that (i) it has freely agreed that all
Proceedings will be heard in accordance with Section 2 above, (ii) the
agreement to choose arbitration in the State of Delaware to hear all Proceedings
in accordance with Section 2 above is reasonable and will not place such party
at a disadvantage or otherwise deny it its day in court, (iii) it is a
knowledgeable, informed, sophisticated business entity capable of understanding
and evaluating the provisions set forth in this Agreement, including Section 2,
and (iv) it has been represented by such counsel and other advisors of its
choosing as it has deemed appropriate in connection with its decision to
enter into this Agreement, including Section 2.
4. Appointment of Agent. For purpose of further effecting the
---------------------
parties' agreements set forth in the Satellite Lease Agreement and Section 2
above, (i) the parties hereby irrevocably appoint Corporation Service Company,
1013 Centre Road, Wilmington, Delaware 19805, as its agent for acceptance of
legal process in the State of Delaware in connection with any Proceeding, and
each party agrees that service upon its agent shall have the same legal force
and effect as if served upon it personally within the State of Delaware.
5. Governing Law. This Agreement shall be governed by, and
-------------
construed and enforced in accordance with, the internal laws of the State of
Delaware.
~~ end of page ~~
[signatures appear on next page]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
AMSC SUBSIDIARY CORPORATION
By
Name:
Title:
AMERICAN MOBILE SATELLITE CORPORATION
By
Name:
Title:
AFRICAN CONTINENTAL TELECOMMUNICATIONS LTD.
By
Name:
Title:
<PAGE>
Schedule 1.3
WIRE TRANSFER INSTRUCTIONS
OF LESSOR
<TABLE>
<CAPTION>
<S> <C>
Bank Name: Wachovia Bank of North Carolina
Address: 100 N. Main Street
Winston-Salem, NC
ABA No.: 053 100 494
Account Name: AMSC Subsidiary Corporation
Account Number: 8738-071423
Reference: Include invoice number, if applicable
AMSC Contact: Geri Hopkins
Manager, Treasury Operations
703-758-6453
</TABLE>
Schedule 1.3 Page 1
<PAGE>
SCHEDULE 2.1
SATELLITE RELOCATION AND ACCEPTANCE PLAN
SUMMARY
The following are the major steps in the relocation of the Satellite.
Remove traffic from the Satellite. If practicable, Telesat will assume control
from Panamsat at this time.
Adjust ESA and RPMs to the configuration to be used at the Relocated Orbital
Position.
Conduct the North American Performance Test (a.) t o verify that the Satellite
Operates as described and can perform acceptably when moved to the
Relocated Orbital Location, and (b.) to obtain a set of baseline data.
These test are summarized below.
If required, reorient the Satellite to its nominal configuration and restore
traffic to the Satellite until the Satellite Relocation Date, then
permanently remove traffic from the Satellite.
Drift the Satellite from 101 degrees West to the Relocated Orbital Position.
Transfer orbit facilities in Chilworth England will be upgraded to receive
the Satellite and initially operate it until TT&C facilities at Gibraltar
and Johannesburg are completed.
Invert and reorient the Satellite and re-adjust RPMs and ESA if required.
Conduct the African Performance Test, which are a subset of the North American
Performance Tests to be repeated at Johannesburg and a few other African
points once the Satellite has reached the Relocated Orbital Position to
validate that coverage is correct and relocation of the Satellite has not
degraded performance.
Schedule 2.1 Page 1
<PAGE>
AMSC-1 TEST PLAN DESCRIPTION
The following summarizes the test planned for both the North American and the
African Performance Test.
Test Plan Objective
The proposed plan is to test the satellite in North America at or near its
current location at 101oW. to both verify performance and to obtain a set of
baseline data. These tests would then be repeated in Africa once the satellite
has reached the Relocated Orbital Position and is pointed correctly. The
accompanying diagrams assume this position is 18o East; slight adjustments to
the test points may be needed to accommodate a different orbital location.
The purpose of the test would be as follows:
To verify the L-Band satellite EIRP performance for each of the four beams.
Using the measured EIRP data to verify that the satellite antenna pointing is
correct.
To verify the L-Band satellite receive performance for each of the four beams.
To verify the Ku-Band satellite receive performance (one location only).
To verify the Ku-Band downlink performance (one location only).
The main element of the testing will be to verify that the satellite expected
coverage is available both in North America and at the new orbital location over
Africa.
Payload Test
The following payload test will be performed as appropriate on the forward,
reverse and Ku-Ku links.
AEIRP and NFD will be measured for all transmit beams,
NPR will be measured at the original orbital loation of 101.0o W for health
verification purposes only,
G/T will be measured for all receive beams; spare receivers will be verified in
pre-designated beams,
All sub-bands will be functionally verified, and
All step attenuators will be functionally verified.
Schedule 2.1 Page 2
<PAGE>
Mobile Test System
It is proposed to use the AMSC mobile L-band EIRP test system to confirm
satellite L-Band EIRP and L-Band Receive G/T at three test locations.
In addition, a TMI designed and assembled mobile uplink test system with both
Ku-band and L-band transmit and receive capability will be deployed during the
test phase. The system would include a Ku-Band HPA transmitting via a ground
based high gain Ku-Band antenna sufficient to exercise the satellites Ku-Band to
L-Band Transponder.
Figure 1 shows the configuration of this test system as now proposed.
Test Point Locations
Test points will be selected to enable all four beams to be tested from a
minimum number of test locations (three are proposed). Test Point 3 will be used
for both Beam 1 and Beam 4 testing. It is proposed that the test point be
selected to correspond to the following geographic locations in Africa:
Test Point 1 at Pretoria or alternately Johannesburg (Ku + L-Band transmit
and receive)
Test Point 2 at Windhoek, Namibia (L-Band transmit and receive only)
Test Point 3 at Cabinda, Congo (L-Band transmit and receive only) (Beam
1 and Beam 4)
Final selection of test locations will be determined following final selection
of satellite orbital slot and associated satellite pointing.
Note that it is proposed to leave the Ku-Band link test set at one location to
simplify logistics and to ensure a satisfactory and stable uplink signal level.
Uplinking from Pretoria or Johannesburg has the advantage that the Ku- band
signal will be received near the antenna boresight, hence minimizing uplink EIRP
requirements.
At each test location the measurement of two beams will be possible, and this
will assist in verifying both satellite repeater performance as well as
satellite antenna pointing. Data will be collected over a 24 hour period to
account for any thermal variations. All measurements will be made using
calibrated equipment and within the small signal region of the satellite payload
transponders.
Figure 2 shows the proposed test locations in Africa and the corresponding beam
coverage at L-Band.
Figure 3 shows the approximate location of the three test points on the L-band
pattern when the satellite is located at 101oo W. with assumed nominal coverage
of the USA.
Figure 4 shows the coverage when the satellite nominal pointing is changed by
approximately 1.9o to the South to enable measurements to be conveniently
carried out at three locations in North and Central America. Note that this bias
is exactly the amount assumed for ESA shift to optimize coverage of Africa.
Please note that coverage shown for all for the above figures is approximate and
only for illustrative purposes.
Fuel Lifetime Estimate
Lessee and Lessor will mutually agree on a method to estimate the remaining fuel
life of the Satellite at the Relocated Orbital Position.
Schedule 2.1 Page 3
<PAGE>
Schedule 2.3
LESSEE'S TT&C FACILITIES
AND SERVICES
Requirements of TT&C Facilities to be provided by Lessee
- --------------------------------------------------------
Introduction
- ------------
Lessee shall provide Tracking Telemetry and Command (TTAC) equipment and
facilities as outlined herein suitable to allow transfer to and ongoing
operations at the Relocated Orbital Position. Lessee agrees to provide three
control facilities each capable of controlling the Satellite via its omni
antenna. One facility will be located within the beam of the communications
antenna pattern in a location such as Johannesburg, South Africa and will be
capable of controlling the Satellite using its directive antenna as well. The
second primary site is to be located in Gibraltar. The third site shall be
located in Chilworth, England and shall be used for transfer orbit maneuvers via
the Satellite's omni antenna. The Chilworth site will also be available for
performing the post-drift testing and systems integration with the
communications ground segment. The Lessee will inform the Lessor three (3)
months prior to the Chilworth station being ready to receive the Satellite to
allow traffic transfer and Pre-Drift IOT to be performed. The Johannesburg site
will be available prior to commencing revenue service. All sites will be linked
to a satellite control facility using redundant International Private Line
64kbps circuits.
Facilities requirements
- -----------------------
At each site, facilities suitable for a Satellite Control System will be
provided including but not limited to the following;
Diesel backed UPS power with a rated power capacity of not less
than 50 kVA Environmentally controlled building, with raised
computer floor for the installation of satellite control
equipment. Suitable land area for two antennas, one 8 meters in
diameter, and one 4.5 meters in diameter. Lessee will provide
suitable antenna foundations as per each antenna manufacturer's
recommendations. The antenna foundations will be not more than 25
meters from where the high power amplifiers are installed. All
environmental control of facilities shall meet recommendations as
outlined by the provider of the Satellite Control Equipment.
Access to the site shall be possible for heavy equipment such as
cranes.
Schedule 2.3 Page 1
<PAGE>
Lessee will provide suitable communications facilities to allow control of
the satellite from a remote location. Facilities required are;
Standard DTMF tone dial telephone services
Facsimile services ISDN services accessible internationally
The site shall be serviceable by International Private Line
services at data rates of 64 kbps minimum.
Lessee shall provide communications equipment suitable for controlling the
satellite from a remote site as per the requirements of the provider of the
Satellite Control System.
Antennas and RF requirements
- -----------------------------
Lessee shall provide two antennas at each site. The prime antenna shall have a
minimum diameter of 8 meters and the back up antenna a diameter of 4.5 meters.
The high power amplifiers (HPAs) shall be 2.5 kilowatt klystrons yielding with
the antenna an minimum EIRP of 88 dBW. An EIRP of 88 dBW will provide effective
commanding through the spacecraft omni antenna, providing an expected command
margin of 15 dB clear sky, assuming a worst case command threshold flux density
of -90 dBW/m2 via the omni.
The 8 meter antenna will have the following characteristics;
Full monopulse tracker using TE21 tracking coupler with Antenna Control
Unit Four port linearly polarized feed +/- 90 degree polarization
adjustment Minimum 120 degree sector azimuth coverage Feed capable of
handling 3kW RF power minimum. G/T of 34 dB/K minimum.
The 34 dB/K antenna performance will provide a minimum telemetry margin of 11.3
dB, with respect to a 1E-6 Bit Error Rate, assuming a 4 kilobit data rate and a
spacecraft EIRP of 7dBW nominal through the omni.
The RF system will be equipped with redundant up and down converters, redundant
LNA's and HPA's.
The high power waveguide combining system will allow routing of the command
signal to either the backup (4.5 meter) or the primary (8 meter) antenna using a
variable power combining system.
The 4.5 meter antenna will allow command and telemetry operations during periods
when the 8 meter antenna is not available due to repair, maintenance and
overhaul. The EIRP is to be 83 dBW minimum and the G/T is 29 dB/K. This will
provide an expected margin of 6 dB for telemetry via the satellite' s omni,
suitable to back up the 8 meter under clear sky conditions. Margins via the
Satellite's communication antenna will be 10 dB's higher nominally.
Schedule 2.3 Page 2
<PAGE>
Computers and Baseband equipment
- --------------------------------
Lessee shall provide computers with associated software to allow full remote
command, telemetry and range functions to be performed at the station from a
remote Satellite Control facility. The monitor and control equipment provided
shall allow remote control and monitoring of all the satellite control
facility's subsystems. The systems provided shall be fully redundant at each of
the TTAC stations. The software shall be suitably modified and upgraded to
permit full processing of command and telemetry data for the Lessee spacecraft.
Local display consoles shall be installed which will display local spacecraft
telemetry data to support emergency spacecraft operations should control from
the remote Satellite Control Facility not be available. The system will allow an
operator to send manual commands to the spacecraft using the front panel
controls of the command generator. Baseband equipment includes telemetry
receivers, FM modulators, command generators, telemetry processors, computers,
display systems, range tone generator processors, bit synchronizers, PSK
demodulators and associated patch panels.
Schedule 2.3 Page 3
<PAGE>
Schedule 3.8
REPORTING SCHEDULE
The following shall be the reporting schedule for the Lessee to the Lessor:
Anomaly Notification shall take place immediately upon the occurrence
---------------------
of any anomaly that threatens or affects the health or safety of the
Satellite or the availability of communications services via verbal
and pager notification to the Lessor upon detection of an anomaly.
Anomaly Reports shall be generated whenever an anomaly is detected by
----------------
either the TT&C Services provider or by the payload monitoring that is
being performed by the Lessee. In the case of any anomaly that
threatens or affects the health or safety of the Satellite or the
availability of communications services, this report shall be a
detailed description along with supporting technical data and shall be
provided no more than two (2) days after anomaly has occurred. All
other anomaly reports shall be summarized and included in the System
Status Report.
Anomaly Investigation Reports shall be generated no more than one
-------------------------------
month from detection of any anomaly that threatens or affects the
health or safety of the Satellite or the availability of
communications services. The Anomaly Investigation Report shall be a
detailed engineering study addressing the cause of the anomaly, impact
to the Satellite and correction actions required, if any, due to the
anomaly.
System Control Log: Lessee shall maintain a log showing date, time and
------------------
person performing each entry. The System Control Log shall show the
completion of all planned events and note any unusual, unplanned
events with the Satellite or ground system. A copy of the log shall be
available for inspection at all times and shall be maintained
throughout the term of the Lease.
Payload Utilization Reports shall be generated on a quarterly basis
-----------------------------
showing on a monthly basis the busy hour utilization of each beam and
the busy hour of each matrix of the Satellite.
Satellite Health Reports shall be generated on a yearly basis suitable
------------------------
for submission to any outside entity Lessee deems appropriate. This
report shall provide a detailed status of each subassembly of the
craft.
Schedule 3.8 Page 1
<PAGE>
Satellite Status Reports shall be generated quarterly with a focus on
------------------------
changes that may have occurred from the last Satellite Health Report.
System Status Reports shall be generated quarterly summarizing the
----------------------
status of the Satellite or ground system, with a focus on changes that
may have occurred since the last System Status Report.
Schedule 3.8 Page 2
<PAGE>
Schedule 3.12
ESCROW OF SECURITIES
<TABLE>
<CAPTION>
<S> <C>
Name Title/Position
---- --------------
C. Paul Dollery Vice Chairman, African Continental
Telecommunications Ltd.
James R. Walker Chief Executive Officer, African
Continental Telecommunications Ltd.
Tony Leng Managing Director, African
Continental Telecommunications Ltd.
Ernest G. DeNigris President, African Continental
Telecommunications Ltd.
Michael Johnson Chief Financial Officer, African
Continental Telecommunications Ltd.
</TABLE>
Schedule 3.12 Page 1
<PAGE>
Schedule 5.1 and 5.2
GOVERNMENT APPROVALS AND CONSENTS
TO RELOCATE THE SATELLITE AND
CONSUMMATE THE LEASE TRANSACTIONS
United States Government Approvals
Federal Communications Commission
Department of Commerce and
any other applicable agencies with respect to
export control matters or with respect to
the Satellite and the licensed software under the
CGS and the License Agreement
Canadian Government Approvals
Industry Canada
(including under the Bulk Capacity Lease of TMI)
with respect to change in spectrum and orbital slot
for the TMI Satellite
Communications Security Establishment (Canada)
with respect to the TMI Satellite
Schedule 5.1/5.2 Page 1
<PAGE>
SCHEDULE 10.1
LESSOR'S CONSENTS
1. Approval of the Federal Communications Commission
2. Export control approval by the Department of Commerce and other government
agencies, as applicable
Schedule 10.1 Page 1
<PAGE>
SCHEDULE 10.2
AMSC PARENT'S CONSENTS
1. Approval of the Federal Communications Commission
2. Export control approval by the Department of Commerce and other government
agencies, as applicable
Schedule 10.2 Page 1
<PAGE>
Schedule 12.1(d)
LESSEE CONSENTS
Teleport License from Gibraltar
Approval of Relocated Orbit Position
Orbital Space License under the
Outer Space Act 1986 (Gibraltar) Order 1996
(Gibraltar or UK approval)
Spectrum approval and coordination
Schedule 12.1(d) Page 1
<PAGE>
Schedule 12.1(e)
FOUNDERS AND THEIR OWNERSHIP INTERESTS
Schedule 12.1(e)
<PAGE>
<TABLE>
Elcor Satellites (PTY) Limited
<CAPTION>
Shareholder Number of Shares*
- --------------------------------------------------- -------------------
<S> <C>
Yancey Family LP 8,086,307
Prentiss Yancey 8,086,307
Charles Andrews 4,917,173
Samuel A. Andrews 100,000
Homer B. Walls 100,000
J.L. Nelson 100,000
Balozi Harvey 4,624,973
Andrew Young 453,622
Victor Labat 453,622
Inner City Broadcasting 246,534
Gregory Brown 31,326,392
China Victory Investment Limited 1,918,592
James R. Walker 5,329,800
James R. Walker K/A J.A. Tobey 1,184,400
James R. Walker K/A J.B. Walker 1,184,400
James R. Walker K/A J.R. Walker 1,184,400
Michael W. Johnson 2,664,900
Michael W. Johnson Jr. Trust 888,300
Robert Graham Clark 1,184,400
Gary Goodchild 1,184,400
Ratory, L.P. (a Delaware limited partnership) 1,184,400
Babacar N'Diaye 1,184,400
Investment Facility 581 (PTY) Ltd. 1,776,600
Kaydon Limited 8,883,000
PTC Holdings Limited 8,883,000
Tintagle Trading Company Limited 8,883,000
Thomas Wynne Watts 3,553,200
Olivier Chedel 888,300
PTC Holdings Limited 67,119,850
Comorant Commercial Enterprises LTD 1,776,600
Elaine Dollery 1,776,600
Elcor Holdings Limited 11,700,000
Skybird Limited 4,700,000
Christopher Paul Dollery 20,135,954
Kenly Limited 16,779,963
Francis Elaine Dollery 13,423,970
Pippin Limited 16,779,963
Percy Sutton 9,075,493
Touch and Tutor Research and Development 1,184,790
Charles Andrews 592,395
--------
Total 305,500,000
</TABLE>
- --------------------------------
* Ordinary shares of R0.001 (one tenth of one cent) each
Schedule 12.1(e) Page 1
<PAGE>
EXHIBIT 10.63
TMI COMMUNICATIONS AND COMPANY, LIMITED PARTNERSHIP
- and -
AMSC SUBSIDIARY CORPORATION
- and -
AMERICAN MOBILE SATELLITE CORPORATION
SATELLITE PURCHASE AGREEMENT
December 2, 1997
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1
INTERPRETATION
Section 1.1. Definitions.................................................... 1
Section 1.2. Gender and Number.............................................. 7
Section 1.3. Headings....................................................... 7
Section 1.4. Currency....................................................... 7
Section 1.5. Certain Phrases, etc........................................... 7
Section 1.6. Incorporation of Schedules..................................... 7
Section 1.7. Certificates................................................... 7
ARTICLE 2
SALE OF 50% INTEREST IN SHARED SATELLITE
Section 2.1. Sale of 50% Interest in Shared Satellite....................... 7
Section 2.2. Satellite Purchase Price....................................... 8
Section 2.3. Satellite Purchase Price and Prepayment........................ 9
Section 2.4. Closing on Traffic Transfer Date............................... 9
Section 2.5. Conditions to Traffic Transfer Date and Sale by TMI............ 9
Section 2.6. Conditions to Traffic Transfer Date and Purchase by AMSC....... 11
ARTICLE 3
TT&C AND SERVICES OPERATING COMMITTEE
Section 3.1. TT&C Fees...................................................... 12
Section 3.2. Services Operating Committee................................... 12
Section 3.3. Quarterly Reporting............................................ 14
Section 3.4. Performance Anomalies and Incentive Payments................... 14
Section 3.5. Satellite Health Reports....................................... 14
Section 3.6. Radio Frequencies.............................................. 14
ARTICLE 4
SATELLITE SHARING ARRANGEMENTS
Section 4.1. Effect of Traffic Transfer Date................................ 14
Section 4.2. Orbital Slots.................................................. 15
Section 4.3. Insurance...................................................... 15
Section 4.4. Excess Capacity; and Termination of Satellite
Capacity Agreement............................................. 16
Section 4.5. Decommissioning of Satellite................................... 17
Section 4.6. Exclusion of Liability for Telesat............................. 17
Section 4.7. Temporary Traffic Transfer..................................... 18
(i)
<PAGE>
Page
ARTICLE 5
CERTAIN COVENANTS
Section 5.1. Conduct of Business............................................ 19
Section 5.2. Satellite Capacity Agreement and Joint Operating Agreement..... 19
Section 5.3. Reasonable Efforts............................................. 19
Section 5.4. Confidentiality; Press Releases................................ 19
Section 5.5. Access to Information.......................................... 20
Section 5.6. FCC Applications............................................... 20
Section 5.7. Notices of Certain Events...................................... 20
Section 5.8. Limitation on Liability to Customers, Resellers, etc........... 21
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
Section 6.1. Representations and Warranties of TMI.......................... 21
Section 6.2. Representations and Warranties of AMSC......................... 23
Section 6.3. Disclaimer of Warranties....................................... 24
Section 6.4. Disclosure..................................................... 25
ARTICLE 7
TERM AND TERMINATION
Section 7.1. Term........................................................... 25
Section 7.2. Termination Prior to the Traffic Transfer Date................. 25
Section 7.3. Remedies of TMI Prior to TMI Security Discharge Date........... 27
Section 7.4. Liabilities in Event of Termination............................ 28
Section 7.5. Purchase Price Prepayment and Liquidated Damages............... 28
Section 7.6. Procedure Upon Termination..................................... 30
Section 7.7. Exclusion of Consequential and Punitive Damages................ 30
Section 7.8. Option of AMSC to Put Interest to TMI.......................... 30
Section 7.9. Satellite Failure.............................................. 33
Section 7.10. General Rights and Remedies................................... 35
ARTICLE 8
MISCELLANEOUS
Section 8.1. Notices........................................................ 35
Section 8.2. Amendments; No Waivers......................................... 36
Section 8.3. Expenses....................................................... 36
Section 8.4. Successors and Assigns......................................... 36
Section 8.5. Interest on Amounts and Set Off................................ 38
(ii)
<PAGE>
Page
Section 8.6. Governing Law.................................................. 38
Section 8.7. Dispute Resolution; Arbitration................................ 38
Section 8.8. Counterparts; Effectiveness.................................... 39
Section 8.9. Severability.................................................. 40A
Section 8.10. Cooperation and Further Assurances........................... 40A
Section 8.11. Entire Agreement............................................. 40A
Section 8.12. Structure.................................................... 40A
Section 8.13. No Fiduciary Duties; Other Business Opportunities............ 40A
Section 8.14. Indemnification.............................................. 40B
Section 8.15. Export Control Compliance.................................... 40B
Section 8.16. Regulatory Compliance........................................ 40B
Section 8.17. Bulk Sales Act (Ontario)..................................... 40B
Section 8.18. AMSC Parent Corp. Joint and Several Liability................ 40C
SCHEDULES AND EXHIBITS
Schedule 1.1 Permitted Transferees
Schedule 3.2(1) Technical and Operating Matters
Schedule 3.2(2) Telesat Procedures
Schedule 4.1(2) Allotted Usage
Schedule 4.4(1) Excess Capacity and Pricing
Schedule 4.4(3) Restoral Capacity
Schedule 5.2(1) Amendment to Satellite Capacity Agreement
Schedule 5.4 Form of Press Release
Schedule 6.1(c) Documents Relating to the Condition of the Shared Satellite
Schedule 6.1(f) Existing Liens on Shared Satellite
Exhibit A Form of Conveyance Agreement
Exhibit B Form of Security Agreement
(iii)
<PAGE>
SATELLITE PURCHASE AGREEMENT
Satellite purchase agreement dated as of December 2, 1997 between TMI
COMMUNICATIONS AND COMPANY, LIMITED PARTNERSHIP , a limited partnership
organized under the laws of the Province of Quebec, with its principal executive
office in the City of Gloucester, Province of Ontario and AMSC SUBSIDIARY
CORPORATION, a corporation dually incorporated under the laws of the States of
Delaware and Virginia, respectively, with its principal executive office in
Reston, Virginia (and a wholly-owned subsidiary of American Mobile Satellite
Corporation), and, solely for purposes of Section 8.18, American Mobile
Satellite Corporation, a Delaware Corporation.
WHEREAS:
A. TMI operates a communications system for the provision of mobile
satellite services in Canada;
B. AMSC operates a communications system for the provision of mobile
satellite services in the United States;
C. AMSC and Telesat Mobile Inc. have heretofore executed a Satellite
Capacity Agreement for the purpose, inter alia, of establishing the terms and
conditions for the provision of satellite capacity by either party to the other
in certain circumstances; and
D. AMSC has offered to purchase a 50% undivided interest in the Shared
Satellite owned by TMI, and to jointly own and operate the Shared Satellite with
TMI to meet the satellite capacity demands of their respective customers, and to
amend (and, under certain conditions, terminate) the Satellite Capacity
Agreement in a manner consistent with such joint ownership, all as more
particularly set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements contained in this
Agreement, and other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto), the
parties hereto agree as follows:
ARTICLE 1
INTERPRETATION
Section 1.1. Definitions. (1) As used in this Agreement and the recitals
hereto, the following terms have the following meanings:
"Affiliate" means, with respect to any Person, any Person controlling,
controlled by or under common control with such Person; provided that neither
party hereto shall by reason of entering into this Agreement and the
consummation of the transactions contemplated hereby be an Affiliate of the
other party or of the entity or entities, if any, through which the other party
holds its Interest. For purposes hereof, the term "control" (including the terms
"controlling," "controlled by" and "under common control with") means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise.
"Agreement" means this satellite purchase agreement and all schedules,
exhibits and instruments in amendment or confirmation of it; and the expressions
"Article" and "Section" followed by a number mean and refer to the specified
Article or Section of this Agreement.
"AMSC" means AMSC Subsidiary Corporation, a corporation dually incorporated
under the laws of the States of Delaware and Virginia, respectively, and its
successors and permitted assigns in accordance with the terms of this Agreement.
"AMSC Parent Corp." means American Mobile Satellite Corporation, a
corporation incorporated under the laws of the State of Delaware, and its
successors.
"AMSC Satellite" means the satellite owned by AMSC as of the date hereof
(and referenced as the MSAT-2 (M2) satellite).
"AMSC Satellite Contract" means the agreement between AMSC, as lessor, the
AMSC Satellite Lessee, and AMSC Parent Corp., as guarantor of the obligations of
AMSC, providing for the lease of the AMSC Satellite.
"AMSC Satellite Lessee" means African Continental Telecommunications Ltd.,
and its successors and assigns under the AMSC Satellite Contract.
"Bankruptcy Event" with respect to a Person means (i) the voluntary
commencement of any proceeding, or voluntary filing, by such Person of a
petition seeking liquidation, reorganization, arrangement or readjustment, in
any form, of its debts under Title 11 of the United States Code or under the
Bankruptcy and Insolvency Act (Canada) or under the Winding-Up and Restructuring
Act (Canada) or under the Companies' Creditors Arrangement Act (Canada) (or
corresponding provisions of future laws of the United States or of Canada) or
under any other jurisdiction's insolvency, liquidation or similar laws (each
such United States, Canadian and other jurisdictions' laws being referred to as
a "Bankruptcy Law"), or such Person's filing of an answer consenting to or
acquiescing in any such petition; or (ii) the making by such Person of any
general assignment for the benefit of its creditors or the admission by such
Person in writing of its inability to pay its debts as they mature; or (iii) the
consent by such Person to the filing of, the failure by such Person to contest
successfully with respect to, or the granting of an order of relief with respect
to (x) any involuntary petition or application under any Bankruptcy Law seeking
an application for the appointment of a receiver, trustee, custodian,
sequestrator or similar official for the assets of such Person, or (y) any
involuntary petition or application under any Bankruptcy Law seeking
liquidation, reorganization, arrangement or readjustment of its debts under any
Bankruptcy Law; or (iv) the appointment of a receiver, trustee, custodian,
sequestrator or similar official for the assets of such Person under any
Bankruptcy Law or otherwise.
"Business Day" means a day which is not a Saturday, Sunday or legal holiday
on which commercial banking institutions in New York, New York or Montreal,
Quebec are authorized to close.
"Collateral" means the subject matter of the TMI Purchase Money Security
Interest, including the Interest of AMSC and proceeds thereof.
"CMIS Contract" means the agreement dated as of the date hereof between TMI
and AMSC providing for a license from TMI to AMSC in respect of TMI's
CMIS/Eclipse software.
"Drift Orbit Services Agreement" means the agreement dated as of the date
of this Agreement between AMSC and Telesat in respect of drift orbit services
for the AMSC Satellite, as amended, supplemented, restated or modified from time
to time.
"Enforcement Notice" means a notice which may be given by TMI to AMSC,
whenever the Purchase Money Security Interest has become enforceable, that TMI
intends to exercise or enforce any remedy which it may have against AMSC under
the Security Agreement.
"Enforcement Period" means the period commencing on the date which is 30
days following the delivery of the Enforcement Notice.
"Force Majeure" means any acts of God; meteors; fire, flood, weather, or
other catastrophes; other circumstances in the space environment over which the
parties have no control; any laws of any governmental agency or body, national
emergencies, insurrections, riots, embargoes, wars, or strikes, lockouts, work
stoppages or other labour difficulties.
"Interest" means, with respect to TMI or AMSC, respectively (or their
respective successors or permitted assigns in accordance with the terms of this
Agreement), its 50% undivided ownership interest in the Shared Satellite,
including its rights and obligations under this Agreement in respect of the
Shared Satellite.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind.
"Permitted Liens" means, with respect to any Person, undetermined or
inchoate liens, privileges and charges incurred and incidental to the ordinary
course of business which arise solely by operation of law and have not been
filed pursuant to law against such Person or its assets and which relate to
obligations which are not delinquent.
"Permitted Transferee" means, with respect to TMI and AMSC, respectively,
any of the Persons set forth under its name on Schedule 1.1.
"Person" means an individual, corporation, partnership, association, trust,
limited liability company or any other entity or organization, including a
court, a government or political subdivision or an agency, unit or
instrumentality thereof.
"PIP Contracts" means, collectively, (i) MSAT Spacecraft Contract No.
C90TM0001 dated December 10, 1990 (and amendments thereto) between Spar
Aerospace Limited and TMI; and (ii) MSAT Spacecraft Contract No. A90TM0002 dated
December 10, 1990 (and amendments thereto) among Hughes Communications
International, Inc., Spar Aerospace Limited and TMI, in each case as amended,
supplemented or modified from time to time.
"Relocated Orbital Position" means the geostationary orbital position
located at 101o West longitude or such other nearby orbital position as may be
required for satellite coordination for the Shared Satellite.
"Revenue Adjustment Amounts" means, collectively, each Lease Revenue
Adjustment and each Sale Revenue Adjustment which become payable to TMI under
Sections 2.2(2) and 2.2(3).
"Satellite Capacity Agreement" means the memorandum of agreement for
satellite capacity dated as of February 17, 1992 between AMSC and Telesat Mobile
Inc., as assigned to and assumed by TMI, and as amended, modified, restated or
supplemented from time to time.
"Satellite Failure" means at any time that one or more of the following
events has occurred and is unremedied at such time: (i) physical loss or
destruction of the Shared Satellite; (ii) inability of the Shared Satellite to
respond to commands from the Shared Satellite operator; (iii) inability of the
Shared Satellite to maintain its orbital position or attitude with respect to
the earth; (iv) loss of 50% or more of the available L Bank RF Power (determined
in accordance with Schedule 4.1(2)) in either Hybrid Matrix Amplifier; (v)
reduction in Ku Band EIRP of 3 dB or more; (vi) reduction of 3 dB or more in L
Band G/T in any of the four Primary Beams; or (vii) reduction of 3 dB or more in
Ku Band G/T.
"Satellite Purchase Price" means the amount equal to sum of the Minimum
Satellite Purchase Price and the Revenue Adjustment Amounts.
"Secured Obligations" means the payment and performance of all debts,
liabilities and obligations at any time due or accruing due and owing by, or
otherwise payable by, AMSC to TMI under this Agreement or the Security
Agreement.
"Security Agreement" means a security agreement to be made by AMSC in
favour of TMI pursuant to which TMI reserves, and AMSC grants, the TMI Purchase
Money Security Interest as security for the Secured Obligations in the form of
Exhibit B.
"Shared Satellite" means the satellite owned by TMI as of the date hereof
(and is referenced as the MSAT-1 (M1) satellite).
"Technical and Operating Matters" means all matters of the type described
in Schedule 3.1(1).
"Telesat" means Telesat Canada, a Canadian corporation.
"Telesat Agreement" means the operations agreement dated March 24, 1993
between Telesat and Telesat Mobile Inc., as amended by amending agreement no. 1
dated July 18, 1994 and by amending agreement no. 2 dated September 26, 1995.
"TMI" means TMI Communications and Company, Limited Partnership, a limited
partnership organized under the laws of the Province of Quebec, and its
successors and permitted assigns in accordance with the terms of this Agreement.
"TMI Payment Account" means at any time the account of TMI maintained by
The Toronto Dominion Bank at its branch at 106 Sparks Street, Ottawa, Ontario,
branch no. 32326 with account no. 7300269, ABA 026003243 or such other account
as the chief financial officer of TMI may designate in writing prior to such
time by notice to AMSC.
"TMI Purchase Money Security Interest" means the reservation out of the
transfer by TMI of a 50% undivided ownership interest in the Shared Satellite,
and the grant by AMSC, of a first priority security interest in AMSC's Interest
and the proceeds thereof all as more particularly set forth in the Security
Agreement.
"TMI Security Discharge Date" means the first to occur of (i) at any time
prior to the commencement of the Enforcement Period, the date upon which AMSC
shall have indefeasibly paid to TMI the Minimum Satellite Purchase Price in full
together with all TT&C Fees then owing under this Agreement as at the date of
payment in full of the Minimum Satellite Purchase Price; (ii) at any time
following the commencement of the Enforcement Period, the date upon which TMI
shall have been indefeasibly paid in full the Secured Obligations; and (iii) the
date of the transfer of AMSC's Interest to TMI in accordance with Section 7.8.
"Traffic Transfer Date" means the date stipulated by AMSC pursuant to
Section 2.4 (or such later date as AMSC and TMI may agree) as of which each of
the conditions set forth in Section 2.5 and 2.6 has been satisfied (or waived by
the party entitled to waive such condition) and as of which AMSC will acquire a
50% undivided ownership interest in the Shared Satellite subject to the TMI
Purchase Money Security Interest.
"TT&C" means tracking, telemetry and control services, drift orbit
operations and/or other operational services in connection with a satellite.
"TT&C Fees" means, collectively, (i) the daily and monthly fees payable to
TMI by AMSC pursuant to Section 3.1(2); and (ii) such other amounts as the
parties agree are payable pursuant to Section 3.1(3).
"U.S. Base Rate" means, at any time, the rate of interest per annum equal
to the per annum rate of interest which National Bank of Canada announces from
time to time as the reference rate of interest for loans in U.S. dollars to its
Canadian borrowers, adjusted automatically with each change in such rate, all
without the necessity of any notice to any Person.
(2) Each of the following terms is defined in the Section set forth
opposite such term:
<TABLE>
<CAPTION>
Term Section
- ---- -------
<S> <C>
AAA 8.7(2)
AAA Rules 8.7(2)
AMSC Collateral Agent 8.4(2)
AMSC Secured Lenders 8.4(2)
Agents 5.4(1)
Allotted Usage 4.1(2)
Arbitration Demand 8.7(3)
Claimant 8.7(2)
Confidential Information 5.4(1)
Contracting Party 5.8
Conveyance 2.1
Damages 8.14
Dispute 8.7(1)
Excess Capacity 4.4(1)
Excess Coverage 4.3(4)
Existing Obligations 5.4(1)
GE Spacecraft 3.6
Indemnitee 8.14
Indemnitor 8.14
Information 6.1(h)
Joint Operating Agreement 5.2(2)
Joint Ownership 3.01(a)(ii)
Lease Revenue Adjustment 2.2(2)
Losses 4.7(d)
Minimum Satellite Purchase Price 2.1
Mountain Beam Settlement 6.1(h)
Percentage Insurance Interest 4.3(3)
Purchase Price Prepayment 2.2(a)
Put Notice 7.8(2)
Put Payment 7.8(1)
Representative 3.2(1)
Respondent 8.7(3)
Sale Revenue Adjustment 2.2(3)
Satellite Failure Notice 7.9(1)
Satellite Failure Payment 7.9(1)
Satellite Insurance 4.3(2)
Satellite Performance 6.1(h)
Services Operating Committee 3.2(1)
Specified Time Period 4.4(1)
Technical and Operating Matters 3.2(1)
Telesat Procedures 3.2(2)
Temporary Testing Right 4.7
Term 7.1
TMI Existing Liens 6.1(f)
Uninsured Amount 4.3(2)
</TABLE>
Section 1.2. Gender and Number. Any reference in this Agreement to gender
includes all genders and words importing the singular number only include the
plural and vice versa.
Section 1.3. Headings, etc. The provision of a Table of Contents, the
division of this Agreement into Articles and Sections and the insertion of
headings are for convenient reference only and are not to affect the
interpretation of this Agreement.
Section 1.4. Currency. All references in this Agreement to dollars, unless
otherwise specifically indicated, are expressed in the currency of the United
States of America.
Section 1.5. Certain Phrases, etc. In this Agreement (i) (y) the words
"including" and "includes" mean "including (or includes) without limitation" and
(z) the phrase "the aggregate of", "the total of", "the sum of", or a phrase of
similar meaning means "the aggregate (or total or sum), without duplication,
of", and (ii) in the computation of periods of time from a specified date to a
later specified date, unless otherwise expressly stated, the word "from" means
"from and including" and the words "to" and "until" each mean "to but
excluding".
Section 1.6. Incorporation of Schedules. The schedules attached to this
Agreement shall, for all purposes of this Agreement, form an integral part of
it.
Section 1.7. Certificates. Any certificate required by the terms of this
Agreement to be given by any officer of either party for and on behalf of such
party shall be given without any personal liability on the part of the officer
giving the certificate.
ARTICLE 2
SALE OF 50% INTEREST IN SHARED SATELLITE
Section 2.1. Sale of 50% Interest in Shared Satellite. Subject to the terms
and conditions of this Agreement, TMI agrees to sell, assign and transfer to
AMSC, and AMSC agrees to purchase from TMI on the Traffic Transfer Date, good
and marketable title to a 50% undivided ownership interest in the Shared
Satellite, free and clear of all Liens, except for and subject to the TMI
Purchase Money Security Interest, for an aggregate amount equal to the sum of
(x) U.S.$60,000,000 (the "Minimum Satellite Purchase Price") and (y) the Revenue
Adjustment Amounts. The transfer shall be effected pursuant to a conveyance
agreement in the form attached as Exhibit A (the "Conveyance").
Section 2.2. Satellite Purchase Price. (1) Except as otherwise provided
under Sections 7.3, 7.8 and 7.9, the Minimum Satellite Purchase Price shall be
paid by AMSC to TMI as follows:
(a) on the date of this Agreement, the amount of U.S.$5,000,000 (the "Purchase
Price Prepayment");
(b) on the Traffic Transfer Date, the amount of U.S.$3,000,000; and
(c) the amount of U.S.$52,000,000 shall be paid in equal quarterly instalments
of U.S.$3,000,000, the first instalment to be due and payable on the date which
is three months following the Traffic Transfer Date and each instalment after
that date to be due and payable on the date which is three months thereafter
until the Minimum Satellite Purchase Price has been paid in full.
(2) At any time and from time to time that AMSC receives payments from the
AMSC Satellite Lessee (or any subsequent lessee of, or transferee of an interest
in, the AMSC Satellite) pursuant to the AMSC Satellite Contract (or any renewal,
extension, substitution or replacement thereof) in an aggregate amount in excess
of U.S.$190,000,000, then AMSC shall pay to TMI, and there shall become
immediately due and payable, an amount (each a "Lease Revenue Adjustment") equal
to twelve thirty-eighths (12/38ths) of all such excess amounts; and
(3) At any time and from time to time that AMSC receives proceeds upon any
sale or other disposition of the AMSC Satellite which together with the
aggregate amount of all payments received from the AMSC Satellite Lessee (or any
subsequent lessee of, or transferee of an interest in, the AMSC Satellite)
pursuant to the AMSC Satellite Contract (or any renewal, extension, substitution
or replacement thereof) in an aggregate amount in excess of the sum of (x)
U.S.$190,000,000 and (y) thirty-eight twelfths (38/12ths) of all Lease Revenue
Adjustments received by TMI pursuant to Section 2.2(2), then AMSC shall pay to
TMI, and there shall become immediately due and payable, an amount (each a "Sale
Revenue Adjustment") equal to one-half (2) of all such excess proceeds;
(4) Each Lease Revenue Adjustment and each Sale Revenue Adjustment shall be
paid to TMI immediately upon receipt thereof by AMSC but the calculation of such
amounts (i) shall be net of any bona fide costs and expenses incurred by AMSC in
connection with such additional payments or proceeds, as the case may be; and
(ii) shall be in respect of the sale or the lease of, or other transfer of an
interest in, the AMSC Satellite only and shall exclude any revenues or proceeds
attributable to ground systems, licensing or other related revenue.
(5) AMSC may prepay at any time the Minimum Satellite Purchase Price
without premium or penalty.
(6) At any time prior to the commencement of the Enforcement Period, TMI
will discharge the TMI Purchase Money Security Interest upon indefeasible
payment in full of the Minimum Satellite Purchase Price and all TT&C Fees owing
as at the date of payment in full of the Minimum Satellite Purchase Price and at
the request and expense of AMSC.
(7) For the purposes of verifying the calculation of Revenue Adjustment
Amounts or the amounts payable by AMSC under Section 7.9(5), AMSC shall provide
TMI, within five Business Days (or such longer period as is reasonable to
respond in the circumstances) of any request by TMI therefor, with true and
complete copies of the books, records, invoices and contracts of AMSC evidencing
or relating to payments received under the AMSC Satellite Contract (or any
renewal, extension, substitution or repayment thereof) and any sale or other
disposition of the AMSC Satellite and the proceeds thereof, as needed for TMI to
evaluate the application of Section 2.2 or 7.9(5).
Section 2.3. Satellite Purchase Price and Prepayment. (1) Each of TMI and
AMSC acknowledges and agrees that:
(a) on and after the Traffic Transfer Date and the completion of the transfer
specified in Section 2.1 and except as otherwise provided under Sections 7.8 and
7.9, the Satellite Purchase Price and the TT&C Fees shall be payable in each and
every event and circumstance including Force Majeure, failure of the Shared
Satellite or any part thereof, revocation or termination of any authorization,
license, approval or consent required to relocate, use or operate the Shared
Satellite and the relocation of the Shared Satellite; and
(b) TMI has entered into this Agreement on the condition that subject only
to the repayment of the Purchase Price Prepayment in accordance with Section
7.5, the Purchase Price Prepayment shall be irrevocable and non-refundable.
(2) All payments of the Satellite Purchase Price, TT&C Fees and other
amounts owing by AMSC hereunder shall be made to the TMI Payment Account by wire
transfer in immediately available funds prior to 2:00 p.m. (Montreal time) on
the payment date. If any payment to be made under this Agreement is stated to be
due on a day which is not a Business Day, the due date shall be the immediately
preceding Business Day.
Section 2.4. Closing on Traffic Transfer Date. AMSC shall give TMI at least
10 Business Days prior written notice (or such shorter period as TMI may agree
in writing) of the proposed Traffic Transfer Date which shall be a date upon
which AMSC believes, acting reasonably, the conditions to the sale by TMI under
Section 2.5 will be capable of performance or satisfaction, as the case may be.
Section 2.5. Conditions to Traffic Transfer Date and Sale by TMI. The
occurrence of the Traffic Transfer Date, and the obligation of TMI to sell the
50% undivided ownership interest in the Shared Satellite, shall be subject to
the fulfilment of the following conditions precedent (or waiver thereof by TMI)
at or prior to the Traffic Transfer Date:
(a) TMI shall have received the Security Agreement executed and delivered by
AMSC;
(b) TMI shall receive in the TMI Payment Account the partial payment of the
purchase price specified in Section 2.2(b) and the TT&C Fees specified in
Section 3.1(2)(a);
(c) TMI shall have obtained (or satisfied in the case of any applicable waiting
period) all Canadian governmental consents and approvals required by it to
relocate the Shared Satellite to the Relocated Orbital Position and all other
consents and approvals specified in Section 6.1(e)(iii)(y); AMSC shall have
obtained (or satisfied in the case of any applicable waiting period) all
American governmental consents and approvals required to relocate the Shared
Satellite to the Relocated Orbital Position and to relocate the AMSC Satellite
to a new orbital slot over or near the continent of Africa; and TMI shall have
received a certificate signed by the chief executive officer of AMSC on such
date confirming that all such consents and approvals have been so obtained (or
waiting periods satisfied, as the case may be);
(d) AMSC shall have performed in all material respects all of its obligations
hereunder required to be performed by it on or prior to the Traffic Transfer
Date, the representations and warranties of AMSC contained in Article 6 or in
any certificate or other writing delivered pursuant hereto shall be true in all
material respects on each of the date hereof and the Traffic Transfer Date, in
each case as if made on and as of such date (except as otherwise expressly
stated in the subject representation and warranty as being made as of the date
of this Agreement, the Traffic Transfer Date or another specific date); and TMI
shall have received a certificate on the Traffic Transfer Date signed by the
chief executive officer of AMSC to the foregoing effect;
(e) TMI shall have received legal opinions, in form and substance reasonably
satisfactory to TMI, (i) from AMSC in house counsel, as to execution and
delivery by AMSC and AMSC Parent Corp. of this Agreement and, in the case of
AMSC, the Security Agreement, the corporate authority and capacity of AMSC and
AMSC Parent Corp. to enter into this Agreement and, in the case of AMSC, the
Security Agreement; (ii) from outside Ontario counsel as to the enforceability
of this Agreement against AMSC and AMSC Parent Corp. and the enforceability of
the Security Agreement against AMSC; and (iii) from outside local counsel as to
the validity and perfection of the Security Agreement in the jurisdiction in
which the chief executive office of AMSC is located, and as to perfection of the
Security Agreement in Washington D.C., the Province of Ontario and each
jurisdiction from which signals from a feeder link earth station are or, to the
knowledge of AMSC, will be transmitted to the Shared Satellite;
(f) TMI shall have received evidence of registration of the Security Agreement
(or notices or financing statements in respect thereof) in the jurisdiction in
which the chief executive office of AMSC is located, Washington D.C., the
Province of Ontario and each jurisdiction from which signals from a feeder link
earth station are or, to the knowledge of AMSC, will be transmitted to the
Shared Satellite;
(g) TMI shall have received from each creditor of AMSC holding a Lien upon any
part of the Collateral, an agreement that such creditor's rights and interests
in and to the collateral pledged to such creditor under the Lien granted to it
by AMSC is subject to the provisions of this Agreement, and an agreement to
postpone and subordinate such creditor's Lien to the TMI Purchase Money Security
Interest, in form and substance reasonably satisfactory to TMI; and
(h) TMI shall have received a true and complete copy of the AMSC Satellite
Contract and a certificate executed by the President of AMSC which confirms that
(w) TMI has received a true and complete copy of the AMSC Satellite Contract,
(x) the AMSC Satellite Contract is a legal, valid and binding agreement of AMSC
and the AMSC Satellite Lessee enforceable in accordance with its terms subject
to the effect of any applicable Bankruptcy Law or similar laws affecting
creditors' rights generally and the discretion that a court may exercise in the
granting of equitable remedies, (y) the AMSC Satellite Contract remains in full
force and effect as of the Traffic Transfer Date, and (z) AMSC has received
payment from the AMSC Satellite Lessee of all amounts due and owing as of such
date.
Section 2.6. Conditions to Traffic Transfer Date and Purchase by AMSC. The
occurrence of the Traffic Transfer Date shall be further subject to, and the
obligation of AMSC to purchase the 50% undivided ownership interest in the
Shared Satellite shall be subject to, the fulfilment of the following conditions
precedent (or waiver thereof by AMSC) at or prior to the Traffic Transfer Date:
(a) AMSC shall have obtained (or satisfied in the case of any applicable waiting
period) all American governmental consents and approvals required to relocate
the Shared Satellite to the Relocated Orbital Position and to relocate the AMSC
Satellite to a new orbital slot over or near the continent of Africa; TMI shall
have obtained (or satisfied in the case of any applicable waiting period) all
Canadian governmental consents and approvals required by it to relocate the
Shared Satellite to the Relocated Orbital Position and all other consents and
approvals specified in Section 6.1(e)(iii)(y); and AMSC shall have received a
certificate signed by the chief executive officer of TMI on such date confirming
that all such consents and approvals have been so obtained (or waiting periods
satisfied, as the case may be);
(b) TMI shall have performed in all material respects all of its obligations
hereunder which are required to be performed by it on or prior to the Traffic
Transfer Date, the representations and warranties of TMI contained in Article 6
or in any certificate or other writing delivered pursuant hereto shall be true
in all material respects on each of the date hereof and the Traffic Transfer
Date, in each case as if made on and as of such date (except as otherwise
expressly stated in the subject representation and warranty as being made as of
the date of this Agreement, the Traffic Transfer Date or another specific date);
and AMSC shall have received a certificate on the Traffic Transfer Date signed
by the chief executive officer of TMI to the foregoing effect;
(c) AMSC shall have received the Conveyance executed and delivered by TMI;
(d) AMSC shall have received legal opinions, in form and substance reasonably
satisfactory to it, (i) from TMI's in house counsel as to execution and delivery
by the general partner of TMI, in the name and on behalf of TMI of this
Agreement and the Conveyance and the corporate authority and capacity of the
general partner of TMI to enter into this Agreement and the Conveyance in the
name and on behalf of TMI and (ii) from outside Ontario counsel as to the
enforceability of this Agreement and the Conveyance against TMI; and
(e) AMSC shall have received evidence satisfactory to it, acting reasonably,
that the undivided 50% interest in the Shared Satellite to be conveyed to it
under this Agreement and the Conveyance is free and clear of any Liens
registered against TMI or its assets under the personal property security
registers of the Provinces of Ontario and Quebec including TMI Existing Liens.
ARTICLE 3
TT&C AND SERVICES OPERATING COMMITTEE
Section 3.1. TT&C Fees. (1) AMSC and TMI acknowledge and agree that Telesat
currently provides and will continue to provide following the Traffic Transfer
Date TT&C services for the Shared Satellite pursuant to the Telesat Agreement.
(2) In consideration of the payment by TMI of all such TT&C services
provided by Telesat in respect of the Shared Satellite, AMSC shall pay to TMI,
and there shall become due and payable:
(a) on the Traffic Transfer Date, an amount equal to the product of (i) the
number of days remaining in the calendar month in which the Traffic Transfer
Date occurs (including the Traffic Transfer Date), and (ii) U.S.$3,333; and
(b) on the first Business Day of each calendar month, during the period
commencing on the first calendar month immediately following the Traffic
Transfer Date and ending on the decommissioning of the Shared Satellite or at
such time as Telesat ceases to provide the TT&C services for the Shared
Satellite, the amount of U.S.$100,000.
(3) Upon the expiry of the Telesat Agreement in accordance with its terms
and the election by TMI to renew, extend or replace the Telesat Agreement, TMI
and AMSC shall negotiate in good faith to fairly determine the amount of the
TT&C fees and expenses to be payable by AMSC under such renewed, extended or
replaced TT&C agreement taking into account the then existing circumstances.
Section 3.2. Services Operating Committee. (1) On or before the Traffic
Transfer Date, the parties shall establish a committee (the "Services Operating
Committee") consisting of four members (each a "Representative"), two of whom
shall be appointed by TMI and two of whom shall be appointed by AMSC. Each of
TMI and AMSC may at any time and from time to time, by written notice to the
other party, replace any one or both of the Representatives appointed by it, and
any person so replaced shall cease to be a Representative and a member of the
Services Operating Committee upon the giving of such notice. During the period
commencing on the Traffic Transfer Date and ending on the expiry of the Term of
this Agreement, the Services Operating Committee shall manage or direct all
technical and operating matters in respect of the Shared Satellite, including
determination of power capacity and capacity usage and related spectrum
considerations, traffic planning, access engineering, interference,
troubleshooting, satellite reconfiguration, satellite health considerations and
matters related to TT&C services as well as the other matters set forth in
Schedule 3.2(1) (" Technical and Operating Matters"). In managing and directing
Technical and Operating Matters, the parties shall apply the principles set
forth in such Schedule 3.2(1). Except as otherwise provided in Sections 3.2(4)
and 7.3(2), all decisions or actions to be made or taken by the Services
Operating Committee shall require the unanimous agreement of all of the
Representatives, and each of TMI and AMSC agrees to use its reasonable best
efforts to cause the Representatives appointed by it to negotiate in good faith
to resolve all matters that are within the scope of responsibility of the
Services Operating Committee. If, notwithstanding the good faith efforts of the
Representatives to resolve any such matter, the Services Operating Committee is
unable to reach unanimous agreement with respect to any such matter within a
reasonable period of time, the Services Operating Committee shall refer the
disputed matter to the respective Chief Executive Officers of TMI and AMSC, who
shall attempt to resolve the disputed matter in accordance with Section 8.7(1),
and if the disputed matter is not so resolved, then either party may submit the
disputed matter to arbitration in accordance with Sections 8.7(2) to (7)
inclusive.
(2) Technical and Operating Matters relating to TT&C services to be
provided by Telesat shall be conducted in accordance with the operating
procedures referred to in Schedule 3.2(2) (the "Telesat Procedures") (taking
into account any Technical and Operating Matters that are particularly relevant
to the Shared Satellite). The Services Operating Committee may amend the Telesat
Procedures (in accordance with any procedures set forth in the Telesat
Agreement) or establish and adopt additional operating procedures for matters
other than those relating to TT&C matters covered by the Telesat Agreement. The
Services Operating Committee shall be responsible for monitoring compliance with
the Telesat Procedures (as amended or supplemented from time to time as provided
above); provided that the parties may agree to delegate such responsibility to
Telesat or another third party operator.
(3) The Services Operating Committee shall promptly establish, and at all
times maintain, an on-call roster, on an alternating monthly basis, of TMI
delegated personnel and AMSC delegated personnel, respectively, who shall be on
call to make emergency decisions on matters affecting the health of the Shared
Satellite not covered by the Telesat Procedures. Except as otherwise provided
under Section 7.3(2), the parties intend and agree that the single person then
designated from TMI's on-call roster, acting alone, is authorized to make all
such emergency decisions during the first month, commencing on the Traffic
Transfer Date, and that the single person then designated from AMSC's on-call
roster, acting alone, is authorized to make all such emergency decisions during
the next succeeding month, and so on, alternating each month from the parties'
respective on-call rosters.
(4) In the event the Services Operating Committee is unable to reach
unanimous agreement with respect to any Technical and Operating Matter necessary
to safeguard the health of the Shared Satellite, then until such unanimous
agreement is reached or such matter has been resolved pursuant to Section 8.7,
TMI shall have the sole and exclusive right to issue to Telesat all commands,
directions and instructions as are necessary to safeguard the health of the
Shared Satellite. AMSC and TMI shall cooperate with each other during any such
period of dispute and shall provide Telesat with all data and other information
as may be required.
Section 3.3. Quarterly Reporting. Commencing on the Traffic Transfer Date
and ending upon the expiry of the Term of this Agreement, in order to assist in
effecting the transactions contemplated hereunder, no later than 30 days after
the end of each calendar quarter, each of TMI and AMSC will deliver to the other
party hereto a report showing its monthly power usage of the Shared Satellite
determined in accordance with Schedule 4.1(2)(II) for the calendar quarter
ending immediately preceding the date such report is delivered together with the
delivering party's estimate of its expected monthly power usage of the Shared
Satellite for the calendar quarter immediately following the last calendar
quarter in respect of which actual results are shown.
Section 3.4. Performance Anomalies and Incentive Payments. Each of TMI and
AMSC shall promptly notify the other upon learning of any satellite performance
anomalies and of the relevant facts known to it concerning such anomaly. AMSC
shall cooperate with TMI as may be reasonably necessary from time to time to
determine whether any performance incentive payments are payable under the PIP
Contracts. AMSC shall not be responsible for any payments to the manufacturers
of the Shared Satellite under the PIP Contracts or otherwise.
Section 3.5. Satellite Health Reports. TMI shall promptly furnish to AMSC
one copy of each satellite health report which it receives from Telesat, the
manufacturers of the Shared Satellite or any other Person in respect of the
Shared Satellite.
Section 3.6. Radio Frequencies. AMSC shall be solely responsible for any
and all obligations under the agreement dated December 14, 1992 between AMSC and
GTE Spacenet Corporation, as amended by the amendment dated November 7, 1997
between AMSC and GE American Communications, Inc. TMI shall, in consultation
with AMSC, exercise reasonable commercial efforts to operate the Shared
Satellite so as to avoid interference with any spacecraft owned or operated by
GTE Spacenet Corporation or GE American Communications, Inc. (the "GE
Spacecraft") at or near the Relocated Orbital Position.
ARTICLE 4
SATELLITE SHARING ARRANGEMENTS
Section 4.1. Effect of Traffic Transfer Date. (1) From the date of this
Agreement until the Traffic Transfer Date, TMI will continue to use and enjoy
the economic benefits and risks of the entire Shared Satellite.
(2) Effective as of the Traffic Transfer Date, TMI and AMSC will hold their
respective Interests in the Shared Satellite as tenants in common and not as
joint tenants and will each have a first priority right to use, without charge,
one-half of the capacity of the Shared Satellite, which capacity shall be
determined in accordance with the provisions of Schedule 4.1(2) (the "Allotted
Usage"), on the terms and conditions set forth in this Agreement.
Section 4.2. Orbital Slots. At any time following the Traffic Transfer Date
AMSC may request TMI to, and within 30 days following receipt of any written
request therefor by AMSC, TMI and AMSC shall, commence the move of the Shared
Satellite to the Relocated Orbital Position. Upon relocation to the Relocated
Orbital Position, the bore site of the Shared Satellite shall be fixed at 45.9?
North latitude and 92.3? West longitude. If:
(a) at any time after the Traffic Transfer Date, AMSC acquires a new second
generation satellite (other than the Shared Satellite or the AMSC Satellite) or
the AMSC Satellite is returned to AMSC for whatever reason (and is not resold or
re-leased to a third party); and
(b) the original orbital position of the Shared Satellite located at 106.5o West
longitude is then available;
then, upon the written request by AMSC, TMI and AMSC shall use their good faith
efforts to obtain all regulatory consents necessary to permit and, if so
obtained, will cause (unless, taking into account all facts and circumstances,
TMI and AMSC agree otherwise), the Shared Satellite to be returned to its
original orbital position located at 106.5o West longitude to permit AMSC to
place the new satellite acquired by it or the AMSC Satellite at the Relocated
Orbital Position. All expenses associated with obtaining such regulatory
approvals and with any such move of the Shared Satellite to its original orbital
slot and with any such placement of AMSC's new satellite or the AMSC Satellite,
shall be borne solely by AMSC.
Section 4.3. Insurance. (1) Each of TMI and AMSC agree that all insurance
proceeds paid or payable to TMI under any insurance policy in respect of any
event occurring prior to the Traffic Transfer Date in respect of the Shared
Satellite belong solely and exclusively to TMI, and TMI has no obligation to
AMSC in respect thereof.
(2) On and after the Traffic Transfer Date, TMI and AMSC will each have the
right (but not the obligation), at such party's sole expense, to obtain in-orbit
insurance ("Satellite Insurance") in respect of their respective Interest in the
Shared Satellite up to 50% of the total insurable value (based on reasonable
commercial availability) of the Shared Satellite. If TMI or AMSC elects to
obtain Satellite Insurance for any twelve month period for less than all or none
of its share of the total insurable value in respect of its respective Interest
in the Shared Satellite (as the case may be, the "Uninsured Amount"), then it
shall so notify the other party in writing and the other party shall be entitled
to obtain Satellite Insurance for such twelve month period in respect of the
notifying party's Interest in the Shared Satellite (in addition to the other
party's share of such total insurable value) up to the Uninsured Amount.
(3) If both TMI and AMSC elect to obtain Satellite Insurance for any twelve
month period and it is necessary or advantageous to have a single, joint
insurance policy in respect of the Shared Satellite for such twelve month
period, then each of TMI and AMSC will use all reasonable efforts to cause the
insurer providing Satellite Insurance on, or in respect of, the Shared Satellite
to issue, effective as of the commencement of and during such period, a new
policy (or riders to any existing insurance policy) naming both TMI and AMSC as
a named co-insured. Subject to the proviso in Section 4.3(4), after the
commencement of such period, each of TMI and AMSC shall pay that percentage of
all insurance premiums owed in connection with the Satellite Insurance for the
Shared Satellite which is provided pursuant to a single, joint insurance policy
equal to the percentage of Satellite Insurance obtained by them, respectively,
in accordance with Section 4.3(2) (a party's "Percentage Insurance Interest").
(4) On and after the Traffic Transfer Date, to the extent that any
insurance proceeds become payable under Satellite Insurance in respect of the
Shared Satellite which is provided pursuant to a single, joint insurance policy
in respect of any loss event occurring after the Traffic Transfer Date, each of
TMI and AMSC shall be entitled to that amount of such insurance proceeds equal
to their respective Percentage Insurance Interests; provided that if either
party wishes to obtain insurance coverage in excess of 100% of the insurable
value of the Shared Satellite (" Excess Coverage") and such Excess Coverage is
available and is obtained as part of (or by rider to) the subject single joint
insurance policy, then (i) that portion of the insurance premiums allocable to
such Excess Coverage shall be borne by the party obtaining such Excess Coverage
and (ii) the parties shall divide any insurance proceeds payable or paid in
respect of the total insurance coverage under such single joint insurance policy
in a manner that is equitable and reflects the pay-out attributable to the
respective Percentage Insurance Interests held by the parties as well as the
Excess Coverage held by one or both parties. To the extent that proceeds are
distributed to the parties by the insurer otherwise than in the manner provided
for in this Section 4.3(4), TMI and AMSC shall make such payments and take such
actions as may be necessary to give effect to the intent of this Section 4.3(4),
and the party who has received a payment in excess of that amount to which it is
entitled hereunder shall hold such excess amount in trust for the other party
and shall pay such excess amount to the other party not later than three
Business Days after receipt thereof.
(5) If required under any joint constructive total loss insurance policy,
the parties shall execute and deliver all such instruments, assignments and
other documents as may be required by the insurer to transfer their respective
interests in the Shared Satellite to the insurer in connection with a
constructive total loss under such policy.
(6) TMI shall, upon the written request of AMSC, provide to AMSC such
technical information developed by or furnished to TMI regarding the Shared
Satellite as AMSC may reasonably request in connection with any attempt by AMSC
to obtain such insurance.
Section 4.4. Excess Capacity; and Termination of Satellite Capacity
Agreement. (1) Effective as of the Traffic Transfer Date, each party will make
available to the other party, promptly after receipt of a request therefor, any
excess capacity that such party then has as part of its Allotted Usage and which
is reasonably considered by such party not to be required for its existing or
prospective business ("Excess Capacity"); provided that (i) this Section 4.4(1)
shall be subject to United States and Canadian governmental or agency rules and
regulations with respect to priority and preemptive access in emergency
situations, and (ii) in determining its Excess Capacity, a party shall have the
right to specify the time period during which such capacity is reasonably
expected not to be required for its existing or prospective business (the
"Specified Time Period"). Unless the parties agree otherwise, once a party has
allocated Excess Capacity to the other party, (x) the allocating party shall
thereafter have no right to use such Excess Capacity for the Specified Time
Period except with the consent of the receiving party, and (y) the receiving
party shall thereafter be obligated to pay for such Excess Capacity for the
Specified Time Period without regard to the receiving party's use or nonuse of
such Excess Capacity. Excess Capacity shall be determined in accordance with the
provisions of Schedule 4.1(2) and the amount to be paid for the availability of
Excess Capacity shall be determined in accordance with the provisions of
Schedule 4.4(1).
(2) If, as of the Traffic Transfer Date, the Satellite Capacity Agreement
(as amended pursuant to Section 5.2(1)) has not been terminated in accordance
with its terms, then effective as of the Traffic Transfer Date, the Satellite
Capacity Agreement (as so amended) shall be deemed suspended and, without any
further action by the parties, shall not be operative or enforceable by the
parties thereto. If, following such deemed suspension of the Satellite Capacity
Agreement, this Agreement is terminated for any reason, including pursuant to
Sections 7.2, 7.8 or 7.9, and the Satellite Capacity Agreement has not been
terminated in accordance with its terms, then effective as of such termination
date, the Satellite Capacity Agreement (as so amended) shall cease to be
suspended without any further action by the parties and shall be and become
operative and enforceable by the parties thereto.
(3) The parties shall provide each other with restoral capacity in
accordance with the provisions of Schedule 4.4(3).
Section 4.5. Decommissioning of Satellite. At such time as the Shared
Satellite has reached the end of its useful life or upon the occurrence of a
constructive total loss within the meaning of any applicable constructive total
loss insurance policy, TMI shall cause Telesat, at the expense of TMI, to
decommission the Shared Satellite by removing it from the Relocated Orbital
Position to the extent technically possible to do so.
Section 4.6. Exclusion of Liability for Telesat. EACH OF TMI AND AMSC
HEREBY ACKNOWLEDGE AND AGREE THAT TELESAT SHALL NOT BE LIABLE, DIRECTLY OR
INDIRECTLY, TO TMI, AMSC OR ANY PERMITTED ASSIGNEES OR SUCCESSOR OWNERS OF THE
SHARED SATELLITE FOR ANY LOSS, DAMAGE, LIABILITY OR EXPENSE HOWSOEVER ARISING,
WHETHER FORESEEABLE OR NOT, WITH RESPECT TO THE PERFORMANCE OR NON-PERFORMANCE
OR IMPROPER PERFORMANCE OF THE SHARED SATELLITE OR ANY PART THEREOF OR THE
PERFORMANCE OR NON-PERFORMANCE OR IMPROPER PERFORMANCE BY TELESAT UNDER THE
TELESAT AGREEMENT OR ANY ACTS OR OMISSIONS ASSOCIATED THEREWITH, WHETHER THE
BASIS OF LIABILITY IS BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT
LIABILITY), STATUTE OR ANY OTHER LEGAL THEORY EXCEPT AS EXPRESSLY PROVIDED UNDER
THE TELESAT AGREEMENT. AMSC and TMI agree that TMI shall hold the benefit of the
provisions contained in this Section as agent and bare trustee for Telesat and
that TMI shall enforce such provision in accordance with the directions of
Telesat.
Section 4.7. Temporary Traffic Transfer. Prior to the Traffic Transfer
Date, TMI shall, upon 30 days prior written notice from AMSC, permit AMSC to
temporarily transfer its communications traffic to the Shared Satellite for the
purpose of enabling AMSC to perform such tests on the AMSC Satellite as are
necessary or desirable to confirm that the AMSC Satellite will be able to
provide mobile satellite service over the continent of Africa (the "Temporary
Testing Right"). Such Temporary Testing Right is granted to AMSC subject to the
following terms and conditions:
(a) the Temporary Testing Right shall be provided to AMSC free of charge for a
term of no more than 7 weeks, or such longer period as may be required to
perform the testing contemplated under the Drift Orbit Services Agreement; upon
completion of the temporary testing, in accordance with TMI's election, prior to
the Traffic Transfer Date, AMSC will either remove its traffic back to the AMSC
Satellite or maintain the traffic on the Shared Satellite until the Traffic
Transfer Date without charge to AMSC. In the event that AMSC does not remove its
traffic from the Shared Satellite following the completion of testing upon the
exercise of its Temporary Testing Right and following an election by TMI that
AMSC remove its traffic until the Traffic Transfer Date, AMSC shall pay TMI, in
advance, at the rate of U.S.$24,109 per month (or portion thereof, on a
pro-rated basis) for each 0.5% of the available Radio Frequency (RF) power in
either the North or South Hybrid Matrix Amplifier (as referenced in Schedule
4.1(2)) so provided;
(b) Telesat shall have assumed control of the AMSC Satellite pursuant to the
Drift Orbit Services Agreement before AMSC is entitled to exercise the Temporary
Testing Right;
(c) before transferring any traffic to the Shared Satellite, AMSC shall have
submitted a written traffic transfer plan to TMI for its approval, which
approval shall not be unreasonably withheld;
(d) AMSC shall indemnify TMI, its partners, the respective Affiliates of TMI and
such partners and the respective officers, directors, employees, shareholders
and agents of each of the foregoing Persons against, and agrees to hold each of
them harmless from, any and all losses, liabilities, damages, claims and
expenses ("Losses") incurred by them to the extent that such Losses arise out of
any damage or degradation to the Shared Satellite caused by AMSC's exercise of
the Temporary Testing Right; and
(e) AMSC acknowledges that the Shared Satellite will be made available in
connection with the Temporary Testing Right on an "as is" basis, and AMSC
expressly excludes and disclaims any warranty or condition of any kind with
respect to the grant or exercise of the Temporary Testing Right or the
performance, nonperformance or improper performance of the Shared Satellite or
any part thereof in connection therewith, whether express or implied by
contract, tort, statute or other legal theory. None of TMI, its partners and the
respective Affiliates of TMI and such partners shall assume or have any
liability whatsoever to AMSC with respect to the grant or exercise of the
Temporary Testing Right to or by AMSC or the performance, nonperformance or
improper performance of the Shared Satellite or any part thereof in connection
therewith.
ARTICLE 5
CERTAIN COVENANTS
Section 5.1. Conduct of Business. Subject to the parties' respective
obligations under this Agreement, each of the parties shall have the right to
conduct its business in whatever manner it deems appropriate and such conduct
shall not require notice to or the consent of the other party hereto.
Section 5.2. Satellite Capacity Agreement and Joint Operating Agreement.
(1) The Satellite Capacity Agreement shall, effective as of the date hereof, be
deemed amended as set forth in Schedule 5.2(1), and the Satellite Capacity
Agreement, as so amended, shall be and remain operative and enforceable by the
parties thereto from the date hereof until the date (if any) such Satellite
Capacity Agreement (as so amended) is deemed suspended pursuant to Section
4.4(2) or is terminated pursuant to its terms, provided that if the Satellite
Capacity Agreement ceases to be suspended as provided in Section 4.4(2) and has
not been terminated, it shall once again be operative and enforceable by the
parties thereto.
(2) To the extent that (i) any provision of the joint operating agreement
dated as of April 25, 1990 between AMSC and Telesat Mobile Inc. (as assigned to
TMI) (as the same has been amended from time to time, the "Joint Operating
Agreement") is inconsistent with any provision(s) of this Agreement, the
provisions of this Agreement shall override the inconsistent provisions of the
Joint Operating Agreement, and (ii) any provision of the Satellite Capacity
Agreement (as so amended), for so long as the Satellite Capacity Agreement, as
so amended, remains operative and is not then deemed suspended, all as
contemplated in Sections 4.4(2) and 5.2(1), is inconsistent with any provision
of this Agreement, the provision of this Agreement shall override the
inconsistent provision of the Satellite Capacity Agreement (as so amended).
Section 5.3. Reasonable Efforts. Subject to the terms and conditions of
this Agreement, each of TMI and AMSC will use all reasonable efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary under applicable laws and regulations to consummate the transactions
contemplated hereby as promptly as practicable.
Section 5.4. Confidentiality; Press Releases. (1) Each of TMI and AMSC
will, and will use its reasonable efforts to cause its respective Affiliates and
its and their respective officers, directors, employees, partners, accountants,
counsel, consultants, advisors' agents and financing parties (collectively, the
"Agents") to hold in confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law, all confidential
documents and information (the "Confidential Information") that is furnished to
such party or its Agents in connection with this Agreement or the transactions
contemplated hereby and will use such information solely in connection with the
transactions contemplated hereby. To the extent that existing confidentiality or
nondisclosure obligations contained in any agreements between the parties
("Existing Obligations") prohibit the disclosure of Confidential Information to
Affiliates or consultants, this Section 5.4 shall override the Existing
Obligations. "Confidential Information" shall not include, and neither party
shall have any obligation with respect to, information (i) that has become
public from a source other than such party or its Agents, or (ii) that has
become available to such party on a non-confidential basis from a source that
such party has no reason to believe to be under an obligation of
confidentiality.
(2) Except as may be required by applicable law or any listing agreement
with any national securities exchange or quotation system, neither party will
issue any press release or public statement with respect to this Agreement or
the transactions contemplated hereby without the consent of the other party
hereto; provided that the parties agree that, as promptly as practicable
following the execution of this Agreement, they shall issue a press release
substantially in the form of the draft set forth on Schedule 5.4.
Section 5.5. Access to Information. Subject to Section 5.4, from the date
hereof until the Traffic Transfer Date, each party will give the other party and
its authorized representatives access to all technical and operating data and
information regarding the Shared Satellite to the extent necessary (i) to enable
the other party to verify the accuracy of the representations and warranties of
such party contained in this Agreement and the Schedules hereto, and (ii) to
permit such other party to comply with its obligations hereunder.
Section 5.6. FCC Applications. The initial applications to be made by AMSC
to the U.S. Federal Communications Commission in connection with obtaining its
consent to relocate the Shared Satellite to the Relocated Orbital Position and
to permit the co-ownership and operation of the Shared Satellite contemplated
under this Agreement, and all documents and other information filed in
connection with or referred to in such application, will make no reference,
directly or indirectly, to either party's present markets or present or future
rights to access markets in the United States of America, Canada or elsewhere or
to provide services directly to Persons located in the United States of America,
Canada or elsewhere. Each of TMI and AMSC in response to comments, replies or
submissions by the U.S. Federal Communications Commission, or by any other
Person in connection with such application, may present evidence and make
arguments and other statements as to market access rights and other competition
issues to challenge or counter such comments, replies or submissions. Each party
shall, at least two Business Days prior to the filing thereof (or such shorter
period as the circumstances may require), furnish the other party with a copy of
each document that it intends to file with the U.S. Federal Communications
Commission in connection with the applications, filings, submissions, comments,
responses and replies referred to in this Section.
Section 5.7. Notices of Certain Events. Each party shall promptly notify
the other party of:
(a) any notice or other communication from any Person alleging that the consent
of such Person is or may be required in connection with any of the transactions
contemplated by this Agreement;
(b) any notice or other communication from any governmental or regulatory
agency or authority in connection with any of the transactions contemplated by
this Agreement or from any other Person in connection with consents and
approvals required from any governmental or regulatory agency or authority
hereunder or any submissions, applications, reports or other filings made
thereto; and
(c) any actions, suits, claims, investigations or proceedings commenced or, to
its knowledge, threatened against it that relate to the consummation of any of
the transactions contemplated by this Agreement.
Section 5.8. Limitation on Liability to Customers, Resellers, etc. Each of
TMI and AMSC (in this Section, the "Contracting Party") hereby covenants and
agrees that, where and to the extent that such a provision is permitted by
applicable law and regulation, the Contracting Party shall in good faith seek to
specifically and expressly provide in each and every of its respective contracts
and agreements entered into after the date of this Agreement with its customers,
resellers, or other vendors of its services, and governmental entities obtaining
such services from such party, a limitation on liability of the other party, in
substantially the following form:
"[the other party (TMI or AMSC, as the case may be)] and its
officers, directors, employees, shareholders, partners,
subcontractors, investors or agents shall not be liable, for
any reason whatsoever, whether in contract or tort or under
any other theory of law, for losses, damages, costs, expenses,
liabilities or claims arising out of an act or omission of
[the Contracting Party (TMI or AMSC, as the case may be)] or
resulting from the use of services hereunder, including but
not limited to any fault in a channel which results in failure
to establish service, delays, in-service interruption,
degradation or loss or distortion of services."
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
Section 6.1. Representations and Warranties of TMI. TMI represents and
warrants to AMSC that:
(a) Organization and Existence. TMI is a limited partnership duly organized and
validly existing under the laws of the Province of Quebec, TMI Communications
Inc. is the general partner of TMI and is a corporation duly organized, validly
existing and in good standing under the laws of Canada and TMI Communications
Inc. has all corporate and partnership power required to execute and deliver
this Agreement in the name and on behalf of TMI and to cause the performance by
TMI of its obligations contemplated hereunder.
(b) Corporate Authorization. The execution, delivery and performance by TMI
Communications Inc., in the name and on behalf of TMI, of this Agreement have
been duly approved by all necessary corporate action on the part of TMI
Communications Inc., the general partner of TMI. This Agreement constitutes a
valid and binding agreement of TMI.
(c) Shared Satellite Condition. To the knowledge of TMI, the description of
the condition of the Shared Satellite contained in (i) the document entitled
"Joint Technical Assessment of MSAT and AMSC-1" dated January 31, 1997, and (ii)
the documents described in Schedule 6.1(c), is accurate. With the exception of
the report set out as item #5 on Schedule 6.1(c), TMI has furnished to AMSC
exact duplicates of any and all technical reports furnished as of the date of
this Agreement to the insurance companies who provided insurance coverage for
the Shared Satellite.
(d) Governmental Authorization. The execution and delivery by TMI Communications
Inc., in the name and on behalf of TMI, of this Agreement requires no action by
or in respect of, or filing with, any governmental body, agency or official
other than actions or filings the failure of which to occur have not had and
would not reasonably be expected to have, individually or in the aggregate, a
material adverse effect on TMI or the operation of the Shared Satellite.
(e) Non-Contravention. The execution and delivery by TMI Communications Inc., in
the name and on behalf of TMI, of this Agreement, and the performance of this
Agreement by TMI Communications Inc. on behalf of TMI, on and after the Traffic
Transfer Date, do not and will not (i) violate the partnership agreement of TMI,
(ii) violate any law, rule, regulation, judgment, injunction, order or decree
applicable to TMI or any of its assets or properties, (iii) to the knowledge of
TMI on the date of this Agreement, after due inquiry, require any consent of any
Person other than (x) consents which have been obtained on or before the date of
this Agreement, copies of which have been provided to AMSC on or prior to the
date of this Agreement, (y) Industry Canada under the Bulk Capacity Lease dated
September 14, 1988, as amended, Industry Canada with respect to spectrum and
change in orbital slot, and the Communications Security Establishment (Canada),
and (z) consents or violations which have not had and would not reasonably be
expected to have, individually or in the aggregate, a material adverse effect on
TMI, or (iv) on and after the Traffic Transfer Date, require the consent of any
Person other than (A) consents which have been obtained on or before the Traffic
Transfer Date, copies of which have been provided to AMSC on or before such
date, and (B) consents or violations specified in Section 6.1(e)(iii)(z).
(f) Title to Shared Satellite. TMI holds title to the Shared Satellite free and
clear of any Liens, other than those Liens identified in Schedule 6.1(f) ("TMI
Existing Liens") and Permitted Liens. Effective upon the Traffic Transfer Date,
AMSC will acquire good and marketable title to the 50% undivided ownership
interest in the Shared Satellite, free and clear of all Liens except (x) for and
subject to the TMI Purchase Money Security Interest and (y) those granted by
AMSC to any Person other than TMI.
(g) Telesat Agreement. TMI has furnished to AMSC an accurate and complete copy
of the Telesat Agreement as in effect on the date of this Agreement.
(h) Satellite Performance. There is no information (whether in the form of
facts, representations or opinions) ("Information") contained in any material
provided by TMI or Telesat to TMI's insurers in connection with its insurance
claim and settlement with respect to its mountain beam (the "Mountain Beam
Settlement") that indicates or suggests that the coverage, health, insurability,
estimated life, capacity or other performance criteria of the Shared Satellite
(collectively, the "Satellite Performance") would be different in any material
respect from that indicated in the reports referred to in Schedule 6.1(c).
(i) Operating Restriction. There is no Information contained in or relating to
the Mountain Beam Settlement which would impose a present or future operating
restriction (including the shutting down of the mountain beam) with respect to
the Shared Satellite or that would indicate that insurance coverage would be
limited in any material respect or unavailable on commercially reasonable terms
unless such operating restriction were imposed, other than as described in the
reports referred to in Schedule 6.1(c).
(j) Other Information. TMI is not (i) aware of any other Information with
respect to the Shared Satellite that would indicate that the Satellite
Performance would be different in any material respect from that indicated in
the reports referred to in Schedule 6.1(c) or (ii) in possession, or aware, of
any non-technical report prepared with respect to the Satellite Performance of
the Shared Satellite which would provide information with respect to Satellite
Performance different than, or in addition to, in any material respect, the
information indicated in the reports referred to in Schedule 6.1(c).
(k) Compliance with Laws. The Shared Satellite, and the operation thereof are in
compliance in all material respects with all applicable laws of any applicable
jurisdiction and TMI has not received any written notice of any alleged breach
of any such laws.
(l) Options, Rights of Purchase, etc. No Person other than AMSC has any right to
purchase the Shared Satellite, and, as of the Traffic Transfer Date, no Person
other than TMI and TMI's customers has any right to use, and TMI has not granted
any Person (other than its customers) any right to use, any of AMSC's Interest.
TMI has not granted any option or right of first refusal with respect to the
Shared Satellite other than to AMSC pursuant to this Agreement or the Satellite
Capacity Agreement.
(m) Tax Residency. TMI is not a non-resident of Canada for purposes of the
Income Tax Act (Canada).
Section 6.2. Representations and Warranties of AMSC. AMSC represents and
warrants to TMI that:
(a) Corporate Existence and Power. AMSC is a corporation dually incorporated,
validly existing and in good standing under the laws of the States of Delaware
and Virginia, respectively, and AMSC Parent Corp. is the sole shareholder of
AMSC and is a corporation incorporated, validly existing and in good standing
under the laws of the State of Delaware. Each of AMSC and AMSC Parent Corp. has
all corporate power to execute and deliver this Agreement and, in the case of
AMSC, the Security Agreement and to perform its obligations contemplated
hereunder and thereunder.
(b) Corporate Authorization. The execution, delivery and performance by each of
AMSC and AMSC Parent Corp. of this Agreement and, in the case of AMSC, the
Security Agreement are within their respective corporate powers and have been
duly authorized by all necessary corporate action on the part of AMSC and AMSC
Parent Corp. This Agreement and the Security Agreement constitute valid and
binding agreements of AMSC and this Agreement constitutes a valid and binding
agreement of AMSC Parent Corp.
(c) Governmental Authorization. The execution and delivery by AMSC of each of
this Agreement and the Security Agreement and by AMSC Parent Corp. of this
Agreement requires no action by or in respect of, or filing with, any
governmental body, agency or official other than (i) the U. S. Securities and
Exchange Commission as may be required in accordance with the provisions of the
U.S. Securities Exchange Act of 1934, as amended, and the U.S. Federal
Communications Commission as may be required to provide notice of the
contemplated transactions and (ii) actions or filings the failure of which to
occur have not had and would not reasonably be expected to have, individually or
in the aggregate, a material adverse effect on AMSC or AMSC Parent Corp.
(d) Non-contravention. The execution and delivery by AMSC of each of this
Agreement and the Security Agreement, and the performance by AMSC of each of
this Agreement and the Security Agreement on and after the Traffic Transfer
Date, and the execution and delivery of this Agreement by AMSC Parent Corp. and
the performance by AMSC Parent Corp. of its obligations hereunder on and after
the Traffic Transfer Date, in each case do not and will not (i) violate the
certificate of incorporation or bylaws of AMSC or AMSC Parent Corp., (ii)
violate any law, rule, regulation, judgment, injunction, order or decree
applicable to AMSC or AMSC Parent Corp. or any of its assets or properties,
(iii) to the knowledge of AMSC on the date of this Agreement, after due inquiry,
require the consent of any Person other than (x) consents which have been
obtained on or prior to the date of this Agreement, copies of which have been
provided to TMI on or prior to the date of this Agreement, (y) the U.S. Federal
Communications Commission, and (z) consents or violations which have not had and
would not reasonably be expected to have, individually or in the aggregate, a
material adverse effect on AMSC or AMSC Parent Corp, or (iv) on and after the
Traffic Transfer Date, require the consent of any Person other than (A) consents
which have been obtained on or prior to the Traffic Transfer Date, copies of
which have been provided to TMI on or before such date, and (B) consents or
violations specified in Section 6.2(d)(iii)(z).
Section 6.3. Disclaimer of Warranties. AMSC acknowledges and agrees that
except for the representations and warranties of TMI set forth in Section
6.1(c), (f), (h), (i), (j), (k) and (l), the Shared Satellite will be purchased
on an "as is" basis. ACCORDINGLY, EACH PARTY COVENANTS AND AGREES THAT ANY AND
ALL EXPRESS OR IMPLIED WARRANTIES OR CONDITIONS WITH RESPECT TO THE SHARED
SATELLITE OR ANY PART THEREOF, ITS CONDITION, DURABILITY, PERFORMANCE,
RELIABILITY, EXPECTED LIFE OR SUITABILITY FOR ANY PARTICULAR USE INCLUDING
WARRANTIES OR CONDITIONS OF MERCHANTABILITY OR FITNESS FOR ANY PURPOSE OR USE,
WHETHER EXPRESSED OR IMPLIED BY CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT
LIABILITY) STATUTE OR OTHER LEGAL THEORY, ARE EXPRESSLY EXCLUDED AND DISCLAIMED.
Section 6.4. Disclosure. During the period commencing on the date of this
Agreement and ending on the Traffic Transfer Date, each party shall promptly
notify the other party upon becoming aware of any representation or warranty of
such party contained in this Agreement becoming untrue or incorrect. Any such
representation or warranty shall be deemed to be amended as set forth in any
such notification provided that such amendment does not affect the rights or
obligations of the other party hereto in any material respect.
ARTICLE 7
TERM AND TERMINATION
Section 7.1. Term. Subject to this Article 7, the term of this Agreement
shall commence on the date hereof and, unless TMI and AMSC otherwise agree with
each other, shall terminate upon the decommissioning of the Shared Satellite
pursuant to Section 4.5 (the "Term").
Section 7.2. Termination Prior to the Traffic Transfer Date. This Agreement
may be terminated prior to the Traffic Transfer Date:
(a) at any time, by mutual written agreement of TMI and AMSC; or
(b) at any time after the date which is the earlier of (i) forty days after the
date of this Agreement; and (ii) the Traffic Transfer Date; by TMI if the AMSC
Satellite Lessee has not entered into written agreements with Telesat,
substantially on the terms contained in the draft agreements between the AMSC
Satellite Lessee and Telesat (x) for operational services for the Elcor-1
satellite, draft date November 12, 1997 and (y) for the supply and installation
of TT&C equipment and software in Johannesburg, South Africa and back up
facility in Chilworth, England for the Elcor- 1 satellite, draft date November
12, 1997; or
(c) at any time prior to the Traffic Transfer Date, by TMI or AMSC, if there is
a material adverse change in the condition of the Shared Satellite; and TMI and
AMSC agree that, with respect solely to the Mountain Beam of the Shared
Satellite, any complete or partial failure or shutdown of the Mountain Beam,
shall not constitute a material adverse change in the condition of the Shared
Satellite; or
(d) at any time on and after March 15, 1998, by AMSC, if all consents and
approvals of Industry Canada and the U.S. Federal Communications Commission
required for the relocation of the Shared Satellite to the Relocated Orbital
Position (and any other Canadian or American governmental consent or approval
required for such relocation as a result of a change in applicable law after the
date of this Agreement) have not been obtained for any reason other than the
failure of AMSC to exercise all reasonable commercial efforts in good faith (i)
to obtain all such required consents and approvals of the American government;
and (ii) to assist TMI to obtain all such required consents and approvals of the
Canadian government; or
(e) at any time on and after March 15, 1998, by AMSC, if all consents and
approvals of the U.S. Federal Communications Commission required for the
relocation of the AMSC Satellite to a new orbital slot over or near the
continent of Africa and the U.S. Department of Commerce with respect to export
controls required for such relocation (and any other American governmental
approvals required for such relocation arising under a change in applicable law
after the date of this Agreement) have not been obtained for any reason other
than the failure of AMSC to exercise all reasonable commercial efforts in good
faith to obtain, and to assist the AMSC Satellite Lessee to obtain, such
required consents and approvals; or
(f) at any time on and after April 30, 1998, by TMI, if all consents and
approvals of the U.S. Federal Communications Commission required for the
relocation of the Shared Satellite to the Relocated Orbital Position (and any
other Canadian or American governmental consent or approval required for such
relocation as a result of a change in applicable law after the date of this
Agreement) have not been obtained for any reason other than the failure of TMI
to exercise all reasonable commercial efforts in good faith (i) to obtain all
such required consents and approvals of the Canadian government; and (ii) to
assist AMSC to obtain all such required consents and approvals of the American
government; or
(g) at any time on and after April 30, 1998, by TMI, if all consents and
approvals of the U.S. Federal Communications Commission required for the
relocation of the AMSC Satellite to a new orbital slot over or near the
continent of Africa and the U.S. Department of Commerce with respect to export
controls required for such relocation (and any other American governmental
approvals required for such relocation arising under a change in applicable law
after the date of this Agreement) have not been obtained for any reason; or
(h) at any time prior to the Traffic Transfer Date, by TMI, if there shall occur
a Bankruptcy Event with respect to AMSC; or
(i) at any time prior to the Traffic Transfer Date, by AMSC if there shall occur
a Bankruptcy Event with respect to TMI; or
(j) at any time on and after 4:00 p.m. (Montreal time) on September 30, 1998, by
either party if the transactions contemplated hereunder to occur on or before
the Traffic Transfer Date have not been consummated for any reason; or
(k) at any time prior to the Traffic Transfer Date, by AMSC if the AMSC
Satellite Contract is terminated for any reason other than an event specified in
Section 7.2.
Section 7.3. Remedies of TMI Prior to TMI Security Discharge Date. (1) If
at any time during the period commencing on the Traffic Transfer Date and ending
on the TMI Security Discharge Date:
(a) AMSC shall fail to pay when due the Minimum Satellite Purchase Price (or any
instalment thereof) or any TT&C Fees within 10 days after receipt of written
notice from TMI of late payment; or
(b) any Bankruptcy Event shall occur with respect to AMSC;
then TMI may declare the entire unpaid amount of the Satellite Purchase Price
(or any part thereof) and all remaining TT&C Fees and other amounts owing by
AMSC and AMSC Parent Corp. hereunder during the Term of this Agreement to be
immediately due and payable, without presentment, demand, protest or further
notice of any kind, all of which are expressly waived by AMSC and AMSC Parent
Corp. Upon such declaration, TMI may exercise such rights and remedies and
commence such legal action or proceedings as it, in its sole discretion, may
deem expedient, including the commencement of enforcement proceedings under the
Security Agreement or any other security granted by AMSC and AMSC Parent Corp.
to TMI or any combination thereof, all without additional notice, presentation,
demand, protest, notice of dishonour, entering into of possession of any
property or any other action, notice of all of which AMSC and AMSC Parent Corp.
hereby expressly waive to the extent permitted by applicable laws. For the
purposes of calculating the accelerated amounts owing hereunder for the Term of
this Agreement, the parties hereby acknowledge and confirm that (i) the expected
useful life of the Shared Satellite will extend for a period of 10 years
following the Traffic Transfer Date; and (ii) in respect of Revenue Adjustment
Amounts, the expected useful life of the AMSC Satellite will extend for a period
of 10 years following the Traffic Transfer Date and that the accelerated amount
of the Revenue Adjustment Amounts owing by AMSC upon any acceleration pursuant
to this Section which occurs (x) during the first five years following the
Traffic Transfer Date, is U.S.$30,000,000, and (y) in any year thereafter, is an
amount equal to U.S.$30,000,000 less the product of U.S.$6,000,000 and the
number of years after the fifth year following the Traffic Transfer Date that
the acceleration event occurs. The parties further acknowledge and agree that
the calculation of such amounts is their reasonable pre-estimate of the
accelerated Revenue Adjustment Amounts owing hereunder determined after taking
into account their expectations as to technological advances, business risk and
satellite failure risk and does not constitute a penalty.
(2) If, at any time after the TMI Security Discharge Date, AMSC shall fail
to pay the TT&C Fees owing by it under this Agreement when due and payable and
such failure shall continue for 10 days after written notice thereof by TMI to
AMSC, then in addition to any other rights and remedies of TMI under this
Agreement or otherwise, AMSC shall cease to be entitled to have Representatives
on the Services Operating Committee or any other representation, input or
decision-making power in respect of Technical and Operating Matters or other
decisions or actions made or taken by the Services Operating Committee until
such overdue amounts (together with accrued interest thereon) have been paid in
full to TMI.
(3) If at any time following the occurrence of a default under Section
7.3(1)(a) but prior to acceleration by TMI of amounts owing hereunder and prior
to commencement of enforcement proceedings under the Security Agreement, such
default is remedied by or on behalf of AMSC, then TMI shall have no right to
accelerate pursuant to Section 7.3(1) or exercise any of its rights and remedies
under the Security Agreement, in each case, in respect of the occurrence of that
default (but such waiver shall not extend to the recurrence of such default or
the occurrence of any other default unless remedied as provided herein).
Section 7.4. Liabilities in Event of Termination. (1) Subject to Section
7.4(2), the termination or expiration of this Agreement will in no way limit any
obligation or liability of either party based on or arising from a breach or
default by such party with respect to any of its representations or warranties
contained in this Agreement, or with respect to any of its covenants or
agreements contained in this Agreement which by their terms were to be performed
prior to the date of termination or expiration, nor shall any such termination
or expiration release either party from any liabilities or obligations under
Sections 5.4, 8.5 and 8.14.
(2) Upon any termination of this Agreement pursuant to Section 7.2, the
Parties shall have no obligations or liabilities to each other hereunder or in
respect of the transactions contemplated hereby except as otherwise provided
under Section 7.5. Upon any such termination of this Agreement pursuant to
Section 7.2, the Parties shall have no further obligations or liabilities to
each other under the CMIS Contract which agreement shall automatically and
simultaneously terminate without penalty except with respect to any amounts then
owing to TMI as at and to the date of termination which amounts shall remain due
and payable to TMI and shall be deemed to have been earned by TMI (together with
all amounts previously paid to TMI).
Section 7.5. Purchase Price Prepayment and Liquidated Damages. (1) Upon any
termination of this Agreement pursuant to Section 7.2(b), TMI shall be entitled
to retain U.S.$1,000,000 of the Purchase Price Prepayment. AMSC and TMI hereby
acknowledge and agree that such amount is a genuine and reasonable pre-estimate
of the damages suffered by TMI in the event of such termination, and of the
costs and expenses incurred by TMI in pursuing this transaction at the request
of AMSC, and not a penalty and that such amount shall constitute liquidated
damages and as such be TMI's sole right and remedy, at law and in equity, with
respect to the obligations of AMSC under this Agreement. The remaining amount of
the Purchase Price Prepayment shall be promptly repaid by TMI to AMSC by wire
transfer or certified cheque in immediately available funds.
(2) Upon any termination of this Agreement pursuant to Section 7.2(h) or
7.2(k), TMI shall be entitled to retain the entire amount of the Purchase Price
Prepayment. AMSC and TMI hereby acknowledge and agree that such amount is a
genuine and reasonable pre-estimate of the damages suffered by TMI in the event
of such termination, and of the costs and expenses incurred by TMI in pursuing
this transaction at the request of AMSC, and not a penalty and that such amount
shall constitute liquidated damages and as such be TMI's sole right and remedy,
at law and in equity, with respect to the obligations of AMSC under this
Agreement.
(3) Upon any termination of this Agreement pursuant to Section 7.2(f) or
(g) in circumstances where AMSC has failed to exercise all reasonable commercial
efforts in good faith to obtain, or to assist in the obtaining of, the consents
or approvals referred to in such Section 7.2(f) or (g), then TMI shall be
entitled to retain the entire amount of the Purchase Price Prepayment. AMSC and
TMI hereby acknowledge and agree that such amount is a reasonable pre-estimate
of the damages suffered by TMI in the event of such termination, and of the
costs and expenses incurred by TMI in pursuing this transaction at the request
of AMSC, and not a penalty and that such amount shall constitute liquidated
damages and as such be TMI's sole right and remedy, at law or in equity, with
respect to the obligations of AMSC under this Agreement.
(4) Except as otherwise provided in Section 7.5(3), upon any termination of
this Agreement pursuant to Section 7.2(c), (d), (e), (f), (g) or (i), the
Purchase Price Prepayment shall be promptly repaid by TMI to AMSC by wire
transfer or certified cheque in immediately available funds.
(5) Upon any termination of this Agreement pursuant to Section 7.2(j) by
reason of the failure of AMSC to satisfy or deliver, or arrange for the
satisfaction or delivery of, any of the conditions set forth in Section 2.5
(other than the failure to obtain the consents to be obtained by TMI under
Section 2.5(c)), TMI shall be entitled to retain the entire amount of the
Purchase Price Prepayment. AMSC and TMI hereby acknowledge and agree that such
amount is a reasonable pre-estimate of the damages suffered by TMI in the event
of such termination, and of the costs and expenses incurred by TMI in pursuing
this transaction at the request of AMSC, and not a penalty and that such amount
shall constitute liquidated damages and as such be TMI's sole right and remedy,
at law or in equity, with respect to the obligations of AMSC under this
Agreement.
(6) Upon any termination of this Agreement pursuant to Section 7.2(j) by
reason of the failure of TMI to satisfy or deliver, or arrange for the
satisfaction or delivery of, any of the conditions set forth in Section 2.6
(other than the failure to obtain the consents to be obtained by AMSC under
Section 2.6(a)), the Purchase Price Prepayment shall be promptly repaid by TMI
to AMSC by wire transfer or certified cheque in immediately available funds.
(7) Upon any termination of this Agreement pursuant to Section 7.2(d) or
(j) due to the wilful misconduct or bad faith of TMI in failing to satisfy or
deliver, or arranging for the satisfaction or delivery of, any of the conditions
set forth in Section 2.6 (other than the failure to obtain consents to be
obtained by AMSC under Section 2.6(a)), TMI shall indemnify AMSC, subject to the
exclusion of liability in Section 6.3, from and against all losses, damages and
costs it may have suffered or incurred, directly or indirectly, as a result of
the termination of this Agreement under Section 7.2(d) or (j) due to the wilful
misconduct or bad faith of TMI in failing to satisfy or deliver, or arranging
for the satisfaction or delivery of, any of the conditions set forth in Section
2.6 (other than the failure to obtain consents to be obtained by AMSC under
Section 2.6(a)); provided, however that the maximum amount for which TMI shall
be liable under this Section 7.5(7) or otherwise under this Agreement with
respect to any such termination is U.S.$5,000,000. The rights of AMSC under this
Section 7.5(7) shall be in addition to any obligation which TMI may have to
repay the Purchase Price Prepayment pursuant to Section 7.5(1), 7.5(4) or
7.5(6).
(8) Upon any termination of this Agreement pursuant to Section 7.2(a), TMI
and AMSC shall agree upon the entitlement of each of them to all or any part of
the Purchase Price Prepayment.
(9) The provisions of Sections 4.4(2), 5.2(1), 5.4, 6.3, 7.4, 7.5, 7.7, 8.7
and 8.18 shall survive any termination pursuant to Section 7.2.
Section 7.6. Procedure Upon Termination. In the event of the termination of
this Agreement by either Party pursuant to Section 7.2, notice of such
termination will promptly be given by the terminating party to the other party.
Section 7.7. Exclusion of Consequential and Punitive Damages. NEITHER PARTY
SHALL BE LIABLE DIRECTLY OR INDIRECTLY TO THE OTHER PARTY OR TO ANY PERMITTED
ASSIGNEES OR SUCCESSOR OWNERS OF THE SHARED SATELLITE FOR ANY AMOUNTS (INCLUDING
ANY SUCH AMOUNTS CLAIMED BY THIRD PARTIES) REPRESENTING LOSS OF PROFITS, LOSS OF
BUSINESS, OR INDIRECT, SPECIAL, EXEMPLARY, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES, WHETHER FORESEEABLE OR NOT, ARISING FROM THE PERFORMANCE OR
NONPERFORMANCE OR IMPROPER PERFORMANCE OF THIS AGREEMENT, THE SHARED SATELLITE
OR ANY PART THEREOF OR ANY ACTS OR OMISSIONS ASSOCIATED HEREWITH OR THEREWITH OR
RELATED TO THE USE OF ANY ITEMS OR SERVICES FURNISHED HEREUNDER, OR OCCASIONED
BY ANY DEFECT IN THE SHARED SATELLITE OR ANY PART THEREOF, DELAY IN DELIVERY OF
THE SHARED SATELLITE, FAILURE OF THE SHARED SATELLITE OR ANY PART THEREOF TO
PERFORM OR ANY OTHER CAUSE WHATSOEVER, WHETHER THE BASIS OF THE LIABILITY IS
BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), STATUTE OR
ANY OTHER LEGAL THEORY, UNLESS SUCH ACT OR OMISSION ARISES FROM THE NON-CLAIMING
PARTY'S WILFUL MISCONDUCT.
Section 7.8. Option of AMSC to Put Interest to TMI. (1) At any time during
the Term of this Agreement (whether before or after the occurrence of an event
set forth in Section 7.3(1)(a) or 7.3(1)(b)) but not at any time that a
Satellite Failure has occurred and is continuing, AMSC may elect to transfer
good and marketable title in and to its Interest to TMI, free and clear of all
Liens, and to pay to TMI on closing pursuant to Section 7.8(2) the Put Payment
(as defined and calculated in accordance with Section 7.8(5)) and thereupon AMSC
shall be released by TMI from the obligations of AMSC to pay any amount of the
Satellite Purchase Price and TT&C Fees, in each case, which are payable in
respect of the period commencing after the date of closing of the transfer of
AMSC's Interest to TMI (whether accelerated due under Section 7.3(1) or
otherwise). Any other amounts payable by AMSC pursuant to Section 7.8(4) and any
amounts due from AMSC to TMI (otherwise than upon an acceleration pursuant to
Section 7.3(1) and except for the Satellite Purchase Price and TT&C Fees) up to
and including the date of closing of the transfer of AMSC's Interest (including
interest on any amount of the Put Payment which is not paid when otherwise due
hereunder, without regard to any acceleration pursuant to Section 7.3(1)) are
not released or satisfied by the Put Payment but shall be and remain immediately
due and payable by AMSC hereunder notwithstanding any termination pursuant to
Section 7.8(3).
(2) Closing of the transfer of AMSC's Interest to TMI under this Section
7.8 shall occur on the first Business Day which is 60 days after the day on
which TMI receives notice from AMSC (the "Put Notice") that it has elected to
transfer its Interest to TMI in accordance with this Section 7.8 (or on such
other day as the parties may agree).
(3) At the closing of the transfer pursuant to this Section 7.8;
(a) AMSC shall deliver to TMI:
(i) a conveyance of the Interest substantially in the form of the
Conveyance (with necessary modifications) and;
(ii) the Put Payment; and
(b) TMI shall deliver to AMSC:
(i) a release of AMSC's obligations to pay any amount of the Satellite
Purchase Price and TT&C Fees, in each case, which are payable in respect of the
period commencing after the date of closing (whether accelerated due prior to
the date of closing under Section 7.3(1) or otherwise);
(ii) executed discharges and financing change statements, designated as
discharges, prepared by AMSC and delivered to TMI for execution in respect of
all filings and registrations made with respect to the TMI Purchase Money
Security Interest; and
(iii) a termination of the Security Agreement and a release of AMSC from
all of its obligations thereunder.
Upon completion of these deliveries, this Agreement and all rights and
obligations of the parties hereunder shall terminate except for those rights and
obligations under Sections 4.4(2), 5.2(1), 5.4, 6.3, 7.4, 7.7, 7.8, 7.10, 8.5,
8.7, 8.14 and 8.18 and the parties shall execute a mutual release of all such
terminated obligations in respect of the period commencing after the date of
closing.
(4) Following receipt by TMI of the Put Notice, TMI and AMSC shall use
their good faith efforts to obtain all regulatory consents necessary to permit
and, if so obtained, TMI will cause, the Shared Satellite to be returned to its
original orbital position at 106.5o West longitude (or such other Canadian
orbital position as TMI may designate). All expenses associated with obtaining
such regulatory approvals and with any such move of the Shared Satellite shall
be borne solely by AMSC. In addition, whenever the TMI Purchase Money Security
Interest shall have become enforceable, all expenses, costs and charges incurred
by or on behalf of TMI and referred to in Section 2.2(2) of the Security
Agreement, shall be and remain immediately due and payable by AMSC under this
Agreement notwithstanding any termination pursuant to Section 7.8(3).
(5) The terms "Put Payment"under Section 7.8 and "Satellite Failure
Payment" under Section 7.9, as the case may be, mean and shall be calculated as
follows:
(a) the entire amount of the Satellite Purchase Price and TT&C Fees due and
unpaid during the period prior to the delivery of a Put Notice or Satellite
Failure Notice, as the case may be (excluding in each case, amounts due solely
by reason of acceleration pursuant to Section 7.3(1)) shall remain due and
payable and, to the extent unpaid, be paid to TMI at closing;
(b) any Revenue Adjustment Amount due and unpaid during the period
commencing on the delivery of a Put Notice or a Satellite Failure Notice, as the
case may be, and ending on closing shall remain due and payable and, to the
extent unpaid, be paid to TMI at closing (excluding any amount due solely by
reason of acceleration pursuant to Section 7.3(1));
(c) any amount of the Minimum Satellite Purchase Price which is due during
the period commencing on the delivery of a Put Notice or a Satellite Failure
Notice, as the case may be, and ending on closing shall be due and payable to
TMI as at such due date but pro rated based on the proportion that the number of
days from such due date to the date of closing is to 90 days and, to the extent
unpaid, shall be paid to TMI at closing;
(d) any amount of the Minimum Satellite Purchase Price which is due during
the period commencing after a closing under Section 7.9(2) shall be payable to
TMI only in the event of delivery of a Satellite Failure Notice and then, only
in the manner and at the times provided for in Sections 7.9(4) and 7.9(5);
(e) any TT&C Fees due during the period less than 30 days prior to such
closing shall be due and payable to TMI as at such due date but pro rated based
on the proportion that such number of days prior to closing is to 30 days and,
to the extent unpaid, shall be paid to TMI at closing; and
(f) any TT&C Fees due more than 30 days prior to such closing shall be due
and payable to TMI as at such due date and, to the extent unpaid, shall be paid
to TMI at closing.
In the event that the closing of any transfer pursuant to Section 7.8 or
7.9, as the case may be, fails to occur by reason of the failure of TMI to
deliver the items specified in Section 7.8(3)(b) or 7.9(3)(b), as the case may
be, in circumstances where AMSC has tendered the items specified in Section
7.8(3)(a) or 7.9(3)(a), as the case may be, the calculation of the amounts
payable under Section 7.8 or 7.9 shall be made on the basis that the closing
occurred on the first Business Day which is 60 days following delivery of the
Put Notice or Satellite Failure Notice, as the case may be, or such other day as
the parties may agree.
Section 7.9. Satellite Failure. (1) At any time that a Satellite Failure
has occurred and is continuing, AMSC may by notice to TMI elect not to use the
Shared Satellite or any capacity thereon (the "Satellite Failure Notice").
Within 30 days of receipt of the Satellite Failure Notice, TMI shall elect by
notice to AMSC to either (i) arrange for the decommissioning of the Shared
Satellite (to the extent technically possible to do so) in accordance with
Section 4.5 or (ii) request AMSC to, and if so requested, AMSC shall, transfer
good and marketable title in and to AMSC's Interest to TMI, free and clear of
all Liens. In either event, AMSC shall pay to TMI on closing pursuant to Section
7.9(2) the Satellite Failure Payment (as defined and calculated in accordance
with Section 7.8(5)) and thereupon AMSC shall be released by TMI from the
obligations of AMSC to pay any TT&C Fees and Revenue Adjustment Amounts, in each
case, which are payable in respect of the period commencing after the date of
closing pursuant to Section 7.9(2); it being understood and agreed that the
portion of the Satellite Failure Payment consisting of the Minimum Satellite
Purchase Price which is due in respect of the period commencing after the
closing under Section 7.9(2) shall be made by AMSC only in the manner and at the
times provided for in Sections 7.9(4) and 7.9(5). Any amounts due from AMSC to
TMI up to and including the date of closing (other than TT&C Fees and the
Revenue Adjustment Amounts but including interest on any amount of the Satellite
Failure Payment which is not paid when otherwise due hereunder, without regard
to any acceleration pursuant to Section 7.3(1)) are not released or satisfied by
the Satellite Failure Payment but shall be and remain immediately due and
payable by AMSC hereunder notwithstanding any termination pursuant to Section
7.9(3).
(2) Closing pursuant to this Section 7.9 shall take place on the first Business
Day which is 60 days after the day on which TMI receives the Satellite Failure
Notice from AMSC (or on such other day as the parties may agree). At TMI's
request, AMSC will assist TMI in the move of the Shared Satellite to its
original orbital position of 106.5o West longitude (or such other Canadian
orbital position as TMI may designate). All expenses associated with obtaining
such regulatory approvals and with any such move of the Shared Satellite to such
orbital position shall be borne solely by TMI.
(3) At the closing pursuant to this Section 7.9;
(a) AMSC shall deliver to TMI:
(i) the Satellite Failure Payment (other than the portion thereof
consisting of the Minimum Satellite Purchase Price which is due in
respect of the period commencing after the closing under Section
7.9(2)); and
(ii) if requested by TMI, a conveyance of the interest substantially
in the form of the Conveyance (with necessary modifications); and
(b) TMI shall deliver to AMSC:
(i) a release of AMSC's obligations to pay TT&C Fees and Revenue
Adjustment Amounts which are payable in respect of the period
commencing after the closing date contemplated by this Section and
confirmation that the portion of the Satellite Failure Payment
consisting of the Minimum Satellite Purchase Price due in respect of
such period is payable only in the manner and at the times specified
in Sections 7.9(4) and 7.9(5);
(ii) executed discharges and financing change statements, designated
as discharges, prepared by AMSC and delivered to TMI for execution in
respect of all filings and registrations made with respect to the TMI
Purchase Money Security Interest; and
(iii) a termination of the Security Agreement and a release of AMSC
from all of its obligations thereunder.
Upon completion of these deliveries, this Agreement and all rights and
obligations of the parties hereunder shall terminate except for those rights and
obligations under Sections 4.4(2), 5.2(1), 5.4, 6.3, 7.4, 7.7, 7.8(5), 7.9,
7.10, 8.5, 8.7, 8.14 and 8.18.
(4) Upon or from time to time after any relocation of the AMSC Satellite or the
delivery of a replacement satellite owned or operated by AMSC, AMSC Parent Corp.
or any other Person controlled directly or indirectly by AMSC Parent Corp. which
provides L-Band satellite service to all or part of North America, TMI may elect
to purchase restoral capacity from AMSC in accordance with the provisions of
Schedule 4.4(3). Any and all amounts owing by TMI to AMSC in respect of such
capacity will be set off by AMSC against the portion of the Satellite Failure
Payment consisting of the Minimum Satellite Purchase Price then outstanding to
TMI (as such amount may be reduced from time to time pursuant to this Section
7.9(4) and Section 7.9(5)).
(5) At any time and from time to time following the closing pursuant to this
Section 7.9 that:
(a) AMSC receives any payments under the AMSC Satellite Contract (or any
renewal, extension, substitution or replacement thereof), then AMSC shall pay,
and there shall become immediately due and payable, to TMI an amount equal to
twelve thirty-eighths (12/38ths) of such payment;
(b) AMSC receives proceeds upon any sale or other disposition of the AMSC
Satellite then AMSC shall pay, and there shall become immediately due and
payable, to TMI an amount equal to one-half (1/2) of such proceeds;
in each case, up to the aggregate amount equal to the portion of the
Satellite Failure Payment consisting of the Minimum Satellite Purchase Price
then outstanding to TMI (as such amount may be reduced from time to time
pursuant to Section 7.9(4) and this Section 7.9(5)).
Section 7.10. General Rights and Remedies. Subject to the limitation of
liability in Section 7.7 and the exclusion of liability in Section 6.3, in the
event any representation or warranty of any party contained in this Agreement
shall prove to have been incorrect in any material respect when made or deemed
to have been made or if any party fails to perform, observe or comply with any
of its covenants or agreements contained in this Agreement, the other party will
be entitled to whatever rights or remedies are available at law or in equity.
ARTICLE 8
MISCELLANEOUS
Section 8.1. Notices. All notices, requests and other communications to
either party shall be in writing (including telecopy or similar writing) and
shall be given as follows:
if to TMI, to:
TMI Communications and Company, with a copy to: TMI Communications Inc.
Limited Partnership c/o BCE Inc.
c/o TMI Communications Inc. 1000 de La Gauchetiere
P.O. Box 9826 Street West
1601 Telesat Court Suite 3800
Ottawa, Ontario, Canada K1G 5M2 Montreal, Quebec, Canada
Fax: (613) 742-4124 H3B 4Y7
Fax: (514) 397-7057
Attention: President Attention: Senior Vice-President,
with a copy to: Vice President, Law; Law and Corporate
Secretary
and with a copy to: General Counsel
if to AMSC, to:
AMSC Subsidiary Corporation with a copy to: American Mobile Satellite
10802 Parkridge Blvd. Corporation
Reston, VA 20191-5416 10802 Parkridge Blvd.
Fax: (703) 758-6134 Reston, VA 20191-5416
Fax: (703) 758-6106
Attention: General Counsel
with a copy to: Director of Accounting; Attention: Chief Executive Officer;
and
or to such other address or telecopier number as such party may hereafter
specify for the purpose by notice to the other party given in accordance with
this Section 8.01. All such notices, requests and other communications shall be
deemed received on the date of receipt by the recipient thereof if received
prior to 5 p.m. in the place of receipt and such day is a Business Day in the
place of receipt. Otherwise, any such notice, request or communication shall be
deemed not to have been received until the next succeeding Business Day in the
place of receipt.
Section 8.2. Amendments; No Waivers. (1) Any provision of this Agreement
may be amended or waived if, and only if, such amendment or waiver is in writing
and signed, in the case of an amendment, by each of TMI and AMSC, or in the case
of a waiver, by TMI if the waiver is to be effective against TMI or by AMSC if
the waiver is to be effective against AMSC.
(2) Except as expressly set forth herein, no failure or delay by TMI or
AMSC in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
Section 8.3. Expenses. All costs and expenses incurred in connection with
(a) the negotiation, execution and performance of this Agreement or (b) the
transactions contemplated hereby, shall be paid by the party incurring such
costs and expenses, except as otherwise expressly set forth in (i) this
Agreement or (ii) any other agreement executed and delivered by the parties
prior to, on or after the date of this Agreement relating to the allocation or
sharing of any such costs and expenses.
Section 8.4. Successors and Assigns. (1) The provisions of this Agreement
shall be binding upon and inure to the benefit of TMI and AMSC. This Agreement
is for the sole benefit of TMI and AMSC and, except as otherwise contemplated
herein, nothing herein expressed or implied shall give or be construed to give
any Person, other than TMI and AMSC, any legal or equitable rights hereunder.
(2) No party may assign, delegate or otherwise transfer any of its rights
or obligations under this Agreement or sell, transfer or otherwise dispose of
all or any part of its Interest in the Shared Satellite, except as expressly
provided in Section 8.4(3) or with the prior written consent of the other party
hereto which shall not be unreasonably withheld; provided that:
(a) AMSC hereby acknowledges and consents to the grant by TMI to BCE Inc.
of a security interest in all of TMI's rights under this Agreement and under the
Security Agreement as security for the obligations from time to time owing by
TMI to BCE Inc., and AMSC hereby agrees that BCE Inc. may enforce all rights of
TMI hereunder and under the Security Agreement upon the security interest
granted by TMI in favour of BCE Inc. becoming enforceable; and
(b) subject to receipt by TMI of the agreements described in Section
2.5(g), TMI hereby agrees to consent to the grant of a security interest by AMSC
of all of AMSC's rights under this Agreement to Bank of America National Trust
and Savings Association, as common collateral agent (the "AMSC Collateral
Agent") for Morgan Guaranty Trust Company of New York and Toronto Dominion
(Texas) Inc. and the other lenders and guarantors (collectively, the "AMSC
Secured Lenders") from time to time under the U.S.$150 million five-year
multi-draw term loan facility agreement with AMSC dated June 28, 1996 and the
U.S.$75 million five-year revolving credit facility agreement with AMSC dated
June 28, 1996, as security for the obligations of AMSC from time to time owing
to the AMSC Secured Lenders under such agreements and, subject to receipt of the
agreements described in Section 2.5(g), TMI will agree that the AMSC Collateral
Agent may enforce all rights of AMSC hereunder upon the security interest
granted by AMSC in favour of the AMSC Collateral Agent becoming enforceable.
(3) Either party may, without the consent of the other Party, assign its
rights and obligations hereunder and sell any or all of its Interest in the
Shared Satellite to any Permitted Transferee provided that (i) the non-assigning
Party is given 30 days' prior written notice of the proposed assignment; (ii)
the proposed assignee executes and delivers an assumption agreement pursuant to
which the transferee assumes the obligations of the assigning party hereunder in
form and substance satisfactory to the other party acting reasonably; and (iii)
in the case of an assignment by AMSC, the proposed assignee executes and
delivers a security agreement in favour of TMI in the form of the Security
Agreement and pursuant to which TMI shall (x) continue to have a perfected
security interest in the Collateral in each such jurisdiction where the nature
of such collateral or the nature of the business of the proposed assignee makes
such perfection necessary to preserve the rights of TMI under the Security
Agreement and under the security agreement with the assignee and (y) have the
same rights and be subject to the same obligations with creditors of the
proposed assignee as TMI has pursuant to the Security Agreement with AMSC and
any intercreditor agreements entered into pursuant thereto. Notwithstanding any
such assignment of this Agreement or of a party's rights and obligations
hereunder to any Permitted Transferee, the assigning party shall remain liable
hereunder to the other party to the same extent as if such assignment had not
occurred in the event that and to the extent that the assignee fails to fully
perform the assignor's obligations hereunder, and in the case of an assignment
by AMSC, AMSC Parent Corp. shall remain liable hereunder as guarantor to the
same extent as if the assignment had not occurred.
Section 8.5. Interest on Amounts and Set Off. (1) Any amount owing
hereunder which is not paid when due (whether by acceleration or otherwise)
shall bear interest (both before and after judgment) from the date on which such
amount is due until such amount is paid in full at a rate per annum equal to the
U.S. Base Rate in effect from time to time plus 2% calculated daily and payable
on demand.
(2) All computations of interest shall be made by taking into account the
actual number of days occurring in the period for which such interest is payable
and on the basis of a year of 365 or 366 days, as the case may be.
(3) Except as otherwise provided under Section 7.9, all payments made by
AMSC hereunder will be made without set off, counterclaim or other defense.
Section 8.6. Governing Law. This Agreement shall be construed and
interpreted in accordance with and governed by the laws of the Province of
Ontario, without giving effect to the principles of conflicts of laws thereof,
and the federal laws of Canada applicable therein.
Section 8.7. Dispute Resolution; Arbitration. (1) Any dispute, controversy
or claim arising out of, relating to, or in connection with this Agreement
including any alleged breach of any provision of, any contested termination of,
or any contested validity of, this Agreement (in each case, a "Dispute"), shall
be referred by the party asserting such Dispute by written notice delivered to
the Chief Executive Officer of each of TMI and AMSC, who shall attempt, in good
faith, to resolve the Dispute within 30 days after written notice of such
Dispute is given to them. Such written notice shall contain a statement setting
forth the nature of the Dispute. At the request of either TMI or AMSC, the Chief
Executive Officers shall meet at the same location to discuss such Dispute in
good faith. If the Chief Executive Officers are unable to reach agreement to
resolve the Dispute within the 30-day period after written notice of such
Dispute is given to them, the Dispute may be submitted by either party to
arbitration in accordance with Sections 8.7(2) to (7) inclusive.
(2) Any Dispute which cannot be resolved pursuant to Section 8.7(1) may be
submitted by either party (the "Claimant") for final and exclusive settlement by
arbitration administered by the American Arbitration Association ("AAA") under
the AAA's Commercial Arbitration Rules (the "AAA Rules") and pursuant to the
Expedited Procedures of the AAA Rules (regardless of the amount of the claim or
counterclaim which is the subject of the Dispute) other than Section 54 of such
Expedited Procedures (relating to the appointment and qualification of
arbitrators), and any such arbitration shall be conducted in the English
language.
(3) An arbitration shall be initiated by (i) the giving of written notice
by the Claimant to the other party (the "Respondent"), within the 30-day period
immediately following the conclusion of the 30-day period referred to in Section
8.7(1), of its demand to arbitrate (an " Arbitration Demand"), which Arbitration
Demand shall contain a statement specifying (in reasonable detail) the nature of
the Dispute, the dollar amount involved (if any), and the remedy sought, and
(ii) the filing of three copies of such Arbitration Demand and three copies of
this Section 8.7, together with the appropriate filing fee as provided in the
AAA Rules, at any regional office of the AAA. The Respondent shall select the
place of the arbitration, which shall be either (at the Respondent's sole
election) Toronto (Province of Ontario) Canada, or New York City (New York
State) United States of America, and the Respondent shall, within 5 days after
its receipt of the Arbitration Demand, deliver written notice of its selection
of the place of the arbitration to the Claimant, with a copy to the AAA.
(4) The parties shall, within 7 days after receipt by the Respondent of the
Arbitration Demand, attempt to agree upon one arbitrator who shall constitute
the arbitration panel and shall conduct the arbitration. If the parties agree on
a single arbitrator, they shall give written notice of such appointment, with
the name and address of the arbitrator, to the AAA. If the parties are unable to
agree on a single arbitrator within such time period (including for the reason
that either or both parties desire a three-member arbitration panel) then each
party shall appoint, within the next 3 days, one arbitrator (each, a
"party-appointed arbitrator", as such term is used in the AAA Rules) and shall
give written notice of such appointment, with the name and address of the
party-appointed arbitrator, to the other party, with a copy to the AAA. Such two
party- appointed arbitrators shall, within the next 5 days, appoint a third
"neutral" arbitrator (as such term is used in the AAA Rules), who shall act as
chairman of the arbitration panel. Such three arbitrators shall constitute the
arbitration panel and shall conduct the arbitration, and all decisions of such
three-member panel shall be taken by a majority of the arbitrators.
(5) All filing fees payable to the AAA, including any filing fee in respect
of any counterclaim asserted by the Respondent, and all expenses of the
arbitrator(s) constituting the arbitration panel, shall be shared equally by the
Claimant and Respondent.
(6) Any arbitral award shall be in writing and shall be final and binding
on the parties. The award may include (to the extent not inconsistent with the
provisions of Section 8.7(5)), an award of costs, including reasonable
attorneys' fees and disbursements, but may not include an award of punitive
damages. Judgment upon the award may be entered by any court having jurisdiction
thereof or having jurisdiction over the parties or their assets including (i)
with respect to TMI, any court located in the Province of Ontario or Quebec
(Canada) and (ii) with respect to AMSC, any court located in the State of New
York, Virginia or Delaware (United States).
(7) This Section 8.7 shall be construed and interpreted in accordance with
and governed by the laws of the Province of Ontario, without giving effect to
the principles of conflicts of laws thereof, and the federal laws of Canada
applicable therein.
Section 8.8. Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be deemed an original. This
Agreement shall become effective when each party shall have received a
counterpart hereof signed by the other party.
<PAGE>
Section 8.9. Severability. If any provision of this Agreement or the
application to any Person or circumstance shall be invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such
provisions to other Persons or circumstances shall not be affected thereby and
shall be enforced to the greatest extent permitted by law.
Section 8.10. Cooperation and Further Assurances. The parties hereto will
cooperate with each other, and will execute and deliver such further instruments
and do such further acts and things, as may be required to expeditiously carry
out the intent and purposes of this Agreement.
Section 8.11. Entire Agreement. This Agreement, together with the Schedules
and Exhibits hereto and all agreements and documents to be delivered by either
or both the parties pursuant hereto, constitutes the entire agreement among the
parties hereto with respect to the transactions contemplated under this
Agreement or otherwise in respect of the Shared Satellite, and supersedes all
other prior discussions, negotiations, agreements or undertakings with respect
thereto, both written and oral. The parties acknowledge and agree that no
representations, warranties, instruments, promises, understandings or conditions
have been made or relied upon by the parties or any of their Affiliates in
connection with the transactions contemplated by this Agreement except as
expressly set forth herein or in such other agreements or documents referred to
in this Section.
Section 8.12. Structure. The parties acknowledge that they intend to hold
their Interests directly; provided that the parties agree to explore mutually
beneficial alternative structures for holding their respective Interests. If an
alternative structure, acceptable to each party in its sole discretion, is not
agreed to by both parties, the parties agree that they shall hold their
respective Interests directly.
Section 8.13. No Fiduciary Duties; Other Business Opportunities. (1) None
of TMI, AMSC and their respective Affiliates shall have any duties, commitments,
obligations or covenants, expressed or implied, in respect of the transactions
contemplated hereunder other than those expressly set forth in (i) this
Agreement (including the Schedules and Exhibits hereto), or (ii) the other
agreements referred to in Section 8.11. Except as set forth herein, to the
fullest extent permitted by applicable law, neither party shall have any
fiduciary or similar duty, or any liability relating thereto, to the other party
(or any Affiliate of such other party) in connection with the transactions
contemplated under this Agreement or otherwise in respect of the Shared
Satellite, and each of TMI and AMSC and their respective Affiliates hereby
waives any claim for breach of fiduciary duty against the other party or any
Affiliate of the other party in connection with the transactions contemplated by
this Agreement.
(2) Without limiting Section 8.13(1) above, to the fullest extent permitted
by applicable law, the doctrine of corporate opportunity, or other analogous
doctrine, shall not apply with respect to the transactions contemplated under
this Agreement or otherwise in respect of the Shared Satellite. In particular,
(i) nothing herein shall limit either party hereto from engaging in business
activities outside the transactions envisaged by this Agreement, whether or not
in competition with the operating activities of the other party, and (ii)
neither party shall
<PAGE>
have any obligation to the other with respect to any opportunity to acquire
property or make investments outside the transactions contemplated hereunder at
any time.
(3) Nothing in this Agreement is intended or shall be deemed to constitute
a partnership, agency, franchise or joint venture relationship between the
parties. Except as otherwise expressly provided elsewhere herein, all revenues,
assets, liabilities, personnel, operations and other aspects of the respective
businesses of TMI and AMSC will remain separate and neither party shall have any
right to any revenues or assets of the other or any obligation in respect of the
liabilities or obligations of the other.
Section 8.14. Indemnification. Subject to the limitation of liability in
Section 7.7 and the exclusion of liability in Section 6.3, each of the parties
hereto (an "Indemnitor") hereby indemnifies the other party, its partners or
shareholders, the respective Affiliates of such other party and of the
respective partners or shareholders of such other party and the respective
officers, directors, employees and agents of each of the foregoing Persons
(each, an "Indemnitee") against, and agrees to hold each of them harmless from,
any and all losses, liabilities, damages, claims and expenses (including
reasonable expenses of investigation and reasonable attorneys' fees in
connection with any arbitration or other proceeding) ("Damages"), incurred by
any Indemnitee to the extent such Damages: (i) arise out of any
misrepresentation or breach of warranty, covenant or agreement made or to be
performed by the Indemnitor pursuant to this Agreement; or (ii) arise out of or
relate to a claim asserted against any Indemnitee which claim relates solely to
the assets, liabilities, operations or business of the Indemnitor, whether
previously owned, incurred or conducted or whether acquired, incurred or
conducted after the date hereof; or (iii) to the extent not covered by
insurance, arise out of or relate to the gross negligent use or operation of the
Shared Satellite by the Indemnitor; or (iv) in the case of the indemnity given
hereunder by AMSC only, arise out of or relate to any RF interference with or
other disruption of communications or other interference between the Shared
Satellite and the GE Spacecraft.
Section 8.15. Export Control Compliance. The obligations hereunder of TMI
and AMSC to furnish technical information to the other are subject to any
restrictions and limitations that may be imposed by any agency or department of
the federal government of the United States or Canada, respectively.
Section 8.16. Regulatory Compliance. Notwithstanding any other provision of
this Agreement to the contrary, each of TMI and AMSC acknowledges and agrees
that it shall not, without first obtaining all required prior governmental
authorizations, take any action that constitutes or results in an assignment or
transfer of control of any material governmental authorization held by it which
is necessary to the operation of the Shared Satellite.
Section 8.17. Bulk Sales Act (Ontario). _)Although neither TMI nor AMSC
accept that the Bulk Sales Act (Ontario) is applicable to the transfer, as
contemplated herein, by TMI to AMSC of a 50% undivided interest in the Shared
Satellite: (i) AMSC hereby waives compliance by TMI with the Bulk Sales Act
(Ontario) to the extent (if any) applicable to such transaction, and (ii)
subject to the exclusion of liability in Section 6.3, TMI hereby indemnifies
<PAGE>
AMSC, its Affiliates and their respective officers, directors, employees,
partners and agents against, and agrees to hold each of them harmless from, any
and all losses, liabilities, claims, expenses and damages (including reasonable
expenses of investigation and reasonable attorneys' fees in connection with any
proceeding) incurred by any such indemnified Person arising from the
applicability (if any) of the Bulk Sales Act (Ontario) and any failure by TMI to
comply with such legislation.
Section 8.18. AMSC Parent Corp. Joint and Several Liability. AMSC Parent
Corp. hereby agrees that it is jointly and severally liable with AMSC (and any
Permitted Transferee of AMSC) in respect of the performance of all obligations,
monetary or otherwise, of AMSC (and any Permitted Transferee of AMSC) contained
in this Agreement or in any of the other agreements referred to in Section 8.11
(as this Agreement may be amended, modified or otherwise changed and as any
provision of this Agreement may be waived in accordance with Section 8.2, or as
any such other agreement may be amended, modified or otherwise changed and as
any provision of any such other agreement may be waived in accordance with the
terms of such subject other agreement). AMSC Parent Corp. hereby acknowledges
and agrees that any amendment, modification or other change to this Agreement
(including any Schedule or Exhibit hereto) or to any of the other agreements
referred to in Sections 8.11, and any waiver of any provision of this Agreement
or of any such other agreement, which is consented to or granted by AMSC (or any
Permitted Transferee thereof) shall not require notice to or the consent of AMSC
Parent Corp., shall nonetheless be effective against AMSC Parent Corp. and shall
not affect the validity or enforceability of the undertaking by AMSC Parent
Corp. contained in this
<PAGE>
Section 8.18. The undertaking of AMSC Parent Corp. contained in this
Section 8.18 shall be in addition to and not in substitution for the rights and
remedies of TMI pursuant to this Agreement or the Security Agreement or
elsewhere.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers, in each
case as of the day and year first above written.
TMI COMMUNICATIONS AND COMPANY, LIMITED PARTNERSHIP
By: TMI COMMUNICATIONS INC.,
its General Partner
By: /s/LARRY J. BOISVERT
Name: Larry J. Boisvert
Title: President and Chief Operating Officer
By: /s/TED IGNACY
Name: Ted Ignacy
Title: Chief Financial Officer
AMSC SUBSIDIARY CORPORATION
By: /s/GARY M. PARSONS
Name: Gary M. Parsons
Title: Chief Executive Officer and President
Solely for purposes of Section 8.18:
AMERICAN MOBILE SATELLITE
CORPORATION
By: /s/GARY M. PARSONS
Name: Gary M. Parsons
Title: Chief Executive Officer and President
<PAGE>
PERMITTED TRANSFEREES
A. The "Permitted Transferees" of TMI are:
1. Telesat Canada or any direct or indirect wholly owned subsidiary
or Affiliate of Telesat Canada for so long as such subsidiary is
so owned or such Person remains an Affiliate.
2. BCE Inc. or any direct or indirect wholly owned subsidiary or
Affiliate of BCE Inc. for so long as such subsidiary is so owned
or such Person remains an Affiliate.
3. Any Person that succeeds to the business carried on by TMI and
that is a direct or indirect wholly owned subsidiary or Affiliate
of BCE Inc. for so long as such subsidiary is so owned or such
Person remains an Affiliate.
4. Any Person(s) which (i) is a lender to TMI (or any of its
subsidiaries) or a guarantor of any obligations of TMI (or any of
its subsidiaries); and (ii) holds a Lien on or in respect of all
or any part of TMI's Interest, or all or any part of the other
assets and properties of, and/or partnership interests in, TMI .
B. The "Permitted Transferees" of AMSC are:
1. Any direct or indirect wholly owned subsidiary or Affiliate of
AMSC for so long as such subsidiary is so owned or such Person
remains an Affiliate.
2. AMSC Parent Corp. or any direct or indirect wholly owned
subsidiary or Affiliate of AMSC Parent Corp. for so long as such
subsidiary is so owned or such Person remains an Affiliate.
3. Any Person that succeeds to the business carried on by AMSC and
that is a direct or indirect wholly owned subsidiary or Affiliate
of AMSC Parent Corp. for so long as such subsidiary is so owned
or such Person remains an Affiliate.
4. Any Person(s) which (i) is a lender to AMSC (or any of its
subsidiaries) or a guarantor of any obligations of AMSC (or any
of its subsidiaries); and (ii) holds a Lien on or in respect of
all or any part of AMSC's Interest, or all or any part of the
other assets and properties of, and/or capital stock of, AMSC.
<PAGE>
SCHEDULE 3.2(1)
TECHNICAL AND OPERATING MATTERS
I. Technical and Operating Matters
(a) Traffic Planning
Traffic planning issues that could potentially affect the operation and the use
of either party's 50% power within the Shared Satellite. The process is not
intended to limit the flexibility of either party but is intended to ensure that
the operations of TMI and AMSC within the Shared Satellite are harmonized.
(b) Access Engineering
To ensure integrity and safe operation of the Shared Satellite (safe access to
the Shared Satellite), Existing Access Agreement Documents developed by each of
TMI and AMSC to control its existing or future independent uplinks will be
harmonized and used for this purpose.
Each party agrees that it will mute RF transmissions to the Shared Satellite
from its Communications Ground Segment (either the operational or test facility)
under any one of the following conditions:
(i) addition of new beams to the system; or
(ii) increase in beam group power limits.
(c) Interference Troubleshooting
Intra and inter-system interference caused by the operation of the other party=s
independent communications ground system, other uplinks, or other satellite
systems will be jointly resolved.
(d) Satellite Reconfiguration
Hardware reconfigurations mandated by traffic considerations (either prompted by
new frequency coordination agreements or interference events). Also, hardware
reconfigurations mandated by in-orbit failure not specifically covered by the
Telesat Procedures.
(e) Satellite Health Considerations
Decisions mandated by observed in-orbit events not covered by On-Station
Operation Procedures (either on the Shared Satellite or other operating HS 601s)
which could affect communications payload operation, satellite stability and/or
pointing, expected fuel life or hardware redundancy considerations.
(f) Determination of Power Capacity and Usage
Any changes to the power capacity determination, or to the operational
procedures to manage usage to be defined by the Services Operating Committee, as
provided in Schedule 4.01(a).
II. Principles for Managing and Directing Technical and Operating Matters
In managing and directing Technical and Operating Matters, the Services
Operating Committee shall have regard to all of the following principles, in the
following order of priority:
(a) Satellite health shall be safeguarded.
(b) Regulatory approvals and privileges shall be maintained and facilitated.
(c) Adverse impacts upon the customers of either party shall be minimized.
(d) The usage of the Shared Satellite shall be maximized.
(e) Issues brought before the Services Operating Committee shall be
resolved as quickly as possible.
<PAGE>
SCHEDULE 3.2(2)
TELESAT PROCEDURES
Attached hereto is the table of contents of the documents constituting the
Telesat Procedures, full copies of which have previously been provided to each
of TMI and AMSC.
<PAGE>
MSAT PROCEDURE/ROP
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<C> <C> <C> <C> <C>
ROP ISSUE REV
TELEMETRY AND COMMAND SUBSYSTEM
9.1.0 Telesat MSAT Command System
9.1.1 Not Assigned
9.1.2 SCP Commanding 1.1.2 DRAFT
9.1.3 Not Assigned
9.1.4 Command File Commanding DRAFT
9.1.5 MSAT Decrypt Mode Change 1.1.4 DRAFT
Section 4.1. - Switch CDU 1 from Bypass Mode to Secure Mode
Section 4.2 - Switch CDU 2 from Bypass Mode to Secure Mode
Section 4.3 - Switch CDU 1 from Secure Mode to Bypass Mode
Section 4.4 - Switch CDU 2 from Secure Mode to Bypass Mode
9.1.6 MSAT CDU VCC Change 1.1.5 DRAFT
Section 4.1 - Setting VCC for CDU 1
Section 4.2 - Setting VCC for CDU 2
9.1.7 CDU Key Change 1.1.6 DRAFT
Section 4.1 - Setting CDU 1 Key Address
Section 4.2 - Setting CDU 2 Key Address
9.1.8 Command System - CDU Timer Reset 1.1.7 DRAFT
9.1.9 COMSEC Reset 2.1.3 DRAFT
Section 4.1 - CDU 1 COMSEC Reset
Section 4.2 - CDU 2 COMSEC Reset
9.1.10 CDU Control - Key Management
9.1.11 Not Assigned
9.1.12 MSAT Edmonton Command Test
9.1.13 Omni T&C Emergency Switching 2.1.2 DRAFT
Section 4.1 - Emergency Switch from Dish to Omni Command and Telemetry
Section 4.2 - Response to SCP Fault Protection Test S3 Activation
9.1.14 Omni T&C Planned Switching 2.1.2 DRAFT
Section 4.1 - Planned Switch from Dish to Omni Command
Section 4.2 - Planned Switch from Omni to Dish Command
Section 4.3 - Planned Switch from Dish to Omni Telemetry
Section 4.4 - Planned Switch from Omni to Dish Telemetry
TELEMETRY SUBSYSTEM PROCEDURES
9.1.15 PCM - Telesat System General
9.1.16 Not Assigned
9.1.17 Telemetry Encoder Unit (TEU) Functions 1.2.2 1 0
Section 4.1 - Dwell Channel Setup
Section 4.2 - PCM Mode Change to Dwell
Section 4.3 - PCM Normal Mode Selection
Section 4.4 - TEU Format Selection
Section 4.5 - TEU Data Rate Selection
9.1.18 Not Assigned
9.1.19 Not Assigned
9.1.20 MRO Telemetry Data - Normal 1.2.5 1 0
9.1.21 MRO Telemetry Data - Dwell 1.2.6 DRAFT
9.1.22 TEU Switching 1.2.7 1 0
9.1.23 PCM Dwell Data Collection
9.1.24 Not Assigned
9.1.25 Not Assigned
9.1.26 Not Assigned
9.1.27 ULPC Control 1 1
9.1.28 Not Assigned
9.1.29 Not Assigned
POWER SUBSYSTEM PROCEDURES
9.1.30 Not Assigned
9.1.31 Not Assigned
9.1.32 SCP Controlled Battery Management 1.5.1 DRAFT
9.1.33 Ground Controlled Battery Management 2.5.2
9.1.34 Battery Pressure Limit Calibration 1.5.2 DRAFT
Section 4.1 - Manual Pressure Bias Recalibration
Section 4.2 - Manual SCP Pressure Correction Factor Upload
Section 4.3 - MPM Pressure Bias Recalibration
Section 4.4 - MPM SCP Pressure Correction Factor Upload
9.1.35 Not Assigned
9.1.36 Eclipse Operations Activities 1.5.0 1 0
1.5.1
1.5.3
Section 4.1 - Eclipse Monitoring Setup - First Eclipse Minus 7 Days
Section 4.2 - Eclipse Monitoring Setup - First Eclipse Minus 1 Day
Section 4.3 - Eclipse Activities
Section 4.4 - Post-Eclipse Activities - End of Eclipse Minus 1 Day
Section 4.5 - Modifying the Thermal Shock Eclipse Sequencing Parameters
Section 4.6 - Modifying the Thermal Shock Feedforward Parameters
9.1.37 Solstice Operations
9.1.38 Not Assigned
9.1.39 Not Assigned
9.1.40 Not Assigned
9.1.41 Not Assigned
9.1.42 Not Assigned
9.1.43 Not Assigned
9.1.44 Not Assigned
9.1.45 Not Assigned
9.1.46 Not Assigned
9.1.47 Not Assigned
9.1.48 Solar Array Performance Measurement 1.8.1 DRAFT
9.1.49 Not Assigned
PROPULSION SUBSYSTEM PROCEDURES
9.1.50 Not Assigned
9.1.51 Propellant Remaining Measurement and Residual
Propellant Management
9.1.52 Not Assigned
9.1.53 Not Assigned
9.1.54 Not Assigned
9.1.55 Latch Valve Control 1.4.3 1 0
Section 4.1 - Uploading Latch Valve Selections for Mode Programs/Sequences
Section 4.2 - Reprogramming Mode Program/Sequence Latch Valve Closure Commands
Section 4.3 - Enable or Disable Latch Valve Checking
Section 4.4 - Resetting Latch Valve Check Test Status Telemetry
Section 4.5 - Closing all Latch Valves
9.1.56 Pressure Transducer Management 1.4.4 1 0
9.1.57 Not Assigned
9.1.58 Not Assigned
9.1.59 Not Assigned
ATTITUDE CONTROL SUBSYSTEM PROCEDURES
9.1.60 Not Assigned
9.1.61 Not Assigned
9.1.62 Not Assigned
9.1.63 Not Assigned
9.1.64 Switch SCP 1 to SCP 2 in Normal Mode 2.7.2 1 0
9.1.65 Switch SCP 2 to SCP 1 in Normal Mode 2.7.2 1 0
9.1.66 Not Assigned
9.1.67 OTS and ACCL Table Upload 2.4.2 1 0
9.1.68 Optimized Parameter Upload 2.7.4 1 0
9.1.69 SCP Parameter Upload and Verification 2.7.14 DRAFT
9.1.70 SCP Clock Control 1.7.1 1 0
Section 4.1 - Pre-Clock Set Activities
Section 4.2 - Clock Set Activities
Section 4.3 - Post-Clock Set Activities
9.1.71 RAM Patch Upload and Verification 2.7.13 1 0
Section 4.1 - RAM Patch Upload
Section 4.2 - Magnetic Torquer (MTO) RAM Patch
Section 4.3 - ESA RAM Patch Setup
Section 4.4 - Payload (PSF) RAM Patch
Section 4.5 - Command (CMD) RAM Patch
Section 4.6 - Earth Acquisition (EAC) RAM Patch
9.1.72 Not Assigned
9.1.73 Not Assigned
9.1.74 Not Assigned
9.1.75 Not Assigned
9.1.76 Magnetic Torquer Operations 1.7.3 1 2
Section 4.1 - Initial Setup
Section 4.2 - Preparing to Enable the Magnetic Torquer Algorithm
Subsection 4.2.1 - Restart
Subsection 4.2.2 - Restart with Reprogramming
Subsection 4.2.3 - Initialization
Section 4.3 - Enabling Magnetic Torquer Algorithm
Section 4.4 - Monitoring Autonomous Commanding
Section 4.5 - MWP Angle Offsets
Section 4.6 - Magnetic Torque Estimate Improvement
Section 4.7 - Individual Parameter Reprogramming
Section 4.8 - Disabling Magnetic Torquer Algorithm
9.1.77 Not Assigned
9.1.78 Not Assigned
9.1.79 ASWA Control 1.7.8 1 1
Section 4.1 - Initial Torque measurements
Section 4.2 - Calculation of Solar Wing Drive (SWD) Offset Angle
Section 4.3 - Short-Term ASWA Stepping
Section 4.4 - Nominal Torque Measurements
Section 4.5 - Correction Angle Calculation
Section 4.6 - ASWA Correction Angle Commanding
Subsection 4.6.1 - Decrease the Yoke Deployment Angle
Subsection 4.6.2 - Increase the Yoke Deployment Angle
Section 4.7 -ASWA Failure Diagnostic
9.1.80 Not Assigned
9.1.81 IRU Management 2.7.11 1 0
Section 4.1 - Change Gyro Range
Section 4.2 - Update Gyro Biases
Section 4.3 - Change Gyro Set Selection
Section 4.4 - Power On/Off Gyro Heaters
Section 4.5 - Periodic Power Up and Calibration of Gyros
Section 4.6 - Power Down Gyros
Section 4.7 - Power Up Gyros
9.1.82 OTS Stationkeeping 1.4.1 2 1
Section 4.1 - Performing and Monitoring a Stationkeeping Maneuver
Section 4.2 - Aborting a Stationkeeping Maneuver
9.1.83 Not Assigned
9.1.84 Body-to-Sun Angle Gain Reprogramming 1.7.10
9.1.85 Not Assigned
9.1.86 Roll/Yaw Momentum Adjust 2.4.5 DRAFT
9.1.87 Manual Momentum Dump Maneuver 2.4.3
9.1.88 Not Assigned
9.1.89 Pitch Momentum Adjust 2.4.4 1 0
9.1.90 ESA Switch in Normal Mode 2.7.15 1 0
9.1.91 Not Assigned
9.1.92 ESA Bias Maintenance 1.7.5 DRAFT
Section 4.1 - ESA Biasing to Point Spacecraft
Section 4.2 - ESA Biasing for Long-Term Earth Pointing
9.1.93 ESA Calibration Coefficients Upload 2.7.16 1 0
9.1.94 STESA Sun/Moon Discrimination Operations 1.7.6 1 0
9.1.95 Not Assigned
9.1.96 SCP Fault Protection Management 2.7.4 DRAFT
Section 4.1 - Hardware Toggle Enable/Disable
Section 4.2 - Software Toggle Enable/Disable
Section 4.3 - VLSI and PWDT Response Enable/Disable
Section 4.4 - Test Latch/Audit Trail Reset
Section 4.5 - Response Flag Reset
Section 4.6 - Stored Command Processing Disable Allow/Disallow
Section 4.7 - Test Enable/Disable
Section 4.8 - Response Enable/Disable
Section 4.9 - Fault Protection San Enable/Disable
Section 4.10 - Unit Availability Table Maintenance
Section 4.11 - Fault Protection Parameter Maintenance
Section 4.12 - Fault Protection Initialization
9.1.97 Solar Wing Drive Management 2.7.9
9.1.98 RPM Management 1.7.7 1 0
Section 4.1 - RPM Switch to Ground Stepping Mode
Section 4.2 - Manual RPM Stepping
Section 4.3 - RPM Step Deadband Parameter Upload
Section 4.4 - RPM Step Inhibit Time Parameter Upload
9.1.99 SCP Memory Latch Control 1.7.2 1 0
THERMAL SUBSYSTEM PROCEDURES
9.1.100 Not Assigned
9.1.101 Communications Heater Control 1.6.1 DRAFT
Section 4.1 - Maintenance Communications Heaters Disable
Section 4.2 - Maintenance Communications Heaters Enable
Section 4.3 - Replacement Communications Heaters Disable
Section 4.4 - Replacement Communications Heaters Enable
9.1.102 Not Assigned
9.1.103 Not Assigned
CONFIGURATION TABLES
9.1.104 Not Assigned
9.1.105 Not Assigned
9.1.106 Not Assigned
9.1.107 Not Assigned
9.1.108 Not Assigned
9.1.109 Not Assigned
PAYLOAD PROCEDURES
9.1.110 Payload Operations - General
9.1.111 MSAT Local Oscillators Initial Turn-On
Configuration 1 0
9.1.112 Reference Local Oscillator Frequency Adjust 1 0
9.1.113 SSPA T-Switch Initial Configuration 1 0
Section 4.1 - North SSPA T-Switches Initial Configuration
Section 4.2 - South SSPA T-Switches Initial Configuration
9.1.114 SSPA Initial Turn-On 1 0
9.1.115 L-Band Upconverter Initial Configuration 1 0
9.1.116 L-Band Upconverter Sub-Band Filter and 1 0
Attenuator Control
9.1.117 Ku-Band Receiver Initial Configuration 1 0
9.1.118 Not Assigned
9.1.119 Not Assigned
9.1.120 Ku-Ku Attenuator Control 1 0
9.1.121 Solstice/Equinox Payload Attenuation
9.1.122 Not Assigned
9.1.123 Not Assigned
9.1.124 LTWTA Initial Configuration 1 0
9.1.125 Ku-Band Upconverter Initial Configuration 1 0
9.1.126 L-Band Receiver Initial Configuration 1 0
9.1.127 L-Band Receiver Sub-Band Filter and
Gain Control 1 0
9.1.128 LTWTA Manual Gain Control 1 0
9.1.129 Not Assigned
9.1.130 Not Assigned
NON-NOMINAL OPERATIONS and TMI INTERFACE PROCEDURES
9.2.1 AMSC Traffic Restoral 1 0
9.2.2 Not Assigned
9.2.3 Not Assigned
9.2.4 Not Assigned
9.2.5 Not Assigned
9.2.6 Not Assigned
9.2.7 Not Assigned
9.2.8 Not Assigned
9.2.9 Not Assigned
9.2.10 Not Assigned
9.2.11 Not Assigned
9.2.12 Not Assigned
9.2.13 Not Assigned
9.2.14 Not Assigned
9.2.15 Not Assigned
9.2.16 Not Assigned
9.2.17 Not Assigned
9.2.18 Not Assigned
9.2.19 Not Assigned
9.2.20 TMI/Telesat Communications Protocol 1 1
EMERGENCY OPERATIONS - GENERAL PROCEDURES
9.3.0 Satellite Emergency Team 1 2
9.3.1 Emergency Recovery Operations - General 2.0.1 1 0
9.3.2 Not Assigned
9.3.3 Command System Failure - Diagnostic and Recovery 2.1.1 1 0
9.3.4 Emergency - Manual Command 2.1.1 1 0
Section 4.1 - Configuration and Commanding
Seciton 4.2 - Pulse Command Execution
Section 4.3 - Non-SCP Serial Command Execution
Section 4.4. - SCP Serial Command Execution
9.3.5 Telemetry System Failure-Diagnostic and Recovery 2.2.1 1 0
9.3.6 Not Assigned
9.3.7 Not Assigned
9.3.8 Not Assigned
9.3.9 Not Assigned
9.3.10 Power Subsystem Failure - General 2.5.1
9.3.11 Bus Short/Bus Undervoltage Transient Recovery
9.3.12 Not Assigned
9.3.13 Not Assigned
9.3.14 Battery Charge Controller Failure
9.3.15 Battery Discharge Controller Failure
9.3.16 Not Assigned
9.3.17 Solar Wing Drive (SWD) Failure 2.7.10
9.3.18 Solar Wing Drive (SWD) Potentiometer Failure
9.3.19 Not Assigned
9.3.20 Not Assigned
9.3.21 Not Assigned
9.3.22 Not Assigned
9.3.23 Not Assigned
9.3.24 Not Assigned
9.3.25 Attitude Control System Failure - General 2.7.1
9.3.27 MWA Unit Failure
9.3.27 MWP Unit Failure 2.7.7
9.3.28 Not Assigned
9.3.29 IRU Unit Failure 2.7.12 DRAFT
Section 4.1 - Emergency Response to Gyro Failure
Section 4.2 - Diagnosis as Operator Errors
Section 4.3 - Diagnosis as Spacecraft Gyro Failure
9.3.30 STESA Unit Failure 2.7.3
9.3.31 Not Assigned
9.3.32 Not Assigned
9.3.33 Magnetic Torquer Failure 2.7.8
9.3.34 RPM Unit Failure 2.7.17
9.3.35 Not Assigned
9.3.36 Attitude Recovery 2.7.6
9.3.37 Not Assigned
9.3.38 Long-Term Sun Hold Mode 2.7.5
9.3.39 Not Assigned
9.3.40 Not Assigned
9.3.41 Not Assigned
9.3.42 Not Assigned
9.3.43 Not Assigned
9.3.44 ULPC Failure
9.3.45 Local Oscillators - Failure Recovery 1 1
9.3.46 Payload Overdrive Recovery 2.7.20E 1 1
Section 4.1 - Payload Overdrive Threshold Aadjustments
Section 4.2 - Payload Overdrive Response Reset
Section 4.3 - Payload Overdrive Response Recovery
9.3.47 L-Band Upconverter Emergency Turn Off 1 0
9.3.48 SSPA Failure Recovery 1 5
Section 4.1 - SSPA Failure Recovery Procedure - General
Section 4.2 - SSPA 3 Failure Recovery
Section 4.3 - SSPA 4 Failure Recovery
Section 4.4 - SSPA 7 Failure Recovery
Section 4.5 - SSPA 8 Failure Recovery
Section 4.6 - SSPA 11 Failure Recovery
Section 4.7 - SSPA 12 Failure Recovery
Section 4.8 - SSPA 13 Failure Recovery
Section 4.9 - SSPA 14 Failure Recovery
9.3.49 L-Band Upconverter Failure Recovery 2 2
Section 4.1 - L-Band Upconverter Failure Recover - General
Section 4.2 - L-Band Upconverter 1 Total Failure
Section 4.3 - L-Band Upconverter 2 Total Failure
Section 4.4 - L-Band Upconverter 3 Total Failure
Section 4.5 - L-Band Upconverter 4 Total Failure
Section 4.6 - L-Band Upconverter 5 Total Failure
Section 4.7 - L-Band Upconverter 6 Total Failure
Section 4.8 - L-Band Upconverter 1 Partial Failure
Section 4.9 - L-Band Upconverter 2 Partial Failure
Section 4.10 - L-Band Upconverter 3 Partial Failure
Section 4.11 - L-Band Upconverter 4 Partial Failure
Section 4.12 - L-Band Upconverter 5 Partial Failure
Section 4.13 - L-Band Upconverter 6 Partial Failure
9.3.50 Forward Repeater, Ku-Band Receiver - Failure Recovery 1 0
9.3.51 Reverse Repeater, LTWTA - Failure Recovery
Section 4.1 - Ku-Band LTWTA 1 Failure Recovery
Section 4.2 - Ku-Band LTWTA A Failure Recovery
9.3.52 LTWTA Filament Boost 1 0
Section 4.1 - Ku-Band LTWTA 1 Filament Boost
Section 4.2 - Ku-Band LTWTA A Filament Boost
Section 4.3 - Ku-Band LTWTA B Filament Boost
9.3.53 Ku-Band LTWTA Timer Override 1 0
Section 4.1 - Ku-Band LTWTA 1 Timer Override
Section 4.2 - Ku-Band LTWTA A Timer Override
Section 4.3 - Ku-Band LTWTA B Timer Override
9.3.54 Ku-Band LTWTA Trip-Off Recovery 1 1
Section 4.1 - Ku-Band LTWTA 1 Trip-Off Recovery
Section 4.2 - Ku-Band LTWTA A Trip-Off Recovery
Section 4.3 - Ku-Band LTWTA B Trip-Off Recovery
9.3.55 Ku-Band Upconverter Failure Recovery 1 0
9.3.56 L-Band Receiver - Failure Recovery 2 2
Section 4.1 - L-Band Receiver Failure Recovery - General
Section 4.2 - L-Band Receiver 1 Total Failure
Section 4.3 - L-Band Receiver 2 Total Failure
Section 4.4 - L-Band Receiver 3 Total Failure
Section 4.5 - L-Band Receiver 4 Total Failure
Section 4.6 - L-Band Receiver 5 Total Failure
Section 4.7 - L-Band Receiver 6 Total Failure
Section 4.8 - L-Band Receiver 1 Partial Failure
Section 4.9 - L-Band Receiver 2 Partial Failure
Section 4.10 - L-Band Receiver 3 Partial Failure
Section 4.11 - L-Band Receiver 4 Partial Failure
Section 4.12 - L-Band Receiver 5 Partial Failure
Section 4.13 - L-Band Receiver 6 Partial Failure
CONSTRAINTS
9.4.0 Not Assigned
</TABLE>
SCHEDULE 4.1(2)
DETERMINATION OF ALLOTTED USAGE OF THE SHARED SATELLITE
I. Determination of Power Capacity
TMI and AMSC are each entitled to 50% of the available Radio Frequency (RF)
power in each of the North Hybrid Matrix Amplifier (HMA) (East and Central
Beams) and South HMA (Mountain, West, South, Alaska/Hawaii Beams). For planning
purposes, combined operation at 16 dB Noise Power Ratio (NPR) is adopted as the
baseline as of the commencement of the satellite sharing, subject to change as
approved by the Services Operating Committee (pursuant to Section 3.02 of the
Agreement). The nominal operating power for each HMA at 16 dB NPR is defined at
54.3 dBW at a gain reference level of 31.3 dBi (see below). In-orbit power
capability may be more or less than this reference level. The addition or
reduction in performance margin, if any and once clearly established, will be
shared equally by TMI and AMSC.
The 31.3 dBi gain reference level referred to above defines the Nominal Edge of
Coverage (EOC) of the four beams (East, Central, Mountain, West) as defined in
spacecraft contract specifications (ref. 4). The defined EOC gain for the
Alaska/Hawaii Beam is 28 dBi and the gain for the South Beam is 26.4 dBi. As
outlined in ref. 4, the combined AMSC and TMI traffic will not exceed 80% of the
nominal operational power of an HMA (the nominal being defined at 16 dB NPR for
an EIRP of 54.3 dBW) in a single beam. In such an operating mode, each of TMI
and AMSC has the right of access to 40% of the HMA power within a single beam,
with the exception of the Mountain Beam.
Unless otherwise approved by the Services Operating Committee, the operation of
the Mountain Beam will be limited to 11% of the South HMA's maximum operational
power, referenced at 16 dB NPR level (equivalent to 13% of operational power
referenced at the 18 dB NPR level). Each of TMI and AMSC therefore has right of
access to 5.5% of the South HMA maximum operational power in the Mountain Beam.
If the power limit of a beam is revised in the future, each of TMI and AMSC will
be entitled to up to half of the maximum operational power of such beam.
II. Determination of Allotted Usage
The Services Operating Committee shall define operational procedures to manage
usage. This is required to establish soft/hard alarm levels for the RAM Patch,
to control the payload drive level and to ensure safe operation of the payload.
In the absence of these operational procedures and for planning purposes usage
will be tracked by existing software that uses the daily CGS Call Processing
Records (CPR), in conjunction with data concerning traffic not handled by the
CGS, to generate daily power usage profiles for each party and for each beam.
The daily power Busy Hour data for each beam will be averaged over 5 business
days to generate a weekly average. The largest weekly average in a calendar
month will represent the monthly usage (the "Monthly Power Usage"). The same
procedures shall also be used to account for and manage Excess Capacity (as
defined in Section 4.4(1) of the Agreement).
III. Spectrum Considerations:
It is assumed that each of the parties will use its coordinated L-Band spectrum
in accordance with its 50% on-board power.
If Satellite failures adversely impact the available spectrum to either or both
parties, TMI and AMSC will cooperate to minimize the impact and seek to arrange
for an equitable burden sharing (without charge), proportional to the respective
Coordinated Spectrum under the on-going Memorandum of Understanding for
Intersystem Coordination of Certain Geostationary Mobile Satellite Systems
Operating in the Bands 1525-1544/1545-1559 MHz and 1626.5-1645.5/1646.5-1660.5
MHz, dated June 18, 1996.
<PAGE>
SCHEDULE 4.4(1)
EXCESS CAPACITY AND PRICING
If a party has requested use of the other party's Excess Capacity (as
contemplated in Section 4.4(1) of the Agreement), the party receiving such
Excess Capacity shall pay to the party allocating such Excess Capacity, in
advance, an amount equal to U.S. $24,109 per month (or portion thereof, on a
pro-rated basis) during the Specified Time Period for each 0.5% of the available
Radio Frequency (RF) power in either the North or South Hybrid Matrix Amplifier
(as referenced in Schedule 4.1(2)) included within the specified Excess Capacity
without regard to the receiving party's use or non-use of such Excess Capacity.
<PAGE>
SCHEDULE 4.4(3)
RESTORAL CAPACITY
1. In this Schedule 4.4(3):
"Shared Satellite Degradation" means any diminution or degradation in
the condition of the Shared Satellite below that specified in the
documents relating to the condition of the Shared Satellite listed in
Schedule 6.1(c) of this Agreement;
"AMSC Satellite Degradation" means any diminution or degradation in
the condition of the AMSC Satellite below that specified in the
documents relating to the condition of the AMSC Satellite listed at
the end of this Schedule 4.4(3); and
"Restoral Capacity" means Radio Frequency (RF) power.
Restoral Capacity to TMI
- ------------------------
2. TMI shall, to the extent reasonably possible, mitigate any Shared Satellite
Degradation which affects it by utilizing:
(a) its own Allotted Usage; and/or
(b) Excess Capacity purchased by it; and/or
(c) any other L-Band Satellite which it or any Person directly or
indirectly controlled by TMI owns or operates.
3. If TMI is unable to fully mitigate such Shared Satellite Degradation as set
out in paragraph 2 above, then to the extent reasonably possible, AMSC shall,
immediately upon its receipt of a written request for Restoral Capacity from
TMI, commence to provide Restoral Capacity from its Allotted Usage and/or Excess
Capacity purchased by it to TMI, at the price of U.S.$24,109 per month (or
portion thereof, on a pro-rated basis) for each 0.5% of the available Radio
Frequency (RF) power in either the North or South Hybrid Matrix Amplifier so
provided (such RF power being determined in accordance with Schedule 4.1(2)),
provided that for the purposes of this paragraph 3, the extent to which AMSC has
Restoral Capacity available to sell will be determined solely with reference to
actual (and not to forecasted) customer usage.
4. If TMI is unable to fully mitigate such Shared Satellite Degradation as set
out in either paragraph 2 or 3 above, and if, at the time at which TMI provides
its written request for Restoral Capacity to AMSC, AMSC is providing L-Band
satellite service to all or any part of North America using the AMSC Satellite,
then to the extent reasonably possible, AMSC shall, immediately upon its receipt
of such written request, commence to provide Restoral Capacity to TMI on the
AMSC Satellite, at the price of U.S.$24,109 per month (or portion thereof, on a
pro-rated basis) for each 0.5% of the available Radio Frequency (RF) power in
either the North or South Hybrid Matrix Amplifier so provided. In this paragraph
4, such RF power shall be determined on the basis of a nominal operating power
for each HMA at 16dB NPR defined at 54.3 dBW for the South Matrix and 53.2 dBW
for the North Matrix at a gain reference level of 31.3 dBi. The 31.3 dBi gain
reference level defines the Nominal Edge of Coverage of the 3 beams (Central,
Mountain, West) as defined in the AMSC Satellite contract specifications.
5. If TMI is unable to fully mitigate such Shared Satellite Degradation as set
out in any of paragraphs 2, 3 or 4 above, and if, at the time at which TMI
provides its written request for Restoral Capacity to AMSC, AMSC is providing
L-Band satellite service to all or any part of North America using any satellite
which is owned or operated by either AMSC or AMSC Parent Corp. or any Person
controlled directly or indirectly by AMSC Parent Corp. other than the Shared
Satellite or the AMSC Satellite, then AMSC shall, within two Business Days of
its receipt of such written request, deliver a written offer to provide Restoral
Capacity to TMI on such other satellite (the "Offer to Provide"), at a price and
on terms and conditions specified in such Offer to Provide, such price, terms
and conditions to be no less favourable than those given or quoted by AMSC to
any of its actual or potential wholesale customers as at the date of the Offer
to Provide. TMI shall have up to 10 Business Days from the date upon which it
receives such Offer to Provide to deliver a written acceptance of same to AMSC,
failing with AMSC may revoke such Offer to Provide.
6. Notwithstanding anything else in this Schedule 4.4(3), AMSC shall not be
obliged to provide Restoral Capacity to TMI if to do so would require AMSC to
pre-empt any of its existing customers.
Restoral Capacity to AMSC
- -------------------------
7. AMSC shall, to the extent reasonably possible, mitigate any Shared Satellite
Degradation or AMSC Satellite Degradation which affects it by utilizing:
(a) its own Allotted Usage; and/or
(b) Excess Capacity purchased by it; and/or
(c) any other L-Band Satellite which it or AMSC Parent Corp. or any Person
directly or indirectly controlled by AMSC Parent Corp. owns or
operates.
8. If AMSC is unable to fully mitigate such Shared Satellite Degradation or AMSC
Satellite Degradation as set out in paragraph 7 above, then to the extent
reasonably possible, TMI shall, immediately upon its receipt of a written
request for Restoral Capacity from AMSC, commence to provide Restoral Capacity
from its Allotted Usage and/or Excess Capacity purchased by it to AMSC, at the
price of U.S. $24,109 per month (or portion thereof, on a pro-rated basis) for
each 0.5% of the available Radio Frequency (RF) power in either the North or
South Hybrid Matrix Amplifier so provided (such RF power being determined in
accordance with Schedule 4.1(2)), provided that for the purposes of this
paragraph 8, the extent to which TMI has Restoral Capacity available to sell
will be determined solely with reference to actual (and not forecasted) customer
usage.
9. If AMSC is unable to fully mitigate such Shared Satellite Degradation as set
out in any of paragraphs 7 or 8 above, and if, at the time at which AMSC
provides its written request for Restoral Capacity to TMI, TMI is providing
L-Band satellite service to all or any part of North America using any satellite
which is owned or operated by TMI or any Person controlled directly or
indirectly by TMI other than the Shared Satellite, then TMI shall, within two
Business Days of its receipt of such written request, deliver a written offer to
provide Restoral Capacity to AMSC on such other satellite (the "Offer to
Provide"), at a price and on terms and conditions specified in such Offer to
Provide, such price, terms and conditions to be no less favourable than those
given or quoted by TMI to any of its actual or potential wholesale customers as
at the date of the Offer to Provide. AMSC shall have up to 10 Business Days from
the date upon which it receives such Offer to Provide to deliver a written
acceptance of same to TMI, failing which the TMI may revoke such Offer to
Provide.
10. Notwithstanding anything else in this Schedule 4.4(3), TMI shall not be
obliged to provide Restoral Capacity to AMSC if to do so would require TMI to
pre-empt any of its existing customers.
11. AMSC shall only be entitled to request that TMI provide Restoral Capacity to
mitigate an AMSC Satellite Degradation when AMSC is using the AMSC Satellite to
provide L-Band satellite service to all or any part of North America.
<PAGE>
<TABLE>
<CAPTION>
DOCUMENTS RELATING TO THE CONDITION OF THE AMSC SATELLITE
<S> <C> <C>
1 AMSC Satellite Status, Monthly Report, AMSC-1 October 1-31, 1997
2 In-Orbit Renewal Presentation August, 1996
3 AMSC-1, Material Up-date to August 1996 On-Orbit Insurance Renewal Presentation May, 1997
4 AMSC-1 Payload In-Orbit Test Report
5 MSAT (M2) Bus In-Orbit Test Report August, 1995
6 MSAT M2 Receiver Failure Investigation, Summary Report March 1, 1996
7 MSAT SSPA Turn-Off Anomaly Investigation, Summary Report March 15, 1996
8 Report on the MS Second Investigation of the East Beam, SPAR March 22, 1996
9 Proof of Loss Statement, Launch Policy Claim (Binder)
# AMSC Report "AMSC-1 Forward Repeater East Beam EIRP Fluctuation
Frequency and Magnitude", April 2, 1996
# AMSC Report "Review of On-Orbit Test Data of the East Beam
Forward Repeater of AMSC-1 since the In-Orbit Test Phase
Completed May 7, 1995", March 29, 1996
# AMSC Report "CONUS Coverage Using West, Mountain and Central
Beams - Achieved Using Antenna Repointing and Higher Up-Link
EIRP's", April 3, 1996
# Hughes/SPAR Report "Report on MSAT M2 Second Investigation of the
East Beam", April 3, 1996
# Hughes Report "AMSC-1 RF Gain Change Anomaly Report", December
22, 1995
# Addendum to the hughes Report of December 22, 1995
# Hughes Report "MSAT M2 In-Orbit Anomalies Summary Report",
January 12, 1996
# AMSC Report "AMSC-1 EIRP Drop Test Results of Testing Conducted
Since December 22, 1995", March 5, 1996
# AMSC Report "Estimation of AMSC-1 95% CONUS 3 Beam Coverage
Following March 4, 1996 Reflector Repositioning", April 4, 1996
10 Proof of Loss Statement, On-Orbit Policy Claim
# AMSC Report "AMSC-1 Forward Repeater East Beam EIRP Fluctuation
Frequency and Magnitude", April 2, 1996
# AMSC report "Review of On-Orbit Test Data of the East Beam
Forward Repeater of AMSC-1 Since the In-Orbit Test Phase
Completed May 7, 1995", March 29, 1996
# AMSC Report "CONUS Coverage Using West, Mountain and Central
Beams - Achieved Using Antenna Reporting and Higher Up-Link
EIRP's", April 3, 1996
# Hughes/Spar Report "Report on the MSAT M2 Second Investigation of
the East Beam", April 3, 1996
# Hughes/Spar Report "Summary Report on MSAT M2 OHM Anomaly and
Recovery", September 20, 1995
# Hughes Report "AMSC-1 RF Gain Change Anomaly Report", December
22, 1995
# Addendum to the Hughes Report of December 22, 1995
# Hughes Report "MSAT M2 In-Orbit Anomalies Summary Report",
January 12, 1996
# AMSC Report "AMSC-1 EIRP Drop Test Results of Testing Conducted
Since December 22, 1995", March 5, 1996
# AMSC Report "Reston RF Terminal Testing Conducted May 10, 1995",
April 3, 1996
# AMSC Report "Estimation of AMSC-1 95% CONUS 3 Beam Coverage
Following March 4, 1996 Reflector Repositioning", April 4, 1996
11 Letter from Spar to AMSC Re: Operating Levels for the M2Spacecraft July 3, 1997
</TABLE>
<PAGE>
SCHEDULE 5.2(1)
AMENDMENT TO SATELLITE CAPACITY AGREEMENT
Effective upon execution of the Agreement, the Satellite Capacity Agreement is
deemed amended to provide that neither party shall have the right to invoke the
Option to Purchase set out in paragraph 5 of the letter dated October 18, 1993
from AMSC to TMI (which letter amended the Satellite Capacity Agreement), and
that if this Agreement terminates prior to the Satellite Capacity Agreement,
then the parties shall again have the right to invoke such Option to Purchase.
<PAGE>
SCHEDULE 5.4
FORM OF PRESS RELEASE(S)
Reference:
------------------
FOR IMMEDIATE RELEASE
TMI, American Mobile Satellite team up
on powerful mobile communications satellite.
Joint ownership and operation of MSAT satellite to benefit both companies.
OTTAWA, CANADA and RESTON, VIRGINIA, December XX, 1997 C TMI Communications and
American Mobile Satellite Corporation (Nasdaq: SKYC) today announced that both
companies will use the powerful MSAT-1 satellite to bring their mobile
communications services to customers. Under an agreement signed today, American
Mobile Satellite will buy a half interest in MSAT-1 from TMI, and the companies
will share the costs of satellite operations. The agreement is subject to
regulatory approvals in both Canada and the US.
In a related announcement issued today by American Mobile Satellite, the twin
MSAT-2 satellite will be leased to African Continental Telecommunications Ltd.
(ACTEL) and moved to provide service in southern Africa.
"In North America, MSAT mobile satellite technology is well-suited to the needs
of maritime, government, transportation, utility and oil and gas industries,"
said Gary M. Parsons, president and chief executive officer of American Mobile
Satellite. "This agreement allows American Mobile Satellite to develop these
targeted business applications while moving more quickly to a second generation
solution."
Parsons' enthusiasm was echoed by Larry Boisvert, TMI's president and CEO. "TMI
wants to use the MSAT satellite to position the company for success in the North
American mobile communications market," Boisvert said. "By working with American
Mobile Satellite, TMI will be better positioned to serve and aggressively expand
its customer base."
TMI and American Mobile Satellite are no strangers to doing business together.
Through a joint development and operating agreement, they funded the design and
development of the unique MSAT mobile satellite technology. During 1995 and
1996, TMI and American Mobile Satellite placed twin MSAT satellites into service
over Canada and the United States.
Unlike proposed low earth orbit (LEO) systems, MSAT uses geostationary earth
orbit satellites and spot beam technology to maximize coverage and capacity over
targeted geographic areas to provide unique business features, such as wide-area
dispatch services, which are not contemplated in current LEO system plans.
<PAGE>
American Mobile Satellite and TMI Communications use the world's most powerful
mobile communications satellite to offer a wide range of mobile communications
services including telephone, digital broadcast dispatch, data communications,
mobile messaging and position reporting services. American Mobile Satellite's
shareholders include Hughes Communications, Inc.; Singapore Telecom; and AT&T
Wireless Services, Inc. TMI is a limited partnership controlled by BCE Inc.,
Canada's largest telecommunications company.
Note: Factors that could cause forward-looking statements in this news release
to differ materially from actual results are discussed in American Mobile
Satellite Corporation=s S-1 registration statement; Form 10K for the year ended
December 31, 1996; Form 10Q for the quarter ended September 30, 1997, and other
periodic filings the company has made with the Securities and Exchange
Commission. Copies of the filings are available upon request from the American
Mobile Satellite=s investor relations department.
American Mobile Satellite Contacts:
Media Contact: Orly Konig Lopez
703-716-6522
Investor Contact: Renate Brown Neely
703-716-6558
TMI Communications Contacts:
Marilynn Wright
613-748-8855
Daniel Tisch
416-920-9000, ext. 260
[email protected]
<PAGE>
SCHEDULE 6.1(c)
<TABLE>
<CAPTION>
DOCUMENTS RELATING TO THE CONDITION OF THE SHARED SATELLITE
<S> <C> <C>
1 MSAT Health Report (Telesat) June 12, 1997
2 MSAT Payload In-Orbit Test Report (Telesat) July 2, 1996
3 MSAT Bus In-Orbit Test Report (Telesat) October, 1996
4 MSAT West Central Beam Anomaly Investigation Review (Spar Draft) November 26, 1996
5 MSAT M1 West-Central Beam Anomaly Investigation Summary Report December 16, 1996
6 MSAT M1-WC Beam Anomaly (ID & Associates) January 8, 1997
7 MSAT M1 West-Central Beam Anomaly Report (Telesat) January 20, 1997
8 MSAT M1 West-Central Beam Test - Phase 1 Report (Telesat) March 18, 1997
9 Mountain Beam Anomaly Presentation (Telesat) March 27, 1997
10 MSAT M1 West-Central Beam Investigation Report (Telesat) March 31, 1997
11 MSAT West Central Beam EIRP Anomaly of April 17, 1997 (Telesat) May 16, 1997
12 Letter from Spar to TMI Re: Operating power levels for the M1 S Julyc3,f1997
13 Review of MSAT M1 SSPA 4 and Carrier Monitoring Data (Spar) September 12, 1997
14 MSAT Health Report (Telesat) November 5, 1997
</TABLE>
<PAGE>
SCHEDULE 6.1(f)
<TABLE>
<CAPTION>
EXISTING LIENS ON SHARED SATELLITE
<S> <C> <C>
Secured Party Agreement Nature and Amount of Secured Obligations
- ------------- --------- ----------------------------------------
BCE Inc. Security Agreement, Payment andperformance of all debts,liabilities
dated February 1, and obligations, present or future, direct or
1994 between BCE indirect, absolute or contingent, matured or
Inc. and TMI unmatured, at any time due or accruing due by
TMI to BCE Inc., however or wherever
incurred, in any currency, and whether incurred
by TMI alone or with others and whether as
principal or surety, together with other
expenses, costs and charges as set out in the
Security Agreement.
</TABLE>
<PAGE>
EXHIBIT A
FORM OF CONVEYANCE
This conveyance (this "Conveyance") dated as of , 1997,
____________
by TMI Communications and Company, Limited Partnership, a limited partnership
organized under the laws of the Province of Quebec (the "Assignor"), to and in
favour of AMSC Subsidiary Corporation, a corporation dually incorporated under
the laws of the States of Delaware and Virginia, respectively (the "Assignee").
WHEREAS this Conveyance is delivered pursuant to the requirements of the
satellite purchase agreement dated as of December 2, 1997 between the Assignee
and the Assignor (the "Agreement"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed thereto in the
Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the consideration specified in the Agreement and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Assignor does hereby convey, grant, bargain, sell, transfer
and assign unto the Assignee, its successors and assigns, a 50% legal and
beneficial undivided ownership interest in and to the Shared Satellite, free and
clear of all Liens, except for and subject to the TMI Purchase Money Security
Interest.
Except for the representations and warranties of TMI set forth in Sections
6.1(c), (f), (h), (i), (j), (k) and (l) of the Agreement, the interest in the
Shared Satellite transferred hereunder is on an "as is" basis. ACCORDINGLY, ANY
AND ALL EXPRESS OR IMPLIED WARRANTIES OR CONDITIONS WITH RESPECT TO THE SHARED
SATELLITE OR ANY PART THEREOF, ITS CONDITION, DURABILITY, PERFORMANCE,
RELIABILITY, EXPECTED LIFE OR SUITABILITY FOR ANY PARTICULAR USE INCLUDING, BUT
NOT LIMITED TO, WARRANTIES OR CONDITIONS OF MERCHANTABILITY OR FITNESS FOR ANY
PURPOSE OR USE, WHETHER EXPRESSED OR IMPLIED BY CONTRACT, TORT (INCLUDING
NEGLIGENCE AND STRICT LIABILITY), STATUTE OR OTHER LEGAL THEORY, ARE EXPRESSLY
EXCLUDED AND DISCLAIMED.
Nothing contained in this Conveyance shall increase the liability of the
Assignor to the Assignee beyond the liability that Assignor has under the
Agreement and any action brought by the Assignee with respect to this Conveyance
shall be subject to the limitations on liabilities and remedies set forth in the
Agreement.
<PAGE>
- 2 -
IN WITNESS WHEREOF, the undersigned has executed this Conveyance effective
as of the date first written above.
TMI COMMUNICATIONS AND COMPANY, LIMITED PARTNERSHIP
By: TMI COMMUNICATIONS INC.,
its General Partner
By: /s/________________________________
Authorized Signing Officer
By: /s/________________________________
Authorized Signing Officer
<PAGE>
SCHEDULE 1.1
EXHIBIT B
FORM OF SECURITY AGREEMENT
AMSC SUBSIDIARY CORPORATION
as Obligor
- in favour of -
TMI COMMUNICATIONS AND COMPANY, LIMITED PARTNERSHIP
SECURITY AGREEMENT
--------------, 1997
<PAGE>
SECURITY AGREEMENT
Security agreement dated as of the day of , 1997
made between AMSC SUBSIDIARY CORPORATION, a corporation dually incorporated
under the laws of the States of Delaware and Virginia, respectively, with its
principal executive office in Reston, Virginia, and TMI COMMUNICATIONS AND
COMPANY, LIMITED PARTNERSHIP, a limited partnership organized under the laws of
the Province of Quebec.
WHEREAS:
A. The Obligor and TMI have entered into the Satellite Purchase Agreement
pursuant to which TMI has agreed to sell to the Obligor a 50% undivided
ownership interest in the Shared Satellite for the Satellite Purchase Price and
the Obligor has agreed to pay certain TT&C Fees to TMI in respect of the
operation of the Shared Satellite; and
B. It is a condition precedent to the sale of a 50% undivided ownership
interest in the Shared Satellite and the satellite sharing arrangements under
the Satellite Purchase Agreement that TMI reserve out of the transfer of such
50% undivided ownership interest, and the Obligor grant, a security interest in
AMSC's interest in the Shared Satellite as security for the payment and
performance to TMI of all debts, liabilities and obligations of the Obligor
under the Satellite Purchase Agreement, all as more particularly set forth in
this Agreement;
NOW THEREFORE, in consideration of the foregoing premises, the sum of
$10.00 in lawful money of Canada now paid by TMI to the Obligor and other good
and valuable consideration (the receipt and adequacy of which are hereby
acknowledged), the Obligor agrees as follows:
ARTICLE 1
INTERPRETATION
Section 1.1 Definitions. (1) As used in this Agreement and the recitals
hereto, the following capitalized terms have the following meanings:
"Affiliate" means, with respect to any Person, any Person controlling,
controlled by or under common control with such Person; provided that neither
party hereto shall by reason of entering into the Satellite Purchase Agreement
or this Agreement and the consummation of the transactions contemplated thereby
or hereby be an Affiliate of the other party or of the entity or entities, if
any, through which the other party holds its Interests. For purposes hereof, the
term "control" (including the terms "controlling," "controlled by" and "under
common control with") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or otherwise.
"Agreement" means this security agreement and all schedules and instruments
in amendment or confirmation of it; "hereof", "hereto", "herein" and "hereunder"
and similar expressions mean and refer to this Agreement and not to any
particular Article or Section; "Article" or "Section " of this Agreement
followed by a number means and refers to the specified Article or Section of
this Agreement.
"Bankruptcy Event" with respect to a Person means (i) the voluntary
commencement of any proceeding, or voluntary filing, by such Person of a
petition seeking liquidation, reorganization, arrangement or readjustment, in
any form, of its debts under Title 11 of the United States Code or under the
Bankruptcy and Insolvency Act (Canada) or under the Winding-Up and Restructuring
Act (Canada) or under the Companies' Creditors Arrangement Act (Canada) (or
corresponding provisions of future laws of the United States or of Canada) or
under any other jurisdiction's insolvency, liquidation or similar laws (each
such United States, Canadian and other jurisdictions' laws being referred to as
a "Bankruptcy Law"), or such Person's filing of an answer consenting to or
acquiescing in any such petition, or (ii) the making by such Person of any
general assignment for the benefit of its creditors or the admission by such
Person in writing of its inability to pay its debts as they mature, or (iii) the
consent by such Person to the filing of, the failure by such Person to contest
successfully with respect to, or the granting of an order of relief with respect
to (x) any involuntary petition or application under any Bankruptcy Law seeking
an application for the appointment of a receiver, trustee, custodian,
sequestrator or similar official for the assets of such Person, or (y) any
involuntary petition or application under any Bankruptcy Law seeking
liquidation, reorganization, arrangement or readjustment of its debts under any
Bankruptcy Law, or (iv) the appointment of a receiver, trustee, custodian,
sequestrator or similar official for the assets of such Person under any
Bankruptcy Law or otherwise.
"Business Day" means a day which is not a Saturday, Sunday or legal holiday
on which commercial banking institutions in New York, New York or Montreal,
Quebec are authorized to close.
"Conveyance" means the conveyance to be dated as of the date of this
Agreement by TMI to and in favour of the Obligor pursuant to which TMI conveys a
50% undivided ownership interest in the Shared Satellite to the Obligor subject
to the reservation by TMI of, and the grant by the Obligor of, the Purchase
Money Security Interest.
"Enforcement Notice" means a notice which may be given by TMI to AMSC,
whenever the Purchase Money Security Interest has become enforceable, that TMI
intends to exercise or enforce any remedy which it may have against AMSC under
the Security Agreement.
"Enforcement Period" means the period commencing on the date which is 30
days following the delivery of the Enforcement Notice.
"Lien" means, with respect to any asset, any mortgage, lien (statutory or
otherwise), pledge, hypothecation, charge, assignment, lease, title retention
agreement or arrangement, security interest or encumbrance of any kind, or any
other security agreement or arrangement creating in favour of any creditor a
right in respect of such asset that is prior to the right of any other creditor
in respect of such asset.
"Minimum Satellite Purchase Price" means the amount of U.S.$60,000,000
payable by AMSC to TMI pursuant to Section 2.2(1) of the Satellite Purchase
Agreement.
"Obligor" means AMSC Subsidiary Corporation, a corporation dually
incorporated under the laws of the States of Delaware and Virginia,
respectively, and its successors and permitted assigns.
"Permitted Liens" means, with respect to any Person, undetermined or
inchoate liens, privileges and charges incurred and incidental to the ordinary
course of business which arise solely by operation of law and have not been
filed pursuant to law against such Person or its assets and which relate to
obligations which are not delinquent.
"Person" means an individual, corporation, partnership, association, trust,
limited liability company or any other entity or organization, including a
court, a government or political subdivision or an agency, unit or
instrumentality thereof.
"PPSA" means the Personal Property Security Act (Ontario), as amended from
time to time.
"Satellite Purchase Agreement" means the satellite purchase agreement dated
as of December 2, 1997 between the Obligor and TMI, as such agreement may be
amended, modified, extended, renewed, replaced, restated or supplemented from
time to time.
"Satellite Purchase Price" has the meaning ascribed thereto in the
Satellite Purchase Agreement.
"Shared Satellite" means the satellite owned by TMI as of the date hereof
(and is referenced as the MSAT-1 (M1) satellite).
"Shared Satellite Interest" means the Obligor's 50% undivided ownership
interest in the Shared Satellite acquired from TMI pursuant to the Conveyance
subject to the reservation by TMI of, and the grant by the Obligor of, the
Purchase Money Security Interest.
"TMI" means TMI Communications and Company, Limited Partnership, a limited
partnership organized under the laws of the Province of Quebec, and its
successors and permitted assigns.
"TT&C Fees" means, collectively, (i) the daily and monthly fees payable to
TMI by the Obligor pursuant to Section 3.1(2) of the Satellite Purchase
Agreement; and (ii) such other amounts as are payable by AMSC pursuant to
Section 3.1(3) of the Satellite Purchase Agreement.
(2) Terms defined in the Personal Property Security Act (Ontario) (as in
effect as at the date of this Agreement) and used in this Agreement shall have
the same meaning in this agreement.
(3) Each of the following terms is defined in the Section set forth
opposite such term:
<TABLE>
<CAPTION>
Term Section
- ---- -------
<S> <C>
Obligations 2.2(1)
Other Secured Party 2.4(1)(a)
Permitted User 2.4(3)
Purchase Money Security Interest 2.2(1)
Satellite Collateral 2.1
Satellite Rights 2.1(a)
Subordination Clause 2.4(3)(a)
</TABLE>
Section 1.2. Gender and Number. Any reference in this Agreement to gender
includes all genders and words importing the singular number only include the
plural and vice versa.
Section 1.3. Headings, etc. The division of this Agreement into Articles
and Sections and the insertion of headings are for convenient reference only and
are not to affect the interpretation of this Agreement.
Section 1.4. Certain Phrases, etc. In this Agreement (i) the words
"including" and "includes" mean "including (or includes) without limitation",
and (ii) in the computation of periods of time from a specified date to a later
specified date, unless otherwise expressly stated, the word "from" means "from
and including" and the words "to" and "until" each mean "to but excluding".
Section 1.5. Incorporation of Schedules. The schedules attached to this
Agreement shall, for all purposes of this Agreement, form an integral part of
it.
ARTICLE 2
INTERPRETATION
Section 2.1 Purchase Money Security Interest. TMI hereby reserves to itself
out of the transfer to the Obligor of a 50% undivided ownership interest in the
Shared Satellite contemplated under the Conveyance, a security interest in, and
the Obligor hereby (i) mortgages and charges to TMI as and by way of a fixed
mortgage and charge; (ii) pledges to TMI; (iii) assigns and transfers to TMI as
and by way of a specific transfer and assignment; and (iv) grants to TMI a
security interest in:
(a) all of the Shared Satellite Interest, rights of use and other intangible
rights now owned or hereafter acquired by the Obligor from TMI pursuant to the
Satellite Purchase Agreement and the Conveyance and all right, title and
interest of the Obligor in, to, under and in respect of the Satellite Purchase
Agreement, all benefits, powers and advantages of the Obligor thereunder or
derived therefrom and all services due or to become due to the Obligor under or
in connection with the Satellite Purchase Agreement (collectively, such Shared
Satellite Interest and rights are referred to in this Agreement as "Satellite
Rights"); and
(b) all proceeds derived directly or indirectly from any sale, lease or other
disposition of all or any part of the Satellite Rights;
provided, however, that no security interest shall attach to customer contracts
entered into in the ordinary course of business of the Obligor and the proceeds
thereof;
(collectively, the property described in the foregoing paragraphs (a) and (b)
and each part thereof, being referred to in this Agreement as the "Satellite
Collateral").
Section 2.2 Obligations Secured. (1) The interests reserved hereby and
under the Conveyance and the charges, pledges, transfers, assignments and
security interest granted hereby (collectively, the "Purchase Money Security
Interest") secure the payment and performance to TMI of all debts, liabilities
and obligations, present or future, matured or unmatured, at any time or from
time to time due or accruing due and owing by, or otherwise payable, by the
Obligor to TMI arising out of, in connection with or pursuant to the Satellite
Purchase Agreement or this Agreement (collectively, and together with the
expenses, costs and charges set out in Section 2.2(2), the "Obligations").
(2) All expenses, costs and charges incurred by or on behalf of TMI in
connection with the enforcement of its rights under this Agreement, the Purchase
Money Security Interest, the preservation and protection of the Satellite
Collateral or the realization of the Satellite Collateral or the relocation of
the Shared Satellite to a different orbital position (and the licensing fees
payable in connection therewith), including all legal fees, court costs,
receiver's or agent's remuneration and other expenses of taking possession of,
repairing, protecting, insuring, discharging other secured liabilities,
preparing for disposition, realizing, collecting, selling, transferring,
delivering or obtaining payment of the Satellite Collateral shall be added to
and form a part of the Obligations.
Section 2.3 Attachment. The Obligor and TMI hereby acknowledge that (i)
value has been given; (ii) the Obligor has rights in the Satellite Collateral
(other than after-acquired Satellite Collateral); (iii) they have not agreed to
postpone the time of attachment of the Purchase Money Security Interest; and
(iv) the Obligor has received a duplicate original copy of this Agreement.
Section 2.4 Obligor's Dealings with Satellite Collateral. (1) The Obligor
shall not without the prior written consent of TMI:
(a) create, assume or permit to be created or allow to subsist in favour of any
other Person any Lien on the Satellite Collateral except (x) the Obligor may
allow to subsist any Permitted Lien but only for so long as such Lien
constitutes a Permitted Lien, and (y) the Obligor may create or allow to subsist
a Lien on the Satellite Collateral in favour of any Person (the "Other Secured
Party") which, prior to any such creation or subsistence, has entered into an
agreement with TMI, and TMI agrees to enter into such agreement with the Other
Secured Party at such time, which provides for:
(i) the acknowledgement and agreement of the Other Secured Party
that any and all of its rights in and to the Satellite Collateral
are subject to and subordinate to the Purchase Money Security
Interest and the rights of TMI in and to the Satellite Collateral
reserved or granted under this Agreement (irrespective of the
actual time, place of creation or order of execution, attachment,
perfection, delivery, registration, filing or crystallization of,
or other priority otherwise accorded under applicable law to, the
Purchase Money Security Interest and such Other Secured Party's
Lien, the date or dates of default, the date or dates of taking
enforcement proceedings (including possession), the giving or
failure to give any notice to AMSC or any failure to properly
perfect or maintain the perfection of the Purchase Money Security
Interest in the applicable jurisdiction) and that the proceeds of
realization arising from any disposition of the Satellite
Collateral shall be applied first to the amounts owing to TMI
under the Satellite Purchase Agreement and under this Agreement;
(ii) the agreement of TMI that in the event that the Purchase
Money Security Interest shall become enforceable upon an event
set forth in Section 3.1(a), it shall notify the Other Secured
Party of such default and if, within 30 days of receipt of such
notice, the Other Secured Party cures the default by payment to
TMI of any and all overdue amounts, TMI will not accelerate the
unpaid Satellite Purchase Price, TT&C Fees and any other amounts
owing pursuant to the Satellite Purchase Agreement or commence
realization proceedings under this Agreement in respect of that
occurrence of that event or issue any Enforcement Notice (but
such waiver by TMI of its rights in respect of any payment
default will not extend to any recurrence of any such event or
the occurrence of any other event unless the Other Secured Party
cures any such recurrence or occurrence as set forth in this
Section 2.4(1)(a)(ii)); and
(iii) the agreement of TMI that in the event that the Purchase
Money Security Interest shall become enforceable upon an event
set forth in Section 3.1(b), TMI will not accelerate the
remaining TT&C Fees and other amounts owing pursuant to the
Satellite Purchase Agreement (but TMI may accelerate the unpaid
Minimum Satellite Purchase Price) or commence realization
proceedings under this Agreement in respect of that occurrence of
that event or issue any Enforcement Notice so long as:
(A) the Minimum Satellite Purchase Price is paid in full
(whether or not then due under Section 2.2 of the Satellite
Purchase Agreement) within 30 days of the occurrence of such
event specified in Section 3.1(b), and
(B) all TT&C Fees and other amounts owing under the
Satellite Purchase Agreement are paid when due in accordance
with the Satellite Purchase Agreement or the Other Secured
Party has remedied the payment default as set forth in
Section 2.4(1)(a)(ii);
(but such waiver by TMI of its rights in respect of any payment
default will not extend to any recurrence of any such event or
the occurrence of any other event unless the Other Secured Party
cures any such recurrence or occurrence as set forth in this
Section 2.4(1)(a)(iii)); and
(iv) the agreement of each of TMI and the Other Secured Party
that it:
(A) will provide the other with copies of any Enforcement
Notice or any other notice of intention to enforce, or
notice of exercise of, any of its respective remedies with
respect to the Satellite Collateral under any security
agreement granted in its favour by AMSC within one Business
Day of delivery thereof to AMSC; and
(B) will use reasonable efforts to provide the other with
copies of any other notice of intention to enforce, or
notice of exercise of, any of its other remedies with
respect to any other collateral subject to any security
agreement granted in its favour by AMSC within one Business
Day of delivery thereof to AMSC but in no event shall either
party be liable to the other for any failure to provide such
other notices with respect to such other collateral; and
(v) the agreement of TMI that in the event that the Purchase
Money Security Interest shall become enforceable upon an event
set forth in Section 3.1(b),
(x) TMI will not issue an Enforcement Notice or any other notice
of intention to enforce, or notice of exercise of, any remedies
under this Agreement nor commence realization proceedings under
this Agreement in respect of the occurrence of that event or an
event set forth in Section 3.1(a), and
(y) any time periods under any Enforcement Notice or any other
notice of intention to enforce, or notice of exercise of, any
remedies under this Agreement issued prior to such event shall
not run and be counted;
so long as the Other Secured Party is stayed or restrained in the
United States of America by operation of law, or is subject to an
order of a court of competent jurisdiction in the United States of
America which stays or restrains the Other Secured Party, from
(A) issuing any notice of intention to enforce, or notice of
exercise of, any remedies under its respective security
agreement with AMSC, and
(B) proceeding with the realization of any collateral
subject to, and the other exercise of its other remedies
under, its respective security agreement with AMSC; and
(vi) the agreement of the Other Secured Party that it
(A) will not (i) assert in any action, suit or proceeding
whatsoever the invalidity, ineffectiveness or general
unenforceability of this Agreement or the Satellite Purchase
Agreement; and (ii) pursue or cooperate with any other party
to pursue any such action, suit or proceeding; it being
understood and agreed that regardless of the validity,
effectiveness and enforceability of this Agreement or the
Satellite Purchase Agreement as between the other Secured
Party and TMI, TMI shall have the priorities set forth in
Section 2.4(a)(i); and
(B) to the fullest extent permitted by law, (i) waives any
claim which it may have, in any action by way of suit,
foreclosure, sale, quit claim, acceptance of a deed in lieu
of foreclosure or proceeding for acceptance by TMI of
Satellite Collateral in satisfaction of the Obligations or
any other proceeding with respect to realization of the
Satellite Collateral, that the fair market value of the
Satellite Collateral exceeds the amount of the Obligations;
(ii) waives and renounces any right to object to any
proposal of TMI to accept the Satellite Collateral in
satisfaction of the Obligations; and (iii) waives and
renounces any right to claim for relief from forfeiture or
to claim that any remedy available to TMI hereunder,
including the right to receive the Satellite Collateral in
satisfaction of the Obligations, constitutes a penalty and
agrees not to participate in or cooperate with any other
party to pursue any such claim in any action, suit or
proceeding; it being understood and agreed that subject to
(x) the rights to remedy defaults provided to the Other
Secured Party under any agreement entered into between TMI
and the Other Secured Party pursuant to this Section 2.4(a),
and (y) any rights under the Satellite Purchase Agreement to
which the Other Secured Party may be entitled to exercise by
virtue of the enforcement of the security interest granted
to it in all of AMSC's rights thereunder, TMI shall be
entitled to obtain the Shared Satellite Interest upon any
event set forth in Section 3.1 in satisfaction of the
Obligations; or
(b) sell, transfer, assign, exchange, lease, release, let waste, abandon or
otherwise dispose of all or any part of the Satellite Collateral provided,
however, that the Obligor shall be able to enter into customer contracts in the
ordinary course of business except as otherwise provided under Section 2.4(3).
(2) The Obligor may, before the Purchase Money Security Interest becomes
enforceable, without the consent of TMI sell the Satellite Collateral to any
Person to whom the Satellite Purchase Agreement is assigned in accordance with,
and subject to, the terms of the Satellite Purchase Agreement.
(3) Except as otherwise provided in Section 2.4(4), the Obligor shall not,
without the prior written consent of TMI, sell, lease, license or otherwise
grant any Person (each a "Permitted User") any interest in the Shared Satellite
Interest, or any dedicated filters or dedicated frequency on, or dedicated
rights of access to, the Shared Satellite except pursuant to an agreement
evidencing such sale, license or other use between the Obligor and any Permitted
User which contains:
(a) an agreement by the Permitted User to and in favour of the Obligor as agent
of and bare trustee for TMI that any and all of the Permitted User's rights in
and to the Satellite Rights are subject and subordinate to the Purchase Money
Security Interest and the rights of TMI in and to the Satellite Collateral
granted under this Agreement (the "Subordination Clause"); and
(b) an agreement by the Permitted User that TMI is an intended third party
beneficiary of the Subordination Clause and TMI may enforce the Subordination
Clause directly against the Permitted Lessee.
(4) TMI acknowledges and agrees that the form of customer contracts
presently entered into by the Obligor substantially in the form provided by the
Obligor to TMI prior to the date of the Satellite Purchase Agreement are not
required to comply with Sections 2.4(3)(a) and (b) and do not require the
consent of TMI; further, in the event that any change in the form of customer
contracts or agreements entered into in the ordinary course of business may be
construed as being subject to Section 2.4(3), in lieu of complying with Sections
2.4(3)(a) and (b), the Obligor may include in such contracts or agreements an
express disclaimer that notwithstanding any other term or condition of such
contract or agreement, the customer shall not acquire any proprietary or
leasehold interest in the Shared Satellite or the Shared Satellite Interest or
in any part thereof, including any proprietary or leasehold interest in any
filters, frequency or rights of access.
(5) The Obligor hereby agrees to hold the Subordination Clause of any
Permitted User contained in any agreement between the Obligor and the Permitted
User evidencing the sale, lease, licence or other use, and any express
disclaimer contained in any customer contract referred to in Section 2.4(4), as
agent and bare trustee for TMI and to enforce all such covenants in accordance
with the directions of TMI.
ARTICLE 3
DEFAULT AND ENFORCEMENT
Section 3.1 Default. The Purchase Money Security Interest shall be and
become enforceable against the Obligor in each and every one of the following
events in accordance with the terms thereof:
(a) if the Obligor shall fail to pay the Minimum Satellite Purchase Price (or
any instalment thereof) or any TT&C fees within 10 days after its receipt from
TMI of written notice of late payment; or
(b) any Bankruptcy Event with respect to the Obligor.
Section 3.2 Remedies. Whenever the Purchase Money Security Interest has
become enforceable, TMI may realize only upon the Satellite Collateral and
enforce its rights by:
(a) entry onto any premises where equipment which transmits RF signals to, and
receives RF signals from, the Shared Satellite for the sole purpose of
terminating such transmissions or receptions;
(b) unilaterally issuing directions or commands to Telesat Canada or any other
operator from time to time of the Shared Satellite as if TMI were the absolute
owner of all of the Obligor's right, title and interest in and to the Satellite
Collateral;
(c) entry into possession of any or all of the Satellite Collateral by any other
method permitted by law;
(d) seizure, collection or enforcement of, or other dealing with, any or all of
the Satellite Collateral in such manner, on such terms and conditions and at
such times as TMI deems advisable but subject to the provisions of the PPSA and
other applicable law or equity;
(e) sale, lease, assignment, grant of options to purchase or otherwise dispose
of and deliver any or all of the Satellite Collateral (or contract to do any of
the above), in one or more parcels at any public or private sale, on such terms
and conditions and at such prices as is commercially reasonable, and for cash or
on credit or for future delivery with or without assumption of any credit risk;
(f) collection of any proceeds arising in respect of the Satellite Collateral;
(g) the appointment by instrument in writing of a receiver (which term as used
in this Agreement includes a receiver and manager) or agent of the Satellite
Collateral;
(h) the institution of proceedings in any court of competent jurisdiction for
the appointment of a receiver of the Satellite Collateral;
(i) the institution of proceedings in any court of competent jurisdiction for
sale or foreclosure of the Satellite Collateral;
(j) filing proofs of claim and other documents to establish claims in any
proceeding relating to the Obligor;
(k) the institution of proceedings in any court of competent jurisdiction or
before any regulatory authority for the termination of any transmissions to or
from the Satellite Collateral and the substitution therefor with such other
transmissions as TMI may direct; and
(l) elect to retain the Satellite Collateral in full satisfaction of the
Obligations in the manner authorized or permitted under the PPSA or other
applicable law;
(m) any other remedy or proceeding with respect to the Satellite Collateral
authorized or permitted under the PPSA or otherwise by law or equity.
Except as otherwise provided in this Agreement or the Satellite Purchase
Agreement, such remedies may be exercised from time to time separately or in
combination and are in addition to and not in substitution for any other rights
of TMI however created. TMI shall not be bound to exercise any right or remedy
under Sections 3.2 or 3.3, and the exercise of such rights and remedies shall be
without prejudice to the rights of TMI in respect of the Obligations including
the right to claim for any deficiency.
Section 3.3 Additional Rights. In addition to the remedies of TMI set forth
in Section 3.2, TMI may whenever the Purchase Money Security Interest has become
enforceable:
(a) repair, process, modify, complete or otherwise deal with any or all of the
Satellite Collateral and prepare for the disposition of any or all of the
Satellite Collateral, whether on the premises of the Obligor or otherwise;
(b) pay any liability secured by any actual or threatened Lien against any or
all of the Satellite Collateral;
(c) borrow for the purpose of maintaining, preserving or protecting any or all
of the Satellite Collateral and mortgage, charge, pledge or grant a security
interest in any or all of the Satellite Collateral, whether or not in priority
to the Purchase Money Security Interest, to secure repayment; and
(d) demand, commence, continue or defend any judicial or administrative
proceedings for the purpose of protecting, seizing, realizing or obtaining
possession of any or all of the Satellite Collateral, and give valid and
effectual receipts and discharges therefor.
Section 3.4 Concerning the Receiver. Any receiver appointed by TMI shall be
vested with the rights and remedies which could have been exercised by TMI in
respect of the Satellite Collateral. The identity of the receiver, any
replacement thereof and any remuneration thereof shall be within the sole and
unfettered discretion of TMI.
Section 3.5 Appointment of Attorney. The Obligor hereby irrevocably
appoints each of TMI and TMI Communications Inc., the general partner of TMI (or
any successor or assignee to or of TMI Communications Inc.) (and any officer
thereof) as attorney of the Obligor (with full power of substitution) to
exercise in the name of and on behalf of the Obligor, during the Enforcement
Period, any of the Obligor's right (including the right of disposal), title and
interest in and to the Satellite Collateral including the execution, endorsement
and delivery of any agreements, documents, instruments, securities, documents of
title and chattel paper and any notices, receipts, assignments or verifications
of the accounts. All acts of any such attorney are hereby ratified and approved,
and such attorney shall not be liable for any act, failure to act or any other
matter or thing in connection therewith, except for its own negligence or wilful
misconduct. This appointment and power of substitution, being coupled with an
interest, are irrevocable and shall not terminate upon the bankruptcy,
dissolution, winding up or insolvency of the Obligor.
Section 3.6 Dealing with the Satellite Collateral and the Purchase Money
Security Interest. (1) TMI shall not be obliged to exhaust its recourse against
the Obligor or any other person or persons or against any other security it may
hold in respect of the Obligations before realizing upon or otherwise dealing
with the Satellite Collateral in such manner as TMI may consider advisable.
(2) TMI may grant extensions or other indulgences, take and give up
securities, accept compositions, grant releases and discharges and otherwise
deal with the Obligor and with other parties, sureties or securities as TMI may
see fit without prejudice to the Obligations or the rights of TMI in respect of
the Satellite Collateral.
(3) TMI shall not be (i) liable or accountable for any failure to collect,
realize or obtain payment in respect of the Satellite Collateral; (ii) bound to
institute proceedings for the purpose of collecting, enforcing, realizing or
obtaining payment in respect of the Satellite Collateral or for the purpose of
preserving any rights of TMI, the Obligor or any other parties in respect
thereof; (iii) responsible for any loss occasioned by any sale or other dealing
with the Satellite Collateral or by the retention of or failure to sell or
otherwise deal therewith; and (iv) bound to protect the Satellite Collateral
from depreciating in value or becoming worthless.
Section 3.7 Standards of Sale. Without prejudice to the ability of TMI to
dispose of the Satellite Collateral, the Obligor agrees with TMI that so long as
the following dispositions are commercially reasonable in the circumstances:
(a) Satellite Collateral may be disposed of in whole or in part;
(b) Satellite Collateral may be disposed of by public auction, public tender or
private contract, with or without advertising and without any other formality;
(c) any purchaser or lessee of such Satellite Collateral may be TMI or any
customer or Affiliate of TMI;
(d) a disposition of Satellite Collateral may be on such terms and conditions as
to credit or otherwise as is commercially reasonable; and
(e) TMI may establish an upset or reserve bid or price in respect of the
Satellite Collateral.
Section 3.8 Dealings by Third Parties. (1) No person dealing with TMI or
its respective agents or a receiver shall be required (i) to determine whether
the Purchase Money Security Interest has become enforceable; (ii) to determine
whether the powers which TMI or its respective agents are purporting to exercise
have become exercisable; (iii) to determine whether any money remains due to TMI
by the Obligor; (iv) to determine the necessity or expediency of the
stipulations and conditions subject to which any sale or lease shall be made;
(v) to determine the propriety or regularity of any sale or of any other dealing
by TMI with the Satellite Collateral; or (vi) to see to the application of any
money paid to TMI.
(2) Any purchaser of the Satellite Collateral from TMI shall hold such
Satellite Collateral absolutely, free from any claim or right of whatever kind,
including any equity of redemption, of the Obligor, which the Obligor hereby
specifically waives (to the fullest extent permitted by law) as against any such
purchaser, all rights of redemption, stay or appraisal which the Obligor has or
may have under any rule of law or statute now existing or hereafter adopted.
Section 3.9 Non-extinguishment of Certain Obligations. The Obligor will not
remain liable for any Obligations that are outstanding following realization of
the Satellite Collateral, save and except for (i) any expenses, costs and
charges incurred by or on behalf of TMI and referred to in Section 2.2(2); (ii)
any unpaid Satellite Purchase Price and TT&C Fees due (otherwise than upon any
acceleration pursuant to Section 7.3(1) of the Satellite Purchase Agreement) up
to and including the date of the transfer or sale of the Satellite Collateral to
any Person or the acceptance by TMI of the Satellite Collateral; (iii) any
amounts payable by the Obligor pursuant to Section 7.8(4) of the Satellite
Purchase Agreement; and (iv) any other amounts due by the Obligor to TMI
(otherwise than upon an acceleration pursuant to Section 7.3(1) of the Satellite
Purchase Agreement and except for the Satellite Purchase Price and TT&C Fees) up
to and including the date of the transfer or sale of the Satellite Collateral to
any Person or the acceptance by TMI of the Satellite Collateral.
Section 3.10 Application of Proceeds and Duty to Account. (1) All proceeds
of any of the Satellite Collateral received by TMI may be applied to discharge
or satisfy any expenses, Liens, borrowings, taxes and other outgoings affecting
the Satellite Collateral or which are considered advisable by TMI to preserve,
maintain, relocate or enhance the Satellite Collateral or to keep in good
standing any Liens on the Satellite Collateral ranking in priority to the
Purchase Money Security Interest. The balance of such proceeds will be applied
on account of the Obligations.
(2) Upon indefeasible payment in full of all Obligations to TMI, TMI shall
pay over any surplus proceeds of disposition of the Satellite Collateral to the
Obligor or such other Person as may be lawfully entitled to receive such surplus
or as any court of competent jurisdiction may otherwise direct.
Section 3.11 Stay of Remedies. In the event that the Obligor gives a notice
to elect to transfer the Shared Satellite Interest to TMI under Section 7.8 of
the Satellite Purchase Agreement prior to the commencement of the Enforcement
Period, all enforcement of remedies provided for in Sections 3.2, 3.3 and 3.5 of
this Agreement and all time periods under notices given pursuant to Section 3.2
shall be stayed and shall not resume unless the transactions contemplated under
Sections 7.8 of the Satellite Purchase Agreement are not completed in accordance
with the terms thereof.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANTS
Section 4.1 Representations and Warranties. The Obligor represents and
warrants to TMI that:
(a) its principal place of business and chief executive office, and the place
where it keeps its books and records, is at the address specified on the
signature page of this Agreement;
(b) the only name under which it conducts its business and the location of the
feeder link earth stations from which transmissions are made to the Satellite
Collateral are set forth in Schedule "A" hereto; and
(c) no Lien, security agreement or other agreement evidencing an Lien or any
financing statement or other notice evidencing any Lien which ranks or is
capable of ranking ahead of or pari passu with the Purchase Money Security
Interest, with respect to any or all of the Satellite Collateral, exists (other
than Permitted Liens) or is registered on file or on record in any public
office.
Section 4.2 Survival of Representations and Warranties. All
representations, warranties and covenants made by the Obligor in this Agreement
are material, will be considered to have been relied on by TMI and will survive
the execution and delivery of this Agreement or any investigation made at any
time by or on behalf of TMI and any disposition or payment of the Obligations
until repayment in full of the Obligations.
Section 4.3 Further Documentation. The Obligor shall, from time to time
whether before or after the Purchase Money Security Interest becomes
enforceable, promptly and duly authorize, execute and deliver such further
deeds, transfers, assignments, instruments and documents, and take such further
action, as TMI may request for the purpose of obtaining or preserving the full
benefits of, and the rights and powers granted by, this Agreement (including the
filing of any financing statements or financing change statements under any
applicable legislation with respect to the Purchase Money Security Interest).
The Obligor acknowledges that this Agreement has been prepared based on the
existing laws of the Province of Ontario and the States of Delaware and
Virginia, and that a change in such laws, or the laws of other jurisdictions,
may require the execution and delivery of different forms of security
documentation. Accordingly, the Obligor agrees that TMI will have the right to
require that this Agreement be amended or supplemented or replaced, and that the
Obligor will immediately on request of TMI authorize, execute and deliver any
such amendment, supplement or replacement:
(a) to reflect any changes in such laws, whether arising as a result of
statutory amendments, court decisions or otherwise;
(b) to facilitate the creation and registration of appropriate security in all
appropriate jurisdictions; or
(c) if the Obligor merges or amalgamates with any other Person or enters into
any corporate reorganization;
in each case in order to confer on TMI a Lien which is similar to, and which
will have the same rights, priorities and effect as, the Purchase Money Security
Interest. The Obligor shall, from time to time after the Purchase Money Security
Interest has become enforceable, do all such acts and things and execute and
deliver all such deeds, transfers, assignments, instruments and documents as TMI
may require for facilitating the sale of the Satellite Collateral in connection
with any realization thereof.
Section 4.4 Notices. The Obligor will promptly notify TMI in writing, in
reasonable detail, of any Lien (other than the Purchase Money Security Interest,
any Permitted Lien and any Lien permitted in writing by TMI) on, or claim
asserted against, any of the Satellite Collateral. The Obligor will notify TMI
in writing, in reasonable detail, of (i) any proposed change in the location of
any place of business or the chief executive office of the Obligor; (ii) any
proposed change in the location of any feeder link earth station or any proposed
additional feeder link earth station location from which transmissions to the
Satellite Collateral may in the future originate; and (iii) any proposed change
in the name of the Obligor; in each case, at least 30 days before any of such
changes become effective.
ARTICLE 5
GENERAL
Section 5.1 Discharge. The Purchase Money Security Interest shall be
discharged upon, but only upon (i) at any time (x) prior to the commencement of
the Enforcement Period, full indefeasible payment of the Minimum Satellite
Purchase Price and all TT&C Fees owing as at the date of payment of the final
instalment of the Minimum Satellite Purchase Price, or (y) on or after the
commencement of the Enforcement Period, full indefeasible payment of the
Obligations; or (ii) the transfer of the Shared Satellite Interest to TMI in
accordance with Section 7.8 of the Satellite Purchase Agreement; and, in each
case, (iii) the request in writing for such discharge and payment of all
expenses in connection therewith by the Obligor. In furtherance thereof, TMI
shall, at such time and at the Obligor's request and expense, execute and
deliver to the Obligor such releases and discharges as the Obligor may
reasonably require.
Section 5.2 No Merger, etc. No judgment recovered by TMI shall operate by
way of merger of or in any way affect the Purchase Money Security Interest,
which is in addition to and not in substitution for any other security now or
hereafter held by TMI in respect of the Obligations.
Section 5.3 Waivers, etc. No amendment, consent or waiver by TMI shall be
effective unless made in writing and signed by an authorized officer of TMI and
then such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure or delay on
the part of TMI in exercising any right under this Agreement shall operate as a
waiver of, or impair, any right of TMI however created. No single or partial
exercise of a right shall preclude any further exercise of such right or the
exercise of any other right.
Section 5.4 Successors and Assigns. This Agreement shall be binding upon
the Obligor, its successors and permitted assigns, and shall enure to the
benefit of TMI and its successors and permitted assigns. AMSC hereby
acknowledges and consents to the grant by TMI to BCE Inc. of a security interest
in all of TMI's rights under the Satellite Purchase Agreement and under this
Agreement as security for the obligations from time to time owing by TMI to BCE
Inc., and AMSC hereby agrees that BCE Inc. may enforce all rights of TMI
hereunder and under the Satellite Purchase Agreement upon the security interest
granted by TMI in favour of BCE Inc. becoming enforceable. TMI may assign all of
its rights and obligations hereunder (i) to any Person to whom the Satellite
Purchase Agreement is assigned in accordance with, and subject to, the terms of
the Satellite Purchase Agreement; or (ii) to any other Person with the prior
written consent of the Obligor not to be unreasonably withheld.
Section 5.5 Severability. If any provision of this Agreement shall be
deemed by any court of competent jurisdiction to be invalid or void, the
remaining provisions shall remain in full force and effect.
Section 5.6 Governing Law. (1) This Agreement shall be governed by and
interpreted and enforced in accordance with the laws of the Province of Ontario
and the laws of Canada applicable therein and shall be treated in all respects
as an Ontario contract.
(2) The Obligor hereby (i) irrevocably submits to the jurisdiction of any court
of competent jurisdiction sitting in the Province of Ontario over any suit,
action or proceeding arising out of or relating to this Agreement; (ii)
irrevocably agrees that all claims in respect of any such suit, action or
proceeding may be heard and determined in such court; (iii) irrevocably waives,
to the fullest extent permitted by law, any objection which it may have or
hereafter have to the laying of the venue of any such suit, action or proceeding
brought in such a court and any claim that any such suit, action or proceeding
brought in such a court has been brought in an inconvenient forum; and (iv)
irrevocably agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in any manner provided by law.
(3) Nothing in this Section shall affect the right of the parties to serve
process in any manner permitted by law or, except as otherwise provided under
Section 5.6(2), limit the right of the parties to bring proceedings against the
other parties in the courts of any other jurisdiction.
(4) Nothing in this Section shall constitute a waiver by any party of any right
to (i) appeal any order or judgment referred to herein; (ii) seek any stay or
reconsideration
<PAGE>
or review of any such order or judgment; or (iii) seek any stay of execution or
levy pending any appeal from, or a suit, action or proceeding for
reconsideration or review of, any such order or judgment.
IN WITNESS WHEREOF, each of the Obligor and TMI has duly executed this
Agreement under the hands of its proper officers duly authorized in that behalf
as of the day and year first above written.
AMSC SUBSIDIARY CORPORATION
By:
Name:
Title:
TMI COMMUNICATIONS AND COMPANY, LIMITED PARTNERSHIP
By: TMI COMMUNICATIONS INC.,
its General Partner
By:
Authorized Signing Officer
By:
Authorized Signing Officer
<PAGE>
SCHEDULE "A"
BUSINESS NAMES AND LOCATION OF FEEDER LINK EARTH STATIONS
[AMSC to confirm all business names and locations as at Traffic Transfer Date]
Business Names:
- ---------------
American Mobile Satellite Corporation
AMSC Subsidiary Corporation
Skycell
MSAT
Locations of Feeder Link Earth Stations:
- ----------------------------------------
American Mobile Satellite Corporation
10802 Parkridge Blvd.
Reston, Virginia 22109
Washington International Teleport
5600 General Washington Drive
Alexandria, VA 22312
<PAGE>
Reference: 97- #22
FOR IMMEDIATE RELEASE
AMERICAN MOBILE SATELLITE TO
LEASE MSAT-2 SATELLITE TO NEW AFRICAN VENTURE
MSAT-1 Satellite to Serve US Customers
RESTON, VIRGINIA, December 4, 1997--American Mobile Satellite Corporation
(NASDAQ: SKYC) will lease its MSAT-2 satellite to African Continental
Telecommunications Limited (ACTEL) for deployment over sub-Saharan Africa.
Through an agreement with TMI Communications of Ottawa, Canada, American Mobile
Satellite will jointly own and operate the identical MSAT-1 satellite to
continue to build its customer base for unique mobile communications services.
The African project is endorsed by key business and political figures in
the US and Africa. ACTEL's board of directors and advisors includes such
noteworthy figures as Andrew Young, former mayor of Atlanta and former US
ambassador to the UN; Percy Sutton, former president of the Borough of Manhattan
and founder of Inner City Broadcasting; and Babacar N'Diaye, former president of
the African Development Bank.
"American Mobile Satellite is privileged to contribute to this worthy
African venture," said Gary M. Parsons, president and chief executive officer of
American Mobile Satellite. "The transaction is financially positive for our
company, while accelerating development of the business and communications
infrastructure of Africa."
"The new southern African communications system will bring much needed
communications to mobile users and remote villages previously unreached by
telephone service of any kind, helping to raise the standard of living and
increase the economic development of the countries served," said James R.
Walker, ACTEL chief executive officer.
- more -
<PAGE>
Under the proposed arrangement, American Mobile Satellite will lease
MSAT-2 to ACTEL for a five-year renewable lease with payments of $38 million per
year. American Mobile Satellite will also license its ground station technology
to ACTEL. The lease income will be used by American Mobile Satellite to fund the
purchase of its share of the MSAT-1 satellite and to further develop its core
business by enhancing service offerings, developing more advanced customer
equipment and adding additional customers.
American Mobile Satellite provides a wide range of mobile communications
services including telephone, digital broadcast dispatch, data communications,
mobile messaging and position reporting services. The company's shareholders
include Hughes Communications, Inc.; Singapore Telecom; and AT&T Wireless
Services, Inc.
###
Factors that could cause forward-looking statements in this news release to
differ materially from actual results are discussed in American Mobile Satellite
Corporation's S-1 registration statement; Form 10K for the year ended December
31, 1996; Form 10Q for the quarter ended September 30, 1997 and other periodic
filings the company has made with the Securities and Exchange Commission. Copies
of the filings are available upon request from the American Mobile Satellite's
investor relations department.
American Mobile Satellite Contacts
Press Contact: Orly Konig Lopez
703/716-6522
Investor Contact: Renate Brown Neely
703/716-6558
ACTEL Contact
James R. (Jim) Walker
908/953-9659
<PAGE>
Reference: 97- #23
FOR IMMEDIATE RELEASE
TMI, AMERICAN MOBILE SATELLITE
TEAM UP ON POWERFUL MOBILE COMMUNICATIONS SATELLITE
Joint Ownership and Operation of MSAT Satellite to Benefit Both Companies
OTTAWA, CANADA and RESTON, VIRGINIA, December 4, 1997--TMI Communications
and American Mobile Satellite Corporation (NASDAQ: SKYC) today announced that
both companies will use the powerful MSAT-1 satellite to bring their mobile
communications services to customers. Under an agreement signed today, American
Mobile Satellite will buy a half interest in MSAT-1 from TMI, and the companies
will share the costs of satellite operations. The agreement is subject to
regulatory approvals in Canada and the US.
In a related announcement issued today by American Mobile Satellite, the
twin MSAT-2 satellite will be leased to African Continental Telecommunications
Limited (ACTEL) and moved to provide service in southern Africa.
"In North America, MSAT mobile satellite technology is well suited to the
needs of maritime, government, transportation, utility, and oil and gas
industries," said Gary M. Parsons, president and chief executive officer of
American Mobile Satellite. "This agreement allows American Mobile Satellite to
develop these targeted business applications while moving more quickly to a
second generation solution."
Parsons' enthusiasm was echoed by Larry Boisvert, TMI's president and chief
executive officer. "TMI wants to use the MSAT satellite to position the company
for success in the North American mobile communications market," Boivsert said.
"By working with American Mobile Satellite, TMI will be better positioned to
serve and aggressively expand its customer base."
- more -
<PAGE>
TMI and American Mobile Satellite are no strangers to doing business
together. Through a joint development and operating agreement, they funded the
design and development of the unique MSAT mobile satellite technology. During
1995 and 1996, TMI and American Mobile Satellite placed twin MSAT satellites
into service over Canada and the United States. Unlike proposed low earth orbit
(LEO) systems, MSAT uses geostationary earth orbit satellites and spot beam
technology to maximize coverage and capacity over targeted geographic areas to
provide unique business features, such as wide area dispatch services, which are
not contemplated in current LEO system plans.
American Mobile Satellite and TMI Communications use the world's most
powerful mobile communications satellite to offer a wide range of mobile
communications services including telephone, digital broadcast dispatch, data
communications, mobile messaging and position reporting services. American
Mobile Satellite's shareholders include Hughes Communications, Inc.; Singapore
Telecom; and AT&T Wireless Services, Inc. TMI is a limited partnership
controlled by BCE Inc., Canada's largest telecommunications company.
###
Factors that could cause forward-looking statements in this news release to
differ materially from actual results are discussed in American Mobile Satellite
Corporation's S-1 registration statement; Form 10K for the year ended December
31, 1996; Form 10Q for the quarter ended September 30, 1997, and other periodic
filings the company has made with the Securities and Exchange Commission. Copies
of the filings are available upon request from the American Mobile Satellite's
investor relations department.
American Mobile Satellite Contacts
Press Contact: Orly Konig Lopez
703/716-6522
Investor Contact: Renate Brown Neely
703/716-6558
TMI Contacts
Marilyn Wright
613-748-8855
Daniel Tisch, Environics Communications
416/920-9000
[email protected]
<PAGE>
