SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q/A
(MARK ONE)
[X] AMENDED QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to __________________
Commission File No. 33-63284
PanAmSat Corporation
PanAmSat Capital Corporation
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 06-1407851
Delaware 06-1371155
- --------------------------------------------------------------------------------
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
One Pickwick Plaza, Greenwich, CT 06830
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: 203-622-6664
- --------------------------------------------------------------------------------
(Former Name, Former Address and Former
Fiscal Year if Changed Since Last Report)
Indicate by check mark whether the Registration (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
YES [X] NO [ ]
As of March 31, 1996, an aggregate of 19,081,137 shares of the Company's Common
Stock, 40,459,432 shares of the Company's Class A Common Stock and 40,459,431
shares of the Company's Class B Common Stock were outstanding.
<PAGE>
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
a) EXHIBITS
10.7.3 Amended and Restated Contract Between PanAmSat Corporation and Space
Systems/Loral, Inc. for PanAmSat Program, dated May 2, 1996. (Portions
of this exhibit have been omitted subject to a request for
confidential treatment by the Securities and Exchange Commission.)*
10.12.3 Agreement for the Launching into Geostationary Transfer Orbit of
PanAmSat Satellites by an Ariane Launch Vehicle, No. 95.5.933,
executed as of December 20, 1995. (Portions of this exhibit have been
omitted subject to a request for confidential treatment by the
Securities and Exchange Commission.)*
10.12.4 Side letter executed as of December 20, 1995, to the Agreement for
Launching into Geostationary Transfer Orbit of PanAmSat Satellites by
an Ariane Launch Vehicle, No. 95.5.933. (Portions of this exhibit
have been omitted subject to a request for confidential treatment by
the Securities and Exchange Commission.)*
10.12.5 Amendment No. 1, entered into as of April 29, 1996, to the Launch
Services Agreement No. 95.5.933 between Arianespace S.A. and PanAmSat
Corporation.*
10.12.6 Amendment No. 2, entered into as of April 29, 1996, to the Launch
Services Agreement No. 94.5.918 between Arianespace S.A. and PanAmSat,
L.P., a predecessor to PanAmSat Corporation.*
10.15 Letter agreement among the News Corporation Limited, Globo
Participacoes, Ltd., Grupo Televisa, S.A., and PanAmSat entered into
February 29, 1996. (Portions of this exhibit have been omitted subject
to a request for confidential treatment by the Securities and Exchange
Commission.)+
* Filed with the Securities and Exchange Commission as an Exhibit to the
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934, for the quarterly period ended March 31, 1996.
+ Filed herewith.
FORM 10-Q
February 29, 1996
The News Corporation Limited
New York, New York
Globo Participacoes, Ltda.
Rio de Janeiro, Brazil
Grupo Televisa, S.A.
Mexico City, Mexico
PanAmSat Corporation
Greenwich, Connecticut
Gentlemen:
Reference is made to certain discussions between PanAmSat Corporation
("PanAmSat"), on the one hand, and The News Corporation Limited ("News") and
Globo Participacoes, Ltda. ("Globo"), on the other, with respect to a series of
joint ventures for DTH services in Latin America to be entered into among News,
or its affiliates, and certain other parties, including Globo and Grupo
Televisa, S.A. ("Televisa").
In that connection, the parties hereto agree as follows:
1. *
2. With respect to the utilization of transponder capacity for Mexico and the
remainder of Latin America (other than ******) and, with respect to *********
************************* programming, the *****************************
********* (together, the "Territory"), the parties agree to the terms specified
in the MOU and the PAS-6 Agreement, as modified by the terms set out in Annex II
hereto.
3. *
<PAGE>
4. *
5. The parties agree to negotiate in good faith for a period of 14 days from the
date hereof in order (i) to conclude long-form documentation with respect to the
matters set forth in paragraphs 1 and 2 above, and *****************************
***********************************************************.
Notwithstanding anything in this letter agreement to the contrary, the terms and
conditions of this letter agreement, including, without limitation, the terms
and conditions of Annex I and Annex II hereto, shall be, and are intended to be,
binding upon the parties; ******************************************************
********************************************************************************
************************************.
Please indicate your agreement to the foregoing by signing in the appropriate
space indicated below.
<PAGE>
THE NEWS CORPORATION LIMITED
By
----------------------------------
Its
GLOBO PARTICIPACOES, LTDA.
By
----------------------------------
Its
GRUPO TELEVISA, S.A.
By
----------------------------------
Its
PANAMSAT CORPORATION
By
----------------------------------
Its
<PAGE>
ANNEX I
*
<PAGE>
ANNEX II
1. Successor/Collocated Rights as Modified From Current Draft Of PAS 6
Transponder Agreement Dated 2/14/1996 (Brazil Agreement)
a) Scope: Applies to successor and collocated satellites; excludes already
launched satellites and their successors, even if collocated.
b) Number: Customer may acquire capacity from PanAmSat of up to the number of
Ku-band transponders on any satellite with coverage over the territory, but in
no event ****** than the ****** of (i) **, and (ii) an amount equal to
********** of the total Ku-band capacity on such satellite.
c) Consultation: PanAmSat will consult on the planning and design of the
satellites (including the transponders, footprints, etc.) intended for the
territory; custom design work (e.g., extra switching) that adds costs get passed
on to Customer at PanAmSat's cost to Customer above and beyond ************, if
applicable.
d) Customer May ********************** to Launch a Collocated or Successor
Satellite, provided that:
i) The right ********* is limited to a successor satellite for PAS-6,
**** collocated ********** and such collocated ************* successor, provided
that the right to ****** such collocated *********** successor may be exercised
only if the collocated *********** was ordered within ****** years of the
in-service date of PAS-6. Customer and Brazil Platform will use reasonable
efforts to coordinate with each other and PanAmSat with respect to the exercise
of the PAS-6 successor rights.
ii) Customer must commit to a minimum of *** Ku-band transponders.
iii) The platform must be using substantially all of the capacity already
provided for DTH when forced; all when provided
iv) Subject to PanAmSat obtaining all necessary licenses, coordination
and technical feasibility. PanAmSat will use all reasonable efforts in this
regard, it being agreed that PanAmSat will use efforts in respect of Customer's
capacity at least as great as it has used or uses for other capacity during the
prelaunch period.
v) PanAmSat doesn't have to proceed until authorization and coordination
issues are resolved; if Customer wants PanAmSat to proceed with construction,
etc., it is at Customer's risk.
vi) PanAmSat can require up front payment of costs (price discounted to
present value at the rate of **** per annum).
<PAGE>
e) Survival: **** years, except early termination. The Agreement terminates
unless (a) ************************** (pursuant to successor or collocated
rights or otherwise) for territory has already been committed or made and is in
effect or (b) Agreement was terminated because (I) Minimum Complement of both
Beams (reduced to **** for this purpose) of transponders not met, (ii) satellite
is taken out of service; or (iii) satellite taken outside acceptable orbital
range (********************** from the applicable location) and bulk buy is made
on next available collocated/successor satellite.
f) Pricing for Additional Capacity: The parties shall negotiate in good faith
the pricing arrangements for additional capacity which may be acquired by the
Customer and the effect on existing pricing arrangements if Customer acquires
additional capacity either from PanAmSat or from other parties for DTH service
in the territory, to the extent permitted under the Agreement. **** party shall
****** ***** a ************************************** vis-a-vis the other than
the last one it proposed in the negotiations that preceded the letter agreement
to which this annex is appended.
Consequences of ***********************: *************************
************************************** will have *** right to ***** the launch
of collocated/successor satellites. *************** (other than as a result of a
transfer of a stake in PanAmSat), ********* shall have no rights vis-a-vis
collocated satellite not already contracted for.
2. **************
Based upon principle of mutuality. Buyer's liability with respect to
************* obligations shall be limited to the same extent as that of
PanAmSat.
a) Limits on ***********
i) Prohibition in transponder contracts (or own use) on using Ku-band capacity
in the ********* for ****, excluding *****************
********************************* or ************************ in ***********. No
assignment of license for any satellite located at *************** unless
assignee agrees to be bound by the same ************** obligations with respect
to such slot.
ii) ********** will be prohibited from having an ****** or ********
************************** or ******* in any ******************* in the
territory except with this venture.
iii) ************************* obligations go away if they go away for
*********.
iv) *************************** goes away if control of *********** is
transferred (by whatever means) to an actual or announced **********************
*********, provided that this shall not relieve
<PAGE>
********** (or any transferee of the *******************) of its **********
obligations under the agreement as to the **************.
b) Limits on ******** (also applicable to joint venture members)
i)
***************************************************************************
*********************************************************************
ii) Subject to the provisions below, Customer shall not use ***** Ku-based
transponder capacity **********************.
iii) ******** can ******************** under clause (ii) above if, with ***
years notice, ********* cannot make available additional capacity (and existing
capacity is all used for DTH)
iv) ********* can ************************ under clause (ii) above if there is
********* of a ***************************** (e.g.
*******************************, or ******************** if ******* is
transferred to a party ******************************************
************************************.
v) Customer's proposed ***************** commitment is carved out; but DTH
service is *************** to ************ as soon as reasonably practical so
that, even during the period of the ****** *****, DTH service is provided
********* via ********* transponders. Once the ******** capacity is available in
the territory, but without prejudice to the matters identified in clause l(f)
above to be negotiated, ******************* from *************** shall be
included in ***** and the **************** transponders shall not be included in
the ***** formula.
c) Additional Provisions Regarding ************************:
Territory excludes *************************************, except for
predominantly ************************ DTH services.
3. *************************************:
***** shall be as set forth in the MOU except for the following:
a) The calculation will be determined on a Platform by Platform basis. For the
avoidance of doubt, ***** will not be calculated across the territory as a
whole.
b) To the extent the Customer is not able to realize the tax benefit of any
********************* in conjunction with the calculation of
***********************, the amount of ************* will be calculated net of
************************* for purposes of calculating *****, provided that
Customer will use all reasonable efforts to structure its business to minimize
such ******************* and, if any such taxes are deducted from *****
**********, to allow ******** to obtain the tax benefit of such
********************.
<PAGE>
c) Pay Per View revenue included in ***************** shall be net of
****************, if any, which shall be determined by the following formula:
*********************;
where,
*********************************,
*********************************************
*********************************************
************************************
<PAGE>
DRAFT -- 2/29/96
BINDING
MEMORANDUM OF UNDERSTANDING
FOR SATELLITE TRANSPONDERS
This Memorandum of Understanding ("MOU") dated as of February _____, 1996 is
made by and among PanAmSat Corporation, a Delaware corporation ("PanAmSat"), and
the following entities collectively referred to as the "Customers": Grupo
Televisa, S.A., a Mexican corporation ("Televisa"), The News Corporation Limited
("News Corp."), Globo Participacoes Ltda. ("Globo"), and Tele-Communications
International, Inc. ("TCI2").
A. Televisa, News Corp. and TCI2 have entered, or are about to enter, into a
Memorandum of Understanding (the "Mexico MOU") relating to the
establishment and operation of a DTH business (the "Mexico Platform") in
Mexico and the Caribbean, and, subject to the terms of the Mexico MOU, in
the United States, Canada and Puerto Rico.
B. Televisa, News Corp., Globo and TCI2 have entered, or are about to enter,
into a Memorandum of Understanding (the "Multi-Country MOU") relating to
the establishment and operation of a DTH business (the "Multi-Country
Platform") in those countries in Latin America which are not included in
the Mexico Platform or the Brazil Platform. The Mexico Platform and the
Multi-Country Platform are herein called the "************ Platforms" and
sometimes individually called a "************ Platform."
C. News Corp. and Globo have entered into definitive agreements relating to
the establishment of a DTH business (the "Brazil Platform") in Brazil.
D. Televisa and PanAmSat are parties to a binding Memorandum of Understanding
dated as of March 27, 1995 (the "Galavision MOU") which is being modified
by agreement (the "Revised Galavision MOU") [to be completed].
In consideration of the foregoing premises and the agreements, covenants and
conditions set forth below, the parties agree as follows:
1. PAS-5 Transponder Agreement. PanAmSat and the Mexico Platform will enter into
a contract (the "PAS-5 Agreement") for the utilization of ** transponders on the
PAS-5 satellite for the service fees set forth in Section 4 below.
2. PAS-3/PAS-6 Agreement. PanAmSat and the Multi-Country Platform will enter
into a contract (the "PAS-3/PAS-6 Agreement") for the utilization of **
transponders on the PAS-3 (aka PAS-3R) satellite, which shall be replaced with
** transponders on the PAS-6 satellite, for the service fees set forth in
Section 4. The PAS-3 transponders shall be surrendered upon the operational
service date of the PAS-6 satellite.
<PAGE>
-2-
3. *
4. Transponder Fees. The method for determining the service fees for the
transponders furnished under Sections 1 and 2, but not the ****************
transponders (except with respect to deposits), shall be as follows:
o Commencement Date. Service Fees for PAS-3 are due and payable as of
*********** ********, the operational service date of PAS-3. Service Fees with
respect to PAS-5 and PAS-6 will commence on the operational service date of
PAS-5 and PAS-6, respectively.
o ********** Service Fee. The minimum service fee ("******** Fee") per
transponder shall be **********************************************.
o Total Service Fees. The service fees per transponder per annum, which shall be
net of all applicable taxes (other than U.S. income taxes), will be computed in
accordance with the following table:
******************
******************
****************** *******************************
***** *******************************
***** ********************************
***********************
***** ********************************
***********************
***** ********************************
***********************
***** ********************************
***********************
************************. **************************************************
******** shall be determined by satellite, e.g. PAS-3, PAS-5 and PAS-6, shall be
determined by reference to all of the *********** Platforms being served by such
satellite, and shall mean ****************** (determined in accordance with U.S.
generally accepted accounting principles) of such ************ Platforms
(whether or not the satellite capacity is provided by PanAmSat or any other
source) divided by the number of transponders furnished to such
<PAGE>
-3-
*************** Platforms on such satellite. ********************** shall be
determined ********************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
*****************************************************************************.
General Terms. The transponder contracts, other than for transponders on PAS-3
which are to be replaced as provided above, shall be ************* (other than
for the causes expressly stated therein) and shall be for a term expiring upon
the end of life of each applicable satellite (estimated to be ** years).
References above to a minimum number of transponders does not mean acceptable
"minimum complements" (the minimum number of transponders on a satellite which
meet specification or the Platform has a termination right), which shall be
established consistent with prior negotiations.
Deposit. In addition to the deposit payable under the
***************************, the applicable parties will pay the following
deposits:
* *****************************************************************
*****************************************************************
*********************************
* *****************************************************************
*****************************************************************
*****************************************************************
*****************************************************************
*******
* *****************************************************************
*****************************************************************
******************************************
* *****************************************************************
**********************************
5. Transponder Agreements. Taking into account differences in language
associated with a service agreement, the PAS-5 Agreement and the PAS-3/PAS-6
Agreement (the "*********** Agreements") shall contain provisions that are
substantially the same (other than as to identified matters as to which the
parties have not reached final agreement as to all points), the provisions of
********************** Agreement, with such modifications as are reasonably
required to reflect the economic terms of the ***************** Agreements and
associated provisions
<PAGE>
-4-
needed to protect PanAmSat in such ************ arrangements (e.g., monthly
estimates, audit rights, consequences of underestimation, obligation to use all
commercially reasonable efforts to maximize ************), different technical
characteristics, number of transponders and beams, delivery dates, the fact that
not all transponders on PAS-3 and PAS-5 will be taken by the parties to this
agreement, and the transition from PAS-3 to PAS-6. It is understood that certain
additional provisions will be added to reflect the above, as to the provisions
of the *********************.
PanAmSat shall use all commercially reasonable efforts to cause a
replacement satellite to be available for PAS-6, in the event it suffers a
launch failure, that will be available for launch within *************** of such
failure. The Platforms ******************************* will pay PanAmSat for its
out of pocket costs, as they become due for the work that will be required,
prior to the launch of PAS-6, to make such a replacement satellite available for
launch within this period, in the event of a launch failure of PAS-6,
******************. If there is a launch failure of PAS-6, after the receipt of
launch insurance proceeds, PanAmSat will give the Platforms a credit against
their PAS-3/PAS-6 and ********************** payment obligations, as they become
due, of *************************** the Platforms pursuant to the previous
sentence. If there is not a launch failure of PAS-6, PanAmSat shall use all
reasonable efforts to mitigate the amounts paid by the Platforms over
*************** (not subject to mitigation under PanAmSat's arrangements with
*****) by employing the spare parts secured for other programs and, to the
extent mitigated, will give the Platforms, in proportion to the amounts paid,
credits against their transponder payment obligations, as they become due, as
mitigated up to the amount **************** paid by the Platforms in this
regard; provided that if the costs are in excess of **************, PanAmSat may
mitigate such costs first, before mitigating the Platforms' costs.
The PAS-3/PAS-6 and *************************** will not be subject to
termination for delay of PAS-6 or PAS-6R or for launch failure of PAS-6 as long
as PAS-6 or PAS-6R is successfully launched by **********************. These
agreements will further specify that if it becomes clearly ascertainable prior
to *****************, that neither PAS-6 nor PAS-6R will be launched by
*******************, that, within ** days of being notified of this condition,
the Platforms will either terminate the PAS-3/PAS-6 and **********
*************, which exercise may be different for the different Platforms, or
grant PanAmSat an extension of time in order to launch PAS-6 or PAS-6R, as
applicable, up to the then predicted launch date for the satellite plus ** days.
Based upon discussions and correspondence with ***************************
represents and warrants that it believes that ************* will be able to
schedule the launch of the PAS-6R, in the event of a launch failure of PAS-6,
within the ************ month period specified above.
6. Guaranties by ****************. The obligations of each of the DTH Platforms
to PanAmSat pursuant to the transponder agreements will be guaranteed by the
**************
<PAGE>
-5-
********************************** of the Platforms that are identified herein,
************************************************ in the Platforms that shall be
identified to PanAmSat not later than the execution of the transponder
agreements. Changes in ********** the guaranties, as long as *************, to
reflect changes of the **********************
********************************************** to the platforms
***************** ************** as the Customers may be made subject to
PanAmSat's prior written consent, not to be unreasonably withheld, conditioned
or delayed; provided that changes in the *********** ***************** of the
initial equity holders identified herein, as between themselves, that are made
within one year of the date hereof shall be permitted without PanAmSat's
consent; provided further that, before any such changes are made, PanAmSat shall
be provided with all necessary or appropriate documentation to ensure that the
guaranties of these parties as so revised remain binding and fully enforceable.
Until and unless such platforms are created and the *************** of the
********** specified, the Customers shall have ******** ********* under this MOU
and the long form transponder agreements for all of the obligations of the
************ that are associated with the to-be-created Platforms as to which
they are identified all *********************** set out below:
Platform Portion Guaranteed
-------- ------------------
********* ***************************
********* ***************************
********* ***************************
7. Legal Effect. This MOU is intended to be and is a binding agreement among the
parties, and shall be binding upon, and shall inure to the benefit of, the
parties and their successors and assigns. The failure of the parties to execute
and deliver transponder agreements as contemplated in Section 5 of this MOU
shall have no effect upon the legal liability of the parties.
8. No Third Party Beneficiaries. Nothing contained in this MOU is intended to
confer on any person or entity, other than the parties hereto, any rights,
remedies or obligations.
9. Governing Law. This MOU will be governed by and construed in accordance with
the laws of the State of New York, without giving effect to principles of
conflicts of laws.
10. Counterparts. This MOU may be executed in one or more counterparts each of
which shall constitute an original agreement.
<PAGE>
-6-
IN WITNESS WHEREOF, the parties have caused this MOU to be duly executed
as of the day and year first above written.
PANAMSAT CORPORATION
By:
-------------------------------------
Name: Frederick A. Landman
Title: President and Chief Executive Officer
GRUPO TELEVISA, S.A.
By:
-------------------------------------
Name: Emilio Azcarraga Milmo
Title: Chairman of the Board and President
THE NEWS CORPORATION LIMITED
By:
-------------------------------------
Name:
Title:
GLOBO PARTICIPACOES LTDA.
By:
-------------------------------------
Name:
Title:
TELE-COMMUNICATIONS INTERNATIONAL,
INC.
By:
-------------------------------------
Name:
Title:
